GRSM Orange County Partner James A. Marissen and New York Partner Mark A. Beckman obtained the reversal of a previous denial of GRSM’s motion to dismiss in the United States District Court, Southern District of New York, dismissing all claims against GRSM’s client, one of the world’s largest shipping companies.
Plaintiff sued the client claiming that plaintiff’s cargo of 3,400 cartons of frozen shrimp arrived damaged. Under the federal Carriage of Goods at Sea Act, such claims have a one-year statute of limitations. The client granted plaintiff two extensions, both in emails. The first extended until “December 15, 2022 – 17h00 (CET time),” and the second extended until “February 15, 2023, 17h00 CET.” CET stands for Central European Time, where the client is located. Plaintiff requested a third extension, but the client refused, leaving the deadline February 15, 2023, 17h00 CET. Plaintiff filed, but at 5:32 p.m. New York time, several hours outside the extension and thus beyond the statute of limitation. GRSM moved to dismiss the claim.
In opposition, plaintiff claimed it believed “CET” to mean Central Time, the time zone one hour earlier than New York, and that even if it were wrong, the term is ambiguous and not subject to a pre-answer motion to dismiss. In denying the motion to dismiss, the court discussed the rule that only documents attached to or referenced in a complaint may be considered; other documents must be excluded. However, a court “may nevertheless consider” an extraneous document where the complaint relies heavily upon it, making it “integral” to the complaint. The court determined it properly could consider the contract between plaintiff and the client—the Sea Waybill—as its breach formed the basis of the claim, but not the extension emails. The court ruled that the emails were not integral to the complaint and that because the parties dispute the meaning of “CET,” the question was not “suited for resolution on a motion to dismiss.”
GRSM moved to reconsider with a two-step argument. First, the court’s ruling defied logic: having found that the complaint incorporated the Sea Waybill, the court should have found that the complaint also incorporated the emails, as they modified, and thus became part of, the agreement. Second, once the court agrees to consider the emails, it must rule that the emails were not ambiguous but rather unambiguously demonstrated the parties’ agreement on a deadline, which plaintiff missed.
Upon reconsideration, the court agreed with GRSM, referencing language in the complaint where plaintiff alleged the client extended plaintiff’s time to file the complaint, thus relying upon and incorporating those emails.
The court then turned to the question of ambiguity, noting the extension terms were a tolling agreement, and therefore subject to contract interpretation. The court agreed with GRSM that determining whether a contract is ambiguous is a question of law for the court, resolvable on a motion to dismiss, and that just because the parties may interpret a term differently does not make that term ambiguous. Here, upon reconsideration, the court agreed with GRSM that CET has a “definite and precise meaning” and plaintiff had not introduced any support to conclude CET meant Central Time, or anything other than Central European Time. Indeed, the court referenced the Oxford English Dictionary and the Cambridge Dictionary, both unequivocally confirming the correct meaning, and further noted that there is no “Central Time” but rather “Central Standard Time.” Accordingly, the court found that the term was unambiguous and that plaintiff missed the deadline, therefore dismissing the complaint as time-barred.
The team is pleased to demonstrate that a judge's mind can be changed by compelling arguments when presented effectively.