Opinion ID: 3009823
Heading Depth: 2
Heading Rank: 1

Heading: The Tongil Action

Text: Hyundai’s indemnity claim originates in an action brought by Tongil in the District Court for the Central District 0 Given our conclusion that the district court erred in failing to give preclusive effect to the Atlantic Mutual decision, we need not address the correctness of the district court’s resolution of the merits, i.e. its holding that the provision in the Burlington circular (adopted as part of the contract of carriage), providing an absolute time limit for the filing of claims, is not subject to the general common law rule of accrual in indemnity actions, which provides that a cause of action in indemnity does not accrue -- and thus that a statute of limitations does not begin to run -- until such time that liability is determined or a cognizable loss is suffered. 4 of California for damages sustained to a cargo of furnace equipment shipped aboard M/V Hyundai Innovator in 1986 from Seattle, Washington to Pusan, South Korea. See Tongil Co. v. Vessel Hyundai Innovator, Case No. 88-04895 (C.D. Ca. 1988). The cargo had originally been shipped from Milwaukee to Seattle via Burlington railcar. On August 10, 1988, Tongil filed suit against Hyundai for the damages sustained to the shipment. On December 15, 1988, in response, Hyundai gave Burlington notice of its indemnity claim, but Burlington denied Hyundai’s claim as not having been filed within the nine month time limitation prescribed in its circular and adopted as part of the contract of carriage. In particular, Burlington relied on Item 12 of its Rules Memorandum 2-C, which provides: As a condition precedent to recovery, any claim for loss or damage to lading shall be filed with BN [Burlington Northern] within nine (9) months of the date of delivery of the shipment, or within nine (9) months of a reasonable time for delivery in the event of non-delivery. Claim shall be supported with a copy of the shipping order, invoice, inspection report, or other proof of loss, and, if possible, the paid freight bill. App. at 107. In the underlying action by Tongil against Hyundai, to which Burlington was not a party, the District Court for the Central District of California concluded, following a bench trial, that the cargo was in fact damaged while in the possession of Burlington; yet the court awarded Tongil $114,870.64 in damages, interests, and costs against Hyundai. Hyundai appealed the judgment to the Ninth Circuit Court of Appeals, which 5 reversed. See Tongil Co. v. Vessel Hyundai Innovator, 968 F.2d 999 (9th Cir. 1992). Following the appeal, Hyundai settled the action with Tongil for $10,000 and then on January 26, 1993, requested indemnity of this amount together with legal expenses and costs totaling $104,079.49, which Burlington again denied.