OFI INTERNATIONAL, INC. et al v. PORT NEWARK REFRIGERATED WAREHOUSE
OPINION. Signed by Judge William J. Martini on 1/12/15. (gh, )
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
Civ. No. 2:11-cv-06376 (WJM)
OFI INTERNATIONAL, INC. et al.,
PORT NEWARK REFRIGERATED
WILLIAM J. MARTINI, U.S.D.J.:
Plaintiffs OFI International, Inc. (“OFI”) and Watermark Foods, Inc.
(“Watermark”) filed this action against Defendant Hudson Refrigeration Company d/b/a
Port Newark Refrigerated Warehouse (“Defendant” or “PNRW”). Plaintiffs allege that
PNRW mishandled numerous shipments of Plaintiffs’ frozen seafood. Specifically,
Plaintiffs seek damages for 958,297 pounds of frozen seafood products (the “Subject
Goods”), which were allegedly subject to temperature abuse while in storage at PNRW’s
warehouse at 125 Tyler Street, Newark, New Jersey (the “PNRW Warehouse”).
This matter comes before the Court on Defendant’s motion and Plaintiffs’ crossmotion for summary judgment under Federal Rule of Civil Procedure 56. Also before
the Court is Defendant’s motion to strike certain evidence from the summary judgment
record. There was no oral argument. Fed. R. Civ. P. 78(b). For the reasons set forth
below, the Court will treat Defendant’s motion to strike as objections under Rule 56(c)
and will partially SUSTAIN and partially OVERRULE those objections. Additionally,
Defendant’s motion for summary judgment is DENIED, and Plaintiffs’ cross-motion for
summary judgment is partially GRANTED and partially DENIED.
MOTION TO STRIKE/RULE 56 OBJECTIONS
Defendant moves to strike the following evidence, which Plaintiffs submitted in
opposition to Defendant’s motion for summary judgment: (1) portions of the Declaration
of Neel Reddy (the “Reddy Declaration”), (2) the Declaration of William Bennett, Esq.
(the “Bennett Declaration”), (3) the Declaration of Charles McLaughlin (the
“McLaughlin Declaration”), (4) the expert report of Patrick Brecht (the “Brecht Report”),
and (5) the expert report of Pierce Powers (the “Powers Report,” and together with the
Brecht Report, the “Expert Reports”). Following the 2010 amendments to Rule 56, a
motion to strike is no longer a proper means of attacking the admissibility of summary
judgment evidence. See Ankney v. Wakefield, No. 10-1290, 2012 WL 1633803, at *1
(W.D. Pa. May 8, 2012). The Court will thus construe Plaintiff’s motion to strike as
objections under Rule 56(c). See id.
A. The Declarations
Rule 56(c) provides that “an affidavit or declaration used to support or oppose a
motion must be made on personal knowledge, set out facts that would be admissible in
evidence, and show that the affiant or declarant is competent to testify on the matters
stated.” Fed. R. Civ. P. 56(c)(4). Defendant argues that the Reddy Declaration, the
Bennett Declaration, and the McLaughlin Declaration fail to meet these requirements.
The Court disagrees, with one exception related to an inadmissible opinion in the
i. Reddy Declaration
Neel Reddy is the President of OFI International and the Vice President of
Watermark Foods. Reddy Decl. ¶ 1, ECF No. 70-2. Defendant objects to paragraphs 2,
3, 5, 6, 7, 8, 9, 10, 11, and 12 of the Reddy Declaration. Defendant argues that those
paragraphs are not based on personal knowledge, set forth inadmissible facts, and contain
information outside of Reddy’s competence. The Court will overrule Defendant’s
A declaration or affidavit need not explicitly state that the declarant or affiant is
competent to testify or that his statements are made on personal knowledge. Rule
56(c)(4) requires not that an affiant state these things, but rather that the affidavit “be
made on personal knowledge” and “show affirmatively that the affiant is competent to
testify to the matters stated therein.” Thus, if a sworn affidavit clearly flows from
personal knowledge of a competent affiant, a court may consider it on summary
judgment. See, e.g., Keating v. Bucks County Water & Sewer Auth., 2000 WL 1888770
at *4 (E.D. Pa. 2000) (noting that, to extent averments in affidavit sworn to be “true and
correct to the best of [affiant’s] knowledge, information and belief” clearly were based on
personal knowledge, they were appropriately considered on summary judgment).
Furthermore, the Supreme Court has stated that a nonmoving party need not
produce evidence in a form that would be admissible at trial to avoid summary judgment.
Celotex v. Catrett, 477 U.S. 317, 324 (1986). Accordingly, the Third Circuit has
concluded that “. . . hearsay evidence produced in an affidavit opposing summary
judgment may be considered if the out-of-court declarant could later present the evidence
through direct testimony, i.e., in a form that ‘would be admissible at trial.’” J.F. Feeser,
Inc. v. Serv-A-Portion, Inc., 909 F.2d 1524, 1542 (3d Cir. 1990) (quoting Williams v.
Borough of West Chester, 891 F.2d 458, 465-66 n.12 (3d Cir. 1989)).
Regarding paragraph 3, Defendant objects to the statement “Watermark Foods is a
“d/b/a’ [sic] of RFD Enterprises, LLC, a California Corporation.” Defendant argues that,
in their Second Amended Complaint, Plaintiffs alleged that Watermark was a corporation
formed under New York law and that Plaintiffs should be bound by that allegation. See
Second Am. Compl. ¶ 2, ECF No. 11. However, Plaintiff confirmed during a November
18, 2014 hearing that the representation in the Second Amended Complaint was a
mistake, and that Watermark is registered in California. Thus, this objection is overruled.
Defendant’s objections to a portion of paragraph 21 and paragraphs 5 through 122
are also unconvincing. Each paragraph complies with Rule 56(c)(4). First, as a corporate
officer, Reddy is presumed to possess personal knowledge of the acts of the corporation.
See Catawba Indian Tribe v. State of South Carolina, 978 F.2d 1334, 1342 (4th Cir.
1992) (holding that a corporate officer ordinarily possess personal knowledge of acts of
corporation and, in absence of proof of no personal knowledge, the personal knowledge
element is satisfied). Further, as a Rule 30(b)(6) representative, Reddy may “testify
about information known or reasonably available to the organization.” Fed. R .Civ. P.
30(b)(6). The use of the word “we” in the declaration is thus permissible, because Reddy
is testifying on Plaintiffs’ behalf. Second, Reddy will be a declarant produced at trial to
offer his statements in admissible form and subject to cross-examination. Third, the
record lays the foundation for Reddy’s declarations. For instance, in his deposition,
Reddy discusses both his and his brother’s experience in the frozen shrimp industry. See
Def.’s Mot. for Summary J. Ex. 2 (“Reddy Dep.”) 15:23-17:10, ECF No. 69-4. This
In paragraph 2, Defendant seeks to strike language stating that “between [my brother and me] we have over 30
years of experience importing frozen shrimp into the United States.”
Paragraphs 5 through 12 read as follows:
Mr. von Dohlen guaranteed that PNRW was the [sic] state of the art facility and was equipped to
keep our shrimp frozen at 0°F. We relied on Mr. von Dohlen’s representation.
Shortly after meeting with Mr. von Dohlen, Dan Taskilla [sic] sent a one page rate quote sheet.
At no time prior to the loss did PNRW ever provide us with the Terms and Conditions of their
Periodically, we would receive receipts filed [sic] in by hand, which listed what shipments PNRW
On numerous occasions after the loss we demanded that all of our cargo be released to us so we
could inspect all of the shrimp. PNRW refused us access to our shrimp and would only let us
inspect a small portion of the cargo because they said they were too busy to bring out the cargo for
inspection. They held onto the cargo for more than a month after the initial notice of loss.
After we were able to receive our cargo back we inspected each lot and each carton. All of the
cargo suffered from temperature abuse, some to a lesser extent than others.
If the shrimp was stored at PNRW at 0°F, the shelf life was in excess of 18 months.
We sold the cargo for salvage at the best possible price we could get.
experience, as well as his position as a corporate officer of Plaintiffs, lays the foundation
for his declarations in paragraphs 11 and 12. Additionally, regarding paragraph 5, Reddy
specifically stated during his deposition that he met with Mr. Van Dohlen, who assured
him that there would be no issues with storing the frozen shrimp at PNRW. Reddy Dep.
128:10-129:15. Fourth, Plaintiffs do not need to lay a foundation for or attach the rate
quote sheet referenced in paragraph 6, because the declaration has nothing to do with the
content of that sheet. Rather, it is simply stating that Plaintiffs received that sheet from
Defendant. Fifth, none of these paragraphs constitute inadmissible hearsay. For instance,
in paragraph 9, to the extent that Reddy’s knowledge of the cargo access issues relied on
statements by Chris Bender, the insurance adjuster, Bender provided corroborating
deposition testimony about those issues. See Def.’s Mot. for Summ. J. Ex. 13 (“Bender
Dep.”) 13 26:7-28:13, ECF No. 69-20. Accordingly, Plaintiffs can produce him at trial to
offer those statements in admissible form. See Rossi v. Standard Roofing, Inc., 156 F.3d
452, 470 n.13 (3d Cir. 1998). And regarding paragraph 10, Bender reviewed and
inspected the cargo and provided a report to Plaintiffs summarizing his findings. See
Bender Dep. 29:5-14. Finally, the Court will not disregard paragraph 7 under the sham
affidavit doctrine, because paragraph 7 is consistent with Plaintiff’s interrogatory
responses and Reddy’s prior deposition testimony.3 See In re CitX Corp., 448 F.3d 672,
679 (3d Cir. 2006) (finding that courts may disregard an affidavit submitted in opposition
to a motion for summary judgment when the affidavit contradicts the affiant’s prior
deposition testimony). Similarly, the Court will not disregard paragraphs 5 and 10 under
that doctrine, because those paragraphs do not necessarily conflict with the record
evidence.4 Accordingly, the Court will overrule Defendant’s objections to the Reddy
ii. Bennett Declaration and the McLaughlin Declaration
The Court will also overrule Defendant’s objections to the Bennett Declaration
and the McLaughlin Declaration. The Bennett Declaration consists of 12 paragraphs. 11
of those paragraphs identify attached exhibits, which are labeled A though K. One of
these exhibits – Exhibit F – is the McLaughlin Declaration. Defendant argues that the
entire Bennett Declaration is inadmissible, because it is not based on Bennett’s personal
Defendant argues that paragraph 7 is contrary to Plaintiffs’ response to its interrogatories and Reddy’s deposition
testimony. In their original response, Plaintiffs stated that “PNRW provided its terms and conditions and its
warehouse receipts for the Subject Goods,” and during his deposition, Reddy confirmed the accuracy of this
statement. Def.’s Mot. for Summary J. Ex. 5 p. 6, ECF No. 69-12; Reddy Dep. 120:13-123:14. However, Plaintiffs
later supplemented their response to clarify that they did not receive the terms and conditions until after they put
Defendant on notice of their loss. Ps.’ Opp’n to Mot. to Strike Ex. A, ECF No. 74. This supplemental response is
not contrary to the original response or Reddy’s deposition testimony. It merely clarifies that Plaintiffs received the
terms and conditions after reporting their loss.
Paragraph 5 does not necessarily contradict Reddy’s deposition testimony that he did not remember any specific
discussion of the condition of the warehouse, but only that Defendant guaranteed various services. D.’s Mot.
Summ. J. Ex. 2 128:10-129:15. Likewise, nothing in Reddy’s deposition testimony necessarily contradicts his
declaration that “each lot and each carton were eventually inspected” (emphasis added) in paragraph 10.
knowledge. Defendant also argues that because Exhibits A, B, D, F, and G5 were
produced by Plaintiffs – not Defendant – during discovery and because Plaintiff failed to
properly authenticate those exhibits, the Court should not consider them. Finally,
Defendant argues that Exhibit F and Exhibit J were not produced during discovery and
are thus inadmissible.
As an initial matter, Defendant misreads the Bennett Affidavit. Bennett is not
attesting to the facts contained within the attached documents; he’s offering true and
accurate copies of documents produced in discovery. Bennett has personal knowledge as
to whether he has submitted true and accurate copies of documents produced in
discovery. And Defendant ignores the reality that filing documents pursuant to attorney
declaration is a well-established practice. See, e.g., Shell Trademark Mgmt. BV v. Ray
Thomas Petroleum Co., Inc., 642 F. Supp. 2d 493, 511 (W.D.N.C. 2009). “Documents
produced in response to discovery requests are admissible on a motion for summary
judgment since they are self-authenticating and constitute the admissions of a party
opponent.” Anand v. BP W. Coast Prods. LLC, 484 F. Supp. 2d 1086, 1092 n.11 (C.D.
Cal. 2007). Accordingly, courts have warned litigants like Defendant that “[i]t is
disingenuous and wasteful” to object to one’s own documents based upon personal
knowledge or authentication. Id. (quoting Comm. Data Servers, Inc. v. IBM, 262
F.Supp.2d 50, 60 (S.D.N.Y. 2003)).
Further, as to the documents that Plaintiffs themselves produced, the Court finds
that there is sufficient circumstantial evidence to authenticate those documents. See
United States v. Balice, 505 F. App’x 142, 146 (3d Cir. 2012) (“The burden of proof
under Rule 901 is slight, requiring only a foundation from which the fact-finder could
legitimately infer that the evidence is what the proponent claims it to be.”); Link v.
Mercedes-Benz of N. Am., Inc., 788 F.2d 918, 928 (3d Cir. 1986) (noting that distinctive
characteristics of the challenged documents – such as “company logos and other
trademarks, the professional appearance of the various handbooks and manuals, and the
specific nature of the contents” – are sufficient to overcome the slight authentication
admissibility burden). Exhibit A includes customer complaints about the Subject Goods
addressed to an OFI employee. See United States v. Siddiqui, 235 F.3d 1318, 1322–23
(11th Cir. 2000) (authenticating emails based on the email addresses in the headers,
explanations in the body of the emails, defendants’ conduct after receiving the emails,
and other circumstantial evidence). Exhibit B is a letter on Defendant’s own letterhead
addressed to OFI regarding the customer complaints. Exhibit D contains warehouse
receipts with “Port Newark Refrigerated Warehouse Company” printed along the top.
And Exhibit G includes work orders and invoices for “Port Newark Refrigerated
Warehouse,” which contain a “Refrigeration Design & Service Inc.” logo. Finally, as to
Exhibit J, Plaintiffs provided the Court with an email from Bennett to Plaintiffs, dated
April 19, 2013, describing it as a “transcript of a telephone conversation between Mr.
Defendant also objects to the Expert Reports, which were originally attached to the Bennett Declaration as Exhibits
H and I. However, as explained below, Plaintiffs have cured any defects regarding the Expert Reports.
Barrillaro [an employee of OFI] and Mrs. Blanc [an employee of Defendant].” The Court
also notes that Defendant does not claim that the transcript is inaccurate. Finally, even if
there were not sufficient circumstantial evidence to authenticate these documents, they
can be authenticated through testimony at trial. Accordingly, the Court could still
consider them in connection with Plaintiffs’ opposition. See Celotex Corp., 477 U.S. at
324 (holding that a nonmoving party need not “produce evidence in a form that would be
admissible at trial in order to avoid summary judgment”).
The Court moves next to Defendant’s argument that the Court should not consider
Exhibits F and J because they were not produced during discovery. The Court finds that
Plaintiffs were under no obligation to provide Defendant with Exhibit F – the
McLaughlin Declaration. McLaughlin is a fact witness for Plaintiffs – not an expert –
and was identified in documents produced by Plaintiffs as an individual with knowledge
about the case. However, the Court agrees that paragraph 20 of the McLaughlin
Declaration is an inadmissible opinion and will not consider that statement.6 And as to
Exhibit J – which is a copy of a transcribed telephone conversation – Plaintiffs provided
the Court with proof that Defendants received that document via email on April 19, 2013.
Letter from William R. Bennett III Ex. 6, ECF No. 83-6.
The Court will thus sustain Defendant’s objection to paragraph 20 of the
McLaughlin Declaration, but will overrule all other objections to the Bennett Declaration
and the McLaughlin Declaration.
B. The Expert Reports
Finally, Defendant objects to the Expert Reports, which Plaintiff initially
submitted without a sworn declaration attached to the Bennett Declaration as Exhibit H
(Brecht Report) and Exhibit I (Powers Report). A court should not consider an unsworn
expert report when evaluating a motion for summary judgment. Fowle v. C & C Cola,
868 F.2d 59, 67 (3d Cir.1989) (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 158
n.17 (1980). However, on May 30, 2014, Plaintiffs cured the defect by providing sworn
declarations from Dr. Brecht and Mr. Powers. Maytag Corp. v. Electrolux Home
Products, Inc., 448 F. Supp. 2d 1034, 1064 (N.D. Iowa 2006) aff’d, 224 F. App’x 972
(Fed. Cir. 2007).
Defendant further objects to the Expert Reports on the grounds that they are
irrelevant to the issues raised in Defendant’s summary judgment motion. The Court
disagrees. The Expert Reports each provide evidence as to whether overcrowding at
PNRW’s facility damaged the Subject Goods. See Decl. of Patrick Brecht 13, ECF No.
In paragraph 20, McLaughlin, a lay witness, states that “[b]ased upon my inspections of the PNRW facility in 2006
and 2010, I believe that the refrigeration system as of September 2011 was outdated, in a state of disrepair,
antiquated, inefficient, and unable to maintain proper cooling of its refrigeration rooms.”
75; Decl. of Pierce N. Power 34, ECF No. 76. Defendant’s objections to the Expert
Reports will be overruled.
MOTION FOR SUMMARY JUDGMENT
Having considered Defendant’s lengthy and almost entirely unmeritorious
objections, the Court turns to the parties’ summary judgment motions. The Court will
deny summary judgment on all but one issue.
A. UNDISPUTED FACTS
The following facts are undisputed. Defendant PNRW operated the PNRW
Warehouse. Defendant is a wholly-owned subsidiary of Newark Refrigerated
Warehouse, Inc., which operates a different refrigerated warehouse at 104 Avenue C,
Newark New Jersey (the “Newark Warehouse”). Plaintiff OFI is a seafood importer.
Plaintiff Watermark is a seafood wholesaler, trader, and distributor. The Subject Goods
include: (1) 215,842 pounds of India Individually Quick Frozen and Block Frozen
shrimp (the “India Shrimp”), (2) 696,210 pounds of Ecuador Block Frozen shrimp (the
“Ecuador Shrimp”), (3) 28,065 pounds of Mexico shrimp, (4) 3,100 pounds of Thailand
shrimp, and (5) 15,080 of miscellaneous other seafood products. PNRW stored 96,210
pounds of the Subject Goods for the account of Watermark and the remainder for OFI.
The parties met in the fall of 2010 and shortly thereafter OFI began storing its
shrimp at Defendant. Pls.’ Resp. to D.’s R. 56.1 Stmt. (“Pls.’ Resp. Stmt.”) ¶ 7, ECF No.
70. The parties disagree about what they discussed at this meeting. Defendant provided
testimony indicating that the parties agreed on the storage rates and on Defendant’s
Terms and Conditions, while Plaintiffs submitted a declaration stating that only rates
were discussed. D.’s Mot. Summ. J. Ex. 4 66:9-13, ECF No. 69-11; Reddy Decl. ¶¶ 7,8.
Between October 29, 2010 and September 26, 2011, Defendant received and
stored the Subject Goods for Plaintiffs. D.’s R. 56.1 Stmt. (“D.’s Stmt.”) ¶ 10, ECF No.
69-2. Defendant stored all of the Subject Goods at the PNRW Warehouse. D.’s Stmt. ¶¶
19-20. The Subject Goods were sorted and stored in 116 lots, each of which contained
anywhere from one pallet (1 master carton) to 24 pallets (1,700 master cartons) of
Subject Goods. D.’s Stmt. ¶ 11. Defendant’s submitted a declaration stating that each
time Defendant received a lot of the Subject Goods, it issued Plaintiffs its Standard NonNegotiable Warehouse Receipt. D.’s Mot. Summ. J. Ex 1 ¶¶ 7, 8; Ex. 6. That declaration
also states that Defendant mailed its Terms and Conditions to Plaintiffs each fiscal
quarter. D.’s Mot. Summ. J. Ex. 1 ¶¶ 9. Plaintiffs admit that they received the
Warehouse Receipts periodically, but submitted a declaration that Defendant only sent
them the front of the Warehouse Receipts, which did not include the Terms and
Conditions. Reddy Decl. ¶¶ 6-8. That declaration also states that they never received the
Terms and Conditions from Defendant. Reddy Decl. ¶¶ 6-8.
The Warehouse Receipt provided to Plaintiffs each month states on its face
“SUBJECT TO CONTRACT TERMS AND CONDITIONS ON REVERSE SIDE.” D.’s
Stmt. ¶ 13; Bennett Decl. Ex C. Section 9(b) of the Terms and Conditions that Defendant
provided in connection with its instant motion limits Defendant’s liability as follows:
(d) IN THE EVENT OF LOSS, DAMAGE OR DESTRUCTION TO GOODS
FOR WHICH THE COMPANY IS LEGALLY LIABLE, STORER DECLARES
THAT COMPANY’S LIABILITY SHALL BE LIMITED TO THE LESSER OF
THE FOLLOWING: (1) THE ACTUAL COST TO STORER OF REPLACING,
OR REPRODUCING THE LOST, DAMAGED, AND/OR DESTROYED
GOODS TOGETHER WITH TRANSPORTATION COSTS TO WAREHOUSE,
(2) THE FAIR MARKET VALUE OF THE LOST, DAMAGED, AND/OR
DESTROYED GOODS ON THE DATE STORER IS NOTIFIED OF LOSS,
DAMAGE AND/OR DESTRUCTION, (3) 50 TIMES THE MONTHLY
STORAGE CHARGE APPLICABLE TO SUCH LOST, DAMAGED AND/OR
DESTROYED GOODS, (4) $0.50 PER POUND FOR SAID LOST, DAMAGED,
AND/OR DESTROYED GOODS. PROVIDED, HOWEVER THAT WITHIN A
REASONABLE TIME AFTER RECEIPT OF THIS WAREHOUSE RECEIPT,
STORER MAY, UPON WRITTEN REQUEST INCREASE COMPANY’S
LIABILITY ON PART OR ALL OF THE GOODS IN WHICH CASE AN
INCREASED CHARGE WILL BE MADE BASED UPON SUCH INCREASED
VALUATION; FURTHER PROVIDED THAT NO SUCH REQUEST SHALL
BE VALID UNLESS MADE BEFORE LOSS, DAMAGE OR DESTRUCTION
TO ANY PORTION OF THE GOODS HAS OCCURRED.
D.’s Stmt. ¶ 15. Defendant maintains that Section 9(d) limits its liability for the Subject
to $444,599.00. D.’s Stmt. ¶ 16. Further, Defendant directs the Court to Section 10(b) of
the Terms and Conditions, which provides that “As a condition precedent to making any
claim and/or filing any suite [sic], STORER shall provide COMPANY with a reasonable
opportunity to inspect the GOODS which are the basis of STORER’S claim.” D.’s Stmt.
On August 28, 2011, Hurricane Irene made landfall in New Jersey. D.’s Stmt. ¶
23. The PNRW Warehouse lost power for two to six hours. D.’s Stmt. ¶ 25. The
Newark Warehouse also lost power during the storm. D.’s Mot. Summ. J. Ex. 4 81:5-9.
Due to the loss of power, 10 containers that should have been sent to the Newark
Warehouse were rerouted to the PNRW Warehouse. D.’s Stmt. ¶ 27; Pls.’ Resp. Stmt. ¶¶
25, 27. Plaintiffs submitted an expert opinion that, as result of the rerouting, the PNRW
Warehouse became filled beyond capacity and was unable to maintain the proper storage
temperature for the Subject Goods. Decl. of Patrick Brecht 13. On the other hand,
Defendant provided testimony stating that its refrigeration system could maintain proper
temperatures even if the PNRW Warehouse was over capacity. D.’s Mot. Summ. J. Ex. 4
Plaintiffs submitted emails showing that in September 2011, OFI received
numerous complaints from customers stating that they received spoiled seafood from the
PNRW Warehouse. Bennett Decl. Ex. B. In two letters dated September 20, 2011, each
Plaintiff made a claim against PNRW for approximately $5,000,000.00 in damages to the
Subject Goods. D.’s Stmt. ¶ 29. Defendant responded the next day with a letter stating:
We have not had abnormal operating conditions at Port Newark Refrigerated
Warehouse that would account for your claim . . . . This week, we are extremely
busy and cannot devote manpower to pull pallets for you to inspect during
operating hours . . . . I will make arrangements to enable you to examine your
freight on Monday.
Bennett Decl. Ex. B.
On September 27, 2011, Defendant informed its insurance broker of Plaintiffs’
claims, who instructed Defendant not to release any of the Subject Goods until the insurer
had a chance to inspect them. D.’s Stmt. ¶¶ 30-31. On September 28, 2011, Defendant
advised Plaintiffs’ that the Subject Goods were on hold and that it would not release the
Subject Goods. D.’s Stmt. ¶ 33. That same day, Plaintiffs’ representative, Michael
Barillaro, asked why the Subject Goods were on hold. D.’s Stmt. ¶ 34. Defendant
explained that its insurer had instructed Defendant not to release the products that were
subject to Plaintiff’s claim. D.’s Stmt. ¶ 35. Barillaro then stated that Plaintiffs’ claim
was only for the Ecuador shrimp. D.’s Stmt. ¶ 36. Defendant’s Vice President, Daniel
Taskila, testified that he told Barillaro that if he provided something in writing specifying
which products were part of Plaintiffs’ claim, Defendant would release the uninvolved
products.7 D.’s Mot. Summ. J. Ex. 8 99:4-100:16, ECF No. 69-15. Later that day,
Barillaro clarified that all of the Subject Goods were part of Plaintiffs’ claim. D.’s Stmt.
¶ 39. Defendant provided testimony stating it did not receive another request from
Plaintiffs to release the Subject Goods until October 26, 2011, when Defendant advised
Plaintiffs that the Subject Goods were available for pick up. D.’s Mot. Summ. J. Ex. 8
100:17-101:13. Plaintiffs submitted a declaration stating that they made numerous
requests for the Subject Goods’ release. Reddy Decl. ¶ 9.
OFI’s cargo insurers retained Christopher Bender to inspect the Subject Goods.
D.’s Stmt. ¶ 42. On September 26, 2011, October 20, 2011, and November 21, 2011,
Bender, Barillaro, and Defendant inspected the Subject Goods. D.’s Stmt. ¶ 41. They
inspected 100 of the 116 lots then in storage. D.’s Stmt. ¶ 41, 43-45. The lots vary in
size and type of shrimp and the number of master cartons. D.’s Stmt. ¶ 50. Defendant
claims, based on Bender’s testimony, that for each lot inspected, Plaintiffs inspected only
two to three master cartons, for a total of 200 to 300 master cartons. D.’s Stmt. ¶ 51.
Plaintiff’s claim that PNRW refused to release all of Plaintiff’s cargo, but did not cite to anything in the record
supporting this assertion.
And an expert witness for Defendant submitted an affidavit stating that Plaintiffs only
inspected between 6% and 9% of the Subject Goods. D.’s Mot. Summ. J. Ex. 3 ¶ 14,
ECF 69-5. Plaintiffs maintain, based on Reddy’s declaration, that each lot and each
carton were eventually inspected. Reddy Decl. ¶ 10 (“After we were able to receive our
cargo back we inspected each lot and each carton.”). The parties disagree as to how
many lots were damaged. D.’s Stmt. ¶ 47; Pls.’ Resp. Stmt. ¶ 47. Plaintiffs submitted
the Reddy Declaration as proof that all of the Subject Goods suffered temperature abuse,
while Defendant provided an expert affidavit stating that Plaintiffs deemed 18% of the
lots inspected undamaged. D.’s Mot. Summ. J. Ex. 3 ¶ 12; Reddy Decl. ¶ 10.
Relevant to mitigation of damages, the parties disagree as to the shelf life of the
Subject Goods. Plaintiffs submitted a declaration stating that if the frozen shrimp were
stored at 0°F, they had a shelf life in excess of 18 months. Reddy Decl. ¶ 11. Defendant
maintains that the India Shrimp or the Ecuador Shrimp had a shorter shelf life. Plaintiffs
admit that they did not sell the India Shrimp or the Ecuador Shrimp within their shelf life.
D.’s Stmt. ¶¶ 59, 60; Pls.’ Resp. Stmt. ¶¶ 59, 60. However, Plaintiffs also submitted the
Reddy Declaration, which states that Plaintiffs sold the Subject Goods for “the best
possible price we could get.” Reddy Decl. ¶ 12.
B. LEGAL STANDARD
Federal Rule of Civil Procedure 56 provides for summary judgment “if the
pleadings, the discovery [including, depositions, answers to interrogatories, and
admissions on file] and disclosure materials on file, and any affidavits show that there is
no genuine issue as to any material fact and that the movant is entitled to judgment as a
matter of law.” Fed. R. Civ. P. 56; see also Celotex Corp., 477 U.S. at 322-23; Turner v.
Schering-Plough Corp., 901 F.2d 335, 340 (3d Cir. 1990). A factual dispute is genuine if
a reasonable jury could find for the non-moving party, and is material if it will affect the
outcome of the trial under governing substantive law. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986). The Court considers all evidence and inferences drawn
therefrom in the light most favorable to the non-moving party. Andreoli v. Gates, 482
F.3d 641, 647 (3d Cir. 2007).
Initially, the moving party has the burden of demonstrating the absence of a
genuine issue of material fact. Celotex Corp., 477 U.S. at 323. Once the moving party
has met this burden, the nonmoving party must identify, by affidavits or otherwise,
specific facts showing that there is a genuine issue for trial. Id. The opposing party must
do more than just rest upon mere allegations, general denials, or vague statements.
Saldana v. Kmart Corp., 260 F.3d 228, 232 (3d Cir. 2001). Rather, to withstand a proper
motion for summary judgment, the nonmoving party must identify specific facts and
affirmative evidence that contradict those offered by the moving party. Anderson, 477
U.S. at 256-57.
Defendant moves for summary judgment on the following issues:
(1) Whether Section 9(d) of the Terms and Conditions limits Defendant’s
(2) Whether Plaintiffs appropriately mitigated their damages.
(3) Whether Defendant is liable for conversion.
(4) Whether Defendant breached the covenant of good faith.
(5) Whether overcrowding caused damage to the Subject Goods.
(6) Whether Plaintiffs inspected a representative sample of the Subject Goods.
(7) Whether Plaintiffs recover for Subject Goods deemed undamaged.
(8) Whether Watermark has capacity to sue.
Plaintiffs, in turn, cross-move for summary judgment on some of those issues. The Court
finds that there are numerous issues of material fact and will deny both motions, with the
exception that the Court will grant Plaintiffs’ cross-motion regarding Watermark’s
capacity to sue.
i. Whether Section 9(d) of the Terms and Conditions limits
Defendant argues that Section 9(d) of the Terms and Conditions limits the amount
that Plaintiffs can recover for damages under Counts I, II, III, and V of the Second
Amended Complaint. Plaintiffs argue that Section 9(d) is not binding because
Defendants never provided the Terms and Conditions to them. Plaintiffs further argue
that Defendant cannot limit its liability for gross negligence.
New Jersey law permits a warehouse to limit its liability for loss or damage. N.J.
Stat. Ann. 12A:7-204(b). A warehouse’s liability limitation provision is binding against
a bailor, provided that the warehouse receipt calls attention to the provision, so as to
inform the bailor of its terms. Silvestri v. South Orange Storage Corp., 81 A.2d 502,
504-05 (N.J. Super. Ct. App. Div. 1951). However, the limitation provision cannot create
a complete exemption from liability for losses proximately resulting from the negligence
of the bailee. Id. at 504.
Here, genuine issues of material fact exist as to whether Section 9(b) of the Terms
and Conditions limits Defendant’s liability for the Subject Goods. The record contains
conflicting evidence as to whether Plaintiffs agreed to the Terms and Conditions.
Defendant submitted evidence showing that it provided the Terms and Conditions, which
included the limitation provision, to Plaintiffs. D.’s Mot. Summ. J. Ex 1 ¶¶ 7-9; Ex. 6.
And Plaintiffs submitted evidence showing they never received the Terms and
Conditions. Reddy Decl. ¶¶ 6-8. Thus, the Court will deny Defendant’s motion for
summary judgment on this issue.
As to Plaintiffs’ argument that the liability limitation, if enforceable, would not
apply to its gross negligence claim in Count III, the Court disagrees. While a common
carrier and a bailee cannot ““effectuate a complete exemption from liability for losses
proximately resulting from the negligence of the carrier or bailee,’” nothing prevents
them from placing limitations on that liability. Choice Canning Co. v. MCST Preferred
Transp., Inc., No. A-4165-05T3, 2006 WL 3511467, at *3 (N.J. Super. Ct. App. Div.
Dec. 7, 2006) (quoting Silvestri, 81 A.2d at 504); see also St. Paul Fire & Marine Ins.
Co. v. Wells Fargo Alarm Servs., No. 95-712, 1995 WL 306642, at *5 (D.N.J. May 9,
1995) (citing Tessler and Son v. Sonitrol Sec. Sys., 497 A.2d 530, 532-33 (N.J. Super. Ct.
App. Div. 1985). Further, whether Defendant acted with gross negligence is a genuine
issue of material fact. See, e.g., D.’s Mot. Summ. J. Ex. 4 45:18-46:10; Bennett Decl.
Exs. F, H, I. Thus, Plaintiff’s request for summary judgment on this issue will likewise
ii. Whether Plaintiffs appropriately mitigated their damages.
Defendant next asks the Court to find that Plaintiffs failed to adequately mitigate
damages for some of the Subject Goods, because those Subject Goods were sold after
their shelf life expired. Specifically, Defendant argues that Plaintiffs did not sell 5,528
pounds of India Shrimp until after the expiration of their shelf life of 12 months and did
not sell 2,200 pounds of Ecuador Shrimp until after the expiration of their shelf life of 18
Under New Jersey law, parties injured by a breach of contract must take
reasonable steps to mitigate their damages. State v. Ernst & Young, L.L.P., 902 A.2d
338, 348 (N.J. Super. Ct. App. Div. 2006). Whether a plaintiff’s mitigation efforts were
reasonable is a question of fact. Ingraham v. Trowbridge Builders, 84, 687 A.2d 785,
791 (N.J. Super. Ct. App. Div. 1997). The burden of proof in mitigation of damages rests
on the defendant. Wade v. Kessler Inst., 778 A.2d 580, 591 (N.J. Super. Ct. App. Div.
2001), aff’d, 798 A.2d 1251 (2002).
Here, a reasonable jury could find that Plaintiffs took appropriate steps to mitigate
their damages. For instance, while Defendant submitted evidence showing that Plaintiffs
waited until after the shelf life had expired to sell some of the frozen shrimp, Plaintiffs
submitted evidence indicating that Defendant hindered their mitigation efforts. D.’s
Stmt. ¶ 59; Reddy Decl. ¶ 9. Defendant’s motion for summary judgment on this issue
will be denied.
iii. Whether Defendant is liable for conversion.
In Count IV of the Amended Complaint, Plaintiffs assert a claim for conversion
based on Defendant’s refusal to return the Subject Goods to them until October 26, 2011.
Defendant argues that summary judgment in its favor is warranted because Section 10(b)
of the Terms and Conditions permitted it to hold goods for inspection and because
Plaintiffs have provided no evidence of damages. Plaintiffs argue that Defendant’s
refusal to return the Subject Goods hindered their attempts to mitigate the loss and
exacerbated the damage by forcing the shrimp to remain in a warm warehouse. Plaintiffs
ask the Court to find that Defendant converted their goods and that any the alleged
limitation provision does not apply to their conversion claim.
“Conversion is essentially the wrongful exercise of dominion and control over the
property of another in a manner inconsistent with the other person’s rights in that
property.” McAdam v. Dean Witter Reynolds, Inc., 896 F.2d 750, 771 (3d Cir. 1990)
(citations omitted); see also Mueller v. Technical Devices Corp., 8 N.J. 201, 207, 84 A.2d
620, 623 (1951)). Under New Jersey law, a limitation on liability “is not effective with
respect to the warehouse’s liability for conversion to its own use.” N.J. Stat. Ann. §
Factual issues exist as to whether Defendant is liable for conversion. Defendant
provided evidence showing that Plaintiffs’ agreed to Section 10(b) of the Terms and
Conditions, which permitted them to hold goods for inspection. D.’s Mot. Summ. J. Ex 1
¶¶ 7-9; Ex. 6. Plaintiffs submitted evidence showing that they never assented to the
Terms and Conditions and made numerous requests for release of the Subject Goods.
Reddy Decl. ¶¶ 6-9. Further, a reasonable jury could find that Defendant’s refusal to
return the Subject Goods damaged Plaintiffs by delaying their efforts to mitigate damages
or subjecting the Subject Goods to additional temperature abuse. Notably, “New Jersey
courts permit conversion claims for only nominal damages and, in certain instances, even
permit an award of punitive damages in the absence of compensatory damages.” City
Select Auto Sales, Inc. v. David Randall Associates, Inc., No. 11-2658, 2014 WL
4755487, at *8 (D.N.J. Sept. 24, 2014) (citations omitted). Finally, there are factual
issues as to whether any conversion was for Defendant’s own use, so as to void any
limitation provision. Accordingly, both Defendant’s and Plaintiffs’ motion for summary
judgment on this issue will be denied.
iv. Whether Defendant breached the covenant of good faith.
In Count V, Plaintiffs assert a violation of the implied covenant of good faith and
fair dealing. Every contract in New Jersey contains a covenant of good faith and fair
dealing. Sons of Thunder, Inc. v. Borden, Inc., 690 A.2d 575, 587 (N.J. 1997). Under
that covenant, neither party shall do anything that will have the effect of destroying or
injuring the right of the other party to receive the fruits of the contract. Palisades
Properties, Inc. v. Brunetti, 207 A.2d 522, 531 (N.J. 1965). In other words, “[a] party to
a contract breaches the covenant if it acts in bad faith or engages in some other form of
inequitable conduct in the performance of a contractual obligation.” Black Horse Lane
Assoc., L.P. v. Dow Chem. Corp., 228 F.3d 275, 288 (3d Cir. 2000).
Contrary to Defendant’s arguments, a reasonable jury could conclude that
Defendant violated the implied covenant of good faith and fair dealing. For instance,
Plaintiffs have produced evidence showing that Defendant refused to release the Subject
Goods for over a month and initially refused to let Plaintiffs into the PNRW Warehouse
to inspect the Subject Goods. Bennett Decl. Ex. B; Reddy Decl. ¶ 9. Defendant has
submitted evidence indicating that these actions were reasonable. However, Plaintiffs
have also submitted evidence of overcrowding at the PNRW Warehouse, from which a
reasonable jury could conclude that Defendant’s refusal to provide Plaintiffs with access
to the Subject Goods was in bad faith. See Decl. of Patrick Brecht 13, ECF No. 75; Decl.
of Pierce N. Power 34. The Court will thus deny Defendant’s motion for summary
judgment on this claim.
v. Whether overcrowding caused damage to the Subject Goods.
Defendant next asks the Court to find that there is no evidence that overcrowding
caused damage to the Subject Goods. Plaintiff cross-moves for summary judgment on
the “issue” of whether the PNRW Warehouse was filled beyond capacity. Pls.’ Opp’n
Br. 21, ECF No. 70-1.
Plaintiff’s cross-motion is premised on a misunderstanding of the summary
judgment standard and will be denied. While Court agrees that the fact that the PNRW
Warehouse was over capacity is undisputed, that does not entitle Plaintiffs to judgment
on any legal issues. Genuine issues of material fact remain as to whether, as a result of
being filled beyond capacity, the PNRW Warehouse was unable to maintain proper
temperatures for the Subject Goods.
The Court will also deny Defendant’s motion. Plaintiffs produced ample evidence
supporting their claim that overcrowding caused damage to the Subject Goods. See, e.g.,
Decl. of Patrick Brecht 13, ECF No. 75; Decl. of Pierce N. Power 34.
vi. Whether Plaintiffs inspected a representative sample of the
Defendant also asks this Court to find, as a matter of law, that the sample size of
Subject Goods inspected is insufficient to support Plaintiffs’ claim that all the Subject
Goods were damaged. Plaintiffs, in turn, cross-moves for the Court to grant summary
judgment in their favor on this issue.
“[T]he extent and amount of damages to an entire shipment may be extrapolated
from a representative sampling.” S.C. Johnson & Son, Inc. v. Louisville & Nashville R.
Co., 695 F.2d 253, 259 (7th Cir. 1982); see also Royston Distributors, Inc. v. MooreMcCormack Lines, Inc., 252 F. Supp. 480, 488 (E.D. Pa. 1965). A sampling is sufficient
proof of damages when “a reasonably representative sample has been taken and so long
as the sample is sufficient to indicate fairly the quality, condition and nature of damage to
the whole cargo.” Amstar Corp. v. M/V Alexandros T., 472 F. Supp. 1289, 1297 (D. Md.
Genuine factual disputes exist as to the amount of goods inspected. Defendant
submitted an affidavit stating that Plaintiffs inspected between 6% and 9% of the Subject
Goods. D.’s Mot. Summ. J. Ex. 3 ¶ 14, ECF 69-5. Plaintiffs submitted a declaration
stating that each lot and each carton were eventually inspected.8 Reddy Decl. ¶ 10. Thus,
the Court will deny summary judgment on this issue.
vii. Whether Plaintiffs can recover for Subject Goods deemed
Defendant argues that Plaintiffs should not be permitted to recover for the goods
that were found undamaged during the inspection. Plaintiffs maintain that all of the
goods suffered from temperature abuse and were therefore appropriately withheld from
sale for human consumption. Factual disputes exist as to whether all of the Subject
Goods suffered from temperature abuse. D.’s Mot. Summ. J. Ex. 3 ¶ 12; Reddy Decl. ¶
10. Further, a reasonable jury could conclude that, because some of the Subject Goods
were visibly damaged, all of the Subject Goods were unfit for sale. The Court will deny
summary judgment on this issue.
viii. Whether Watermark has capacity to sue.
Defendant asks the Court to find that Watermark does not have capacity to sue
Defendant, because Watermark is a New York entity that was dissolved fifteen years ago.
Plaintiff argues that Watermark is a California entity with capacity to sue. Both parties
seek summary judgment on this issue.
As clarified both by the Reddy Declaration and by Plaintiffs on the record at a
hearing before this Court on November 18, 2014, Watermark is a California entity.
Defendant’s motion for summary judgment will therefore be denied. Further, as
Defendant has provided nothing showing that Watermark is organized in a state other
than California,9 the Court will grant summary judgment to Plaintiffs on this issue.
For the above reasons, Defendant’s motion to strike, which the Court has
construed as objections under Rule 56(c), is SUSTAINED as to the paragraph 20 of the
McLaughlin Declaration and OVERRULED as to all other objections. Further,
Defendant’s motion for summary judgment is DENIED. Finally, Plaintiffs’ cross-motion
Defendant’s claim that it objected to paragraph 10 of the Reddy Declaration under the sham affidavit doctrine is
incorrect. Defendant only objected to paragraph 7 under that doctrine. Further, Defendant points to nothing in
Reddy’s deposition testimony that contradicts his declaration that “each lot and each carton were eventually
inspected” in paragraph 10.
Defendant submitted a record from the California Secretary of State showing that “RFD Enterprises, Inc.” is
registered in California. This submission indicates that there is a typo in the Reddy Declaration, which states that
“Watermark Foods is a “d/b/a’ [sic] of RFD Enterprises, LLC, a California Corporation.” It does not create a
genuine issue of material fact.
for summary judgment is GRANTED as to whether Watermark has capacity to sue
Defendant and DENIED as to all other issues.
/s/ William J. Martini
WILLIAM J. MARTINI, U.S.D.J.
Date: January 12, 2015
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