United States District Court,
S.D. New York.
ST. PAUL FIRE AND MARINE INSURANCE, COMPANY and Ait Worldwide Logisitics, Inc.,
Plaintiffs,
v.
SCHNEIDER NATIONAL CARRIERS, INC., Defendant.
No. 03 CIV 5197 RMB/GWG.
March 3, 2006.
DECISION AND ORDER (FINDINGS OF FACT AND CONCLUSIONS OF LAW)
BERMAN, J.
I. Introduction
On or about July 15, 2003, St. Paul Fire and Marine Insurance Company (“St.Paul”) and AIT Worldwide Logistics, Inc. (“AIT”) (collectively, “Plaintiffs”) commenced this action against Schneider National Carriers, Inc. (“Defendant” or “Schneider National”) alleging, among other things, that Schneider National was “negligent and careless” in handling computer equipment that was owned by two of AIT’s shipping customers, CDW Computer Centers, Inc. (“CDW”) and PC Wholesale (“PC Wholesale”), and which AIT had provided to Schneider National for shipment. (See Complaint, dated July 15, 2003 (“Complaint”).) Plaintiffs allege that CDW and PC Wholesale’s computer equipment (“Computer Equipment”) “was seriously damaged and/or destroyed” when Schneider National’s truck was involved in an accident on or about March 9, 2002, at or near St. Louis, Missouri. (See Complaint at 3.) Plaintiffs allege that Schneider National is obligated to reimburse AIT and St. Paul for $692,092.85 for the payments that they made to CDW and PC Wholesale, respectively, to compensate CDW and PC Wholesale for damages sustained by the equipment in the accident. (See id.) []
This amount includes $672,092.85 to reimburse St. Paul for payments it made to AIT, as well as $20,000 for payments AIT made which were not reimbursed by St. Paul.
Plaintiffs contend that they were obligated to pay CDW and PC Wholesale for the full amount of their damages because, among other things, AIT, CDW, and PC Wholesale “agree that it was their expectation that AIT would be liable … for the cargo’s full value in the event cargo damage was sustained.” (See Plaintiffs’ Memorandum of Law, dated October 29, 2004 (“Pl.Mem.”), at 7.)
On or about October 13, 2003, Defendant filed an answer, denying that it was “negligent and careless” in the handling of the cargo. (See Answer, dated October 9, 2003 (“Answer”), at 4.) Defendant also denied that it was liable for the payments that it says AIT and St. Paul “voluntarily” made to CDW and PC Wholesale, (see Answer at 4), contending that there was a $100,000 per shipper limitation of liability contained in the four Air Waybills issued by AIT to CDW and PC Wholesale (“Four Air Waybills”) and that AIT’s “legal liability for the cargo claims at issue was limited to $200,000.” (See Defendant’s Memorandum of Law, dated November 30, 2004 (“Def.Mem.”), at 1.)
The parties submitted a Joint Pre-Trial Order, dated October 26, 2004 (“Pre-Trial Order”), as well as trial exhibits, deposition testimony, and affidavits. (See Joint Pre-Trial Order, dated October 26, 2004 (“PTO”).)
Plaintiffs submitted: (i) a memorandum of law on October 29, 2004 (see Pl. Mem.); (ii) a trial affidavit of Curt Dony, Director of Corporate Operations at AIT, dated October 25, 2004 (“Dony Aff.”); (iii) a trial affidavit of James Rodwell, Team Leader of the Claims and Logistics Group of CDW, dated October 18, 2004 (“Rodwell Aff.”); (iv) a trial affidavit of Ruben Locke, Director of Distribution Operations of PC Wholesale, dated October 14, 2004 (“Locke Aff.”); and a reply letter on December 3, 2004 (see Plaintiffs’ Reply Letter from Laura R. Landau to the Court, dated December 3, 2004 (“Pl.Reply”).).
Defendant submitted a memorandum of law on November 30, 2004. (See Def. Mem.) []
References to “Stip. Facts” are to the stipulated facts contained in the Pre-Trial Order submitted by the parties; references to “J.E.” are to the Joint Trial Exhibits submitted by the parties.
The parties agreed to have the Court adjudicate the matter based upon these written submissions without oral testimony.
Pursuant to Federal Rule of Civil Procedure (“Fed. R. Civ.P.”) 52(a), the Court’s findings of fact and conclusions of law follow:
II. Findings of Fact
1. “AIT is a freight forwarder that arranges for the transport of cargo for its customers.” (Stip. Facts ¶ 1.)
2. “In March of 2002, AIT was retained by various shippers to transport cargoes, consisting mostly of computer equipment and electronic goods, from Illinois to California.” (Id. ¶ 5.) AIT issued approximately 45 Air Waybills to its shippers, including four to CDW and PC Wholesale, “to reflect the shipments loaded into the trailer being transported by Schneider.” (Id. ¶ ¶ 7-8.)
3. “AIT issued CDW and PC Wholesale an Air Waybill for each shipment at issue. The [Four] Air Waybills issued to CDW and PC Wholesale constituted the contracts of carriage between those shippers and AIT.” (Id. ¶ 13.)
4. AIT’s standard form Air Waybill, which was put into use in or about 2000 (“Standard Form Air Waybill”), gives shippers “an opportunity to declare the value of their shipments.” (Id. ¶ ¶ 14-15.) The declared values are to be typed onto the Standard Form Air Waybill in a box designated “DECLARED VALUE.” (See, e.g, Air Waybill, dated March 7, 2002, J.E. 2.)
5. Immediately beside the space where shippers can declare the value of their cargo, the Standard Form Air Waybill provides that:
THE DECLARED VALUE FOR CARRIAGE OF THIS SHIPMENT IS AGREED AND UNDERSTOOD TO BE $50.00 OR $0.50 PER POUND, WHICHEVER IS GREATER, UNLESS A HIGHER VALUE IS DECLARED AND APPLICABLE CHARGES PAID. (SUBJECT TO THE TERMS AND CONDITIONS ON REVERSE SIDE, THE LIABILITY OF AIT WORLDWIDE FOR LOSS/DAMAGE IS AS STATED ABOVE.)
(Stip. Facts ¶ 16.)
6. Paragraph 1 of the printed Conditions of Contract of Carriage on the reverse side of the Standard Form Air Waybill provides that:
Except to the extent of any written contract between shipper and AIT, this shipping document supercedes and negates any claimed, alleged, or asserted oral agreement, promise, representation, or understanding between the parties with respect to this shipment.
(Stip. Facts ¶ 18.)
7. Paragraph 12 of the Conditions of Contract of Carriage on the reverse side of the Standard Form Air Waybill provides that:
Liability for aggregate losses at any one time at any one place is limited to $100,000.00. For shipments having declared values over $25,000.00, AIT must be given advance notice prior to pickup.
(Stip. Facts ¶ 17.)
8. AIT issued Air Waybill numbers 0081358330 and 0081360595 to PC Wholesale. PC Wholesale, in turn, entered values in the “DECLARED VALUE” sections of these Standard Form Air Waybills in the amounts of $387,000.00 and $108,680.00, respectively. (See Air Waybill, dated March 7, 2002, J.E. 2; Air Waybill, dated March 7, 2002, J.E. 3.)
9. AIT issued Air Waybill numbers CGH4470400 and CA00010754 to CDW. CDW, in turn, entered values in the “DECLARED VALUE” sections of these Standard Form Air Waybills in the amounts of $277,819.00 and $5,594.00, respectively. (See Air Waybill, dated March 6, 2002, J.E. 4; Air Waybill, dated March 6, 2002, J.E. 5.)
10. The total declared value for the Four Air Waybills was $774,092.85. (See Letter from St. Paul to AIT, dated June 18, 2002 (“Letter Approving Claims”), Ex. 14, at 436.)
11. PC Wholesale understood “that in cases where PC Wholesale declared the value of its goods, AIT would be liable to PC Wholesale for its replacement cost in the event of damage.” (Locke Aff. ¶ 5 .) Likewise, CDW understood “that in cases where PC Wholesale declared the value of its goods, AIT would be liable to CDW for its replacement cost in the event of damage.” (Rodwell Aff. ¶ 5.)
12. It was AIT’s policy that when a shipper declares the value of a shipment, “AIT is obligated to pay that shipper for its replacement costs up to the amount declared.” (Dony Aff. ¶ 18.)
13. Prior to the March 9, 2002 shipping accident, when PC Wholesale entered a value of $142,055.46 in the “DECLARED VALUE” section of AIT’s Air Waybill on or about February 12, 2001, and PC Wholesale’s property was damaged during shipping, AIT reimbursed PC Wholesale for (approximately) the declared value, $139,961.95. (See AIT Customer Report, dated May 20, 2004, J.E. 24, at 1.)
14. Both CDW and PC Wholesale were sophisticated shippers. (See Stip. Facts ¶ ¶ 9-11.) “PC Wholesale has a shipping department, warehouse and a docking facility with more than ten doors.” (Id. ¶ 10.) “CDW has a small shipping department, docking facilities and a cargo claims department.” (Id. ¶ 11.)
15. During discussions between AIT and Schneider National “about the Transportation Contract [dated September 19, 2001] and limitations of liability” there were no discussions “of the terms of AIT’s Air Waybill.” (Dony Aff. ¶ 19.) Schneider National’s claims department had never seen AIT’s Standard Form Air Waybill prior to the March 9, 2002 accident. (See Deposition of Janet Terp, dated May 13, 2004 (“Terp.Dep.”), J.E. 34, at 51-52.)
16. On or about March 8, 2002, “AIT consolidated the various shipments and retained Schneider to transport the truckload of the cargo from AIT’s facilities in Itasca, Illinois to Hawthorne, California.” (Stip. Facts ¶ 6.)
17. Schneider National and AIT’s shipping relationship was governed by the Transportation Contract, dated September 19, 2001 (“Transportation Contract”). (Id. ¶ 2; Transportation Contract, J.E. 1, at 189.) Paragraph 12 of the Transportation Contract, entitled “Loss or Damage,” provides that:
liability for loss or damage to shipper’s commodities entrusted to [Schneider National’s] care shall be that of a motor common carrier (49 U.S.C. 14706), provided, however, that such liability shall not exceed $750,000 per truckload shipment. Carrier assumes no liability for loss or damage that occurs in Mexico. Claims for loss or damage shall be reduced by its reasonable salvage value.
(Stip. Facts ¶ 3.)
18. The Transportation Contract between Schneider and AIT was in full force and effect at all times relevant to this litigation. (Id. ¶ 4.)
19. Before Schneider National picked up the Computer Equipment, “AIT conducted a detailed inspection of the cargo” and found “no damage to any of the packaging.” (Dony Aff. ¶ 5)
20. “On or about March 8, 2002, Schneider’s driver picked up the cargo from AIT’s facilities.” (Stip.Facts.¶ 21.)
21. “On March 9, 2002, while en route to California, Schneider’s truck was involved in an accident in St. Louis, Missouri while transporting the subject cargo.” (Id. ¶ 22.)
22. “As a result of the accident, Schneider’s trailer broke in half and a portion of the trailer fell from the bridge to a parking lot below the elevated highway” and “some of the cargo was damaged .” (Id. ¶ ¶ 23-24.)
23. The damage to the Computer Equipment was in the amount of $774,092.85. (See PC Wholesale Claim Documents, pursuant to Air Waybill No. 0081358330, J.E. 17; PC Wholesale Claim Documents, pursuant to Air Waybill No. 0081360595, J.E. 18; CDW Claim Documents, pursuant to Air Waybill No. CGH4470400, J.E. 19, CDW Claim Documents, pursuant to Air Waybill No. CW00010754, J.E. 20; Matthew, Matson & Kelly, Ltd. Survey Report, dated June 18, 2002, J.E. 29)
24. CDW and PC Wholesale submitted claims to AIT pursuant to the Four Air Waybills. AIT paid $277,819.00, $5,594.33, $384,794.00 and $105,885.52, respectively (a total of $774,092.85), to reimburse CDW and PC Wholesale for their losses. (See Letter from AIT to CDW, dated April 23, 2002, J.E. 6; Invoice, dated April 9, 2002, J.E. 7; Invoice, dated April 9, 2002, J.E. 8; Letter, dated April 23, 2002, J.E. 9.)
25. “AIT secured the highest salvage bid in the amount of $82,000 .00,” (Id. ¶ 32) thus reducing the amount of money that AIT was out-of-pocket to $692,092.85. (See Letter Approving Claims at 436.)
26. AIT’s decision to reimburse CDW and PC Wholesale before receiving payment from Schneider National was a “business decision.” (See, e.g., Deposition of Skip Perricelli, dated February 4, 2004, at 70.)
27. At the time of the accident, AIT was covered for shipping damage under an insurance policy issued on or about March 1, 2002 by St. Paul (“Insurance Policy”). (Stip. Fact ¶ 29.) Pursuant to the terms and conditions of the Insurance Policy, AIT had a $5,000 per bill of lading deductible. (Id. ¶ 30.)
28. AIT submitted claims for the Four Air Waybills to St. Paul for reimbursement. (See Letter from St. Paul to AIT, dated June 18, 2002 (“Letter Approving Claims”), Ex. 14, at 436.) AIT’s claims fell within the terms of the Insurance Policy. (See Letter Approving Claims at 436 (“Based on the documentation received we have determined the following amounts are due under the policy of insurance.”); Deposition of Janice McIntyre, dated February 4, 2004, at 13-16.) “St. Paul issued a check to AIT in the amount of $672,092.85 to reimburse AIT for what AIT paid PC Wholesale and CDW.” (See Stip. Facts ¶ 34.) []
The $672,092.85 amount was calculated by reducing the total damage ($774,092.85) by the salvage value ($82,000) and by the amount of AIT’s deductibles ($20,000). (See Letter Approving Claims.)
29. On or about June 18, 2002, AIT, CDW and PC Wholesale signed subrogation agreements relating to the Computer Equipment, assigning to St. Paul “all the rights, claims and interest which [AIT, CDW, or PC Wholesale] may now or in the future have, in contract or tort … against any person or corporation in respect of the loss, damage or expense suffered.” (See, e.g., Subrogation Receipt, dated June 18, 2002, J.E. 11, at 65.)
30. Schneider National “has not, to date, reimbursed AIT or St. Paul for what was paid to AIT’s shippers.” (Pl. Mem. at 2; see Terp. Dep. at 73-74 (Defendant argued that: “It appears … that AIT paid their customer’s loss profits, perhaps paid their customers more than what was indicated as what they are legal [sic ] liable on the reserve side of the bill of lading.”); Dony Aff. ¶ 17.)
III. Conclusions of Law
(i) Choice of Law
1. Schneider National argues that Illinois state law should apply to questions of contract interpretation that are not preempted by the Carmack Amendment. (See Def. Mem. at 11 n. 2 (“[T]he Air Waybills were issued by AIT to CDW and PC Wholesale in Illinois … Because Carmack does not address general rules of contractual drafting and interpretation, those issues are governed by Illinois law.”).) Illinois has the most significant contacts (including, among other things, being the place where the Four Air Waybills were issued), and the Court will, therefore, apply Illinois law. See Indosuez Int’l Fin. B.V. v. Nat’l Reserve Bank, 98 N.Y.2d 238, 245 (2002) (“New York choice of law principles require a court to apply the law of the state with the most significant relationship with the particular issue in conflict.”).
(ii) The Carmack Amendment
2. Plaintiffs argue that Schneider National is liable for the declared values in the Four Air Waybills because “there is no doubt that the damages sustained to the cargo are attributed to Schneider’s accident.” (Pl. Mem. at 2-4.)
3. Schneider National does not contest that the damage sustained by the Computer Equipment occurred as a result of the March 9, 2002 accident, but claims that paragraph 12 in the Four Air Waybills limits its liability to $200,000. (See Def. Mem. at 1 (“[AIT]’s legal liability for the cargo claims at issue was limited to $200,000.”).) []
Schneider National claims that each shipper is limited to $100,000 in damages because “[i]t is undisputed that the damages alleged by Plaintiffs occurred at the time of the accident in St. Louis and therefore, all of the losses at issue occurred at one time and one place.” (Def. Mem. at 21.)
4. There is no dispute that the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706, governs the liability of motor carriers for loss or damage to goods transported in interstate commerce and is applicable to this case. See Pre-Trial Order, Agreed Statement of Law, ¶ 1; Calka v. N. Am. Van Lines, Inc., No. 00 Civ. 2733, 2001 WL 434871, at(S.D.N.Y. Apr. 27, 2001); (Def. Mem. at 19 (“The parties agree that Schneider’s liability for the cargo claims is defined [by 49 U.S.C. § 14706].”).).
5. The Carmack Amendment reads, in relevant part: “A carrier … shall issue a receipt or bill of lading for property it receives for transportation…. 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 of bill of lading. The liability imposed under this paragraph is for the actual loss or injury to the property….” 49 U.S.C. 14706(a)(1).
6. To state a claim under the Carmack Amendment, a plaintiff must show, by a preponderance of the evidence: (i) that the carrier received the goods in good order and condition; (ii) that the shipment arrived at its destination in a damaged condition or did not arrive at all; and (iii) the amount of the loss. See Project Hope v. M/V IBN Sina, 250 F.3d 67, 73 (2d Cir.2001); Mooney v. Farrell Lines, Inc., 616 F.2d 619, 625 (2d Cir.1980); see also A.I.G. Uruguay Compania De Seguros, S.A. v. AAA Cooper Trans., 334 F.3d 997, 1003 (11th Cir.2003). Once a prima face case is established by a plaintiff, the burden shifts to the defendant to show that “it was free from negligence and that the damage to the cargo was due to one of the expected causes [i.e., act of God or the inherent nature or vice of the cargo] relieving the carrier of liability.” See Mooney, 616 F.2d at 625. If the defendant does not meet this burden, liability for “actual loss or injury to the property” under the Carmack Amendment is established. 49 U.S.C. 14706(a)(1); see Project Hope, 250 F.3d at 73.
7. The evidence in this case clearly establishes by a preponderance of the evidence that (i) Schneider National received the Computer Equipment from AIT in good working order (see Dony Aff. ¶ 5; Stip. Facts ¶ 7); (ii) the cargo was damaged during shipment (see Stip. Facts ¶ ¶ 23-24); and (iii) $692,092.85 worth of damage was sustained (see PC Wholesale Claim Documents, pursuant to Air Waybill No. 0081358330, J.E. 17; PC Wholesale Claim Documents, pursuant to Air Waybill No. 0081360595, J.E. 18; CDW Claim Documents, pursuant to Air Waybill No. CGH4470400, J.E. 19, CDW Claim Documents, pursuant to Air Waybill No. CW00010754, J.E. 20; Matthew, Matson & Kelly, Ltd. Survey Report, dated June 18, 2002, J.E. 29).
8. Schneider National does not argue that “it was free from negligence and that the damage to the cargo was due to one of the expected causes relieving the carrier of liability.” See Mooney, 616 F.2d at 625.
9. The Court concludes that Schneider National is liable for damage to the Computer Equipment under the Carmack Amendment (and other relevant documents) in the amount of $692,092.85, as explained below. See Project Hope, 250 F.3d at 73.
No Limitation of Liability
10. Defendant argues (unpersuasively) that, pursuant to paragraph 12 of the Four Air Waybills, it should be liable for $100,000 (or, at most, $200,000 for CDW and for PC Wholesale together) because “all of the losses at issue occurred at one time and one place.” (See Def. Mem. at 20-21 (“Based on the relevant facts and applicable law … [AIT]’s legal liability for the cargo claims at issue was limited to $200,000.”).) Defendant contends that “because AIT, as a freight forwarder, steps into the shoes of the shippers, it takes only the rights that CDW and PC Wholesale had under the [Four] Air Waybills.” (Def. Mem. at 19.)
11. Plaintiffs argue (persuasively) that Schneider National’s position is “an effort to escape Schneider’s own liability under its separate Transportation Contract with AIT, pursuant to which Schneider is obligated to reimburse AIT up to $750,000.00.” (Pl. Mem. at 8.) Plaintiffs also argue that “Schneider was a total stranger to AIT’s Form Air Waybill as well as to AIT’s contracts with PWC and CDW” and, therefore, “has no standing to challenge the interpretation of the Air Waybill.” (Pl. Mem. at 9.)
12. Once liability under the Carmack Amendment has, as here, been established, “[t]he inquiry then becomes the amount of damages and, usually, whether the carrier legitimately limited its liability for the shipment to a specified value or amount.” A.I.G. Uruguay Compania De Seguros, S.A., 334 F.3d at 1003. Schneider National’s liability under the Carmack Amendment is not reduced (limited) to an amount less than the declared value of the Four Air Waybills because, inter alia, the damage to the Computer Equipment does not exceed the $750,000 limit in the Transportation Contract and because Schneider National may not rely on paragraph 12 of the Four Air Waybills to which it was neither a party to nor a beneficiary. (And, in any event, the declared values would supercede any such limitation. See Bio-Lab, Inc. v. Pony Express Courier Corp., 911 F.2d 1580, 1583 (11th Cir.1990).)
13. Under the Carmack Amendment, shipping “contracts purporting to grant immunity from, or limitation of, liability must be strictly construed and limited to intended beneficiaries, for they are not to be applied to alter familiar rules visiting liability upon a tortfeasor for the consequences of his negligence, unless the clarity of the language used expresses such to be the understanding of the contracting parties.” See Toyomenka, Inc. v. S.S. Tosaharu Maru, 523 F.2d 518, 521 (2d Cir.1975) (“Such a limitation of common law liability … must be clearly expressed. A bill of lading containing such a limitation will be strictly construed against the parties whom it is claimed to benefit.”) (citing Herd & Co. v. Krawill Machinery Corp., 359 U.S. 297, 305 (1959)); see also Rupp v. Int’l Terminal Operating Co., 479 F.2d 674, 676- 77 (2d Cir.1973).
14. “In Illinois, an individual not a party to a contract may only enforce the contract’s rights when that contract’s original parties intentionally enter into the contract for the direct benefit of the individual.” Cahill v. Eastern Ben. Systems, Inc., 603 N .E.2d 788, 791-792 (Ill.App.Ct.1992); see Continental Cas. Co. v. American Nat. Ins. Co., 417 F.3d 727, 734 (7th Cir.2005) (Illinois law “recognizes two types of third-party beneficiaries, intended and incidental. An intended beneficiary is intended by the parties to the contract to receive a benefit for the performance of the agreement and has rights and may sue under the contract; an incidental beneficiary has no rights and may not sue to enforce them .”); Coalition of 9/11 Families v. Rampe, No. 04 Civ. 6941, 2005 WL 323747, at(S.D.N.Y. Feb. 8, 2005) (third parties may “sue to enforce rights or obtain benefits under a contract only to the extent that the contracting parties specifically intended to provide the third parties with such rights or benefits.”). Schneider National is clearly not an intended beneficiary of the Four Air Waybills.
15. The $750,000 limitation contained in the Transportation Contract exceeds the damages at issue in this action. (Stip. Facts ¶ 4.)
16. The limitation of liability in paragraph 12 of the Four Air Waybills is not available to Schneider National, because Schneider National was not a party to the Four Air Waybills and there is no evidence that AIT, CDW, or PC Wholesale intended to benefit Schneider National when executing the Four Air Waybills. See Toyomenka, 523 F.2d at 520; see also Cahill v. Eastern Ben. Systems, Inc., 603 N.E.2d 788, 791-792 (Ill.App.Ct.1992) (“intention must be shown by an express provision in the contract identifying the third party beneficiary.”); Continental Cas. Co. v. American Nat. Ins. Co., 417 F.3d 727, 734 (7th Cir.2005) (a third-party beneficiary “must be identified in some manner, for example, by describing the class to which it belongs.”); Wallace v. Chicago Housing Authority, 298 F.Supp.2d 710, 724 (N.D.Ill.2003) (“Under Illinois law, there is a strong presumption against creating rights in a third-party beneficiary. To overcome this presumption the intent to benefit a third party must affirmatively appear from the language of the contract and the circumstances surrounding the parties at the time of execution.”).
17. Since Plaintiffs have proven that Schneider National is liable for damage to the Computer Equipment under the Carmack Amendment, and because neither the Transportation Contract nor paragraph 12 of the Four Air Waybills limits the amount of the damages available to Plaintiffs, Schneider National is liable to St. Paul and AIT for $692,092.85. See Toyomenka, 523 F.2d at 520.
Reasonable Opportunity Doctrine
18. The Carmack Amendment’s “reasonable opportunity” doctrine may also provide a basis for rejecting Schneider National’s position that liability should be limited to $100,000 per shipper.
19. Plaintiffs argue persuasively that a limitation of liability is impermissible “when a shipper has not been given the opportunity to declare value or choose a higher level of liability” and that this requirement prevents AIT from enforcing the limitation of liability contained (in the boilerplate language) of the Four Air Waybills in the manner that Schneider National suggests. (Pl. Mem. at 12.)
20. “[A] very strong burden is placed on a carrier when attempting to enforce a limitation of liability provision pursuant to the Carmack Amendment.” Commercial Union Ins. Co. v. Forward Air., Inc., 50 F.Supp.2d 255, 260 (S.D.N.Y.1999); see Novelty Textile Mills, Inc. v. C.T. Eastern, Inc., 743 F.Supp. 212, 216 (S.D.N.Y.1990). “The general thrust of the Interstate Commerce Act places on the carrier absolute liability for loss or damage of a shipper’s goods. As an exception to this general thrust, a carrier may limit its liability of specific procedures are followed.” Commercial Union, 50 F.Supp.2d at 260 n. 9 (internal citations omitted). “Under the Carmack Amendment, a carrier is liable for the ‘the actual loss or injury to the property,’ unless it limits its liability by (1) maintaining a tariff in compliance with the requirements of the Interstate Commerce Commission; (2) giving the shipper a reasonable opportunity to choose between two or more levels of liability; (3) obtaining the shipper’s agreement as to his choice of carrier liability limit; and (4) issuing a bill of lading prior to moving the shipment that reflects any such agreement.” The Travelers Indem. Co. of Illinois v. Schneider Specialized Carriers, Inc., No. 04 Civ. 5307, 2005 WL 351106, atn. 4 (S.D.N.Y. Feb 10, 2005); see Commercial Union, 50 F.Supp.2d at 260 n. 9; Eatemad Inc. v. Carolina Freight Carriers Corp., No. 95 Civ.1978, 1996 WL 499334, at(S.D.N.Y.1996).
21. Where, as here, a “shipper has declared the value of his goods in a bill of lading[,] a provision to the contrary in the printed portion of the document cannot operate as an agreement of the parties establishing a different value unless it is reasonably clear that the shipper was specifically aware of that provision.” Bio-Lab, Inc. v. Pony Express Courier Corp., 911 F.2d 1580, 1583 (11th Cir.1990) (“In other words a carrier cannot limit liability by implication. There must be an absolute, deliberate and well-informed choice by the shipper. Only by granting its customers a fair opportunity to choose between higher or lower liability by paying a correspondingly greater or lesser charge can a carrier lawfully limit recovery to an amount less than the actual loss sustained.”); see Sassy Doll Creations, Inc. v. Watkins Motor Lines, Inc., 331 F.3d 834, 839 (11th Cir.2003) (where there is “no evidence that the shipper was actually aware of the liability limitation … the carrier’s printed bill of lading and tariff provisions [does] not trump the declared value the shipper had written on the bill of lading.”)
22. The evidence presented shows that CDW and PC Wholesale did not agree to limit their exposure in the case of an accident and intended to be reimbursed for damage to their cargo up to the amount declared on the Four Air Waybills. (See Locke Aff. ¶ 5; Rodwell Aff. ¶ 5.); Commercial Union, 50 F.Supp.2d at 260 n. 9; see also Bio-Lab, Inc. v. Pony Express Courier Corp., 911 F.2d 1580, 1583 (11th Cir.1990); Toyomenka, 523 F.2d at 520.
(iii) Contract Ambiguity
23. Even assuming, arguendo, that Schneider National could rely on paragraph 12 of the Four Air Waybills, the declared values found on the face of the Four Air Waybills may be said to override the limitation of liability in paragraph 12, because, among other reasons, the Four Air Waybills may be analyzed under Illinois’ “extrinsic ambiguity” doctrine, see Cook, Inc. v. Boston Scientific Corp., No. 01 Civ. 9479., 2002 WL 406977,(N.D.Ill. March 15, 2002); see also Brzozowski v. Northern Trust Co., 618 N.E.2d 405, 409 (Ill.App.Ct.1993) (“Where an ambiguity exists between a typed provision and the printed form, then the typed provision is to be given effect over the printed provision.”), and the parties to the Four Air Waybills clearly intended to provide CDW and PC Wholesale with reimbursement for the declared value of their cargo in the event that the cargo was damaged during shipment (as evidenced by, among other things, the affidavits submitted by CDW, dated October 18, 2004, and PC Wholesale, dated October 14, 2004). (See, e.g., Locke Aff. ¶ 5; Rodwell Aff. ¶ 5); see also DuQuoin Nat. Bank v. Vergennes Equip., Inc., 599 N.E.2d 1367, 1371 (Ill.App.Ct.1992) (“A court, in construing a contract, must seek to ascertain the intention of the parties.”). Thus, even if Schneider National could properly rely on the Four Air Waybills, it would still be liable to AIT and St. Paul for $692,092.85.
(iv) Schneider National’s Volunteer Argument
24. Schneider National’s argument that AIT and St. Paul paid claims to CDW and PC Wholesale as “volunteers” is without merit. (See Def. Mem. at 19-20 (“[I]f AIT paid CDW and PC Wholesale’s claims as a volunteer, neither AIT nor St. Paul may recover.”).); Project Hope, 250 F.3d at 73. AIT’s obligation to reimburse CDW and PC Wholesale for damages to the Computer Equipment was not simply voluntary (“to preserve its business relationship with those shippers,” (Def. Mem. at 1)), but was a legal obligation under the Carmack Amendment. See Conclusions of Law ¶ 1 et seq.; Stewart Title Guar. Co. v. Azar, No. 92 Civ. 7576, 1993 WL 141797, at(N.D. Ill April 30, 1993) (“To be deemed a volunteer, [plaintiff] must have acted without any potential or possibility of liability. Potential liability should be construed broadly for the purposes of ascertaining whether a party is a volunteer.”); see also Transamerica Ins. Co. v. South, 125 F.3d 392, 397 (7th Cir.1997) (“Consistent with Illinois policy favoring subrogation … [T]he potential for legal liability to the subrogor, as well as the disruption of normal relations and the frustration of reasonable expectations can, in many cases, supply sufficient compulsion to support subrogation.”)
IV. Conclusion and Order
For the foregoing reasons, the Clerk of the Court is respectfully requested to enter judgment in favor of the Plaintiffs against Defendant Schneider National in the amount of $692,092.85. Plaintiff is also awarded post-judgment interest calculated from the date of entry of this Decision and Order. See 28 U.S.C. § 1961.
Thereafter, the Clerk is respectfully requested to close this case.
