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ACE BAG & BURLAP v. SEA-LAND SERVICE

March 15, 1999

ACE BAG & BURLAP CO., INC., PLAINTIFF,
v.
SEA-LAND SERVICE, INC. AND M/V SINTRA, HER ENGINES, TACKLE, EQUIPMENT, ETC., DEFENDANTS.



The opinion of the court was delivered by: Politan, District Judge.

AMENDED LETTER OPINION

ORIGINAL ON FILE WITH CLERK OF THE COURT

This matter comes before the Court on defendant Sea-Land Service, Inc.'s Motion for Summary Judgment and plaintiff Ace Bag & Burlap Co., Inc.'s Motion for Summary Judgment. This matter was decided without oral argument pursuant to Federal Rule of Civil Procedure 78. For the reasons stated herein, defendant Sea-Land Service, Inc.'s Motion for Summary Judgment is GRANTED. Furthermore, plaintiff Ace Bag & Burlap Co., Inc.'s Motion for Summary Judgment is DENIED and its' Complaint is DISMISSED WITH PREJUDICE.

STATEMENT OF FACTS & PROCEDURAL HISTORY

Plaintiff Ace Bag and Burlap Co., Inc. ("plaintiff") is a corporation engaged in the business of manufacturing and trading burlap and jute bags. See Stipulation of Facts at ¶ 3. Defendant Sea-Land Service Co., Inc. ("Sea-Land") is engaged in the business of ocean carriage of merchandise. See id. at ¶ 5.

In May 1995, plaintiff made arrangements to purchase a quantity of jute bags from a manufacturer in Bangladesh with the intention of selling the jute bags to the Association de Exportadores ("ADECAFE"), an association of Honduran coffee growers. See id. at ¶ 4. Thereafter, Sea-Land entered into a contract of carriage with a shipper (arranged by the Bangladeshi manufacturer) to carry five (5) twenty-foot containers constituting 180 bales of Hessian jute bags aboard the M/V SINTRA, an oceangoing vessel chartered and controlled by Sea-Land. See id. at ¶ 5. The goods were loaded in Chittagong, Bangladesh for carriage, through the port of Puerto Cortes, Honduras, to San Pedro Sula, Honduras. See id. at ¶ 6. On or about May 30, 1995, Sea-Land issued Bill of Lading No. 324-026482 to the shipper evidencing the contract of carriage. See id. at ¶ 6.

During the ocean voyage, plaintiff became the owner of the jute bags, having obtained title by negotiating the original bill of lading from the shipper. See id. at ¶ 8. ADECAFE then contracted with plaintiff to purchase the 180 bales of Hessian jute. See id. at ¶ 9. The transaction with ADECAFE was to be consummated via site draft negotiation. See id. The original bill of lading was dispatched by plaintiff to a bank in Honduras to be delivered to ADECAFE upon payment of the sum of $90,000.00. See id. at ¶ 10.

The MV/SINTRA sailed from Bangladesh with the five containers on board and arrived at Puerto Cortes, Honduras on or about July 29, 1995. See id. at ¶ 7. Sea-Land then transported the goods to a leased lot where Sea-Land was met by Honduran Customs Authorities. See Declaration of Jorge R. Pineda at ¶ 5. It is undisputed that a customs broker, AGENCIA ADUANERA ARGUELLO, then submitted four petitions to the customs office requesting permission to move the containers from the leased lot to an inland warehouse. See Stipulation of Facts at ¶ 12. The customs office accepted the petitions without requiring presentment of the original bill of lading (which had been dispatched by plaintiff to a bank in Honduras) and issued Authorization Pass Nos. 006605, 06606, 06607, 06608. See id. Pursuant to authorization from the customs office, the containerized goods were transported by Sea-Land from the leased lot to the ALMACAFE Warehouse, a fiscal or "bonded" warehouse, which is authorized by the Customs Authorities of Honduras to store goods until customs clearance has been granted. See id. at ¶¶ 11, 13; see also Declaration of Jorge R. Pineda at ¶ 5. Thereafter, the goods were either disbursed or converted by persons unknown. See id. at ¶ 13. Neither ADECAFE nor any other person made payment to the bank in exchange for the original bill of lading. Consequently, plaintiff never received payment for the goods, and the bank eventually returned the original bill of lading. See id. at ¶ 14.

DISCUSSION

The issue before this Court is whether Sea-Land effectuated "proper delivery" of the five containers holding 180 bales of Hessian jute bags when it followed the Honduran Customs Authorities' order to transfer the cargo to the ALMACAFE fiscal warehouse without requiring presentment of the bill of lading.

Sea-Land contends that it is entitled to summary judgment because it discharged its duties as a carrier under the contract of carriage and bill of lading by properly delivering the goods, under mandatory Honduran Customs laws and regulations, to the ALMACAFE fiscal warehouse. Arguing that presentment of the bill of lading was not necessary since delivery was made to "a person entitled to possession," Sea-Land contends that it did, in fact, effectuate a proper delivery by safely delivering the goods to the port authorities at the leased lot and later, to the ALMACAFE warehouse. See Declaration of Jorge R. Pineda at ¶ 4.

Plaintiff, however, contends that Sea-Land did not properly deliver the goods because the authorization for transfer forms issued by the Honduran Customs Authority were not "mandatory" but were, instead, "permissive." Additionally, plaintiff asserts that, while it may be true that Sea-Land received "authorization" from customs officials to move the containers from the leased lot to the ALMACAFE fiscal warehouse, such "permission" does not alleviate Sea-Land's duty to be sure that the "authorizations" issued by the customs authorities were supported by original bills of lading.

I. Standard of Review for Summary Judgment

The standard governing a summary judgment motion is set forth in Fed. R.Civ.P. 56(c), which provides, in pertinent part, that:

  [t]he judgment sought shall be rendered forthwith if
  the pleadings, depositions, answers to
  interrogatories, and admissions on file, together
  with the affidavits, if any, show that there is no
  genuine issue as to any material fact and that the
  moving party is entitled to a judgment as a matter of
  law.

Fed.R.Civ.P. 56(c). A fact is material if it might affect the outcome of the suit under the governing substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, ...


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