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)

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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

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