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TOKIO MARINE AND FIRE INSURANCE v. FEDERAL MARINE TERMINAL

November 9, 2005.

TOKIO MARINE AND FIRE INSURANCE CO., LTD. and MITSUBISHI INTERNATIONAL CORPORATION, Plaintiffs,
v.
FEDERAL MARINE TERMINAL, INC., Defendant. FEDERAL MARINE TERMINAL, INC., Third-party Plaintiff, v. ADM COCOA, INC. and NESTLE USA, INC., Third-party Defendants.



The opinion of the court was delivered by: VICTOR MARRERO, District Judge

DECISION AND ORDER

Plaintiffs Tokio Marine and Fire Insurance Company, Ltd. ("Tokio") and Mitsubishi International Corporation ("MIC") (collectively "Plaintiffs") brought an action in New York State Supreme Court against defendant Federal Marine Terminal, Inc. ("FMT") alleging breach of contract, breach of bailment, negligence, and conversion based on the alleged disappearance of approximately 46 metric tons of MIC's cocoa during FMT's storage and delivery of the cocoa. The case was removed to this Court pursuant to 28 U.S.C. § 1441. FMT moves for summary judgment on all claims, and Plaintiffs cross-move for summary judgment on all claims. The Court denies both motions for summary judgment in their entirety for the reasons set forth below.

I. BACKGROUND*fn1

  A. THE PARTIES

  MIC purchases cocoa from suppliers in cocoa-producing countries and sells to manufacturers in the United States, Japan, and Europe. Tokio is the insurer of the cocoa at issue in this proceeding pursuant to a marine open cargo policy. FMT is a marine terminal operator providing services including cargo loading and unloading, handling, and storage at the Port of Albany in Albany, New York. On October 19, 2004, FMT filed a Third-Party Complaint against ADM Cocoa, Inc. and Nestle USA, Inc. ADM Cocoa, Inc. and Nestle USA, Inc., were customers of MIC and received deliveries of MIC's cocoa from FMT during the period in which the cocoa at issue in this proceeding was stored by FMT. On June 8, 2005, Plaintiffs, FMT, and third-party defendant ADM Cocoa, Inc., stipulated to a discontinuance of the action as against ADM Cocoa, Inc.

  B. THE CLAIMS

  The claims in this proceeding arise from the alleged disappearance of approximately 46 metric tons of MIC's cocoa stored in FMT's terminal warehouse at the Port of Albany. The cocoa arrived at the Port of Albany on May 14, 2001, aboard the M/V PRITZWALK. FMT accepted the cocoa shipment into its terminal warehouse for storage and reported receipt of 91,938 bags of cocoa into its warehouse from the shipment. During the following twelve months, FMT periodically re-packaged portions of the stored cocoa into 2,000-pound sacks referred to as "supersacks" and delivered the supersacks to MIC's customers.

  In July, 2002, FMT discovered that although its inventory records showed that 737 bags of cocoa remained from the PRITZWALK shipment, no cocoa remained in its warehouse. FMT subsequently reported the 737 bag shortage to MIC. The 737-bag shortage represents a deficit of approximately 46 metric tons of cocoa.

  Plaintiffs allege breach of contract, breach of bailment, negligence, and conversion arising out of the 737-bag shortage. FMT moves for summary judgment on the grounds that Plaintiffs' claims are time-barred pursuant to a time limitation set out in FMT's 2000 Marine Terminal Operator Schedule ("MTO Schedule"), a schedule of rates and practices maintained by FMT pursuant to the Ocean Shipping Reform Act of 1998 ("OSRA"). FMT argues that the MTO Schedule is enforceable against MIC as an implied contract between FMT and MIC pursuant to OSRA § 1707(f). Plaintiffs assert that the MTO Schedule is not enforceable as an implied contract because FMT and MIC entered into an actual contract for storage and delivery of the cocoa which superceded the MTO Schedule pursuant to 46 C.F.R. 525.2 (a) (3).

  Plaintiffs cross-move for summary judgment on the ground that Plaintiffs have made a prima facie showing of conversion and that FMT has failed to adequately rebut the presumption of conversion that arises from Plaintiffs' prima facie case. The Court finds triable issues of material fact that preclude summary judgment on any claim. Accordingly, the Court denies both motions for summary judgment in their entirety.

  II. SUMMARY JUDGMENT STANDARD Federal Rule of Civil Procedure 56(c) authorizes the granting of summary judgment when the evidence "show[s] that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is material if it "might affect the outcome of the suit under the governing law." Id. A factual dispute is genuine where "the evidence is such that a reasonable jury could return a verdict for the non-moving party." Id. The party moving for summary judgment bears the initial burden of showing the absence of a genuine dispute over any issues of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). After such a showing, the burden shifts to the non-moving party to provide evidence of "specific facts showing that there is a genuine issue for trial." Fed.R. of Civ. P. 56(e). In considering a motion for summary judgment, the Court must "`construe the facts in the light most favorable to the non-moving party and must resolve all ambiguities and draw all reasonable inferences against the movant.'" Williams v. R.H. Donnelley, Corp., 368 F.3d 123, 126 (2d Cir. 2004) (quoting Dallas Aerospace, Inc. v. CIS Air Corp., 352 F.3d 775, 780 (2d Cir. 2003)).

  III. DISCUSSION

  A. FMT'S MOTION FOR SUMMARY JUDGMENT 1. Applicability of FMT's MTO Schedule

  FMT moves for summary judgment on the ground that Plaintiffs' claims are time-barred pursuant to the terms of FMT's MTO Schedule. As noted above, an MTO Schedule is a publicly-available schedule of the rates and practices of a marine terminal operator maintained by the operator pursuant to OSRA § 1707 (f). See 46 U.S.C. app. § 1707(f). FMT alleges that the terms of ...


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