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Meditteranean Shipping Co. v. International Freight Services, Inc.

United States District Court, S.D. New York

March 26, 2014



HAROLD BAER, Jr., District Judge.

Plaintiff Mediterranean Shipping Company ("MSC" or "Plaintiff") brought this admiralty action against Defendant International Freight Services ("IFS" or "Defendant") to recover demurrage. Before the Court are cross motions for summary judgment. For the reasons below, Plaintiff's motion is GRANTED, and Defendant's motion is DENIED.


Plaintiff MSC, on behalf of its principal, Mediterranean Shipping Company, SA, a Swiss entity, books carriage for cargo originating in the United States and collects demurrage. (Krusen Dec. ¶¶ 1, 3.) Upon delivery of cargo, Plaintiff allows shippers a certain number of days to use and return Plaintiff's container, known as "free-time." ( Id. ¶ 6.) If a shipper does not return Plaintiff's container within the allocated free-time, Plaintiff will charge a fee for demurrage. ( Id. ) Defendant IFS is a non-vessel operating common carrier ("NVOCC"). (Def.'s 56.1 ¶ 2.) As a NVOCC, Defendant arranges for ocean transportation of cargo for its principal by way of an ocean common carrier. ( Id. ¶¶ 3-4; Krusen Dec. ¶9.)

On September 23, 2008, Plaintiff issued a bill of lading number MSCULB254625 ("Bill of Lading") to Defendant for the carriage of one container, bearing registration number MSCU7089779 ("Container") from Baltimore, Maryland to Montevideo, Uruguay. (Pl.'s 56.1 ¶8; Krusen Dec. Ex. B.) The Bill of Lading identified Defendant as the "shipper." (Krusen Dec. Ex. B.) By its terms, Defendant was also considered a "merchant, " and as such, "expressly...agree[d] to all the terms and conditions... on this side and on the reverse side of this bill of lading and the terms and conditions of the carrier's applicable tariff..." (Krusen Dec. Ex. B; Krusen Dec. Ex. A. at 1.) On October 23, 2008 the container was discharged from Plaintiff's vessel at the port of Montevideo where it remained unclaimed, until December 4, 2012, when the cargo was disposed of by Uruguay's Customs Authorities and the container was returned to Plaintiff. (Krusen Dec. ¶ 26; Def.'s 56.1 ¶12.) During this period, Plaintiff sent Defendant thirteen invoices for the container's outstanding demurrage and a letter demanding payment. (Krusen Dec. Exs. C, D.) Plaintiff filed this action on March 11, 2013. (Compl.)


"Summary judgment is appropriate only if there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.'" Kuebel v. Black & Decker Inc., 643 F.3d 352, 358 (2d Cir. 2011) (quoting Fed.R.Civ.P. 56(a)). The Court must "constru[e] the evidence in the light most favorable to the nonmoving party and draw[] all reasonable inferences in that party's favor." Id. "An alleged factual dispute regarding immaterial or minor facts between the parties will not defeat an otherwise properly supported motion for summary judgment." Powell v. Nat'l Bd. of Med. Examiners, 364 F.3d 79, 84 (2d Cir. 2004). "[T]he existence of a mere scintilla of evidence in support of nonmovant's position is insufficient to defeat the motion; there must be evidence on which a jury could reasonably find for the nonmovant." Id. (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986)).

1. Laches

"In admiralty actions, courts employ the equitable doctrine of laches to determine the timeliness of claims." Dziennik v. Sealift, Inc., 2013 WL 5502916, at *3 (E.D.N.Y. Sept. 30, 2013)(citing DeSilvio v. Prudential Lines, 701 F.2d 13, 15 (2d Cir. 1983)). "In analyzing the laches arguments, courts must consider: (1) an analogous statute of limitations; (2) whether plaintiff delayed in filing her claims; and (3) whether the delay, if any, unfairly prejudices defendant." Id. at *4 (citing DeSilvio, 701 F.2d at 15.)

a. Analogous Statute

Where there is no specific statute of limitations, "courts apply the limitations period of the most analogous state law cause of action to the instant claim to determine the applicable statute of limitations." Id. (citing Graham County Soil & Water Conservation Dist. v. United States, 545 U.S. 409, 417 (2005)). However, a "narrow" exception applies "when a rule from elsewhere in federal law clearly provides a closer analogy than available state statutes...'" Sandberg v. KPMG Peat Marwick, L.L.P., 111 F.3d 331, 336 (2d Cir. 1997)(quoting Reed v. United Transp. Union, 488 U.S. 319, 324 (1989)).

Although Plaintiff argues that the statute of limitations for New York contract law disputes should apply, Plaintiff's claims are prescribed by tariffs, which are regulated by the Shipping Act of 1984 ("Shipping Act").[2] See Pl. Summ. Judg. Mem. at 10-13. Thus, the Shipping Act "provides the most analogous statute of limitations." SL Serv., Inc., d/b/a CSX Lines v. Int'l Food Packers, Inc., 217 F.Supp.2d 180, 184-185 (D.P.R. 2002) (applying the Shipping Act's three year statute of limitations to demurrage claims.)

b. Prejudice and Delay

"In admiralty actions, the analogous state statute of limitations merely determines where the burden of proof falls[;] if a plaintiff files a complaint within the analogous statutory period the burden of proving unreasonable delay and prejudice falls on the defendant." Dziennik, 2013 WL 5502916, at *8 (E.D.N.Y. Sept. 30, 2013)(internal citations and quotation omitted). Here, Plaintiff charged demurrage each day, and Defendants received thirteen invoices reflecting these daily demurrage charges. ( See Pl. 56.1 at ¶ 11; Krusen Dec. at ¶¶ 22-27, Ex. C.) To determine when the statute accrued, I consider each daily demurrage charge separately. See, e.g., SL Serv., 217 F.Supp.2d at 185-186; TAG/ICIB Services, 570 F.3d at 68. Because the three year statute of limitations splits the time for which Plaintiff seeks damages, I ...

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