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VALERINA FASHIONS, INC. v. HELLMAN INTL. FORWARDER

September 7, 1995

VALERINA FASHIONS, INC., Plaintiff,
v.
HELLMAN INTERNATIONAL FORWARDERS, INC. and RELIABLE VAN & STORAGE COMPANY, INC., Defendants.



The opinion of the court was delivered by: DEBORAH A. BATTS

 DEBORAH A. BATTS, United States District Judge.

 This case is brought pursuant to the admiralty and maritime jurisdiction of this Court to recover for lost and damaged cargo shipped from Hong Kong to New York. Defendant Hellman International Forwarders, Inc. ("Hellman") moves for partial summary judgment on the issue of Plaintiff's damages pursuant to Fed R. Civ. P. 56(c). For the reasons set forth below, Defendant's motion is granted in part and denied in part.

 Background

 Plaintiff Valerina Fashions, Inc. ("Valerina") is a wholesaler of women's sportswear, and in particular women's jeans, all of which are marketed and sold under its own "Seruchi" trade name and label in the United States. (Pl.'s Mem. of Law at 3.) In or about January 1990, Valerina made arrangements with Hellman to ship an order of jeans from Hong Kong to New York. (Pl.'s Mem. of Law at 3.)

 The shipment was scheduled to arrive sometime in May 1990 for sale and distribution to retail stores for the "back to school" and Fall 1990 seasons. (Pl.'s Mem. of Law at 3.) The jeans comprising this shipment -- designated by style numbers 013, 1013, and 1007 -- were specifically manufactured for Valerina, and were characterized by their distinctive embroidery, pockets, and colors. Valerina was the only source of these jeans and did not market, sell, or distribute jeans under any other trade name. (Pl.'s Mem. of Law at 3.)

 A survey of the shipment on September 7, 1990 disclosed that 8 of the 327 cartons shipped were missing and that virtually all of the remaining cartons were ripped open, with approximately one-third of their contents removed. The missing jeans covered all sizes, patterns, and styles. (Pl.'s Mem. of Law at 5.) Following an investigation, the jeans were released and delivered to Valerina in January 1991, after the "back-to-school" and Fall 1990 seasons had passed. (Pl.'s Mem. of Law at 5.) Valerina then marketed and sold these jeans over the course of 1991 at prices on the average markedly lower than those received for their stylistic counterparts in 1990. (Pl.'s Mem. of Law at 5.)

 Valerina commenced this suit to recover damages in the amount of $ 198,000. Valerina includes in its calculation of damages the invoice value for the lost goods, lost profits on the lost goods, and lost profits as a result of the delay in delivery of the remaining merchandise. Without admitting liability, Hellman moves for an order granting partial summary judgment limiting Valerina's damages to the invoice value of the lost goods: $ 29,753.

 Discussion

 Summary judgment may be granted only when there is no genuine issue of material fact remaining for trial and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). As a general rule, all ambiguities and all inferences drawn from the underlying facts must be resolved in favor of the party contesting the motion, and all uncertainty as to the existence of a genuine issue for trial must be resolved against the moving party. LaFond v. General Physics Services Corp., 50 F.3d 165, 171 (2d Cir. 1995). "However, where the nonmoving party will bear the burden of proof at trial, Rule 56 permits the moving party to point to an absence of evidence to support an essential element of the nonmoving party's claim." Bay v. Times Mirror Magazines, Inc., 936 F.2d 112, 116 (2d Cir. 1991). As is often stated, "viewing the evidence produced in the light most favorable to the nonmovant, if a rational trier could not find for the nonmovant, then there is no genuine issue of material fact and entry of summary judgment is appropriate." Binder v. Long Island Lighting Co., 933 F.2d 187, 191 (2d Cir. 1991); see also Bay, 936 F.2d at 116.

 The Carriage of Goods by Sea Act ("COGSA"), 46 U.S.C. §§ 1300 et seq., governs the rights of the parties in the present litigation. With respect to the issue of damages, Section 1304(5) of COGSA provides that "in no event shall the carrier be liable for more than the amount of damage actually sustained." In Internatio, Inc. v. M.S. Taimyr, 602 F.2d 49 (2d Cir. 1979), the Second Circuit construed COGSA 1304(5) as being consistent "with the long-established principle of contract law stated by Mr. Justice Holmes in Chicago, Milwaukee & St. Paul Railway v. McCaull-Dinsmore Co., 253 U.S. 97, 100, 40 S. Ct. 504, 504-05, 64 L. Ed. 801 (1920): 'The rule of the common law is . . . an embodiment of the plain fact that the actual loss caused by breach of a contract is the loss of what the contractee would have had if the contract had been performed . . . .'" 602 F.2d at 50.

 In the context of COGSA, this translates into a measure of damages normally computed at "the difference between the fair market value of the goods at their destination in the condition in which they should have arrived and the fair market value of the goods in the condition in which they actually did arrive." Texport Oil Co. v. M/V Amolyntos, 11 F.3d 361, 365 (2d Cir. 1993); Pacol (Canada) Ltd. v. M/V Minerva, 523 F. Supp. 579, 581 (S.D.N.Y. 1981); see also St. Johns NF Shipping Corp. v. S.A. Companhia Geral, 263 U.S. 119, 125, 68 L. Ed. 201, 44 S. Ct. 30 (1923).

 "This is not a hard and fast rule. When circumstances suggest a more appropriate alternative, the fair market test may be superseded by another method of calculating damages." Texport Oil, 11 F.3d at 365; see also Pacol, 523 F. Supp. at 582. "'The assessment of damages in particular situations has called for the development of lesser rules, the use of common sense and the creation of exceptions, all to the end that the shipper whose property has been affected be made ...


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