Hale Container v. Houston Sea

PUBLISH

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

No. 95-3201

District Court No. 90-216-CIV-T-21A

HALE CONTAINER LINE, INC., Plaintiff-Counter-Defendant-
Cross-Claimant-Appellee,

SOCIETE GUYANAISE DE CONSEILS IMMOBILERS (SOGUCI),

Plaintiff-Appellant,

versus

HOUSTON SEA PACKING CO., INC.,

Defendant-Cross-Defendant-
Counterclaimant-Appellant,

MERIDIAN SHIP INCORPORATED,

Defendant-Cross-Defendant,

FABRICATED PRODUCTS OF TAMPA, INC.,

Defendant-Cross-Defendant-
Cross Claimant,

D&D WELDING FABRICATION,

Defendant-Cross-Defendant-
Cross Claimant,

PROJECT LOGISTICS AND TRANSPORTATION, INC.,
TUG “ALEXANDRA HALE” in rem, BARGE “LIBERTY TRADER” in rem,
 Defendants-Appellees,
NATIONAL CARGO BUREAU,

Defendant-Cross-Claimant-
Cross-Defendant,

LONDON OFFSHORE CONSULTANTS, INC.,

Defendant-Cross-Defendant.

No. 95-3296

District Court No. 90-216-CIV-T-21A

HALE CONTAINER LINE, INC., Plaintiff-Counterdefendant-
Cross-Claimant,

SOCIETE GUYANAISE DE CONSEILS IMMOBILERS (SOGUCI),

Plaintiff-Appellee,

versus

HOUSTON SEA PACKING CO., INC.,

Defendant-Cross-Defendant-
Counterclaimant-Appellant,

MERIDIAN SHIP INCORPORATED,

Defendant-Cross-Defendant,

FABRICATED PRODUCTS OF TAMPA, INC.,

Defendant-Cross-Defendant-
Cross-Claimant,

D&D WELDING FABRICATION,

Defendant-Cross-Defendant-
Cross Claimant,

2
PROJECT LOGISTICS AND TRANSPORTATION, INC.,
TUG “ALEXANDRA HALE” in rem, BARGE “LIBERTY TRADER” in rem,

Defendants,

NATIONAL CARGO BUREAU,

Defendant-Cross-Claimant-
Cross-Defendant,

LONDON OFFSHORE CONSULTANTS, INC.,

Defendant-Cross-Defendant.

Appeals from the United States District Court for the
Middle District of Florida

(April 3, 1998)

Before HATCHETT, Chief Judge, BIRCH, Circuit Judge, and CLARK, Senior Circuit Judge.

CLARK, Senior Circuit Judge:

Defendant Houston Sea Packing Co., Inc. ("Houston") appeals the district

court's judgments against it in favor of plaintiffs Hale Container Line, Inc. ("Hale") and

Societe Guayanaise De Conseils Immobiliers (“SOGUCI”). SOGUCI cross-appeals from

the judgment against it in favor of Hale, the National Cargo Bureau (“NCB”), and the

Alexander Hale and Liberty Trader in rem, and the amount of damages it was awarded

against Hale. We affirm the district court's judgment.

I. BACKGROUND

3
 In July 1989, Jean Pierre Porry, a representative of SOGUCI, contracted with

Project Logistics and Transportation, Inc. ("Project Logistics") to arrange for the transport

of 210 mobile homes from Tampa, Florida, to French Guyana.1 A Project Logistics

representative contacted Craig Firing of Meridian Shipping Inc. ("Meridian"), a shipping

agency. Firing contacted Don Jones, the owner of Houston concerning the transportation of

the mobile homes and the construction of a stanchion assembly to hold the homes during

shipment.2 Jones gathered information to determine the method and costs of transporting the

homes, and contacted London Offshore, a marine surveying company that approved vessels

for hauling cargo, to assist him. On July 31, 1989, Meridian and Houston entered into a

"Conlinebooking" Liner Booking Note3 with Project Logistics for the shipment of 210

mobile homes on two voyages. The Booking Note named the "carrier" as "Meridian

Ship/Houston Sea-Pack," the "merchant" or “shipper” as "Project Logistics and

Transportation, Inc.," and the "vessel" as "Tug Barge(s) TBN." On August 4, 1989, Project

Logistics and Florida Mercury Export, Inc.,4 as SOGUCI's representative, executed a

1
SOGUCI had previously contracted with the European Space Agency to provide
housing for workers constructing the Space Center in French Guyana. SOGUCI contracted with
Florida Mercury to purchase the mobile homes from Fleetwood Homes. One of SOGUCI's
principles, Michel Porry, asked his brother and maritime specialist Jean Pierre Porry to make the
arrangements for the transportation of the mobile homes to French Guyana.
2
R2-99 at 3; R11-9, 11, 13-14.
3
In admiralty, a “liner” is a cargo operation that sails along fixed routes on a
preannounced schedule. Grant Gilmore & Charles L. Black, Jr., The Law of Admiralty 13 (2nd
ed. 1975). A shipper reserves or “books” space on a liner for the cargo. Id.
4
Florida Mercury Export, Inc. was a U.S. corporation set up by Jacques Gallet, a Porry
(continued...)

4
Booking Note which named the "carrier" as "Project Logistics," the “merchant” or “shipper”

as “Florida Mercury,” and the "vessels" as "Tug: ‘Carol Hale’ Barge: ‘Liberty Trader.’"

Both booking notes gave the time for shipment as "September 1989."

Houston contacted design engineer Arthur Tertyshny of Design Research for

stress analysis of the stanchion system. Tertyshny provided drawings and calculations

pertaining to a system containing three tiers of mobile homes.

On August 28, 1989, Hale, as "Owner," and Houston, as "Charterer," executed

a Time Charter5 in which Hale chartered the tug "Alexandra Hale" and barge "Liberty

Trader" to Houston. The Time Charter provided for payment as follows:

CHARTER HIRE PAYABLE: $100,000 wired to Owner's bank
prior to departure from Baltimore. $150,000 wired to Owner's
bank no later than 72 hours after departure from Tampa to South
America on first and any successive trips, adjusted to projected
charter hire to be earned.6

The Time Charter provided:

4. PAYMENT AND DEFAULT: In the event Charterer shall
fail to pay hire or other money due hereunder, promptly on the
date thereof, or fail to comply with any of the terms, provisions

4
(...continued)
relative, to provide for the payment of the mobile homes and ocean freight in U.S. currency.
5
“A time charter is a contract of affreightment to use a ship in order to ship goods for a
specific period of time. The carrier makes the ship’s capacity available to the time charterer for
this purpose. The charterer bears the expenses connected with each voyage and pays hire to the
carrier based upon the time the ship is under charter.” Thomas J. Schoenbaum, 2 Admiralty and
Maritime Law § 11-5 (2nd ed. 1994). An “affreightment” is a contract with a ship-owner to hire
a ship, or part of it, for the carriage of goods, and is generally in the form of either a charter-
party or a bill of lading. Black’s Law Dictionary 60 (6th ed. 1990).
6
Pltf. Hale Trial Exh. 48 at 1.

5
 or conditions hereof, . . . Owner shall have the option of
terminating this agreement and Charterer shall forthwith
surrender possession of said vessel to Charterer; . . . and
Charterer shall continue to remain liable for all sums then due
hereunder, as well as for any and all other damages suffered by
Owner.7

***
12. LIENS: . . . Owner shall have a lien on all cargoes and
subfreights for all charter payments and general averages.8

***

16. Owner and Charterer acknowledge that Charterer plans to
add stanchions to the Liberty Trader. In consideration thereof,
Charterer shall be fully responsible for, and fully indemnify
Owner for, all claims, liability, costs, or expenses of any kinds,
including attorney fees, arising in any way or degree from
addition of stanchions by Charterer to the Liberty Trader. . . .9

The Alexandra Hale and Liberty Trader arrived in Tampa, Florida on

September 6, 1989. Pursuant to the Time Charter, Houston arranged for an inspection and

survey of both vessels. Houston discovered that the Liberty Trader had a breakwater on the

bow that would displace five mobile homes on the bottom bow tier. Houston then decided

to construct a fourth tier at the aft end of the barge to accommodate the displaced mobile

homes.10

7
Pltf. Hale Trial Exh. 48 at 3 ¶ 4.
8
Pltf. Hale Trial Exh. 48 at 4 ¶ 12.
9
Pltf. Hale Trial Exh. 48 at 6 ¶ 16; Deft. Houston Trial Exh. 1 at 6 ¶ 16.
10
Although Jones testified that he discussed this with Bill Lowe of London Offshore and
engineer Tertyshny, Tertyshny stated that the decision to place the fourth tier was made "after he
was out of it," and that if questioned about the possibility of adding a fourth tier, he would have
(continued...)

6
 Pursuant to the Booking Note entered into between Houston and Project

Logistics, Project Logistics was responsible for providing stevedoring services for the

loading of the mobile homes onto the barge, securing and lashing the homes onto the

stanchion system, and insuring that the nuts and bolts were securely fastened and tightened.11

On September 18, 1989, James McElroy, Project Logistics representative, and

Harry C. Anderson, Master of the M/V Alexandra Hale, executed a Liner Bill of Lading12 in

Tampa, Florida, and Meridian, as agent, executed a Liner Bill of Lading in Baltimore,

Maryland, for the first shipment of the mobile homes. Each Bill of Lading contained a

General Paramount Clause, providing that the Carriage of Goods by Sea Act applied, and

included a list of terms and conditions, including:

5. The Scope of the Voyage.
As the vessel is engaged in liner service the intended voyage
shall not be limited to the direct route but shall be deemed to
include any proceeding or returning to or stopping or slowing
down at or off any ports or places for any reasonable purpose

(...continued)
changed his stress calculations.
11
The stanchions were built by, obtained from, delivered by, and pre-assembled by
Fabricated Products of Tampa (“Fabricated Products”). The stanchions were welded to the barge
by Fabricated Products, D&D Welding Fabrication, and a third night crew. Project Logistics
employed Metro Stevedores to load and discharge the mobile homes from the barge, bolt, secure
and lash the mobile homes to the stanchion system, and insure that the nuts and bolts were
securely fastened and tightened; and employed other stevedores to discharge the mobile homes
in French Guyana.
12
A Bill of Lading is a “document which is signed by the carrier or his agent
acknowledging that goods have been shipped on board a specific vessel that is bound for a
particular destination and stating the terms on which the goods are to be carried. . . . Each
shipping line generally has its own form of bill of lading.” 2 Schoenbaum, § 10-11 at 44 (2nd ed.
1994).

7
 connected with service including maintenance of vessel and
crew.

***

9. Live Animals and Deck Cargo shall be carried subject to the
Hague Rules . . . with the exception that notwithstanding
anything contained in Clause 19 the Carrier shall not be liable
for any loss or damage resulting from any act, neglect or default
of his servants in the management of such animals and deck
cargo.

***
13. Delay.
The Carrier shall not be responsible for any loss sustained by the
Merchant through delay of the goods unless caused by the
Carrier's personal gross negligence. . . .13

The first shipment of homes departed on board the barge from Tampa on

September 23, 1989. However, after the vessels departed, the Tug began experiencing

engine problems and had to return to Tampa for repairs. After the repairs were completed,

the vessels again left Tampa. While en route to French Guyana, the Tug put into a port in

Puerto Rico because one of its crew became ill, and later put into Martinique because of more

engine problems. The Tug arrived in French Guyana on October 13, 1989. Upon arrival, it

was noted that the stanchions and supports for the fourth tier of the last row of mobile homes

had started to bend, causing some of the mobile homes to shift and sustain minor damage.

Jones testified that the damage to the mobile homes was caused by shifting due to the bolts

not being properly tightened by the stevedores or caused while the stevedores were unloading

the homes. SOGUCI'S insurance underwriters' surveyor, Christian Renaux, reported that the

13
Hale Trial Exhibits 49 and 85 at 2.

8
damage was caused by the improper modification of the stanchion system, a failure to

properly tighten the connecting bolts, and inadequate bracing of the structure due to welding

of stanchions on the deck instead of plates on the deck. Renaux advised that the deformed

stanchions should be replaced, and the mobile homes should be transported on only three

levels. One of SOGUCI’s owners, Michael Porry, testified that five mobile homes were

damaged as a result of the first voyage, and were repaired quickly. Jean-Pierre Porry,

another SOGUCI owner, testified that he never objected to the transport of the mobile homes

in four, rather than three, tiers.

A dispute arose between Houston and Hale concerning the amount of charter

hire and other charges due arising from the first voyage.14

Based on the insistence of its insurers, SOGUCI notified Houston and Project

Logistics that it would require a survey of the vessels before departure on the second voyage.

Houston subsequently hired NCB as surveyor to assure that the mobile homes were properly

secured prior to the sailing of the vessels.15 NCB first viewed the barge when it was two-

thirds loaded and examined the tightness of the nuts and bolts and the securing of the lashing.

NCB marine surveyor Arthur Evans Collins stated that, if the nuts and bolts were not

14
Although Houston had paid the $100,000.00 due according to the Time Charter prior
to the departure of the tug and barge from Baltimore, Maryland, and had transferred $150,000.00
to Hale three days after the commencement of the first voyage, no further amounts had been
paid. Hale claimed it was owed $129,405.05 upon the completion of the first voyage, but
Houston disputed the amount. The parties agreed to compromise for $99,605.58.
15
Although NCB was initially asked to do a "trip and tow" survey as to the
seaworthiness of the tug and the adequacy of the tug's towing gear, they declined to do so.

9
tightened to the stanchion system, the system "would eventually work loose" causing

possible damage to the mobile homes and bending to the system. NCB's surveyors examined

the nuts, bolts, and lashing on the first tier physically, and on the other tiers visually. Their

examination on the first tier revealed that some of the nuts and bolts were extremely loose.

Their examination of the other tiers did not reveal whether or not the nuts were properly

torqued, which would permit the nuts to back off the bolt. NCB’s surveyors were not

notified that the sailing of the barge was conditioned on the issuance of a trip and tow survey

ordered by SOGUCI, and were not notified of Renaux's recommendations for the second

voyage.

On November 13, 1989, Project Logistics advised Houston that the stevedores

had completed the loading, lashing, and securing of the mobile homes on the barge. Houston

then advised Project Logistics that some of the nuts and bolts were loose. However, later that

day, after the crew had rectified the loose nuts and bolts, NCB issued its document stating

that all of the mobile home cargo was properly secured. The NCB document was accepted

by SOGUCI and the vessels were permitted to sail.

Houston was to receive payment from Project Logistics after the bill of lading

was issued for the cargo. After the vessels sailed, Project Logistics refused to pay Houston

the freight, demurrage and other charges due to it. On November 20, 1989, Houston required

that SOGUCI make payment in the amount of $456,250.00. When SOGUCI did not pay,

Houston instructed Hale to return the tug and barge to the nearest U.S. port. Hale ignored

10
Houston's instructions, unilaterally canceled the time charter, and entered into a separate

agreement with Project Logistics.16

On November 25, 1989, while the mobile homes were under the care, custody,

and control of Hale and/or Project Logistics en route to French Guyana, the mobile homes

on the fourth tier of the last row shifted. At Hale's instruction, the captain took the barge into

Martinique. The shifting of the stanchions caused one mobile home to drop down on the

mobile home below it, and to puncture a small hole in the roof. There was no other

movement or damage to the mobile homes in the other rows. As a result of a dispute

between Hale and SOGUCI concerning the manner in which the mobile homes would be

transported to French Guyana, SOGUCI instituted legal proceedings against the vessels in

Martinique. The vessels were held under arrest in Martinique from December 8 until

December 29, 1989. Fifteen mobile homes were off loaded and shipped to French Guyana

on another vessel, and the vessels then sailed with the remaining mobile homes. The mobile

homes arrived in French Guyana in January 1990, and were again inspected by Renaux.

Renaux testified that all of the mobile homes sustained damage because the steel structures

were loose and the stanchions were bent, and he observed many loose bolts after both

voyages.

16
After the second voyage commenced, Hale advised Houston that it required payment
of all sums due by November 16, 1989. Hale also advised Houston that if it failed to make
timely payments, Hale intended to exercise its rights under the Time Charter and maritime law to
withdraw the vessels from service and to lien subfreights.

11
 In February 1990, Hale filed this complaint in admiralty against Houston,

seeking its unpaid charter hire, fuel and lube oil expenses, indemnification for any sums due

to the cargo claimant from SOGUCI’s pending action in Martinique, payment for the

$70,895.38 of expenses incurred during the emergency call at Fort de France, Martinique,

and for lost profits in the amount of $100,000.00. It also sought indemnification for any

sums due to the cargo claimant from the action pending in Martinique, damages for

detention, loss of profit, port charges, pilotage, and stevedoring costs from Meridian, NCB,

D&D Welding, and Fabricated Products. Houston counterclaimed against Hale for damages

from Hale’s breach of the charter agreement. NCB cross-claimed against Houston, Meridian,

D&D Welding, and Fabricated Products for indemnification or contribution on the claims

brought by Hale, and against Houston for breach of contract to recover its unpaid surveying

fees. SOGUCI subsequently filed a complaint for $700,000.00 in damages to the shipment

of mobile homes against Houston, NCB, London Offshore, Hale, and Project Logistics.17

The case proceeded to a non-jury trial.18 Following the submission of post-trial

briefs, the district court entered judgment for NCB, Hale, and the Alexandra Hale and Liberty

17
By stipulation, SOGUCI’s action against London Offshore was dismissed.
18
Meridian was in Chapter 7 bankruptcy, and the case proceeded without its
participation. Project logistics never entered an appearance and, based on the parties’ tacit
agreement that the case proceed to trial in the absence of Project Logistics, without any effort to
default Project logistics, the district court found Project Logistics effectively dismissed. D&D
Welding was dismissed as a party at the commencement of the trial, and summary judgment was
granted against Hale on its claim against Fabricated Products. Hale and NCB’s cross-claims
against London Offshore were stricken, and NCB’s cross-claims against Fabricated Products and
D&D Welding were dismissed.

12
Trader on SOGUCI’s claims against them. It ruled against Hale on its claims against NCB

and Houston for indemnity and contribution. It entered judgment for Hale against Houston

on its charter party claim for $378,325.03 with interest, and “on each of Houston’s claims

against Hale.” It entered judgment against NCB on its breach of contract claim against

Houston. After Houston and SOGUCI submitted a stipulation as to the exchange rate, the

district court granted judgment for SOGUCI on its claims against Houston for $337,049.52

with interest. Houston appealed, and SOGUCI cross-appealed. Houston and SOGUCI timely

filed appeals from the district court’s judgment on all claims except SOGUCI’s against Houston, our

case no. 95-3201. After the district court entered judgment for SOGUCI against Houston, Houston

and SOGUCI filed timely appeals, our case no. 95-3296.

II. DISCUSSION

A. “Carriers” under COGSA

Houston argues that the district court erred in finding that it was not a “carrier”

or independent contractor of the carrier, Project Logistics, and thus entitled to the limitations

under the Carriage of Goods by Sea Act (“COGSA”).19 SOGUCI maintains that the district

court erred in finding the vessels, in rem, “carriers” under COGSA.

Under COGSA,20 “the carrier in relation to the loading, handling, stowage,

carriage, custody, care, and discharge” of goods by sea is subjected to certain duties and

19
46 U.S.C. § 1300 et. seq.
20
46 U.S.C. §§ 1300-1315.

13
entitled to certain rights.21 The statute defines a carrier as “the owner or charterer who enters

into a contract of carriage with a shipper.”22 An owner may be a “carrier” either directly as

the signor of a contract of carriage, indirectly by a charterer’s authority to bind the owner by

signing bills of lading as “for the master,”23 or otherwise has some privity of contract with the

shipper.24 A charterer may be a “carrier” as established by the vessel’s charter, its acts of

accepting and loading goods into containers owned by the charterer, and issuance of the bill

of lading.25 More than one party may be a carrier, and where the owner has not completely

relinquished possession, command and navigation of the ship to the charterer, both the owner

and charterer may be held jointly liable.26 A vessel is a “carrier,” and thus liable under

COGSA, where (1) the ship transported and discharged the cargo; (2) the bill of lading was

21
46 U.S.C. § 1302.
22
46 U.S.C. § 1301(a).
23
Matter of Intercontinental Properties Management, S.A., 604 F.2d 254, 258 n. 3 (4th
Cir. 1979)); EAC Timberlane v. Pisces, Ltd., 745 F.2d 715, 719 (1st Cir. 1984); Pacific
Employers Insurance Company v. M/V Gloria, 767 F.2d 229, 235-236 (5th Cir. 1985); J. Gerber
& Co., Inc. v. M/V Inagua Tania, 828 F.Supp. 458, 460-461 (S.D. Tex. 1992) (absent bills of
lading showing contractual relationship between owner and shipper and evidence that the
charterer had actual or apparent authority to bind the owner, owner is not a “carrier” subject to
liability); Otto Wolff Handelsgesellschaft v. Sheridan Transportation Company, 800 F.Supp.
1359, 1362-1363 (E.D. Va. 1992).
24
EAC Timberlane, 745 F.2d at 719.
25
Yeramex International v. S.S. Tendo, 595 F.2d 943, 946-947 (4th Cir. 1979); Dempsey
& Associates v. Steamship Sea Star, 461 F.2d 1009, 1014 (2nd. Cir. 1972); Joo Seng Hong Kong
Co., Ltd. v. S.S. Unibulkfir, 483 F.Supp. 43, 45-47 (S.D. N.Y. 1979); Trans-Amazonica Iquitos,
S.A. v. Georgia Steamship Company, 335 F.Supp. 935, 937-938 (S.D. Ga. 1971).
26
Trans-amazonia Iquitos, S.A., 335 F.Supp. at 940-941 (S.D. Ga. 1971); J. Gerber &
Co., 828 F.Supp. at 460.

14
issued “for the master;” (3) no contractual relationship existed which absolved the ship and

its owner from liability for the cargo.27 The COGSA defenses and protections may be

extended to the carrier’s agents and contractors by an express provision, a “Himalaya clause,”

in the bill of lading.28

In considering the COGSA limitation of liability, this court construes Himalaya

clauses strictly limiting their application to the intended beneficiaries.29 The clause must

express the understanding of the contracting parties through language expressing a clear intent

to extend the benefits to a well-defined class of readily identifiable persons.30 A reference to

a class of persons such as “agents” and “independent contractors” clearly indicates that the

contract includes all persons engaged by the carrier to perform the functions and duties of the

carrier within the scope of the carriage contract, and no further clarity, such as enumeration

27
Industria Nacional Del Papel, CA. v. M/V “Albert F,”, 730 F.2d 622, 624 (11th Cir.),
cert. denied, 469 U.S. 1037, 105 S.Ct. 515, 83 L.Ed. 2d 404 (1984); Compagnie De Navigation
Fraissinet & Cyprien Fabre, S.A. v. Mondial United Corporation, 316 F.2d 163, 172-173 (5th
Cir. 1963); Otto Wolff Handelsgesellschaft, 800 F.Supp. at 1362-1363.
28
Certain Underwriters at Lloyds’ v. Barber Blue Sea Line, 675 F.2d 266, 269 (11th Cir.
1982); Generali v. D’Amico, 766 F.2d 485, 487-488 (11th Cir. 1985); Taisho Marine & Fire
Insurance Co., Ltd. v. Vessel “Gladiolus”, 762 F.2d 1364, 1367 (9th Cir. 1985) (whether an
entity is the intended beneficiary of a Himalaya clause is determined by the contractual
relationship between the entity and the carrier, and the natures of services performed compared
with the carrier’s responsibilities); Agrico Chemical Company v. S/S Atlantic Forest, 620 F.2d
487, 489 n. 1 (5th Cir. 1980); Almacen Boyaca CIA, LTDA v. Gran Golfo Express, 771 F.Supp.
354, 356 (S.D. Fla. 1991); Agrico Chemical Co. V. § Atlantic Forest, 459 F.Supp. 638, 647
(E.D. La. 1978)(carrier may not insulate itself from liability by use of independent contractors).

29
Certain Underwriters at Lloyds’, 675 F.2d at 268.
30
Id. at 269-270.

15
of the parties, is necessary.31 To determine whether a party is an independent contractor

referenced in a Himalaya clause, a court should (1) compare the nature of the services

provided by the party with the carrier’s responsibilities under the bill of lading or contract of

carriage,32 and (2) consider whether the independent contractor’s duty had been fulfilled at

the time when the liability was incurred.33 Further, a contractor will be entitled to the benefits

of a Himalaya clause where there is a manifest consent by the carrier that the contractor shall

act on its behalf and subject to its control, and consent by the contractor to so act.34

As the district court noted, COGSA governed the carriage of the mobile homes

from Tampa to French Guyana by virtue of clauses incorporated in the bills of lading. Each

bill of lading contained a "Clause Paramount" which provided that COGSA applied to the

carriage of the cargo a "Clause 9" which provided that deck cargo shall be carried subject to

COGSA's provisions, and a “Clause 19" which provided for a Himalaya clause extension of

the rights provided to the carrier to agents, servants, and independent contractors of the

carrier.

The district court found that the vessels, in rem, qualified as carriers under

COGSA because they (1) transported and discharged the cargo of the mobile homes, and (2)

the master of each voyage, by transporting the cargo, ratified the bills of lading. It found that

31
Id.
32
Taisho Marine & Fire Insurance Co., 762 F.2d at 1367.
33
Hiram Walker & Sons, Inc. V. Kirk Line, 877 F.2d 1508, 1516 (11th Cir. 1989).
34
Grace Line, Inc. v. Todd Shipyards Corporation, 500 F.2d 361, 373 (9th Cir. 1974).

16
Project Logistics was also a carrier as it signed both bills of lading, booked the cargo through

its booking note with SOGUCI, hired the stevedores to load and discharge the cargo, received

payment from the shipper, SOGUCI, and disbursed payment to other parties. However, it

concluded that Houston was neither an agent nor independent contractor of Project Logistics.

It noted that Houston was not directly employed by Project Logistics, did not receive payment

for its services from Project Logistics, had no contractual relationship with Project Logistics,

and was not rendered an agent by Project Logistics as Project Logistics did not consent to

have Houston act on its behalf. Although the July 31, 1989 booking note listed “Meridian

Ship/Houston Sea-Pack” as the carrier, the district court noted that Houston’s representative,

Don Jones, was neither a party to the contract nor signed the booking note.

The evidence supports the district court's finding that Houston was not a

“carrier” entitled to COGSA benefits. Houston was neither an agent nor contractor of shipper

Project Logistics. Houston was contacted by a representative of Meridian Shipping, Inc., and

Houston and Meridian proposed a shipping plan to Project Logistics. The July 31, 1989, and

August 4, 1989, Booking Notes were executed, respectively, by representatives of Project

Logistics and Meridian naming "Meridian Ship/Houston Sea-Pack" as the carrier and Project

Logistics as the merchant, and by representatives of Project Logistics and Florida Mercury

naming Project Logistics as the carrier. Neither Houston nor its representative were a party

to the July 31, 1989 contract.

On August 28, 1989, representatives of Houston and Hale executed a Time

Charter in which Hale chartered the vessels Alexandra Hale and Liberty Trader to Houston.

17
On September 18, 1989, a representative of Project Logistics and Harry C. Anderson, Master

of the M/V Alexandra Hale, executed a Bill of Lading listing SOGUCI as the shipper and

consignee, and the Liberty Trader as the vessel. Meridian, as Houston’s agent, executed a

separate Bill of Lading for the first shipment of mobile homes.

On November 13, 1989, a representative of Project Logistics executed a Bill of

Lading for the second shipment of mobile homes, listing SOGUCI as the shipper and

consignee, and the vessel as Liberty Trader; Meridian, as Houston’s agent, executed a Bill of

Lading for the shipment of mobile homes. On November 16, 1989, Project Logistics'

representative executed a corrected Bill of Lading for the second shipment of mobile homes,

listing SOGUCI as the shipper and consignee, and Liberty Trader as the vessel. There was

no evidence presented that showed that Project Logistics entered into a contract of carriage

or bill of lading with Houston, consented to have Houston act on its behalf as an agent, or was

in privity with Houston. Project Logistics signed both bills of lading, booked the cargo

through its booking note with SOGUCI, hired the stevedores to load and discharge the cargo,

received payment from the shipper, and disbursed the funds to other parties.

Houston claims that the district court failed to consider SOGUCI’s stipulation

that “Project Logistics contracted with Houston to design a stanchion support system to carry

110 mobile homes per voyage on the deck of the barge.”35 It also claims that the district court

failed to consider that the provided tug, barge and stanchion system were fundamental to the

performance of the contract for ocean carriage of the cargo from Tampa to Guyana, and that

35
R2-104 at 2 ¶6; R2-99 at 3 ¶A.

18
written agreements were entered into between Project Logistics and Houston, specifically the

July 31, 1989 Liner Booking Note signed by representatives of “Meridian Ship/Houston Sea

Pack” and Project Logistics stating that the carrier is “Meridian Ship/Houston Sea” and the

merchant or shipper is Project Logistics; the August 4, 1989 communication from George

Mandeville of Project Logistics to Don Jones of Houston indicating agreement of certain

loading and support requirements to be provided by Houston; the August 7, 1989

communication from Don Jones of Houston agreeing to conditions set forth in Project

Logistics’ August 4 transmittal; and the August 8, 1989 agreement signed by representatives

from Project Logistics, “Meridian Ship/Houston Sea Pack,” and Houston Sea-Packing.

The evidence showed that Houston was originally contacted by Meridian

concerning the methods and costs of transporting the mobile homes and the construction of

a stanchion system. In July 1989, Meridian and Houston entered into a booking note with

Project Logistics for the shipment of the mobile homes; this booking note showed Meridian

Ship/Houston Sea Pack as the “carrier” or “owner” but indicated that the vessel was to be

named later. However, the July 1989 booking note was replaced by the August 4, 1989

booking note which was signed by Project Logistics and Florida Mercury and which named

the vessels.

The September 18, 1989 bill of lading showed SOGUCI as the consignee or

shipper, and was signed by a representative of the carrier, Project Logistics, and by the Master

of the M/V Alexandra Hale, Harry C. Anderson. The November 13, 1989 bill of lading

showed SOGUCI as the consignee or shipper, and was signed by a representative of the

19
carrier, Project Logistics. Houston, however, did not issue either bill of lading. Houston, by

virtue of the “Conlinebooking” Liner Booking Note it entered into with Project Logistics, was

not responsible for the loading of the mobile homes onto the barge, securing and lashing the

homes onto the stanchion system, or insuring that the nuts and bolts were securely fastened

and tightened.

Houston argues that its carrier status was determined by the district court's

finding that "pursuant to the time charter between Hale and Houston, the Master of the vessels

signed the bills of lading on behalf of Houston, rather than Hale” or, alternatively, that by

sailing the vessels with the mobile homes on board, Houston impliedly ratified the bills of

lading. However, Houston mischaracterizes the district court's findings.

In considering the vessels' "carrier" status, the district court noted the

qualifications for a vessel, in rem, to qualify as a carrier, and found that the vessels met those

requirements because a “master's" sailing of the vessel with cargo aboard constitutes a

ratification of the bill of lading. The district court made no findings as to Houston's implicit

ratification of the bills of lading.

In considering Hale's "carrier" status, the district court found that:

"[n]o Hale representative signed the November 13, 1989 bill of lading.
Although Captain Anderson signed the September 18, 1989 bill of lading, he
did so without actual or apparent authority to bind Hale as the vessels' owner.
The time charter between Hale and Houston defined the respective duties of
each party ... and provided that the captain would serve under the orders and
directions of the charterer, Houston, with respect to employment and agency.
The time charterer further provided that the charterer's agent would sign bills
of lading in place of the captain. Captain Anderson, therefore, signed the bill
of lading in contravention of the time charter. Moreover, any authority

20
 conferred on Captain Anderson to sign the bills of lading flowed from Houston
as a principal to the Captain as its agent. . . .36

The district court did not find that the Master signed the bills of lading on behalf

of Houston, but only that he did so without actual or apparent authority, and any of his

authority would have flowed from Houston under the time charter. Similarly, as the district

court noted in denying Hale’s “carrier” status claim, Houston neither booked the cargo nor

hired stevedores to load the cargo on the vessel, and did not receive any payment directly

from the shipper, SOGUCI.

The district court’s conclusions that the vessels in rem were carriers and that

Houston was not a carrier are correct.

B. Liability under COGSA

SOGUCI maintains that the district court erred in finding that the vessels were

entitled to the $500 per package limitation of liability under COGSA. It contends that the

district court improperly found that the vessel’s captain exercised due diligence in loading and

stowing the cargo on the second voyage, and that the vessels were not liable for the costs of

discharging and transhipping the fifteen mobile homes off-loaded in Martinique. It maintains

that the vessels were not entitled to the COGSA limitation on liability because they did not

give SOGUCI an opportunity to declare a higher value per package.

Under COGSA, a shipper establishes a prima facie case by proving that the

carrier received the cargo in good condition, but unloaded it in damaged condition at its

36
R2-257 at 22.

21
destination.37 Once the shipper presents a prima facie case, the burden shifts to the carrier to

prove that it either exercised due diligence to prevent damage to the cargo by handling,

stowing, and carrying the cargo in a seaworthy ship, or that the harm resulted from an

“uncontrollable” cause of loss as statutorily defined.38 The determination of whether due

diligence and proximate cause are matters of fact, and this court will not overturn the district

court’s findings on these issues absent a finding that the findings are clearly erroneous.39 This

court may not reverse the district court’s findings on the evidence if they are plausible in light

of the record viewed in its entirety, even if we would have weighed the evidence differently

and arrived at a contrary conclusion.40 Independent surveyor reports and testing can be

considered as “very strong evidence of due diligence.”41

37
Sony Magnetic Products Inc. of America v. Merivienti O/Y, 863 F.2d 1537, 1539
(11th Cir. 1989); M. Golodetz Export Corp. V. 2d S/S Lake Anja, 751 F.2d 1103, 1109 (2nd
Cir.), cert. denied, 471 U.S. 1117, 105 S.Ct. 2361, 86 L.Ed.2d 261 (1985) (the shipper is not
required to prove that the carrier was at fault or how the damage might have occurred);
Westinghouse Electric Corporation v. M/V “Leslie Lykes”, 734 F.2d 199, 206 (5th Cir.), cert.
denied, 469 U.S. 1077, 105 S.Ct. 577, 83 L.Ed.2d 516 (1984); Terman Foods, Inc. v. Omega
Lines, 707 F.2d 1225, 1227 (11th Cir. 1983); Blasser Brothers, Inc. v. Northern Pan-American
Line, 628 F.2d 376, 381 (5th Cir. 1980).
38
Sony Magnetic Products Inc. of America, 863 F.2d at 1539; Westinghouse Electric
Company, 734 F.2d at 206; Terman Foods, Inc., 707 F.2d. at 1227; Blasser Brothers, Inc. v.
Northern Pan-American Line, 628 F.2d at 382-383; 46 U.S.C. § 1304(2).
39
Fireman’s Fund Insurance Companies v. M/V Vignes, 794 F.2d 1552, 1555 (11th Cir.
1986).
40
Id.
41
Id. at 1556.

22
 The duty to load, stow, and discharge cargo in the carriage of goods under a

time charter is on the ship and its owner.42 Use of stevedores to load and discharge the cargo

does not relieve the ship and her owner of responsibility for any consequent cargo damage.43

However, a shipper may contract with another party to exercise control over the loading and

unloading of the cargo, and liability will be found by determining who controlled the loading

and storage.44

The doctrine of deviation provides that, when a ship deviates from the contract

of carriage or varies the conduct in the carriage of goods, increasing the risk of shipment of

the goods, COGSA does not apply because the bill of lading, which acts as the contract of

carriage, is nullified.45 The doctrine of deviation has been applied sparingly for geographical

42
Associated Metals & Minerals Corp. v. M/V Arktis Sky, 978 F.2d 47, 50 (2nd Cir.
1992); United States v. Lykes Bros. Steamship Co., Inc., 511 F.2d 218, 224 (5th Cir. 1975);
Nichimen Company, Inc. V. M.V. Farland, 462 F.2d 319, 330 (2nd Cir. 1972); Demsey &
Associates, Inc., 461 F.2d at 1014 (operation under a charter does not affect the liability of the
vessel); Agrico Chemical Company, 459 F. Supp. 638, 647 (E.D. La. 1978), aff’d, 620 F.2d 487,
489 (5th Cir. 1980)(a carrier may not insulate itself from liability by use of independent
contractors, servants, or agents).
43
Id..
44
Sumitomo Corporation of America v. M/V “Sie Kim”, 632 F.Supp. 824, 836-837 (S.D.
N.Y. 1985).
45
Unimac Co., Inc. v. C.F. Ocean Service, Inc., 43 F.3d 1434, 1437 (11th Cir. 1995);
Spartus Corporation v. S/S Yafo, 590 F.2d 1310, 1313-1314 (5th Cir. 1979), quoting G.W.
Sheldon & Co. v. Hamburg Amerikanische Packetfahrt-Actien-Gesellschaft, 28 F.2d 249, 251
(3rd Cir. 1928)(a deviation may include “carrying the cargo on the deck of the ship contrary to
custom and without the consent of the shipper” or “failure to deliver the goods at the port named
in the bill of lading”).

23
departures and unauthorized on-deck stowage.46 Where a ship leaves port badly stowed or

unseaworthy, courts have held that the ship did not deviate in seeking a port of refuge.47 Also,

a ship’s master is empowered to exercise his good faith judgment during his command where

the safety of the crew, vessel and cargo are concerned.48

Under COGSA,49 the shipper has the burden of declaring the value of its goods

and paying a higher freight if it wants to have greater liability placed on the carrier.50 Where

the carrier demonstrates that the shipper was given a fair opportunity to declare a higher value

on paying a higher freight by being offered a choice of rates and valuations, the burden shifts

to the shipper to demonstrate that a fair opportunity did not exist.51 The $500 per package

46
Unimac Co., Inc., 43 F.3d at 1437.
47
The Malcom Baxter, Jr., 20 F.2d 304, 305-306 (2nd Cir. 1927), aff’d, 277 U.S. 323, 48
S.Ct. 516, 72 L.Ed.901 (1928) (distinguishing between a voluntary and involuntary deviation,
and noting that there is no deviation where a ship’s master seeks a port of refuge for the safety
and best interest of the crew, ship or cargo after finding that a ship is unseaworthy from the
“unfitness of the structure.”).
48
Westinghouse Electric Company, 734 F.2d at 215-216.
49
46 U.S.C. § 1304(5).
50
Sony Magnetic Products of America v. Merivienti O/Y, 668 F.Supp. 1505, 1512 (S.D.
Ala. 1987), aff’d 863 F.2d 1537 (11th Cir. 1989); Caterpillar Americas Company v. S.S. Sea
Roads, 231 F.Supp. 647, 648 (S.D. Fla. 1964), aff’d, 364 F.2d 829 (5th Cir. 1966).
51
Insurance Company of North America v. M/V Ocean Lynx, 901 F.2d 934, 939 (11th
Cir. 1990), cert. denied, 498 U.S. 1025, 111 S.Ct. 675, 112 L.Ed.2d 667 (1991); Couthino, Caro
and Co., Inc. v. M/V Sava, 849 F.2d 166, 170-171 (5th Cir. 1988).

24
limitation applies to on-deck shipments where it is plain on the face of the bill of lading that

the cargo is to be carried on-deck and that COGSA is to be applied.52

The district court found that Hale was not liable for the discharging and

transhipment of the off-loaded mobile homes in Martinique because it exercised due diligence

“to ensure seaworthiness of the vessel with respect to the stanchion system.” It noted that,

although the vessel’s captain “had reason to know of a potential deficiency in the design of

the stanchion system prior to the second voyage,” he was reassured by Houston that the

stanchion system was safe, and “properly deferred to the judgment of the engineer who

designed the system and the surveyors who certified the suitability of the system.” It noted

that the captain was not present during the repairs, and the time charter placed full

responsibility for the system in Houston’s care.

The district court’s finding as to due diligence is not clearly erroneous. Under

the time charter, Houston, as charterer, assumed full responsibility for the stanchion system.

Houston hired a surveyor, as required by SOGUCI, to assure that the mobile homes were

properly secured prior to the sailing of the vessels, and the surveyor inspected the system, and

issued a document stating that all of the mobile home cargo was properly secured. SOGUCI

accepted the surveyor’s document and permitted the vessel to sail. The captain was not

informed of the surveyor’s apprehension of inadequacies of the stanchion system. The

52
Brown & Root, Inc. V. M/V Peisander, 648 F.2d 415, 420-421 (5th Cir. Unit A 1981);
Z.K. Marine, Inc. v. M/V Archigetis, 808 F.Supp. 1561, 1566-1567 (S.D. Fla. 1992).

25
evidence showed that the captain reasonably relied on the surveyor, and the engineer

responsible for the repairs of the stanchion system.

The district court also found that, when the vessels sought a port of refuge at

Fort de France, Martinique, it was necessary to remove fifteen mobile homes from the barge

in order to safely continue the second voyage. The decision to remove the mobile homes was

made by SOGUCI’s insurance underwriters’ surveyor, Christian Renaux. The vessel’s

captain agreed with the decision to remove the fifteen mobile homes and indicated that he

would not continue the voyage until the mobile homes could safely make it to French Guyana.

After removal, the fifteen mobile homes were transhipped on another vessel to French

Guyana. The district court found that “any loosening of bolts on the second voyage” was

attributable only to the extreme strain placed on the system by the improper design of the

stanchion system.

Although the offloading of the mobile homes in Fort of France may have been

a change in the time charter, it was not a “deviation.” The vessel’s captain was empowered

to exercise his good faith judgment where the safety of the cargo was involved, and in reliance

on the opinion of SOGUCI’s surveyor. The vessels were not, therefore, liable for the costs

of discharging and transhipping the fifteen mobile homes off-loaded in Martinique.

26
 As the vessels, in rem, were not liable and the issue was not decided by the

district court, this court will not consider the application of the COGSA per package

limitation.53

C. Non-COGSA Liability

1. Hale’s claim for charter hire against Houston

Houston argues that the district court erred in finding it liable to Hale for charter

hire incurred subsequent to the cancellation of the charter party agreement because Hale

unilaterally canceled the agreement.

The district court noted that, following a dispute with Houston regarding

payment, Hale withdrew the vessels from charter hire on November 22, 1989. The court

commented that Houston owed Hale $99,606.08 in charter hire from the first voyage, and

$150,000.00 advance charter hire for the second voyage. It noted that the time charter

permitted Hale to terminate the agreement if Houston failed to make payment, required

Houston to surrender possession of the vessels upon termination, and provided that Houston

would remain liable for sums due under the charter hire despite the termination.54 The district

court also found that Houston was obligated for charter hire until discharge of the cargo.

53
However, this court notes that “it is plain on the face” of the September 1989 bill of
lading, that the “cargo is loaded on deck” and that COGSA is to be applied. See Brown & Root,
Inc., 648 F.2d at 420-421.
54
Although the district court refers to Paragraph 7, the default clause is found at
Paragraph 4.

27
 As long as a vessel remains under control of the charterer, mere notice of

withdrawal to the time charterer is not enough to effectuate a withdrawal of the charter, and

the time charter remains in effect until the cargo is discharged.55 However, where a

withdrawal is made during the term of the charter, and the owners immediately make a new

charter with a new voyage charterer, the withdrawal may be effective although the vessel has

not been unloaded.56 Generally, the obligation to carry and care for the goods remains on the

carrier until the goods are actually delivered by being discharged at the port of discharge at

the shore or alongside of a vessel.57 The measure for lost income of a vessel by its owner for

a vessel under charter hire is the contract rate for the vessel under the time charter.58

Houston was liable for charter hire incurred subsequent to the cancellation of the

charter party agreement because, under the terms of the time charter, Houston remained liable,

after termination, for any sums due at the time of the termination, and for charter hire until

discharge of the cargo. Further, under the charter agreement, Houston was responsible for all

55
Schirmer Stevedoring Co., Ltd. v. Seaboard Stevedoring Corp., 306 F.2d 188, 193 (9th
Cir. 1962).
56
Id.
57
Surrendra ( Overseas) Private, Ltd. v. S.S. Helenic Hero, 213 F.Supp. 97, 101
(S.D.N.Y.), aff’d, 324 F.2d 955 (2nd Cir. 1963); Cardinal Shipping Corporation v. M/S Seisho
Maru, 744 F.2d 461, 468 (5th Cir. 1984), quoting Luckenbach v. Pierson, 229 F.130, 132 (2nd Cir.
1915), and citing Diana Compania Maritime, S.A. v. Subfreights of the S.S. Admiralty Flyer,
280 F.Supp. 607, 612 (S.D.N.Y. 1968), 2B Benedict on Admiralty § 6, at 53 (7th ed. 1983); and
W. Poor, American Law of on Charter Parties and Ocean Bills of Lading § 8, at 38 (1968);
Rainbow Navigation, Inc. v. United States, 742 F.Supp. 171, 183 (D.N.J. 1990), aff’d, 937 F.2d
105 (3rd Cir. 1991); Finora Co., Inc. v. Amitie Shipping, Ltd., 852 F.Supp. 1298, 1307 (D.S.C.
1994), aff’d, 54 F.3d 209 (1995).
58
Delta S.S. Lines, Inc. v. Avondale Shipyards, Inc., 747 F.2d 995, 1009 (5th Cir. 1984).

28
consequences arising from the stanchion system. The district court did not err in finding

Houston liable, or in calculating the loss of the use of the vessel.

2. NCB’s liability to SOGUCI

SOGUCI maintains that the district court erred in not finding NCB’s negligence

in examining the bolting of the stanchion system causation for damages to the mobile homes.

It contends that the district court’s reasoning was speculative, and contrary to the evidence.

It also contends that the district court erred in not finding that NCB negligently misrepresented

the seaworthiness of the barge, and failed to disclose the barge’s unseaworthiness.59 It argues

that NCB was aware that SOGUCI was relying on NCB to ensure the seaworthiness of the tug

and barge, and misled SOGUCI by issuing a letter making no mention of its observation that

the stanchion system was in danger of failing.

The district court’s determination of negligence is a finding of fact that will not

be disturbed unless clearly erroneous.60 In performing a survey of a vessel, a marine surveyor

must use due care in making its recommendations and detecting all perceptible defects and

must notify the owner of any defects.61

59
Despite NCB’s argument to the contrary, this issue was raised in and addressed by the
district court.
60
Verrett v. McDonough Marine Service, 705 F.2d 1437, 1441 (5th Cir. 1983).
61
Dillingham Tug & Barge Corporation v. Collier Carbon & Chemical Corporation, 548
F.Supp. 691, 698 (N.D. Ca. 1981), aff’d in part and rev’d on other grounds, 707 F.2d 1086 (9th
Cir. 1983), cert. denied, 465 U.S. 1025, 104 S.Ct. 1280, 79 L.Ed.2d 684 (1984).

29
 In order to state a claim for negligent misrepresentation, a plaintiff must allege

that: (1) the defendant, in the course of its profession, supplied false information to the

plaintiff for a business transaction; (2) the defendant failed to exercise reasonable care in

gathering the information; (3) the plaintiff relied on the information for the transaction that was

intended by the defendant; and (4) the plaintiff suffered a resulting pecuniary loss.62 A party’s

access to information and the failure to inquire precludes, as a matter of law, claims of reliance

on misrepresentations.63

As to the causation issue, the court found that:

On the second voyage, the stanchions bent again due to the
improper placement of a fourth tier on the system. . . . SOGUCI
assert(s) that failed bolt connections in the system also caused its
collapse. Various witnesses testified that just prior to the second
voyage, stevedores climbed to all tiers of the system to ensure all
bolts were tightened. Don Jones testified that pursuant to his
request, Project Logistics had their stevedores undertake this
activity. NCB confirmed in its physical and visual inspection that
the stevedores adequately secured the bolts in the system. The
Court finds that any loosening of bolts on the second voyage can
be attributed only to the extreme strain placed on the system by
the improper design of the fourth tier in conjunction with the
pitching at sea.64

***

62
Coastal (Bermuda) Ltd. v. E.W. Saybolt & Co., Inc., 826 F.2d 424, 428-429 (5th Cir.
1987), reh’g denied, citing Grass v. Credito Mexican, S.A., 797 F.2d 220 (5th Cir. 1986), cert.
denied, 480 U.S. 934, 107 S.Ct. 1575, 94 L.Ed.2d 766 (1987) for the requirements to state a
cause of action for negligent misrepresentation under Restatement (Second) of Torts § 552
(1977).
63
Grumman Allied Industries, Inc. v. Rohr Industries, Inc., 748 F.2d 729, 737-738 (2nd
Cir. 1984).
64
R2-257 at 18.

30
 Although NCB fully inspected the bolting on the first tier of the
system, it failed to properly examine the bolting on upper tiers of
the system. NCB could not have fully assessed the proper
tightening of bolts on the upper tiers by visual inspection, as it
was difficult to view the bolts from the ground. Additionally, it
appears that NCB’s surveyors made very little effort to obtain a
ladder or to utilize other means to physically examine the bolting
on the upper tiers. Nevertheless, NCB’s negligence in examining
these bolts on the upper tiers had no causal relationship to the
cargo damage. The Court has concluded that the bolts on all tiers
were adequately tightened prior to departure of the second voyage
and that the failure of the stanchion system and damage to the
cargo did not result from loose bolting of the system prior to the
second voyage. NCB’s failure to examine the bolts did not,
therefore, contribute to the failure of the stanchion system.65

The district court’s conclusion that any failure to inspect was not casually related

to the damage to the mobile homes does not appear clearly erroneous. There was testimony

that the bolts were tightened prior to the voyage after NCB inspection revealed that some of

the nuts and bolts on the first tier were extremely loose, and that any loosening of the bolts

during the voyage was due to the improper design of the system, and the pitching of the sea.

Renaux explained that the damage resulted from “the lack of rigidity from the whole

structure,”66 and, due to the damage incurred on the first voyage, he had advised replacing “all

the deformed stanchions to consolidate the lashing and to carry, to transport the mobile homes

on three levels only.”67 Although Renaux answered “I suppose so” when asked whether the

65
R6-257 at 33.
66
R10 at 42, 67-69, 74, 87-89, 91; Renaux deposition at 106-107.
67
Id. at 29, 138.

31
bolts were loose because they weren’t properly tightened when the barge was in Tampa,68 and

“I think so, yes,” when asked whether “had the bolts been properly tightened in Tampa they

would not have come loose,”69 and testified that the mobile homes “sustained damage . . .

because the structures were loose, got loose,”70 his answers were in response to questions about

his thoughts during his inspection of the cargo in Martinique.

As to negligent misrepresentation, the district court found that NCB could not

“be held liable for a failure to conduct a full trip and tow survey,” because NCB had no duty

to Houston, SOGUCI, or any other party to perform a trip and tow survey or to detect and

report defects which such a survey would have encompassed. It reasoned that NCB entered

into the agreement to perform the survey with Houston, and conducted the survey according

to Houston’s instructions. It noted that, although Houston had initially requested a trip and tow

survey, Houston acquiesced to a different type of survey when NCB informed Houston that

it would be unable to perform a full trip and tow survey.

The district court’s conclusion is not clearly erroneous. NCB was hired by

Houston, albeit at SOGUCI’s insurers’ insistence that a survey would be required before

departure of the second voyage, to “assure that the mobile homes were properly secured.”71

Although NCB was initially asked by Houston to perform a trip and tow survey, addressing

68
Renaux deposition at 111.
69
Id.
70
Id. at 107.
71
R8 at 71.

32
the seaworthiness of the tug and its ability to safely carry the cargo to its destination, NCB

declined to perform a trip and tow survey. Further, Houston advised NCB’s surveyor that the

stanchion system was none of his concern, and not to worry about it. NCB was not notified

that the sailing of the barge was conditioned on the issuance of a trip and tow survey.

The November 13, 1989 letter issued by NCB states:

This will confirm that the National Cargo Bureau, Inc., performed
a final inspection of the cargo loaded on the Barge Liberty Trader
on November 13, 1989. We sighted the stowage and securing of
cargo, specifically noting that the frames of houses/mobile homes
were properly secured to the network of framed bays . . . The
frames comprising the bays were also noted to be secured to one
another. The cargo of mobile homes was stowed three high
throughout except the aftermost thwartship row was stowed four
high. In our opinion, all cargo, including the row stowed four
high, was adequately secured with respect to frames of mobile
homes being secured to frames in bays.72

The letter made no reference to the seaworthiness of the barge or the stanchion

system, and clearly indicated that some of the mobile homes were being transported on a fourth

level. After the first voyage, SOGUCI had been advised by its own surveyor that the mobile

homes should be transported on only three levels, and a representative of SOGUCI was present

for both the loading of the barge and the issuance of NCB’s letter. SOGUCI, therefore, had

access to information of the defect in the stanchion system design, and could not rely on

NCB’s failure to address such in its letter.

D. Calculations of Loss of Rental Income

72
Hale trial exh. 2 at 8.

33
 SOGUCI claims that the district court erred in finding that SOGUCI had failed

to mitigate damages by repairing the mobile homes, and committed a clerical error in the

calculation of its loss of rental income.73 It maintains it made the repairs as quickly as possible,

and that the six-month delay was due to the unavailability of replacement parts, materials, and

repair facilities in French Guyana. It states that the district court erroneously calculated the

lost rental income using 375 francs per month as the loss of rental income for each mobile

home, although the undisputed testimony was that the rent for each mobile home was 6,375

francs. It suggests that this miscalculation was a clerical error in the calculation of the

judgment, or was unsupported by the record. As to the miscalculation, Hale responds that the

matter should be remanded as the district court’s intention is not clear.

This court reviews a district court’s finding of fact for clear error, and will not

reverse unless, after “making all credibility choices in the fact-finder’s choice” and reviewing

the record as a whole, it is clear that a mistake has been made.74 If the district court’s finding

is plausible in light of the entire record, this court will not reverse “even though convinced that

73
Although SOGUCI states that it filed a Fed.R.Civ.P. 60(a) motion for correction of the
clerical error with this court, the clerk of this court returned that motion to SOGUCI in March
1996, with instructions that the motion be filed in the district court pursuant to Lairsey v.
Advance Abrasives Company, 542 F.2d 928 (5th Cir. 1976) (if the district court is inclined to
grant the motion, it should certify such to this court so that the movant can request remand from
this court). By telephone, SOGUCI’s counsel advises that the motion was filed with the district
court on January 8, 1998. On March 2, 1998, the district court denied the motion without
prejudice. It noted that it was without authority to correct the alleged clerical error absent leave
of this court.
74
Hiram Walker & Sons, Inc. v. Kirk Line, 30 F.3d 1370, 1374 (11th Cir. 1994), cert.
denied, 514 U.S. 1018, 115 S.Ct. 1362, 131 L.Ed.2d 219, quoting Meek v. Metropolitan Dade
County, 985 F.2d 1471, 1481 (11th Cir. 1993); Verrett v. McDonough Marine Service, 705 F.2d
1437, 1441 (5th Cir. 1983).

34
had it been sitting as the trier of fact, it would have weighed the evidence differently.”75 Under

general maritime law, damages for lost profits against a tortfeasor are allowed only when the

amount of such profits is proven with reasonable certainty.76 In order to apportion damages

based on a theory of failure to mitigate, the movant must establish that the failure to mitigate

was unreasonable under the circumstances and aggravated the harm.77 In determining whether

a victim’s conduct was reasonable, a court must consider that “the necessity for decision-

making was thrust upon him by the defendant, and judgments made at times of crisis are

subject to human error,” and should “allow the injured party a wide latitude in determining

how best to deal with the situation.”78

A district court may correct clerical mistakes in judgments based on oversight

or omission at any time on its own initiative or on motion of any party,79 in order to correct

mistakes that were not intended.80 A damages award that is incorrect because it is based on

75
Hiram Walker & Sons, Inc., 30 F.3d at 1374, quoting Anderson v. City of Bessemer
City, 470 U.S. 564,574, 105 S.Ct. 1504, 1511, 84 L.Ed.2d 518 (1985); Pacific Employers
Insurance Company v. M/V Gloria, 767 F.2d 229, 235 (5th Cir. 1985).
76
Domar Ocean Transportation, Ltd. v. Independent Refining Company, 783 F.2d 1185,
1191-1192 (5th Cir. 1986), citing Bolivar County Gravel Company v. Thomas Marine Co., 585
F.2d 1306, 1308 n. 2 (5th Cir. 1978).
77
Bosner, S.A. DE C.V. v. Tug L.A. Barrios, 796 F.2d 776, 783 (5th Cir.), reh’g denied,
803 F.2d 717 (1986), citing Tennessee Valley Sand & Gravel Co. v. M/V Delta, 598 F.2d 930,
933 (5th Cir. 1979).
78
Tennessee Valley Sand & Gravel Co., 598 F.2d at 933.
79
Fed.R.Civ.P. 60(a).
80
Allied Materials Corporation v. Superior Products Company, Inc., 620 F.2d 224, 225-
th
226 (10 Cir. 1980).

35
an erroneous mathematical computation that does not involve the substantive rights of the

parties may be corrected under Rule 60(a).81

The district court noted that SOGUCI had asserted that it had contracted to rent

the mobile homes commencing January 1, 1990, at the rate of 375 francs per month.82 It

found that SOGUCI’s loss of rental income for the mobile homes while the mobile homes

were being repaired was “a foreseeable damage resulting from Houston’s negligence.”83 It

found that SOGUCI “acted promptly in making repairs to the homes during January and

February of 1990,” but did not have the remaining repairs made until August 1990.84 The

district court concluded that SOGUCI had failed to mitigate damages by making repairs and

facilitating the rental of these mobile homes at an earlier date, and allowed lost rental income

for January and February, but denied lost rental income from March to September.85

Both testimony and documentary evidence showed that each of the mobile

homes were to be rented for 6,375 francs per month. The district court made no factual

findings reducing the rent. Therefore, this matter is remanded to the district court for

correction pursuant to Rule 60(a).

81
Matter of West Texas Marketing Corp., 12 F.3d 497, 502-505 (5th Cir. 1994).
82
R2-257 at 37. The judgment was subsequently calculated in U.S. dollars based on the
375 franc rent. R2-262 at 2.
83
Id.. R2-257 at 37.
84
Id. at 37-38.
85
Id. at 38.

36
 Mark Richard Bushey, a mobile home repairman from Florida, was employed

by the manufacturer of the mobile homes to make the repairs on the damaged mobile homes

in French Guyana. Bushey was contacted in December 1989, and went to French Guyana

in February 1990. Although the materials that the mobile home manufacturer’s

representative had indicated would be needed for the repairs were shipped to French Guyana,

once Bushey arrived in French Guyana, he realized that more materials were needed,

specifically sheet metal corners and toilet parts, and ordered the additional parts. He repaired

most of the first 105 damaged mobile homes by using all of the available materials, and left

about ten to fifteen mobile homes needing repairs. Bushey said that he was available to

return to French Guyana at any time, but was not called to return until August or September.

When he returned, there were about 50 mobile homes in need of repair.

Mobile home representative Charles Aylor testified that it took about five

months to get the necessary repair materials for the second trip to French Guyana, because

the materials were shipped from Florida in April or May, and did not arrive in French

Guyana until July or August.86 He explained that the shipping delay was due to a strike,

problems with the shipping company, and the need for a boat to take the materials from

Surinam to French Guyana. He said that, although a couple of packages were sent by air, the

bulk of the other materials made it very expensive to send them by air. When asked whether

86
Aylor did not explain why the materials which were ordered in February were not
shipped until April or May.

37
the repairs were done “as quickly and as efficiently as possible” based on the need to get the

materials to French Guyana, and the shipping problems, Aylor replied:

Using the transportation methods that were there, they
were done as quickly as possible. We could have gotten Air
France to fly in a plane or something like that done quicker,
obviously. But there wasn’t any delay because of money or
anything of that nature that kept us from meeting the time
schedules.87

Houston had the burden of showing that SOGUCI acted unreasonably in

mitigating its damages. Although the district court noted that SOGUCI did not have the

repairman return to make the repairs until August 1990, it is not clear that the district court

considered the evidence explaining that this delay was due to problems in shipping the

needed materials to French Guyana. The district court’s denial of lost rental income from

March to September 1990, is vacated, and the matter is remanded for consideration of the

reasonableness of SOGUCI’s conduct.

III. CONCLUSION

The district court’s findings of fact and conclusions of law are AFFIRMED on

all issues, other than SOGUCI’s loss of rental income and the calculation of that rental

income. As to those issues, the district court’s findings are VACATED and the matter is

REMANDED for further consideration consistent with this opinion.

AFFIRMED IN PART and VACATED AND REMANDED IN PART.

87
Aylor deposition at 145.

38