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DB TRADE INTERN., INC., v. ASTRAMAR

August 30, 1984

DB TRADE INTERNATIONAL, INC., PLAINTIFF,
v.
ASTRAMAR, MITSUI ENGINEERING & SHIPBUILDING CO., LTD., A/K/A MITSUI ZOSEN K.K., ET AL., DEFENDANTS.



The opinion of the court was delivered by: William T. Hart, District Judge.

MEMORANDUM OPINION AND ORDER

In this action DB Trade International, Inc. ("DB Trade") seeks to recover approximately $99,000, plus costs and fees, for loss sustained when a shipment of steel from Argentina arrived in damaged condition. DB Trade's claim is an admirality claim within this Court's jurisdiction pursuant to 28 U.S.C. § 1333, and also 28 U.S.C. § 1337. Plaintiff and two of the defendants have filed cross-motions for partial summary judgment on the issue of damages, the matters currently before the Court.

In connection with these motions, the parties have submitted a stipulation of uncontested facts. The defendants maintain that plaintiff's recovery is limited to the $11,500 by the Carriage of Goods by Sea Act ("COGSA"). 46 U.S.C. § 1304(5). For the reasons set forth below, the defendants are not entitled to the protection of the COGSA limitation of liability provision. Accordingly, the defendants' motion is denied and the plaintiff's motion is granted.

FACTS

Since January, 1980, plaintiff DB Trade has been engaged in the business of importing steel and other products from overseas. On September 10, 1981, DB Trade contracted to purchase cold rolled steel from Columbia International Investments and also contracted to resell the steel to National Material Corporation in Illinois. Propulsora Siderurgica SAIC ("Propulsora") manufactured the steel in Argentina and made arrangements for its shipment from Argentina to Chicago. Propulsora arranged for shipment by engaging Fletamar S.A.C., a local broker and shipping agent.

After loading the steel on board, the ship's mate (an employee of Fuji) prepared and signed receipts for the goods. Based on these receipts, Fletamar then prepared a cargo manifest and signed the bills of lading issued by Astramar. Under the customary practice, the carrier (Astramar) provides the shipper (Fletamar) with blank form bills of lading. The shipper completes the forms with the requested information, signs the bills and returns them to the carrier. The parties have stipulated that Fletamar and Astramar followed this customary practice Although Astramar's bill of lading form does not contain a specific space labelled "valuation" in which the shipper may insert the actual value of the shipment, the form also has no restriction prohibiting the shipper from including such a valuation in its description of the goods. The forms used here contain the following provision on their face:

Paramount Clause

  This Bill of Lading shall have effect subject to
  the provisions of any legislation relating to the
  carriage of goods by sea which incorporates the
  rules relating to Bills of Lading contained in
  the International Convention, dated Brussels 25th
  August, 1924, and any modification thereof which
  is compulsorily applicable to the contract of
  carriage herein contained.

The COGSA is the legislation in this country which incorporates these treaty provisions. It contains the following section on limitations of liability:

  (5) Neither the carrier nor the ship shall in any
  event be or become liable for any loss or damage
  to or in connection with the transportation of
  goods in an amount exceeding $500 per package
  lawful money of the United States, or in case of
  goods not shipped in packages, per customary
  freight unit, or the equivalent of that sum in
  other currency, unless the nature and value of such
  goods have been declared by the shipper before
  shipment and inserted in the bill of lading. This
  declaration, if embodied in the bill of lading,
  shall be prima facie evidence, but shall not be
  conclusive on the carrier.
    By agreement between the carrier, master, or
  agent of the carrier, and the shipper another
  maximum amount than that mentioned in this
  paragraph may be fixed: Provided, that such
  maximum shall not be less than the figure above
  named. In no event shall the carrier be liable
  for more than the amount of damage actually
  sustained.
    Neither the carrier nor the ship shall be
  responsible in any event for loss or damage to or
  in connection with the transportation of the
  goods if the nature or value thereof has been
  knowingly and fraudulently misstated by the
  shipper in the bill of lading.

46 U.S.C. ยง 1304(5) (emphasis added). Neither DB Trade, Propulsora nor Fletamar requested that a declaration of actual value be inserted in the bills of lading. DB Trade's marine cargo insurer, Employers Insurance of Wausau, and the underwriter, American Marine Underwriters, Inc. also failed to request a declaration of actual value. DB Trade brought ...


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