United States District Court,

N.D. Texas, Amarillo Division.

Cynthia ZARNOSKI-MCCATHERN and Darren McCathern, Plaintiffs,

v.

EAGLE VAN LINES, Defendant.

Feb. 8, 2005.

OPINION

ROBINSON, J.

Plaintiffs Zarnoski-McCathern and McCathern sue Eagle Van Lines alleging numerous state court causes of action growing out of a shipment of Plaintiffs’ goods from Pennsylvania to Texas. Defendant Eagle Van Lines contends that Plaintiffs’ causes are preempted by the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706 and that they are now barred by the limitations period in the Carmack Amendment. The case is before the Court on Defendant’s motion for summary judgment.

Background

Plaintiff Zarnoski-McCathern (formerly Cynthia Zarnoski) contracted with Defendant Eagle Van Lines on or about May 22, 2000, to pack, load, and ship household goods from West Chester, Pennsylvania to Memphis, Texas. At the time of the move, Plaintiff Zarnoski-McCathern had already departed Pennsylvania and resided in Texas. The initial quote provided to Zarnoski-McCathern for the cost of the move was estimated at $6,515. On May 25, 2000, upon arrival at the Pennsylvania property, an Eagle representative contacted Zarnoski-McCathern and informed her that he anticipated the cost of the move to be approximately $10,000, to which she agreed. On May 26, 2000, Eagle again contacted her and informed her that some of her property had been left behind. On May 30, 2000, Eagle informed her that the items that were left behind would cost an additional $2,371.95 to ship, to which she also agreed. The total cost of the move, which occurred in two separate shipments, was $12,485.55.

The bill of lading called for a standard damage or loss valuation of household goods of up to $0.60 per pound unless an additional value was declared for the property. Plaintiff Zarnoski-McCathern declared a stated amount of $30,000 as the value of her household goods and paid an additional $210 for this increased valuation. On June 1, 2000, Eagle delivered the first shipment to Plaintiffs’ Texas home. On June 25, 2000, the second shipment arrived. Plaintiff contends that numerous items were damaged or missing in each shipment. In their petition, Plaintiffs allege that Zarnoski-McCathern had to sign off on Eagle’s inventory before she would be allowed to inspect her goods.

Beginning on or about June 25, 2000, Plaintiffs contacted Defendant by letter and phone requesting: 1) that Eagle ship Plaintiffs’ remaining possessions, and 2) that Eagle send copies of the policy declaration for the insurance that was purchased. On or about January 21, 2001, Plaintiffs identified Defendant Hartford Insurance Co. as the cargo insurance carrier for Eagle, and on February 25, 2001, Plaintiffs submitted their claim to Hartford.

The 2001 State Court Suit

On or about May 31, 2001, Plaintiffs filed suit in Texas State Court against Eagle alleging a breach of contract, a violation of the Texas Deceptive Trade Practices Act, and negligence. On August 6, 2001, Eagle filed a general denial in that suit denying the claim in its entirety. [FN1] On or about October 2, 2001, Plaintiffs filed a Notice of Nonsuit in this first state court case because attorneys for Eagle had said that they were going to remove the case to federal court.

FN1. Defendant’s employee, Dia Freni, stated in her affidavit in support of Defendant’s motion for summary judgment that Eagle filed a written denial of Plaintiffs’ claim in its entirety. Plaintiff acknowledges in its brief in response to the motion for summary judgment that the general denial was filed.

This 2004 Suit

On May 20, 2004, Plaintiffs brought a second suit asserting the same claims against Eagle and Hartford in Texas state court. On June 21, 2004, Hartford removed this second case to the United States District Court for the Northern District of Texas, Amarillo Division on grounds of diversity. Thereafter, pursuant to Plaintiffs’ motion, all claims against Hartford were dismissed without prejudice. Eagle is the only remaining Defendant.

Contentions of Plaintiff

The Plaintiff asserts various state law claims against Eagle, including: 1) breach of contract, 2) fraud, 3) fraudulent misrepresentation, 4) negligent misrepresentation, 5) damage to personal property, 6) loss of personal property, 7) violation of the Texas Deceptive Trade Practices Act, 8) unfair claim settlement practices under Texas Code 21.55, 9) economic and actual damages, 10) mental anguish damages and 11) attorneys’ fees. Plaintiff contends that this cause of action is not exclusively governed by the Carmack Amendment and that the Amendment does not apply to the Defendant’s failure to pack and load Plaintiff’s personal property onto the truck. Plaintiffs also contend that the general denial filed by Defendant in the 2001 state court suit did not constitute a denial of claim under the Carmack Amendment.

The Carmack Amendment and State Claims

A purpose of the Carmack Amendment was to “substitute a paramount and national law as to the rights and liabilities” of interstate carriers subject to the amendment regarding the interstate shipping, delivering, loading and unloading, and transporting or servicing of goods to be shipped. Moffit v. Bekins Van Lines Co., 6 F.3d 305, 306 (5th Cir.1993); See R.R. Ret. Bd. v. Duquesne Warehouse Co., 326 U.S. 446, 453, 66 S.Ct. 238, 90 L.Ed. 192 (1946)(“loading and unloading services … is a transportation service within the meaning of the Interstate Commerce Act.”); Southeastern Express Co. v. Pastime Amusement Co., 299 U.S. 28, 29, 57 S.Ct. 73, 81 L.Ed. 20 (1936)(“The words of the statute ‘are comprehensive enough to embrace all damages resulting from any failure to discharge a carrier’s duty with respect to any part of the transportation to the agreed destination.” ‘); Adams Express Co. v. Croninger, 226 U.S. 491, 505-06, 33 S.Ct. 148, 57 L.Ed. 314 (1913)(“Almost every detail of the subject [of the liability of the carrier under a bill of lading which he must issue] is covered so completely that there can be no rational doubt but that Congress intended to take possession of the subject, and supersede all state regulation with reference to it.”). As a result of Congress’ preemption of the regulation of all matters regarding interstate shipping of goods, all damages sought against a common carrier for failure to perform, or for negligent performance of, and interstate contract of carriage are also governed by the Carmack Amendment. Am. Synthetic Rubber Corp. v. Louisville & Nashville R.R. Co., 422 F.2d 462, 468 (6th Cir.1970). Further, the Carmack Amendment preempts all state claims that seek to recover for damage or loss to goods during shipment, for misdelivery or untimely delivery of goods, for failure of the carrier to fulfill duties closely related to its duty of delivery, or for charging an improper rate for transporting goods. See Sam L. Major Jewelers v. ABX, Inc., 117 F.3d 922, 926 (5th Cir.1997)(“via the Carmack Amendment, Congress had totally preempted state regulation of liability of common carriers.”); Cleveland v. Beltman N. Am. Co., 30 F.3d 373, 379 (2d Cir.1994) (holding that Carmack Amendment preempts federal common-law claims for goods lost or damaged during transport and for untimely delivery); Moffit, 6 F.3d at 306-07 (holding that Carmack Amendment preempts state claims seeking recovery for untimely delivery of goods); Am. Synthetic Rubber Corp., 422 F.2d at 468 (“When the cause of action arises out of a misdelivery in breach of a contract or carriage, a tort action does not lie.”). The courts have consistently held the duty of loading and unloading is part of the transportation services of interstate carriers, and is within the Carmack Amendment. Therefore, all state claims in this cause of action are preempted by and governed exclusively by the Carmack Amendment.

Limitations

Pursuant to the Carmack Amendment, a carrier may not provide by rule, contract, or otherwise a period of less than two (2) years for bringing a civil action against it for violation of the agreed upon terms of the shipping agreement. 49 U.S.C. § 14706(e). In this case, the bill of lading as well as the applicable tariff provision provide that “suit must be instituted within two (2) years and one (1) day from the date when notice in writing is given by the carrier to the claimant that carrier has disallowed the claim or any part or parts thereof.”

The period for bringing an action commences from the date the carrier provides written notice of denial of “any part” of a shipper’s claim. Id. In order for the statute of limitations to commence, “a carrier’s notice of disallowance must be clear, final, and unequivocal.” Burtman Iron Works, Inc. v. Con-Way Trans. Serv., Inc., 97 F.Supp.2d 122, 127-28 (D.Mass.2000)(quoting Combustion Eng’g, Inc. v. Consolidated Rail Corp., 741 F.2d 533, 537 (2d Cir.1984)); see also Cordingley v. Allied Van Lines, Inc., 563 F.2d 960, 964 (9th Cir.1977); John Morrell & Co. v. Chicago, Rock Island & Pac. R.R. Co., 495 F.2d 331, 333 (7th Cir.1973); Universal Mfg. Corp. v. Assoc. Rigging & Hauling Corp., 773 F.Supp. 549, 551 (E.D.N.Y.1991); Cammack v. Trans World Airlines, Inc., 482 F.Supp. 914, 916 (W.D.Mo.1979); Burns v. Chicago, M., St. P. & P.R. Co., 100 F.Supp. 405, 408 (W.D.Mo.1951), aff’d 192 F.2d 472 (8th Cir.1951). A disallowance or denial is clear, final and unequivocal when “the only conclusion that can be rationally apprehended” is that the defendant refuses to allow any further advancement of some part of the plaintiff’s claim. Burns, 100 F.Supp. at 408. Settlement negotiations following a disallowance do not vitiate the rejection of the claim for the purpose of a limitation period. See Cordingley, 563 F.2d at 963-64 (“that a carrier has waived, or is estopped from asserting, a limitation period have been explicitly rejected by the Supreme Court”). The clarity of the notice of denial is “properly ascertained by viewing it in context” of the entire chain of correspondence between the parties. Id. at 964.

Defendant Eagle filed a general denial to Plaintiffs’ claim in Eagle’s Original Answer filed in the first state court case on August 6, 2001. In that suit, Plaintiff asserted identical claims stemming from the same course of events as those sought in this present action. While the requirement is that a carrier provide written notice that it intends to deny any part of a shipper’s claim, Eagle’s original answer denied the Plaintiff’s claim in its entirety. This denial when taken under the totality of the circumstances clearly, finally, and unequivocally served as a written notice of Eagle’s intent to disallow Plaintiffs’ claims. This present cause of action was commenced on May 20, 2004, which is more than two (2) years and (one) day after Eagle’s general denial filed in state court. Therefore, Plaintiffs’ cause of action is barred by the two-year and one day period of limitations.

Conclusion

Summary judgment will be entered for the Defendant.

It is SO ORDERED.

United States District Court,

D. South Carolina,

Charleston Division.

Jean Pierre ROSSETTI, Plaintiff,

v.

CHARLESTON FREIGHT STATION, INC., Defendant.

Feb. 1, 2005.

DUFFY, District Judge.

This matter is before the court upon Defendant Charleston Freight Station, Inc.’s Motion For Summary Judgment In Favor of Plaintiff In The Amount of $500 Based On The COGSA Package Limitation. For the reasons set forth herein, Defendant’s motion is denied.

BACKGROUND

Plaintiff Jean-Pierre Rossetti (“Rossetti”) contracted with American Lamprecht Transport, Inc. (“Lamprecht”) for the transportation of goods from Spartanburg, South Carolina to Geneva, Switzerland, with carriage by sea from Charleston, South Carolina to Le Havre, France. Lamprecht then contracted with Orient Overseas Container Lines, Ltd. (“OOCL”) for the ocean carriage portion of the transport. OOCL issued a bill of lading for the shipment which contained several provisions relating to The Carriage of Goods by Sea Act (“COGSA”) and its applicability. OOCL also retained Defendant Charleston Freight Station, Inc. (“Charleston Freight”) as a subcontractor. Charleston Freight is engaged in the business of cargo handling, container stuffing and stripping, segregation of cargo, intermodal transportation of cargo, warehousing of cargo, and U.S. Customs inspection of cargo.

On October 4, 2002, Charleston Freight took possession of the container bearing Rossetti’s goods. At some point that day or the next, Charleston Freight opened the container to perform a customs inspection. Rossetti contends that Charleston Freight unwrapped and unboxed many of his goods, and left them in this condition for shipment. Accordingly, Rossetti alleges, his goods were damaged in an amount in excess of $100,000 during shipment.

Rossetti’s complaint was originally filed in The Court of Common Pleas for the Ninth Judicial Circuit of South Carolina. On January 2, 2004, Charleston Freight removed the action to this court on the grounds that COGSA, 46 U.S.C. § 1300 et seq., provides the exclusive remedy for Rossetti. In its motion for summary judgment, Charleston Freight contends that COGSA limits Rossetti’s relief to $500, and that summary judgment should be granted in that amount in favor of Rossetti.

STANDARD OF REVIEW

To grant a motion for summary judgment, this court must find that “there is no genuine issue as to any material fact.” Fed.R.Civ.P. 56(c). The judge must not weigh the evidence, but rather must determine if there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). If no material factual disputes remain, then summary judgment should be granted against a party who fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which the party bears the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). All evidence should be viewed in the light most favorable to the non-moving party. Perini Corp. v. Perini Constr., Inc., 915 F.2d 121, 123-24 (4th Cir.1990).

“[W]here the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, disposition by summary judgment is appropriate.” Teamsters Joint Council No. 83 v. Centra, Inc., 947 F.2d 115, 119 (4th Cir.1991). Summary judgment is not “a disfavored procedural shortcut,” but an important mechanism for weeding out “claims and defenses [that] have no factual basis.” Celotex, 477 U.S. at 327, 106 S.Ct. 2548.

ANALYSIS

The bill of lading is a contract between the shipper and the carrier that “govern[s] the rights and obligations of the parties until delivery.” [FN1] Wemhoener Pressen v. Ceres Marine Terminals, Inc., 5 F.3d 734, 738 (4th Cir.1993). COGSA controls bills of lading that evidence a contract of carriage of goods by sea to or from the United States and in foreign trade. See 46 U.S.C. app. § 1300. As the parties acknowledge, COGSA contains a default limitation of liability for issuers of bills of lading, which provides in relevant part:

Amount of Liability; valuation of cargo–(5) Neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with the transportation of goods in an amount exceeding $500 per package lawful money of the United States, or in case of goods not shipped in packages, per customary freight unit, or the equivalent of that sum in other currency, unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading. This declaration, if embodied in the bill of lading, shall be prima facie evidence, but shall not be conclusive on the carrier.

By agreement between the carrier, master, or agent of the carrier, and the shipper another maximum amount than that mentioned in this paragraph may be fixed: Provided, that such maximum shall not be less than the figure above named. In no event shall the carrier be liable for more than the amount of damage actually sustained.

46 U.S.C. app. § 1304(5). The parties’ Bill of Lading incorporated this default limitation of liability, providing:

If COGSA applies then the liability of the Carrier shall not exceed US$500 per package or customary freight unit unless the value of the Goods has been declared on the face hereof with the consent of the Carrier and extra freight has been paid in which case Clause 23 shall apply and the declared value (if higher) shall be substituted for the limit and any partial loss or damage shall be adjusted pro rata on the basis of such declared value.

The parties agree that COGSA applies, and that no separate value of the goods was declared on the face of the bill of lading. Thus, the only issue in the matter sub judice is whether COGSA’s $500 package limitation applies to the one forty foot container in which Rossetti’s goods were shipped to limit Rossetti’s recovery to a total of $500, or whether the package limitation more liberally allows Rossetti to recover up to $500 for each of the one hundred and sixty nine pieces designated within that container. Rossetti’s position is that the latter proposition is correct, while Charleston Freight urges the court to apply the $500 package limitation to allow Rossetti to recover only $500 for the entire contents of the container.

As the parties acknowledge, this case is governed by Universal Leaf Tobacco Co. v. Companhia De Navegacao Maritima Netumar, 993 F.2d 414 (4th Cir.1993). In Universal, the Fourth Circuit expressly adopted the Second Circuit’s reasoning in Mitsui & Co. v. American Export Lines, Inc., 636 F.2d 807 (2d Cir.1981). The Mitsui court held that when a bill of lading discloses on its face what is inside the container, and those contents may reasonably be considered COGSA packages, then the container is not the COGSA package. 636 F.2d at 817 (“[A]t least when what would ordinarily be considered packages are shipped in a container supplied by the carrier and the number of such units is disclosed in the shipping documents, each of those units and not the container constitutes the ‘package’ referred to in s 4(5).”); see also Monica Textile Corp. v. S.S. Tana, 952 F.2d 636, 641 (2d Cir.1991) (noting that “in container cases [the court] must take a critical look at clauses purporting to define the container as the COGSA package.”).

Charleston Freight recognizes that, pursuant to Universal, the so-called “Mitsui–Monica ” rule applies and would dictate that the individual pieces be considered the package for purposes of COGSA’s package limitation. However, Charleston Freight argues, the Universal decision contains a caveat that applies to the situation at hand. In Universal, the Fourth Circuit referred to Monica for the proposition that when a bill of lading “refers to both containers and other units susceptible of being COGSA packages, it is inherently ambiguous.” Universal, 993 F.2d at 417 (quoting Monica, 952 F.2d at 642). Immediately thereafter, the Fourth Circuit warned that “[t]his ambiguity should be resolved against the carrier unless the parties have clearly and explicitly agreed to treat the container as the COGSA package.” Id. (emphasis added).

Charleston Freight argues that in the matter sub judice the parties clearly and explicitly agreed to treat the container as the package for purposes of COGSA’s limitation. In making this argument, Charleston Freight relies on language on the first page of the bill of lading which states

TOTAL NO. OF CONTAINERS/PACKAGES RECEIVED & ACKNOWLEDGED BY CARRIER FOR THE PURPOSE OF CALCULATION OF PACKAGE LIMITATION (IF APPLICABLE): 1 CONTAINER(S)/ PACKAGE(S).

(Def.Mem, Ex.A).

The court disagrees that this constitutes a clear and unequivocal agreement to treat the container as the COGSA package, as just above this section the bill of lading provides that “169 pieces” have been declared by the shipper. Id. In the court’s opinion, the language Charleston Freight relies on is simply non-bargained for boilerplate that courts have repeatedly refused to consider in applying COGSA’s package limitation. See, e.g., Universal, 993 F.2d at 417 (“Under the Mitsui–Monica rule, this specific reference to the quantity of cases trumps the more general ‘no. of pkgs.’ designation (which was also filled in by Universal’s agent) and the boilerplate language….”); St. Paul Fire & Marine Ins. v. Sea-Land Serv., Inc., 735 F.Supp. 129, 132 n. 4 (S.D.N.Y.1990) (“Allowing the carrier … to insert an essentially unbargained-for definition of ‘package’ in the bill of lading would effectively eliminate the protection COGSA was meant to afford shippers.”); Matsushita Electric Corp. v. S.S. Aegis Spirit, 414 F.Supp. 894, 905 (W.D.Wash.1976) (“Bills of lading, though, are hardly appropriate vehicles for such expressions of mutual intent, because their contractual terms are commonly the product of unilateral draftsmanship by the carrier incorporating largely self-serving provisions.”). Given that the bill of lading references the number of separate pieces on its face, the court finds that it is ambiguous and must be construed against Defendant Charleston Freight. See, e.g., Mitsui, 636 F.2d at 817; Smythgreyhound v. M/V Eurygenes, 666 F.2d 746, 752 (2d Cir.1981) ( “[Mitsui ] adopted a general rule that where the bill of lading discloses the contents of the container, then the container is not the COGSA package.”).

In reaching this ruling, the court is also persuaded by the wealth of authority finding that COGSA’s purposes would be frustrated by allowing carriers to limit their liability unduly. See, e.g., Binladen BSB Landscaping v. M/V Nedlloyd Rotterdam, 759 F.2d 1006, 1012-13 (2d Cir.1985) ( “classification of [the container] as a ‘package’ would violate the purpose of § 4(5) by permitting the carrier to limit its liability unduly”); Mitsui, 636 F.2d at 817 (noting that earlier precedent “acknowledg[ed] that treating the containers as packages … was precluded by the underlying purpose of [COGSA] § 4(5)”); Matsushita, 414 F.Supp. at 905 (“If carriers alone, or even carriers and shippers together, are allowed to christen something a ‘package’ which distorts or belies the plain meaning of this word …, then the liability floor becomes illusory….”). Accordingly, Defendant’s attempt to invoke the package limitation protection to limit its total liability to $500 must be rejected.

CONCLUSION

It is therefore ORDERED, for the foregoing reasons, that Defendant’s Motion for Summary Judgment in Favor of Plaintiff in the Amount of $500 Based on the COGSA Package Limitation is DENIED.

AND IT IS SO ORDERED.

FN1. While neither Plaintiff nor Defendant is a party to the bill of lading, no one disputes that the bill of lading governs this matter.