Ferrostaal v. M/V Sea Baisen
Ferrostaal, Inc. v. M/V Sea Baisen
DMC Rating Category: Confirmed
This case note is contributed by David Jensen of Healy & Baillie, LLP in New York. Healy & Baillie are the International Contributors to the website for the United States
Panobulk granted the extension request as to the vessel and its owners, managers, and charterers. Panobulk ultimately granted six extensions as to two of the claims and five extensions as to the third. Ferrostaal specifically requested extensions as to all of the parties from Panobulk, and Panobulk repeatedly purported to grant the request. In addition, Panobulk promptly transmitted the notice of claim to Cosco and stated its intention to seek reimbursement from Cosco for any claims paid to Ferrostaal. Ferrostaal brought suit against Panobulk, Cosco, Sea Baisen, and Pan Ocean on March 7, 2002, before the extensions had expired as to any of the claims. Sea Baisen and Cosco jointly moved for summary judgment, arguing that Ferrostaal’s claims against them failed as a matter of law because Ferrostaal had no evidence to support an agency relationship between either of the two and Panobulk, thus negating any extensions purportedly made on their behalf by Panobulk.
As this was an application for summary judgment, Judge Holwell addressed the issue whether Ferrostaal had established a genuine question of fact as to the existence of actual, implied, or apparent authority. [If it had, the application for summary judgment would have failed, and the case would have gone on to trial] Actual and implied authority can exist "only where the agent may reasonably infer from words or conduct of the principal that the principal has consented to the agent’s performance of a particular act" (quoting Minskoff v. Am. Exp. Travel Related Servs. Co., 98 F.3d 703, 708 (2d Cir. 1996)) (emphasis added). Apparent authority exists where "written or spoken words or any other conduct of the prinicipal which, reasonably interpreted, causes [a] third person to believe that the principal consents to have [an] act done on his behalf by the person purporting to act for him" (quoting Minskoff, 98 F.3d at 708) (emphasis added). Therefore, to state a triable - capable of going on to trial - claim, of actual, implied, or apparent authority, Paobulk needed to "allege some action on the part of Cosco and/or Sea Baisen from which Panobulk’s agency may be inferred."
Analyzing the communications between Ferrostaal and Panobulk, the court noted that the communications were not made by Cosco or Sea Baisen, the two alleged principals. Because "an alleged agent cannot establish actual authority through his own statements, and apparent authority can only be found in the words or actions of the alleged principal" Ferrostaal’s claims of actual, implied, and apparent authority all failed as a matter of law.
The court also considered whether Cosco and Sea Baisen were estopped from denying an agency relationship or from asserting the COGSA time limitation. The court concluded that apparent authority was itself "based on the principle of estoppel" and that neither doctrine -- estoppel or apparent authority -- was available "in the absence of affirmative actions by the purported principal." Furthermore, Cosco and Sea Baisen could not be estopped from invoking the COGSA limitation unless Ferrostaal showed that it "reasonably and justifiably believed that the statute of limitations would not be used as a defense or would be extended" (quoting Mikinberg v. Baltic S.S. Co., 988 F.2d 327, 331 (2d Cir. 1993)). The court concluded that Ferrostaal had no ground for such a belief as to Cosco or Sea Baisen.
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