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Great American Insurance Co. v. Seaboard Marine, Ltd., Inc.

United States District Court, S.D. Florida, Miami Division

June 18, 2019

GREAT AMERICAN INSURANCE COMPANY, a foreign corporation, Plaintiff,
SEABOARD MARINE, LTD., INC., a foreign corporation, Defendant.



         THIS MATTER comes before the Court upon Defendant Seaboard Marine, Ltd., Inc.*s ("Seaboard Marine") Motion for Summary Judgment (D.E. 16), filed May 14, 2019.[1]


         This subrogation suit arises out of the theft of a forty-foot shipping container as it was being transported by truck to a port where it was to be loaded onto a vessel destined for the United States. According to three bills of lading dated November 15, 2017, Defendant Seaboard Marine contracted with non-party Darik Enterprises, Inc. ("the seafood owner") to transport thousands of cases of frozen seafood from "place of receipt" Rama, Nicaragua to "port of loading" Puerto Limon, Costa Rica; then via vessel "Angelina 24" to "port of discharge" Brooklyn, NY; and finally to "place of delivery" Elizabeth, New Jersey (see D.E. 16-2, at 6-9).

         It is undisputed that on November 16, 2017, container No. CXRU 155737 8 was transported by Defendant Seaboard Marine by truck from Central American Fisheries to the Costa Rican border, and on November 17, 2017 it was transported to Defendant's container yard "located a few miles outside Puerto Limon, Costa Rica" (D.E. 16, at 3, ¶¶ 7-8). Then, on November 20, 2017 at 12:48 a.m., the container departed Defendant's container yard for the port "where it was to be loaded onto the ship Angelina, which was scheduled to depart that day" (D.E. 16, at 4, ¶ 9). It is undisputed the container was lost in the area between the container yard and the port, which is known as the "carousel" (D.E. 16, at 2).[2] Plaintiff attaches to its Complaint a "Subrogation Receipt" signed by the seafood owner for the loss at issue (D.E. 1, at 7).

         In the instant Motion for Summary Judgment, Defendant argues that "[p]ursuant to trie express terms of the Responsibility clause of [Defendant's] bill of lading terms and conditions, [Defendant] is not liable for loss arising from hijacking and is therefore entitled to judgment asja matter of law" (D.E. 16, at 8). In response, Plaintiff argues that (a) the Harter Act prohibits ja carrier from using terms and conditions in its bill of lading to avoid liability (D.E. 18, at 4-11 j); and (b) Defendant has not met its burden under the burden-shifting framework of the Carriage (j»f Goods by Sea Act of 1935 ("COGSA") to show it was not at fault (id. at 11-15). j


         A. Legal Standard on Summary Judgment

         Summary judgment is appropriate where there is "no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c) (emphasis added); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). An issue is genuine if a reasonable fact finder could return a verdict for the nonmoving party. Mize v. Jefferson City Bd. of Educ, 93 F.3d 739, 742 (11th Cir. 1996). A fact is material if it may affect the outcome of the case under the applicable substantive law. Allen v. Tyson Foods, Inc., 121 F.3d 642, 64|6 (11th Cir. 1997). If a reasonable fact finder could draw more than one inference from the facts, creating a genuine issue of material fact, summary judgment should not be granted. Samples ex rel. Samples v. City of Atlanta, 846 F.2d 1328, 1330 (11th Cir. 1988). The moving party has th|e burden of establishing both the absence of a genuine issue of material fact and that it is entitled 1o judgment as a matter of law. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 106 S.Ct. 1348, 1356(1986).

         B. Clause 4(b) of Defendant's Bill of Lading is Void Under the Harter Act

         Defendant Seaboard Marine argues that it is not liable for the loss at issue because Clause 4(b) of its Bill of Lading Terms and Conditions is "an enforceable provision . . . reflecting the parties' agreement to allocate risk in the event of a hijacking" (D.E. 16, at 8). The provision states:

The Carrier shall not be liable in any capacity whatsoever for . . . acts of thieves, hijacking ... or any other loss or damage to or in connection with the Goods or Containers or other packages occurring at any time contemplated under subdivision; a) of this Clause.

(D.E. 16-1, at 2-3). Subdivision (a) of that Clause defines the applicable time as "during the entire time the Carrier is responsible for the goods."[3]

         Plaintiff counters that the Harter Act applies to this action (D.E. 18, at 4-11). The Harter Act states that a "carrier engaged in the carriage of goods to or from any port in the United States}" 46 U.SC. § 30702(a), "may not insert in a bill of lading or shipping document a provision avoiding its liability for loss or damage arising from negligence or fault in . . . custody, care, or proper delivery," id. § 30704. "Any such provision is void." Id. The Eleventh Circuit has recognized that the Harter Act governs a carrier's custody or care of property during the preloading phase. Allstate Ins. Co. v. Int 7Shipping Corp.,703 F.2d 497, 499 (11th Cir. 1983) ("Because the damage here undeniably occurred prior to the time the goods were loaded, the Harter Act. . . controls."). In Allstate, a carrier that contracted to ship cargo from Mobile, Alabama to San Juan, Puerto Rico broke the seals of the items while still in Mobile, Alabama. Id. at 498. The Eleventh ...

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