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EUROSTEEL CORPORATION v. M/V KOGGEGRACHT

United States District Court, Southern District of New York


April 9, 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: Denise Cote, United States District Judge

MEMORANDUM OPINION AND ORDER

An order of default was entered against C.V. Scheepvaartonderneming ("Scheep") in this action on June 17, 2002. On June 18, 2002, the case was referred to Magistrate Judge Maas for an inquest on damages. For the reasons that follow, Judge Maas' Report and Recommendation of January 20, 2003 as amended on February 3, 2003, is adopted (collectively, the "Report").

Background

The facts described in the Report and summarized here are drawn from the plaintiff's complaint and inquest papers and are taken as true on the defendant's default. Cotton v. Slone, F.3d 176, 181 (2d Cir. 1993). Scheep is engaged in the business of transporting goods by sea, and it owned, operated, managed, or otherwise controlled a vessel called the Koggegracht. Scheep was contracted by a shipper to transport aboard the Koggegracht two shipments of galvanized steel coils owned by Eurosteel Corporation ("Eurosteel"), from Piombino, Italy, to Camden, New Jersey, and Houston, Texas.

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. Upon arrival, a survey of the first shipment of cargo performed on behalf of Eurosteel by Trident Marine Surveyors revealed damage. The cargo was forwarded to the ultimate consignee, Roll Coater, Inc., in West Virginia. A second survey conducted at the premises of Roll Coater by Universal Marine Surveying Inc. on February 27, 2001, confirmed damage in the amount of $3,500.

After Camden, the Koggegracht continued on to Houston, Texas, where it arrived on or about September 1, 2000. Upon arrival, a survey performed on behalf of Eurosteel by Captain Trevor O'Brien & Associates, Inc. ("O'Brien") revealed some coils were damaged. The second shipment was then forwarded to the ultimate consignee, New Process Steel Corp. ("New Process"), where O'Brien conducted a second survey on July 16, 2001, which confirmed the damage. O'Brien concluded that the invoice value of the goods consigned to New Process was reduced by $30,551.92. New Process, however, deducted only $25,085.58 from the amount invoiced by the shipper.

Discussion

A reviewing court "may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate." 28 U.S.C. § 636(b)(1)(C). "To accept the report and recommendation of a magistrate, to which no timely objection has been made, a district court need only satisfy itself that there is no clear error on the face of the record." Nelson v. Smith, 618 F. Supp. 1186, 1189 (S.D.N.Y. 1985); see also Pizarro v. Bartlett, 776 F. Supp. 815, 817 (S.D.N.Y. 1991). No substantive objections have been offered to the Report.

This Court finds no clear error on the face of the record. The Report correctly concluded that Eurosteel had established a prima facie case for recovery under the Carriage of Goods by Sea Act, 46 U.S.C. § 1300 et seq., by demonstrating that clean bills of lading had been issued, that the damage to the steel coils was a condition that was externally observable when they were loaded on the Koggegracht, and that the steel coils were in a damaged condition at outturn. See Transatlantic Marine Claims Agency, Inc. v. M/V "OOCL Inspiration", 137 F.3d 94, 98 (2d Cir. 1998).

The Report did not err when it relied upon the invoice price and assessments of the surveyors to calculate the amount of damages. See GTS Indus. S.A. v. S/S Havtjeld, 887 F. Supp. 531, 538 (S.D.N.Y. 1994); Centennial Ins. Co. v. M/V Constellation Enter., 639 F. Supp. 1261, 1265 (S.D.N.Y. 1986). Eurosteel demonstrated that its first shipment had been reduced in value by $3,500 and that its second shipment had been reduced in value by $25,085.58, resulting in total damages to Eurosteel in the amount of $28,585.58.*fn1

The Report correctly concluded that the plaintiff is entitled to prejudgment interest given the absence of exceptional circumstances. Mitsui & Co., Ltd. v. American Export Lines, Inc., 636 F.2d 807, 823 (2d Cir. 1981). Magistrate Judge Maas appropriately exercised his discretion in determining the rate, nine percent per annum, and the date, August 25, 2000, from which the interest should be calculated, since this rate and date were based on accepted methods for making such determinations.

Finally, the Report did not err in denying Eurosteel attorney's fees in this admiralty suit, since Eurosteel had not alleged bad faith. New York Marine & Gen. Ins. Co. v. Tradeline (L.L.C.), 266 F.3d 112, 130 (2d Cir. 2001).

Conclusion

Finding no clear error, the Report is adopted. The Clerk of Court shall enter judgment for Eurosteel Corporation against the defendant C.V. Scheepvaartonderneming in the amount of $28,585.58 for damage to the goods and prejudgment interest from August 25, 2000, at a rate of nine percent. There being no record that defendant M/V Koggegracht was ever served, the complaint against it is dismissed. The Clerk of Court shall close the case.

SO ORDERED:


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