829 F.2d 1407 (7th Cir. 1987), 86-2134, Hughes v. United Van Lines, Inc.

Docket Nº:86-2134.
Citation:829 F.2d 1407
Party Name:Edward and Nancy HUGHES, Plaintiffs-Appellants, v. UNITED VAN LINES, INC., and 291 Sisser Brothers, Inc., Defendants-Appellees.
Case Date:September 11, 1987
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit
 
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829 F.2d 1407 (7th Cir. 1987)

Edward and Nancy HUGHES, Plaintiffs-Appellants,

v.

UNITED VAN LINES, INC., and 291 Sisser Brothers, Inc.,

Defendants-Appellees.

No. 86-2134.

United States Court of Appeals, Seventh Circuit

September 11, 1987

Argued Dec. 11, 1986.

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[Copyrighted Material Omitted]

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Stephen T. Mikus, Mark F. Devane, McKenna, Storer, Rowe, White & Farrug, Chicago, Ill., for plaintiffs-appellants.

James W. Tallant, James W. Tallant & Associates, Ltd., Chicago, Ill., for defendants-appellees.

Before BAUER, Chief Judge, and COFFEY and EASTERBROOK, Circuit Judges.

COFFEY, Circuit Judge.

Plaintiffs Edward and Nancy Hughes, brought suit against defendants United Van Lines, Inc. (United) and 291 Sisser

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Bros., Inc. (Sisser Inc.) to recover the full value of their household goods destroyed by fire while in transit in United's van between New Medford, New Jersey, and Chicago, Illinois. The district court found United had limited its liability with the plaintiffs to $3.00 per pound pursuant to its contract and awarded plaintiffs $26,180.00 1 and also denied the plaintiffs' state and common law theories of recovery. Plaintiffs appeal the district court's award contending that (1) the district court erred in holding that the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. 11707, preempted their state and common law theories of recovery; and (2) the district court erroneously found that the defendants properly limited their liability (in this case to $3.00 per pound) under the Carmack Amendment. Thus, the questions on appeal are, whether the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. 11707, preempts state and common law remedies; and second, whether the district court erred in holding that the defendants satisfied the conditions necessary to limit their liability under the Carmack Amendment. We affirm on both issues.

I

In the spring of 1982, after accepting a new position, plaintiff Edward Hughes moved his family from Medford, New Jersey, to Chicago, Illinois. Mrs. Hughes initiated the moving arrangements by contacting Larry Haney, a United Van Lines agent who had organized the Hughes' moves on several previous occasions. Haney in turn made arrangements for Sisser Inc., the local United Van Lines subsidiary moving company in New Jersey, to meet with the Hughes to plan their move. Subsequently, Cy Pavliga, a representative of Sisser Inc., met with Mrs. Hughes to arrange the move of their personal belongings and household goods to Illinois. Pavliga conducted a survey of the Hughes' furniture, clothing and other household and personal items and completed the ICC required Estimated Costs of Service Form. Upon completion of this form, the carrier is required to estimate the weight of the shipment while the shipper must choose the level of liability at which he wishes to insure his goods. Pavliga estimated the weight of the Hughes' shipment at 12,000 pounds and discussed with Mrs. Hughes the various levels of carrier liability insurance available. He stated that he also provided Mrs. Hughes with several Interstate Commerce Commission (ICC) prescribed explanatory pamphlets. 2 The pamphlets included information on how the shipper is to declare a value for his goods and the liability the carrier assumes based on that declared value. The pamphlets also recited warnings to the shipper that he "fully understand the maximum liability of the option [the shipper] desire[s] before signing any documents;" and a recommendation that the shipper not transport family heirlooms or small articles of high value. (Defendants Exhibits 3 and 4). Mrs. Hughes then selected the liability package entitled "Gold Umbrella Protection-Full Value Guarantee " based on the weight of the shipment at $3.00 per pound. 3 The $3.00 per pound

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is the lowest valuation available under the "full value protection" package for the household goods. Based on the assumption that the household goods weighed 12,000 pounds, Mrs. Hughes ordered $36,000 worth of coverage at $3.00 per pound. Mrs. Hughes signed and kept a copy of the Estimate for Services form, which provided that United's liability was limited to $36,000.

Subsequent to the meeting with Pavliga, Dave Hendershott, a sales coordinator with Sisser Inc., sent Mrs. Hughes the required ICC Order for Service form with a letter stating:

"It is necessary to sign in two places and declare a value and return to us in the accompanying envelope. We have shown the desired areas for signing as well as the place for valuation. (We understand that you desire full coverage, minimum $3.00 per pound, which is what you should enter in that area.)"

Mrs. Hughes signed the blanks on the ICC Order for Service form indicating that she had received a summary of the information provided shippers of household goods and declared that the coverage chosen was limited to $3.00 per pound.

In the early morning hours of June 25, 1982, employees of Sisser Inc. completed loading the Hughes' goods in a United moving van. The driver prepared a list of the items loaded which her husband, Ed Hughes, signed. The driver also presented Mr. Hughes with a Uniform Household Goods Bill of Lading and Freight Bill which required the shipper to declare and fill in the blank indicating the valuation rate of the goods shipped and the signature of the shipper. Ed Hughes signed his name in the appropriate space reserved for the shipper's signature, but mistakenly signed his name a second time in the space reserved for the shipper's declared value rate. Thus, because Hughes claims that he mistakenly signed the bill of lading where he was supposed to declare a value for the goods, the Uniform Household Goods Bill of Lading and Freight Bill form failed to expressly state and set forth the shippers' declared value rate for the goods shipped.

Immediately after departing New Jersey, the moving van stopped at a weigh station and recorded the weight of the shipment at 17,060 pounds or 5,060 pounds over the estimate of 12,000 pounds Sisser Inc.'s agent made. While in transit on the Ohio Turnpike, a fire on board the moving van destroyed a substantial portion of the Hughes' shipment. Defendants concede liability for the loss incurred by the Hughes, but challenge the extent (limitation) of their liability. 4

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On May 21, 1984, the Hughes filed a complaint against the defendants for full replacement cost or $111,848.31 of their personal belongings and household goods damaged or destroyed in the fire. On February 11, 1985, the Hughes amended their complaint to include eight state and common law counts for recovery. 5 The district court determined that the Hughes were entitled to coverage of $51,180.00 ($3.00 per pound x 17,060 lbs.) and entered judgment for the Hughes in that amount, less the $25,000.00 the defendants had already paid, or $26,180.00. In addition, the district court denied plaintiffs' state and common law counts holding that the Carmack Amendment to the Interstate Commerce Act preempted all state and common law theories of recovery. Plaintiffs appeal the district court's holding that their state and common law theories of recovery are preempted by federal law and that their recovery under federal law is limited to $3.00 per pound.

II. CARMACK AMENDMENT

The plaintiffs initially argue that the Carmack Amendment 6 does not preempt existing state and common law remedies and rely upon 49 U.S.C. Sec. 10103 which provides:

"Except as otherwise provided in this subtitle, the remedies provided under this subtitle are in addition to remedies existing under another law or at common law."

49 U.S.C. Sec. 10103 (Revised Interstate Commerce Act). A federal law may only preempt state and common laws if it can be established that Congress so intended. Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230, 67 S.Ct. 1146, 1152, 91 L.Ed. 1447 (1947). It is not necessary for a federal statute to provide explicitly that particular state laws are preempted. Hillsborough County v. Automated Medical Laboratories, Inc., 471 U.S. 707, 105 S.Ct. 2371, 85 L.Ed.2d 714 (1985). Congress' intent to supersede state law may be evidenced in several ways: preemption may be inferred where Congress has legislated so comprehensively that it has left no room for supplementary state legislation, Rice v. Santa Fe Elevator Corp., supra, 331 U.S. at 230, 67 S.Ct. at 1152; further preemption may be inferred where state legislation would impede the very purpose and objectives of Congress as expressed in its legislative enactment. Hillsborough County v. Automated Medical Laboratories, Inc., supra 471 U.S. at 713, 105 S.Ct. at 2375.

The United States Supreme Court addressed the preemptive scope of the Carmack Amendment relating to state regulation of carrier liability in Adams Express Co. v. Croninger, 226 U.S. 491, 33 S.Ct. 148, 57 L.Ed. 314 (1913). There, the Court held that:

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"[a]lmost every detail of the subject is covered as completely that there can be no rational doubt that Congress intended to take possession of the subject and supersede all state regulation with reference to it."

Adams v. Croninger, supra 226 U.S. at 505, 33 S.Ct. at 152. Although the issue in Croninger was whether the states could regulate carrier liability despite the Carmack Amendment, the Court went further and delineated the preemptive scope of the Carmack Amendment as it relates to the availability of state and common law remedies. The Court stated:

"But it has been argued that the non-exclusive character of this regulation is manifested by the proviso of the section, and that state legislation upon the same subject is not superseded, and that the holder of any such bill of lading may resort to any right of action against...

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