965 F.2d 391 (7th Cir. 1992), 91-2658, Capitol Converting Equipment, Inc. v. LEP Transport, Inc.

Docket Nº:91-2658.
Citation:965 F.2d 391
Case Date:June 05, 1992
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit

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965 F.2d 391 (7th Cir. 1992)




No. 91-2658.

United States Court of Appeals, Seventh Circuit

June 5, 1992

Argued March 31, 1992.

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Allen W. Oshinski, James T. Ryan (argued), Ryan & Nelson, Arlington Heights, Ill., for plaintiff-appellant.

Kathleen M. Smith, North & Associates, Glen Ellyn, Ill., Kenneth E. North (argued), Bollinger, Ruberry & Garvey, Chicago, Ill., Andrew David Kaplan, Andrew R. Spector, Hyman & Kaplan, Miami, Fla., for defendant-appellee.

Before RIPPLE and MANION, Circuit Judges, and ESCHBACH, Senior Circuit Judge.

ESCHBACH, Senior Circuit Judge.

Capitol Converting Equipment, Inc. (Capitol) hired LEP Transport, Inc. (LEP) to arrange for the transportation of certain machinery from Genoa, Italy to Chicago, Illinois. Because the machinery never reached Chicago, Capitol sued LEP under the Carmack Amendment, 49 U.S.C. § 11707, and for breach of contract under Illinois law. The district court granted LEP's motion for summary judgment, holding that the Carmack Amendment is inapplicable to this transaction and that LEP's liability to Capitol is limited to $150.00 under Illinois law. For the reasons that follow, we affirm.


Capitol markets industrial machinery to manufacturers of cardboard and paper containers; LEP's business includes arranging for the international and domestic transportation of goods. Capitol and LEP have done business together since approximately 1977, engaging in "hundreds of transactions" during that time. 1 In November

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1985, Capitol's president Norman Singer phoned LEP and requested that LEP arrange for the transportation of three crates of machinery from Genoa to Chicago. No discussion regarding LEP's liability for lost or damaged goods occurred during the phone call. Ultimately, the machinery was shipped from Genoa aboard the vessel Pilar of the ocean carrier, Italia Di Navigazione, SPA (Italian Line). A bill of lading was issued by Italian Line to cover the machinery in its transit from Genoa to Chicago; the terms of shipment were noted on the bill of lading as "shipper's load and count, house to house, freight prepaid." Although the machinery arrived in Norfolk, Virginia on January 6, 1986, the machinery was never delivered to Capitol. For reasons the record leaves unclear, the machinery was sold by the United States Customs Service.

After LEP and Capitol's phone conversation, but apparently before either became aware of the fate of Capitol's machinery, LEP sent Capitol an invoice for its services in arranging for the machinery's transportation, and for freight charges LEP had prepaid on behalf of Capitol. At the bottom of the front of this letter-size invoice appears the instructions "SEE REVERSE SIDE FOR TRADING CONDITIONS." On the reverse side are nine standard terms and conditions in separately numbered paragraphs. These same terms were included on the back of each invoice LEP sent Capitol during the time they did business together. The two relevant paragraphs state:

1. The Company assumes no liability as a carrier, and is not to be held responsible for any loss or damage to the goods to be forwarded, but undertakes only to use reasonable care in the selection of carriers, truckmen, lightermen, forwarders, agents, warehousemen and others to whom it may entrust the goods for transportation, handling and/or storage or otherwise, subject to the conditions imposed by such carriers and other parties.

* * * * * *

5. The Company shall not be liable or responsible for any claim or demand from any cause whatsoever, unless in each case the damages alleged to have been suffered be proven to be caused directly by the negligence of the company, its officers or employees, in which event the liability of the Company shall not exceed $50.00 per package.

As a result of the failed shipment, Capitol began this case against LEP as a one-count breach of contract action in diversity under Illinois law. Subsequently, Capitol added an additional count under 49 U.S.C. § 11707 (the Carmack Amendment), and also added another defendant (Containership) who was allegedly involved in the shipment once it reached Virginia. In November 1990, the district court granted LEP summary judgment on both counts, limiting its liability to Capitol to $150.00 (three boxes at $50.00 each). See Capitol Converting Equipment, Inc. v. LEP Transport, Inc., 750 F.Supp. 862 (N.D.Ill.1990). LEP then consented to an entry of judgment against it for $150.00. 2 The entire litigation was eventually terminated on June 18, 1991 when the district court granted Containership summary judgment as well. This appeal followed; Capitol appeals only the summary judgments in favor of LEP.


We first address the district court's grant of summary judgment to LEP on Capitol's Carmack Amendment claim.

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The district court granted LEP summary judgment on the ground that the Carmack Amendment was inapplicable to Capitol's shipment because it was governed by a "through" bill of lading issued in a foreign country. See Capitol, 750 F.Supp. at 864-65. We agree that LEP is entitled to summary judgment on this issue. The Carmack Amendment is an amendment to the Interstate Commerce Act that imposes liability on certain carriers for the loss of goods. 49 U.S.C. § 11707; see Reider v. Thompson, 339 U.S. 113, 70 S.Ct. 499, 94 L.Ed. 698 (1950). It applies to "a common carrier providing transportation or service subject to the jurisdiction of the Interstate Commerce Commission under subchapter I, II, or IV of chapter 105 of this title." 49 U.S.C. § 11707. This jurisdiction does not extend to shipments by water, rail or motor carriers from a foreign country to the United States, see 49 U.S.C. §§ 10501, 10521, 10561, unless a domestic segment of the shipment is covered by a separate domestic bill of lading. Swift Textiles, Inc. v. Watkins Motor Lines, Inc., 799 F.2d 697, 701 (11th Cir.1986), cert. denied, 480 U.S. 935, 107 S.Ct. 1577, 94 L.Ed.2d 768 (1987). A bill of lading issued in a foreign country to govern a shipment throughout its transportation from abroad to its final destination in the United States is termed a "through" bill of lading. Because such a "through" bill of lading includes no separate domestic segment as described above, the Carmack Amendment is inapplicable. See Swift Textiles, 799 F.2d at 701; see also Reider, 339 U.S. at 117, 70 S.Ct. at 501 (earlier version of Carmack Amendment does not cover goods shipped under a through bill of lading issued in a foreign country); Tokio Marine & Fire Insurance Co. v. Hyundai Merchant Marine Co., 717 F.Supp. 1307, 1309 (N.D.Ill.1989); Fine Foliage of Florida, Inc. v. Bowman Transportation, Inc., 698 F.Supp. 1566, 1571 (M.D.Fla.1988), aff'd, 901 F.2d 1034 (11th Cir.1990).

Whether a bill of lading is a "through" bill of lading is predominantly a question of fact. See, e.g., Tokio Marine, 717 F.Supp. at 1309. Capitol, however, has failed to present any conflict on this question. In LEP's Rule 12(m) 3 statement supporting its motion for summary judgment, it listed as undisputed several key facts regarding the bill of lading. First, LEP noted that the bill of lading covering Capitol's shipment was issued by Italian Line in Italy, that the bill of lading shows Genoa as the place of acceptance and Chicago as the place of delivery, and that the bill of lading was "house to house" with freight prepaid. More precisely, LEP also stated that the bill of lading was a "through bill of lading issued by the Italian Line," and that "no domestic bill of lading was ever issued for this shipment." R. 78 pp 10-12, 20, 25. Capitol's Rule 12(n) statement did not controvert these facts or supplement them in any manner. See R. 81. Further, it did not respond to the numbered paragraphs of LEP's Rule 12(m) statement as the Rule requires, nor did it even touch on the...

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