Indemnity Insurance Company of North America v. Expeditors International of…

Background

Indemnity Insurance Company of North America ("IINA"), acting for GE Medical Systems Trade and Development (Shanghai) Co., sued Expeditors International of Washington, Inc. ("EIW"), Expeditors Japan KK ("EXPJapan"), and Nippon Cargo Airlines. IINA brought the claims under the Montreal Convention, an international treaty governing certain air-cargo claims, alleging that EIW was liable for damage to a LightSpeed VCT CT scan machine shipped from Tokyo, Japan, to Shanghai, China. IINA insured the shipment and later paid GE Medical $359,585.31 for the loss.

EIW moved for summary judgment, which is a request to resolve a case without a trial when no important facts are genuinely disputed. EIW argued that GE Medical failed to give timely notice of the damage under Article 31 of the Montreal Convention and under notice provisions in a Global Air Freight Transportation Contract between EIW and General Electric Company. The contract purported to bind GE’s affiliates.

Notice Under the Montreal Convention

Article 31.2 of the Montreal Convention requires the person entitled to delivery to complain to the carrier promptly after discovering cargo damage and no later than 14 days after receiving the cargo. If the required complaint is not timely, an action for damages cannot proceed.

GE Medical issued a claim notice to EIW on August 29, 2016. EIW argued that the cargo had been collected from EIW’s warehouse on August 11, 2016, making the notice late. The court found that the evidence did not establish that delivery to the person entitled to delivery occurred by August 14, 2016.

The evidence was conflicting about Shanghai Eastern Logistics Co.’s role. One account indicated that Shanghai Eastern delivered the cargo from the Shanghai airport to GE Medical. EIW offered evidence that Shanghai Eastern instead moved the cargo from the airport terminal to EIW’s warehouse, after which another company, Shanghai Waigaoqiao International Trading Operation Center Co., picked it up for delivery to GE Medical. The court also noted that the document EIW offered regarding that pickup did not clearly show August 11, 2016 as the date and was not translated into English.

Because these factual disputes could affect whether the August 29 notice was timely, the court could not decide the issue as a matter of law. The court also did not decide EIW’s legal argument that an agent of the consignee could qualify as the person entitled to delivery.

Global Contract

EIW alternatively argued that the Global Contract required a formal claim within 270 days after the date of service and that GE Medical had not submitted one. The court denied summary judgment on this ground because EIW did not provide evidence showing that the contract’s terms applied to this shipment.

The parties agreed that the Global Contract existed and that EIW and GE were parties to it, but EIW did not provide the contract provision defining the relevant services or evidence connecting the shipment to a service covered by the contract. The court explained that its earlier ruling on a motion to dismiss had found only that IINA had made a sufficient showing, at that earlier stage, that EIW could be an indirect carrier under the Montreal Convention. That earlier ruling did not decide that the Global Contract governed this shipment.

Ruling

The court denied EIW’s motion for summary judgment. The court denied the motion because disputed facts prevented a legal conclusion that the notice was untimely and because EIW had not sufficiently shown that the Global Contract’s notice provisions applied. The clerk was directed to terminate the motion at docket entry 46. The opinion also states that the same factual disputes prevented the court from granting summary judgment to IINA on liability and damages.