Court of Appeals of Ohio,

Third District, Union County.

Scott and Lori BOWERSMITH DBA Parkway Golf Range and Pro Shop Plaintiffs-

Appellees

v.

UNITED PARCEL SERVICE, INC. Defendant-Appellee

and

Aaron M. Shank Appellant.

No. 14-05-41.

 

Decided March 27, 2006.

 

 

BRYANT, P.J.

 

{¶  1} The appellant, Aaron M. Shank (“Shank”), appeals from the judgment of the Union County Common Pleas Court granting Civ.R. 11 sanctions against him in the amount of $6,212.50.

 

{¶  2} On February 23, 2005, the plaintiffs-appellees, Lori and Scott Bowersmith, d/b/a Parkway Golf Practice (“Bowersmiths”), filed a complaint against Defendant-Appellee United Parcel Service, Inc. (“UPS”) alleging breach of contract, negligence, and frivolous conduct under R.C. 2323.51. The complaint resulted from the shipment of three packages, [] which were delivered to a wrong address, causing the Bowersmiths to suffer damages of approximately $2,500.00. On March 28, 2005, Shank filed a motion to dismiss for failure to state a claim upon which relief may be granted on behalf of UPS. Pertinent to this appeal, UPS argued that the Carmack Amendment to the Interstate Commerce Act, codified at 49 USC 14706, “occupies the entire field of carriers’ liability to shippers for goods transported interstate [.]” Therefore, UPS argued that the federal statute precludes state claims against common carriers, and the Bowersmiths’ complaint asserted state claims against UPS. The next day, the trial court granted UPS’ motion and dismissed the case . []

 

The packages were sent from Marysville, Ohio to Torrance, California.

 

“Defendant’s Motion to Dismiss for lack of subject matter jurisdiction is SUSTAINED[.] * * * Upon examination of the applicable case law, this case is dismissed, the subject matter having been pre-empted by applicable federal law, thus divesting this State Court of jurisdiction.” J. Entry, Mar. 29, 2005 (emphasis added).

 

{¶  3} On April 1, 2005, the Bowersmiths filed a response to UPS’ motion to dismiss, and the trial court filed a journal entry, which set aside the March 29, 2005 dismissal and reinstated the case . [] In the same journal entry, the court ordered counsel to appear in person for a scheduling conference on April 13, 2005. On April 4, 2005, the Bowersmiths filed a motion for relief from judgment. Shank failed to appear for the April 13, 2005 scheduling conference. [] At the April 13, 2005 conference, the trial court held some type of proceeding on the record and entered default judgment, sua sponte, against UPS on the issue of liability. [] On April 14, 2005, UPS filed a memorandum in response to the Bowersmiths’ motion for relief.

 

“A Motion to Dismiss having been filed herein by Plaintiff [sic], citing statutory law which ‘pre-empted’ this Court’s right to entertain jurisdiction, was sustained and this case dismissed on March 29, 2005. Subsequently, this Court has found that the statutory law previously cited by Plaintiff [sic] has been superceded [sic] and the cited reference is no longer the applicable law. Therefore, this Court Orders that the Dismissal Entry be and hereby is set aside and held for naught, and the case be fully reinstated.” Journal Entry, Apr. 1, 2005.

 

In the second assignment of error, Shank argues he was sanctioned based on his failure to appear, and in their briefs, the parties made an issue of whether the trial court sent notice and whether Shank received it. However, at oral argument, both parties conceded that the issues of notice and Shank’s failure to appear at the scheduling conference are irrelevant because he was sanctioned based on the “frivolous” nature of his filings

 

“This matter having been set for Scheduling Conference and notice given, Defendant and its attorney failing to appear after citing a statute which had been amended, without citing the amendment, thereby misleading this Court as to its jurisdiction, and further, failing to file an Answer or other pleading after notification of vacation of the Dismissal Entry filed herein, it is Ordered that default judgment as to liability be and hereby is rendered against Defendant[.]” Journal Entry, April 13, 2005.

 

{¶  4} The Bowersmiths filed a motion for sanctions against Shank and UPS under Civ.R. 11 on April 19, 2005. In their motion, the Bowersmiths argued that UPS and Shank had acted frivolously by filing a Civ.R. 12(B)(6) motion based on outdated law. The Bowersmiths argued that UPS and Shank should be sanctioned for continuing their argument in favor of dismissal based on the Carmack Amendment. Shank filed a pleading entitled “Defendant’s motion to reconsider and set aside default judgment and to reconsider April 1, 2005 entry setting aside dismissal entry.” The trial court denied the motion on April 22, 2005, and the parties filed responses and replies on the issue of Civ.R. 11 sanctions.

 

{¶  5} The trial court held a hearing on May 2, 2005 to determine damages in the underlying case. In its judgment entry, filed on May 12, 2005, the trial court awarded damages of $2,583.84 to the Bowersmiths and overruled their motion for sanctions because they had not presented expert testimony on the issue of attorneys fees. Subsequently, the Bowersmiths filed an amended motion for sanctions pursuant to Civ.R. 11. On August 18, 2005, the trial court granted the motion and held a hearing on September 9, 2005. On September 19, 2005, the trial court filed a judgment entry sanctioning Shank in the amount of $6,212.50. Shank appeals the trial court’s judgment and asserts the following assignments of error:

The trial court erred in holding that Appellant, an attorney, violated Ohio Civil Rule 11 for presenting legal arguments amply supported by correctly cited, controlling, current and overwhelming authority.

The trial court erred in holding that Appellant violated Ohio Civil Rule 11 by not appearing at a scheduling conference for which he did not receive notice and when the evidence indicates the trial court never sent notice of the conference to Appellant.

 

{¶  6} An appellate court has jurisdiction to review only the lower court’s final judgments. Section 3(B)(2), Article IV of the Ohio Constitution. “For a judgment to be final and appealable, the requirements of R.C. 2505.02 and Civ.R. 54(B), if applicable, must be satisfied.” Walter v. Allstate Ins. Co., 9th Dist. No. 21599, 2004-Ohio-3080, at ¶  7 (citing Chef Italiano Corp. v. Kent State Univ. (1989), 44 Ohio St.3d 86, 88, 541 N.E.2d 64). An order is final and appealable if it “affects a substantial right in an action that in effect determines the action and prevents a judgment” or if it ” ‘resolves at least one full cause of action in a multiple claim case with an express certification that there is no just reason for delay pursuant to Civ.R. 54(B).” ‘ R.C. 2505.02(B)(1); Walter, supra at ¶  7 (quoting Dellagnese v. First Fed. S. & L. Assn., 9th Dist. No. 14809, 1991 WL 21542, at(internal citation omitted)). In this matter, the trial court’s dismissal was a final, appealable order pursuant to R.C. 2505.02, and the trial court certified it as such by stating in its judgment entry, “[t]his is a final appealable order.” J. Entry, Mar. 29, 2005. See generally Schroeder v. Shearson, Lehman & Hutton, Inc., 8th Dist. No. 60236, 1991 WL 64318 (“an order that dismisses a complaint is a final appealable order”).

 

{¶  7} By entering a final, appealable order, the trial court was patently and unambiguously divested of jurisdiction in the underlying case. See generally Schroeder, supra. Once the case was dismissed, the trial court did not have jurisdiction to set aside the dismissal and reinstate the case. See Haynes v. Ohio Dept. of Rehab. and Corrections, 10th Dist. No. 05AP-78, 2005-Ohio-5099, at ¶  13 (a dismissal “relieves the court of all jurisdiction over the matter and leaves the parties in the same position as if the plaintiff had never commenced the action”). Therefore, the trial court had no jurisdiction in this case after it journalized its judgment entry pursuant to Civ.R. 58(A) on March 29, 2005. However, we note that the lack of jurisdiction does not affect the underlying case since there has been no appeal as to those issues and UPS has paid a judgment to the Bowersmiths.

 

{¶  8} While a trial court will be divested of jurisdiction when it dismisses a case, sanctions are a collateral issue over which the trial court retains jurisdiction. Burrell v. Kassicieh (1998), 128 Ohio App.3d 226, 229-230, 714 N.E.2d 442 (citations omitted). In this case, the Bowersmiths filed both a motion and an amended motion for sanctions pursuant to Civ.R. 11 based on Shank’s frivolous conduct. Civ.R. 11 addresses frivolous claims and states in pertinent part:

The signature of an attorney or pro se party constitutes a certificate by the attorney or party that the attorney or party has read the document; that to the best of the attorney’s or party’s knowledge, information, and belief there is good ground to support it; and that it is not interposed for delay. If a document is not signed or is signed with intent to defeat the purpose of this rule, it may be stricken as sham and false and the action may proceed as though the document had not been served. For a willful violation of this rule, an attorney or pro se party, upon motion of a party or upon the court’s own motion, may be subjected to appropriate action, including an award to the opposing party of expenses and reasonable attorney fees incurred in bringing any motion under this rule. Similar action may be taken if scandalous or indecent matter is inserted.

(emphasis added). ” ‘A frivolous claim is a claim that is not supported by facts in which the complainant has a good-faith belief, and which is not grounded in any legitimate theory of law or argument for future modification of the law.” ‘ Burrell, supra at 230 (quoting Jones v. Billingham (1995), 105 Ohio App.3d 8, 12, 663 N.E.2d 657). Whether a party has made a good faith argument under the law is a legal question subject to de novo review on appeal. Curtis v. Hard Knox Energy, Inc., 11th Dist. No.2005-L-023, 2005-Ohio-6421, at ¶  15 (citing State Farm Ins. Cos. v. Peda, 11th Dist. No.2004-L-082, 2005-Ohio-3405, at ¶  28 (citations omitted)). However, we review a trial court’s decision to impose sanctions for an abuse of discretion. Burrell, supra at 230 (citing Label & Co. v. Flowers (1995), 104 Ohio App.3d 227, 233, 661 N.E.2d 782; Lewis v. Celina Fin. Corp. (1995), 101 Ohio App.3d at 464, 471, 473, 665 N.E.2d 1333). An ” ‘abuse of discretion’ connotes more than an error of law or judgment; it implies that the court’s attitude is unreasonable, arbitrary or unconscionable.” Blakemore v. Blakemore (1983), 5 Ohio St.3d 271, 219, 450 N.E.2d 1140 (quoting State v. Adams (1980), 62 Ohio St.2d 151, 157, 404 N.E.2d 144 (internal citations omitted)). In this case, the trial court clearly abused its discretion by sanctioning Shank.

 

{¶  9} In their motion for sanctions, the Bowersmiths argued “[w]hile the filing of a Rule 12 Motion may have been the conduct of vigorous defense when viewed as a single action, it becomes a pattern of frivolous conduct when coupled with the failure to attend a scheduled hearing and the filing of additional pleadings citing law from the early 1900s in the face of copies of the 1996 statutes.” If we were to accept the appellees’ argument, every attorney who filed a motion under Civ.R. 12(B), and lost thereon, would be subject to sanctions, which makes Appellees’ argument the closest thing to frivolity in this case.

 

{¶  10} In filing the Civ.R. 12(B)(6) motion on behalf of his clients, Shank argued that the Carmack Amendment, codified at 49 USC 14706, pre-empts state law claims against common carriers, such as UPS. Shank cited the trial court to precedent established by the United States Supreme Court in the early 1900’s, which states that the Carmack Amendment pre-empts state claims against common carriers. In the motion, Shank argued that the Bowersmiths’ complaint asserted state claims for breach of contract and negligence, which are exactly the types of claims barred by the Carmack Amendment. Although the trial court mistakenly believed it did not have subject matter jurisdiction, it dismissed the case, while noting it had examined applicable case law.

 

{¶  11} The next day, and apparently after reading the Bowersmiths’ tortured argument against dismissal, the trial court set aside its judgment. The Bowersmiths argued that the cause was properly in state court due to a 1996 amendment to 49 USC 14706. The Bowersmiths argued that “the law is clear. Pursuant to Title 49 an action may be brought in the state court of general jurisdiction, and under Title 28 the action shall be brought in state court unless the amount of each individual bill of lading or receipt is in excess of $10,000.” (emphasis in original).

 

{¶  12} We have reviewed 49 USC 14706 and the case law to which Shank cited. The cited case law has not been overruled and is therefore proper authority for Shank’s motion. A law does not become “bad law” merely because a statute is amended and the case law based thereon is almost 100 years old. Although 49 USC 14706 is a complicated statute, as pertinent to this case, it may be summarized as follows. [] 49 USC 14706 pre-empts state law claims against common carriers. See Adams Express Co. v. Croninger (1913), 226 U.S. 491, 505, 33 S.Ct. 148, 57 L.Ed. 314. Likewise, in Hoskins v. Bekins Van Lines (5th Cir.2003), 343 F.3d 769, 777, the court held that the Carmack Amendment preempts all state law claims including

 

For a comprehensive summary of the Carmack Amendment, see Alvarez, Patricia O. and Marc J. Yellin, The Carmack Amendment: Where to Start with a Motor Carrier Cargo Claim, FOR THE DEFENSE, Feb. 2006, at 29.

 

claims for 1) the tort of outrage, 2) intentional and negligent infliction of emotional distress, 3) breach of contract, 4) breach of implied warranty, 5) breach of express warranty, 6) violation of the Texas Deceptive Trade Practices Act sections 17.46 and 17.50, 7) slander, 8) misrepresentation, 9) fraud, 10) negligence and gross negligence, and 11) violation of the common carrier’s statutory duties as a common carrier under state law.

(internal citations omitted) (emphasis added). However, federal and state courts have concurrent jurisdiction over claims brought pursuant to the Carmack Amendment. See 49 USC 14706(d). Under 28 USC 1337(a), the federal courts have original jurisdiction over Carmack claims with damages exceeding $10,000.00, and a defendant in state court on a Carmack claim may only remove the case to federal court if the alleged damages exceed $10,000.00. 28 USC 1445(b).

 

{¶  13} 49 USC 14706, 28 USC 1337(a), 28 USC 1445(b), and the relevant case law clearly allow claims to be filed against a common carrier in state court, but only if the complaint alleges a claim under the Carmack Amendment, and not if it alleges state claims. Shank informed the trial court that state claims are barred by the Carmack Amendment. While he did not mention that the statute had been amended and that a state court may entertain properly pleaded Carmack claims, Shank supported his motion to dismiss a complaint for state claims, citing relevant statutory and case law, which has not been overruled or superseded. During oral arguments, Appellees argued that their complaint asserted a Carmack claim and, essentially, that Shank had an affirmative duty to advise the trial court and opposing counsel as to how a plaintiff may successfully file a case against a common carrier. We are aware of no rule of procedural or substantive law or of ethical considerations, which would require defense counsel to advise the plaintiff’s counsel about how to properly plead the plaintiff’s case. [] Furthermore, Appellees’ complaint did not assert a claim under the Carmack Amendment. The complaint set forth relevant facts and asserted causes of action for negligence and breach of contract, both wholly state law claims. While the requirements of notice pleading under Civ.R. 8 are minimal, the defendant must have enough information to answer the complaint, and the complaint in this matter certainly did not notify UPS that it must defend a cause of action brought pursuant to 49 USC 14706.

 

The record does suggest that Shank called Appellants’ trial counsel and advised him to file the case as a Carmack claim. See Appellant’s Br., Nov. 22, 2005, at Ex. 19.

 

{¶  14} Not only was Shank’s argument made in good faith, it was correct. Because Shank did not mention the 1996 amendment to 49 USC 14706, the trial court consistently and mistakenly believed it had been misled as to the law and its jurisdiction in this matter. The trial court abused its discretion by arbitrarily sanctioning Shank based on the belief that it had been misled as to the law governing the case. [] The first assignment of error is sustained. The second assignment of error is moot, and we note that the appellant apparently withdrew the second assignment of error at oral argument stating that his failure to appear for the scheduling conference was not the “frivolous conduct” for which he was sanctioned.

 

The Court: ” * * * I think it’s rather disingenuous for [Appellants] to suggest that the Court needs to check every citation to sure it’s been properly cited[.] * * * And I had to do that. You know, here I thought I was dealing with a firm that’s very professional in their presentations and so forth. And if they site [sic] me–if they site [sic] me to a case or site [sic] me a statute and they say this stands for the proposition, I expect it to be that. I don’t think I have to run around and clean up their work.” Appellant’s Br., at Ex. 20, 25:4-14. See also judgment entries quoted above.

 

{¶  15} As a final point, we wish to express our dismay with the trial court’s sua sponte default judgment in favor of the Bowersmiths in clear violation of the civil rules. Clearly, none of the rules for imposition of a sanction for contempt of court or for discovery violations apply. Civ.R. 55(A) states in pertinent part:

[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend as provided by these rules, the party entitled to a judgment by default shall apply in writing or orally to the court therefore[.] * * * If the party against whom judgment by default is sought has appeared in the action, he (or, if appearing by representative, his representative) shall be served with written notice of the application for judgment at least seven days prior to the hearing on such application.

 

{¶  16} In this case, the Bowersmiths’ counsel appeared for a scheduling conference on April 13, 2005. The following pertinent conversation took place on the record at the conference:

Mr. DePascale: I understand. I would make, you know, I would make a motion based on–on what has occurred to this point. You know, as you enter judgment for the plaintiff, but I don’t know that you can do that.

The Court: Well, that’s just–so that you know, that’s exactly what I was– what I was trying to do. Number one, he hadn’t filed an answer.

Mr. DePascale: He hasn’t filed an answer. He’s filed pleadings which but for the fact that everyone has an absolute right to file a Rule 12 motion, would be considered frivolous in this case considering the status of the law. And then he doesn’t show up pursuant to court order.

The Court: Yeah.

* * *

The Court: One of the things that I can’t do, I don’t think–I don’t think that I can default him. I don’t think–

* * *

Mr. DePascale: I don’t have the exact date [for service of the complaint]. I know that–I know he called me and said basically you have no right to file this suit. He then files his motion which obviously was within time and within rule. You sustained it and then overruled it based on what you got in the mail. * * * But the clock’s continued to run. * * * So he’s out of time on an answer.

The Court: Well, I’ll tell you what. I’m going to–on the Court’s own motion, the Court will number one, I will recognize that there has been no response since the dismissal entry was set aside. That–and because–and the man didn’t appear after ordered to be. So I’m going to find him in default. I’m going to render judgment for you.

Scheduling Conference Tr., Nov. 2, 2005, 4-7.

 

{¶  17} At the time of the hearing, Shank had entered an appearance for UPS by filing the motion to dismiss. Even if the trial court had jurisdiction to vacate the judgment, a party has 14 days after its Civ.R. 12(B)(6) motion is overruled in which to file an answer. See Civ.R. 12(A)(2). Since setting aside the dismissal “overruled” the motion under the strange circumstances of this case, Shank had until April 15, 2005 to file an answer. Therefore, as of April 13, 2005, the Bowersmiths were not entitled to move for default judgment.

 

{¶  18} Civ.R. 55(A) provides that the party entitled to judgment shall apply to the court for judgment. The first mention of default judgment was made at the April 13, 2005 scheduling conference, and Shank had entered an appearance on behalf of UPS by filing the motion to dismiss. Civ. R. 55(A) requires that Shank had to receive written notice of the application for default judgment at least seven days prior to the hearing on the application. Here, the trial court sua sponte entered default judgment, did not serve Shank with any written notice that it was considering entry of judgment against UPS, and did not hold a hearing to determine whether default judgment was proper. The trial court’s sua sponte grant of default judgment in this case was arbitrary and an egregious violation of Civ.R. 55(A).

 

{¶  19} Having sustained the first assignment of error, the imposition of sanctions ordered by the Union County Common Pleas Court is reversed.

Judgment Reversed.

 

SHAW, J., concurs.

 

ROGERS, J., concurs in judgment only.

 

 

United States District Court,

W.D. Wisconsin.

SPRAY-TEK, INC., Plaintiff,

v.

ROBBINS MOTOR TRANSPORTATION, INC., Defendant.

No. 05 C 506 S.

 

April 5, 2006.

 

MEMORANDUM AND ORDER

 

SHABAZ, District J.

 

Plaintiff Spray-Tek, Inc. commenced this action against defendant Robbins Motor Transportation, Inc. alleging defendant is subject to liability for cargo loss or damage pursuant to the Carmack Amendment to the Interstate Commerce Act 49 U.S.C. §  14706 et seq. because of its status as a regulated for-hire carrier. Plaintiff also alleges defendant is subject to liability based on the principles of promissory estoppel and unjust enrichment. Plaintiff seeks an award of ordinary and special damages in this action. Jurisdiction is based on 28 U.S.C. §  1331 and 49 U.S.C. §  14706(d). The matter is presently before the Court on cross-motions for summary judgment. Also presently before the Court are: (1) defendant’s motion to strike the affidavit of Colin Barrett because plaintiff failed to previously disclose him as an expert witness; and (2) defendant’s motion to strike plaintiff’s reply brief and supporting affidavits because they were untimely filed. The following facts are either undisputed or those most favorable to the non-moving party.

 

BACKGROUND

Plaintiff Spray-Tek, Inc. is engaged in the business of commercial dehydration of food flavor, pharmaceutical and soft chemical products. In 2003 plaintiff entered into a contract with Niro, Inc. (hereinafter Niro) in which Niro was to design and manufacture a fourteen foot diameter cone bottom drying chamber (hereinafter drying chamber) for plaintiff. Pursuant to the terms of the contract Niro was also responsible for shipping the drying chamber from its facility in Hudson, Wisconsin to plaintiff’s facility in Bethlehem, Pennsylvania. The contract stated in relevant part:

 

2.0 PRICING

 

2.1 Base Spray Dryer System

For one (1) Niro-Bowen spray drying system with 14-ft. diameter, cone-bottom drying chamber, having a design production capacity as specified in Section 8.0 of this quotation, and including all scope of equipment and services as specified in this quotation document, F.O.B. points of manufacture in the U.S.A. Freight charges for shipment of mechanical scope to site are to be pre-paid by Niro and invoiced to Buyer at-cost, utilizing Buyer’s preferred carrier(s) where possible.

Price …………………………… $1,161,500.00

…IX. RISKS OF LOSS. The Purchaser shall bear the risk of loss of or damage to the equipment and parts after delivery of the equipment and parts to the job site or to the shipping point if delivery F.O.B. shipping point is specified.

 

On October 14, 2004 Niro’s representative Mr. David Thoen contacted defendant Robbins Motor Transportation, Inc. to obtain an estimate for transporting the drying chamber to plaintiff. Mr. Thoen spoke with Mr. Robert Kauffman, Jr. who serves as defendant’s Southwest Regional Terminal Manager. Mr. Thoen provided Mr. Kauffman with information concerning the dimensions and estimated weight of the drying chamber as well as Niro’s required pick-up and delivery dates which were October 18, 2004 and October 25, 2004 respectively. After receiving said information Mr. Kauffman prepared and sent an estimate to Niro. Defendant’s estimate stated in relevant part:

Re: Rates for Hudson, WI to Bethlehem, PA

Thank you for including Robbins Motor Transportation in this opportunity to bid our services to you again! Below indicates the price for transportation with dims of:

Load # 1 Vessel 25’x15’x14.75 25,000 lbs. $16,887

Loading on the 18th of October and delivering on the 25th of October. The delivery date is subject to change due to permits and routing.

…STANDARD TERMS AND CONDITIONS

ESTIMATE IS BASED ON DIMENSION, WEIGHT, AND SERVICES SPECIFIED. CHANGES OR ERRORS IN THESE COULD AFFECT PRICING. RATE ESTIMATE VALID FOR 30 DAYS. WE FOLLOW THE FOLLOWING DETENTION RATES (PER HOURS OR FRACTION THEREOF) FLATBEDS $85.00/HOUR EXTENDABLE. DROPDECK OR LOWBED AT $100.00/PER HOUR

DETENTION RATE ON SPECIALIZED EQUIPMENT WILL VARY DEPENDING UPON THE NUMBER OF AXELS. MODIFICATIONS TO EQUIPMENT NECESSARY TO TRANSPORT CARGO DUE TO UNUSUAL SHAPE OR SPECIAL HANDLING WILL BE AT SHIPPERS EXPENSE. COST CAN BE INCLUDED IN QUOTATION IF REQUIREMENTS ARE KNOWN IN ADVANCE.

Approval: _____________________

Mr. Thoen signed the estimate and faxed it back to defendant on October 14, 2004. Mr. Thoen and Mr. Kauffman never discussed the value of the drying chamber before the estimate was prepared. However, Mr. Kauffman testified at his deposition that “value really doesn’t come into play” in preparing an estimate. Additionally, he testified he failed to advise Mr. Thoen that he could have his rate quotation based on either value or weight and dimensions. Finally, Mr. Thoen testified at his deposition that he never advised Mr. Kauffman before he prepared the estimate that if defendant failed to deliver the drying chamber by October 25, 2004 plaintiff would be subject to consequential damages.

 

On October 18, 2004 defendant arrived at Niro’s facility in Hudson, Wisconsin and the drying chamber was loaded onto its trailer. Niro prepared a Bill of Lading for the shipment by completing the blanks on the form for: (1) load information; (2) identity of the carrier; (3) address of the consignee and shipper; (4) description of the dryer; and (5) weight of the dryer. Additionally, the Bill of Lading stated in relevant part:

Received, subject to the classifications and tariffs in effect on the date of this Bill of Lading:

…the property described below in apparent good order, … It is mutually agreed, as to each carrier of all or any of said property over all or any of said portion of said route to destination, and as to each party at any time interested in all or any of said property, that every service to be performed hereunder shall be subject to all the conditions not prohibited by law, whether printed or written, herein contained (as specified in Appendix B to Part 1035) which are hereby agreed to by the shipper and accepted for himself and his assigns.

…Note–where the rate is dependent on value, shippers are required to state specifically in writing the agreed or declared value of the property. The agreed or declared value of the property is hereby specifically stated by the shipper to be not exceeding-

$____________________ per____________________

Mr. Thoen signed the Bill of Lading on Niro’s behalf. Defendant’s driver signed it as well. However, Mr. Thoen failed to declare a value for the drying chamber on the Bill of Lading. The Bill of Lading was part of a multi-copy form Niro provided to defendant. Said Niro prepared form was the only documentation exchanged between the parties on October 18, 2004.

 

On or about October 28, 2004 the drying chamber was damaged while it was in transit on Interstate Highway 695 in Baltimore, Maryland. Accordingly, the drying chamber never arrived at plaintiff’s facility in Bethlehem, Pennsylvania. The drying chamber was damaged when it struck an overpass and became dislodged from defendant’s vehicle. It was inspected and declared a total loss. Accordingly, Niro manufactured a replacement drying chamber for plaintiff and invoiced it $233,100.00 in replacement costs. Additional facts relevant to the Court’s analysis will be discussed throughout the course of this opinion.

 

MEMORANDUM

Plaintiff argues it is entitled to partial summary judgment on three issues:  (1) defendant’s liability under the Carmack Amendment; (2) defendant’s liability cannot be limited by released rate provisions contained within its tariff; and (3) plaintiff’s entitlement to damages for repair costs. Defendant argues it is entitled to summary judgment on three issues as well: (1) its potential liability was effectively limited to $2,500.00 per ton because of limited liability provisions contained within its tariff and terms and conditions; (2) plaintiff is not entitled to special damages; and (3) plaintiff’s common law claims of unjust enrichment and promissory estoppel are preempted by the Carmack Amendment.

 

As a preliminary matter, the Court has before it defendant’s motion to strike plaintiff’s reply brief and supporting affidavits because they were untimely filed. Defendant’s motion is one of form over substance. Defendant was not prejudiced by plaintiff’s minimal delay in filing its reply brief and supporting affidavits. Accordingly, defendant’s motion to strike is denied. See Glass v. Crimmins Transfer Co., 299 F.Supp.2d 878, 881 (C.D.Ill.2004).

 

Additionally, the Court has before it defendant’s motion to strike the affidavit of Colin Barrett because plaintiff failed to previously disclose him as an expert witness. Defendant asserts it will suffer prejudice if plaintiff is allowed to use Mr. Barrett’s testimony because it will have “little or no opportunity to depose Mr. Barrett, rebut his ‘expert’ opinions, nor challenge his credentials, as is [defendant’s] right.” Additionally, defendant asserts it will not have the opportunity to “solicit expert opinions of its own.” Again, defendant’s motion is one of form over substance. Trial in this action is not set to begin until April 27, 2006 which gives defendant approximately three weeks to depose Mr. Barrett and to “solicit expert opinions” of its own. Accordingly, plaintiff’s failure to previously disclose Mr. Barrett as an expert witness is harmless within the meaning of Federal Rule of Civil Procedure 37(c)(1) and defendant’s motion to strike the affidavit of Colin Barrett is denied.

 

Summary judgment is appropriate where 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 a judgment as a matter of law.” Fed.R.Civ.P. 56( c ).

 

A fact is material only if it might affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). Disputes over unnecessary or irrelevant facts will not preclude summary judgment. Id. Further, a factual issue is genuine only if the evidence is such that a reasonable fact finder could return a verdict for the nonmoving party. Id. A court’s role in summary judgment is not to “weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.” Id. at 249, 106 S.Ct. at 2511.

 

To determine whether there is a genuine issue of material fact for trial courts construe all facts in the light most favorable to the non-moving party. Heft v. Moore, 351 F.3d 278, 282 (7th Cir.2003) (citation omitted). Additionally, a court draws all reasonable inferences in favor of that party. Id. However, the non-movant must set forth “specific facts showing that there is a genuine issue for trial” which requires more than “just speculation or conclusory statements.” Id. at 283 (citations omitted).

 

A. Defendant’s liability under the Carmack Amendment

Plaintiff asserts uncontested facts in the record establish its prima facie case under the Carmack Amendment. Additionally, plaintiff asserts nothing in the record suggests that the drying chamber was damaged because of one of the excepted causes which would relieve defendant of liability. Accordingly, plaintiff argues it is entitled to summary judgment on the issue of defendant’s liability under the Carmack Amendment. Defendant asserts plaintiff failed to meet its burden of establishing its prima facie case under the Carmack Amendment because it failed to demonstrate that the drying chamber arrived in damaged condition. Additionally, defendant asserts plaintiff failed to establish its amount of damages. Accordingly, defendant argues plaintiff’s motion for summary judgment on the issue of liability should be denied.

 

The Carmack Amendment to the Interstate Commerce Act (hereinafter Carmack Amendment) states in relevant part:

A carrier providing transportation or service… shall issue a receipt or bill of lading for property it receives for transportation under this part. That carrier and any other carrier that delivers the property and is providing transportation or service…are liable to the person entitled to recover under the receipt or bill of lading. The liability imposed under this paragraph is for the actual loss or injury to the property caused by (A) the receiving carrier, (B) the delivering carrier, or ( C ) another carrier over whose line or route the property is transported in the United States….Failure to issue a receipt or bill of lading does not affect the liability of a carrier.

49 U.S.C. §  14706(a)(1). The purpose of the Carmack Amendment is to  “establish uniform federal guidelines designed in part to remove the uncertainty surrounding a carrier’s liability when damage occurs to a shipper’s interstate shipment.” Hughes v. United Van Lines, Inc., 829 F.2d 1407, 1415 (7th Cir.1987).

 

Under the Carmack Amendment plaintiff bears the burden of establishing a prima facie case which requires it to demonstrate: (1) delivery to the carrier in good condition; (2) arrival in damaged condition; and (3) the amount of damages. Miss. Pac. R.R. Co. v. Elmore & Stahl, 377 U.S. 134, 138, 84 S.Ct. 1142, 1145, 12 L.Ed.2d 194 (1964), reh’g. denied, 377 U.S. 984, 84 S.Ct. 1880, 12 L.Ed.2d 752 (1964). Upon such a showing the burden shifts to the carrier to demonstrate both that it was free from negligence and that damage to the shipment was due to one of the excepted causes relieving it of liability. Allied Tube & Conduit Corp. v. S. Pac. Transp. Co., 211 F.3d 367, 369 (7th Cir.2000) (citing Id. at 137-138). The excepted causes are: (1) acts of God; (2) the public enemy; (3) acts of the shipper himself; (4) public authority; or (5) the inherent vice or nature of the goods. Miss. Pac. R.R. Co., at 137, 84 S.Ct. at 1144 (citations omitted). If defendant cannot meet its burden plaintiff is entitled to recover damages for its actual loss or injury to the shipment.

 

Defendant concedes that it received the drying chamber in good condition. Accordingly, plaintiff’s first element of its prima facie case is established. Defendant also concedes the drying chamber was damaged. However, defendant asserts plaintiff cannot establish the second element of its prima facie case because it cannot demonstrate that the drying chamber actually arrived at its final destination which was plaintiff’s Bethlehem, Pennsylvania facility.

 

The purpose of demonstrating delivery to the carrier in good condition and arrival in damaged condition is to show an adverse change in the condition of goods while they were in the carrier’s custody which implies that whatever injury occurred was caused by the carrier. Camar Corp. v. Preston Trucking Co., Inc., 221 F.3d 271, 275 (1st Cir.2000) (citing Id. at 138). Accordingly, carriers are subject to liability under the Carmack Amendment even if goods they were transporting never arrive at their final destination. See Eddie Bauer, Inc. v. Focus Transp. Serv., 881 F.Supp. 1174, 1177-1181 (N.D.Ill.1995) (defendant carrier liable to plaintiff under the Carmack Amendment despite the fact that plaintiff’s goods were stolen before final delivery) and Hughes, at 1411 (defendant carrier liable for loss incurred by plaintiff for household goods destroyed by fire while in transit).

 

It is undisputed that the drying chamber was damaged when it struck an overpass and became dislodged from defendant’s vehicle. Additionally, it is undisputed that after the accident the drying chamber was inspected and declared a total loss. Accordingly, the fact that the drying chamber never arrived at plaintiff’s facility is irrelevant because the record clearly demonstrates that there was an adverse change in the condition of the drying chamber while it was in defendant’s custody.

 

An additional argument defendant asserts concerning plaintiff’s second element of its prima facie case is that plaintiff cannot demonstrate it owned the drying chamber during transport. However, the contract plaintiff entered into with Niro establishes that it was the owner of the drying chamber when it was damaged. The contract provided that the terms of sale were F.O.B. points of manufacture in the U.S.A. According to the declaration of David Brand who serves as plaintiff’s vice-president and general manager F.O.B. points of manufacture means that the drying chamber became plaintiff’s property once it was “placed on board the delivery truck at its point of manufacture in Hudson, Wisconsin.”

 

Mr. Brand’s assertion that plaintiff owned the drying chamber once it was loaded onto defendant’s trailer is reinforced by the provision in the contract concerning risks of loss. Said section provided that plaintiff would bear the risk of loss of or damage to the equipment after delivery to the shipping point if delivery F.O.B. shipping point was specified. Here the shipping point and the manufacturing point were identical. Accordingly, the F.O.B. points of manufacture language contained within plaintiff’s contract demonstrates that plaintiff bore the risk of loss once the drying chamber departed from Niro’s Hudson, Wisconsin facility. There is no genuine issue concerning either ownership of the drying chamber or arrival of the drying chamber in damaged condition. Accordingly, plaintiff established the second element of its prima facie case.

 

Finally, defendant asserts plaintiff cannot meet its burden of establishing the third element of its prima facie case because it failed to demonstrate what “it is obligated to pay for the dryer.” However, the declaration of Mr. Brand indicates that Niro invoiced plaintiff $233,100.00 for the replacement dryer. Accordingly, plaintiff established the third element of its prima facie case because its amount of damages is $233,100.00.

 

Plaintiff met its burden of establishing a prima facie case under the Carmack Amendment. Accordingly, the burden now shifts to defendant to prove that it was both free from negligence and that damage to the shipment was due to one of the excepted causes relieving it of liability. Allied Tube & Conduit Corp., at 369 (citation omitted). Defendant concedes it failed to produce any evidence establishing that damage to the shipment was due to one of the accepted causes. Accordingly, plaintiff is entitled to summary judgment on the issue of defendant’s liability under the Carmack Amendment.

 

B. Limitation of defendant’s liability under the Carmack Amendment and

plaintiff’s entitlement to repair costs

Defendant asserts it limited its liability to $32,500.00 because of limited liability provisions contained within its tariff and terms and conditions which serve to limit its liability to $2,500.00 per ton unless a shipper declares a higher value. Accordingly, because Niro failed to declare a value for the drying chamber on the Bill of Lading defendant argues it is entitled to summary judgment limiting is liability to $32,500.00. Plaintiff asserts defendant failed to provide Niro with notice of its released rate valuation or provide it with an opportunity to choose between two different levels of liability. Additionally, plaintiff asserts defendant’s tariff is void as a matter of law. Accordingly, plaintiff argues it is entitled to summary judgment concerning the non-limitation of defendant’s liability which would entitle it to damages for repair costs in the amount of $233,100.00.

 

An exception to the general rule that a carrier is liable for the actual loss or injury to property exists pursuant to 49 U.S.C. §  14706 ( c )(1)(A). Said statute provides in relevant part:

…a carrier…may…establish rates for the transportation of property… under which the liability of the carrier for such property is limited to a value established by written or electronic declaration of the shipper or by written agreement between the carrier and shipper if that value would be reasonable under the circumstances surrounding the transportation.

Said written agreement between a carrier and a shipper may incorporate a limitation of liability contained within a tariff. Nieman Marcus Group, Inc. v. Quast Transfer, Inc., 1999 WL 436589, at 3 (N.D.Ill. June 21, 1999).

 

Under the prior statutory scheme four requirements had to be met by a carrier to limit its liability under the Carmack Amendment. A carrier had to: (1) maintain a tariff within the prescribed guidelines of the Interstate Commerce Commission; (2) obtain the shipper’s agreement as to his choice of liability; (3) give the shipper a reasonable opportunity to choose between two or more levels of liability; and (4) issue a receipt or bill of lading prior to moving the shipment. Hughes, at 1415 (citing Anton v. Greyhound Van Lines, Inc., 591 F.2d 103 (1st Cir.1978)).

 

However, the Interstate Commerce Commission (hereinafter ICC) no longer exists. Additionally, carriers are no longer required to file tariffs with the ICC’s successor the Surface Transportation Board. Nieman Marcus Group, Inc., at 3. Accordingly, element number one can no longer be a requirement for applying a liability limitation. Id. However, a liability limitation provision contained within a tariff does not automatically limit a carrier’s liability because today tariffs have no binding effect apart from their status as contracts. Tempel Steel Corp. v. Landstar Inway, Inc., 211 F.3d 1029, 1030 (7th Cir.2000). Accordingly, a carrier must upon the shipper’s request provide it with “a written or electronic copy of the rate, classification, rules, and practices [such as a tariff] upon which any rate applicable to a shipment, or agreed to between the shipper and the carrier is based.” 49 U.S.C. §  14706( c )(1)(B).

 

Plaintiff asserts defendant cannot limit its liability under the Carmack Amendment based on provisions contained within its tariff because its tariff is entirely void by operation of law. A carrier is no longer required to file a tariff with the Surface Transportation Board. Nieman Marcus Group, Inc., at 3. Accordingly, tariffs are no longer automatically binding upon a shipper. See Tempel Steel Corp., at 1030. However, as previously indicated a carrier’s liability can be effectively limited based on a liability limitation provision contained within a tariff if said tariff is part of an enforceable contract between the parties. Id. Accordingly, the fact that defendant’s tariff is not automatically applicable is not dispositive of the matter because the Court must still determine what documents served as enforceable contracts between Niro; defendant; and plaintiff as Niro’s assign.

 

First, the Court concludes defendant’s October 14, 2004 estimate served as an enforceable contact between the parties. The estimate contained all required contract elements: (1) offer; (2) acceptance; and (3) consideration. See Zemke v. City of Chicago, 100 F.3d 511, 513 (7th Cir.1996). However, that does not end the Court’s inquiry because a subsequently issued Bill of Lading can also serve as an enforceable contract. See Schneider Nat’l. Carriers, Inc. v. Rudolph Express Co., Inc., 855 F.Supp. 270, 273-274 (E.D.Wis.1994). Accordingly, if the Bill of Lading served as an enforceable contract the parties’ motions for summary judgment are ones of contract interpretation. When a motion for summary judgment concerns contract interpretation summary judgment is only proper if the contract “is clear and unambiguous as a matter of law, meaning that [it] can be read only one way.” Penske Logistics, Inc. v. KLLM, Inc., 285 F.Supp.2d 468, 472 (D.N.J.2003) (citing Starr v. Katz, 1994 WL 548209, at 7 (D.N.J. Oct.5, 1994)). The Court concludes the Bill of Lading served as an enforceable contract between Niro and defendant. Accordingly, elements two and four of the Hughes test were established when: (1) Niro prepared its Bill of Lading; and (2) Mr. Thoen and defendant’s driver signed the Bill of Lading. However, summary judgment is not proper because the contract is ambiguous concerning the issue of whether defendant gave Niro a reasonable opportunity to choose between two or more levels of liability.

 

The Bill of Lading contained the language “[r]eceived, subject to the classifications and tariffs in effect on the date of this Bill of Lading.” Defendant’s tariff provides in relevant part:

 

ITEM 161–APPLICATION OF RATES VALUATION–CARRIER’S LIABILITY

When a shipper tenders a shipment and declares a value in excess of $2,500.00 per ton…such shipment will only be accepted subject to the base valuation rate of one dollar…for each one thousand dollars…of fraction thereof of the declared value.

The shipper must make and sign the following notation of the Bill of Lading: “The agreed or declared value of the property on the Bill of Lading is hereby specifically stated by the shipper to be $__________ per 2,000 pounds. SIGNED: ______________________________.”

Unless a greater value is declared by the shipper and stated on the Bill of Lading the carrier’s liability for any loss or damage to any article or package comprising the shipment shall be limited to $2,500.00 per ton…or fraction thereof.

The language contained in Item 161 of defendant’s tariff was incorporated into paragraph 18 of defendant’s terms and conditions entitled Limited Liability. The Bill of Lading also contained the language “where the rate is dependent on value, shippers are required to state specifically in writing the agreed or declared value of the property.”

 

It is undisputed that Niro failed to advise Mr. Kauffman of the value of the drying chamber before he prepared the estimate. Additionally, it is undisputed that Niro failed to declare a value for its shipment on the Bill of Lading. Accordingly, at first glance it appears defendant’s liability was effectively limited by its tariff which was incorporated into the shipper prepared Bill of Lading. However, there remains a genuine issue concerning whether Niro’s rate was dependent on value.

 

Mr. Kauffman testified that value does not come into play when rates are determined. He indicated dimensions are what is important. Additionally, Mr. Kauffman testified that he uses defendant’s computer tariff system when he prepares a quote which takes into account: (1) the pickup point; (2) the delivery point; (3) weight; (4) size; and (5) dimension. Value of an item apparently is not taken into account by defendant’s computer tariff system. Further, Mr. Kauffman testified that he has never used defendant’s paper tariff (including Item 161) in preparing an estimate. Additionally, his office does not maintain a copy of defendant’s paper tariff. Finally, Mr. Kauffman testified he: (1) failed to advise Mr. Thoen that he could have his rate quotation based on either value or weight and dimension; and (2) is not sure whether Niro was provided defendant’s terms and conditions. Although it is undisputed that Mr. Thoen failed to request a copy of either defendant’s tariff or terms and conditions.

 

Accordingly, there remains a genuine issue of material fact concerning the issue of whether defendant provided Niro with a reasonable opportunity to choose between two different levels of liability. If the jury finds in the affirmative plaintiff’s damages will be limited to $32,500.00. However, if the jury answers in the negative defendant will be subject to liability for the full value of plaintiff’s actual loss.

 

C. Plaintiff’s entitlement to special damages

Defendant asserts it is entitled to summary judgment on the issue of special damages because it never received notice of any circumstances which would give rise to plaintiff’s special damages. Plaintiff asserts its change order and additional general contracting costs were natural and probable consequences of defendant’s breach. Accordingly, plaintiff argues defendant’s motion for summary judgment concerning the issue of special damages should be denied.

 

The Carmack Amendment is comprehensive enough to “embrace all damages resulting from any failure to discharge a carrier’s duty with respect to any part of the transportation to the agreed destination.” Se. Express Co. v. Pastime Amusement Co., 299 U.S. 28, 29, 57 S.Ct. 73, 74, 81 L.Ed. 20 (1936) (internal quotation marks and citation omitted). Accordingly, an injured party can recover damages for delay, non-speculative lost profits and all reasonably foreseeable consequential damages. Mach Mold Inc. v. Clover Assoc., Inc., 383 F.Supp.2d 1015, 1032 (N.D.Ill.2005) (citations omitted).

 

However, the Carmack Amendment has not changed the common law rule that special damages are usually not recoverable in a breach of contract action. Id. at 1032-1033 (citation omitted). Special damages are those that a carrier would not reasonably foresee as the ordinary consequence of a breach at the time the contract was made. Id. at 1033 (citations omitted). To recover special damages plaintiff must show that defendant had notice of circumstances which might lead to such damages. John Morrell & Co. v. Burlington N., Inc., 560 F.2d 277, 281 (7th Cir.1977) (citations omitted). Additionally, under the general rule notice of special damages must be given when the shipping contract is made. Mach Mold Inc., at 1033 (citing F.J. McCarty v. S. Pac. Co., 428 F.2d 690, 693 (9th Cir.1970)). Plaintiff cannot meet its burden of demonstrating that at the time the initial contract was made defendant had notice of circumstances which would lead to special damages. Accordingly, defendant is entitled to summary judgment on this issue.

 

Mr. Thoen testified at his deposition as follows:

Q Prior to October 18, 2004 did you have any knowledge what specifically [plaintiff] was going to use the dryer for?

A No, I have no idea. Other than it’s a dryer.

Q Did you have any idea what was going on at [plaintiff’s] facilities in Bethlehem, Pennsylvania?

A No. I had no contact with them at all. I worked strictly through Joe Mally.

Q …He told you the delivery date he needed it by?

A That’s correct.

Q Did he tell you the specifics of why he needed it by that date?

A No, he did not.

Q So did you request a specific delivery date from Robbie Kauffman at [defendant]?

A Yes, I did.

Q …Did you say anything to Robbie Kauffman or anyone else at [defendant] regarding what had happened if [plaintiff] didn’t receive the dryer by the delivery date?

A. No.

Q. …Did you tell [defendant] anything about time being of the essence or consequential damages?

A. I did not know of any….

It is undisputed that the only contact between Niro and defendant occurred between Mr. Thoen and Mr. Kauffman. Accordingly, defendant was unaware when it entered into the initial transportation contract with Niro that plaintiff’s facility in Bethlehem, Pennsylvania was under construction and failure to deliver the drying chamber by October 25, 2004 would subject plaintiff to additional general contracting or change order costs. Additionally, defendant clearly indicated on its estimate that delivery date was subject to change due to permits and routing.

 

Plaintiff asserts that it was “obvious to [defendant] that Niro was shipping a unique, one-of-a-kind object that was part of a larger system being assembled at [plaintiff’s] facility.” However, plaintiff cannot rest on conclusory allegations alone and successfully defeat a motion for summary judgment. The undisputed evidence in the record establishes that defendant did not have the prerequisite notice at the time it entered into the initial contract with Niro that failure to deliver the drying chamber by October 25, 2004 would subject plaintiff to special damages. Accordingly, plaintiff cannot seek recovery for its change order or additional general contracting costs in the form of special damages under its Carmack Amendment claim. Defendant’s motion for summary judgment on the issue of special damages is granted.

 

D. Preemption of plaintiff’s common law claims under the Carmack Amendment.

Defendant asserts that plaintiff’s common law claims for unjust enrichment and promissory estoppel must be dismissed as a matter of law because they are preempted by the Carmack Amendment. Plaintiff concedes that this action is governed exclusively by the Carmack Amendment. Accordingly, defendant’s motion for summary judgment on the issue of preemption is granted and count two of plaintiff’s complaint is dismissed.

 

The Court’s role on summary judgment is not to weigh the evidence and determine the truth of the matter. Accordingly, trial in this action will focus on the issue of whether defendant provided Niro with a reasonable opportunity to choose between two different levels of liability. Both the October 14, 2004 estimate and the Bill of Lading served as enforceable contracts. The October 14, 2004 estimate does not contain a term or condition limiting defendant’s liability. However, the Bill of Lading limits defendant’s liability by incorporating its tariff. Accordingly, when the two documents are viewed together as a whole the Court concludes the contract is ambiguous and its interpretation must be reserved for the fact finder.

 

ORDER

IT IS ORDERED that defendant’s motions to strike: (1) plaintiff’s reply briefs and supporting affidavits; and (2) the affidavit of Colin Barrett are DENIED.

 

IT IS FURTHER ORDERED that plaintiff’s motion for summary judgment concerning defendant’s liability under the Carmack Amendment is GRANTED and in all other respects DENIED.

 

IT IS FURTHER ORDERED that defendant’s motion for summary judgment concerning: (1) the inapplicability of special damages; and (2) preemption of plaintiff’s common law claims under the Carmack Amendment is GRANTED and in all other respects DENIED.

 

IT IS FURTHER ORDERED that Count Two of plaintiff’s complaint is DISMISSED.