Krystal Inc. et al v. China United Transport, Inc. et al

Filing 55

ORDER RE: PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT 45 by Judge Ronald S.W. Lew: The Court GRANTS Plaintiffs' Motion as to liability under their breach of contract claim, DENIES as MOOT Plaintiffs' Motion as to liability under their negligence claim, and DENIES Plaintiffs' Motion as to the amount of damages. SEE ORDER FOR COMPLETE DETAILS. (jre)

1

O

2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9

CENTRAL DISTRICT OF CALIFORNIA

10
11
12 KRYSTAL INC. AND KEDE
GROUP, INC.,
13
Plaintiffs,
14

20

)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)

21

Currently before the Court is Plaintiffs Krystal

15

v.

16
CHINA UNITED TRANSPORT,
17 INC., DBA C.U. TRANSPORT,
INC.; AND DOES ONE THROUGH
18 TEN,
19
Defendant.

5:16-cv-02406-RSWL-SP
ORDER RE: PLAINTIFFS’
MOTION FOR SUMMARY
JUDGMENT [45]

22 Inc. (“Krystal”) and Kede Group, Inc.’s (“Kede”)
23 (collectively, “Plaintiffs”) Motion for Summary
24 Judgment (“Motion”) [45].

Having reviewed all papers

25 submitted pertaining to this Motion, the Court NOW
26 FINDS AND RULES AS FOLLOWS: the Court GRANTS
27 Plaintiffs’ Motion as to liability under their breach
28 of contract claim, DENIES as MOOT Plaintiffs’ Motion as
1

1 to liability under their negligence claim, and DENIES
2 Plaintiffs’ Motion as to the amount of damages.
3

I. BACKGROUND

4 A.

Factual Background

5

Plaintiffs are owners, sellers, and exporters of

6 motor vehicles.

Compl. ¶ 7, ECF No. 1.

Defendant is a

7 licensed non-vessel-operating common carrier who
8 provides ocean transportation of cargo from the United
9 States to foreign countries.
10

Id. ¶ 8.

Plaintiffs allege that they agreed to sell a

11 Mercedes Benz Sprinter van (the “Cargo”) to Krystal
12 Dalian Automotive Sales Co., Ltd. (“Dalian”) for
13 $72,980.00.

Decl. of Jack Xu (“Xu Decl.”) ¶ 5, Ex. A,

14 ECF No. 45-7.

The invoice, however, names Grand Union

15 Autotrade Group Corporation (“Grand Union”) as the
16 buyer.
17 47-3.

Decl. of Ruby Hu (“Hu Decl.”), Ex. 2, ECF No.
According to Qiuchen Wang, Director of Dalian,

18 Dalian agreed to sell the Cargo to Tangwei Xu, a
19 Chinese buyer, for 1,350,000.00 Chinese Yuan Renminbi
20 (“CNY”), equal to $217,678.74.

Decl. of Quichen Wang

21 (“Wang Decl.”) ¶ 5, Ex. A, ECF No. 45-3.
22

On November 5, 2015, Plaintiffs contracted with

23 Defendant to transport the Cargo from the United States
24 to China.

Compl. ¶ 9.

On November 18, 2015, Defendant

25 issued a “Clean on Board” Bill of Lading, the contract
26 for shipment, to Krystal, stating that the Cargo was
27 loaded into an “open top” shipping container.
28 Decl., Ex. B, ECF No. 45-8.
2

Xu

1

Section Six of the Bill of Lading, labeled “Extent

2 of liability,” states, “C.U. Transport Inc. shall be
3 liable for loss or damage to the goods occurring
4 between the time when he received the goods into his
5 charge and the time of delivery.”

Id.

The Bill of

6 Lading also states,
7
8
9
10
11
12
13
14
15
16

When
C.U.
Transport
Inc
is
liable
for
compensation in respect of loss or of damage to
the goods, such compensation shall be calculated
by reference to the value of such goods at the
place and time they are delivered to the
consignee in accordance with the contract or
should have been so delivered.
The value of the goods shall be fixed according
to the commodity exchange price, or, if there be
no such price, according to the current market
price, by reference to the normal value of goods
of the same kind of quality.
C.U. Transport Inc. shall hold a single
carrier’s liability for cargo transported under
Through Bill of Lading. The carrier’s liability
is limited to US $2.00 per kilogram or US
$100.00 per shipment which ever is smaller.

17 Id.
18

On December 1, 2015, Ruby Hu, working for

19 Defendant, emailed Jenny Chao at Kede to inform Ms.
20 Chao that the Cargo had been damaged.

Decl. of Jenny

21 Chao (“Chao Decl.”), Ex. C, ECF No. 45-12.

On January

22 12, 2016, Dalian United International Inspection Co.,
23 Ltd. conducted a survey of the Cargo.

Hu Decl., Ex. 3.

24 The Report of Survey concluded, “the cargo were damaged
25 partly.”

Id.

26 B.

Procedural Background

27

Plaintiffs filed their Complaint on November 21,

28 2016 against Defendant [1].

The Complaint alleges two
3

1 causes of action against Defendant, breach of contract
2 and negligence.
3

See Compl.

Plaintiffs filed their Motion on August 4, 2017

4 [45].

Defendant filed its Opposition on August 15,

5 2017 [47].

Plaintiffs filed their Reply on August 22,

6 2017 [48].
7

II. FINDINGS OF FACT

8 1.

Plaintiffs delivered the Cargo to Defendant at the

9

port of loading in good condition.

Def.’s Stmt. of

10

Genuine Issues in Opp’n to Mot. for Summ. J. ¶ 9;

11

Chan Decl., Ex. 1.

12 2.

The Cargo was discharged in damaged condition at

13

the port of discharge.

14

Chao Decl., Ex. C.

III. DISCUSSION

15 A.

Legal Standard

16

Federal Rule of Civil Procedure 56 states that a

17 “court shall grant summary judgment” when the movant
18 “shows that there is no genuine dispute as to any
19 material fact and the movant is entitled to judgment as
20 a matter of law.”

A fact is “material” for purposes of

21 summary judgment if it might affect the outcome of the
22 suit, and a “genuine issue” exists if the evidence is
23 such that a reasonable fact-finder could return a
24 verdict for the non-moving party.

Anderson v. Liberty

25 Lobby, Inc., 477 U.S. 242, 248 (1986).

The evidence,

26 and any inferences based on underlying facts, must be
27 viewed in the light most favorable to the opposing
28 party.

Twentieth Century-Fox Film Corp. v. MCA, Inc.,
4

1 715 F.2d 1327, 1329 (9th Cir. 1983).

In ruling on a

2 motion for summary judgment, the court’s function is
3 not to weigh the evidence, but only to determine if a
4 genuine issue of material fact exists.

Anderson, 477

5 U.S. at 255.
6

Under Rule 56, the party moving for summary

7 judgment has the initial burden to show “no genuine
8 dispute as to any material fact.”

Fed. R. Civ. P.

9 56(a); see Nissan Fire & Marine Ins. Co. v. Fritz Cos.,
10 210 F.3d 1099, 1102-03 (9th Cir. 2000).

The burden

11 then shifts to the non-moving party to produce
12 admissible evidence showing a triable issue of fact.
13 Nissan Fire & Marine Ins., 210 F.3d at 1102-03.
14

The standard for a motion for summary judgment

15 “provides that the mere existence of some alleged
16 factual dispute between the parties will not defeat an
17 otherwise properly supported motion for summary
18 judgment; the requirement is that there be no genuine
19 issues of material fact.”

Anderson, 477 U.S. at 247-

20 48.
21 B.

Discussion

22

1.

23
24

The Court GRANTS Plaintiffs’ Request for
Judicial Notice

Plaintiffs seek judicial notice of the exchange

25 rates for the CNY to the U.S. dollar from the Federal
26 Reserve’s website.
27 (“RJN”) ¶ 1.

Pls.’ Req. for Judicial Notice

A court may take judicial notice of a

28 fact that is not subject to reasonable dispute because
5

1 it “can be accurately and readily determined from
2 sources whose accuracy cannot reasonably be
3 questioned.”

Fed. R. Evid. 201(b)(2).

Exchange rates

4 listed on the Federal Reserve’s system are a “fitting
5 subject of a request for judicial notice.”

HostLogic

6 ZRT v. GH Int’l, Inc., No. 6:13-cv-982-Orl-36KRS, 2014
7 U.S. Dist. LEXIS 88680, at *27 (M.D. Fla. June 10,
8 2014)(taking judicial notice of Euro to U.S. Dollar
9 exchange rate from Federal Reserve System).

As such,

10 the Court GRANTS Plaintiffs’ Request for Judicial
11 Notice of the CNY to U.S. dollar exchange rate
12 contained on the Federal Reserve’s website.
13

Plaintiffs also seek judicial notice of a page from

14 the Federal Maritime Commission’s website showing that
15 Defendant is licensed to operate as a non-vessel16 operating common carrier.

See RJN ¶ 2.

Defendant does

17 not dispute that it has a non-vessel-operating common
18 carrier license from the Federal Maritime Commission.
19 See Def.’s Stmt. of Genuine Issues in Opp’n to Mot. for
20 Summ. J. ¶ 6.

The license shown on the Federal

21 Maritime Commission’s website is a public record whose
22 accuracy cannot reasonably be questioned.
23 Consequently, the Court GRANTS Plaintiffs’ Request for
24 Judicial Notice of Defendant’s license from the Federal
25 Maritime Commission.
26 ///
27 ///
28 ///
6

1

2.

Defendant’s Evidentiary Objections to

2

Plaintiffs’ Declarations Are OVERRULED in part

3

and SUSTAINED in part

4

a.

5

Chao Declaration

Defendant objects to Exhibits A and B to the Chao

6 Declaration, the Booking Confirmation and Receipt of
7 Cargo respectively.

Defendant argues that Plaintiffs

8 have failed to properly authenticate the Exhibits as a
9 business record.
10 10.

Def.’s Evid. Objs. to Chao Decl. 2:6-

However, as Plaintiffs point out in their Response

11 to Defendant’s Evidentiary Objections, Defendant
12 ignores Federal Rule of Evidence 901, which states that
13 witness testimony can be used to authenticate evidence.
14 Pls.’ Resp. to Def.’s Evid. Objs. 2:9-11; see Fed. R.
15 Evid. 901(b)(1).

Defendant has not objected based on

16 hearsay, merely lack of authentication, and while a
17 business record is self-authenticating, Ms. Chao can
18 also authenticate the Exhibits through her testimony.
19 Fed. R. Evid. 901(b)(1).

Based on Ms. Chao’s personal

20 knowledge of Kede’s business practices and procedures,
21 Kede’s document retention system, and where Kede keeps
22 its files in the ordinary course of its business, Ms.
23 Chao can testify that the documents are what they
24 purport to be.

The Court therefore finds that there is

25 sufficient indicia of authenticity to support the
26 admissibility of Exhibits A and B and OVERRULES
27 Defendant’s authenticity objection.
28

Defendant objects to paragraphs 5-7 of the Chao
7

1 Declaration1 on the basis that Ms. Chao lacks personal
2 knowledge of the events about which she is testifying.
3 Def.’s Evid. Objs. to Chao Decl. 4:15-26.

However, the

4 Chao Declaration states that Ms. Chao is the Secretary
5 of Kede, and as the Secretary, she “assists with the
6 overall management of Kede’s business” and has
7 “personal knowledge of Kede’s business practices and
8 procedures.”

Chao Decl. ¶¶ 3-4.

In paragraphs 5-7,

9 Ms. Chao is testifying to events that occurred during
10 her employment and about which she would have known as
11 Secretary of Kede.

Redwind v. W. Union, LLC, No.

12 3:14-cv-01699-AC, 2016 U.S. Dist. LEXIS 57793, at *64
13 (D. Or. May 2, 2016)(“Each statement to which Redwind
14 objected for lack of personal knowledge was made about
15 the declarants’ employment and events which occurred
16 during the scope of that employment.”).

Accordingly,

17 the Court OVERRULES Defendant’s lack of personal
18 knowledge objections.
19

Defendant objects to Ms. Chao’s testimony regarding

20 the exhibits attached to her Declaration based on the
21 best evidence rule.

However, Ms. Chao is not

22 testifying to the contents of the documents, she merely
23 attaches them to her Declaration.

Therefore, the Court

24
25
26
27
28

1

Defendant objects to the statement in paragraph 5, “Kede
requested a quote for transportation of Cargo . . . .” Defendant
objects to the statement in paragraph 6, “Kede accepted a quote
and tendered the Cargo shipment.” Finally, Defendant objects to
the statement in paragraph 7, “On November 5, 2015, C.U.,
received the Cargo from Kede in good order and condition
attaching Exhibit B.”
8

1 should OVERRULE Defendant’s best evidence rule
2 objections.
3
4

b.

Xu Declaration

Defendant objects to Exhibit A of the Xu

5 Declaration, the invoice for the sale of the Cargo from
6 Krystal to “Grand Union,” for lack of authentication.
7 Def.’s Evid. Objs. to Xu Decl. 2:6-10.

However,

8 Defendant also attaches the Invoice as an exhibit to
9 the Chan Declaration.2

See Chan Decl., Ex. 1.

By

10 offering the Invoice as evidence in support of its
11 Opposition, Defendant is agreeing that the Invoice is
12 authentic.

Forest Labs., Inc. v. Ivex Pharm., Inc.,

13 237 F.R.D. 106, 117 (D. Del. 2006)(overruling
14 foundation objection where defendants offered the same
15 exhibit to which they were objecting).

Accordingly,

16 the Court OVERRULES Defendant’s objection to Exhibit A
17 to the Xu Declaration.
18

Defendant then objects that Mr. Xu’s testimony

19 about Krystal’s sale of the Cargo to Dalian is
20 inadmissible because the Invoice is the best evidence
21 of the sale.

Def.’s Evid. Objs. to Xu Decl. 6:7-14.

22 As Defendant notes, the Invoice does not name Dalian as
23 the buyer, but rather names Grand Union.

Id.

The

24
25

2

The only difference between the two documents is that

26 Plaintiffs attach as Exhibit A a copy of the Invoice that was
attached to the Report of Survey regarding the potential damage

27 to the Cargo, so the copy of the Invoice is on the Report of
Survey letterhead. The contents of the two invoices are the
28 same.
9

1 Court agrees that the Invoice is the best evidence to
2 prove the contents of the Invoice, not Mr. Xu’s
3 testimony, and SUSTAINS Defendant’s objection to
4 paragraph 5 of the Xu Declaration.
5
6

c.

Wang Declaration

Defendant objects that the Wang Declaration fails

7 to properly authenticate the three exhibits attached to
8 the Declaration: (1) the sales contract between Dalian
9 and the Chinese buyer of the Cargo, (2) the repair
10 quote, and (3) the Assignment of Rights.

See Wang

11 Decl., Exs. A-C.
12

First, Ms. Wang testifies in her Declaration that

13 she is the Director of Dalian and her duties include
14 “assisting with the overall management of Dalian’s
15 business.”

Id. ¶ 3.

Ms. Wang therefore has personal

16 knowledge of the sales Dalian makes.

Further, the

17 sales contract names Dalian and the Chinese buyer and
18 appears to be what Ms. Wang claims it to be.

See Las

19 Vegas Sands, Ltd. Liab. Co. v. Nehme, 632 F.3d 526, 533
20 n.6 (9th Cir. 2011)(“[A]uthentication sufficient for
21 admissibility can be satisfied by the object’s
22 ‘[a]ppearance, contents, substance, internal patterns,
23 or other distinctive characteristics, taken in
24 conjunction with circumstances.’” (quoting Fed. R.
25 Evid. 901(b)(4))).

Therefore, Ms. Wang has

26 authenticated the sales contract.
27

Second, the repair quotation also appears to be

28 what Ms. Wang claims it to be.
10

It specifically states

1 that the quotation is for a 2014 Mercedes Benz Sprinter
2 roof with the same VIN number as the Cargo.
3 Accordingly, Ms. Wang has sufficiently authenticated
4 the repair quotation.
5

Third, the Assignment of Rights contains Ms. Wang’s

6 signature, and she testifies that the exhibit is a true
7 and correct copy of the Assignment.

See APL Co. Pte.

8 Ltd. v. UK Aerosols Ltd., No. C 05-00646 MHP, 2007 U.S.
9 Dist. LEXIS 12689, at *26 (N.D. Cal. Feb. 22,
10 2007)(overruling authentication objection when witness
11 testified to personal knowledge of the agreement and
12 the agreement had his signature on it).

Therefore, Ms.

13 Wang has sufficiently authenticated the Assignment of
14 Rights exhibit.
15

Defendant’s lack of authentication objections to

16 the exhibits attached to the Wang Declaration are
17 therefore OVERRULED.
18

Defendant also objects to these Exhibits on the

19 grounds that they are inadmissible hearsay.
20 Evid. Objs. to Wang Decl. 7:9-8:17.

Def.’s

Plaintiffs briefly

21 address the hearsay objection as it pertains to the
22 repair quote, arguing that it is a business record.
23 Pls.’ Resp. to Def.’s Evid. Objs. 7:15-24.

However, to

24 qualify as a business record, Federal Rule of Evidence
25 803(6) requires that a declarant state (1) that the
26 record was made at or near the time of the event
27 recorded (2) by a person with knowledge, (3) the record
28 were kept in the course of a regularly conducted
11

1 business activity, and (4) it was the regular practice
2 of that business activity to make the record.

Ms.

3 Wang’s Declaration does not mention any of these four
4 requirements in reference to any of the attached
5 Exhibits.

See Li v. Affordable Art Co., No.

6 1:12-CV-03523 RLV, 2014 U.S. Dist. LEXIS 190314, at *15
7 (N.D. Ga. Feb. 10, 2014)(concluding that exhibits did
8 not fall within the business records exception because
9 the accompanying declaration did not include all four
10 of the requirements under Rule 803(6)).

Accordingly,

11 Defendant’s hearsay objections to the Wang Declaration
12 Exhibits are SUSTAINED.
13

Defendant also objects to three statements Ms. Wang

14 makes in her Declaration.

It first objects to the

15 statement, “Kede began to modify the Cargo to meet the
16 requirements of Dalian’s Chinese buyer.”
17 ¶ 5.

Wang Decl.

Ms. Wang does not provide any foundation for how

18 she knows this information, much less that she has any
19 connection to Kede.

Ms. Wang has failed to provide any

20 testimony of her personal knowledge of this statement.
21 Therefore, Defendant’s objection to this statement is
22 SUSTAINED.
23

Defendant also objects to paragraph 6 on the basis

24 that Ms. Wang has not shown she has personal knowledge
25 of Dalian obtaining a repair quotation for the Cargo.
26 Def.’s Evid. Objs. to Wang Decl. 6:3-9.
27 states:

Paragraph 6

“Dalian obtained a repair estimate of CNY

28 534072.00, equal to $82,291.53 on the basis of the
12

1 then-prevailing exchange rate.”

Wang Decl. ¶ 6.

Ms.

2 Wang also testified that she is the Director of Dalian
3 and is responsible for overseeing the management of the
4 business.

Id. ¶¶ 2-3.

5 personal knowledge.
6 57793, at *64.

This is sufficient to establish

See Redwind, 2016 U.S. Dist. LEXIS

Therefore, Defendant’s lack of personal

7 knowledge objection to paragraph 6 is OVERRULED.
8

Defendant objects to paragraph 7 on the basis that

9 it is hearsay and Ms. Wang has not demonstrated that
10 she has personal knowledge necessary to make this
11 statement.

Def.’s Evid. Objs. to Wang Decl. 6:9-13.

12 Ms. Wang has not shown how she has any personal
13 knowledge of the cost of the Cargo at origin or whether
14 she was at all involved in determining the cost of the
15 Cargo.

Additionally, the fact that the repairs were

16 not acceptable to the Chinese buyer of the Cargo is
17 hearsay because it is the Chinese buyer’s out-of-court
18 statement offered for its truth.

Ms. Wang has not

19 demonstrated that she participated in conversations
20 with the Chinese buyer.

Because she has failed to show

21 how she has any personal knowledge of these statements,
22 and Plaintiffs have failed to establish how the
23 statements from the Chinese buyer fall within an
24 exception to the hearsay rule, the Court SUSTAINS
25 Defendant’s objections to paragraph 7.
26

2.

Plaintiffs’ Evidentiary Objections Are

27

OVERRULED in part and SUSTAINED in part

28

Plaintiffs object to statements made in the Chan
13

1 and Hu Declarations.

Many of Plaintiffs’ objections

2 “are boilerplate and devoid of any specific argument or
3 analysis as to why any particular exhibit or assertion
4 in a declaration should be excluded,” and therefore,
5 the Court OVERRULES each of these objections.

See

6 United States v. HIV Cat Canyon, Inc., 213 F. Supp. 3d
7 1249, 1257 (C.D. Cal. 2016); see also Stonefire Grill,
8 Inc. v. FGF Brands, Inc., 987 F. Supp. 2d 1023, 1033
9 (C.D. Cal. 2013)(refusing to “scrutinize each objection
10 and give a full analysis of identical objections”);
11 Amaretto Ranch Breedables v. Ozimals, Inc., 907 F.
12 Supp. 2d 1080, 1081 (N.D. Cal. 2012)(“This Court need
13 not address boilerplate evidentiary objections that the
14 parties themselves deem unworthy of development, and
15 the Court accordingly summarily overrules the
16 objections.” (internal citations omitted)).

The Court

17 will only address the objections for which Plaintiffs
18 have provided specific argument.
19

Plaintiffs object to the statement in paragraph 3

20 of the Chan Declaration where Ms. Chan states, “[Jenny
21 Xu of Plaintiff Krystal] acknowledged this,” when
22 referring to Ms. Xu’s ability to purchase marine
23 insurance for any cargo Defendant shipped.

Whether

24 Defendant provided Plaintiffs with an opportunity to
25 purchase marine insurance is irrelevant to the analysis
26 of Plaintiffs’ Motion.

Because the Court does not rely

27 on this statement in ruling on Plaintiffs’ Motion, the
28 Court OVERRULES this objection as MOOT.
14

1

Plaintiffs object to the statement, “Sharon Yu and

2 Jenny Xu declined to obtain marine insurance, which
3 would have resolved the issue,” which is contained in
4 both the Chan and Hu Declarations.
5 Hu Decl. ¶ 6.

See Chan Decl. ¶ 8;

As noted above, the offer of marine

6 insurance is irrelevant to the Court’s ruling on
7 Plaintiffs’ Motion.

As such, the Court OVERRULES this

8 objection as MOOT.
9

Plaintiffs make the same objection to several

10 statements in both the Chan and Hu Declarations, which
11 all state the declarant is “aware” of a certain fact.
12 See Chan Decl. ¶¶ 8, 11, 14, 16-19; Hu Decl. ¶¶ 8-9,
13 12, 14-16.

Plaintiffs argue that awareness is not

14 sufficient for personal knowledge.
15 to Chan Decl. 2:11-18.

Pls.’ Evid. Objs.

However, both declarants have

16 established that they were directly involved in
17 communicating with Plaintiffs’ employees about the
18 shipment of the Cargo.
19 ¶ 2.

Chan Decl. ¶¶ 3-4; Hu Decl.

Therefore, the declarants’ awareness of the

20 statements to which they testify are based on adequate
21 personal knowledge.

The Court OVERRULES Plaintiffs’

22 lack of personal knowledge objections based on the use
23 of the word “aware.”
24

Plaintiffs object to the following statement in the

25 Chan Declaration, “In this instance, I am aware that
26 neither the trucking company, nor US Lines, nor APM
27 Terminals called C.U. Transport to alert C.U. Transport
28 that the Sprinter was damaged while being transported
15

1 to the APM Terminals,” Chan Decl. ¶ 16, on the grounds
2 that Ms. Chan does not have personal knowledge of
3 whether the entities called Defendant.
4 Objs. to Chan Decl. 4:23-5:8.

Pls.’ Evid.

Ms. Chan has not

5 established how she knows none of the entities called
6 Defendant regarding the damage to the Cargo.

As such,

7 Plaintiffs’ objection to this statement is SUSTAINED.
8

Plaintiffs object to the statement, “In previous

9 shipments, Krystal, Inc. also had the ability to
10 declare a higher value on the bill of lading.”
11 Decl. ¶ 3.

Hu

Plaintiffs argue that Ms. Hu has not

12 established personal knowledge necessary to make this
13 statement.

Pls.’ Evid. Objs. to Hu Decl. 1:7-16.

14 However, Ms. Hu testified in her Declaration that she
15 had worked previously with Plaintiff Krystal, and the
16 “course of dealing” between herself and Plaintiff
17 Krystal “indicate [the] pattern for value declaration.”
18 Hu Decl. ¶ 11.

Based on her previous dealings with

19 Plaintiff Krystal, Ms. Hu has shown personal knowledge
20 of the statement she has made, and the Court OVERRULES
21 this objection.
22

Plaintiffs object to the statement, “I am aware

23 that Sharon Yu and Jenny Xu of Krystal, Inc. had the
24 opportunity on numerous transactions to indicate a
25 different value on the Bill of Lading yet never did,”
26 Hu Decl. ¶ 11, on the grounds that Ms. Hu lacks
27 personal knowledge of what the women “had the
28 opportunity” to do.

Pls.’ Evid. Objs. to Hu Decl. 4:416

1 11.

However, Ms. Hu states that her prior course of

2 dealing with the women provides evidence of this
3 practice.

Hu Decl. ¶ 11.

As such, Ms. Hu has personal

4 knowledge of what the women had the opportunity to do,
5 and the Court OVERRULES the objection.
6

4.

The Court GRANTS Plaintiffs’ Motion as to

7

Breach of Contract Liability, DENIES as MOOT

8

Plaintiffs’ Motion as to Negligence Liability,

9

and DENIES Plaintiffs’ Motion as to Damages

10

The Court turns to the merits of Plaintiffs’

11 Motion.3
12

a.

13

Liability for Damage to Goods Under COGSA

In this matter, Plaintiffs bring breach of contract

14 and negligence claims based on alleged damage that
15 occurred to the Cargo during shipment.

The parties do

16 not dispute that COGSA governs the shipment in this
17 matter and any potential liability for damage to the
18 Cargo during shipment.
19 19.

See Mot. 3:25-4:6; Opp’n 9:18-

COGSA “was enacted to allocate risk of loss and

20 create predictable liability rules for ocean carriers
21
3

Defendant notes that it was not aware Plaintiffs were

22 assignees of Dalian, to whom Plaintiffs sold the Cargo. Opp’n
invoice Defendant
23 9:25-10:1. Rather, the commercialthe Cargo. Id. at received
3:13-15.
named Grand Union as the buyer of
24 Defendant therefore included Grand Union on the Bill of Lading.
25
26
27
28

Id. at 3:17-18. While Defendant argues that Plaintiffs failed to
inform Defendant that Plaintiffs were suing as assignees of
Dalian, Defendant does not argue that the Court should deny the
Motion for that reason. Rather, Defendant simply states that
“Plaintiffs stand in the shoes of their assignor and are subject
to all of the defenses existing at the time of the assignment.”
Id. at 10:3-6. As such, the Court addresses the merits of
Plaintiffs’ Motion.
17

1 and shippers.”

Indem. Ins. Co. of N. Am. v. Totem

2 Ocean Trailer Express, No. C13-6093 BHS, 2015 U.S.
3 Dist. LEXIS 15488, at *6-7 (W.D. Wash. Feb. 9, 2015).
4 “Every bill of lading or similar document of title
5 which is evidence of a contract for the carriage of
6 goods by sea to or from ports of the United States, in
7 foreign trade, shall have effect subject to the
8 provisions of [COGSA].”
9 (Language of COGSA).

46 U.S.C.S. § 30701 note

Therefore, COGSA specifically

10 governs the Bill of Lading in this matter and any
11 potential breach of the Bill of Lading Plaintiffs are
12 alleging.
13

“Generally under COGSA, a shipper establishes a

14 prima facie case against the carrier by showing that
15 the cargo was delivered in good condition to the
16 carrier but was discharged in a damaged condition.”
17 Taisho Marine & Fire Ins. Co. v. M/V Sea-Land
18 Endurance, 815 F.2d 1270, 1274 (9th Cir. 1987).
19

Defendant disputes the fact that Plaintiffs

20 delivered the Cargo to Defendant in good condition.
21 See Stmt. of Genuine Issues in Opp’n to Mot. for Sum.
22 J. ¶ 8.

However, Defendant does not dispute that it

23 issued a “Clean on Board” Bill of Lading.

See id. ¶ 9.

24 “[I]n the usual cargo-damage case the shipper makes a
25 showing of good condition on shipment sufficient for
26 its prima facie case by introducing a ‘clean’ bill of
27 lading.”

Daido Line v. Thomas P. Gonzalez Corp., 299

28 F.2d 669, 671 (9th Cir. 1962).
18

Because there is a

1 “clean” Bill of Lading, which Defendant does not
2 dispute, Plaintiffs have established that they
3 delivered the Cargo to Defendant in good condition.
4

Plaintiffs must then prove that the Cargo was

5 discharged in a damaged condition.
6 1274.

Taisho, 815 F.2d at

Defendant does not dispute that the Cargo

7 arrived in the port in China in a damaged condition,
8 nor could they do so.

Plaintiffs include as an exhibit

9 to the Chao Declaration an email from Ruby Hu of
10 Defendant to Jenny Chao of Plaintiff Kede in which Ms.
11 Hu states, “Sorry to inform you that your car has been
12 damaged.”

Chao Decl., Ex. C.

To prove liability,

13 Plaintiffs need only show that the Cargo was discharged
14 in a damaged condition.

In re Complaint of Damodar

15 Bulk Carriers, Ltd., 903 F.2d 675, 683 (9th Cir. 1990).
16 Plaintiffs have met their burden to do so, and
17 Defendant has offered no evidence to raise a genuine
18 issue of material fact as to whether the Cargo was
19 damaged upon arrival to port.
20

Ultimately, there is no genuine issue of material

21 fact as to the two elements of liability under COGSA.
22 As noted, COGSA governs Plaintiffs’ breach of contract
23 claim, which alleges a breach of the Bill of Lading.
24 Compl. ¶¶ 10-11.

The Court GRANTS Plaintiffs’ Motion

25 as to liability under their breach of contract claim.
26 Because the Court has granted Plaintiffs’ Motion as to
27 liability for their breach of contract claim,
28 Plaintiffs’ Motion as to liability for their negligence
19

1 claim is DENIED as MOOT.
2

b.

3
4

Limitation of Liability in the Bill of
Lading

After determining that no genuine issue of material

5 fact exists as to whether Defendant is liable for a
6 breach of contract under COGSA, the Court must
7 determine whether a genuine issue of material fact
8 exists as to the amount of damages for which Defendant
9 is liable.
10

The focus of the parties’ arguments in regards to

11 Plaintiffs’ Motion is whether the Bill of Lading
12 properly limited the amount of Defendant’s liability.
13 COGSA limits a carrier’s liability for loss and damage
14 to goods shipped:
15
16
17
18
19
20

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.

21 46 U.S.C.S. § 30701 note.

This limitation only applies

22 “if the shipper is given a ‘fair opportunity’ to opt
23 for a higher liability by paying a correspondingly
24 greater charge.”

Nemeth v. Gen. S.S. Corp., 694 F.2d

25 609, 611 (9th Cir. 1982).

“[T]he burden of proving

26 ‘fair opportunity’ is initially upon the carrier.”
27 Komatsu, Ltd. v. States S.S. Co., 674 F.2d 806, 809
28 (9th Cir. 1982).

“[T]he mere incorporation of COGSA by
20

1 reference is not adequate.”

Mori Seiki USA, Inc. v.

2 M.V. Alligator Triumph, 990 F.2d 444, 449 (9th Cir.
3 1993).

Instead, the bill of lading must explicitly

4 include the specific limitation of liability language
5 of COGSA or language “‘to the same effect’ as the
6 statute.”
7

Id. (citation omitted).

Prior to addressing whether Plaintiffs were

8 provided with a fair opportunity to opt for higher
9 liability, Defendant argues that it is under no
10 obligation to alert Dalian, and therefore Plaintiffs as
11 the assignees of Dalian, of the limitation of liability
12 because Dalian was a consignee.

Opp’n 10:11-15.

It

13 argues that the Ninth Circuit has determined that a
14 carrier does not have to alert consignees or other
15 third parties of the limitation of liability.

Id. at

16 10:9-13 (citing Carman Tool & Abrasives, Inc. v.
17 Evergreen Lines, 871 F.2d 897, 900-01 (9th Cir. 1989)).
18 Relying on Carman, Defendant oddly argues that “without
19 notice of the limitation of liability codified in
20 COGSA, Dalian is bound by COGSA’s limitation of
21 liability.”
22

Opp’n 10:19-22.

However, Defendant misconstrues the holding of

23 Carman.

The court in Carman held that the carrier was

24 not responsible for notifying every involved party of
25 the limitation of liability as long as the limitation
26 of liability language from COGSA was contained in the
27 bill of lading.

871 F.2d at 901.

Defendant

28 specifically admits that the language of COGSA was not
21

1 contained in the Bill of Lading.

Opp’n 12:3-6.

2 Therefore, the holding in Carman is irrelevant.
3

Defendant makes clear that it is not aiming to

4 limit its liability to $500 as provided in COGSA.
5 at 12:25-26.

Id.

Instead, it argues that its liability

6 should be limited based on the $2.00 per kilogram
7 limitation explicitly contained in the Bill of Lading.
8 Id. at 12:26-13:2.

The Bill of Lading states that

9 Defendant’s liability is “limited to US $2.00 per
10 kilogram or US $100.00 per shipment which ever is
11 smaller.”
12

Hu Decl., Ex. 1.

Defendant correctly acknowledges that the $100.00

13 limitation is unenforceable.

Opp’n 13 n.2; see Tessler

14 Bros. (B.C.), Ltd. v. Italpacific Line, 494 F.2d 438,
15 443 n.6 (9th Cir. 1974)(noting that any clause that
16 lessens the liability of the carrier below the $500
17 enumerated in COGSA is null and void).

However,

18 Defendant focuses on the limitation of $2.00 per
19 kilogram.

Opp’n 12:25-13:2.

But focusing on the $2.00

20 per kilogram limitation ignores the full text of the
21 limitation.

The clause limits liability to $2.00 per

22 kilogram or $100.00, “which ever is smaller.”
23 Decl., Ex. 1.

Hu

Therefore, the only time the parties

24 would rely on the weight-based portion of the clause is
25 if the weight of the Cargo multiplied by $2.00 was less
26 than $100.00.

Put simply, the limitation of liability

27 would never be over $100.00.

Because this limitation

28 lessens the liability to below the $500 limitation
22

1 COGSA provides, it is “null and void.”

Tessler Bros.,

2 494 F.2d 438, 443 n.6.
3

Defendant also argues that Plaintiffs had actual

4 knowledge of the limitation of liability based on past
5 conduct and communications of the parties.
6 10.

Opp’n 11:6-

However, in making this argument, specifically

7 through the Chao and Hu Declarations, Defendant focuses
8 on the $2.00 per kilogram limitation, not the $500
9 default limitation in COGSA.

In fact, Ms. Hu’s

10 Declaration notes that the $2.00 per kilogram
11 limitation was included “in all bills of lading between
12 [Defendant] and Krystal, Inc. in the past.”
13 ¶ 10.

Hu Decl.

The Court has already determined that the

14 limitation of liability clause in the Bill of Lading is
15 null and void because it lessens liability to below the
16 $500 default limitation in COGSA.

Therefore, Defendant

17 cannot argue that Plaintiffs were on “actual notice” of
18 a void limitation of liability.

Cf. Royal Exchange

19 Assurance of Am., Inc. v. M/V Hoegh Dene, 1988 A.M.C.
20 868 (W.D. Wash. 1987)(holding that carrier could still
21 meet its burden to show shipper had a “fair
22 opportunity” to opt for higher liability by showing
23 actual knowledge of the COGSA limitation through
24 communications and prior practices, rather than just
25 constructive knowledge through quoting COGSA’s
26 limitation provision in the bill of lading, and such
27 was an issue of fact).
28

Accordingly, Defendant has failed to raise a
23

1 genuine issue of material fact as to its limitation of
2 liability in the Bill of Lading.
3
4

c.

Proper Calculation of Damages

Because Defendant has failed to raise a genuine

5 issue of material fact as to whether the Bill of Lading
6 limited liability, the question then becomes what the
7 correct value of the damages is.
8

Under COGSA, the “basis of recovery for the usual

9 carriage of goods [is] the value at the point of
10 destination.”

Otis McAllister & Co. v. Skibs, 260 F.2d

11 181, 183 (9th Cir. 1958); see Ansaldo San Giorgio I v.
12 Rheinstrom Bros. Co., 294 U.S. 494, 495-96
13 (1935)(affirming “damages [computed] on the basis of
14 the market value of the goods at destination on the
15 date of arrival”); Neptune Orient Lines, Ltd. v.
16 Burlington N. & Santa Fe Ry. Co., 213 F.3d 1118, 1120
17 (9th Cir. 2000)(“‘Market value at destination’ is the
18 proper measure of the actual loss . . . .”).

However,

19 the Neptune Orient Lines court noted that this formula
20 for determining damages is appropriate where “the
21 shipment is lost or destroyed.”

213 F.3d at 1120.

22 Where the cargo is merely damaged, the measurement of
23 damages is “the difference between the fair market
24 value of the goods at their destination in the
25 condition in which they should have arrived and the
26 fair market value of the goods in the condition in
27 which they actually did arrive.”

Texport Oil Co. v.

28 M/V Amolyntos, 11 F.3d 361, 365 (2d Cir. 1993).
24

1

Plaintiffs argue that the market value of the Cargo

2 is $217,678.74, “the price Dalian’s buyer contracted to
3 pay.”

Mot. 8:4-8.

However, Defendant points to the

4 fact that Plaintiffs have not provided any evidence
5 that Plaintiffs sold the Cargo to Dalian.
6 17.

Opp’n 2:13-

The invoice Plaintiffs provided to Defendant named

7 Grand Union as the buyer, and nowhere on the invoice
8 does it reference a sale to Dalian.
9 Ex. 2.

See Chan Decl.,

Moreover, the invoice for the sale of the Cargo

10 to Grand Union lists the sale price as $72,980.00, the
11 purported fair market value of the Cargo.
12

Id.

In response to Defendant’s Interrogatories,

13 Plaintiffs claimed a total of $154,435.95 in damages,
14 which included the $72,980.00 vehicle value, taxes,
15 penalties paid to the buyer, and shipping.

Decl. of

16 Joan Cochran (“Cochran Decl.”), Ex. 5, at 22, ECF No.
17 47-4.

It was not until Plaintiffs filed this Motion

18 that they argued they were entitled to recover
19 $217,678.74 in damages.4
20

Further, the only evidence Plaintiffs have provided

21 to support their claim of $217,678.74 in damages is the
22
23
24
25
26
27
28

4

Plaintiffs claim that they provided the contract regarding
the sale of the Cargo from Dalian to the Chinese buyer, which
contained the $217,678.74 purchase price, in their Initial
Disclosures. Reply 7:7-11. However, Plaintiffs did not include
this number in any prior computation of damages, including their
Complaint (loss of $142,841.15), Initial Disclosures (“Damages
are based upon the cost of repair, freight charges, taxes and the
amount of a contractual penalty PLAINTIFFS paid to the Cargo
buyer.”), or responses to Defendant’s Interrogatories (total
damages of $154,435.95).
25

1 contract for sale of the Cargo from Dalian to the
2 Chinese buyer.

See Wang Decl., Ex. A.

As noted,

3 Defendant objected to this Exhibit based on hearsay.
4 See Def.’s Evid. Objs. to Wang Decl. 7:9-20.

Ms. Wang

5 did not lay the proper foundation in her Declaration
6 for an exception to the hearsay rule, and therefore,
7 the contract is inadmissible.5

Even if the contract was

8 admissible evidence, Plaintiffs have failed to prove as
9 a matter of law that this sale price is in fact the
10 fair market value of the Cargo at the destination.
11

Plaintiffs have offered different damage

12 calculations throughout this litigation, only arguing
13 the highest, $217,678.74, in the instant Motion.
14 Plaintiffs have failed to provide evidence confirming
15 the sale of the Cargo from Plaintiffs to Dalian and the
16 true market value of the Cargo at destination.

As

17 such, genuine issues of material fact exist as to the
18 calculation of damages, and the Court DENIES
19 Plaintiffs’ Motion as to damages.
20
21

III. CONCLUSION
Based on the foregoing, the Court GRANTS

22 Plaintiffs’ Motion [45] as to the question of liability
23 under their breach of contract claim, DENIES as MOOT
24
25

5

Further, while Plaintiffs offer the Quotation Dalian

26 received for repairs to the Cargo, see Wang Decl., Ex. B, they
have not provided any evidence of what the value of the Cargo was

27 when it arrived damaged in China. Therefore, there the Court
cannot calculate the proper damages owed to Plaintiffs using the
28 typical formula. See Texport Oil Co., 11 F.3d at 365.
26

1 Plaintiffs’ Motion as to liability under their
2 negligence claim, and DENIES Plaintiffs’ Motion as to
3 the amount of damages.
4 IT IS SO ORDERED.
5
6 DATED: September 26, 2017
7

s/ RONALD S.W. LEW
HONORABLE RONALD S.W. LEW
Senior U.S. District Judge

8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
27