Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

ARKWRIGHT MUT. v. M.V. ORIENTAL FORTUNE

August 27, 1990

ARKWRIGHT MUTUAL INSURANCE COMPANY A/S/O RICKEL HOME CENTERS DIVISION OF SUPERMARKETS GENERAL CORPORATION, AND SUPERMARKETS GENERAL CORPORATION, PLAINTIFFS,
v.
THE M.V. ORIENTAL FORTUNE, HER ENGINES, BOILERS, ETC., AND KAWASAKI KISEN KAISHA, LTD. (K-LINE) AND NEPTUNE ORIENT LINES, LTD., DEFENDANTS. NEPTUNE ORIENT LINES, THIRD-PARTY PLAINTIFF, V. ORIENT OVERSEAS CONTAINER LINE, INC., THIRD-PARTY DEFENDANT. KAWASAKI KISEN KAISHA, LTD. (K-LINE), THIRD-PARTY PLAINTIFF, V. ORIENT OVERSEAS CONTAINER LINE, INC., THIRD-PARTY DEFENDANT. ARKWRIGHT MUTUAL INSURANCE COMPANY A/S/O RICKEL HOME CENTERS DIVISION OF SUPERMARKETS GENERAL CORPORATION, AND SUPERMARKETS GENERAL CORPORATION, PLAINTIFFS, V. THE M.V. ORIENTAL FORTUNE, HER ENGINES, BOILERS, ETC., AND KAWASAKI KISEN KAISHA, LTD. (K-LINE), DEFENDANTS AND THIRD-PARTY PLAINTIFFS, V. ORIENT OVERSEAS CONTAINER LINE, INC., THIRD-PARTY DEFENDANT.



The opinion of the court was delivered by: Robert L. Carter, District Judge.

OPINION

Arkwright Mutual Insurance Company ("Arkwright") is an insurance company with offices in Massachusetts. It was the insurer under a blanket cargo policy held by Supermarkets General Corporation ("Supermarkets") on the shipments of goods on Voyages 7 and 8 of M/V Oriental Fortune which are the subject of this litigation. Arkwright has paid the loss claimed by the insured and brings this action to recover from defendants, Kawasaki Kisen Kaisha, Ltd. ("K-Line") and Neptune Orient Lines ("NOL"). These two carrier defendants have in turn brought third-party actions against a third carrier, Orient Overseas Container Line, Inc. ("Orient"), the owner of the M/V Oriental Fortune. K-Line and NOL are foreign corporations doing business in the Southern District of New York. Orient is a corporation with offices in the Southern District of New York. There was a three day bench trial May 10, 11 and 14.

FACTS

K-Line, NOL and Orient are parties to a space charter contract, pursuant to which each carrier has shares of space on each others' vessels, and each carrier issues its own bills of lading for container slots used on the others' ships. Under the space charter each carrier is responsible for the keep and care of its own containers and goods before loading and after discharge. Any dispute among them as to responsibility for damage to cargo is to be privately arbitrated.

In February, 1988, two containers of electrical ceiling fans were placed on board the M/V Oriental Fortune at the port of Hong Kong pursuant to bills of lading of NOL, and a few days later two containers of ceiling fans were loaded on board the M/V Oriental Fortune at the port of Kaohsiung pursuant to bills of lading of K-Line. The M/V Oriental Fortune was en route to New York on Voyage 7. In April, 1988, a container of ceiling fans was received on board the M/V Oriental Fortune pursuant to bills of lading issued by K-Line for carriage of the cargo to New York on Voyage 8.

The bills of lading were house-to-house, which means that the containers were loaded by the shipper at its own facility in Hong Kong and outside Kaohsiung and sealed. The sealed containers were then delivered to the vessel and carried to New York. At New York the sealed containers were off-loaded, picked up by truckers of the consignee, Supermarkets, and delivered to its warehouse in New Jersey.

The fans were shipped in cartons, each box containing a fan body, light kit, blades, hardware, etc., and packed in styrofoam and cardboard. Each package contained a silicone gel desiccant packet and instructional material. The exterior box was imprinted with merchandising data and wrapped with shrink wrap.

The four containers on Voyage 7 were delivered to the distribution center of Supermarkets between March 8th and March 14th. When the containers were opened dampness on the ceilings and walls of the four containers could be seen. On entry into the containers water on the floors was encountered. The cartons were wet and discolored. Nine containers of fans consigned to Supermarkets arrived on this voyage, but the merchandise suffered damage only in the four containers involved in this litigation.

John Bradley, who personally inspected the merchandise when the four containers were unsealed, testified that some of the cartons were stained and discolored "where the red was coming into a yellow shade, and it was wet all over the product. Some of the cartons felt like that (sic) they were crumbling." Tr. at 42.

The container on Voyage 8 which was delivered to Supermarkets' warehouse on May 15, 1988, was old and there was a breach of its exterior wall. This container was wet on the ceiling, walls and floor. Bradley testified that "you could see discoloring on the cartons. On the side you [could] see water and feel the wetness of the cardboard, and inside some of the cellophane . . . you could put your fingers in there and feel the dampness and wetness." Tr. at 49. Some of the fans showed signs of rust and corrosion.

Although surveyors recommended that the merchandise be segregated, the damaged from the undamaged, Supermarkets decided to turn the whole lot over to salvage, except for 476 units from one of the K-Line containers on Voyage 7. Its rationale for this decision was that in view of the low price for which it could sell the fans — $29.95 to $49.95 — it would not be economically feasible to undertake the expense that segregating and repackaging the fans would require. There was concern also about selling wet electrical products to customers.

12,458 units were delivered to George M. Ruddy & Co. for salvage. 10,138 of these units were from the containers on Voyage 7. Part of the agreement with Ruddy was that it would not attempt to sell the fans in the northeast area where Supermarkets does business. The salvor returned net proceeds of $133,931.90 for the fans on Voyage 7, and $37,152.60 net proceeds for fans on Voyage 8.

The insurer paid Supermarkets under the blanket cargo policy $135,104.57 for the loss incurred in connection with the cargo on Voyage 7 and $51,364.60 for the loss incurred in connection with the cargo on Voyage 8.

No evidence was presented concerning the condition of the fans when loaded and sealed in the containers by the shippers in Hong Kong and Kaohsiung. No evidence was presented concerning the stowage of the containers or their care and condition during the voyages at issue, except that there was testimony that the containers ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.