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Pacific Asian Enterprises, A California v. Cross Chartering N.V.

April 19, 2011

PACIFIC ASIAN ENTERPRISES, A CALIFORNIA CORPORATION, AND RLI INSURANCE COMPANY, AN ILLINOIS CORPORATION,
PLAINTIFFS,
v.
CROSS CHARTERING N.V., A FOREIGN LIMITED LIABILITY COMPANY, IN PERSONAM; SSA MARINE, INC., A WASHINGTON CORPORATION DOING BUSINESS AS STEVEDORE SERVICES OF AMERICA; AND M.V. CATALONIA V-285, HER MACHINERY, TACKLE, AND ENGINES, ETC., IN REM; DEFENDANTS



The opinion of the court was delivered by: Honorablelarryalanburns United States District Judge

ORDER ON DEFENDANTS' MOTION TO DISMISS

The facts of this case are straightforward. Plaintiff Pacific Asian Enterprises, based in Dana Point, California, designs and sells yachts. It contracts with a Taiwanese shipbuilder to actually build them, and the finished yachts are shipped from Taiwan to various locations worldwide. Defendant Cross Chartering is a "carrier" that charters and sells space on cargo ships. As the carrier, it issues a "bill of lading" to the shipper, which is basically a commercial shipping contract. Defendant Stevedore Services of America is, as its name suggests, a stevedore. It unloads cargo from cargo ships when they arrive at their destination; it is hired by the carrier.

On June 4, 2009, PAE shipped one of its yachts, a "Nordhavn Motor Sailer" from Kaohsiung, Taiwan to San Diego. Cross Chartering arranged for the Nordhavn to be shipped on board the M.V. Catalonia, a Maltese cargo ship that is also a Defendant in this case but was apparently never served. When the Catalonia arrived in San Diego on June 27, 2009 SSA employees attempted to unload the Nordhavn from the ship with a pair of cranes. Somehow, they dropped the Nordhavn and she sank.*fn1 PAE was out $1,826,777.86. Its insurer RLI Insurance covered the loss, and now RLI is asserting a subrogation claim for roughly that amount against Cross Chartering and SSA.

The only issue now before the Court is whether this case can proceed in San Diego, where PAE filed it, or whether a forum clause in the bill of lading that Cross Chartering issued to PAE controls. That forum selection clause provides for all disputes arising out of the shipment of the Nordhavn to be resolved "where the Carrier has his principal place of business." Cross Chartering's principal place of business is Antwerp, Belgium.

I. The Bill of Lading

The parties have jointly submitted to the Court a copy of the bill of lading at issue that they agree is authentic and admissible. (Doc. No. 24.) It is two pages.

The first page (or front page) contains the vital details of the shipping agreement: who the shipper is, who the receiver is, the name of the cargo vessel, the cost of the shipment, and so forth. The cargo is described as "ONE NORDHAVEN 56 MOTOR SAILER, HULL NO. 5." Just below this description are the words "CARRIED ON DECK WITH MERCHANTS' CONSENT AND AT THEIR RISK AS TO PERILS INHERENT IN SUCH CARRIAGE WITHOUT LIABILITY AND OR RESPONSIBILITY TO THE VESSEL OR CARRIER BUT IN ALL OTHER RESPECTS SUBJECT TO THE PROVISIONS OF THE // //

UNITED STATES CARRIAGE OF GOODS BY SEA ACT 1936."

The declared value of the Nordhavn is "NONE."*fn2

The second page of the bill of lading contains the fine print, that is, the legal terms of the shipping contract.*fn3 For the purposes of the present dispute, there are four pertinent provisions. The first is the forum selection clause:

4. Law and Jurisdiction. Disputes arising out of or in connection with this Bill of Lading shall be exclusively determined by the courts and in accordance with the law of the place where the Carrier has his principal place of business, as stated on Page 1, except as provided elsewhere herein.

The second and third pertinent provisions relate to liability.

3. Liability for Carriage Between Port of Loading and Port of Discharge. The Carrier shall in no case be responsible for loss of damage to cargo arising prior to loading, after discharging, or with respect to deck cargo and live animals.

15. Defences and Limits of Liability for the Carrier, Servants and Agents. It is hereby expressly agreed that no servant or agent of the Carrier (which for the purpose of this Clause includes every independent contractor from time to time employed by the Carrier) shall in any circumstances whatsoever be under any liability whatsoever to the Merchant under this Contract of carriage for any loss, damage or delay of whatsoever kind arising or resulting directly or ...


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