United States District Court, Northern District of Illinois, E. D
May 28, 1971
ISLAND YACHTS, INC. PLAINTIFF,
FEDERAL PACIFIC LAKES LINE, RESPONDENT.
The opinion of the court was delivered by: Marovitz, District Judge.
Motion for Partial Summary Judgment on Issue of Damages
This is an action in admiralty to recover damages in the
amount of $13,915.55 for alleged damage to a forty-two foot
cruiser shipped from Hong Kong to Detroit, Michigan, by
defendant Federal Pacific Lakes Line (FPLL) to plaintiff
Island Yachts, Inc. (Island). FPLL has moved to limit its
liability, if any, to $500.00 pursuant to the Carriage of
Goods by Sea Act, 46 U.S.C. § 1304(5).
For our purposes, the facts are not in dispute. The
allegedly damaged cruiser was approximately forty-two feet
long, fourteen feet wide, seventeen feet high, and weighed
thirty-four thousand pounds. For $2,475.30 in charges,
defendant agreed to carry the cruiser on deck aboard the M/S
Heering Lotte from Hong Kong to Detroit, and issued a bill of
lading H-Det 34, dated September 29, 1969, for the cruiser. A
copy of the bill of lading is attached to and incorporated in
the Complaint. Essentially, the plaintiff alleges that the
cruiser was delivered in a damaged and deteriorated
condition, not in accordance with the terms of the bill of
lading. Complaint, ¶¶ 3, 5.
Both sides acknowledge that the bill of lading incorporates
the Carriage of Goods by Sea Act. The relevant section of that
"Neither the carrier nor the ship shall . . .
be . . . liable for any . . . damage to . . .
goods . . . exceeding $500 per package . . . or
in case of goods not shipped in packages, per
customary freight unit, . . . unless the nature
and value of such goods have been declared by the
shipper before shipment and inserted in the bill
of lading." 46 U.S.C. § 1304(5).
The question before the Court is whether the cargo described
in the bill of lading, the cruiser, is a "package" or a
"customary freight unit" or neither.
There is no statutory definition of "package" or "customary
freight unit," and court decisions have been confusingly
inconsistent. Aluminios Pozuelo Ltd. v. S. S. Navigator,
407 F.2d 152, 154-155 (2d Cir. 1968). In his fine analysis of the
problem, Judge Moore in Aluminios stated that "it is obvious
that the `package' as a descriptive term, is quite out-moded
and utterly meaningless." Id. at 154.
In Aluminios, the cargo was an eleven foot high, three-ton
toggle press. Under the bill of lading headings "No. of Pkgs"
and "Shipper's Description of Packages and Goods" the press was
described as "One (1) Skid Machinery" of a particular weight in
kilos and pounds. The Court concluded that the parties'
contract specified that the press was "One (1)" package, that
they "must be presumed to have understood" the consequences of
applying a maritime word of art "to this Brobdingnagian
package," and so "must abide by its meaning as a word of
liability limitation." Id. at 156.
Judge Moore also stated:
"The meaning of `package' which has evolved from
the cases can . . . be said to define a class of
cargo, irrespective of size, shape or weight, to
which some packaging preparation for
transportation has been made which facilitates
handling, but which does not necessarily conceal
or completely enclose the goods." Id. at 155.
Since a skid was attached to the toggle press which primarily
facilitated delivery and also protected the press, the Court
had another basis for concluding that the cargo was a package.
The instant case is quite analogous. On the bill of lading,
under the headings "NUMBER OF PACKAGES" and "DESCRIPTION OF
PACKAGES AND GOODS," the cargo is described as "1 SHIPPING
CRADLE CONTAINING: ONE (1) 41'-10" CRUISER. . . . TOTAL: ONE
(1) UNIT ONLY." As in Aluminios, there is "some packaging
preparation for transportation . . . which facilitates
handling," i. e., the shipping cradle, and, also a description
in the bill of lading of the cargo as a single unit, see
Encyclopaedia Britannica, Inc. v. S. S. Hong Kong Producer,
422 F.2d 7, 20 (2d Cir.) (dissent); Standard Electrica, S. A. v.
Hamburg Sudamerikanische Dampfschiffahrts-Gesellschaft,
375 F.2d 943, 946 (2d Cir. 1967). Consequently, we find that the
cargo in this matter, a cruiser, is a package under
46 U.S.C. § 1304(5) and that defendant's liability, if any, is limited to
the statutory amount of $500.00.
Now defendant has alternatively argued that if the cruiser
were not considered to be a "package," then it was a
"customary freight unit" under Section 1304(5). The latter
phrase "refers to the unit upon which the charge for the
freight is computed and not to the physical shipping unit."
Caterpillar Americas Co. v. S. S. Sea Roads, 231 F. Supp. 647,
649 (S.D.Fla. 1964), aff'd 364 F.2d 829 (5th Cir. 1966). On
occasion, however, the unit for computing freight will,
coincidentally, be the same as the shipping unit. See, e. g.,
Mission v. S. S. Oversea Joyce, 246 F. Supp. 536, 539 (S.D.N Y
1965) (a locomotive); Caterpillar Americas Co. v. S. S. Sea
Roads, supra, 231 F. Supp. at 649 (a tractor); Freedman &
Slater, Inc. v. M.V. Tofevo, 222 F. Supp. 964, 973 (S.D.N Y
1963) (an automobile).
It is instructive that on the bill of lading under the
column entitled "MEASUREMENT CUBIC FEET," the only information
is "LENGTH 42'." In the section "FREIGHT AND CHARGES," no
freight assessment is made in the areas allotted rates per
cubic foot and per pound. Instead the length of the cruiser is
inserted as is a lump sum charge of $2,460.00*fn*. See,
Id., see also Aluminios, supra, 407 F.2d at 156. Thus, the bill
of lading itself indicates that a per vehicle rate not a unit
of poundage or cubic feet was used to calculate the freight
charge. This conclusion is buttressed by an affidavit in
support of defendant's motion which affidavit indicates that
the freight rates used by defendant in the carriage of yachts
from Hong Kong to Great Lakes ports in 1969 were the same as
the contract rates established by the Hong Kong/East Canada
Freight Conference. For yachts, sailing boats and pleasure
crafts between forty-one and forty-two feet in length and under
35,000 pounds, the contract rate provided was $2,460.00. In
short, the customary freight unit for a cruiser of the size
shipped in this cause was the cruiser itself. See Pannell v.
United States Lines Co., 263 F.2d 497, 499 (2d Cir. 1959)
(Moore, J. concurring).
In conclusion, we grant defendant's motion for partial
summary judgment on the issue of potential liability, finding
that defendant's liability, if any, is limited to $500.00 for
the one package shipped. If the result seems harsh, the
shipper has the option of declaring the value of the goods
shipped and paying a higher tariff and/or of seeking revision
of the statutory limitation from Congress. 46 U.S.C. § 1304(5);
Aluminios, supra, 407 F.2d at 156; Caterpillar Americas Co. v.
S. S. Sea Roads, supra, 231 F. Supp. at 650.