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Globalnet v. Port Newark Refrigerated Warehouse


September 9, 2010


On appeal from Superior Court of New Jersey, Law Division, Essex County, L-4867-08.

Per curiam.


Submitted August 31, 2010

Before Judges Simonelli and Waugh.

Plaintiff Wang Globalnet (Wang) appeals the dismissal on summary judgment of its claim against defendant Port Newark Refrigerated Warehouse (Port Newark) for breach of a bailment contract concerning the storage of frozen squid. We affirm.


We discern the following facts and procedural history from the record.

In late June 2007, Wang delivered approximately 2,368 cartons of whole squid to Port Newark's warehouse located on Tyler Street in Newark. They were designated as Lot No. 65298 in warehouse Receipt No. 156000, which was dated June 29, 2007.

The receipt is characterized as "non-negotiable" in several locations. In the upper middle portion of the front of the receipt, the following appeared in white type on a black background: "See reverse side for Storage Terms and Conditions including provisions limiting time to make claim and file suit and amount of damages." The following appeared in the lower left corner in relatively small print: "[t]he goods are stored subject to all the terms and conditions stated on the reverse hereof. Said terms and conditions constitute a contract to which customer agrees by the acceptance of this Warehouse Receipt."

On the back of the warehouse receipt in the upper middle portion of the document, the following appears in large print and capital letters: "CONTRACT TERMS AND CONDITIONS. THE PERSON ACCEPTING THIS DOCUMENT AGREES, FOR HIMSELF AND ASSIGNS, TO THE FOLLOWING TERMS AND CONDITIONS."

The terms and conditions on the back of the receipt, which are numerous, are in small type and single spaced. The term denominated as "No. 10-NOTICE OF CLAIM AND FILING OF SUIT" contains the following language in paragraph (c):

No lawsuit or other action may be maintained by storer [Port Newark] or others against company with respect to goods unless... such lawsuit or other action is commenced within nine (9) months after storer learns or in the exercise of reasonable care, should have learned of the loss and/or destruction of and/or damage to the goods.

On August 31, 2007, Wang removed Lot No. 65298 of squid from Port Newark's Warehouse. On the same day, it sent a fax to First Newark that stated, in part, as follows:

We... pick[ed] up above-mentioned product from your cold storage today. We found out that squids also are melted under your storage system. Above-mentioned Squids are spoiled; therefore, we have to destroy above-mentioned product. We have decided that we could not sell it because of risk [to] human health.

Wang claimed damages in the amount of $36,282.95 in the fax.

Wang filed its complaint against Port Newark on June 13, 2008, alleging breach of contract and breach of warranty. Port Newark answered in July 2008. Following discovery, Port Newark filed a motion for summary judgment, relying on the nine-month time limitation for filing suit quoted above. Wang opposed the motion, arguing that the nine-month limitation was unconscionable and that, in any event, its suit was timely.

Judge Paul J. Vichness heard oral argument on August 28, 2009, and granted the motion. He determined that the provision limiting the time to commence suit was not unconscionable, and that the terms and conditions on the warehouse receipt were legible. He held that the nine-month limitation period began to run on August 31, 2007, when Wang made its initial claim against Port Newark. He rejected Wang's argument that the time did not begin to run until the later date on which Wang alleged it sold the last useable squid from Lot No. 65298.

This appeal followed.


An appellate court reviews a grant of summary judgment de novo, applying the same standard governing the trial court under Rule 4:46. Liberty Surplus Ins. Corp. v. Nowell Amoroso, P.A., 189 N.J. 436, 445-46 (2007). Generally, the court must "consider whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995); see also R. 4:46-2(c).

Wang first argues that the nine-month limitation is unconscionable. It points to our decision in Trinity Church v. Lawson-Bell, 394 N.J. Super. 159, 170 (App. Div. 2007), in which we recognized that parties may agree to shorter periods of limitation than are provided by statute "so long as they are reasonable." It also points to N.J.S.A. 12A:2-725(1), a provision of the Uniform Commercial Code governing actions for breach of contracts for the sale of goods, which provides that such shorter periods cannot be less than one year.

This case, however, is not governed by N.J.S.A. 12A:2-725(1). It is, instead, governed by N.J.S.A. 12A:7-204(3), the provision of the Uniform Commercial Code governing the liability of warehousemen, which provides that "[r]easonable provisions as to the time and manner of presenting claims and instituting actions based on the bailment may be included in the warehouse receipt or tariff." In contrast to N.J.S.A. 12A:2-725(1), N.J.S.A. 12A:7-204(3) contains no lower limit to the length of time to which the parties may agree. It also specifically provides that such limitations "may be included in the warehouse receipt."

Wang has failed to demonstrate that there is anything commercially unreasonable with respect to the nine-month limitation period. Indeed, in Amenip Corp. v. Ultimate Distribution Systems, Inc., 200 N.J. Super. 109, 116 (App. Div. 1985), we upheld such a nine-month limitation period. Consequently, we affirm the motion judge's conclusion that the nine-month provision is not unconscionable.

Wang also argues that there were genuine issues of material fact as to the date on which the limitation period began to run. We are satisfied that Judge Vichness correctly held that it began to run on August 31, 2007, when Wang notified Port Newark that the squid was spoiled and that it had decided that it "could not sell it because of risk of human health." Indeed, Wang's employee Suk Joong Kim testified at his deposition that Wang knew about the problem even earlier than August 31, 2007.

For the reasons set forth above, we affirm the order granting summary judgment to Port Newark.



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