The Shaw Group, Inc. v. Next Factors, Inc.
United States Bankruptcy Court for the District of Delaware
335 B.R. 300 (2005)
- Written by Rich Walter, JD
Facts
[Editor’s Note: This case can also be found under the title “In re Stone & Webster, Inc.”] The Shaw Group, Inc. (Shaw) (plaintiff) was the successor in interest to a Georgia warehouse operator. The warehouse lost a load of frozen shrimp belonging to Next Factors, Inc. (defendant). Although no one knew what had caused the loss, under Georgia law there was a rebuttable presumption that the loss had been due to the operator’s negligence. Shaw sued in federal bankruptcy court, under Georgia’s Uniform Commercial Code (UCC), for a declaratory judgment enforcing a clause in the warehouse receipt that limited the warehouse’s liability to 50 cents per pound of lost goods. Next Factors moved for summary judgment that, under UCC § 7-204, the liability cap did not apply, because the warehouse operator presumably had converted the shrimp to its own use.
Rule of Law
Issue
Holding and Reasoning (Walsh, J.)
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