Opinion
No. 02 Civ. 1900 (RJH) (DCF).
November 24, 2004
MEMORANDUM OPINION AND ORDER
Plaintiff Ferrostaal, Inc. ("Ferrostaal") brings this action under the United States Carriage of Goods by Sea Act, 46 U.S.C. App. § 1300 et seq. ("COGSA") against defendants Pan Ocean Shipping Co., Ltd. ("Pan Ocean"), Qingdao Ocean Shipping Co. (Cosco Qingdao) ("Cosco") and Sea Baisen Maritime, Inc. ("Sea Baisen"), alleging damage to cargo transported via the vessel M/V SEA BAISEN (the "Vessel"). Pursuant to a contract of affreightment with plaintiff, Pan Ocean agreed to transport steel pipe from China to the Gulf of Mexico via the vessel M/V SEA BAISEN (the "Vessel"), which had been chartered from its owner, Sea Baisen. Plaintiff alleges that the pipe was damaged during shipment, and brings this action to recover $50,604.79.
Plaintiff also brings an in rem claim against the vessel M/V SEA BAISEN. The Court notes that it does not have jurisdiction over marine vessels that have not been arrested. See, e.g., Dluhos v. Floating and Abandoned Vessel, Known as New York, 162 F.3d 63 (2d Cir. 1998) (warrant of arrest of vessel must issue for trial court to establish jurisdiction over the res, as required to maintain in rem action against it); Burns Bros. v. Long Island R. Co., 176 F.2d 950 (2d Cir. 1949) (per curiam) (holding under the antecedent to the current admiralty rules that because "there has been no arrest of the vessel . . ., jurisdiction to enter a decree in rem is lacking").
Cosco and Sea Baisen now jointly move for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure (the "Rules") and Local Civil Rule 56.1, arguing that plaintiff's claim is time-barred pursuant to 46 U.S.C. App. § 1303(6). Plaintiff responds that Cosco and Sea Baisen granted timely extensions to file this action, or, in the alternative, contends that the legal significance of the extensions is a mixed question of law and fact not appropriate for resolution on a motion for summary judgment.
Cosco was the manager and operator of the M/V SEA BAISEN at the time plaintiff's pipe was allegedly damaged.
For the reasons that follow, the motion for summary judgment is GRANTED, and the claims against Cosco and Sea Baisen are dismissed.
BACKGROUND
The following facts are set forth in the parties' Rule 56.1 statements and are not otherwise in dispute. Accordingly, they are deemed admitted for purposes of this motion. Giannullo v. City of New York, 322 F.3d 139, 140 (2d Cir. 2003) ("If the opposing party . . . fails to controvert a fact . . . set forth in the moving party's Rule 56.1 statement, that fact will be deemed admitted.").
Pan Ocean is a Korean entity that conducts business in the United States through its agent, Panobulk America, Inc. ("Panobulk") (Pl. Statement of Material Facts in Opp. to Def. Mot. for Summ. J., p. 5 ("Pl. Opp. Facts")). Pan Ocean chartered the M/V SEA BAISEN pursuant to a July 6, 1999 time charter party contract ("Charter Contract") entered into with Sea Baisen. (April 9, 2004 Aff. of Owen Duffy, p. 4 ("Duffy Aff.")). Pursuant to three bills of lading dated July 19, 1999, Pan Ocean transported plaintiff's steel pipe from Shanghai, China to Houston, Texas via the M/V SEA BAISEN. (Duffy Aff., Ex. A). The cargo was offloaded on or about September 12, 1999. (Duffy Aff., p. 3).
The Charter Contract establishes the rights and obligations of Pan Ocean and Sea Baisen with respect to the loading, storage and discharge of cargo. (Duffy Aff., pp. 4, 6). The Charter Contract also incorporates by reference the Inter-Club New York Produce Exchange Agreement ("Inter-Club Agreement"), which, among other things, serves to apportion liability for cargo claims arising during voyages made pursuant to the Charter Contract. (Duffy Aff., p. 5).
According to several reports prepared by John P. Zemanek, Jr., an independent ship and cargo surveyor with Capt. I.S. Derrick Independent Ship Cargo Surveyors, Inc., plaintiff's steel pipe was damaged before it was off-loaded from the Vessel in Houston. (December 7, 1999 Survey Report, attached to Duffy Aff. as Ex. D; December 29, 1999 Survey Reports, attached to Duffy Aff. as Ex. J) (collectively, the "Survey Reports"). The Survey Reports indicate that the condition in which the pipe was found was indicative of "rough, careless and/or improper handlings during loading operations, as well as faulty stowage aboard the ocean liner." (Duffy Aff., p. 5).
On June 14, 2000, approximately nine months after the steel pipe was delivered, plaintiff sent three "claim bills" to Panobulk, seeking $50,604.79 in compensation for the damaged cargo. (Pl. Opp. Facts, Ex. 1). Approximately one week later, Panobulk acknowledged receipt of the claims "on behalf of our principals," but denied liability and reserved the right to assert all defenses "available to the vessel and its owners under the bills of lading and/or otherwise." ( Id., Ex. 2). Soon thereafter, Panobulk sent Cosco a notification later, stating: "we . . . hold you responsible for [the] claim[s] [filed by Ferrostaal] as per Inter-Club Agreement stipulated in the governing [Charter Party Contract] . . . We will look to you for your reimbursement when we settle this claim." (Duffy Aff., Ex. H).
At about the same time, plaintiff requested an extension from Panobulk to file the present suit. On July 12, 2000, Panobulk granted plaintiff an extension until November 19, 2000 "to sue the . . . [Vessel], her owners, managers and charterers herein" on two of its three damages claims. (Pl. Opp. Facts, Ex. 3). Similarly, by letter dated July 20, 2000, plaintiff requested and received an extension until December 19, 2000 to file suit on its third claim. ( Id., Ex. 4). Several more extensions were to follow, and each request communicated via the same boilerplate letter and duly authorized by Panobulk. ( Id., Exs. 3-13).
In total, plaintiff received six extensions with respect to its first two claims, later extensions coming on October 18, 2000, February 15, June 14, October 16, 2001 and February 11, 2002. ( Id., pp. 7-8). Likewise, plaintiff received five extensions on its third claim, subsequent extensions being granted on November 27, 2000 and March 16, July 13, and November 14, 2001. ( Id.). The net result of this activity was that Panobulk agreed to toll the relevant COGSA limitations period through August 19, 2002 on plaintiff's first two claims, and through April 19, 2002 on plaintiff's third. ( Id., p. 8). Plaintiff filed the present suit before either deadline expired, on March 7, 2002. Significantly, plaintiff does not claim that it ever requested or received an extension directly from Cosco or Sea Baisen.
DISCUSSION
Summary judgment is appropriate when "there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). Similarly, summary judgment should be granted if, "after adequate time for discovery," the non-moving party "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). In deciding whether a genuine issue of a material fact exists, a Court must "examine the evidence in the light most favorable to the party opposing the motion, and resolve ambiguities and draw reasonable inferences against the moving party." In re Chateaugay Corp., 10 F.3d 944, 957 (2d Cir. 1993) (citations omitted).Under the Carriage of Goods by Sea Act, potential plaintiffs have one year to file claims against owners, operators and charterers for damage to goods carried pursuant to bills of lading. 46 U.S.C. App. § 1303(6). COGSA Section 1303(6) states in pertinent part: "[T]he carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered." Id. Plaintiff filed the present claim on March 7, 2002, more than one year after the COGSA limitations period expired.
It is undisputed that plaintiff's claims derive from maritime cargo shipped pursuant to bills of lading, and therefore fall within COGSA's one-year limitation period. See 48 U.S.C. App. § 1300 ("Every bill of lading or similar document of title which is evidence of a contract of carriage of goods by sea to or from ports of the United States, in foreign trade, shall have effect subject to the provisions of this chapter.")
Assuming that delivery occurred on September 31, 1999, the limitation period would have ended on September 31, 2000.
Thus, the only question before the Court is whether plaintiff has submitted evidence sufficient to establish that the one-year COGSA statute of limitations was tolled through March 7, 2002 with respect to its claims against both Cosco and Sea Baisen. In the absence of an extension granted directly by Cosco or Sea Baisen, plaintiff must show either that Panobulk was acting as an agent for Cosco and Sea Baisen when the extension requests were granted, or that Cosco and Sea Baisen are now estopped from denying the existence of such a relationship.
A. Agency
Under general principles of agency, the authority of an agent "is the power of the agent to do an act or to conduct a transaction on account of the principal which, with respect to the principal, he is privileged to do because of the principal's manifestations to him." Restatement (Second) of Agency § 7, cmt. a (1958). A principal may be bound by the acts of an agent only if the agent acted with actual or apparent authority. Heckler v. Community Health Services of Crawford County, Inc., et al., 467 U.S. 51, 64 n. 21 (1984).
Actual authority may be express or implied, but in either case can exist "only where the agent may reasonably infer from the words or conduct of the principal that the principal has consented to the agent's performance of a particular act." Minskoff v. American Exp. Travel Related Services Co., Inc., 98 F.3d 703, 708 (2d Cir. 1996) (citations omitted). Apparent authority is "entirely distinct from authority, either express or implied", and arises from the "written or spoken words or any other conduct of the principal which, reasonably interpreted, causes [a] third person to believe that the principal consents to have [an] act done on his behalf by the person purporting to act for him." Id. at 708 (citations omitted); see also Fennell v. TLB Kent Co., 865 F.2d 498, 502 (2d Cir. 1989). Apparent authority, then, is "normally created through the words and conduct of the principal as they are interpreted by a third party, and cannot be established by the actions or representations of the agent." Minskoff at 708 (citing Fennell, 865 F.2d at 502).
Thus, whether founded in actual or apparent authority, the existence of a principal/agent relationship depends crucially on the words or actions of the principal. That is, in order to state a claim sufficient as a matter of law to establish actual or apparent authority, plaintiff must allege some action on the part of Cosco and/or Sea Baisen from which Panobulk's agency may be inferred. Plaintiff contends that three key events establish such agency, or at a minimum qualify the question as a "genuine issue of material fact" sufficient to preclude summary judgment.
The first such event allegedly occurred in June 2000, when Panobulk initially acknowledged plaintiff's claims on behalf of its "principals." (Pl. Opp. Facts, Ex. 2). Plaintiff contends that the "inference to be taken from Panobulk's acknowledgements is that it's [sic] `principal' included `the vessel and its owners." (Pl. Memo. of Law in Opp. to Def. Mot. for Summ. J., p. 3 ("Pl. Memo.")). Even assuming that Panobulk's ambiguous reference to its "principals" was intended to include Cosco and Sea Baisen, this allegation is insufficient as a matter of law to establish agency — either actual or apparent — because an alleged agent cannot establish actual authority through his own statements, Tarstar Shipping Co. v. Century Shipline Ltd., 451 F.Supp. 317, 323 (S.D.N.Y. 1978), and apparent authority can only be found in the words or actions of the alleged principal. Minskoff at 708.
Panobulk's standard "claim acknowledgment form" states in fuller part: "Your claim for alleged loss and/or damage is hereby acknowledged on behalf of our principles. This acknowledgment is without admission of liability and without prejudice to any defenses available to the vessel and its owners under the bills of lading and/or otherwise." (Pl. Opp. Facts, Ex. 2)
The next "significant event" allegedly occurred in July 2000, "when [Cosco] received the notices of claim from Panobulk which undertook the handling of the claims with plaintiff." (Pl. Sur-Reply Memo. of Law in Opp. to Def. Mot. for Summ. J., pp. 2-3 ("Pl. Sur-Reply")). This second allegation fails as a matter of law for the same reasons as does the first: it does not allege any action taken by Cosco or Sea Baisen, and is therefore insufficient to establish either actual or apparent authority. In any case, the letters to Cosco are easily explained without reference to agency; Panobulk was required under the Inter-Club agreement to notify Cosco of all claims for which Pan Ocean would later seek apportionment, as it apparently did in this case. (Duffy Aff., Ex. H).
Finally, plaintiff contends that each of the extensions authorized by Panobulk are evidence of its agency because plaintiff's extension requests state: "We request an extension of time to sue the above vessel, her owners, managers, andcharterers herein." ( See, e.g., Pl. Opp. Facts, Ex. 3) (emphasis added). That is, plaintiff contends that agency can be found in the fact that Panobulk counter-signed these extension requests "without objection, notation, or correction as to its authority to grant these extensions" on behalf of Cosco and Sea Baisen. (Pl. Memo, p. 4). This argument — based solely on the actions of plaintiff and Panobulk — is also insufficient as a matter of law to establish any form of agency.
Although "the existence of apparent authority is normally a question of fact, and therefore inappropriate for resolution on a motion for summary judgment," Green Door Realty Corp. v. TIG Ins. Co., 329 F.3d 282, 289 (2d Cir. 2003) (citing Minskoff, 98 F.3d at 708), in this case plaintiff has failed to introduce evidence sufficient to raise a genuine issue of material fact regarding Panobulk's purported authority, either actual or apparent. Under similar circumstances, and in the course of deciding a motion for summary judgment, other courts have found that a purported agent lacked authority. See, e.g., Royal Industries Ltd. v. Kraft Foods, Inc., 1998 WL 67671 at *3 (E.D.N.Y. 1998), aff'd, 164 F.3d 619 (2d Cir. 1998) (granting summary judgment where there was "insufficient evidence to support a finding of either actual or apparent authority"); see also Flame Cut Steel Products Co., Inc. v. Performance Foams Coatings Inc., 46 F.Supp.2d 222, 229 (E.D.N.Y. 1999) (collecting cases).
B. Estoppel
Plaintiff argues — rather vaguely and without reference to controlling precedent — that Cosco and Sea Baisen are estopped from denying that Panobulk acted as their agent when it granted plaintiff's requested extensions. (Pl. Memo, p. 2). In the alternative, plaintiff argues that Cosco and Sea Baisen are estopped from invoking the COGSA statute of limitations as a defense to this action. ( Id.)
Plaintiff's first estoppel argument fails for the same reason its apparent authority argument fails. Indeed, apparent authority is based on the principle of estoppel and neither doctrine is available in the absence of affirmative actions by the purported principal against whom estoppel is asserted. Royal Industries Ltd., 1998 WL 67671 at *2 (E.D.N.Y. 1998). Plaintiff's second estoppel claim also fails. A party is estopped from using the COGSA statute of limitations as a defense only where the opposing party can show that it "reasonably and justifiably believ[ed] that the statute of limitations would not be used as a defense or would be extended." Mikinberg v. Baltic S.S. Co., 988 F.2d 327, 331 (2d Cir. 1993). Neither Cosco nor Sea Baisen gave plaintiff ground for such a "reasonable belief." Securitas Bremer Allgemeine Verischerungs-AS v. M/V "AURORA", et al., 1990 WL 52096 at *3 (S.D.N.Y. 1990) (granting summary judgment on limitations grounds for carrier, holding that shipper had no basis for assuming that carrier would waive statute of limitations); General Electric Co. v. M/V Gediz, 720 F.Supp. 29, 30-31 (S.D.N.Y. 1989).
C. Ms. Jiang's Affidavit
Plaintiff also contends that the affidavit of Jiang Ying in support of defendants' motion for summary judgment is of "little or no probative value" to the question of agency because the affidavit was not made on the basis of Ms. Ying's "personal knowledge" in accordance with Fed.R.Civ.P. 56(e). (Pl. Sur-Reply, pp. 1, 4). In relevant part, Rule 56(e) states: "[On a motion for summary judgment], supporting and opposing affidavits shall be made on personal knowledge . . . and shall show affirmatively that the affiant is competent to testify to the matters stated therein." Fed.R.Civ.P. 56(e).
In her affidavit, Ms. Jiang Ying testifies that she has been the "Manager of Insurance Claims Department" at Cosco for the "past three years," but she does not provide an exact start date. (Declaration of Jiang Ying, p. 1 ("Ying Decl.")). Ms. Jiang explains that "neither PAN-OCEAN nor PANOBULK had any authority, apparent or express, to grant suit tie extensions on behalf of COSCO" at the time those extensions were granted by Panobulk. ( Id., p. 4). She also notes that "there is no provision in the governing Charter Party [Contract] . . . which grants PAN-OCEAN authority to grant suit time extensions . . . on behalf of COSCO." ( Id.).
Plaintiff argues that "there is no foundation for Ms. Jiang's declaration," (Pl. Sur-Reply, p. 4), because the "key events" of this case occurred for the most part before Ms. Jiang started at Cosco. Plaintiff then cites Nippon Fire v. M/V Tourcoing, 979 F.Supp. 206 (S.D.N.Y. 1997), aff'd, 167 F.3d 99 (2d Cir. 1999) for the proposition that Ms. Jiang's affidavit is properly disregarded as "out-of-time from the events at issue." (Pl. Sur-Reply, p. 3).
In Nippon Fire, Judge Cedarbaum refused to grant summary judgment where the defendant failed to submit evidence establishing an element essential to its defense — the existence of a particular contract — and for which it was to bear the burden of proof at trial. 979 F.Supp 206, 213. Although the Nippon Fire defendant had established that a contract existed at some point, Judge Cedarbaum relied on the fact that "[defendant] has not submitted an affidavit or other evidence to suggest that the [earlier] contract continued in force without further written agreement" to deny summary judgment. Id.
Plaintiff's reliance on Nippon Fire is misplaced. In the present case, Cosco and Sea Baisen have submitted persuasive evidence to establish their statute of limitations defense. Indeed, it is uncontested that plaintiff's complaint was filed well after the expiration of the one-year limitations period. Under the circumstances, the burden is on Ferrostaal to establish that Panobulk was acting as the agent of Cosco and Sea Baisen when it agreed to extend the limitations period. Enterprise Press, Inc. v. Fresh Fields Markets, Inc., 13 F.Supp.2d 413, 415 (S.D.N.Y. 1998) ("The burden upon the plaintiff, the non-moving party [on a motion for summary judgment], is to produce factual support sufficient to establish the existence of an agency relationship."); U.S. Fidelity and Guar. Co., et al. v. Petroleo Brasileiro S.A.-Petrobras, et al., 1999 WL 307642 at *6 (S.D.N.Y. 1999) ("The burden is on the party alleging the existence of a principal-agent . . . relationship to assert facts sufficient to withstand a motion to dismiss based on the agency relationship."). Thus, defendant's allegedly "out-of-time" affidavit is secondary to the question, and only gains significance if plaintiff can establish a prima facie case for agency, which it cannot do on the record before the Court.
CONCLUSION
Courts should not be reluctant to grant summary judgment in cases where an element essential to prove the non-moving party's case is factually unsupported in the record. Celotex Corp. v. Catrett, 477 U.S. 317, 322-24 (1986). Here, the record is devoid of any communication from either Cosco or Sea Baisen to Panobulk or plaintiff. Accordingly, plaintiff cannot establish that Panobulk acted as the agent of Cosco or Sea Baisen when it granted plaintiff's extension requests. For the same reason, neither can plaintiff show that Cosco or Sea Baisen is estopped from denying agency. In the absence of such a showing, plaintiff's claims against Cosco and Sea Baisen are time-barred pursuant to 46 U.S.C. App. § 1303(6).
For the foregoing reasons, the present motion for summary judgment [21] is granted, and all claims against Cosco and Sea Baisen are dismissed.
SO ORDERED.