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ASSOCIATED METALS & MINERALS CORP. v. M/V LOTILA

December 23, 1993

ASSOCIATED METALS & MINERALS CORPORATION
v.
M/V LOTILA, et al.



The opinion of the court was delivered by: BY THE COURT; STEWART DALZELL

 Dalzell, J.

 This admiralty action seeks to recover for damage allegedly caused to a large quantity of steel coils that were shipped from Finland to the United States in the winter of 1991-1992. After a trial de novo was demanded following an arbitration held pursuant to this court's statutorily-authorized mandatory program, *fn1" we conducted a non-jury trial on December 20 and 21.

 Background

 Many of the facts necessary to resolve this dispute are undisputed and set forth in PP 1 through 20 of the parties' pretrial stipulation.

 Plaintiff Associated Metals & Minerals Corp. ("Asoma"), based in White Plains, New York, is in the business of importing steel and other metal products for sale in the United States. Defendant FCRS Shipping Limited is a corporation, apparently organized under the laws of the Cayman Islands, with an office in Helsinki, Finland. FCRS owns and operates the defendant motor vessel Lotila. The Lotila, built in 1977, is a modern, 500-foot bulk cargo carrier equipped with mechanical ventilation and dehumidification systems that make it well-suited for the ocean transport of steel and paper.

 In November of 1991, Asoma arranged the purchase of a large quantity of cold rolled steel products from a Finnish steel mill. The steel coils were shipped from the mill aboard covered rail cars to a marine terminal at Naantali, Finland.

 Asoma retained the services of Jukka Suksi, who testified at the trial and was qualified as an expert in the packaging, handling and ocean transport of steel. Suksi conducted a survey of the cargo in Finland on December 10, 1991, and stated his uncontradicted opinion that the Finnish mill had properly packaged the cold rolled steel, and that the steel in question was in "prime, new and very good condition."

 While it is true that the Lotila 's Master stated on the relevant bills of lading that the coils were "slightly damp due to condensation", Suksi testified that such a condition is "not anything remarkable" in Finland at that time of year *fn2" and that, more importantly, the Lotila 's "modern dehumidifiers could easily handle this quantity of condensation." Indeed, after viewing photographs of the coils after they were unloaded in the United States, Suksi expressed the opinion that the dehumidifiers had "not been used" and, further, that the Lotila 's "Master and Chief Officer ... did not take proper care of this cargo."

 The Lotila 's sometimes rough voyage across the North Atlantic in late December concluded with its arrival in New Haven, Connecticut on or about January 3, 1992. Because of a mishap involving water from the ship's swimming pool, a great deal of damage was done to paper cargo in the second hold of the ship (the steel coils were stored in the third cargo hold). Consequently, the Lotila was welcomed in New Haven by surveyors not only for consignees, but also for the Lotila itself. According to Arthur Kittelsen, the Lotila 's surveyor, the paper cargo represented a large loss.

 Also in New Haven on January 3 was Hugh Fowley, Asoma's surveyor. Although Kittelsen would not allow Fowley to go into cargo hold number 3, Fowley was able to notice imperfections in the gasket on the cargo hatch of the hold. Of particular note to Fowley were white "run down lines" along the coaming from China clay that had been transported on the Lotila 's previous voyage.

 Unlike Kittelsen, Fowley followed the Lotila to its eventual unloading in Wilmington, Delaware, after paper had been unloaded in Philadelphia. When Fowley inspected the unloaded steel coils, he saw "much white rust and patterns of China clay" on the coils. Fowley expressed his expert opinion, which we credit, that there had been an entrance of water into the cargo hold, which raised the humidity in the cargo hold, thereby causing "ship's sweat." This condensation carried the China clay down onto some, but by no means all, of the many steel coils stored in the cargo hold. *fn3"


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