|
IN THE UNITED STATES COURT OF
APPEALS
FOR THE ELEVENTH CIRCUIT
No. 99-14643
D. C. Docket No. 96-08341-CV-KLR
FIREMAN'S FUND INSURANCE COMPANY,
TALL PONY PRODUCTIONS, INC.,
Plaintiffs-Appellants,
IN ANY EVENT, INC.,
Plaintiff,
versus
TROPICAL SHIPPING AND CONSTRUCTION
COMPANY, LTD., BIRDSALL, INC.,
Defendants-Appellees,
STAGELINE MOBILE STATE, INC.,
Defendants-Cross-Defendants,
M/V TROPIC TIDE, in rem,
SEVEN SEAS INSURANCE CO., INC.,
Defendants,
BROMMA, INC.,
Defendant-Cross-Claimant.
__________________
No. 00-10131
___________________
D. C. Docket Nos. 96-08341-CV-KLR
& 96-08876-CV-KLR
FIREMANMAN'S FUND INSURANCE COMPANY,
IN ANY EVENT, INC.,
Plaintiff-Appellee,
TALL PONY PRODUCTIONS, INC.,
Plaintiff-Appellee-
Cross-Appellant,
versus
TROPICAL SHIPPING AND CONSTRUCTION
COMPANY, LTD.,
BIRDSALL, INC.,
Defendants-Cross-
Defendants,
BROMMA, INC.,
Defendant-Cross-
Claimant,
M/V/ TROPIC TIDE, In Rem,
STAGELINE MOBILE STAGE, INC.,
Defendants,
SEVEN SEAS INSURANCE COMPANY, INC.,
Defendant-Appellant-
Cross-Appellee.
----------------------------------------------------------------
TALL PONY PRODUCTIONS, INC.,
Plaintiff-Appellee-
Cross-Appellant,
versus
SEVEN SEAS INSURANCE CO., INC.,
Defendant-Appellant-
Cross-Appellee.
__________________
No. 00-11678
__________________
D. C. Docket Nos. 96-08341-CV-KLR
& 96-08876-CV-KLR
FIREMAN'S FUND INSURANCE COMPANY,
IN ANY EVENT, INC.,
TALL PONY PRODUCTIONS, INC.,
Plaintiffs-Appellees,
versus
TROPICAL SHIPPING AND CONSTRUCTION
COMPANY, LTD., BIRDSALL, INC.,
Defendants-Cross-
Defendants,
BROMMA, INC.,
Defendant-Cross-
Claimant,
STAGELINE MOBILE STATE, INC.,
M/V TROPIC TIDE, in rem,
Defendant,
SEVEN SEAS INSURANCE CO., INC.,
Defendant-Appellant.
___________________
No. 00-12336
__________________
D. C. Docket No. 96-08341-CV-KLR
FIREMAN'S FUND INSURANCE COMPANY,
IN ANY EVENT, INC.,
TALL PONY PRODUCTIONS, INC.,
Plaintiffs-Appellees,
versus
TROPICAL SHIPPING AND CONSTRUCTION
COMPANY, LTD.,
Defendant-Cross-
Defendant-Appellant,
BROMMA, INC.,
Defendant-Cross-
Claimant,
BIRDSALL, INC.,
Defendant-Cross-
Defendant,
M/V TROPIC TIDE, in rem,
SEVEN SEAS INSURANCE CO., INC.,
Defendants,
STAGELINE MOBILE STAGE, INC.,
Cross-Defendant.
_______________________________________________________
Appeals from
the United States District Court
for the Southern District of Florida
_______________________________________________________
(June 19, 2001)
Before TJOFLAT, DUBINA and MESKILL1, Circuit Judges.
MESKILL, Circuit Judge:
This action spawned four appeals
from various final judgments entered by the United States District
Court for the Southern District of Florida, Ryskamp, J.,
brought by two insurance companies, an ocean carrier and its
stevedore, and a television production company, arising out of
the destruction of a mobile stage while it was being loaded for
transport from the Port of Palm Beach to the island of St. Maarten
for use in an HBO television special titled "Sinbad's 70's
Soul Party."
BACKGROUND
A. Facts
In May 1995, Tall Pony Productions
(Tall Pony) leased a mobile stage from In Any Event, Inc. (Any
Event). Any Event had previously leased the stage from its owner,
Stageline Mobile Stage (Stageline), a Canadian manufacturer of
mobile stages. Tall Pony subleased the stage in connection with
an HBO Sinbad Special television production scheduled to take
place in St. Maarten. Tall Pony contracted with Tropical Shipping
& Construction (Tropical), an ocean carrier, to transport
the stage and other equipment from the Port of Palm Beach to
St. Maarten. Tropical and Tall Pony entered into a shipping contract,
evidenced by a bill of lading, for shipment of the cargo on Tropical's
vessel, the "Tropic Tide." A separate clause in the
bill of lading limited Tropical's liability to $500 for each
trailer or container prepared by the shipper, except where the
shipper, in this case Tall Pony, declared a higher value for
the equipment and paid the corresponding higher ad valorem
tariff. Tropical contends that Tall Pony did not declare value
for the shipment on the bill of lading, and, as such, did not
pay a higher tariff rate for its cargo, which the district court
noted would have been approximately $64,000 based on figures
provided by Tropical. If Tropical is correct, Tall Pony's recovery
for property damage to the stage is limited to the $500 per package
limitation provided under the Carriage of Goods by Sea Act (COGSA),
46 U.S.C. App. § 1304(5).
Fireman's Fund insured both Tall
Pony and Any Event. To that end, Fireman's Fund issued Tall Pony
a "blanket policy," which was supplemented with separate
declaration endorsements for each production undertaken by Tall
Pony. Fireman's Fund issued one such policy and declaration for
the "Sinbad's 70's Soul Party" production. That policy
states, in pertinent part, that "[t]his coverage insures
against all risks of direct physical loss or damage to the property
covered." The policy further provides coverage for "the
value of personal property, including but not limited to . .
. mechanical effects equipment, grip equipment and mobile equipment
. . . damaged or destroyed during the term of coverage, caused
by the Perils Insured against, while such property is used or
to be used by you in connection with an insured production."
Notably, the policy does not contain an exclusion for property
damage incurred during the loading and transport of the stage,
and no endorsement to that effect was ever issued by Fireman's
Fund in connection with the Tall Pony production at issue. The
Fireman's Fund policy also contains an "Other Insurance"
provision, which provides that the policy "shall apply as
excess insurance over [any] other insurance" issued in favor
of Tall Pony and covering the same property.
Fireman's Fund issued a Certificate
of Insurance on behalf of Tall Pony and in favor of Stageline
for the mobile stage. As the lessee of the stage, Any Event was
required to indemnify Stageline for damage to the stage. Tall
Pony, the sublessee and actual user of the stage, was in turn
legally obligated to indemnify Any Event for any amounts it paid
to Stageline arising from damage to the stage.
Shortly before the scheduled shipment
date, Jerome Anderson, the Fireman's Fund underwriter for the
Tall Pony policy, informed Tall Pony that its policy did not
cover the loading and ocean transport of the stage and that Fireman's
Fund did not wish to underwrite risks associated with shipping
by water. Concerned about lack of coverage for the stage once
it was turned over to Tropical for loading onto its vessel, Danny
Harris, head of production at Tall Pony, contacted Tropical to
inquire about obtaining ocean marine cargo coverage for the shipment.
Tropical referred Harris to Jim McIntire, a vice-president at
Seven Seas Insurance Company (Seven Seas), a sister corporation
of Tropical. After independently checking on Seven Seas with
its broker, Tall Pony obtained "open cargo" or "open
sea" insurance coverage from Seven Seas for the ocean transport
of the stage, listing Tall Pony as named assured. The Seven Seas
policy was an "all risk" cargo policy, and contained
an "Other Insurance" provision similar to the one contained
in the Fireman's Fund policy. At Tall Pony's request, on May
17, 1995, the same day the stage was damaged, Seven Seas issued
a letter to Tall Pony, confirming that the stage was insured
for ocean transport under the Seven Seas policy: "Tall Pony
Productions is held covered on their cargo sailing from Port
of Palm Beach to St. Maarten and on the return trip from St.
Maarten to Port of Palm Beach. Coverage is all risk excluding
any pre-existing discrepancies prior to receipt from Tropical
Shipping." Relying on Seven Seas' letter as proof of insurance
coverage for its shipment, Tall Pony took no further action with
respect to securing insurance coverage.
Tropical employed Birdsall, a stevedore,
to load the stage onto the vessel through the use of a crane
with spreaders. The crane employed by Birdsall was manufactured
by Bromma. During the course of loading the stage, the crane
failed, causing the stage to drop to the dock, resulting in its
total destruction. Consistent with the adage that "the show
must go on," Tall Pony made arrangements to secure a replacement
stage.
B. Proceedings in the District
Court
On May 17, 1996, Tall Pony, Fireman's
Fund, its insurer, and Any Event commenced an action against
Tropical, Birdsall, Bromma and Stageline, and the Tropic Tide,
in rem, for damages arising from the destruction
of the stage at the time it was being loaded onto the Tropic
Tide (Tall Pony I). On December 19, 1996, Tall Pony initiated
a separate action against Seven Seas to recover, inter
alia, property and consequential damages pursuant to the
terms of the "all risk" policy issued by Seven Seas
(Tall Pony II). On May 1, 1997, the district court dismissed,
on joint stipulation of the parties, Any Event as a plaintiff
in Tall Pony I. On November 7, 1997, the district court consolidated
the Tall Pony I and Tall Pony II actions.
While Tall Pony I and Tall Pony
II were pending in the district court, Stageline and its insurers
commenced an action against Fireman's Fund and Any Event to recover
for the property damage to the stage. In settlement of that claim,
Fireman's Fund paid Stageline and its insurers $234,000. On December
2, 1997, in exchange for payment of the settlement proceeds,
Stageline and its insurers executed a release in favor of Fireman's
Fund and/or its insureds for all claims relating to the physical
damage to the stage. Fireman's Fund made additional payments
for claims arising out of the destruction of the stage: $57,500
to Any Event for its loss of use claim against Tall Pony; $180,348
to Tall Pony for reimbursement of expenses incurred in connection
with obtaining a replacement stage; and $2,175 for miscellaneous
accounting expenses.
In October 1998, some ten months
after Fireman's Fund settled the claims brought by Stageline
and its insurers, Tall Pony signed a loan receipt in favor of
Fireman's Fund for $474,023, the total amount of funds paid out
by Fireman's Fund for claims arising out of the destruction of
the stage. The loan receipt was principally comprised of three
separate sets of payments made by Fireman's Fund: the settlement
funds Fireman's Fund paid to Stageline and its insurers; payment
to Any Event on its loss of use claims against Tall Pony; and
payment to Tall Pony directly for costs incurred in securing
a replacement stage, i.e., consequential damages.
The loan receipt provided, inter alia, that the
$474,023 was a loan and not payment on any claim, and was repayable
out of any net recovery Tall Pony made against any vessel, carrier
or insurance company for property damage to the stage.
In a decision dated August 25, 1997,
the district court held that the mobile stage constituted a single
"package" for purposes of COGSA and, thus, Tropical
and Birdsall's liability to Fireman's Fund and Tall Pony for
the damage to the stage was limited to $500, the statutory perpackage
limitation on a carrier's liability under COGSA. See 46
U.S.C. App. § 1304(5). In concluding that the $500 COGSA
limitation applied, the district court determined that Tall Pony
was on constructive notice of the contents of the bill of lading,
which contained a "clause paramount" that expressly
adopted the provisions of COGSA, seeIns. Co. of N. Am.
v. M/V Ocean Lynx, 901 F.2d 934, 939 (11th Cir. 1990),
and that Tall Pony failed to declare a higher value -- and, therefore,
pay a higher tariff rate -- for its cargo in order to opt out
of the COGSA limitation. In reaching its decision, the district
court found that the bill of lading legibly and clearly described
the stage as "one unit" or "package" for
purposes of COGSA. The district court further held that Birdsall's
liability was limited to $500 pursuant to the "Himalaya
Clause" contained in the bill of lading.1 On appeal, Fireman's Fund and Tall
Pony argue that the district court erred in holding that Tropical
and Birdsall had limited liability under section 1304(5).
On February 16-18, 1999, the district
court held a bench trial on the issue of liability as to Tropical,
Birdsall and the other defendants in connection with the destruction
of the stage. Following that trial, the district court held that
Birdsall was negligent in lifting the stage, and that its negligence
was the proximate cause of the damage to the stage. The district
court further held that Tropical was vicariously liable to Tall
Pony and Fireman's Fund for the damage to the stage. The district
court held Tropical and Birdsall jointly and severally liable
for the damage to the stage. However, based on the district court's
prior ruling, Tropical's and Birdsall's liability to Tall Pony
and Fireman's Fund was limited to $500 under COGSA section 1304(5)
and the "Himalaya Clause" contained in the bill of
lading. The district court also dismissed with prejudice the
claims asserted by Tall Pony and Fireman's Fund against Stageline
and Bromma. The district court entered final judgment on the
issue of liability on June 7, 1999. Stageline and Bromma are
not parties to the instant appeals.
On October 12-13, 1999, the district
court held a bench trial on Tall Pony's claim against Seven Seas
for damages and attorney's fees under the ocean cargo policy
issued by Seven Seas as the liability insurer of Tropical, and
on Tall Pony's failure to procure insurance claim against Tropical.
On October 13, 1999, the district court orally issued its findings
of fact and conclusions of law with respect to Tall Pony's claims.
The district court held that Seven Seas had assumed sole
coverage for ocean transport of the stage by Tropical and, accordingly,
was liable to Tall Pony for $234,000, the amount paid by Fireman's
Fund on behalf of Tall Pony in settlement of the claims brought
by Stageline and its insurers. The district court held that Tall
Pony could not, however, recover consequential damages from Seven
Seas related to the cost of obtaining a replacement stage and
the interruption of its business. Although the district court
held that Tall Pony was entitled to attorney's fees pursuant
to Fla. Stat. § 627.428, it did not make a specific fee
award at that time. Finally, the district court held that Tropical
was not liable on Tall Pony's failure to procure insurance claim.
Final judgment to that effect was entered on October 14, 1999,
and an amended final judgment was entered on December 9, 1999.
On March 6, 2000, the district court entered judgment awarding
attorney's fees of $76,912.50, plus interest, in favor of Tall
Pony and against Seven Seas.
On appeal, Seven Seas challenges
the district court's finding that it alone is liable to Tall
Pony for the amounts paid by Fireman's Fund on behalf of Tall
Pony to Stageline and its insurers for the property damage to
the stage. Tall Pony cross- appeals, contesting the district
court's decision limiting its recovery against Seven Seas to
$234,000. Tall Pony also seeks attorney's fees in connection
with the instant appeal pursuant to Fla. Stat. § 59.46.
Following the district court's decision,
Tropical filed a motion to tax costs pursuant to Fed. R. Civ.
P. 54(d) with respect to the dismissal of Tall Pony's failure
to procure insurance claim. The district court initially granted
Tropical's motion, but later vacated that award after Tall Pony
moved for reconsideration. On appeal, Tropical argues that its
award of costs should be reinstated.
DISCUSSION
We first consider whether the district
court erred in holding that section 1304(5) of COGSA limits Tropical's
and Birdsall's liability for the physical damage to the stage
to $500.
A. Tall Pony v. Tropical
1. Limited Liability Under COGSA
We review de novo
the district court's interpretation and application of the provisions
of COGSA and its factual findings for clear error. See
All Underwriters v. Weisberg, 222 F.3d 1309, 1310
(11th Cir.) ("This court reviews a district court's application
of admiralty law de novo."), cert.
dismissed, 121 S.Ct. 674 (2000); Marine Transp. Servs.
Sea-Barge Group v. Python High Performance Marine Corp.,
16 F.3d 1133, 1138 (11th Cir. 1994) (Sea Barge) (citing
M/V Ocean Lynx, 901 F.2d at 939).
The parties do
not dispute that COGSA, which governs "all contracts for
carriage of goods by sea to or from ports of the United States
in foreign trade," Polo Ralph Lauren, L.P. v.Tropical
Shipping & Constr. Co., 215 F.3d 1217, 1220 (11th Cir.
2000) (quoting 46 U.S.C. App. § 1312), applies to Fireman's
Fund's and Tall Pony's claims against Tropical and Birdsall for
the property damage to the stage. The parties differ, however,
on the application of section 1304(5) to the instant dispute.
Fireman's Fund and Tall Pony argue that, because the stage is
an unpackaged piece of machinery, the $500 COGSA limitation should
be multiplied by each "customary freight unit," which
theycontend is cubic feet. See Hayes-Leger Assocs.
v. M/V Oriental Knight, 765 F.2d 1076, 1081 n.10 (11th
Cir. 1985) (Hayes-Leger) (holding that the "customary
freight unit" determination "is a question of fact
that varies from contract to contract"). Thus, Fireman's
Fund and Tall Pony contend that the maximum recovery they are
entitled to under section 1304(5) is $500 multiplied by 5,304
cubic feet (the total size of the stage), or $2,652,000, which
far exceeds the $474,023 they sought. In response, Tropical
and Birdsall argue that the bill of lading listed the stage as
a single item or unit and, accordingly, the stage constituted
one "package" for purposes of COGSA. Thus, under
Tropical's and Birdsall's theory, Tall Pony's recovery for the
damage to the stage should be limited to $500. We conclude
that the district court properly applied section 4(5) of COGSA,
46 U.S.C. App. § 1304(5), when it concluded that the mobile
stage trailer qualified as one "package," such that
Tropical and Birdsall's liability for damage to the stage should
be limited to $500.
Section 4(5) of COGSA provides,
in pertinent part:
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 . . . , 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. § 1304(5); see
alsoM/V Ocean Lynx, 901 F.2d at 939 ("Congress enacted
the COGSA limitation on liability . . . in order to restrain
the superior bargaining power wielded by carriers over shippers
by setting a reasonable limitation on liability that the carriers
could not reduce by contract."). The bill of lading executed
by Tall Pony and Tropical extended the applicability of COGSA
-- which included, inter alia, the limitation of
liability clause contained in section 1304(5)-- "from the
time when the goods are received by the Carrier . . . at the
port of loading until they are delivered or dispatched by the
Carrier . . . at the port of discharge." Bill of Lading
at ¶ 3; see also Hartford Fire Ins. Co.
v. Orient Overseas Containers Lines (UK) Ltd., 230 F.3d
549, 557 (2d Cir. 2000) ("A carrier and a shipper can extend
COGSA so that it applies prior to loading and subsequent to discharge
of goods from a ship, but the extent of any application beyond
the scope of the statute is a matter of contract.") (citing
46 U.S.C. App. § 1307) (footnote omitted).
To invoke the limitation on liability
under section 1304(5), the carrier must satisfy two preconditions:
"First, the carrier must give the shipper adequate notice
of the $500 limitation by including a `clause paramount' in the
bill of lading that expressly adopts the provisions of COGSA.
Second, the carrier must give the shipper a fair opportunity
to avoid COGSA section 4(5)'s limitation by declaring excess
value." M/V Ocean Lynx, 901 F.2d at 939 (internal
citations omitted); seealso 46 U.S.C. App. § 1312.
After reviewing the bill of lading, the district court concluded
that Tropical satisfied both preconditions. We agree.
Paragraph two of the bill of lading
is entitled "Clause Paramount," and provides that the
bill of lading is subject to the provisions of COGSA and that
the carrier is entitled "to any privilege and right and
immunity provided [under COGSA]." Bill of Lading at ¶
2. The clause paramount put Tall Pony on constructive notice
that it could declare a higher value for its cargo on the bill
of lading. See, e.g., M/V Ocean Lynx,
901 F.2d at 939 (holding that a clause paramount in the bill
of lading "is sufficient to afford the shipper an opportunity
to declare excess value"). Tracking the language in section
1304(5), the bill of lading also put Tall Pony on actual notice
that it could opt out of the COGSA liability limitation by declaring
a higher value for the shipment and paying an extra freight charge:
[T]he value of the goods shall be
deemed to be $500.00 per package . . . unless the nature of the
goods in a valuation higher than $500.00 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 . .
. .
. . . .
Where container(s) or trailer(s)
[are] stuffed by shipper or on his behalf, Carrier's liability
shall be limited to $500.00 with respect to the contents of each
container or trailer, except when the Shipper declares ad valorem
valuation on the face hereof and pays additional freight on such
declared valuation.
Bill of Lading at ¶ 12; see
alsoSea-Barge, 16 F.3d at 1141 (holding that, to avoid
the $500 COGSA limitation on liability, the shipper "must
declare the value of its cargo on the face of the bill of lading"
and "pay additional freight on the cargo, as required by
the applicable tariff to obtain the benefit of such higher valuation")
(internal quotation marks omitted). The bill of lading extended
the limitation on liability to Birdsall, which functioned as
the stevedore during the loading of Tall Pony's shipment. See
Bill of Lading at ¶¶ 4 (Himalaya Clause) and 12. We
conclude that the district court did not commit clear error when
it found that the bill of lading was not illegible as a matter
of law. Accordingly, we conclude that the bill of lading provided
Tall Pony sufficient notice of the limitation of liability under
section 1304(5), and an opportunity to declare a higher value
for its cargo (and, thus, pay a higher freight charge) in order
to avoid COGSA's limitation for loss or damage resulting from
the actions of the carrier or its servants and agents.
We must next determine whether the
district court properly applied the COGSA definition of "package"
to the equipment shipped.
This Circuit has adopted the Second
Circuit's definition of "package" under COGSA. See
Fishman & Tobin v. Tropical Shipping & Constr.
Co., Ltd., 240 F.3d 956, 960 (11th Cir. 2001) (Fishman);
Hayes-Leger, 765 F.2d at 1082. In Fishman, we recently
reaffirmed our adherence to the definition of "package"
set forth by the Second Circuit in Aluminios Pozuelo, Ltd.
v. S.S. Navigator, 407 F.2d 152 (2d Cir. 1968) (Aluminios):
"The meaning of `package' . . . can therefore be said to
define a class of cargo, irrespective of size, shape or weight,
to which some packaging preparation for transportation has been
made which facilitates handling, but which does not necessarily
conceal or completely enclose the goods." Id. at
155.
At the outset, we note that our
resolution of disputes arising out of the $500 per package limitation
on carrier liability is complicated by the absence of statutory
language "defining the meaning and scope of the word `package,'"
and "the adoption of new methods of preparing and assembling
goods for shipment." Binladen BSB Landscaping v.
M.V. "Nedlloyd Rotterdam", 759 F.2d 1006, 1011-12
(2d Cir. 1985) (Binladen) (citing Allied Int'l Am.
Eagle Trading Corp. v. S.S. "Yang Ming",
672 F.2d 1055, 1064 (2d Cir. 1982)). Accordingly, in construing
the parameters of the COGSA limitation on liability provision,
courts are called on to "evaluate diverse and occasionally
idiosyncratic items shipped in various forms -- bundles, boxes,
cartons, bales, coils, crates, rolls, skids, pallets, and containers
-- in order to determine what units, if any, constitute COGSA
`packages.'" Id. at 1012. Our analysis is further
complicated by advancements in technology, such as those present
in the design of the stage, that outpace the existing law under
COGSA. Here, for instance, we must decide whether a "fully
mobile, preassembled, hydraulically operated staging unit"
constitutes a "package" under COGSA.
Notwithstanding, several basic principles
guide our determination of whether the mobile stage constitutes
a single "package" under COGSA. For carriers to avoid
unforeseen liability, "the number of packages should be
fully and accurately disclosed and easily discernable by the
carrier." Fishman, 240 F.3d at 961. "As a result,
the touchstone of our analysis is the contractual agreement between
the parties as set forth in the bill of lading." Id.
(internal quotations omitted); see also Hale
Container Line v. Houston Sea Packing Co., 137 F.3d
1455, 1469 (11th Cir. 1998) (characterizing the bill of lading
as "the contract of carriage"); Hayes-Leger,
765 F.2d at 1080 (quoting Binladen, 759 F.2d at 1012).
"Entries on the bill of lading are thus important evidence
of the intent of the parties to the shipping contract, and the
declaration on the bill may bind a shipper even when the contents
of the shipment diverge from the description on the bill."
Binladen, 759 F.2d at 1012 (internal citations omitted).
We have taken great pains to note, however, that reference to
the $500 COGSA liability limitation in the bill of lading "shall
be primafacie evidence, but shall not be conclusive
on the carrier." Hiram Walker & Sons v. Kirk
Line, 963 F.2d 327, 331 n.5 (11th Cir. 1992) (quoting 46
U.S.C. App. § 1304(5)). While "an ambiguity on a bill
of lading regarding the number of COGSA packages should be resolved
in favor of the shipper," Sony Magnetic Prods. v.
Merivienti O/Y, 863 F.2d 1537, 1542 (11th Cir. 1989),
in construing the terms of the bill of lading, like any other
contract, "[t]he court cannot make a new contract for the
parties where they themselves have employed express and unambiguous
words." Int'l Ins. Co. v. Johns, 874 F.2d
1447, 1454 (11th Cir. 1989).
We begin with the district court's
description of the mobile stage, unchallenged by the parties
on appeal, which we accept as not clearly erroneous, see
Hiram Walker & Sons, 963 F.2d at 330:
The mobile stage in question is
not a shipping container per se. When the stage
is folded up, it can be pulled by a diesel tractor on the highways
as if it were a regular tractor-trailer rig. When the stage is
folded down, the walls of the trailer form the floor of the stage,
and internal aluminum superstructures fold up to form metal rigging
for attaching lights, roofing and windwalls. The manufacturer's
promotional materials claims [sic] that "Stageline has not
reinvented the wheel, it's reinvented the stage on wheels!"
In the bill of lading, the parties
listed the mobile stage trailer as one unit. This designation,
along with the terms of the bill of lading incorporating the
provisions of COGSA and expressly invoking the $500 per package
limitation on liability under COGSA for loss or damage to the
shipment, is "important evidence of the intent of the parties
to the shipping contract." Binladen, 759 F.2d at
1012. Thus, absent ambiguity in the description of the number
of packages on the bill of lading, "parties to bills of
lading should expect to be held to the number that appears under
a column whose heading so unmistakably refers to the number of
packages." Seguros "Illimani" S.A. v. M/V
Popi P, 929 F.2d 89, 94 (2d Cir. 1991) (Seguros "Illimani");
seealsoFishman, 240 F.3d at 964 (holding that courts should
look beyond the "number of packages" column in the
bill of lading in cases where the description of the shipment
in the bill of lading is ambiguous or where the carrier's description
of the shipment is "self-serving"). In Fishman,
we cited with approval to the Second Circuit's decision in Seguros
"Illimani", which held, in pertinent part:
The number appearing under the heading
"NO. OF PKGS." is our starting point for determining
the number of packages for purposes of the COGSA per-package
limitation, and unless the significance of that number is plainly
contradicted by contrary evidence of the parties' intent,
or unless the number refers to items that cannot qualify as "packages,"
it is also the ending point of our inquiry.
929 F.2d at 94 (emphasis added);
see alsoHayes-Leger, 765 F.2d at 1081 (shipper
not entitled to recover full damages where "the bill of
lading listed `ONE CONTAINER ONLY' as the number of packages");
Aluminios, 407 F.2d at 156 ("Having specified that
the press was `ONE (1)' package, they must abide by its meaning
as a word of liability limitation."). Further, courts have
held similarly large items to constitute a single unit or package
for purposes of COGSA. See, e.g., FMC
Corp. v. S.S. Marjorie Lykes, 851 F.2d 78 (2d Cir.
1988) (fire engine); Aluminios, 407 F.2d at 156 (three-ton
press); Z.K. Marine, Inc. v. M/V Archigetis, 776
F.Supp. 1549, 1554-55 (S.D. Fla. 1991) (yacht); Taiwan Power
Co. v. M/V George Wythe, 575 F.Supp. 422, 423-24 (N.D.
Fla. 1983) (pressurizer weighing approximately 155,000 pounds,
placed on three wooden saddles and secured by means of steel
straps).
Tall Pony argues that because the
stage's design does not require packaging for it to be transported
by the ocean carrier, the stage cannot be classified as a "package"
for purposes of section 1304(5). We disagree.
We will not permit Tall Pony to
hide behind the sophisticated technology and design of the stage
to avoid the unambiguous terms of the bill of lading and the
description of the stage as one unit in the bill of lading. The
stage was "prepared for shipment in the normal manner in
which goods of this kind are prepared," Hayes-Leger,
765 F.2d at 1082 (quotation marks omitted), and no further packaging
was required or could have been undertaken in order to ready
the stage for ocean transport. As the district court stated,
"[t]he sheer cleverness of the design obviates any need
to prepare the stage in any way for shipping other than by folding
it up." Danny Harris, the head of production at Tall Pony,
testified at deposition that the stage was "[s]elf-contained:"
"[y]ou push two buttons and it opens up out of a giant tractor
trailer and becomes a giant stage, with . . . little help from
its technicians." Thus, the packaging of the stage is effectively
incorporated into the design of the stage, which becomes one
"package" enclosed on all sides when it is folded up.
Under these circumstances, it would be unfair to permit Tall
Pony to rely on the state-of-the-art technology of the stage
as a means of avoiding the $500 per package COGSA limitation
on liability and the express language in the bill of lading,
and thereby expose carriers like Tropical to unforeseen liability.
See Fishman, 240 F.3d at 961.
Because we conclude that the mobile
stage trailer constitutes a single "package" for purposes
of COGSA, we reject Tall Pony's argument that the district court
should have applied the $500 COGSA limitation on damages based
on the cubic area of the stage, which Tall Pony contends was
the "customary freight unit" used by Tropical in calculating
the freight charge for the stage. In Aluminios, the Second
Circuit rejected this argument under similar circumstances:
[T]here is nothing in the Bill of
Lading or in the statute that justifies the assumption that [a
cubic foot] constitute[s] a "customary freight unit."
The parties could select this method for fixing the freight charges
but there was no proof that such a cubic area was a "customary"
unit to each of which units the $500 limitation was applicable.
It would be highly artificial to attribute to the [stage] as
would [Tall Pony], . . . $500 to each [cubic foot] or a ceiling
on liability of [$2,652,000] in order to cover the [$474,023]
loss.
407 F.2d at 156.
Tall Pony next argues that it is
entitled to recover the full value of the stage because it satisfied
the requirements in the bill of lading by declaring a higher
value for the stage on the bill of lading. In response, Tropical
and Birdsall contend that the amount listed in the bill of lading
represents the insurable value of the stage for purposes
of obtaining insurance coverage, and was not the declared
value of the stage, which would have required Tall Pony to pay
a significantly higher ad valorem freight charge
pursuant to applicable tariff regulations. We conclude that Tall
Pony did not declare the value of the stage on the bill of lading
and, accordingly, is limited to the $500 recovery provided under
section 1304(5).
A shipper can increase the carrier's
potential liability for loss or damage to the shipper's cargo
"simply by declaring a higher value and ensuring that it
is inserted in the bill of lading." Stolt Tank Containers
v. Evergreen Marine Corp., 962 F.2d 276, 279 (2d Cir.
1992) (quotation marks omitted). If the shipper chooses this
option, it must pay additional freight on the cargo "in
accord with filed ad valorem rates." Sea-Barge, 16
F.3d at 1141; seealso Fishman, 240 F.3d at 962
n.7 ("[I]f [the shipper] wanted greater insurance coverage
on its clothing, it could have paid additional freight charges,
thus opting out of COGSA coverage."); Stolt Tank Containers,
962 F.2d at 279. "The shipper must declare the value of
its cargo on the face of the bill of lading, not on some other
related documents, to satisfy the valuation requirement."
Sea-Barge, 16 F.3d at 1141. As the shipper, it was Tall
Pony's responsibility to ensure that the declared value was properly
documented on the bill of lading.2SeeHale Container Line, 137
F.3d at 1469 ("Under COGSA, the shipper has the burden of
declaring the value of its goods and paying a higher freight
if it wants to have greater liability placed on the carrier.")
(footnotes omitted).
In arguing that it is entitled to
the full value for the stage, Tall Pony fails to distinguish
between the insurable and declared value of the stage. See,
e.g., Sea Barge, 16 F.3d at 1141 (holding
that the $100,000 figure appearing on the bill of lading "was
the amount of insurance coverage . . . sought -- not a declaration
of value for the purpose of satisfying the valuation requirement").
Simply stated, the insurable value is relevant with respect to
the amount of premium paid to the insurer for coverage
of a particular shipment. In contrast, the declared value is
relevant in calculating the higher tariff rate paid to the carrier
in order for the shipper to opt out of the COGSA $500 limitation
on liability. Thus, the amount of insurance coverage sought by
a shipper is not equivalent to a declaration of value for the
shipment sufficient to satisfy the valuation and tariff requirements.
Tall Pony's confusion is evident in its brief on appeal where
it argues that Tropical cannot limit its liability because "Tall
Pony declared the value of the shipment and agreed to
pay $9,721.51 to insure the cargo" (emphasis added).
As such, we agree with the district court's conclusion that Tall
Pony failed to declare the value of the stage on the bill of
lading.
Moreover, it is undisputed that
Tall Pony failed to pay additional freight on the cargo based
on the applicable advalorem tariff rates. An addendum
to the bill of lading provided that "[a]dditional liability
will only be assumed by Carrier at the request of the shipper
and upon payment of an additional charge of two and one-half
(2?%) percent of the total declared valuation." The district
court determined that Tall Pony would have been required to pay
an additional advalorem freight tariff of approximately
$64,000 based on a declared value of $2,547,505 for the
shipment. We concur in the district court's calculation.3 Instead,
Tall Pony opted to rely on its insurance policy with Seven Seas
to insure its cargo. See, e.g., M/V Ocean
Lynx, 901 F.2d at 940. If Tall Pony believed that it had
declared the higher value for the cargo, it would not have needed
to obtain the Seven Seas policy. By making the business decision
in favor of insurance coverage, Tall Pony actually paid an insurance
premium of $9,807.40 (as listed in the bill of lading), an amount
significantly less than the $64,000 advalorem tariff it
would have been required to pay had it declared the value of
the shipment on the bill of lading. Under these circumstances,
we will not provide Tall Pony "the benefit of insurance
for which it did not pay." Unimac Co. v. C.F.
Ocean Serv., 43 F.3d 1434, 1438 n.7 (11th Cir. 1995). For
these reasons, we hold that the district court properly concluded
that Tall Pony's claim against Tropical and Birdsall for damage
to the stage was limited to $500 under section 1304(5).
2. Failure to Procure Insurance
Claim
Tall Pony also appeals the district
court's dismissal of its failure to procure insurance claim against
Tropical.
Tall Pony brought a claim against
Tropical for negligently failing to procure the proper insurance
coverage on its cargo for that portion of Tall Pony's property
and consequential damages resulting from the destruction of the
stage that are not recoverable under the Seven Seas policy. In
the event that it cannot recover on its failure to procure insurance
claim, Tall Pony raises an alternative theory of recovery under
Restatement (Second) Torts § 323, which provides liability
for negligence in a voluntary, rather than a contractual, undertaking.
See, e.g., DeShaney v. Winnebago
County Dep't of Soc. Servs., 489 U.S. 189, 201-02 (1989).
The claims were tried before the
district court and Tropical prevailed. In dismissing the claims,
the district court found that Tropical merely recommended that
Tall Pony contact Seven Seas to discuss obtaining coverage for
the shipment and that Tropical was not acting as Seven Seas'
agent when it made that recommendation. Because we conclude that
the district court's findings under the agency and Restatement
(Second) Torts § 323 theories of recovery were not clearly
erroneous as a matter of law, we affirm the district court's
dismissal of Tall Pony's claims. See Beck v. Prupis,
162 F.3d 1090, 1101 (11th Cir. 1998), aff'd, 529 U.S.
494 (2000). We elaborate.
It was Seven Seas, rather than Tropical,
that Tall Pony contacted prior to the scheduled shipment date
to confirm that it was adequately insured. Further, Tall Pony
concedes that it checked on Seven Seas with its broker before
it contracted with Seven Seas for ocean marine insurance coverage
for its shipment. Similarly, Seven Seas, not Tropical, issued
the letter to Tall Pony stating that Tall Pony was fully insured
on its cargo. Thus, following its initial inquiry of Tropical,
Tall Pony dealt primarily with Seven Seas in obtaining insurance
coverage. Under these circumstances, Tall Pony cannot persuasively
argue that Tropical undertook to obtain insurance coverage on
behalf of Tall Pony for its cargo. SeeKlonis v. Armstrong,
436 So.2d 213, 216 (Fla. 1st Dist. Ct. App. 1983).
B. Seven Seas v. Tall
Pony
Seven Seas challenges the district
court's ruling that it is solely liable to Tall Pony under the
terms of the Seven Seas insurance policy for $234,000, the amount
paid by Fireman's Fund to Stageline and its insurers for the
property damage to the stage. Notably, Seven Seas does not dispute
that its policy covered loss claims resulting from damage to
the stage during ocean transport; rather, Seven Seas argues that
the Fireman's Fund policy also insured Tall Pony for damage to
the stage and, thus, the $234,000 should be allocated pro
rata between Fireman's Fund and Stageline based on the
terms of their respective policies. Seven Seas also contends
that the district court erred in holding that Tall Pony is entitled
to attorney's fees under Fla. Stat. § 627.428 in connection
with its $234,000 damage award against Seven Seas. Tall Pony
cross-appeals, arguing that the district court erred by limiting
its damage recovery against Seven Seas to the amount of physical
property loss to the stage. Specifically, Tall Pony argues that
it is entitled to recover an additional $240,023, the difference
between the amount paid by Fireman's Fund to satisfy its obligations
to third parties and Tall Pony arising from the accident and
the amount awarded by the district court to Tall Pony under the
terms of the Seven Seas policy for the physical damage to the
stage. This amount is principally comprised of additional expenses
Tall Pony incurred to obtain a replacement stage and settlement
of Any Event's loss of use claim against Tall Pony. We will consider
the merits of these arguments seriatim.
1. The Seven Seas Policy
In concluding that the parties intended
that only the Seven Seas policy afforded coverage for property
damage to the stage occurring during ocean transport, the district
court considered the deposition testimony of Jerome Anderson
and Robert Sattler, the insurance agents who underwrote the Fireman's
Fund policy to Tall Pony, and Danny Harris, the head of production
at Tall Pony. Anderson testified that he had informed Tall Pony
that Fireman's Fund did not wish to insure risks associated with
the "open seas" and, thus, that its policy did not
cover the loading and transport of the stage. Tall Pony also
relies on a letter from James McIntire, a vice president at Seven
Seas, to Harris stating that the Seven Seas policy covered Tall
Pony's cargo both to and from St. Maarten. McIntire sent the
letter to Harris after Harris had expressed concern that Tall
Pony lacked adequate coverage for the ocean transport of its
cargo.
Following a bench trial on Tall
Pony's claim against Seven Seas for breaching its obligations
under the Seven Seas policy, in which the district court considered
the testimony of the Anderson, Sattler and Harris and the letter
from Seven Seas, the district court held that:
Fireman's Fund said, we don't want
to insure this [cargo] while it's on the open seas. We don't
want to take the open cargo type of coverage. We're not very
good at that and we just don't want to handle that coverage.
Tall Pony says fine, I'll try to get other coverage. And they
talk to the shipper, who is Tropical, and Tropical recommends
its sister company, which is Seven Seas.
So representatives at Tall Pony
call Fireman's Fund and say, what about this company, are they
any good? They check them out and they say yeah, they should
be all right [sic], we'll write our coverage and we won't charge
you for the coverage with regard to the open sea trip, the ocean
cargo policy.
Now, all of this seems to happen
at the last minute. And, finally, Tall Pony doesn't have any
indication of its insurance and so it calls Seven Seas and says,
That thing isn't moving until I get some confirmation of coverage.
That's the infamous letter which says you're covered for all
risks.
. . . .
[T]he . . . first question the Court
has to deal with is, did Fireman's Fund provide any coverage
for the maritime leg of this trip? The insurance company, one
party to the contract, says we didn't write out any coverage,
we didn't charge a premium that reflected that. The insured says
they didn't provide any coverage and we didn't pay for that coverage.
We paid somebody else for that risk.
. . . .
[W]ith regard to the incident in
question, I would find that at the time the stage was dropped
Fireman's Fund did not have coverage for that portion because
that's the portion that was specifically assumed by Seven Seas
and they picked up the coverage at that time.
. . . .
So if there is no insurance from
Fireman's Fund, that leaves -- and Fireman's Fund has an assignment
from Tall Pony and Tall Pony is the ultimate bailee of this,
they had coverage with Seven Seas -- I would hold Seven Seas
liable for the total amount of the property damage, which is
$234,000.
The import of the district court's
findings and conclusions of law was that Fireman's Fund was not
liable for any claims arising out of the destruction of the stage
and that Tall Pony's sole recourse was against Seven Seas under
the terms of its "all risk" cargo policy. We disagree
with the district court's reasoning on this issue.
The question of the extent of coverage
under an insurance policy is a question of law to be decided
by the court and is therefore subject to plenary review by this
Court. See Gulf Tampa Drydock Co. v. Great Atl.
Ins. Co., 757 F.2d 1172, 1174 (11th Cir. 1985); see
also Coleman v. Florida Ins. Guar. Ass'n,
517 So.2d 686, 690 (Fla. 1988); Jones v. Utica Mut.
Ins. Co., 463 So.2d 1153, 1157 (Fla. 1985).
The parties apparently agree that
resolution of the instant dispute is governed by Florida law.
See, e.g., Steelmet v. Caribe
Towing Corp., 842 F.2d 1237, 1244 n.9 (11th Cir. 1988); Gulf
Tampa Drydock Co., 757 F.2d at 1174 ("[A]dmiralty courts
will generally look to appropriate state law in determining questions
involving a marine insurance contract.") (citing Wilburn
Boat Co. v. Fireman's Fund Ins. Co., 348 U.S. 310,
315-21 (1955)). Under Florida law, "the parties' intent
is to be measured solely by the language of the policies unless
the language is ambiguous." Towne Realty v.
Safeco Ins. Co. of Am., 854 F.2d 1264, 1267 (11th Cir.
1988). Thus, in the absence of ambiguous language, a court may
not look to parol evidence in ascertaining the intent of the
parties to an insurance contract. SeeMoore v. Pa. Castle
Energy Corp., 89 F.3d 791, 795 (11th Cir. 1996); Durham
Tropical Land Corp. v. Sun Garden Sales Co., 138 So.
21, 23 (Fla. 1931) ("The intention of the parties to a contract
is to be deducted from language employed, and such intention,
when expressed, is controlling, regardless of intention existing
in the minds of parties."); Lee
v. Montgomery, 624 So.2d 850, 851 (Fla. 1st Dist. Ct.
App. 1993) (per curiam) ("As a general rule, in the absence
of some ambiguity, the intent of the parties to a written contract
must be ascertained from the words used in the contract, without
resort to extrinsic evidence."); seealso 9 Lee R.
Russ & Thomas F. Segalla, Couch on Insurance 3d § 137:6
(1997) ("In harmony with the general principle of construction,
a contract of marine insurance is not to be construed beyond
the intent expressed in the policy as determined by the fair
and ordinary meaning of its terms.") (footnotes omitted).
"[A]mbiguity exists in an insurance
policy only when its terms make the contract susceptible to different
reasonable interpretations, one resulting in coverage and one
resulting in exclusion." Gulf Tampa Drydock Co.,
757 F.2d at 1174-75. We examine the language of the policy in
its entirety, construing any ambiguity against the insurer. Id.
at 1174; see also Gas Kwick v. United
Pac. Ins. Co., 58 F.3d 1536, 1539 (11th Cir. 1995). We are
mindful that "[c]ourts may not, however, rewrite contracts
or add meaning to create an ambiguity, and an ambiguity is not
invariably present when a contract requires interpretation."
Gas Kwick, 58 F.3d at 1539. Because the instant appeal
turns on the language in the Fireman's Fund and Seven Seas policies,
we confine ourselves to the language in those policies to ascertain
whether the policies are ambiguous with respect to the existence
of ocean marine cargo coverage for the Tall Pony shipment. See
Mindis Metals v. Transp. Ins. Co., 209 F.3d 1296,
1298 (11th Cir. 2000) (per curiam) ("As in any dispute over
insurance coverage, the Court begins by examining the source
of coverage itself -- the general promises of coverage made in
the insurance policy.").
Section II, Coverage D of the Fireman's
Fund insurance policy provides as follows:
I. INSURING AGREEMENT
We agree to pay to you or on your
behalf the value of personal property, including but not limited
to cameras, camera equipment, sound and lighting equipment, portable
electrical equipment, mechanical effects equipment, grip equipment
and mobile equipment, not including loss of use, owned by you
or which is the property of others for which you are legally
liable and which is lost, damaged or destroyed during the term
of coverage, caused by the Perils Insured against, while such
property is used or to be used by you in connection with an insured
production.
The "Perils Insured" provision
under Coverage D of the Fireman's Fund Policy provides: "This
coverage insures against allrisksof direct physical
lossor damageto theproperty coveredfrom
any externalcause, exceptashereinafter excluded"
(emphasis added). Thus, under the plain language of these provisions,
the Fireman's Fund policy provided Tall Pony coverage for physical
damage to equipment it owned or leased from a third party, unless
the property was specifically excluded or the damage was caused
by an uninsured peril. Further, the policy limited Fireman's
Fund liability for each loss under Coverage D to $2 million,
with a per loss deductible of $1,500.
This brings us to the "Perils
Not Insured" and "Property Excluded" sections
in Coverage D of the Fireman's Fund policy. Notably, those sections
do not exclude coverage for the mobile stage or ocean transport.4 Further,
Fireman's Fund and Tall Pony point to no language in the Fireman's
Fund policy that is arguably ambiguous on its face. Accordingly,
we conclude that, under the clear and unambiguous language contained
in "the four corners" of the Fireman's Fund policy,
Vulcan Painters v. MCI Constructors, 41 F.3d 1457,
1460 (11th Cir. 1995), the parties intended that Fireman's Fund
would insure Tall Pony against loss on account of damage done
to equipment, including, but not limited to, the mobile stage
at issue, which Tall Pony was legally liable for at the time
of the accident. Therefore, the district court erred in considering
parol evidence in construing the scope of coverage afforded under
the Fireman's Fund policy and holding that Seven Seas was exclusively
liable for Tall Pony's claimed loss arising from the property
damage to the stage.
Seven Seas does not dispute that
the coverage under its open cargo policy, which contained a $4
million limitation on liability, extended to property damage
to the stage at the time of the accident. Indeed, the letter
written by James McIntire on behalf of Seven Seas on the date
of the accident confirms that conclusion. Thus, having determined
that Fireman's Fund and Seven Seas are liable under the terms
of their respective policies, we must next consider the impact
of the mutual "other insurance" provisions contained
in those policies.
The "other insurance"
provision in the Fireman's Fund policy states: "If at the
time of loss or damage any other insurance is available which
would apply to the property in the absence of this policy, the
insurance provided by this policy shall apply as excess insurance
over the other insurance." The Seven Seas policy contains
a similar provision: "If an interest insured hereunder is
covered by other insurance which attached prior to the coverage
provided by this policy, then this Company shall be liable only
for the amount in excess of such prior insurance." The result
of these competing "other insurance" clauses is settled
under Florida law: "When two insurance policies contain
`other insurance' clauses the clauses are deemed mutually repugnant
and both insurers share the loss on a pro rata basis in accordance
with their policy limits." Galen Health Care v. Am.
Cas. Co. of Reading, Pa., 913 F.Supp. 1525, 1530 (M.D. Fla.
1996) (citing Travelers Ins. Co. v. Lexington Ins.
Co., 478 So.2d 363, 365 (Fla. 5th Dist. Ct. App. 1985));
see alsoRouse v. Greyhound Rent-a-Car, 506
F.2d 410, 415-16 (5th Cir. 1975) (in applying Florida law, holding
that "the [`other insurance'] clauses are mutually repugnant,
since if both are given effect neither insurer would be liable").
Accordingly, the Fireman's Fund and Seven Seas "other insurance"
clauses "cancel each other out and both insurers share the
loss on a pro rated basis." Galen Health Care, 913
F.Supp. at 1530. Without the benefit of adequate briefing on
this point, we leave it to the district court on remand to decide
in the first instance the manner in which liability for the physical
damage loss to the stage should be apportioned between Fireman's
Fund and Seven Seas based on the scope of coverage provided under
their respective policies. See, e.g., Clark
v. Putnam County, 168 F.3d 458, 463 (11th Cir. 1999).
Accordingly, we vacate the $234,000 damage award, plus prejudgment
interest, against Seven Seas in connection with Tall Pony's claimed
loss for property damage to the stage.
2. Tall Pony's Cross-Appeal for
Consequential Damages
Tall Pony challenges the district
court's ruling that the Seven Seas policy did not provide for
consequential damages, comprised mainly of costs associated with
settling Tall Pony's liability to Any Event and payments made
by Tall Pony to obtain a replacement stage and transport it to
St. Maarten where it was assembled. Specifically, Tall Pony claims
that all of these costs, totaling $240,023, fall within the scope
of coverage provided in the Seven Seas policy. We turn to the
district court's resolution of Tall Pony's claim for consequential
damages as our starting point.
In rejecting Tall Pony's claim for
consequential damages, the district court reasoned:
I think that the language "all
risks" in the context of shipping things by sea has to be
construed in the terms of all risk of damage to the, all types
of damage to the equipment. I don't believe that there was any
indication here that they're saying we'll get paid for consequential
damages.
If that were sought, it seems to
me it would be incumbent upon Mr. Harris [of Tall Pony] to say
not only do I want all kinds of coverage for all kinds of perils,
but I want consequential damages too.
. . . .
[W]ith regard to . . . Tall Pony's
contention that they had broader coverage than [the total amount
of the property damage to the stage], I would think that there
at least ought to be some document indicating that they were
looking for broader coverage than that. I have read a lot of
cases involving shipping and they always talk about an all-risk
policy as being all risks of sea. You know, sinking. Anything.
Act of God. Anything that can happen to it, including breakage.
And I'm sure that that's exactly what they meant by that letter.
I have never seen nor have I heard
of, with many of these maritime cases, somebody providing an
open cargo coverage, interruption of business, and consequential
damages. There would be no way that anybody could underwrite
that, from a standpoint of saying, well, we're going to insure
that your product isn't lost or damaged or unusable.
They could say, well, we were going
to use that for this, and because we couldn't do that and this
happened, that consequential damages could go into the gazillions.
We agree with the result reached
by the district court, albeit for slightly different reasons.
The inherent flaw in Tall Pony's
argument is its failure to distinguish between a risk or peril
insured against under the insurance policy, i.e.,
the cause of the loss, and the damages or recovery sought as
a result of the occurrence of that risk or peril. To view Tall
Pony's argument, and the misconceptions that underlie that argument,
in their proper context, we first briefly discuss certain general
principles applicable to "all risk" policies.
In general, an "all risk"
insurance policy provides coverage for the "primary risks
to the ship of navigating on the waters." 9 Lee R. Russ
& Thomas F. Segalla, Couch on Insurance 3d at § 137:11;
id. at § 137:10 ("As a general statement, the
coverage under a marine insurance policy is presumed to apply
to risks common to the sea or other navigable waters.").
An "all risk" policy, such as the one present here,
typically works in favor of the insured: "[o]nce the insured
establishes a loss apparently within the terms of an `all risks'
policy, the burden shifts to the insurer to prove that the loss
arose fromacausewhich is excepted."
Nat'l Union Fire Ins. Co. v. Carib Aviation, 759
F.2d 873, 875 (11th Cir. 1985) (per curiam) (emphasis added)
(quotation marks omitted); seealsoInt'l Ship Repair &
Marine Servs. v. St. Paul Fire & Marine Ins. Co.,
944 F.Supp. 886, 892 (M.D. Fla. 1996) (Int'l Ship Repair).
This benefit to the insured applies, however, "only where
what is at issue is the risk insured against in an all-risk policy."
Appalachian Ins. Co. v. United Postal Sav. Ass'n,
422 So.2d 332, 333 (Fla. 3d Dist. Ct. App. 1982) ("Where,
as here, the issue is not the risk, but the application of a
deductible, then the fact that the instant policy happens to
be an all-risk policy is totally immaterial.").
In contrast, an insurance policy
may provide coverage for "named perils," where, for
example, "the insured may purchase protection from a specific
peril, such as fire, collision, or ice." 9 Lee R. Russ &
Thomas F. Segalla, Couch on Insurance 3d at § 137:11. In
these cases, the insured may recover only if the loss was caused
by one of the covered perils enumerated in the policy. See,
e.g., Steelmet, 842 F.2d at 1242-43; United
States Fire Ins. Co. v. Cavanaugh, 732 F.2d 832, 835
(11th Cir. 1984).
Cases involving an "all risk"
insurance policy generally share a common theme: a determination
of whether the claimed loss or damage was caused by a
peril falling within the policy's coverage. See, e.g.,
Morrison Grain Co. v. Utica Mut. Ins. Co., 632
F.2d 424, 430 (5th Cir. 1980); Atl. Lines Ltd. v. Am.
Motorists Ins. Co., 547 F.2d 11, 13 (2d Cir. 1976) (holding
that the average insured "would not believe that this was
a risk or hazard against which he had insured when he purchased
all risk insurance"); Jewelers Mut. Ins. Co. v. Balogh,
272 F.2d 889, 892 (5th Cir. 1959) ("The assured did not
have to . . . demonstrate that [the] loss was not caused
by one of the excepted conditions."); Int'l Ship Repair,
944 F.Supp. at 892; Redna Marine Corp. v. Poland,
46 F.R.D. 81, 86 (S.D.N.Y. 1969); see also 9 Lee
R. Russ & Thomas F. Segalla, Couch on Insurance 3d §
at 137:11 (noting that coverages under "all risk" marine
insurance policies "address only what instrumentalities
of the loss are covered"). This point is further illustrated
by Webster's definition of the word "risk:" "someone
or something that creates or suggests a hazard
or adverse chance" or "the chance of loss or theperils
to thesubject matter ofinsurancecoveredby
a contract." Webster's Third New International
Dictionary 1961 (1993) (emphasis added). With these basic principles
in mind, we examine the perils clause contained in the Seven
Seas marine insurance policy, which governs our analysis.
The "Perils" clause contained
in the Seven Seas policy provides:
Touching the adventures and perils
[Seven Seas] is contented to bear, and takes upon itself, they
are: of the seas, fire, assailing thieves, jettisons, barratry
of the master and mariners, and all other like perils, losses
and misfortunes, (illicit or contraband trade excepted in all
cases) that have cometothehurt, detriment,
or damageof thesaidgoods and merchandiseor
any partthereof.
(emphasis added). The parties assert,
and we agree, that the language in the clause is sufficient to
demonstrate Seven Seas' intention "to provide `all risk'
coverage to its insured." Int'l Ship Repair, 944
F.Supp. at 892. However, the plain import of the Perils clause
is that it applies only to the ship's cargo, and not for damages
"for loss of profits and expected use of a [piece of equipment]
that is out of commission." 9 Lee R. Russ & Thomas F.
Segalla, Couch on Insurance 3d at § 137:11; cf. Nevers
v. Aetna Ins. Co., 546 P.2d 1240, 1241 (Wash. Ct. App.
1976) (holding that an "all risks" yachtsman's hull
policy was not broad enough to provide coverage for the loss
of the boat due to defective title). While the Seven Seas policy
limited Tall Pony's recovery to damage to its cargo, it did not
make Tall Pony's recovery contingent on the occurrence of a specific
peril as the cause of that damage. Accordingly, we hold that
the plain language of the policy repudiates Tall Pony's contention
that the Seven Seas policy is broad enough to include consequential
damages. Further, Tall Pony cites no authority in support of
its claim that consequential damages are recoverable as a matter
of common industry practice in cases involving similar marine
insurance policies. Because the Seven Seas policy is unambiguous
on this point, we need not consider the McIntire letter in construing
the scope of coverage afforded under the policy or as evidence
of the coverage Tall Pony believed it had at the time of the
accident. See Towne Realty, 854 F.2d at 1267; Nat'l
Union Fire Ins. Co., 759 F.2d at 875-76.
To the extent Tall Pony argues that
the parties intended the McIntire letter to supplement or modify
the coverage provided under the Seven Seas policy, this argument
still fails to rescue Tall Pony's claim for consequential damages.
To view Tall Pony's claim in its
proper context, we begin with the circumstances surrounding the
issuance of the letter by Seven Seas. On the same day
that Tropical was scheduled to ship the stage and Tall Pony's
other equipment, Tall Pony became concerned that it lacked insurance
coverage for its cargo. This prompted Harris to contact Seven
Seas and request a written confirmation from Seven Seas that
it was covered for the trip. In response, James McIntire, vice
president at Seven Seas, issued a letter to Harris stating, in
part, that "Tall Pony Productions is held covered on their
cargo sailing from Port of Palm Beach to St. Maarten and on the
return trip." Seven Seas' letter apparently quelled Tall
Pony's concerns, as there was no further contact between the
parties with respect to the letter. The accident that resulted
in the damage to the stage occurred later that day.
In support of its contention that
the McIntire letter is sufficiently broad to include a claim
for consequential damages in connection with the damage to the
stage, Tall Pony relies on the following excerpted language from
that letter: "Coverage is all risk excluding any pre-existing
discrepancies prior to receipt from Tropical Shipping."
Even assuming that this isolated language represented the sum
and substance of the McIntire letter and that the letter effectively
modified the terms of the Seven Seas policy, it adds nothing
to Tall Pony's claim. As we held above, under an "all risk"
policy, an insured is entitled to recover for damage to its cargo
regardless of the peril that caused that damage. The term "all
risk" does not, however, stand for the far broader application
advanced by Tall Pony; namely, that an "all risk" policy
permits an insured to recover for all losses or
damages resulting from the accident.
Tall Pony's contention is further
flawed because it reads that sentence in isolation of the remainder
of the letter. Specifically, Tall Pony's selective treatment
of the McIntire letter fails to include the following language
from the preceding sentence: "Tall Pony Productions isheldcovered
on their cargo sailing from Port of Palm
Beach to St. Maarten" (emphasis added). Thus, read in its
entirety, the McIntire letter supports Seven Seas' position that
it intended to limit its policy coverage to Tall Pony's cargo.
Moreover, given the timing and sequence of events that prompted
issuance of the letter, we are not persuaded by Tall Pony's argument
that the parties intended that letter to embody their intentions
with respect to the parties' mutual obligations and the scope
of coverage provided under the Seven Seas policy. Rather, the
letter was intended to address Tall Pony's immediate concerns
regarding proof of insurance for its shipment. To hold otherwise,
we would have to stretch reality to conclude that the parties
relied on a two-sentence letter, prepared with little or no negotiation,
to encompass their entire insurance agreement. Accordingly, we
affirm the district court's denial of Tall Pony's claim against
Seven Seas for $240,023 in consequential damages arising out
of the accident.5
3. Award of Attorney's Fees Under
Fla. Stat. § 627.428
With little argument from the parties,
the district court held, following the conclusion of the bench
trial in Tall Pony II, that Tall Pony, "as an insured suing
its insurance company," was entitled to attorney's fees
in connection with its damage award against Seven Seas. The district
court did not, however, make a specific award of attorney's fees
at that time. In a Final Judgment dated March 6, 2000, the district
court awarded Tall Pony attorney's fees in the amount of $76,912.50,
along with prejudgment interest. On appeal, Seven Seas does not
challenge the amount of attorney's fees awarded to Tall Pony,
but rather, Tall Pony's entitlement to attorney's fees in connection
with its $234,000 damage award against Seven Seas. Specifically,
Seven Seas argues that Fireman's Fund, rather than Tall Pony,
is the real party-in-interest and, thus, the present dispute
is actually between two insurance companies. We agree, and therefore
vacate the district court's award of attorney's fees made pursuant
to Fla. Stat. § 627.428.
We review de novo
the legal question of whether Tall Pony is entitled to an award
of attorney's fees pursuant to Fla. Stat. § 627.428. See
Weisberg, 222 F.3d at 1310.
Our vacatur of the $234,000 damage
award against Seven Seas requires that we also vacate the award
of attorney's fees against Seven Seas in connection with that
damage award. Simply put, an award of attorney's fees cannot
stand absent a judgment in favor of the insured. See Fla.
Stat. § 627.428(1) ("Upon the rendition of a judgment
. . . against an insurer and in favor of any named or omnibus
insured . . . the trial court . . . shall adjudge or decree against
the insurer and in favor of the insured [reasonable attorney's
fees]."). However, because we hold today that both the Fireman's
Fund and Seven Seas insurance policies provide coverage for the
property damage to the stage at the time of the accident, we
will consider now the question whether Tall Pony is entitled
to any award of attorney's fees based on the district
court's determination on remand of Seven Seas' pro rata
share of the claimed loss for the physical damage to the stage.
See Steelmet, 842 F.2d at 1245 ("[A]n insured
is entitled to an award of fees even where both parties obtain
some relief in the appellate court."). As a threshold question,
we must first determine whether state or federal maritime law
governs.
In Weisberg, we considered
the question of whether federal or state law governs an application
for attorney's fees in the context of a marine insurance contract
dispute. See Weisberg, 222 F.3d at 1312. In that
case, the insurance company argued that Fla. Stat. § 627.428
conflicted with established maritime law, which "prohibit[s]
any award of attorney's fees in an admiralty action absent a
contract provision, a federal statute, or bad faith in the litigation
process." Id. We disagreed, noting that "[t]his
circuit has awarded attorney's fees pursuant to Fla. Stat. §
627.428 in a number of marine insurance contract disputes."
Id. at 1313. We viewed the consistent application of state
law in this context as "implicitly hold[ing] that there
exists no specific and controlling federal law relating to attorney's
fees in maritime insurance litigation." Id. Accordingly,
we expressly held that "a district court may award attorney's
fees pursuant to Fla. Stat. § 627.428 against an insurer
in a maritime insurance contract case." Id. at 1315.
Having determined that the district
court did not err in relying on Fla. Stat. § 627.428 as
a basis for awarding attorney's fees, we turn to the substantive
question at hand: whether the district court properly applied
Fla. Stat. § 627.428 based on the specific facts and circumstances
present in this case.
Fla. Stat. § 627.428(1) provides:
Upon the rendition of a judgment
or decree by any of the courts of this state against an insurer
and in favor of any named or omnibus insured or the named beneficiary
under a policy or contract executed by the insurer, the trial
court or, in the event of an appeal in which the insured or beneficiary
prevails, the appellate court shall adjudge or decree against
the insurer and in favor of the insured or beneficiary a reasonable
sum as fees or compensation for the insured's or beneficiary's
attorney prosecuting the suit in which the recovery is had.
Broadly read, section 627.428 "provides
attorney's fees to an insured that obtains a judgment against
an insurer." Ins. Co. of N. Am. v. Lexow,
937 F.2d 569, 572 (11th Cir. 1991). However, because "[s]ection
627.428 is in the nature of a penalty against an insurer who
wrongfully refuses to pay a legitimate claim," we strictly
construe its language. Great Southwest Fire Ins. Co. v.
DeWitt, 458 So.2d 398, 400 (Fla. 1st Dist. Ct. App. 1984)
(citing Lumbermens Mut. Ins. Co. v. Am. Arbitration
Ass'n, 398 So.2d 469, 471 (Fla. 4th Dist. Ct. App. 1981));
see also Lexow, 937 F.2d at 573; id.
at 572 (noting that the purpose of section 627.428 is to (1)
"discourage contesting of valid claims of insureds against
insurance companies," and (2) "reimburse successful
insureds reasonably for their outlays for attorney's fees when
they are compelled to defend or to sue to enforce their contracts")
(quoting Wilder v. Wright, 278 So.2d 1, 3 (Fla.
1973)). "[I]ndividuals entitled to recover attorney's fees
under section 627.428(1) are either `an insured or the named
beneficiary under a policy or contract executed by the insurer,'"
Lexow, 937 F.2d at 573 (quoting Indus. Fire & Cas.
Ins. Co., v. Prygrocki, 422 So.2d 314, 316 (Fla. 1982)),
and the statute "authoriz[es] the recovery of attorney's
fees from the insurer only when the insurer has wrongfully withheld
payment of the proceeds of the policy." Lumbermens Mut.
Ins. Co., 398 So.2d at 471 (quotation marks omitted). "The
paramount condition is the entry of a judgment against the insurer
and in favor of the insured." Lexow, 937 F.2d at
573 (quotation marks omitted).
Seven Seas concedes that Tall Pony
was a named assured under the Seven Seas policy and that the
policy is "all risk" and covers Tall Pony's claimed
loss for the physical damage to the stage. We also note that
Tall Pony is listed as the plaintiff in the action against Seven
Seas seeking to recover for the loss arising from the damage
to the stage. The parties' dispute focuses on the significance
of the loan receipt executed by Fireman's Fund and Tall Pony,
and, more importantly, whether the present dispute is in substance
an action between two insurance companies, to wit, Fireman's
Fund and Seven Seas.
The loan receipt provides, in pertinent
part, that Tall Pony receives the sum of $474,023 from Fireman's
Fund
as a loan and not as payment of
any claim, repayable only out of any net recovery [Tall Pony]
may make from any vessel, carrier, bailee, or others upon or
by reason of any claim for the loss of or damage to the [stage],
or from any insurance effected by [Tall Pony] . . . and as security
for such payment we hereby pledge to [Fireman's Fund] all such
claims and any recovery thereon.
In further consideration of the
said advance, . . . we hereby appoint the agents and officers
of [Fireman's Fund] . . . with irrevocable power to collect [on]
such claim[s] and to begin, prosecute, compromise or withdraw,
in [Tall Pony's] name, but at the expense of [Fireman's Fund],
any and all legal proceedings which [it] may deem necessary to
enforce such claim or claims, and to execute in our name any
documents which may be necessary to carry into effect the purposes
of this agreement.
We hereby ratify, approve and confirm
the filing and maintenance of any suits . . . in our name . .
. for recovery of any damages with respect to said shipments.
The loan receipt covered payments
made by Fireman's Fund in settlement of claims brought by Any
Event and Stageline, as well as payments made directly to Tall
Pony for expenses incurred in obtaining a replacement stage.
Seven Seas argues that the timing and circumstances surrounding
the execution of the loan receipt demonstrate that Tall Pony
was not the real party-in-interest in the action against Seven
Seas. We agree.
Fireman's Fund and Tall Pony executed
the loan receipt approximately ten months after Fireman's
Fund tendered the $234,000 payment to settle the suits initiated
by Stageline and its insurers for the damage to the stage. More
notably, the remaining payments that comprise the balance due
under the loan receipt were made during 1995 (with the exception
of a $2,175 audit expense), some three years before the loan
receipt was executed. See id. During that three
year period, Tall Pony proffered no consideration for the payments
made by Fireman's Fund directly to Tall Pony and on its behalf,
and Fireman's Fund did not seek a subrogation of Tall Pony's
rights or a reservation of its rights in exchange for those payments.
In addition, both Fireman's Fund and Tall Pony were represented
by the same attorney, and that attorney was compensated by Fireman's
Fund. Under these circumstances, we conclude that the loan receipt
masks "the true nature of this action," Utica Mut.
Ins. Co. v. Pa. Nat'l Mut. Cas. Ins. Co., 639 So.2d
41, 43 (Fla. 5th Dist. Ct. App. 1994), which was one "solely
between two insurers rather than a subrogation action."
Id.
An examination of the various judgments
entered by the district court in the Seven Seas action reinforces
our conclusion.
To further support its position
that Fireman's Fund was the real party-in-interest in the action
against Seven Seas, Seven Seas maintains that the district court
entered judgment in favor of Fireman's Fund, which is neither
a "named or omnibus insured or the named beneficiary"
under the Seven Seas policy, Fla. Stat. § 627.428, and,
therefore, Tall Pony is not entitled to an award of attorney's
fees under that section. This argument is not without force,
as both the October 14, 1999 Final Judgment and the December
9, 1999 Amended Final Judgment state that "FINAL JUDGMENT
IS HEREBY ENTERED for the plaintiff, Fireman's Fund, for the
use and benefit of Tall Pony." Further, during the bench
trial in Tall Pony I, the district court commented that, in cases
such as the present action, "the real party in interest
is the insurance company who paid the loss and is looking to
pass their loss off on the party who created the damage. . .
. [T]he real party . . . was the insurance company who [provided
insurance] . . . for the use and benefit of [the insured]."
We note, however, that in the Final Judgment Awarding Attorney's
Fees entered on March 6, 2000, the district court awarded $76,912.50,
plus interest, "in favor of Plaintiff, Tall Pony Productions,
Inc."
Notwithstanding the language employed
by the district court in the March 6, 2000 judgment, and that
Tall Pony was identified as the plaintiff in the action commenced
against Seven Seas, we conclude that Fireman's Fund was the real
party-in-interest in that action. Accordingly, we hold that Tall
Pony is not entitled to any award of attorney's fees in connection
with the judgment entered by the district court on remand against
Seven Seas for its pro rata share of Tall Pony's
claimed loss for the physical damage to the stage. Because we
reverse the district court's award of attorney's fees in favor
of Tall Pony, we conclude that an award of appellate attorney's
fees to Tall Pony pursuant to Fla. Stat. § 59.46 would be
improper. See Fla. Stat. § 59.46 (providing for the
payment of attorney's fees "to the prevailing party on appeal").
C. Tropical's Motion for Costs
Finally, Tropical challenges the
district court's vacatur of its award of costs against Tall Pony
in the amount of $1,894.45.
Rule 54(d) of the Federal Rules
of Civil Procedure provides that a prevailing party is entitled
to an award of costs. See Fed. R. Civ. P. 54(d)(1) ("Except
when express provision therefor is made either in a statute of
the United States or in these rules, costs other than attorneys'
fees shall be allowed as of course to the prevailing party unless
the court otherwise directs."); see also EEOC
v. W&O, Inc., 213 F.3d 600, 620 (11th Cir. 2000).
The costs that a prevailing litigant is entitled to under Rule
54(d) are enumerated in 28 U.S.C. §§ 1821 and 1920.
See Crawford Fitting Co. v. J.T. Gibbins, Inc.,
482 U.S. 437, 445 (1987).
"We review the factual findings
underlying a district court's determination regarding prevailing
party status for clear error." Head v. Medford,
62 F.3d 351, 354 (11th Cir. 1995) (per curiam). "Whether
the facts as found suffice to render the plaintiff a 'prevailing
party' is a legal question reviewed de novo."
Id. (quotation marks omitted). We review a district court's
determination with respect to the denial of an award of costs
for abuse of discretion. SeeChapman v. AI Transp.,
229 F.3d 1012, 1039 (11th Cir. 2000) (en banc); W&O, Inc.,
213 F.3d at 620; seealso Cavaliere v. Allstate
Ins. Co., 996 F.2d 1111, 1115 (11th Cir. 1993) (appellate
court reviews a district court's denial of relief under Fed.
R. Civ. P. 60(b) for relief from a judgment or an order under
the abuse of discretion standard).
"[A]lthough the district court
has discretion to deny a prevailing party costs, such discretion
is not unfettered." Head, 62 F.3d at 354. Thus, "where
the trial court denies the prevailing party its costs, the court
must give a reason for its denial of costs so that the
appellate court may have some basis upon which to determine if
the trial court acted within its discretionary power." Id.
(quotation marks omitted); see also Chapman,
229 F.3d at 1039 (holding that "a district court must have
and state a sound basis" for denying an award of costs to
a prevailing party).
This brings us to the definition
of a "prevailing party" adopted by this Court in Head:
To be a prevailing party [a] party
need not prevail on all issues to justify a full award of costs,
however. Usually the litigant in whose favor judgment is rendered
is the prevailing party for purposes of rule 54(d). . . . A party
who has obtained some relief usually will be regarded as the
prevailing party even though he has not sustained all his claims.
. . . Cases from this and other circuits consistently support
shifting costs if the prevailing party obtains judgment on even
a fraction of the claims advanced.
62 F.3d at 354 (internal citations
omitted). Against these settled principles, we review the district
court's application of Rule 54(d) to the present circumstances.
Because the manner in which Tall Pony's failure to procure insurance
claim against Tropical was resolved is relevant to the district
court's denial of costs in favor of Tropical, we briefly discuss
the various actions and proceedings before the district court.
Tall Pony brought two separate actions:
one alleging a total of nine claims against Tropical, Birdsall,
Bromma and Stageline, and the Tropic Tide, in rem
(Tall Pony I), and one against Seven Seas (Tall Pony II), both
arising from the damage to the stage at the time it was being
loaded onto the Tropic Tide. These actions resulted in two separate
bench trials before the district court. In Tall Pony I, Tall
Pony brought four causes of action against Tropical: breach of
contract (count I), bailment (count II), failure to provide insurance
(count IIA) and negligence (count IV). In Tall Pony II, Tall
Pony brought a breach of insurance contract action against Seven
Seas seeking damages for the destruction of the stage and attorney's
fees.
In the first bench trial, the district
court ruled in Tall Pony's favor, concluding that Tropical and
Birdsall were liable for the damage to the stage, but limited
Tall Pony's recovery to $500 under COGSA section 1304(5). The
failure to procure insurance claim against Tropical was consolidated
for discovery purposes with the Seven Seas action, and tried
during the second bench trial along with the breach of insurance
contract claim against Seven Seas. Tropical ultimately prevailed
against Tall Pony on its failure to procure insurance claim,
a decision we now affirm on appeal.
In its decision initially awarding
costs, the district court stated that "Tropical is the 'prevailing
party' with regard to the insurance matter, which was initially
a separate case and claim subsequently consolidated." However,
as the district court clarified on reconsideration, the failure
to procure insurance claim was alleged as count IIA in the nine
count complaint brought by Fireman's Fund and Tall Pony against
Tropical, Birdsall, Bromma and Stageline. The district court
went on to hold that Tall Pony, rather than Tropical, was the
"prevailing party" in Tall Pony I for purposes of Rule
54(d):
[T]he fact that Tropical successfully
defended itself against Count IIA does not transform it into
the prevailing party. Rather, as the plaintiffs correctly argue,
although they did not prevail on all of the counts asserted against
Tropical, they are nonetheless the prevailing party in
the single case whereinplaintiffssuedTropical.
(emphasis added). Viewed this way,
we cannot conclude that the district court's determination that
Tropical was not a "prevailing party" in the Tropical
action for purposes of Rule 54(d) was clearly erroneous. Accordingly,
the district court did not abuse its discretion in vacating its
initial award of costs in favor of Tropical in connection with
the dismissal of Tall Pony's failure to procure insurance claim.
CONCLUSION
We have considered the remaining
arguments raised by the various appellants and find them to be
without merit. For the foregoing reasons, we AFFIRM the decision
of the district court in part and REVERSE and REMAND in part,
as follows: (1) we affirm the district court's holding that the
limitation on liability under COGSA section 1304(5) applied to
the claims against Tropical and Birdsall, as well as its dismissal
of the failure to procure insurance claim against Tropical; (2)
we REVERSE the district court's holding that Seven Seas is solely
liable for the physical damage loss to the stage and, therefore,
VACATE the $234,000 damage award, plus interest, against Seven
Seas in connection with that claimed loss; (3) we REMAND this
matter for the district court to determine the manner in which
Tall Pony's claim for physical damage loss to the stage should
be apportioned between Fireman's Fund and Seven Seas under the
terms and coverage limits provided in their respective policies;
(4) we AFFIRM the district court's holding that Tall Pony is
not entitled to consequential damages under the Seven Seas policy;
(5) we REVERSE the district court's award of attorney's fees
in favor of Fireman's Fund/Tall Pony and against Seven Seas and
deny Tall Pony's claim for costs on appeal pursuant to Fla. Stat.
§ 59.46; and (6) we further REMAND the case to the district
court with instructions to modify its various judgments and for
further proceedings consistent with this opinion.
FOOTNOTES
[*]
Honorable Thomas J. Meskill, U.S.
Circuit Judge for the Second Circuit, sitting by designation.
[1]
A "Himalaya Clause"
is an express provision in the bill of lading that extends the
COGSA defenses and protections to the carrier's agents and contractors.
See Hale Container Line v. Houston Sea Packing
Co., 137 F.3d 1455, 1465 (11th Cir. 1998).
[2]
Interestingly, in arguing that it
did not accept the bill of lading, and would not have done so
in the present case, see, e.g., Belize
Trading, Ltd. v. Sun Ins. Co., 993 F.2d 790, 792 (11th
Cir. 1993) (holding that descriptions of the cargo in the bill
of the lading were not controlling since "the descriptions
were merely the carrier's unilateral and self- serving statements
of the shippers' cargos"), Tall Pony does not challenge
the bill of lading's description of the stage as one unit, which
is prima facie evidence of the parties' intention
to treat the stage as a single package for purposes of COGSA.
See 46 U.S.C. App. § 1304(5). Instead, Tall Pony
rests its argument on the very different ground that the bill
of lading would not have been accepted because it failed to contain
the declared value for the stage. This argument is insufficient
to preclude application of COGSA in the present circumstances.
See, e.g., Itel Container Corp. v.
M/V "Titan Scan", 139 F.3d 1450, 1453 (11th
Cir. 1998) ("[T]he parties' intent to apply the higher limit
must be clear; if the question of whether the parties agreed
to a higher liability limit is `irretrievably ambiguous,' then
U.S. COGSA applies by default."). The weakness in this argument
is based on Tall Pony's confusion over a cargo's "declared"
value and its "insurable" value. This confusion is
apparent in Tall Pony's assertion on appeal that "[t]he
bill of lading in any event would not have been accepted[] because
it did not contain the insured value" (emphasis added).
[3]
$2,547,505 times .025 results in
an additional tariff charge of $63,688 for the shipper.
[4]
This reading is consistent with
the testimony of Denise Denim, the Fireman's Fund adjuster for
the Tall Pony claims. Ms. Denim testified that Fireman's Fund's
payment of $234,000 in settlement of claims brought by Stageline
and its insurers for damage to the stage was covered under Section
II, Coverage D of the Fireman's Fund policy, which was "intended
to pick up physical damage to property for which the insured
is legally liable."
[5]
Because the district court properly
dismissed Tall Pony's failure to procure insurance claim against
Tropical, Tropical cannot be liable for any consequential damages
that may have resulted from the accident.
|
