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ALPINA INS. CO. LTD. v. TRANS AMERICAN TRUCKING SERVICE

July 28, 2004.

ALPINA INSURANCE COMPANY, LTD. ZURICH, AON JAUCH & HUBENER GMBH, TRANSPAC CONTAINER SYSTEM LTD. d/b/a BLUE ANCHOR LINE and KUEHNE & NAGEL (AG & CO.), Plaintiffs,
v.
TRANS AMERICAN TRUCKING SERVICE, INC., TRANS AMERICAN BROKERAGE SERVICE, INC. and UNITED EXPRESS SERVICE, INC. d/b/a UES TRANSPORT, Defendants.



The opinion of the court was delivered by: WILLIAM PAULEY, District Judge

MEMORANDUM and ORDER

Plaintiffs Alpina Insurance Company, Ltd. Zurich ("Alpina"), AON Jauch & Hubener GmbH ("AON"), Transpac Container System Ltd. d/b/a Blue Anchor Line ("Blue Anchor") and Kuhne & Nagel (AG & Co.) ("K&N") (collectively, "plaintiffs") bring this breach of contract and negligence action to recover $385,000 in damages from defendants Trans American Trucking Service, Inc., Trans American Brokerage Service, Inc. (collectively, "Trans American") and United Express Service, Inc. d/b/a/ UES Transport ("UES") (collectively, "defendants"). Alpina is an insurer of Blue Anchor and K&N, and AON is Alpina's agent in connection with its insurance for Blue Anchor and K&N. (Amended Complaint, dated Sept. 30, 2003 ("Am. Compl.") ¶¶ 4-5.) Plaintiffs seek to recover funds Alpina paid in settlement in Germany to non-party Gerling-Konzern Allgemeine Versicherungs-AG ("Gerling"), the insurer of non-party MAN Roland/DE (the "German Shipper"), for printing equipment damaged in New Jersey en route from Germany to Nebraska. (Am. Compl. ¶¶ 10, 20-22.) Presently before this Court are: (1) Trans American's "motion to dismiss" the complaint pursuant to Fed.R.Civ.P. Rules 12(b) and 56; (2) UES's motion to dismiss pursuant to Fed.R.Civ.P. Rule 12(b)(6), and (3) UES's motion for partial summary judgment pursuant to Fed.R.Civ.P. Rule 56, limiting its liability to $500 per package. For the reasons stated below, defendants' motions to dismiss are granted, and UES's motion for partial summary judgment is denied as moot.

BACKGROUND

  This action concerns printing equipment damaged in an accident during transport from Bremerhaven, Germany to Omaha, Nebraska. In February 2001, the German Shipper hired Blue Anchor to transport a printing press by ship from Bremerhaven to New York, and then by truck to Omaha. (Am. Compl. ¶ 10.) Through its agent K&N, Blue Anchor issued a bill of lading ("Bill of Lading") to the German Shipper to transport the equipment. (Am. Compl. ¶¶ 10-11.) On February 13, 2001, the printing equipment was loaded aboard the MV Atlantic Carrier in Germany, and on February 27, 2001, the equipment arrived at the port of discharge in New York City. (Am. Compl. ¶¶ 12-13.) In March 2001, K&N contracted with Trans American to transport the printing equipment from New York to Nebraska, and Trans American subcontracted the transport to UES, a common carrier. (Am. Compl. ¶¶ 14-15.) On March 5, 2001, the printing equipment was severely damaged after UES's truck jackknifed into the median on I-80 West in New Jersey. (Am. Compl. ¶¶ 18-19.)

  After settling the loss the German Shipper's insurer, Gerling asserted a claim for damage against K&N under the Bill of Lading. (Plaintiffs' Supplemental Memorandum, dated January 27, 2004 ("Pl. Supp. Mem."), Ex. A: Declaration of Roland Doerre, dated January 20, 2004 ("Doerre Decl.") at ¶ 3.)*fn1 On the advice of its German counsel, Alpina paid Gerling 335,000 Euros (approximately $385,000) to settle the claim. (Am. Compl. ¶¶ 1, 21; Doerre Decl. at ¶ 9.) Plaintiffs argue that as a result of that payment, they are subrogated to the rights of the German Shipper in connection with the printing equipment.

  The Bill of Lading contains a nine-month statute of limitations clause, which states: "The Carrier shall be discharged of all liability under this Document unless suit is brought within nine months after the delivery of the Goods, or the date when the Goods should have been delivered unless International Conventions or statutory regulations compulsorily applicable in the individual case are stipulating a longer term of prescription." (Bill of Lading ¶ 3.)

  Additionally, the Bill of Lading contains a "U.S. Clause" which states that the Carriage of Goods by Sea Act ("COGSA"), 46 App. U.S.C.A. § 1300, et seq., is applicable where the goods are shipped to a United States port, and continues to be applicable while the goods are in the carrier's custody. (Bill of Lading ¶ 28.1.) The U.S. Clause expressly adopts Section 1304(5) of COGSA limiting the Carrier's and/or the vessel's liability to $500 unless the nature and value of goods are declared. (Bill of Lading ¶ 28.1.) The Bill of Lading also states that if any part of the Bill of Lading is deemed unenforceable under COGSA, it "shall not affect the validity or enforceability" of any other term of the Bill. (Bill of Lading ¶ 28.1.)

  Finally, the Bill of Lading contains a "Himalaya Clause," that allows a secondary carrier to claim the benefits of the primary carrier's contractual limitations of liability and extends the terms of the Bill of Lading to inland transport after transport by sea. (Bill of Lading ¶ 17(c).) Plaintiffs Blue Anchor and K&N filed their original complaint on January 31, 2003. On September 30, 2003, plaintiffs filed an amended complaint, adding plaintiffs Alpina and AON and joining defendant Trans American Brokerage Service, Inc. (Am. Compl. ¶¶ 4-5, 8.)

  DISCUSSION

  Trans American moves to dismiss the complaint pursuant to Fed. R. Civ. P. Rule 12(b) for: (i) lack of subject matter jurisdiction; (ii) improper venue; and (iii) failure to state a claim upon which relief can be granted. Trans American also moves "to dismiss" pursuant to Fed.R.Civ.P. Rule 56 for: (i) failure to file within the statute of limitations; (ii) failure to satisfy a condition precedent to suit; and (iii) failure to file a timely action. (See Declaration of James M. Haddad, dated October 31, 2003 ("Haddad Decl.") ¶¶ 3-4.)

  Defendant UES separately moves to dismiss the complaint for: (i) failure to file within the applicable COGSA statute of limitations; and (ii) as against plaintiffs Blue Anchor and K&N for lack of standing. Alternately, UES moves for partial summary judgment limiting liability to $500 per package. (UES Memorandum, dated October 31, 2003 ("UES Mem.") at 3.) I. Summary Judgment

  Both defendants move to dismiss plaintiffs' complaint on the ground that it is barred by the applicable statute of limitations. Defendants asserted their statute of limitations arguments during an initial exchange of memoranda and supplemented them with additional briefing required by this Court. (Tr. at 15-16.)

  "When matters outside the pleadings are presented on a motion to dismiss under Rule 12(b)(6), a court may convert the motion to one for summary judgment so long as it affords all parties the opportunity to present supporting material." Wesley v. NMU Pension & Welfare Plan, No. 01 Civ. 2628 (WHP), 2002 WL 10486, at *3 (S.D.N.Y. Jan. 3, 2002) (citing Morelli v. Cedel, 141 F.3d 39, 46 (2d Cir. 1998)). The court may base its decision to convert the motions sua sponte on "whether [plaintiff] should reasonably have recognized the possibility that the motion might be converted into one for summary judgment or [was] taken by surprise and deprived of a reasonable opportunity to meet facts outside the pleadings." Kraft Foods N. Am., Inc. v. Rockland County Dept. of Weights & Measures, No. 01 Civ. 6980 (WHP), 2003 WL 554796 (S.D.N.Y. Feb. 26, 2003) (citing In re G. & A. Books, Inc., 770 F.2d 288, 295 (2d Cir. 1985)); see also Kennedy v. Empire Blue Cross & Blue Shield, 989 F.2d 588, 592 (2d Cir. 1993) (holding that there was no error in sua sponte conversion, and plaintiffs were not unfairly surprised, where defendant's motion papers sought dismissal on certain grounds, summary judgment was granted on those grounds, and plaintiffs had supplemented the record with exhibits).

  Defendants' motions to dismiss were accompanied by summary judgment motions that expressly addressed the applicability of COGSA and the applicable statute of limitations period. At oral argument, plaintiffs acknowledged that the motions to dismiss would likely be converted to summary judgment, and subsequently provided this Court with a supplemental memorandum, a Rule 56.1 Statement, and a declaration with exhibits. (Tr. at 11-12, 15-16; Pl. Supp. Mem, Exs. A, B.) Since plaintiffs had sufficient notice and opportunity to respond to the allegations ...


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