Court Opinion

ID: 4123674
Source: CourtListenerOpinion
Date Created: 2017-02-06 22:00:27.757642+00
Date Added: 2024-06-11T09:23:38.589127
License: Public Domain

United States Court of Appeals
                      For the First Circuit

No. 15-2482

                MEDITERRANEAN SHIPPING CO., S.A.,

                       Plaintiff, Appellee,

                                v.

                    BEST TIRE RECYCLING, INC.,

                      Defendant, Appellant,

                                v.

    ARMSTRONG INTERNATIONAL, INC., d/b/a ARMSTRONG EXCHANGE;
                       JOHN WAYNE KWANGE,

                     Third Party Defendants.

          APPEAL FROM THE UNITED STATES DISTRICT COURT
                 FOR THE DISTRICT OF PUERTO RICO
        [Hon. Bruce J. McGiverin, U.S. Magistrate Judge]

                              Before
                       Howard, Chief Judge,
              Torruella and Kayatta, Circuit Judges.

     Israel Roldán-González, with whom Isis Aimée Roldán-Márquez
were on brief, for appellant.
     Alberto J. Castañer-Padró, with whom Castañer Law Offices
P.S.C. was on brief, for appellee.

                         February 6, 2017
             TORRUELLA, Circuit Judge.                The present dispute arises

out of a contract for the shipment of used tires from Puerto Rico

to Vietnam.      The shipment accrued demurrage charges, port storage

charges, and related administrative fees, apparently because it

arrived late to Vietnam.            On summary judgment, the district court

found that Best Tire Recycling, Inc. ("Best Tire") was the shipper,

and therefore, pursuant to the bills of lading, was liable for the

charges    and     fees    to     the    carrier,     Mediterranean     Shipping   Co.

("Mediterranean").         Best Tire now contends that the district court

erred in holding that there were no genuine issues of material

fact as to whether Best Tire was the shipper.                   However, Best Tire

was designated as the shipper on the bills of lading, and we

therefore affirm the findings of the district court.

                                    I.    Background

             Mediterranean is an ocean common carrier that transports

goods between the United States and foreign countries.                     Best Tire

is a Puerto Rico-based corporation that collected and transported

scrap tires, among other things, within Puerto Rico.                        In 2012,

John Wayne Kwange ("John Wayne"), doing business as Armstrong

Exchange and/or Armstrong International, Inc. ("Armstrong") hired

Best Tire to deliver forty containers of scrap tires to the port

of   San   Juan,    Puerto      Rico     for   $600    a   container.      Best    Tire

instructed       John     Wayne    to     contact     Mediterranean,     the   common

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carrier, to get booking information and then inform Best Tire of

the arrangement.

           On April 3, 2012, John Wayne emailed Gypsa Carrión, of

Oceanic General Agency, an agent of Mediterranean, and requested

price quotes to ship tires from San Juan, Puerto Rico to Haiphong,

Vietnam.      Best Tire was copied on this email and admits to

receiving it.    In this email, John Wayne designated Best Tire as

the "shipper" and Phong Vuong Limited Company as the "consignee."

On April 11, Ms. Carrión sent a reply email to John Wayne and Nydia

Caro, Best Tire's administrative assistant, providing them with

"booking numbers for the next 4 sailings" and further notifying

them that Mediterranean was "creating the shipper in their system."

In this email, Ms. Carrión also stated:   "[Y]our trucker may start

pulling out the [container] units with . . . just the [booking]

number[s]."

           Once Best Tire received the booking information, it

subcontracted with IPM Transport to bring empty containers from

the port of San Juan to Best Tire's storage facilities in Rincón,

Puerto Rico, and then to transport the containers, filled with

scrap tires, back to Mediterranean's cargo ship in the port of San

Juan.   Between April and May of 2012, all containers were delivered

and Best Tire charged John Wayne $600 per delivered container.

Mediterranean issued bills of lading for each of the scrap tire

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shipments    and,     consistent     with     John   Wayne's     initial   email,

identified Best Tire as the shipper.

            Best Tire admits that it received the bills of lading.

Mediterranean's standard bill of lading provides that, inter alia,

"[e]very Person defined as a Merchant is jointly and severally

liable     towards        [Mediterranean]      for   all    of     the     various

undertakings, responsibilities, and liabilities of the Merchant."

A "Merchant" is defined to "include[] the Shipper, Consignee,

holder of th[e] 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."    "Freight" is defined to "include[] the freight and all

charges, costs and expenses whatsoever payable to [Mediterranean]

in accordance with the applicable Tariff and this Bill of Lading,

including   storage,       per   diem   and   demurrage."        Mediterranean's

standard    bill     of    lading   also    incorporates    "[t]he    terms   and

conditions of [Mediterranean's] applicable Tariff," which include

information about "demurrage, per diem, storage expenses and legal

fees."

            When the cargo ultimately arrived at its destination in

Vietnam, the consignee refused to accept delivery, apparently

because the shipment arrived late.            As a result of the consignee's

refusal to accept the shipment, Mediterranean had to store it.                  In

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total,   this    stored   cargo    incurred     demurrage    charges    totaling

$353,083.50,     port-storage      charges      totaling    $36,780,    and   an

administrative fee totaling $300.             Moreover, Mediterranean argued

"that $69,889.54 of the cost to ship the freight from Puerto Rico

to Vietnam remained unpaid."        Best Tire received a total of $24,000

for its services in this transaction.

           The    district      court    sitting     in     admiralty    granted

Mediterranean's motion for summary judgment, holding that Best

Tire was a party to the contract of ocean carriage and as such was

liable to Mediterranean for unpaid ocean freight charges, shipping

container demurrage, port storage and related administrative fees.

                          II.    Standard of Review

           "Summary judgment is appropriate when the record shows

that 'there is no genuine dispute as to any material fact and the

movant is entitled to judgment as a matter of law.'"              Farmers Ins.

Exch. v. RNK, Inc., 632 F.3d 777, 782 (1st Cir. 2011) (quoting

Fed. R. Civ. P. 56(a)).         "We review de novo the grant of a motion

for summary judgment."       Id.   "[W]e may affirm the entry of summary

judgment on any ground made manifest by the record, so long as the

record reveals that there is no genuine issue as to any material

fact and that the moving party is entitled to judgment as a matter

of law."    Batista v. Cooperativa de Vivienda Jardines de San

Ignacio, 776 F.3d 38, 42 (1st Cir. 2015) (citation omitted).

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                          III.   Discussion

          "'To ascertain what contract was entered into[, courts]

look primarily to the bills of lading, bearing in mind that the

instrument serves both as a receipt and as a contract' and that

'[o]rdinarily, the person from whom the goods are received for

shipment assumes the obligation to pay the freight charges; and

his obligation is ordinarily a primary one.'"      EIMSKIP v. Atlantic

Fish Market, Inc., 417 F.3d 72, 77 (1st Cir. 2005) (quoting

Louisville & Nashville R.R. v. Cent. Iron & Coal Co., 265 U.S. 59,

67 (1924)).

          Nevertheless, the "pattern and presumption" that the

party identified as "shipper" on the bills of lading is the party

that bears liability "can be overcome by statute, by contractual

provisions, or by the parties' course of conduct."        Id. (citing

Louisville & Nashville R.R., 265 U.S. at 67-68.).

          It is uncontested that Best Tire is designated as the

shipper on all of the bills of lading.        Best Tire does not argue

that the presumption this creates is overcome by statute or by a

contractual provision.   Rather, Best Tire argues that the parties'

course of conduct overcomes the pattern and presumption that Best

Tire bears liability.    We find that it does not.

          Best Tire relies heavily on our reasoning in EIMSKIP.

In EIMSKIP, the district court had found Atlantic liable to

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EIMSKIP,   the    common   carrier,    even    though       Atlantic   was   not

identified   as   the   shipper   on   the    bills    of    lading;   Atlantic

appealed, and we affirmed.        Id. at 76.        We relied on Atlantic's

conduct:   it had booked the shipments with EIMSKIP, it was invoiced

for the shipments, and it had orally agreed to pay for them.                 Id.

Mayflower, the party designated as the shipper on the bills of

lading, was never invoiced for the shipments.            Id.    Best Tire sees

a similarity between the conduct of John Wayne and/or Armstrong

and the conduct of Atlantic, in that John Wayne was the one who

contacted Mediterranean to organize the shipments and, seemingly,

prepaid a number of the shipments.

           The fundamental flaw in Best Tire's argument is that in

EIMSKIP, we found that both Mayflower (who was identified as the

shipper on the bills of lading) and Atlantic (who was not) were

liable to the carrier.       "Two parties may each make themselves

liable to a third party for payment of the same freight on a single

shipment -- one by a contract reflected in part by the bill of

lading and the other by explicit promises and course of conduct

independent of the bill of lading."           Id.     Thus, our reasoning in

EIMSKIP does not absolve Best Tire of liability.                 At most, our

reasoning suggests that John Wayne and/or Armstrong could also be

held liable -- however, the district court was unable to serve

either John Wayne or Armstrong, as they are apparently nowhere to

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be found.     In any event, Mediterranean can elect which party it

will hold liable, because Best Tire is jointly and severally liable

to   Mediterranean   --   the   question   whether   John   Wayne   and/or

Armstrong could also be held liable is not before us.

             Best Tire also relies on Norfolk S. Ry. v. Groves, 586
F.3d 1273 (11th Cir. 2009), for the proposition that "a party must

assent to being named as a consignee on the bill of lading to be

held liable as such, or at the least, be given notice that it is

being named as a consignee in order that it might object or act

accordingly."     Id. at 1282.      We need not decide whether Best

Tire's silence can be construed as assent to being named a party

on the bill of lading, because Best Tire was given notice of this

fact.   Best Tire had received two email messages notifying it that

it would be the shipper.        As Best Tire itself admits, it "could

have refused being named as the shipper by replying to those

messages."    In addition, Best Tire received the six bills of lading

on four separate occasions between April 24, 2012 and June 28,

2012.   Best Tire was designated as the shipper on all these bills

of lading.    Yet Best Tire made no objections until August of 2013,

when it received invoices for demurrage and other charges -- well

over a year after it had accepted the bills of lading.1

1  Best Tire raised two additional issues in its appeal brief:
(1) because some of the shipments were marked as "freight prepaid"
Mediterranean is estopped from collecting from Best Tire;

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                         IV.   Conclusion

          The decision of the district court is affirmed.

          Affirmed.

(2) pursuant to the doctrine of laches, Mediterranean may only
collect demurrage and port charges accrued in the 180 days prior
to the filing of the complaint by Mediterranean.    The first of
these issues is being raised for the first time on appeal.
Although Best Tire did identify "laches" as one of several
affirmative defenses in its complaint, these arguments were never
clearly raised or argued before the district court. Both of these
arguments are therefore waived. See Nat'l Ass'n of Soc. Workers
v. Hardwood, 69 F.3d 622, 627 (1st Cir. 1995).

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