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R.B.K. ARGENTINA S.A. v. M/V DR. JUAN B. ALBERDI

July 23, 1996

R.B.K. ARGENTINA S.A., Plaintiff,
v.
M/V DR. JUAN B. ALBERDI, her engines, etc., in rem, EMPRESA LINEAS MARITIMAS ARGENTINA S.A., (E.L.M.A.), CHRISTIAN F. AHRENKIEL G.M.B.H. & CO., AQUITANIA, BETELILIGUNGS GESELLSCHAFT NAVI-FONDS Nr. 25 M.B.H. & CO. KG and UNIVERSAL MARITIME SERVICE CORPORATION, in personam, Defendants.



The opinion of the court was delivered by: NEWMAN

 BERNARD NEWMAN, Senior Judge: *fn1"

 R.B.K. Argentina S.A ("plaintiff") brings this action grounded in Admiralty against Empresa Lineas Maritimas Argentinas S.A. ("ELMA") and Universal Maritime Service Corporation ("Universal"). Plaintiff seeks money damages of $ 311,733.21 as compensation for losses sustained respecting a shipment of sport shoes. The shoes were received by ELMA in Boston, transported by truck to New York, where they were stored by Universal, and thereafter loaded by ELMA on board the M/V Dr. Juan B. Alberdi for transport to Buenos Aires, for pick-up by plaintiff. After the shipment arrived in Argentina, plaintiff alleges that a large amount of the shoes were discovered to be missing. Both defendants, ELMA and Universal, deny any liability for the lost shoes. This matter arises under the court's jurisdiction, pursuant to 28 U.S.C. § 1333.

 The case was tried to the court in a five day bench trial. In conformity with F.R.C.P. Rule 52(a), the following constitutes the court's findings of fact and conclusions of law.

 THE RECORD

 Plaintiff presented three witnesses: Alejandro Guerrico, a customhouse broker for a Customs Dispatch Company in Argentina; Steven Stanford, operations manager for Kellaway Transportation Inc.; and David Sinclair, President of Theodore D. Helprin, Inc., a cargo surveying company. ELMA presented three witnesses: Carlos Lesmi, an expert in Argentine law; Jose Gussoni, a customs agent and lawyer in Argentina; and Captain Ariel G. Canzani, the United States Supervisor for ELMA. Universal presented one witness: Ray Richards, the cargo claims supervisor for Universal Maritime. Pursuant to agreement by counsel and F.R.C.P. Rule 32(a)(3)(E), the depositions of Jose Diaz, a customs verifier for Argentine Customs; Frederick D. Carter Jr., dispatcher for Ideal Transportation; Philip A. Puopolo, a truck driver; Marcelo Fernando Scarone, the General Manager of R.B.K. Argentina; and Edward James St. John, a driver for Ideal, were admitted into evidence. The parties moved 113 exhibits into evidence.

 CONTENTIONS OF THE PARTIES

 Plaintiff contends that on August 28, 1992 a container of 736 cartons of sport shoes were delivered to ELMA in Massachusetts. At that time a seal, which had been previously placed on the container by plaintiff, was intact. After receiving the container, ELMA transported it by truck to a New York shipping terminal run by Universal. While at Universal's terminal, the container and its contents were determined to weigh approximately 17,000 pounds. After being stored in Universal's warehouse for several days, the container was then loaded aboard the ship, M/V Dr. Juan Alberdi, and was transported to Buenos Aires, Argentina.

 In advancing its argument as to the applicable law governing this matter, plaintiff states that this case falls under the United States Carriage of Goods by Sea Act, 46 U.S.C. § 1300 et seq. ("COGSA"). COGSA provides that after the plaintiff establishes a prima facie case against the defendant carrier by proving receipt of goods by the defendant in good order, and demonstrating that upon their outturn the goods were damaged, the burden of proof then shifts to the defendant. Consequently, argues plaintiff, since it has made a prima facie showing that it delivered the shoes to ELMA in good order and there were cartons missing when ELMA returned the container to plaintiff, ELMA and Universal bear the burden of demonstrating that they did not cause the loss.

 Therefore, plaintiff insists, since ELMA and Universal are unable to explain the loss of shoes, they are liable for the lost merchandise. Plaintiff also contends that its damages are the fair market value of the shoes, $ 312,186.89. Moreover, plaintiff seeks recovery of $ 10,875 paid for additional security, upon discovery of the missing cargo. Finally, plaintiff asserts that it is entitled to $ 7,020 it paid in freight and insurance.

 ELMA and Universal dispute that COGSA is the applicable law governing this case. ELMA suggests that the law of Argentina applies after the cargo was discharged. Moreover, ELMA argues that since plaintiff did not comply with Argentine legal requirements, it cannot now recover. Finally, ELMA maintains that even under COGSA, plaintiff has failed to establish a prima facie case. With respect to any claims plaintiff has against Universal, since Universal characterizes this action as one against a stevedore for negligent loss of cargo, it maintains that such a claim is not within federal maritime jurisdiction but is a state claim governed by New York State bailment law.

 ELMA argues that plaintiff has failed to submit any credible evidence to demonstrate that ELMA was at fault for the shortage. In advancing its claim, ELMA points out that Guerrico, plaintiff's only fact witness regarding the loss, admitted to lying in his deposition by stating that all of the seals were intact when the container was delivered to plaintiff in Argentina, that there were no independent custom brokers present when the cargo was being counted after delivery in Argentina, that the container was stored in an inaccessible position on the ship while being transported and that there was no record of notice given to ELMA or even plaintiff with respect to the loss until several days after Guerrico discovered the loss. Continuing, ELMA points out that there was at least 45 minutes during which the plaintiff had possession of the container and did not submit any evidence regarding its status during that time period. Consequently, ELMA concludes that plaintiff has failed to eliminate the possibility that the loss occurred while in the plaintiff's possession or demonstrate that ELMA was in any way responsible for the cargo shortage.

 Universal argues that as a bailor, it need not establish that it was free from negligence. Rather, Universal insists that it is plaintiff who bears the burden to establish that there was negligent conduct on the part of Universal which contributed to the loss of the shoes. Universal states that there is not a shred of evidence demonstrating that any loss of plaintiff's cargo occurred while the container was in Universal's care. Accordingly, Universal maintains that plaintiff has failed to establish a valid claim. Alternatively, Universal argues that even if the court were to find that plaintiff had established a prima facie case against it, plaintiff's recovery is limited to damages as provided by COGSA. By virtue of a clause in the contract of carriage between ELMA and plaintiff which extends COGSA's liability provision to ELMA's stevedore, Universal can assert rights under COGSA regarding liability against plaintiff.

 Lastly, Universal contends that ELMA cannot maintain a valid cross-claim for indemnification. Universal advances two arguments in support of its position. First, the contract between Universal and ELMA requires that Universal receive notice of any claim brought against Universal within one year of the time in which Universal surrendered the shipment to ELMA. In this case, since it is undisputed that ELMA regained control of the cargo from Universal on September 5, 1992, ELMA's failure to notify Universal prior to September 5, 1993 of the claim, renders any attempt to force indemnity from Universal, time barred. Secondly, as previously noted, Universal maintains that since there is no evidence to establish that Universal's negligence contributed to the loss, ELMA cannot establish a valid claim for indemnity against Universal.

 FINDINGS OF FACT

 Plaintiff is a distributor of sport shoes. Defendant ELMA, the owner of the M/V Dr. Juan Alberdi, was at all pertinent times engaged in the business of common carrier of merchandise by water for hire. Defendant Universal in September 1992 operated Red Hook Terminal in Brooklyn, N.Y. and was engaged in the business of stevedoring on behalf of various ocean carriers including co-defendant ELMA.

 In June 1992, plaintiff ordered certain styles of sneakers from Reebok International, LTD for delivery to Buenos Aires, Argentina. Thereupon, plaintiff entered into a charter with ELMA to transport the shoes from Massachusetts to Buenos Aires. On August 26, 1992 at the Kellaway Warehouse in Brockton Massachusetts, 736 cartons of sport shoes were loaded into a container bearing the identification number TRIU 4246320 ("the container"). The loading of the container was supervised by Steven Stanford, manager of Kellaway Warehouse. Upon completion of the loading, a seal bearing number 024734 was placed upon the container. Kellaway did not compile a packing list with respect to the container's cargo, nor was the weight of the shipment recorded. Nevertheless, Sanford represented to the court that the cargo had a weight of 16,890 pounds. On August 28, 1992 the container was delivered to ELMA at the J.F. Moran Terminal at Charleston, Massachusetts. It is undisputed that seal number 024734 was intact when ELMA received the container. ELMA transported the container by truck from Charleston, Massachusetts to Red Hook terminal located in Brooklyn, New York. At that point, custody of the cargo was assumed by Universal.

 After the container was received by Universal at Red Hook, the container, its contents, the chassis and the tractor were weighed and found to have a total weight of 49,880 pounds. At the time the container was delivered to Universal, an ELMA seal bearing the number 000317 was affixed to the container. ELMA's driver, Phillip Puopolo, verified the secure placement of ELMA's seal. The container was placed in "area N" of the Red Hook facility, where it remained until September 5, 1992 when it was loaded aboard the ship M/V Dr. Juan Alberdi. There is no dispute that both seals were intact when Universal returned the container to the custody of ELMA aboard the vessel. At that time, ELMA issued an "on board" bill of lading covering the transportation of the container to Buenos Aires (Exh. 50). The stated weight of the cargo as documented by the bill of lading was 16,890 pounds.

 Having been loaded aboard the ship, the container was stored in Cargo Bay 17, in the fifth tier from the bottom of the hold. In this position the container was approximately 32-40 feet above the ship's deck. Before arriving in Argentina, the vessel made stops in Savanna, Miami and Santos. Since all of the cargo that was stored in Bay 17 was bound for Buenos Aires, none of the containers were disturbed prior to ...


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