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REEFER & GEN. SHIPPING CO. v. GREAT WHITE FLEET

June 22, 1994

REEFER AND GENERAL SHIPPING CO., INC., Plaintiff,
v.
GREAT WHITE FLEET, LTD., Defendant.



The opinion of the court was delivered by: SHIRLEY WOHL KRAM

 SHIRLEY WOHL KRAM, U.S.D.J.

 In this admiralty and maritime action, plaintiff Reefer and General Shipping Co., Inc. ("Reefer") seeks damages against Great White Fleet, Ltd. ("GWF") for the wrongful termination of a charter party. Presently before the Court is GWF's motion, pursuant to Federal Rule of Civil Procedure 56, for summary judgment dismissing the complaint. For the reasons set forth below, GWF's motion is denied.

 BACKGROUND1

 On December 7, 1990, Reefer and GWF entered into a Refrigerated Vessel Time-Charter (the "Charter"), pursuant to which GWF hired Reefer's ship, the Kinaros V (the "Vessel"), for two years. *fn2" Pursuant to paragraph 50 of the Charter, GWF could terminate the contract if the Vessel was deemed unseaworthy by a class surveyor *fn3" for the purpose of carriage maintenance or care of the cargo. See the Charter at P 50, annexed to the Reisert Aff. as Exh. "3." In addition, paragraph 51 provided that GWF had the right to terminate the Charter if "the vessel or its refrigeration machinery and equipment breakdown for any reason whatsoever and such breakdown occurs on three occassions [sic] within a 12 month period." Id. at P 51. The Charter provided, however, that GWF could not reduce payments unless a breakdown hindered the working of the Vessel for more than twenty-four hours. Id. at P 11(A).

 I. Shipment of Bananas

 The Vessel contains three diesel-powered generators that propel it and provide electricity to the refrigeration equipment. In October 1992, the Vessel loaded a cargo of bananas in Honduras for discharge in Italy and Iran. On October 15, 1992, while enroute to Italy, the Vessel's No. 1 and No. 3 generators failed, causing the Vessel to lose power (the "October 15th Failure"). *fn4" As a result, the Vessel stopped at Cartegena, Spain for emergency repairs. Although the No. 3 generator was restored to service, the No. 1 generator could not be repaired at Cartegena. Thus, in order to avoid further delays, the Vessel sailed to Salerno, Italy, where a portable generator was installed as a substitute for the No. 1 generator.

 II. Shipment of Citrus

 On November 27, 1992, the Vessel sailed from Morocco, carrying a cargo of clementines destined for the United States and Canada. The Vessel arrived in New Bedford, Massachusetts on December 7, 1992. Upon arrival in New Bedford, United States Department of Agriculture ("U.S.D.A.") inspectors denied entry of the United States' portion of the cargo, finding that the Vessel had failed to comply with U.S.D.A. "Cold Treatment" regulations requiring it to carry the cargo at or below designated temperatures for a prescribed number of consecutive days. *fn5" Accordingly, after discharging her Canadian-bound cargo, the Vessel shifted to the New Bedford anchorage to complete Cold Treatment of the United States cargo.

 III. Termination of the Charter

 On December 16, 1992, while still at anchor, the Vessel's three generators failed, causing a complete power outage of the ship, including a shutdown of the refrigeration plant (the "December 16th Blackout"). *fn6" Although sufficient power was ultimately restored to enable the cargo to complete the Cold Treatment procedures, the No. 3 generator remained out of service. The Vessel discharged the United States cargo on January 6, 1993.

 The Vessel was next scheduled to sail for Panama to load a cargo of bananas. Before departing New Bedford, however, crewmembers reported to GWF's agent that the Vessel was unseaworthy. Some crewmembers also wrote letters to the ship's Master indicating their refusal to sail and demanding a full survey of the Vessel's seaworthiness. As a result, the Vessel was placed off-hire.

 From January 7 through January 9, 1993, the Vessel was inspected by a class surveyor, members of the United States Coast Guard and several GWF representatives. Graham Anderson ("Anderson"), GWF's technical superintendent, found that "the vessel is not in a satisfactory condition for employment with Great White Fleet. Her seaworthiness is questionable and her ability to successfully carry a refrigerated cargo is doubtful to say the very least." See memorandum from Anderson to J. Parker of January 7, 1993, annexed to the Reisert Aff. as Exh. "26." In addition, Joseph H. Winer ("Winer"), GWF's cargo insurance underwriter, reported that "it is my firm opinion that the vessel in its present state is not at all suitable for reasonably reliable service in refrigerated trade." See telefacsimile from Joseph H. Winer to William E. O'Neil of 1/10/93, annexed to the Reisert Aff. as Exh. "4." Based on this report, ...


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