799 F. Supp. 2d 550
D. Maryland2011Background
- Ferrostaal contracted to transport, stevedore, and store Ferrostaal's shipment of 41,121 steel pipes on the M/V Federal Rhine and related parties included in the suit.
- The pipes arrived in September 2007 at the Port of Baltimore; Ferrostaal alleges damage and depreciation in value.
- Rukert stored the goods after stevedoring and seeks to limit liability under a clause in its warehouse receipt providing liability limited to 10 times the provided, per ton, monthly storage rate.
- The rate letter dated December 15, 2006 lists a monthly storage rate of $1.50 per metric ton, which Ferrostaal utilized for business with Rukert.
- The warehouse receipt's Section 11 states liability limited to 10 times the provided, per ton, monthly storage rate; Ferrostaal contends this term is ambiguous and not properly delivered.
- The court previously denied Rukert's initial motion for declaratory judgment pending discovery; the current order grants the declaration limiting liability to $20,170.91.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Ferrostaal had actual notice of the limitation provision | Ferrostaal did not receive full receipt; ambiguity exists. | Rukert mailed receipts; Ferrostaal had actual notice through mailing and standard practice. | Ferrostaal had actual notice; liability limited per clause. |
| Whether the liability limitation clause is enforceable as reasonable and part of the contract | Limitation is ambiguous and potentially unconscionable. | Clauses are reasonable, incorporated via warehouse receipt, and customary for sophisticated parties. | Limitation provision is reasonable and became part of the contract. |
| Whether the warehouse receipt terms and rate letter create ambiguity | Disparities between the tariff, rate letter, and receipt create ambiguity. | Rate letter and receipt address separate liability areas; there is no ambiguity when viewed together. | Contract interpreted as unambiguous; receipt's limit governs. |
| Whether Maryland commercial-code limits apply to cap Rukert's liability | Maryland code constraints do not clearly cap liability in this context. | Maryland § 7-204(b) permits liability limitation; rate and receipt support cap. | Maryland law supports enforcement of the liability cap; grant of declaratory judgment affirmed. |
Key Cases Cited
- Ferrex International, Inc. v. M/V Rico Chone, 718 F.Supp. 451 (D.Md. 1988) (warehouseman liability limits enforceable under state law)
- Phillips Bros. v. Locust Indus., Inc., 760 F.2d 523 (4th Cir. 1985) (warehouse receipt can add limited-liability terms; enforceable if not unreasonable)
- Ford v. Wolf, 335 Md. 525, 644 A.2d 522 (Md. 1994) (sophisticated parties held to stronger contract terms)
- Int'l Nickel Co., Inc. v. Trammel Crow Distrib. Corp., 803 F.2d 150 (5th Cir. 1986) (contract terms controlling when language is unambiguous)
- Inland Metals Ref. Co. v. Ceres Marine Terminals, Inc., 557 F.Supp.344 (N.D. Ill. 1983) (contract language interpreted in context; ambiguity resolved by overall contract)