Bits & Pieces

Carroll v. Wright

Court of Appeals of Kentucky.

Kim CARROLL, Appellant


Reuben J. WRIGHT; Matthew Keeton d/b/a Matthew Keeton Trucking; and Anthem Health Plans of Kentucky, Inc., Appellees.


No. 2012–CA–000787–MR.

April 5, 2013.


Appeal from Elliott Circuit Court, Action No. 06–CI–00027; Rebecca K. Phillips, Judge.William H. Wilhoit, Grayson, KY, for Appellant.


John G. McNeill, Elizabeth Deener, Lexington, KY, for Appellees Reuben J. Wright and Matthew Keeton d/b/a Matthew Keeton Trucking.


Before ACREE, Chief Judge; COMBS and STUMBO, Judges.



STUMBO, Judge.

*1 Kim Carroll appeals from a Judgment of the Elliott Circuit Court reflecting a jury verdict in favor of Reuben J. Wright, Matthew Keeton d/b/a Matthew Keeton Trucking in Carroll’s action alleging negligence resulting in a motor vehicle accident. Carroll contends that the trial court improperly failed to render a Directed Verdict in her favor, erred in failing to instruct the jury of the specific duty to drive in the right lane, and erred in allowing the Appellees to argue their driver faced an “unforeseeable situation” and did “the best he could” under the situation. For the reasons stated below, we reverse the Trial Verdict and Judgment, and remand the matter to the Elliott Circuit Court on the issue of damages.


Reuben J. Wright was an employee of Keeton Trucking. On the afternoon of September 27, 2005, Carroll was driving north on a two-lane roadway in Elliott County. Wright, who was driving a tractor-trailer owned by Keeton Trucking, was heading south. Wright approached a curve to the right, past which was an intersection. At the intersection, which apparently could not be seen before the curve, one southbound vehicle was stopped as the driver was waiting to turn left. A second driver in another vehicle had stopped behind that vehicle. When Wright rounded the curve and saw the two vehicles stopped at the intersection, he slammed on his brakes and steered to the right to avoid hitting the stopped vehicles. The brakes on Wright’s vehicle locked, leaving one hundred feet of skid marks. Although he avoided a collision with the vehicles in the southbound lane, his trailer swung into the northbound lane where it struck Carroll’s northbound vehicle. Carroll sustained serious injuries to her legs in the accident.


Carroll filed the instant action against Wright and Keeton Trucking alleging the negligent maintenance and operation of the truck proximately caused the accident and resultant injuries. A jury trial was conducted on December 4, 2007, at the conclusion of which the jury was instructed on the “sudden emergency doctrine”.FN1 The jury then returned a verdict in favor of Wright and Keeton Trucking.


Carroll appealed to a panel of this Court, where she argued that the sudden emergency doctrine was not applicable to the facts.FN2 Wright and Keeton Trucking (hereinafter referred to collectively as “Wright”) argued that the issue was not preserved because, although Carroll moved for a directed verdict, she failed to make any post-verdict motions to set aside the verdict, for a new trial or for a judgment notwithstanding the verdict.


In an Opinion rendered on February 20, 2009, a panel of this Court concluded that 1) Carroll was not entitled to a Directed Verdict, and 2) the trial court’s application of the sudden emergency doctrine was improper because the purported sudden emergency herein, i.e., cars stopped at an intersection, was not an emergency which Wright could not have anticipated. The Judgment was reversed and the matter remanded.


*2 A second trial was conducted beginning on October 18, 2011, where Wright argued that the accident was created by an unforeseen circumstance during which he did the best he could to avoid striking the vehicles stopped at the intersection. At the conclusion of the trial, the court denied Carroll’s request for an instruction that Wright had a duty to drive in the right lane. The jury returned a verdict in favor of Wright upon concluding that he did not fail to comply with the duty to keep his tractor-trailer under reasonable control, operate it at a reasonable speed not exceeding 55 miles per hour, keep a lookout ahead, obey traffic control devices and exercise ordinary care to avoid a collision. This appeal followed.


[1] Carroll first argues that the trial court erred in failing to sustain her Motion for a Directed Verdict. She notes that it is undisputed that Wright was operating the tractor-trailer and that it crossed the center line, proximately resulting in her injuries. She directs our attention to a wealth of case law holding that a motorist’s presence on the wrong side of the road at the time of a collision constitutes prima facie evidence of negligence, see e.g., Mulberry v. Howard, 457 S.W.2d 827, 829 (Ky.1970), and that court’s have “no hesitancy” directing a verdict in favor of the plaintiff under these circumstances. Davis v. Kunkle, 302 Ky. 258, 194 S.W.2d 513 (1946). The focus of her argument on this issue is that Wright had statutory and common law duties to operate the tractor-trailer in his lane and in a prudent and safe manner, that the uncontradicted evidence—including Wright’s own testimony—was that he lost control of the trailer and slid into oncoming traffic, and that she was entitled to a directed verdict as to liability. In response, Wright maintains that “no evidence was presented that the tractor-trailer was steered to the left and into Appellant’s line of travel” (emphasis added) and that when all reasonable inferences are drawn from the evidence in his favor, the trial court properly overruled Carroll’s motion for a directed verdict.


[2] In adjudicating the first appeal in this matter, the prior panel of this Court determined that Carroll was not entitled to a directed verdict upon concluding that the question of whether Wright was negligent in causing the accident was a jury question. This ruling would usually be considered “the law of the case”, but not in this instance. “The law of the case doctrine is ‘an iron rule, universally recognized, that an opinion or decision of an appellate court in the same cause is the law of the case for a subsequent trial or appeal however erroneous the opinion or decision may have been.’ “ Brooks v. Lexington–Fayette Urban County Housing Authority, 244 S.W.3d 747, 751 (Ky.App.2007), quoting Union Light, Heat & Power Co. v. Blackwell’s Adm’r, 291 S.W.2d 539, 542 (Ky.1956).


[3] The law of the case doctrine applies to a particular and unique nexus of facts and law. Inman v. Inman, 648 S.W.2d 847 (Ky.1982). Inman held that, “if, on a retrial after remand, there was no change in the issues or evidence, on a new appeal the questions are limited to whether the trial court properly construed and applied … [the law].” Id. at 849. The corollary to this holding is that a change in the evidence on retrial does not implicate the law of the case doctrine in subsequent appeals. That is to say, when either “the issues or evidence” are different on retrial, a subsequent appellate tribunal is not constrained by the law of the case doctrine. Id. See also, Louisville N.R. Co. v. Cecil, 155 Ky. 170, 159 S.W. 689 (1913).


*3 [4] In the first trial, Wright testified as to whether the brakes on the tractor-trailer were functioning properly, whether they needed adjustment and if so, how often, and other matters related to the vehicles braking system. He did not testify that he lost control of the tractor-trailer or caused the accident. In the second trial, however, Wright acknowledged that he had a duty to keep control of his vehicle and operate it in a safe manner, that he lost control of the trailer, that the trailer slid into oncoming traffic causing the accident, and that there was nothing Carroll could have done to avoid the accident. Because additional testimony was adduced at the second trial, and as that testimony was directly relevant to causation and liability, we are not constrained by the law of the case doctrine in this circumstance.FN3


[5] Carroll points us to Paducah Area Public Library v. Terry, 655 S.W.2d 19 (Ky.App.1983), wherein a “bookmobile” successfully avoided a car stopped in the roadway by swerving off the road. However, after returning to the pavement, the vehicle crossed the center line causing a collision and resultant personal injury. The Kentucky Supreme Court stated therein that,


We find no error in directing a verdict on the question of liability. When a vehicle is struck in its own traffic lane, the vehicle in the wrong or improper lane is presumptively at fault. There are situations where one’s presence in the wrong lane can be excused as a matter of law but they are rare, indeed. There are also situations where one’s negligence in being in the wrong lane may be weighed by the jury under a “sudden emergency” instruction, but this succor to a defendant does not exist where his presence in the wrong lane is brought about by his own negligence, or where the situation causing his departure from the correct lane could reasonably have been anticipated.


Paducah Area Public Library, 655 S.W.2d at 22.


[6] A motorist’s presence on the wrong side of the road at the time of a collision constitutes prima facie evidence of negligence. Mulberry, supra. Applying this principle to the facts before us, including the holding of Paducah Area Public Library that a vehicle in the wrong lane at the time of an accident is presumptively at fault, we must conclude that the presence of Wright’s vehicle in the wrong lane at the time of the accident demonstrates his presumptive fault. Uncontroverted testimonial and documentary evidence—notably including Wright’s direct testimony—demonstrates that he was driving in a manner which precluded his ability to safely brake; that he lost control of the trailer; that the trailer slid into the wrong lane; that Carroll was not at fault and could have done nothing to avoid the accident; FN4 and that the trailer’s presence in the wrong lane caused the accident. Additionally, Carroll, her husband and an expert witness each testified that Carroll received serious injuries in the accident, and this testimony was unrebutted.


*4 While testifying, Wright also acknowledged various duties shared by all drivers, including his duty to remain in control of his vehicle and the duty to stay in his lane. In addition, Wright had a specific statutory duty to stay in his lane—except to safely pass a vehicle—wherein the Legislature employed mandatory “shall” language. KRS 189.300(1) states that, “[t]he operator of any vehicle when upon a highway shall travel upon the right side of the highway[.]”


[7][8][9][10] When presented with a motion for directed verdict, “the trial court must ‘draw all fair and rational inferences from the evidence in favor of the party opposing the motion, and a verdict should not be directed unless the evidence is insufficient to sustain the verdict.’ “ Kroger Co. v. Willgruber, 920 S.W.2d 61, 64 (Ky.1996) (quoting Spivey v. Sheeler, 514 S.W.2d 667, 673 (Ky.1974)). We will review a trial court’s refusal to direct a verdict under a clear error standard. Radioshack Corp. v. ComSmart, Inc., 222 S.W.3d 256 (Ky.App.2007). The question of whether to direct a verdict rests on a determination of whether the jury’s verdict can be supported with all evidence construed in favor of the prevailing party. Lewis v. Bledsoe Surface Mining Co., 798 S.W.2d 459, 461 (Ky.1990). An appellate court may reverse the denial of a directed verdict if it determines, after reviewing the evidence in favor of the prevailing party, that the verdict is “ ‘palpably or flagrantly’ against the evidence so as to ‘indicate that it was reached as a result of passion or prejudice.’ “ Id. at 461–62, quoting Nat’l Collegiate Athletic Ass’n v. Hornung, 754 S.W.2d 855, 860 (Ky.1988).


Given the uncontroverted testimony that Wright lost control of his trailer, that it slid into oncoming traffic causing an accident and the resultant injuries, and that in so doing he violated statutory and common law duties to stay in his lane and safely operate his vehicle, we must conclude that Carroll was entitled to a directed verdict and that the Elliott Circuit Court erred in failing to so rule.


For the foregoing reasons, we reverse the Judgment of the Elliott Circuit Court and remand the matter for retrial as to damages.




FN1. In Carroll’s first appeal, the panel of this Court noted that the Kentucky Supreme Court revived the doctrine of sudden emergency in Regenstreif v. Phelps, 142 S.W.3d 1 (Ky.2004), which it defined as follows:


The common-law doctrine of “sudden emergency” attempts to explain to a jury how to judge the allegedly negligent conduct of a person, plaintiff or defendant, who is suddenly confronted with an emergency situation that allows no time for deliberation. The sudden emergency doctrine does not excuse fault; it defines the conduct to be expected of a prudent person in an emergency situation. In Harris v. Thompson [497 S.W.2d 422 (Ky.1973) ], our predecessor court noted the purpose for including the sudden emergency qualification in instructions:


[W]hen a defendant is confronted with a condition he has had no reason to anticipate and has not brought on by his own fault, but which alters the duties he would otherwise have been bound to observe, then the effect of that circumstance upon these duties must be covered by the instructions.


Regenstreif, 142 S.W.3d at 4 (emphasis in original) (citations omitted).


FN2. Carroll v. Wright, 2009 WL 414064 (Ky.App.2009).


FN3. It also merits noting that even if the issues or evidence did not change when the matter was retried, a subsequent appellate tribunal is not constrained by the law of the case doctrine in circumstances where applying the doctrine would result in manifest injustice or would sustain palpable error. Union Light, Heat & Power Co. v. Blackwell’s Adm’r, 291 S.W.2d 539 (Ky.1956). See also Justice Stephenson’s dissent in Inman, supra, at 852 wherein he quoted Union Light in opining that “[i]n such a case it is deemed to be the duty of the court to admit its error rather than to sanction an unjust result and ‘deny to [the] litigants or ourselves the right and duty of correcting an error merely because of what we may be later convinced was merely ipse dixit in a prior ruling in the same case.’ “


FN4. The circuit court granted a directed verdict in favor of Carroll on the question of her comparative negligence.

National Bankers Trust Corp. v. Peak Logistics LLC

United States District Court,

W.D. Tennessee,

Western Division.

NATIONAL BANKERS TRUST CORPORATION, a Tennessee corporation, Plaintiff,


PEAK LOGISTICS LLC, an Indiana limited liability company; Summitt Trucking LLC, an Indiana limited liability company; Pacer Transportation Solutions Inc., an Ohio corporation; Zappos.Com, Inc., a Delaware corporation; and Deckers Outdoor, Inc., Defendants,


Andy Transport, Inc., Third Party Defendant.


No. 12–2268–STA–tmp.

April 8, 2013.


Kyle A. Young, Adams & Reese, LLP, Nashville, TN, Randall J. Fishman, Richard S. Townley, Ballin Ballin & Fishman, Keith A. Aiken, National Bankers Trust, Memphis, TN, for Plaintiff.


Kyle A. Young, Adams & Reese, LLP, Nashville, TN, Lewis Wilkinson Lyons, Todd B. Murrah, Glassman Edwards Wade & Wyatt, PC, Memphis, TN, for Defendants.


Matthew Scott Mazza, Law Office of Matthew S. Mazza, Santa Barbara, CA, for Third Party Defendant.



S. THOMAS ANDERSON, District Judge.

*1 Before the Court is Defendant Deckers Outdoor, Inc.’s (“Deckers”) Motion to Dismiss for Failure to State a Claim (D.E.# 79), filed December 21, 2012. Plaintiff National Bankers Trust Corporation (“NBT”) filed a Response (D.E. # 82) on December 28, 2012. For the reasons given herein, the Court hereby DENIES Deckers’ Motion to Dismiss.



For purposes of the instant Motion, the Court accepts the following as true. FN1 NBT is engaged in the business of factoring for motor carriers. (First Am. Compl. ¶ 17, D.E. # 64.) NBT purchases its clients’ accounts receivables (owed by shippers or consigners using the clients’ carrier services) at a discount and takes a security interest in its clients’ assets (including present and after-acquired accounts receivables) securing the purchase price. (Id.) NBT remits a portion of the purchase price, known as the “advance rate,” at the time of purchase, reserving a portion of the purchase price as further security. (Id. ¶¶ 18–19.) NBT releases the reserved funds to its clients once the shipper pays the account. (Id. ¶ 19.)


FN1. On a motion to dismiss under Rule 12(b)(6), the Court will take the well-pleaded factual allegations in the complaint as true and construe them in the light most favorable to the plaintiff. Saylor v. Parker Seal Co, 975 F.2d 252, 254 (6th Cir.1992).


Defendant Pacer Transportation Solutions Inc. (“Pacer”) brokered loads of shoes Defendant Zappos.com Inc. (“Zappos”) purchased from various suppliers. (Id. ¶ 26.) Pacer contracted with Defendant Summitt Trucking, LLC (“Summitt”) to carry some of these loads. (Id. ¶ 25.) Defendant Peak Logistics, LLC (“Peak”) would then, in turn, broker some of these Summitt loads to other carriers. (Id. ¶ 24.)


On August 15, 2011, NBT and Third-party Defendant Andy Transport, Inc. (“Andy Transport”) entered into a factoring agreement. (Id . ¶ 20.) In October 2011, Peak began brokering shipments of Zappos’ shoes to Andy Transport. (Id. ¶ 21.) These loads included shipments of shoes Zappos purchased from Deckers. (Id. ¶ 22.) Pursuant to their factoring agreement, Andy Transport sold the receivables generated by these brokered shipments to NBT. (Id. ¶ 23.) NBT promptly notified Peak of NBT’s purchase of the Andy Transport receivables and of Peak’s obligation to pay NBT. (Id.)


On November 23, 2011, and January 5, 2012, Andy Transport hauled two separate loads of Zappos’ shoes shipped from Deckers’ Caramillo, California facility. (Id. ¶¶ 29, 37.) Peak brokered both loads to Andy Transport. (Id.) However, unnamed persons absconded with both loads before they reached their destination. (Id.)


On January 17, 2012, after NBT made numerous inquiries to Peak regarding payment on open Andy Transport receivables, Peak informed NBT of the thefts and that it had two insurance claims for lost cargo pending. (Id. ¶ 3 9.) Peak further informed NBT it was holding payment on Andy Transport receivables due to the pending claims. (Id.) Included in these receivables were payments on twenty-four bills of lading naming Deckers as shipper or consignor. (Id. ¶¶ 47–48.) FN2 These bills of lading incorporated the terms of the Uniform Bill of Lading. (See, e.g., Ex. to Compl. at 6, D.E. # 1–9.)


FN2. The Court notes Deckers identifies Paragraphs 47 and 48 of the Amended Complaint as containing “conclusory allegations” the Court should disregard. (Mot. to Dism. at 4, D.E.79–1.) The Court reads this as objecting to the statement “Therefore, Deckers is primarily liable for the freight charges on these twenty-four (24) invoices[,]” and not to the remainder of Paragraphs 47 and 48.


*2 NBT commenced this diversity action by filing a Complaint (D.E.# 1) in this Court on April 4, 2012, alleging causes of action against Peak, Summitt, Pacer, and Zappos for failure to pay a sworn account, fraudulent misrepresentation, negligent misrepresentation, unjust enrichment, and replevin. NBT then filed a First Amended Complaint (D.E.# 64) on October 18, 2012, adding a cause of action for failure to pay a sworn account against a new defendant, Deckers. Deckers moves the Court here to dismiss NBT’s sole claim against Deckers for failure to pay a sworn account. Deckers argues the bills of lading NBT submits to the Court indicate Deckers was not liable for shipping charges. (Mot. to Dism. at 3–5.) NBT argues in response a shipper-consignor is primarily and presumptively liable for freight charges on a bill of lading unless they elect the bill of lading’s non-recourse provisions, which Deckers did not do. (Resp. to Mot. to Dism. at 4–5, D.E. # 81.)



Under Federal Rule of Civil Procedure 12(b)(6), a defendant may move to dismiss a claim “for failure to state a claim upon which relief can be granted.” FN3 When considering a Rule 12(b)(6) motion, the Court must treat all of the well-pleaded allegations of the complaint as true and construe all of the allegations in the light most favorable to the non-moving party. FN4 However, the Court will not accept legal conclusions or unwarranted factual inferences as true.FN5 “To avoid dismissal under Rule 12(b)(6), a complaint must contain either direct or inferential allegations with respect to all material elements of the claim.” FN6 Ordinarily, a reviewing court may not consider matters outside the pleadings on a motion to dismiss under Rule 12(b)(6).FN7 However, “a copy of a written instrument that is an exhibit to a pleading is a part of the pleading for all purposes.” FN8


FN3. Fed.R.Civ.P. 12(b)(6).


FN4. Saylor, 975 F.2d at 254.


FN5. Morgan v. Church’s Fried Chicken, 829 F.2d 10, 12 (6th Cir.1987).


FN6. Wittsock v. Mark A. Van Sile, Inc., 330 F.3d 899, 902 (6th Cir.2003).


FN7. Rondingo, LLC v. Twp. of Richmond, 641 F.3d 673, 680–81 (6th Cir.2011).


FN8. Fed.R.Civ.P. 10(c).


Under Federal Rule of Civil Procedure Rule 8(a)(2), a complaint need only contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” FN9 Although this standard does not require “detailed factual allegations,” it does require more than “labels and conclusions” or “a formulaic recitation of the elements of a cause of action.” FN10 In order to survive a motion to dismiss, the plaintiff must allege facts, if accepted as true, sufficient “to raise a right to relief above the speculative level” and to “state a claim to relief that is plausible on its face.” FN11 “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” FN12


FN9. Fed.R.Civ.P. 8(a)(2).


FN10. Ashcroft v. Iqbal, 556 U.S. 662, 681 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). See also Reilly v. Vadlamudi, 680 F.3d 617, 622 (6th Cir.2012) (quoting Twombly, 550 U.S. at 555).


FN11. Twombly, 550 U.S. at 570.


FN12. Iqbal, 556 U.S. at 678.



In order to decide whether NBT states a claim against Deckers, the Court must determine the meaning of the terms in the bills of lading at issue. “The bill of lading is the basic transportation contract between the shipper-consigner and the carrier; its terms and conditions bind the shipper and all connecting carriers.” FN13


FN13. S. Pac. Transp. Co. v. Comm’l Metals Co., 456 U.S. 336, 342 (1982) (citing Tex. & Pac. R. Co. v. Leatherwood, 250 U.S. 478, 481 (1919)).


*3 The consignor, being the one with whom the contract of transportation is made, is originally liable for the carrier’s charges and unless he is specifically exempted by the provisions of the bill of lading, or unless the goods are received and transported under such circumstances as to clearly indicate an exemption for him, the carrier is entitled to look to the consignor for his charges.FN14


FN14. S. Pac. Transp., 456 U.S. at 343 (quoting C–F–G Grain Co. v. Atchison T. & S.F.R. Co., 351 I.C.C. 710, 712 (1976) (quoting In re Bills of Lading, 52 I.C.C. 671, 721 (1919), modified, 64 I .C.C. 357 (1921), further modified, 66 I.C.C. 63 (1922))).


Deckers argues the terms of the bills of lading at issue clearly and unambiguously demonstrate Deckers was not liable for the freight charges. Deckers premises this argument on two notations on the face of each bill of lading: Deckers checked the “3rd Party” box in the “Freight Charge Terms” section, and the section “Third Party Freight Charges Bill To” indicates billing to Zappos care of Pacer. NBT counters the terms contained in the “Freight Charge Terms” and “Third Party Freight Charges Bill To” sections have no effect on Deckers’ presumptive liability for shipping charges under the bills of lading.


The Court holds the terms contained in the “Freight Charge Terms” and “Third Party Freight Charges Bill To” sections do not explicitly release Deckers from primary liability for shipping charges on the bills of lading. “[A]bsent an express statement on the face of the bill of lading or a separate agreement allocating liability, the shipper-consignor remains presumptively liable for all lawful freight charges.” FN15 The Uniform Bill of Lading provides a method for a consignor to release itself from primary liability for shipping charges:


FN15. CSX Transp., Inc. v. Meserole St. Recycling, 618 F.Supp.2d 753, 766 (W.D.Mich.2009) (citing S. Pac. Transp., 456 U.S. at 342–43; Oak Harbor Freight Lines, Inc. v. Sears Roebuck Co., 513 F.3d 949, 954–55 (9th Cir.2008)).


[t]he consignor shall be liable for the freight and all other lawful charges, except that if the consignor stipulates, by signature, in the space provided for that purpose on the face of this bill of lading that the carrier shall not make delivery without requiring payment of such charges and the carrier, contrary to such stipulation, shall make delivery without requiring such payment, the consignor (except as hereinafter provided) shall not be liable for such charges.FN16


FN16. 49 C.F.R. pt. 1035 app. B, § 7 (emphasis added). A signature in the space provided on the face of the bill of lading stating the carrier shall not make delivery without requiring payment of freight charges from the consignee is known as the “non-recourse” or “Section 7” election.


The Sixth Circuit has not discussed the effect of directions to bill third parties on the face of a bill of lading. However, a district court in the Western District of Michigan has confronted such an issue, as have the Fifth and Ninth Circuit Courts of Appeals.


In CSX Transportation, Inc. v. Meserole Street Recycling, the Western District of Michigan examined an argument similar to that advanced by Deckers. There, the defendants in an action for shipping charges on bills of lading claimed listing a third party in the section marked “Send Freight Bill To” released the defendants from liability for shipping charges.FN17 The Meserole court reasoned “federal regulation of interstate rail shipments was intended to establish ‘clear, easily enforceable rules for liability .’ “ FN18 The court further noted “[t]he uniform bill of lading in general, and Section 7 in particular, loses its utility if … the carrier cannot rely on unambiguous representations contained on the face of the bill in determining how to allocate liability for freight charges.” FN19 Finding the language merely indicated the carrier expected payment from either the consignee or the shipper, and did not explicitly release the shipper from liability, the court held the “ ‘simple glossation’ of the ‘Send Freight Bill To’ designation … insufficient to relieve [the defendants] of liability.” FN20


FN17. Meserole, 618 F.Supp.2d at 768.


FN18. Id. (quoting CSX v. Novolog Bucks Co., 502 F.3d 247, 257 (3d Cir.2007)).


FN19. Meserole, 618 F.Supp.2d at 768 (citing Mo. Pac. R.R. Co. v. Cent. Plains Indus., Inc., 720 F.2d 818, 819 (5th Cir.1983)).


FN20. Id. at 768–69 (quoting Mo. Pac. R.R., 720 F.2d at 819).


*4 In Missouri Pacific Railroad Co. v. Center Plains Industries, Inc., the Fifth Circuit considered a case where the consignor had typed “Send Freight Bill To” and the address of a third party on the face of the bill of lading. FN21 The Missouri Pacific panel noted “the transfer of [the shipper’s liability for payment] must be clearly established by the agreement between the parties or the circumstances surrounding the receipt and transportation of the goods.” FN22 As a general matter, a shipper designates such a transfer by “exercising the privilege made available by Section 7 of the Contract Terms and Conditions printed … on the bill of lading by the simple expedient of marking the Section 7 box[.]” FN23 As a result, the Fifth Circuit held the “Send Freight Bill To” language, on its own, insufficient to “transfer the obligation of payment.” FN24


FN21. Mo. Pac. R.R., 720 F.2d at 819.


FN22. Id. (citing S. Pac. Transp., 456 U.S. at 342).


FN23. Id. (citing S. Pac. Transp., 456 U.S. at 342).


FN24. Id.


In Oak Harbor Freight Lines, Inc. v. Sears Roebuck & Co., the Ninth Circuit examined the case of shipper liability when the bill of lading stated “Freight Terms: PREPAID” and instructed the carrier to send freight bills to a third party.FN25 The Ninth Circuit found under the default terms of the Uniform Bill of Lading, the shipper is liable for freight charges unless the shipper marks the bill of lading “nonrecourse.” FN26 The Ninth Circuit noted that their holding did not preclude an allocation of responsibility by separate agreement, but in the absence of such an agreement the default terms of the Uniform Bill of Lading controlled.FN27


FN25. Oak Harbor Freight Lines, Inc. v. Sears Roebuck & Co., 513 F.3d 949, 953 (9th Cir.2008).


FN26. Id. at 954–55 (citing C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 478–79 (9th Cir.2000); Toyo Kisen Kaisha v. W.R. Grace & Co., 53 F.2d 740, 742 (9th Cir.1931)).


FN27. Id. at 955 (“As a consequence, in the absence of a separate agreement, Sears is liable for the freight charges on the outbound bills of lading.”).


In the instant case, the bills of lading explicitly incorporate the default terms of the Uniform Bill of Lading. Although the bills of lading contained a checked-off box indicating third-party billing and directed Andy Transport was to bill Zappos care of Pacer, they also included a box where Deckers could make a Section 7 election by signature. Although Deckers argues it did not make the Section 7 election because doing so would not reflect the agreement between the parties, the Court finds this line of reasoning unpersuasive. Deckers states the agreement between the parties was that Andy Transport would pick up the loads of shoes from Deckers, carry them to Zappos, then bill freight charges to Zappos care of Pacer. Since the Section 7 election language mandates the carrier collect payment at delivery, Deckers maintains making this election would run contrary to the agreement. While a narrow reading of the terms of the Section 7 box would indicate the consignee was to tender cash upon delivery, a more reasonable construction allows for a shipper to receive payment in the form of a promise to pay-exactly the arrangement Deckers seems to assert. FN28 Since the weight of authority directs the Court to the finding that, absent a Section 7 election, language on the face of a bill of lading indicating a third party is to receive billing does not relieve a consignee of primary liability on the bill of lading, the Court cannot find NBT fails to state a claim against Deckers. Therefore, the Court DENIES Deckers’ Motion to Dismiss.


FN28. The Court notes the existence of a separate agreement between Andy Transport, Deckers, and Zappos might constitute a defense to liability. See Oak Harbor, 513 F.3d at 949 (“[I]f parties enter into a contract before preparing a bill of lading, and there is ‘an irreconcilable repugnancy between the prior written contract and the bills of lading, that conflict would have to be resolved in favor of the former.’ ”) (quoting Toyo Kisen Kaisha, 53 F.2d at 742). However, that issue is not before the Court on this Motion to Dismiss.



*5 Because Deckers has not shown the bills of lading expressly relieve Deckers of liability, the Court finds NBT states a claim against Deckers in its Amended Complaint. Therefore, the Court hereby DENIES Deckers’ Motion to Dismiss.



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