Albany Insurance Company, Plaintiff-appellant, v. M.v. Istrian Express, Her Engines, Tackle, Machinery,appurtenances, Etc., in Rem, Defendant-appellee, 61 F.3d 709 (9th Cir. 1995)

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US Court of Appeals for the Ninth Circuit - 61 F.3d 709 (9th Cir. 1995) Argued and Submitted April 10, 1995. Memorandum Filed June 22, 1995. Decided July 25, 1995

G. Geoffrey Robb, Derby, Cook, Quinby & Tweedt, San Francisco, CA, for plaintiff-appellant.

Keith W. Heard, Burke & Parsons, New York City, for defendant-appellee.

Appeal from the United States District Court for the Northern District of California.

Before: FLOYD R. GIBSON,*  HUG, and FERGUSON, Circuit Judges.


The memorandum disposition filed June 22, 1995, is redesignated as an authored opinion by Judge Gibson.


FLOYD R. GIBSON, Circuit Judge:

Albany Insurance Company appeals the district court's grant of summary judgment in favor of the M.V. Istrian Express in Albany's in rem action against the M.V. Istrian Express for damage to goods sustained in transport. We reverse.

The district court granted the M.V. Istrian Express' motion for summary judgment because no contract of carriage existed between the M.V. Istrian Express and Albany's insured/subrogor, Ekland Marketing Company. In reaching its decision, the district court relied on Ins. Co. of N. America v. S.S. American Argosy, 732 F.2d 299, 302-304 (2d Cir. 1984). However, S.S. American Argosy is inapposite.

In S.S. American Argosy, the cargo in issue was damaged after it was discharged from the S.S. American Argosy, the vessel against which the maritime lien was being executed. Because the cargo's non-vessel operating common carrier ("NVOCC") had issued a bill of lading purporting to provide carriage through to the cargo's final destination, the subrogated insurer brought an in rem action against the S.S. American Argosy, claiming that the ship's owners had ratified the NVOCC bill of lading. The Second Circuit refused to extend the doctrine of ship-ratification where no charter-party relationship exists. S.S. American Argosy, 732 F.2d at 303. In the present case, Albany is proceeding against the vessel which was responsible for the damage to the cargo and whose time-charterer, Compania SudAmerica de Vapores ("CSAV"), issued the bill of lading for the goods in issue.

The district court erred in granting summary judgment to the M.V. Istrian Express based solely on the absence of a contract claim. This Circuit recognizes a maritime tort lien irrespective of contractual obligations. All Alaskan Seafoods, Inc. v. M.V. Sea Producer, 882 F.2d 425, 430 (9th Cir. 1989) (quoting Supreme Court dicta in The John G. Stevens, 170 U.S. 113, 124-25, 18 S. Ct. 544, 548-49, 42 L. Ed. 969 (1898)). A carrier which receives undamaged goods, but which delivers damaged goods is subject to the rule applicable to all bailees and a prima facie case of liability exists. Schnell v. The Vallescura, 293 U.S. 296, 305, 55 S. Ct. 194, 196, 79 L. Ed. 373 (1934). Albany had only to demonstrate that the strawberry cuttings were received by the M.V. Istrian Express in good condition and delivered in damaged condition for the burden to shift to the M.V. Istrian Express to show that the M.V. Istrian Express, as the carrier, was not responsible for the damage. The Vallescura, 293 U.S. at 305, 55 S. Ct. at 196.

In a motion for summary judgment, the court must review the facts in the light most favorable to the non-moving party. Jesinger v. Nevada Federal Credit Union, 24 F.3d 1127, 1130 (9th Cir. 1994). In its complaint, Albany alleged that the M.V. Istrian Express "received, in good order and condition, a shipment of 3,904 cartons of Strawberry Rooted Cuttings". Albany also alleged that the defendants "discharged and delivered said shipment, but not in like good order and condition as when received". As Albany offered into evidence copies of bills of lading issued by CSAV designating the strawberry rooted cuttings as "clean on board", Albany fulfilled its burden and created a genuine issue of material fact as to the cause of the damage to the cuttings prior to their arrival at their final destination.

The district court erred in granting summary judgment in favor of the M.V. Istrian Express. A maritime lien exists for Albany's cause of action which sounds in tort and an in rem proceeding is therefore appropriate. WE REVERSE AND REMAND FOR FURTHER PROCEEDINGS.


The Honorable Floyd R. Gibson, Senior Judge for the Eighth Circuit Court of Appeals, sitting by designation