G & P Trucking Co. v. Zurich American Insurance ex rel. SKF USA, Inc.
Docket: Civil Action No. 3:14-cv-501
Court: District Court, D. South Carolina; August 19, 2015; Federal District Court
Motions for summary judgment were filed by Plaintiff G. P Trucking, Inc. and Defendants SKF USA, Inc. and Zurich American Insurance Company. G. P seeks to establish that it has no liability for a trucking accident under the 'Ocean or Combined Transport Waybill' (Bill of Lading) or, alternatively, that its liability is limited to $50.00 or $500.00 under the Delivery Order and the Carriage of Goods by Sea Act (COGSA), respectively. SKF and Zurich argue that G. P has not provided evidence of a valid limitation of liability.
The court held hearings and requested supplemental briefs on the condition of the goods delivered to G. P. It addressed the disagreements regarding the applicable law—whether COGSA or the Carmack Amendment applies—clarifying that the determination of whether the Bill of Lading is a through bill is a factual question under admiralty jurisdiction. Following an evidentiary hearing, the court concluded that the Bill of Lading is indeed a through bill of lading, thus COGSA governs this shipment. It found that G. P’s liability is limited by a valid Himalaya clause in the Bill of Lading. Consequently, the court granted G. P’s motion for summary judgment and denied SKF’s motion, rendering G. P’s motion in limine moot. The court summarized that a bill of lading serves to record the receipt of goods, state carriage terms, and act as a contract for carriage, with a through bill covering both ocean and inland transport.
In an admiralty proceeding, the court is responsible for resolving factual disputes relevant to the case. A critical factor in determining whether a bill of lading is a through bill involves assessing whether it indicates the final destination of the goods, whether freight for the entire shipment was prepaid, and whether a separate domestic bill of lading was issued. The court may also evaluate the conduct of the shipper and carriers.
In this case, the Bill of Lading does not specify the 'Place of Delivery,' leading to ambiguity regarding the final destination of the goods. G. P argues that the consignee's Tennessee address should be interpreted as the final destination. The definition of a consignee is the individual named in the bill to whom delivery is promised.
Testimony from Philip Stender, a corporate designee for Panalpina, clarifies this ambiguity. Stender noted that while the internal shipment documentation indicated Savannah as a final destination for the shipment, he asserted that the goods were always transported directly to Crossville, Tennessee, and that Savannah was not the ultimate destination. Therefore, the understanding of the consignee’s address is pivotal in discerning the actual delivery point.
The document addresses the final destination of goods, confirming that both Savannah and Crossville, Tennessee, are indicated in the Bill of Lading and Pantainer waybill, establishing Crossville as the place of delivery. The court concludes that the designation of SKF as consignee signifies the final destination, supporting the assertion that the Bill of Lading is a through bill of lading.
Regarding freight payment, testimony from Stanley Nutt clarifies that "prepaid" in the shipping context means that the shipper has arranged credit for freight charges, not that payment is made upfront. Consequently, the court determines that the freight for the shipment was prepaid, reinforcing the conclusion that the Bill of Lading is a through bill.
The court also evaluates whether a separate domestic bill of lading was issued, noting that the absence of such a document does not automatically exclude the applicability of the Carmack Amendment, as established in the Supreme Court case Kawasaki. Despite the potential oversight by G. P. in issuing a separate bill, the lack of a separate bill still supports the finding that the Bill of Lading is a through bill.
Finally, the court considers the billing practices of the parties, particularly the invoices from Panalpina to SKF, which consolidated charges for transport from Spain to Tennessee. This billing arrangement further indicates the nature of the shipment as a combined transport, relevant to the determination of the Bill of Lading's status.
G. P’s invoices demonstrate that G. P billed Panalpina for services, confirming that SKF contracted with Panalpina for the transport of goods from Spain to Tennessee, without an independent contract with G. P for the domestic inland freight. Testimony from Stender corroborates this, indicating that the invoice issued to SKF included charges for various segments of the shipment, from origin handling to customs clearance, all categorized as door-to-door services.
The court determined that the Bill of Lading constitutes a through bill of lading for the shipment from Spain to Tennessee, thereby subjecting it to the Carriage of Goods by Sea Act (COGSA). Although COGSA applies primarily to shipments between U.S. and foreign ports, it permits parties to extend its terms by contract to cover inland transport periods. COGSA limits carrier liability to $500 per package, a limitation that can apply to third parties if specified in the bill of lading, which must be interpreted strictly.
The Terms and Conditions of the Bill of Lading further clarify that the carrier's liability is confined to COGSA's limits. Additionally, they define 'SubContractors' broadly to encompass various transport operators and independent contractors involved in fulfilling the carrier's obligations.
The Terms and Conditions include a 'Himalaya Clause' allowing the Carrier to subcontract its obligations. The Merchant agrees not to make claims against any parties performing the Carriage other than the Carrier, thus granting those parties the same rights and defenses as the Carrier. The Bill of Lading extends COGSA to domestic inland portions of the shipment. G. P, a subcontractor of Panalpina, is protected from liability under this clause. SKF argues the Bill of Lading, issued by Pantainer, only applies to its subcontractors, not those of Panalpina. Testimony clarifies that Pantainer is a separate entity managing port-to-port moves for Panalpina, which issued the Bill of Lading. The court concludes the Bill of Lading was issued by Panalpina, covering all its subcontractors, including G. P. As a result, SKF's claims against G. P are rejected, leading to the court granting G. P’s motion for summary judgment and denying SKF's motion. SKF’s claims regarding the governing law of the shipment are disputed, with G. P asserting a through bill of lading under COGSA, while SKF contends it was two separate shipments under different legal frameworks.
A Himalaya Clause is a provision in a bill of lading that allows a carrier's defenses and limitations under the Carriage of Goods by Sea Act (COGSA) to be applied to third parties. The term originates from the English case known as The Himalaya, specifically Adler v. Dickson. The Fourth Circuit has not addressed COGSA since the 2010 Supreme Court ruling in Kawasaki. The current analysis framework for bills of lading, referenced from a previous order, is reiterated for clarity. Two versions of Terms and Conditions were presented: one from G. P dated 2011 and another from SKF dated 2015. Since the 2015 version could not apply to a Bill of Lading from 2013, the 2011 version is utilized in this ruling. Consequently, this determination leads to the dismissal of SKF's counterclaims under the Carmack Amendment and negligence, resulting in summary judgment in favor of G. P on these claims.
