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Mediterranean Shipping Co. USA Inc. v. Cargo Inc.

United States District Court, S.D. New York

June 23, 2014

MEDITERRANEAN SHIPPING CO. USA INC., Plaintiff,
v.
CARGO INC., Defendant

Page 295

For Mediterranean Shipping Company USA Inc., Plaintiff, Counter Defendant: John Alan Orzel, Carroll, McNulty & Kull, New York, N.Y. USA; Lindsay Anne Sakal, Carroll McNulty & Kull, LLC, Basking Ridge, N.J. USA.

For Aa Cargo, Inc., Defendant: Brian James O'Connor, LEAD ATTORNEY, The O'Connor Law Firm, New York, N.Y. USA.

Page 296

MEMORANDUM DECISION & ORDER

KATHERINE B. FORREST, United States District Judge.

On March 11, 2013, plaintiff Mediterranean Shipping Company USA Inc. (" MSC" ) initiated this action against defendant AA Cargo, Inc. to recover $232,984.00 in accrued demurrage in connection with defendant's alleged breach of contract for failing to clear certain shipping containers from their terminals of arrival, remove the cargo, and return the containers to the terminal. (Compl., ECF No. 1; Pl.'s Rule 56.1 Stmt, of Undisputed Facts (" Pl.'s 56.1" ) ¶ 33.) On May 13, 2013, defendant answered the complaint and counterclaimed for, inter alia, certain violations of the Shipping Act. (ECF No. 7.) On May 31, 2013, plaintiff answered the counterclaims. (ECF No. 9.)

Now before the Court is plaintiff's motion for summary judgment. (ECF No. 30.) For the following reasons, plaintiff's motion is GRANTED IN PART and DENIED IN PART.

I. BACKGROUND

Plaintiff is the United States agent for Mediterranean Shipping Company S.A., a Swiss common carrier of cargo for hire. (Pl.'s 56.1 ¶ 2; Rule 56.1 Counterstatement of Facts (" Def.'s 56.1" ) ¶ 2, ECF No. 45.) Generally, a party interested in booking cargo with plaintiff will contact plaintiff seeking a price quotation. (Pl.s' 56.1 ¶ 4; Def.'s 56.1 ¶ 4; Decl. of Teri Krusen in Supp. of Pl.'s Mot. for Summ. J. (" Krusen Decl." ) ¶ 6, ECF No. 33.) Once the parties agree on a price, plaintiff issues a " booking confirmation" to the putative shipper; the booking confirmation notes the name of the shipper for whom plaintiff has agreed to carry cargo and refers to the terms and conditions of the bill of lading. (Krusen Decl. ¶ 6.) Once the cargo is loaded on board a carrying vessel, plaintiff issues a bill of lading to cover the carriage of that cargo from the United States to its destination. (Id. ¶ ¶ 3, 6.) Plaintiff allows a set number of days in which shippers and receivers of cargo may use its container equipment free of charge, referred to as " free time." (Pl.'s 56.1 ¶ 6; Def.'s 56.1 ¶ 6.) The charge for exceeding the allowed free time is known as " demurrage." (Pl.'s 56.1 ¶ 7; Def.'s 56.1 ¶ 7.)

In this case, plaintiff contracted with defendant to carry four containers from California to Brazil. (Pl.'s 56.1 ¶ ¶ 9, 12; Def.'s 56.1 ¶ ¶ 9, 12; Krusen Decl. ¶ 8.) All four containers arrived at their respective ports, but none were cleared from the terminal at the port of discharge within the free time allowed bye plaintiff's tariff governing container usage at the discharge port. (Pl.'s 56.1 ¶ ¶ 18, 22, 26, 30; Def.'s 56.1 ¶ ¶ 18, 22, 26, 30; Krusen Decl. ¶ 10.)

Plaintiff issued four freight invoices to defendant that listed " AA CARGO INC." as the party to be invoiced, and issued four booking confirmations to defendant that listed " AA CARGO INC." as the shipper. (Krusen Decl. ¶ 9, Exs. A, C.) However, the four bills of lading issued in this case list the shipper as defendant operating as an " agent" or " as agents" for other parties. (Id. ¶ ¶ 19-22, Exs. D-G.) Plaintiff states that it " did not become aware of the existence of a third-party" principal on whose behalf defendant was acting " until after MSC agreed to carry the cargo." (Id. ¶ 9.) However, Arben Hodza, defendant's president and sole employee, claims that he spoke on the telephone with two of plaintiff's representatives, and " indicated that [defendant] was acting as agent for shippers that [he] identified by name for each respective shipment." (Decl. of Arben Hodza in Opp. to Pl.'s Mot. (" Hodza Decl." ) ¶ 5, ECF No. 43.)

Page 297

Plaintiff issued four booking confirmations to defendant. The confirmations refer to plaintiff's terms and conditions contained in the bill of lading; they state, " Please be informed that MSC has implemented the use of a new [bill of lading] format. We suggest that you read the terms and conditions since some of the clauses have been changed." (Krusen Decl. ¶ 6; Ex. C.) The bills of lading state:

IN ACCEPTING THIS BILL OF LADING THE MERCHANT EXPRESSLY ACCEPTS AND AGREES TO ALL THE TERMS AND CONDITIONS, WHETHER PRINTED, STAMPED OR OTHERWISE INCORPORATED ON THIS SIDE AND ON THE REVERSE SIDE OF THIS BILL OF LADING AND THE TERMS AND CONDITIONS OF THE CARRIER'S APPLICABLE TARIFF AS IF THEY WERE ALL SIGNED BY THE MERCHANT.

(Id. Exs. D-G.)

Paragraph 3 of the standard terms and conditions contained in the bills of lading, which also appear on plaintiff's website, states, inter alia, " The terms and conditions of the Carrier's applicable Tariff are incorporated into this Bill of lading. Particular attention is drawn to terms and conditions concerning additional charges including demurrage . . . ." (Id. Ex. B, at ¶ 3.)

The terms and conditions contained in the bills of lading, which are also available on plaintiff's website, define " Merchant" as " the Shipper, Consignee, holder of this Bill of Lading, the receiver of the Goods and any person owning, entitled to or claiming the possession of the Goods or of this Bill of Lading or anyone acting on behalf of this Person." (Id. Ex. B, at ¶ 1 (emphasis added).)

Paragraph 14.8 of the terms and conditions states, inter alia, " The Merchant is required and has the responsibility to return to a place nominated by the Carrier the Container and other equipment before or at the end of the free time allowed at the Port of Discharge of the Place of Delivery. Demurrage, per diem and detention charges will be levied and payable by the Merchant thereafter in accordance with the Tariff." (Id. ¶ 25, Ex. B, at ¶ 14.8 (emphasis added).) Paragraph 16.3 states, " Every Person defined as 'Merchant' in clause 1 shall be jointly and severally liable to the Carrier for the payment ...


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