United States District Court, Southern District of New York
February 20, 1991
HARTFORD FIRE INSURANCE COMPANY AND SUNLAND, INC., PLAINTIFFS,
M/V "SAVANNAH", ITS ENGINES, BOILERS, ETC., K.G. IVARANS REDEREI B.M.B.H. & CO. AND IVARAN LINES, DEFENDANTS. IVARAN LINES, DEFENDANT AND THIRD-PARTY PLAINTIFF, V. REDEREI CLAUS-PETER OFFEN, THIRD-PARTY DEFENDANT.
The opinion of the court was delivered by: Haight, District Judge:
MEMORANDUM OPINION AND ORDER
In this admiralty action alleging short delivery of cargo,
plaintiffs move for summary judgment under Rule 56,
In December 1987 plaintiff Sunland, Inc., a New York
corporation, purchased a quantity of Brazilian cashew nuts
from Cia. Industrial de Productos Alimenticios ("CIPA") in
Fortaleza, Brazil. The shipment consisted of 500 cartons of
first quality large whole cashews priced at $2.95 per pound
F.O.B. vessel at Fortaleza, and 200 cartons of first quality
pieces priced at $1.25 per pound. The total F.O.B. invoice
purchase price was U.S. $86,250. Sunland paid CIPA for the
cashews through an irrevocable letter of credit issued by
Chase Manhattan Bank in New York for the full purchase price,
payment to be made upon CIPA's presentation of specified
documents, including a full set of on board clean ocean bills
The complaint alleges that although the shipment was F.O.B.
vessel, CIPA arranged for the ocean transportation of the
goods from Fortaleza to New York with defendant Ivaran Lines
through the latter's agents at Fortaleza. Sunland insured the
cargo for physical loss and damage during transit with
plaintiff Hartford Fire Insurance Company under an open marine
On December 19, 1987 Marnosa Navegacao Ltda., acting "for
and on behalf of the Master", and "as agents only," issued at
Fortaleza an Ivaran Lines bill of lading reflecting the
loading of the 700 cartons of cashews on board the M.V.
"SAVANNAH." The printed form bill of lading recites:
"Particulars Furnished by Shipper of Goods." The typed
description of goods says:
1 (One) Container 20 FT said to contain 700
cartons brazilian cashew kernels as follows:
500 Cartons cashew L.W. 1's
200 Cartons cashew P 1's
In a column bearing the printed caption "gross weight in
kilos," there is typed opposite the reference to 500 cartons
the figures "12.000." Opposite the reference to 200 cartons,
there is typed "4.800," and then a total figure of "16.800."
It is common ground that the bill of lading shows the weight
of the 700 cartons of cashews to be 16,800 kilos, the
equivalent of approximately 37,037 pounds. The bill of lading
does not recite the weight of the 20-foot container into which
the 700 cartons were placed prior to loading on board the
The bill of lading contains stamped notations which recite
"House to House Movement;"
"Shipper's Loads and Count;" and "Quality, Quantity and Weight
as Declared by Shippers." The face of the bill of lading also
contains this stamped paragraph:
Carrier received the above container(s) locked
and/or sealed and did not open the container(s).
Carrier did not tally the container's contents
nor did it weigh them. The weights or quantity
stated on this bill of lading are simply those
stated by the shipper and are not deemed to have
been issued by the carriers.
The bill of lading identifies the shipper as CIPA.
On the back of the bill of lading this printed provision
11(a) This Bill of Lading shall be prima facie
evidence of the receipt by the Carrier of the
goods as herein described insofar as he had
reasonable means of checking the particulars as
furnished by the shipper. In respect of such
particulars, proof to the contrary shall not be
admissible when this document has been
transferred for value to a third party who in
good faith relied on the accuracy of the
The bill of lading recites that the container number was
IVLU 707528-8 and bore seal number IVL-30865.
The "SAVANNAH" proceeded on her voyage to New York. Robert
Natale, Sunland's traffic manager, made arrangements for a
trucker to pick up the container at the Red Hook Marine
Terminal in Brooklyn and deliver it to Commodity Warehouse in
Linden, New Jersey, a public warehouse where Sunland
warehouses its goods. On January 11, 1988, the trucking
company designated by Sunland picked up the container at the
Red Hook Marine Terminal. On that date Universal Maritime
Service Corp., a stevedoring company, issued a transit
interchange receipt ("T.I.R.") which recited, among other
things, that the container when delivered to the trucking
company had a gross weight of 21,040 pounds. That is a total
weight (including the weight of the container) substantially
less than the weight of the cashews reflected in the bill of
lading, which as noted was 16,800 kilos or approximately
37,037 pounds. A copy of the T.I.R. is attached to the moving
papers as Ex. 8 to the Natale affidavit. Defendant Ivaran has
admitted that Universal Maritime Service Corp. was acting for
and on behalf of Ivaran Lines in the discharge and delivery of
the container in question. See defendant's response to Request
No. 25 of Requests for Admissions promulgated by plaintiffs
pursuant to Rule 36, Fed.R.Civ.P.
Subsequent surveys reveal that 477 of the 700 cartons of
cashews shipped were missing. The container door handle had
been tampered with and was in such condition that the
container door could be removed without breaking the seal
affixed at the loading port.
Hartford settled Sunland's claim for $79,103.38,
representing the C.I.F. value plus 10% minus the policy
deductible of $981.75. Hartford sues by subrogation. The claim
asserted in the complaint is for $78,705, representing the
alleged market value of the cashews short delivered at $3.30
per pound ex Sunland's warehouse. (All the missing cartons
came from the 500 cartons of first quality large whole
cashews.) Plaintiffs also claim pre-judgment interest. They
contend that they are entitled to summary judgment both as to
liability and as to amount of damages.
At the threshold, plaintiffs contend that their motion must
succeed because defendants did not file a timely response to
plaintiffs' statement under Rule 3(g) of the Civil Rules of
this Court. But Ivaran Lines did file a responsive Rule 3(g)
statement as part of its motion papers, and I will permit the
late filing, preferring to deal with the motion on its merits,
rather than resolve it on a technicality.
The issue is therefore whether plaintiffs have satisfied
Rule 56(c), which provides in part:
The judgment sought shall be rendered forthwith
if the pleadings, depositions, answers to
interrogatories, and admissions on file, together
with the affidavits, if any, show that there is
issue as to any material fact and that the moving
party is entitled to a judgment as a matter of
Rule 56(e) governs the form of supporting and opposing
shall be made on personal knowledge, shall set
forth such facts as would be admissible in
evidence, and shall show affirmatively that the
affiant is competent to testify to the matters
Plaintiffs attach to their motion papers a number of
documents generated at the loading and discharge ports.
Counsel for Ivaran Lines and for the vessel challenge the
admissibility into evidence of certain of these documents. To
the extent that the motion papers do not reveal an adequate
foundation for the admissibility of documents at trial, they
cannot be considered on a motion for summary judgment.
However, there is one document which passes the test of
admissibility. That is the Transit Interchange Receipt issued
by Universal Maritime Service Corp. on January 11, 1988. As
noted, Ivaran Lines has admitted that Universal acted as its
stevedore at the port of discharge, performing functions which
formed a part of Ivaran's duty as ocean carrier. The T.I.R.
was produced from his file during a deposition of Caldo
Piccione, Ivaran Lines' claims manager, who identified
Universal Maritime Services Corp. as "the New York
stevedores." Tr. 14. Ivaran Lines raises no question on this
motion as to the authenticity of the copy of the T.I.R.
submitted by plaintiffs on this motion. The written notation
of the gross weight of the container appearing on that
document constitutes a "statement" under Rule 801(a)(1),
Fed.R.Evid., and is admissible as an admission by Ivaran Lines
under Rule 801(d)(2)(D). The stevedore was Ivaran's "agent"
for the purpose of executing the T.I.R., even though it was
also an independent contractor.
Thus the T.I.R. establishes a short delivery at the
discharge port of the quantity of cashews reflected on the
face of the bill of lading issued at the loading port. That is
because, as noted, the gross weight of container and cargo
reflected on the T.I.R. is less than the amount of cargo
reflected on the bill of lading. Short delivery of cargo is a
recognized form of damage for which a cargo owner may sue an
ocean carrier under the United States Carriage of Goods by Sea
Act, 46 U.S.C.App. §§ 1300 et seq., 1303, ("COGSA") which all
parties agree applies to the shipment in suit.
The decisive question is therefore whether the carrier and
vessel are bound by the cargo weights stated in the bill of
Plaintiffs are entitled to summary judgment on the issue of
liability. Defendant Ivaran Lines chose to issue a negotiable
bill of lading reflecting the receipt on board the "SAVANNAH"
of 700 cartons of cashews weighing 16,800 kilos. Sunland's
seller having presented that bill of lading to the bank
issuing the letter of credit, Sunland was obligated to pay the
seller for that quantity, and in fact did so. As the Second
Circuit observed in Berisford Metals Corp. v. S/S Salvador,
779 F.2d 841, 845 (2d Cir. 1985), such a document performs several
. . a negotiable or order bill of lading is a
fundamental and vital pillar of international
trade and commerce, indispensable to the conduct
and financing of business involving the sale and
transportation of goods between parties located
at a distance from one another. It constitutes an
acknowledgement by a carrier that it has received
the described goods for shipment. It is also a
contract of carriage. As a document of title it
controls the possession of the goods themselves.
In particular, the bill of lading in the case at bar
acknowledges receipt by the ocean carrier on board its vessel
of the weight of goods stated on the bill of lading. The
Second Circuit made that point plain enough in Westway Coffee
Corp. v. M.V. Netuno, 675 F.2d 30
, 33 (2d Cir. 1982):
Once the carrier lists the weight of the goods
(which normally will be readily verifiable by the
carrier), he represents that he has no reasonable
ground for suspecting that the weight of the
goods actually received varies from the listed
weight and that he has reasonable means of
checking the weight, 46 U.S.C. § 1303(3)(c) (1976).
This is enough for a prima facie showing of receipt
of the listed weight. 46 U.S.C. § 1303(4) (1976).
As in Westway, plaintiffs at bar have established a prima
facie case under COGSA. The bill of lading establishes the
loaded weight of cashews, and events at the discharge port
clearly demonstrate outturn of a lesser weight. Defendants'
motion papers show no ground upon which that prima facie case
could be rebutted. Markings on the bill of lading such as
"Shippers Load and Count" and "Quality Quantity and Weight as
Declared by Shippers" do not change that result. Westway at
While defendants proclaim the existence of disputed issues
of fact, they are not material, and accordingly do not
preclude summary judgment. For instance, the bill of lading is
marked "House to House Movement," while it is fair to say that
plaintiffs treat the shipment as one of "Pier to House." But
the different loading port scenarios inherent in these
differing descriptions are not material in respect of
defendants' liability, since in any event the ocean carrier's
issuance of a negotiable bill of lading constituted its
acknowledgements that it received the designated weights, and
had reasonable means of checking those weights. These are the
precise holdings of Berisford and Westway. And, of course, the
ocean carrier acting through its agent at the loading port had
means of checking the weights. As Judge Newman observed in
Westway at 33 n. 4:
Had Netumar weighed the containers at loading and
listed that weight on the bill of lading, and
then weighed them again at unloading and found
the same weight, it would have a defensible
position at least as to a claimed shortage of
Plaintiffs are entitled to summary judgment on the issue of
liability. I agree with defendants that the present record
does not sufficiently establish valuation for purposes of
entry of summary judgment on the amount of damages.
Accordingly a reference will be made to a Magistrate-Judge for
inquest, recommendation and report.
The Clerk of the Court is directed to enter summary judgment
in favor of plaintiffs and against defendants holding
defendants fully liable for all damages suffered by plaintiffs
as the result of the shipment alleged in the complaint.
The Court is making a separate order of reference to a
Magistrate-Judge. The issues arising out of the third-party
complaint are not involved in this motion, and I make no order
with respect to them.
It is SO ORDERED.