Petition for Writ of Certiorari — Hiram Walker & Sons, Inc. v. Eller & Co.

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Supreme Court of The Milfted “States

October Term, 1994

HIRAM WALKER AND SONS, INC.,

Petitioner,

vs.

KIRK LINE, R.B. KIRKONNELL & BRO. LTD.;

JAMAICA MERCHANT MARINE ATLANTIC

LINE; ELLER & COMPANY INC., INDIAN

RIVER TRANSPORT, INC.; AND S.S. MORANT

BAY, its engines, boilers etc.

Respondents.

Petition for Writ of Certiorari to the United States Court of Appeals

for the Eleventh Circuit

PETITION FOR WRIT OF CERTIORARI

JOHN P. D’AMBROSIO

Counsel of Record

D’AMBROSIO & D’AMBROSIO, P.C.

Attorneys for Petitioner

42 Main Street

Irvington, New York 10533

(914) 591-5400

Appeal Press at

(914) 761-3600 (212) 267-6602 (516) 872-1110 (3339)

QUESTIONS PRESENTED FOR REVIEW

1. Is an independent terminal operator entitled to the

benefit of a contractually extended Carriage of Goods by Sea

Act (COGSA) (46 U.S.C. App. Section 1304 {5}) limit of

liability when performing in a non-maritime situs?

2. Is a contractual limitation of liability rendered

null and void by the Harter Act, 46 U.S.C. App. Sections

190, 191 where a terminal operator negligently damages

goods after they have been successfully discharged from the

ship but before they are properly delivered?

3. Where a terminal operator so unreasonably

deviates from the contract in the manner of making delivery

that the goods are exposed to greater risk than had been

agreed upon is it deprived of the contractual limit of liability

under St. John’s Corp. v. Companhia Geral., 263 U.S. 119

(1923)?

4. Where a common carrier makes a proper

delivery, is an independent subcontractor terminal operator

which thereafter damages cargo deprived of a contractually

extended limit of liability?

LIST OF PARTIES

The parties to the proceeding are:

Petitioner: Hiram Walker & Sons, Inc. (Parent: Allied

Domecq PLC; no nonwholly owned subsidiaries)

Respondent: Eller & Company, Inc.

SP en tte ae 4 nt a PERSE i.

TABLE OF CONTENTS

Page

Questions Presented for Review .............. l

Rs 2

EE ee ee eee 3

ES 6

TE gece sect ee een tenses 8

ea ling bia gs ee eee wok 8

a ee ee ee ee eee eee 9

EE a ee em 9

ee 12

Reasons for Granting the Writ ............... 15

THE DECISION BELOW PRESENTS

IMPORTANT UNANSWERED QUESTIONS

AND CONFLICTS WITH SUPREME

COURT, FEDERAL CIRCUIT COURT

| 15

mE wg Ce ct cee ee eee ees 16

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APPENDIX

Appendix A -

The Decision of the Eleventh Circuit Court of

Appeals, affirming, Hiram Walker & Sons, Inc.

v. Kirk Line, 30 F.3d 1370 (11th Cir. 1994) ...... la

Appendix B -

The Order on remand from Court of Appeals

of the United States District Court for the

Southern District of Florida, entered March 10, 1993 2la

Appendix C -

The Decision of the Eleventh Circuit Court

of Appeals, reversing and remanding, Hiram

Walker & Sons, Inc. v. Kirk Line, 963 F.2d

Be ee ee 6S bw ee wees 25a

Appendix D -

Judgment entered August 6, 1990 ............ 35a

Appendix E -

The Findings of Fact and Conclusions of Law

of the United States District for the Southern

District of Florida dated August 6, 1990 ........ 36a

Appendix F -

The Decision of the Eleventh Circuit Court

of Appeals, reversing and remanding, Hiram

Walker & Sons, Inc. v. Kirk Line, 877 F.2d

soa fe Sere ee. ee ee ee 53a

Appendix G -

Judgment entered February 10, 1988 .......... 72a

Appendix H -

The Findings of Fact and Conclusions of

Law of the United States District Court

for the Southern District of Florida dated

Pobriaty 2, 1908 ccc ccc e scenes 73a

Appendix I -

The Order granting partial Summary Judgment

of the United States District Court for the

Southern District of Florida, entered

Se Fee Ue na Ree kee Ke Vee 88a

Appendix J -

Denial of Rehearing and Rehearing en banc,

pe eer 95a

Appendix K -

The judgment sought to be reviewed entered

on September 1, 1994 .........20 eee eee 97a

TABLE OF AUTHORITIES

Page

CASES:

American President Lines Inc. v. Federal

Maritime Board, 317 F.2d 887 (D.C. Cir. 1962) . 20,21

Baker Oil Tools v. Delta,

562 F.2d 938 (Sth Cir. 1977) ...........0... 24

Brown & Root, Inc. v M/V Peisander,

684 F.2d 415 (Sth Cir. 1981) ........20..0... 18

F.J Walker Limited v Orleans International Inc..,

561 F.2d 1138 (Sth Cir. 1977) ............. 20,21

Hiram Walker & Sons, Inc. v. Kirk Line,

877 F. 2d 1508 (11th Cir. 1989) .......... 8,14,16

Hirarn Walker & Sons, Inc. v. Kirk Line,

963 F. 2d 327 (11th Cir. 1992)..........., 8,15,17

Hiram Walker & Sons, Inc. v. Kirk Line,

30 F. 3d 1370 (11th Cir. 1994)............. 8,15

Nemeth v General SS Corp. Lid.,

694 F.2d 609 (9th Cir. 1982) ...........0... 24

Philip Morris v. American Shipping Co. Inc.,

748 F.2d 563 (11th Cir. 1984) ............. 23,24

Robert C. Herd & Company, Inc. v.

Krawill Machinery Corp., 359 U.S. 297 (1959)

Veer hs 6-6 ae oe vee a alee awe 17,18,19,25

Schiess-Froriep Corp. v. S.S. Finnsailor,

a pe le a 6 ee ee 19

St. John’s N.F. Shipping Corp. v. S.A. Companhia

Geral Commercial Do Rio de Janeiro,

yr ee ef Pee TTT Lee 1,24,25

STATUTES

ae OR an BID gh 6 oi 0 eo VG 9

yp BR ER | | re eer 12

po errr ee ee ee 12

46 U.S.C. App. Section 190 ......... 1,9,16,21,22

44 U3. Aap. Geen Bs ee es 1,10,21,22

46 U.S.C. App. Section 1301(e) .......... 10,12,16

46 U.S.C. App. Section 1304(5) ............ 1,10

El ere ee 11,17

Se Be SII hoe ee ew 12,16

RULE:

Federal Rules of Civil Procedure Rule 9(h) ....... 12

PETITION FOR A WRIT OF CERTIORARI

PRELIMINARY STATEMENT

Petitioner, Hiram Walker & Sons, Inc. (Hiram

Walker) petitions for a writ of certiorari to review the

Judgment of the United States Court of Appeals for the

Eleventh Circuit which affirmed the Judgment of the United

States District Court for the Southern District of Florida

limiting liability of Eller & Company, a terminal operator,

for negligently damaging cargo as a matter of law to

$500.00.

OPINIONS BELOW

The Order granting partial Summary Judgment of the

United States District Court for the Southern District of

Florida, entered December 17, 1986 is unreported (88a).

The Findings of Fact and Conclusions of Law of the United

States District Court for the Southern District of Florida

dated February 2, 1988 is unreported (73a). The Findings of

Fact and Conclusions of Law of the United States District

Court for the Southern District of Florida dated August 6,

1990 is unreported (36a). The Order on remand from Court

of Appeals of the United States District Court for the

Southern District of Florida, entered March 10, 1993 is

unreported (21a). The Decision of the Eleventh Circuit Court

of Appeals, reversing and remanding is reported. Hiram

Walker & Sons, Inc. v. Kirk Line, 877 F.2d 1508 (11th Cir.

1989) (53a). The Decision of the Eleventh Circuit Court of

Appeals, reversing and remanding is reported. Hiram Walker

& Sons, Inc. v. Kirk Line, 963 F.2d 327 (11th Cir. 1992)

(25a). The Decision of the Eleventh Circuit Court of

Appeals, affirming is reported. Hiram Walker & Sons, Inc.

v. Kirk Line, 30 F.3d 1370 (11th Cir. 1994) (1a).

JURISDICTION

The judgment sought to be reviewed was entered on

September 1, 1994 (97a).

This Court’s jurisdiction to review a Judgment of the

United States Court of Appeals for the Eleventh Circuit,

affirming the Judgment of the United States District Court

for the Southern District of Florida in favor of Petitioner and

against Eller & Company in the amount of $500.00 pius

interest and costs is invoked pursuant to 28 U.S.C. Section

1254 (1).

This Petition is timely filed within 90 days of the

denial by the Eleventh Circuit on November 1, 1994 of

Petitioner’s Petition for a re-hearing (95a).

STATUTES INVOLVED

Section 190 of the Harter Act, 46 U.S.C. App.

Section 190, provides:

Stipulations relieving from liability for negligence

It shall not be lawful for the manager, agent, master,

or owner of any vessel transporting merchandise or property

from or between ports of the United States and foreign ports

to insert in any bill of lading or shipping document any

clause, covenant, or agreement whereby it, he, or they shall

be relieved from liability for loss or damage arising from

negligence, fault, or failure in proper loading, stowage,

custody, care, or proper delivery of any and all lawful

merchandise or property committed to its or their charge.

Any and all words or clauses of such import inserted in bills

of lading or shipping receipts shall be null and void and of

no effect. Feb. 13, 1893, c. 105, Section 1, 27 Stat. 445.

Section 191 of the Harter Act provides:

Stipulations relieving from exercise of due diligence in

equipping vessels

It shall not be lawful for any vessel transporting merchandise

Or property from or between ports of the United States of

America and foreign ports, her owner, master, agent, or

manager, to insert in any bill of lading or shipping document

any Covenant or agreement whereby the obligations of the

Owner or owners of said vessel to exercise due diligence to

properly equip, man, provision, and outfit said vessel, and to

make said vessel seaworthy and capable of performing her

intended voyage, or whereby the obligations of the master,

officers, agents, or servants to carefully handle and stow her

cargo and to care for and properly deliver same, shall in any

wise be lessened, weakened, or avoided. Feb. 13, 1893, c.

105, Sections 2, 27 Stat. 445.

Section 1301 (e) of the Carriage of Goods by Sea

Act (COGSA) 46 U.S.C. App. 1301(e) provides:

Definitions

(e) The term "carriage of goods” covers the period

from the time when the goods are loaded on to the time when

they are discharged from the ship.

Section 1304 (5) of the Carriage of Goods by Sea

Act, 46 U.S.C. App. Section 1304 (5S) provides:

Amount of liability; valuation of cargo

(5) Neither the carrier nor the ship shall in any event

be or become liable for any loss or damage to or in

connection with the transportation of goods in an amount

exceeding $500 per package lawful money of the United

States, or in case of goods not shipped in packages, per

customary freight unit, or the equivalent of that sum in other

currency, unless the nature and value of such goods have

been declared by the shipper before shipment and inserted in

the bill of lading. This declaration, if embodied in the bill of

lading, shall be prima facie evidence, but shall not be

conclusive on the carrier.

By agreement between the carrier, master, or agent of

the carrier, and the shipper another maximum amount than

that mentioned in this paragraph may be fixed: Provided,

That such maximum shall not be less than the figure above

named. In no event shall the carrier be liable for more than

the amount of damage actually sustained.

Neither the carrier nor the ship shall be responsible in

any event for loss or damage to or in connection with the

transportation of the goods if the nature or value thereof has

been knowingly and fraudulently misstated by the shipper in

the bill of lading.

Section 1311 of the Carriage of Goods by Sea Act,

46 U.S.C. App. Section 1311 provides:

Liabilities before loading and after discharge; effect on

other laws

Nothing in this chapter shall be construed as

Superseding any part of sections 190 to 196 of this title, or

of any other law which would be applicable in the absence of

this chapter, insofar as they relate to the duties,

responsibilities, and liabilities of the ship or carrier prior to

the time when the goods are loaded on or after the time they

are discharged from the ship.

STATEMENT OF THE CASE

On March 15, 1985 Hiram Walker purchased 5,000

gallons of Tia Maria from Estate Industries in Jamaica. On

March 26, 1985 a 23 ton tank on wheels, similar to a milk

or gasoline tank truck, containing the liqueur was rolled

aboard the M/V Morant Bay in Kingston in apparent good

order and condition. The Morant Bay was operated by Kirk

Line under charter. Kirk Line issued a bill of lading to

Hiram Walker. The vessel arrived in Miami on March 29,

1985. On that day, Eller & Company (Eller), a stevedore and

terminal operator hired by Kirk Line rolled the tank from the

Morant Bay to a place of rest on its terminal. It was, at that

time, in good order and condition. Hiram Walker contracted

with Indian River Transport, Inc. (Indian River) to transfer

the liqueur from the Kirk Line tank into its own

Over-the-road tanker trailer for delivery to New Jersey.

Hiram Walker and Indian River agreed that Indian River was

to pump the liqueur from the tank into its trailer. On April

1, 1985 the Indian River driver arrived at the pier, was

issued several documents including a delivery receipt signed

by Eller & Company and countersigned by the driver, David

Jones. Jones found that he was missing a fitting in order to

connect hoses from the Kirk tank to his own to effect a pump

transfer. Unable to do so, he asked an Eller longshoreman

employee to help him accomplish a gravity feed. Eller raised

the tank on a large fork lift. It fell off the fork lift spilling

almost all of its contents.

Petitioner, Hiram Walker, brought this case in the

United States District Court for the Southern District of New

York pursuant to the admiralty and maritime jurisdiction of

the Federal Courts as a maritime or admiralty claim within

the meaning of Rule 9 (h) of the Federal Rules of Civil

Procedure and pursuant to 28 U.S.C. Sections 1333 (1),

1332, 46 U.S.C. 1301 et. seq. and 49 U.S.C. 11707. It was

later removed to the U.S. District Court for the Southern

District of Florida.

Hiram Walker, Kirk Line and Eller agreed that Hiram

Walker alone was responsible for arranging a transfer of the

Tia Maria from the Kirk Line tank to the Indian River tank.

Hiram Walker and Kirk Line had no agreement regarding

delivery of the Tia Maria. The bill of lading made no

provision regarding delivery. Kirk Line and Eller &

Company testified that neither had any obligation to transfer

the Tia Maria either by pump or gravity feed. However,

Kirk Line testified that it expected Eller to provide whatever

services were needed by Hiram to effect a transfer, and

Eller’s longshoreman testified that in lifting the truck he was

under no obligation to do so but just did Indian River a

favor. Officers of Hiram Walker, Kirk Line and Eller

testified that they had no prior knowledge that Eller was

going to raise the tank by fork lift. They would not have

approved it if they had known. Eller would not have

approved it because it felt it was a dangerous operation.

Unbeknownst to Eller or Hiram, Eller’s employees had

performed gravity feeds before the April 1, 1985 incident in

about 1/3 of the cases and used a fork lift in about 15 prior

cases.

In 1986 all of the Defendants moved for partial

Summary Judgment to limit their liability if any to $500.00

pursuant to the per package limitation contained in the bill of

lading. Hiram Walker moved for Summary Judgment against

all of the Defendants both on the question of their liability

and in opposition to their Motions to limit that liability to

$500.00. By Order of December 16, 1986, (88a) the District

Court denied the Motions of Eller and Indian River, granted

Hiram’s Motion for liability against them holding that they

were not entitled to limit their liability and granted Kirk

Line’s Motion to be dismissed from the action holding that

there were no grounds upon which it might be held liable

since Kirk Line fulfilled its obligations to Hiram at the point

where Hiram’s liqueur had been safely delivered to Miami,

unloaded from the Morant, and placed in storage. Indian

River was held not to be entitled to limit its liability because

it was not a carrier within the contemplation of maritime

law. Eller was held not to be entitled to a limitation of

liability because, in performing the gravity feed, it had acted

as a volunteer and not on behalf of Kirk Line. The Court

held that transfer of the liqueur from the Kirk tank to the

Indian tank was not a function or duty for which Kirk was

responsible. Hiram, Eller and Indian River appealed. While

the appeals were pending, the District Court held hearings

wherein Hiram quantified its damages and on February 10,

1988 the District Court entered Judgment for Hiram Walker

against Indian River and Eller in the amount of $147,111.43

Plus costs (72a). Indian River thereafter settled with Hiram

Walker and the appeals proceeded between Hiram Walker

and Eller.

In Hiram Walker y. Kirk Line et al (Hiram Walker 1),

877 F.2d at 1515-1517 (1989) (64a) the Eleventh Circuit

agreed with the District Court that Eller’s negligence had

been established as a matter of law, but reversed the

Judgment because it perceived unresolved questions of fact

regarding Eller’s eligibility for the $500.00 liability cap.

Expressly ignoring the District Court’s Order wherein Kirk

Line was dismissed because it had fulfilled its responsibility,

and despite the fact that Kirk Line did not appeal, the Circuit

Court focused on Kirk Line’s responsibility for the cargo and

whether that responsibility had been completely discharged

when the spill occurred. It remanded, directing the District

Court to determine whether, at the time of the accident,

delivery had occurred. The District Court, after a bench

trial, entered Judgment in favor of Hiram Walker but this

time limited Eller’s liability to $500.00, basically because

Eller still had custody of the Cargo at the time of the loss

(35a, 36a). In so holding the Court explicitly disregarded the

delivery receipt issued by Eller to Indian River before the

accident.

Hiram Walker appealed that decision and again the

Eleventh Circuit reversed, Hiram Walker & Sons v. Kirk

Line et al, 963 F.2d 327 (1992) (Hiram Walker IT) (25a),

holding that the District Court had misinterpreted the bill of

lading as identifying change of Custody as the only possible

evidence of delivery. It remanded with a direction that the

District Court develop any facts that would aid it in

determining the point of delivery. On remand, the District

Court amended its findings of fact and conclusions of law,

found that the delivery receipt was issued either inadvertently

or in error, concluded that Eller was trying to effect delivery

when the accident occurred and was, therefore, entitled to

the $500.00 limitation of liability (21a).

Hiram Walker appealed again. In Hiram Walker &

Sons v. Kirk Line et al, 30 F.3d 1370 (1994) (Hiram Walker

IIT) (1a), the Circuit Court affirmed the District Court,

opining that although delivery receipts are generally highly

probative evidence of delivery, the receipt in this case was

issued prematurely and mistakenly before completion of

delivery. Chief Judge Tjoflat dissented, finding that legal

delivery had taken place before the spill since Indian River

controlled the process by which the Tia Maria would be

transferred and that accordingly Eller was not working on

behalf of Kirk at the time of the loss and was not entitled to

the $500.00 per package limitation.

REASONS FOR GRANTING THE WRIT

THE DECISION BELOW PRESENTS

IMPORTANT, UNANSWERED QUESTIONS

AND CONFLICTS WITH SUPREME

COURT, FEDERAL CIRCUIT COURT AND

STATUTORY LAW

a) Non Maritime Claim

In Hiram Walker & Sons, Inc. v. Kirk Line (Hiram

Walker I), 877 F.2d at 1511 (57a), the Eleventh Circuit

observed that since the accident in question did not occur at

a maritime situs, admiralty jurisdiction would not support the

claims against Indian River and Eller. As to Eller,

jurisdiction was upheld as properly within the pendent-party

jurisdiction of the District Court. Specifically, the claim

against Eller was sustained because it was sued as a joint

tort-feasor with Indian River and the claim against Indian

River was properly a federal claim arising under the

Carmack Amendment, 49 U.S.C. Section 11707. After the

ocean carrier, Kirk Line, had been dismissed from the case

because it was held to have fulfilled its obligations to Hiram

by safely delivering the liqueur to Miami and placing it in

storage, Eller, as a terminal operator, was allowed to limit

its liability to $500.00 under COGSA and the parallel

provisions of the bill of lading when it almost totally

destroyed the cargo by subjecting it to a risk unauthorized by

the parties. The District Court, and the Circuit Court below,

in sanctioning that result, gave Eller an independent right

under COGSA and Harter which Congress never intended.

A carriage of goods by sea involves three Stages. The

goods are: 1. delivered to a carrier or its agent, 2. loaded to,

carried by, and discharged from the vessel, and 3. delivered

to a consignee. All stages are governed by the Harter Act, 46

U.S.C. App. Section 190 et seq. The Harter Act took effect

in 1893. In 1936 the Congress adopted the Carriage of Goods

by Sea Act, 46 U.S.C.-App. Section 1301 et seq. (COGSA).

By its terms COGSA applies only to that stage of the

carriage when the goods are actually on the vessel. COGSA

Section 1301 (e). The carrier’s custody and care for the

goods pre-loading and after discharge but before delivery are

governed exclusively by the Harter Act.

By virtue of the bill of lading’s “clause paramount"

Kirk Line applied COGSA to all Stages of the shipment and

at all times that the goods were in the Custody of the carrier.

However, it could only do so effectively insofar as COGSA

did not contradict the Harter Act during those periods of time

prior to loading and after discharge, 46 U.S.C. App. Section

1311.

The $500.00 per package limit at issue in this case

was either the COGSA limit or a parallel independent

provision of the bill of lading found in clause 17 thereof set

forth verbatim in Hiram Walker II at 963 F.2d 329, note 1

(31a, 32a). It essentially tracks COGSA.

It’s application to Eller was found by the Courts

below to likewise exist in clause 17. There, the bill of

lading’s Himalaya clause provided as follows:

“The limitation of liability and other provisions

contained in the article shall inure not only to

the agents, servants and employees, but also to

the benefit of any independent contractors

performing services including stevedoring in

connection with the goods covered hereunder."

In Robert C. Herd & Company, Inc. v. Krawill

Machinery Corp., 359 U.S. 297 (1959) this Court held that

neither the limitation of liability provisions of COGSA nor

the parallel provisions of an ocean bill of lading, limiting the

liability of the steamship carrier to a shipper to $500.00 per

package, protected a stevedore who negligently damaged

cargo while attempting to load it aboard the vessel. There,

the stevedore dropped a press weighing 19 tons into the

harbor while in the process of loading it to the ship. While

concluding that there was nothing in the provisions,

legislative history and environment of the Carriage of Goods

by Sea Act, or in the limitation of liability provisions of the

bill of lading to directly extend the benefits of the limitations

of liability to the stevedore, the court invited carriers to

extend those provisions by contract to their negligent agents.

In the intervening 35 years that invitation has been accepted

by carriers in a variety of wordings. The extension has been

upheld or rejected in an equally varied set of factual

contexts, mainly involving stevedores operating in a Clearly

maritime situs. Brown & Root, Inc. v. M/V Peisander, 684

F.2d 415 (Sth Cir. 1981) esp. ns. 17 & 18.

This case presents the important unanswered question

of whether a terminal operator which is under no obligation

to the carrier to undertake the act which results in damage in

a non-maritime situs, although originally engaged by the

carrier, nevertheless, enjoys the limitation of liability

provisions of an ocean bill of lading and the Carriage of

Goods by Sea Act, both clearly maritime in nature and

application.

The question is important because those engaged in

international trade, whether in the insurance, freight

forwarding, merchant or shipping industries, need to have a

Clear understanding of the risks which flow from their

reliance on the maritime laws of the United States.

b. Lack of Clarity

This Court has not directly re-visited this area since

Herd & Co., supra. Petitioner respectfully submits that it

should do so now. The facts in this case have expanded the

envelope concerning the extension of ocean carriers’

limitations of liability to their agents to the breaking point.

Eller & Company was not operating as a stevedore when it

raised the truck off its wheels on a hi-lo and dropped it. The

accident happened in what .was essentially a parking lot

where the Kirk Line truck awaited removal of its cargo by an

ICC regulated carrier which alone was responsible to make

the transfer. Without authorization by even Eller itself, one

of its employees, at the request of Indian River, and simply

to accommodate and help Indian River, performed an act

which Eller characterized as dangerous. The questions are

presented: Is the Himalaya provision in the Kirk Line bill of

lading what this Court intended in Herd as a sufficiently

clear contracting provision making Eller a beneficiary of

COGSA? Is it effective to extend that limitation of liability

to “any independent contractors performing services...in

connection with the goods covered...(by the bill of lading)",

without ever mentioning the carrier’s obligation to the

shipper as the defining criterion? Is the clause a nullity for

lack of clarity in failing to identify whose independent

contractors are meant? See, Schiess-Froriep Corp. v. S.S.

Finnsailor, 574 F.2d 123 (2d Cir. 1978). A literal reading of

that phrase could be said to limit the liability of Indian River

itself which was clearly not fulfilling Kirk’s obligation, but,

equally clearly, was performing services in connection with

the goods. The Petitioner respectfully submits that such

cannot have been the intention of Congress or this Court and

that the decisions of the Eleventh Circuit and the District

Court distort the maritime law as formulated by this Court,

the various circuits, COGSA and the Harter Act itself.

Accordingly, this case conflicts with the purpose of COGSA

and Harter and the precedents of this Court and the various

circuits, and requires guidance on important but unanswered

questions of Federal Maritime Law.

c) Delivery

The Hiram Walker trilogy, culminating with the

Eleventh Circuit opinion under review including the District

Court’s Findings of Fact and Conclusions of Law and Final

Judgment all dated August 6, 1990 (35a, 36a) and, the

District Court’s Order on remand from Court of Appeals

entered March 10, 1993 (21a) are all fatally flawed. They all

pursued the elusive question of whether and when delivery

had been accomplished in order to properly position Eller’s

actions as having taken place either before delivery or after

delivery. That question was further refined into an inquiry as

whether Kirk Line’s responsibility for the cargo had ended

before the spill. But that question had been answered in 1986

when the District Court granted Kirk Line’s Motion to

Dismiss holding that it “fulfilled its obligations to Hiram at

the point where Hiram’s liqueur had been safely delivered to

Miami, unloaded from the Morant, and placed in storage.”

(93a). In reality, that was, then, the beginning and the end of

the matter. Kirk Line had been dismissed, having been held

to have completed its obligations to Hiram Walker and with

it, the vicarious entitlement, if any, of Eller to the $500.00

per package cap of the bill of lading. Hiram Walker rested

comfortably on that determination which became the law of

the case. That determination conformed with long standing

maritime law. F.J. Walker Limited v. Orleans International

Inc., 561 F.2d 1138, 1142 (Sth Cir. 1977); American

President Lines Inc. v. Federal Maritime Board, 317 F.2d

887, 888 (D.C. Cir. 1962).

Ignoring that conclusion and the dismissal of Kirk

Line, the District Court and the Eleventh Circuit in its

trilogy continued to treat Eller’s obligation as if it were not

vicarious and as if Eller were a carrier entitled directly to the

benefits of the Harter Act and COGSA. It is not and it was

not. That inherent conflict in the cases led to a tremendous

amount of mischief, and the trilogy, resulting in the

Judgment sought to be reviewed. In essence the dismissal of

Kirk Line from this action, which the Petitioner consciously

declined to appeal, severed the underpinnings of Eller’s

further arguments of entitlement to a vicarious $500.00 per

package limit. Nevertheless, the Eleventh Circuit and the

District Court at its prompting, continued pursuit of that

question which had already been answered.

Quite apart from that state of the law of the case after

the dismissal of Kirk Line, the continued pursuit of the issue

of when delivery occurred by the Eleventh Circuit and the

District court should have resulted in the same conclusion:

That delivery had occurred before the spill. All of the proven

facts lead to that conclusion. The parties did not define

between themselves anywhere what constituted delivery.

COGSA has no requirement whatsoever concerning delivery.

It is undisputed that all parties including Kirk agreed that

neither Kirk nor Eller had any obligation to transfer the

liqueur. Kirk and Eller admitted in answers to interrogatories

unequivocally that delivery had been effected on April 1,

1985 before the accident and that the cargo had been

delivered in good order and condition to Indian River, Hiram

Walker’s agent. Despite all of those facts and despite the

actual issuance of a delivery receipt signed by both Eller and

Indian River, the District Court and the Eleventh Circuit

continued to explore the meaning behind all of those facts

and dwelt on the absence of a gate pass to conclude that

delivery had not taken place and was actually in the process

of occurring when the accident happened. As a consequence,

Eller was given the benefit of the limitation. Petitioner

submits that the conclusion was in error and conflicts with

F.J. Walker, and American President Lines.

d) Proper Delivery

Assuming that the Courts below were justified in

ignoring the dismissal of Kirk Line from the case because it

had completed its obligations, and thereafter were correct in

pursuing that very question in the absence of Kirk Line, and

if they were thereafter correct in concluding that delivery did

not take place prior to the spill, there is no question but that

the delivery was not proper. Dropping the tank could not be

a proper delivery. Neither the parties nor the bill of lading

nor COGSA nor the Harter Act define "delivery".

“Delivery” only appears in the statutes as a term modified by

the adjective “proper”. And it appears in the Harter Act,

Sections 190 and 191. Petitioner respectfully submits that if

delivery is not proper it does not comply with the Harter Act

and it results in a deprivation to the Carrier and its

subcontractors of the benefits of any limitations of liability.

Eller was held liable as a matter of law on account of its

negligence. That was, in itself, a highly unusual holding by

both the District Court and the Eleventh Circuit since

negligence is almost always a question of fact for the trier.

However, despite that holding Eller was deemed entitled to

limit its liability to $500.00. That conclusion by the Court

below directly conflicts with the Harter Act which proscribes

any lessening, weakening, or avoiding of a carrier’s

obligation to carefully handle, care for, and properly deliver

Cargo.

Section 191 of the Act renders unlawful any

agreement whereby the obligations of the master, officers,

agenis, or servants of the vessel “to carefully handle and

Stow her cargo and to care for and Properly deliver same,

Shall in any wise be lessened, weakened or avoided."

(Emphasis added). Petitioner submits that when Eller,

through Kirk Line, was entitled to limit its liability for

destroying $146,000.00 worth of cargo to $500.00 its

obligations to care for and properly deliver the cargo were

substantially lessened and weakened and, essentially,

avoided. Petitioner respectfully submits that the most

compelling evidence that Congress intended to void any

limitation on a carrier’s liability under circumstances like

those at bar is from the very language of the Harter Act

itself. In Section 190 it speaks in terms of relief from

liability. Section 191, on the other hand, speaks in terms of

obligations which it mandates cannot be lessened, weakened,

or avoided. While relief from liability does not preclude

limiting that liability when it comes to quantifying damages,

lessening, weakening or avoiding obligations does. An

obligation of a carrier extends not only to its legal liability

for damaging goods of others, but also to paying for that

damage. In short, the Court below rewarded the Carrier in a

way that Congress forbade.

Oe ee ee Ey ee ee ee ee ee

Petitioner submits that the holding of the Court below

also conflicts with the various Circuits that have addressed

the question. In Philip Morris v. American Shipping Co.

Inc., 748 F.2d 563 (11th Cir. 1984), in a case involving

damage sustained by a cargo of tobacco owned by Philip

Morris, the tobacco moved to Miami where Maritime

Terminal Inc. unloaded the Cargo and stored it in its

unprotected yard during which time it sustained damage. This

was post discharge and, therefore, COGSA did not apply to

the case ex proprio vigore. While American’s bill of lading

extended the COGSA provisions including the $500.00 per

package limitation to the entire period of time in which the

Cargo was in the custody of the carrier, the District Court

refused to grant the carrier a limitation of liability because it

violated the provisions of the Harter Act concerning proper

delivery. The Circuit held:

"The district court properly found that delivery

by American to Philip Morris was not effected

until the cargo was picked up by Central Truck

Lines on January 21, 1980. Limitations on the

carrier’s liability are inapplicable if damage

occurs due to negligence in the proper delivery

of the cargo." (emphasis added) (citing cases).

Philip Morris at 566, 567.

The court went on to hold that because the Cargo was

not properly delivered, the Harter Act, not the limitation

provisions contained in the bills of lading, controls the

question of liability. The court continued at 567:

“To permit American the benefit of the $500

limitation, despite the finding of the district

court that American did not exercise due

diligence in preventing damage to the cargo,

both before it was loaded onto the CRUZ DEL

SUR and after it arrived in Miami, would

immunize the carrier from the adverse

consequences of the negligent handling of the

cargo."

The holding of the Eleventh Circuit below in the case

at bar conflicts with Philip Morris, Supra and also with the

Fifth Circuit Decision in Baker Oil Tools v, Delta, 562 F.2d

938 (Sth Cir. 1977); rehearing denied 571 F.2d 978,

rehearing denied 577 F.2d 1134. There, when goods were

lost on a pier before loading onboard the vessel, again at the

time when Harter applied of its own force and COGSA did

not, the Court held that the carrier did not have a limitation

on its liability precisely because the Harter Act forbade it.

e) Deviation

The holding of the Eleventh Circuit below in the case

at bar also conflicts with this Court’s holding in St. John’s

N.F. Shipping Corp. v. S.A. Companhia Geral Commercial

Do Rio de Janeiro, 263 U.S. 119, 124, 44 S.Ct. 30, 31, 65

L.Ed. 201 (1923) and Nemeth v. General SS Corp. Lid. , 694

F.2d 609 (9th Cir. 1982). Eller clearly unreasonably deviated

from the agreement Hiram had with Kirk that the liqueur

would be pumped.

Hiram did not bargain for, expect, or sanction the

risks to which Eller subjected its goods. Neither Kirk, nor

Hiram, nor Eller itself knew that the Eller employees would

lift the tank. None of them would have approved of the

exercise. Eller considered it dangerous. It was, in short,

fraught with danger and unorthodox. The consequence of that

deviation is loss of any limit of liability. For the Courts

below to observe that Eller’s employees did the dangerous

act carefully on prior occasions does not make it any less a

deviation. Nor did it thereby become a custom of the port.

Eller claims its limit through Kirk’s bill of lading. By

lifting the tank, Eller broke Kirk’s contract with Hiram,

exposed the goods to greater risk than had been agreed and

thereby caused the loss which would never had happened if

a pump had been used. As in St. John’s N.F., Kirk, and

Eller through Kirk, “became liable as for a deviation, cannot

escape by reason of the relieving clauses inserted in the bill

of lading...and must account for the value at destination." Id.

at 263 U.S. 124, 125.

CONCLUSION

The Decision below conflicts with the purpose of

COGSA and the Harter Act and is an unwarranted extension

of the principle enunciated in Herd & Co. It presents an

important unanswered question about what limits, if any,

should be imposed on an ocean carrier when it extends the

benefits of COGSA and the maritime law of the United

States to a non-maritime entity operating in a non-maritime

situs, under an ambiguous provision of a bill of lading,

where the actions at issue are a breach of the parties’

contract. For the foregoing reasons, certiorari should be

granted.

Respectfully Submitted

John P. D’Ambrosio

Counsel of record

D’Ambrosio & D’Ambrosio, P.C.

Attorneys for Petitioner

42 Main Street

Irvington, New York 10533

(914) 591-5400

Appendix A

HIRAM WALKER & SONS, INC.,

Plaintiff-Appellant,

KIRK LINE, R.B. Kirkconnell & Bro. Ltd.; Jamaica

Merchant Marine, Adantic Line Ltd.; Eller &

Company, Inc.; Indian River Transport, Inc.; and SS

Morant Bay, _its engines, boilers, etc.,

Defendants-Appellees.

No. 93-4346.

United States Court of Appeals,

Eleventh Circuit.

Sept. 1, 1994,

Shipper brought action against common Carrier and

stevedore to recover damages arising from cargo spill. The

United States District Court for the Southern District of

Florida entered summary judgment for shipper and carrier

and stevedore appealed. The Court of Appeals, 877 F.2d

1508, reversed and remanded. The District Court, No. 86-

762-CIV-KLR, Kenneth L. Ryskamp, J., entered judgment

for stevedore and the Court of Appeals, 963 F.2d 327,

reversed and remanded. On remand, the District Court en-

tered judgment for stevedore and shipper appealed. The

Court of Appeals, Roney, Senior Circuit Judge, held that

finding that delivery receipt was issued inadvertently before

stevedore completed delivery of cargo on behalf of ocean

carrier and was therefore not probative of delivery, as

bearing on stevedore’s entitlement to $500 limitation of

liability under Carriage of Goods by Sea Act (COGSA) for

destruction of cargo when it fell from forklift, was not

Clearly erroneous. Affirmed.

Dubina, Circuit Judge, concurred specially with opinion.

Tjoflat, Chief Judge, filed dissenting opinion.

(Keynotes not reproduced)

Appeal from the United States District Court for the

Southern District of Florida.

Before TJOFLAT, Chief Judge, DUBINA, Circuit

Judge, and RONEY, Senior Circuit Judge.

RONEY, Senior Circuit Judge:

At issue in this case is whether Eller & Co., Inc., a

stevedore and terminal operator, was in the process of

delivering cargo on behalf of an ocean carrier, R.B.

Kirkconnell & Bro. Ltd. (Kirk Line) when it negligently

destroyed the cargo in a forklift accident. The district court,

following remand, made certain factual findings and

reinstated its earlier judgment, holding that delivery was

ongoing at the time of the accident, and that, as a result,

Eller’s liability was limited to $500 under the Carriage of

Goods by Sea Act, 46 U.S.C.App. Section 1304(5), as

incorporated into the bill of lading between Kirk Line and the

cargo’s owner, Hiram Walker & Sons, Inc. (Hiram Walker).

Hiram Walker appeals the limitation of Eller’s liability,

contending that the underlying factual findings are clearly

erroneous. We affirm.

This case is before us for the third time. To

understand its current posture, it is necessary to review the

factual and procedural background in some detail. We begin

by reciting the facts as set forth in our prior opinions:

Hiram Walker purchased five thousand gallons of Tia

Maria from Estate Industries in Jamaica on March 15, 1985.

On March 26, a twenty-three ton tank containing the liqueur

was loaded aboard the M/V Morant Bay in Kingston,

apparently in good order. Kirk Line had chartered the

Morant Bay ... for a shipment of cargo including Hiram

Walker’s liqueur, which was shipped under the Kirk

Line-Hiram Walker bill of lading. The tank arrived in Miami

three days later. Kirk Line hired Eller, a stevedore, to unload

the tank from the Morant Bay and store it at the dock.

Hiram Walker contracted with [Indian River

Transport, Inc. (Indian River)] to transport the liqueur

overland to New Jersey; Hiram Walker and Indian River

agreed that Indian River was to pump the liqueur from the

tank into its freight trailer. On April 1, Jones, an employee

of Indian River, arrived at the port to effect the pumping

transfer. An Eller employee removed the tank from storage

and aligned it with the trailer. Jones attempted to connect the

tank and the trailer, but realized that a fitting needed to

connect the hoses was missing. Even though another fitting

on the back of the tank might have been used to pump the

liqueur into the trailer, Jones decided that pumping the

liqueur would be impossible; therefore, he asked Marshall,

an Eller employee, to help him accomplish a "gravity feed” -

essentially, Jones wanted to pour the liqueur from the tank to

the trailer. To effect a gravity feed, the tank had to be

elevated higher than the trailer. Marshall directed another

Eller employee, Wright, to assist Jones. Wright lifted the

tank on a large forklift; Wright, however, was not licensed

to operate forklifts of this capacity.

Wright and Marshal neglected to put straw mats or

other dunnage between the metal forks and the metal

container. Fifteen minutes into the operation, the tank

apparently began to slide off the forks because of the lack of

dunnage. Deciding that the tank was not properly balanced,

Marshall instructed Wright to find another forklift. Wright

did not lower the tank, but left the forklift holding the tank

suspended eight feet off the ground for ten minutes; leaving

a load suspended was a violation of Standard company

procedure. As Wright returned, the tank fell off the forklift.

The tank ruptured, and eighty-five percent of the Tia Maria

in the tank spilled out. The liqueur remaining in the tank was

contaminated during the cleanup, in which several fire engine

companies covered the area with anti-explosive foam.

Hiram Walker & Sons, Inc. v. Kirk Line, 877 F.2d

1510-11 (11th Cir.1989) (Hiram Walker )).

Hiram Walker sued Eller, among others, for the loss

of the cargo. In December 1986, the district court granted

summary judgment in favor of Hiram Walker on the issue of

liability, finding that Eller had been negligent as a matter of

Florida law. The court also considered whether Eller was

entitled to COGSA’s $500 per container limitation on

liability, which was incorporated into the bill of lading

between Kirk Line and Hiram Walker, and which, pursuant

to a “Himalaya” clause, "inure{d] to the benefit of any inde-

pendent contractors performing services including

stevedoring" for Kirk Line. (Footnote 1) The court concluded

that the $500 limitation did not apply because Eller, in

performing the gravity feed, had acted as a volunteer, not as

Kirk Line’s independent contractor.

Eller appealed, and in Hiram Walker I, 877 F.2d at

1515-1517, we agreed with the district court that Eller’s

negligence had been established as a matter of law, but

reversed the judgment because there remained unresolved

factual issues regarding its eligibility for the $500 liability

cap. Noting that the bill of lading required Kirk Line to

deliver the cargo to Indian River, we held that Eller would

be a beneficiary of the Himalaya clause as long as Kirk Line

had not completely discharged that responsibility when the

spill occurred. We remanded for trial, directing the district

court to determine whether, at the time of the spill, delivery

had already occurred. If not, then Eller had performed the

gravity feed on Kirk Line’s behalf and was entitled to the

$500 limitation on liability. If delivery was complete, howev-

er, Eller would be deemed a volunteer and there would be no

such limitation.

After the resulting bench trial, the district court again

entered judgment in favor of Hiram Walker. This time,

however, it limited Eller’s liability to $500, finding that Kirk

Line’s responsibility for delivery under the bill of lading had

not ended before the spill, and that Eller was therefore

performing services on its behalf. Noting that the parties had

not defined "delivery", the court made extensive findings of

fact regarding the parties’ agreements and practices. It found,

for example, that although Hiram Walker and Indian River

orally agreed that Indian River was responsible for pumping

the cargo into its trailer, they had no agreement about how

the cargo should be transferred if not pumped. The court

found, moreover, that neither the bill of lading, which

contained the carriage agreement between Hiram Walker and

Kirk Line, nor the oral contract between Kirk Line and Eller

for stevedoring and terminal services, specified the method

of transferring the cargo to Indian River. From the trial

testimony, however, the court determined that Kirk Line

expected Eller to provide Indian River “with whatever

services were necessary to effect a physical transfer of the

cargo", and that Eller had discretion to decide how best to

accomplish that task. It further found that Eller had

performed gravity transfers in approximately one-third of all

deliveries, and that at least fifteen of those deliveries

involved the use of a forklift.

In concluding that delivery was not complete before

the spill, the district court placed special emphasis on Clause

18 of the bill of lading, which provided that "removal of the

goods into the custody of the person entitled to delivery

thereof under the contract of carriage ... shall be prima facie

evidence of the delivery by the Carrier of the goods as

described in the bill of lading." The court interpreted that

language as precluding the possibility of delivery without a

change of custody. Because it was undisputed that Eller had

never transferred the cargo into Indian River’s Custody, the

court held that delivery did not occur in this case. In so

holding, the court explicitly disregarded evidence that Eller

had issued a delivery receipt to Indian River before the

accident.

Hiram Walker appealed that decision, and again this

court reversed. Hiram Walker & Sons v. Kirk Line, 963 F.2d

327 (11th Cir. 1992) (Hiram Walker Il). Although con-

cluding that the district court’s findings of fact were not

Clearly erroneous, we held that the court had misinterpreted

the bill of lading as identifying change of custody as the only

possible evidence of delivery. Id. at 331. We explained that

although Clause 18 provided that change of custody would be

prima facie evidence of delivery, Indian River’s lack of

custody at the time of the spill was not conclusive evidence

that delivery had not occurred. Noting that other evidence,

such as the delivery receipt, might establish that Kirk Line’s

delivery obligation was completed before the accident, the

case was remanded with instructions that the district court

develop any facts that would aid it in determining the point

of delivery. We made Clear, however, that the delivery

receipt was not conclusive evidence of delivery and that its

probative value would depend upon the circumstances of its

issuance. Id. at 332.

On remand, the district court held a status conference

at which both parties indicated they had no further evidence

to present regarding delivery. Thereafter, the court amended

its findings of fact and conclusions of law, stating that "the

court has considered the significance of the delivery receipt,

in accordance with the Eleventh Circuit’s mandate, and has

determined that the delivery receipt did not establish the

point in time that ’legal delivery’ took place." Relying on the

trial testimony, the district court found that the issuance of

the delivery receipt in this case was either inadvertent or

erroneous because it was inconsistent with Eller’s usual

practice of issuing such receipts, along with gate passes, only

after physical possession of the Cargo has passed to the

consignee. Because the receipt was issued in error, and there

was no other compelling evidence that delivery was

complete, the district court concluded that Eller was trying

to effect delivery when the accident occurred , and that it was

therefore entitled to the $500 limitation on liability. Hiram

Walker has again appealed.

[1] The sole issue in this appeal is whether the district

court committed reversible error in finding that the delivery

receipt was issued inadvertently or erroneously and was

therefore not probative of delivery. (Footnote 2)

{2,3] As Hiram Walker acknowledges, the Challenged

finding is one of fact and is therefore reviewed only for clear

error. Fed.R.Civ.P. 52. "This court will not disturb a district

court’s findings of fact under the clearly erroneous standard

unless it is left with the ‘definite and firm conviction that a

mistake has been made’ after making all credibility choices

in favor of the fact-finder’s choice, in light of the record as

a whole." Meek v. Metropolitan Dade County, 985 F.2d

1471, 1481 (11th Cir. 1993) (quoting Maddox v. Claytor, 764

F.2d 1539, 1545 (11th Cir. 1985). If the district court’s

finding is plausible in light of the entire record, “the court of

appeals may not reverse it even though convinced that had it

been sitting as the trier of fact, it would have weighed the

evidence differently." Anderson vy. City of Bessemer City,

470 U.S. 564, 574, 105 S.Ct. 1504, 1511, 84 L.Ed.2d 518

(1985).

Hiram Walker contends that the district court’s

finding is clearly erroneous because there is no evidence in

the record that the delivery receipt was issued erroneously or

that such receipts are customarily issued only after physical

transfer of the cargo. This argument is baseless. The district

court finding rests on the trial testimony of two Eller

employees, Marvin Stephens and Jose Naranjo. Stephens,

Eller’s manager of operations at the time of the spill,

testified as follows:

Q. Now on April 1, 1985, the incident took place where the

Tia Maria was spilled. What function was Eller & Company

performing at that period of time?

A. They were attempting to deliver the product to Indian

River. (R9-61).

Q. Would the delivery have occurred upon the alignment of

Tank 24 with the Indian River tank if Indian River could

have pumped the cargo?

A. After it was cleared our gate, yes.

Q. What do you mean by that?

A. If all the proper documentation had been made and it was

pumped and a gate pass was issued for it to leave our gate

and leave the Port of Miami.

Q. Would delivery have occurred by aligning Tank 24 with

trailer no. 24 [sic] when the pumping could not occur?

A. No. (R9-83-84).

Q. Is there a point in time when Eller’s terminal services for

Kirk Line ends that you are aware of, for the handling of

cargo?

A. Yes, upon the issuance of a gate pass. (R9-83-84),

A. That’s right.

Q. Do you know ifa delivery receipt was issued in this case?

A. I think I saw one.

Q. Is there a difference between the two?

A. Yes. The gate pass allows the unit to leave our facility.

Q. What’s the function of the delivery receipt?

A. It is that the cargo has been delivered. (R9-93).

Q. Was it customary on a day-to-day basis for Eller &

Company to sign delivery receipts and to get a receiver, a

trucker, to sign a delivery receipt before delivery had been

effected? That’s my only question. Was that customary to

do?

A. No.

Q. And yet it was done in this case, is that what you are

suggesting.

A. Evidently. (R9-100-101).

Q. Were delivery receipts issued customarily with shipments

of Tia Maria, that is coming into Miami and going off?

A. Yes.

Q. And when ordinarily were those issued?

A. Upon completion of the delivery of the cargo.

Q. And ordinarily the delivery of the cargo of bulk Tia

Maria was done by pumping, isn’t that correct?

A. Not all the time.

Q. But I mean customarily it was -

A. Not in this case.

Q. I know not in this case. Tank 24 was normally pumped

out, wasn’t it?

A. I would say probably at least a third of the time it was

delivered by a gravity feed. (R9-103).

Stephens’s testimony is clear: Eller, contrary to its custom,

issued the delivery receipt to Indian River before completion

of delivery, which in this case was being performed by

gravity transfer. The court reasonably inferred that this

departure from custom was a mistake, and that the receipt,

therefore, did not establish the time delivery took place.

The testimony of Jose Naranjo, Eller’s general traffic

manager at the time of the accident, further supports the

district court’s finding:

Q. Were there times when the pumping couldn’t be

performed that you are aware of?

A. Yes sir, there were many times.

10a

Q. At any time prior to April 1, 1985, what if anything did

Eller do with the Tia Maria when a pump could not occur?

A ... [W]e brought the tank from the lot, the container lot,

and brought it alongside the Indian River truck where the

tank was transferred through gravity. What we did very

simply is we placed it at a higher level than the receiving

tank. (R9- 113-114).

Q. Do you think Eller was obligated to lift Tank 24 on the

forklifts for this gravity feed in its contract with Kirk Line?

[objection omitted]

A. Eller’s responsibility was to deliver the contents of Tank

24 to Indian River and they were to utilize whatever methods

were necessary to complete the transfer.

Q. But lifting the tank with a forklift, was that an obligation

Eller owed to Kirkconnell?

A. With a forklift or any other equipment that was

available.... (R9-116).

Q. Please look at Plaintiff's Exhibit 11. Can you identify that

for the court?

A. Yes sir. This is a delivery receipt.

Q. What is the function of the delivery receipt?

A. This delivery receipt is completed after the cargo is

delivered to the receiver’s trucker.

Q. That appears to be the delivery receipt issued for the Tia

Maria that was spilled. Would that have been issued before

the spill or after the spill, if you know?

A. Normally this document is issued immediately after the

delivery. (R9-117).

Q. Can you think of a reason why there would be the release

for this dock receipt signed by the parties prior to the

transfer?

[objection omitted]

A. No sir, I couldn’t say why. Like I say, normally this is

issued after the cargo is delivered.

Q. Could it have been issued because it was anticipated that

the cargo would have been pumped?

lla

A. I would say that is the case, yes sir. (R9-118).

[4] Thus, Naranjo, like Stephens, believed that Eller

performed gravity transfers, whenever necessary, as a service

to Kirk Line, and that the issuance of a delivery receipt

before completion of such a transfer was contrary to normal

procedures. Even assuming, as Hiram Walker contends, the

evidence on this point is not uncontroverted, it is the

factfinder’s job to weigh the evidence and make necessary

credibility determinations. The "clear error" standard of

review "imposes an especially heavy burden on the appellant

in a case such as this, in which the evidence was largely

testimonial, and the district court had the advantage of

observing the witnesses and evaluating their credibility

firsthand." Lincoln v. Board of Regents of the University

System of Georgia, 697 F.2d 928, 939 (11th Cir.), cert.

denied, 464 U.S. 826, 104 S.Ct. 97, 78 L.Ed.2d 102 (1983).

Nothing Hiram Walker has presented to this court comes

close to satisfying its heavy burden. Having found the

testimony of Stephens and Naranjo believable, the district

court could easily infer that the receipt was issued

inadvertently or in error. This court is not in a position to

second guess that finding.

Hiram Walker is mistaken in asserting that "the

[delivery receipt] itself hardly bespeaks an inadvertent error."

As the district court noted, the face of the receipt does, in

fact, suggest that it was issued erroneously. Handwritten

across the front of the document are the words “pumped out

of Tank # 24 (as per manifest).". Obviously, no such

pumping occurred, and the written statement is therefore

false. Moreover, the writing implies, consistent with court’s

finding, that the receipt is meant to confirm that cargo has

been successfully transferred. On its face, therefore, the

receipt indicates that it was issued prematurely, in the

mistaken belief that a successful pump transfer would ensue

and that no further services would be required of Eller.

Because the anticipated method of delivery proved infeasible,

12a

and Eller was requested to provide additional services, the

district court reasonably concluded the receipt had been

issued in error and that it did not accurately reflect the point

of delivery.

[5] In its amended findings, the district court also

considered it important that no gate pass was issued in this

case. (Footnote 3) The court found, based on the testimony

of Naranjo and Stephens, that had Eller acted in accordance

with its custom, a gate pass would have issued

simultaneously with the delivery receipt. Thus, the court

reasoned, the absence of a gate pass further demonstrates that

the delivery receipt was issued prematurely.

Hiram Walker contends the district court’s finding is

clearly wrong because there is no evidence that gate passes

and delivery receipts normally issue simultaneously. This

argument, too, is unfounded. As shown above, Stephens and

Naranjo both testified that when a gravity transfer is

performed, the delivery receipt ordinarily issues following

the transfer. Stephens added that Eller issues gate passes

when it completes its terminal services and the consignee is

ready to leave the facility. Although neither witness

specifically stated that the documents normally issue at the

same time, that can be fairly inferred since Eller’s terminal

services apparently end when the «ansfer is complete. The

court’s finding is therefore not clear error.

Hiram Walker also argues that the district court’s

emphasis on the gate pass conflicts with this court’s

Statement in Hiram Walker II, 963 F.2d at 331, that "the

absence of a gate pass ... does little to question the status of

the delivery receipt as evidence, though perhaps not prima

facie evidence, of delivery." That argument, however,

ignores the context of the quoted statement. At the time it

was made, this court was not addressing whether the delivery

receipt had been issued in error - that argument had not been

raised. Rather, we were merely explaining that the absence

of evidence establishing change of custody, such as a gate

13a

pass, was not conclusive proof that delivery did not occur,

and that the district court had therefore erred by apparently

ignoring the receipt. In the context of the argument now

before us, however, the absence of a gate pass may properly

be viewed as limiting the probative value of the delivery

receipt because it suggests that the receipt was issued

prematurely. The district court’s finding, therefore, does not

conflict with the law of this case.

We emphasize that this ruling does not depreciate the

evidentiary value of delivery receipts. Ordinarily, such a

receipt would be strong evidence of delivery. We simply re-

ject Hiram Walker’s argument that the issuance of a delivery

receipt conclusively proves that delivery occurred. Such an

absolute rule is inappropriate in light of situations like this

where the evidence strongly indicates that the receipt was

mistakenly issued before completion of delivery.

[6] Finally, contrary to Hiram Walker’s argument, the

district court did not ignore any longstanding practice

between the parties in concluding that the gravity transfer

was within the scope of Kirk Line’s, and thus Eller’s, duty

of delivery. As noted above, the district court found that

Kirk Line expected Eller to provide whatever services were

needed to physically transfer the cargo to Indian River, and

that it was up to Eller to decide how to accomplish that task.

It found, moreover, that Eller performed gravity transfers in

approximately one-third of all deliveries, and that forklifts

were used at least fifteen times. These findings, all of which

have previously been accepted by this court as not Clearly

erroneous, Hiram Walker II, 963 F.2d at 330, support the

district court’s conclusion that Eller was performing services

for Kirk Line, and not as a volunteer, when the spill

occurred. AFFIRMED.

Footnotes:

1. Clause 17 of the bill of lading, which

contains the Himalaya clause, provides in pertinent part

l4a

as follows:

In the case of any loss or damage to or in connection

with goods exceeding in actual value $500 lawful

money of the United States per package, Or, in case of

goods not shipped in packages per customary freight

unit the value of the goods shall be deemed to be $500

: Per package or per unit, on which basis the freight is

| adjusted and the Carrier’s liability, if any, shall be

determined on the basis of a value of $500 per package

j Or per customary freight unit or pro rata, in case of

partial loss or damage...

The limitation of liability and other provisions

contained in the article shall inure not Only to the

agents, servants and employees, but also to the benefit

of any independent contractors performing services

including stevedoring in connection with the goods

covered hereunder.

2. The plaintiff also argues that delivery was complete,

as a matter of law, when the tank was aligned with

Indian River's trailer and made available for a pump

transfer. That argument, however, was rejected in

Hiram Walker 1, in which we held that undisputed

evidence of such alignment was insufficient, in this

case, to establish delivery as a matter of law:

When a pumping transfer is effected, delivery

may occur when the tank and the trailer are aligned—

but it does not necessarily follow that delivery in the

case of a gravity feed can finally occur before the last

of the liquid is drained into the trailer; the scope of

Kirk Line’s duty under the bill of lading may thus

depend upon the type of transfer that actually is

performed. The district court should determine after

trial whether Kirk Line’s obligations had completely

terminated by the time of the spill..877 F.2d at 1517.

3. This court has already accepted as not clearly

erroneous the district court’s finding that “[nJo gate

pass was issued." Hiram Walker II, 963 F.2d at 330.

DUBINA, Circuit Judge, concurring specially:

In Hiram Walker I, 877 F.2d 1508, 1516-17 (11th

15a

Cir.1989), we held that the stevedore Eller was entitled to

the COGSA $500 limitation of liability up until the point at

which it delivered the cargo. In Hiram Walker II, 963 F.2d

327, 331-32 (11th Cir.1992), we held that the district court

erred in treating custody of the cargo as conclusive evidence

of delivery and ignoring all other evidence of delivery, in

particular the issuance of a delivery receipt. We remanded

this case for the district court to make a factual determination

of delivery based on all the evidence. On remand, the district

court found that the delivery receipt had been issued

erroneously and contrary to custom and thus provided no

evidence of delivery. In sum, the district court found no

evidence that delivery had taken place at the time of the

accident.

The issues presented in this appeal are what

constitutes delivery and whether delivery is a purely factual

question or a mixed question of law and fact. Although the

panel in Hiram Walker II treated it as a purely factual

question, in the present appeal Chief Judge Tjoflat’s dissent

treats it as a mixed question. (Footnote 1) Neither COGSA

nor the agreements between the parties define delivery. The

closest thing to a definition is the provision in clause 18 of

bill of lading number 9 which states that “removal of the

goods into the custody of the person entitled to delivery

thereof under the contract of carriage ... shall be prima facie

evidence of the delivery . . .” Regardless of whether delivery

is a legal or factual question, the district court found no

evidence of delivery: custody had not been transferred; the

delivery receipt was issued erroneously; and in the case of

gravity feeds, delivery receipts customarily were not issued

until the completion of the transfer. These factual findings

are not clearly erroneous. (Footnote 2) In the absence of any

factual evidence of delivery, I fail to see how there could

have been any delivery, either factual or legal.

While Chief Judge Tjoflat has written a compelling

dissent, under the circumstances of this case, I disagree with

l6a

his treatment of delivery as a legal question for several rea-

sons. First, Hiram Walker II essentially remanded for the

district court to make a factual finding on delivery. If this

court were going to propound a legal definition of delivery,

we should have done so in Hiram II. Second, Chief Judge

Tjoflat cites no authority for his definition of delivery, which

he equates with control of the cargo. Third, I disagree with

Chief Judge Tjoflat’s finding that Indian River controlled the

Cargo at the time of the accident. | agree that Indian River

would have had control if it had proceeded to pump the Tia

Maria into its own tank; however, since Indian River did not

in fact pump the Tia Maria but rather chose to use a gravity

feed transfer, it remained dependent on Eller to effectuate the

transfer and thus Indian River did not have control of the

Cargo at the time of the accident.

For the foregoing reasons, I concur in Judge

RONEY’s opinion.

1. While I agree with the dissent that the question of

delivery can be a mixed question--that is, depending on

the circumstances of a given case, delivery can be

purely factual or purely legal— here, given the sparse

factual evidence of delivery, I cannot see how legal

delivery could have taken place under any common

sense notion of delivery.

2. The Seventh Circuit’s definition of Clearly erroneous

is the best I have seen: "To be clearly erroneous, a

decision must strike us as more than just maybe or

probably wrong; it must, as one member of the court

recently stated during oral argument, strike us as wrong

with the force of a five-week old, unrefrigerated dead

fish." Parts and Elec. Motors, Inc. y. Sterling Elec.,

Inc., 866 F.2d 228, 233 (7th Cir. 1988).

TJOFLAT, Chief Judge, dissenting:

I respectfully dissent.

17a

This case has been before the district court three

times and before this court twice. See Hiram Walker & Sons,

Inc. v. Kirk Line, 877 F.2d 1508 (11th Cir. 1989) ("HW I");

Hiram Walker & Sons, Inc. v. Kirk Line, 963 F. 2d 327

(11th Cir.1992) ("HW II"). Nevertheless, I am convinced

that the main issue to be decided - when legal delivery took

place - remains unresolved. (Footnote 1) It is time that we

resolve it.

. What must be our focus is not the point of physical

delivery of the liqueur, that is, when the transfer of the Tia

Maria from one container to another was completed; of

course, that never happened in this case. (Footnote 2) Rather,

this case turns on the time at which legal delivery occurred:

At what point was "Kirk Line’s duty . .. fulfilled?” HW I,

877 F.2d at 1516; HW II, 963 F.2d at 330 n. 3.

General maritime law holds that a carrier’s

responsibilities include unloading the Cargo onto the dock and

making it accessible to the consignee. See FJ. Walker, Lid.

v. Motor Vessel “Lemoncore", 561 F.2d 1138, 1142 (Sth

Cir.1977). (Footnote 3) And, although one searches in vain

for a conclusive definition of "delivery" in the Harter Act,

46 U.S.C.App. Section 190 (1988), (Footnote 4) delivery

typically requires nothing more than "discharge of cargo

upon a fit and customary wharf.” Allstate Ins. Co. v. Im-

parca Lines, 646 F.2d 166, 168 (Sth Cir. Unit B May 1981).

Yet, that definition is subject to modification "according to

the custom and usage of the port." Id.. (quoting Walker, 561

F.2d at 1144),

In its post-trial findings of fact and conclusions of law

entered after our remand in HW I, the district court made

two findings of fact that are of some assistance to our under-

standing of “custom and usage” at the Port of Miami.

(Footnote 5) First, the district court concluded that,

“[a]ccording to an oral agreement between Hiram Walker

and Indian River, Indian River was responsible for pumping

the Tia Maria cargo into its trailer." In other words, in the

. 7 53 "

ne LS et te ee eee

18a

case of a standard, pump transfer, legal delivery took place,

at the latest, at the time the two containers were aligned and

Indian River was prepared to begin the pump transfer.

Second, the district court noted that "Hiram Walker had no

agreement with Indian River regarding how the liqueur

should be transferred if it were not pumped.” Thus, in the

absence of a pump transfer, Hiram Walker and Indian River

had not agreed contractually to a point of legal delivery. It

might well be that legal delivery took place at the time the

containers were aligned, just as in a pump transfer; it is

equally conceivable, however, that legal delivery would have

taken place only after the liqueur physically had passed from

one container to a second.

Earlier, it appeared that the delivery receipt might be

probative as to the point of legal delivery; now, however, it

appears that the receipt may be of no use to us in resolving

this contentious issue. (Footnote 6)

In the absence of a probative delivery receipt, then,

we must turn to indicia of control. The facts reveal that, as

of the time at which Eller aligned the tank car with Indian

River’s truck, Indian River controlled the direction of events.

Indian River’s driver could have Provided the device by

which the Tia Maria would be pumped from the tank.

Having failed to bring that device, he could have directed

that Eller leave the tank car in place in order that he might

obtain the necessary pumping attachment. Or, as eventually

occurred, he could have directed that Eller accomplish a

gravity feed. Moreover, the Indian River driver could have

Stopped the gravity feed at any time and, after obtaining the

necessary equipment, performed a pump transfer.

Thus, through it all, Eller’s actions were dictated by

Indian River’s driver. Control of the process by which the

contents of the tank would be transferred rested with Indian

River and, with it, control of the Tia Maria itself. Legal

delivery had taken place.

Eller’s liability is not at issue; that was settled years

19a

ago. The amount of damages also is not questioned. I,

therefore, would remand to the district court with the instruc-

tion that judgment be entered on behalf of Hiram Walker and

against Eller for the complete injury suffered without regard

to the $500 COGSA limitation.

1. I believe the issue we must examine on appeal (when

legal delivery took place) to be broader than that

presented in the majority opinion (whether the district

court was clearly erroneous in finding that the delivery

receipt was issued inadvertently). See Ante slip opinion

at 3353. Accordingly, I believe our standard of review

to be de novo as the determination of legal delivery is

# question of law (or, at the least, a mixed question of

law and fact), not a question of fact subject to a clearly

erroneous standard.

2. The district court’s amended findings of fact and

conclusions of law, entered after our remand in HW II,

belie its continued treatment of change of custody and

legal delivery as interchangeable: “As long as the Tia

Maria remained in Tank # 24, it had not been delivered

to Hiram Walker’s agent, Indian River.” Amended

Conclusion of Law No. 8. It is the district court’s

mistaken equivalence of these concepts that mandates

appellate de novo review.

3, In Bonner v. City of Prichard, 661 F.2d 1206, 1209

(11th Cir. 1981 ) (en banc), this court adopted as

binding precedent decisions of the former Fifth Circuit

handed down prior to October 1, 1981.

4. The Harter Act defines the duty of care from the

time goods are discharged from the ship until they are

delivered to the consignee. See Allstate Ins. Co. y.

Imparca Lines, 646 F.2d 166,168 (Sth Cir. Unit B May

1981).

5. We have accepted the findings of fact in the district

court's first opinion on remand as not clearly

erroneous. HW II, 963 F.2d at 330.

6. Delivery receipts, the district court correctly

concluded, typically were issued only after physical

delivery, regardless of the means of transfer (pump or

gravity). Thus, in the case of a pump transfer, although

20a

physical delivery of the liqueur and the issuance of the

delivery receipt were closely conjoined, there was no

nexus between the legal delivery of the Tia Maria and

issuance of the delivery receipt. Eller has not demon-

strated--and the district court has not found that the

delivery receipt is of any greater probative value in

determining the point of legal delivery for gravity

transfers either.

ea aed

2la

Appendix B

MAR 10 1993

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

CASE NO. 86-0762-CIV-RYSKAMP

HIRAM WALKER & SONS, INC.,

Plaintiff,

KIRK LINE, R.B. KIRKCONNELL & BRO.,

LTD., Eller & Company, Inc., et al.,

Defendants.

ORDER ON REMAND FROM COURT OF APPEALS

THIS CAUSE came before the Court upon Defendant

Eller’s Motion for Status Conference, after an order of

remand and reversal from the Eleventh Circuit. Hiram

irkli , 963 F.2d 327 (11th Cir.

1992). A status conference was held on September 25,

1992.

The Court has reviewed the Eleventh Circuit’s order

and the pertinent portions of the record, and enters the

following amendments to its prior Findings of Fact and

Conclusions of Law, rendered August 6, 1990. The purpose

of these amendments is to Clarify that the Court has

considered the significance of the delivery receipt, in

accordance with the Eleventh Circuit’s mandate, and has

determined that the delivery receipt did not establish the

point in time that “legal delivery" took place. Because

delivery in the legal sense had not taken place at the time of

the accident which destroyed 5000 gallons of Tia Maria, the

stevedore, Eller & Company, is entitled to $500 limitation

of liability.

AMENDED FINDINGS OF FACT

(1) This Court finds that execution of the delivery

receipt prior to physical transfer of the cargo was

either issued inadvertently or erroneously.

(2) In terms of ordinary custom and practice, delivery

receipts and gate passes are usually issued only after physical

transfer of the cargo from the shipper to the consignee.

(See December 4, 1989 trial testimony of Jose Naranjo and

Marvin Stephens, pp. 100-102 and 117-118). This

undisputed evidence confirmed that it was the usual practice

of Eller & Company to issue the delivery receipt and gate

pass after physical possession of the cargo had been

transferred to the consignee.

(3) The Court concludes that the person who

executed the receipt earlier did so in error, and that the

delivery receipt was not evidence of legal delivery of the Tia

Maria.

(4) Reconstructing the sequence of events, the Court

finds that, before the accident, an Eller employee

inadvertently or erroneously issued a delivery receipt to the

Indian River driver stating that the Tia Maria was “pumped

out of tank #24 (as per manifest)." Plaintiff's Exhibit No.

11. As of the moment when it was issued, the delivery

receipt did not reflect the actual location or possession of the

cargo. The Tia Maria had not yet been pumped out of the

tanker when the receipt was issued.

(5) No gate pass was ever issued, even though custom

and practice dictate that both this pass and the delivery

receipt should have been issued simultaneously.

AMENDED CONCLUSIONS OF LAW

(1) The mere fact that a delivery receipt was issued

23a

does not persuade the court that actual delivery had taken

place.

(2) Because the undisputed evidence confirms that the

receipt was issued before the physical transfer of the cargo

from the possession of the shipper to the consignee, despite

the undisputed evidence that it was Eller’s custom and

practice to issue both the delivery receipt and the gate pass

only after transfer of the physical possession of the cargo,

the Court cannot determine why the delivery receipt in this

case was issued before the transfer of the Tia Maria.

(3) However, based on Eller’s custom and practice,

the Court concludes that only the issuance of a gate pass

would have completed delivery, and this pass was never

issued, since delivery was aborted by the accident.

(4) Thus, the uncertainty surrounding the issuance of

the delivery receipt lacks legal significance. If the receipt

plus the gate pass had been issued, then this Court might

find that completed delivery had taken place. The weight of

the testimony plus the absence of the gate pass precludes

such a finding.

(5) The Eleventh Circuit held in its opinion in this

case that the absence of a change of custody of cargo did not

compel a finding of absence of delivery for purposes of

determining whether the carrier’s duty was fulfilled before

cargo spill occurred.

(6) This Court’s findings are not at variance with

the Eleventh Circuit’s holding. This Court does not rely

upon the absence of change in custody of the Tia Maria.

(7) Rather, the Court relies upon the evidence

presented at trial of custom and practice which indicates (1)

that in this case, the delivery receipt was issued prematurely

and (2) that in this case, as between these particular parties,

only the issuance of a gate pass would have indicated a

completed, normal delivery.

(8) As long as the Tia Maria remained in Tank #24,

it had not been delivered to Hiram Walker’s agent, Indian

24a

River.

(9) Thus, the accident occurred in the process of

making the delivery to Hiram Walker which, and thus the

accident was the ocean carrier’s responsibility.

(10) For all the foregoing reasons, this Court again

concludes that Eller & Company are entitled to the $500

COGSA limitation.

(11) This Court’s Findings of Fact entered on August

6, 1990 are hereby AMENDED to include the above

Findings of Fact and Conclusion of Law, following the

mandate of the Eleventh Circuit.

(12) This Court’s Judgment entered August 6, 1990

is hereby ADOPTED and REINSTATED.

DONE AND ORDERED in chambers at the United

States District Court, West Palm Beach, Florida, this 10th

day of March, 1993.

Kenneth L. Ryskamp

United States District Judge

25a

Appendix C

HIRAM WALKER & SONS, INC.,

Plaintiff-Appellant,

KIRK LINE, R.B. KIRKCONNELL &

BRO., LTD., et al., Defendants,

Eller & Company, Inc. Defendant-

Appellee.

No. 90-5699.

United States Court of Appeals,

Eleventh Circuit.

June 17, 1992.

Shipper brought action against common carrier and

stevedore to recover damages arising from cargo spill. The

United States District Court for the Southern District of

Florida entered summary judgment for shipper. Carrier and

stevedore appealed. The Court of Appeals, 877 F.2d 1508,

reversed and remanded. The District Court, No. 86-

762-CIV-KLR, Kenneth L. Ryskamp, J., entered judgment

for stevedore. Shipper appealed. The Court of Appeals,

Tjoflat, Chief Judge, held that absence of change of custody

of cargo did not compel finding of absence of delivery, for

purposes of determining whether carrier’s duty was fulfilled

before spill occurred so that stevedore could not be an

independent contractor performing services under bill of

lading at time of accident and would not be entitled to $500

limitation of Carriage of Goods by Sea Act (COGSA).

Reversed and remanded.

(Keynotes not reproduced)

Appeal from the United States District Court for the

Southern District of Florida.

Before TJOFLAT, Chief Judge, DUBINA, Circuit Judge,

and HENDERSON, Senior Circuit Judge.

TJOFLAT, Chief Judge:

Hiram Walker & Sons, Inc. (Hiram Walker) appeals

from a final judgment of the United States District Court for

the Southern District of Florida holding that Eller &

Company, Inc. (Eller), a stevedore and terminal operator,

was an "independent contractor performing services” for

R.B. Kirkconnell & Bro., Ltd. (Kirk Line), an ocean carrier,

and therefore entitled to limit its liability to $500 under

section 4(5) of the Carriage of Goods by Sea Act, ch. 229,

49 Stat. 1207 (1936) (codified as amended 46 U.S.C.App.

Section 1304(5) (1988)) (COGSA).

We reverse and remand for proceedings in accordance

with this opinion.

Hiram Walker sued Eller, among others, to recover for the

loss of a shipment of five thousand gallons in bulk of Tia

Maria Liqueur. On appeal from the district court’s summary

judgment against Eller, we held Eller liable as a matter of

law, but reversed and remanded, instructing the district court

to determine whether Eller functioned as an "independent

contractor performing services" for Kirk Line at the time of

the spill and therefore was entitled to a $500 liability cap.

Hiram Walker & Sons, Inc. v. Kirk Line, 877 F.2d 1508,

1516 (11th Cir. 1989). We specifically called on the district

——

a eae

27a

court to "determine after trial whether Kirk Line’s

obligations had completely terminated by the time of the

spill...." Id. at 1517.

For a more detailed rendition of the accident, we turn

to our prior opinion:

Hiram Walker purchased five thousand gallons of Tia

Maria from Estate Industries in Jamaica on March 15, 1985.

On March 26, a twenty-three ton tank containing the liqueur

was loaded aboard the M/V Morant Bay in Kingston,

apparently in good order. Kirk Line had chartered the

Morant Bay from its proprietor, [Jamaica Merchant Marine

Atlantic Line, Ltd. (Jamaica Line) }, for a shipment of cargo

- including Hiram Walker’s liqueur, which was shipped under

the Kirk Line-Hiram Walker bill of lading. The tank arrived

in Miami three days later. Kirk Line hired Eller, a stevedore,

to unload the tank from the Morant Bay and store it at the

dock.

Hiram Walker contracted with [Indian River

Transport, Inc. (Indian River)] to transport the liqueur

overland to New Jersey; Hiram Walker and Indian River

agreed that Indian River was to pump the liqueur from the

tank into its freight trailer. On April 1, Jones, an employee

of Indian River, arrived at the port to effect the pumping

transfer. An Eller employee removed the tank from storage

and aligned it with the trailer. Jones attempted to connect the

tank and the trailer, but realized that a fitting needed to

connect the hoses was missing. Even though another fitting

on the back of the tank might have been used to pump the

liqueur into the trailer, Jones decided that pumping the

liqueur would be impossible; therefore, he asked Marshall,

an Eller employee, to help him accomplish a "gravity feed"-

essentially, Jones wanted to pour the liqueur from the tank to

the trailer. To effect a gravity feed, the tank had to be

elevated higher than the trailer. Marshall directed another

Eller employee, Wright, to assist Jones. Wright lifted the

tank on a large forklift; Wright, however, was not licensed

28a

to operate forklifts of this capacity.

Wright and Marshall neglected to put straw mats or

other dunnage between the metal forks and the metal

container. Fifteen minutes into the operation, the tank

apparently began to slide off the forks because of the lack of

dunnage. Deciding that the tank was not properly balanced,

Marshall instructed Wright to find another forklift. Wright

did not lower the tank, but left the forklift holding the tank

suspended eight feet off the ground for ten minutes; leaving

a load suspended was a violation of standard company

procedure. As Wright returned, the tank fell off the forklift.

The tank ruptured, and eighty-five percent of the Tia Maria

in the tank spilled out. The liqueur remaining in the tank was

contaminated during the clean-up, in which several

fire-engine companies covered the area with anti-explosive

foam.

Hiram Walker, 877 F.2d at 1510-11.

On remand, the district court determined after trial

that Kirk Line’s obligations had not completely terminated by

the time of the spill. It found that Eller was an "independent

contractor performing services” under the "Himalaya" clause

in Kirk Line’s bill of lading with Hiram Walker, which

limits liability to $500 “per customary freight unit" and

provides that the “limitation of liability [to $500 per unit]

shall inure ... to the benefit of any independent contractors

performing services including stevedoring in connection with

the goods covered hereunder." (Footnote . ) The bill of

lading’s clause paramount further incorporated COGSA,

which also limits liability to $500 for any “customary freight

unit." (Footnoie 2) Since the dropped tank of Tia Maria

constituted a customary freight unit, see id., the district court

capped Eller’s liability at $500.

The district court made extensive findings of fact, all

of which we accept as not clearly erroneous. The court found

iii

29a

that, although “[a]ccording to an oral agreement between

Hiram Walker and Indian River, Indian River was

responsible for pumping the Tia Maria cargo into its trailer{,]

Hiram Walker had no agreement with Indian River regarding

how the liqueur should be transferred if it were not

pumped.” The court further found that "Hiram Walker’s

agreement with Kirk Line is contained in bill of lading

number 9, which contains no provision regarding the method

for transferring the liqueur from Tank 24 to the Indian River

trailer." The court noted, however, that clause 18 of the bill

of lading provides that "removal of the goods into the

custody of the person entitled to delivery thereof under the

contract of carriage ... shall be prima facie evidence of the

delivery by the Carrier of the goods as described in the bill

of lading.” Finally, the court found that “[bJefore the

accident, an Eller employee issued a delivery receipt to the

Indian River driver, stating that the cargo was pumped out of

Tank 24 (as per manifest),’" but that “[nJo gate pass was

issued."

At the outset of its conclusions of law, the district

court correctly acknowledged that "[t]his action is governed

by the terms of the bill of lading issued for Tank 24 and the

provisions of COGSA." Guided by our prior opinion in this

case, (Footnote 3) the district court also correctly identified

delivery as the linchpin of the question we had instructed it

to address. In order to determine the time at which Kirk

Line’s obligations had completely terminated, it would have

to pinpoint the time at which delivery had occurred. (Footnote

The court stumbled not in charting its road, but in

traveling it. Explicitly disregarding its fact finding that a

delivery receipt was issued, the court mistakenly interpreted

the quoted language in clause 18 of the bill of lading as

compelling the conclusion that Eller had not completed

delivery at the time of the spill: "Considering [the quoted]

language, the court concludes that delivery did not occur

30a

before the accident, because Indian River had not removed

the Tia Maria from Tank 24 into its custody. By linking

delivery to custody, the parties agreed that actual delivery of

the cargo would be required before Kirk Line’s

responsibilities ended."

The court’s reading of clause 18 turned on an

incorrect interpretation of the phrase “prima facie evidence."

The court, in effect, took clause 18 as identifying change of

custody not only as conclusive, but also as the only possible

evidence of delivery. (Footnote 5) While clause 18 did link

custody to delivery, it did not equate the two at the exclusion

of all other possible evidence of delivery. It was only the

court’s improperly categorical reading of clause 18 that per-

mitted it to ignore the delivery receipt as evidence of

delivery. Clause 18 does not concern itself with the question

of when delivery has not occurred, but with the question of

when delivery has occurred. Absence of custody change,

however, implies absence of delivery only if delivery cannot

occur without a change in custody. Clause 18, however, Says

no such thing. Instead of identifying custody change as the

conditio sine qua non of delivery, it marks custody change

as primus inter pares of all possible evidence of

delivery. (Footnote 6)

Once the connection between custody change and

delivery is loosened in this way, it becomes obvious that the

absence of custody change does not compel a finding of

absence of delivery. By the terms of the bill of lading,

absence of custody change simply means that the prima facie

evidence of delivery identified in clause 18 is not available.

We therefore look to other evidence of delivery and come

upon the delivery receipt issued prior to the spill. Once it is

agreed that delivery does not stand or fall on custody change,

the absence of a gate pass - which would have constituted

conclusive evidence of change of custody - does little to

question the status of the delivery receipt as evidence, though

perhaps not prima facie evidence, of delivery.

3la

Hiram Walker concedes that Eller had custody at the

time of the spill. Assuming that Eller had custody and that

therefore no custody change had occurred that would have

constituted prima facie evidence of delivery, (Footnote 7) we

search the district court’s fact findings in vain for indications

that the delivery receipt documented anything other than

delivery. The passing remark that “[t]he mere fact that a

delivery receipt issued does not persuade the court that actual

delivery occurred" will not do once the custody

determination is stripped of its dispositive pretenses.

We refrain from making a factual determination

regarding the point of delivery, which is better left to the

district court. On remand, we instruct the district court to

develop any facts that would aid it in making this

determination, including, for example, the precise time at

which the delivery receipt was issued. Issuance of the deliv-

ery receipt prior to the time Hiram Walker claims delivery

was completed - the moment the tank had been aligned with

the trailer - might lessen the delivery receipt’s probative

value. A finding that Indian River and Eller customarily, or

by agreement, completed delivery receipts prior to delivery

could have a similar effect. 3

For the above stated reasons the judgment of the

district court is REVERSED and the case is REMANDED

for proceedings in accordance with this opinion.

REVERSED AND REMANDED.

1. Clause 17 provides in pertinent part:

In the case of any loss or damage to or in connection

with goods exceeding in actual value $500 lawful

money of the United States per package, or, in case of

goods not shipped in packages per customary freight

unit the value of the goods shall be deemed to be $500

per package or per unit, on which basis the freight is

adjusted and the Carrier’s liability, if any, shall be

determined on the basis of a value of $500 per package

32a

Or per customary freight unit or pro rata, in case of

partial loss or damage, unless the nature of the goods

and a valuation higher than $500 shall have been

declared in writing by the shipper upon delivery to the

Carrier and inserted in this bill of lading and extra

freight paid if required and in such case if the actual

value of the goods per package or per customary freight

unit shall exceed such declared value, the value shall

nevertheless be deemed to be the declared value and the

Carrier’s liability, if any, shall not exceed the declared

value and any partial loss of damage shall be adjusted

pro rata on the basis of such declared value. The

limitation of liability and other provisions contained in

the article shall inure not only to the agents, servants

and employees, but also to the benefit of any

independent contractors performing services including

stevedoring in connection with the goods covered

hereunder.

2. In pertinent part, section 4(5) of COGSA provides:

Neither the carrier nor the ship shall in any event be or

become liable for any loss or damage to or in

connection with the transportation of goods in an

amount exceeding $500 per package lawful money of

the United States, or in case of goods not shipped in

packages, per customary freight unit, or the equivalent

of that sum in other currency, unless the nature and

value of such goods have been declared by the shipper

before shipment and inserted in the bill of lading. This

declaration, if embodied in the bill of lading, shall be

prima facie evidence, but shall not be conclusive on the

carrier. 46 U.S.C. App. Section 1304(5) (1988).

3. The question thus presented is whether Kirk Line’s

duty was fulfilled when Eller aligned the tank with

Indian River’s truck; if so, Kirk Line had completed its

responsibilities under the bill of lading before the spill

had occurred, and Eller could not be said to have been

an "independent contractor performing services" under

the bill of lading at the time of the accident. If,

however, because of Indian River’s failure to secure the

Proper fitting, delivery was not completed by the mere

alignment of the tank with the trailer, then Kirk Line’s

duty of delivery would have continued and Eller would

33a

have been “an independent contractor performing

services" under the bill of lading at the time of the

spill, entitled to the $500 limitation. Hiram Walker &

Sons, Inc. v. Kirk Line, 877 F.2d 1508, 1516 (11th

Cir. 1989) (emphasis supplied).

4. Eller argues that custody change, not delivery,

constitutes the relevant occurrence for determining the

scope of Kirk Line’s obligations to Hiram Walker. In

support, Eller points to the clause paramount of the bill

of lading, which provides that "[t]he provisions stated

in [COGSA] (except as may be otherwise specifically

provided herein) shall govern before the goods are

loaded on and after they are discharged from the ship

and throughout the entire time the goods are in the

custody of the carrier." (Emphasis supplied.) In its

findings of fact, the district court did opine that

"[uJnder the clause paramount, Kirk Line’s liability to

Hiram Walker is limited to $500 per package during the

entire time period that Kirk Line had custody of Tank

24." (Emphasis supplied.) In its conclusions of law,

however, the court focussed not on the clause

paramount, but on clause 18 of the bill of lading, and

sought to determine whether delivery, not custody

change, had occurred at the time of the spill. Although

the court considered absence of custody change

conclusive evidence of absence of delivery and

conflated the two occurrences in the process, see infra

slip op. pp. 2757-60, it nevertheless set out ultimately

to determine the point of delivery, not of custody

change. Our previous opinion specifically instructed the

district court to determine the point of delivery, Hiram

Walker, 877 F.2d at 1516, and we see no reason now

to shift the focus onto custody. While the clause para-

mount rendered COGSA applicable until the point of

custody change, the district court specifically found that

“the parties agreed [in clause 18] that actual delivery of

the cargo would be required before Kirk Line's

responsibilities ended." (Emphasis supplied.) Although

COGSA remained applicable following delivery, but

prior to change of custody, Eller could at that time no

longer claim the benefit of the damage cap in section

4(5) of COGSA and in clause 17 of the bill of lading,

34a

because it was no longer an “independent contractor

performing services” for Kirk Line.

5. It is well settled that prima facie evidence differs

from both conclusive evidence, and the only possible

evidence, of a given occurrence. See, ¢ §-, Associated

Metals and Minerals Corp. v. Etelae Suomin Laiva, 858

F.2d 674, 677-78 (11th Cir. 1988) (interpreting COGSA

§ 3(6); prima facie evidence “accorded no special

weight" upon introduction of sufficient contrary

evidence) (quoting Harbert Int'l Establishment v. Power

Shipping, 635 F.2d 370, 373 (Sth Cir. Unit B 1981);

Miller v. Norvell, 775 F.2d 1572, 1574 (11th Cir.

1985)), cert. denied, 476 U.S.1126,106 S.Ct. 1995, 90

L.Ed.2d 675 (1986) ("Prima facie evidence means

evidence of such nature as is sufficient to establish a

fact and which, if unrebutted, remains sufficient for that

purpose."). The very COGSA provision the benefit of

which Eller seeks distinguishes prima facie from con-

clusive evidence: Neither the carrier nor the ship shall

in any event be or become liable for any loss or

damage to or in connection with the transportation of

goods in an amount exceeding $500 per package ...,

unless the nature and value of such goods have been

declared by the shipper before shipment and inserted in

the bill of lading. This declaration, if embodied in the

bill of lading, shall be prima facie evidence, but shall

not be conclusive on the carrier. 46 U.S.C. App.

Section 1304(5) (emphasis supplied).

6. Strictly speaking, more than one occurrence may

constitute prima facie evidence of another.

7. Hiram Walker, somewhat self-defeatingly, urges us

to find that Kirk Line no longer had custody at the time

of the spill. In conjunction with Hiram Walker’s

concession that Eller had custody at the time of the

spill, this finding would make for a change of custody,

which in turn would constitute prima facie evidence of

delivery. In that case, however, Kirk Line’s obligations

would have terminated long before the spill, namely at

the moment custody transferred from Kirk Line to

Eller.

35a

Appendix D

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

CASE NO:86-0762-CIV-RYSKAMP

HIRAM WALKER & SONS, INC., Plaintiff,

KIRK LINE, R.B. KIRKCONNELL & BRO., LTD.;

JAMAICA MERCHANT MARINE ATLANTIC LINE,

LTD.; ELLER & COMPANY, INC.; INDIAN RIVER

TRANSPORT, INC.; and the S/S MORANT BAY, its

engines, boilers, etc. Defendants.

FINAL JUDGMENT IN FAVOR OF PLAINTIFF

THIS MATTER came for a trial before the court. The

issues having been duly tried and a decision duly rendered,

it is hereby:

ORDERED and ADJUDGED that final judgment is

entered in favor of plaintiff and against defendant Eller &

Company, Inc., as set forth in the court’s order of August 1,

1990. The order of August 1, 1990, is expressly adopted

and incorporated by reference. Accordingly, the plaintiff

shall recover of defendant Eller & Company, Inc. the sum of

$500; prejudgment interest on that amount from the date of

loss April 1, 1985, Argonaut Ins, Co, V. May Plumbing

Co., 474 So.2d 212 (Fla. 1985); and costs of the action.

DONE and ORDERED at the United States District

Court, Miami, Florida, this 6 day of August, 1990.

Kenneth L. Ryskamp

United States District Judge

36a

Appendix E

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

CASE NO:86-0762-CIV-RYSRAMP

HIRAM WALKER & SONS, INC., Plaintiff,

KIRK LINE, R.B. KIRKCONNELL BRO., LTD.;

JAMAICA MERCHANT MARINE ATLANTIC LINE,

LTD.; ELLER & COMPANY, INC.; INDIAN RIVER

TRANSPORT, INC.; and the S/S MORANT BAY, its

engines, boilers, etc. Defendants.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

THIS MATTER came before the court for trial on

December 4, 1989. Having considered the testimony and

other evidence presented, the court enters its findings of fact

and conclusions of law pursuant to Rule 52 of the Federal

Rules of Civil Procedure.

A. BACKGROUND

Plaintiff Hiram Walker & Sons, Inc. ["Hiram Walker"]

brought this action to recover for the loss of a shipment of

Tia Maria liqueur transported from Kingston, Jamaica to the

Port of Miami, Florida.’ The liqueur spilled as it was being

transferred from a bulk tank to a trailer. Defendants were

' Aetna, Hiram Walker's insurer, paid the entire loss and thus is the

real party in interest. The court constructively joined Aetna as a party

plaintiff, which the Eleventh Circuit determined was within the court’s

discretion . Hiram Walker & Sons, Inc. v. Kirk Line et al., 877 F.2d

1508, 1510 n.1 (11th Cir. 1989)

37a

R.B. Kirkconnell & Bro., Ltd., the ocean carrier operating

under the trade name Kirk Line ["Kirk Line"]; Jamaican

Merchant Marine Atlantic Line, Ltd. ["Jamaican Merchant

Marine”], the owners of the M/V Morant Bay, the vessel on

which the tank containing the liqueur was transported; Eller

& Co. ["Eller"], the stevedore and terminal operator in

Miami; and Indian River Transport, Inc. ["Indian River"],

the inland trucking company hired by Hiram Walker to pick

up the cargo in Miami and transport it to New Jersey.

In an earlier order, this court dismissed Kirk Line and

Jamaican Merchant Marine and found defendants Eller and

Indian River jointly and severally liable to Hiram Walker.

Hiram Walker & Sons Inc, v, Kirk Line, No.

86-0762-CIV-RYSKAMP, Order Granting Partial Summary

Judgment (S.D. Fla. Dec. 17, 1986). The court then held a

trial on damages and determined that Hiram Walker was

entitled to damages in the amount of $147,111.43, to be

apportioned equally between Eller and Indian River.

On appeal, the Eleventh Circuit reversed the summary

judgment and remanded for further proceedings on a number

of issues. Hiram Walker & Sons, Inc, v. Kirk Line, 877

F.2d 1508, 1516 (11th Cir. 1989). Before trial on remand,

Hiram Walker and Indian River settled their dispute, and

Indian River was dismissed from the suit with prejudice.

Consequently, Eller was the sole remaining defendant at trial

on remand.

Regarding Eller’s purported negligence, the Eleventh

Circuit agreed with this court’s conclusion that Eller’s

negligence in performing the transfer was established under

Florida law. Hiram Walker, 877 F. 2d at 1515 . The issue

on remand was whether Eller was entitled to limit its liability

to $500 pursuant to section 4(5) of the Carriage of Goods by

Sea Act ["“COGSA"], ch. 229, 49 Stat. 1207 (1936) (codified

as amended 46 U.S.C. App. § 1304(5) (1982 and Supp. V

1987)). As the Eleventh Circuit framed the question, the

resolution of this issue required a determination of whether

38a

Kirk Line’s responsibilities under the bill of lading had

terminated and whether delivery of the liqueur was complete

when it spilled. Hiram Walker, 877 F.2d at 1516. If so,

Eller could not claim the liability limitation as it was not then

acting as Kirk Line’s “independent contractor." If delivery

had not been completed, however, Eller would be entitled to

COGSA’s $500 package limitation as a third party

beneficiary of a clause in the bill of lading.

B. FINDINGS OF FACT

In 1972, Kirk Line and Eller entered into an oral

agreement under which Eller would provide agency,

stevedoring, and terminal operating services to Kirk Line at

the Port of Miami. Eller billed Kirk Line for its stevedoring

services in one invoice. Eller billed Kirk Line for its terminal

operations under separate invoice.

Regarding the bulk tank involved in this case, Eller

billed Kirk Line $74.74 for “trailer handling" of the full

trailer. Plaintiff's Exhibit No. 48. Kirk Line billed Hiram

Walker $200.00 for handling on the bill of lading. Plaintiff's

Exhibit No. 1. Eller’s charges for trailer handling were

governed by the trailer handling bill, which constituted its

contract with Kirk Line. Plaintiff's Exhibit No. 57 at 9, 24.

The charge for trailer handling meant that Eller “was

responsible for delivering the trailer or its product to the

consignee or its agents." Id. at 25. The amount Eller charged

for trailer handling on Tank 24 would not vary, whether or

not a forklift was used to perform a gravity feed. Id. at

25-26. The trailer handling charge also included Eller’s

handling of the empty tank. Id. at 11.

Beyond the trailer handling bill that Eller issued to

Kirk Line, handling services performed by Port of Miami

terminal operators at the time of the accident were governed

by Tariff No.4 of the Port of Miami Freight Handlers,

effective October 1, 1982. Plaintiff's Exhibit No. 46 at a

39a

para. 12. Tariff No. 4 defined “terminal handling" as

follows:

Handling between point of rest of terminal and

transporting conveyance or vice versa.

The service of handling cargo to or from the

terminals, to or from trucks, trailers or other highway type

of conveyance. Hand stacking or unstacking of cargo in

conveyances is not included in rates as shown under this

classification. When hand stacking or unstacking is required,

such services will be provided under Item No.7.

When cargo is handled to the terminal from railroad

cars or vice versa, the tariff charges shown under this

classification will apply where such handling service can be

accomplished with mechanized equipment (lift trucks, etc.).

If hand stacking or unstacking is required, double the

prevailing rate will apply.

On any handling from the terminals to railroad

equipment, or vice versa, the tariff rates will include the

handling (loading or unloading) only, and any labor and/or

material cost for cleaning or securing will be billed

additionally as per Item No. 7.

Should distance between point of rest and cargo

conveyance exceed 250 Feet, Freight Handlers reserve the

right to negotiate a cost-plus labor operation in lieu of rates

shown.

These services also apply to services performed in

connection with the receiving or delivering of automobiles,

trucks, buses, or other wheeled vehicles received or

delivered under their own power.

In all cases, Eller’s responsibility for terminal

Operations would end when a gate pass was issued for the

cargo to leave the terminal and the Port of Miami facility.

Transcript of Trial Dec. 4, 1989, at 82.

On or before March 26, 1985, the shipper Estate

Industries loaded Tank 24, a 40-foot bulk tank owned by

Kirk Line, with Tia Maria liqueur. On March 26, 1985,

40a

Tank 24 was loaded aboard the M/V Morant Bay in

Kingston, Jamaica. Kirk Line issued bill of lading number 9

to govern transport of Tank 24 to the Port of Miami.

Clause 1 of the bill of lading, the paramount clause,

provided that the bill of lading was subject to and

incorporated the provisions of COGSA. In pertinent part,

Clause 1 provided that:

This bill of lading shall have effect subject to the

provisions of the Carriage of Goods by Sea Act of the United

States of America, approved April 16, 1935, which shall be

deemed to be incorporated herein, and nothing herein

contained shall be deemed a surrender by the Carrier of any

of its rights or immunities or an increase of any of its

responsibilities or liabilities under said Act. The provisions

stated in said Act (except as may be otherwise specifically

provided herein) shall govern before the goods are loaded on

and after they are discharged from the ship and throughout

the entire time the goods are in the custody of the Carrier.

The Carrier shall not be liable in any capacity whatsoever for

any delay, non-delivery, or mis-delivery, or loss of or

damage to the goods occurring while the goods are not in the

actual custody of the Carrier. If this bill of lading is issued

in a locality where there is in force a Carriage of Goods by

Sea Act or Ordinance or Statute of a similar nature to the

International Convention for the Unification of Certain Rules

Relating to Bills of Lading at Brussels of August 24, 1924,

it is subject to the provisions stated in such Act, Ordinance

and rules thereto annexed which may be in effect where this

bill of lading is issued.

The bill of lading also specifically limited Kirk Line’s

liability for damage to $500 per customary freight unit, in

accordance with 46 U.S.C. app. § 1304(5). Clause 17

provided that:

In the case of any loss or damage to or in connection

with goods exceeding in actual value $500 lawful money of

the United States per package, or, in case of goods not

4la

shipped in packages per customary freight unit the value of

the goods shall be deemed to be $500 per package or per

unit, on which basis the freight is adjusted and the Carrier’s

liability, if any, shall be determined on the basis of a value

of $500 per package or per customary freight unit or pro

rata, in case of partial loss or damage, unless the nature of

the goods and a valuation higher than $500 shall have been

declared in writing by the shipper upon delivery to the

Carrier and inserted in this bill of lading and extra freight

paid if required and in such case if the actual value of the

goods per package or per customary freight unit shall exceed

such declared value, the value shall nevertheless be deemed

to be the declared value and the Carrier’s liability, if any,

shall not exceed the declared value and any partial loss or

damage shall be adjusted pro rata on the basis of such

declared value.

Whenever the value of the goods is less than $500 per

package or other freight unit, their value in the calculation

and adjustment of claims for which the Carrier may be liable

shall for the purpose of avoiding uncertainties and difficulties

in fixing value be deemed to be the invoice value, plus

freight and insurance if paid, irrespective of whether any

other value is greater or less.

The limitation of liability and other provisions

contained in the article shall inure not only to the agents,

servants and employees, but also to the benefit of any

independent contractors performing services including

stevedoring in connection with the goods covered hereunder.

Tank 24 was shipped on a lump sum freight basis and

is a customary freight unit under COGSA. Hiram Walker,

877 F.2d at 1516.

On March 26, 1985, the M/V Morant Bay set sail for

the Port of Miami. It arrived March 29, 1985, after which

Eller’s longshoremen unloaded Tank 24 from the vessel onto

the pier at the Port of Miami and stored it on Eller’s lot

number 4. On April 1, 1985, a driver for Indian River

42a

arrived to receive the cargo on behalf of Hiram Walker.

Eller made Tank 24 available to the Indian River driver, so

that he could connect a hose to Tank 24 and pump the Tia

Maria from the tank into his trailer. At this point, the Indian

River driver realized that he lacked the proper connections

for the pump and requested that Eller perform a gravity feed

of the liqueur.

The gravity feed is described in this court’s findings

of fact and conclusions of law entered February 1, 1988, and

in the Eleventh Circuit decision. In summary, the gravity

feed involved using a forklift to lift Tank 24 to a position

higher than the trailer, so that gravity would force the liqueur

through a hose and into the trailer. While the gravity feed

was being performed, Tank 24 fell from the blades of the

forklift, and most of its contents spilled. The remaining

liqueur was contaminated by anti-explosive foam during

cleanup operations.

According to an oral agreement between Hiram

Walker and Indian River, Indian River was responsible for

pumping the Tia Maria cargo into its trailer. Transcript of

Trial Dec.4, 1989, at 21-22.

Hiram Walker had no agreement with Indian River

regarding how the liqueur should be transferred if it were not

pumped. Id. Hiram Walker’s agreement with Kirk Line is

contained in bill of lading number 9, which contains no

provision regarding the method for transferring the liqueur

from Tank 24 to the Indian River trailer.

The bill of lading does not define delivery, but it

makes various references to delivery. Clause 12 provides that

"the goods shall be considered to be delivered and at their

own risk and expense in every respect when taken into the

custody of customs or other authorities." Clause 15 provides

that the carrier has a lien on "the goods, which shall survive

delivery” for all charges due under the bill of lading. Clause

18 provides that "removal of the goods into the custody of

the person entitled to delivery thereof under the contract of

43a

carriage . . . shall be prima facie evidence of the delivery by

the Carrier of the goods as described in the bill of lading.”

Customs authorities never took custody of the goods,

so the type of delivery contemplated in Clause 12 never

occurred.

Before the accident, an Eller employee issued a

delivery receipt to the Indian River driver, stating that “the

cargo was "pumped out of Tank 24 (as per manifest).”

Plaintiff's Exhibit No. 11. No gate pass was issued.

Transcript of Trial Dec. 4, 1989, at 90.

Although the bill of lading includes no provisions

regarding transfer of the cargo, Kirk Line expected Eller to

provide to the shipper whatever services were necessary to

effect a physical transfer of the cargo. Plaintiff’s Exhibit No.

56 at 57. While Eller was not obligated to accommodate a

gravity transfer, it was obligated to ensure that the cargo was

transferred. Transcript of Trial Dec. 4, 1989, at 86. Eller

performed gravity transfers in approximately a third of all

deliveries, most commonly by using an elevated ramp. Id.

at 103. Before the accident on April 1, 1985, Eller also had

performed gravity transfers with a forklift at least fifteen

times. Deposition of Daniel Wright at 24 (Oct. 1, 1986).

While the agreement between Eller and Kirk Line was oral,

Eller’s vice president negotiated with Kirk Line for clauses

to be included in the bill of lading that would extend to Eller

the COGSA liability limitation. Transcript of Trial Dec. 4,

1989, at 82-83. Clause 17 extends the liability limitation to

Kirk Line’s agents, servants and employees, and to

"independent contractors performing services including

stevedoring in connection with the goods covered

hereunder.” The same third parties are included in what is

44a

known as a Himalaya clause,” clause 29 of the bill of lading

entitled "Exemptions and immunities of all servants and

agents of the Carrier”:

It is hereby expressly agreed that no servant or agent

of the Carrier (including every independent contractor from

time to time employed by the Carrier) shall in any

circumstances whatsoever be under any liability whatsoever

to the Shipper, Consignee or Owner of the goods or to any

Holder of this Bill of Lading for any loss, damage or delay

of whatsoever kind arising or resulting directly or indirectly

from any act, neglect or default on his part while acting in

the course of or in connection with his employment and,

but without prejudice to the generality of the foregoing

provisions in this Clause, every exemption, limitation,

condition and liberty herein contained and every right,

exemption from liability, defence [sic] and immunity of

whatsoever nature applicable to the Carrier or to which the

Carrier is entitled hereunder shall also be available and shall

extend to protect every such servant or agent of the Carrier

acting as aforesaid and for the purpose of all the foregoing

provisions of this Clause the Carrier is or shall be deemed to

be acting as agent or trustee on behalf of and for the benefit

of all persons who are or might be his servants or agents

from time to time (including independent contractors as

aforesaid) and all such persons shall to this extent be or be

deemed to be parties to the contract in or evidenced by this

Bill of Lading.

C. CONCLUSIONS OF LAW

This action is governed by the terms of the bill of

* Himalaya clauses are named after the vessel in an English case.

For an explanation, see Brown & Root, Inc. v M/V Peisander, 648 F.2d

415, 417 n.5 (Sth Cir. 1981).

45a

lading issued for Tank 24 and the provisions of COGSA. By

its terms, COGSA applies to a carrier only “in relation to the

loading, handling, stowage, carriage, custody, care ane

discharge” of goods. 46 U.S.C. app. § 1302;

y. American Shipping Co., Inc., 748 F.2d 563, 566 (11th

Cir. 1984). Regarding the time periods not governed by

COGSA--that is, the time before the cargo is loaded on the

vessel and the time from discharge until delivery--the Harter

Act normally applies. Harter Act, ch. 105, § 1, 27 Stat. 445

(1893) (codified as amended 46 U.S.C. app. §§ 190-195

(1982 and Supp. V 1987)).

Nevertheless, the parties contractually may agree that

COGSA applies to the entire period of time in which the

carrier has custody of the cargo. Philip Morris, 748 F.2d at

566. The Parties may agree to incorporate COGSA in a bill

of lading in whole or in part.

Lines _Inc,, 619 F.2d

374, 375-76 (Sth Cir. 1980) (where COGSA incorporated but

bill of lading provided different statute of limitations,

limitations period in bill of lading and not COGSA would

govern). Thus, by agreement the parties can extend the

COGSA $500-per-package liability limitation to the period

after discharge and before delivery. Cf, Baker Oil Tools Inc.

y. Delta S.S. Lines Inc,, 562 F.2d 938, 940 n.3 (Sth Cir.

1977) (parties may agree to extend COGSA package

limitation to period before loading when in carrier’s

possession), modified and reh’g denied, 571 F.2d 978 (Sth

Cir. 1978), 577 F.2d 1134 (Sth Cir. 1978).

In this case, the parties included a clause paramount

in bill of lading number 9 that made COGSA in its entirety

applicable to the time period “after [the cargo is] discharged

from the ship and throughout the entire time the goods are in

the custody of the Carrier." This clause paramount makes

COGSA applicable to a time period in which it would not

normally apply, deems COGSA to be incorporated in the bill

of lading, and ensures that nothing in the bill of lading shall

46a

increase the carrier’s liability beyond the $500 per package

limitation of section 1304(5). Brown & Root, Inc. y. M/V

Peisander, 648 F.2d 415, 420 (Sth Cir. 1981); see also

, 901

F.2d 934, 939 (11th Cir. 1990) (clause paramount and fair

opportunity to declare higher value for cargo two

preconditions to invoking COGSA liability limitation). Under

the clause paramount, Kirk Line’s liability to Hiram Walker

is limited to $500 per package during the entire time period

that Kirk Line had custody of Tank 24.

On its face, the COGSA package limitation

incorporated in the clause paramount applies only to carriers

and ships.’ Stevedores, terminal operators, freight handlers,

and the carrier’s agents are not protected automatically by the

COGSA liability limitation.

» 359 U.S . 297 , 79 S. Ct. 766, 3

Krawill Machinery Corp,

L.Ed.2d 820 (1959); Generali v, D’Amico, 766 F.2d 485,

> Section 1304(5) provides that:

Neither the carrier nor the ship shall in any event be or become

liable for any loss or damage to or in connection with the transportation

of goods in an amount exceeding $500 per package lawful money of the

United States, or in case of goods not shipped in packages, per customary

freight unit, or the equivalent of that sum in other currency, unless the

nature and value of such goods have been declared by the shipper before

shipment and inserted in the bill of lading. This declaration, if embodied

in the bill of lading, shall be prima facie evidence, but shall not be

conclusive on the carrier.

By agreement between the carrier, master, or agent of the

carrier, and the shipper another maximum amount than that mentioned in

this paragraph may be fixed: Provided, That such maximum shall not be

less than the figure above named. In no event shall the carrier be liable

for more than the amount of damage actually sustained.

Neither the carrier nor the ship shall be responsible in any event

for loss or damage to or in connection with the transportation of the

goods if the nature or value thereof has been knowingly and fraudulently

misstated by the shipper in the bill of lading.

47a

487 (11th cir. 1985). Notwithstanding, it is well settled that

parties to a bill of lading may contractually extend a liability

limitation to non-carriers or the carrier’s agents, if the intent

to make third parties beneficiaries of the liability limitation

is expressed clearly and unambiguously. Generali, 766 F.2d

at 487.

Language in bill of lading number 9 that extended the

liability limitation to stevedores and “independent

contractors” is sufficiently clear to extend the limitation to

Eller, in its capacity both as a stevedore and as a terminal

operator. Certain Underwriters at Lloyds’ v, Barber Blue

Sea Line, 675 F.2d 266, 270 (11th Cir. 1982) (when bill of

lading extended protection to “independent contractor,”

company acting as stevedore and terminal operator protected

by COGSA when cargo lost at Port of Miami), cited in 2A

A. Jenner, E. Flynn, G. Raduazzo, Benedict on Admiralty

$169 n.17 (6th ed. 1990) (courts generally hold that phrase

"independent contractors” sufficiently clear to include

stevedores and terminal operators); cf. Generali v. D’Amico,

766 F.2d 485, 490 (11th Cir. 1985) (“clarity of language”

requirement does not mean only parties specifically

enumerated in bill of lading entitled to COGSA liability

limitation).

When functioning as either a stevedore or as a

terminal operator, Eller was acting as an independent

contractor and not as Kirk Line’s agent, because Eller was

not subject to Kirk Line’s general supervision and control

while performing its contractual duties. Koppers Co., Inc. v.

- S/S Defiance, 542 F. Supp. 1356, 1361 and n.7 (D. Md.

1982), aff'd, 704 F.2d 1309 (4th Cir. 1983). The accident

occurred after Tank 24 was stored on Eller’s lot number 4

and at a point of rest. See 46 C.F.R. § 515.4(c) (1989)

(defining point of rest as area on terminal facility assigned

for receipt of inbound cargo and from which cargo may be

delivered to consignee). Thus, it occurred after the

stevedoring portion of Eller’s services had concluded.

48a

Accordingly, if Eller acted as an independent contractor of

Kirk Line in performing the gravity transfer, it did so as a

terminal operator.

Determination of whether Eller was acting in its

capacity as Kirk Line’s terminal operator at the time of the

accident involves consideration of whether Eller was

“perform[ing] the functions and duties of the carrier within

the scope of the carriage contract." i

Lloyds’, 675 F.2d at 270. A written memorandum of the

contract of carriage is included in the bill of lading. G.

Gilmore & C. Black, The Law of Admiralty 93 (2d ed.

1975). The terms of the bill of lading made Kirk Line

responsible until the goods were delivered, as long as the

cargo remained in its custody. Whether that responsibility

still existed when the accident occurred, and whether Eller

can benefit from the COGSA package limitation, depends on

the meaning of the terms delivery and custody.

For proper delivery to occur, general maritime law

requires only that a carrier “unload the Cargo onto a dock,

segregate it by bill of lading and count, put it in a place of

rest so that it is accessible to the consignee, and afford the

consignee a reasonable opportunity to come and get it.” F.J,

Walker Lid. v. M/V “Lemoncore”, 561 F.2d 1138; 1142

(Sth Cir. 1977) (quoting American

iti , 317 F.2d 887, 888 (D.C. Cir.

1962)). Although most cases thus defining delivery have been

decided under the Harter Act, it has been held that such

delivery relieves the carrier of his responsibility under both

COGSA and the Harter Act. Crisis Transportation Co. _v,

M/V_ Erlanger Exp., 794 F.2d 185, 188 (Sth Cir. 1986)

(citing Allstate Ins. Co, v. Imparca Lines, 646 F.2d 166

(Sth Cir. 1981); E.J. Walker., Ltd., 561 F.2d 1138)).

Furthermore, it is reasonable to apply interpretations of the

term “delivery” under the Harter Act to delivery of goods

when the parties have incorporated COGSA by agreement.

G. Gilmore & C. Black, The Law of Admiralty 148-49 (2d

49a

ed. 1975).

Notwithstanding this general rule of delivery, the

requirements for delivery may be modified by custom,

regulation, or the law of the port. Philip Morris, 748 F.2d

at 566-67; Allstate Ins, Co,, 646 F.2d at 168 (while neither

bill of lading nor Harter Act defined proper delivery,

delivery in most general sense "requires discharge of the

cargo upon a fit and customary wharf . . . according to the

custom and usage of the port"). The required type of

delivery also may be modified by contract, as when the bill

of lading bears designations like “pier to pier” or “house to

house." See Austracan (U.S.A.), Inc, v, Neptune Orient

Lines, Lid., 612 F. Supp. 578, 584-85 (S.D.N.Y. 1985)

(discussing various such designations and their trade

meanings).

In this case, the bill of lading is imprecise as to when

the carrier’s responsibility ended, merely indicating that this

responsibility ended when the cargo was delivered and

custody was relinquished. The bill of lading does not define

either delivery or custody. It provides in clause 18, however,

that "removal of the goods into the custody of the person

entitled to delivery thereof under the contract of carriage . .

shall be prima facie evidence of the delivery by the Carrier

of the goods as described in the bill of lading."

Considering this language, the court concludes that

delivery did not occur before the accident, because Indian

River had not removed the Tia Maria from Tank 24 into its

custody. By linking delivery to custody, the parties agreed

that actual delivery of the cargo would be required before

Kirk Line’s responsibilities ended. Actual delivery required

that Eller “completely transfer[] the possession and control

of goods from the vessel to the consignee or his agent." B.

Elliott (Canada) Ltd. v. John T. Clark & Son of Maryland,

Inc., 704 F.2d 1305, 1308 (4th Cir. 1983) (distinguishing

between constructive delivery, akin to general definition of

delivery, and actual delivery); see also A/S

50a

Dampskibsselskabet » 788 F.2d

1103, 1109 (Sth Cir. 1986) (if no particular custom at point

of discharge, “goods are delivered when they are so

completely in the custody of the consignee that he may do as

he pleases with them"). The mere fact that a delivery receipt

issued does not persuade the court that actual delivery

occurred.

Although Eller made Tank 24 available to Indian

River for pumping, custody of the cargo did not change

because possession and control would not have transferred to

Indian River until the gravity feed was complete. Hiram

Walker has conceded that had Eller asked the Indian River

driver to return with proper pumping equipment, custody of

the cargo would have remained with Eller until the Indian

River driver returned. Transcript of Trial Dec. 4, 1989, at

26. The fact that Eller once made Tank 24 available to

Indian River would not have prevented Eller from being

liable if the tank were lost or damaged while the driver was

procuring the equipment. See

Lloyds’, 675 F.2d at 268 (terminal operator and freight

handler liable for 14 cargo cartons lost at Port of Miami,

although liability limited to $500 per carton); see also

Mallard, 814

F.2d 84, 88 (2nd Cir. 1987) (shipping company retained

custody of goods until trucker picked up container, although

liability for water damage limited to $500 under COGSA);

Thyssen vy. M/V Med Transporter, 1989 Am. Maritime Cas.

1515, 1516 (N.D. Ohio 1989) (stevedore responsible for

loss occurring before delivery to consignee or for damage

while in stevedore’s custody); E,M. Chemicals v, S/S

Sloman Najade, 670 F. Supp. 87, 89 (S.D.N.Y. 1987)

(when goods lost while in custody of terminal operator,

neither actual nor constructive delivery occurred). Eller’s

responsibility continued until the empty Tank 24 was

returned to the vessel. Transcript of Trial Dec. 4, 1989, at

123.

S5la

Having considered the meaning of delivery and

custody within the scope of the parties’ agreement, the court

concludes that Eller was attempting to make delivery and

transfer custody of the cargo when the accident occurred.

Thus, Kirk Line’s responsibility under the bill of lading had

not ended when Tank 24 fell from the forklift. See Generali,

766 F.2d at 487 (COGSA protected terminal operator that

loaded cargo onto consignee’s truck, at which point package

fell and was damaged; operator stored cargo for 18 days “at

which time the consignee arrived to take delivery").

The fact that Indian River was obligated to Hiram

Walker to pump the liqueur did not relieve Kirk Line of its

responsibility under the bill of lading to deliver the cargo

into Indian River’s custody nor did it relieve Eller of its

responsibility to perform certain services as Kirk Line’s

independent contractor. Just as Eller was performing Kirk

Line’s functions and duties under the carriage contract by

delivering the cargo and ensuring a complete transfer of

custody, Eller’s actions in performing the gravity feed were

within the scope of the independent contracting services

contemplated by its oral agreement with Kirk Line, which

were governed by the bill of lading.

The bill of lading extended COGSA’s liability

limitation to “any independent contractors performing

services including stevedoring in connection with the goods

covered hereunder." Although Kirk Line may not have

contemplated specifically that Eller would perform gravity

feeds, agents of both Kirk Line and Eller testified that Kirk

Line expected Eller to perform whatever terminal services

were necessary to accommodate the shippers and inland

carriers.‘ The court considers this testimony credible.

* To determine whether the gravity transfer was a service that Kirk

Line and Eller contemplated as being connected to the goods and

governed by the bill of lading, the court considers evidence extrinsic to

52a

In summary, Eller’s act in performing the gravity

transfer occurred before Kirk Line’s responsibility under the

bill of lading ended, because custody of the Cargo remained

with Kirk Line and delivery had not occurred. Furthermore,

Eller’s act was within the scope of its employment by Kirk

Line as an independent contractor. Thus, Eller’s liability is

capped by clauses 17 and 29 of Kirk Line’s bill of lading.

Eller is entitled to limit its liability for damages to Tank 24

to $500, as the tank is a customary freight unit. Hiram

Walker, 877 F.2d at 1516.

Judgment will be entered in accordance with these

findings and conclusions as provided by Rule 52, pursuant to

Rule 58 of the Federal Rules of Civil Procedure.

DONE and ORDERED at the United States District

Court, Miami, Florida, this 6 day of August, 1990.

Kenneth L. Ryskamp

United States District Judge

the bill of lading, which does not define the scope of such services. See

Koppers Co. Inc., 542 F. Supp. at 1356 (court may consider extrinsic

evidence to establish whether stevedore and/or terminal operator acting

as Cafrier’s agent).

53a

Appendix F

HIRAM WALKER & SONS, INC.,

Plaintiff-Appellee,

KIRK LINE, et al., Defendants,

Indian River Transport, Inc.,

Defendant-Appellant.

HIRAM WALKER & SONS, INC.

Plaintiff-Appellee,

KIRK LINE, et al., Defendants,

’

Eller & Company, Inc.,

Defendant-Appellant,

Indian River Transport, Inc.,

Defendant-Appellee.

HIRAM WALKER & SONS, INC.,

Plaintiff-Appellee,

Vv.

KIRK LINE, RB. Kirkconnell & Bro.

Ltd., et al., Defendants,

Indian River Transport, Inc.,

Defendant-Appellant.

HIRAM WALKER & SONS, INC.,

Plaintiff-Appellee,

Cross-Appellant,

KIRK LINE, R.B. Kirkconnell & Bro.,

54a

Ltd., Jamaica Merchant Marine Atlantic Line

Ltd., Indian River Transport, Inc.,

SS MORANT BAY, its engines, boilers, etc.,

Defendants,

Eller & Company, Inc., Indian River

Transport, Inc., Defendants Appellants,

Cross-Appellees.

Nos. 87 5048, 87-5094, 87-5111

and 88-5180.

United States Court of Appeals,

Eleventh Circuit.

July 21, 1989.

The owner of liqueur which was spilled while being

transferred from tanks into a common carrier’s freight trailer

sued common carrier and a stevedore. The United States

District Court for the Southern District of Florida, No. 86-

762-CIV-KLR, Kenneth L. Ryskamp, J., entered summary

judgment for owner, and defendants appealed. The Court of

Appeals, Kravitch, Circuit Judge, held that (1) the district

court had subject matter jurisdiction over both defendants;

(2) issues of material fact existed as to whether the

negligence of the common carrier was superseded by the

conduct of the stevedore; and (3) issues of material fact

existed as to whether stevedore was entitled to the protection

of a “Himalaya” clause in the bill of lading.

Reversed and remanded.

(Keynotes not reproduced)

Appeals from the United States District Court for the

55a

Southern District of Florida.

Before KRAVITCH and HATCHETT, Circuit Judges, and

MARKEY, Chief Circuit Judge.

KRAVITCH, Circuit Judge:

The plaintiff Hiram Walker & Sons, Inc. (Footnote 1)

(Hiram Walker), filed this action in the Southern District of

New York against defendants Indian River Transport, Inc.

(Indian River), Eller & Company, Inc. (Eller), R.B.

Kirkconnell & Bro., Ltd. (Kirk Line), and Jamaica Merchant

Marine Atlantic Line, Ltd. (Jamaica Line), seeking damages

for the loss of several thousand gallons of the liqueur Tia

Maria. Upon Eller’s motion, the case was subsequently

transferred to the Southern District of Florida. After all

parties moved for summary judgment, the district court

dismissed Kirk Line and Jamaica Line from the action, and

granted Hiram Walker’s motion against Eller and Indian

River on the question of liability. Indian River and Eller each

filed an interlocutory appeal in this court, but because of a

jurisdictional problem those appeals were never decided on

the merits. The district court subsequently held a bench trial

to determine the amount of damages due Hiram Walker.

Following the trial, the district court quantified Hiram Walk-

er’s damages, for which it adjudged Eller and Indian River

each fifty percent liable. Eller and Indian River appealed;

Hiram Walker cross-appealed against those two defendants

but did not appeal the district court’s dismissal of the actions

against Kirk Line and Jamaica Line. We consolidated all

appeals from the earlier summary judgment order and the

order following trial; we now reverse and remand.

I. BACKGROUND

Hiram Walker purchased five thousand gallons of Tia

Maria from Estate Industries in Jamaica on March 15, 1986.

56a

On March 26, a twenty-three ton tank containing the liqueur

as loaded aboard the M/V Moran Bay in Kingston,

apparently in good order. Kirk Line had chartered the Mor-

ant Bay from its proprietor, Jamaica Line, for a shipment of

cargo including Hiram Walker’s liqueur, which was shipped

under a Kirk Line-Hiram Walker bill of lading. The tank

arrived in Miami three days later. Kirk Line hired Eller, a

stevedore, to unload the tank from the Morant Bay and store

it at the dock.

Hiram Walker contracted with Indian River to

transport the liqueur overland to New Jersey; Hiram Walker

and Indian River agreed that Indian River was to pump the

liqueur from the tank into its freight trailer. On April 1,

Jones, an employee of Indian River, arrived at the port to

effect the pumping transfer. An Eller employee removed the

tank from storage and aligned it with the trailer. Jones at-

tempted to connect the tank and the trailer, but realized that

a fitting needed to connect the hoses was missing. Even

though another fitting on the back of the tank might have

been used to pump the liqueur into the trailer, Jones decided

that pumping the liqueur would be impossible; therefore, he

asked Marshall, an Eller employee, to help him accomplish

a “gravity feed"--essentially, Jones wanted to pour the

liqueur from the tank to the trailer. To effect a gravity feed,

the tank had to be elevated higher than the trailer. Marshall

directed another Eller employee, Wright, to assist Jones.

Wright lifted the tank on a large forklift; Wright, however,

was not licensed to operate forklifts of this Capacity.

Wright and Marshall neglected to put straw mats or

other dunnage between the metal forks and the metal

container. Fifteen minutes into the Operation, the tank

apparently began to slide off the forks because of the lack of

dunnage. Deciding that the tank was not properly balanced,

Marshall instructed Wright to find another forklift. Wright

did not lower the tank, but left the forklift holding the tank

suspended eight feet off the ground for ten minutes; leaving

57a

a load suspended was a violation of standard company

procedure. As Wright returned, the tank fell off the forklift.

The tank ruptured, and eighty-five percent of the Tia Maria

in the tank spilled out. The liqueur remaining in the tank was

contaminated during the clean-up, in which several

fire-engine companies covered the area with anti-explosive

foam.

II. BASIS OF FEDERAL

JURISDICTION

The claim against Indian River was pleaded as a

federal question; and against Eller, in diversity. The district

court analyzed the cases against Eller and Indian River under

maritime tort law; because the accident in question did not

occur at a maritime situs, however, admiralty jurisdiction

would not support the claims against these two defendants.

Harville v. Johns-Manville Products Corp., 731 F.2d 775,

782 (11th Cir.1984); Boudloche v. Conoco Oil Corp., 615

F.2d 687, 688 (Sth Cir.1980). (Footnote 2) On appeal,

Indian River argues that the district court lacked

subject-matter jurisdiction over.the claim asserted against it.

We of course may consider the question of Article III

subject-matter jurisdiction for the first time on appeal;

additionally, an explanation of the basis of federal jurisdic-

tion over each defendant will point out the source of law

applicable to each claim.

A. Federal subject-matter jurisdiction

{1] Hiram Walker urges that its claim against Indian River

arises under the Carmack Amendment, 48 U.S.C. 11707,

which provides in relevant part:

A common carrier providing transportation or service

subject to the jurisdiction of the Interstate Commerce

Commission ... shall issue a receipt or bill of lading for

58a

property it receives for transportation under this subtitle.

That carrier . . . [is] liable to the person entitled to recover

under the receipt or bill of lading. The liability imposed

under this paragraph is for the actual loss or injury to the

Property caused by (1) the receiving carrier.... Failure to

issue a receipt or bill of lading does not affect the liability of

a Carrier...

49 U.S.C.A. § 11707(a)(1) (1988). In its complaint,

Hiram Walker alleged that Indian River "totally breached,

failed and violated its duties as an interstate common carrier

in receiving, tending, caring for and delivering the [shipment

of Tia Maria] in good condition, but on the contract, so

seriously [damaged] the same while in its possession that it

"as rendered a total loss." Section 1337 of Title 28 imposes

an amount-in-controversy requirement over suits brought

under the Carmack Amendment; that requirement is satisfied

by the allegations in the complaint. The complaint

sufficiently pleaded a federal claim against Indian

River. (Footnote 3)

Because the Carmack Amendment would not support

the claim against Eller, Hiram Walker alleged that this claim

was properly within the court’s diversity jurisdiction. 28

U.S.C. 1332. In the complaint, Hiram Walker conspicuously

failed to allege that it and Indian River were of diverse

citizenship. Diversity jurisdiction ordinarily is not available

“when any plaintiff is a citizen of the same State as any

defendant." Owen Equipment & Erection Co. v Kroger, 437

U.S. 365, 374, 98 S.Ct. 2396, 2403, 57 L.Ed.2d 274

(1978). An exception to the general rule exists, however,

when the plaintiff joins a non-diverse defendant sued under

federal law with a diverse: defendant sued in diversity.

Romero v. Int’l Terminal Operatirg Co., 358 U.S. 354, 381,

79 S.Ct. 468, 485, 3 L.Ed.2d 388 (1959) ("Since the Jones

Act provides an independent basis of federal jurisdiction over

the non-diverse respondent, ... the rule of Strawbridge v.

Curtiss, 3 Cranch 267, 2 L.Ed. 435, does not require

59a

dismissal of the claims against the diverse respondents.”");

Kauth v. Hartford Ins. Co., 852 F.2d 951, 958-59 (7th

Cir.1988); Baker v. J.C. Penney Co., 496 F.Supp. 922

(N.D.Ga. 1980). In Baker, Judge Vining observed that an

anomaly would be created by “not allowing a plaintiff to do

in one federal suit what he would be entitled to do in two

separate federal suits.” 496 F.Supp. at 924.

[2] Alternatively, the claim against Eller was properly

within the pendent-party jurisdiction of the district court. We

recently held that district courts have the power to hear the

state claim against the second party if (1) the federal claim

against the first party is substantial, meaning not

"inescapably” frivolous, Jackson v. Stinchcomb, 635 F.2d

462, 471 (Sth Cir.1981), (2) the statute conferring

jurisdiction over the federal claim does not “expressly or by

implication negate[ ]" the existence of pendent jurisdiction,

Aldinger v. Howard, 427 U.S. 1, 18, 96 S.Ct. 2413, 2422,

49 L.Ed.2d 276 (1976), and (3) the state claim arises out of

a “common nucleus of operative fact,” such that the plaintiff

would be expected to try the federal and state claims

together. [United Mine Workers v. Gibbs, 383 U.S. 715,

725, 86 S.Ct. 1130, 1138, 16 L.Ed.2d 218 (1966)].

Giardiello v. Balboa Ins. Co., 837 F.2d 1566, 1570 (11th

Cir. 1988) (emphasis in original). Here, the federal claim is

substantial and the claims against Eller and Indian River, as

joint tortfeasors, arise out of a “common nucleus of operative

fact.” With regard to the second prong, even though claims

under the Carmack Amendment may be brought in state

court, 49 U.S.C. §11707(d)(1), Congress has neither ex-

pressly nor impliedly foreclosed the possibility of

pendent-party jurisdiction under the Carmack Amendment.

Boudreaux v. Puckett, 611 F.2d 1028,1031 (Sth Cir. 1980)

(no negation of pendent-party jurisdiction under 15 U.S.C.

1981 even though such claims may be brought in State

court); compare Aldinger, 427 U.S. at 19, 96 S.Ct. at 2422

(Congress impliedly negated pendent-party jurisdiction over

60a

counties in suits predicated on 28 U.S.C. $1343 (3), which

provides jurisdiction for suits brought under 42 U.S.C. §

1983, because counties were not “persons” covered by 1983

under the then extant construction) with Giardiello, 837 F.2d

at 1571 (no negation of pendent-party jurisdiction under

ERISA); First Alabama Bank v. Parsons Steel, Inc., 747

F.2d 1367, 1377 (lth Cir. 1984) (no negation of

pendent-party jurisdiction under Bank Holding Company

Act), rev’d on other grounds, 474 U.S. 5 18, 106 S.Ct. 768,

88 L.Ed.2d 877 (1986); and Lykins v. Pointer Inc., 725 F.2d

645, 647 (11th Cir.1984) (no negation of pendent-party

jurisdiction under 28 U.S.C. § 1346(b)).

B. Source of the rule of law

(3] For Indian River, federal law governs the

determination of liability and the measure of damages under

the Carmack Amendment, and common-law principles give

content to the federal rule. Hector A. Martinez & Co. y.

Southern Pacific Transportation Co., 606 F.2d 106, 108 n.

1 (Sth Cir.1979), cert. denied, 446 U.S. 982, 100 S.Ct.

2962, 64 L.Ed.2d 838 (1980); Dublin Co. v. Ryder Truck

Lines, Inc., 417 F.2d 777, 778 (Sth Cir.1969).

Analysis of the source of law for the claim against

Eller is a bit more complicated. This action Originally was

filed in the Southern District of New York, and Eller moved

that court, pursuant to 28 U.S.C. § 1404(a), to transfer the

case to the Southern District of Florida. The Florida federal

court, therefore, must apply the rule that would have been

applied by the transferor New York federal court. Van Dusen

v. Barrack, 376 U.S. 612, 639, 84 S.Ct 805, 821, 11

L.Ed.2d 945 (1964). The New York federal court would

have applied the New York choice-of-law rule in determining

whether to apply Florida tort law or New York tort law to

this claim. Klaxon Co. v. Stentor Electric Manufacturing

Co., 313 U.S. 487, 496, 61 S.Ct. 1020,1021, 85 L.Ed. 1477

6la

(1941).

Over twenty-five years ago the New York Court of

Appeals abandoned the strict lex loci delicti rule in favor of

interest analysis for choice-of-law in torts cases. Babcock v.

Jackson, 12 N.Y.2d 473, 191 N.E.2d 279, 240 N.Y.S.2d

743 (1963). Interest analysis would in any event lead a New

York court to apply Florida law in judging Eller’s conduct,

even were Florida law inconsistent with the law in New

York. See Schultz v. Boy Scouts of America, Inc., 65 N.Y .2d

189, 480 N.E.2d 679, 491 N.Y.S.2d 90 (1985) ("when the

conflicting rules involve the appropriate standards of

conduct, rules of the road, for example, the law of the place

of the tort will usually have a predominant, if not exclusive

concern’"); Hacohen v. Bolliger Lid, 108 A.D.2d 357, 489

N.Y.S.2d 75 (1985) (where defendant’s standard of conduct

is judged, court should look to the place of the tort in order

to give effect to that jurisdiction’s interest in regulating

conduct within its borders). Eller’s conduct is therefore to be

measured under Florida law.

Ill. LIABILITY OF INDIAN

RIVER AND ELLER

A. Indian River

[4] We review the disposition of a motion for summary

judgment de novo, applying the same standards that should

have been applied by the district court Eastern Air Lines v.

Air Line Pilots Assoc. Int’l, 861 F.2d 1546, 1549 (11th

Cir. 1988). The district court drew the following inferences

from the papers the parties submitted in support of their

cross-motions for summary judgment:

A gravity feed, unlike a pumping transfer, required

that the tank containing the liqueur be elevated to a height

sufficient to allow sheer gravitational force to impel the

liqueur in the tank to drain downward to the [Indian River]

62a

trailer. This operation, of course, was intrinsically and

conspicuously fraught with dangers which would not have

been present in a pumping transfer. It therefore seems plain

that had Jones brought a cam-lock, the instrumentality needed

to perform the transfer of the liqueur properly, the accident

resulting in [Hiram Walker’s} tank of liqueur being dropped

and spilled, would never have occurred.

On the basis of these observations, the district court

adjudged Indian River liable for the damage to the Tia

Maria. The trial court disregarded contradictory evidence and

Plainly drew inferences against Indian River, the

non-movant. In the procedural posture of this case, the

district court’s exercise of its fact-finding powers constituted

reversible error. (Footnote 4)

The claim against Indian River appears to based on

both a theory of tort and a theory of contract. Indian River

behaved negligently in failing to bring the required fitting

and then requesting a gravity transfer; alternatively, Indian

River breached an express term of its contract with Hiram

Walker by failing to perform a pump transfer. At least two

questions are presented under a theory of tort that were not

susceptible of resolution against Indian River on a motion for

summary judgment. First, drawing inferences in favor of the

non movant, the district court should have concluded that it

was “highly extraordinary" that Indian River’s failure to

bring the proper fitting “should have brought about the

harm." Restatement (Second) of Torts §435(2). The court

may yet draw that conclusion after a full airing of the facts

at trial, a conclusion that would absolve Indian River of

liability for the lost liqueur.

Second, Indian River has demonstrated a very

substantial question whether Eller’s behavior should be

considered a superseding cause of the accident, another

finding that would preclude Indian River’s liability.

Restatement (Second) of Torts §§ 440 453. It is beyond

dispute that Eller’s conduct “actively operate[d] in producing

63a

harm to [Hiram Walker] after [Indian River’s] negligent act

or omission ha[d] been committed." Restatement (Second) of

Torts § 441(1). Eller’s conduct was thus an “intervening

force" causing the spill; again drawing all inferences in favor

of Indian River, the court should have determined that the

intervening force as a superseding cause. Among other

considerations, Eller’s negligence brought about “harm

different in kind from that which would otherwise have

resulted from [Indian River’] negligence; “Eller’s negligence

was not "a normal result" of Indian River’s negligence; the

intervening force was due to Eller’s action; and “the

intervening force [was] due to an act of [Eller] which [was]

wrongful toward [Hiram Walker] and as such subject[{ed]

[Eller] to liability." (Footnote 5) See Restatement (Second)

of Torts § 442. Evidence before the district court established

the foregoing for summary judgment purposes; the court had

before it proof that gravity transfers are common and usual,

and that Eller had previously performed gravity feeds for

Indian River’s drivers who had arrived without the proper

pumping equipment. (Footnote 6)

As a matter of law, Indian River’s conduct in

ordering a gravity feed cannot be characterized as negligent

on the basis of the facts before the district court. The district

court had before it no evidence tending to show that gravity

feeds are inherently and unreasonably dangerous; to the

contrary, the court was presented with evidence that

dockworkers often perform gravity feeds. (Footnote 7) It

may be that gravity feeds are more difficult than pump trans-

fers, but that alone would not render one who requests a

gravity feed liable for any damage that arises from a botched

execution. We are presented with no substantial evidence that

a competently executed gravity feed is an unreasonable

solution to the problem of transferring a liquid from one tank

to another; indeed, a gravity feed may under some

circumstances be more efficient than pumping transfers. We

cannot write a rule of law which would prevent prudent

64a

persons from requesting gravity feeds. (Footnote 8)

[5] Nor was summary judgment against Indian River

proper under a theory of contract. Assuming Indian River did

breach its contract with Hiram Walker, it would be liable

only for those damages which it had "reason to foresee as a

probable result of the breach When the contract as made.”

Restatement (Second) of Contracts § 351(1); see Hadley v.

Baxendale, 9 Ex. 341, 156 Eng.Rep. 145 (1854). We cer-

tainly cannot say as a matter of law that Indian River had

"reason to foresee" that its failure to perform a pump

transfer and its request that Eller undertake a gravity feed

would result in the loss of nearly all of the Tia Maria.

Whether framed as a tort or a breach of contract, summary

judgment should not have been entered against Indian River

on the question of liability.

B. Eller

[6] We agree that the undisputed facts surrounding the

- loss of the Tia Maria established Eller’s negligence as a

matter of Florida law. See Russ v. State, 140 Fla. 217, 191

So. 296 (1939); Seaboard Coast Line R.R. Co. v. Griffis,

381 So.2d 1063, 1065 (Fla. App.) ("Negligence is the failure

to observe, for the protection of another’s interest, such care

and precaution as the circumstances demand, or the failure

to do what a reasonable and prudent person would ordinarily

have done under the circumstances."), cert. denied, 376

So.2d 72 (Fla.1979); Stirling v. Sapp, 229 So.2d 850, 853

(Fla. 1969) ("Where the facts are undisputed and the evidence

is reasonably susceptible of but a single inference, the ques-

tion of defendant’s negligence ... becomes one of law for the

court.”). An Eller employee not licensed to Operate the

particular forklift raised the twenty-three ton tank containing

Tia Maria without placing dunnage between the tank and the

blades of the forklift. When his supervisor noticed that the

tank was slipping, the employee left the tank suspended

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above the ground for several minutes while searching for

another forklift. The tank fell and ruptured; the Tia Maria

was lost to the happy wharf rats. Hiram Walker satisfied its

burden of producing enough undisputed evidence to make out

a prima facie case for negligence under the Russ standard.

The burden shifted to Eller to show that, notwithstanding

these facts, its employees’ behavior was reasonable under the

circumstances. Eller argues that the trial court incorrectly

presumed that the Eller forklift operator should have

complied with standard operating procedures and “lowered

the tank when the tilt was first noticed to save the day.”

Eller, who had the burden of showing that this direct

inference from the undisputed facts was at least questionable,

points to no proffer that calls the inference into doubt. Even

assuming that the tank could not have been lowered, Eller

does not proffer evidence suggesting why it should not be

held negligent for allowing an unlicensed forklift operator to

lift the tank without proper dunnage. Accordingly, Eller has

raised only a “metaphysical doubt” as to the material facts

and its claim must fail. Matsushita Electric Industrial Co. v.

Zenith Radio Corp., 475 U.S. 574, 106 S.Ct 1348, 1356, 89

L.Ed.2d 538 (1986) (when moving party has satisfied its

burden, non-movant must come forward with “specific facts

showing that there is a genuine issue for trial “ (quoting

Fed.R.Civ.P. 56(c)) (emphasis in original)).

[7] Hiram Walker and Eller also join issue on the

effect of a "Himalaya" (Footnote 9) clause in Kirk Line’s bill

of lading, which provides that the “limitation of liability [in

the Carriage of Goods by Sea Act (COGSA) J shall inure .

. . to the benefit of any independent contractors performing

services hereunder including ‘stevedoring in connection with

the goods covered hereunder." COGSA limits liability to

$500 for damage to-the tank, a “customary freight unit.”

E.g., Caterpillar Americas Co. v. S.S. Sea Roads, 231

F.Supp. 647 (S.D.Fla.1964), aff'd, 364 F.2d 829 (Sth

Cir. 1966). Kirk Line hired Eller, a stevedore, to complete its

66a

delivery obligation; Eller was an independent contractor. On

summary judgment, however, the trial court concluded as

a matter of law that “Eller was a volunteer and acted only

when [Indian River] failed to p ide the

equipment for the pumping operation." Accordingly, the

court found that Eller was not acting within the scope of its

stevedoring responsibilities to Kirk Line, and was not entitled

to the limitation-of-liability provision of COGSA. We renew

this determination de novo, applying the law of COGSA

which the parties to the bill of lading made applicable beyond

the Act’s legal scope. Assicurazioni Generali v. D'Amico,

766 F.2d 485, 488 (11th Cir.1985); Triple E Development

Co. v. Floridagold Citrus Corp., 51 So.2d 435, 438

(Fla.1951) (intent of parties governs construction of

contract).

Although Himalaya clauses must be “strictly

construed ard limited to intended beneficiaries," Robert C.

Herd & Co. v. Krawill Machinery Corp., 359 U.S. 297,

305, 79 S.Ct. 766, 771, 3 L.Ed.2d 820 (1959); Certain

Underwriters at Lloyds v. Barber Blue Sea Line, 675 F.2d

266, 269 (11th Cir. 1982), “[w]hen a bill of lading refers to

a class of persons such as ‘agents’ or ‘independent

contractors’ it is clear that the contract includes all those

persons engaged by the carrier within the scope of the car-

riage contract." Id at 270. Kirk Line was responsible under

the bill of lading for delivering the Tia Maria to Hiram

Walker’s agent Indian River; Eller would be an intended

beneficiary of the Himalaya clause as long as Kirk Line had

not completely discharged its responsibility by the time of the

spill. Assicurazioni Generali 766 F.2d at 489. The question

thus presented is whether Kirk Line’s duty was fulfilled when

Eller aligned the tank with Indian River’s truck; if so, Kirk

Line had completed its responsibilities under the bill of lad-

ing before the spill occurred, and Eller could not be Said to

have been an “independent contractor performing services"

under the bill of lading at the time of the accident. If,

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however, because of Indian River’s failure to secure the

proper fitting, delivery was not completed by the mere

alignment of the tank with the trailer, then Kirk Line’s duty

of delivery would have continued and Eller would have been

"an independent contractor performing services” under the

bill of lading at the time of the spill, entitled to the $500

limitation. (Footnote 10)

Hiram Walker proffered the following evidence on

this narrow question. First, it offered the deposition

testimony of Eller’s director of safety, in which he stated that

Eller employees had performed the gravity transfer for the

convenience of Indian River and agreed that “doing the

gravity transfer bit was over and above the normal expected

activities of Eller in transferring products." Second, this

witness testified that during a pumping transfer, Eller had the

duty to align the tank and the trailer, but Indian River had

the duty to effect the transfer. (Another deposition witness,

Eller’s employee Marshali, confirmed that Indian River bore

responsibility for the mechanics of a pump transfer once

Eller aligned the tank and the trailer.) Finally, Hiram Walker

offered the affidavit of its traffic manager, who stated that

"[iJt was HIRAM WALKER’s understanding with INDIAN

RIVER that it was the latter’s sole responsibility to transfer

the bulk products from the ocean tanks to its tankers. It was

not part of HIRAM WALKER’s agreement with KIRK LINE

that KIRK LINE would bear that responsibility."

Eller for its part proffered the affidavit of its local Miami

manager, who stated that Eller’s responsibility as

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