Court of Appeals of Kansas.
Stephen HOOVER and Diane Hoover, Appellees,
v.
ALLIED VAN LINES, INC., Appellant.
May 27, 2005.
Before MCANANY, P.J., MALONE, J., and KNUDSON, S.J.
MEMORANDUM OPINION
PER CURIAM.
Allied Van Lines, Inc., (AVL) appeals from the district court’s award of attorney fees and costs to the plaintiffs, Stephen Hoover and Diane Hoover, under 49 U.S.C. § 14704 (2000) after the Hoovers received a favorable jury verdict for damage to their household goods during interstate shipment. AVL contends the district court erred because: (1) 49 U.S.C. § 14704 is not applicable as a matter of law; (2) 49 U.S.C. § 14708 (2000) is not applicable under the facts established at trial; and (3) absent statutory authority, prevailing litigants are not entitled to attorney fees under Kansas law.
Holdings on Appeal
It is undisputed the Hoovers’ recovery for damages to their household goods was based upon the Carmack Amendment, 49 U.S.C. § 14706 (2000). The Hoovers never filed a claim or subsequently contended in pretrial pleadings that their cause of action was based on 49 U.S.C. § 14704. Thus, the district court erred in granting attorney fees under § 14704. However, if a shipper is successful in litigation under the Carmack Amendment, attorney fees are authorized under § 14708 for collect-on-delivery shipments. Unfortunately, the Hoovers’ contract did not provide for collect-on-delivery transportation. Thus, attorney fees cannot be based upon § 14708. Finally, in Kansas, an award of attorney fees must be based upon statutory authority or the express agreement of the parties. See United States Fidelity & Guaranty Co. v. Maish, 21 Kan.App.2d 885, 905-06, 908 P.2d 1329 (1995). Accordingly, we conclude the district court’s award must be reversed.
UNDERLYING FACTS
The Hoovers arranged with AVL to move their personal household belongings from their previous home in Clive, Iowa, a suburb of Des Moines, to their new home in Shawnee, Kansas. According to the Order for Service, the shipment was to be paid “C.O.D.” The Bill of Lading and Freight Bill, however, indicated that the method of payment would be “Charge.” An invoice to Life Care Services, Stephen Hoover’s employer, establishes that the move was charged to the employer after the move had been completed.
During the move, which occurred on August 11, 1999, AVL lost several boxes of the Hoovers’ possessions and damaged other items, including a Baldwin grand piano. Following the procedure outlined in Section 6 of the Bill of Lading, the Hoovers filed a claim with AVL for the damage to the piano on August 29, 1999. This claim indicated that a subsequent claim for other damaged or lost property would also be filed. This second claim was filed on May 9, 2000. AVL denied both sets of claims.
According to the Hoovers, AVL never provided them with notice of an available arbitration procedure or a copy of the federally mandated brochure, “Your Rights and Responsibilities When You Move,” until after litigation discovery had begun. In November 2000, the Hoovers filed this suit. AVL attempted to remove the action to federal district court, but the federal court refused to accept jurisdiction because the filing was not accomplished within the time period prescribed by 28 U.S.C. § 1446(b) (2000). See Hoover v. Allied Van Lines, Inc., 205 F.Supp.2d 1232, 1241 (D.Kan.2002).
After the case was remanded to the state district court and just prior to trial, AVL stipulated to the damages claimed with respect to all of the lost or damaged personalty except the Baldwin grand piano, the Peter Vatalie pool table, the Bernhardt cherry dresser, and the Bernhardt cherry four-poster bed. The district court awarded the Hoovers $17,120 plus applicable interest for these stipulated damages.
Following a trial on the remaining damaged property issues, the jury returned a verdict of $16,639 for the repair of the grand piano. The jury awarded no damages for replacement or repair of the other items listed. The Hoovers filed a motion for attorney fees under 49 U.S.C. § 14708(d). On January 30, 2004, the district court issued a letter to the parties indicating its decision to award attorney fees under 49 U.S.C. § 14704(e) but requesting a revised claim which redacted fees and costs related to the unsuccessful Kansas Consumer Protection Act (KCPA) and fraud actions. As the record on appeal was silent as to why the district court relied upon § 14704(e) rather than § 14708(d), we asked the parties during oral argument for an explanation. Neither party had an explanation. After receiving the revised claim, the district court entered an order awarding the Hoovers $61,326.17 in attorney fees and costs. AVL has filed a timely appeal, contesting the district court’s authority to award attorney fees and costs under the undisputed facts of the litigation.
STANDARD OF REVIEW
An appellate court possesses unlimited review of a district court’s construction of a statute. See Cooper v. Werholtz, 277 Kan. 250, 252, 83 P.3d 1212 (2004). The fundamental rule of statutory construction to which all other rules are subordinate is that courts must effectuate the intent of the legislature as expressed through the unambiguous language of the statutory scheme enacted. It is only when the provisions of a statute or a statutory scheme create an ambiguity that courts apply various rules of statutory interpretation. See Williamson v. City of Hays, 275 Kan. 300, 305, 64 P.3d 364 (2003).
Discussion
49 U.S.C. § 14704
49 U.S.C. § 14704 provides, in pertinent part:
“(a) IN GENERAL.–
(1) ENFORCEMENT OF ORDER.–A person injured because a carrier or broker providing transportation or service subject to jurisdiction under chapter 135 does not obey an order of the Secretary or the Board, as applicable, under this part, except an order for the payment of money, may bring a civil action to enforce that order under this subsection. A person may bring a civil action for injunctive relief for violations of sections 14102 and 14103.
(2) DAMAGES FOR VIOLATIONS.–A carrier or broker providing transportation or service subject to jurisdiction under chapter 135 is liable for damages sustained by a person as a result of an act or omission of that carrier or broker in violation of this part.
….
“(e) ATTORNEY’S FEES.–The district court shall award a reasonable attorney’s fee under this section. The district court shall tax and collect that fee as part of the costs of the action.”
According to the plain language of subsection (e), attorney fees are only allowed within this statutory provision for actions brought pursuant to § 14704. In Owner-Operator Independent Drivers v. New Prime, 192 F.3d 778, 783-84 (8th Cir.1999), cert. denied 529 U.S. 1066 (2000), the court interpreted § 14704(a)(2) to authorize private parties to sue for damages for carrier conduct in violation of regulations promulgated by the Secretary of Transportation.
Unfortunately for the Hoovers, their cause of action was not based upon AVL’s violation of any regulations promulgated by the Secretary of Transportation; i.e., AVL never provided notice of the availability of neutral arbitration as required in 49 C.F.R. § 375.213 (2004). Indeed, the Hoovers in their motion for attorney fees and costs did not claim a right of recovery under § 14704(e). Because their lawsuit was based solely upon § 14706 of the Carmack Amendment, they logically sought an allowance for fees under § 14708. In other words, the Hoovers’ lawsuit was limited to recovery of damages to their household goods during shipment. The parties do not disagree the statutory authorization for such litigation is under § 14706. Only after the jury verdict was rendered, and AVL contested Hoovers’ motion for attorney fees, did the Hoovers raise the issue that there was a violation of regulations issued by the Secretary of Transportation. This belated effort to avoid the strictures of § 14708 must fail because without a substantive recovery under § 14704(a)(2), the district court lacked subject matter jurisdiction to award attorney fees under § 14704(e).
49 U.S.C. § 14708
As the Hoovers fully recognized, in litigation under the Carmack Amendment (49 U.S.C. § 14706), seeking recovery for household goods damaged during shipment, attorney fees are allowable under 49 U.S.C. § 14708:
49 U.S.C. § 14708 provides, in pertinent part:
“(a) OFFERING SHIPPERS ARBITRATION.–As a condition of registration under section 13902 or 13903, a carrier providing transportation of household goods subject to jurisdiction under subchapter I or III of chapter 135 must agree to offer in accordance with this section to shippers of household goods arbitration as a means of settling disputes between such carriers and shippers of household goods concerning damage or loss to the household goods transported.
“(b) ARBITRATION REQUIREMENTS.–
….
(2) NOTICE OF ARBITRATION PROCEDURE.–The carrier must provide the shipper an adequate notice of the availability of neutral arbitration, including a concise easy-to-read, accurate summary of the arbitration procedure, any applicable costs, and disclosure of the legal effects of election to utilize arbitration. Such notice must be given to persons for whom household goods are to be transported by the carrier before such goods are tendered to the carrier for transportation.
(3) PROVISION OF FORMS.–Upon request of a shipper, the carrier must promptly provide such forms and other information as are necessary for initiating an action to resolve a dispute under arbitration.
“(d) ATTORNEY’S FEES TO SHIPPERS.–In any court action to resolve a dispute between a shipper of household goods and a carrier providing transportation or service subject to jurisdiction under subchapter I or III of chapter 135 concerning the transportation of household goods by such carrier, the shipper shall be awarded reasonable attorney’s fees if–
(1) the shipper submits a claim to the carrier within 120 days after the date the shipment is delivered or the date the delivery is scheduled, whichever is later;
(2) the shipper prevails in such court action; and
(3)(A) a decision resolving the dispute was not rendered through arbitration under this section within the period provided under subsection (b)(8) of this section or an extension of such period under such subsection; or
(B) the court proceeding is to enforce a decision rendered through arbitration under this section and is instituted after the period for performance under such decision has elapsed.
….
“(f) LIMITATION OF APPLICABILITY TO COLLECT-ON-DELIVERY TRANSPORTATION.–The provisions of this section shall apply only in the case of collect-on-delivery transportation of household goods.”
The language of subsection (f) is clear and is not subject to multiple interpretations. See Williamson, 275 Kan. at 305. While Congress did not provide a statute-specific definition, “collect-on-delivery” is a term of art in law dealing with personalty. Black’s Law Dictionary 273 (8th ed.2004) defines “C.O.D.” in the following manner:
“1. Cash on delivery; collect on delivery. By consenting to this delivery term, the buyer agrees to pay simultaneously with delivery and appoints the carrier as the buyer’s agent to receive and transmit the payment to the seller. With C.O.D. contracts, the practice of carriers has traditionally been to disallow inspection before payment.”
See also Young v. Santa Fe Trail Transportation Co., 179 Kan. 678, 681, 298 P.2d 235 (1956) (“As a general rule, the common practice of shipping goods collect on delivery [C.O.D.] to a buyer instructs the carrier not to deliver the goods until the price has been collected.”).
The Hoovers claim that their shipment was a C.O.D. transaction, as indicated on the Order of Service. They further claim that the inconsistent designation of method of payment on the Bill of Lading creates an ambiguity which should be resolved in favor of the party who did not control the drafting of the contract. The so-called ambiguity to which the Hoovers refer involves only conflicting facts. Although this court must draw reasonable inferences from the facts in a light most favorable to the prevailing party below, see Dougan v. Rossville Drainage Dist., 270 Kan. 468, 478, 15 P.3d 338 (2000), the record on appeal permits no inference that payment for the shipped household goods was made before AVL unloaded the goods in Kansas. The invoice to Mr. Hoover’s employer for payment of the shipping charges was dated August 17, 1999, nearly a week after the move was completed.
Alternatively, the Hoovers claim that any shipment of household goods is a C.O.D. transaction, as indicated by AVL’s brochure of shipper’s rights and responsibilities, which states: “Disputes eligible for arbitration are unresolved claims that occur as a result of loss or damage to an interstate shipment of household goods for an individual householder (also referred to as a C.O.D. shipper.)” While this definition of a C.O.D. shipper appears to be broader than the common definition of C.O.D., the Hoovers cannot claim that this definition was a material term of the contract when the basis for any claim under 49 U.S.C. § 14708 is that AVL failed to provide them with the brochure of their rights and responsibilities, including the right to arbitrate claims against AVL. If, as the Hoovers claim, AVL neglected to provide a copy of its arbitration program to the Hoovers, the terms defined by that arbitration program, even if broader than the definitions employed by the federal statute, are not part of the contract between the parties.
As 49 U.S.C. § 14708(f) clearly limits the provisions of that section to C.O.D. transactions, and the Hoovers transaction with AVL was not a C.O.D. transaction, the district court properly concluded that 49 U.S.C. § 14708(d) was not available to support the award of attorney fees and costs. As such, it is unnecessary to consider AVL’s second argument, here.
Despite the clear limiting language of subsection (f), the Hoovers cite Ward v. Allied Van Lines, Inc., 231 F.3d 135, 142 (4th Cir.2000), in support of their argument that 49 U.S.C. § 14708 (2000) provides attorney fees under the circumstances of their case. In Ward, the Fourth Circuit Court of Appeals granted attorney fees to an individual shipper under 49 U.S.C. § 11711 (1994), which contained provisions substantially similar to 49 U.S.C. § 14708(d) (2000), except that arbitration procedures were not mandated by the former statute. The Wards had moved from New Jersey to North Carolina, and Mr. Ward’s employer, Mitsubishi, had paid for the move. During the move, the truck containing the Wards’ belongings became stalled on some railroad tracks and was destroyed when a train collided with it.
Although subsection (f) of 49 U.S.C. § 11711 (1994) contained the same C.O.D. limitation as that contained in 49 U.S.C. § 14708(f) (2000), the Fourth Circuit did not address the limitation, so there is no detailed discussion of the method of payment in that case. This court cannot ascertain from the opinion whether the C.O.D. limitation was not discussed by the Ward court because the issue was not raised by the parties or because the facts of that case differed from the facts presented in this case. In either case, the C.O.D. limitation was raised in this case and the facts clearly do not support a conclusion that the Hoovers’ shipment was a C.O.D. transaction. Consequently, Ward is distinguished and not persuasive authority. We hold 49 U.S.C. § 14708(d) (2000) is not available for the recovery of the Hoovers’ attorney fees and costs.
The judgment of the district court for an allowance of fees and costs is reversed.
