Clevo Co. v. Hecny Transportation, Inc. , 715 F.3d 1189 ( 2013 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
CLEVO CO ., a Taiwan Corporation, No. 11-55823
Plaintiff-Appellant,
D.C. No.
v. 2:09-cv-09135-
MMM-MAN
HECNY TRANSPORTATION , INC., a
California Corporation,
Defendant-Appellee. OPINION
Appeal from the United States District Court
for the Central District of California
Margaret M. Morrow, District Judge, Presiding
Argued and Submitted
January 9, 2013—Pasadena, California
Filed April 26, 2013
Before: Alfred T. Goodwin and William A. Fletcher,
Circuit Judges, and Edward R. Korman, Senior District
Judge.*
Opinion by Judge Goodwin
*
The Honorable Edward R. Korman, Senior District Judge for the U.S.
District Court for the Eastern District of New York, sitting by designation.
2 CLEVO CO . V . HECNY TRANSP ., INC.
SUMMARY**
Maritime Law
Affirming the district court’s summary judgment in an
admiralty action filed by a seller of computer parts, the panel
held that misdelivery claims against a freight forwarder were
barred by a one-year limitations period set forth in bills of
lading.
The panel held that a guarantee, which established no
express statute of limitations, was initially effective to place
the seller and the freight forwarder in direct contractual
privity. That initial relationship was modified when the bills
of lading issued. By operation of a Himalaya clause, the
benefit of the one-year statute of limitations in the bills of
lading was extended beyond the non-vessel-operating
common carrier that issued the bills of lading to the freight
forwarder, an agent of the carrier.
COUNSEL
Mitra M. Eskandari-Azari and Cassandra Hooks, Alston &
Bird LLP, Los Angeles, California; Yitai Hu and Elizabeth H.
Rader, (argued) Alston & Bird LLP, Menlo Park, California,
for Plaintiff-Appellant.
Andrew D. Kehagiaras, Roberts & Kehagiaras LLP, Long
Beach, California, for Defendant-Appellee.
**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
CLEVO CO . V . HECNY TRANSP ., INC. 3
OPINION
GOODWIN, Senior Circuit Judge:
Clevo Company appeals the district court’s grant of
summary judgment in favor of Hecny Transportation, Inc.
We affirm.
I. BACKGROUND
A. CLEVO ’S SALES AGREEMENT WITH AMAZON
Clevo is a Taiwan-based manufacturer of computer parts
and accessories. In 2007, Clevo and a Brazilian entity,
Amazon PC Industria e Comerciao de Microcomputadores,
LTDA (“Amazon”), agreed that Clevo would manufacture
and sell, and Amazon would buy, millions of dollars’ worth
of Clevo computer parts. Clevo and Amazon also agreed that
the parts would be delivered to Amazon in multiple
shipments; that Amazon would take delivery of each
shipment in Brazil; and that Amazon would pay for each
shipment in installments. The first installment, 10% of the
shipment’s price, would be paid pre-manufacture; another
20% installment would be paid before Clevo arranged
shipment; and the remaining 70% balance would be paid after
shipment but before Amazon took possession of the parts.
To protect its interest in receiving full payment, Clevo
insisted that after it released a particular shipment for
international carriage, Clevo would retain the original bills of
lading for that shipment while awaiting Amazon’s final 70%
payment. Clevo and Amazon agreed that a shipment of parts
would not be released to Amazon unless Amazon presented
the original bills of lading.
4 CLEVO CO . V . HECNY TRANSP ., INC.
B. THE HECNY GROUP
Under Clevo and Amazon’s negotiated terms, the Hecny
Shipping Group (“Hecny Group”) was designated to handle
all of the contract shipments. The Hecny Group’s members
include multiple separate entities:
(1) Hecny Shipping, Limited (“Hecny Shipping”).
Hecny Shipping is a non-vessel-operating common carrier
(“NVOCC”) based in Hong Kong, China. NVOCCs are
“middlemen who typically arrange for relatively small
shipments to be picked up from shippers, consolidate the . . .
parcels, and ship them via a carrier or several carriers.”
Schoenbaum, Admiralty & Maritime Law (5th ed. 2012) § 7-
7; see also Kukje Hwajae Ins. Co. v. M/V Hyundai Liberty,
294 F.3d 1171, 1176 (9th Cir. 2002), vacated on other
grounds by Green Fire & Marine Ins. Co. v. M/V Hyundai
Liberty, 543 U.S. 985 (2004).
(2) Hecny Transportation, Inc. (“Hecny
Transportation”). Hecny Transportation is a freight
forwarder with operations in Miami. A “freight forwarder
acts as an intermediary between [a] shipper and [an] ocean
carrier.” Schoenbaum, Admiralty & Maritime Law § 7-7; see
also Constructores Tecnicos v. Sea-Land Serv., Inc., 945 F.2d
841 (5th Cir. 1991).
(3) Hecny Transportation (Shanghai) Limited (“Hecny
Shanghai”). Hecny Shanghai is a China-based entity that
takes delivery of Shanghai-originating shipments for the
Hecny Group.
(4) HTI Transportes Internacionais Ltda. (“Hecny
Brazil”). Hecny Brazil is a Manaus, Brazil-based freight
CLEVO CO . V . HECNY TRANSP ., INC. 5
forwarder. Hecny Transportation maintained Hecny Brazil as
its agent in Brazil, and Hecny Brazil maintained Hecny
Transportation as its agent outside Brazil.
C. THE GUARANTEE
In May 2007, Clevo began sending numerous shipments
of computer parts to Amazon, and the parts were delivered
without incident. But at the end of 2007, Clevo took
additional measures to protect its right to payment and to
formalize Hecny Transportation’s role in the delivery process.
To that end, Clevo sent a document denominated
“Guarantee Letter” to Hecny Transportation on December 21,
2007. The document stated:
We (Clevo Co.) will give sea shipments over
to your agent in Shanghai (Hecny Shipping
Limited) . . . .
....
In order to protect Clevo’s right of ownership,
we request you to sign [sic] a guarantee letter
which contains as following:
If you release any sea shipment to Amazon
PC without our further notice, Hecny
Transportation, Inc.-MIA must compensate
Clevo all damage which we suffer.
For the purpose of protecting your right, on[]
the other hand, provided that Clevo agree[s] to
release sea shipment[s] to Clevo’s customer,
6 CLEVO CO . V . HECNY TRANSP ., INC.
Clevo will give you a notice by fax, and
please work[] in accordance with International
Transportation Rule.
Unless Clevo propose[s] a written notice to
terminate this letter, the Parties have caused
[it] to be executed . . . .
Notably, the text of the letter lacks any reference to a
contractual statute of limitations or any other significant
provisions limiting the parties’ liability. But those omissions
did not prevent Hecny Transportation from giving assent.
Instead, a Hecny Transportation employee signed the letter
and returned the signed copy (the “Guarantee”) to Clevo.
After receiving the Guarantee, Clevo made multiple
additional shipments of parts to Amazon between January
2008 and September 2008. Although the Hecny Group
completed each of those shipments without any apparent
difficulty, it would fare much worse when handling Clevo’s
next shipment, in October 2008.
D. SHIPPING THE GOODS
1. Clevo prepares the Goods and Hecny Shipping
issues the Bills of Lading.
In October 2008, Clevo received an Amazon order for an
additional $2,210,000 in parts (the “Goods”), as well as
Amazon’s pre-shipment payments. After manufacturing the
Goods, Clevo delivered them to Hecny Shanghai for transport
on or about October 23, 2008. Four days later, Hecny
Shipping issued two bills of lading for the shipment (the
“Bills of Lading”).
CLEVO CO . V . HECNY TRANSP ., INC. 7
Each of the Bills of Lading includes a front and back
page. The front pages describe:
• the Goods;
• the name of the shipper (“CLEVO CO.”);
• the consignee, Amazon;
• the port of loading and destination (“SHANGHAI”
and “MANAUS”, respectively); and
• the delivery agent (“HECNY TRANSPORTATION,
INC. - MIA”).
The back pages contain numerous Terms and Conditions of
Contract (“Terms and Conditions”).
Section 5 of the Terms and Conditions includes a
Himalaya clause (the “Himalaya Clause”), which provides
that:
[Hecny Shipping] shall be entitled to sub
contract on any terms the whole or any part of
the carriage . . . and any and all duties
whatsoever . . . . [E]very such servant, agent
and sub contractor shall have the benefit of all
provisions herein for the benefit of [Hecny
Shipping] as if such provisions were expressly
for their benefit . . . .
Himalaya clauses are commonly used in bills of lading. See
Mori Seiki USA, Inc. v. M.V. Alligator Triumph, 990 F.2d
444, 450 (9th Cir. 1993); Norfolk S. Ry. v. James N. Kirby,
Pty Ltd., 543 U.S. 14, 31–32, 20 n.2 (2004); Adler v. Dickson
(The Himalaya) [1954] 2 Lloyd’s Rep. 267; [1955] 1 Q.B.
158 (C.A.).
8 CLEVO CO . V . HECNY TRANSP ., INC.
Additionally, Section 21 of the Terms and Conditions
states that Hecny Shipping “shall [be] discharged from all
liability in respect of non-delivery[,] misdelivery[,] delay[,]
loss[,] or damage unless suit is brought within 1 year after
delivery of the Goods.”
Clevo received the original Bills of Lading on or about
October 27, 2008, and retained them, as Amazon had yet to
pay the remaining 70% of the Goods’ purchase price.
2. The Goods are transported and released.
At or around the time that Hecny Shipping issued the
Bills of Lading, the Goods began their transit to Brazil.
Hecny Shanghai arranged an initial sea transportation
segment, during which the Goods traveled from Shanghai to
Los Angeles. After the Goods arrived in Los Angeles, Hecny
Transportation booked their motor transport to Miami,
unloaded them, and staged them for air transportation
between Miami and Manaus. Hecny Transportation then
arranged for carrier Arrow Air, Inc. (“Arrow Air”) to
complete the Goods’ final air transportation segment via two
flights. For both flights, Hecny Transportation issued its own
“house” air waybill, as well as a “master” air waybill on
behalf of Arrow Air (the “Waybills”).
Soon after the Goods arrived in Manaus, Hecny
Transportation forwarded the Waybills to Hecny Brazil, and
Hecny Brazil released those Waybills to Amazon. With the
Waybills in hand, Amazon took delivery of the Goods in
November 2008.
Hecny Brazil concedes that it never required Amazon to
present the Bills of Lading prior to taking possession of the
CLEVO CO . V . HECNY TRANSP ., INC. 9
Goods. For its part, Clevo never provided the Bills of Lading
to Amazon and Clevo never notified any Hecny Group entity
that it could release the Goods. Instead, Clevo retained the
Bills of Lading while awaiting the final 70% balance of the
Goods’ purchase price.
3. Clevo discovers the improper delivery.
By January 2009, Clevo still had not received payment
and emailed Hecny Transportation to ensure that the Goods
were still being held. To Clevo’s apparent surprise, a Hecny
Transportation employee responded that the “sh[i]p[men]ts
were moved to Manaus . . . . I have not received any request
to hold the [shipments] in Miami.”
Despite taking delivery of the Goods, Amazon never
forwarded the outstanding purchase price to Clevo and
instead filed for bankruptcy. On December 11, 2009, more
than one year after the initial misdelivery to Amazon, Clevo
sued numerous Hecny Group entities for the unpaid
remainder of the Goods’ purchase price.
II. DISCUSSION
A. JURISDICTION AND STANDARD OF REVIEW
The district court correctly concluded that it had original
jurisdiction under 28 U.S.C. § 1333, and we have jurisdiction
under 28 U.S.C. § 1291. We review orders granting summary
judgment de novo, see Bamonte v. City of Mesa, 598 F.3d
1217, 1220 (9th Cir. 2010), and therefore apply “the same
principles as the district court: whether, with the evidence
viewed in the light most favorable to the non-moving party,
there are no genuine issues of material fact, so that the
10 CLEVO CO . V . HECNY TRANSP ., INC.
moving party is entitled to a judgment as a matter of law.” Id.(internal quotation marks omitted).
B. APPLICATION
Viewing the evidence in the light most favorable to
Clevo, the record reflects that Hecny Transportation and its
agent, Hecny Brazil, were required to obtain the original Bills
of Lading from Amazon prior to releasing the Goods. And
there is no dispute that the relevant Hecny entities never
obtained those documents. Nevertheless, Hecny
Transportation’s liability to Clevo turns not on any failure in
delivery but instead on the applicable statute of limitations.
Put differently, because Clevo filed suit more than one year
after the improper delivery, the central question is whether
Clevo’s claims are governed by the Guarantee, which
establishes no express statute of limitations, or the Bills of
Lading, which establish a one-year limit on suit.
We conclude that the Guarantee was initially effective to
place Clevo and Hecny Transportation in direct contractual
privity, without any contractually-created statute of
limitations. But that initial relationship was modified when
the Bills of Lading issued. Section 21 of the Terms and
Conditions supplemented the terms of the Guarantee and
created an express limitations period, providing that Hecny
Shipping “shall [be] discharged from all liability in respect of
. . . misdelivery . . . unless suit is brought within 1 year after
delivery of the Goods.”
By operation of the Himalaya Clause, the benefit of the
one-year statute of limitations in the Bills of Lading extended
beyond Hecny Shipping to Hecny Transportation as well. See
M.V. Alligator Triumph, 990 F.2d at 450; Kirby, 543 U.S. at
CLEVO CO . V . HECNY TRANSP ., INC. 11
31–32. And because Hecny Transportation has asserted that
provision in defense to suit, Clevo’s claims are time-barred.
We explain our reasoning in greater detail below.
1. The Guarantee was effective ab initio between
Clevo and Hecny Transportation.
We first consider the nature and effect of the Guarantee.
Hecny Transportation contends that the document cannot be
considered a valid contract between it and Clevo, because the
requisite elements of contract formation are absent here. Not
so.
Basic principles in the common law of contracts readily
apply in the maritime context. See Kirby, 543 U.S. at 23(“federal common law . . . appl[ies]” where contract suit is
“under. . . admiralty jurisdiction”); Yang Ming Mar. Transp.
Corp. v. Okamoto Freighters Ltd., 259 F.3d 1086, 1092 (9th
Cir. 2001) (“familiar principles of contract interpretation
govern” construction of maritime bill of lading). And the
Guarantee presents the requisite elements of offer,
acceptance, and consideration. See RESTATEMENT (SECOND )
OF CONTRACTS §§ 17, 22, 24, 50.
Clevo made an offer by explaining proposed terms of
conduct on its own letterhead; “request[ing]” Hecny
Transportation “to sign” the document as a means of assent;
and sending the document to Hecny Transportation. Hecny
Transportation tendered an acceptance by signing the
Guarantee and returning it to Clevo. And the parties’ mutual
assent accompanied a mutual exchange of promises as
consideration. Viewing the Guarantee in the light most
favorable to Clevo, see Bamonte, 598 F.3d at 1220, Clevo
promised Hecny Transportation that, among other things, it
12 CLEVO CO . V . HECNY TRANSP ., INC.
would provide future Amazon-destined shipments to Hecny
Shanghai and Hecny Transportation. Clevo also vested in
Hecny Transportation a direct breach-of-contract claim if
Clevo failed to perform. In return, Hecny Transportation
promised not to “release any sea shipment to Amazon . . .
without [Clevo’s] further notice” and to compensate Clevo
for an improper release. Therefore, the signed Guarantee
established a valid contract. As of December 2007, Clevo
and Hecny Transportation were directly bound to an
agreement that prescribed specific delivery instructions for
Clevo’s shipments but lacked any contractual statute of
limitations.
However, ten months after the Guarantee was executed,
Hecny Shipping issued the Bills of Lading.
2. The Bills of Lading supplemented the Guarantee.
The Bills of Lading, which directly bind Clevo,1 describe
a multifaceted, multimodal shipment of the Goods between
Shanghai and Manaus, and provide additional details about
the roles of Hecny Transportation and other Hecny Group
entities during transport. The Himalaya Clause makes clear
that Hecny Shipping is “entitled to sub contract on any terms
the whole or any part of the carriage . . . and any and all
duties whatsoever undertaken . . . in relation to the Goods,”
and the Clause also grants Hecny Shipping’s agents and
subcontractors “the benefit of all provisions [in the Bills] for
the benefit of [Hecny Shipping] as if such provisions were
expressly for their benefit.” Moreover, the front page of each
Bill of Lading describes a “Delivery Agent . . . Hecny
1
Clevo does not argue that it is not bound by the terms of the Bills of
Lading.
CLEVO CO . V . HECNY TRANSP ., INC. 13
Transportation, Inc.-MIA,” thereby further confirming that
agents would be involved in handling Clevo’s shipment.
Thus, where the Guarantee provided a general outline of the
relationship between Clevo and Hecny Transportation, the
Bills of Lading supplement that outline, explain a division of
labor, and identify Hecny Transportation’s role in that
division of labor.
In addition to providing these details, however, the Bills
of Lading also add an express statute of limitations for
shipping-related suits. Under the terms of Section 21, suits
against Hecny Shipping for non-delivery, delay, loss,
misdelivery, or damage to the Goods must be filed, if at all,
within one year after delivery.2
3. The Himalaya Clause extends Hecny Shipping’s
one-year statute of limitations to Hecny
Transportation.
Although the express language of Section 21 protects
only Hecny Shipping from untimely suits, the Himalaya
Clause extends the benefits of the one-year limitation to
Hecny Transportation as well.
We previously explained that Himalaya clauses are
“commonly used to extend a carrier’s defenses and liability
limitations to certain third parties performing services on its
2
The terms of the Bills of Lading expressly permit Hecny Shipping to
amend pre-existing contracts to which it was a stranger. In Section 5 of
the Terms and Conditions, Hecny Shipping represented that it executed
the Bills of Lading “not only on its own behalf but also as agent and
trustee for [its] servants, agents, and sub contractors.” Neither Clevo nor
Hecny Transportation has attacked the validity of this agency
representation.
14 CLEVO CO . V . HECNY TRANSP ., INC.
behalf,” M.V. Alligator Triumph, 990 F.2d at 450, and the
Supreme Court has recently addressed Himalaya clauses in
Kirby. Kirby teaches that where, as here, a Himalaya clause
“indicates an intent to extend the [carrier’s] liability
limitation broadly” and describes the carrier’s servants,
agents, and subcontractors, there is “no reason to contravene
the clause’s obvious meaning,” and the carrier’s defenses
should be extended to those servient parties. 543 U.S. at31–32; see also Kawasaki Kisen Kaisha Ltd. v. Regal-Beloit
Corp., 130 S. Ct. 2433, 2439 (2010); M.V. Alligator Triumph,
990 F.2d at 450–51 (reviewing Himalaya clause and
extending carrier’s liability limitations to agent). Because:
(1) the Himalaya Clause expressly permits “every . . . servant,
agent and sub contractor [to] have the benefit of all provisions
. . . for the benefit of” Hecny Shipping; (2) the one-year
statute of limitations is such a provision; and (3) Hecny
Transportation is such an agent, Hecny Transportation is
thereby entitled to assert Section 21’s time-bar.
4. Clevo’s claims are time-barred.
Hecny Transportation’s error in releasing the Goods to
Amazon without first obtaining the original Bills of Lading
is a misdelivery. See C-ART, Ltd. v. Hong Kong Islands
Lines Am., S.A., 940 F.2d 530, 533 (9th Cir. 1991) (“if the
carrier delivers the goods to one other than the authorized
holder of the bill of lading, the carrier is liable for
misdelivery”) (internal alterations and quotation marks
omitted). And the Bills of Lading specifically bar all suits for
“misdelivery . . . unless suit is brought within 1 year after
delivery of the Goods.” Because Clevo did not file suit
against Hecny Transportation until December 11, 2009, more
than one year after the misdelivery occurred, Clevo’s claims
are time-barred.
CLEVO CO . V . HECNY TRANSP ., INC. 15
III. CONCLUSION
The district court correctly granted summary judgment to
Hecny Transportation.
AFFIRMED.