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OHOUD ESTABLISHMENT v. TRI-STATE CONTR. & TRADING

September 22, 1981

OHOUD ESTABLISHMENT FOR TRADE AND CONTRACTS, Plaintiff,
v.
TRI-STATE CONTRACTING & TRADING CORPORATION, Roger Wilco Inc., Pepsi-Cola and National Brands Beverages, Ltd., Pepsi-Cola Bottling Company of Pennsauken, New Jersey, Paterson Canning Co., Inc., Pepsico, Inc., Continental Can Co., a division of Continental Group Inc., Farrell Lines, Inc., United Arab Shipping Company, (S.A.G.), Barber Steamship Lines, Inc., and J. E. Hogan Forwarders, Inc., all of the foregoing in personam, and S/S ASTORIA, S/S BLACKFORD, MELANPUS M/VEXPORT COMMERCE &EXPORT BAY, their respective engines, machinery, tackle, furniture, etc., in rem, Defendants. and CONTINENTAL CAN COMPANY, a division of the Continental Can Group Inc., Defendant-Third-Party Plaintiff, v. PEPSI-COLA METROPOLITAN BOTTLING COMPANY, INC., Third-Party Defendant. Mohamed BAHAKIM, Plaintiff, v. TRI-STATE CONTRACTING AND TRADING CORP., Pepsi-Cola and National Brand Beverages, Ltd. (formerly Pepsi-Cola Bottling Company of Pennsauken, New Jersey), Pepsico, Inc., and Continental Can Company U.S.A., Defendants. and PEPSI-COLA AND NATIONAL BRAND BEVERAGES, LTD., Defendant-Third-Party Plaintiff, v. PEPSI-COLA METROPOLITAN BOTTLING COMPANY, INC., Farrell Lines, Inc., United Arab Shipping Company (S.A.G.), Barber Steamship Lines, Inc., and J. E. Hogan Forwarders, Inc., Third-Party Defendants. and CONTINENTAL CAN COMPANY U.S.A., Defendant-Third-Party Plaintiff, v. PEPSI-COLA METROPOLITAN BOTTLING COMPANY, INC. (Pepsi-Metro), Third-Party Defendant



The opinion of the court was delivered by: SAROKIN

Two motions in this case are presently pending before this court. First, defendants Farrell Lines, Inc. ("Farrell") and United Arab Shipping Co. ("S.A.G.") (collectively referred to as "ocean carriers") move for summary judgment on the cross-claims of defendants Continental Can Co., U.S.A., ("Continental") Pepsi-Cola and National Brand Beverages, Ltd. ("National Brands"), Pepsico, Inc., Roger Wilco Inc., Tri-State Contracting and Trading Corp. ("Tri-State"), and J. E. Hogan Forwarders Inc. filed against the ocean carriers in Civil Action No. 79-1422. In addition, defendant ocean carriers move for dismissal of the third party complaint of National Brands demanding indemnity and/or contribution from them in the event of any liability found on the part of National Brands in Civil Action No. 79-2018.

A second motion has been brought by defendants Continental, Pepsi, Inc., Pepsi-Cola Metropolitan Bottling Co., Inc. (collectively "Pepsi"), Pepsi-Cola and National Brand Beverages, Ltd., Pepsi-Cola Bottling Co. of Pennsauken, New Jersey and Patterson Canning Co., Inc. who move for judgment on the cross-claims asserted by defendant Tri-State and the claims asserted by plaintiff Mohamed Bahakim pursuant to Rule 12(b) of the Federal Rules of Civil Procedure.

 Both Tri-State and Bahakim ("claimants") allege damages in the form of harm to their business reputations and for loss of future profits. They base their respective claims on negligence, strict liability and breach of warranties surrounding the imperfect delivery of soda after leakage was sustained during the transoceanic shipment of Pepsi-Cola to Tri-State's agents in Saudi Arabia.

 FACTUAL BACKGROUND

 The soda was contained in twelve ounce aluminum cans which were manufactured by Continental Can Co. for Pepsico, Inc. The cans were filled at the plant of Patterson Canning Co., now a subdivision of National Brands. After filling, the cans were packed on trays, covered with "shrink wrap", and shipped to National Brands' warehouse in Pennsauken, New Jersey where the trays were unloaded and were hand packed directly into twenty foot containers for the ocean carriage to the Middle East. The containers were sealed at the warehouse and transported to the ocean terminals in Philadelphia and New York by various trucking companies.

 Tri-State had independently made arrangements for the ocean shipment of the Pepsi through J. E. Hogan Forwarders, Inc., who in turn booked space for Tri-State with various ocean carriers, including the defendants Farrell Lines and United Arab Shipping. The ocean carriers issued negotiable bills of lading which Tri-State presented at various American banks prior to the arrival of the carriers in the Middle East.

 Tri-State sold more than 700,000 cases of Pepsi to Near Eastern purchasers, of which approximately 411,000 cases were sold to the six Saudi Arabian importers who are involved in this action (of the six, five assigned their claims to the plaintiff Ohoud). Tri-State was fully paid for all its sales of Pepsi, and Bahakim received payment in full of his commission for his role as agent-solicitor.

 When the shipment arrived in Jeddah, the Pepsi-Cola cans were found to have sustained significant amounts of leakage, and as such was not merchantable.

 PROCEDURAL BACKGROUND

 Subsequently, two suits were brought. Commencing in May of 1979, Ohoud, as assignee of the claims of five Saudi importers, sued Tri-State, as well as Continental Can, Pepsi, and National Brand. *fn2" Ohoud sought compensation for direct and consequential damages resulting from the alleged total loss of the shipment. Tri-State asserted affirmative cross-claims against the co-defendants for damage to Tri-State's reputation and for loss of future business. The primary claims of the plaintiffs have been settled. At this time, only Tri-State's affirmative cross-claims remain in said action.

 Shortly after the Ohoud action was filed, Bahakim instituted a suit against the same defendants. *fn3" Bahakim also claims damage based upon lost future profits. Bahakim does not allege that any of the moving defendants, Continental Can, Pepsi or National Brands, knew that Bahakim was in any way involved in the transactions. In response to Bahakim's claims, National Brands and Pepsi Cola instituted a third party complaint against the ocean carriers demanding indemnity and/or contribution, if the third party plaintiffs were held liable to Bahakim.

 The two actions were consolidated in July of 1979. Presently, the moving defendants seek a judgment on both Tri-State's and Bahakim's claims for unspecified future business profits, contending that they are without foundation as a matter of both law and fact.

 The court now has before it two separate motions. First, defendant ocean carriers move for dismissal of the third party complaint of National Brands. Second, defendants Continental Can, Pepsi and National Brands move for judgment on the pleadings dismissing claims of Tri-State and Bahakim for loss of future profits.

 DISCUSSION

 A. The "Ocean Carriers".

 In assessing the liability of an ocean carrier to his co-defendants for indemnity and/or contribution in a suit surrounding the delivery of damaged goods, this court is bound by the strictures of the United States Carriage of Goods by Sea Act ("COGSA"), 46 U.S.C. ยง 1300, et seq. Carrier liability attaches only if the plaintiff in the main action can sustain the prima facie case required under COGSA and common law. To meet these requirements, those making claims against an ocean carrier must adduce proof that the goods in question were received by the carrier in good condition and that they were subsequently delivered at their destination in a damaged condition. Demsey & Associates v. S.S. Sea Star, 461 F.2d 1009 (2d Cir. 1972); Nichimen Company v. MV Farland, 333 F. Supp. 691 (S.D.N.Y.1971), modified and aff'd 462 F.2d 319 ...


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