In 1986, various sailing syndicates competed in the Americas
Cup competition in Fremantle, Australia. At the conclusion of
the competition, several American sailing syndicates, including
plaintiffs in this action, took steps to transport their
equipment to the United States. The syndicates hired an
international freight forwarder, European Ocean Freight, Inc.
("EOF"), to secure transportation of the equipment to the
United States. In its efforts, EOF worked with a New York-based
freight forwarder, Alfred E. Bowen, Inc. ("Bowen"), though EOF
negotiated on behalf of plaintiffs at all times. Both freight
forwarders hoped to consolidate the various syndicates' cargo
into a single shipment in order to obtain economies of scale.
The two freight forwarders agreed that Bowen would arrange
transportation for the syndicates' cargo. To this end, Bowen
entered into a booking note agreement with T.J. Stevenson & Co.
under which Bowen agreed to book certain on-deck and below-deck
space aboard the vessel T.S. Prosperity ("TSP"), which is owned
by defendant N.L. Brier Shipping, N.A. ("NLB"), for the
carriage of the syndicate's cargo from Australia to the United
States. In 1987, the TSP arrived in Fremantle for purposes of
loading the syndicate's cargo for transport to the United
Bowen issued a bill of lading to plaintiffs. These bills are
identical except for their description of the cargo. The bills
specifically incorporate the $500 per package limitation of
liability contained in the United States Carriage of Goods By
Sea Act ("COGSA"), 46 U.S.C. App. § 1300 et seq. The bills also
state that Bowen is the sole carrier and that Bowen alone will
be liable as a carrier under the bill of lading. These bills
provide in relevant part:
6. Carrier's Liability Limitation:
b. During all other periods of the Carrier's
responsibility for the Goods, except as
otherwise specifically provided for herein the
rights and liabilities of the parties to this
B/L with respect to the Goods shall be governed
by the United States Carriage of Goods By Sea
Act . . . which shall be deemed to be
incorporated herein; and all other statutes and
laws compulsorily applicable to this B/L during
c. Limitation of Liability. In any event, the
Carrier shall not be liable for any loss or
damage to or in connection with the Goods in an
amount exceeding U.S. $500 per package, unless
the nature and a higher valuation of the Goods
have been declared by the Merchant before
shipment and inserted in this B/L. Such a
declaration shall be prima facie of the value of
the Goods, but not conclusive on the Carrier.
When not repugnant to a compulsorily applicable
statute or law, "package" is defined as all
pieces of cargo shipped individually and not
prepared in any manner for transport, and all
containers as defined in . . . this B/L.
e. Any provision or any part of a provision of
this B/L which is repugnant to a statute or law
compulsorily applicable to this B/L is void, but
only for that period during which said statute
to limit or deprive the Carrier of any statutory
or law compulsorily applies and nothing in this
B/L shall operate liberty, defense, exemption or
limitation of liability.
f. The Carrier's defenses, exceptions, limits of
liability, liberties and the like provided for
by this B/L shall apply in all proceedings
against the Carrier with respect to the Goods
whether they be grounded in contract or tort.
Plaintiffs allege that the defendants are liable for damage
inflicted on two pieces of their cargo that plaintiffs had
placed on board the TSP. Sail America Foundation ("SAF")
contends that its motorized tender boat, Betsy, incurred
damages during the trip to America. The Betsy is a 64 foot long
motor yacht used by SAF for various non-racing functions.
Defendants stowed the Betsy on the No. 1 hatch cover on the
TSP's deck. Eagle Syndicate ("Eagle") asserts that its 100-foot
long sailing mast, which was part of its twelve meter yacht,
also sustained damages during this trip. The mast was also
carried on the TSP's deck. It is not disputed that all parties
consented to transport of the cargo on the deck of the TSP. The
TSP arrived in Long Beach, California with plaintiffs' cargo on
April 14, 1987. Plaintiffs gave notice of the alleged damage to
their cargo in May 1987 and then commenced the instant action.
Discovery is complete.
Defendants N.L Brier and the TSP have moved for summary
judgment pursuant to Federal Rule of Civil Procedure 56 to
dismiss plaintiffs' action or, in the alternative, for partial
summary judgment limiting plaintiffs' maximum recovery to
$1,000. Defendant Bowen has also moved for partial summary
judgment limiting plaintiffs' maximum recovery to $1,000. For
purposes of these motions, the defendants will assume that
plaintiffs' cargo incurred damage. Plaintiffs have cross moved
pursuant to Rules 7(b) and 12(f) to strike defendants' defenses
that seek to limit their liability to $1,000.
"It is well settled that a court should grant a motion for
summary judgment only if the evidence, viewed in the light most
favorable to the party opposing the motion, presents no genuine
issue of material fact." Cable Science Corp. v. Rochdale
Village, Inc., 920 F.2d 147, 151 (2d Cir. 1990); see United
States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994,
8 L.Ed.2d 176 (1962). Whether an issue is genuine and material
for purposes of summary judgment depends on "whether the
evidence presents a sufficient disagreement to require
submission to a jury or whether it is so one-sided that one
party must prevail as a matter of law." Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 251-52, 106 S.Ct. 2505, 2512, 91
L.Ed.2d 202 (1986). "One of the principal purposes of the
summary judgment rule is to isolate and dispose of factually
claims or defenses. . . ." Celotex Corp. v. Catrett,
477 U.S. 317, 323-24, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). The
Supreme Court added that "[s]ummary judgment procedure is
properly regarded not as a disfavored procedural shortcut, but
rather as an integral part of the Federal Rules as a whole,
which are designed `to secure the just, speedy and inexpensive
determination of every action.'" Id. at 327, 106 S.Ct. at 2555
(quoting Fed.R.Civ.P. 1).
I. Motion for Summary Judgment Dismissing Action Against
NLB and TSP
COGSA, if it applies to plaintiffs' cargo, provides exclusive
remedies that bar all other theories of liability. Where COGSA
applies, therefore, it precludes any action against a defendant
that is exempt under the statute's provisions. See St. Paul
Fire & Marine Ins. Co. v. Marine Transp. Serv. Sea-Barge, Inc.,
727 F. Supp. 1438, 1442 (S.D.Fla. 1989); Miller Export Corp. v.
Hellenic Lines, Ltd., 534 F. Supp. 707, 710 (S.D.N.Y. 1982);
National Automotive Publications, Inc. v. United States Lines,
Inc., 486 F. Supp. 1094, 1099 (S.D.N.Y. 1980); B.F. McKernin &
Co. v. United States Lines, Inc., 416 F. Supp. 1068, 1070-71
(S.D.N.Y. 1976). Because this Court finds that COGSA applies to
plaintiffs' cargo and that NLB is not subject to COGSA because
it is not a "carrier" within the statute's meaning, NLB's
motion for summary judgment discharging the complaint against
it is granted.
A. COGSA Applies to Plaintiffs' Cargo
COGSA applies to plaintiffs' cargo by operation of law, or
ex proprio vigore. COGSA governs every bill of lading that
evidences a contract for the carriage of goods by sea in
foreign commerce to or from ports in the United States. See 46
U.S.C. App. § 1300; Excel Shipping Corp. v. Seatrain Int 7
S.A., 584 F. Supp. 734, 746 (E.D.N.Y. 1984). Because the Bowen
bills of lading evidence a shipment from Australia to the
United States, the bills of lading are subject to COGSA unless
the cargo in this case is not "goods" within the statute's
COGSA provides that "[t]he term goods' includes goods, wares,
merchandise and articles of every kind whatsoever, except live
animals and cargo which by the contract of carriage is stated
as being carried on deck and is so carried." 46 U.S.C. App.
§ 1301(c). Thus, COGSA does not apply to cargo carried on the
deck of the vessel if the bill of lading states that the cargo
will be carried on deck. See Institute of London Underwriters
v. Sea-Land Serv., Inc., 881 F.2d 761, 764 (9th Cir. 1989);
General Motors Corp. v. Moore-McCormack Lines, Inc.,
451 F.2d 24, 25 n. 1 (2d Cir. 1971); Saint Paul Fire & Marine Ins. Co.
v. Sea-Land Serv., Inc., 745 F. Supp. 186, 188 (S.D.N.Y. 1990);
Miller Yacht Sales, Inc. v. M/V Vishva Shobha, 494 F. Supp. 1005,
1014 (S.D.N.Y. 1980). It is undisputed, however, that the
Bowen bills of lading do not specifically provide that the
syndicate's cargo would be carried on deck. Accordingly, it is
subject to COGSA.
In an attempt to escape the effect of COGSA's provisions,
however, plaintiffs assert that COGSA is inapplicable because
all parties intended for carriage of the cargo on deck and
because the cargo was actually carried on deck. This argument
is without merit. For instance, in Seguros Banvenez, S.A. v.
S/S Oliver Drescher, 761 F.2d 855, 859 (2d Cir. 1985), cargo
was stowed on deck although the bills of lading did not note
such stowage. The court nevertheless held the shipper to
COGSA's provisions because the shipper "had actual notice of
the on-deck stowage option and also had notice through prior
practice that on-deck stowage was usual" for the cargo in
question. Id.; see also English Elec. Valve Co. v. M/V Hoegh
Mallard, 814 F.2d 84, 89 (2d Cir. 1987) (COGSA applies to cargo
stowed on deck where bill of lading lacked on deck notation and
shipper "had notice through prior practice that on-deck stowage
was usual"); Royal Exchange Assurance of America, Inc. v. M/V
Hoegh Dene, 1988 A.M.C. 868 (W.D.Wash. 1987) (COGSA applies
where shipper agreed to
stow yachts on-deck but bill of lading lacked on-deck
notation). The court added that COGSA is applicable where a
bill of lading does not contain an on-deck notation but where
the cargo is stowed on deck pursuant to "an agreement or an
established custom from which consent of the shipper for on
deck stowage may be imputed." Seguros, 761 F.2d at 859; see
also M. Golodetz Export Corp. v. S/S Lake Anja, 751 F.2d 1103,
1110 (2d Cir.) (courts presume that bill of lading issued
pursuant to custom), cert. denied, 471 U.S. 1117, 105 S.Ct.
2361, 86 L.Ed.2d 261 (1985). Only unauthorized on deck stowage
deprives a carrier of COGSA protection where the bill of lading
lacks an on deck notation but the carriage is stowed on deck.
It is undisputed that plaintiffs consented to on deck stowage
of their cargo. Therefore, COGSA applies to the Bowen bills of
lading by operation of law in light of the parties' agreement,
industry custom, and lack of an on deck notation on the Bowen
bills of lading.
Furthermore, COGSA applies to the parties' agreement because
the parties to the Bowen bills of lading expressly incorporated
the statute's provisions in the contract. See Bowen Bill of
Lading, cl. 6(b). Where COGSA does not apply by operation of
law, the parties to a bill of lading may incorporate the
statute as a contractual term. See General Motors Corp. v.
Moore-McCormack Lines, Inc., 451 F.2d 24, 25 n. 1 (2d Cir.
1971); General Elec. Co. v. M.V. Lady Sophie, 458 F. Supp. 620,
622 (S.D.N.Y. 1978). Furthermore, when it applies as a
contractual provision, the terms of COGSA can be modified and
expanded. See Institute of London Underwriters v. Sea-Land
Serv., Inc., 881 F.2d 761, 764 (9th Cir.199); North River Ins.
v. Federal Sea/Fed. Pac. Line, 647 F.2d 985 (9th Cir. 1981)
(COGSA applies to deck cargo where bill of lading so states),
cert. denied, 455 U.S. 948, 102 S.Ct. 1448, 71 L.Ed.2d 662
(1982); Pannell v. United States Lines Co., 263 F.2d 497 (2d
Cir.), cert. denied sub nom., Pannell v. The Am. Flyer,
359 U.S. 1013, 79 S.Ct. 1151, 3 L.Ed.2d 1037 (1959). The bills of
lading extended COGSA to deck cargo. Clause 2(b) of the Bowen
bills of lading defines goods as "all cargo including the deck
cargo. . . ." Bowen Bill of Lading, cl. 2(b). It is apparent,
then, that COGSA applies to plaintiffs' cargo.*fn1
B. NLB Is Not Subject to COGSA's Provisions
A plaintiff may recover in personam damages under COGSA only
against the carrier of the cargo. See Pacific Employers Ins.
Co. v. M/V Gloria, 767 F.2d 229, 234 (5th Cir. 1985). COGSA
defines carrier to include "the owner or the charterer who
enters into a contract of carriage with a shipper." 46 U.S.C.
App. § 1301(a). A bill of lading is such a contract. See 46
U.S.C. App. § 1301(b). Accordingly, plaintiffs must establish
that NLB executed a contract of carriage with the shipper.
"A contract of carriage with an owner may either be direct
between the parties, or by virtue of a charterer's authority to
bind the owner by signing bills of lading `for the master.'"
In re Intercontinental Properties
Management, S.A., 604 F.2d 254, 208 n. 3 (4th Cir. 1979). It is
not disputed that NLB and plaintiffs never directly executed a
contract for carriage.
Furthermore, plaintiffs put forth no evidence that Bowen
signed a bill of lading on NLB's behalf and with NLB's
authority. When a bill of lading is signed by the charterer or
its agent "for the master," the shipowner is liable only if the
signor had authority to bind the shipowner. See Pacific
Employers, 767 F.2d at 237; Dempsey & Assoc., Inc. v. S.S. Sea
Star, 461 F.2d 1009, 1015 (2d Cir. 1972); Centennial Ins. Co.
v. M.V. Constellation Enter., 639 F. Supp. 1261, 1265 (S.D.N Y
In this case, defendants have put forth evidence that Bowen
did not sign the bill of lading with NLB's authority. Bowen
chartered the TSP from T.J. Stevenson & Co. While Stevenson
issued bills of lading to Bowen and Bowen issued the bills of
lading to plaintiffs, neither the vessel nor its owners
received copies of either the Bowen or Stevenson bills of
lading. The Bowen bills of lading were signed by Anthony
D'Aria, a Bowen shipping employee who is unaffiliated with NLB.
In addition, none of the vessel's officers were employed by the
vessel owner, which suggests that they had no authority to
authorize the issuance of bills of lading on the owner's
behalf. Moreover, Bowen's president was not aware of any
authorization to sign bills of lading on behalf of the master.
Finally, neither Bowen, SAF, Eagle or EOF ever conferred with
the vessel owner or its agent.
Plaintiffs do not contest these facts. They merely assert
that because the Bowen bill of lading was signed "for the
master," some sort of authorization existed for the signature.
This lone conclusory assertion cannot defeat a motion for
summary judgment. See Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 256, 106 S.Ct. 2505, 2514, 91 L.Ed.2d 202 (1986); Francis
v. Coughlin, 891 F.2d 43, 47 (2d Cir. 1989).
Moreover, plaintiff has the burden of proving that the vessel
owner or master authorized the issuance of the bills of lading
on its behalf. See Centennial Ins., 639 F. Supp. at 1265. A
"court may grant summary judgment . . . against a party who
fails to make a showing sufficient to establish the existence
of an element essential to that party's case, and on which that
party will bear the burden of proof at trial." Celotex, 477
U.S. at 322, 106 S.Ct. at 2552. The Court added that in such a
case, the movant must show only that "there is an absence of
evidence to support the nonmoving party's case." Id. at 325,
106 S.Ct. at 2554. Plaintiffs have failed to assert any fact,
or establish the existence of any factual dispute, that could
successfully prove this element of its case. Accordingly, NLB's
motion for summary judgment dismissing the complaint against it
The vessel TSP, however, may still be liable in rem. In
Cactus Pipe & Supply Co. v. M/V Montmartre, 756 F.2d 1103, 1113
(5th Cir. 1985), the court addressed the liability of a vessel
in rem where the vessel's owner is not liable in personam. The
court stated that
the vessel may be held liable even in the absence
of the liability, in personam, of the vessel
owner. . . . [Where] bills of lading [are] issued
and the vessel sails with the goods on board, . .
. a settled maritime principle . . . sweeps away
as immaterial any question of the authority of the
issuer of the bills of lading to hold the ship
liable in rem for loss or damage to the cargo
carried. When cargo has been stowed on board the
vessel and bills of lading are issued, the bills
of lading become binding contracts of the vessel
in rem upon the sailing of the vessel with the
cargo. The sailing of the vessel constitutes a
ratification of the bills of lading.
Id. Accordingly, TSP's motion for summary judgment is denied.
II. Defendants' Motion to Limit Liability
As previously noted, COGSA applies to the Bowen bills of
lading. COGSA limits a carrier's and a ship's liability for
goods in transportation to $500 per package or, for goods not
shipped in packages, $500 per customary freight unit ("CFU").
See 46 U.S.C. App. § 1304(5). If the Betsy
and the mast were either packages or customary freight units,
the defendants' liability may not exceed COGSA's $500 per
package or CFU amount.
The Second Circuit has defined a COGSA package as "a class of
cargo, irrespective of size, shape or weight to which some
packaging in preparation for transportation has been made,
which facilitates handling but which does not necessarily
conceal or completely enclose the goods." Aluminios Pozuelo
Ltd. v. S.S. Navigator, 407 F.2d 152, 155 (2d Cir. 1968). The
bill of lading definitions are a primary consideration of what
constitutes a COGSA package. See Allied Chem. Int'l Corp. v.
Companhia de Navegacao Lloyd Brasileiro, 775 F.2d 476, 485 (2d
Cir. 1985), cert. denied, 475 U.S. 1099, 106 S.Ct. 1502, 89
L.Ed.2d 903 (1986); Binladen BSB Landscaping v. M.V. Nedlloyd
Rotterdam, 759 F.2d 1006, 1012 (2d Cir.), cert. denied,
474 U.S. 902, 106 S.Ct. 229, 88 L.Ed.2d 229 (1985).
Clause 6(c) of the Bowen bills of lading defines a package as
"all pieces of cargo shipped individually and not prepared in
any manner for transport, and all containers as defined in
Clause 2(d) of this B/L." Bowen Bill of Lading, cl. 6(c).
Clause 2(d) defines containers as "all boxes, trailers, tanks,
bundles, lifts, flats, pallets or other packages, shipping
units or articles of transport used to consolidate the Goods in
or which the Goods are transported." Bowen Bill of Lading, cl.
It is undisputed that substantial packaging was applied to
the mast. The mast was wrapped in burlap and plastic, and had
wooden crates surrounding it in four locations. In addition,
wooden chocks or braces were lashed around the mast. Because
clause 6(c) excludes from the definition of a package all cargo
prepared in some manner for transport unless it is a container,
the mast is only a package if it is a container as defined in
It is unclear to this Court, however, whether the mast and
the Betsy fall within the contractual definition of a
container. Plaintiffs assert, for instance, that the mast
cannot be considered a box, trailer, tank, bundle, lift, flat,
or pallet. Plaintiffs also contend that the rest of clause 2(d)
includes items used to consolidate other goods, but does not
include the consolidated item. Defendants, on the other hand,
note that the bills of lading list the mast as a package.
"Entries on the bill of lading are . . . important evidence of
the intent of the parties to the shipping contract and the
declaration on the bill may bind a shipper even when the
contents of the shipment diverge from the description on the
bill." Binladen BSB Landscaping v. M.V. Nedlloyd Rotterdam,
759 F.2d 1006, 1012 (2d Cir. 1985) (citations omitted).
Furthermore, Bowen's president asserted that the term
containers includes cargo prepared for transport. Defendants
also claim that because a container includes items used to
consolidate goods, the mast in its packaging is also a
container. A similar dispute surrounds whether the Betsy falls
within the bills of lading definition of package or container.
Such a dispute over contractual interpretation and intent of
the parties counsels against a grant of summary judgment.
See National Union Fire Ins. Co. v. Turtur, 892 F.2d 199, 205
(2d Cir. 1989). Accordingly, this Court is constrained to deny
defendants' motion for partial summary judgment in which they
seek to limit their liability to $1,000. Because this Court has
denied defendants' motion to limit liability, it does not
address plaintiffs' argument that they did not receive a fair
opportunity to declare a higher value for carriage, which if
true would preclude defendants from limiting their liability.
Similarly, this Opinion does not address whether defendants are
precluded from asserting COGSA's liability limitation if
defendants' tortious and criminal conduct caused the damage to
Defendant N.L. Brier's motion for summary judgment dismissing
it as a party to this action is granted. Defendant T.S.
Prosperity's motion for summary judgment dismissing the vessel
as a party is denied. All defendants' motions for partial
summary judgment seeking to limit their total
liability to $1,000 are denied. Plaintiffs' motion to strike
defendants' defenses relating to limitation of liability is