United States District Court, S.D. Florida,

Miami Division.

C.H. ROBINSON WORLDWIDE, INC., Plaintiff,

v.

COMPAÑIA LIBRE DE NAVEGACION (URUGUAY) S.A., Defendant.

No. 09-22693-CV.

 

June 16, 2010.

 

ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT

 

JAMES LAWRENCE KING, District Judge.

 

THIS CAUSE comes before the Court upon Defendant’s Motion for Summary Judgment (DE # 16). Plaintiff has responded (DE # 17), and Defendant has filed a Reply (DE # 20).

 

I. Legal Standard

 

Summary judgment is appropriate where the pleadings and supporting materials establish that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). If the record as a whole could not lead a rational fact-finder to find for the nonmoving party, there is no genuine issue of fact for trial. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

 

The moving party bears the burden of pointing to the part of the record that shows the absence of a genuine issue of material fact. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970); Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th Cir.1997). Once the moving party establishes the absence of a genuine issue of material fact, the burden shifts to the nonmoving party to go beyond the pleadings and designate “specific facts showing that there is a genuine issue for trial.” Celotex, 477 U.S. at 324; see also Chanel, Inc. v. Italian Activewear of Fla., Inc., 931 F.2d 1472, 1477 (11th Cir.1991) (holding that, to meet its burden, the nonmoving party must “come forward with significant, probative evidence demonstrating the existence of a triable issue of fact.”).

 

On a motion for summary judgment, the court must view the evidence and resolve all inferences in the light most favorable to the nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). However, a mere scintilla of evidence in support of the nonmoving party’s position is insufficient to defeat a motion for summary judgment. See id. at 252. If the evidence offered by the nonmoving party is merely colorable or is not significantly probative, summary judgment is proper. See id. at 249-50.

 

II. Discussion

 

The Court has examined the pleadings and the one affidavit that has been filed in this case (DE # 16-1) , and determines that the material facts are not in dispute. On or about August 7, 2008, Plaintiff entered into a contract of carriage with Defendant, wherein Defendant agreed to transport a shipment of pears to a named consignee, Agropel Agroindustrial Perazzoli LTDA. On August 21, 2008, the shipment was discharged from the vessel at the Port of Santos, Brazil, and turned over to the terminal operator at the port. On August 25, 2008, the shipment was inspected by an agent of the consignee, at which point it was discovered that the pears had frozen during shipment, rendering them unusable. A joint survey of the shipment was then conducted on September 13, 2008. This lawsuit was subsequently filed on September 10, 2009 (DE # 1).

 

The affidavit incorporates the bill of lading, a survey report, and several other documents, all of which the Court has considered.

 

Defendant argues that summary judgment should be granted because the one-year statute of limitations has expired. Indeed, this case is governed by the Carriage of Goods at Sea Act (COGSA), which states as follows: “In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered.” 46 U.S.C. App’x § 1303(6). The dispute, therefore, turns on the meaning of the word “delivery.” Defendant contends that delivery occurred on either August 21 (when the goods were discharged) or August 25 (when the consignee’s agent inspected the goods). Plaintiff, on the other hand, argues that delivery did not occur until September 13, when the joint survey of the goods was conducted.

 

There appears to be no binding precedent in this jurisdiction that explains the meaning of the word “delivery” as used in the COGSA statute. In other circuits, however, there appear to be two differing approaches. One approach, adopted by the Fifth Circuit, is that delivery only refers to the responsibilities of the carrier, and occurs when “the carrier places the cargo into the custody of whomever is legally entitled to receive it from the carrier.” Servicios-Expoarma, C.A. v. Industrial Maritime Carriers, 135 F .3d 984, 992 (5th Cir.1998). The second approach, followed by several district courts, is that delivery occurs when the consignee has been notified of the discharge of the goods and has had a reasonable opportunity to inspect them. See, e.g., Lithotip, CA v.. S.S Guarico, 569 F.Supp. 837, 840 (S.D.N.Y.19813); Sumitomo Corp. of Am. v. M/V Pennsylvania Rainbow, 1989 AMC 1467 (N.D.Cal.1989).

 

The Fifth Circuit’s decision contains the most recent and thorough discussion of this issue, and the Court finds it persuasive. Indeed, as noted by the court in Servicios, the word “delivery” was a deliberate choice by the drafters to indicate fulfillment of the carrier’s duties, rather than notice to the recipient. 134 F.3d at 992. The Servicios court further noted, and this Court agrees, that COGSA’s one-year limitations period is not drafted as a typical statute of limitations, which generally starts running when a cause of action “accrues,” which, in turn, typically involves a reasonable opportunity for notice to the injured party. Id. at 988. Rather, the choice of the term “delivery” indicates a clear intent to depart from typical statute-of-limitations principles. Thus, the Court will follow the Fifth Circuit’s analysis in the instant case.

 

Here, the record is undisputed that, on August 21, 2008, the shipment was discharged from the ship and delivered into the custody of the terminal operator, which was the entity legally entitled to receive the shipment. At that point, the carrier had fulfilled its legal duties and the clock on COGSA’s one-year limitations period began running That time limit expired on August 21, 2009, two and a half weeks before this lawsuit was filed.

 

Plaintiffs brief reference in a footnote to the “custom of the port” doctrine does not alter this analysis. The Fifth Circuit in Servicios acknowledged that, to determine who is the entity legally entitled to receive the goods, one may have to look to the “custom of the port.” Id. at 993. That is, each port may have a different practice of receiving shipments, and whatever specific action that must be taken by the carrier in order to fulfill its legal duty of delivery may differ from port to port. Here, however, it appears from the record that the carrier followed the proper procedure by placing the goods in the custody of the terminal operator, and Plaintiff has not suggested otherwise. Moreover, even if there were some allegation that a custom existed that would have caused the “delivery” to occur after the actual discharge of the goods to the terminal operator, Plaintiff has failed to support it with any evidence. In fact, Plaintiff has failed to provide any affidavits, documents, or deposition transcripts in support of its position. The record is therefore uncontradicted that Defendant delivered the goods in accordance with port customs.

 

Finally, even if the Court were to follow the second approach to the definition of “delivery,” the same result would be reached. Indeed, the second upproach dictates that delivery occurs when the consignee has been notified of the discharge of the goods and has had a reasonable opportunity to inspect them. See Lithotip, 569 F. Supp, at 840. Here, the record is uncontradicted that an agent for the consignee actually inspected the goods on August 25, 2008, at which point the damage was discovered. Thus, even under the second approach, COGSA’s one-year limitation period began running on August 25 when the consignee had actual notice of the damage to the shipment, and would have expired on August 25, 2009, two weeks before this lawsuit was filed. Therefore, Plaintiff cannot prevail under either theory.

 

III. Conclusion

 

Accordingly, after careful consideration of all the materials and the Court being otherwise fully advised, it is ORDERED, ADJUDGED, and DECREED that:

 

1. Defendant’s Motion for Summary Judgment (DE # 16) is hereby GRANTED.

 

2. All pretrial dates and deadlines are hereby CANCELLED.

 

3. The Clerk shall CLOSE this case.

 

DONE AND ORDERED.

Court of Appeals of Michigan.

HOME-OWNERS INSURANCE COMPANY, Plaintiff-Appellee/Cross-Appellant,

v.

Imad BEYDOUN, Eddie Trucking, Inc., Unknown/John Doe Trucking Company, Unknown/John Doe Insurance Company and Lexington Insurance Company, Defendants,

and

Reserve Transportation Services, Inc., Roadlink USA National, L.L.C., Roadlink USA Midwest, L.L.C., and Ace American Insurance Company, Defendants-Appellants,

and

Clearwater Insurance Company and Great American Insurance Company, Defendants-Appellees/Cross-Appellees.

Docket No. 290227.

 

June 15, 2010.

 

Wayne Circuit Court; LC No. 08-110532-NF.

 

Before: METER, P.J., and MURRAY and BECKERING, JJ.

 

PER CURIAM.

 

In this insurance priority case, defendants, Reserve Transportation Services, Inc., Roadlink USA National, L.L.C., Roadlink USA Midwest, L.L.C., (collectively “Roadlink”) and Ace American Insurance Company, appeal as of right the circuit court’s order finding Ace American first in priority to pay first-party personal injury protection (PIP) benefits. Plaintiff, Home-Owners Insurance Company, cross appeals this same order insofar as it also found defendants, Clearwater Insurance Company and Great American Insurance Company, exempt from liability under their policies. We affirm.

 

I. BACKGROUND

 

On April 27, 2007, Nemr Dakroub was injured in a three-vehicle accident while driving a semi-tractor owned by Eddie Trucking and leased to Reserve Transportation. The lease was for an indefinite period of greater than 30 days and granted Reserve Transportation, which the lease identified as an independent contractor, exclusive control over the vehicle during the lease period. The lease additionally required Reserve Transportation to obtain and pay for all insurance for the operator or driver of the tractor. The traffic incident report and Dakroub’s logbook indicated that Dakroub was driving for Roadlink National, Reserve Transportation’s successor in interest, at the time of his accident.

 

Dakroub subsequently claimed first-party PIP benefits from Home-Owners, his personal no-fault carrier, which in turn paid PIP benefits before filing the instant suit against various other insurers and their insureds to determine the priority of benefits due to Dakroub. In its suit, Home-Owners named as defendants Eddie Trucking/Beydoun, the owner/registrant of the semi-tractor and its “bobtail” insurers , Clearwater Insurance Company and Great American Insurance Company. Reserve Transportation, Roadlink, and Ace American were also named in the action.

 

“Bobtail” insurers issue policies at a reduced premium to cover tractors without a trailer.

 

Shortly after filing suit, Home-Owners filed a motion for summary disposition arguing that because Dakroub was an employee of Roadlink, Ace American as the employer’s insurer was first in priority under MCL 500.3114(3). Roadlink contested the motion on the grounds that Dakroub was an independent contractor. The trial court denied the motion without prejudice to allow for further discovery. Following further discovery, Home-Owners renewed its motion, this time adding that Dakroub was an employee under 49 CFR 390.5  as adopted by MCL 480.11a of the Motor Carrier Safety Act (MCSA), and therefore Ace American was first in priority. Alternatively, Home-Owners asserted that Clearwater or Great American was liable as the insurer of Eddie Trucking/Beydoun, the owner/registrant. Ace American responded that Dakroub’s status as an independent contractor triggered an exclusion under its insurance policy thereby rendering MCL 500.3114(3) inapplicable and that federal regulations were also inapplicable as they were enacted to govern third-party benefits. Clearwater concurred that Ace American was first in priority, but claimed its “bobtail” policy precluded its liability.

 

Under MCL 500.3101(h)(ii), an owner includes an entity with exclusive use of a motor vehicle for more than 30 days.

 

Independent contractors while in the course of operating a commercial motor vehicle are considered employees under that regulation. 49 CFR 390.5.

 

After hearing arguments, the trial court found that under the economic reality test Dakroub was an employee of Roadlink given Roadlink’s control over and direction of Dakroub and because Dakroub carried and provided the insurance issued by Roadlink to police following the accident. Thus, having characterized the positions taken by Ace American and Roadlink as “fictions” designed to exonerate their liability, the court concluded that Ace American was first in priority under MCL 500.3114(3). Finally, Clearwater and Great American’s “bobtail” policies were found to exclude them from liability. Accordingly, on January 20, 2009, an order was entered granting Home-Owners’s motion for summary disposition. The instant appeal and cross appeal ensued.

 

II. ANALYSIS

 

Appellants claim that the court erred in finding Ace American first in priority where under the economic reality test Dakroub’s status was that of independent contractor rather than employee. Summary disposition rulings are reviewed de novo. Dressel v. Ameribank, 468 Mich. 557, 561; 664 NW2d 151 (2003). A motion for summary disposition pursuant to MCR 2.116(C)(10) should be granted when the moving party is entitled to judgment as a matter of law because there is no genuine issue of material fact. Maiden v. Rozwood, 461 Mich. 109, 120; 597 NW2d 817 (1999). A genuine issue of material fact exists when reasonable minds could differ after drawing reasonable inferences from the record. West v. Gen. Motors Corp., 469 Mich. 177, 183; 665 NW2d 468 (2003). In reviewing this motion, the court must consider the pleadings, affidavits, depositions, admissions, and other documentary evidence and construe them in light most favorable to the nonmoving party. Corley v. Detroit Bd. of Ed., 470 Mich. 274, 278; 681 NW2d 342 (2004). Similarly, the application of the legal standards, such as the economic reality test, is a question of law subject to de novo review. Walker v. Dep’t of Social Services, 428 Mich. 389, 401 (RILEY, C.J., dissenting); 410 NW2d 698 (1987), citing Askew v. Macomber, 398 Mich. 212, 217; 247 NW2d 288 (1976).

 

Priority of insurers for payment of PIP benefits is governed by MCL 500.3114. The usual rule, applicable when the claimant was injured while in a noncommercial vehicle, is that one looks to his own insurance company for such coverage. MCL 500.3114(1). However, MCL 500.3114(3) provides that an employee injured “while an occupant of a motor vehicle owned or registered by the employer, shall receive personal protection insurance benefits … from the insurer of the furnished vehicle.”

 

To determine the existence of an employment relationship under the Michigan no-fault act, we apply the economic reality test. Parham v. Preferred Risk Mut. Ins. Co., 124 Mich.App 618, 624; 335 NW2d 106 (1983). The following non-exclusive list of factors should be considered under this test: “(1) control of a worker’s duties, (2) payment of wages, (3) right to hire, fire and discipline, and (4) the performance of the duties as an integral part of the employer’s business towards the accomplishment of a common goal.”   Mantei v. Michigan Pub. School Employees Retirement Sys., 256 Mich.App 64, 78-79; 663 NW2d 486 (2003) (citations omitted). In applying this test, “[w]eight should be given to those factors that most favorably effectuate the objectives of [MCL 500.3114(3) ].” Id. at 79. Thus, we proceed mindful that “cases interpreting that section have given it a broad reading designed to allocate the cost of injuries resulting from use of business vehicles to the business involved through the premiums it pays for insurance.” Celina Mut. Ins. Co. v. Lake States Ins. Co ., 452 Mich. 84, 89; 549 NW2d 834 (1996).

 

It is undisputed that Roadlink was the owner of the vehicle having leased it over 30 days. See MCL 500.3101(h)(ii)

 

The trial court did not err in finding that Dakroub was an employee of Roadlink under the economic reality test. Roadlink memoranda carried and signed by Dakroub strongly point to Roadlink’s control over him. In particular, the documents expressly reserve to Roadlink the right to fire and discipline Dakroub should he fail to comply with Roadlink’s regulations regarding passengers, who were expressly excluded from coverage under Roadlink’s policy. Consistent with Roadlink’s memoranda, Roadlink’s lease also indicated that Roadlink had exclusive control over its drivers, that any discipline or discharge was at Roadlink’s sole discretion, and additionally noted that Roadlink was required to insure its drivers. Moreover, that Dakroub’s log books were recorded on Roadlink’s forms betrays appellants’ argument that Dakroub’s duties did not form an integral part of Roadlink’s business. On this score, Dakroub elaborated that Roadlink essentially instructed him on his whereabouts. Even the insurance Dakroub provided to police following the accident was the Ace American policy issued to Roadlink, and the results of Dakroub’s alcohol test following the accident-upon which Roadlink was identified as Dakroub’s employer-were sent to Roadlink. In view of these circumstances, it would contravene the objectives of MCL 500.3114(3) as well as a broad reading of that section to conclude Dakroub was not an employee.

 

In reaching this decision, we are cognizant that Roadlink did not pay Dakroub directly, that the vehicle lease expressly classifies drivers as independent contractors, and that Roadlink did not technically furnish the vehicle to Dakroub. However, to accord weight to such formalities would exalt form over substance and give disproportionate weight to facts that would lend a narrow reading to MCL 500.3114(3).

 

Before concluding, we note that Home-Owners, Clearwater, and Great American argue at length that the definition of employee provided in 49 CFR 390.5 should govern our analysis because that section was expressly adopted by MCL 480.11a of the MCSA. However, we decline to construe the no-fault act and the MCSA in pari materia to reach “one harmonious outcome” where the two acts seek very different goals  and Michigan courts since Parham have consistently applied the economic reality test in resolving employee status under MCL 500.3114(3). See, e.g., Mantei, 256 Mich. at 79; Celina Mut. Ins. Co., 452 Mich. at 89; Citizens Ins. Co. v. Automobile Club Ins. Ass’n, 179 Mich.App 461, 465; 446 NW2d 482 (1989). We would add that our conclusion is consistent with our Supreme Court’s reversal of this Court’s holding in Dep’t of Transportation v. Initial Transport, Inc., 276 Mich.App 318, 325-329; 740 NW2d 720 (2007), that construed the MCSA and the federal regulations incorporated therein in pari materia with the property damages cap in the no-fault act. Dep’t of Transportation v. Initial Transport, Inc., 481 Mich. 862, 862-863; 748 NW2d 239 (2008). Notwithstanding, for the reasons already stated, the trial court correctly concluded that Dakroub was an employee of Roadlink and that Ace American was therefore first in priority.

 

The goal of the no-fault act is to provide victims with prompt reparation for their losses, Rednour v. Hastings Mut. Ins. Co., 468 Mich. 241, 246; 661 NW2d 562 (2003), whereas the MCSA is a regulatory scheme imposing minimum amounts of financial responsibility and civil penalties for certain motor carriers to promote highway safety, Dep’t of Transportation v. Initial Transport, Inc., 276 Mich.App 318, 334-341 (WHITBECK, C.J., dissenting); 740 NW2d 720 (2007).

 

In light of this holding, Home-Owners’s alternative claim on cross-appeal challenging the court’s ruling that Clearwater and Great American’s “bobtail” policies precluded their liability is moot, and we need not address it.

 

Affirmed.