Oheneba Nti et al. v. LLC

MEMORANDUM OF DECISION

This is an action brought by two plaintiffs against the defendant corporation.   The plaintiffs are Nti, Oheneba and Osei–Tutu, Kwame.   The defendant is Gold Coast Shipping, LLC of 2946 Main Street, Hartford, Connecticut, 06120.

The plaintiffs bring this action via first amended complaint in four counts.   Count One is breach of contract.   The plaintiffs maintain that the defendant Gold Coast Shipping, LLC, a limited liability company with its principal office in Hartford was engaged in the business of international shipping, specializing in shipping of autos and trucks to West Africa and Europe and maintains that Gold Coast agreed to ship the plaintiffs' five motor vehicles and related car parts from Connecticut to Tema, Ghana.   They maintain that they paid Gold Coast Shipping a total of $5,200 for the shipping services and $17,688.83 to acquire the motor vehicles and related car parts, that defendant failed to ship said motor vehicles and car parts to Tema and the plaintiffs suffered damages.

Count Two alleges negligence in that the defendant performed the agreement to ship in a negligent manner.   They allege that defendant failed to properly advise them that the shipped vehicles were classified as end of life motor vehicles under the “Basel Convention” and had to be decontaminated and made free of fluids, which defendant knew or in the exercise of good judgment should have known.   Plaintiffs further allege that Gold Coast Shipping failed to pay the cost of decontamination required by the Customs Office in Antwerp, Belgium;  and the automobiles and related parts were neither delivered to Tema, Ghana nor returned to plaintiffs thereby causing damage to the plaintiff.

In Count Three the plaintiffs allege breach of a fiduciary duty.   The plaintiff Osei–Tutu gave Gold Coast Shipping an Export Power of Attorney whereby he authorized the defendant and its employees to act as his forwarding agent for export control and Custom purposes and to prepare, sign, declare or swear to any shipper's export declaration required by law or regulations in connection with the exportation of any commodities shipped by Osei–Tutu and to do all things necessary to insure compliance with all requirements pursuant to § 192 of the U.S. Customs regulations.   He claims that a fiduciary relationship was created between Gold Coast Shipping and Osei–Tutu which gave rise to a duty of loyalty, an obligation on the part of Gold Coast Shipping to act in the best interest of Osei–Tutu and an obligation on the part of Gold Coast shipping to act in good faith in any matter relating to Osei–Tutu.

Plaintiff claims that the defendant acted in its own interest and did not act in good faith to the detriment of Osei–Tutu and that Gold Coast Shipping failed to properly advise plaintiffs that the shipped vehicles were classified as end-of-life motor vehicles under the Basel Convention and had to be decontaminated and made free of fluids.   Gold Coast Shipping also refused to pay the cost of decontamination when notified of the need and failed to return the motor vehicles and related parts to the plaintiff.

In Count Four plaintiffs allege a violation of the Connecticut Unfair Trade Practices Act (CUTPA) General Statutes § 42–100a et seq.

The plaintiff recites all of the allegations in Count Three and maintains that the actions and conduct of Gold Coast Shipping constitutes unfair and/or deceptive trade practices in violation of § 42–100a et seq. of the Connecticut General Statutes and that such actions and conduct are unfair, deceptive, unconscionable, oppressive, immoral, and/or unethical and as a result of the foregoing actions the plaintiffs have suffered ascertainable losses and damages.

The defendant has filed an answer to the original complaint which answer remains as the answer to the amended complaint.   In answer to the breach of contract count the defendant denies being an expert in shipping autos to West Africa and Europe and that it failed to ship the motor vehicles but it does admit that the motor vehicles were never delivered to the proper destination.

As to Count Two in negligence, Gold Coast Shipping denies that plaintiffs fulfilled all conditions of the agreement and claims it properly advised plaintiffs that the shipped vehicles were classified as end-of-life vehicles as alleged by the plaintiff and that Gold Coast Shipping failed to pay the cost of decontamination when notified by the Customs Office of Belgium.   It also denies that it failed to return the motor vehicles and related parts to the plaintiffs.

With respect to Count Three alleging a fiduciary relationship, the defendant leaves the plaintiff to the burden of its proof as to whether such a relationship did exist.

As to the Paragraph in which the plaintiff alleges that the defendant advanced its own interest and did not act in good faith to the detriment of Osei–Tutu, the defendant leaves the plaintiff to its proof.   The defendant admits that Gold Coast Shipping refused to pay the cost of decontamination;  and it admits that the vehicles were not returned to the plaintiff but denies responsibility.   The defendant leaves the plaintiff to its proof as to whether the plaintiff sustained damages and whether the damages were caused by defendant's breach of its fiduciary duty.

The defendant has filed a special defense alleging negligence on the part of the plaintiffs in that the plaintiffs were offered insurance but they refused to insure the cargo.   Also the defendant claims that when it learned the cargo was being held by Customs in Belgium it advised plaintiffs what they needed to do to remedy the situation but they ignored this advice.   Defendant also alleges that the plaintiffs are in the business of shipping motor vehicles to other parts of the world and they should have decontaminated their vehicles in order to comply with Customs.

In addition to the special defense the defendant has filed a counterclaim in which it claims that the motor vehicles were detained by Customs because they contained oil and other hazardous substances and that the defendant contacted the plaintiffs on numerous occasions advising them of what it would need to remedy the situation but the plaintiffs failed to respond and as a result of the plaintiffs' failure to act the shipment was sent back to New Jersey and the defendant had to pay $2,053 for the shipping and storage.

Plaintiff has filed a reply to the special defense and counterclaim in which the special defense is denied and as an answer to the counterclaim the plaintiffs plead lack of sufficient information to admit or deny the allegations and leaves the defendant to its proof.   As to the fact that the defendant contacted the plaintiffs it is admitted but the rest of the allegations are denied.   As to the counterclaim the plaintiffs offer a special defense claiming that the defendant is estopped from filing the counterclaim because as a condition of shipment the plaintiffs were required to give the defendant an export power of attorney and based on said power of attorney the plaintiffs relied on defendant to properly advise them of the shipping requirements.

The trial of this case took place on March 29, 2011 and was completed after final argument by both parties.   The Court, having examined the exhibits, a brief filed by the plaintiffs as well as a transcript of the final arguments of counsel, is of the opinion that the plaintiffs have proven by a fair preponderance of the evidence both their first and second counts i.e., breach of contract and negligence.

The elements of a Breach of Contract action are:  1) formation of an agreement;  2) performance by one of the parties to that agreement;  3) breach of a material term or terms of the agreement by another party;  and 4) damages resulting from that breach Seligson v. Brower, 109 Conn.App. 749, 753 (2008).   All of these elements have been met in this case.

With respect to the first count of Breach of Contract, the pertinent facts are that the plaintiff's acting together bought some used automobiles which would not have been allowed to be operated in the United States, contracted with the defendants, a limited liability company engaged in the business of international shipping and specializing in shipping of autos and trucks to West Africa.   Defendant agreed in writing to ship plaintiffs' five motor vehicles and related car parts from Connecticut to Tema, Ghana for a fee of $5,200.   The fee was about one third of the cost of $17,688.83 of the motor vehicles and car parts.

The defendant chose the shipping company not the plaintiffs.   The automobiles were sent to Antwerp, Belgium where the defendant was notified that the autos were classified as end-of-life vehicles and under a controlling set of rules known as the Basel Convention they would have to be decontaminated there in Antwerp before they could be shipped any farther.   At this stage of the proceedings it was the obligation of the defendant to have the vehicles decontaminated and then to move the vehicles on to their final destination for delivery to Tema, Ghana even though it meant that they would have to bear the cost.   There is much evidence and many exhibits indicating attempts by the defendant to have the plaintiffs pay the decontamination cost.   The plaintiffs failed to do so and the defendant paid to ship the vehicles back to the U.S. where they sat on a dock in New Jersey.   There is much evidence that defendants attempted to get the plaintiffs to pay for the return shipment and fees as the vehicles sat on the dock.   The Court considers, however, these obligations to be the defendant's rather than the plaintiffs'.   The defendant failed to deliver the vehicles to the plaintiff.   The defendant contracted with the plaintiff to transport the vehicles to Ghana and failed to do so.   The plaintiffs delivered the vehicles to the defendants, paid the fee but did not have the vehicles delivered to Ghana nor were they returned to them.

The essential elements of a cause of action in negligence are 1) duty;  2) breach of that duty;  3) causation;  and 4) actual injury.  R.K. Construction, Inc. v. Fusco Corporation, 231 Conn. 281, 384 (1994).

With respect to the second count of negligence, the facts are the same as those for the breach of contract.   The defendant, had no knowledge of the Basal Convention but since it involved the very field with which they were supposed to be familiar, transportation of vehicles, it was negligent in not having acquired the necessary knowledge so that it could have warned the plaintiff and incorporated into the contract the additional costs and it was negligent in not paying the additional fees and not delivering the autos to Ghana.

To prevail on a claim of Breach of Fiduciary Duty, a plaintiff must establish 1) the existence of a relationship between the parties;  2) characterized by a unique degree of trust and confidence;  3) in which one party has superior knowledge skill or experience, and is under a duty thereby to represent the interests of the other party;  and 4) a breach of that duty causing harm to the plaintiff.  Biller Associates v. Peterkin, 269 Conn. 716, 723 (2004).   The burden of proof in such a circumstance has been described as “clear and convincing evidence, clear and satisfactory evidence or clear, convincing and unequivocal evidence.  Cadle Co., v. D'Addario, 268 Conn. 441, 455 (2004).

In the opinion of the Court the allegation of breach of fiduciary relationship falls short in its proof because it is based primarily upon the signing of a power of attorney.   This power of attorney was limited in scope to the United States legal requirements alone and falls short of the degree of trust required by this cause of action.

The Connecticut Unfair Trade Practices Act (CUTPA), governed by Connecticut General Statutes § 42–110a, et seq., provides that “no person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.   Because the Connecticut Statute is similar to the Federal law, the Connecticut Supreme Court has adopted the criteria as set out in the cigarette rule by the Federal Trade Commission.   These criteria are:  1) whether the practice, without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law, or otherwise, in other words, it is within at least the penumbra of some common law, statutory or other established concept of unfairness;  2) whether it is immoral, unethical, oppressive or unscrupulous;  and 3) whether it causes substantial injury to competitors or other business persons.   All three criteria do not need to be satisfied to support a finding of unfairness.   A practice may be unfair because of the degree to which it meets one of the criteria or because to a lesser extent it meets all three.   Ventres v. Goodspeed Airport, LLC, 274 Conn. 105, 154–55 (2005).

With respect to the allegation of violation of the Unfair Trade Practices Act the Court points out that the defendant is guilty of negligence and not the intentional aspect of evidence required by the application of the cigarette rule.

Three special defenses were filed by the defendant.   First, selling insurance to the plaintiff would not have lessened the defendant's obligation under the contract.   Second, the fact that the defendant attempted to have the plaintiff remedy the situation after discovery of the need for decontamination was, as pointed out earlier, not the obligation of the plaintiff but the obligation of the defendant.   Third, there is no evidence to support the third special defense regarding the business of the plaintiffs.

With respect to the counterclaim filed by the defendant, the Court must repeat that in its opinion it was the obligation of the defendant having undertaken to deliver this property to Ghana for a substantial fee and authority to determine where and how it would be shipped to pay whatever was necessary to keep it moving to Ghana.

Although there was no mention in the pleadings of mitigation of damages each party in their final arguments dwelt on the subject.   Technically the matter was not before the Court.   However, the burden of the mitigation of damages under contract as well as negligence falls on the defendant.  Preston v. Keith, 217 Conn. 12 (1991).  Lynch v. Granby Holdings, Inc., 37 Conn.App. 84 (1995).

Judgment may enter for the plaintiff as to Counts One and Two and judgment may enter for the defendant as to Counts Three and Four.

Damages in this case are the out of pocket expenses of the plaintiff which amounts to $22,888.83.   These figures consist of the cost of the vehicles and parts ($17,688.83) and the shipping charge of $5,200.

Hale, JTR

Hale, Robert J., J.T.R.