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EUROSTEEL CORPORATION v. M/V KOGGEGRACHT

January 20, 2003

EUROSTEEL CORPORATION, PLAINTIFF
v.
M/V KOGGEGRACHT, HER ENGINES, BOILERS, ETC., AND C.V. SCHEEPVAARTONDERNEMING, DEFENDANTS.



The opinion of the court was delivered by: Frank Maas, United States Magistrate Judge.

REPORT AND RECOMMENDATION TO THE HONORABLE DENISE L. COTE

I. Introduction

Plaintiff Eurosteel Corporation ("Eurosteel") brings this action against defendants M/V Koggegracht ("Koggegracht") and C.V. Scheepvaartonderneming ("C.V.") to recover damages arising out of a shipment of goods. After the defendants failed to answer the complaint, Your Honor entered a default judgment and referred the matter to me for an inquest. (Docket Nos. 15-16). By order dated August 1, 2002, I directed Eurosteel to serve papers setting forth its dam ages by September 3, 2002, with the defendants to respond by September 17, 2002. (Docket No. 17). Although Eurosteel's papers were timely filed, neither defendant filed any opposition papers.

As set forth below, I recommend that Eurosteel be awarded damages against the defendants in the amount of $33,224.48, consisting of $28,585.58 for damage to the goods and prejudgment interest in the amount of $4,638.90.

II. Facts

In light of the defendants' default, Eurosteel's well-pleaded allegations concerning issues other than damages must be accepted as true. See Cotton v. Slone, 4 F.3d 176, 181 (2d Cir. 1993); Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992); Time Warner Cable of New York City v. Barnes, 13 F. Supp.2d 543, 547 (S.D.N.Y. 1998); Cablevision Sys. New York City Corp. v. Lokshin, 980 F. Supp. 107, 111 (E.D.N.Y. 1997).

Additionally, although a plaintiff seeking to recover damages against a defaulting defendant must prove its claim through the submission of evidence, the Court need not hold a hearing as long as it has (i) determined the proper rule for calculating damages on the claim, see Credit Lyonnais Secs. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999), and (ii) the plaintiff's evidence establishes, with reasonable certainty, the basis for the damages specified in the default judgment. See Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir. 1997); Fustok v. ContiCommodity Servs., Inc., 873 F.2d 38, 40 (2d Cir. 1989); see also Tamarin v. Adam Caterers, Inc., 13 F.3d 51, 53-54 (2d Cir. 1993) (inquest on damages without hearing improper where based upon "single affidavit only partially based upon real numbers").

In this case, on the basis of the complaint and Eurosteel's inquest papers, I find that the facts are as follows:

Eurosteel is a corporation organized and existing under the laws of the State of New York. (Compl. Sched. A). C.V. is an entity organized and existing under foreign law, with its principal place of business in the Netherlands. (Id.). C.V. is engaged in the business of transporting goods by sea, and, at all times, "owned, operated, managed, chartered and/or otherwise controlled" the Koggegracht. (Compl. ¶¶ 3-4). C.V. was contracted by a shipper to transport two shipments of galvanized steel coils owned by Eurosteel, from Piombino, Italy, to Camden, New Jersey, and Houston, Texas, aboard the Koggegracht. (Compl. Scheds. B & C; Declaration of George F. Bradford, dated August 29, 2002 ("Bradford Decl."), ¶ 2 & Ex. A).

The Koggegracht left Italy on or about July 20, 2000, with the shipment of coils in good order and condition, and arrived in Camden, New Jersey, on or about August 17, 2000. (Compl. ¶ 5 & Sched. B; Bradford Decl. ¶¶ 2-3 & Ex. A). Upon arrival, a survey of the first shipment of cargo performed on behalf of Eurosteel by Trident Marine Surveyors revealed wrapper damage and "out of round" distortion of the coils. (Bradford Decl. ¶¶ 4-5 & Ex. B at 7-8). The cargo then was forwarded to the ultimate consignee, Roll Coater, Inc., in West Virginia. (Id. ¶ 6). A second survey conducted at the premises of Roll Coater by Universal Marine Surveying Inc. on February 27, 2001, confirmed the "out of round" condition of the coils. (Id. ¶ 8 & Ex. C). The surveyor determined that as a result of such damage, the invoice value of the goods was reduced by $3,500. (Id. ¶ 11 & Ex. C at 3).

After Camden, the Koggegracht continued on to Houston, Texas, where it arrived on or about September 1, 2000. (Id. ¶ 12; Compl. Sched. C). Upon arrival, a survey performed on behalf of Eurosteel by Capt. Trevor O'Brien & Associates, Inc. ("O'Brien") revealed "[s]ome coils outturned with skids broken, packaging distorted, bands broken or coils ovalized and/or dented." (Bradford Decl. ¶ 13 & Ex. E at 6). The second shipment of cargo then was forwarded to the ultimate consignee, New Process Steel Corp. ("New Process"), w here O'Brien conducted a second survey on July 16, 2001. (Id. ¶¶ 14-15). This survey confirmed the earlier findings and noted that "[t]he damages seen were indicative of previous rough and improper handling," which "likely occurred during transportation, prior to delivery to New Process. . . ." (Id., Ex. F at 6). The surveyor concluded that the invoice value of the goods consigned to New Process was reduced by $30,551.92. (Id. ¶¶ 17-19 & Ex. F at 11). It appears, however, that New Process deducted only $25,085.58 from the amount invoiced by the shipper. (Id. ¶ 19 & Ex. H).

III. Discussion

A. Damaged Coils

To establish a prima facie case for recovery under the Carriage of Goods by Sea Act, 46 U.S.C. app. § 1300 et seq., a plaintiff-consignee must demonstrate (1) delivery of the goods to the carrier in good condition and (2) outturn by the carrier in damaged condition. Transatlantic Marine Claims Agency, Inc. v. M/V OOCL Inspiration, 137 F.3d 94, 98 (2d Cir. 1998); Bally, Inc. v. M.V. Zim America, 22 F.3d 65, 69 (2d Cir. 1994). Generally, "the issuance of a clean bill of lading creates a presumption of delivery in good condition favorable to the plaintiff." Transatlantic, 137 F.3d at 98. A clean bill of lading, however, does not constitute prima facie evidence of the condition of the goods if the damage or loss relates to concealed, internal conditions not ...


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