The opinion
UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF FLORIDA
Miami Division
Case Number: 22-21262-CIV-MORENO
CERTAIN UNDERWRITERS AT
LLOYDS OF LONDON,
Plaintiff,
v.
SCENTS CORPORATIONS, d/b/a
PERFUMES OF THE WORLD, .
Defendant.
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ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
THIS CAUSE came before the Court upon both parties' Motions for Summary Judgment
(D.E. 43 and D.E. 45), each filed on September 5, 2023.
I. Factual Background
The dispute in this case concerns a shipment of $351,543.00 of perfume products. [D.E.
28] 46. Perfumes of the World contracted with Benron Perfume, LLC; M&R Distributors, Inc.;
and Elegance Distributors, Inc.—three perfume suppliers in South Florida—to buy perfume
products and have them shipped via truck to Dallas, Texas. [D.E. 43]. Perfumes of the World also
contracted with Total Quality Logistics, a freight broker, to arrange for the transportation of the
goods. /d. The trailer for the products was loaded at the three different shipper’s warehouses, and
then the truck and trailer departed South Florida heading to Perfumes of the World in Dallas,
Texas. Id. The truck and trailer were stolen at a Petro Gas Station in Reddick, Florida, (north of
Orlando) during transit. Jd. When the truck was ultimately recovered, the perfume goods were
missing and stolen. Jd. The shippers demanded payment from Perfumes of the World, claiming
that the risk of loss passed to Perfumes of the World when the truck and trailer left Miami. Id.
Having not been paid by Perfumes of the World for the cargo, the shippers filed insurance claims
with their insurance underwriters, Lloyd’s, the Plaintiff in this case. Jd. Lloyd’s made payment to
the shippers in the total amount of $351,543.00 (including applicable deductibles) and is pursuing
payment from Perfumes of the World. Jd.
Total Quality Logistics, the freight broker, contractually agreed and represented to
Perfumes of the World that it would hire a carrier with additional insurance to cover the high-value
perfume products to be shipped for an additional cost. [D.E. 45] Total Quality Logistics hired a
shipping freight carrier, New Glory Corporation, to make three pick-ups in South Florida for
receiving, loading, and transporting the perfume products from the three perfume suppliers to
Perfumes of the World in Dallas, TX. Jd Total Quality Logistics neither obtained standard
insurance coverage nor the additional insurance coverage for the high value load as contractually
required and as paid for by Perfumes of the World. Jd New Glory did not carry high value
insurance coverage and did not accept high value goods for shipping and transporting goods. Id.
New Glory was further unaware that tt would be shipping high-value perfume products and instead
understood that it would be transporting lower value toiletry items based upon the contents of the
bills of lading certified by each of the perfume suppliers. Jd. New Glory claims that had it known
that the goods being transported were high-value perfume products, it would have never accepted
the shipping contract or the perfume products. Jd. Further, New Glory alleges that had it known it
was shipping high-value perfume products, it would have taken certain precautionary measures to
ensure the safe transport of goods, such as security cameras, GPS, and kill switches. Jd.
Il. Issue
Plaintiff Certain Underwriters at Lloyd’s of London (“Lloyd’s”) argues that the purchase
terms of the cargo were “free on board-origin”—in other words, that the risk of loss passed to
Defendant Perfumes of the World once the cargo was loaded into the truck and received by the
carrier. Lloyd’s, therefore, claims that Perfumes of the World breached the purchase contracts by
failing to pay for the perfume products and, as a result of that breach, Lloyd’s incurred damage in
the amount of $351,543.
Defendant Scents Corporation (“Perfumes of the World,”) conversely, argues that it did
not assume the risk of loss because the perfume suppliers materially misdescribed the products
loaded with the carrier in the Bills of Lading, In other words, because of the perfume suppliers’
inaccuracies in describing the goods tendered, Perfumes of the World feels that title and risk of
loss failed to transfer to it.
UW. Legal Analysis
If there is no genuine issue of material fact that the three perfume suppliers materially
misrepresented the products in their bills of lading—and that the risk of loss did not transfer to
Perfumes of the World—then Perfumes of the World will prevail. In that scenario, Lloyd’s
argument that the “free on board” terms govern the risk of loss is irrelevant. If, however, the risk
of loss does transfer despite the bills of lading, then the free on board shipment terms are more
pertinent. This analysis begins with arguments from Defendant’s Motion for Summary Judgment.
This dispute over perfume products pertains to the purchase and sale of goods in Florida,
governed by the Florida Uniform Commercial Code (“Fla. UCC”). Fla. Stat. § 672.102. Under
the Fla. UCC, “[w]here the seller is required . . . to send the goods to the buyer and the contract
does not require her or him to deliver them at a particular destination,” then the seller must “obtain
and promptly deliver or tender in due form any document necessary to enable the buyer to obtain
possession of the goods or otherwise required by the agreement or by the usage of trade.” Fla. Stat.
§ 672.504(2). Sellers typically satisfy this requirement through a bill of lading.
A bill of lading is a “document of title evidencing the receipt of goods for shipment issued
by a person engaged in the business of directly or indirectly transporting or forwarding goods.”
Fla. Stat. § 671.201(6). The bill of lading is the “basic transportation contract between the shipper-
consignor and the carrier; its terms and conditions bind the shipper and all connecting carriers.” S.
Pac. Transp. Co. v. Commercial Metals Co., 456 U.S. 336, 342 (1982) (citing Texas & Pac. R.
Co. v. Leatherwood, 250 U.S. 478, 481 (1919)). Additionally, “[e]ach term has in effect the force
of a statute, of which all affected must take notice.” Texas & Pac. R. Co., 250 U.S. at 481. A bill
of lading is “the best evidence of the contract of carriage between the carrier and the seller,” “serves
the receipt for the goods under transport,” and “is a document of title to property which can be
endorsed and negotiated.” King Ocean Cent. Am. v. Precision Cutting Servs., 717 So. 2d 507, 510
(Fla. S. Ct. 1998).
Under the Florida UCC, [i]f a person negotiates or delivers a bill of lading, the transferor
warrants to its immediate purchaser the following: (1) “[t]he document is genuine; (2) [t]he
transferor does not have knowledge of any fact that would impair the document’s validity or worth;
and (3) [t]he negotiation or delivery is rightful and fully effective with respect to the title to the
document and the goods it represents.” Fla. Stat. § 677.507. Here, Benron and M&R made material
misrepresentations in their bills of lading by misdescribing the goods loaded with the carrier as
low-value “toiletry preparations” instead of high-value, high-end perfume products. Therefore,
any warranty by Benron or M & R extends only to those misdescribed toiletry items identified in
their respective bills of lading. See Fla. Stat. § 677.507(3). Elegance’s invoice contains no
description of the goods tendered to the carrier other than a generic description of “139 boxes on
2 pallets.” Perfumes of the World, however, did not order “139 boxes on 2 pallets” from Elegance;
rather, it ordered high-value perfumes and expected to take title to those perfumes at the time of
tender to the carrier through proper description in the bill of lading. Ultimately, because the bills
of lading failed to accurately describe the goods tendered, title and risk of loss should not transfer
to Perfumes of the World.
The three perfume suppliers’ breaches of contract negated transfer of any risk of loss to
Perfumes of the World. A shipment contract is considered the “normal” contract in which “the
seller is required to send the subject goods by carrier to the buyer but is not required to guarantee
delivery thereof at a particular destination.” Pestana y. Karinol Corp., 367 So. 2d 1096, 1099 (Fla.
3d DCA 1979). Under a shipment contract, the seller must do the following:
“(1) put the goods sold in the possession of a carrier and make a contract for their
transportation as may be reasonable having regard for the nature of the goods and
other attendant circumstances,
(2) obtain and promptly deliver or tender in due form any document necessary to
enable the buyer to obtain possession of the goods or otherwise required by the
agreement or by usage of the trade, and
(3) promptly notify the buyer of the shipment.”
Id. Further, on a shipment contract, “the risk of loss passes to the buyer when the goods sold are
duly delivered to the carrier for shipment to the buyer.” Jd. However, “[w]here a tender or delivery
of goods so fails to conform to the contract as to give a right of rejection[,] the risk of their loss
remains on the seller until cure or acceptance.” Fla. Stat. § 672.510(1). Moreover, a shipper
guarantees to an issuer “the accuracy at the time of shipment of the description, marks, labels,
number, kind, quantity, condition and weight” and that “the shipper shall indemnify the issuer
against damage caused by inaccuracies in those particulars.” Fla. Stat. § 677.301(5). “This right
of indemnity does not limit the issuer’s responsibility or liability under the contract of carriage to
any person other than the shipper.” Jd.
Here, Benron and M&R made misrepresentations and falsely certified in their bills of
lading that the products being shipped to Perfumes of the World were toiletry products, which are
lower value products that do not require high-value insurance. The three perfume suppliers failed □
to transfer title to the perfume products by failing to correctly describe the goods tendered to the
carrier in their respective bills of lading. Therefore, the perfume suppliers retained risk of loss due
to their breaches of the warranties and breaches of the bills of lading.
No genuine issue of material fact exists to suggest that the perfume suppliers did not
materially misrepresent their products in their respective bills of lading. Plaintiff's only counter
to Defendant’s argument regards the “Free on Board” purchase terms of the cargo—that the risk
of loss passed to Perfumes of the World once the cargo was loaded into the truck and received by
the carrier. However, even if it is true that the risk of loss should have passed to Perfumes of the
World once the cargo was loaded into the truck under “Free on Board—origin” shipment terms, it
remains true that the suppliers had an obligation to accurately describe the goods, regardless of
shipment terms. They did not meet that obligation. Therefore, at the time of the loading of the
cargo, the risk of loss did not pass to Perfumes of the World because the delivery failed to conform
to the contract. Thus, the Court GRANTS Defendant’s Motion for Summary Judgment.
THE COURT has considered the motions, the responses in opposition, the replies, pertinent
portions of the record, and being otherwise fully advised in the premises, it is
ADJUDGED that Defendant’s Motion for Summary Judgment is GRANTED and
Plaintiff's Motion for Summary Judgment is DENIED.
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DONE AND ORDERED in Chambers at Miami, Florida, this / / ? of June 2024.
FEDERIC ge MORENO
UNITED STATES DISTRICT JUDGE
Copies furnished to:
Counsel of Record