B & D APPRAISALS v. GAUDETTE MACHINERY MOVERS

• Decision Date: 28 March 1990
• Docket Number: Civ. A. No. 88-0581 L.
• Court: U.S. District Court — District of Rhode Island
• Parties: B & D APPRAISALS, Plaintiff, v. GAUDETTE MACHINERY MOVERS, INC. and Tri-State Motor Transit Co., Defendants.

733 F. Supp. 505

B & D APPRAISALS, Plaintiff, v. GAUDETTE MACHINERY MOVERS, INC. and Tri-State Motor Transit Co., Defendants.

Civ. A. No. 88-0581 L.

United States District Court, D. Rhode Island.

March 28, 1990.

Mark A. Pogue, Providence, R.I., for plaintiff.

Robert G. Parks, Wellesley Hills, Mass., for Gaudette Machinery Movers, Inc.

Richard D. Boriskin and Thomas Bender, Providence, R.I., for Tri-State Motor Transit Co.

MEMORANDUM AND ORDER

LAGUEUX, District Judge.

This matter is before the Court on the motion of defendant, Tri-State Motor Transit Co. (Tri-State), to alter or amend the judgment entered for plaintiff, B & D Appraisals (B & D), pursuant to Federal Rule of Civil Procedure 59(e). The jury returned a verdict for B & D in the amount of $45,360.00 for damage done to its goods being transported by Tri-State.¹ Tri-State now argues in support of the motion that the jury verdict represents an excessive award under the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. §§ 10103, 11707 and 10730 (1989), which limits a common carrier's liability for damage to transported goods to the actual loss suffered. Tri-State argues that in light of evidence that B & D planned to sell the transported goods immediately upon delivery, at a price which could be readily calculated, this Court should amend the judgment by reducing the jury award to $31,474.00 and recalculating interest on that amount. Plaintiff defends the jury finding by arguing that B & D was not contractually bound to sell the goods at a set price at delivery and that, therefore, the jury award was within the range allowed by law—the measure of damages being the fair market value of the goods before the incident less any amounts received for salvage thereafter.

Background

From the evidence elicited at trial, it appears that B & D, a Rhode Island partnership (Henry Barney and Patrick Doran being the partners), operates a business which buys, sells, and brokers jewelry machinery. In June of 1988, Leach & Garner of North Attleboro, Massachusetts (a jewelry manufacturer) contacted Doran requesting that B & D purchase a gold mixing machine, called an Inresa, at an auction to be held in St. Petersburg, Florida. Leach & Garner promised that if B & D purchased the machine and successfully delivered it in good condition to Leach & Garner in North Attleboro, Leach & Garner would pay B & D an amount equal to the purchase price paid at auction (not to exceed $60,000.00), plus a 10% commission, plus all expenses of custody and delivery.

Doran testified that B & D purchased the Inresa machine and necessary accessories at the auction for $41,250.00. B & D paid the auctioneers from its own funds and hired a guard, at a cost of $2,500.00, to protect the machine until B & D could arrange for shipping. B & D contracted with Gaudette Machinery Movers, Inc. (Gaudette) to ship and deliver the Inresa machine to Leach & Garner in North Attleboro for $2,200.00. Gaudette, unknown to B & D, hired Tri-State to transport the machine. On route, the Inresa machine fell from Tri-State's truck in Connecticut causing substantial damage. Leach & Garner refused to purchase the machine when it arrived in North Attleboro in its damaged condition. Thereafter, while B & D attempted to find a new buyer, it paid $360.00 to have the Inresa removed from Leach & Garner's property, $1,000.00 to have the machine placed in storage, and $39.00 in advertising costs. After a period of time, B & D sold the machine in its damaged condition for $20,000.00.

After the close of all evidence, the Court granted plaintiff's motion for a directed verdict as to both defendants on the issue of liability and stated that only the issue of damages would be submitted to the jury. The Court further indicated that in closing arguments the attorneys were free to argue their own interpretations of the evidence relating to damages. B & D argued that it should receive the difference in market value of the Inresa machine before and after the event causing the damage. It relied on its expert witness, Peter DiChristifano, who had opined that the Inresa machine had a fair market value, in June of 1988, in or around North Attleboro, of $65,000.00. B & D argued that, after deducting the salvage value received by B & D from $65,000.00 and considering the additional expenses incurred by B & D, a total award of approximately $48,000.00 would be reasonable. Tri-State argued that B & D should recover approximately $31,000.00, the amount that it would have been paid by Leach & Garner minus the net salvage value.

The Court instructed the jury that the liability imposed on any carrier should represent the actual loss suffered by the shipper. The Court further stated that the before and after market value test merely represents one convenient means of determining the loss suffered and that said measure of damages could be discarded when another, more accurate method presented itself. The Court stressed to the jury that the amount awarded must fully and fairly compensate the plaintiff for the amount lost as a result of damage to its machine and specified that the damages should place the plaintiff in the same position as it would have been in had the equipment been delivered to its destination undamaged.

After deliberations, the jury returned a verdict of $45,360.00. Tri-State, in its motion to alter or amend the judgment, now contends that the jury's verdict is excessive as a matter of law.² Tri-State argues that since B & D acted merely as a broker, intending to transfer the Inresa to Leach & Garner upon delivery, the jury's verdict unjustly enriches B & D because the award fails to limit B & D's damages to the price Leach & Garner had agreed to pay.

B & D argues that it is entitled to the full fair market value of the Inresa before the damage less its salvage value after the damage because B & D owned the Inresa machine outright and could have sold the machine to any customers after delivery. Plaintiff contends that although Leach & Garner promised to buy the Inresa from B & D if B & D purchased the machine at the auction, B & D was never contractually bound to sell the Inresa to Leach & Garner.

After hearing oral arguments on this issue, the Court took the matter under advisement. It is now in order for decision.

Discussion

The courts which have discussed damages under the Carmack Amendment have sought, on a case by case basis, to determine the amount of actual injury suffered by a plaintiff shipper. The difference between the fair market value (measured at the point of destination) of the goods transported by a carrier before and after the damage occurred represents the generally accepted measure of damages. Polaroid Corp. v. Schuster's Express, Inc., 484 F.2d 349, 351 (1st Cir.1973); F.J. McCarty Co. v. Southern Pac. Co., 428 F.2d 690, 692 (9th Cir.1970). However, courts have abandoned this measure when another approach has more accurately reflected the plaintiff's actual loss. Illinois Cent. R.R. Co. v. Crail, 281 U.S. 57, 64, 50 S.Ct. 180, 181, 74 L.Ed. 699 (1930); F.J. McCarty Co., supra, 428 F.2d at 692.

The Carmack Amendment refers to actual loss. See 49 U.S.C. § 11707(a)(1) (1989). The First Circuit has interpreted actual loss to mean what the plaintiff would have received had the carrier delivered the goods undamaged. See Polaroid Corp., supra, 484 F.2d at 351-52. The Court rejects plaintiff's contention that courts only stray from the market value measure when evidence of fair market value does not exist. The Court also rejects plaintiff's assertion that the intended use of the goods by the owner is irrelevant. To the contrary, it is clear that a court should examine meticulously what the owner of the goods intends to do with the goods upon delivery. See Illinois Cent. R.R. Co., supra, 281 U.S. at 63-65, 50 S.Ct. at 181-82 (consignee of coal only allowed wholesale value of coal lost in transit because of ability to replace coal without loss of retail sales); United States v. Palmer & Parker Co., 61 F.2d 455, 459 (1st Cir.1932) (court rejected market value of mahogany logs as measure of damages because owner used logs to manufacture furniture; loss, if any, diminished price of furniture). Courts have used contract prices as the measure of market value when, prior to the shipment of the goods, the shipper had executed a binding contract to sell the goods upon delivery. See John Morrell &...