Court Opinion

ID: 74182
Source: CourtListenerOpinion
Date Created: 2010-04-26 08:41:23+00
Date Added: 2024-06-11T12:10:58.833165
License: Public Domain

[PUBLISH]

               IN THE UNITED STATES COURT OF APPEALS

                        FOR THE ELEVENTH CIRCUIT                  FILED
                                                         U.S. COURT OF APPEALS
                          ________________________         ELEVENTH CIRCUIT
                                                                11/12/99
                                 No. 99-08145                THOMAS K. KAHN
                          ________________________               CLERK
                          D. C. Docket No. CV 498-241

MESOCAP IND. LIMITED,

                                                              Plaintiff-Appellant,

                                     versus

TORM LINES,

                                                             Defendant-Appellee.

                          ________________________

                   Appeal from the United States District Court
                      for the Southern District of Georgia
                        _________________________
                             (November 12, 1999)

Before EDMONDSON and BIRCH, Circuit Judges, and OWENS*, Senior District
Judge.

OWENS, Jr., Senior District Judge:

      *
         Honorable Wilbur D. Owens, Jr., Senior U.S. District Judge for the Middle
District of Georgia, sitting by designation.
       Plaintiff Mesocap Industries Limited (Mesocap) and Tradelink Exports Corp.

(Tradelink), on September 25, 1998, brought this Admiralty action to recover from

defendant Torm Lines (Torm) for damage to Mesocap cargo that Torm carried on its

vessel in 1996 from Savannah, Georgia to Calabar, Nigeria by way of Cotonou, Benin.

Over Mesocap’s opposition, Torm moved under F.R.Civ. P. 12(b)(6) to dismiss

Mesocap’s Complaint because it was filed more than one year after the delivery of

goods or the date when the goods should have been delivered, and is therefore barred

by the one-year limitation period of the Carriage of Goods by Sea Act (COGSA), 46

U.S.C.A App. §§ 1300-1315 (1994). The district court granted Torm’s Motion to

Dismiss based on the reasoning in Bunge Edible Oil Corp. v. M/V Torm Rask, 756

F.Supp. 261 (E.D. La. 1991), aff’d 949 F.2d 786 (5th Cir. 1992)(An unreasonable

course deviation by a carrier does not prevent it from invoking COGSA’s one-year

limitation period because the limitation has no conceptual nexus with cargo risk

allocation). Mesocap and Tradelink appeal the district court’s grant of defendant

Torm’s Motion to Dismiss, arguing that Torm’s COGSA time limitation defense is

precluded because Torm substantially deviated from the contract’s delivery terms. We

affirm the district court.

I. Background

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      Mesocap contracted with Torm for the shipment of three containers of goods

from Savannah, Georgia to Calabar, Nigeria aboard Torm’s vessel, the M/V

ESTETURM. The containers were discharged at Cotonou, Benin on March 13, 1996.

On March 16, 1996 Mesocap obtained “a pre-clearance approval/advanced release”

from Torm’s agent at Cotonou permitting the shipment of the three containers to

continue on to Calabar, Nigeria. However, Torm did not ship the containers to

Calabar. Eventually, Mesocap made arrangements with OT Africa Lines to complete

the shipment of the containers, and OT Africa shipped two of the three containers to

Port Harcourt, Nigeria in December, 1996. The cargo in the third container was

discovered to be “moldy and rotten” due to salt water damage. Plaintiffs allege that

the damage, totaling $110, 646.55, took place while aboard Torm’s M/V

ESTETURM.

II. Issue on Appeal

       Plaintiffs concede that suit was not brought within COGSA’s one-year

limitation period. The issue presented by this appeal is whether an unreasonable

course deviation by an ocean common carrier prevents the carrier from invoking

COGSA’s one-year limitation for bringing suit on a cargo damage claim.

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III. Standard of Review

      In reviewing an order granting a motion to dismiss, the appellate court must

accept the factual allegations of the complaint as true and may affirm the dismissal of

the complaint “only if it is clear that no relief could be granted under any set of facts

that could be proved consistent with the allegations.” Hishon v. King & Spalding, 467

U.S. 69, 73, 81 L.Ed.2d 59, 65, 104 S.Ct. 2229 (1984); Conley v. Gibson, 355 U.S.

41, 45-46, 2 L.Ed. 80, 85-86, 78 S.Ct. 99 (1957). The Appellate Court reviews the

District Court’s legal conclusions de novo. G.S.W., Inc. v. Long County, 999 F.2d

1508 (11th Cir. 1993).

IV. Discussion

      COGSA is a comprehensive statute intended to limit the liability of carriers

engaged in international shipping. Unimac Co., Inc. v. C.F. Ocean Service, Inc.,

43 F.3d 1434, 1436 (11th Cir. 1995). It applies to “all contracts for carriage of

goods by sea to or from ports of the United States in foreign trade.” Id., citing 46

U.S.C.A.App. § 1312. The Statute defines “foreign trade” as “the transportation of

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goods between the ports of the United States and ports of foreign countries.” Id.

Because the dispute between Mesocap and Torm stems from a contract for the

shipment of goods from Savannah, Georgia to Calabar, Nigeria, COGSA governs

this transaction.

      Torm argues that the district court correctly concluded that COGSA bars

Mesocap’s recovery. The relevant provision of COGSA’s one-year limitation

period, 46 U.S.C.A.App. § 1303(6), provides that “the carrier and the ship shall be

discharged from all liability in respect of loss or damage unless suit is brought

within one year after delivery of the goods or the date when the goods should have

been delivered.” Torm argues that Mesocap’s claim is barred because Mesocap

had custody and control of the cargo no later than December 1996 when Mesocap

made arrangements with OT Africa Lines to transport the cargo to Contonou,

Nigeria and Mesocap did not file its complaint until September 25, 1998, more

than one year after delivery**. Mesocap acknowledges that if COGSA applies, the

carrier is discharged from all liability in respect of loss or damage since suit was

not brought within one year after delivery of the goods or the date when the goods

      **
         Note, however, that Cerro Sales Corp. v. Atlantic Maritime Enterprises Inc., 403
F.Supp. 562, 565 (S.D.N.Y. 1975), holds that the delivery date is of no importance and
the limitations period runs from the date the goods should have been delivered. citing
Western Gear Corporation v. States Marine Lines, Inc., 362 F.2d 328 (9th Cir. 1966).
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should have been delivered, but argues that Torm unreasonably deviated from the

contract nullifying the contract of carriage and making COGSA inapplicable, citing

Unimac Co., Inc. v. C.F. Ocean Service, 43 F.3d 1434, 1437 (11th Cir. 1995).

      Torm concedes, for the purposes of appeal, that it unreasonably deviated

from the contract of carriage, but argues that, as a matter of law, it nevertheless

must prevail. The issue, then, is whether an unreasonable course deviation by a

carrier prevents it from invoking COGSA’s one-year limitation period.

      The effect of a deviation on the COGSA time bar is unsettled in this circuit.

Two district court cases from the Southern District of Florida have reached

different conclusions on this issue, See Birdsall, Inc. v. Tramore Trading Co., Inc.,

771 F.Supp. 1193, 1198-1199 (S.D. Fla. 1991)(upholding the COGSA one-year

time limitation despite a deviation), and Allstate Insurance Co. v. International

Shipping Corp., 1982 A.M.C. 1763, 1769 (S.D. Fla. 1981)(holding that a deviation

nullifies the time limitation), aff’d on other grounds, 703 F.2d 497 (1983)(holding

that no one-year limitation period was applicable to the action, hence, no need to

reach any other issues (such as whether a deviation nullifies the time limitation)),

but this court has not specifically addressed the issue. This court, however, has

addressed the COGSA’s $500 per package limitation on liability, but in doing so

declined to reach the one year limitation in Unimac Co., Inc. v. C.F. Ocean

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Service,43 F.3d 1434, 1437 n.5 (11th Cir. 1995)(“we need not decide whether a

deviation would strip a carrier of both the $500 limitation on liability and the

statute of limitations, or as the Fifth Circuit has held, merely of the liability

limitation, and not of the one-year statute of limitations”). Further, while this court

in Hale Container Line, Inc. v. Houston Sea Packing Co., 137 F.3d 1455 (11th Cir.

1998), quoted Unimac for the following proposition: “The doctrine of deviation

provides that, when a ship deviates from the contract of carriage or varies the

conduct in the carriage of goods, increasing the risk of shipment of the goods,

COGSA does not apply because the bill of lading, which acts as the contract of

carriage, is nullified,” it did not distinguish between the $500 liability limitation

and the one-year limitation as Unimac indicated was necessary. Id. at 1469.

Furthermore, all discussion in Hale Container Line, Inc., related to the $500

liability limitation (not the time limitation). Id.

      The Fifth Circuit specifically addressed the issue at hand when it held that

the deviation doctrine only nullifies COGSA’s $500 per package liability

limitation, not its one-year statute of limitation. See Bunge Edible Oil Corp. v.

M/V Torm Rask, 756 F.Supp. 261, 266 (E.D. La. 1991), aff’d 949 F.2d 786, 788

(5th Cir. 1992). The filing limitation provision, the court reasoned, had little to do

with the parties’ risk of loss allocation with respect to the cargo. Id. Hence, an

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unreasonable deviation logically disturbs only the parties’ expectations concerning

the risk of loss, but not their expectations about when they can sue. Id. No

justification exists, then, to nullify COGSA’s limitation period merely because a

carrier veers off course. Id. at 263-66. Accord: Francosteel Corp. v. N.V.

Nederlandsch Amerikaansche, Stoomvart-Maatschappij, 57 Cal. Rptr. 867, 1967

A.M.C. 2440 (Cal. Dist. Ct. App. 1967), cert. denied, 389 U.S. 931, 19 L.Ed.2d

282, 88 S.Ct. 293 (1967); Birdsall, Inc. v. Tramore Trading Co., Inc., 771 F.Supp.

1193, 1198-1199 (S.D. Fla. 1991).

      While some courts side with Mesocap on this issue, those cases can be

distinguished or are unpersuasive. See Northwestern Nat’l Ins. Co. v. Galin, 1988

AMC 878, 879 (S.D. N.Y. 1987), citing Cerro Sales Corp. v. Atlantic Maritime

Enterprises Inc., 403 F.Supp. 562, 566 (S.D. N.Y. 1975) (“An unreasonable

deviation deprives the ocean carrier of COGSA’s one-year time limitations”).

Neither Northwestern nor Cerro provide a basis or rationale for so holding.

Additionally, Yang Machine Tool Co., v. Sea-Land Service, Inc., 58 F.3d 1350 (9th

Cir. 1995), General Electric Co. Int’l Sales Division, v. S.S. Nancy Lykes, 706

F.2d 80 (2nd Cir. 1983), Sedco, Inc. v. SS Strathewe, 800 F.2d 27, 32, 1986 AMC

2801 (2nd Cir. 1986), Asahi America, Inc. v. M/V Arild Maersk, 602 F.Supp. 25,

1986 AMC 53 (S.D.N.Y. 1985), and Nemeth v. General Steamship Corp., 694 F.2d

                                         8
609, 613 (9th Cir. 1982), cited by Mesocap, did not specifically discuss whether an

unreasonable deviation eliminated the one-year statute of limitations defense; they

only dealt with the $500 liability limitation. Finally, the Court in Yutana Barge

Lines, Inc., v. Northland Services, Inc., 574 F.Supp. 1003 (W.D. Wash. 1983), held

that since an unreasonable deviation deprives the carrier of contractual and

statutory limitations of liability (because the deviation subjects the cargo to risks

the shipper did not anticipate), a defendant may not rely upon its (1) time-bar, (2)

package/customary freight unit limitation, and peril of the sea defenses. Yutana, at

1005-1006.

      This court is persuaded by the reasoning in Bunge. An unreasonable course

deviation, while increasing the risk of loss (hence the need for elimination of the

per package limitation defense), has no bearing on a plaintiff’s ability to timely file

a lawsuit. In other words, a deviation in the delivery terms creates no greater risk

that plaintiff will not be able to file suit within the statutory period. Accordingly,

this court joins the Fifth Circuit in concluding that an unreasonable course

deviation does not nullify COGSA’s one year statute of limitation.

      AFFIRMED

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