Mediterranean Shipping Co. v. Best Tire Recycling, Inc. , 848 F.3d 50 ( 2017 )

United States Court of Appeals
For the First Circuit
No. 15-2482
MEDITERRANEAN SHIPPING CO., S.A.,
Plaintiff, Appellee,
v.
BEST TIRE RECYCLING, INC.,
Defendant, Appellant,
v.
ARMSTRONG INTERNATIONAL, INC., d/b/a ARMSTRONG EXCHANGE;
JOHN WAYNE KWANGE,
Third Party Defendants.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Bruce J. McGiverin, U.S. Magistrate Judge]
Before
Howard, Chief Judge,
Torruella and Kayatta, Circuit Judges.
Israel Roldán-González, with whom Isis Aimée Roldán-Márquez
were on brief, for appellant.
Alberto J. Castañer-Padró, with whom Castañer Law Offices
P.S.C. was on brief, for appellee.
February 6, 2017
TORRUELLA, Circuit Judge. The present dispute arises
out of a contract for the shipment of used tires from Puerto Rico
to Vietnam. The shipment accrued demurrage charges, port storage
charges, and related administrative fees, apparently because it
arrived late to Vietnam. On summary judgment, the district court
found that Best Tire Recycling, Inc. ("Best Tire") was the shipper,
and therefore, pursuant to the bills of lading, was liable for the
charges and fees to the carrier, Mediterranean Shipping Co.
("Mediterranean"). Best Tire now contends that the district court
erred in holding that there were no genuine issues of material
fact as to whether Best Tire was the shipper. However, Best Tire
was designated as the shipper on the bills of lading, and we
therefore affirm the findings of the district court.
I. Background
Mediterranean is an ocean common carrier that transports
goods between the United States and foreign countries. Best Tire
is a Puerto Rico-based corporation that collected and transported
scrap tires, among other things, within Puerto Rico. In 2012,
John Wayne Kwange ("John Wayne"), doing business as Armstrong
Exchange and/or Armstrong International, Inc. ("Armstrong") hired
Best Tire to deliver forty containers of scrap tires to the port
of San Juan, Puerto Rico for $600 a container. Best Tire
instructed John Wayne to contact Mediterranean, the common
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carrier, to get booking information and then inform Best Tire of
the arrangement.
On April 3, 2012, John Wayne emailed Gypsa Carrión, of
Oceanic General Agency, an agent of Mediterranean, and requested
price quotes to ship tires from San Juan, Puerto Rico to Haiphong,
Vietnam. Best Tire was copied on this email and admits to
receiving it. In this email, John Wayne designated Best Tire as
the "shipper" and Phong Vuong Limited Company as the "consignee."
On April 11, Ms. Carrión sent a reply email to John Wayne and Nydia
Caro, Best Tire's administrative assistant, providing them with
"booking numbers for the next 4 sailings" and further notifying
them that Mediterranean was "creating the shipper in their system."
In this email, Ms. Carrión also stated: "[Y]our trucker may start
pulling out the [container] units with . . . just the [booking]
number[s]."
Once Best Tire received the booking information, it
subcontracted with IPM Transport to bring empty containers from
the port of San Juan to Best Tire's storage facilities in Rincón,
Puerto Rico, and then to transport the containers, filled with
scrap tires, back to Mediterranean's cargo ship in the port of San
Juan. Between April and May of 2012, all containers were delivered
and Best Tire charged John Wayne $600 per delivered container.
Mediterranean issued bills of lading for each of the scrap tire
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shipments and, consistent with John Wayne's initial email,
identified Best Tire as the shipper.
Best Tire admits that it received the bills of lading.
Mediterranean's standard bill of lading provides that, inter alia,
"[e]very Person defined as a Merchant is jointly and severally
liable towards [Mediterranean] for all of the various
undertakings, responsibilities, and liabilities of the Merchant."
A "Merchant" is defined to "include[] the Shipper, Consignee,
holder of th[e] Bill of Lading, the receiver of the Goods and any
Person owning, entitled to or claiming the possession of the Goods
or of this Bill of Lading or anyone acting on behalf of this
Person." "Freight" is defined to "include[] the freight and all
charges, costs and expenses whatsoever payable to [Mediterranean]
in accordance with the applicable Tariff and this Bill of Lading,
including storage, per diem and demurrage." Mediterranean's
standard bill of lading also incorporates "[t]he terms and
conditions of [Mediterranean's] applicable Tariff," which include
information about "demurrage, per diem, storage expenses and legal
fees."
When the cargo ultimately arrived at its destination in
Vietnam, the consignee refused to accept delivery, apparently
because the shipment arrived late. As a result of the consignee's
refusal to accept the shipment, Mediterranean had to store it. In
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total, this stored cargo incurred demurrage charges totaling
$353,083.50, port-storage charges totaling $36,780, and an
administrative fee totaling $300. Moreover, Mediterranean argued
"that $69,889.54 of the cost to ship the freight from Puerto Rico
to Vietnam remained unpaid." Best Tire received a total of $24,000
for its services in this transaction.
The district court sitting in admiralty granted
Mediterranean's motion for summary judgment, holding that Best
Tire was a party to the contract of ocean carriage and as such was
liable to Mediterranean for unpaid ocean freight charges, shipping
container demurrage, port storage and related administrative fees.
II. Standard of Review
"Summary judgment is appropriate when the record shows
that 'there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.'" Farmers Ins.
Exch. v. RNK, Inc., 632 F.3d 777, 782 (1st Cir. 2011) (quoting
Fed. R. Civ. P. 56(a)). "We review de novo the grant of a motion
for summary judgment." Id. "[W]e may affirm the entry of summary
judgment on any ground made manifest by the record, so long as the
record reveals that there is no genuine issue as to any material
fact and that the moving party is entitled to judgment as a matter
of law." Batista v. Cooperativa de Vivienda Jardines de San
Ignacio, 776 F.3d 38, 42 (1st Cir. 2015) (citation omitted).
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III. Discussion
"'To ascertain what contract was entered into[, courts]
look primarily to the bills of lading, bearing in mind that the
instrument serves both as a receipt and as a contract' and that
'[o]rdinarily, the person from whom the goods are received for
shipment assumes the obligation to pay the freight charges; and
his obligation is ordinarily a primary one.'" EIMSKIP v. Atlantic
Fish Market, Inc., 417 F.3d 72, 77 (1st Cir. 2005) (quoting
Louisville & Nashville R.R. v. Cent. Iron & Coal Co., 265 U.S. 59,
67 (1924)).
Nevertheless, the "pattern and presumption" that the
party identified as "shipper" on the bills of lading is the party
that bears liability "can be overcome by statute, by contractual
provisions, or by the parties' course of conduct." Id. (citing
Louisville & Nashville R.R., 265 U.S. at 67-68.).
It is uncontested that Best Tire is designated as the
shipper on all of the bills of lading. Best Tire does not argue
that the presumption this creates is overcome by statute or by a
contractual provision. Rather, Best Tire argues that the parties'
course of conduct overcomes the pattern and presumption that Best
Tire bears liability. We find that it does not.
Best Tire relies heavily on our reasoning in EIMSKIP.
In EIMSKIP, the district court had found Atlantic liable to
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EIMSKIP, the common carrier, even though Atlantic was not
identified as the shipper on the bills of lading; Atlantic
appealed, and we affirmed. Id. at 76. We relied on Atlantic's
conduct: it had booked the shipments with EIMSKIP, it was invoiced
for the shipments, and it had orally agreed to pay for them. Id.
Mayflower, the party designated as the shipper on the bills of
lading, was never invoiced for the shipments. Id. Best Tire sees
a similarity between the conduct of John Wayne and/or Armstrong
and the conduct of Atlantic, in that John Wayne was the one who
contacted Mediterranean to organize the shipments and, seemingly,
prepaid a number of the shipments.
The fundamental flaw in Best Tire's argument is that in
EIMSKIP, we found that both Mayflower (who was identified as the
shipper on the bills of lading) and Atlantic (who was not) were
liable to the carrier. "Two parties may each make themselves
liable to a third party for payment of the same freight on a single
shipment -- one by a contract reflected in part by the bill of
lading and the other by explicit promises and course of conduct
independent of the bill of lading." Id. Thus, our reasoning in
EIMSKIP does not absolve Best Tire of liability. At most, our
reasoning suggests that John Wayne and/or Armstrong could also be
held liable -- however, the district court was unable to serve
either John Wayne or Armstrong, as they are apparently nowhere to
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be found. In any event, Mediterranean can elect which party it
will hold liable, because Best Tire is jointly and severally liable
to Mediterranean -- the question whether John Wayne and/or
Armstrong could also be held liable is not before us.
Best Tire also relies on Norfolk S. Ry. v. Groves, 586
F.3d 1273 (11th Cir. 2009), for the proposition that "a party must
assent to being named as a consignee on the bill of lading to be
held liable as such, or at the least, be given notice that it is
being named as a consignee in order that it might object or act
accordingly." Id. at 1282. We need not decide whether Best
Tire's silence can be construed as assent to being named a party
on the bill of lading, because Best Tire was given notice of this
fact. Best Tire had received two email messages notifying it that
it would be the shipper. As Best Tire itself admits, it "could
have refused being named as the shipper by replying to those
messages." In addition, Best Tire received the six bills of lading
on four separate occasions between April 24, 2012 and June 28,
2012. Best Tire was designated as the shipper on all these bills
of lading. Yet Best Tire made no objections until August of 2013,
when it received invoices for demurrage and other charges -- well
over a year after it had accepted the bills of lading.1
1 Best Tire raised two additional issues in its appeal brief:
(1) because some of the shipments were marked as "freight prepaid"
Mediterranean is estopped from collecting from Best Tire;
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IV. Conclusion
The decision of the district court is affirmed.
Affirmed.
(2) pursuant to the doctrine of laches, Mediterranean may only
collect demurrage and port charges accrued in the 180 days prior
to the filing of the complaint by Mediterranean. The first of
these issues is being raised for the first time on appeal.
Although Best Tire did identify "laches" as one of several
affirmative defenses in its complaint, these arguments were never
clearly raised or argued before the district court. Both of these
arguments are therefore waived. See Nat'l Ass'n of Soc. Workers
v. Hardwood, 69 F.3d 622, 627 (1st Cir. 1995).
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