Onebeacon Ins. Co. v. Haas Indus. Inc.

• Decision Date: 09 March 2011
• Docket Number: No. 08–16826.,08–16826.
• Citation: 634 F.3d 1092
• Parties: ONEBEACON INSURANCE COMPANY, Plaintiff–Appellant,v.HAAS INDUSTRIES, INC., Defendant–Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

634 F.3d 1092

11 Cal. Daily Op. Serv. 3044

2011 Daily Journal D.A.R. 3625

ONEBEACON INSURANCE COMPANY, Plaintiff–Appellant,

v.HAAS INDUSTRIES, INC., Defendant–Appellee.

No. 08–16826.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Oct. 4, 2010.Filed March 9, 2011.

James Attridge, San Francisco, CA, for the plaintiff-appellant.Geoffrey W. Gill, Countryman & McDaniel, Los Angeles, CA, for the defendant-appellee.Appeal from the United States District Court for the Northern District of California, Bernard Zimmerman, Magistrate Judge, Presiding. D.C. No. 3:07–cv–03540–BZ.Before: ROBERT R. BEEZER, ANDREW J. KLEINFELD, and SUSAN P. GRABER, Circuit Judges.

OPINION

BEEZER, Circuit Judge:

OneBeacon Insurance Company (“OneBeacon”) brought suit against Haas Industries, Inc. (“Haas”), under the Carmack Amendment, 49 U.S.C. § 14706, to recover for goods lost during shipping. Following a bench trial, the district court entered judgment in favor of Haas. OneBeacon appeals the district court's holdings that OneBeacon lacked standing to sue under the Carmack Amendment and, alternatively, that Haas limited its liability. We reverse the holding that OneBeacon lacked standing, affirm the holding that Haas limited its liability, and remand for an entry of judgment consistent with the limitation of liability.

I

OneBeacon is the subrogated insurer of Professional Products, Inc. (“PPI”). Around June 2005, PPI purchased three pallets of computer wafers from Omneon Video Graphics (“Omneon”). PPI requested that Omneon ship the wafers directly to the City University of New York, the end purchaser of the goods. Omneon and PPI agreed that Omneon would ship the wafers FOB Omneon's dock. Therefore, ownership of the wafers had passed from Omneon to PPI when the shipment left Omneon's dock.

Nevertheless, instead of arranging for its own carrier to transport the wafers, PPI authorized Omneon to arrange shipment through Haas, a carrier Omneon frequently used. Omneon and Haas had previously negotiated a fee schedule that applied to all Omneon shipments, and Omneon kept copies of pre-printed Haas bill of lading forms, which Omneon filled in prior to a shipment.

The face of Haas's bill of lading provides blank spaces for details about the shipping arrangement, such as the type and weight of the shipment, the type of service, and the sending and receiving companies. Haas also lists Conditions of Contract Carriage on the reverse side of the bill of lading. The Conditions of Contract Carriage are expressly incorporated into the bill of lading.

The Conditions of Contract Carriage describe the rights and obligations of various parties, including the “Shipper.” Among other things, the shipper and consignee are jointly and severally liable for any unpaid shipping charges. Paragraph 1 of the Conditions of Contract Carriage defines “Shipper” as “the party from whom the shipment is received, the party who requested the shipment be transported by Haas Industries, and [sic] party having an interest in the shipment, and any party who acts as an agent for any of the above.”

The Conditions of Contract Carriage also describe the extent of Haas's liability for “lost, damaged, misdelivered or otherwise adversely affected” goods. Paragraph 8 states that “in the absence of a higher declared value for carriage,” Haas's liability “is limited to a minimum of $50.00 per shipment or $0.50 per pound, per piece.” The same paragraph states that “Declared values for carriage in excess of $0.50 per pound, per piece, shall be subject to an excess valuation charge.” The face of the bill of lading provides a blank “declared value” box two lines above the shipper's signature. An adjacent line states that the declared value is “agreed and understood to be not more than $.50 per pound, per piece, or $50.00 whichever is higher unless higher value declared and charges paid [sic].”

Haas's bill of lading does not specify the amount of the excess valuation charge, but Haas asserts that it had provided this information to customers. In January 2005, Haas sent a letter to its customers specifying the excess valuation charge. In the letter, Haas informed customers that it had increased the excess valuation charge to $0.70 for every $100 of declared value. The letter reiterated, “Obviously, if you do not declare value on the bill of lading you will not be charged.” Haas states that it sent a copy of this letter to each of its customers, including Omneon, by enclosing the letter with its billing statement. Haas asserts that it would have re-sent the information to customers upon request.

Omneon contracted with Haas to ship PPI's goods. Omneon used one of Haas's pre-printed bills of lading for the shipment. Omneon filled in the City University of New York's address, the number of pallets to be shipped, and the weight of the shipment. Omneon did not list a declared value for the shipment. PPI did not sign the bill of lading, and Omneon did not indicate PPI's ownership of the goods identified on the bill of lading.

Haas retained Direct Air Service, Inc. to transport the shipment to New York. When the shipment arrived, it contained only two of the three pallets of computer wafers.

PPI filed a claim with Haas for the lost wafers, but Haas replied that only Omneon was entitled to file a claim. Omneon then filed a claim with Haas, and Haas issued a check for $88 to Omneon, asserting that this amount fulfilled Haas's obligation because the bill of lading limited Haas's liability to $0.50 per pound. OneBeacon, PPI's insurance company, compensated PPI for the value of the lost goods, and OneBeacon stepped into PPI's shoes as subrogee. OneBeacon brought suit against Haas claiming that Haas is liable for the full value of the lost goods under the Carmack Amendment.

Magistrate Judge Bernard Zimmerman held a bench trial on July 1, 2008. ¹ The trial focused on three issues: whether OneBeacon had standing to sue under the Carmack Amendment,² whether Haas limited its liability, and whether Omneon's acceptance of the $88 check constituted an accord and satisfaction between Haas and PPI. Magistrate Judge Zimmerman found that OneBeacon did not have standing to sue; Haas limited its liability; but Haas failed to prove the existence of an accord and satisfaction.

Judgment was entered in favor of Haas. OneBeacon timely appealed the issues of OneBeacon's standing and Haas's limitation of liability. We have jurisdiction pursuant to 28 U.S.C. § 1291.

II

We review the district court's findings of fact after a bench trial for clear error. Navajo Nation v. U.S. Forest Serv., 535 F.3d 1058, 1067 (9th Cir.2008) (en banc). We review its conclusions of law de novo. Id. Mixed questions of law and fact are also reviewed de novo. Ambassador Hotel Co. v. Wei–Chuan Inv., 189 F.3d 1017, 1024 (9th Cir.1999).

We review the district court's interpretation of contract provisions de novo. Conrad v. Ace Prop. & Cas. Ins. Co., 532 F.3d 1000, 1004 (9th Cir.2008).

III

This case presents the question whether an owner of goods who was not referenced by name in the bill of lading has standing under the current text of the Carmack Amendment. Congress passed the Carmack Amendment in 1906 to amend the Interstate Commerce Act and establish a uniform system of liability for carriers of goods in interstate commerce. See Adams Express Co. v. Croninger, 226 U.S. 491, 503–06, 33 S.Ct. 148, 57 L.Ed. 314 (1913) (describing the diversity of laws governing carrier liability before the Carmack Amendment and concluding that “Congress intended to adopt a uniform rule” under the Carmack Amendment).

“The purpose of the Carmack Amendment was to relieve shippers of the burden of searching out a particular negligent carrier from among the often numerous carriers handling an interstate shipment of goods.” Reider v. Thompson, 339 U.S. 113, 119, 70 S.Ct. 499, 94 L.Ed. 698 (1950). The Amendment accomplishes this purpose by imposing liability on the receiving, delivering, and any intermediate carriers regardless of which carrier is at fault. Kawasaki Kisen Kaisha Ltd. v. Regal–Beloit Corp., ––– U.S. ––––, 130 S.Ct. 2433, 2441, 177 L.Ed.2d 424 (2010); see also 49 U.S.C. § 14706(a)(1) (liability of motor carriers and freight forwarders). It also regulates a carrier's ability to limit liability for lost or damaged goods. See id.

Motor carriers are among the various types of carriers subject to the Carmack Amendment. 49 U.S.C. § 14706. The Carmack Amendment requires a motor carrier to issue a receipt or bill of lading for the property it transports. Id. § 14706(a)(1). The carrier is then “liable to the person entitled to recover under the receipt or bill of lading” for any loss or injury to the property caused by any carrier during shipment. Id.

During the relevant transaction, Haas was a licensed motor carrier and freight forwarder. The parties therefore agree that under the Carmack Amendment Haas is liable to someone for the lost pallet of computer wafers. The question is to whom.

OneBeacon was PPI's subrogee. To decide whether OneBeacon has standing, we must therefore determine whether PPI would have standing under the Carmack Amendment.³ OneBeacon contends that PPI must have standing as the owner of the lost goods. Haas contends that only Omneon has standing because Omneon, not PPI, negotiated the shipping arrangement and signed the bill of lading.

OneBeacon and Haas are not the first parties to debate who has standing to sue under the Carmack Amendment. The original text of the 1906 Carmack Amendment provided that carriers were “liable to the lawful holder” of the “receipt or bill of lading.” Pub. L. No. 59–337, 34 Stat. 584, 595 (1906). In some early cases, parties argued that the term “lawful holder” was synonymous with the owner of the goods, but the Supreme Court rejected that argument. The Court held that under the original text of the Carmack Amendment, the “lawful holder” of the bill of lading could sue, regardless of...