The opinion of the court was delivered by: Hellerstein, District Judge.
MEMORANDUM AND ORDER GRANTING SUMMARY JUDGMENT
Pursuant to Rule 56 of the Federal Rules of Civil Procedure,
Plaintiff International Multifoods Corporation ("Multifoods")
moves for summary judgment against Defendant Commercial Union
Insurance Company ("Commercial Union").
The issue is whether or not a loss suffered by Multifoods, as an
accredited indorsee of an "All Risk" policy written by
Commercial Union, was covered by the policy. I hold that the
loss was a covered loss, that the policy exclusions do not bar
coverage, and that there are no triable issues of fact.
Accordingly, I grant Multifoods' motion for summary judgment,
and instruct the Clerk to enter judgment in favor of Multifoods
and against Commercial Union in the amount of $6,662,557.43,
plus interest at the rate of 9% per annum from March 25, 1998 to
the date of Judgment.
In September, 1997, Plaintiff Multifoods, a Delaware
corporation principally located in Minnesota, shipped a cargo of
frozen meat and foodstuff, from Pascagoula, Mississippi to St.
Petersburg, Russia aboard the M/V Ozark, at the order and
pursuant to a contract with ASCOP Corporation ("ASCOP"), a New
York corporation. Upon satisfactory discharge to the consignee
in St. Petersburg, ASCOP was to pay Multifoods $6,056,870.39,
the balance remaining after a down payment of $465,802.21.
The ship arrived in St. Petersburg on September 14, 1997, but
was unable to discharge Multifoods' cargo. Russian police
authorities arrested the ship and its cargo, over Multifoods'
objection and incident to a criminal investigation involving a
different shipper. Multifoods was not able to recover the cargo
or salvage, and made claim against Commercial Union under the
policy obtained by ASCOP and indorsed to Multifoods.
A. Commercial Union's All-Risk Policy
The All-Risk Policy, procured by ASCOP from Commercial Union
and certified by Commercial Union to Multifoods, comprised 71
pages. Its insuring clauses, exceptions and exclusions were
repetitive and inconsistent. The cross-referencing of clauses,
from and to indorsements, special indorsements, specimen clauses
and appendices increased the difficulty.
The insurance covered Multifoods' shipment from "U.S. Gulf or
East Coast Port . . . to safe release of tackle at . . . St.
Petersburg Russia. . . ." An endorsement extended the coverage
to "further transit or period of storage whether prior to,
intervening or subsequent thereto," and including "risks whilst
in the care, custody or control of . . . warehousemen or others
. . . whether prior to loading and/or after discharge from
overseas vessel. . . ."
This insurance covers the subject matter
insured hereby during the whole of the period
covered by the duration provisions of the insuring
clauses applicable and any further transit or
period of storage whether prior to, intervening or
subsequent thereto for which provision is made
under this contract and irrespective of whether the
interest of the Assured is as principals, bailees
or agents in any other capacity.
Including risks whilst in the care, custody or
control of freight forwarders, consolidators,
truckers, warehousemen or others for the purpose of
storage, consolidation, decontainerization,
distribution redistribution [sic], packing,
repacking or otherwise whether prior to loading
and/or after discharge from overseas vessel or at
any transshipment point. Coverage after discharge
from ocean vessel shall terminate on completion of
discharge overside from the oversea vessel of the
goods insured under this contract to any one port
at that port.
Insurance hereunder remains in force during delay
beyond the control of the Assured, any deviation,
forced discharge, reshipment or transshipment whether
beyond the control of the Assured or otherwise and
during any variation of the adventure arising from
the exercise of a liberty granted to shipowners or
charterers under the contract of the affreightment.
Where after the attachment of this insurance, the
destination is changed by the Assured insurance
hereunder shall continue in accordance with the terms
of this contract until delivery to final destination
as eventually established.
If the assured or consignee refused or was unable to accept
delivery, coverage under the Policy continued in effect during
delay or return, until "otherwise disposed of."
In the event of refusal or inability of the Assured
or other consignee to accept delivery of the subject
matter insured hereunder this contract is extended to
cover such goods during delay and/or return and/or
otherwise disposed of subject to an additional
premium if required. . . .
Further, by an indorsement covering "inland transit", the
coverage extended for the property insured "until delivered to
the warehouse or store at destination."
Thus, the coverage insured Multifoods against risk of loss to
its cargo, not only during the ocean voyage, but continued until
delivery at final destination, including delays, deviations and
In case of covered loss, the insured goods were to be valued
at "cost and freight plus 10% advance."
The coverage was made subject to conditions, those
specifically incorporated from a set of specimen clauses in an
annex, "[London] Institute Frozen Meat Clauses (A) — 24 Hours
Breakdown Cl. 324 (1.1.86)." "All risks of loss of or damage to
the subject matter insured," were to be covered, subject only to
specific exceptions, those specifically excluded ...