Royal Insurance Co. Vantare International, Inc. v. Sea-Land Service Incorporated Container Stevedoring Company, Inc.

Royal Insurance Company insured a yacht shipped by Vantare International, Inc., from Taiwan to Oakland, California. The yacht was shipped on a vessel owned by Sea-Land Service, Inc. The stevedore unloading the yacht, Container Stevedoring Company, dropped it on the dock in Oakland. The yacht was a total loss. The district court found that Vantare’s recovery was limited to $500 under a loss limitation clause in the on-board bill of lading. Royal and Vantare appeal, and we affirm.

FACTS

Vantare International, Inc. (“Vantare”) is in the business of buying yachts overseas and selling them in the United States. Its owner and president, Michael Guth, has sold 20-25 yachts since Vantare began operation in early 1987, many bought from Chung-Hwa Boat Building Company (“Chung-Hwa”) in Taiwan.

In November, 1987, Vantare and other yacht importers entered into a service contract with Sea-Land Service, Inc. (“Sea-Land”), an ocean carrier, and other ocean carriers who had joined together as the “Asian North American Eastbound Rate Agreement” (“AÑERA”) (the “Service Contract”). Under the Service Contract, Van-tare was entitled to a special reduced freight rate when it shipped on an AÑERA…