Opinion
CASE NO. 02-22154-CIV-GOLD/SIMONTON
April 28, 2003
ORDER ON MOTIONS FOR SUMMARY JUDGMENT
THIS CAUSE is before the Court upon five Motions for Summary Judgment filed in the above-captioned case. First, Defendant Hapag-Lloyd filed a Motion for Summary Judgment (DE #22), which is based on a forum selection clause, on November 8, 2002. Plaintiff filed a Response (DE #25) on December 9, 2002, and Hapag-Lloyd filed a Reply (DE #26) on December 17, 2002. Next, on January 17, 2003, Defendant Port of Miami Terminal Operating Company ("Port of Miami") filed a Motion for Summary Judgment Based on Forum Selection Clause (DE #31) and Defendants Oceanic Steamship Company, Inc. and Oceanic Stevedoring Company (collectively, "Oceanic") also filed a Motion for Summary Judgment Based on Forum Selection Clause (DE #30). Plaintiff filed a Response (DE #35) to both motions on January 28, 2003, and no Replies were filed. In addition, Defendants Oceanic Steamship Company and Oceanic Stevedoring Company filed a Motion for Summary Judgment (DE #29) on January 17, 2003 arguing that they are not proper parties to the suit. Plaintiff filed a Response (DE #32) on January 28, 2003, and Defendants filed a Reply (DE #36) on February 6, 2003. Finally, on February 12, 2003, Defendant Port of Miami Terminal Operating Company filed a Motion for Summary Judgment (DE #37) arguing that it is not a proper party to the lawsuit. Plaintiff filed a Response (DE #40) on March 3, 2003, and no Reply was filed.
On Thursday, April 24, 2003, one day before oral argument on these motions, the parties filed a Consent Motion (DE #42) to drop Defendants Port of Miami and Oceanic from this action. Upon review of the motion, the Court will grant the Consent Motion to Drop Defendants Port of Miami and Oceanic from this action. Thus, this Order only addresses Defendant Hapag-Lloyd's Motion for Summary Judgment. Oral argument took place before the Court on Friday, April 25, 2003.
Plaintiff brought this action based upon alleged freeze damage to a shipment of wine and sparkling wine shipped from Barcelona, Spain to Miami, Florida. The Complaint alleges that the cargo was received by Defendants in good order and condition, but that when it was delivered to the consignee, National Distributing Co., Inc., in Deerfield Beach, Florida, it was freeze damaged. The jurisdiction of this Court is invoked pursuant to 28 U.S.C. § 1333 and 28 U.S.C. § 1331.
After careful consideration of the parties' briefs, oral arguments, the record in this case, and applicable case and statutory law, the Court GRANTS Defendant Hapag-Lloyd's Motion for Summary Judgment, GRANTS the Consent Motion to Drop Defendants Port of Miami and Oceanic, DENIES, AS MOOT, Defendants Port of Miami and Oceanic's Motions for Summary Judgment Based on Forum Selection Clause, and DENIES, AS MOOT, Defendants Port of Miami and Oceanic's Motions for Summary Judgment. I. Factual Background
Over the course of briefing for the Motions for Summary Judgment pending before the Court, the parties have filed, inter alia, several affidavits and included Statements of Undisputed Facts pursuant to Southern District of Florida Local Rule 7.5. The following facts are derived from the Local Rule 7.5 statements of the parties and corresponding filings before the Court. Any factual disputes between the parties are noted.
In its Motion for Summary Judgment based on the forum selection clause, Defendant Hapag-Lloyd states that Plaintiff's claim against Hapag-Lloyd is for alleged breach of the bill of lading identified as HLCUBCNO10601492. (Compl. ¶ 7). Hapag-Lloyd states that the bill of lading contains a choice of law and jurisdiction clause that requires suit to be brought in Hamburg, Germany to the exclusion of the jurisdiction of the courts of any other place. (Clause 25, Bill of Lading). Plaintiff disputes Hapag-Lloyd's factual assertions, stating that Plaintiff's claim against Hapag-Lloyd sounds in contract and tort. (Complaint ¶ 10). Plaintiff states that the bill of lading that Hapag-Lloyd refers to is an "express cargo bill." Plaintiff denies that the express cargo bill contains a choice of law and jurisdiction clause that requires suit to be brought in Hamburg, Germany.
In its Response to Defendants Port of Miami and Oceanic's Motion for Summary Judgment Based on Forum Selection Clause, Plaintiff incorporates its factual and legal arguments from its Response to Hapag-Lloyd's similar motion. In addition, Plaintiff lists "additional material issues of fact in dispute." Plaintiff states that the construction of the applicable clause, whether Port of Miami and Oceanic were agents or subcontractors of Hapag-Lloyd, and whether Port of Miami and Oceanic were in privity with Hapag-Lloyd, are in dispute.
In Oceanic's second Motion for Summary Judgment, in which Defendants argue that they are not proper parties to this lawsuit, Oceanic states that Plaintiff alleges that the subject container was "discharged from the ocean vessel into the custody of . . . Oceanic Steamship and Ocean Stevedoring at Port of Miami, Florida." (Compl. ¶ 8). Moreover, Plaintiff alleges that the damages to the contents of the subject container were caused by the negligence of Oceanic in the handling, storage, and care of the container. (Id. at ¶ 10). Oceanic states that it was not involved in the carriage of the subject container, and had no involvement in the delivery, handling, or storage of the containers arriving aboard the vessel. (Parker Aff.). In its Response, Plaintiff states that whether Oceanic was an agent for Hapag-Lloyd, the vessel upon which the cargo was delivered, the "P O Nedlloyd Pinta," or its owner and whether Oceanic was involved in the discharge, handling, storage, and/or delivery of the cargo are in dispute between the parties.
Finally, in Port of Miami's second Motion for Summary Judgment, in which it argues it is not a proper party to this lawsuit, Port of Miami states that it is not a named party to the bill of lading governing the subject shipment. (Bill of Lading HLCUBCN010601492). Moreover, Port of Miami states that as part of the services provided for containers arriving at the Port of Miami terminal, Port of Miami does not provide services pertaining to monitoring, repair, or temperature selection for refrigerated cargo. (Haggerty Aff.). Port of Miami maintains that for refrigerated containers arriving at the facility, it is the responsibility of the line/carrier or their agents to care for refrigerated containers. ( Id.). Port of Miami asserts that it did not provide any temperature monitoring of the cargo at any time, and that the subject container was not in the care, custody, or control of Port of Miami at any time relative to the alleged freeze damage. (Id.). In its Response, Plaintiff states that the contractual relationship between Port of Miami and the other Defendants is in dispute, as is whether Port of Miami owed a contractual or other duty to Plaintiffs insured or any other Defendant or party, whether Plaintiff is a third party beneficiary of any contract or agreement between Port of Miami and any other Defendant or party, and whether Port of Miami received and had custody of the subject cargo.
II. Standard for Summary Judgment
Rule 56(c) of the Federal Rules of Civil Procedure authorizes summary judgment where the pleadings and supporting materials establish that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The court's focus in reviewing a motion for summary judgment is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th Cir. 1997). The moving party has the burden to establish the absence of a genuine issue as to any material fact. See Adickes v. S.H. Kress Co., 398 U.S. 144, 157 (1970); Tyson Foods, Inc., 121 F.3d at 646. Once the moving party has established the absence of a genuine issue of material fact, to which the nonmoving party bears the burden at trial, it is up to the nonmoving party to go beyond the pleadings and designate "specific facts showing that there is a genuine issue for trial." Celotex v. Catrett, 477 U.S. 317, 324(1986). Issues of fact are genuine only if a reasonable jury, considering the evidence presented, could find for the nonmoving party. See Anderson, 477 U.S. at 247-51. In determining whether to grant summary judgment, the district court must remember that "credibility determinations, the weighing of evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge." Id. at 255. Finally, the "[s]ummary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed to `secure the just, speedy and inexpensive determination of every action'" Celotex, 477 U.S. at 327. III. Analysis
As noted above, the Court will grant the Consent Motion to Drop Defendants Port of Miami and Oceanic from this action, and therefore will only address Defendant Hapag-Lloyd's Motion for Summary Judgment. Defendant Hapag-Lloyd argues it is entitled to summary judgment on the basis of a forum selection clause (entitled "Law and Jurisdiction") in the bill of lading through which the parties have agreed that all disputes must be resolved in Hamburg, Germany to the exclusion of any other place.
The clause relied upon by Defendant, which is found on the reverse side of the express cargo bill, referred to as the bill of lading by Defendant, states:
Law and Jurisdiction.
Except as otherwise provided specifically herein any claim or dispute arising under this Express Cargo Bill shall be governed by the law of the Federal Republic of Germany and determined in the Hamburg courts to the exclusion of the jurisdiction of the courts of any other place. In case the Carrier intends to sue the Merchant the Carrier has also the option to file a suit at the Merchant's place of business. In the event this clause is inapplicable under local law then jurisdiction and choice of law shall lie in either the Port of Loading or Port of Discharge at Carrier's option.
Defendant argues that the forum selection clause is valid, reasonable, and fair, and should thus be applied precluding Plaintiff's claims in this Court. In Response, Plaintiff argues that the forum selection clause is not exclusive, because it does not provide for suit in Hamburg, Germany to the exclusion of any other jurisdiction. Plaintiff stresses the second sentence of the clause, which alternatively provides for suit at the merchant's place of business ("In case the Carrier intends to sue the Merchant the Carrier has also the option to file a suit at the Merchant's place of business.") as evidence that the forum selection clause is not exclusive.
Plaintiff essentially argues that the contractual provision at issue in this case is a permissive forum selection clause, which does not provide for exclusive jurisdiction in the Hamburg courts. The United States Supreme Court has stated that forum selection clauses are "prima facie valid and should be enforced unless enforcement is shown by the resisting party to be `unreasonable' under the circumstances." M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10, 92 S.Ct. 1907, 1913 (1972). Following the M/S Bremen decision, the Eleventh Circuit and district courts within the Eleventh Circuit have attempted to delineate permissive and mandatory forum selection clauses.
In Citro Florida, Inc. v. Citrovale, S.A., 760 F.2d 1231 (11th Cir. 1985), the Eleventh Circuit considered a forum selection clause that stated "[p]lace of jurisdiction is Sao Paulo/Brazil." While the district court found the clause to be mandatory, the Eleventh Circuit reversed stating "[a]lthough the forum selection clause was properly determined by the district court to be an enforceable agreement, the clause does not clearly specify that Sao Paulo is the only place of jurisdiction." Id. at 1231-1232 (emphasis original). Thus, the Eleventh Circuit concluded that "[t]he forum selection clause in this case is ambiguous concerning the exclusive nature of the provision" and reversed the district court's dismissal based on the forum selection clause. Id. at 1232.
In a 1999 decision, the Eleventh Circuit held that a forum selection clause that vested "jurisdiction regarding the rights and obligations of either party under this Agreement and all litigation resulting therefrom . . . in the . . . [circuit court of] Polk County, Florida" was mandatory rather than permissive. Florida Polk County v. Prison Health Services, Inc., 170 F.3d 1081, 1083 (11th Cir. 1999). In so holding, the Eleventh Circuit stated that "construing the clause as permissive would render it meaningless. Neither the Sheriff nor FACT needed the clause in order to sue PHS in the circuit court of Polk County . . . because Polk County is where their causes of action arose. The contract between the Sheriff and PHS was made in Polk County, PHS provided the services called for by the contract in Polk County, and PHS's duty to indemnify the Sheriff was triggered in Polk County." Id. at 1084. Thus, "to read the forum selection clause as permissive would render it surplusage, because the circuit court of Polk County . . . already had the authority to entertain any controversy arising out of the contract." Id.
District courts within the Eleventh Circuit have addressed the enforceability of forum selection clauses in different ways. For example, in Links Design, Inc. v. Lahr, 731 F. Supp. 1535 (M.D. Fla. 1990), the court considered a forum selection clause that stated "[i]n the event that any legal action is taken in connection with this Agreement, the proper venue for said action shall be Polk County, Florida." Id. at 1536. The court stated that "[a] forum selection clause may constitute a waiver of a defendant's right to remove an action to federal court, but the waiver must be clear and unequivocal." Id. (citation omitted). The Links Design court cited the Fifth Circuit rule that "[i]f the clause is ambiguous, `subject to opposing, yet reasonable interpretation,' the clause will be construed against the party who drafted it." Id. (citing Zapata Marine Service v. O/Y Finnlines, Ltd., 571 F.2d 208, 209 (5th Cir. 1978)). The Links Design court concluded that the "contract clause in this case is subject to two reasonable interpretations: 1) that the case is subject to removal, on diversity grounds, to the federal district court for the district including Polk County and 2) the clause requires the parties to proceed only in the state courts of Polk County." Id. The court interpreted the ambiguity against the plaintiff, and denied its motion to remand.
All Fifth Circuit decisions prior to October 1, 1981 are binding precedent on the Eleventh Circuit. See Banner v. Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981).
In contrast, in Submersible Systems Technology v. 21st Century Film Corp., Inc., 767 F. Supp. 266 (S.D. Fla, 1991), the court addressed a forum selection clause that stated "[s]ole and exclusive venue for any legal action arising out of this Agreement shall be in the Circuit Court in and for Palm Beach County, Florida." Id. at 267. The court stated that "[i]t appears well settled that a forum selection clause may constitute a waiver of one's right to remove an action from a state to a federal court. To be effective as a waiver of one's right to remove, however, a forum selection clause must be clear and unequivocal. The clause must provide unambiguously that all litigation arising under the subject contract is to be conducted in a specific state court before such a clause may prevent removal." Id. at 267-68. In determining that the forum selection clause at issue in that case was "clear and unequivocal," the Submersible Systems court noted that the clause referred specifically to the "circuit court" in and for Palm Beach County and that it did not "generically say that `venue shall be in Palm Beach County.'" Id. at 268. In addition, the clause used the words "sole and exclusive venue." Id.
In Snapper, Inc., however, the Eleventh Circuit rejected the "clear and unequivocal" standard for application in such cases. In response to the guarantors' argument that the federal courts require waivers of the statutory right of removal to be clear and unequivocal, the Eleventh Circuit stated "[w]e need not decide whether the clause rises to the level of a clear and unequivocal waiver because we do not agree that such a high standard is required or desirable." Snapper, Inc., 171 F.3d 1249, 1260-61. "Indeed, requiring such a high standard . . . goes against the general trend of interpreting the removal statutes against removal and probably springs from the outdated notion that forum selection clauses are disfavored. Thus, in the context of removal based solely on diversity jurisdiction, ordinary contract principles govern a contractual waiver." Id. at 1261.
Moreover, in discussing the distinction between permissive and mandatory forum selection clauses, the Eleventh Circuit stated that the guarantors "correctly note that these cases require quite specific language before concluding that a forum selection clause is mandatory, such that it dictates an exclusive forum for litigation under the contract. They also correctly note that these decisions refuse to dismiss a suit or transfer an action to the stated forum when the clause is deemed permissive." Id. at 1262 n. 24. Despite this, "they err, however, in concluding that these decisions hold that permissive clauses are unenforceable in the sense that the clauses are effectively read out of the contract." Id. The Eleventh Circuit stressed the importance of the "context in which this distinction [between mandatory and permissive forum selection clauses] was relevant." Id. "In all of the cases cited by the guarantors, the party seeking enforcement of the clause was seeking dismissal of the suit when the plaintiff had chosen to bring suit in a forum not stated in the clause." Id. The Snapper, Inc. court then again revisited its holding in Citro Florida. "In Citro Florida, for example, Citro Florida sued Citrovale in federal court in Florida for breach of contract. Citrovale moved to dismiss the suit because of a clause in the contract stating `[p]lace of jurisdiction is Sao Paulo/Brazil.' We specifically concluded that the clause was enforceable, but that it did not compel jurisdiction in Brazil." Id. The Eleventh Circuit did so because "[t]he clause merely permitted either party to bring suit in Brazil without allowing the opposing party to object; it did not go further and preclude suit in any other forum." Id.
While removal is not specifically at issue in this case, the Eleventh Circuit's treatment of permissive and mandatory forum selection clauses is instructive. The clause at issue in this case states that "any claim or dispute arising under this Express Cargo Bill shall be governed by the law of the Federal Republic of Germany and determined in the Hamburg courts to the exclusion of the jurisdiction of the courts of any other place" (emphasis added). The second portion of the forum selection clause states "[i]n case the Carrier intends to sue the Merchant the Carrier has also the option to file a suit at the Merchant's place of business. In the event this clause is inapplicable under local law then jurisdiction and choice of law shall lie in either the Port of Loading or Port of Discharge at Carrier's option." Plaintiff asserts that the second portion of the forum selection clause renders it permissive rather than mandatory and exclusive.
At oral argument, Plaintiff for the first time cited a case it concluded was probative of the question presented in Hapag-Lloyd's Motion for Summary Judgment. Plaintiff cited I. G. Electronics, Inc. v. Fritz Transportation Int'l, et al., Case No. C 00-04507, 2002 A.M.C. 106 (N.D.Cal. Oct. 2, 2001), in which the court concluded that a forum selection clause first provided that all claims or disputes under the bill of lading "shall be determined in the United States according to U.S.A. law," but then included a second phrase stating "provided that, at the option of the Carrier, the law and jurisdiction of the country of either Place of Acceptance or of the Port of Loading or of the Port of Discharge or of the Transshipment Port or of the Place of Delivery or of the place where this Bill of Lading was issued may be substituted for U.S.A. law and jurisdiction." Id. at 107. The court concluded that this forum selection clause did not require that litigation be brought in one exclusive forum. Plaintiff concludes that the forum selection clause at issue in this case is similar to the one in L.G. Electronics, which the Court notes is not binding precedent on this Court, because the second portion of both clauses provide options that vitiate the exclusive nature of the first part of the clauses. Upon review of the forum selection clause at issue in L.G. Electronics, however, the Court concludes that it is readily distinguishable from the forum selection clause in this case. As the L.G. Electronics court notes, "where the selection agreement allows defendant to choose among six fora at will at any time during litigation, the agreement creates uncertainty." Id. at 110. The forum selection clause in this case, however, does not provide for such options nor does it create uncertainty. It provides for jurisdiction in Hamburg "to the exclusion of the jurisdiction of the courts of any other place." The second part of the clause, which states "[i]n case the Carrier intends to sue the Merchant the Carrier has also the option to file a suit at the Merchant's place of business," does not vitiate the exclusive nature of the forum selection clause. It merely provides for a specific "qualification" that falls within the phrase "[e]xcept as otherwise provided specifically herein" which begins the forum selection clause. It does not provide for several fora to be chosen at will at any time during the litigation as in L.G. Electronics. Moreover, it is undisputed that the specific qualification provided by the forum selection clause "in case the Carrier intends to sue the Merchant" is not applicable to this case because the carrier is not suing the merchant. At oral argument, the Court asked Plaintiff's counsel, "This is not a case where the carrier sued the merchant, correct?" (Transcript, 2:42:06). "That's correct, Your Honor," Plaintiff's counsel replied. (Id. at 2:42:14).
At oral argument, Defendant's counsel cited two cases he asserted where instructive on the question facing the Court. In General Electric v. G. Siempelkamp GmbH Co., 29 F.3d 1095, 1099 (6th Cir. 1994), the Sixth Circuit considered a forum selection clause consisting of three sentences that initially stated the place of jurisdiction for all disputes arising in connection with the contract shall be at the principal place of business of the supplier. The final sentence, however, stated that "[t]he supplier is also entitled to file a suit at the principal place of business of the purchaser." Id. The Sixth Circuit found that the forum selection clause was exclusive and mandatory and that the final sentence did not vitiate the exclusive nature of the clause, stating that "[t]he clause is clear and should be enforced according to its terms." Id.
Defendant also cites Union Steel Am. Co. v. M/V Sanko Spruce, 14 F. Supp.2d 682, 687 (D. N.J. 1998), in which the court considered a forum selection clause that first provided that "any dispute arising under this bill of lading shall be decided in the country where the Carrier has his principal place of business." The clause also included a second sentence stating that "the carrier has the option to elect to have any disputes arising under the bill of lading submitted to arbitration in New York." Id. Despite the presence of the second sentence, the Union Steel court concluded that the forum selection clause was "mandatory and exclusive," Id.
While the Court notes that neither of the two above-specified cases cited by Defendant are controlling legal precedent on this Court, the Court concludes that the forum selection clauses and the courts' analyses in General Electric and Union Steel are more applicable to this case than the forum selection clause in L.G. Electronics. The second portion of the forum selection clause at issue in this case does not provide the uncertainty evident in the L.G. Electronics clause. Having reviewed the language in this clause and applying relevant case law and ordinary contract principles, the Court concludes that there is no genuine issue of material fact that the forum selection clause at issue here does vest exclusive jurisdiction in the Hamburg courts. Moreover, the Court concludes that there is no genuine issue of material fact that the other parts of the phrase, stating, for example, "[i]n case the Carrier intends to sue the Merchant the Carrier has also the option to file a suit at the Merchant's place of business," do not vitiate the exclusive nature of the forum selection clause. These "qualifications" merely fall within the phrase "[e]xcept as otherwise provided specifically herein," which begins the forum selection clause and allows for specifically enumerated exceptions. Because Plaintiff's claim does not fall within one of the situations otherwise specifically provided in the forum selection clause, there is no genuine issue of material fact that Plaintiff should have brought its suit in the courts of Hamburg in accordance with the forum selection clause to which it agreed with Defendant. Therefore, the Court will grant Defendant Hapag-Lloyd's Motion for Summary Judgment based on the forum selection clause. Accordingly, it is hereby:
ORDERED AND ADJUDGED:
1. Defendant Hapag-Lloyd's Motion for Summary Judgment (DE #22) is GRANTED. The case against Defendant Hapag-Lloyd is CLOSED in the U.S. Southern District of Florida, with Plaintiff possessing leave to file its claims in the Federal Republic of Germany as required by the forum selection clause.
2. The Court GRANTS the Consent Motion (DE #42) to Drop Defendants Port of Miami and Oceanic from this action. The case against Defendants Port of Miami and Oceanic is CLOSED based on the granting of the Consent Motion.
3. Defendant Port of Miami's Motion for Summary Judgment Based on Forum Selection Clause (DE #31) is DENIED, AS MOOT.
4. Defendant Oceanic's Motion for Summary Judgment Based on Forum Selection Clause (DE #30) is DENIED, AS MOOT.
5. Defendant Port of Miami's Motion for Summary Judgment (DE #37) is DENIED, AS MOOT.
6. Defendant Oceanic's Motion for Summary Judgment (DE #29) is DENIED, AS MOOT.
7. All pending motions in this case are DENIED, AS MOOT.
8. This case is CLOSED. ORDERED IN CHAMBERS