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SELARAS v. M/V CARTAGENA DE INDIAS

April 3, 1997

PT. KERATON SELARAS; QQ PT. CITRAMARGA NUSAPHALA PERSADA; QQ KONSORSIUM HUTAMA YALA; and QQ PT. CITRAMARGA NUSAPHALA PERSADA
v.
M/V CARTAGENA DE INDIAS, her engines, machinery, tackle, apparel, etc.; INDUSTRIAL MARITIME CARRIERS (BAHAMAS), INC.; and FLOTA MERCANTE GRANCOLOMBIANA, S.A.



The opinion of the court was delivered by: PADOVA

 Padova, J.

 April 3, 1997

 Plaintiff, an Indonesian importer of construction equipment, hired Defendants, overseas carriers, to transport a mobile truck crane from Philadelphia, Pennsylvania to Jakarta Pusat, Indonesia. The crane sustained damage while in transit, and Plaintiff brought this action pursuant to the Carriage of Goods by Sea Act, 46 U.S.C.A.App. §§ 1300-1315 (West Supp. 1997) ("COGSA"). Plaintiff and Defendants submitted cross-motions for partial summary judgment, and, by Memorandum and Order dated October 21, 1996, the Court granted Defendants' Motions and denied Plaintiff's Cross-Motion. See Pt. Keraton Selaras v. M/V Cartagena De Indias, 951 F. Supp. 1196, 1996 WL 596107 (E.D. Pa. 1996). Plaintiff currently submits, for the Court's consideration, a motion to reconsider that decision. For the following reasons, the Court will grant Plaintiff's Motion For Reconsideration and vacate the October 21, 1996 Order.

 I. Facts

 Plaintiff, Pt. Keraton Selaras ("Keraton"), imports and operates heavy machinery and construction equipment in Jakarta Pusat, Indonesia. Defendant M/V Cartagena De Indias ("Vessel") is the ship on which the mobile truck crane was transported from the United States to Indonesia. Defendant Flota Mercante Grancolombiana, S.A. ("FMG"), a Columbian company, owns, charters, manages, and operates the Vessel. In making transportation arrangements for the mobile truck crane, Keraton contacted Global Transport Services, Inc. ("Global") to act as its agent and freight forwarder. Global, not a party to this litigation, entered into a contract of carriage with Defendant Industrial Maritime Carriers (Bahamas), Inc. ("IMC") to transport the cargo. IMC chartered the Vessel from FMG. In short, Keraton approached Global to arrange transport; Global contracted with IMC; and IMC chartered the Vessel from FMG. The underlying accident which initiated this lawsuit occurred in Jakarta Pusat. While the Vessel was moored alongside a pier and the "rolling crane house" portion of the mobile truck crane was being unloaded, a wire sling failed, causing the rolling crane house to drop and sustain damage.

 Keraton filed suit under the COGSA, which "controls bills of lading that evidence a contract of carriage of goods by sea to or from the United States and in foreign trade." SPM Corp. v. M/V Ming Moon, 965 F.2d 1297, 1300 (3d Cir. 1992) (citation omitted). Essentially, the COGSA "defines rights, responsibilities, and liabilities of carriers of goods by sea . . . . [The COGSA aims] to protect shippers from the overreaching of carriers through contracts of adhesion and to provide incentive for careful transport and delivery of cargo." Gamma-10 Plastics, Inc. v. American President Lines, Ltd., 32 F.3d 1244, 1249-51 (8th Cir. 1994), cert. denied, 513 U.S. 1198, 131 L. Ed. 2d 148, 115 S. Ct. 1270 (1995). The Act's application is compulsory. "Once a party issues a bill of lading, goods covered by that bill of lading become subject to section [1304(5) of the COGSA]." Stolt Tank Containers, Inc. v. Evergreen Marine Corp., 962 F.2d 276, 279 (2d Cir. 1992). The COGSA contains a liability limitation provision, providing that "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 . . . or in the case of goods not shipped in packages, per customary freight unit." 46 U.S.C.A.App. § 1304(5). By contractual agreement, the parties may agree to a higher figure, "either by declaring a higher value on the bill of lading . . . or by contractual agreement." SPM, 965 F.2d at 1301. See also 46 U.S.C.A.App. § 1304(5) (stating "by agreement between the carrier, master, or agent of the carrier, and the shipper another maximum amount than that mentioned in this paragraph may be fixed").

 Defendants moved for partial summary judgment, arguing that Keraton had a fair opportunity to declare a higher value, and, therefore, the COGSA's $ 500 liability limitation applied. According to Keraton, however, Defendants did not afford Keraton a fair opportunity to declare a higher cargo value. See Pyropower Corp. v. M/V Alps Maru, 1993 U.S. Dist. LEXIS 2174, 1993 AMC 1562, 1574 (E.D. Pa. 1993) (stating the "Supreme Court has held that a carrier cannot limit its liability under [the] COGSA unless the shipper is afforded a fair opportunity to declare a higher value and pay a correspondingly higher rate"). The Court agreed with Defendants, finding prima facie evidence that they afforded Keraton adequate notice and a fair opportunity. In reaching this decision, the Court examined inter alia (1) the Conline Booking Note; (2) the Bill of Lading's "Clause Paramount;" and (3) IMC's Tariff, on file with the Federal Maritime Commission, which explicitly and unambiguously provided Keraton with an opportunity to choose a higher value limitation, informed Keraton of the consequences of the failure to specifically select the higher value limitation, i.e. freezing the value limitation to that contained in the Bill of Lading, and discussed the ad valorem rates for excess coverage. The Court also considered Keraton's purchase of insurance; the standardization of bills of lading in the shipping industry; the sophistication of the parties; and the parties' prior dealings and negotiations.

 Having found that the $ 500 limitation applied, the Court then examined whether the limitation applied per "package " or per customary freight unit. Keraton asserted that the $ 500 limitation applied per customary freight unit because the goods were not shipped in packages. Defendants responded that the goods were shipped in packages, and the $ 500 limit applied per package. The Court agreed with Defendants and awarded partial summary judgment in their favor, limiting recovery to $ 500 for the one package supposedly damaged. It is that portion of the Court's October 21, 1996 Memorandum and Order that Keraton's current Motion for Reconsideration attacks, and the Court limits its discussion to thereto. Generally, Keraton disputes the Court's conclusion that the rolling crane house is a package under the COGSA.

 II. Standard of Review

 "The purpose of a motion for reconsideration is to correct manifest errors of law or fact or to present newly discovered evidence." Harsco Corp. v. Zlotnicki, 779 F.2d 906, 909 (3d Cir. 1985) (citation omitted), cert. denied, 476 U.S. 1171, 106 S. Ct. 2895, 90 L. Ed. 2d 982 (1986). "Federal district courts should grant such motions sparingly because of their strong interest in finality of judgment." Continental Cas. Co. v. Diversified Indus., Inc., 884 F. Supp. 937, 943 (E.D. Pa. 1995) (citation omitted).

 III. Discussion

 A. The COGSA Generally

 The sole issue presented for reconsideration is whether the Court erred in finding that the damaged rolling crane house constituted a package under the COGSA. In this district, Pyropower Corp. v. M/V Alps Maru, 1993 U.S. Dist. LEXIS 2174, 1993 AMC 1562 (E.D. Pa. 1993) provides instruction for defining a package under the COGSA. Adopting legal precepts articulated by the United States Court of Appeals for the Second Circuit, Pyropower noted that what constitutes a package is a matter of contract interpretation. Pyropower instructs courts to define package "in light of what the parties intended to describe as the unit of cargo shipped." 1993 AMC at 1572. Under ...


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