Bits & Pieces

Cardinal Contracting, LLC v. Landstar Logistics, Inc.

Court of Appeals of Indiana.



LANDSTAR LOGISTICS, INC., Appellee-Defendant.

No. 49A02-0902-CV-187.

Sept. 18, 2009.


NAJAM, Judge.


Cardinal Contracting, LLC (“Cardinal”), appeals from the trial court’s judgment in favor of Landstar Logistics, Inc. (“Landstar”), following a bench trial. Cardinal raises four issues for our review, which we restate as follows:

1. Whether the trial court abused its discretion when it refused to admit into evidence proof of Landstar’s insurance coverage.

2. Whether the trial court’s judgment is clearly erroneous.

We affirm.


Cardinal is an industrial contractor specializing in the transportation of auto industry manufacturing equipment. Landstar is a transportation broker that matches entities in need of transportation services with transportation-service providers. That is, Landstar “matches providers of various types [of transportation] to meet [Landstar’s] customers’ shipping requirements.” Appellee’s App. at 23. Landstar does not own assets, including tractor-trailers.

In 2003, DaimlerChrysler (“Chrysler”) hired Cardinal to move a “grinder” and other large manufacturing equipment from New Castle to Kokomo. Appellant’s App. at 46. According to the Chrysler-Cardinal contract, Cardinal was responsible for Chrysler’s equipment while it was in Cardinal’s control. Cardinal did not have enough of its own tractor-trailers to complete the job, and so it orally contracted with Landstar to obtain additional transportation equipment. Landstar, in turn, hired Vogel Trucking, Inc. (“Vogel”) as the third-party carrier and informed Cardinal of that decision. Cardinal did not object. Liability in the event of damage to the equipment during transportation was not discussed by either party in the creation of the Cardinal-Landstar contract.

On August 5, 2003, Cardinal and Vogel tractor-trailers arrived at Chrysler’s New Castle plant to load the equipment for transportation. Vogel’s trucks were clearly marked with Vogel’s company name. Cardinal loaded the equipment onto both sets of trailers. Before doing so, however, Cardinal was supposed to drain the equipment of all fluids, such as oil and hydraulic fluid, but Cardinal did not do so. As a result, while in route fluid leaked from the grinder and caused the grinder to shift on the Vogel trailer. The grinder fell off the trailer, causing damage in excess of $269,000.

Cardinal paid Chrysler for the damage caused to the grinder, but then Cardinal filed suit against Landstar and Vogel. On May 12, 2008, the parties agreed to dismiss Vogel from the action. The matter proceeded to a bench trial, and on January 30, 2009, the court entered findings of fact and conclusions thereon in favor of Landstar. This appeal ensued.


At the outset, we note that Cardinal’s arguments on appeal rely upon a version of the facts unfavorable to the trial court’s judgment. The manner in which Cardinal states the facts does not comply with the basic rule of appellate practice that the facts are to be considered most favorable to the judgment. As discussed in greater detail below, notwithstanding Cardinal’s statement of facts, on appeal we are obliged to review the record in the light most favorable to the court’s rulings. See Yoon v. Yoon, 711 N.E.2d 1265, 1268 (Ind.1999) (review of Trial Rule 52 judgments); Cole v. State, 878 N.E.2d 882, 885 (Ind.Ct.App.2007) (review of the trial court’s admission of evidence).

Issue One: Evidence Rule 411

The first issue on appeal is whether the trial court abused its discretion when it prohibited Cardinal from entering into evidence its Exhibit 1, a certificate of insurance that showed that Landstar held $100,000 in “Motor Truck Cargo” coverage. Appellant’s App. at 158. Our standard of review of a trial court’s findings as to the admissibility of evidence is an abuse of discretion. Speybroeck v. State, 875 N.E.2d 813, 818 (Ind.Ct.App.2007). A trial court abuses its discretion only if its decision is clearly against the logic and effect of the facts and circumstances before the court. Id.

Here, Cardinal offered into evidence Landstar’s certificate of insurance. Landstar objected under Indiana Evidence Rule 411, and the trial court sustained those objections. That Rule provides as follows:

Evidence that a person was or was not insured against liability is not admissible upon the issue whether the person acted negligently or otherwise wrongfully. This rule does not require the exclusion of evidence of insurance against liability when offered for another purpose, such as proof of agency, ownership, or control, or bias or prejudice of a witness.

Ind. Evidence Rule 411. Cardinal argues on appeal that the trial court abused its discretion in refusing to admit the insurance evidence because Cardinal was offering the certificate as proof that Landstar had agency, ownership, or control over the transported cargo. That is, Cardinal contends that, if Landstar was simply in the business of brokering transportation and not providing its own transportation services, Landstar would not have had cargo insurance.

Cardinal disregards the nature of Landstar’s insurance policy. John O’Dell, Landstar’s Director of Claims, testified that Landstar’s cargo insurance policy was a “contingent” policy. Transcript at 79. That is, Landstar required its third-party carriers to have at least $100,000 in cargo coverage, and in the event that the carrier could not provide proof of the coverage required, or if the carrier wanted excess coverage, Landstar would “provide on behalf of [the] carrier coverage under [Landstar’s] contingent cargo program up to … $900,000.” Id. Nothing about that coverage indicates Landstar’s agency, ownership, or control over the transported Chrysler equipment. Rather, the coverage was for the benefit of the carrier. And, in light of O’Dell’s testimony, the admission of the certificate of insurance would have been merely cumulative. See Witte v. Mundy ex rel. Mundy, 820 N.E.2d 128, 135 (Ind.2005) (defining cumulative evidence as evidence that supports a fact established by the existing evidence). Thus, the trial court did not abuse its discretion in denying Cardinal’s attempts to offer Landstar’s certificate of insurance into evidence.

Cardinal objected to O’Dell’s testimony because Cardinal had not been permitted to introduce the certificate of insurance into evidence. The court overruled Cardinal’s objection, stating that Landstar had opened the door to the admissibility of the evidence by raising the issue in the direct examination of its own witness, and Cardinal does not challenge that ruling on appeal.

Issue Two: Trial Court’s Judgment

Cardinal also asserts on appeal that Landstar breached their contract. The trial court entered findings of fact and conclusions thereon pursuant to Indiana Trial Rule 52(A). We may not set aside the findings or judgment unless they are clearly erroneous. Menard, Inc. v. Dage-MTI, Inc., 726 N.E.2d 1206, 1210 (Ind.2000). First, we consider whether the evidence supports the factual findings. Id. Second, we consider whether the findings support the judgment. Id. “Findings are clearly erroneous only when the record contains no facts to support them either directly or by inference.” Quillen v. Quillen, 671 N.E.2d 98, 102 (Ind.1996). A judgment is clearly erroneous if it relies on an incorrect legal standard. Menard, 726 N.E.2d at 1210.

In conducting our review, we give due regard to the trial court’s ability to assess the credibility of witnesses. Id. While we defer substantially to findings of fact, we do not do so to conclusions of law. Id. We do not reweigh the evidence; rather, we consider the evidence most favorable to the judgment with all reasonable inferences drawn in favor of the judgment. Yoon, 711 N.E.2d at 1268.

We note that the trial court entered its findings and conclusions by accepting verbatim Landstar’s proposed findings and conclusions. “This practice weakens our confidence as an appellate court that the findings are the result of considered judgment by the trial court.” Cook v. Whitsell-Sherman, 796 N.E.2d 271, 273 n. 1 (Ind.2003).

Here, Cardinal sued Landstar on the theory that Landstar breached its contractual obligations when the grinder was not safely transported and when Landstar refused to pay Cardinal the cost to repair the damaged grinder. To maintain an action for breach of contract, a party must show three elements: the existence of a contract, the defendant’s breach of that contract, and damages arising from that breach. U.S. Fid. & Guar. Ins. Co. v. Hartson-Kennedy Cabinet Top Co., 857 N.E.2d 1033, 1039 (Ind.Ct.App .2006). A party breaches a contract if it fails to perform all of its contractual obligations. See Strodtman v. Integrity Builders, Inc., 668 N.E.2d 279, 282 (Ind.Ct.App.1996), trans. denied.

The trial court specifically found that Landstar “brokers the transportation of freight through third party providers for shipment,” that Landstar “does not perform transportation services other than as a broker,” and that Cardinal contracted with Landstar to “arrange for the transportation services [Cardinal] requested.” Appellant’s App. at 11-12. In light of those findings, the court concluded that Landstar’s only contractual obligation to Cardinal was “to broker the transportation of machinery owned by [Chrysler] from New Castle … to Kokomo,” which Landstar did when it hired Vogel. Id. at 14. That is, the court expressly found that Landstar performed all of its obligations under its contract with Cardinal and, therefore, that Landstar did not breach the contract.

On appeal, Cardinal contends that the trial court’s judgment is clearly erroneous for two interrelated reasons. First, Cardinal argues that it “proved that the contract obligated Landstar to safely move … the grinder.” Appellant’s Brief at 13. Second, Cardinal states that it “proved that Landstar breached its contract … by showing that a truck and driver brought to the Chrysler job by Landstar caused damage to the grinder.” Id. at 14. Cardinal also avers that the trial court misapplied concepts of a principal-agent relationship and the law of negligence.

In support of its position that it “proved” that Landstar both accepted responsibility for the safe transportation of the equipment and used its own trucks and drivers to move that equipment, Cardinal emphasizes the testimony of its witnesses. First, Rick Colburn, Cardinal’s Vice President and 2003 Project Manager, testified that “[i]t was understood in the agreement with Landstar that the equipment would be moved safely,” although that understanding was not actually discussed, id. at 5; that Landstar had its own trucks that it used to transport equipment; that Landstar used its own trucks in transporting Chrysler’s equipment; and that Landstar breached its contract in not providing for the safe transportation of the grinder. Colburn also testified that, after the accident, a Landstar representative told him that it would accept responsibility for the damages. In addition, Jeff Trent, a job foreman for Cardinal, testified that he saw Landstar-branded trucks at Chrysler’s New Castle plant. Cardinal also notes that Landstar has not sought to enforce payment of its bill under the Cardinal-Landstar contract, which, Cardinal asserts, amounts to an admission by Landstar to the alleged breach of contract. Finally, Cardinal notes that it is undisputed that it satisfied its own obligations under the Cardinal-Landstar agreement.

Cardinal also emphasizes that Landstar had insurance coverage, but, as discussed above, that insurance does not indicate Landstar’s agency, ownership, or control over the cargo.

Cardinal contends that Len Shook, an agent for Landstar, admitted that Landstar had accepted responsibility for the cargo. According to Cardinal, when informed by Colburn of the accident Shook stated “We’ll take care of it” and “That’s why we have insurance.” Appellant’s Brief at 6. But even accepting as true Cardinal’s interpretation of the record, Shook’s statements do not amount to an acceptance of agency, ownership, or control, nor are they equivalent to an admission that the Cardinal-Landstar contract was anything other than an agreement for Landstar to broker transportation services for Cardinal. Further, Shook’s purported after-the-fact statements cannot have caused Cardinal to detrimentally rely on them such that Cardinal might have a claim of promissory estoppel against Landstar. See Brown v. Branch, 758 N.E.2d 48, 52 (Ind.2001).

As we have noted, Cardinal’s emphasis on the evidence most favorable to its position is contrary to this court’s standard of review. We must review the record most favorable to the trial court’s judgment, and we must not reweigh the evidence as Cardinal suggests. See Yoon, 711 N.E.2d at 1268. Under our standard of review, the trial court’s judgment is not clearly erroneous. The court’s findings are supported by evidence from the trial. Specifically, O’Dell testified that Landstar does not own any assets and that Landstar is only in the business of brokering transportation services, not providing those services directly. The evidence also demonstrated that Cardinal and Landstar had an oral agreement; that the terms safe transportation, indemnification, and liability were not a part of that agreement; and that Landstar brokered Vogel to aid Cardinal in the transportation of Chrysler’s equipment.

It light of its findings, the trial court concluded that Landstar “performed all contractual obligations” and “did not breach its contract” with Cardinal. Appellant’s App. at 14. We must agree. Landstar’s obligations under its contract with Cardinal were, again, only to find a third-party provider of transportation services to assist Cardinal in relocating Chrysler’s equipment. By hiring Vogel, Landstar did just that. And Cardinal does not suggest that Landstar failed to timely provide the equipment needed to the New Castle site. Therefore, Landstar fulfilled its contractual obligations. Having fulfilled all of its contractual obligations, Landstar cannot be liable for the subsequent damage to the grinder under a breach-of-contract theory. See Strodtman, 668 N.E.2d at 282.

Although the trial court found that safe transportation of the equipment was not a part of the Cardinal-Landstar contract, Cardinal argues on appeal that Indiana law requires that that term be read into the contract. Specifically, Cardinal states that “a contract for services always contains an implied duty ‘to do the work skillfully, carefully, and in a workmanlike manner.’ “ Appellant’s Brief at 13 (quoting Homer v. Burman, 743 N.E.2d 1144, 1147 (Ind .Ct.App.2001)). But that argument assumes that Cardinal retained Landstar to transport the equipment. As discussed above, here, Landstar is not a provider but a broker.

Cardinal also asserts that Vogel was acting as Landstar’s agent, and, therefore, that Landstar is liable for the damage that occurred during Vogel’s transportation of the equipment. But Cardinal’s argument is misplaced. Insofar as agency principles are involved here, it is Landstar, the broker, that is the agent of both Cardinal and Vogel. See Black’s Law Dictionary 7th ed. 187 (defining “broker” as “[a]n agent who acts as an intermediary or negotiator”). In any event, Cardinal cites no evidence in the record that supports its assumption that Landstar and Vogel were acting, respectively, as principal and agent. Cardinal has waived this argument. See Ind. Appellate Rule 46(A)(8)(a).

Finally, Cardinal states that the trial court committed reversible error “when it admitted evidence at trial, and then later made findings of fact and conclusions [thereon], on the concepts of the fault of non-parties and the comparative fault of Cardinal,” among other things. Appellant’s Brief at 23. The trial court entered findings and conclusions regarding how Cardinal’s conduct contributed to the accident. See, e.g., Appellant’s App. at 13-14 (trial court’s Finding No. 14 and Conclusion No. 7). We agree that these findings, which sound in negligence, are inconsistent with the trial court’s pre-trial determination that “[n]egligence is no part of this action.” Id. at 196. But the trial court expressly stated that those findings and conclusions were in the “[a]lternative[ ]”  to the court’s principal conclusion that Landstar did not breach its contract with Cardinal. Thus, those findings and conclusions are superfluous and cannot be fatal to the judgment. See Curley v. Lake County Bd. of Elections & Registration, 896 N.E.2d 24, 32 (Ind.Ct.App.2008), trans. denied.

The trial court entered ten alternative theories justifying its ruling in favor of Landstar.


In sum, the trial court did not commit reversible error in denying Cardinal’s attempt to admit Landstar’s certificate of insurance into evidence. Neither is the court’s judgment for Landstar clearly erroneous. Thus, we affirm the court’s order in all respects.


KIRSCH, J., and BARNES, J., concur.

Mark VII Transportation v. Responsive Trucking

Court of Appeals of Tennessee.




No. W2009-00143-COA-R3-CV.

July 22, 2009 Session.

Sept. 18, 2009.

Direct Appeal from the Circuit Court for Shelby County, No. CT-002165-02; James F. Russell, Judge.

Allan B. Thorp, Memphis, Tennessee, for the Appellant, Mark VII Transportation Co. Inc.

Bill M. Wade, Memphis, Tennessee, for the Appellee, Responsive Trucking, Inc.

J. STEVEN STAFFORD, J., delivered the opinion of the court, in which ALAN E. HIGHERS, P.J., W.S., and HOLLY M. KIRBY, J., joined.



This action arises from an agreement between Appellant Mark VII Transportation Co. and Appellee Responsive Trucking, Inc. Appellant filed suit seeking to recover for breach of contract based on the Carmack Amendment standard of liability adopted by the parties in their agreement and for indemnification as allowed by their agreement. Both parties moved for summary judgment. The trial court denied Appellant’s motion for summary judgment and granted Appellee’s motion for summary judgment. Finding material issues of fact in dispute, we affirm in part and reverse in part.


Appellant, Mark VII Transportation Co. (“Mark VII”), is a motor carrier property broker that arranges for the transportation of property for its customer shippers. Mark VII is not a motor carrier itself; instead, it selects carriers and routes for the shipments of its customers. Appellee Responsive Trucking, Inc. (“Responsive”) was one of the motor carriers that Mark VII utilized.

Mark VII and Responsive were parties to an agreement entitled “Contract Motor Carrier Agreement.” (“the Agreement”). It included the following provisions which are relevant to this dispute:


The Carrier’s liability for loss or damage to cargo transported shall commence upon loading and continue until unloading at destination or at any intermediate point of drop shipment. While this Agreement covers contract carriage, CARRIER agrees it will accept as a standard of liability that standard imposed on common carriers at common law and the provisions of 49 U.S.C. Section 11701 and 10730 (the Carmack Amendment) subject to the regulations of the ICC at 49 CFR Part 1005.


(b) CARRIER shall defend, indemnify, and hold MARK VII harmless from and against any and all claims, lawsuits, damage costs, expenses, and penalties for damage to the Goods of MARK VII’s customer while under the care, custody, or control of CARRIER or damage to the Vehicles in which the Goods are transported, regardless of the cause thereof, including the negligence of MARK VII’s customer.

Hasbro/Milton Bradley (“Hasbro”) is a manufacturer of games and toys. It ships toys from its factory in East Long Meadow, Massachusetts to various retailers throughout the United States. Mark VII arranged for the transportation of toys with Responsive as the initial carrier

Between June 2000 and November 2002, many of those shipments were allegedly short shipped, meaning that not all the toys that were designated for shipping were delivered at the destination. Responsive’s agents or employees loaded each of the shipments at issue. The parties dispute which party, if any, had the responsibility to count the items delivered for shipping. However, Responsive did not have anyone count the items shipped. In each transaction, Responsive’s employee would acknowledge the receipt of a specified quantity of toys by signing the bill of lading for each shipment. Once the shipments were loaded, the trailers were then sealed and a guard would check the seal upon leaving the Hasbro property. All the seals remained intact until the toys were delivered. Cynthia Herring, vice president of Responsive testified that the shortages could have occurred during loading or unloading, either before the seal was placed on the trailer or after it was removed.

Hasbro made a claim against Mark VII for each of the short shipments. Based on the agreement, Mark VII made a claim against Responsive for the short shipments. Responsive refused to pay any of the claims contending that there was no proof that the loss occurred while the toys were under its care, custody or control. Mark VII paid Hasbro $129,627.07 and filed suit against Responsive.

Both Mark VII and Responsive filed motions for summary judgment. The trial court denied Mark VII’s motion for summary judgment finding that material issues of fact existed. The trial court granted Responsive’s motion for summary judgment. Mark VII appeals the grant of summary judgment to Responsive and the denial of its motion for summary judgment.

Issues Presented:

Mark VII raises the following issues for our review:

1. Is Responsive liable for the short shipments under the standard of the Carmack Amendment?

2. Is Responsive liable for the claims for breach of its contract to indemnify?

3. Did the trial court err in granting Responsive’s motion for summary judgment?

4. Did the trial court err in denying Mark VII’s motion for summary judgment?

Law and Analysis


Standard of Review for Summary Judgment

A trial court’s decision to grant a motion for summary judgment presents a question of law. Our review is therefore de novo with no presumption of correctness afforded to the trial court’s determination. Bain v. Wells, 936 S.W.2d 618, 622 (Tenn.1997). In evaluating the trial court’s decision to grant summary judgment, we review the evidence in the light most favorable to the nonmoving party and draw all reasonable inferences in the nonmoving party’s favor. Mooney v. Sneed, 30 S.W.3d 304, 305-06 (Tenn.2000); Bryd v. Hall, 847 S.W.2d 208, 210-11 (Tenn.1993).

When a motion for summary judgment is made, the moving party has the burden of showing that “there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law.” Tenn. R. Civ. P. 56.04. If the moving party’s motion is properly supported, “The burden of production then shifts to the nonmoving party to show that a genuine issue of material fact exists.” Hannan v. Alltel Publ’g Co., 270 S.W.3d 1, 5 (Tenn.2008) (citing Bryd, 847 S.W.2d at 215). In order to shift the burden of production, “the moving party must either affirmatively negate an essential element of the nonmoving party’s claim or establish an affirmative defense.”   Hannan, 270 S.W.3d at 5. However, “[i]t is not enough for the moving party to challenge the nonmoving party to ‘put up or shutup’ or even to cast doubt on a party’s ability to prove an element at trial.” Id. at 8. Instead, the moving party has the more difficult task of demonstrating “that the nonmoving party cannot establish an essential element of the claim at trial.” Id. at 7.


Contract Interpretation

The interpretation of a contract is a question of law and not a question of fact. Pitt v. Tyree Org., Ltd., 90 S.W.3d 244, 252 (Tenn.Ct.App.2002). When interpreting a contract, the court’s aim is to ascertain and give effect to the parties’ intent. Harrell v. Minnesota Mut. Life Ins., 937 S.W.2d 809 (Tenn.1996). Each provision must be construed in light of the entire agreement, and the language in each provision must be given its natural and ordinary meaning. Buettner v. Buettner, 183 S.W.3d 354, 359 (Tenn.Ct.App.2005). When a contract contains both general and specific provisions relating to the same thing, the specific provisions control. Where uncertainty exists between general and specific provisions, the specific provisions will usually qualify the general. Cocke County Bd. V. Newport Utilities Bd., 690 S.W.2d 231, 237 (Tenn.1985) (citing 17 Am.Jur.2d Contracts § 270 (1964)). If a contract is unambiguous, a court must interpret it as written and not in accordance with a party’s unexpressed intent. Pitt, 90 S.W.3d at 252.

Responsive contends that the agreement limits Mark VII’s potential recovery to indemnification under paragraph 13 because Mark VII has already paid Hasbro’s claims. Mark VII asserts that it is entitled to seek recovery under either paragraph 10 or paragraph 13 of the agreement, i.e. either for breach of contract or for indemnification. The trial court agreed with Mark VII’s position but ultimately ruled that Mark VII failed to prove its claim under either provision.

Responsive also argues that the paragraphs are in conflict and therefore the more specific (paragraph 13) must govern. The agreement, however, does not limit Mark VII to an exclusive remedy. Furthermore, the two provisions are not in conflict. Paragraph 10 merely sets forth the standard of liability agreed to by the parties. Mark VII has alleged that the toys were lost by Responsive and paragraph 10 provides a remedy for that situation. The agreement also requires Responsive to indemnify Mark VII for claims related to the toys shipped. Therefore, Mark VII may assert a claim under both paragraph 10 and 13.


Carmack Amendment Standard of Liability

Mark VII relies on paragraph 10 of the contract as the basis for its claim against Responsive for the value of the lost toys. Paragraph 10 states that the Carmack Amendment, 49 U.S.C. § 14706 provides the standard of liability by which the parties conduct would be judged. The contract further provides that liability for loss or damage to cargo “shall commence upon loading and continue until unloading at destination.” The trial court found that Mark VII could not establish the elements of a claim under the Carmack Amendment standard of liability.

Responsive initially argues that the Carmack Amendment is not applicable. It asserts that because Mark VII is a “broker” and not a “shipper” the Carmack Amendment is inapplicable and therefore does not provide Mark VII with a basis of recovery. See Edwards Bros., Inc. v. Overdrive Logistics, Inc., 581 S.E.2d 570 (Ga.Ct.App.2003). Responsive is correct in asserting that Mark VII does not have a cause of action under the Carmack Agreement. However, the contract provides that the Carmack Amendment’s standard of liability would apply to the agreement.

The Carmack Amendment provides a statutory right to shippers to recover for damages to their property caused by carriers involved in shipment. It imposes liability on a carrier when property is transported in the United States under a bill of lading. 49 U.S.C § 14706. “The purpose of the Carmack Amendment [is] to relieve shippers of the burden of searching out a particular negligent carrier from among the often numerous carriers handling an interstate shipment of goods.” Reider v. Thompson, 339 U.S. 113, 119 (1950). The Carmack Amendment permits “a shipper in interstate commerce to bring an action against the initial carrier to recover for damages to the shipment whether such damages occurred while the goods were in the hands of the initial carrier or connecting carriers.” Mercer Transp. Co. v. Greentree Transp. Co ., 341 F.3d 1192, 1196 (10th Cir.v 2003)(quoting L.E. Whitlock Truck Serv., Inc. v. Regal Drilling Co., 333 F.2d 488, 490 (10th Cir.1964). Accordingly, the shipper can hold a carrier liable for damage to cargo without regard to fault. Id. at 1196-97. The Carmack Amendment makes a common carrier liable for any damage to or loss of property that the carrier receives for transportation. Plough v. Mason & Dixon Lines, 630 F.2d 468, 479 (6th Cir.1980); Premier Graphics, Inc. v. W. Express, Inc., 2008 WL 4415773, at(Tenn.Ct.App. Sept. 26, 2008).

To establish a prima facie case against a carrier under the Carmack Amendment, a plaintiff must prove: (1) delivery of the goods to the carrier in good condition, (2) receipt by the consignee of a lesser quantity of goods at the destination and (3) damages. Beta Spawn, Inc. v. FFE Transp. Servs. Inc., 250 F.3d 218, 223 (3rd Cir.2001). If the plaintiff establishes a prima facie case, the burden shifts to the carrier to show that it was free from negligence and that the damage to the cargo was due to one of the excepted causes relieving the carrier of liability. Plough v. Mason & Dixon Lines, 630 F.2d 468, 470 (6th Cir.1980). Upon making a prima facie case, an inference of negligence on the part of the carrier arises. Id.

The trial court determined that Mark VII failed to establish the first element of its claim under the Carmack Amendment. The parties agree that elements two and three have been established. Accordingly, our analysis focuses on whether the toys where delivered to Responsive in good condition. The trial court found that the bills of lading did not establish delivery. It also found that Responsive did not have a duty to count the items delivered for shipping.

Mark VII relied on the bills of lading signed by the Responsive employees as proof of delivery of the toys in good condition. Indeed, a prima facie showing of delivery in good condition may be made through a bill of lading. Kaiser Aluminum & Chem. Corp. v. Ill Cent. Gulf R.R. Co., 615 F.2d 470, 475 (8th Cir.1980); see also Pac. Employers Ins. Co. v. M/V Gloria, 767 F.2d 229, 242 (5th Cir.1980); Blue Bird Food Prods. Co. v. Baltimore & Ohio R.R. Co., 474 F.2d 102, 104 (3rd Ci.1973). Mark VII relies on Johnson & Johnson v. Chief Freight Lines Co., 679 F.2d 421 (5th Cir.1982), to support its contention that the bills of lading establish a prima facie case that the toys were delivered in good condition. In Johnson & Johnson, the court held that

“[t]he issuance of a bill of lading acknowledges receipt of the goods as described in the bill and further states that the goods were in apparent good order unless otherwise noted … [and] is sufficient to establish a prima facie case against the carrier that the goods were in fact delivered in a good condition.”

Id. The Johnson & Johnson court further noted that unless the “shipper load and count or similar notations appear on the face of the bill of lading,” a presumption should be established that the damage was not caused by the shipper and the carrier “should have the affirmative burden” of establishing the shipper caused the loss. Id.; see also Allied Tube & Conduit Corp. v. Southern Pacific Transp. Co., 211 F.3d 367, 369 (7th Cir.2000) and Minneapolis St. Paul & Sault Ste. Marie R.R. v. Metal-Matic, Inc., 323 F.2d 903, 905 (8th Cir.1963).

The trial court, however, relied on The Pillsbury Co. v. Ill. Cent. Gulf R.R., 687 F.2d 241 (8th Cir.1982), to support its finding that the bills of lading were insufficient to establish delivery. In Pillsbury, the court found that the bills of lading were not prima facie evidence of “delivery in good order” where the goods are traveling under seal. Id. at 244. Pillsbury, however is factually distinguishable from the case before us. In Pillsbury, the shipments were loaded and sealed by the shipper. Id. at 243. The Pillsbury court reasoned that because the goods were sealed by the shipper, the carrier could not have knowledge of the condition of the goods. Id. at 244. The Pillsbury court “expressly distinguished the circumstance where the bill of lading is relied upon to establish the good condition of a shipment open to inspection and visible.” Id. at n4. Unlike Pillsbury, the toys in this case were not delivered under seal to Responsive. Instead, Responsive’s agents loaded and sealed the containers themselves. Because the containers were loaded by Responsive, the toys were open to inspection and visible. Consequently, if no additional facts were present, the bills of lading could be utilized to establish a prima facie case of delivery.

The trial court further reasoned that Responsive was only responsible for loading the toys on the trucks and that Hasbro was responsible for counting the toys. Hasbro provided Responsive with preprinted bills of lading purportedly listing the quantity of the toys. Responsive did not verify the amount of toys delivered. Responsive simply loaded the trailers, sealed them and delivered the merchandise to the appropriate location. The seal placed on each shipment at issue, remained intact until delivery.

Mark VII asserts that as a matter of law, Responsive had the duty to count the toys it loaded. It bases this assertion on the presumption that without some notation, the toys listed on the bills of lading were shipped in good condition. Johnson & Johnson, 679 F.2d at 422. Mark VII argues that because the bills of lading did not contain the notation “shipper’s load and count” or similar notation, we are to presume that the carrier is liable for any difference between what the bills of lading show and what was delivered. However, the trial court specifically noted that the bills of lading and loading sheets introduced in this case are incomplete and illegible. We have conducted our own independent review of the bills of lading and are unable to determine what items were delivered for shipping. Because we are unable to determine the amount of merchandise listed on the bills of lading, we are unable to determine if all the toys claimed were delivered to Responsive in good condition. Consequently, a material fact remains in dispute and summary judgment is inappropriate.


Liability under Indemnification Paragraph 13

Part (b) of Paragraph 13 of the agreement, requires Responsive to indemnify Mark VII from and against any claims “for damage of the goods of Mark VII’s customer while under the care, custody, or control of” Responsive. This is required regardless of the cause of the damage, including the negligence of Mark VII’s customer.

We have concluded that we are unable to determine the number of toys delivered to Responsive for shipping. Since we are unable to determine what was delivered for shipping it is equally apparent that we are also unable to determine when the alleged loss occurred.

It is self evident that a material factual dispute exists regarding when the loss incurred in this case. Each party alleges that it occurred when some other entity had control of the goods. This is a crucial factor that must be first determined before the indemnification clause of the agreement is implicated. Based on the evidence presented to the trial court, it is impossible to make this determination at this juncture. Consequently, we find that the trial court erred when it awarded summary judgment to Responsive on the indemnification claim.


Mark VII’s Motion for Summary Judgment

Mark VII also filed a Motion for Summary Judgment which the trial court denied. We previously pointed out the existence of material factual disputes that make the grant of summary judgment inappropriate for Responsive. These very same factual disputes make an award of summary judgment equally inappropriate for Mark VII as well. “Summary judgment proceedings have never been envisioned as substitutes for trials of disputed factual issues.”   Martin v. Norfolk Southern Railway Company, 271 S.W.3d 76, 89 (Tenn.2008)(Koch, J., concurring).

The summary judgment procedure was designed to provide a quick, inexpensive means of concluding cases, in whole or in part, upon issues as to which there is no dispute regarding the material facts. Where there does exist a dispute as to facts which are deemed material by the trial court, however, or where there is uncertainty as to whether there may be such a dispute, the duty of the trial court is clear. He is to overrule any motion for summary judgment in such cases, because summary judgment proceedings are not in any sense to be viewed as a substitute for a trial of disputed factual issues.

EVCO Corporation v. Ross, 528 S.W.2d 20, 24 -25 (Tenn.1975).

We find no error in the order of the trial court denying the Motion for Summary Judgment filed by Mark VII.


In summary, we find that Mark VII may pursue its theories of recovery under paragraph 10 of the parties agreement, based on the Carmack Amendment’s standard of liability and under paragraph 13 of the agreement for indemnification. We, however, find that disputed material issues of fact remain on both the Carmack Amendment cause of action and the indemnification cause of action that preclude the granting of summary judgment for either party.

The judgment of the trial court granting summary judgment to Responsive is reversed. The judgment of the trial court denying summary judgment to Mark VII is affirmed. The costs of this cause are taxed one-half to the Appellant, Mark VII Transportation Co. Inc. and its surety and one-half to the Appellee, Responsive Trucking.

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