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

Background

Indemnity Insurance Company of North America sued Expeditors International of Washington, Inc. and China Airlines, Inc. concerning damage allegedly sustained by cargo during international transportation. Indemnity asserted claims for breach of a contract of carriage, breach of bailment obligations, and negligence. The complaint invoked the Montreal Convention, but the court had previously determined that the convention did not apply and denied the parties’ earlier summary-judgment motions without prejudice.

The parties filed new motions for summary judgment under the court’s diversity jurisdiction. Summary judgment may be granted only when there is no genuine dispute about a fact that could affect the outcome and the moving party is entitled to judgment under the law.

Indemnity’s Motion

The court denied Indemnity’s motion in its entirety. Indemnity did not provide evidence addressing each element of its three claims or adequately connect the evidence to those elements.

The court also found that factual disputes prevented summary judgment on the notice issues. The record did not resolve whether GE Aviation Materials, L.P., the subrogor, was a party to the Global Air Freight Transportation Contract or whether that contract applied to the shipments handled by Expeditors. Because that contract required notice in a sworn statement, the court could not decide on summary judgment whether notice to Expeditors was sufficient.

A separate factual dispute remained about whether Expeditors acted as a freight forwarder or as a carrier for this shipment. That classification mattered because China Airlines’ waybill allowed notice to be given to certain carriers. The court concluded that issuing a waybill alone did not resolve Expeditors’ role.

Expeditors’ Motion

The court granted Expeditors’ motion in part as to Indemnity’s breach-of-bailment and negligence claims. Under federal common law, the court stated, a shipper’s claims against a carrier are limited to breach-of-contract claims, so there could be no separate tort or bailment liability.

The court denied Expeditors’ motion as to Indemnity’s breach-of-contract claim. Expeditors’ clean bill of lading was initial evidence that the engine had been received in good working order, but the fact that the engine was being shipped for overhaul did not conclusively defeat Indemnity’s claim. The court also found disputed facts about causation, including evidence concerning how the engine was tied down and instructions warning that improper fastening could damage engine bearings.

The court further found that the evidence was not so lacking that Indemnity could not establish damages. Evidence included a declaration stating that the repair invoice concerned inspection and repair resulting from improper transportation, as well as a letter in which Expeditors characterized the invoice as costs caused by improper tie-down. Finally, factual disputes remained about whether GE properly packaged the engine and communicated its loading requirements, and whether Expeditors knew how to tie it down properly.

China Airlines’ Motion

The court denied China Airlines’ motion in its entirety. The parties agreed that China Airlines had not received actual notice of Indemnity’s claim. However, China Airlines’ own waybill permitted notice to be given to certain carriers, so the existence of separate waybills did not by itself defeat Indemnity’s constructive-notice theory.

The unresolved question was whether Expeditors qualified as a carrier under China Airlines’ waybill. Because the record did not answer that question, summary judgment for China Airlines was unavailable.

Disposition

The court denied Indemnity’s motion for summary judgment, granted Expeditors’ motion for summary judgment in part and denied it in part, and denied China Airlines’ motion for summary judgment. The court directed the parties to appear for a status conference and directed the clerk to close the three motions.