FILED

U.S. COURT OF APPEALS

ELEVENTH CIRCUIT

FEB 26, 2010

JOHN LEY

 CLERK

[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

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No. 09-12990

Non-Argument Calendar

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D.C. Docket No. 07-21516-CV-AMS

CHANNA IMPORTS, INC.,

Plaintiff-Appellant,

versus

HYBUR, LTD.,

Defendant-Appellee.

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Appeal from the United States District Court

for the Southern District of Florida

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(February 26, 2010)

Before TJOFLAT, WILSON and COX, Circuit Judges.

PER CURIAM:
Channa Imports, Inc. brought thissuit against Hybur, Ltd. and Ocean Express,

Ltd. for the loss of oriental carpets alleged to be valued at $207,968.11. The 1

Magistrate Judge granted Hybur’s motion for partialsummary judgment, finding that

each individual oriental carpet did not constitute a package under the Carriage of

Goods by Sea Act (“COGSA”). Following a bench trial, the Magistrate Judge found

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that Channa did not prove a shortage of carpets at outturn. Channa appeals. After

review, we affirm on both issues. 

Channa is in the business of selling oriental carpets. Channa contracted with

Ocean Express to transport carpets from Channa’s warehouse in Milano, Italy to an

affiliate’s warehouse in Cozumel, Mexico. Ocean Express, in turn, sub-contracted

with Hybur and other carriers. Hybur agreed to transport a shipment of the carpets

by sea from Port Everglades, Florida to Puerto Morelos, Mexico.

On May 8, 2006, a trucking company hired by Ocean Express loaded the

carpets into a forty-foot container at Channa’s warehouse in order to transport it to

a port in Geneva, Italy. The carpets were packaged in the following way. First, each

carpet was folded and then stacked on a wooden pallet. When the stack reached one

meter in height, the pallet was closed. Each pallet was covered with plastic in order

The district court dismissed the claims against Ocean Express. 1

The parties consented to a decision by the Magistrate Judge. (R.1-20) (R.1-21).

2

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to keep the carpets dry, and then secured with strapping material. (R.1-38 at 2.) In

all, there were twenty pallets containing 1,834 carpets. (Id. at 3.) The twenty pallets

were placed in one shipping container. The driver affixed a white seal to the 

container, and the next day, the container arrived at the port in Geneva. On May 17,

2006, the container was loaded onto the Barcelona Express, and on June 1, 2006, the

container arrived at the Port of Miami, Florida. On June 7, 2006, a carrier hired by

Ocean Express moved the container to Hybur’s shipping facility in Port Everglades,

Florida, where Hybur accepted the shipment. Hybur then placed a second security

seal on the container pursuant to its ordinary business practice. (R.1-62 at 8.) The

container was in Hybur’s terminal for five days; the terminal is protected by security

guards and barbed wire fencing. (Id. at 9.) Additionally, the containers are stored in

such a way that all containers, except the last one on the bottom row, cannot be

opened. (Id.) On June 12, 2006, the container was loaded onto the vessel Argosy,

which departed to Puerto Morelos. (Id. at 10.) Hybur issued the bill of lading

numbered PEVMEX08640 on June 13; it indicated that both seals were intact. The

heading on the bill of lading entitled “Description of Packages” identifies the goods

as “Oriental Carpets S[aid] T[o] C[ontain] 1834 P[ackages].” (R.1-38 at 3.) Under

the column “N[umber] of,” the bill of lading refers to the forty-foot container, but

does not refer to the twenty pallets inside the container. On June 15, 2006, at the

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latest, the container arrived in Puerto Morelos, where it was off-loaded from the ship

and placed within the Port Administration facilities, which the Mexican government

controls. LapisItor de Cozumel, an affiliate of Channa, took custody of the container

in Puerto Morelos. (R.1-62 at 3.) Lapis was responsible for transporting the carpets

to their final destination in Cozumel. (Id.) When the container reached Cozumel and

was opened, both seals were still intact. (Id. at 12.) However, four pallets were

missing from the container. (Id. at 4.) Channa’s corporate representative, Uri Ben

Yehuda, became aware of the missing carpets on June 20, 2006, but Channa did not

report the loss to Hybur until it served Hybur with a summons in this case on July 24,

2007. 

The relevant act is COGSA, 46 U.S.C.A. §§ 30701, et seq. (2007) (formerly

codified at 46 U.S.C. § 1300 et seq):

Neither the carrier nor the ship shall . . . be . . . liable for any loss . . . in

connection with the transportation of goods in an amount exceeding

$500 per package . . . or in case of goods not shipped in packages, per

customary freight unit . . . unless the nature and value of such goods

have been declared by the shipper before shipment and inserted in the

bill of lading. This declaration, if embodied in the bill of lading, shall

be prima facie evidence, but shall not be conclusive on the carrier.

COGSA, § 4(5). Because COGSA does not define the term “package,” and on

account of “the adoption of new methods of preparing and assembling goods for

shipment,” courts are inevitably asked to determine whether a given item qualifies as

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a package under the statute. Fireman’s Fund Ins. Co. v. Tropical Shipping &Constr.

Co., 254 F.3d 987, 997 (11th Cir. 2001) (quotation and citation omitted). 

Channa contends that each of the 1,834 individual carpets constituted a

COGSA package. This argument is without merit. We find no error in the Magistrate

Judge’s analysis of this issue or in the grant of partial summary judgment to Hybur

based on its finding that the pallets, not the carpets, constituted the COGSA packages.

(R.1-38 at 12-13.)

Channa next argues that the district court erred by finding that it failed to prove

shortage at outturn. Because we affirmthe Magistrate Judge’s finding that each pallet

constituted a package, Hybur is only potentially liable for $500 per missing pallet, not

$500 for each carpet contained therein. In order for Hybur to be responsible for the

four missing pallets under COGSA, Channa must prove that the pallets were lost

while in Hybur’s control. Plastique Tags, Inc. v. Asia Trans Line, Inc., 83 F.3d 1367,

1369 (11th Cir. 1996) (citation omitted). In order to meet this burden, Channa must

demonstrate: “1) full delivery of the goods in good condition to the carrier, and 2)

outturn by the carrier of the cargo with damaged or missing goods.” Id. Although

the Magistrate Judge found that Channa sufficiently established “that it made a full

delivery of the carpets . . . to Hybur by virtue of the terms of the Bill of Lading,” the

Magistrate Judge found that Channa “failed to demonstrate that there was a shortage

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of carpets at outturn.” (R.1-62 at 15.) We consider, then, whether the Magistrate

Judge erred in finding that Channa did not prove such a shortage. 

The Magistrate Judge found that both seals remained intact throughout the

period Hybur controlled the container, and were only removed after reaching the

container’s final destination in Cozumel. Although this fact tends to suggest the loss

did not occur while Hybur possessed the container, it is not determinative. See Bally,

Inc. v. M.V. Zim America, 22 F.3d 65, 69-70 (2d Cir. 1994). Moreover, Channa failed

to introduce evidence suggesting the container was tampered with. The Magistrate

Judge also found that Channa did not offer any evidence suggesting it was more

likely that the missing carpets were removed while in Hybur’s possession than at any

time after Hybur transferred the carpets to the custody of the consignee, including

when the container was in Puerto Morelos at the Port Administration facilities, en

route to the warehouse in Cozumel, or after it reached the warehouse where the loss

was discovered. (R.1-62 at 24.) 

The Magistrate Judge’s conclusion isfurther supported by the fact that Channa

did not report the loss to Hybur until one year after it discovered the missing carpets.

This fact serves as prima facie evidence that Hybur delivered all the carpets. 

COGSA, § 3(6). Accordingly, the Magistrate Judge’s factual finding that Channa

failed to establish a loss of carpets at outturn was not clearly erroneous. 

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AFFIRMED. 

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