G&P Trucking Company Inc v. Zurich American Insurance Company et al
Filing
61
ORDER AND OPINION denying as moot 35 Motion in Limine; granting 20 Motion for Summary Judgment; denying 26 Motion for Summary Judgment Signed by Honorable Margaret B Seymour on 8/19/2015.(mdea )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
COLUMBIA DIVISION
G&P Trucking Co., Inc.,
)
)
Plaintiff,
)
)
v.
)
)
Zurich American Insurance
)
Company, as subrogee of SKF
)
USA, Inc.; SKF USA, Inc.,
)
)
Defendants.
)
______________________________)
Civil Action No. 3:14-cv-501
ORDER AND OPINION
Before the court are motions for summary judgment by both Plaintiff G&P Trucking, Inc.
(“G&P”) and Defendants SKF USA, Inc. (“SKF”) and Zurich American Insurance Company
(“Zurich”). ECF Nos. 20 (G&P) & 26 (SKF). Zurich is insurer and subrogee of SKF. In this action,
G&P seeks a determination of its liability for a trucking accident and a determination as to any
limitation of liability available to it. ECF No. 1.
I. Factual and Procedural Background
On January 14, 2014, G&P moved the court for summary judgment in its favor and asked
the court to find that it had no liability under the “Ocean or Combined Transport Waybill,” ECF
Nos. 20-3 & 26-5 (hereinafter the “Bill of Lading”), or, alternatively, that its liability was limited
to $50.00 by the terms of the Delivery Order, ECF Nos. 20-6 & 26-3, or $500.00 by the Carriage
of Goods by Sea Act (“COGSA”), Note following 46 U.S.C. § 30701 . ECF No. 20. On March 2,
2015, SKF and Zurich also moved for summary judgment on the issue of liability, asking the court
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to hold that G&P had not presented evidence of a viable limitation of liability. ECF No. 26.1 G&P
filed a consolidated response in opposition to SKF’s motion and reply on April 2, 2015. The court
held a hearing on the summary judgment motions on April 14, 2015. On May 6, 2015, the court
entered an order requesting supplemental briefing from the parties on the issue of the condition of
the goods when they were delivered to G&P in Savannah. ECF No. 43. The parties completed this
briefing by May 18, 2015. ECF Nos. 45 & 46.
On June 19, 2015, the court issued an order addressing some of the issues raised by the
parties in their summary judgment motions. ECF No. 49 (“June 19 Order”). In that order, the court
summarized the underlying facts and various details of the shipping documents involved. Id. at 2-6.2
The court noted the parties’ disagreement about the applicable law—COGSA or the Carmack
Amendment, 49 U.S.C. § 14706–-and provided background about each provision. Id. at 7-9. The
court further observed that whether the Bill of Lading is a through bill determines whether COGSA
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SKF’s motion for summary judgment also served as a response in opposition to
G&P’s motion for summary judgment. ECF No. 27.
2
The court summarized the various carriers and documents in its June 19 Order:
“The parties disagree as to which law governs the shipment at issue in this case.
G&P’s position is that the shipment is governed by the terms of a bill of lading
issued by the ocean carrier, Pantainer (H.K.) Limited (“Pantainer”), doing
business as Pantainer Express Line, in Spain where the goods originated at a
factory owned by SKF Espanola S.A. (“SKF Espanola”). G&P contends that the
bill of lading may extend the provisions of the Carriage of Goods by Sea Act
(“COGSA”), Note following 46 U.S.C. § 30701, to the domestic inland portions
of the journey. G&P characterizes the document issued by Pantainer as a through
bill of lading. SKF, on the other hand, contends that the movement was in fact
two shipments, and that the domestic inland portion from Savannah, Georgia, to
Crossville, Tennessee, was a second transaction, governed by a delivery order
issued in the United States by Panalpina, Inc. (“Panalpina”) and by the provisions
of the Carmack Amendment, 49 U.S.C. § 14706.” ECF No. 49 at 1-2.
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or the Carmack Amendment applies. Id. at 6. The court held the through bill of lading question to
be a question of fact resolvable by the court as an exercise of the court’s admiralty jurisdiction. Id.
at 9. The court found the record to be ambiguous and scheduled an evidentiary hearing on the
through bill of lading issue. Id. at 13. That hearing was held on July 29, 2015. ECF No. 57.
Considering the record as a whole, including the exhibits, depositions, and witness
testimony, the court finds that the Bill of Lading is a through bill of lading. COGSA governs the
shipment at issue in this case. G&P’s liability is limited by a valid Himalaya clause3 in the Bill of
Lading. For the reasons set forth below, the court grants G&P’s motion for summary judgment and
denies SKF’s motion for summary judgment. This order renders G&P’s motion in limine (ECF No.
35) moot; it is, therefore, denied as moot.
II. Law and Analysis
A bill of lading “records that a carrier has received goods from the party that wishes to ship
them, states the terms of carriage, and serves as evidence of the contract for carriage.” A through
bill of lading covers both the ocean and inland portions of the transport in a single document.
Kawasaki Kisen Kaisha Ltd. v. Regal-Beloit Corp., 561 U.S. 89, 94 (2010) (quoting Norfolk So. R.
Co. v. James N. Kirby, Pty. Ltd., 543 U.S. 14 (2004)). Bills of lading may contain a so-called
“Himalaya clause,” “which extends the bills’ defenses and limitations on liability to parties that sign
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A Himalaya Clause is a provision in a bill of lading that extends the carrier’s
defenses and the limitations of COGSA to third parties. Black’s Law Dictionary
(10th ed. 2014), Himalaya clause. Such clauses take their name from an English
case commonly known as The Himalaya and reported as Adler v. Dickson, 1 Q.B.
158. See Michael F. Sturley, International Uniform Laws in National Courts:
The Influence of Domestic Law in Conflicts of Interpretation, 27 Va. J. Int’l L.
729, 749 n.101 (1987).
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subcontracts to perform services contemplated by the bills.” Id.4
Determining whether a shipment is governed by a through bill of lading is a question of fact.
Am. Rd. Serv. Co. v. Consol. Rail Corp., 348 F.3d 565, 568 (6th Cir. 2003); see also Capitol
Converting Equip., Inc. v. LEP Trans., Inc., 965 F.2d 391, 394 (7th Cir. 1992). In an admiralty
proceeding, it is the duty of the court to settle factual disputes. New Jersey Steam Navigation Co.
v. Merchant’s Bank of Boston, 47 U.S. 344, 423 (1847) (“[I]t is our duty to settle facts in an
admiralty proceeding, when they are material to the merits.”). Whether a particular bill of lading
is a through bill is to be determined with reference to various factors, including: “(1) whether the
bill of lading indicates the final destination for the goods; (2) whether the freight for the entire
shipment was prepaid; and (3) whether a separate, domestic bill of lading ever issued.” Custom
Rubber Corp. v. ATS Specialized, Inc., 633 F. Supp. 2d 495, 504 (N.D. Ohio 2009). The court may
also consider other general aspects of the conduct of the shipper and the carriers. Marine Office of
Am. Corp. v. NYK Lines, 638 F. Supp. 393, 399 (N.D. Ill. 1985) (collecting cases).5
1. Whether the bill of lading indicates the final destination for the goods
As the court noted in its June 19 Order, the Bill of Lading leaves the “Place of Delivery”
blank, and does not, therefore, indicate clearly on its face the final destination of the goods. See
ECF No. 26-5. G&P urges the court to construe the listing of SKF’s Tennessee address in the
consignee box as being an indication of the final destination of the goods.
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The Fourth Circuit does not appear to have considered COGSA since the 2010
Supreme Court decision in Kawasaki.
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The foregoing paragraph repeats verbatim the framework governing the bill of
lading analysis that was set forth in the June 19 Order. ECF No. 49 at 10. The
standard is recapitulated here for convenience.
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A consignee is the “person named in a bill to whom or to whose order the bill promises
delivery.” Black’s Law Dictionary (10th ed. 2010), consignee. Looking only at the document itself,
there is ambiguity as to whether the address of the consignee is the final destination of the goods and
was so understood by the parties, or, alternatively, whether the final destination of the goods was
unclear and was to be provided by the consignee at some date after the issuance of the Bill of
Lading.
The deposition of Philip Stender (“Stender”), Panalpina’s corporate designee pursuant to
Federal Rule of Civil Procedure 30(b)(6), resolves this ambiguity in G&P’s favor. During the
deposition, counsel for SKF questioned Stender about a shipment communication platform printout,
“an internal document” that gives various information about the shipment. ECF No. 60 at 12
(Stender Depo.); see also ECF No. 60-1 at 11 (Printout). When he was asked whether Savannah was
the final destination, Stender demurred. For example:
Q: What is the final destination listed under the file characteristics for
the Pantainer Hong Kong Limited waybill?
A: Savannah. And then we delivered it on to Crossville, Tennessee as
part of our contract rates.
Q. I understand that. What is the final destination that is listed for this
particular waybill?
A. In the file characteristics it just says: Savannah, final destination.
They shipped it as far–Spain shipped it as far as Savannah. Then I
picked up the ball and ran with it there and trucked it from Savannah
to Crossville, the place of delivery.
ECF No. 60 at 15:3-17; see also id. at 20:2-23.
Stender testified that he understood the listing of SKF USA as the consignee to be
tantamount to a listing of a place of delivery:
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Q: And as far as this particular waybill goes, the port of discharge for
the main carriage was Savannah, correct?
A: Correct.
Q: And the final destination of the goods for this particular waybill
according to the internal Panalpina documents is Savannah, correct?
A: Incorrect. Consignee, again, you have to look at the consignee
spot. Partner info, Crossville, Tennessee. We always move this
freight from Spain via Savannah to Crossville. It never stops in
Savannah. It’s always delivered to Crossville.
Q: I understand that. However, in this document it says final
destination is Savannah, correct?
A: Yes. That’s what the document says, but is also says Crossville,
Tennessee.
Q: That says consignee is Crossville, Tennessee, correct?
A: Correct. It also says consignee Crossville, Tennessee on the
Pantainer waybill. If you, again, look down below on partner info
. . . it shows Crossville, Tennessee.
ECF No. 60 at 17:22-18:20. The court concludes from this testimony that the listing of SKF as
consignee on the Bill of Lading was understood by the parties to be a designation of the place of
delivery, or the final destination, of the goods. The inclusion of the final destination of the goods
on the Bill of Lading favors a finding that the Bill of Lading is a through bill of lading.
2. Whether the freight for the entire shipment was prepaid
At the evidentiary hearing, the court heard the testimony of Stanley Nutt (“Nutt”), a
corporate employee of G&P. Nutt testified that the designation “prepaid” is a term of art in the
shipping industry. It does not mean, as the term does in everyday usage, that the shipper pays the
carrier the total amount of the bill before the carrier takes the goods. In the shipping industry, the
term “prepaid” indicates that the shipper has arranged a line of credit to cover payment of the freight
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charge. Nutt testified that the shipment in this case was prepaid according to the meaning of the
term in the shipping industry. The court concludes that the freight for the shipment was prepaid.
This conclusion favors a finding that the Bill of Lading is a through bill.
3. Whether a separate, domestic bill of lading ever issued
The court noted in its June 19 Order that this third factor:
is no longer of much analytic value after Kawasaki in a case such as this.
While the issuance of a separate bill of lading strongly implies that the
case is within the Carmack Amendment, and therefore, that the original
bill of lading is not a through bill, the Supreme Court held in Kawasaki
that the absence of such a separate, domestic document does not ipso
facto render the Carmack Amendment inapplicable, and, by default,
render the original bill a through bill. Kawasaki Kisen, 561 U.S. at 103
(distinguishing several appellate cases where those courts placed primacy
on the issuance or non-issuance of a separate domestic bill of lading).
Thus, there exists the possibility that G&P may have erroneously failed
to issue a separate bill of lading. That possibility substantially limits the
value of this third factor in evaluating whether the Bill of Lading is a
through bill.
ECF No. 39 at 12. With that caveat in mind, however, the court observes that G&P did not issue
a separate bill of lading in this case. To the extent this third factor remains relevant in the postKawasaki landscape, it also favors a finding that the Bill of Lading is a through bill.
4. Other general aspects of the conduct of the shipper and the carriers
In addition to the three enumerated factors, the court may also consider other general aspects
of the conduct of the shipper and the carriers. Marine Office of Am. Corp. v. NYK Lines, 638 F.
Supp. 393, 399 (N.D. Ill. 1985) (collecting cases). The court finds the billing arrangements used by
the parties to be particularly relevant. At the evidentiary hearing, copies of the invoices sent by
Panalpina to SKF were introduced. ECF No. 60-1 at 8-9. These invoices reveal that Panalpina sent
SKF one invoice which included charges for the inland freight in Spain, the ocean freight, and the
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“inland freight - domestic delivery.” Id. In other words, the invoice reflects billing for combined
transport from Fontellas, Spain, to Crossville, Tennessee. Additionally, G&P’s invoices were
introduced into evidence. ECF No. 60-1 at 13-14. These invoices reveal that G&P billed
Panalpina—not SKF—for its services. Id.
These invoices show that SKF contracted with
Panalpina to move the goods from Spain to Tennessee and never independently contracted with
G&P for the domestic inland freight potion of the journey. Stender’s testimony confirms that SKF
never independently contracted with G&P:
Q: Is this [ECF No. 60-1 at 8] a document that Panalpina would have
issued to its customer for payment of charges for this shipment?
A: Correct, for door-to-door charges.
Q: Who was the customer that this invoice was issued to?
A: SKF in Kulpsville, Pennsylvania.
Q: Is that SKF USA, Inc.?
A: Yes.
Q: What charges are you invoicing to SKF in this invoice?
A: Origin handling charges, origin export clearance, ocean freight,
USA terminal handling charge, inland freight to US door, customs
clearance, end bond–you know, notificat[ion]–end bond is our
customs clearance documentation and transfer documents. Total
transportation, in other words, from door to door.
[ . . . .]
Q: When you say door to door, that means from the ground origin
facility in Spain to the ground destination facility in Tennessee?
A: That’s correct.
Q: . . .. But is this invoice specifically invoiced for both ocean freight,
tariffs charges, and ground freight carriage charges?
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A: Yes, it does. Again, it’s an all-inclusive invoice. It has all of the
various charges in there.
ECF No. 60 at 6:4-7:17; see also id. at 7:25-8:13. The course of conduct evidenced by the billing
documents and Stender’s testimony indicates that the Bill of Lading is a through bill of lading
covering shipment of the goods door-to-door from Spain to Tennessee. In light of the foregoing,
the court finds the Bill of Lading to be a through bill of lading. The court therefore concludes that
COGSA governs the shipment at issue in this case.
By its terms, COGSA applies only to shipments from United States ports to ports of foreign
countries and vice versa. Kawasaki, 561 U.S. at 94. The statute, however, allows parties “the
option of extending [certain COGSA terms] by contract” to cover “the entire period in which [the
goods] would be under [a carrier’s] responsibility, including [a] period of . . . inland transport.” Id.
(quoting Kirby, 543 U.S. at 29). “While COGSA does not provide any limitation of liability in favor
of third parties, the parties, by the bill of lading, may extend to third parties the limitation of liability
granted the carrier [by COGSA]. . . . Such limitations of liability in the bill of lading in favor of third
parties, however, are to be ‘strictly construed.’” Caterpillar Overseas, S.A. v. Marine Transp. Inc.,
900 F.2d 714, 725 (4th Cir. 1990) (citations omitted). A carrier’s liability under COGSA is limited
to $500.00 “per package.” Note following 46 U.S.C. § 30701.
The Terms and Conditions associated with the Bill of Lading specifically limited Carrier’s
liability to that provided by the COGSA, i.e., $500.00 per package. ECF Nos. 20-5 & 26-8
(hereinafter the “Terms and Conditions”)6 at ¶ 8.1. These terms and conditions also include other
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The parties have submitted two slightly differing versions of the Terms and
Conditions. That submitted by G&P is dated 2011. ECF No. 20-5 at 12. That
submitted by SKF is dated 2015. ECF No. 26-8. Because the 2015 version could
not have governed a Bill of Lading issued in 2013, the court uses the 2011 version
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relevant provisions.
First, in its “Definitions” section, the Terms and Conditions defines: “Sub-Contractors” as
including “the owners, charterers and operators of any Vessel, stevedores, terminal operators,
forwards, groupage operators, consolidators, warehouse operators, road, rail and air transport
operators, and other independent contractors employed directly or indirectly by or for Carrier in the
performance of any of Carrier’s obligations hereunder, and including subcontractors of any degree.”
ECF No. 20-5 at 2.
Second, the Terms and Conditions also includes provisions constituting a so-called
“Himalaya Clause”:
4.1 Carrier may sub-contract directly or indirectly on any terms the
Carriage or any of its obligations hereunder.
4.2 Merchant warrants that no claim or demand shall be made against
any person whomsoever by whom the Carriage is performed or
undertaken (including Carrier’s servants, agents and SubContractors) other than Carrier which imposes or attempts to impose
on any such person or any vessel owned or operated or controlled by
any such person, any liability whatsoever in connection with the
Goods or the Carriage or this Waybill, whether or not arising out of
negligence on the part of such person . . . . Every such person shall
have the benefit of all Rights and Defenses herein provided for the
benefit of or otherwise available to Carrier as if the same were
expressly made also for such person’s benefit.
Id. at 3. The Terms and Conditions of the Bill of Lading extend COGSA to the domestic inland
portions of the shipment at issue in this case. G&P was a subcontractor of Panalpina and is therefore
shielded from liability by the Bill of Lading’s Himalaya clause.
SKF argues that the Bill of Lading was issued by Pantainer (H.K.) Limited (“Pantainer”) and
in this order.
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that its Himalaya clause can only apply to subcontractors of Pantainer, not subcontractors of
Panalpina. Laura Brennan, the country ground transportation manager for Panalpina in the United
States, testified that “Pantainer is a separate legal entity [from Panalpina] which handles the port-toport move for Panalpina’s forwarding entity.” ECF No. 59 at 5:14-18. Although the Bill of Lading
is on Pantainer letterhead, the internal document behind the Bill of Lading indicates that it was
signed by, and therefore issued by, “Panalpina Transp. Mundiales S.A.” ECF No. 60-1 at 11.
Panalpina Transp. Mundiales S.A. also appears on the face of the Bill of Lading itself. E.g., ECF
No. 26-5 at 2. The court concludes from Stender’s deposition that the Bill of Lading was issued by
“Panalpina Bilbao,” or the Spanish office of Panalpina. See ECF No. 60 at 16:13-25; 19:5-22. The
court therefore rejects SKF’s contention that the Bill of Lading was issued by Pantainer. The Bill
of Lading was issued by Panalpina and covers all subcontractors used by Panalpina, including, for
example, G&P, Pantainer itself, and Hapag-Lloyd. SKF’s recourse is, therefore, against Panalpina
rather than any of Panalpina’s subcontractors such as G&P. The court concludes that, pursuant to
the terms of the Bill of Lading, G&P has no liability to SKF.7
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This conclusion bars SKF’s Carmack Amendment and negligence counterclaims.
Summary judgment is, therefore, granted to G&P on SKF’s two counterclaims.
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III. Conclusion
In accordance with the foregoing, the court grants G&P’s motion for summary judgment
(ECF No. 20) and denies SKF’s motion for summary judgment (ECF No. 26). Because summary
judgment has been granted to G&P, G&P’s motion in limine, ECF No. 35, is denied as moot.
IT IS SO ORDERED.
_s/ Margaret B. Seymour_____
Margaret B. Seymour
Senior United States District Judge
Columbia, S.C.
August 19, 2015.
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