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Bits & Pieces

One Step Up v. J.B. Hunt

One Step Up, Ltd. v. J.B. Hunt Transportation Services, Inc.

S.D.N.Y.,2006.

United States District Court,S.D. New York.

ONE STEP UP, LTD., Plaintiff,

v.

J.B. HUNT TRANSPORATION SERVICES, INC., Defendant.

 

Nov. 22, 2006.

 

 

MEMORANDUM AND ORDER

BUCHWALD, J.

One Step Up, Ltd. (“plaintiff or “One Step Up”), a New York corporation, brings this action under both federal law and diversity jurisdiction against J.B. Hunt Transportation Services, Inc. (“defendant” or “J.B. Hunt”), a company based in Arkansas. Plaintiff seeks damages arising from defendant’s alleged failure to satisfactorily deliver three shipments of women’s wear apparel to a Wal-Mart distribution center. Defendant moves for summary judgment against plaintiff; plaintiff, in turn, cross-moves for summary judgment. For the reasons set forth below, defendant’s motion is granted, and plaintiff’s cross-motion is denied.

 

 

BACKGROUND

 

 

Except where indicated, there are no genuine issues regarding the following facts.

 

Plaintiff One Step Up is an importer, manufacturer, and distributor of women’s wear apparel. Joint Stipulation (“JS”) ¶  1. Defendant J.B. Hunt is a motor carrier, engaged in the provision of trucking and transportation services. Defendant’s Rule 56.1 Statement (“Def. 56.1 Stmt.”) ¶  1; Plaintiff’s Rule 56.1 Statement (“Pl. 56.1 Stmt.”) ¶  1. At issue in this case are three shipments (the “July”, “August” and “September” shipments, or shipments # 1-3, respectively) of women’s wear apparel, purchased by Wal-Mart from plaintiff, that defendant was retained to deliver to a Wal-Mart distribution center in Sharon Springs, New York. JS ¶ ¶  2-3. Wal-Mart hired Transplace, a shipping logistics company, to arrange for the transportation of the loads from Miami to the distribution center; Transplace then hired J.B. Hunt to transport the shipments. Id. at ¶  3-4. Wal-Mart found shortages in each shipment delivered, and took exception at the time of their delivery. JS ¶  8. Wal-Mart noted these exceptions on the bills of lading and/or the delivery slips of each of the shipments. Id. Plaintiff One Step Up did not file claims with J.B. Hunt directly for any of the cargo shortages. Instead, Transplace and Wal-Mart filed claims relating to shipping shortages to J.B. Hunt. The claims for shipments # 1 and # 3 were withdrawn and J.B. Hunt rejected the claim for shipment # 2 on the basis of the sealed nature of the cargo. After claims for shipments # 1 and # 3 were withdrawn by the claimants, and after J.B. Hunt rejected the claim for shipment # 2, Wal-Mart adjusted its accounts with plaintiff One Step Up to reflect the losses in cargo. Plaintiff then brought this case to seek compensation from defendant for the losses caused by Wal-Mart’s deduction in its accounts resulting from shortages in the shipments. Since the timing of the events related to each of the three shipments is relevant to our discussion, each shall be described in turn.

 

 

Although the dates on which these events occurred are material to the issue at hand, both parties oftentimes specify dates imprecisely by using the phrase “on or about.” Any disputes with regard to dates are duly noted.

 

A. July Shipment (“Shipment # 1”)

 

J.B. Hunt picked up the July shipment, containing 3,521 cartons of apparel goods, on or about July 8, 2003, and delivered them to Wal-Mart on July 15, 2003. Plaintiff’s Complaint (“Pl.Compl.”) ¶  5; Declaration of Robert Briere (“Briere Decl.”) ¶  5 & App. D; Affidavit of Victor Abriano (“Abriano Aff.”) ¶  9. According to plaintiffs, on September 23, 2003, Wal-Mart deducted $32,630.40 in connection with plaintiff’s invoicing for the July shipment, to reflect the agreed price and invoice value of 618 cartons which were missing from the shipment upon arrival; however, upon plaintiff’s protest, Wal-Mart reversed this deduction on November 12, 2003. Pl. Compl. ¶  8; Abriano Aff. ¶  17. Wal-Mart, it appears, then attempted to recoup its losses from J.B. Hunt directly. On December 15, 2003, defendant received a notice of a claim filed by Wal-Mart for the July shipment in the amount of $32,683.20; subsequently, on January 21, 2004, defendant received written notice from Wal-Mart, dated January 16, 2004, indicating it was withdrawing its claim against J.B. Hunt with regard to the July shipment. Briere Decl.App. G, Bates No. 2; Deposition of Tracy Kremer (“Dep.Kremer”) at 21. On February 2, 2004, J.B. Hunt received written notice of a claim filed by Transplace, dated January 30, 2004, for the July shipment in the amount of $32,683.20. Declaration of Tracy Kremer (“Decl.Kremer”) Ex. A. Then, Wal-Mart, for the second and final time, on December 22, 2004, deducted $32,630.40 from its account with One Step Up to reflect the shortages associated with the July shipment. Abriano Aff. ¶  18, Ex. D. On January 7, 2005, defendant J.B. Hunt received written notice that Transplace’s claim relating to the July shipment had been cancelled as well. Decl. Kremer ¶  5, Ex. B.

 

 

B. August Shipment (“Shipment # 2”)

 

The August shipment consisted of 2,985 cartons of apparel goods. Pl. Compl. ¶  6, Abriano Aff. ¶  10. Defendant J.B. Hunt picked up the August shipment from plaintiff on or about August 26, 2003, and delivered it to Wal-Mart on or about September 5, 2003. Pl. Compl. ¶  6, Briere Decl. ¶  6, App. E & G. On February 25, 2004, defendant received notice of a claim for the August shipment filed by Transplace in the amount of $7,397.76. Dep. Kremer at 19, Decl. Briere App. G. Transplace sent to J.B. Hunt a series of letters, dated March 25, April 26, and May 24, 2004, requesting resolution of its claim. Pl.Ex. 12, 13, 15. J.B. Hunt then sent written notification to Transplace on September 21, 2004 denying its claim on the basis of a continuous seal delivery. Pl.Ex. 5; Dep. Kremer at 19; Decl. Briere App. G. On September 30, 2004, the cargo claims manager of Transplace sent the cargo claims manager of J.B. Hunt a letter stating that Transplace could not “accept this denial based on the fact that this was a Driver Count load and the driver signed for 2,985 pieces. Only 2,940 pieces were received.” Pl.Ex. 18. Subsequently, on April 12, 2005, Wal-Mart informed One Step Up that it had received 61 cartons fewer than had been picked up by J.B. Hunt. Pl. Compl. 9; Abriano Aff. ¶  19. Wal-Mart then charged back and debited One Step Up’s account with Wal-Mart a sum of $4,157 .76, reflecting the agreed price and invoice value of the apparel goods which Wal-Mart did not receive in the August shipment. Id. at 20.

 

 

We are aware of the discrepancy between the number of missing pieces as noted in the Transplace letter and the number in Wal-Mart’s letter to One Step Up. This difference, however, is not material to our decision.

 

C. September Shipment (“Shipment # 3”)

 

Defendant picked up the September shipment, which consisted of 2,782 cartons of apparel goods, from plaintiff on or about September 22, 2003, and delivered it to Wal-Mart on or about October 2, 2003. Pl. Compl. ¶  7; Abriano Aff. ¶  11; Briere Decl. ¶  6 & App. E. According to plaintiff, on December 15, 2003, Wal-Mart advised One Step Up that it had received 984 cartons fewer than J.B. Hunt had picked up, and as a result it deducted $34,516.80 in connection with plaintiff’s invoicing for the September shipment for cargo shortages. However, again upon protest by plaintiff, Wal-Mart reversed the deduction on January 15, 2004. Pl. Compl. ¶  10; Abriano Aff. ¶  21. On March 9, 2004, J.B. Hunt received notice of a claim filed by Transplace with regard to the September shipment in the amount of $60,220.80. Dep. Kremer at 20; Decl. Briere App. G. Transplace followed its claim with letters dated May 7, June 8, and July 6, 2004, to J.B. Hunt demanding that it resolve the open claim. Pl.Ex. 14, 16, 17. The last of these letters, dated July 6, 2004, noted that federal regulations required resolution of claims within 120 days, and that if a claim could not be processed within that stated period, the carrier must write to the claimant every 60 days to advise the claimant of the status of the claim and the reasons in delay. Pl.Ex. 17. Eventually, Wal-Mart deducted $60,220.80 from its account with One Step Up on December 8, 2004 due to the shortages associated with the September shipment. Abriano Aff. ¶  22. Transplace then notified J.B. Hunt, in a letter dated December 14, 2004, that the claim for the September shipment had been cancelled. Dep. Kremer at 23; Decl. Briere App. G, Bates No. 18.

 

 

Plaintiff believes that the shipment was received by Wal-Mart “on or about September 30, 2003.” Abriano Aff. ¶  21. The inconsistency of dates is but one week, and both parties use the approximate phrase “on or about” to describe the dates. We find this discrepancy not to be material to this case.

 

D. J.B. Hunt’s Processing of Claims

 

Defendant deposed Tracy Kremer, Cargo Claims Manager at J.B. Hunt, with regard to the documentation and the processing of the claims for the shipments at issue here. As a matter of course, for claims filed against J.B. Hunt less than nine months after the date of delivery, a J.B. Hunt claims clerk creates a physical file folder for the claim and enters the claim into a computer, which assigns a claim number. Dep. Kremer at 9-10. Claims filed more than nine months from the date of delivery are not entered into the regular claims system, as the load order number has already been archived from J.B. Hunt’s system; instead, they are entered into a separate spreadsheet. Id. at 10-11. Claims are then taken to the claim adjuster, who begins an investigation by pulling all order documents in the J.B. Hunt system relating to the load, and then evaluates the documents to determine if the carrier should pay the claimant or deny the claim. Id. at 11-12. Claims in excess of $5,000, including the three shipments at issue here, are adjusted by Ms. Kremer herself. Id. at 13. On average, claims take between 60 to 90 days from the date the claim is filed until the payment or denial of the claim. Id. If a claim remains open 120 days after it was filed, J.B. Hunt notifies the claimant of the status of the claim, and again every 60 days thereafter. Id. at 15. This notice takes the form of monthly reports, printed every 30 days on the first of each month, detailing each claimant’s new claims filed since the previous report, any claims they already had on file, and the status of claims, including those which have been open for more than 120 days. Id. at 15-16. However, J.B. Hunt did not retain a copy of these notices, and thus they did not become part of the claim files. Id. at 29. Ms. Kremer noted that she was unaware of any requirement that a copy of these notices be retained. Id. at 30.

 

 

Ms. Kremer, in her deposition, noted that there is no record of any notices sent to any claimant, and that she understood these notices to have been sent to the claimants as a matter of “[s]tandard procedure.” Dep. Kremer at 29-30. According to Ms. Kremer, the transmittal of these notices is “indirectly” under Ms. Kremer’s supervision, and she herself never sees the notices. Id. Instead, the claims assistant takes computer printouts of notices, stuffs them into envelopes, and mails them to claimants. Id.

 

Plaintiff has submitted letters, mentioned above, from Transplace to J.B. Hunt demanding resolution of the second and third claims. Pl.Ex. 12, 13, 15 (letters regarding shipment # 2); Pl.Ex. 14, 16, 17 (letters regarding shipment # 3). These letters do not indicate whether Transplace had received notification from J.B. Hunt via monthly reports, as Ms. Kremer suggests would have been the case for claims open longer than 120 days; instead, they request that J.B. Hunt resolve the claims expediently.

 

 

E. The Present Controversy

 

This complaint was originally filed in the Supreme Court, New York County, on July 19, 2005; it was subsequently removed to this Court on August 10, 2005 pursuant to 28 USC § §  1441, 1445, on the basis of the provisions of 28 U.S.C. §  1337, which confers original jurisdiction to this Court over any civil action or proceeding arising under any Act of Congress regulating commerce or protecting trade and commerce against restraints and monopolies, and pursuant to 49 U.S.C. § §  10101 et seq., which regulates interstate transportation via railways. Notice of Removal ¶  7. Both parties jointly stipulated that the time limitations as set forth in the Uniform Straight Bill of Lading, which specifies that “[c]laims for loss or damage must be filed within nine months after the delivery of the property (or, in the case of export traffic, within nine months after delivery at the port of export), except that claims for failure to make delivery must be filed within nine months after a reasonable time for delivery has elapsed.” JS ¶  7; National Motor Freight Classification Uniform Straight Bill of Lading §  3(b). Defendant moves for summary judgment on the basis that plaintiff did not file written claims against defendant within the nine month limitation, and is thus time barred from pursuing the present action. Plaintiff responds by asserting that defendant failed to respond to the claims filed by Wal-Mart and Transplace in accordance with 49 C.F.R. §  1005.5, and thus is estopped from insisting on plaintiff’s compliance with the nine month requirement for filing claims. Plaintiff also cross-moves for summary judgment, asserting that it has established a prima facie case under the Carmack Amendment, codified at 48 U.S.C. § §  14706 et seq. (governing liability for interstate transportation carriers), and that defendant has failed to show it was not negligent, nor that the damage or loss was due to one of the excepted causes which relieve a carrier from liability.

 

 

In the alternative, plaintiff also alleged that federal jurisdiction would be proper on the basis of diversity, as the parties are from diverse states and the amount in controversy exceeds $75,000. See Notice of Removal ¶  7.

 

DISCUSSION

 

A. Standard for Summary Judgment

 

 

A motion for summary judgment must be granted “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show 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.”  Fed.R.Civ.P. 56(c). In deciding a motion for summary judgment, the evidence submitted must be viewed in the light most favorable to the nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). Summary judgment should be granted “against a party who fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.”  Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Even if parties dispute material facts, summary judgment must be granted “unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party.” Golden Pacific Bancorp. v. F.D.I.C., 375 F.3d 196, 200 (2d Cir.2004) (internal citations and quotation marks omitted). In addition, once the moving party has made a sufficient showing, “[t]he non-moving party may not rely on mere conclusory allegations nor speculation, but instead must offer some hard evidence showing that its version of the events is not wholly fanciful.” Id. (quoting D’Amico v. City of New York, 132 F.3d 145, 149 (2d Cir.1998)).

 

 

B. The Carmack Amendment

 

This case is governed by the 1906 Carmack Amendment of the Interstate Commerce Act, under which a buyer or seller may recover directly from an interstate common carrier in whose care the buyer or seller’s goods are damaged. See 49 U.S.C. §  14706; Windows, Inc. v. Jordan Panel Systems Corp., 177 F.3d 114, 117-118 (2d Cir.1999). The Carmack Amendment and the accompanying federal regulations which implement it require that carriers such as J.B. Hunt issue a receipt or bill of lading for goods they receive for transportation. 49 U.S.C. §  14706(a)(1); Windows, 177 F.3d at 118. Thereafter, the common carrier is liable for loss or damage to goods to anyone entitled to recover under the terms of the bill of lading or receipt. 49 U.S.C. §  14706(a)(1); see also Windows, 177 F.3d at 118; Calka v. North American Van Lines, Inc., 2001 WL 434871, at(S.D.N.Y.2001). In addition, the federal regulations which accompany the Carmack Amendment impose restrictions on the manner and form that claims must take. Under these regulations, a carrier is barred from paying claims for loss or damage to cargo unless the claim was filed with the carrier within the time limits specified by the bill of lading. 49 C.F.R. §  1005.2.

 

The parties agree that the nine month time limitation to file claims, found in the Uniform Bill of Lading, is applicable to the three shipments in this case. In addition, they agree that at no time did plaintiff One Step Up file any written claims against the defendant J.B. Hunt prior to the initiation of this suit. Defendant argues that since compliance with this time limitation is a mandatory condition precedent for recovery under federal law which cannot be waived by the carrier, the plaintiff’s current action is time-barred from any recovery. In so doing, defendant relies on the Supreme Court’s decision in Chesapeake Ohio Railroad v. Martin, 51 U.S. 209 (1931).

 

In the Second Circuit, the nine month requirement to file claims pursuant to the Uniform Bill of Lading has been strictly construed and enforced. The leading case on this issue is Pathway Bellows, Inc. v. Blanchette, 630 F.2d 900, 901 (2d Cir.1980), cert. denied, 450 U.S. 915 (1981). In that case, Pathway Bellows, the plaintiff, contracted with a receiving carrier, the San Diego & Arizona Eastern Railway Co. (“SD & A”), to transport a shipment of metal joints from California to New York. Penn Central, the defendant carrier, delivered the shipment in a damaged condition to its point of destination on October 22, 1974. Id. Pathway Bellows mailed a letter, containing all the elements necessary to constitute a proper written claim, to SD & A on July 22, 1975, the last day of the nine month period; however, the letter was not received by SD & A until one day after the nine month claim period had expired. Id. The Circuit held that because SD & A had not received the letter until one day after the expiration of the nine month claim period, the claim did not meet the terms required by the bill of lading; thus, plaintiff had failed to comply with a contractually imposed condition precedent to maintain an action to recover damages for the shipment, and consequently defendants were entitled to summary judgment. Id. at 902, 905. The court noted that “[a]lthough it may appear Draconian to require that Pathway Bellows lose a $40,000 recovery because its claim letter was received one day late, Pathway Bellows has identified no special circumstances that would entitle it to be relieved of the admittedly severe consequences of its own procrastination.” Id. at 905. Thus, One Step Up’s failure to file a written claim against J.B. Hunt within nine months ordinarily would bar it from pursuing the present action.

 

Plaintiff, however, argues that defendant’s failure to comply with federal regulations governing carriers’ processing of claims renders it estopped from raising a defense that plaintiff’s claim is time barred. One Step Up specifically points to the often-cited footnote ten of Pathway Bellows, which notes a potential exception to the otherwise strict enforcement of the nine month condition precedent. The footnote reads as follows:

Had any conduct on the part of Penn Central [the carrier] misled Pathway Bellows [the consignor/shipper] into believing that there was no need to file a claim …, Penn Central might have been held estopped from insisting on Pathway Bellows’s compliance with the timely written claim requirement contained in the bill of lading. Similarly, if Pathway Bellows could not, in the exercise of reasonable diligence, have ascertained the extent of its loss within the 9 month claim filing period, untimely filing of the completed claim might be viewed as excusable. Nothing in the present case, however, indicates that the reason for the untimely submission of Pathway Bellows’s claim was attributable to either of these factors or to any factors beyond Pathway Bellows’s control.

 

In other words, the Pathway Bellows footnote suggests two situations under which estoppel may be appropriate: (1) where conduct on the part of J.B. Hunt misled One Step Up into believing that a claim need not be filed; and (2) where One Step Up could not, with reasonable diligence, have ascertained the degree of damage of the three shipments within nine months of their delivery.

 

Plaintiff contends that the first of these two scenarios applies to the present controversy. According to One Step Up, J.B. Hunt failed to comply with the obligations set forth by 49 C.F.R. §  1005.5, which states that carriers who receive a written or electronically transmitted claim for loss or damage to cargo:

… shall pay, decline, or make a firm compromise settlement offer in writing or electronically to the claimant within 120 days after receipt of the claim by the carrier; Provided, however, That, if the claim cannot be processed and disposed of within 120 days after the receipt thereof, the carrier shall at that time and at the expiration of each succeeding 60-day period while the claim remains pending, advise the claimant in writing or electronically of the status of the claim and the reason for the delay in making final disposition thereof and it shall retain a copy of such advice to the claimant in its claim file thereon.

 

49 C.F.R. §  1005.5. Plaintiff asserts that defendant did not “pay, decline, or make a firm compromise settlement offer” within 120 days of receipt of the claims at issue in this case, and that there is “no dispute that there is no record of Defendants [sic] 60 day ‘advises’ [sic].” Memorandum in Opposition to Summary Judgment (“Mem.Opp.”) at 8. Further, plaintiff contends that the letters submitted, sent by Transplace to J.B. Hunt demanding resolution of its claims, “strongly suggest that such advises [sic] do not exist, nor is there any dispute that Defendant did not retain such records.” Mem. Opp. at 8-9. Although plaintiff can point to no case law in support, plaintiff makes the argument that the failure of a carrier to fulfill its obligations under §  1005.5 constitutes a sufficient reason to estop defendant from raising the nine month requirement as a defense to plaintiff’s claims, pursuant to Pathway Bellows.

 

We conclude that defendant’s failure to fulfill its requirements under 49 C.F.R. §  1005.5 does not constitute a basis for plaintiff to evoke estoppel. We are mindful that “[e]stoppel, within the context of the mandatory, statutory and regulatory scheme [which governs interstate carriers], should not be lightly found.” Bobst Division of Bobst Champlain, Inc. v. IML-Freight, Inc., 566 F.Supp. 665, 669 (S.D.N.Y.1983); accord R.T.A. Corporation v. Consolidated Rail Corporation, 594 F.Supp. 205, 210 (S.D.N.Y.1984). For example, in Bobst, the shipper argued that the carrier should be estopped from asserting the nine month bar because an agent of the carrier, who was not the claims adjuster for the company, suggested to the shipper that he should write a claim in the form of a letter to him, and that it would subsequently be followed up by the company. 594 F.Supp. at 669. As the Bobst court noted, “[i]n these circumstances, [the agent]’s silence following his receipt of the … letter cannot be said to have misled [the claimant] in either of the respects referred to in the first sentence of the Pathway footnote,” and thus the claimant could not rely upon estoppel to excuse the untimeliness of the claim. Id. at 669. The court in Bobst distinguished the facts of its case from those before the Third Circuit in Perini-North River Associates v. Chesapeake & O. Ry., 562 F.2d 269 (3d Cir.1977), where the shipper had invoked the doctrine of estoppel against the defendant’s reliance on the time bar for claims. The Bobst court noted that in Perini, the carrier had explicitly told the claimant that no additional claim needed to be filed, and the claimant duly relied upon the carrier’s representation. Compare Bobst, 566 F.Supp. at 669-70, with Perini, 562 F.2d at 272-73. Thus, since there was an affirmative misrepresentation on the part of the carrier in Perini which misled the claimant, the carrier’s actions would have constituted a basis for estoppel under the Pathway Bellows footnote.

 

Here, however, any failure by J.B. Hunt to fulfill its obligations under 49 C.F.R. §  1005.5 cannot have resulted in One Step Up being misled as to the need to file a claim within the specified nine month period. Section 1005.5 is designed to protect the interests of claimants who file claims against carriers by imposing obligations on carriers to investigate, process, and settle claims which are filed with it in a timely fashion. Since plaintiff never made a claim against J.B. Hunt, plaintiff is outside of the scope of entities whom the regulations are designed to protect. Plaintiff’s choice to rely upon Wal-Mart and Transplace to pursue claims against J.B. Hunt for these shipments was an independent business decision, made without regard to J.B. Hunt’s progress in processing these claims pursuant to §  1005.5. One cannot fault J.B. Hunt for not knowing the reasons behind Wal-Mart and Transplace’s withdrawal of their claims, nor could J.B. Hunt have foreseen that the cancellation or rejection of these claims would have had an impact upon plaintiff.

 

In addition, plaintiff offers no evidence that it was aware of the extent to which J.B. Hunt had or had not met the requirements of §  1005.5 during the period after Wal-Mart and Transplace had filed the claims at issue and while J.B. Hunt was processing the claims. Indeed, at oral argument, plaintiff’s counsel conceded that even now, he does not know the extent of J.B. Hunt’s compliance with §  1005.5, and whether J.B. Hunt had sent notices to Wal-Mart or Transplace updating them as to the status of their claims. See, e.g., Transcript from Oral Argument dated October 25, 2006 (“Tr .”) at 16. If plaintiff did not know at the time that the claims were being processed the extent to which J.B. Hunt was complying with §  1005.5, it is difficult to believe that plaintiff was “misled” by J.B. Hunt into assuming it need not file its own claim. Thus, there is no basis for estopping J.B. Hunt from raising its defense as against One Step Up, since it did nothing to mislead plaintiff in the manner described by Pathway Bellows.

 

Plaintiff argues that it could not file its own claim against J.B. Hunt because for much of the nine month period, it was in a “state of repose,” as Wal-Mart and Transplace were in the midst of pursuing their claims against J.B. Hunt and plaintiff had been fully paid by Wal-Mart. See, e.g., Tr. at 14, 19-20. However, plaintiff conceded at oral argument that it could have filed a claim upon learning that there were incomplete deliveries, see id. at 6-7, and could also have done so during the periods of time that Wal-Mart had deducted amounts for shipments # 1 and # 3 from plaintiff’s account, before changing course and reversing its deductions at plaintiff’s request. Id. at 24. Further, One Step Up had the opportunity to ask both Wal-Mart and Transplace to assign their claims to One Step Up in the event that Wal-Mart decided to backcharge its account with One Step Up in lieu of pursuing claims against J.B. Hunt. Plaintiffs must have foreseen this possibility since Wal-Mart had previously shown a willingness to resolve its losses in this fashion. One Step Up’s failure to take steps to protect itself against this outcome cannot constitute a reason to invoke estoppel as against J.B. Hunt.

 

 

Further, we would like to note that were we to have found plaintiff’s estoppel argument compelling, at best it would have allowed plaintiff to pursue the claims as filed by Wal-Mart and Transplace for these shipments-essentially stepping into the shoes of the other parties who were impacted by the incomplete and damaged shipments. However, plaintiff’s pursuit of these claims would have been futile, since claims for shipments # 1 and # 3 had been cancelled, and the claim for shipment # 2 had been rejected by J .B. Hunt.

 

Thus, defendant is entitled to summary judgment against plaintiff for plaintiff’s failure to file a written claim within the specified nine month period, a condition precedent to recovery under the applicable bill of ladings.

 

 

CONCLUSION

 

For the aforementioned reasons, defendant’s motion for summary judgment is granted, and plaintiff’s cross-motion for summary judgment is denied.

 

IT IS SO ORDERED.

 

S.D.N.Y.,2006.

One Step Up, Ltd. v. J.B. Hunt Transportation Services, Inc.

Sickle v. Dosanjh

Sickle v. Dosanjh

Cal. App. 3 Dist.,2006.

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b).  This opinion has not been certified for publication or ordered published for purposes of rule 977.

Court of Appeal, Third District, California.

Mary SICKLE et al., Plaintiffs and Appellants,

v.

Amrik DOSANJH et al., Defendants and Respondents.

 

Dec. 12, 2006.

 

Plaintiffs Mary Sickle, Shirley James-Coll, Debbie Reeves and John Pastorelli (hereafter plaintiffs), appeal from the summary judgment entered in favor of defendants Amrik Dosanjh and AAGH Farms on their complaint for wrongful death.

 

Plaintiffs are the adult children of Roberta Connell, who sustained fatal injuries while riding in an automobile that collided with a truck driven by Bhajan Singh Aujla (hereafter Bhajan). At the time of the accident, Bhajan had just delivered a load of peaches to a weighing station. The peaches belonged to defendants, who owned a peach farm, and hired Bhajan and his brother Mohan to haul peaches for them during the harvest season. Plaintiffs sued defendants for negligence under the doctrine of respondeat superior on the theory that Bhajan was defendants’ employee. The trial court granted summary judgment after finding Bhajan was not an employee, but an independent contractor.

 

 

In the interests of clarity and brevity we shall refer to Bhajan and his brother Mohan Aujla by their given names. We mean no disrespect.

 

On appeal, plaintiffs challenge that finding, claiming the question remains a triable issue of fact. They argue that because Bhajan failed to obtain the requisite motor carrier permit (Veh.Code, §  34620, subd. (a)), he was in violation of the law as an independent contractor but was not in violation as an employee. From this, plaintiffs conclude the presumption of innocence (Evid.Code, §  520) and the maxim “the law has been obeyed,” raise an inference that he was acting lawfully and must therefore be an employee.

 

We find no error and shall affirm the judgment.

 

 

FACTUAL AND PROCEDURAL BACKGROUND

 

 

On appeal from a summary judgment, we view the facts and inferences reasonably drawn from those facts in the light most favorable to the plaintiff. (Crouse v. Brobeck Phleger & Harrison (1998) 67 Cal.App.4th 1509, 1520.)

 

The essential facts are undisputed. On July 26, 2002, Roberta Connell was riding in a car driven by her husband Wilfred August Connell. While heading southbound on State Route 70 in Yuba County, their car collided with a 1987 GMC truck driven by Bhajan, causing Roberta Connell fatal injuries.

 

Bhajan and his brother Mohan are self-employed peach and prune farmers who owned a forklift and two trucks, which they used to load and haul their own peaches to the weigh station. Bhajan operated one of the trucks, which he was driving at the time of the accident.

 

AAGH Farms is a nearby peach farm owned by four individuals including Avtar Judge and defendant Amrik Dosanjh. AAGH Farms did not own any trucks or a forklift, so in July 2000, Judge went to the Aujlas’ farm and asked Mohan if he and Bhajan would haul his peaches to the weigh station until AAGH Farms was able to buy its own equipment. As a neighborly gesture, the Aujlas entered into an oral agreement to haul AAGH Farm peaches during the two-month harvest season.

 

AAGH Farms paid the Aujlas three or four dollars for each ton of peaches hauled. It did not withhold any taxes for the Aujlas, make any social security payments on their behalf, or pay them compensation for gasoline costs or mileage.

 

AAGH Farms did not supervise the Aujlas while they were loading the peaches onto their trucks and did not control whom they employed or used to do their work. AAGH Farms’ only concern was that its peaches were hauled to the weigh station by closing time at 5:00 p.m. Judge directed the Aujlas to take State Route 70 from AAGH Farms to the weigh station as it was the only road from his farm to the station.

 

During the harvest season, Judge went to the Aujlas’ farm and advised them he was going to harvest his peaches and that they should come pick them up. The Aujlas generally picked their peaches before AAGH Farms picked its peaches. Occasionally, however, if AAGH Farm peaches were going to be ready at the same time, the Aujlas would tell Judge to hold off on his harvest so they could finish their work and haul their own peaches first.

 

AAGH Farms harvested its own peaches, loaded them in bins provided by the weigh station, and placed the bins by the road for pick up. Weigh station personnel unloaded the peaches at the station where inspectors graded the fruit. Sometime during the day after the Aujlas had hauled one or more loads for AAGH Farms, someone from AAGH Farms went to the weigh station to ensure that the peaches were delivered and to observe inspection and grading of its peaches.

 

On the date of the accident, Bhajan picked up a load of peaches from AAGH Farms and hauled it to the weigh station. After making the delivery, he headed back to AAGH Farms to pick up a fourth load when he collided with the Connells’ vehicle as he was turning onto State Route 70.

 

Plaintiffs filed a complaint against defendants, the Aujlas, and others for wrongful death, seeking damages for negligence and the creation of a dangerous condition. Their claims against defendants herein are based on the theory that defendants were Bhajan’s employers. After filing their answer, defendants filed a motion for summary judgment, which plaintiffs opposed. The trial court granted the motion finding AAGH Farms hired the Aujla brothers as independent contractors. Judgment was entered in favor of defendants and plaintiffs filed a timely appeal.

 

 

A second cause of action was alleged against AAGH Farms, Hatamiya Farms, Inc., and H.B. Orchard Co., Inc. It is not at issue in this appeal.

 

DISCUSSION

 

A. Standard of Review

 

 

Summary judgment is properly granted when there is no triable issue of material fact and the moving party is entitled to judgment as a matter of law.  (Code Civ. Proc., §  437c, subd. (c); Wiener v. Southcoast Childcare Centers, Inc. (2004) 32 Cal.4th 1138, 1142.) A defendant seeking summary judgment bears the initial burden of proving the “cause of action has no merit” by showing that one or more elements of the plaintiff’s cause of action cannot be established or there is a complete defense. (Code Civ. Proc., §  437c, subds. (a), (o)(2); Addy v. Bliss & Glennon (1996) 44 Cal.App.4th 205, 213.) Once the defendant’s burden is met, the burden shifts to the plaintiff to show that a triable issue of fact exists as to that cause of action. (Ibid.)

 

We independently review the trial court’s decision, viewing the evidence in the light most favorable to plaintiffs as the losing party. (Wiener v. Southcoast Childcare Centers, Inc., supra, 32 Cal.4th at p. 1142.) In resolving any evidentiary doubts or ambiguities, we liberally construe plaintiffs’ evidence and strictly construe defendants’ evidence. (Ibid.)

 

 

B. Analysis

 

The general rule is that one who hires an independent contractor is not liable to third parties for the contractor’s negligence. (Fonseca v. County of Orange (1972) 28 Cal.App.3d 361, 365; Millsap v. Federal Express Corp.  (1991) 227 Cal.App.3d 425, 430.)

 

Citing Serna v. Pettey Leach Trucking, Inc. (2003) 110 Cal.App.4th 1475 (Serna ), plaintiffs argue there is “a strong public policy which supports a finding that one who uses an unpermitted, unlicensed and unregistered motor carrier to transport his goods on California’s highways should not be permitted to escape liability for injury caused by such an unpermitted, unlicensed and unregistered carrier by characterizing that carrier as an independent contractor.” Plaintiff’s reliance on Serna is misplaced.

 

In Serna, supra, 110 Cal.App.4th 1475, an interstate trucking company (PLT) hired by a poultry farmer to arrange transportation for a load of its poultry, contracted with another carrier, Sky Transportation, Inc. (Sky), to transport the poultry. En route, Sky’s driver negligently collided with and killed a motorcyclist, whose widow sued PLT. Although PLT contended it was not liable because Sky was an independent contractor, the court found liability under a long line of cases beginning with Taylor v. Oakland Scavenger Co. (1941) 17 Cal.2d 594.

 

The court in Serna stated the rule thusly, “the carrier, having undertaken an activity which can be lawfully carried on only under a public franchise or authority and which involves possible danger to the public, is liable to the plaintiffs for harm caused by the negligence of the carrier’s independent contractor.” (Serna, supra, 110 Cal.App.4th at p. 1477.) Were it otherwise, “a carrier could escape liability for the negligence of its independent contractors, thus reducing the incentive for careful supervision and depriving those who are injured of the financial responsibility of those to whom the privilege was granted. For these reasons, the carrier’s duties are nondelegable, and it is only when the carrier is ‘not regulated’ at all that the rule is otherwise.” (Id. at p. 1486.)

 

Clearly, this rule is inapplicable here because AAGH Farms is not a common carrier and plaintiff does not claim otherwise.

 

Next, plaintiffs argue that a triable issue of fact remains as to whether Bhajan was hired as an employee or an independent contractor. That question is generally one of fact. However, when there is only one inference that may be drawn from all the evidence, the question is one of law. (Millsap v. Federal Express Corp., supra, 227 Cal.App.3d at p. 431.) Here the trial court found the only inference to be drawn from the evidence was that the Aujlas were independent contractors. We agree with that finding.

 

“ ‘An “independent contractor” is generally defined as a person who is employed by another to perform work; who pursues an “independent employment or occupation” in performing it; and who follows the employer’s “desires only as to the results of the work, and not as to the means whereby it is to be accomplished.” [Citations.] The most significant factor in determining the existence of an employer-independent contractor relationship is the right to control the manner and means by which the work is to be performed.  [Citations.] “If control may be exercised only as to the result of the work and not the means by which it is accomplished, an independent contractor relationship is established.” [Citations.]’ [Citation.]” (Millsap v. Federal Express Corp., supra, 227 Cal.App.3d at p. 431.)

 

In Clarke v. Hernandez (1947) 79 Cal.App.2d 414 (Clarke ), a case factually similar to the present case, the plaintiffs were injured in a collision when their automobile was rear-ended by a truck driven by Hernandez while he was hauling a load of onions for defendant, a wholesale produce dealer who was unable to haul his own produce. Hernandez was a licensed contract hauler who operated his own trucks. He and the defendant entered into an oral agreement whereby Hernandez was to haul 600 sacks of onions from defendant’s packing shed in Coachella to San Francisco for the agreed-upon compensation of 75 cents per sack. He was told to pick up the onions at a certain farm and given directions to the farm and the delivery destination. He went to the farm, loaded the onions on his truck, and headed towards San Francisco. En route, his truck collided with plaintiff’s automobile.

 

The Court of Appeal found that on these facts there was no other conclusion but that Hernandez was an independent contractor. (Clarke, supra, 79 Cal.App.2d at p. 422.) In so doing, the court reviewed the numerous factors that might be considered in making that determination including “(a) whether or not the one performing services is engaged in a distinct occupation or business; (b) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision; (c) the skill required in the particular occupation; (d) whether the principal or the workman supplies the instrumentalities, tools and the place of work for the person doing the work; (e) the length of time for which the services are to be performed; (f) the method of payment, whether by the time or by the job; (g) whether or not the work is a part of the regular business of the principal; and (h) whether or not the parties believe they are creating the relationship of employer-employee.”  (Clarke, supra, at p. 424.)

 

Applying these principles, we find the only reasonable inference raised by the undisputed evidence is that the Aujlas were independent contractors at the time of the collision because defendants did not exercise any control over the manner and means of their work.

 

The Aujlas owned a peach and prune farm. As part of their farming business, they owned and operated their own trucks and equipment to load and haul their produce to the weigh station. Defendants owned a nearby farm, but did not own the trucks or other equipment necessary to haul their produce to market, so Avtar Judge asked the Aujlas whether they would haul AAGH Farms’ produce to the weigh station during the two-month harvest season, which they agreed to do. Defendants paid them for each load of peaches they delivered based on a fixed tonnage fee. Defendants did not withhold any taxes or pay the Aujlas any benefits other than the agreed-upon compensation of three or four dollars a ton. The Aujlas also paid their own gasoline and maintained insurance on their trucks.

 

During the harvest season, the defendants notified the Aujlas when their peaches would be ready for pick up, they harvested their own peaches, put them in bins, and placed the bins on the road. The Aujlas arrived with their trucks and forklift, loaded the bins onto the trucks, and drove the peaches to the weigh station where they were unloaded and graded by station personnel. Defendants did not monitor or supervise the Aujlas’ work. Their only concern was that the peaches were delivered by the end of the day.

 

To overcome the obvious conclusion the Aujlas were independent contractors, plaintiffs argue that a presumption exists, which creates a triable issue of fact as to whether Bhajan was an employee. They reason that as an independent contractor of a motor truck, Bhajan would be required to have a motor carrier permit. (Veh.Code, §  34620, subd. (a).) Since he failed to obtain the required permit, he is in violation of those requirements if classified as an independent contractor but not if classified as an employee. Relying on Alford v. Bello (1955) 130 Cal.App.2d 291 (Alford ), they conclude the presumption of innocence (see Evid.Code, §  520) and the maxim “the law has been obeyed” require that we find Bhajan obeyed the law and was therefore an employee. We disagree and find that plaintiffs’ reasoning is flawed and their reliance on Alford is misplaced.

 

 

We question the accuracy of this assumption. The Motor Carrier Permit Act (Veh.Code, §  34600 et seq.) does not distinguish between employees and independent contractors. Rather, it broadly defines a “motor carrier of property” to include “any person who operates any commercial motor vehicle.” (Veh.Code, §  34601, subd. (a).) While the Act distinguishes between “private carriers,” “for-hire motor carriers” (Veh.Code, §  34601, subds.(b) and (d)), and “owner-operators” (Veh.Code, §  34624), all such carriers are subject to the permit requirements. (See Veh.Code, § §  34620, subd. (a), 34623, 34624.) Thus, Bhajan may have been in violation of section 34620 whether he was acting as an employee or independent contractor. Nevertheless, because we dispose of plaintiffs’ argument on other grounds, we need not resolve this issue.

 

In Alford, supra, 130 Cal.App.2d 291, the plaintiff filed an action to recover damages for personal injuries arising out of a highway collision with a truck driven by defendant Bello who was transporting goods for Conrotto. Bello had no certificate or vehicle permit. Conrotto on the other hand, was a highway permit carrier who operated a fleet of trucks. The plaintiff contended Bello was Conrotto’s employee. The reviewing court agreed and held that Bello was presumed to be acting as an employee because if it were otherwise, he would be acting in violation of the Public Utilities Code.

 

The court in Alford reasoned as follows: “It is presumed that a person is innocent of crime or wrong and that the law has been obeyed. [Citation.] The presumptions are evidence and if not controverted the trier of fact is bound to find in accordance with them. [Citation.] Bello was transporting property of others for compensation over a public highway by means of a motor vehicle at the time of the accident … It is presumed that in transporting the property he was innocent of crime and was obeying the law. The presumptions are evidence that he was not acting as an independent contractor since if he were acting as such he would be guilty of a crime. It must then be inferred that he was Conrotto’s employee. No status other than that of employer-employee could have been found under the evidence without disregarding or rebutting the presumption of Bello’s innocence of crime and obedience of the law.” (Id. at pp. 294-295.)

 

We decline to follow Alford, supra, 130 Cal.App.2d 291, for the proposition cited because the court’s discussion of presumptions, which no longer have binding effect (Assem. Com. on Judiciary, com., West’s Ann. Evidence Code (1995 ed.), foll. §  600, p. 3; Civ.Code, §  3509), was dicta. Conrotto, as a common motor carrier subject to state and federal regulations, was liable for Bello’s negligent acts under the common carrier exception discussed ante in Serna v. Pettey Leach Trucking, Inc., supra, 110 Cal .App.4th 1475 and as we concluded, that exception is inapplicable here. Moreover, compliance with the motor carrier permit requirements is a collateral matter, one not pertinent to a determination of Bhajan’s employment status. (Millsap v. Federal Express Corp., supra, 227 Cal.App.3d at p. 431; Clarke v. Hernandez, supra, 79 Cal.App.2d at p. 424.) For these reasons, we find the trial court properly granted defendant’s motion for summary judgment.

 

 

DISPOSITION

 

The judgment is affirmed. Defendants are awarded their costs on appeal.  (Cal. Rules of Court, rule 27(a)(1).)

 

We concur: SIMS and BUTZ, JJ.

Cal.App. 3 Dist.,2006.

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