289 F. Supp. 875 | N.D. Cal. | 1968
MEMORANDUM OPINION
FACTS
This is an action by a consignor against an interstate carrier for damages occasioned by the carrier’s delivery of a damaged cargo. The consignor alleges that on two occasions a cargo 'of grapes was injured while being transported by the carrier and that the injury to the cargo caused the damages sought to be recovered.
The plaintiff — F. J. McCarty Co., Inc. — is an exporter of perishable agricultural products such as fresh fruits. Miss Frances J. McCarty is the president and sole owner of the plaintiff.
Plaintiff entered into the contract for the first shipment with Frutas San Martin C. A. — a South American importer — on June 27, 1966 (Exh. 1). Plaintiff agreed to deliver 1,330 lugs or boxes of Cardinal grapes to Caracas, Venezuela. Plaintiff was to receive $6.60/lug (Exhs. 1, 7). The grapes were to be shipped on July 8, 1966 from New York. Plaintiff purchased the grapes from Guimarra Vineyards near Bakersfield, California, for $4.05/lug on June 29, 1966 (Exhs. 2, 5). On June 29, 1966, a United States Department of Agriculture inspector at Edison, California checked the grapes and found them in good condition (Exh. 3). The grapes were shipped pursuant to a Uniform Domestic Straight Bill of Lading (Exh. 4) and were marked “Expedite for Export”.
Although the grapes were carried by various rail carriers and were handled by at least one trucker and one loading contractor, the parties are agreed that any liability arising as a result of the acts of the aforementioned entities must be borne by Southern Pacific.
The grapes were to be delivered to Pier 58, North River, New York, New
The exact day on which defendant was to deliver the grapes to the consignee was to be disclosed to the railroad by Gotham Shipping Co., plaintiff's agent and “freight forwarder” in New York. George Ziegler, president of Gotham, kept track of plaintiff’s shipments as they neared New York and was responsible for making necessary arrangements at the point of destination. On behalf of the plaintiff, he dealt with the Pennsylvania Railroad, the final rail carrier involved in the transaction, and for whose conduct the defendant is responsible.
Plaintiff entered into the contract for the second shipment with Frutas San Martin C. A. on July 20, 1966 (Exh. 10). Plaintiff agreed to deliver 500 lugs of seedless, 500 lugs of Cardinal, and 500 lugs of Ribier grapes — 1500 boxes in all —and was to receive $5.80, $5.55 and $7.-60/lug respectively. The grapes were to be shipped on July 29, 1966 from New York on the Grace Line vessel S. S. Santa Paula. Plaintiff purchased the grapes from Guimarra for $3.25, $3.00 and $5.-00/lug respectively on July 20, 1966 (Exhs. 11, 12). On July 20, 1966, a United States Department of Agriculture inspector at Edison, California, checked the grapes and found them in good condition (Exh. 13). The grapes were shipped pursuant to a Uniform Domestic Straight Bill of Lading (Exh. 14)
For the first shipment, plaintiff would have received $8,778.00.
For the second shipment, plaintiff would have received $9,475.00.
Defendant concedes that it is liable as to the first shipment for the injury to 147 boxes with crushed tops and 14 boxes with open tops. Defendant concedes liability as to the second shipment for the injury to 16 boxes. Defendant concedes liability for $278.32 for the first and for $54.80 for the second shipment. Defendant contends that if additional liability is imposed, the proper measure of the plaintiff’s loss should be determined not by the contract price in South America but by the market value of the grapes in New York. Defendant has submitted Exhibits N-P summarizing its theory of damages. Plaintiff does not contest the accuracy of the computations but does say that the measure is not correct.
DISCUSSION
The court has subject matter jurisdiction of this action, 28 U.S.C. § 1337; 49 U.S.C. § 20(11); Peyton v. Railway Express Agency, 316 U.S. 350, 62 S.Ct. 1171, 86 L.Ed. 1525 (1942); Eazor Express v. Pennsylvania Railroad Co., 214 F.Supp. 695 (W.D.Pa.1963).
Although plaintiff urges the court to hold that the defendant bore the legal duty to separate the undamaged from the damaged cargo, the court is satisfied that the law imposes no such duty upon the carrier. Rather, in a case such as this one, the duty is on the consignee to accept the tender of the partially damaged shipment and to thereafter mitigate damages. See Sunset Motor Lines, Inc. v. Lu-Tex Packing Co., Inc., 256 F.2d 495, 497 (5th Cir. 1958); Republic Carloading & Distributing Co. v. Missouri Pacific R.R. Co., 302 F.2d 381, 386 (8th Cir. 1962).
The consignee’s duty appears to be based on the theory that since the carrier’s liability and standard of care is already so great
As for the measure of damages, the court agrees with the defendant that the general rule is to award the market value of undamaged goods at the point of destination less the market value
DETERMINING DAMAGES
Had the second shipment been shipped to South America, as the court has determined would have been reasonable, plaintiff would have received her contract price less an offset to which Frutas San Martin would have been entitled because of the damage to the 16 lugs of grapes. Therefore, had the consignee mitigated the damages, plaintiff would have lost only an amount represented by the contract price for 16 lugs less the market value of the 16 damaged lugs in Caracas, Venezuela.
As for the first shipment, plaintiff would have been entitled to receive the contract price of $8,778.00 less the offset due to 161 damaged lugs. The only market value evidence in the record is that the damaged lugs had a market value of $5.09 (Exh. N). Hence the offset would be $1.51 per damaged lug or $243.11. Plaintiff would have received $8,534.89. Plaintiff received from the auction $2,309.63 (see Exh. 30 and note 24 supra [the freight is not chargeable to defendant which is the result if plaintiff’s figure of $1,337.14 is used]). Because the grapes were not shipped, plaintiff saved $1,398.87 (notes 21 and 22 supra). Hence, plaintiff may recover $4,826.39 ($8,534.89 less $2,309.63 less $1,398.87) as damages for the first shipment.
Plaintiff is entitled to and is hereby granted judgment for damages in the sum of $4,847.35, with each party to bear its own costs.
The foregoing constitutes the court’s findings of fact and conclusions of law pursuant to Rule 52(a) Fed.R.Civ.P.
. This opinion will refer to the company and its president interchangeably as “McCarty” or “plaintiff”.
. The only significance of the words in this case is that the defendant accepted the shipment with knowledge that the grapes w'ere destined for another country. The relevance of the knowledge as it may affect the carrier’s damages or liability is discussed below.
. In other words, any physical damage to the grapes or lugs v/as caused by Southern Pacific or by entities best characterized as Southern Pacific’s agents which are collectively referred to herein as “defendant”. That Southern Pacific must bear the liability that does exist is not disputed, see 49 U.S.G. § 20(11), which in pertinent part reads as follows:
§ 20, par. (11). Liability of initial and delivering carrier for tons; * * *
Any common carrier, railroad, or transportation company subject to the provisions of this chapter receiving property for transportation from a point in one State * * * to a point in another State * * * shall issue a receipt or bill of lading therefor, and shall be liable to tlie lawful holder thereof for any loss, damage, or injury to such jjroperty caused by it or by any common carrier, railroad, or transportation company to which such property may be delivered or over whose line or lines such property may pass within the United States * * * and no contract, receipt, rule, regulation, or other limitation of any character whatsoever shall exempt such common carrier, railroad, or transportation company from the liability imposed; and • * * any common carrier, railroad, or transportation company delivering said property so received and transported shall be liable to the lawful holder of said receipt or bill of lading or to any party entitled to recover thereon * * * for the full actual loss, damage, or injury to such property caused by it or by any such common carrier, railroad, or transportation company to which such property may be delivered or over whose line or lines such property may pass within the United States * * * notwithstanding any limitation or liability or limitation of the amount of recovery or representation or agreement*878 as to value in any such receipt or bill of lading, or in any contract, rule, regulation, or in any tariff filed with the Interstate Commerce Commission; * * *
See generally, Missouri Pacific E..R. Co. v. Elmore & Stahl, 377 U.S. 134, 84 S. Ct. 1142, 12 L.Ed.2d 194 (1964).
. The Grace Line will be referred to herein as “consignee”.
. See note 3 supra.
. Defendant’s witness Frederick W. Holmes —Pennsylvania’s Greenville foreman in charge of delivering cargo to ships for export — testified that approximately 10% of deliveries are by truck and 90% by “float” or barge. When delivered by float, the railroad car itself is floated from Greenville to Pier 58 (see Exh. D). Consequently, the car’s cargo need be unloaded only once, i. e. at Pier 58, whereas when a truck is used, the cargo is handled twice — once at Greenville when transferred from train to truck and once at Pier 58 when transferred from truck to pier. Also, apparently, when delivery is made to the Grace Line’s float-receiving facility, as opposed to the truek-receiving dock, there is sufficient space in wbicb to separate bad from good or undamaged lugs and such separation is frequently done under the eye of Grace Line’s agent. Defendant contends that while separation is practical when under direction of the consignee’s agent, it is impractical to do so where a refused shipment is returned to Greenville because the railroad would not know if the consignee would thereafter accept the shipment and because Thursday evening (the day on which the first shipment returned to Greenville) is the busiest day at Greenville. The court concludes that the above testimony is irrelevant to the issues in this case because truck delivery was a common mode of transport to which everyone consented and expected to be used and because in no way can plaintiff be said to have “assumed any risk” or interfered (by choosing truck delivery) with the defendant’s performance of any contractual duty or promise. Nor does the court consider relevant Holmes’ testimony that the railroad never informed a consignee that a cargo was damaged.
. The driver and helper do the unloading at the Grace Line’s pier.
. Exh. 20 (report of T. D. Baker & Oo. of July 7, 3966) ; Exh. 21 (Grace Line dock receipt) ; Exh. B (Railroad Perishable Inspection Agency report) ; JENNINGS DEPOSITION 46.
. Whether the damage was caused by the shifting of the load while moving across country in the boxcar (Exh. If) or when loaded into the truck at Greenville (JENNINGS DEPOSITION 47; ZIEGLER DEPOSITION 20) does not matter, since it is agreed that defendant bears the responsibility in either case.
. Ziegler, in turn, notified McCarty by phone and telegram (Exh. 8). Ziegler also wrote to the Pennsylvania Railroad notifying it of plaintiff’s claim and requesting that the grapes not be sold at the New York Fruit Auction (Exh. 9). Although the letter (and the bill of lading) refer to Guimarra Vineyards as the shipper, the parties do not dispute that McCarty had obtained title to the grapes at the time they were shipped and that Guimarra was merely acting for McCarty.
. Whether Ziegler specifically requested that the railroad separate the good and bad lugs is disputed. Since the court concludes that defendant would have had no such duty even given a request, the court does not resolve the factual dispute, for the answer is irrelevant.
In concluding that the railroad had no duty to sort, the court in no way relies upon Exh. A (New York Harbor Tariff 116-G, Item 4410 (f)) and expresses no opinion on the question of when, if ever, such a duty might descend upon a carrier to do more than tender the shipment to the consignee at the time and place designated and to act as a “warehouseman” thereafter.
. A report (Exh. 25) of an inspection performed for the auctioneer on July 10, 1966, confirms the damage noted at Pier 58, see note 8 supra; see also Exh. 26.
. See note 3 supra.
. See note 2 supra.
. Compare Exh. F (comparable report for the first shipment.)
. The parties do not dispute that for all practical purposes the word of the surveyor of T. D. Baker &j Co. is the word of Grace Line, although the consignee is not bound in any way by the surveyor’s recommendation. (REARDON DEPOSITION 4, 6).
. Cuomo did testify that on occasion a shipment would be rejected merely because of the way it was loaded. He further testified that rarely would he actually separate bad from good cargo, though on one occasion he did and it took him eleven hours. In response to the question of whether he voiced any objection to the refusal of the shipment, he replied that he did not because he didn’t “look good floating in the East River”.
. Of much less relevance is Exh. 19 (see also Exh. 27) which is a report made of an inspection of the second shipment which was conducted three days later for the auctioneers. The report indicates that the shipment was actually damaged. The court attaches little significance to Exh. 19 because the grapes, following the examination reflected in Exh. 18, were moved and unloaded from the truck and reloaded onto the rail car and the subsequent movement could have been responsible for the damage reflected in Exh. 19. For the reasons stated in this opinion, the court deems the condition of the grapes at the time the consignee refused them to be the more significant fact. It should be noted, however, that any damage accruing after refusal has not been shown to be anything but unavoidable. Finally, Exh. 19 does not dispute the findings of Exh. O, another inspection report of an examination subsequent to the consignee’s refusal, which indicates ultimate damage to only 16 lugs.
. Defendant concedes its liability for the actual damage it caused as carrier up to the time the shipments were tendered to the consignee at the time and place designated by plaintiff and her agents. Defendant denies liability for any damages accruing after the consignee refused to accept the shipment, and if such liability is found, denies that the proper measure of damages is, as plaintiff contends, determined by the contract price which plaintiff was to receive from South America.
. 1,330 lugs at $6.60/lug.
. 1,330 lugs at $1.03/lug.
. $0.30 per hundred dollars of valuation. Plaintiff insured for 10% above the contract price or for $8,778.00 plus $877.80. Therefore, insurance on a value of $9,-656.00 would be 96.56 hundred dollars at $0.30/hundred.
. $8,778.00 less $1,369.90 less $28.97. The figures assume, of course, that plaintiff could collect the full amount for 1,330 lugs despite the fact that part of the shipment would have arrived either damaged or not at all. Some adjustment, even of plaintiff’s figures, is therefore necessary.
. Exh. 30. However, a portion was deducted from the auction proceeds to pay the rail freight from California to New York. Since that charge would have been paid by x>laintiff had the shipment gone through to South America, i>lain-tiff cannot recover that amount. Hence, the claimed damages must be reduced by the amount of the railroad freight reflected in the check received from the auction company. (LIGHTER DEPOSITION 6-7).
. 500 lugs at $5.80/lug i>lus 500 lugs at $5.55/lug iilus 500 lugs at $7.60/lug.
. 1500 lugs at $1.03/lug.
. The value plus 10% is $9,475.00 plus $947.50. The insurance is therefore on 104.23 hundred dollars at $0.30/hundred.
. $9,475.00 less $1,545.00 less $31.27. See also note 23 supra.
. Exh. 31. See also note 24 supra.
. “[T] hough not an absolute insurer, [a carrier] is liable for damage to goods transported by it unless it can show that the damage was caused by ‘(a) the act of God; (b) the public enemy; (c) the aet of the shipper himself; (d) public authority; (e) or the inherent vice or nature of the goods.’ ” Missouri Pacific R.R. Co. v. Elmore & Stahl, supra 377 U.S. 137, 84 S.Ct. 1144 (1964).
. With aiipropriate adjustments, of course, as previously indicated in notes 23, 24, 28 and 29 supra.
. Such a result appears not only reasonable and just but would appear to follow from the words of 49 U.S.C. § 20(11) and from the common law rule that contract damages may be recovered to the extent they could not be avoided by rea
The burden of proof rests with the party seeking to prove that mitigation was possible. In this case, the defendant must show how plaintiff or the consignee might have mitigated the losses claimed. While the court’s conclusions are made with this burden in mind, the court notes that none of the findings concerning the reasonableness of mitigation would be different on the facts of this case even were the burden of proof on plaintiff to show that mitigation was possible.
. “The carrier can ask no more than that the consignee act reasonably in mitigating damages * * Secretary of Agriculture v. United States, 350 U.S. 162, 172 n. 20, 76 S.Ct. 244, 251, 100 L.Ed. 173 (1956).
. Since plaintiff does not contest the accuracy of defendant’s figures assuming this measure to he appropriate in this case, the court expresses no opinion as to whether, if market value were deemed the appropriate measure, such calculations (Exhs. N-P) are sufficient to establish a relevant market value. See Lapidus v. Chicago, Burlington & Quincy R.R. Co., 161 F.Supp. 664, 667 (N.D.Ill.E.D.1958) (failure to link values with qualities of specific goods damaged does not meet requisite burden of proof) ; compare Meltzer v. Pennsylvania R. Co., 29 F.Supp. 840, 842 (E.D.Pa.1939). Rather, the court holds that plaintiff has met his burden of establishing damages under an alternate but proper theory.
. Actually, such a measure assumes that all the lugs would have been shipped to South America, that the buyer would have been entitled to reject the damaged lugs, that the seller would have sold
. One third of the sum of $5.80, $5.55 and $7.60. See note 25 supra and accompanying text.
. One third of the sum of $4.48, $4.255 and $6.26. The figures are the market values suggested by defendant of the various grapes in the second shipment at New York on July 28, 1966. The court finds that no better market value evidence is available in this case.