Court Opinion

ID: 7099
Source: CourtListenerOpinion
Date Created: 2010-04-25 05:24:50+00
Date Added: 2024-06-11T09:38:29.589491
License: Public Domain

United States Court of Appeals,

                             Fifth Circuit.

                              No. 93-2771.

         THYSSEN STEEL COMPANY, et al., Plaintiffs-Appellants,

                                      v.

         M/V KAVO YERAKAS, etc., et al., Defendants-Appellees.

                             April 27, 1995.

Appeal from the United States District Court for the Southern
District of Texas.

Before WISDOM, DUHÉ and BENAVIDES, Circuit Judges.

     DUHÉ, Circuit Judge:

     Thyssen Steel Company and Associated Metals and Minerals

Corporation (collectively Appellants) appeal from summary judgment

entered in favor of Dodekaton Corporation (Appellee).         We reverse

in part, affirm in part and remand.

                                   I. FACTS

     Thyssen     Steel   Company    (Thyssen),   Associated   Metals   and

Minerals Corporation (AMMC) entered into a contract of carriage

with Europe-Overseas Steamship Lines (Eurolines) to transport steel

pipe from Europe to the United States aboard the vessel M/V YERAKAS

which had been time chartered to Eurolines by its owner, Dodekaton

Corporation (Dodekaton). The cargo was loaded pursuant to bills of

lading issued and signed by Eurolines' agent "for the master."

     Thyssen and AMMC contend that, upon arrival, some of the cargo

was damaged, and that the damage occurred during transit.1        Thyssen

     1
      Although this issue is not before us, the bills of lading
indicate that some of the cargo was damaged prior to loading.

                                      1
and Associated sued the M/V KAVO YERAKAS in rem, Dodekaton and

Eurolines.      The district court granted Dodekaton's motion for

summary judgment and entered a final "take nothing" judgment.              The

remaining defendants settled, and Appellants dismissed all of their

claims except those against Dodekaton.

                         II. STANDARD OF REVIEW

      Summary judgment is appropriate if the record discloses "that

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

moving party is entitled to a judgment as a matter of law."

Fed.R.Civ.P. 56(c).      In reviewing the summary judgment, we apply

the same standard of review as did the district court.             Waltman v.

International Paper Co., 875 F.2d 468, 474 (5th Cir.1989);                Moore

v.   Mississippi    Valley   State   Univ.,    871 F.2d 545,    548   (5th

Cir.1989).

                 III. IS DODEKATON A COGSA "CARRIER"?

A. In General

       Under COGSA, a cargo owner may recover only from the carrier

of the goods.      Pacific Employers Ins. Co. v. M/V GLORIA, 767 F.2d
229, 234 (5th Cir.1985);     Associated Metals & Minerals Corp. v. SS

PORTORIA, 484 F.2d 460, 462 (5th Cir.1973).           A "carrier" is "the

owner or the charterer who enters into a contract of carriage with

a shipper."   46 U.S.C.App. § 1301(a).        A "contract of carriage" is

a contract of carriage covered by a bill of lading or other similar

document of title.      46 U.S.C.App. § 1301(b).        We have expressly

held that to recover under COGSA, the cargo owner must establish

that the vessel owner or charterer executed a contract of carriage

                                     2
with the cargo owner.          See Pacific Employers, 767 F.2d at 236-37.

          A contract of carriage with the vessel owner may be either

directly between the parties, or by virtue of the charterer's

authority to bind the vessel owner by signing the bill of lading

"for the master."        Pacific Employers, 767 F.2d at 236.          See also In

re Intercontinental Properties Management, S.A., 604 F.2d 254, 258

n. 3 (4th Cir.1979).        However, if the charterer signs the bill of

lading without the authority of the vessel owner, then the owner

does not become a party to the contract of carriage and does not

become liable as a "carrier" within the meaning of COGSA.                Pacific

Employers, 767 F.2d at 237;          J. Gerber & Co., Inc. v. M/V INAGUA

TANIA, 828 F. Supp. 458, 460 (S.D.Tex.1992).              The cargo owner has

the burden to prove that the vessel owner was a party to the

contract, and its failure to do so establishes that the cargo owner

did   not    rely   on   the    vessel   owner   to   perform   the    contract.

Associated Metals, 484 F.2d at 462.

B. The District Court's Holding

      The district court held that Dodekaton was not liable for the

cargo damage as a COGSA carrier.             Relying in particular on Clause

8 of the charter party,2 the court found that Dodekaton did not

become a party to the contract of carriage because the master was

the agent of Eurolines, with no authority to issue bills of lading

on behalf of Dodekaton.          The court did not address the argument

that the Charterer (Eurolines) had authority to sign bills of

      2
      The full text of the relevant provisions of the instant
charter party and the Pacific Employers and Yeramex charter
parties are set out in the Appendix.

                                         3
lading on behalf of Dodekaton3 based on charter party provisions

almost identical to those contained in Pacific Employers.

     In Pacific Employers, we found that charter party provisions

largely indistinguishable from Clauses 8 and 45 in the instant

charter party authorized the charterer to sign bills of lading on

behalf of the vessel owner. Pacific Employers, 767 F.2d at 237-38.

We distinguished Yeramex, Int'l v. S.S. TENDO, 595 F.2d 943 (4th

Cir.1979)    because    the   Yeramex      charter   party   contained      an

indemnification    of   the   owner       by   the   charterer      "from   all

consequences arising out of Master or agents signing bills of

lading in accord with charterers' instructions."             Id.4     Although

the instant charter party contains provisions almost identical to

those in Pacific Employers, it also contains an indemnification

provision similar to that in the Yeramex charter party.               For this

reason, this case is distinguishable from Pacific Employers, and we

address res nova the effect of the indemnity provision.

C. Effect of the Indemnity Provision

         A careful examination of the Yeramex opinion reveals that

while the Fourth Circuit may have viewed the indemnity provision as

     3
      Although copies of some of the bills of lading do not
include the signature line showing that they were signed "for the
master," Dodekaton concedes that Eurolines' agent signed the
bills of lading "for the master."
     4
      We also attempted to distinguish Yeramex on the basis that
the charter party in Yeramex did not contain language which
authorized the master, as agent of the owner, to permit the
charterer to sign bills of lading on his behalf. However, upon
re-examination of the Yeramex charter party, as set out in the
Fourth Circuit's opinion, we have found that the charter party in
fact contained authorization language virtually identical to the
language we relied on in Pacific Employers. See Appendix.

                                      4
evidence that the master acted as agent for the charterer vis-a-vis

the cargo, the court did not interpret the provision, by itself, to

relieve the vessel owner of liability to the shipper.5

     Under these [agency and indemnity] provisions, the owner is
     responsible for navigation and seaworthiness of the vessels;
     the charterer is responsible for all matters relating to cargo
     other than trim and stability and other matters affecting the
     vessels' seaworthiness.     As between the owner and the
     charterer, MCL is solely responsible for notice of visible
     damage to cargo when accepted for loading by MCL or its agents
     at port.

Yeramex, 595 F.2d at 947-48 (emphasis supplied).         In fact, a

provision in a contract of carriage that purports to relieve a

party of COGSA liability is expressly void under the Act.   See, 46

U.S.C.App. § 1303(8).6    Therefore, the indemnity provision has no

bearing on whether Appellee is liable as a COGSA carrier.

     We are left with a charter party and bill of lading that

cannot be meaningfully distinguished from the charter party and

bill of lading in Pacific Employers, and our decision is determined

by the holding therein.     Clause 45 of the instant charter party

authorized the master to allow Eurolines' agent to sign the bills

     5
      By its nature, an indemnity provision simply allocates loss
between joint tortfeasors, and cannot relieve a culpable party of
its liability vis-a-vis the injured third-party.
     6
      46 U.S.C.App. § 1303(8) provides,

               Any clause, covenant, or agreement in a contract
          of carriage relieving the carrier or the ship from
          liability for loss or damage to or in connection with
          the goods, arising from negligence, fault, or failure
          in the duties and obligations provided in this section
          or lessening such liability otherwise and as provided
          in this chapter, shall be null and void and have no
          effect. A benefit of insurance in favor of the
          carrier, or similar clause, shall be deemed to be a
          clause relieving the carrier from liability.

                                  5
of lading and therefore to bind Appellee.       On remand, Appellants

will have the burden of proving that the master in fact granted

Eurolines permission to sign on his behalf.       If Appellants carry

this burden, they will prove that Appellee satisfies the Pacific

Employers framework, is in privity of contract and thereby meets

the definition of a COGSA carrier.      In that event, the remaining

issues may prove moot.      However, because we cannot presently be

certain whether Appellee satisfies both prongs of the Pacific

Employers framework, we address the remaining issues.

           IV. IS PRIVITY OF CONTRACT A COGSA PREREQUISITE?

         Thyssen and Associated rely on cases7 from the Second Circuit

to assert a direct claim against the vessel owner under COGSA in

the absence of privity of contract.       See Siderius, Inc. v. M.V.

AMILLA, 880 F.2d 662 (2d Cir.1989) (holding that when charterer's

liability to cargo owner arises because vessel was not seaworthy,

vessel owner may be directly liable to cargo owner for breach of

warranty of seaworthiness);       Samsung America, Inc. v. M/T FORT

PRODUCER, 798 F. Supp. 184 (S.D.N.Y.1992) (holding both charterer

and vessel owner liable because they were closely related business

entities with authority to act for each other);    Joo Seng Hong King

     7
      Thyssen and Associated also rely upon Trade Arbed, Inc. v.
S/S ELLISPONTOS, 482 F. Supp. 991 (S.D.Tex.1980), as authority for
their argument that the vessel owner may be held liable for cargo
damage under COGSA in the absence of privity of contract. "Trade
Arbed merely recognized that, for purposes of considering a
motion to dismiss, it was not inconceivable that both a charterer
and a vessel owner could be carriers under COGSA. But, it
expressly refused to "mak[e] a determination of which parties are
COGSA carriers.' " Tuteur Associates, Inc., No. 93-2573, 24 F.3d
237 (5th Cir. May 18, 1994).

                                   6
Co., Ltd. v. S.S. UNIBULKFIR, 483 F. Supp. 43, 46 (S.D.N.Y.1979)

(construing term "carrier" broadly to include all charterers and

owners to allow for discovery before dismissal of parties not named

on bill of lading).          However, these cases are distinguishable, and

are not controlling authority in this Circuit which requires

privity of contract of carriage before liability under COGSA

arises.

         Although the district court did not directly address the

argument that the "Demise" clause in the bills of lading shifted

liability    from      the   charterer     to    the   vessel   owner,   the   court

correctly disregarded the argument as such clauses are void under

COGSA.    46 U.S.C.App. § 1303(8).              See also Amoco Transport Co. v.

S/S MASON LYKES, 768 F.2d 659, 663 n. 4 (5th Cir.1985).

                                   V. BAILMENT

     Appellants also argue that the district court erred in holding

that no bailment claim exists against the vessel owner for cargo

damage. Specifically, Thyssen and Associated contend that, even if

Dodekaton is not a carrier within the meaning of COGSA, Dodekaton

is liable for the cargo damage as a bailee under common law or

general maritime law.            They cite Tuscaloosa Steel Corp. v. M/V

NAIMO,    1993 A.M.C. 622,    626-27,       1992 WL 477117   (S.D.N.Y.1992)

("[F]airness dictates that the law of bailment be an available

remedy to a shipper where the owner is not bound to the contract of

carriage."), and DB-Trade Int'l, Inc. v. Astramar, 1988 A.M.C. 766,

767 (N.D.Ill.1987) (defendant's "non-liability as a "carrier' under

COGSA    does    not    negate    these        other   common   law    theories   of

                                           7
liability").    Id.8

         COGSA applies to all bills of lading or similar documents

that evidence contracts of carriage of goods by sea in foreign

trade to and from United States ports.     46 U.S.C.App. § 1300.   The

"carriage of goods" is defined as covering "the period from the

time when the goods are loaded on to the time when they are

discharged from the ship."    46 U.S.C.App. § 1301(e).   Thus, COGSA

does not apply to the period prior to loading or after delivery of

the goods.     Indeed, COGSA expressly provides that it does not

preempt any other law applicable to "the duties, responsibilities

and liabilities of the ship or carrier prior to the time when the

goods are loaded on or after the time they are discharged from the

ship."    46 U.S.C.App. § 1311.   General maritime law applies to the

period prior to loading and after delivery of the goods, absent an

agreement to the contrary.   See Baker Oil Tools, Inc. v. Delta S.S.

Lines, Inc., 562 F.2d 938, 940 and n. 3 (5th Cir.1977).      General

maritime law also applies to parties who are not regulated by COGSA

     8
      Appellants also rely on Nichimen Co. v. M/V FARLAND, 462
F.2d 319, 325 n. 1 (2d Cir.1972), in which the court states that
in addition to a claim against the charterer and owner under
COGSA, the shipper established a prima facia bailment claim.
However, the court did not determine whether the charterer or
owner were liable under bailment law. The bailment footnote was
in response to the vessel owner's and charterer's arguments that
COGSA was inapplicable and that, under bailment law, they should
prevail. The court was "by no means certain" that they would
have done so. Id. at 325. Further, the court did not directly
address whether COGSA provides an exclusive remedy against the
charter, charterer, or vessel owner. Therefore, Nichimen does
not support the argument made by Thyssen and Associated. But see
Tuscaloosa Steel Corp., 1993 A.M.C. at 626-27 (construing Nichimen
as allowing a bailment claim in addition to COGSA); DB-Trade
Int'l, Inc., 1988 A.M.C. at 767 (same).

                                   8
and to domestic or "coastwise" trade within the United States. See

EAC Timberlane v. Pisces, Ltd., 745 F.2d 715, 721 (1st Cir.1984);

Alamo Barge Lines, Inc. v. Rim Maritime Co., 596 F. Supp. 1026,

1034-35 (E.D.La.1984).

     Some courts have held that in cases in which COGSA applies, it

provides the exclusive remedy against carriers for cargo damage.

St. Paul Fire and Marine Ins. Co. v. Marine Transp. Services Sea-

Barge Group, Inc., 727 F. Supp. 1438, 1442 (S.D.Fla.1989);               Sail

America Foundation v. M/V T.S. PROSPERITY, 778 F. Supp. 1282, 1285

(S.D.N.Y.1991).   However, the district court for the Southern

District of New York most recently has held that a shipper may

assert a bailment claim against a vessel owner that is not bound

under a contract of carriage as required by COGSA.            Tuscaloosa

Steel Co., 1993 A.M.C. at 626-27.          Although the decisions of the

Southern   District   of   New   York    courts   first   appear   to    be

conflicting, they are consistent to the extent that they hold that:

(1) when applicable, COGSA provides the exclusive remedy for cargo

damage against carriers; and (2) general maritime law applies when

COGSA is inapplicable to a particular party or under particular

circumstances.

     The district court held that the bailment claim "fail[ed]

because no such cause of action exists outside COGSA."         Thus, the

district court implicitly held that COGSA provides the exclusive

remedy against the charterer and vessel owner for cargo damage

occurring during foreign trade to and from United States ports.

      This Court has not directly addressed that issue and we need

                                   9
not reach it in this case.       The district court's decision can be

affirmed on the basis that a prima facie bailment claim was not

established against Dodekaton.              See Bickford v. Int'l Speedway

Corp.,     654 F.2d 1028,   1031        (5th   Cir.1981)    (reversal   is

inappropriate if ruling of district court can be affirmed on any

grounds, regardless whether those grounds were used by district

court).

         Appellants contend that Dodekaton is liable as a bailee of

the cargo for damage caused by its own negligence.             Bailment is the

delivery of goods or personal property to the bailee in trust,

under an express or implied contract, which requires the bailee to

perform the trust and either to redeliver the goods or to otherwise

dispose of the goods in conformity with the purpose of the trust.

See T.N.T. Marine Service, Inc. v. Weaver Shipyards & Dry Docks,

Inc., 702 F.2d 585, 588 (5th Cir.), cert. denied, 464 U.S. 847, 104
S. Ct. 151, 78 L. Ed. 2d 141 (1983);              C. Itoh & Co. v. M/V HANS

LEONHARDT, 719 F. Supp. 514 516 n. 2 (D.D.La.1989).              Under general

admiralty law, bailment does not arise unless delivery to the

bailee is complete and he has exclusive possession of the bailed

property, even as against the property owner.                   T.N.T. Marine

Service, 702 F.2d at 588.

     Appellants have not established a prima facie bailment claim

against Dodekaton. First, Thyssen and Associated did not show that

an express or implied bailment contract existed.               Second, Thyssen

and Associated failed to establish that the cargo was within

Dodekaton's exclusive possession during transit.                  Rather, the

                                       10
evidence, including the bills of lading and Clause 8 of the charter

party, indicates that the cargo was also within the possession of

Eurolines, the charterer.    Thus we affirm the district court's

decision on the alternative ground that, even if such a cause of

action were permissible, as a matter of law, Dodekaton is not

liable as a bailee for the cargo damage under general maritime law.

See Bickford v. Int'l Speedway Corp., 654 F.2d at 1031.

                          VI. CONCLUSION

     We REVERSE the judgment of the district court and find that

the language of the charter party specifically authorized the

master to bind the Appellee.      We AFFIRM the district court's

holdings on privity of contract and bailment.         We REMAND for

further proceedings consistent with this opinion.

     REVERSED in part, AFFIRMED in part and REMANDED.

                             APPENDIX

                Comparison of Charter Party Clauses

  CLAUSES SPECIFYING AGENCY AND EMPLOYMENT OF THE "MASTER," AND
PERMITTING MASTER TO ALLOW CHARTERER TO SIGN BILLS OF LADING ON HIS
BEHALF:

     Thyssen:

     Clause 8. The Captain (although appointed by the Owners ), is
     solely under the orders and directions of the Charterers as
     regards employment and agency; and Charterers are to load,
     stow, trim, lash, dunnage, secure, tally and discharge the
     cargo at their expense under the supervision, directions and
     responsibility of the Captain, who is to sign Bills of Lading
     for cargo as presented, in conformity with Mate's or Tally
     Clerk's receipts. See Clause 45.

     Clause 45.   If signature of Bills of Lading by the Master
     would occasion delay to the sailing of the vessel, he shall
     authorise (sic) Charterers of their agents to sign them on his
     behalf but only in conformity with Mate's and/or Tally Clerk's
     receipts without prejudice to this Charter Party. Charterers

                                11
     to indemnify Owners for any discrepancies/errors/omissions.

(emphasis supplied).

     Pacific Employers, 767 F.2d at 237:

     [Rider] 8.... The Captain (although appointed by the Owners),
     shall be under the orders and directions of the Charters [TMM]
     as regards employment and agency; and Charterers are to load,
     stow, and trim and discharge the cargo at their expense under
     the supervision of the Captain, who is to sign Bills of Lading
     for cargo as presented, in conformity with Mate's or Tally
     Clerk's receipts.

     Rider 37.   If required by Charterers and/or their Agents,
     Master to authorize Charterers or their Agents to sign Bills
     of Lading on his behalf in accordance with mates and/or tally
     clerks receipt with out prejudice to this Charter Party.

(emphasis supplied).

     Yeramex, 595 F.2d at 947:

     That the Captain [Master] shall prosecute his voyage with the
     utmost dispatch, and shall render all customary assistance
     with ship's crew and boats. The Captain (although appointed
     by the Owners), shall be under the orders and directions of
     the Charterers as regards employment and agency;           and
     Charterers are to load, stow discharge, tally, lash and unlash
     the cargo at their expense under the supervision of the
     Captain, who is to sign, or if requested by the Charterers to
     authorize Charterers and/or their agents to sign Bills of
     Lading for cargo as presented in conformity with Mate's for
     Tally Clerk's receipts.

(emphasis supplied).

                       B. INDEMNITY PROVISIONS:

     Thyssen:

     Clause 45.   If signature of Bills of Lading by the Master
     would occasion delay to the sailing of the vessel, he shall
     authorise (sic) Charterers of their agents to sign them on his
     behalf but only in conformity with Mate's and/or Tally Clerk's
     receipts without prejudice to this Charter Party. Charterers
     to indemnify Owners for any discrepancies/errors/omissions.

(emphasis supplied).

     Yeramex, 595 F.2d at 947:

                                  12
     [Clause] 57.    Charterers shall indemnify Owners from all
     consequences arising out of Master or agents signing Bills of
     Lading in accordance with Charterer's instructions, or from
     complying with any orders or directions of Charterers in
     connection therewith. Owners are not to be responsible for
     shortage, mixture, marks, number of pieces or packages,
     contents of containers, or damage to containers or their
     contents, except where occurring on board and without fault of
     Charterer or its agents. Charterers' stevedores are to load
     and discharge under the supervision of Master, who is solely
     responsible for trim and stability.         Charterers to be
     responsible for securing all cargo within container, and for
     loss or damage to vessel, containers or cargo, if due to
     stowage or discharge in negligent fashion or contrary to terms
     of this Charter-Party.

(emphasis supplied).

                                13