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NIPPON FIRE & MARINE INS. CO. v. M.V. TOURCOING

September 16, 1997

THE NIPPON FIRE & MARINE INSURANCE COMPANY, Plaintiff, against M.V. TOURCOING, WILHELMSEN LINES A.S. and MAHER TERMINALS, INC., Defendants.


The opinion of the court was delivered by: CEDARBAUM

 Cedarbaum, J.

 In this action, Nippon Fire & Marine Insurance Company seeks recovery of $ 1,186,467.87 that it paid to Komori America Corporation pursuant to a marine cargo insurance policy. The money was paid for damage to an offset printing press after the press had been shipped from Japan to the United States and while it was being unloaded from the vessel M.V. Tourcoing. Nippon sues Wilhelmsen Lines A.S., the owner and operator of M.V. Tourcoing, and Maher Terminals, Inc., which acted as stevedore for Wilhelmsen at the port of discharge. *fn1" The only issue now before the court is whether the $ 500 limitation of liability that is included in the bill of lading limits the liability of either Wilhelmsen or Maher or both. For the reasons that follow, Wilhelmsen's motion for partial summary judgment limiting its liability to $ 500 per package is granted but Maher's motion for partial summary judgment similarly limiting its liability is denied. Nippon's motion for summary judgment or, in the alternative, for partial summary judgment dismissing any limitation-of-liability defense, is denied. Nippon's motion pursuant to Fed. R. Civ. P. 37 to designate certain facts as true, to preclude defendants from introducing evidence on certain issues and to require defendants to pay Nippon's expenses is also denied.

 Undisputed Facts

 In December 1992, Komori entered into a contract with Wilhelmsen to ship an offset printing press from Japan to the United States. (Pl.'s 3(g) P 5; Defs.' counter-3(g) P 5.) The press was to be shipped disassembled in thirteen separate cases. (Defs.' 3(g) PP 7, 8; Pl.'s Resp. to Defs.' 3(g) PP 7, 8.) It is undisputed that each case constitutes a "package" within the meaning of the Carriage of Goods by Sea Act ("COGSA"). A bill of lading covering the thirteen cases was issued by Wilhelmsen on December 28, 1992. (Defs.' 3(g) P 6; Pl.'s Resp. to Defs.' 3(g) P 6.) Clause 11 of that bill of lading, entitled "Package Limitation," expressly limits the liability of Wilhelmsen, its servants and its subcontractors to $ 500 per package, unless the shipper declares the nature and value of the cargo and pays an additional charge. Although there is a box on the front of the bill of lading in which the shipper could have declared an excess value, it is undisputed that no value was declared. (Defs.' 3(g) P 17; Pl.'s Resp. to Defs.' 3(g) P 17.)

 On February 1, 1993, the Tourcoing, carrying the printing press, arrived at the port of discharge in New Jersey. (Defs.' 3(g) P 9; Pl.'s Resp. to Defs.' 3(g) P 9.) Maher, which was acting as stevedore, unloaded the press from the vessel. During the course of discharge but while the press was still on board the vessel, two of the cases were damaged. *fn2" (Defs.' 3(g) P 11; Pl.'s Resp. to Defs.' 3(g) P 11; Defs.' Br. at 3 n.2.) Nippon, as Komori's insurer, paid Komori 123,582,641 [yen] for the damage. (Pl.'s 3(g) P 14; Defs.' counter-3(g) P 14.) In this action, Nippon seeks to recover $ 1,186,467.87 from defendants. (Pl.'s 3(g) P 12; Defs.' counter-3(g) P 12.)

 Defendants admit that, subject to any package limitation or other defense, they are liable for the damage to the offset printing press. (Pl.'s 3(g) P 15; Defs.' counter-3(g) P 15.) Accordingly, the only issue is whether Wilhelmsen and/or Maher is entitled to the benefit of the $ 500 package limitation in the bill of lading.

 Discussion

 Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). To defeat a motion for summary judgment brought by the party that does not bear the burden of proof, the party with the burden of proof must make a showing sufficient to establish the existence of every element essential to that party's claim. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). In deciding whether a genuine issue of material fact exists, the court must "examine the evidence in the light most favorable to the party opposing the motion, and resolve ambiguities and draw reasonable inferences against the moving party." In re Chateaugay Corp., 10 F.3d 944, 957 (2d Cir. 1993) (citation omitted).

 1. The Fair Opportunity Doctrine

 Plaintiff argues that the bill of lading in this case does not give clear and unambiguous notice to the shipper of a limitation of liability. Accordingly, plaintiff argues, no limitation of liability is available. This argument is based on the judicially-created "fair opportunity doctrine." The doctrine, as enunciated by the Supreme Court in New York, New Haven & Hartford Railroad Co. v. Nothnagle, 346 U.S. 128, 135, 97 L. Ed. 1500, 73 S. Ct. 986 (1953), provides that "only by granting its customers a fair opportunity to choose between higher and lower liability by paying a correspondingly greater or lesser charge can a carrier lawfully limit recovery to an amount less than the actual loss sustained." If the carrier does not provide such a fair opportunity, it is not entitled to the benefit of any limitation of liability that might otherwise apply. General Electric Co. v. MV Nedlloyd, 817 F.2d 1022, 1028 (2d Cir. 1987), cert. denied, 484 U.S. 1011, 98 L. Ed. 2d 661, 108 S. Ct. 710 (1988).

 A carrier seeking to enforce a package limitation must first make a prima facie showing that notice of the limitation was given to the shipper, and that thus the shipper was given an opportunity to opt out of the limitation by declaring a higher value. See General Electric, 817 F.2d at 1029; Couthino, Caro and Co., Inc. v. M/V Sava, 849 F.2d 166, 171 (5th Cir. 1988). This prima facie showing can be made by pointing to the language contained in the bill of lading. General Electric, 817 F.2d at 1029. If the carrier succeeds in establishing its prima facie case, the burden shifts to the shipper to demonstrate that a fair opportunity did not exist. Id.

 The language of the bill of lading at issue in this case expressly provides that liability is limited to $ 500 per package. Clause 11 of the bill of lading, entitled "Package Limitation," states:

 
Neither the Carrier, its servants or subcontractors nor the vessel shall in any event be or become liable for any loss or damage to or in connection with the transportation of goods in an amount exceeding U.S. $ 500 per package, . . . unless the nature and value of such goods have been declared by the shipper before shipment and inserted in this bill ...

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