United States District Court,

N.D. Illinois, Eastern Division.

MITSUI SUMITOMO INSURANCE CO., LTD., a/s/o Sharp Electronics Corp., and Sharp

Electronics Corp., Plaintiffs,

v.

WATKINS MOTOR LINES, INC., Defendant.

 

Feb. 7, 2005.

MEMORANDUM OPINION

 

DERYEGHIAYAN, J.

This matter is before the court on Defendant Watkins Motor Lines, Inc.’s (“Watkins”) second motion for partial summary judgment to limit liability. For the reasons stated below, we deny Watkins’ motion for partial summary judgment.

BACKGROUND

The majority facts in this action are not contested. Defendant Watkins is engaged in business as a motor carrier. Plaintiffs allege that Plaintiff Sharp Electronics Corp (“Sharp”) hired Watkins to transport a shipment of projectors and that on April 30, 2001, Watkins received from Sharp a shipment of twenty-three projectors with an invoice value of $85,100. Watkins failed to deliver the projectors to the intended destination. Watkins contends however, that it is not liable because Sharp did not file a claim with Watkins in a timely fashion. Watkins also claims that under the terms of the bill of lading and incorporated tariff for the projectors, Watkins has only limited liability for the loss. On October 7, 2004, we granted Plaintiffs’ motion for summary judgment, finding Watkins liable under the Carmack Amendment, 49 U.S.C. § 14706, to the Interstate Commerce Act. Watkins had also moved for summary judgment to limit its liability and on October 7, 2004, we denied the motion without prejudice due to Watkins’ failure to follow the requirements of Local Rule 56.1. Watkins has now filed a second motion for summary judgment seeking to limit its liability.

LEGAL STANDARD

Summary judgment is appropriate when the record reveals that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). In seeking a grant of summary judgment the moving party must identify “those portions of ‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,’ which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (quoting Fed.R.Civ.P. 56(c)). This initial burden may be satisfied by presenting specific evidence on a particular issue or by pointing out “an absence of evidence to support the non-moving party’s case.” Id. at 325. Once the movant has met this burden, the non-moving party cannot simply rest on the allegations or denials in the pleadings, but, “by affidavits or as otherwise provided for in [Rule 56], must set forth specific facts showing that there is a genuine issue for trial.” Fed.R.Civ.P. 56(e). A “genuine issue” in the context of a motion for summary judgment is not simply a “metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp, 475 U.S. 574, 586 (1986). Rather, a genuine issue of material fact exists when “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Insolia v. Philip Morris, Inc., 216 F.3d 596, 599 (7th Cir.2000). The court must consider the record as a whole, in a light most favorable to the non-moving party, and draw all reasonable inferences that favor the non-moving party. Anderson, 477 U.S. at 255; Bay v. Cassens Transport Co., 212 F.3d 969, 972 (7th Cir.2000).

DISCUSSION

Watkins argues that its tariff limits Watkins’ liability for loss or damage to $25.00 per pound. It is undisputed in this action that when Watkins entered into the contract with Sharp the bill of lading for the shipment was prepared by Sharp on its own bill of lading form and that the form provided that Watkins would receive the shipment “subject to classifications and lawfully filed tariffs in effect on the date of the issue of the Bill of Lading.” (emphasis added)(R SF 7). Watkins argues that its unfiled tariffs should be read into the bill of lading and that, based on Watkins’ unfiled tariff, damages should be limited to $25.00 per pound because no value was declared on the bill of lading.

Watkins argues that we should read the bill of lading according to Watkins’ interpretation because the bill of lading was prepared by Sharp and thus the document “must be strictly construed against the party which prepared it” and that inferences should be drawn in favor of the party that did not prepare the bill of lading. (Reply 2). Watkins first cites a variety of cases for this proposition (Mot.3-4)(Reply 2), none of which are controlling precedent. Even if we were to strictly construe the bill of lading against Sharp, there is no ambiguity in the bill of lading in the instant action. The bill of lading specifically referred to “lawfully filed tariffs.” The fact that Sharp prepared the document does not allow Watkins to now change the clear terms of the agreement. If, for example the bill of lading merely made reference to “tariffs” in general, perhaps the fact that Sharp prepared the document would warrant inferences in Watkins’ favor that unfiled tariffs were impliedly included, but the bill of lading in the instant action is clear and unambiguous on this point. The document is of such clarity that Watkins should have had no misunderstanding as to what tariffs were covered, and if Watkins thought it prudent to include unfiled tariffs, Watkins could have requested the term “filed” be removed or that “and unfiled” be added to the bill of lading. Watkins is not an unsophisticated party in matters concerning shipping contracts. It is apparent that now, after the fact, when Watkins realizes that the terms it agreed to are not to its liking, that Watkins seeks to alter the terms. Such an alteration is not in accordance with contract law, regardless of which party prepared the contractual document. Watkins argues that in a District of Idaho case and a Western District of New York case, courts have found that unfiled tariffs were impliedly incorporated into a bill of lading. (Reply 4). However, neither of the cases are controlling precedent.

Watkins also cites to Tempel Steel Corp. v. Landstar Inway, Inc ., 211 F.3d 1029, 1030 (7th Cir.2000) in support of its position. However, in Tempel the bill of lading at issue stated that the shipped item was received “subject to classifications and tariffs in effect on the date of the issue of this Bill of Lading.” Id. The bill of lading in Tempel is thus clearly distinguishable from the bill of lading in the instant suit. The bill of lading in the instant suit likewise makes reference to tariffs in effect on the date of issue, but unlike the bill of lading in Tempel, the bill of lading in the instant action also includes a specific reference to filed tariffs. Watkins could have sought terms in its agreement with Sharp to limit its liability, and Watkins chose not to do so in regards to unfiled tariffs. It would be unfair to allow Watkins to alter the terms of the contract at the very point when Sharp seeks to enforce them and it would be unfair to presume that Sharp somehow knew that the unambiguous language in the bill of lading had some hidden meaning, expanding the scope of the limitation of liability. Therefore, we deny Watkins’ motion for partial summary judgment.

CONCLUSION

Based on the foregoing analysis, we deny Watkins’ motion for partial summary judgment.

United States District Court,

N.D. Texas, Amarillo Division.

Cynthia ZARNOSKI-MCCATHERN and Darren McCathern, Plaintiffs,

v.

EAGLE VAN LINES, Defendant.

Feb. 8, 2005.

OPINION

ROBINSON, J.

Plaintiffs Zarnoski-McCathern and McCathern sue Eagle Van Lines alleging numerous state court causes of action growing out of a shipment of Plaintiffs’ goods from Pennsylvania to Texas. Defendant Eagle Van Lines contends that Plaintiffs’ causes are preempted by the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706 and that they are now barred by the limitations period in the Carmack Amendment. The case is before the Court on Defendant’s motion for summary judgment.

Background

Plaintiff Zarnoski-McCathern (formerly Cynthia Zarnoski) contracted with Defendant Eagle Van Lines on or about May 22, 2000, to pack, load, and ship household goods from West Chester, Pennsylvania to Memphis, Texas. At the time of the move, Plaintiff Zarnoski-McCathern had already departed Pennsylvania and resided in Texas. The initial quote provided to Zarnoski-McCathern for the cost of the move was estimated at $6,515. On May 25, 2000, upon arrival at the Pennsylvania property, an Eagle representative contacted Zarnoski-McCathern and informed her that he anticipated the cost of the move to be approximately $10,000, to which she agreed. On May 26, 2000, Eagle again contacted her and informed her that some of her property had been left behind. On May 30, 2000, Eagle informed her that the items that were left behind would cost an additional $2,371.95 to ship, to which she also agreed. The total cost of the move, which occurred in two separate shipments, was $12,485.55.

The bill of lading called for a standard damage or loss valuation of household goods of up to $0.60 per pound unless an additional value was declared for the property. Plaintiff Zarnoski-McCathern declared a stated amount of $30,000 as the value of her household goods and paid an additional $210 for this increased valuation. On June 1, 2000, Eagle delivered the first shipment to Plaintiffs’ Texas home. On June 25, 2000, the second shipment arrived. Plaintiff contends that numerous items were damaged or missing in each shipment. In their petition, Plaintiffs allege that Zarnoski-McCathern had to sign off on Eagle’s inventory before she would be allowed to inspect her goods.

Beginning on or about June 25, 2000, Plaintiffs contacted Defendant by letter and phone requesting: 1) that Eagle ship Plaintiffs’ remaining possessions, and 2) that Eagle send copies of the policy declaration for the insurance that was purchased. On or about January 21, 2001, Plaintiffs identified Defendant Hartford Insurance Co. as the cargo insurance carrier for Eagle, and on February 25, 2001, Plaintiffs submitted their claim to Hartford.

The 2001 State Court Suit

On or about May 31, 2001, Plaintiffs filed suit in Texas State Court against Eagle alleging a breach of contract, a violation of the Texas Deceptive Trade Practices Act, and negligence. On August 6, 2001, Eagle filed a general denial in that suit denying the claim in its entirety. [FN1] On or about October 2, 2001, Plaintiffs filed a Notice of Nonsuit in this first state court case because attorneys for Eagle had said that they were going to remove the case to federal court.

FN1. Defendant’s employee, Dia Freni, stated in her affidavit in support of Defendant’s motion for summary judgment that Eagle filed a written denial of Plaintiffs’ claim in its entirety. Plaintiff acknowledges in its brief in response to the motion for summary judgment that the general denial was filed.

This 2004 Suit

On May 20, 2004, Plaintiffs brought a second suit asserting the same claims against Eagle and Hartford in Texas state court. On June 21, 2004, Hartford removed this second case to the United States District Court for the Northern District of Texas, Amarillo Division on grounds of diversity. Thereafter, pursuant to Plaintiffs’ motion, all claims against Hartford were dismissed without prejudice. Eagle is the only remaining Defendant.

Contentions of Plaintiff

The Plaintiff asserts various state law claims against Eagle, including: 1) breach of contract, 2) fraud, 3) fraudulent misrepresentation, 4) negligent misrepresentation, 5) damage to personal property, 6) loss of personal property, 7) violation of the Texas Deceptive Trade Practices Act, 8) unfair claim settlement practices under Texas Code 21.55, 9) economic and actual damages, 10) mental anguish damages and 11) attorneys’ fees. Plaintiff contends that this cause of action is not exclusively governed by the Carmack Amendment and that the Amendment does not apply to the Defendant’s failure to pack and load Plaintiff’s personal property onto the truck. Plaintiffs also contend that the general denial filed by Defendant in the 2001 state court suit did not constitute a denial of claim under the Carmack Amendment.

The Carmack Amendment and State Claims

A purpose of the Carmack Amendment was to “substitute a paramount and national law as to the rights and liabilities” of interstate carriers subject to the amendment regarding the interstate shipping, delivering, loading and unloading, and transporting or servicing of goods to be shipped. Moffit v. Bekins Van Lines Co., 6 F.3d 305, 306 (5th Cir.1993); See R.R. Ret. Bd. v. Duquesne Warehouse Co., 326 U.S. 446, 453, 66 S.Ct. 238, 90 L.Ed. 192 (1946)(“loading and unloading services … is a transportation service within the meaning of the Interstate Commerce Act.”); Southeastern Express Co. v. Pastime Amusement Co., 299 U.S. 28, 29, 57 S.Ct. 73, 81 L.Ed. 20 (1936)(“The words of the statute ‘are 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.” ‘); Adams Express Co. v. Croninger, 226 U.S. 491, 505-06, 33 S.Ct. 148, 57 L.Ed. 314 (1913)(“Almost every detail of the subject [of the liability of the carrier under a bill of lading which he must issue] is covered so completely that there can be no rational doubt but that Congress intended to take possession of the subject, and supersede all state regulation with reference to it.”). As a result of Congress’ preemption of the regulation of all matters regarding interstate shipping of goods, all damages sought against a common carrier for failure to perform, or for negligent performance of, and interstate contract of carriage are also governed by the Carmack Amendment. Am. Synthetic Rubber Corp. v. Louisville & Nashville R.R. Co., 422 F.2d 462, 468 (6th Cir.1970). Further, the Carmack Amendment preempts all state claims that seek to recover for damage or loss to goods during shipment, for misdelivery or untimely delivery of goods, for failure of the carrier to fulfill duties closely related to its duty of delivery, or for charging an improper rate for transporting goods. See Sam L. Major Jewelers v. ABX, Inc., 117 F.3d 922, 926 (5th Cir.1997)(“via the Carmack Amendment, Congress had totally preempted state regulation of liability of common carriers.”); Cleveland v. Beltman N. Am. Co., 30 F.3d 373, 379 (2d Cir.1994) (holding that Carmack Amendment preempts federal common-law claims for goods lost or damaged during transport and for untimely delivery); Moffit, 6 F.3d at 306-07 (holding that Carmack Amendment preempts state claims seeking recovery for untimely delivery of goods); Am. Synthetic Rubber Corp., 422 F.2d at 468 (“When the cause of action arises out of a misdelivery in breach of a contract or carriage, a tort action does not lie.”). The courts have consistently held the duty of loading and unloading is part of the transportation services of interstate carriers, and is within the Carmack Amendment. Therefore, all state claims in this cause of action are preempted by and governed exclusively by the Carmack Amendment.

Limitations

Pursuant to the Carmack Amendment, a carrier may not provide by rule, contract, or otherwise a period of less than two (2) years for bringing a civil action against it for violation of the agreed upon terms of the shipping agreement. 49 U.S.C. § 14706(e). In this case, the bill of lading as well as the applicable tariff provision provide that “suit must be instituted within two (2) years and one (1) day from the date when notice in writing is given by the carrier to the claimant that carrier has disallowed the claim or any part or parts thereof.”

The period for bringing an action commences from the date the carrier provides written notice of denial of “any part” of a shipper’s claim. Id. In order for the statute of limitations to commence, “a carrier’s notice of disallowance must be clear, final, and unequivocal.” Burtman Iron Works, Inc. v. Con-Way Trans. Serv., Inc., 97 F.Supp.2d 122, 127-28 (D.Mass.2000)(quoting Combustion Eng’g, Inc. v. Consolidated Rail Corp., 741 F.2d 533, 537 (2d Cir.1984)); see also Cordingley v. Allied Van Lines, Inc., 563 F.2d 960, 964 (9th Cir.1977); John Morrell & Co. v. Chicago, Rock Island & Pac. R.R. Co., 495 F.2d 331, 333 (7th Cir.1973); Universal Mfg. Corp. v. Assoc. Rigging & Hauling Corp., 773 F.Supp. 549, 551 (E.D.N.Y.1991); Cammack v. Trans World Airlines, Inc., 482 F.Supp. 914, 916 (W.D.Mo.1979); Burns v. Chicago, M., St. P. & P.R. Co., 100 F.Supp. 405, 408 (W.D.Mo.1951), aff’d 192 F.2d 472 (8th Cir.1951). A disallowance or denial is clear, final and unequivocal when “the only conclusion that can be rationally apprehended” is that the defendant refuses to allow any further advancement of some part of the plaintiff’s claim. Burns, 100 F.Supp. at 408. Settlement negotiations following a disallowance do not vitiate the rejection of the claim for the purpose of a limitation period. See Cordingley, 563 F.2d at 963-64 (“that a carrier has waived, or is estopped from asserting, a limitation period have been explicitly rejected by the Supreme Court”). The clarity of the notice of denial is “properly ascertained by viewing it in context” of the entire chain of correspondence between the parties. Id. at 964.

Defendant Eagle filed a general denial to Plaintiffs’ claim in Eagle’s Original Answer filed in the first state court case on August 6, 2001. In that suit, Plaintiff asserted identical claims stemming from the same course of events as those sought in this present action. While the requirement is that a carrier provide written notice that it intends to deny any part of a shipper’s claim, Eagle’s original answer denied the Plaintiff’s claim in its entirety. This denial when taken under the totality of the circumstances clearly, finally, and unequivocally served as a written notice of Eagle’s intent to disallow Plaintiffs’ claims. This present cause of action was commenced on May 20, 2004, which is more than two (2) years and (one) day after Eagle’s general denial filed in state court. Therefore, Plaintiffs’ cause of action is barred by the two-year and one day period of limitations.

Conclusion

Summary judgment will be entered for the Defendant.

It is SO ORDERED.