Opinion ID: 507127
Heading Depth: 1
Heading Rank: 4

Heading: Indirect and Consequential Damages Clause

Text: 23 Section IX of Contract 1038 comes under the heading Berth, Loading and Demurrage. Section 9.1 deals generally with berthing responsibilities. Subsections 9.2(a)-(f) describe demurrage charges that Occidental was obligated to pay if Nissho's vessels were delayed at port. Subsection 9.2(g) provides: No claim shall be made by [Nissho] under any circumstances for indirect and consequential damages except as may otherwise be provided herein. Section 20.1 of Contract 1038 provides that headings do not necessarily control content. 5 Occidental argued on retrial that subsection 9.2(g) is not restricted to demurrage claims and barred Nissho from recovering all damages claimed in this suit. The district court, however, held as a matter of law that Sec. 9.2(g) of the Contract is unambiguous and relates only to demurrage claims. 24 On appeal, Occidental argues that the district court misread the panel opinion. The prior panel declined to decide whether subsection 9.2(g), raised for the first time on appeal, constituted a complete defense because [i]t is not clear that the proper interpretation of [this subsection] would have involved a pure question of law had it been raised properly at trial. Nissho, 729 F.2d at 1549. Occidental reads the balance of the opinion's discussion of subsection 9.2(g) to stand for two propositions. First, if subsection 9.2(g) is unambiguous it applies to all claims by Nissho for consequential damages. Second, it is Nissho's burden to establish an ambiguity and raise an issue of fact. 25 Occidental's interpretation of the panel opinion is incorrect. Although the prior panel did opine that the placement of the single reference to consequential damages near the end of the lengthy, precisely defined demurrage provisions made it at least ambiguous whether it applied to any other part of the contract, there are only two decisional aspects to the panel's discussion of subsection 9.2(g). First, the panel could not resolve the question on that prior appeal because it might involve facts not yet decided. Second, Occidental was not to be precluded from raising the clause during the retrial on damages. On remand, Occidental failed to protect its right to offer factual evidence to establish the ambiguity the panel noted might exist. We affirm the district court ruling that section 9.2(g), when headings are ignored and the contract is read as a whole, is unambiguous and relates only to demurrage claims.