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Southern Recycling, LLC v. Gibbs International, Inc.

United States District Court, D. South Carolina, Spartanburg Division

March 31, 2016



Bruce Howe Hendricks United States District Judge

This matter is before the Court on Plaintiffs’ motion for partial summary judgment (ECF No. 33) and Plaintiffs’ motion to exclude Defendant’s additional evidence (ECF No. 62). For the reasons set forth in this Order, Plaintiffs’ motion to exclude is denied and Plaintiffs’ motion for partial summary judgment is granted.


This diversity action stems from an alleged breach of contract. On November 6, 2012, Plaintiff Southern Recycling, LLC (“Plaintiff Southern” or “Southern”) contracted with Defendant Gibbs International, Inc. (“Defendant” or “Gibbs”) to purchase 500, 000 pounds of scrap copper wire. (Contract, ECF No. 1-1.) The purchase contract contained a delivery term stating:

F.O.B., loaded in bulk into Buyer’s 20’ sea container at Port of Manila, Philippines. Shipments and delivery to be completed no later than November 30, 2012. Seller [sic] buyer and seller will mutually agree upon dates, location, and loading times for containers. Buyer will have a representative at each loading and will sign each trucker’s bill of ladings [sic], along with Sellers [sic] representative.

(Id. at 2.) The payment term of the purchase contract stated:

Payment to be made via wire transfer to Seller’s designated banking account the following business day upon Buyer’s inspection and acceptance of goods, and Seller’s delivery as described above. Incremental payments will be made on each shipment.


Gibbs purchased the scrap copper wire it sold to Southern Recycling from a third party, Regent Phoenix Imports and Exports (“Regent Phoenix”). (Answer, ECF No. 5 at ¶ 10; Boozer Dep. 103:11-14, 109:1-8, ECF No. 33-6.) A total of thirteen (13) shipping containers, generally two (2) per day, were sent to an inland warehouse in Sucat, Philippines in order to load the copper wire. (ECF No. 5 at ¶ 12.) The containers were trucked from the warehouse in Sucat to the Port of Manila, transported by ocean carrier to Long Beach, California, and then transported to their final destination in Dallas, Texas. (Def. Resp. to Mot. Summ. J., ECF No. 47 at 6; Ford Dep. 62, ECF No. 47-6.) Plaintiffs allege that when the containers were opened in Dallas, they contained debris, e.g. cement blocks and slag, not copper wire. (Compl., ECF No. 1 at ¶ 17.) Although this allegation was denied for lack of sufficient knowledge in Gibbs’ answer (ECF No. 5 at ¶ 17), later deposition testimony from Gibbs’ Fed.R.Civ.P. 30(b)(6) witness appears not to contest that the copper wire was substituted for debris at some point during the shipping process (see Boozer Dep. 163:2-6, 165:6-19, ECF No. 49-2). Plaintiff CNA Insurance Company Limited (“Plaintiff CNA”) is Plaintiff Southern’s marine cargo insurer, and performed an investigation into the loss of the scrap copper wire. (Ford Dep. 17:17-25, ECF No. 47-6.)

Plaintiffs filed their motion for summary judgment on August 28, 2015. (ECF No. 33.) Defendant responded on October 30, 2015 (ECF No. 47), and Plaintiffs replied on December 15, 2015 (ECF No. 49). On March 21, 2016, Defendant filed the affidavit of Woody Ezzell (ECF No. 60-1) as additional evidence in support of its response to the motion for partial summary judgment. Plaintiffs next filed a motion to exclude the affidavit (ECF No. 62) on March 24, 2016, and Defendant responded on March 28, 2016 (ECF No. 63). On March 29, 2016, the Court conducted a hearing on the motion for partial summary judgment and took the matter under advisement.


The Court shall grant summary judgment “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(a). The movant bears the initial burden of demonstrating that summary judgment is appropriate; if the movant carries its burden, then the burden shifts to the non-movant to set forth specific facts showing that there is a genuine issue for trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). If a movant asserts that a fact cannot be disputed, it must support that assertion either by “citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials;” or “showing . . . that an adverse party cannot produce admissible evidence to support the fact.” Fed.R.Civ.P. 56(c)(1).

Accordingly, to prevail on a motion for summary judgment, the movant must demonstrate that: (1) there is no genuine issue as to any material fact; and (2) that he is entitled to judgment as a matter of law. As to the first of these determinations, a fact is deemed “material” if proof of its existence or non-existence would affect disposition of the case under applicable law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). An issue of material fact is “genuine” if the evidence offered is such that a reasonable jury might return a verdict for the non-movant. Id. at 257. In determining whether a genuine issue has been raised, the court must construe all inferences and ambiguities against the movant and in favor of the non-moving party. United States v. Diebold, Inc., 369 U.S. 654, 655 (1962).

Under this standard, the existence of a mere scintilla of evidence in support of the non-moving party’s position is insufficient to withstand a summary judgment motion. Anderson, 477 U.S. at 252. Conclusory allegations or denials, without more, are likewise insufficient. Ross v. Communications Satellite Corp., 759 F.2d 355, 365 (4th Cir. 1985). “Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted.” Anderson, 477 U.S. at 248.


I. Motion for Partial Summary Judgment

Plaintiffs seek partial summary judgment on a discreet legal issue in this case. Specifically, Plaintiffs request that the Court find as a matter of law that, pursuant to the terms of the purchase agreement, Gibbs was obligated to deliver the copper wire in containers to the Port of Manila, Philippines and, if Gibbs failed to satisfy this obligation, Gibbs bore the risk of loss. (ECF Nos. 33 at 1 and 33-1 at 1, 4.) As set forth fully below, the Court agrees with Plaintiffs’ position and grants summary judgment on this narrow legal issue.

The Court would first state some general principles regarding contract interpretation under South Carolina law, which the parties agree is controlling in this case. An action to construe a contract is an action at law. McGill v. Moore, 672 S.E.2d 571, 574 (S.C. 2009) (citing Pruitt v. South Carolina Med. Malpractice Liab. Joint Underwriting Ass’n., 540 S.E.2d 843, 845 (S.C. 2001)). The cardinal rule of contract interpretation is to ascertain and give legal effect to the parties’ intentions as determined by the contract language. McGill, 672 S.E.2d at 574 (citing Schulmeyer v. State Farm Fire and Cas. Co., 579 S.E.2d 132, 134 (S.C. 2003)). The construction of a clear and unambiguous contract presents a question of law for the court. S.C. Dep’t of Transp. v. M&T Enters. of Mt. Pleasant, LLC, 667 S.E.2d 7, 13 (S.C. Ct. App. 2008); see also Pruitt, 540 S.E.2d at 845. Courts must enforce, not write, contracts, and their language must be given its plain, ordinary and popular meaning. Williams v. Gov’t Emps. Ins. Co. (GEICO), 762 S.E.2d 705, 709-10 (S.C. 2014) (citing Sloan Const. Co. v. Cent. Nat’l Ins. Co. of Omaha, 236 S.E.2d 818, 819 (S.C. 1977)).

A. The F.O.B. Term And Its Meaning Under the Commercial Code

Turning to the purchase contract at issue here, the “Delivery” term plainly states: “F.O.B., loaded in bulk into Buyer’s 20’ sea container at Port of Manila, Philippines.” (ECF No. 1-1 at 2 (emphasis added).) Section 36-2-319 of the South Carolina Commercial Code, entitled “F.O.B. and F.A.S. terms, ” states in relevant part:

(1) Unless otherwise agreed the term F.O.B. (which means “free on board”) at a named place, even though used only in connection with the stated price, is a delivery term under which
(a) when the term is F.O.B. the place of shipment, the seller must at that place ship the goods in the manner provided in this chapter (Section 36-2-504) and bear the expense and risk of ...

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