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Mediterranean Shipping Co., S.A. v. Best Tire Recycling, Inc.

United States Court of Appeals, First Circuit

February 6, 2017

MEDITERRANEAN SHIPPING CO., S.A., Plaintiff, Appellee,
v.
BEST TIRE RECYCLING, INC., Defendant, Appellee,
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]

          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.

          Before Howard, Chief Judge, Torruella and Kayatta, Circuit Judges.

          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 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 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 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. Stand ...


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