Sassy Doll Creations v. Watkins Motor Lines

• Decision Date: 23 May 2003
• Docket Number: No. 02-12210.,02-12210.
• Citation: 331 F.3d 834
• Parties: SASSY DOLL CREATIONS, INC., Plaintiff-Appellee, v. WATKINS MOTOR LINES, INC., Defendant-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

331 F.3d 834

SASSY DOLL CREATIONS, INC., Plaintiff-Appellee, v. WATKINS MOTOR LINES, INC., Defendant-Appellant.

No. 02-12210.

United States Court of Appeals, Eleventh Circuit.

May 23, 2003.

COPYRIGHT MATERIAL OMITTED

Lawrence J. Roberts, Lawrence J. Roberts & Associates, P.A., Coral Gables, FL, for Defendant-Appellant.

Ira S. Silver, Silver & Silver, Miami, FL, for Plaintiff-Appellee.

Appeal from the United States District Court for the Southern District of Florida.

Before BIRCH, CARNES and BRUNETTI^*, Circuit Judges.

CARNES, Circuit Judge:

Somewhere between Florida and Texas, Watkins Motor Lines, Inc. lost a shipment of perfume it was carrying for Sassy Doll Creations, Inc. The parties agree that Watkins is liable for the lost shipment, but they disagree about the amount of that liability. Sassy Doll contends that Watkins owes it $28,273.60, the full value of the shipment and the amount Sassy Doll wrote on the bill of lading Watkins supplied. Watkins contends that it owes Sassy Doll only $10,000, the limit of liability according to the formula contained in Watkins' tariff, because Sassy Doll did not request excess liability coverage.

The dispute, which is governed by the Carmack Amendment, 49 U.S.C. § 14706, resulted in a bench trial and a decision by the district court in Sassy Doll's favor for the full value of the shipment. We affirm, because the bill of lading Watkins supplied did not give Sassy Doll "`a reasonable opportunity to choose between two or more levels of liability.'" Bio-Lab, Inc. v. Pony Express Courier Corp., 911 F.2d 1580, 1582 (11th Cir.1990) (quoting Hughes v. United Van Lines, Inc., 829 F.2d 1407, 1415 (7th Cir.1987)).

I.

This appeal turns primarily on the contents of Watkins' bill of lading and its tariff. We begin with the bill of lading, which is a pre-printed form created by Watkins, which it provided to Sassy Doll. Manzoor Awan, who is Sassy Doll's president, filled in the blanks on the bill of lading before the shipment of perfume left Florida for Texas.

The bill of lading is a one-page document with several blank spaces for the shipper to fill in with information about the shipment. The paragraph directly below the blanks for shipment and destination addresses on the bill of lading reads:

RECEIVED subject to individually determined rates or contracts that have been agreed upon in writing between the carrier and shipper, if applicable, otherwise to the rates, classifications, and rules that have been established by the carrier and are available to the shipper on request.... The shipper hereby certifies that he is familiar with all the terms and conditions of the [Uniform Bill of Lading set forth in the National Motor Freight Classification 100-X], and the said terms and conditions are hereby agreed to by the shipper and accepted for himself and his assigns.

Below that paragraph, the bill of lading contains an area marked off into boxes beneath each of these (unnumbered on the form) headings: (1) "Handling Units," (2) "Number [of] Packages," (3) "HM" (hazardous materials), (4) "Kind of Packaging, Description of Articles, Special Marks and Exceptions, NMFC Item Number and Class (Subject to Correction)," and (5) "Weight (Subject to Correction)." Beneath each heading are spaces to be filled in with information corresponding to it. Awan filled in the spaces underneath the first four headings with the words: "16 Boxes of Toiletries Preparation." Under the fifth heading, "Weight," he wrote "400 Lbs."

On the form, a box adjacent to the headings states: "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 specifically stated by the shipper to be not exceeding $ ___ per ___." Awan filled in that space declaring the value as: "$28,273.60 per ___." Below the shipment description and the declared value lines, the bill of lading states in bold: "Liability Limitation for loss or damage on this shipment may be applicable. See 49 U.S.C. § 14706(c)(1)(A) and (B)."

The other relevant document is Watkins' Rules Tariff WWAT 100-D. Item 780 of the tariff contains a section entitled "Property of Extraordinary Value," Part B of which states that "articles of extraordinary value, as defined below, will be accepted for shipment or as premiums accompanying other articles, providing the shipper requests excess liability coverage as provided below." The tariff defines articles of extraordinary value as "[a]rticles tendered with an invoice value exceeding the maximum value provided in Part (C)," which is "$ 25.00 per pound, per package." The tariff then states that "[s]uch articles will not be accepted for transportation unless the shipper requests excess liability coverage. Articles inadvertently accepted with an invoice value exceeding such maximum, but without excess coverage will be considered to have been released by the shipper at the maximum value provided in Part (C)," which again, is "$ 25.00 per pound, per package." The tariff also provides that "[i]n the event of loss of and/or damage to any shipment, carrier's liability will not exceed the maximum value provided in Part (C), unless the shipper has requested excess liability coverage."

Part (C) contains provisions for requesting excess liability coverage. The first paragraph states in part: "If shipper desires to tender a shipment requiring carrier liability in excess of the maximum value provided below, then shipper must indicate in writing on bill of lading at time of shipment the total dollar amount of excess coverage requested (See EXAMPLE)." At the bottom of the paragraph the tariff states: "EXAMPLE: Customer requesting $10,000 additional excess coverage would enter on the bill of lading as follows: `$10,000.00 excess liability coverage requested,' or `Excess liability coverage requested: $10,000.'" Unfortunately for Watkins, and importantly for purposes of our decision, the tariff does not state where on the bill of lading the shipper is supposed to indicate its request for excess liability coverage, and the bill of lading does not contain a section where the shipper can properly request excess liability coverage. As the district court found, "in order to comply with [the tariff] a shipper would have to write and fit its request for additional coverage somewhere on the bill of lading — in a section or box meant for something else."

Awan, who filled in the bill of lading for Sassy Doll, was not aware of the tariff's limitation of liability, and Watkins did not offer him a choice of freight rates beyond what its tariff said. The freight rate to be charged did not concern Awan, however, because it was to be paid by the consignee. Awan believed that Watkins would charge a rate that reflected the stated value of the shipment, and the value he stated on the bill of lading was $28,273.60.

After Watkins lost the shipment, Sassy Doll filed a claim with Watkins for $28,273.60. Watkins offered to pay only $10,000, however, explaining that its tariff limited liability to that amount based on the 400-pound weight of the shipment multiplied by $25.00. Several days after the shipment was lost, Watkins generated a "bill of inquiry" which stated that the freight rate was $156.48, and during the claims process Watkins explained to Sassy Doll that the freight rate would have been an additional $139.00 if Sassy Doll had requested excess liability coverage in an amount sufficient to cover the value claimed. Neither Sassy Doll nor the consignee ever received an invoice or were told what the cost of shipping would be before Sassy Doll filed the loss claim.

II.

Sassy Doll sued Watkins for $28,273.60 in state court under the Carmack Amendment, and Watkins removed the case to federal court under 28 U.S.C. §§ 1337(a) and 1441. Watkins defended on the ground that its liability was limited under the Carmack Amendment to $10,000 because Sassy Doll did not request excess liability coverage on the bill of lading. The case went to a bench trial, and the district court ruled in favor of Sassy Doll for the full $28,273.60, which is the value of the perfume it had declared on the bill of lading. This is Watkins' appeal.

III.

We begin our analysis with the statutory framework. Under the current version of the Carmack Amendment a carrier of property in interstate commerce that loses a shipment generally is liable "for the actual loss or injury to the property caused by" the carrier. 49 U.S.C. § 14706(a)(1). However, a carrier may limit its liability "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." Id. § 14706(c)(1)(A). In addition to a "declaration" or an "agreement," the statute requires the carrier to provide "to the shipper, on request of the shipper, a written or electronic copy of the rate, classification, rules, and practices upon which any rate applicable to a shipment, or agreed to between the shipper and the carrier, is based." Id. § 14706(c)(1)(B); see also id. § 13710.

In Bio-Lab, Inc. v. Pony Express Courier Corp., 911 F.2d 1580, 1582 (11th Cir.1990), we interpreted the prior version of the Carmack Amendment and set out a four-step inquiry for determining whether a carrier has effectively limited its liability. In order to do that, we said, the carrier must:

"(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."

Bio-Lab, 911 F.2d at 1582 (quoting Hughes, 829 F.2d at 1415). We held specifically that:

where the shipper has declared the value of his goods in a bill of...