United States District Court,

E.D. New York.

TRANS-PRO LOGISTIC INC., Plaintiff,

v.

COBY ELECTRONICS CORPORATION, Defendant.

Coby Electronics Corporation, Third-Party Plaintiff,

v.

CSX Intermodal, Inc. and Yellowstone Freight, Inc., Third-Party Defendants.

No. 05 CV 1759(CLP).

 

Oct. 14, 2010.

 

MEMORANDUM AND ORDER

 

CHERYL L. POLLAK, United States Magistrate Judge.

 

On April 12, 2005, plaintiff Trans-Pro Logistic Inc. (“Trans-Pro”) filed this action, alleging breach of contract and claiming payment for an account stated, in connection with monies owed to plaintiff for shipping services provided to defendant Coby Electronics Corporation (“Coby”). (See Compl. ). On December 2, 2005, defendant Coby filed various counterclaims against plaintiff, as well as a Third-Party Complaint against CSX Intermodal, Inc. (“CSXI”) and Yellowstone Freight, Inc. (“Yellowstone”), the transporters of the shipments, alleging that they were responsible for the loss of certain goods that occurred during the transport process.

 

Citations to “Compl.” refer to plaintiff’s Complaint filed on April 12, 2005.

 

On December 14, 2007, third-party defendant CSXI filed a motion for summary judgment, seeking to have the Third-Party Complaint dismissed as against CSXI. By Memorandum and Order dated September 2, 2008, the Honorable Charles P. Sifton denied the CSXI motion for summary judgment, finding that there were material issues of fact in dispute as to the terms of the agreement between plaintiff and defendant that prevented the court from determining the liability of the third party. Trans-Pro Logistics, Inc. v. Coby Electronic, No. 05 CV 1759, 2008 WL 4163992, at(E.D.N.Y. Sept. 3, 2008). CSXI filed a motion for reconsideration on September 15, 2008, which was denied by Judge Sifton in an Order dated January 6, 2009.

 

All parties consented to having the case assigned to a United States Magistrate Judge for all purposes including entry of judgment on May 18, 2009. The parties then filed a proposed Pretrial Order on September 17, 2009, in which CSXI asserted that this Court “does not have subject matter jurisdiction over CSXI Intermodal, Inc. (CSXI) because the forum selection clause contained in CSXI’s contract with its customers, Service Directory No. 1, provides that any suit against CSXI must be brought in either of three places,” none of which is the Eastern District of New York. (PTO  at 2).

 

Citations to “PTO” refer to the proposed Pre-Trial Order filed on September 17, 2009.

 

Although CSXI filed a Pretrial Memorandum of Law, dated October 2, 2009, which essentially repeated the arguments it made to Judge Sifton in its earlier Motion for Summary Judgment, CSXI failed to file a motion to dismiss or a motion for summary judgment. Noting that CSXI objected to jurisdiction in the Eastern District of New York in both the Pretrial Order and its Pretrial Memorandum of Law, this Court issued an Order on September 8, 2010, stating that if CSXI wished to make a motion objecting to this Court’s jurisdiction, it must do so by September 24, 2010.

 

CSXI now moves for summary judgment “as to dismissal of the Third Party Complaint filed by Coby … against it on the grounds that this Court lacks subject matter jurisdiction over it because of a forum selection clause in the transportation agreement….” (Second Mot. at 1-2).

 

Citations to “Second Mot.” refer to the Memorandum of Law in Support of CSX Intermodal, Inc.’s Motion for Summary Judgment, filed on September 24, 2010.

 

DISCUSSION

 

A party moving for summary judgment has the burden of establishing that there is no genuine issue of material fact in dispute and that the moving party is entitled to judgment as a matter of law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986); Thompson v. Gjivoje, 896 F.2d 716, 720 (2d Cir.1990). In addition, “ ‘inferences to be drawn from the underlying facts … must be viewed in the light most favorable to the party opposing the motion.’ “ Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587-88 (1986) (quoting United States v. Diebold, Inc., 369 U.S. 654, 655 (1962)).

 

In moving for summary judgment, CSXI relies on the forum selection clause set forth in the Service Directory agreed to between CSXI and TRT Carriers, a division of NYK Logistics that hired CSXI to transport goods for Coby. (Second Mot. at 8). CSXI argues that this forum selection clause applies to Coby because Trans-Pro was acting on Coby’s behalf when Trans-Pro contracted with TRT, which then contracted with CSXI.

 

Coby disputes CSXI’s allegation that TRT Carriers is a division of NYK Logistics. See Trans-Pro Logistic, Inc. v. Coby Electronics Corp., No. 05 CV 1759, 2008 WL 4163992, at(E.D.N.Y. Sep. 3, 2008). Since the status of TRT Carriers is irrelevant to the Court’s present decision, the Court does not address the issue.

 

CSXI made a similar argument in its first motion for summary judgment, relying on Great Northern Railway Co. v. O’Connor, 232 U.S. 508 (1914), Norfolk Southern Railway Co. v. Kirby, 543 U.S. 14 (2004), and Nippon Fire & Marine Co., Ltd. v. Skyway Freight Systems, Inc, 235 F.3d 52 (2d Cir.2000), to buttress its argument that the Service Directory was enforceable against Coby. Judge Sifton found that the three cases were inapposite, as “third-party defendant CSXI is a shipper’s agent, not a carrier, and knew that defendant and third-party plaintiff Coby was the shipper and not a freight forwarder at the time that it contracted with TRT to arrange for the shipment of the goods in question.” Trans-Pro, 2008 WL 4163992, at *4. Judge Sifton concluded that “[b]ecause there are material factual disputes about the terms of the contract between plaintiff and defendant, a jury must first determine their relationship before addressing whether defendant and third-party plaintiff Coby was bound by the terms of the Service Directory.” Id. at *5.

 

On September 16, 2008, CSXI filed a Motion for Reconsideration or Reargument, arguing that Judge Sifton “overlooked basic principles of agency law” when he ruled that there exist issues of fact surrounding the enforceability of the Service Directory. (Mot. Recons. at 2). In the Motion for Reconsideration, CSXI argued that Trans-Pro had implied or apparent authority to arrange for the shipment of goods on Coby’s behalf, or that Coby had ratified agreement to the Service Directory by voluntarily loading its cargo onto a truck owned by a company hired by CSXI.

 

Citations to “Mot. Recons.” refer to CSXI’s Memorandum of Law in Support of its Motion for Reconsideration or Re-argument,” filed on September 16, 2008.

 

Judge Sifton found that such arguments were not appropriate bases for a motion to reconsider, since the arguments had not appeared in CSXI’s initial motion for summary judgment, and, therefore, they were not arguments that he had “overlooked.” Nevertheless, the judge proceeded to dispose of CSXI’s arguments on the merits, finding that “denial of [CSXI’s] summary judgment motion would nevertheless be appropriate.” Trans-Pro Logistic, Inc. v. Coby Electronics Corp., No. 05 CV 1759, 2009 WL 36824, at(E.D.N.Y. Jan. 6, 2009). In his Order, Judge Sifton found that “[t]he nature and details of the oral agreement between third-party-plaintiff Coby and plaintiff Trans-Pro are in dispute, but there is no allegation that the limitations present in the Service Directory, upon which third-party defendant [CSXI’s] contract with TRT was predicated, were included in the oral agreement between Coby and Trans-Pro.” Id. Further, Judge Sifton rejected CSXI’s arguments that, as a matter of law, Trans-Pro had implied or apparent authority or that Coby ratified the contract between Trans-Pro and CSXI. Id. at *6-7. Accordingly, the judge denied CSXI’s motion for reconsideration.

 

In the instant motion, filed on September 24, 2010, CSXI again seeks summary judgment, now couching the issue surrounding the forum selection clause in the Service Directory as one of subject matter jurisdiction. CSXI notes that “the issue of the court’s subject matter jurisdiction was never resolved in the two opinions by Judge Sifton.” (Resp. at 3). This is true to the extent that Judge Sifton did not frame his opinion in terms of subject matter jurisdiction and did not explicitly find that the forum selection clause did or did not preclude subject matter jurisdiction over this case. However, the judge’s finding that there are material issues of fact as to whether Coby is bound by the terms of the Service Directory, including the forum selection clause, in essence included a ruling on subject matter jurisdiction.

 

Citations to “Resp.” refer to CSXI’s Response to the Court’s October 1, 2010, Order, filed October 6, 2010. Fed.R.Civ.P. 12(b)(3). See Phillips v. Audio Active Ltd., 494 F.3d 378 (2d Cir.2007).

 

For this Court to dismiss the Third Party Complaint as CSXI requests, it must first find that the forum selection clause in question is valid and enforceable as against Coby. To make such a finding in the context of a motion for summary judgment would require the Court to conclude that there exist no triable issues of fact as to the validity and enforceability of the forum selection clause.  Forum selection clauses are presumptively valid and will only be set aside if enforcement would be unreasonable. Mercer v. Raildreams, Inc., 702 F.Supp.2d 176, 180 (E.D.N.Y.2010). Forum selection clauses are unreasonable:

 

At the final pre-trial conference hearing, held on October 13, 2010, counsel for CSXI argued that, in addition to the forum selection clause, other provisions of the Service Directory preclude Coby’s claims against CSXI. Again, there remain issues of triable fact as to whether Coby is bound by the Service Directory entered into by CSXI and TRT Carriers.

 

(1) if their incorporation into the agreement was the result of fraud or overreaching; (2) if the complaining party will for all practical purposes be deprived of his day in court, due to the grave inconvenience or unfairness of the selected forum; (3) if the fundamental unfairness of the chosen law may deprive the plaintiff of a remedy; or (4) if the clauses contravene a strong public policy of the forum state.

Id. (quoting In re Assicurazioni S.p.A. Holocaust Insurance Litigation, 228 F.Supp.2d 372, 373 (S.D.N.Y.2002)). However, before examining these factors-for which no evidence has yet been presented-the Court must first determine if the parties at issue even had an agreement to be bound by the clause.

 

If the Court were to conclude that there are no triable issues of fact in this regard, the Court would then need to determine the propriety of characterizing CSXI’s motion as a motion to dismiss for lack of subject matter jurisdiction, as opposed to a motion to dismiss for improper venue. The Second Circuit “has recognized that ‘there is no existing mechanism with which forum selection enforcement is a perfect fit.’ “ Mercer v. Raildreams, Inc., 702 F.Supp.2d 176, 178 (E.D.N.Y.2010) (quoting New Moon Shipping Co. v. MAN B & W Diesel AG, 121 F.3d 24, 28-29 (2d Cir.1997). Although some courts treat motions to dismiss and motions for summary judgment predicated on a forum selection clause as governed Federal Rule of Civil Procedure 12(b)(1), see, e.g., Cfirstclass Corp. v. Silverjet PLC, 560 F.Supp.2d 324, 327 (S.D.N.Y.2008) (citing AVC Nederland B.V. v. Atrium Inv. Patnership, 740 F.2d 148, 152 (2d Cir.1984)), others have classified such motions as motions to dismiss for improper venue under

 

CSXI has cited only one new case decided since its first motion for summary judgment, Kawasaki Kisen Kaisha Ltd. v. Regal Beloit Corp., 130 S.Ct. 2433 (2010), to support its statement that forum selection clauses “are enforceable whether or not the opposing party bargained for them or was unaware of the precise terms of the clause so long as the clause was in the ‘agreement’ for the arrangement of transportation services.” (Resp. at 7). CSXI fails to elaborate on exactly how Kawasaki is relevant to the instant motion except that the case involves a forum selection clause found to be enforceable by the Supreme Court.

 

In Kawasaki, a number of cargo owners sought to ship their goods from China to the midwestern United States. The cargo owners hired Kawasaki Kisen Kaisha, Ltd., and its agent “K” Line America, Inc. (“ ‘K’ Line”), which issued bills of lading covering the entire course of shipment to the cargo owners. These bills of lading included so-called “Himalaya Clauses,” which “extend [ ] the bills’ defenses and limitations on liability to parties that sign subcontracts to perform services contemplated by the bills.” Id., at 2439. They also included forum selection clauses, setting Tokyo District Court as the proper forum for any action relating to the shipment.

 

“K” Line arranged to have Union Pacific Railroad Company serve as the rail carrier for the portion of the shipment that took place in the United States. When the Union Pacific train derailed in Oklahoma, the cargo was allegedly destroyed, and the cargo owners brought suit in California. The District Court dismissed the case based on the forum selection clause, and the Ninth Circuit reversed. The Supreme Court granted certiorari to determine whether the Carmack Amendment applies “to the inland segment of an overseas import shipment under a through bill of lading.” Id. at 2440.

 

Although the Supreme Court ultimately found the forum selection clause at issue in Kawasaki to be enforceable, the circumstances surrounding this case and Kawasaki are so different that it is difficult to draw any helpful conclusions from the Supreme Court’s decision. In Kawasaki, the forum selection clause was present in written bills of lading issued by “K” Line directly to the cargo owners, and it was clear from the Himalaya Clauses that “K” Line was authorized to subcontract with other companies to complete the shipment. Thus, there was no question that the cargo owners were aware of and agreed to the forum selected. Further, the Himalaya Clauses in the same bills of lading explicitly bound subcontractors.

 

Here, by contrast, not only are the terms of the original oral agreement between Trans-Pro and Coby in dispute, but there are issues of fact in dispute as to whether either Trans-Pro or Coby were ever made aware of the Service Directory that was only part of the agreement between TRT Carriers and CSXI, As Judge Sifton noted: “The nature and details of the oral agreement between third-party-plaintiff Coby and plaintiff Trans-Pro are in dispute, but there is no allegation that the limitations present in the Service Directory … were included in the oral agreement between Coby and Trans-Pro.” Trans-Pro Logistic, Inc. v. Coby Electronics Corp., No. 05 CV 1759, 2009 WL 36824, at(E.D.N.Y. Jan. 6, 2009). The Supreme Court’s decision in Kawasaki addressed only “whether the terms of a through bill of lading issued abroad by an ocean carrier can apply to the domestic part of the import’s journey by a rail carrier, despite prohibitions or limitations in another federal statute.”   Kawasaki, 130 S.Ct. at 2439. Nothing in the Kawasaki decision can be read as new law requiring that the terms of the Service Directory be applied to Coby.

 

CSXI’s argument in the instant motion is, therefore, the same wine in a different bottle. Assuming for the sake of argument that the forum selection clause is jurisdictional, a conclusion that is by no means settled law, CSXI would still have to prove that Coby is bound by the Service Directory before the forum selection clause removed the case from this Court’s jurisdiction. CSXI twice failed to persuade Judge Sifton that, as a matter of law, the Service Directory is enforceable against Coby, and CSXI fails to do so before this Court. In what is essentially a second motion to reconsider, CSXI fails to present “factual matters or controlling decisions the court overlooked that might materially have influenced its decision.” Trans-Pro, No. 05 CV 1759, 2009 WL 36824, at.

 

During the final pre-trial conference, held on October 13, 2010, counsel for CSXI raised a variety of additional arguments as to why CSXI should not and need not be a party to this suit. These contentions were not raised by CSXI in its moving papers. Accordingly, the Court does not consider them at this time.

 

Since the Court concurs with Judge Sifton’s conclusions in ruling on CSXI’s prior Motion for Summary Judgment and Motion to Reconsider that there exist triable issues of fact as to the applicability of the forum selection clause to Coby, CSXI’s motion for summary judgment is denied. CSXI may raise the issue of subject matter jurisdiction again at the conclusion of the presentation of evidence at trial.

 

SO ORDERED.

United States District Court,

C.D. California.

LLR LOGISTICS LLC

v.

K & R TRANSPORTATION LOGISTICS, INC., Etc., et al.

No. CV-10-666-JST (PJWx).

 

Oct. 14, 2010.

 

PROCEEDINGS: (IN CHAMBERS) ORDER GRANTING

 

Honorable JOSEPHINE STATON TUCKER, District Judge.

 

Ellen Matheson, Deputy Clerk.

 

Having reviewed the briefs and heard parties’ oral arguments, the Court GRANTS Defendant/Cross-Complainant Schulz Transportation Services, Inc.’s Motion for Summary Judgment against Defendant/Cross-Defendant Fred Meyer, Inc. (Doc. 52).

 

I. BACKGROUND

 

Schulz Transportation Services, Inc. (“Schulz”), a Nebraska-based trucking company, delivered 91 truckloads of food products to Defendant/Cross-Defendant Fred Meyer, Inc. (“Meyer”) pursuant to a subcontract with Defendant/Cross-Defendant K & R Transportation Logistics, Inc (“K & R”). (Cross-Complainant Schulz’s Separate Statement of Uncontroverted Facts and Conclusions of Law [hereinafter Cross-Compl.’s Facts], Doc. 53, ¶ 3.) K & R paid Schulz’s freight charges for the first 50 truckloads (id. ¶ 4,) but was unable to pay for the additional 41 truckloads because of its own financial problems. (Id. ¶ 7.) Schulz has produced the corresponding bills of lading for the 41 unpaid truckloads. (Decl. of Alan Schulz [hereinafter Schulz’s Deck], Doc. 54, Exh. B.)

 

Because of K & R’s potential insolvency, Schulz contacted Meyer, the consignee on the bills of lading, directly to inquire about payment of its unpaid freight charges. (Id.) Schulz learned that Meyer had not had any direct dealings with K & R, but rather had contracted with Plaintiff LLR Logistics, LLC (“LLR”), a freight broker, to arrange transportation. (Id. ¶ 8.) LLR subsequently contracted with K & R. (Id.) LLR received payment from Meyer for the 91 truckloads, and was in possession of $70,000 that had not been paid out. (Meyer’s Statement of Genuine Issues of Material Fact [hereinafter Meyer’s Facts], Doc. 68, at 10-11 ¶¶ 9, 10.) The $70,000 allegedly accounts for payment for the 41 truckloads. (Id. ¶ 13.)

 

LLR filed a complaint in interpleader in Los Angeles Superior Court against Schulz, Meyer, and TransAm Financial Services, and deposited the $70,000 with the court. (Notice of Removal, Doc. 1, at 18 “Notice of Deposit of Interplead Funds.”) After the case was removed to federal court, Schulz filed a cross-claim against Meyer for quantum meruit and breach of contract, alleging that Meyer was liable for the unpaid freight charges (Doc. 24). Meyer filed its answer to the cross-claim (Doc. 48), and Schulz subsequently filed this Motion for Summary Judgment (Doc. 52).

 

II. LEGAL STANDARD

 

In deciding a summary judgment motion, the court must view the evidence in the light most favorable to the non-moving party and draw all justifiable inferences in its favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Summary judgment is proper “if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c). A factual issue is “genuine” when there is sufficient evidence such that a reasonable trier of fact could resolve the issue in the non-movant’s favor, and an issue is “material” when its resolution might affect the outcome of the suit under the governing law. Anderson, 477 U.S. at 248. The moving party bears the initial burden of demonstrating the absence of a genuine issue of fact.   Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The burden then shifts to the non-moving party to “set out ‘specific facts showing a genuine issue for trial.’ ” Id. at 324 (quoting Fed.R.Civ.P. 56(e)).

 

III. DISCUSSION

 

A. Summary Judgment

 

Schulz’s Motion for Summary Judgment against Meyer relies on the bills of lading between Meyer and Schulz for the 41 truckloads at issue. (Schulz’s Memorandum of Points and Authorities [hereinafter Cross-Compl.’s M.P.A.], Doc. 52, at 6; see Schulz’s Decl., Ex. B .) “[A] a bill of lading is the basic transportation contract between the shipper/consignor and the carrier, the terms and conditions of which bind the shipper and all connecting carriers.”   Oak Harbor Freight Lines, Inc. v. Sears Roebuck, & Co., 513 F.3d 949, 954 (9th Cir.2008) (citing S. Pac. Transp. Co. v. Commercial Metals Co., 456 U.S. 336, 342, 102 S.Ct. 1815, 72 L.Ed.2d 114 (1982)). The default terms and conditions of a standard bill of lading provide that:

 

the owner or consignee shall pay the freight and all other lawful charges upon the transported property and that the consignor remains liable to the carrier for all lawful charges. The bill of lading, however, also contains “nonrecourse” and “prepaid” provisions that, if marked by the parties, release the consignor and consignee from liability for the freight charges. If the nonrecourse clause is signed by the consignor and no provision is made for the payment of freight, delivery of the shipment to the consignee relieves the consignor of liability. Similarly, when the prepaid provision on the bill of lading has been marked and the consignee has already paid its bill to the consignor, the consignee is not liable to the carrier for payment of the freight charges.

 

Id. at 954-55 (quoting C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 478-79 (9th Cir.2000)). Absent a separate agreement that modifies the default terms, “a consignee is liable for freight charges unless the bill of lading is marked ‘prepaid.’ ” Id. at 955 (citing C.A.R. Transp., 213 F.3d at 478-79).

 

Here, Schulz submitted with its Motion copies of the bills of lading for the 41 truckloads it delivered to Meyer. (Schulz’s Decl. Ex. B.) The bills of lading comply with the trucking-industry standard “short form,” and incorporate by reference the standard bill of lading terms and conditions. (Id. ¶ 12.) The bills of lading designate Meyer as the consignee. (Id. ¶ 13.) The bills of lading contain an unsigned nonrecourse section, (Schulz’s Decl. Ex. B,) and all but one are marked “collect.” (Meyer’s Facts at 6 ¶ 13; see Schulz’s Decl. Ex. B. at 15.) None are marked prepaid. (Schulz’s Decl. Ex. B. at 15.) Schulz did not have a separate agreement with Meyer modifying the terms of the bills of lading or precluding Schulz from pursuing collection of its freight charges from Meyer. (Meyer’s Facts at 8 ¶ 16.) Meyer does not dispute the authenticity or accuracy of the bills of lading. Therefore, Meyer, as the consignee, is liable for Schulz’s unpaid freight charges for the 41 truckloads.

 

At the top of the bills of lading, the following text appears: “STRAIGHT BILL OF LADING-SHORT FORM-Original-Not Negotiable. RECEIVED subject to the classifications and tariffs in effect on the date of the issue of this Original Bill of Lading.” At the bottom, the following text appears: “RECEIVED, subject to the classifications and tariffs in effect on the date of the issue of this Bill of Lading ….“ (Schulz’s Decl. Ex. B); see Oak Harbor Freight Lines, 513 F.3d at 953 (citing the following text from the bills of lading in determining that they “complied with industry standards”: “This document is tendered as an individual Bill of Lading. All terms and conditions of the straight Bill of Lading and applicable tariff and classifications in effect as of the date hereon apply.”).

 

Although one of the bills of lading, (“August 10, 2009,” Schulz’s Decl. Ex. B. at 15,) was not checked “collect,” under the default terms of a standard bill of lading, “a consignee is liable for freight charges unless the bill of lading is marked prepaid.” Oak Harbor Freight Lines, 513 F.3d at 955 (internal quotations omitted) (emphasis added). The bill of lading was not marked prepaid. Furthermore, Meyer, through its agent LLR, abided by “custom and practice” of the collect method:

 

LLR helped obtain carriers to transport goods for a particular shipper as need. The shipper would then tender the goods to the carrier, along with the appropriate Bill of Lading. Upon completion of the work, the carrier would submit an invoice and the appropriate Bill of Lading to the broker, and the broker would then collect payment from the shipper. When the shipper tendered payment, the broker LLR in this instance, would take a commission and then remit the payment to the carrier for the work.

 

(Meyer’s Facts at 9-10 ¶ 5.) Therefore, Meyer is liable for all 41 truckloads.

 

Meyer asserts that it is not liable for the unpaid freight charges because Meyer and Schulz were not in contractual privity  and because equitable estoppel should bar Schulz from collecting from Meyer. (Meyer’s Response to Mot. for Summ. J. at 4-5.) Both arguments fail. First, the law is clear: “under the default terms, a consignee is liable for freight charges unless the bill of lading is marked ‘prepaid.’ “ Oak Harbor Freight Lines, 513 F.3d at 955. All outstanding bills of lading operated under the default terms and listed Meyer as the consignee; none were marked prepaid. (Schulz’s Decl. Ex. B.) “[I]n the absence of a separate agreement” modifying these provisions or waiving consignee liability, Meyer is liable for Schulz’s unpaid freight charges. See Oak Harbor Freight Lines, 513 F.3d at 955.

 

Meyer argues that it was not in contractual privity with Schulz because Schulz did not “prepare” the bills of lading for the 41 truckloads. (Meyer’s Response to Mot. for Summ. J. at 5.) This argument lacks merit because “the terms and conditions of [a bill of lading] bind … all connecting carriers” regardless of who prepared the bill of lading. Oak Harbor Freight Lines, 513 F.3d at 954 (emphasis added).

 

Second, Meyer may not make an equitable estoppel defense because it is not an “innocent consignee.” Id. at 960. In this context, courts have “applied estoppel only in limited circumstances: ‘Each and all of them involved a carrier’s misrepresentation, such as a false assertion of prepayment on the bill of lading, upon which a consignee detrimentally relied only to find itself later sued by the carrier for the same freight charges.’ ” Oak Harbor Freight Lines, 513 F.3d at 955 (quoting S. Pac. Transp. Co., 456 U.S. at 351. In Oak Harbor Freight Lines, the court held that equitable estoppel did not bar carrier Oak Harbor’s recovery of freight charges from consignee Sears, noting:

 

The bills of lading clearly were marked “collect,” which put [the consignee] on notice that payment was due. In addition, [the consignee] undertook no actions to limits [sic] its liability. In particular, [the consignee] could have elected to pay [the carrier] directly, but did not, and thereby assumed the risk that [the freight broker] would fail to forward payment.

 

Id. at 960.

 

Similarly, here all but one of the unpaid bills of lading were marked “collect,” (Schulz’s Decl. Ex. B,) which put Meyer on notice of payment. Although Meyer paid LLR, its freight broker, for the shipments, (Meyer’s Facts at 9 ¶ 3; see Declaration of Ray Rivera, Doc. 60, ¶ 8,) the payment was never forwarded to Schulz. (Meyer’s Facts at 11 ¶¶ 11-14.) Meyer also made no effort to limit its liability to Schulz. Finally, although Meyer now argues that it “was never given adequate notice that the carrier for the shipments was Schulz, and as such, [Meyer] could not have limited [its] liability by making the payments directly to Schulz,” (Meyer’s Response to Mot. Summ. J. at 6,) this argument is unavailing. “[A] shipper should bear the risk when it chooses to pay for freight charges through a broker rather than directly to a carrier.”   Oak Harbor Freight Lines, 513 F.3d at 959. Thus, Meyer remains liable for Schulz’s unpaid freight charges.

 

B. Award

 

Schulz seeks payment from Meyer  of $87,800 in freight charges, plus ten percent prejudgment interest accrued from December 23, 2009, the date on which Schulz demanded payment from Meyer. (Cross-Compl.’s M.P.A. at 10-11; Schulz Decl. ¶ 9, Exh. A at 3-7); see Cal. Civ.Code § 3289. Meyer does not dispute these facts.

 

Because Schulz’s Motion for Summary Judgment seeks relief solely from Meyer, the question of whether Schulz has a claim to the $70,000 of interpleaded funds LLR deposited with the Court goes beyond the scope of this decision. (See TransAm’s Response to Mot. for Summ. J., Doc. 70, at 2-4.) Furthermore, Meyer requests that the Court take judicial notice of: (1) the Notice of Deposit of Interplead Funds in the Amount of $70,000 with the U.S. District Court (Doc. 62), and (2) the Notice of Deposit of Interplead Funds in the Amount of $70,000 with the Los Angeles Superior Court (Doc. 1 at 18). Although Courts may take judicial notice of their own records, United States v. Author Serv., 804 F.2d 1520, 1523 (9th Cir.1986) (citing Shuttlesworth v. City of Birmingham, 394 U.S. 147, 157, 89 S.Ct. 935, 22 L.Ed.2d 162 (1969); Diamond v. Pitchess, 411 F.2d 565, 566 (9th Cir.1969)), neither is relevant to the Court’s determination; therefore, judicial notice is unnecessary.

 

“Prejudgment interest is a substantive aspect of a plaintiff s claims, rather than a merely procedural mechanism.” Oak Harbor Freight Lines, 513 F.3d at 961 (quoting Sea Hawk Seafoods, Inc. v. Exxon Corp. (In re the Exxon Valdez), 484 F.3d 1098, 1101 (9th Cir.2007). “State law generally governs awards of prejudgment interest in diversity actions, but federal law may apply to the calculation of prejudgment interest when a substantive claim derives from federal law alone.” Id. Here, Schulz brings state law claims, so California law governs the award of prejudgment interest.

 

“[California] Civil Code section 3287[a] provides that a party is entitled to recover prejudgment interest on an amount awarded as damages from the date that the amount was both (1) due and owing and (2) certain or capable of being made certain by calculation.” Uzye v. Kadisha, —Cal.Rptr.3d —-, No. B196045, 188 Cal.App.4th 866, 2010 WL 3672251, at (Cal.Ct.App. Sept.22, 2010); see Cal. Civ.Code 3287(a). “Damages are certain or capable of being made certain by calculation, or ascertainable, for purposes of Civil Code section 3287[a] if the defendant actually knows the amount of damages or could compute that amount from information reasonably available to the defendant.” Uzyel, 188 Cal.App.4th 866, 2010 WL 3672251 at *32. Schulz’s freight charges were officially due on December 23, 2009, (Schulz Decl. ¶ 9,) and Schulz provides the invoice number, bill of lading date, and amount owed for each of the 41 truckloads, which totals to $87,800. (Schulz’s Decl. Exh. A at 3-7.) This information was reasonably available to Meyer and Meyer could have computed the $87,800 figure on its own.

 

Under Civil Code section 3289(b), “[i]f a contract entered into after January 1, 1986, does not stipulate a legal rate of interest, the obligation shall bear interest at a rate of 10 percent per annum after a breach.” Cal. Civ.Code 3289(b). Because Schulz’s damages derive from bills of lading, i.e. contracts, and because the bills of lading do not stipulate a legal rate of interest, the $87,800 bears ten percent per annum interest from December 23, 2009. Cal. Civ.Code 3289(a).

 

IV. CONCLUSION

 

For the stated reasons, the Court GRANTS Schulz’s Motion for Summary Judgment and FINDS that Meyer owes Schulz $87,800 in damages plus ten percent prejudgment interest accrued from December 23, 2009. Because there remain unadjudicated claims in this matter, and pursuant to the final judgment rule, see 28 U.S.C. § 1291, the Court does not enter a final judgment at this time.