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Godinho v. Howland Hook Container Terminal

A-2000-03T2 (N.J. Super. App. Div. 2005) (Unpublished)

SHIPPING; CARRIAGE OF GOODS BY SEA ACT — Under the federal Carriage of Goods by Sea Act, absent a declaration of value on the dock receipt, a person may only receive up to five hundred dollars in damages for goods lost by a carrier.

A husband and wife decided to move to Brazil and wanted to ship their valuable belongings there. They contracted with a travel agency that was in the business of shipping goods to different countries around the world. The contract provided that the travel agency was to find a carrier to ship the goods to Brazil. The agency also was to drop off the couple’s goods at a port where they could be shipped directly to the carrier. The travel agency took the goods to a port where it turned over the goods to a stevedore, who was responsible for placing the goods on the ship. At the port, the travel agency received a dock receipt by the carrier. The receipt provided that the terms of the carrier’s bill of lading were incorporated into the dock receipt. The carrier’s bill of lading was subject to the federal Carriage of Goods by Sea Act (COGSA). Instead of placing the goods on a ship to Brazil, the stevedore placed the goods on a ship traveling to Ecuador. As a result, the goods never reached the couple in Brazil, and instead went to one of the travel agency’s clients in Ecuador. Upon notification that the goods were mistakenly shipped to Ecuador, the president of the travel agency went to Ecuador to retrieve the goods from the other client. The other client assured the travel agency president that he would return the goods and signed documents to this effect. However, it never returned the goods. As a result, the couple sued the agency’s other client, the travel agency, the stevedore, and the carrier for negligence. In its defense, the stevedore and carrier asserted that despite the actual value of the couple’s goods, under COGSA, the couple was only entitled to five hundred dollars for damages. The lower court granted directed verdicts in favor of the travel agency and the carrier. The jury returned a verdict against the stevedore and the agency’s other client. It held that the stevedore and carrier were liable for only five hundred dollars in damages pursuant to COGSA. The couple appealed.

The Appellate Division affirmed the lower court’s ruling. In reaching its decision, the Court discussed the applicability of COGSA. It held that COGSA applies to every bill of lading or similar document used in a shipping transaction. The Act applies during the time period after which the goods are loaded onto a ship until the goods reach their final port of destination. Under COGSA, a carrier has a duty to properly and carefully load the goods onto a ship. If the carrier breaches this duty, the Act limits the amount for which the carrier can be held liable to five hundred dollars. This limitation applies to all shipping transactions, except when the dock receipt sets forth a specific value of the goods to be shipped. In applying these principles, the Court held that because the dock receipt given to the travel agency did not provide a declaration of value for those particular goods, the carrier’s liability was limited to five hundred dollars pursuant to COGSA. The Court further determined that under the Act, the carrier could contractually extend the liability limitation to employees, agents, and independent contractors such as the stevedore. It held that the carrier extended the liability limitation to the stevedore by incorporating the terms of its bill of lading into the dock receipt, which then became subject to COGSA. As a result, the Court held that under COGSA, the stevedore’s liability was also limited to five hundred dollars.

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