Court Opinion

ID: 50649
Source: CourtListenerOpinion
Date Created: 2010-04-26 00:55:17+00
Date Added: 2024-06-11T09:01:12.159543
License: Public Domain

United States Court of Appeals
                                                                 Fifth Circuit
                                                              F I L E D
                IN THE UNITED STATES COURT OF APPEALS
                                                                July 2, 2007
                        FOR THE FIFTH CIRCUIT
                                                          Charles R. Fulbruge III
                                                                  Clerk

                             No. 05-31133

SCAPA FORMING FABRICS; WURTTEMBERGISCHE UND BADISCHE
VERSICHERUNGS-AKTIENGESELLSCHAFT

                 Plaintiffs - Appellees

     v.

BLUE ANCHOR LINE

                 Defendant - Third Party Plaintiff - Appellant

     v.

MEDITERRANEAN SHIPPING CO, S.A.

                 Third Party Defendant - Appellee

             Appeal from the United States District Court
          for the Eastern District of Louisiana, New Orleans
                            No. 2:02-CV-2213

Before DAVIS, DENNIS, and PRADO, Circuit Judges.

PER CURIAM:*

     This appeal concerns who bears responsibility for damage

that resulted to components of a weaving loom machine while it

was being shipped from Germany to the United States.       Jurgens

     *
        Pursuant to 5TH CIR. R. 47.5, the court has determined
that this opinion should not be published and is not precedent
except under the limited circumstances set forth in 5TH CIR. R.
47.5.4.

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Maschinenbau GmbH & Co. (“Jurgens”), the seller of the weaving

loom machine, hired a freight forwarder, Kuehne & Nagle, to

arrange for transportation of the machinery from its facility in

Emsdetten, Germany, to its customer, Scapa Forming Fabrics

(“Scapa”), in Shreveport, Louisiana.   Kuehne & Nagel booked the

cargo for carriage through Defendant-Third Party Plaintiff-

Appellant Blue Anchor Line (“Blue Anchor”), a non-vessel

operating common carrier.   Blue Anchor in turn contracted with

Third Party Defendant-Appellee Mediterranean Shipping Company

(“MSC”) to carry the machinery aboard one of MSC’s motor vessels,

the MSC Giovanna, from Germany to the United States.   The terms

and conditions of the shipment were encompassed in two bills of

lading, one belonging to Blue Anchor and one belonging to MSC.

     In order to ship the weaving loom machine, the components of

the machine were placed in five open-top containers.   Each

container was assigned a stowage location on the MSC Giovanna.

One of these containers, open-top container No. CCSU-340101-0,

was stowed on deck.   During the voyage, the vessel encountered

rough weather and the machinery parts in this particular

container were damaged as a result of contact with saltwater.

     Plaintiffs-Appellees Scapa and Wurttembergische und Badische

Versicherungs-Aktiengesellschaft, Jurgens’s cargo insurer,

(collectively, “Plaintiffs”) filed this lawsuit against Blue

Anchor for damages to the machinery under the Carriage of Goods

by Sea Act (“COGSA”), 46 U.S.C. §§ 1300-1315, and the applicable

                                -2-
bills of lading.   Blue Anchor filed a third-party complaint

against MSC for indemnification.

     Following a bench trial on liability, the district court

rendered judgment in favor of Plaintiffs and MSC.    The district

court determined that Blue Anchor’s bill of lading was a clean

bill of lading for open-top containers because it was silent as

to the stowage location for open-top containers.    According to

the district court, a clean bill of lading implies below-deck

stowage and constitutes an agreement between the shipper and the

carrier that the cargo will be stowed below deck.    Because Blue

Anchor permitted container No. CCSU-340101-0 to be stowed on deck

when its bill of lading required below-deck stowage, the district

court concluded that Blue Anchor unreasonably deviated from its

contract of carriage.

     The district court then examined whether Blue Anchor was

entitled to limit its liability to $500 per package under COGSA,

46 U.S.C. § 1304, or $7000 for the fourteen packages in container

No. CCSU-340101-0.   Although a carrier generally forfeits the

$500 per package limit defense under COGSA when it stows cargo on

deck under a clean bill of lading, the district court noted two

exceptions to this general rule: (1) when the custom of the port

permits on-deck stowage; or (2) when the vessel contains design

or construction features that eliminate or substantially reduce

the risk of on-deck stowage.   Finding neither exception

applicable, the district court concluded that Blue Anchor

                                -3-
forfeited the $500 per package limit defense under COGSA.

     Finally, the district court determined that MSC was not

required to indemnify Blue Anchor for the damage caused to the

machinery components in container No. CCSU-340101-0 over and

above the $500 per package liability limitation to which MSC was

entitled under COGSA.   The district court reasoned that Blue

Anchor knew Jurgens’s cargo was water-sensitive but failed to

impart that critical information to MSC.   In addition, the

district court found that MSC’s bill of lading expressly

conferred upon MSC the right to stow any type of container,

including open-top containers, on deck without notice to the

shipper.

     In a subsequent order, the district court considered whether

Plaintiffs were entitled to prejudgment interest and whether Blue

Anchor was entitled to a credit for the settlement money received

by Plaintiffs from MSC in a separate action.   Finding no evidence

of peculiar circumstances, the district court awarded prejudgment

interest to Plaintiffs.   Regarding the settlement between

Plaintiffs and MSC, the district court concluded that Blue Anchor

was not entitled to a setoff but rather a credit of $7000, which

represented the $500 per package liability limitation to which

MSC was entitled under COGSA.   The district court entered a final

judgment against Blue Anchor on July 29, 2005.

     Blue Anchor timely appealed the district court’s judgment,

challenging the district court’s conclusion that it deviated from

                                -4-
its bill of lading by stowing the weaving machinery on deck.

Blue Anchor argues that even if its bill of lading required

below-deck stowage, its contractual deviation was still

reasonable, entitling it to limit its liability to $500 per

package under COGSA, 46 U.S.C. § 1304.    Blue Anchor also contends

that the district court erred in concluding that it was not

entitled to full indemnification from MSC because, according to

Blue Anchor, MSC was negligent in stowing the container on deck.

Finally, Blue Anchor challenges the district court’s award of

prejudgment interest and the district court’s refusal to offset

the damages by the amount of the settlement between Plaintiffs

and MSC.

     We have jurisdiction over this matter pursuant to 28 U.S.C.

§ 1291.    “In admiralty cases tried by the district court without

a jury, we review the district court’s legal conclusions de novo

and its factual findings under the clearly erroneous standard.”

Steel Coils, Inc. v. M/V Lake Marion, 331 F.3d 422, 426 (5th Cir.

2003).    “If the district court’s findings are plausible, we may

not reverse even if we would have weighed the evidence

differently.”    Rockwell Int’l Corp. v. M/V Incotrans Spirit, 998

F.2d 316, 319-20 (5th Cir. 1993).

     Having reviewed the briefs, the district court’s oral

reasons for judgment, and the pertinent portions of the record,

we find no error of law or fact warranting reversal.   Essentially

                                 -5-
for the reasons stated by the district court, we agree that Blue

Anchor failed to properly stow the container below deck in

accordance with its bill of lading, which was clean as to open-

top containers.   See Searoad Shipping Co. v. E.I. duPont de

Nemours & Co., 361 F.2d 833, 835 (5th Cir. 1966) (stating that

even if the parties have no express agreement regarding below-

deck carriage, “a clean bill of lading imports under deck

stowage”) (internal quotation marks and citation omitted).     In so

doing, Blue Anchor committed an unreasonable deviation, thereby

eliminating the $500 per package limit defense under COGSA.     See

46 U.S.C. § 1304(4)-(5); Constructores Tecnicos S. de R.L. v.

Sea-Land Serv., Inc., 945 F.2d 841, 845 (5th Cir. 1991).     Because

Blue Anchor committed an unreasonable deviation from its contract

of carriage, we affirm the district court’s judgment in favor of

Plaintiffs.

     We also affirm the district court’s judgment in favor of MSC

on Blue Anchor’s indemnification claim for the same reasons given

by the district court in its oral reasons for judgment.    Pursuant

to its bill of lading, MSC had the right to stow “containers of

all types” on deck without notice to Blue Anchor.   Accordingly,

the district court did not err in ruling in favor of MSC on this

issue.1

     1
        To the extent Blue Anchor is basing its theory of
indemnification on the implied warranty of workmanlike
performance, this court has already rejected this theory in cargo

                                -6-
     Lastly, we affirm the district court’s order on damages.

Based on the record before us, we cannot conclude that Blue

Anchor is entitled to a credit for the settlement between

Plaintiffs and MSC.   There is no evidence in the record that

Plaintiffs will be overcompensated in this case.    We also find no

abuse of discretion in the district court’s award of prejudgment

interest.   Blue Anchor has not pointed to any evidence in the

record showing that peculiar circumstances exist.    See Corpus

Christi Oil & Gas Co. v. Zapata Gulf Marine Corp., 71 F.3d 198,

204-05 (5th Cir. 1995).

     Accordingly, for the reasons stated above, we AFFIRM the

judgment of the district court.

     AFFIRMED.

damage cases. See LCI Shipholdings, Inc. v. Muller Weingarten
AG, 153 F. App’x 929, 932 (5th Cir. 2005) (unpublished).

                                  -7-