Tuesday, December 31, 2013

Bally Inc. v The Zim America case brief

Bally Inc. v The Zim America case brief summary
US Court of Appeals for the 2nd circuit, 1994

This case talks about how the burden of proof works (the pin-pon thing).

Facts
  • In August of 1990, Bally engaged Odino-Valperga, a large freight-forwarding agency, to consolidate several shipments of leather goods that Bally had purchased from six different Italian manufacturer and arrange for the shipment to NY.
  • Zim was the vessel where the goods were ship in.
  • There were 301 cartons of goods.
  • The goods were put in a container and the container was locked and sealed. It was also sealed with a rope.
  • The sealed should remain unbroken until the cargo is delivered to the consignee.
  • The goods were loaded on August 23, 1990 and arrived in NY in good order.
  • 65 cartoons were missing out of 301, but the seal and the rope were intact.
  • Three weeks after delivery, Bally sent Zim a claim statement dated October 10, 1999 for the amount of the loss.
  • Zim denied liability and refused to pay.

Rationale
  • That the goods were damaged while in carrier’s custody can be proven by:
    • Delivery of the goods to the carrier in good condition.
    • Outturn by the carrier in damaged condition
Delivery of the goods to the carrier in good condition (proved):
  • The weight listed on a bill of lading is prima facie proof of receipt by the carrier of that weigh regardless of attempted reservations like “said to weigh”, “shipper’s load and count” and “contents of packages are shipper’s declaration”.
  • A clean bill of lading does not, however, constitute prima facie evidence of the condition of goods shipped in sealed packages where the carrier is prevented from “observing the damaged condition had it existed when the goods were loaded”.
    • In this case the bill of lading was prima facie proof of the weight of the cargo, but not the number of the cartons because it couldn’t be ascertainable from any external examination.
    • Trinca testified that he observed 301 cartons being loaded, so Bally established the first prong of its prima facie case.
Outturn by the carrier in damaged condition (failed to prove):
  • Based on the parties’ stipulation that 65 cartons were missing, proves a shortage of cargo at outturn.
  • Weight: It is generally the carrier and not the consignee that has the obligation of weighing a sealed container upon delivery at the port of destination.
    • The carrier doesn’t have the obligation of weighing cargo at the time of delivery, the COGSA doesn’t impose such obligation.
    • Bally didn’t prove that the cargo was lost while it was in Zim’s custody, if he would have weighed the container while it was sealed and thereby demonstrated a shortfall in weight, Bally would have had a better case.
  • Timely notice (not given): COGSA section 3(6) - Bally didn’t give Zim a timely notice of the missing goods. Bally didn’t provide Zim with a written notice of the missing cartons until three weeks after it discovered the loss, even the phone call was until 8 days after delivery.
    • Therefore it creates a presumption that the carrier delivered the cargo in good order. This wouldn’t be conclusive if there was enough evidence to prove that the goods were lost while in Zim’s custody, but in this case there isn’t enough evidence.
  • There is insufficient evidence in the record to support a finding that the 65 cartons of leather goods were missing at outturn. Even if we had some doubt on this point, there certainly was insufficient evidence to overcome the presumption of good delivery created by 3(6).
  • Bally failed to prove the second prong.

If you give timely notice, then the carrier has the problem to prove that the goods were in good condition.

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