Fireman's Fund Insurance Co (the insurer) commenced proceedings against Orient Overseas Container Line Ltd (OOCL) under the subrogated rights of Tischler & Sohn (Tischler). OOCL contracted to carry Tischler's cargo of custom-made windows and doors under a bill of lading from Germany to New York. OOCL sub-contracted the actual carriage of the goods to a third-party ocean carrier.

The actual carrier's vessel arrived in New York on 17 February 2000, but did not unload the container containing the cargo. When Tischler's truck came to pick up the cargo, the container could not be found and was presumed missing. OOCL began search efforts for the container and corresponded with Tischler regarding the search. On 25 February 2000, OOCL mistakenly informed Tischler that the container had been found. On 29 February 2000, OOCL's representative told Tischler that the actual carrier 'has asked another twenty-four hours before officially reporting this container stolen'. OOCL eventually found the container. It was never unloaded in New York in February. It remained on the vessel and travelled to Japan and California before finally being delivered.

The insurer sought damages for the late delivery of the cargo. Specifically, the insurer alleged that Tischler, relying on OOCL's negligent representation that the container containing the cargo had been stolen, had to re-manufacture a portion of the shipment. Both the insurer and OOCL applied to the Civil Court of the City of New York for summary judgments. OOCL argued that the bill of lading expressly disclaimed liability due to any delay, and that its right to disclaim liability for delay and other consequential damages was provided for in the Carriage of Goods by Sea Act, 46 USC § 1300 ff (COGSA). The insurer submitted that the doctrine of deviation at sea, embodied in COGSA, barred OOCL from disclaiming liability, and that it was entitled to a judgment in its favour, because OOCL misrepresented that the container was stolen.

Held: The insurer's motion is denied; OOCL's motion is granted.

The Judge held that:

1. The delay in the delivery of cargo was not an unreasonable deviation within the meaning of COGSA, which would preclude OOCL from disclaiming liability for damages resulting from delay;
2. The insurer's tort claims was dismissed for a failure to state a duty independent of the carriage contract;
3. Tischler failed to establish OOCL's liability for negligent misrepresentation.

Section 1304(4) of COGSA states:

Any deviation in saving or attempting to save life or property at sea, or any reasonable deviation shall not be deemed to be an infringement or breach of this chapter or of the contract of carriage, and the carrier shall not be liable for any loss or damage resulting therefrom: Provided, however, That if the deviation is for the purpose of loading or unloading cargo or passengers it shall, prima facie, be regarded as unreasonable.

According to the doctrine of unreasonable deviation, a carrier is deprived of all limitations on liability under COGSA where its performance in shipping goods deviates unreasonably from the terms agreed to in the bill of lading. The doctrine is limited to two situations: geographic deviation from the route of the voyage, and unauthorised on-deck stowage. A deviation is unreasonable when in the absence of significant countervailing factors, the deviation substantially increases the cargo's exposure to a foreseeable danger that would have been avoided had no deviation occurred. A carrier's unreasonable deviation must be both voluntary and intentional. The deviation is voluntary when it so changes the essence of the agreement as to effect its abrogation. Such deviations oust the contract of carriage and make the carrier fully responsible for the cargo as an insurer.

The doctrine of unreasonable deviation does not preclude OOCL from disclaiming liability for damages resulting from delay in the cargo delivery. There was no unreasonable deviation. The cargo was inadvertently left on the vessel and carried along on its route until it was eventually discovered and delivered to Tischler. OOCL had no intention of diverting cargo and was actively searching for it. In any case, there was no allegation that there was a voluntary deviation in the ship's route.

A cause of action in negligence could not be the basis of liability where OOCL's sole legal duties to Tischler arose entirely out of contract. OOCL's statement that the actual carrier 'has asked another twenty-four hours before officially reporting this container stolen' was insufficient to support a claim for negligent misrepresentation.