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Mitsui Sumitomo Insurance Company, Ltd. v. Moore Transportation

May 23, 2007


The opinion of the court was delivered by: Judge Rebecca R. Pallmeyer


This case arises out of the mysterious disappearance of 1,500 CD-tape audio units that were to be shipped from Biatorbagy, Hungary for delivery in Greenwood, Indiana in 2004. When the container that was supposed to contain the cargo eventually arrived in Greenwood, it was empty. Mitsui Sumitomo Insurance Company, Ltd. ("Plaintiff"), a commercial insurance firm headquartered in Tokyo, Japan, insured Alpine Electronics, Inc. ("Alpine"), the purchaser of the cargo, for its loss. Defendant ARL, Inc. ("ARL"), a Pennsylvania corporation, is an interstate carrier of goods and contracted to transport the cargo from Chicago to Greenwood. Defendant Moore Transportation, Inc. ("Moore"), an Indiana corporation, procured the shipping contract for ARL. Defendant James Evans ("Evans") worked as an independent contractor for ARL and transported the container that was supposed to contain the cargo from Chicago to Greenwood.

Plaintiff paid Alpine $408,012.00 for the lost cargo and is the subrogee of Alpine's rights against Defendants Moore, ARL, and Evans. Against each Defendant, Plaintiff brings a claim under the Carmack Amendment, 42 U.S.C. § 14706 (Counts I, IV, VII), a claim for breach of "intermodal transportation" contract (II, V, VIII) , and a claim for breach of obligations as carrier and/or bailee (III, VI, IX). Plaintiff has moved for summary judgment against Defendant ARL on Plaintiff's Carmack Amendment claim (Count IV). Defendants have moved for summary judgment on all counts. For the reasons stated below, Plaintiff's motion for summary judgment is denied. Defendants' motion for summary judgment is granted as to Counts V, VI, and VII and is denied as to all remaining counts.


A. Transport of Container No. NYKU 608014-7

Around March 29, 2004, Alpine of Hungary sold 1,500 CD-tape audio units ("the cargo") to Alpine Electronics Inc. for € 220,500. (Pl. LR 56.1 Stmt. ¶ 5; Declaration of Attila Cserepes ¶ 6, Ex. C to Pl. LR 56.1 Stmt.) On March 29, 2004, Alpine Electronics was invoiced for the sale of the cargo, which was to be delivered to Alpine of America in Greenwood, Indiana.*fn2 (3/29/04 Invoice, Ex. 1 to Cserpes Decl.) The events that followed are in dispute. According to Plaintiff, Alpine of Hungary loaded the shipment into Container No. NYKU 608014-7 ("the container") in Biatorbagy, Hungary. (Pl. LR 56.1 Stmt. ¶ 7.) In support of this assertion, Plaintiff cites the affidavit of Attilla Cserepes, the logistics manager at Alpine's manufacturing facility in Hungary; Cserepes supervises the sale and shipment of products manufactured by Alpine of Hungary. (Cserepes Decl. ¶ 3.) Cserepes attested that "Alpine of Hungary loaded the 1,500 units in 250 cartons on 13 palettes into Container No. NYKU608014-7 and, thereafter, in the presence of the customs representative, affixed Seal No. NYK 0269869 to the container doors on March 29, 2004." (Id. ¶ 11.) Defendants dispute this fact, noting that Cserepes did not state that he witnessed the loading of the cargo. (Def. LR 56.1 Resp. ¶ 7.) Notably, although Cserepes attested that he had personal knowledge of the facts in his declaration, (Cserepes Decl. ¶ 1), he does not state that he, or anyone else in particular, witnessed or was responsible for the physical loading of the cargo. Cserepes' vague statement, the only evidence to which Plaintiff cites to support that the cargo was loaded into the container in Hungary, does not satisfy the court. The court therefore concludes that there is a genuine dispute as to whether or not Alpine of Hungary actually loaded the cargo into Container No. NYKU 608014-7.

Plaintiff also contends that, when the 1,500 units were loaded into the container, they were in "good order and condition," again citing only Cserepes' declaration. (Pl. LR 56.1 Stmt. ¶ 8, citing Cserepes Decl. ¶ 8.) Cserepes also attested that, prior to shipment, all electronics items are inspected and tested by Alpine of Hungary to ensure they are in good order and condition, and that items that are not in good order and condition are not allowed to be shipped. (Cserepes Decl. ¶¶ 4-5, 12.) Again, however, because Plaintiff has failed to establish that the cargo was actually loaded, the court does not now reach a conclusion as to whether the cargo was in good order and condition when loaded.

According to Plaintiff, after the cargo was loaded into the container, employees of Alpine of Hungary and a customs agent, Jozsefne Mizerak, affixed Seal No. NYK 0269869 and another seal, which the parties do not discuss in any detail, to the container's doors. (Pl. LR 56.1 Stmt. ¶¶ 9-10.) It is undisputed that Mizerak was responsible for verifying that the seals were properly affixed and that Seal No. NYK 0269869 was a "bolt seal," which is a seal that can only be removed from the container's door handles by being cut. (Id. ¶¶ 11, 14.) Defendants admit that the seal was affixed to the container as described, but they contest Plaintiff's statement that this occurred after the cargo was loaded, a statement supported only by Mizerak's declaration. (Def. LR 56.1 Resp. ¶ 9.) Defendants note that, although Mizerak attested that no shipment is allowed to leave Alpine's facility unless the loading of the shipment is verified by a warehouse administrator, she also attested that it is not her responsibility to physically attend the loading of the cargo. (Id.; Declaration of Jozsefne Mizerak ¶¶ 2, 5, Ex. D to Pl. LR 56.1 Stmt.) The court therefore finds it to be undisputed that Seal No. NYK 0269869 was affixed to Container No. NYKU 608014-7. Without competent evidence relating to the loading of the cargo, however, the court is not satisfied that the cargo was loaded before the seal was affixed and finds this fact to be in dispute.

Container No. NYKU 608014-7 was transported from "Biatorbagy, Hungary to Chicago, Illinois under New Wave Logistics (USA), Inc., Bill of Lading AOHU 109412004 dated April 7, 2004, and NYKS Line Waybill No. NYKS 590001019 (Bremerhaven to Chicago, Illinois), also dated April 7, 2004." (Def. LR 56.1 Stmt. ¶ 17.) On April 26, 2004, ARL received Container No. NYKU 608014-7 at the CSX rail yard in Chicago for transport to Alpine Electronics Manufacturing of America, Inc. in Greenwood, Indiana. (Pl. LR 56.1 Stmt. ¶¶ 3, 6,12.)

Defendants contend that Defendant ARL contracted with a company named NYK Lines*fn3 to transport a sealed container, Container No. NYKU 608014, from Chicago, Illinois to the "Phoenix Warehouse" in Greenwood, Indiana, on or about April 26, 2004. (Def. LR 56.1 Stmt. ¶ 1; see Defendants, ARL, Inc. and Mr. James Evans' Answer to Plaintiff's Amended Complaint at Law ¶¶ 3, 7, Ex. B to Defendants' Motion for Summary Judgment ("Def. SJ Mot.").)*fn4 Though Plaintiff admits that ARL contracted to transport this sealed container, Plaintiff disputes that ARL contracted with NYK Lines to do so. (Pl. LR 56.1 Resp. ¶ 1.) Plaintiff points to the testimony of Bruce Moore, an employee of Defendant Moore Transportation;*fn5 Moore Transportation procures shipping business for ARL and procured the shipment of the subject container from Chicago to Indiana for ARL. (Def. LR 56.1 Stmt. ¶ 4.)*fn6 Mr. Moore testified that his contact regarding "the pick-up number" for the container was MOL Logistics, "an arm of Mitsui," that he had not had any conversations with a representative of NYK Lines regarding the incident in question, and that ARL billed MOL Logistics for the shipment. (Deposition of Bruce Moore at 29-30, 47, Ex. A to Pl. LR 56.1 Resp.)*fn7 Based on this testimony, the court concludes there is a genuine dispute as to whether Defendant ARL contracted with NYK Lines to transport the container from Chicago to Greenwood. The parties agree that ARL invoiced MOL Logistics for ARL's services in connection with the shipment of Container No. 608014-7 on April 26 and April 27, 2004. (Pl. LR 56.1 Stmt. ¶ 28.)

In April 2004, Defendant James Evans was an independent contractor working as a driver for ARL. (Deposition of James Evans at 89, Ex. E to Def. SJ Mot.; Pl. LR 56.1 Stmt. ¶ 12.)*fn8

According to Defendants, other than dispatching Evans to pick up the subject container, Defendant Moore had no other involvement with the shipment. (Def. LR 56.1 Stmt. ¶ 7.) The cited testimony, however, does not support this assertion; Mr. Moore testified that he was involved in the booking of the shipment with Alpine, and that he attended a meeting in connection with the shipment after the container was delivered without the cargo. (Moore Dep. at 7-8, 19-20, 28-29.)

The parties agree that when Defendants ARL and Evans received the container at the CSX rail yard in Chicago, Seal No. NYK 0269869 was intact and properly affixed to the container's doors. (Pl. LR 56.1 Stmt. ¶ 13.) Defendants assert further that the seals were intact upon delivery of the container in Greenwood, Indiana. (Def. LR 56.1 Stmt. ¶ 9.) Plaintiff attempts to dispute this fact, noting Evans's testimony that, upon arriving at the Greenwood facility, he cut the "bolt seals" on the container with bolt cutters before backing into "the docks"; Evans characterized this as the regular procedure he would follow when he delivered containers to that particular facility through and including April 27, 2004. (Evans Dep. at 34-38, 42; Pl. LR 56.1 Stmt. ¶ 16.)*fn9 Evans's practice of cutting the bolt seals before backing into the docks is not inconsistent with Defendant's assertion that the containers were still sealed at the point he arrived at the Greenwood facility. (Id.) If the seals were intact at the time Evans arrived at the Greenwood facility, they must also have been intact when Evans departed Chicago with the container.

The Department of Transportation and ARL company policy require drivers, such as Evans, to keep an accurate driver's log. (Pl. LR 56.1 Stmt. ¶¶ 21-22.) Evans testified that, prior to April 27, 2004, he had received a copy of ARL's Policies and Procedures Manual and had at least skimmed it. (Id. ¶ 26.) This manual states that "on duty time includes time driving the vehicle and performing any work of the carrier, including time related to unloading or the giving or receiving receipts for unloading, but excludes time spent resting in the sleeper berth." (Id. ¶ 27.) Evans' log indicates that he was in the sleeper from 11:00 p.m. on April 26, 2004 until 11:30 a.m. on April 27, 2004. (Id. ¶ 23.) In fact, however, on April 27, 2004, Evans signed the Visitor's Register at the Phoenix warehouse at 6:00 a.m, after he had entered the lot and cut the seal from the container's doors. (Id. ¶ 24.) Evans left the Phoenix warehouse at 11:30 a.m. on April 27, 2004. (Id. ¶ 25.) The parties also agree that Evans slept "somewhere" between the time he received the container in Chicago and the time he tendered delivery at the Phoenix warehouse in Greenwood.

ARL issued a bill of lading "for the receipt and transportation of Container No. NYKU 608014 from CSX Chicago to the Alpine Warehouse in Greenwood[,]" Indiana; this bill of lading did not reflect the weight of the subject container. (Def. LR 56.1 Stmt. ¶¶ 2-3.) Plaintiff admits that ARL submitted this bill of lading to Alpine upon Evans's delivery of the subject container in Greenwood. (Pl. LR 56.1 Resp. ¶ 2; 4/27/04 Bill of Lading, Ex. C to Def. SJ Mot.)*fn10 Dave Furbee, an Alpine employee, signed the ARL bill of lading when Evans arrived at the Phoenix warehouse and noted on the bill of lading, "seal in tact [sic]." (4/27/04 Bill of Lading; Deposition of Dave Furbee at 35-36, Ex. F to Def. SJ Mot.)*fn11 It is undisputed that when Furbee made this notation, Evans had already used bolt cutters to cut the seal. (Pl. LR 56.1 Stmt. ¶ 18.) In his deposition, Furbee acknowledged that although he "went out and saw that the seal was on the ground" and had no reason to think that the seal was not intact when it came into the lot, he did not actually see Evans cut the seal. (Def. LR 56.1 Stmt. ¶ 12; Furbee Dep. at 14, 35-36.) Furbee recalled that he may have told a co-worker, Rajeana Ray, that he did see Evans cut the seal, but Ray herself has no such recollection. (Def. LR 56.1 Stmt. ¶ 11; Deposition of Rajeana Ray at 21-22, Ex. C to Def. LR 56.1 Stmt.) For his part, Evans testified that he observed an individual in Alpine's office, some sixty feet away, when he cut the seal, but he admits that no one was present with him at the back of the container doors at the time he cut the seal. (Pl. LR 56.1 Stmt. ¶¶ 19-20.) Evans had made hundreds of deliveries to the Phoenix warehouse prior to April 27, 2004 and had never before delivered an empty container or a container where a shortage was noted. (Id. ¶ 36.) The parties agree that on this occasion, however, when Evans opened the doors to the container at the Phoenix warehouse, there were some "skids" and plastic shrink wrap in the container but the cargo was not there. (Id. ¶ 17.)

Plaintiff Mitsui paid Alpine $408,012.00 under Policy No. 945-440098 for the loss of the cargo. (Id. ¶ 38.)

2. Investigations of the Lost Cargo

On May 4, 2004, Michael Newstead, an investigator for Signum Services Limited, was assigned to investigate the reported theft of the shipment that is the subject of this case. (Declaration of Michael Edmund Newstead ¶ 5, Ex. I to Pl. LR 56.1 Stmt.) Newstead issued an eight-page report, dated July 22, 2004, detailing his investigation. (Def. Add'l LR 56.1 Stmt. ¶ 1.)*fn12 Newstead inspected the container after Evans returned it empty to Chicago and found no evidence that the container had been tampered with in a manner such that the cargo could have been removed from the container without cutting the seals on the container doors. (Pl. LR 56.1 Stmt. ¶ 32.) Newstead also inspected the seal that had been cut from the container and confirmed that the seal was a "high security Bolt Seal," removable, if properly affixed, only by cutting. (Id. ¶ 34.) Newstead traced the ...

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