MARINE OFFICE OF AMERICA CORP. v. NYK LINES

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

The cargo at issue in this case was shipped by Gomiya Company, Ltd. in Japan to Gomiya (U.S.A.), Inc. by sea, aboard the M/V HIEI MARU, discharged in Los Angeles, and transported from Los Angeles to Chicago first by the Union Pacific Railroad and then the Burlington Northern Railroad. Upon arrival in Chicago, the cargo was delivered to Omni Overseas Freighting, Inc., apparently as agent for Gomiya, on August 27, 1982. As the crates were being lifted from the rail cars, damage to the shipping crates was observed, and the crane operators were instructed to hold the crates in place while the Burlington Northern was notified of the damage. Affidavit of Clarence J. Calabria, ¶ 3. Joseph Calabria and Clarence Calabria of Omni telephoned the Burlington Northern and informed Betty Kastner of the damage. Kastner replied that the railroad's surveyors were unavailable to inspect the damage, and instructed Omni to photograph the damage. Id., ¶¶ 4-5. Two photographs of the damaged crates were taken, and a set was hand-delivered to Kastner. Id., ¶¶ 6-7.

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:

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:

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, ...