Mendes Junior International Co. v. M/V Sokai Maru

United States Court of Appeals,

Fifth Circuit.

No. 94-20228.

MENDES JUNIOR INTERNATIONAL COMPANY, Plaintiff-Counterclaim
Defendant-Appellant,

M/V SOKAI MARU, Defendant-Appellee,

and

Atlanta Maritime Corporation, Defendant-Counterclaim Plaintiff-
Appellee.

Jan. 26, 1995.

Appeal from the United States District Court for the Southern
District of Texas.

Before WHITE, Associate Justice (Ret.)*, BARKSDALE and PARKER,
Circuit Judges.

PER CURIAM:

Plaintiff-Counterclaim Defendant-Appellant Mendes Junior

International Company ("Mendes") appeals the final judgment of the

district court finding its claim time-barred and awarding damages

in favor of Defendant-Counterclaim Plaintiff-Appellee Atlanta

Maritime Corporation ("AMC") on its counterclaims. We affirm.

FACTS AND PROCEDURAL HISTORY

This dispute arises out of a contract to ship supplies from

South America to Iraq in the early 1980s. Mendes had a contract to

build a railroad in Iraq. Mendes consulted Agenave Maritime Agency

("Agenave") regarding shipments of supplies to Iraq, and Agenave,

*
The Honorable Byron R. White, Associate Justice of the
United States Supreme Court, (Ret.), sitting by designation,
pursuant to 28 U.S.C. § 294(a).

1
as agent for time-charterers, undertook to engage appropriate

vessels for Mendes.

Agenave booked several ships with AMC, a time-charterer in

Houston, Texas on "full liner terms," meaning that, in exchange for

receiving a higher freight rate, AMC bore the burden of loading and

discharging cargo and assumed all risk of delay in port. One of

these ships, the M/V Sokai Maru ("Sokai Maru "), left Brazil in

December 1980 to sail for the Middle East. The Sokai Maru

apparently sailed to the Port of Aqaba, Jordan, but because of

congestion, simply registered there instead of discharging its

cargo. The Sokai Maru proceeded to Jeddah, Saudi Arabia to unload

other cargo. At Jeddah, the Sokai Maru was detained for over a

month because the Saudis claimed that the ship was on the Arab

blacklist. The Sokai Maru then returned to Aqaba, arriving on

February 12, 1981. However, she was only able to unload a small

part of the Mendes cargo. The Sokai Maru then proceeded to Kuwait

and discharged the remainder of the cargo.1

On March 24, 1982, Mendes filed suit against the Sokai Maru,

in rem, her owners, her time-chartered owners, and AMC for damages

arising out of the delay in shipment of its cargo. The district

court dismissed the action against the owners and time-charterers

for lack of personal jurisdiction. AMC counterclaimed against

Mendes for amounts due from this and other voyages.

The case was tried before District Judge Sterling in June

1
According to Kuwaiti port authority documents, the Mendes
cargo was unloaded and warehoused on March 15, 1981.

2
1985. Judge Sterling took the case under advisement, but died

before handing down a decision. In 1988, the parties consented to

have Magistrate Judge Karen K. Brown conduct any and all further

proceedings in the case. The joint consent form filed with the

district court contained an order of reference, signed by District

Judge Singleton, assigning the case to Magistrate Judge Brown.

However, before Magistrate Judge Brown was able to enter judgment,

she was elevated to the bankruptcy bench. The case was

subsequently transferred to Magistrate Judge Frances H. Stacy

without the parties' additional consent or objection.

Magistrate Judge Stacy reheard final arguments on November 28,

1990. In April 1991, she entered final judgment against Mendes on

the grounds that its claim was barred by the statute of

limitations, and rendered judgment in favor of AMC on its

counterclaims. 758 F.Supp. 1169 (S.D.Tex.1991). This Court

reversed the judgment and remanded to the district court because

Magistrate Judge Stacy lacked jurisdiction to enter judgment in the

absence of both an order referring the case to her and written

consent by the parties. Mendes Junior Int'l Co. v. M/V Sokai Maru,

978 F.2d 920 (5th Cir.1992). The case was then assigned to

District Judge Lynn Hughes, who rendered a final judgment on the

record of the trial before Judge Sterling. The final judgment

ordered that Mendes take nothing, and awarded AMC $1,008,291.80

plus pre- and post-judgment interest and costs.

STANDARD OF REVIEW

In admiralty cases tried by the court sitting without a jury,

3
as in other cases, the district court's findings of fact are

subject to the clearly erroneous standard of review, while

questions of law are subject to de novo review. Avondale

Industries, Inc. v. International Marine Carriers, Inc., 15 F.3d

489, 492 (5th Cir.1984); E.A.S.T., Inc. v. M/V Alaia, 876 F.2d

1168, 1171 (5th Cir.1989).

STATUTE OF LIMITATIONS

The Carriage of Goods by Sea Act ("COGSA") governs "all

contracts for the carriage of goods by sea to or from ports of the

United States and foreign trade." 46 U.S.C.App. § 1312;

Metropolitan Wholesale Supply, Inc. v. M/V Royal Rainbow, 12 F.3d

58, 60 (5th Cir.1994). The duty of care owed by the carriers runs

"from the time the goods are loaded on the ship until the time that

the cargo is released from the ship's tackle at port."

Metropolitan Wholesale Supply, Inc., 12 F.3d at 61 (citing 46

U.S.C.App. § 1301(e) and Tapco Nigeria, Ltd. v. M/V Westwind, 702

F.2d 1252, 1255 (5th Cir.1983)). Section 1303(6) of COGSA provides

a one-year statute of limitations for claims related to damaged

cargo:

In any event the carrier and the ship shall be discharged from
all liability in respect of loss or damages unless suit is
brought within one year after delivery of the goods or the
date when the goods should have been delivered....

46 U.S.C.App. § 1303(6). Therefore, the statute of limitations

begins to run when the goods are delivered. The question raised in

this case is what date actual delivery of the Mendes cargo

4
occurred.2

Mendes contends that the statute of limitations did not begin

to run until March 26, 1981, the date mentioned in a July 10, 1981

letter from AMC's president to Mendes.3 Although some of the cargo

may have been delivered on March 15, 1981, the date when the Sokai

Maru arrived in Kuwait, Mendes argues that delivery was not

complete until March 26. Therefore, when Mendes filed suit on

March 24, 1982, it was within the one-year statute of limitations.

The district court found that the Sokai Maru left Kuwait on

March 26, 1981. Relying on documents issued by the Kuwaiti port

authority, including dock receipts and storage documents signed by

the Kuwaiti port authority, the Sokai Maru and the consignee,

however, the court determined that the Mendes cargo was completely

discharged on March 15, 1981. The court concluded that the March

26, 1981 date mentioned in the letter sent to Mendes by AMC's

president referred only to the date that the Sokai Maru sailed from

Kuwait, not to the date of delivery of the Mendes cargo. Our

review of the record reveals no evidence that the district court's

2
Several courts have addressed the definition of "delivery"
with respect to the triggering of the statute of limitations
under § 1303(6). Some courts have found delivery to be complete
when the cargo leaves the ship's sling, whether to a consignee or
to an agent. See C. Tennant Sons & Co. v. Norddeutscher Lloyd,
220 F.Supp. 448 (E.D.La.1963). Others have found that, in
particular circumstances, delivery is not complete until after
the consignee has a reasonable opportunity to inspect the goods.
See Orient Atlantic Parco, Inc. v. Maersk Lines, 740 F.Supp.
1002, 1005 (S.D.N.Y.1990). However, because this issue was not
raised at trial, we decline to address it in this appeal.
3
In the letter, AMC's president, John G. Miller, states that
the "vessel finished discharging in Kuwait and sailed on March
26, 1981."

5
findings were clearly erroneous. Nor did the district court err on

any legal issue in this respect. Mendes has presented no other

credible evidence to prove that the discharge of its cargo

continued after March 15, 1981.

Having found this action barred by COGSA's one-year statute of

limitations, we find it unnecessary to address the remaining issues

dealing with Mendes' damages claim. We also agree with the

district court's judgment on appellees' counterclaims, including

its award of pre-judgment interest. We agree with the court's

reasoning, and find no clear error in the court's calculations.

CONCLUSION

Because the COGSA statute of limitations had expired as of

March 15, 1982, nine days before Mendes filed this lawsuit, the

action is barred by the statute. The judgment of the district

court is AFFIRMED.