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Sysco Food Services of Hampton Roads, Inc. v. Maersk Logistics

August 29, 2006

SYSCO FOOD SERVICES OF HAMPTON ROADS, INC., PLAINTIFFS,
v.
MAERSK LOGISTICS, INC., MAERSK GLOBAL LOGISTICS, INC, AIRLINE CARGO SERVICES, INC., FEDERAL EXPRESS CORPORATION, ATLAS AIR WORDLWIDE HOLDINGS, INC., DEFENDANTS.



The opinion of the court was delivered by: John G. Koeltl, Usdj

OPINION & ORDER

The plaintiff, Sysco Food Services of Hampton Roads, Inc. ("Sysco"), brought this action against Maersk Logistics, Inc. and Maersk Global Logistics, Inc. ("Maersk"), Airline Cargo Services Inc. ("ACS"), Federal Express Corporation ("FedEx"), and Atlas Air Worldwide Holdings, Inc. ("Atlas") seeking compensatory damages for the destruction of its cargo while in international transit.

The plaintiff asserts a claim under the Warsaw Convention, a multilateral treaty regulating international air commerce, alleging that the defendants were negligent in failing to follow explicit instructions for the proper loading of the cargo, and are liable for the damage caused to the cargo while in the defendants' charge. Each of the defendants has denied liability and has cross claimed against the other defendants.

Defendant FedEx has moved for summary judgment. FedEx argues, among other things, that it is not liable to Sysco for compensatory damages because the contract between FedEx and defendant ACS is enforceable under the Warsaw Convention and limits FedEx's liability for any damages caused by ACS, that FedEx is entitled to full exoneration under the contributory negligence provision of the Warsaw Convention, and that FedEx is not liable because FedEx strictly adhered to the loading instructions it was given. Defendants Maersk and ACS and plaintiff Sysco all oppose FedEx's motion for summary judgment.

I.

The standard for granting summary judgment is well established. Summary judgment may not be granted unless "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show 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." Fed. R. Civ. P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Gallo v. Prudential Residential Servs. Ltd. P'ship, 22 F.3d 1219, 1223 (2d Cir. 1994). "[T]he trial court's task at the summary judgment motion stage of the litigation is carefully limited to discerning whether there are genuine issues of material fact to be tried, not to deciding them. Its duty, in short, is confined at this point to issue-finding; it does not extend to issue-resolution." Gallo, 22 F.3d at 1224. The moving party bears the initial burden of informing the district court of the basis for its motion and identifying the matter that it believes demonstrates the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323. The substantive law governing the case will identify those facts that are material and "only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); see also Consol. Edison, Inc. v. Northeast Utilities, 332 F. Supp. 2d 639, 642 (S.D.N.Y. 2004).

Summary judgment is appropriate if it appears that the non-moving party cannot prove an element that is essential to the non-moving party's case and on which it will bear the burden of proof at trial. See Cleveland v. Policy Mgt. Sys. Corp., 526 U.S. 795, 805-06 (1999); Celotex, 477 U.S. at 322; Powell v. Nat. Bd. of Med. Exam'rs, 364 F.3d 79, 84 (2d Cir. 2004). In determining whether summary judgment is appropriate, a court must resolve all ambiguities and draw all reasonable inferences against the moving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citing United States v. Diebold, Inc., 369 U.S. 654, 655 (1962)); see also Gallo, 22 F.3d at 1223. Summary judgment is improper if there is any evidence in the record from any source from which a reasonable inference could be drawn in favor of the nonmoving party. See Chambers v. T.R.M. Copy Ctrs. Corp., 43 F.3d 29, 37 (2d Cir. 1994). If the moving party meets its initial burden of showing a lack of a material issue of fact, the burden shifts to the nonmoving party to come forward with "specific facts showing that there is a genuine issue for trial." Fed. R. Civ. P. 56(e). The nonmoving party must produce evidence in the record and "may not rely simply on conclusory statements or on contentions that the affidavits supporting the motion are not credible." Ying Jing Gan v. City of New York, 996 F.2d 522, 532 (2d Cir. 1993); see also Scotto v. Almenas, 143 F.3d 105, 114-15 (2d Cir. 1998); Singh v. New York City Off-Track Betting Corp., No. 03 Civ. 5238, 2005 WL 1354038, at *1 (S.D.N.Y. June 8, 2005).

II.

A.

The following facts are undisputed unless otherwise stated. Sysco is a foodservice marketer and distributor that sought to have a shipment of frozen food shipped from the United States to Qatar. Sysco signed a Charter Agreement with Maersk, a freight forwarder, to perform this operation. Maersk contracted with ACS, a shipping agent, to coordinate the particulars of the shipment and contract with an aircraft charter company. ACS in turn contracted with FedEx to transport the shipment via aircraft from the United States to Qatar. FedEx subsequently leased the aircraft from Atlas. All parties agree that the cargo was improperly loaded before departure from the United States. The plaintiff contends that there was a loss of $800,000 worth of perishable cargo. (Sysco's Local Civil Rule 56.1 Stmt. ("Sysco's Stmt."), ¶ 6; FedEx's Local Civil Rule 56.1 Stmt. ("FedEx's Stmt."), ¶ 6; Maersk's Local Civil Rule 56.1 Stmt. ("Maersk's Stmt."), ¶ 6; ACS's Local Civil Rule 56.1 Stmt. ("ACS's Stmt."), ¶ 6.)

To maintain the food's freshness, Sysco requested that dry ice be used in the aircraft to help keep the food cold. Sysco claims that the defendants failed to follow its instructions and distribute the dry ice throughout the pallets on the aircraft. (Sysco's Stmt., ¶ 21.) It is undisputed that the dry ice was not distributed throughout the pallets, and was merely loaded at the doors of the aircraft. The parties dispute which of the parties, if any, instructed FedEx to load the dry ice at the cargo doors rather than throughout the aircraft's cargo hold. (See FedEx's Stmt., ¶ 25; Sysco's Stmt., ¶ 25; Maersk's Stmt., ¶ 25; ACS's Stmt., ¶ 25.)

On November 4, 2002, Maersk alerted ACS by email that, pursuant to Sysco's instructions, dry ice would be used for the November 13, 2002 shipment to Qatar. (FedEx's Stmt., ¶ 10; ACS's Stmt., ¶ 10.) On November 5, 2002, ACS alerted FedEx by email that, pursuant to Maersk's instructions, the dry ice should be distributed throughout the pallets in the aircraft. (FedEx's Stmt., ¶ 11; ACS's Stmt., ¶ 11.) On the evening of November 12, 2002, a conversation took place between ACS employee Louise Olive ("Olive") and Maersk employee Charles MacLeod-Stuart ("MacLeod-Stuart"). FedEx alleges that during that conversation, MacLeod-Stuart informed Olive that dry ice should not be distributed throughout the pallets. (FedEx's Stmt., ¶ 12; ACS's Stmt., ¶ 12.) Olive testified that "there was a change in the instructions from Mr. Stuart" and the dry ice was to be loaded at the door so it could be used in Qatar. (Olive Deposition ("Olive Dep."), pp. 63-64; FedEx's Stmt., ¶¶ 12-14; ACS's Stmt., ¶¶ 12-14.) MacLeod-Stuart denies that he gave this instruction to ACS or anyone else. (MacLeod-Stuart Deposition ("MacLeod-Stuart Dep."), p. 163; FedEx's Stmt., ¶ 16; Maersk Stmt., ¶¶ 12-14.)

The parties also dispute whether the "amended, improper instruction" was ever given to FedEx. FedEx alleges that Olive relayed the amended instruction to fellow ACS employee Geoffrey Comley-Excell ("Comley-Excell") who was scheduled to be on-site at the FedEx facility at JFK that evening. (FedEx's Stmt., ¶ 15.) While Comley-Excell testified that he received the amended instruction from Olive, he denies ever giving FedEx the instruction. (ACS's Stmt., ¶ 22.) While FedEx has produced no evidence that Comley-Excell relayed the amended instruction to FedEx, FedEx asserts that its on-site "load master," Vince Buscarino, received the amended instruction from the "shipper." (See Transcript of Argument, dated June 29, 2006, p. 4.) FedEx has not produced any testimony from Buscarino to support this assertion or any evidence to suggest the identity of the "shipper" who allegedly gave Buscarino the alleged, amended instruction.

Contrary to FedEx's assertion and Olive's testimony, MacLeod-Stuart testified that when he arrived at JFK to oversee the loading, he informed Comley-Excell that the dry ice should be distributed throughout the pallets. (MacLeod-Stuart Dep., pp. 73-74; FedEx's Stmt., ¶ 17.) MacLeod-Stuart also testified that Comley-Excell rejected this instruction and indicated that "there should not be a need to distribute the ice" and it should be put in the doorways for arrival in Qatar. (MacLeod-Stuart Dep., p. 74; FedEx's Stmt., ¶ 18.) On the other hand, Comley-Excell testified that he attended the loading as an observer only and that he gave no instructions to FedEx regarding the placement of the ice. (Comley-Excell Dep., p. 64; Maersk's Stmt., ¶ 18.) MacLeod-Stuart also testified that he did not protest Comley-Excell's instruction because he relied upon ACS's knowledge of loading and chartering. (FedEx's Stmt., ¶ 19.)

The timeline in which the frozen food, the dry ice, and the representatives from the parties arrived at JFK is generally undisputed. Maersk asserts that the dry ice arrived between 4:00 p.m. and 5:00 p.m. on November 12, 2002 and the frozen food began arriving "well prior" to 8:00 p.m. on November 12, 2002. (Maersk's Stmt., ¶ 2.) Similarly, ACS asserts that the frozen food began arriving at JFK at approximately 2:00 pm on November 12, 2002. (ACS's Brief in Opposition to FedEx's Motion for Summary Judgment, p. 5; ACS's Stmt., ¶¶ 31-33.) ACS has also offered testimony from Edward Rogers ("Rogers"), who was employed by the refrigerator truck company responsible for transporting the food to JFK. Rogers' testimony confirms that truckloads of the frozen food began leaving the warehouse in Perth Amboy, New Jersey at about ...


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