Accordingly, unable to sell the zircon sand under its contracts, plaintiff was compelled to sell the sand for salvage. The sale of the salvaged zircon sand amounted to $ 15,355.
During his inspection of plaintiff s cargo, Hector Gonzalez took samples of the zircon sand. The samples, in which he observed rust particles, were delivered to plaintiff's counsel through the Ewig Company and subsequently sent to Dr. Rising at Umpire & Control Services. Dr. Rising's analysis of the samples found contamination of the sand with rust scale, rust dust, and rust scale coated with red primer paint (Exh. 70). During the return of the samples by Dr. Rising, one of the five samples was lost. No explanation was offered to account for the missing sample. Despite the loss of one sample, the court finds that the evidence sufficiently supports plaintiff's contention that the returned samples were, in fact, zircon sand taken from the Brownsville warehouse.
By written correspondence dated April 16, 1992, plaintiff notified defendant of the zircon sand contamination. The notification of defendant was addressed to plaintiff " C/O M.I.D.- Ship Marine Inc.," the broker used by plaintiff to arrange the transport of this cargo. Plaintiff had previously always communicated with ship owners through a broker and specifically, in this case, had only contacted defendant through M.I.D.- Ship Marine Inc.
CONCLUSIONS OF LAW7
This case involves claims by the owner of premium grade zircon sand against an ocean carrier arising from an alleged breach of contract of carriage. The matter, therefore, falls within the court's admiralty jurisdiction. Allied Chemical v. Companhia de Navegacao, 775 F.2d 476, 481 (2d Cir. 1985). cert. denied, 475 U.S. 1099, 89 L. Ed. 2d 903, 106 S. Ct. 1502 (1986). The private contract of carriage is the charter party which incorporates the United States Carriage of Goods by Sea Act ("COGSA"). 46 U.S.C. § 1300 et seq.; Associated Metals & Minerals Corp. v. S.S. Jasmine, 983 F.2d 410, 413 (2d Cir. 1993). Consequently, COGSA is the governing law in this matter.
Plaintiff insists that the defendants are liable for the loss of cargo under COGSA. In order for a party to enforce its rights under COGSA, "litigants must engage in the ping-pong game of burden shifting mandated by sections 1303 and 1304 of the Act." Tubacex Inc. v. M/V Risan, 45 F.3d 951, 954 (5th Cir. 1995) Initially, the burden falls on the plaintiff shipper, who must establish a prima facie case of loss. This burden is satisfied if the shipper can demonstrate delivery of the cargo in good condition to the carrier and either the arrival of less cargo than was loaded or delivery of the goods in damaged condition. See 46 U.S.C. §§ 1303(3) and 1304; see also, Thyssen, Inc. V. S/S Eurounity, 21 F.3d 533, 538 (2d Cir. 1994); New York Marine & Gen. v. S/S Ming Prosperity, 920 F. Supp. 416, 422 (S.D.N.Y. 1996). It is only after a plaintiff establishes a prima facie case, does the burden then shift, requiring the carrier to establish that any loss falls within one of COGSA's exceptions. Westway Coffee Corp. v. M.V. Netuno, 675 F.2d 30, 32 (2d Cir. 1982), Judy - Philippine Inc. v. S/S Verazano Bridge, 781 F. Supp. 253, 258 (S.D.N.Y. 1991).
As a threshold matter, the court must address the issue of notice. Defendant contends that the failure of plaintiff to give notice
until five months after the discharge of the sand defeats plaintiffs claim by operation of statute. Section 3(6) of the COGSA provides in relevant part:
Unless notice of loss or damage and the general nature of such loss or damage be given in writing to the carrier or his agent at the port of discharge before or at the time of the removal of the goods into the custody of the person entitled to delivery thereof under the contract of carriage, such removal shall be prima facie evidence of the delivery by the carrier of the goods as described in the bill of lading. If the loss or damage is not apparent the notice must be given within three days of the delivery.
46 U.S.C. § 1303(b). In this case the failure of the plaintiff to give notice to defendants within three days creates a presumption in favor of defendants that the cargo was delivered in good condition. Absent any contrary evidence, the presumption of the notice provision would defeat plaintiff's claim altogether. See e.g., M.W Zack Metal Co. v. the S.S. Birmingham City, 291 F.2d 451, 453 (2d Cir. 1961); Leather's Best Intern., Inc. v. MV Lloyd Sergipe, 760 F. Supp. 301, 309-10 (S.D.N.Y. 1991). Notwithstanding the foregoing, "any such presumption of good delivery falls, however, once the plaintiff adduces any credible evidence tending to show that the cargo was damaged prior to delivery." Ferrostaal Corp. v. M. V Singa Wilguard, 838 F. Supp. 757, 767 (S.D.N.Y. 1993); see also, Pacific Employers Ins. Co. v. M/V Gloria, 767 F.2d 229, 238 (5th Cir. 1985); C. Itoh & Co. v. Hellenic Lines, Ltd., 470 F. Supp. 594, 597 (S.D.N.Y. 1979). As will be discussed more rally below, the record does, indeed, show that plaintiff has produced evidence that the rust contamination took place while the zircon sand was in defendants' custody. The plaintiff has, therefore, put forth credible evidence which rebuts the presumption afforded to defendant as a result of receiving late notice. Accordingly, having found that the late notice does not bar plaintiff's case, the court will address the substantive merit of plaintiffs claim.
Merely overcoming the presumption of good delivery does not mean that plaintiff prevails on the ultimate issue. As previously stated, plaintiff is required to establish that it delivered the cargo to defendant in good condition but at outturn the cargo was damaged. Plaintiff argues that defendant received the zircon sand in good condition but delivered the sand in damaged condition due to contamination by rust. To establish a prima facie case, the shipper must adduce evidence that, standing alone, establishes both prongs of the claim. R.B.K Argentina v. M/V Dr. Juan B. Alberdi, 935 F. Supp. 358, 368 (S.D.N.Y. 1996). In this case, the court finds that the plaintiff has established a prima facie case against the defendants.
The first part of the test requires that plaintiff establish that it delivered the cargo in good condition. Here, the evidence clearly illustrates that the sand was not contaminated by rust when it was received by defendant. Initially, there is the unrebutted testimony of plaintiffs Australian witnesses that all of the sand loaded into No. 6 Hold was in good condition. The record demonstrates the meticulous processing to which the sand was subjected. Indeed, it appears that every precaution was taken by the CRL mill to ensure that its sand was not infiltrated with impurities. Moreover, there is the laboratory evidence supporting plaintiff's claim that it delivered the sand in good condition. Gregory Dunn testified that random samples of the sand were taken as it was moved to the ship and these samples were analyzed at the ALS laboratory and no rust contamination was found.
Defendant concludes that because the samples for the first 700 metric tons of sand loaded into the No. 6 Hold were discarded, the is no reliable measure of the condition of the sand that was ultimately delivered to Brownsville. The court does not agree with defendant's conclusion. Initially, the Australian witnesses testified that the entire shipment of sand was in good order. Moreover, even assuming a defect in the sampling of the sand ultimately bound for Texas, defendants' argument ignores the fact that before any sand was loaded the No. 6 Hold, more than 5000 tons of rutile sand was loaded into No. 3 hold, using the same conveyorbelt. Yet, there was no rust contamination of the rutile sand. Surely, if the conveyor belt was responsible for contaminating the zircon sand, it would have had the same effect on the previous load of sand. Finally, there was abundant evidence that many appropriate precautions were taken to ensure that the loading conveyors were maintained rust-free and that contaminants from prior cargo. As Judge Friendly aptly noted, one method of demonstrating good condition of goods at delivery "would be to show that the goods were prepared and packaged in accordance with proper procedures and were carried to the ship under conditions that should have prevented any damage to the contents en route." Caemint Food v. Lloyd Brasileiro, 647 F.2d 347, 354 n. 6 (2d Cir. 1981). Accordingly, even if the court did not consider the chemical analysis of the samples, plaintiff has clearly sustained its burden by establishing the careful procedures employed in loading the sand and the demonstrating that none of the cargo, other than the zircon sand unloaded in Texas, suffered any rust contamination. Therefore, the plaintiff has established the first prong of its prima facie case.
The court likewise finds that plaintiff has sufficiently sustained it burden of demonstrating that the cargo was damaged at outturn. There is no question that defendant was aware of the refined nature of plaintiff's sand. Defendant's own "standard requirements" regarding zircon sand demonstrate its knowledge of the importance of thorough cleaning. The requirements state:
ALL loose rust scale must be removed from the hold prior to loading, with particular attention being given to the underside of the hatch covers, the coaming faces, the underdeck spaces at both ends of the hold, the undersides of the topside tanks, the inner surfaces of the ships shell plating, the "hidden" flanges of the frames and the upper and lower frame bracket, the fore and aft'r bulkheads including ladder flanges and ledges, ventilator trunkings ledges and grills and the tank tops.