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American Home Assurance Co. v. Kuehne & Nagel KG

September 29, 2009


The opinion of the court was delivered by: Douglas F. Eaton, United States Magistrate Judge.


(This is an ECF case.)

This case alleges cargo damage in connection with an air shipment of a digital printing system from Germany to Illinois. American Home Assurance Company ("American Home"), as the subrogated cargo underwriter for Océ Printing Systems GmBH ("Océ"), filed an Amended Complaint against Océ's freight forwarder Kuehne & Nagel (AG & Co.) KG ("K&N").

K&N then filed a Third-Party Complaint against Polar Air Cargo, Inc. and Polar Air's ground handling agent Alliance Air. On September 7, 2007, I granted Polar Air's motion for dismissal. On March 25, 2008, I granted Alliance Air's motion for summary judgment. American Home Assur. Co. v. Kuehne & Nagel (AG & Co.) KG, 544 F.Supp.2d 261 (S.D.N.Y. 2008).

On November 20, 2008, K&N filed a motion (Docket Item #52) to dismiss the Amended Complaint on the ground that K&N had not been given proper notice of a claim for cargo damage. (See also Docket Items ##53-54.) On November 21, 2008, Plaintiff filed a cross-motion (Docket Item #55) seeking summary judgment. (See also Docket Items ##56-61.) On December 4, 2008, K&N filed a reply memorandum (Docket Item #62). On December 5, 2008, Plaintiff filed the final reply memorandum (Docket Item #63). For the reasons set forth below, I grant K&N's dismissal motion and I deny Plaintiff's cross-motion.


The following facts are set forth in the parties' 9/24/08 Stipulation of Facts ("9/24/08 Stip."), and in two declarations submitted by Plaintiff (Richard Freel's 10/29/08 Declaration and Charles Schmidt's 11/21/08 Declaration), and in Plaintiff's 11/21/08 Local Civil Rule 56.1 Statement ("Pl. 56.1 Stat."), which has not been disputed by K&N.

On August 5, 2004, K&N issued its House Air Waybill to Océ. As the contract carrier, K&N agreed to deliver the cargo (a printer and its accessories, contained in 12 cartons) from Munich, Germany to Caterpillar, Inc. ("Caterpillar") in Illinois. K&N acknowledged that it had received the cargo from Océ in good condition. On August 5, 2004, K&N also contracted with Polar Air Cargo, Inc., which agreed to assume all of the responsibilities and duties of the air carriage. Polar Air Cargo, Inc. issued its Air Waybill, which listed K&N as the shipper and Kuehne & Nagel, Inc. ("KNI") as the consignee. (Pl. 56.1 Stat. ¶¶6-11.)

K&N and KNI are sister companies and wholly owned subsidiaries of Kuehne & Nagel International AG, a Swiss-based transport and logistics operator. (Pl. 56.1 Stat. ¶¶4, 11, 74.) KNI has not been served as a defendant. K&N argues that KNI was merely a freight forwarder for the parent company, and that any cargo damage complaint had be made to the carrier (K&N) and not to KNI. However, for the purposes of K&N's dismissal motion and Plaintiff's cross-motion, I will assume that notice to KNI was notice to K&N.

On August 9, 2004, the cargo arrived at Chicago's O'Hare Airport aboard Polar flight 605. Pursuant to Polar's ground handling agreement, Alliance picked up the cargo from the tarmac and brought it to Alliance's warehouse within the airport. On August 12, 2004, R&M Trucking (chosen by KNI) picked up the cargo from Alliance and delivered it to KNI's storage facility in Elk Grove, Illinois. It now appears that the cargo was damaged prior to its arrival at KNI's Elk Grove facility. (Pl. 56.1 Stat. ¶¶10-14, 35; 9/24/08 Stip. ¶¶2-4, 10-11.) See my earlier opinion (544 F.Supp.2d at 265-66) describing two documents dated August 12, 2004 at 19:53 and 21:00 (Docket Item #43, Exhs. A and B).

The 21:00 document said "1 sk[i]d crashed [crushed?;] shock watch it is active" and "1 box crushed[;] shock active." My earlier opinion ruled that K&N's Third-Party Complaint against Alliance was time-barred; this mooted any need to resolve whether the damage to the skid and the box occurred during the custody of Alliance or during the custody of R&M Trucking.

Caterpillar designated North American Van Lines ("NAVL") to pick up the cargo at KNI's Elk Grove facility. NAVL's truck driver James Ramirez picked up the 12 cartons on August 24, 2004. He signed KNI's delivery order, and he wrote on it on August 24, 2004:



(9/24/08 Stip. ¶2; Pl. 56.1 Stat. ¶¶19-31, 36; 11/21/08 Schmidt Decl. Exh. D2.) Mr. Ramirez also filled out a NAVL inventory form; he wrote the following notations on pages 1 and 2 of the inventory form:

[Page 1, referring to item 1]:

CTN [carton] ON SKID SHOCK WATCH ACTIVATED PBS [packed by shipper]

MCU [mechanical condition unknown] * CU [contents and condition unknown] * T [torn] at ALL OVER

[Page 1, referring to item 2]:

CTN [carton] ON SKID T [torn], PBS [packed by shipper]

MCU [mechanical condition unknown] * CU [contents and ...

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