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AMER. HOME ASS. CO. v. HAPAG LLOYD CONT. LINIE

July 19, 2004.

AMERICAN HOME ASSURANCE COMPANY A/S/O CATERPILLAR, INC., Plaintiff,
v.
HAPAG LLOYD CONTAINER LINIE, GMBH; DANZAS, INC.; BURLINGTON NORTHERN AND SANTE FE RAILWAY COMPANY AND MATSON INTERMODAL SYSTEM, Defendants.



The opinion of the court was delivered by: SHIRA SCHEINDLIN, District Judge

OPINION AND ORDER

I. INTRODUCTION

  American Home Assurance Company ("American Home"), insurer for Caterpillar, Inc. ("Caterpillar"), filed this breach of contract, bailment, and tort action against Danzas AEI ("Danzas"), Hapag Lloyd Container Linie, GmbH ("Hapag Lloyd"), Matson Intermodal Systems ("Matson"), and Burlington Northern and Sante Fe Railway Company ("BNSF") on July 23, 2003. American Home seeks to recover for damage to Caterpillar's goods as a result of a train derailment that occurred while the goods were in transit between Illinois and Singapore.

  American Home now moves for partial summary judgment, seeking to strike BNSF's limitation of liability defense. American Home submits that no factual dispute exists and that it is entitled to judgment against BNSF as a matter of law because BNSF's agreement with Matson, containing a limitation of liability clause, does not bind Caterpillar. BNSF opposes American Home's motion and cross-moves for partial summary judgment on its right to limit liability. In support of its cross-motion, BNSF contends that no factual dispute exists and that BNSF's agreement with Matson validly limits BNSF's liability to American Home to $500.00 per package of cargo.

  II. FACTS

  A. The Claim

  American Home seeks $234,536.00 for the total loss, during shipment, of cargo owned by Caterpillar. The cargo, two engines and spare parts, originated in Morton, Illinois, and was damaged while en route to Singapore. The damage occurred when the BNSF train carrying the cargo derailed between Chicago and Long Beach, California.*fn1 Long Beach was the port of departure for the vessel scheduled to carry the goods to Singapore.*fn2

  B. The Parties

  American Home is a U.S. corporation with an office in New York City. Hapag Lloyd is a foreign corporation with an office in Piscataway, New Jersey. Danzas is a foreign corporation with an office in Newark, New Jersey. Matson is a U.S. corporation with an office in San Francisco, California. BNSF is a U.S. corporation with an office in Topeka, Kansas.*fn3

  C. The Contractual Relationship

  Caterpillar booked the entire Illinois-Singapore shipment of the two engines and spare parts with defendant Danzas.*fn4 Danzas then contracted with Hapag Lloyd, with whom Caterpillar had a service contract, to transport the cargo from Chicago to Singapore, via California. Hapag Lloyd, in turn, hired Matson to arrange the Chicago-California leg.*fn5 Matson then employed BNSF for the rail transportation between Chicago and Los Angeles.*fn6

  D. The Contracts

  The agreement between BNSF and Matson contains a provision, Item 62(3), which states that "the liability of BNSF will be no greater than" Hapag Lloyd's liability for shipments that "move[] under the terms of a through intermodal ocean bill of lading."*fn7 A separate agreement, the Express Cargo Bill, contains provisions concerning Hapag Lloyd's liability.*fn8 Clause 7(2) of the Express Cargo Bill limits Hapag Lloyd's liability to $500.00 per package "where the Carriage is to or from a port or final destination in the ...


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