A.P. Moller-Maersk a/S v. Ocean Express Miami

648 F.Supp.2d 490

A.P. MOLLER-MAERSK A/S d/b/a Maersk Sealand, Plaintiff, v. OCEAN EXPRESS MIAMI; Carga Global, Sociedad Anonima; Caniz International Corporation; Caniz Logistica, Sociedad Anonima; and Comercializadora De Calidad, Sociedad Anonima (a.k.a. Quality Print), Defendants.

No. 06 Civ. 2778.

United States District Court, S.D. New York.

August 18, 2009.

COPYRIGHT MATERIAL OMITTED

Freehill, Hogan & Mahar, LLP, by: Eric Einar Lenck, Esq., Willaim Joseph Pallas, III, Esq., New York, NY, for Plaintiff.

Dougherty, Ryan, Giuffra, Zambito & Hession, by: Peter J. Zambito, Esq., New York, NY, for Defendant, Ocean Express Miami.

OPINION

SWEET, District Judge.

Plaintiff A.P. MOLLER MAERSK A/S d/b/a MAERSK SEALAND ("Plaintiff" or "Maersk") has moved for summary judgment under Rule 56, Fed.R.Civ.P., and for sanctions against defendant Comercializadora de Calidad Sociedad Anonima ("Defendant" or "Quality Print"). No opposition having been filed, the motion for sanctions is granted, and the motion for summary judgment is granted in part.

I. PRIOR PROCEEDINGS AND FACTS

The facts as described below have been set forth in Maersk's Rule 56.1 Statement ("Statement"),¹ the affidavits referenced therein, and Maersk's June 30, 2008 Notice to Admit.²

The facts relating to the present dispute are summarized here. More detailed descriptions of the circumstances giving rise to this litigation are set forth in the Court's opinions dated April 25, 2008 and December 5, 2008. See A.P. Moller-Maersk A/S v. Ocean Express Miami, 550 F.Supp.2d 454 (S.D.N.Y.2008) ("April 25 Opinion"); A.P. Moller-Maersk A/S v. Ocean Express Miami, 590 F.Supp.2d 526 (S.D.N.Y.2008) ("December 5 Opinion").

Quality Print was the purchaser, owner, and receiver of a shipment of used printing machinery in four ocean containers being transported from Milwaukee, Wisconsin, to Guatemala City, Guatemala, with ocean carriage from New Orleans to Guatemala. Maersk was the carrier of the shipment based upon a booking agreement dated August 16, 2005. Quality Print had arranged for the carriage with Maersk through freight forwarder Caniz International Corp., who in turn booked the shipment with Maersk through the freight forwarder Ocean Express Miami.

After trucking from Milwaukee to Chicago, the first three containers were carried by rail to New Orleans, transported to the Maersk sea terminal and loaded on board the MAERSK FREMANTLE for carriage to Guatemala. Due to rail congestion at Chicago, which may have been compounded by some delay on the part of the shipper with respect to stuffing and delivery, the fourth container, the "New Orleans Container," did not arrive at New Orleans in time to make the sailing cut-off deadline for the MAERSK FREMANTLE.

On August 29, 2005, Hurricane Katrina, one of the worst natural disasters in this country's history, struck New Orleans. The Maersk sea terminal, along with the entire city of New Orleans, sustained extensive damage as a result of Hurricane Katrina and the consequent failure of New Orleans' levy system. As a result, the terminal facility had to discontinue its operations. The New Orleans Container was not carried forward to Guatemala, but instead, pursuant to mutual agreement, was picked up by Quality Print's cargo underwriters in November 2005 to determine the extent of the damage to the press, if any. An initial joint survey took place on November 9, 2005 at the Cajun Distribution facility in Jefferson, Louisiana. The survey of the container revealed that it contained five individually packaged "skids" of printing press components. The surveyors attending did not find any apparent damage to the printing press components, but recommended prompt testing of the printing press after assembly. Despite repeated demands thereafter, Quality Print has not provided Maersk with any information whatsoever as to the condition of the printing press, testing, or efforts to mitigate any damage subsequent to this first joint survey in November 2005.

The Litigation in Panama and Guatemala

On Friday, October 26, 2005, Quality Print commenced an in rem action against Maersk in the Second Maritime Court of Panama, claiming a total loss of the printing machinery carried in the four ocean containers. The claimed damages included not only the full invoice value of the machinery ($550,000.00), but also the replacement cost of the machinery ($1,500,000.00). In addition, the Complaint alleged numerous consequential losses, including loss of earnings, financial expenses, and "moral damages" for a total claim of $8,415,000. Statement ¶ 15. On October 28, 2005, Quality Print filed a second, in personam action against Maersk based on the same alleged loss as the in rem action. In connection with these proceedings, Quality Print obtained an Order of Arrest for the M/V MAERSK FREMANTLE and the M/V MARGRETHE MAERSK.

To avoid arrest of its vessels in Panama, Maersk posted a $10,000,000 cash bond as security for both claims in Panama. While cargo claimants normally accept the posting of security in the form of a Letter of Undertaking from the vessel's P & I Club ("Club LOU"), Quality Print refused to accept a Club LOU unless Maersk agreed to waive the forum selection clause found in the Bill of Lading/contract of carriage. The forum selection clause, as this Court previously held, requires that any action by Quality Print against Maersk in connection with allegations of damages to the printing press must be brought in the Southern District of New York.

Quality Print then commenced a third action in Guatemala on October 30, 2006, relating to the same shipment of printing machinery. Naming Maersk Guatemala S.A. as the defendant, Quality Print cited the booking confirmation as contractual evidence in support of the claim and stated that the shipping company Maersk Sealand "operates and responds in Guatemala under the trade name of Maersk Guatemala, Sociedad Anonima." Declaration of A. Andrew Tsukamoto ("Tsukamoto Decl.") at ¶¶ 22-24. The Guatemala action included a petition for the appointment of an intervenor by the court in Guatemala which permitted the physical occupation and oversight of the Maersk office in Guatemala City. The presence of the intervenor was a significant disruption to the operation of the office. Maersk was subsequently successful in having the order for an intervenor rescinded.

Maersk has incurred, and continues to incur, significant legal fees defending the duplicative and parallel lawsuits brought by Quality Print in both Panama and Guatemala and continues to incur significant damage in connection with the cash security which it was forced to post in Panama in order to avoid the arrest of its vessels transiting the Panama Canal.

On May 27, 2009, the Supreme Court of Justice, Ci of Panama, Civil Bench, issued an opinion on Maersk's appeal of the attachment, finding that the majority of the $10 million attachment was unsupported by the evidence and reducing the amount of the arrest to $783,000.00.

The Instant Action

Maersk filed its complaint on April 10, 2006, its amended complaint on August 22, 2006, and obtained an order of attachment on August 31, 2006, in the amount of $650,000. On April 24, 2007, Maersk filed a Second Amended Complaint ("SAC").

The SAC sought (1) an injunction enforcing the forum selection clause in the contract of carriage; (2) damages arising from the commencement of actions in Panama prohibited by a service contract incorporated in the contract of carriage; (3) damages resulting from abuse of process in the actions in Panama; (4) a declaration that Maersk is not liable for any damage to the printing machinery; (5) enforcement of limitations of liability pursuant to the United States Carriage of Goods by Sea Act ("US COGSA"), Pub.L. 16 No. 74-521, 49 Stat. 1207 (1936) (codified at 46 U.S.C. §§ 30701 et seq.); (6) damages for demurrage, storage, and other charges incurred on the containers; (7) attorneys' fees; and (8) indemnity from freight forwarders.

Quality Print moved to vacate the attachment and to dismiss the SAC for lack of jurisdiction and failure to state a claim. The motion was denied in the April 25 Opinion.

On June 13, 2008, counsel for Quality Print was granted leave to withdraw. Since that time Quality Print has not replaced its New York counsel and has defaulted on all subsequent actions. On June 30, 2008, Maersk served a Notice to Admit on Defendant Quality Print via Federal Express. A copy was likewise served on Quality Print's former attorneys in New York. Quality Print failed to respond to the Notice to Admit, which is therefore regarded as fully admitted. See Fed. R.Civ.P. 36(a)(3); Herrera, 143 F.R.D. at 550.

On December 5, 2008, in response to Maersk's unopposed motion, the Court enjoined Quality Print from proceeding with litigation on the merits relating to the shipment of the printing press in any forum other than the United States District Court for the Southern District of New York in accordance with the forum selection clause incorporated in the contract of carriage. See December 5 Opinion, 590 F.Supp.2d at 533-35. Summary judgment was also granted in favor of Maersk pursuant to COGSA § 4(5) on its fifth cause of action, thereby limiting Maersk's liability for damages relating to the New Orleans Container to $2,500. Id. at 532.

Counsel for Maersk sent a copy of the December 5 Opinion by Federal Express and e-mail directly to Quality Print in Guatemala and also to Carreira-Pitti PC Abogados, Quality Print's attorneys in Panama. Service by these means was confirmed as of December 12, 2008. In its cover letter, Maersk made the following demand:

In light of the above, Maersk hereby demands that any litigation brought by Comercializadora de Calidad, S.A. (a/k/a Quality Print), its agents and underwriters against Maersk in any jurisdiction outside the United States District Court for the Southern District of New York, including actions presently pending in...