Superior Court of New Jersey,Appellate Division.
DIRECT SHIPPERS ASSOCIATION, INC., Plaintiff-Appellant,
v.
SANYO AUTOMOTIVE PARTS, LTD., d/b/a Brake Headquarters; Bopper Motor Parts, Inc.; Border Motor Parts, Inc.; Tricity Auto Warehouse, Inc., Midstate Automotive, Inc.; Henderson Wheels & Warehouse, Inc.; Ozark Automotive, Inc.; Discount Auto Parts, Inc; R.J. Templeton Co.; Grand Auto Parts, Inc.; East Alabama Auto Parts; Star District Co.; CCF Worldwide Agency, Inc.; Parts Source, Inc.; Empresa Monreal, Inc.; Mayored De Refracciones, Inc.; Bhusa-La, Inc.; Waw D. Hayward, Inc.; Auto Suridora, Inc. Mid Florida Auto, Inc.; San Antonio, Inc.; and An Mex International, Inc., Defendants,
andGonzalez Auto Parts, Inc., Defendant-Respondent.
Argued April 26, 2006.
Decided Aug. 16, 2006.
Before Judges STERN and GRALL.
PER CURIAM.
Plaintiff, Direct Shippers Association, Inc., appeals from an order of October 22, 2004 which granted summary judgment in favor of defendant Gonzalez Auto Parts and an order of December 17, 2004 denying reconsideration. Plaintiff argues that “the trial court erred by granting summary judgment since defendant, as consignee, was liable for freight transportation charges” and that “summary judgment was premature since discovery on genuine issues of material facts was incomplete.”
Plaintiff seeks to recover “unpaid charges for freight transportation services” incident to the delivery to defendant of parts from Sanyo Automotive Parts, Ltd., d/b/a Brake Headquarters. In counts thirteen through sixteen of its amended complaint as to this defendant, plaintiff asserts it delivered parts to defendant, which services “originated” in Keasby, New Jersey, and sought $21,788.79. The complaint claimed to have attached the freight bills evidencing “services rendered by the Plaintiff to the Defendant upon the promise of the Defendant to pay a reasonable price for the same.” The attachment is a “statement of account” in an amount allegedly owed to plaintiff for shipments by Brake Headquarters to all defendants with a balance due of $73,757.45.
The record contains seventeen invoices and bills of lading in the aggregate amount of $21,788.79. Each such bill lists defendant in Laredo, Texas as “consignee” with the “bill to” address of Brake Headquarters as “the shipper” in Long Island City, New York. The accompanying “shipping order” for each is marked prepaid and is stamped:
It is understood that shipper assumes liability for freight payment to party listed above. Other carriers involved in this movement of goods can seek payment from that party only and not from shipper.
Defendant states that plaintiff was “not a party” to the bills of lading and defendant “never received these invoices, and Plaintiff Direct does not deny same.”
There was no dispute that shipments to defendant Gonzalez were made by Sanyo or its Brake Headquarters subsidiary (which is now bankrupt), but the bills of lading were marked as “pre-paid.” Plaintiff asserts it was never paid the freight charges. The motion judge found insufficient evidence to permit plaintiff to satisfy its burden of proceeding against defendant. Plaintiff insists that “the record below did not show that the Defendant paid for all of the freight costs or even some.”
Plaintiff asserts that there are genuine issues of material fact including whether defendant paid any or all of the freight transportation charges billed to Sanyo. Plaintiff argues that if defendant did not pay for the transportation of the goods, defendant is liable for the transportation charges, despite the bills of lading being marked as “pre-paid.”
Defendant contends, however, that plaintiff cannot rely on federal statutory and case law, as it did on the motion for summary judgment and on this appeal, because it provides remedies against the consignee only to motor or common “carriers” or a party to the bill of lading. Defendant submits that plaintiff is not a “carrier,” but a “shipping association,” and therefore the federal law regarding a consignee’s liability to the carrier is inapplicable to the present situation.
Under the Interstate Commerce Act, a bill of lading embodies “the contract for transportation [between the shipper-consignor and carrier] from point of origin to destination.” Texas & P.R. Co. v. Leatherwood, 250 U.S. 478, 481, 39 S.Ct. 517, 518, 63 L. Ed. 1096, 1098 (1919); see also S. Pac. Transp. Co. v. Commercial Metals Co., 456 U.S. 336, 342, 102 S.Ct. 1815, 1820, 72 L. Ed.2d 114, 120 (1982). Under the bill of lading provisions of the Act, a consignee is defined as “the person named in a bill of lading as the person to whom the goods are to be delivered.” 49 U.S.C.A. § 80101. A consignor is “the person named in a bill of lading as the person from whom the goods have been received for shipment.” Ibid.
Plaintiff states “[f]ederal statutory law now renders a consignee independently liable to a carrier for freight charges upon his acceptance and delivery of the goods,” citing 49 U.S.C. 13706(a) and Checker Van Lines v. Siltek Int’l, Ltd., 169 N.J.Super. 102, 106 (App.Div.1979). The liability of the consignee for the payment of rates for the transportation for a shipment of property is governed by the Interstate Commerce Act, 49 U.S.C.A. § 13706, when and if “the transportation is provided by a motor carrier.” See also 49 U.S.C.A. § 80102 (governing when the bill of lading is issued by a common carrier). A “consignee becomes liable, as a matter of law,” if a shipment is accepted, Louisville & Nashville R.R. Co. v. Cent. Iron & Coal Co., 265 U.S. 59, 70, 44 S.Ct. 441, 444, 68 L. Ed. 900, 904 (1924); S. Pac. Co. v. Wheaton Brass Works, 5 N.J. 594, 603-04 (1950), cert. denied, 341 U.S. 904, 71 S.Ct. 614, 95 L. Ed. 1343 (1951). However, the consignee is not so liable if the bill of lading is marked “prepaid.” E.F. Operating Corp. v. Am. Bldgs., 993 F.2d 1046, 1051 (3d Cir.), cert. denied, 510 U.S. 868, 114 S.Ct. 193, 126 L. Ed.2d 151 (1993).
In Checker, relied upon by plaintiff, the defendant, who resided in Pennsylvania accepted a new job from co-defendant Siltek International, Ltd. Checker Van Lines, supra, 169 N.J.Super. at 104. As part of the defendant’s compensation, Siltek agreed to pay the costs of shipping the defendant’s household goods from Pennsylvania to Quebec, Canada. Ibid. The defendant arranged for plaintiff to do the moving and informed plaintiff that Siltek would be solely responsible for the charges involved. Ibid . Plaintiff delivered the goods on September 20, 1974. Ibid. The shipping order showed defendant as the shipper and the consignee and directed Siltek to be billed. Id. at 105. In May 1977, the defendant was served with a summons and complaint. Ibid. Siltek had filed bankruptcy two years before. Ibid. The trial judge granted plaintiff’s motion for partial summary judgment, and the parties stipulated to damages. Ibid.
In reversing the order, we addressed the fact that the trial judge relied upon the then controlling provision of the Interstate Commerce Act, as the basis for imposing liability on the defendant. Ibid. We stated that in interpreting and applying a federal statute, federal case law binds state courts. Ibid. Furthermore, we recognized that:
[t]he United States Supreme Court has held that this statute imposes liability for shipping costs upon the consignee of an interstate shipment of goods when, as owner of the goods he accepts the shipment from the carrier. Under this rule a consignee accepting the shipment as the owner “becomes liable, as a matter of law, for the full amount of the freight charges whether they are demanded at the time of delivery, or not until later.”
[Id. at 105-06 (internal citation omitted).]
Although the bill of lading was not marked “prepaid,” we noted that “[m]any federal and state cases have recognized that a carrier may be estopped from recovering from a consignee,” and that defendant could assert that “Siltek was to pay the full charges for shipping” and defendant “was not barred thereby from asserting estoppel as a defense.” Id. at 106-07.
Defendant could also assert “plaintiff’s delay in seeking payment” from defendant. Id. at 109.
When a carrier delivers goods under a bill of lading marked “pre-paid,” the carrier may be equitably estopped from seeking the charges from the consignee:
The shipper-consignor … “assumes the obligation to pay the freight charges, and his obligation is ordinarily a primary one.” [Louisville & Nashville R.R. Co., supra, 265 U.S. at 67, 44 S.Ct. at 443, 68 L. Ed. at 903.] We have held that when a carrier delivers goods under a bill of lading marked “prepaid,” and when the consignee pays the shipper-consignor the freight charges under this bill, equitable estoppel precludes the carrier from collecting those charges from the consignee. [Missouri Pac. R.R. Co. v. Nat’l Milling Co., 409 F.2d 882, 884 (3d Cir.1969).] The rationale is simple: if the consignee has performed its purchase agreement in good faith by paying the shipper for freight charges, and if the carrier knows this and acknowledges the payment by marking the bill of lading “prepaid,” the carrier is then estopped from forcing an innocent consignee to pay twice for services rendered only once. Other courts have agreed.
[E.F. Operating Corp., supra, 993 F.2d at 1051 (citing United States v. Mason & Dixon Lines, Inc., 222 F.2d 646, 650 (6th Cir.1955); Consol. Freightways Corp. v. Admiral Corp., 442 F.2d 56, 62-63 (7th Cir.1971); S. Pac. Transp. Co. v. Campbell Soup Co., 455 F.2d 1219, 1222 (8th Cir.1972)).]
In the certification submitted by plaintiff’s general manager, Robert Tavani, in opposition to a co-defendant’s motion for partial summary judgment, plaintiff asserted that it “is a shippers’ association, which arranges the transportation of freight at the request and benefit of shippers, consignees and intermediaries, such as freight forwarders and brokers.” “A cooperative or shippers’ association is formed to provide lower freight rates and the ability to contract for large volume shippers.” “[A]ssociations do not issue bills of lading.” According to the certification, plaintiff “is not and has never been a motor carrier subject to regulation and jurisdiction of the United States Department of Transportation.” See 49 U.S.C.A. § 13706 (governing recovery by “motor carrier”). The certification apparently sought to avoid the applicable statute of limitations under the Act and to proceed under the common law.
In its reply brief and before us at argument, plaintiff asserts that “as a freight transportation company,” it has standing to seek unpaid freight charges from a consignee. Plaintiff argues that it “fits within the category of either a carrier and/or freight forwarder,” and that it could also be viewed as a “broker” or a “shippers agent.” In essence, it asserts that as a “transportation intermediary … which holds itself out as ‘carrier,’ [it] should be able to collect freight charges for transportation,” and as it “made itself available to the general shipping community” and the public as an entity that can transport products “from origin to destination at specific freight rates for the entire transportation,” “plaintiff had ample standing to institute the action for collection of unpaid freight charges from the consignee-defendant.”
As noted, plaintiff’s general manager in response to a co-defendant’s motion for summary judgment certified that plaintiff is “a shipper’s association which arranges the transportation of freight at the request and benefit of shipper, consignees and intermediaries, such as freight forwarders and brokers.” In addition to denying the status of a “carrier,” the language in the certification suggests that plaintiff is not a freight forwarder or broker since it states it arranges transportation between “consignees and intermediaries, such as freight forwarders and brokers.”
Furthermore, in its opposition brief in response to co-defendant’s summary judgment motion, plaintiff argued that it was exempt from the federal statute of limitations by claiming it was neither a carrier nor freight forwarder. According to its “legal argument” in the trial court:
The ICC Termination Act of 1995 defines “carriers” to include rail carriers, motor carriers and pipeline carriers. 49 U.S.C. 11101. A motor carrier is defined as a person providing motor vehicle transportation for compensation. 49 U.S.C. 13102(12). Accordingly, all interstate motor carriers must register with the Secretary of Transportation as a motor carrier.
… Direct was not a “carrier” providing transportation services subject to jurisdiction of the U.S. Department of Transportation. Direct, as a shippers’ association or cooperative, is not required to register with the federal Highway Authority.
Moreover, according to plaintiff’s supporting brief on the motion, “[a] cooperative or shippers association … do[es] not issue bills of lading and do [es] not provide actual transportation and therefore, ha[s] been held not to be a surface freight forwarder.”
Plaintiff has not advanced a clear, concise or consistent theory or approach in support of its claim. However, the mere marking of the bill of lading as “pre-paid” may not by itself warrant summary judgment and dismissal of the complaint. Moreover, whether an entity is a “motor carrier” or some other entity for purposes of the Interstate Commerce Act is a question of fact precluding summary judgment, see Phoenix Assurance Co. v. Kmart Corp., 977 F.Supp. 319, 326 (D.N.J.1997), although it may be bound by “what it holds itself out to be.” Ensco, Inc. v. Weicker Transfer & Storage Co., 689 F.2d 921, 925 (10th Cir.1982). Accordingly, we reverse the grant of summary judgment and remand for further proceedings at which the nature of plaintiff’s actual status, its impact on the issue of governance of the Interstate Commerce Act and preemption, and the question of estoppel (including one premised on plaintiff’s different assertions of its status) should be fully developed, after which the issue of summary judgment and dismissal may be reconsidered.
The judgment on review is reversed and the matter is remanded for further proceedings consistent with this opinion. No costs are awarded to plaintiff on this appeal.
