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Lofthouse Manufacturing Ltd v. Ports America Chesapeake, LLC

United States District Court, D. Maryland

September 7, 2016



          Catherine C. Blake United States District Judge

         Lofthouse Manufacturing Ltd. (“Lofthouse”) and Brawo Brassworking Limited (“Brawo”) have sued Ports America Baltimore, Inc. (“PAB”) and Ports America Chesapeake, LLC (“PAC”), alleging that the defendants' negligence in transferring the plaintiffs' cargo to a truck caused $500, 000 in damages. The defendants-who argue that the case is barred, or their liability limited, by the Carriage of Goods by Sea Act (“COGSA”) or the Baltimore Marine Terminal Association (“BMTA”) Schedule-have filed motions to dismiss or, in the alternative, for summary judgment. Oral argument was heard on July 11, 2016, and supplemental briefing followed. For the reasons that follow, the first motion to dismiss or, in the alternative, for summary judgment will be denied as moot, and the second motion will be granted in part and denied without prejudice in part.


         In or about November 2015, an LH electrical cabinet (“cabinet” or “machine”) owned by Lofthouse and Brawo was transported from Verona, Italy to Baltimore, Maryland. (First Am. Compl. ¶ 6, ECF No. 15.) The plaintiffs arranged for a trucking company to transfer their cargo, including the cabinet, from Baltimore to Ontario, Canada, where they are located. (See Id. ¶¶ 1, 6.) PAB and/or PAC operated as terminal operator in Baltimore. (Id. ¶ 7.) On or about December 11, 2014, at the Port of Baltimore, “while [PAB] and/or PAC transferred the Machine” to one of the trucking company's flatbed trailers, the cabinet “fell on its side to the ground resulting in extensive damage” totaling $500, 000. (Id. ¶¶ 8, 10.) The cabinet arrived at the plaintiffs' facility in damaged condition on December 16, 2014. (Id. ¶ 9.) The plaintiffs allege that PAB and/or PAC breached its duty to transfer the cabinet to the flatbed trailer “when its employees, agents and/or servants, through, inter alia, the use of defective lifting slings, improper rigging techniques and methods, and improper and/or lack of supervision of the lifting and transfer of the Machine caused the Machine to be dropped to the ground and extensively damaged.” (Id. ¶¶ 12, 16, 23.)

         On December 15, 2015, the plaintiffs filed a complaint against PAB only. (Compl., ECF No. 1.) On January 22, 2016, PAB filed a motion to dismiss or, in the alternative, a motion for summary judgment, alleging, inter alia, that the plaintiffs had sued the wrong party. (PAB Mot. Dismiss, ECF No. 9.) In particular, PAB stated that PAC-not PAB-contracted with the National Shipping Company of Saudi Arabia (“NSCSA” or “Bahri”), the carrier or vessel operator in this case, to provide stevedoring and marine terminal services for the vessel's cargo at the Port of Baltimore; discharged the cabinet from the vessel; and allegedly damaged the cabinet while loading it on to the truck. (Id. ¶ 2.) On February 9, 2016, the plaintiffs filed an amended complaint that named both PAB and PAC as defendants. (First Am. Compl.) The allegations of the amended complaint, now naming two defendants instead of one, remained largely the same. (Id.) On March 10, 2016, PAB and PAC filed a second, joint motion to dismiss or, in the alternative, for summary judgment (the “second motion”). (Second Mot. Dismiss, ECF No. 19.) In that motion, the defendants incorporate by reference PAB's original motion, and argue that PAB had no involvement in the damage to the cargo and should be dismissed from the lawsuit. (Id. ¶ 5.) The defendants also argue that, pursuant to the bill of lading between the plaintiffs and Bahri, for which PAC acted as stevedoring firm and terminal operator, COGSA applies and the suit is barred by that law's one-year statute of limitations or, in the alternative, damages are capped by its $500 limitation of liability. (Id. ¶¶ 6-8.) The plaintiffs filed a response in opposition, (Resp. Opp'n, ECF No. 20), and the defendants replied, (Reply, ECF No. 21).

         The court held a hearing on the pending motions on July 11, 2016. At that hearing, and in the supplemental briefing that followed, the defendants argued that, even if the services they provided at the time of the alleged loss were not covered by the bill of lading, they were covered by the terms of the BMTA Schedule, which also includes a one-year time bar and a $500 limitation on liability. (See Suppl. Mem., ECF No. 24.) The plaintiffs' response to the supplemental motion requested more time for discovery pursuant to Federal Rule of Civil Procedure 56(d). (See Suppl. Resp., ECF No. 27.) The defendants replied. (See Suppl. Reply, ECF No. 28.)


         The defendants have moved to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) or, in the alternative, for summary judgment under Federal Rule of Civil Procedure 56. A court considers only the pleadings when deciding a Rule 12(b)(6) motion. Where the parties present matters outside of the pleadings and the court considers those matters, as here, the motion is treated as one for summary judgment. See Fed. R. Civ. P. 12(d); Gadsby by Gadsby v. Grasmick, 109 F.3d 940, 949 (4th Cir. 1997); Paukstis v. Kenwood Golf & Country Club, Inc., 241 F.Supp.2d 551, 556 (D. Md. 2003). “There are two requirements for a proper Rule 12(d) conversion.” Greater Balt. Ctr. for Pregnancy Concerns, Inc. v. Mayor and City Council of Balt., 721 F.3d 264, 281 (4th Cir. 2013). First, all parties must “be given some indication by the court . . . that it is treating the 12(b)(6) motion as a motion for summary judgment, ” which can be satisfied when a party is “aware that material outside the pleadings is before the court.” Gay v. Wall, 761 F.2d 175, 177 (4th Cir. 1985) (internal quotation marks omitted); see also Laughlin v. Metro. Washington Airports Auth., 149 F.3d 253, 261 (4th Cir. 1998) (commenting that a court has no obligation “to notify parties of the obvious”). “[T]he second requirement for proper conversion of a Rule 12(b)(6) motion is that the parties first ‘be afforded a reasonable opportunity for discovery.'” Greater Balt., 721 F.3d at 281 (quoting Gay, 761 F.2d at 177). Here, the plaintiffs had adequate notice that the defendants' motion might be treated as one for summary judgment. The motion's alternative caption and attached materials are in themselves sufficient indicia. See Laughlin, 149 F.3d at 260-61. Moreover, the plaintiffs referred to the motion in their opposition brief as one for summary judgment and submitted additional documentary exhibits and a Rule 56(d) request. Therefore, the court will consider the affidavits and additional materials submitted by the parties and will treat the motion of the defendants as a motion for summary judgment.

         Federal Rule of Civil Procedure 56(a) provides that summary judgment should be granted “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a) (emphases added). “A dispute is genuine if ‘a reasonable jury could return a verdict for the nonmoving party.'” Libertarian Party of Va. v. Judd, 718 F.3d 308, 313 (4th Cir. 2013) (quoting Dulaney v. Packaging Corp. of Am., 673 F.3d 323, 330 (4th Cir. 2012)). “A fact is material if it ‘might affect the outcome of the suit under the governing law.'” Id. (quoting Henry v. Purnell, 652 F.3d 524, 548 (4th Cir. 2011). Accordingly, “the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment[.]” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). The court must view the evidence in the light most favorable to the nonmoving party, Tolan v. Cotton, 134 S.Ct. 1861, 1866 (2014) (per curiam), and draw all reasonable inferences in that party's favor, Scott v. Harris, 550 U.S. 372, 378 (2007) (citations omitted); see also Jacobs v. N.C. Admin. Office of the Courts, 780 F.3d 562, 568-69 (4th Cir. 2015). At the same time, the court must “prevent factually unsupported claims and defenses from proceeding to trial.” Bouchat v. Balt. Ravens Football Club, Inc., 346 F.3d 514, 526 (4th Cir. 2003) (quoting Drewitt v. Pratt, 999 F.2d 774, 778-79 (4th Cir. 1993)).


         I. PAB

         As an initial matter, the defendants argue that PAB had no involvement in the alleged negligence at issue and, therefore, should be dismissed from the case. In the original motion, as incorporated in the second motion, Richard Surett, PAB's senior vice president, provided an affidavit explaining that PAB is PAC's parent corporation, and that PAC, not PAB, provided the cargo services related to the plaintiffs' cabinet.[1] (PAB Mot. Dismiss Ex. A, Surett Aff. ¶¶ 2-6, ECF No. 9-2.) The defendants also attached to the second motion an affidavit from Jon Palmbak, PAC's chief financial officer, attesting to the fact that PAC operated as stevedore and terminal operator for NSCSA at the Port of Baltimore, and that it used a forklift to load the cabinet at issue onto the flatbed truck. (Second Mot. Dismiss Ex. 1, Palmbak Aff. ¶¶ 4, 6, ECF No. 19-2.)

         In their response in opposition, Lofthouse and Brawo do not provide any counter to the argument that PAB is the wrong defendant. Because the plaintiffs have not responded to the argument that PAB is not the responsible party, they have abandoned their negligence claim against PAB. See Wood v. Walton, 855 F.Supp.2d 494, 505 & n.35 (D. Md. 2012) (citing Mentch v. E. Sav. Bank, FSB, 949 F.Supp. 1236, 1247 (D. Md. 1997)). Accordingly, the defendants' motion will be granted as to the claim that the plaintiffs have sued the wrong defendant, and PAB will be dismissed.

         II. B ...

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