United States District Court,

E.D. Michigan,

Southern Division.

OAKLAND–MACOMB INTERCEPTOR DRAIN DRAINAGE DISTRICT, Plaintiff,

v.

ZURICH AMERICAN INSURANCE COMPANY, Defendant.

 

No. 13–cv–12399.

Oct. 15, 2013.

 

Douglas Young, Wilson Young PLC, Detroit, MI, for Plaintiff.

 

Edward W. Gleason, Thomas B. Keegan, Senak Keegan Gleason Smith & Michaud, Ltd., Chicago, IL, Michael J. Black, Black & Duggan, Troy, MI, for Defendant.

 

ORDER GRANTING DEFENDANT’S MOTION FOR DISMISSAL PURSUANT TO FED. R. CIV. P. 12(B)(6) [# 7], CANCELLING OCTOBER 17, 2013 HEARING AND DISMISSING ACTION

GERSHWIN A. DRAIN, District Judge.

I. INTRODUCTION

*1 Plaintiff, the Oakland–Macomb Interceptor Drain Drainage District, filed the instant action on May 31, 2013, against its insurer, Zurich American Insurance Company (“Zurich”) for breach of contract, declaratory judgment and bad faith stemming from Zurich’s handling and ultimate denial of Plaintiff’s claim for loss and damage to its property. In lieu of filing its Answer, Zurich filed a Motion for Dismissal Pursuant to Fed.R.Civ.P. 12(b)(6) on July 17, 2013. This matter is fully briefed and the Court concludes that oral argument will not aid in the resolution of this matter. Accordingly, the Court will resolve Defendant’s Motion on the briefs submitted and cancels the October 17, 2013 hearing. See E.D. Mich. L.R. 7.1(f)(2). For the reasons that follow, Zurich’s Motion for Dismissal Pursuant to Fed.R.Civ.P. 12(b)(6) is granted.

 

II. FACTUAL BACKGROUND

In 2010, the parties executed the Zurich Completed Value Builders Risk Policy (the “Policy”), which provided insurance coverage for all risks of direct physical loss to covered property at the Plaintiff’s project. The policy describes the project as “[r]ehabilitation of 23–miles of sewer lines in Oakland and Macomb counties and construction of corridor bypass.” Compl., Ex. A at 6. The period of the policy was from February 1, 2010 through February 1, 2014. The policy contains a suit limitation provision, which states:

 

26. SUIT AGAINST THE COMPANY

 

No suit or action on this Policy for the recovery of any claim will be sustainable in any court of law or equity unless the Insured will have fully complied with all the requirements of this Policy. Any action or proceeding against the Company for recovery of any loss under this Policy will not be barred if commenced within (12) twelve months after the OCCURRENCE* becomes known to the Named Insured unless a longer period of time is required by applicable statute.

 

Compl., Ex. A at 34.

 

During the approximate time period of March 11, 2010 through April 16, 2010, one or more contractors at the project site were negligent in performing watering activities, which caused damage to covered property at a portion of the Plaintiff’s project site. On August 2, 2010, Plaintiff advised Zurich of the loss.

 

Zurich failed to provide Plaintiff with a Statement in Proof of Loss Form (“POLF”), thus Plaintiff, on its own initiative, prepared and submitted its POLF to Zurich on June 25, 2012. The POLF seeks insurance coverage in the amount of $2,837,986.56. Plaintiff indicated that the cause of the loss was “the negligent dewatering and/or unwanted removal of soil from a portion of the Insured Project.” On July 19, 2012, Zurich acknowledged receipt of the POLF and rejected it, claiming it did not have sufficient documentation to substantiate the claim and that its investigation into the loss was ongoing. On August 21, 2012, Plaintiff provided Zurich with additional voluminous records relating to the loss. On January 29, 2013, Zurich denied Plaintiff’s claim. On March 8, 2013, Plaintiff requested that Zurich reconsider its denial of Plaintiff’s claim. On May 22, 2013, Zurich issued a letter reaffirming its denial of coverage for Plaintiff’s claim.

 

III. LAW & ANALYSIS

 

A. Standard of Review

 

*2 Federal Rule of Civil Procedure 12(b)(6) allows the court to make an assessment as to whether the plaintiff has stated a claim upon which relief may be granted. See Fed.R.Civ.P. 12(b)(6). “Federal Rule of Civil Procedure 8(a)(2) requires only ‘a short and plain statement of the claim showing that the pleader is entitled to relief,’ in order to ‘give the defendant fair notice of what the … claim is and the grounds upon which it rests.’ “ Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (citing Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). Even though the complaint need not contain “detailed” factual allegations, its “factual allegations must be enough to raise a right to relief above the speculative level on the assumption that all of the allegations in the complaint are true.” Ass’n of Cleveland Fire Fighters v. City of Cleveland, 502 F.3d 545, 548 (6th Cir.2007) (quoting Bell Atlantic, 550 U.S. at 555).

 

The court must construe the complaint in favor of the plaintiff, accept the allegations of the complaint as true, and determine whether plaintiff’s factual allegations present plausible claims. To survive a Rule 12(b)(6) motion to dismiss, plaintiff’s pleading for relief must provide “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. (citations and quotations omitted). “[T]he tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009). “Nor does a complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.” Id. “[A] complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.” Id. The plausibility standard requires “more than a sheer possibility that a defendant has acted unlawfully.’ Id. “[W]here the wellpleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not ‘show[n]’-‘that the pleader is entitled to relief.” Id. at 1950.

 

The district court generally reviews only the allegations set forth in the complaint in determining whether to grant a Rule 12(b) (6) motion to dismiss, however “matters of public record, orders, items appearing in the record of the case, and exhibits attached to the complaint, also may be taken into account. Amini v. Oberlin College, 259 F.3d 493, 502 (6th Cir.2001). Documents attached to a defendant’s “motion to dismiss are considered part of the pleadings if they are referred to in the plaintiff’s complaint and are central to her claim.’ Id.

 

B. Zurich’s Motion for Dismissal Pursuant to Fed.R.Civ.P. 12(b)(6)FN1

 

FN1. Zurich also moves for dismissal of part of Plaintiff’s damages request, specifically Plaintiff’s claim for attorney fees. See Mot. at 11–12. In its Response, Plaintiff indicates that it will withdraw its claim for attorney fees. Accordingly, the Court will not address this aspect of Zurich’s present motion.

 

Zurich requests that this Court enter an order dismissing Plaintiff’s claims in their entirety based on the twelve month suit limitation provision set forth in the Policy. Plaintiff did not file the instant action until May 31, 2013, or more than thirty-seven months after it became aware of its loss in August of 2010. Conversely, Plaintiff argues its claim is timely based upon judicial and/or statutory tolling because Zurich failed to advise Plaintiff that its claim was denied until January 29, 2013. Thus, Plaintiff maintains that the time between Plaintiff’s notice to Zurich and Zurich’s denial is tolled, therefore the Complaint is not untimely.

 

*3 Plaintiff’s argument relies on decisions that no longer accurately represent Michigan law on the application of judicial tolling to suit limitation provisions in insurance contracts. Further, Plaintiff misinterprets case law concerning the availability of statutory tolling for insurance contracts such as the one before this Court.

 

Plaintiff first relies on the Michigan Supreme Court’s decision in Tom Thomas Organization, Inc. v. Reliance Ins. Co., 396 Mich. 588, 242 N.W.2d 396 (1976), which applied judicial tolling and tolled the running of the limitations period from the time the insured gave notice until the time the insurer formally denied the insured’s claim. Id. at 596–97, 242 N.W.2d 396. However, Tom Thomas was overruled by Rory v. Continental Ins. Co., 473 Mich. 457, 470, 703 N.W.2d 23 (2005), which held that “an unambiguous contractual provision providing for a shortened period of limitations is to be enforced as written unless the provision would violate law or public policy,” and that a one-year suit limitation was not contrary to public policy. Id. at 470, 491, 703 N.W.2d 23.

 

Further, contrary to Plaintiff’s argument, the Michigan Supreme Court has overruled Tom Thomas in the private insurance context. See McDonald v. Farm Bureau Ins. Co., 480 Mich. 191, 747 N.W.2d 811 (2008). The McDonald court specifically held that: “Tom Thomas disregarded long-established case law requiring that we read unambiguous contract provisions as they are written.” Id. at 199, 747 N.W.2d 811. The McDonald court further concluded that “[w]e reiterate that Rory overruled Tom Thomas and its progeny and conclude that express limitations periods in optional insurance contracts are not automatically tolled as a matter of law by filing a claim.”   Id. at 200–01, 747 N.W.2d 811.FN2 Therefore, judicial tolling cannot be used to toll the twelve month suit limitation provision set forth in the Policy.

 

FN2. The Court also notes that the McDonald court reversed the Michigan Court of Appeals’s decision in McDonald v. Farm Bureau Ins. Co., No. 259168, 2006 WL 2457692 (Mich.App. Aug.24, 2006), thus Plaintiff’s reliance on the appellate court decision is similarly misplaced.

 

Plaintiff next argues that statutory tolling applies here because the Policy at issue, a “builders risk” policy, is considered a fire insurance policy, therefore MICH. COMP. LAWS § 500.2833 applies to these circumstances. Michigan Compiled Laws § 500.2833 states:

 

(1) Each fire insurance policy issued or delivered in this state shall contain the following provisions:

 

* * *

(q) That an action under the policy may be commenced only after compliance with the policy requirements. An action must be commenced within 1 year after the loss or within the time period specified in the policy, whichever is longer. The time for commencing an action is tolled from the time the insured notifies the insurer of the loss until the insurer formally denies liability.

MICH. COMP. LAWS § 500.2833. The only legal authority Plaintiff provides, Hunt Construction Group, Inc. v. Allianz Global Risks U.S. Insurance Co., 503 F.3d 632 (7th Cir.2007), does not stand for the proposition Plaintiff claims. Rather, contrary to Plaintiff’s contention, Hunt Construction did not conclude that builders risk policies, such as the one at issue herein, fall within the general definition of a fire insurance policy. See Plf.’s Br. at 8. In reversing the district court, the Seventh Circuit Court of Appeals rejected the lower court’s conclusion that the subject builders risk policy was “actually a ‘fire insurance policy.’ ” Hunt Construction, 503 F.3d at 633. The court further noted that while fire is one of the risks of a construction project against which the builders risk policy insures, “it is only one, and it seems odd, given the evolution of builders risk insurance policies from inland marine policies, to describe a builders risk policy as a fire insurance policy just because fire is among the risks insured by it.” Id. The court also opined “[t]o call the builders risk policy a fire insurance policy, and submit it to the 19 separate requirements that the statute imposes on ‘each fire insurance policy issued or delivered … strains the meaning of the term fire insurance policy.’ ” Id.

 

*4 Thus, the Hunt Construction court held that the statute does not apply to builders risk policies such as the one at issue here, therefore Plaintiff cannot demonstrate that statutory tolling is applicable to the instant matter. The Court concludes that Plaintiff is not entitled to judicial or statutory tolling of the twelve month suit limitation period set forth in the Policy.

 

Plaintiff also relies on the Michigan Department of Financial and Insurance Services issuance of Administrative Rule 500.2212 to suggest that Michigan public policy disfavors shortened limitation of action provisions in insurance contracts. Michigan Administration Code Rule 500.2212 states in relevant part:

 

Rule 2. (1) A shortened limitation of action clause unreasonably reduces the risk purported to be assumed in the general coverage of the policy within the meaning of MCL 500.2236.

 

(2) On and after the first day of the first month following the effective date of these rules, an insurer shall not issue, advertise, or deliver to any person in this state a policy, contract, rider, indorsement, certificate, or similar contract document that contains a shortened limitation of action clause[.]

 

Mich. Admin. Code R. 500.2212(1)-(2). However, this rule is inapplicable to commercial insurance contracts. Under the code, a “[s]hortened limitation of action clause is a provision in a form that shortens the period of time otherwise provided by statute within which a claimant may bring an action in law or equity against an insurer for claims arising under a personal insurance policy.” Mich. Admin. Code R. 500.2211(d) (emphasis supplied). Further, personal insurance is defined as “insurance policies underwritten and sold on an individual or group basis for personal, family, or household use.” Mich. Admin. Code R. 500.2211(c). In any event, as Rory and its progeny make clear, Michigan public policy favors parties’ rights to contract freely.   Rory, 473 Mich. at 468–69, 703 N.W.2d 23.

 

Lastly, the Court notes that the McDonald court rejected the same argument Plaintiff raises herein, namely that Zurich should be equitably estopped from raising the twelve month suit limitation provision because it delayed its decision until January 29, 2013. McDonald, 480 Mich. at 205, 747 N.W.2d 811 (“The trial court’s factual finding that defendant caused delays is insufficient to grant estoppel because there is no evidence that plaintiff relied on anything defendant did or said.”). Plaintiff’s Complaint is devoid of any factual allegations supporting an inference that Zurich led Plaintiff to believe that it would not rely on its available defenses under the Policy. Accordingly, Plaintiff’s Complaint is subject to dismissal because it was untimely filed pursuant to the parties’ Policy.

 

Lastly, Plaintiff’s bad faith claim is also subject to dismissal because Michigan does not recognize bad-faith breach of an insurance contract as a separate and distinct tort. See Livonia Volkswagon, Inc. v. Universal Underwriters Group, No. 06–13619, 2008 WL 880189 (E.D.Mich. March 31, 2008); Jennings v. Nationwide Mutual Fire Ins. Co., No. 11–14439, 2011 WL 5525951 (E.D.Mich. Nov.14, 2011); Casey v. Auto Owners Ins. Co., 273 Mich.App. 388, 729 N.W.2d 277 (2006). Here, Plaintiff alleges that Zurich has “improperly denied” its claim and “taken other coverage positions … which are improper and inapplicable and Zurich has taken these coverage positions without good faith and in bad faith.” See Compl., ¶ 33. Thus, “[t]he only conduct alleged by [P]laintiff as being tortious is [Zurich’s] failure to pay the claim.”   Runions v. Auto–Owners Ins. Co., 197 Mich.App. 105, 495 N.W.2d 166 (1992). Therefore, Plaintiff’s allegations “attempt[ ] to plead the nonexistent tort of bad-faith handling of an insurance claim.” Id . As in Runions, it is appropriate to dismiss this count for failure to state a claim.

 

V. CONCLUSION

*5 For the foregoing reasons, Defendant’s Motion for Dismissal Pursuant to Fed.R.Civ.P. 12(b)(6) [# 7] is GRANTED. This cause of action is dismissed.

 

SO ORDERED.

United States District Court,

W.D. Missouri,

Southern Division.

AURORA ORGANIC DAIRY CORPORATION, Plaintiff,

v.

WESTERN DAIRY TRANSPORT, LLC, Defendant.

 

No. 11–3194–CV–S–DPR.

Oct. 15, 2013.

 

C. Raymond Bell, Michael W. Newport, Foley & Mansfield, PLLP, St. Louis, MO, Diana E. McMonagle, Emilie Bakal–Caplan, Jeffrey S. Weinstein, Mound Cotton Wollan & Greengrass, New York, NY, for Plaintiff.

 

Andrew K. Light, Craig J. Helmreich, Scopelitis, Garvin, Light, Hanson & Feary, Indianapolis, IN, Karrie J. Clinkinbeard, Krystle Marie Scherling, Lynn W. Hursh, Armstrong Teasdale LLP, Patrick Kevin McMonigle, Dysart, Taylor, Cotter, McMonigle & Montemore, P.C., Kansas City, MO, for Defendant.

 

MEMORANDUM AND OPINION

DAVID P. RUSH, United States Magistrate Judge.

*1 Now pending before the Court are 1) a Motion for Summary Judgment filed by Defendant Western Dairy Transport, LLC (Doc. 63); 2) a Motion for Summary Judgment as to Liability filed by Plaintiff Aurora Organic Dairy (Doc. 65); and 3) a Motion to Strike the Statements, Opinions, Testimony, and Affidavits of Neil Bogart and Carolyn Otten filed by Defendant Western Dairy Transport, LLC (Doc. 67). For the reasons set forth below, both motions for summary judgment are DENIED, and the Motion to Strike Statements, Opinions, Testimony, and Affidavits of Neil Bogart and Carolyn Otten is GRANTED in part and DENIED in part.

 

FACTUAL BACKGROUND

As relevant here, Plaintiff Aurora Organic Dairy Corporation (“Aurora”) contracted with Defendant Western Dairy Transport, LLC (“WDT”) to transport raw milk from various farms to Aurora’s processing facility in Platteville, Colorado. Between May 18, 2010, and June 3, 2010, WDT carried 28 tankers of milk from three Aurora farms: Coldwater East, Coldwater West, and Pepper Dairies. Upon delivery at Aurora’s processing facility, the milk was deemed to be contaminated with unidentified black particles. The 28 loads were rejected; the milk was ultimately destroyed. Aurora brought this action seeking damages from WDT for the contaminated milk.

 

MOTION TO STRIKE STATEMENTS, OPINIONS, TESTIMONY, AND AFFIDAVITS OF NEIL BOGART AND CAROLYN OTTEN

Under Fed.R.Civ.P. 37(c)(1), a court may exclude information or opinions provided by undisclosed witnesses as a sanction for failing to disclose them to the opposing parties. The exclusion is “automatic and mandatory” unless the failure was “substantially justified or is harmless.” Musser v. Gentiva Health Services, 356 F.3d 751, 758 (7th Cir.2004). See also Wegener v. Johnson, 527 F.3d 687, 692 (8th Cir.2008). Pursuant to Fed.R.Civ.P. 26(a)(2), a party is required to specifically disclose the identity of any witness “it may use at trial to present evidence under Federal Rule of Evidence 702, 703, or 705.” Under Rule 702, a witness is categorized as an expert based upon his or her reliance on “scientific, technical, or other specialized knowledge.” Thus, a fact witness provides expert testimony if the testimony contains opinions based on that scientific, technical, or specialized knowledge, “regardless of whether those opinions were formed during the scope of interaction with a party prior to litigation.” OCI Chem. Corp. v. Am. Railcar Indus., Inc., Case No. 4:05–cv–1506–FRB, 2009 WL 928730 (E.D.Mo. March 31, 2009) (citing Musser, 356 F.3d at 757 n. 2).

 

Defendant WDT seeks to strike all statements, opinions, testimony, and affidavits of Plaintiff Aurora’s witnesses Neil Bogart and Carolyn Otten. In brief, WDT alleges that the statements and opinions expressed by Neil Bogart and Carolyn Otten and used in support of Aurora’s Motion for Summary Judgment should be stricken because they were not properly disclosed. Specifically, WDT alleges that in initial disclosures filed pursuant to Fed.R.Civ.P. 26(a)(1), Aurora identified Neil Bogart as a fact witness only, and did not name or otherwise designate Carolyn Otten at all. Aurora did not submit any supplemental disclosures. WDT further alleges that Aurora did not disclose either Bogart or Otten as expert witnesses in its expert disclosures pursuant to Fed.R.Civ.P. 26(a)(2). Aurora, however, provided declarations of both Bogart and Otten in support of its motion for summary judgment. WDT requests that the Court strike the statements and opinions of Bogart and Otten as a sanction for failure to disclose them as experts, as specified in Fed.R.Civ.P. 37(c)(1).

 

*2 Aurora responds that its failure to identify Carolyn Otten was inadvertent and ultimately harmless because the reports she issued were fully disclosed to WDT, and WDT used them extensively in deposing other witnesses, as did WDT’s expert Clifford Bigelow. Moreover, Aurora contends that both Bogart and Otten are merely fact, not expert, witnesses, and therefore specific expert disclosure under Rule 26(a)(2) was not required.

 

In reply, WDT contends that it intentionally forwent deposition of Neil Bogart because he was not disclosed as an expert witness, and WDT presumed that Aurora would not offer Bogart’s opinions. WDT argues that had it known Aurora intended to use Bogart as an expert, it would have sought to depose him.

 

The Court has reviewed the declarations of Neil Bogart and Carolyn Otten and finds that both expressed opinions based on their scientific, technical, and specialized expertise. Accordingly, the Court finds that Aurora should have designated both Neil Bogart and Carolyn Otten as experts and should have disclosed them accordingly. Aurora failed to disclose Carolyn Otten as either a fact or expert witness, but subsequently relied on her declaration and scientific reports in support of its motion for summary judgment. This was improper. Therefore, as a sanction for Aurora’s failure to so disclose, Otten’s declaration and reports are excluded from use in support of the motion for summary judgment and may not be used at trial.

 

The Court recognizes that Bogart was a participant in the investigation of the contaminated milk at the earliest stages, and therefore may have witnessed and participated in events that are the basis of this lawsuit. Moreover, Aurora did disclose Bogart as a fact witness. This disclosure is insufficient, however, to save his opinion testimony. Thus, Bogart’s statements describing what he observed or participated in may be used to support the motion for summary judgment, and he may testify to those observations at trial. His opinions and recommendations made as a result of his investigation, however, are based upon scientific, technical, or specialized expertise, and cross the boundary between fact and expert testimony. As a result, the Court has disregarded his expert testimony in support of the motion for summary judgment, and Bogart will be precluded from testifying as an expert at trial.

 

Accordingly, as described above, WDT’s Motion to Strike Statements, Opinions, Testimony, and Affidavits of Neil Bogart and Carolyn Otten is GRANTED in part and DENIED in part.

 

MOTIONS FOR SUMMARY JUDGMENT

Legal Standards

Under Federal Rule of Civil Procedure 56(c), summary judgment is proper only if the moving party can demonstrate “that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). See also Popp Telecom, Inc. v.. Am. Sharecom, Inc., 361 F.3d 482, 487 (8th Cir.2004). The moving party bears the burden of establishing that no material facts are in genuine dispute; any doubt as to the existence of a genuine issue must be resolved against the moving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 160 (1970). See also Johnson v. Crooks, 326 F.3d 995, 1005–06 (8th Cir.2003). A moving party is entitled to judgment as a matter of law where the non-moving party “has failed to make a sufficient showing on an essential element of her case with respect to which she has the burden of proof.”   Celotex, 477 U.S. at 323. “[A] complete failure of proof concerning an essential element of the nonmoving party’s case necessarily renders all other facts immaterial.” Id.

 

*3 The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. See Vaughn v. Roadway Express, Inc., 164 F.3d 1087, 1089 (8th Cir.1998). After the moving party has made that showing, the burden shifts to the non-moving party to demonstrate the presence of a genuine issue for trial. See Beyer v. Firstar Bank, N.A., 447 F.3d 1106, 1108 (8th Cir.2006). “Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial.” Ricci v. DeStefano, 557 U.S. 557, 586 (2009) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986)).

 

Carmack Amendment

The Carmack Amendment to the Interstate Commerce Act holds a carrier of goods in interstate commerce liable for loss, damage, or injury to property they transport. See Kaiser Aluminum & Chem. Corp. v. Illinois Cent. Gulf R.R. Co., 615 F.2d 470, 474 (8th Cir.1980) (citing Missouri Pac. R.R. v. Elmore & Stahl, 377 U.S. 134 (1964)). To make out a prima facie case under the Carmack Amendment, a shipper must show 1) the goods were delivered to the carrier in good condition; 2) the goods arrived in damaged condition; and 3) the amount of damages. See REI Trans., Inc. v. C.H. Robinson Worldwide, Inc., 519 F.3d 693, 699 (7th Cir.2008). If a shipper makes this showing, the carrier may avoid liability by demonstrating 1) it was not negligent, and 2) the cargo was damaged by other means. See Allied Tube & Conduit Corp. v. S. Pac. Transp. Co., 211 F.3d 367, 370–71 (7th Cir.2000).

 

A shipper may demonstrate delivery to the carrier in good condition through direct or circumstantial evidence. Courts have held a clean bill of lading may sufficiently establish delivery in good condition in situations where the carrier can visually inspect the goods for damage. See Pillsbury Co. v. Illinois Cent. Gulf R.R., 687 F.2d 241, 244 (8th Cir.1982). But in cases where damage may not be immediately visible to the carrier, the shipper is required to produce additional or “cumulative” evidence to establish delivery in good condition. See Nat’l Trans., Inc. v. Inn Foods, Inc., 827 F.2d 351, 354 (8th Cir.1987).

 

Cross Motions for Summary Judgment

In its own motion, and in response to WDT’s Motion for Summary Judgment, Aurora argues that it has sufficiently made its prima facie case, and WDT cannot demonstrate it was not negligent. Aurora points to the following evidence (Doc. 66) to demonstrate that the raw milk was free from contaminants when it was loaded onto WDT’s tankers: 1) the damaged milk did not come from a single source—it originated from three separate farms and six different milk silos—but all of the damaged milk was transported on WDT tankers; 2) visual inspection of the milk revealed no contamination; 3) bulk tank samples (samples taken of the raw milk from the silo prior to transfer to a tanker) for all twenty-eight of the rejected loads were “clean” (not contaminated); 4) no notes appeared on the bills of lading that would indicate debris or other contaminants in each load; 5) beginning in July 2009 and into 2010, WDT tankers that arrived for transport of Aurora milk were dirty, and “unsuitable” for transportation of the milk; and 6) the contamination ceased when Aurora took over the process of washing the tankers in a “closed-loop” system.

 

*4 Aurora contends that WDT cannot overcome the presumption of negligence in the face of evidence that its tankers were frequently dirty, and it took no corrective action when informed of the problems with tank washes and wash stations. Aurora further argues that WDT’s own expert identified only three potential sources of contamination: the farm, the tankers shedding some material, or a wash station introducing foreign material. Aurora contends that because it has sufficiently demonstrated that the contamination could not have come from its farms, the only potential explanations left are both the responsibility of WDT, thus making WDT liable. Thus, Aurora contends, the only issue for trial is the amount of damages to which it is entitled.

 

In opposition to Aurora’s Motion for Summary Judgment, and in its own motion, WDT argues that Aurora has not sufficiently made its prima facie case because Aurora did not establish that the raw milk was delivered to the tankers in good condition. WDT points specifically to evidence from the testimony of Joe Drogowski, and the exhibit chart of Donna Getman, that black specks appeared on several of the filters from farm milk silos. WDT further contends that these filters, which might have shown farm-based contamination, were destroyed without having been tested.

 

WDT further supports its argument with the testimony of its expert, Cliff Bigelow, who opines that there is insufficient evidence to show that the tankers themselves or the tanker wash process introduced the foreign matter into the raw milk. Absent such evidence, Bigelow concludes that the raw milk must have been contaminated prior to delivery to WDT’s tankers. WDT contends alternatively that even if it is held liable, certain damages should be excluded because Aurora failed to follow its own practices and procedures once it was determined that the raw milk was delivered by WDT in damaged condition. Finally, WDT maintains that not all of the samples taken of the raw milk before it was loaded onto the tankers were sent for testing, and the filters between the farm silos and the WDT tankers were destroyed. WDT thus argues that Aurora’s claims should be dismissed as a remedy for spoliation of that evidence, or alternatively, the jury should be given an adverse inference instruction.

 

Based upon the arguments of the parties and the evidence submitted in support of the competing motions for summary judgment, the Court finds that genuine issues of material fact exist as to whether Aurora has made its prima facie case under the Carmack Amendment. Aurora has provided circumstantial evidence that the milk from the three farms was delivered to WDT’s tankers in good condition, but WDT has provided testimonial evidence that “black specks” appeared in milk before it was filtered into tankers, and expert testimony that the contaminants did not come from WDT’s tankers. In addition, WDT has raised questions regarding the destruction of filters that might have provided relevant evidence regarding the pre-delivery condition of the milk. This evidence calls into question whether Aurora has sufficiently established the first element of its prima face case; it raises a genuine issue of material fact for a jury. As such, Aurora’s Motion for Summary Judgment is DENIED.

 

*5 By the same token, however, Aurora has provided sufficient evidence of delivery of the raw milk to the tankers in good condition. While WDT’s evidence calls into question Aurora’s establishment of its prima facie case, it is not sufficient to entitle WDT to judgment as a matter of law. Accordingly, WDT’s Motion for Summary Judgment is also DENIED.

 

Finally, regarding the issue of the destruction of the filters prior to testing, the Court will consider WDT’s request for an adverse inference instruction at the upcoming Pretrial Conference as it is the subject of one of WDT’s pending motions in limine.

 

CONCLUSION

Therefore, based on all the foregoing, both Motions for Summary Judgment filed by WDT (Doc. 63) and Aurora (Doc. 65) are DENIED. WDT’s Motion to Strike Statements, Opinions, Testimony, and Affidavits of Neil Bogart and Carolyn Otten is GRANTED in part and DENIED in part. At trial, Neil Bogart may testify as a fact witness, but not as an expert.

 

IT IS SO ORDERED.