The opinion of the court was delivered by: Kimba M. Wood, U.S.D.J.
Plaintiff Vigilant Insurance Company ("Plaintiff") brings this action as subrogee of Pasternak Baum & Co., Inc. ("Pasternak"), the owner and shipper of certain cargo, against defendants Clipper Wonsild, Inc., Clipper Fourth Legacy, Ltd., and related entities (collectively "Defendants"), the carrier of that cargo.
Plaintiff alleges that a shipment of approximately 1900 metric tons of crude ground peanut oil carried by Defendants' tanker, the M/T Clipper Legacy, from Corinto, Nicaragua to New Orleans, Louisiana, pursuant to a contract for carriage between Pasternak and Defendants, was rejected in part by Pasternak's buyer in the United States because of improper storage and possible contamination during the voyage. Plaintiff contends that Defendants' failure to properly stow the cargo constitutes a violation of the contract for carriage, and seeks damages in the amount of $231,963.34 for, inter alia, losses sustained as a result of the rejected cargo shipment.
Defendants have moved for partial summary judgment, seeking to restrict their liability to $500 pursuant to Section 4(5) of the Carriage of Goods by Sea Act ("COGSA"), which limits a carrier's liability for goods lost or damaged in foreign trade to $500 per "package" or, for goods not shipped in packages - as in this case - to $500 per "customary freight unit." 46 U.S.C. § 30701 note (previously codified at 46 U.S.C. App. § 1304(5)).
Specifically, Defendants argue that the customary freight unit in this case was the entire peanut oil shipment, and that accordingly their liability is limited under COGSA to $500. Plaintiff responds, arguing (1) that the customary freight unit in this case was each metric ton of peanut oil shipped, which would limit Defendants' liability under COGSA to $500 for each of the 303.736 metric tons of allegedly contaminated cargo (or, $151,500); and (2) that, in any case, COGSA's limitation of liability should not apply to this shipment because Defendants deviated from the terms of their contract for carriage.
For the reasons stated below, the Court concludes, first, that the customary freight unit for this shipment is the entire peanut oil shipment, and second, that the Defendants' alleged deviation in this case does not void COGSA's limitation of liability. Therefore, the Court GRANTS Defendants' motion for partial summary judgment, limiting Defendants' liability to $500.
Unless otherwise noted, the following facts are undisputed and are derived from the parties' Local Rule 56.1 statements, affidavits, and other submissions.*fn1
A. The Parties and Prior Course of Dealing
Plaintiff brings this action on behalf of its insured, Pasternak. Pasternak is an agricultural and commodity broker. Defendants are part of a leading international shipping consortium, which owns or operates more than 300 ocean-going vessels. Pasternak and Defendants have a history of commercial dealings for the ocean transportation of certain bulk liquid cargoes (mainly, vegetable oils).
In November 2004, Pasternak and Defendants agreed upon certain terms and conditions that would apply to future shipments of Pasternak cargo by Defendants. Defs.' Local Rule 56.1 Statement ¶ 11; see Defs.' Stat. Ex. D-2; Maz. Aff. Ex. 3 ("November 2004 Freight Terms"). The parties refer to each of these individual shipments as "fixtures," and the parties refer to the documents memorializing each of these individual fixtures as "fixture confirmations."
B. The February 23, 2005 Fixture Confirmation
In February 2005 Pasternak proposed to ship 1,500 metric tons of crude ground peanut oil from Corinto, Nicaragua to New Orleans, Louisiana on board vessels owned or operated by Defendants. Defs.' Stat. ¶¶ 9-10. A "fixture confirmation" for the shipment, dated February 23, 2005, specified that Pasternak would pay a lump sum freight amount of $90,000 for the entire shipment. Defs.' Stat. Ex. D-1; Sanchez Decl. Ex. 1 ("February 23, 2005 fixture confirmation").
The February 23, 2005 fixture confirmation incorporated the previously agreed upon November 2004 Freight Terms, and "Vegoilvoy C/P," which refers to the terms and conditions of the standard Vegoilvoy (vegetable oil voyage) charter party form contract.*fn2 Defs.' Stat. ¶ 13; Ex. D-3.
C. Changes to the Agreement
Following the February 23, 2005 fixture confirmation, Pasternak advised Defendants it wished to increase the quantity of peanut oil shipped on the April voyage to 1700 metric tons. The amount was later increased again to 1900 metric tons. Despite these increases, there was no adjustment to the $90,000 lump sum freight amount. Instead, the parties agreed that, as a result of the increase of 400 metric tons on the April vessel, the quantity on an upcoming June ...