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MARINE OFFICE OF AMERICA CORP. v. NYK LINES

July 26, 1985

MARINE OFFICE OF AMERICA CORPORATION, AS SUBROGEE OF GOMIYA (U.S.A.), INC., PLAINTIFF,
v.
NYK LINES, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Grady, Chief Judge.

MEMORANDUM OPINION

Plaintiff Marine Office of America brings this action as the insurer and subrogee of Gomiya (U.S.A.), Inc. ("Gomiya") to recover damages for a breach of contract which occurred when a cargo of machinery shipped by Gomiya was damaged in transit. Defendants in this case are NYK Line and its vessel, M/V HIEI MARU, the Union Pacific Railroad and the Burlington Northern Railroad. Both railroad companies have moved for summary judgment arguing that Gomiya failed to provide them with written notice of a claim for damages within nine months after the delivery of the cargo as required by the bill of lading issued by the railroads.

FACTS

A survey of the damage was arranged by Gomiya and took place on August 31, 1982. According to John Terada, the office manager for Gomiya, a representative of NYK Line was present. The Burlington Northern was notified of the survey and invited to attend, but apparently did not. Affidavit of John Terada, ¶¶ 2-3. A letter was sent by Terada on August 31, 1982, to NYK Line informing it of the damage to the cargo, which was apparently due to the shifting of the machinery inside the crate while in transit to Chicago. The letter indicated that the extent of the damage was not yet known, but that Gomiya intended to hold NYK Line responsible. Motion for Summary Judgment, attachment, August 31, 1982, letter from John Terada.

NYK Line apparently never transmitted a notice of claim to the Union Pacific, Affidavit of Carl D. Summerfield, and did not send written notice to the Burlington Northern until July 14, 1983. Affidavit of John C. Bilek, Jr. The defendant railroads contend that according to the terms of their bill of lading, written notice of a claim for damages must be filed within nine months of delivery of the goods:

  (b) As a condition precedent to recovery, claims
  must be filed in writing with the receiving or
  delivering carrier, or carrier issuing this bill
  of lading, or carrier on whose line the loss,
  damage, injury or delay occurred, within nine
  months after delivery of the property (or, in the
  case of export traffic, within nine months after
  delivery at port of export) or, in the case of
  failure to make delivery, then within nine months
  after a reasonable time for delivery has elapsed;
  and suits shall be instituted against any carrier
  only within one year when letter mailed from the
  day when notice in writing is mailed by the
  carrier to the claimant that the carrier has
  disallowed the claim or any part or parts thereof
  specified in the notice. Where claims are not
  filed or suits are not instituted thereon in
  accordance with the foregoing provisions, no
  carrier hereunder shall be liable, and such
  claims will not be paid.

Motion for Summary Judgment, attachment Union Pacific Railroad Company UP Exempt 2-A, Section 2(b), at 5-6. Because no such written notice was filed with the railroads within the specified time period, defendants argue that they are entitled to summary judgment.

Nine-Month Written Notice to Railroads

Plaintiff maintains that it complied with the requirements of the Intermodal Bill of Lading executed between Gomiya and NYK Line, and that it is the Intermodal Bill of Lading that governs this case. In the alternative, plaintiff argues that under the doctrine of Hopper Paper Co. v. Baltimore & O.R. Co., 178 F.2d 179 (7th Cir. 1949), written notice is unnecessary where it is demonstrated that the defendant carrier had actual notice of the damage.

The Intermodal Bill of Lading is expressly designed to govern the transportation of goods by a variety of carriers. Complaint, Exh. 1, Intermodal Bill of Lading, section 1(c) ("`Intermodal Transportation' means carriage of the Goods under this Bill of Lading from place of receipt from Merchant to place of delivery to Merchant by the Carrier plus one or more Inland Carriers."). The terms of the bill of lading are designed to accommodate the use of various subcontractors in addition to the contracting ocean carrier, and specifically provide that the "Custody and Carriage of the Goods during Intermodal Transportation within the United States are subject to the terms of the relevant rail, motor or other Uniform Domestic Bill of Lading . . . adopted by the Inland Carrier . . . even though the Inland Carrier's bill of lading was not, and was not intended to be, issued covering the Goods. . . ." Section 29(1). The Intermodal Bill of Lading is also intended to protect the shipper, who may only know the identity of the initial contracting carrier:

  (3) Claim for loss or damage against the Carrier
  [NYK Line] shall be given and suit commenced as
  provided in Article 25. Claim for loss of or
  damage to the Goods against a U.S. Inland Carrier
  [the railroads] shall be made in writing within
  nine months after delivery of the Goods by such
  Inland Carrier or, in case of failure to make
  delivery, then within nine months after a
  reasonable time for delivery has elapsed; and
  suits shall be instituted against a U.S. Inland
  Carrier only within two years and one day from
  the day when notice in writing is given by such
  Inland Carrier to the claimant that it has
  disallowed the claim or any part or parts thereof
  specified in the notice. Where claims are not
  filed or suits are not instituted against a U.S.
  Inland Carrier in accordance with the foregoing
  provisions, it shall not be liable for loss of or
  damage to the Goods. The filing of a claim under
  this Bill of Lading with the Carrier shall also
  constitute a filing of a claim with the Inland
  Carrier. The filing of a claim under this Bill of
  Lading with the Inland Carrier shall also
  constitute the filing of a claim with the
  Carrier.

Section 29(3).

This section obviously reiterates the nine-month notice requirement contained in the railroad bill of lading, but adds that the filing of written notice with NYK Line constitutes the filing of written notice with the Inland Carriers, in this case, the Union Pacific and Burlington Northern. This allows a shipper who may not discover the identity of the various inland carriers who transported the goods within nine months to comply with the notice requirement by filing a claim with the carrier it does know. It is undisputed that plaintiff filed written notice with NYK Line on August 31, ...


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