Krystal Inc. et al v. China United Transport, Inc. et al
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)
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
12 KRYSTAL INC. AND KEDE
Currently before the Court is Plaintiffs Krystal
CHINA UNITED TRANSPORT,
17 INC., DBA C.U. TRANSPORT,
INC.; AND DOES ONE THROUGH
ORDER RE: PLAINTIFFS’
MOTION FOR SUMMARY
22 Inc. (“Krystal”) and Kede Group, Inc.’s (“Kede”)
23 (collectively, “Plaintiffs”) Motion for Summary
24 Judgment (“Motion”) .
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 to liability under their negligence claim, and DENIES
2 Plaintiffs’ Motion as to the amount of damages.
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.
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
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
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.
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.
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.”
The Bill of
6 Lading also states,
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.
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.
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
Plaintiffs filed their Complaint on November 21,
28 2016 against Defendant .
The Complaint alleges two
1 causes of action against Defendant, breach of contract
2 and negligence.
Plaintiffs filed their Motion on August 4, 2017
Defendant filed its Opposition on August 15,
5 2017 .
Plaintiffs filed their Reply on August 22,
6 2017 .
II. FINDINGS OF FACT
Plaintiffs delivered the Cargo to Defendant at the
port of loading in good condition.
Def.’s Stmt. of
Genuine Issues in Opp’n to Mot. for Summ. J. ¶ 9;
Chan Decl., Ex. 1.
The Cargo was discharged in damaged condition at
the port of discharge.
Chao Decl., Ex. C.
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).
26 and any inferences based on underlying facts, must be
27 viewed in the light most favorable to the opposing
Twentieth Century-Fox Film Corp. v. MCA, Inc.,
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.
5 U.S. at 255.
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).
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.
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-
The Court GRANTS Plaintiffs’ Request for
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
1 it “can be accurately and readily determined from
2 sources whose accuracy cannot reasonably be
Fed. R. Evid. 201(b)(2).
4 listed on the Federal Reserve’s system are a “fitting
5 subject of a request for judicial notice.”
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).
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.
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.
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.
Defendant’s Evidentiary Objections to
Plaintiffs’ Declarations Are OVERRULED in part
and SUSTAINED in part
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.
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.
Defendant objects to paragraphs 5-7 of the Chao
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.
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
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.”).
17 the Court OVERRULES Defendant’s lack of personal
18 knowledge objections.
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
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.”
1 should OVERRULE Defendant’s best evidence rule
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.
8 Defendant also attaches the Invoice as an exhibit to
9 the Chan Declaration.2
See Chan Decl., Ex. 1.
10 offering the Invoice as evidence in support of its
11 Opposition, Defendant is agreeing that the Invoice is
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).
16 the Court OVERRULES Defendant’s objection to Exhibit A
17 to the Xu Declaration.
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.
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
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.
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.
11 Decl., Exs. A-C.
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
Id. ¶ 3.
Ms. Wang therefore has personal
16 knowledge of the sales Dalian makes.
17 sales contract names Dalian and the Chinese buyer and
18 appears to be what Ms. Wang claims it to be.
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.
Second, the repair quotation also appears to be
28 what Ms. Wang claims it to be.
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.
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).
13 Wang has sufficiently authenticated the Assignment of
14 Rights exhibit.
Defendant’s lack of authentication objections to
16 the exhibits attached to the Wang Declaration are
17 therefore OVERRULED.
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.
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.
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
1 business activity, and (4) it was the regular practice
2 of that business activity to make the record.
3 Wang’s Declaration does not mention any of these four
4 requirements in reference to any of the attached
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)).
11 Defendant’s hearsay objections to the Wang Declaration
12 Exhibits are SUSTAINED.
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.
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
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.
“Dalian obtained a repair estimate of CNY
28 534072.00, equal to $82,291.53 on the basis of the
1 then-prevailing exchange rate.”
Wang Decl. ¶ 6.
2 Wang also testified that she is the Director of Dalian
3 and is responsible for overseeing the management of the
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.
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
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
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.
Plaintiffs’ Evidentiary Objections Are
OVERRULED in part and SUSTAINED in part
Plaintiffs object to statements made in the Chan
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.
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)).
17 will only address the objections for which Plaintiffs
18 have provided specific argument.
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.
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.
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.
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.”
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
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.
Ms. Chan has not
5 established how she knows none of the entities called
6 Defendant regarding the damage to the Cargo.
7 Plaintiffs’ objection to this statement is SUSTAINED.
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.
Plaintiffs argue that Ms. Hu has not
12 established personal knowledge necessary to make this
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.
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
However, Ms. Hu states that her prior course of
2 dealing with the women provides evidence of this
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.
The Court GRANTS Plaintiffs’ Motion as to
Breach of Contract Liability, DENIES as MOOT
Plaintiffs’ Motion as to Negligence Liability,
and DENIES Plaintiffs’ Motion as to Damages
The Court turns to the merits of Plaintiffs’
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.
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
Defendant notes that it was not aware Plaintiffs were
22 assignees of Dalian, to whom Plaintiffs sold the Cargo. Opp’n
23 9:25-10:1. Rather, the commercialthe Cargo. Id. at received
named Grand Union as the buyer of
24 Defendant therefore included Grand Union on the Bill of Lading.
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
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
“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).
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
Daido Line v. Thomas P. Gonzalez Corp., 299
28 F.2d 669, 671 (9th Cir. 1962).
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.
Plaintiffs must then prove that the Cargo was
5 discharged in a damaged condition.
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
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.
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
1 claim is DENIED as MOOT.
Limitation of Liability in the Bill of
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.
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:
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
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
1 reference is not adequate.”
Mori Seiki USA, Inc. v.
2 M.V. Alligator Triumph, 990 F.2d 444, 449 (9th Cir.
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
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.
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.
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
However, Defendant misconstrues the holding of
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.
28 specifically admits that the language of COGSA was not
1 contained in the Bill of Lading.
2 Therefore, the holding in Carman is irrelevant.
Defendant makes clear that it is not aiming to
4 limit its liability to $500 as provided in COGSA.
5 at 12:25-26.
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
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).
18 Defendant focuses on the limitation of $2.00 per
But focusing on the $2.00
20 per kilogram limitation ignores the full text of the
The clause limits liability to $2.00 per
22 kilogram or $100.00, “which ever is smaller.”
23 Decl., Ex. 1.
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
1 COGSA provides, it is “null and void.”
2 494 F.2d 438, 443 n.6.
Defendant also argues that Plaintiffs had actual
4 knowledge of the limitation of liability based on past
5 conduct and communications of the parties.
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.
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.
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).
Accordingly, Defendant has failed to raise a
1 genuine issue of material fact as to its limitation of
2 liability in the Bill of Lading.
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.
Under COGSA, the “basis of recovery for the usual
9 carriage of goods [is] the value at the point of
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 . . . .”).
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).
Plaintiffs argue that the market value of the Cargo
2 is $217,678.74, “the price Dalian’s buyer contracted to
However, Defendant points to the
4 fact that Plaintiffs have not provided any evidence
5 that Plaintiffs sold the Cargo to Dalian.
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.
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.
16 Joan Cochran (“Cochran Decl.”), Ex. 5, at 22, ECF No.
It was not until Plaintiffs filed this Motion
18 that they argued they were entitled to recover
19 $217,678.74 in damages.4
Further, the only evidence Plaintiffs have provided
21 to support their claim of $217,678.74 in damages is the
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).
1 contract for sale of the Cargo from Dalian to the
2 Chinese buyer.
See Wang Decl., Ex. A.
3 Defendant objected to this Exhibit based on hearsay.
4 See Def.’s Evid. Objs. to Wang Decl. 7:9-20.
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.
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.
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.
Based on the foregoing, the Court GRANTS
22 Plaintiffs’ Motion  as to the question of liability
23 under their breach of contract claim, DENIES as MOOT
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.
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.
6 DATED: September 26, 2017
s/ RONALD S.W. LEW
HONORABLE RONALD S.W. LEW
Senior U.S. District Judge
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