Hartford Fire Insurance Co. v. Maersk Line

Background

Klearwall designs and imports glass windows and doors. In March 2017, a shipment manufactured in Ireland arrived at Klearwall’s Connecticut facility damaged and unusable. Maersk transported two sealed containers by ocean from Cork, Ireland, to Newark, New Jersey. Sapsan then transported the containers by truck to Connecticut. Maersk did not transport the containers to the Port of Cork or from Newark to Connecticut, and its role ended when the cargo was discharged at Newark.

Hartford Fire Insurance Co., acting as Klearwall’s subrogor, sued Maersk under the Carriage of Goods by Sea Act (COGSA). The court held a bench trial on October 21, 2021. Sapsan and Albatrans had previously been dismissed from the case.

COGSA claim and proof required

The court explained that a shipper seeking recovery under COGSA must first prove, by a preponderance of the evidence, that the goods were delivered to the carrier in good condition and were damaged when the carrier delivered them. This requirement is intended to show that the damage occurred while the goods were under the carrier’s control. A clean bill of lading can create a presumption of good condition, but that presumption does not suffice when the carrier could not inspect cargo because it was sealed.

The bills of lading listed the number and type of items and included shipper-seal numbers. The court found that the containers were sealed when delivered to Maersk and that their contents were unavailable for inspection. The bills therefore did not establish that the cargo was delivered to Maersk in good order and condition.

Findings about the cargo’s condition and damage

The court found that Hartford’s evidence did not establish the condition of the specific cargo when it was delivered to Maersk. Brendan Scollard stated that the windows and doors were in good order when he observed the loading, but the court viewed his testimony as vague and unsupported by details about his inspection. Testimony from Scollard, Chris Hughes, and Evans about Munster Joinery’s usual packing practices did not describe the particular shipment. The court also found that photographs offered by Hartford were example photographs, not photographs of the cargo at issue.

Hartford also did not provide evidence showing the cargo’s condition when Maersk discharged it at Newark. The cargo was damaged when it reached Connecticut, but Sapsan transported it from Newark to Connecticut. The court noted that the record did not include evidence about Sapsan’s handling of the containers or show that visible damage to a container was present when Sapsan took custody.

The court further rejected Hartford’s argument that the nature of the damage itself showed that the damage occurred during ocean transport. Although the surveyor Nicholas Bruno concluded that the cargo had shifted during extreme movements and forces, the court found no evidence that the damage necessarily resulted from sea conditions or that it occurred while Maersk controlled the cargo.

Insufficient packing defense

The court alternatively concluded that, even if Hartford had established a prima facie case—a basic initial showing sufficient to shift the burden—Maersk proved a COGSA exception for “insufficiency of package.” Bruno observed that the A-frame pallets were not adequately secured, that additional lashings and braces were needed, and that the packing and securing arrangements failed to protect the cargo. The court found Bruno’s observations and photographs persuasive evidence that the cargo was inadequately packed and loaded at Munster Joinery.

The court also found that the containers had only limited and superficial damage because they were returned to service almost immediately. In the court’s view, that condition was more consistent with inadequate packing and loading than with fault or neglect by Maersk. Hartford did not show a concurrent cause of loss attributable to Maersk.

Disposition

The court concluded that Hartford had not established its prima facie COGSA case. It further concluded that, even if Hartford had done so, Maersk proved that the cargo was damaged because of insufficient packing and that Hartford did not prove contributing fault or neglect by Maersk. The court entered judgment for Maersk, directed the Clerk to enter final judgment for all defendants, and ordered the case closed.