Atwood v. U W Freight Line, Inc.

• Decision Date: 29 November 1999
• Docket Number: No. CV 98-0229-S-BLW.,CV 98-0229-S-BLW.
• Citation: 127 F.Supp.2d 1155
• Court: U.S. District Court — District of Idaho
• Parties: Robert ATWOOD, an individual, d/b/a Northwest Carbide Sales & Service, Plaintiff, v. U W FREIGHT LINE, INC., a Utah corporation; Roadway Express, Inc., a Delaware corporation; and John Doe and Jane Doe, Defendants.

127 F.Supp.2d 1155

Robert ATWOOD, an individual, d/b/a Northwest Carbide Sales & Service, Plaintiff, v. U W FREIGHT LINE, INC., a Utah corporation; Roadway Express, Inc., a Delaware corporation; and John Doe and Jane Doe, Defendants.

No. CV 98-0229-S-BLW.

United States District Court, D. Idaho.

November 29, 1999.

David G Ballard, Churchill Law Offices, Boise, ID, for Robert Atwood, plaintiffs.

Phil E De Angeli, Rob H Shockley, Jones Gledhill Hess Andrews, Fuhrman Bradbury & Eiden, Boise, ID, Barry L Marcus, Daniel R Hardee, Marcus Merrick & Montgomery, Boise, ID, William D Bierman, Nowell Amoroso Klein & Bierman, Hackensack, NJ, for U W Freight Line, Inc., Roadway Express Inc., John Doe, Jane Doe, defendants.

ORDER AND REPORT and RECOMMENDATION

WILLIAMS, Chief United States Magistrate Judge.

Currently before the Court for its consideration are: 1) Plaintiff's motion for summary judgment (docket # 57), filed March 18, 1999; 2) Defendant UW Freight's motion to strike (docket # 66), filed March 31, 1999; 3) Defendant Roadway's motion for summary judgment (docket # 76), filed April 8, 1999; 4) Defendant Roadway's motion to dismiss (docket # 91), filed July 6, 1999; and 5) Defendant U W Freight's motion for summary judgment against Defendant Roadway (docket # 114), filed September 24 1999. Having reviewed all briefing submitted, as well as other pertinent documents in the Court's file, and having heard oral arguments, the Court makes its Order and Report and Recommendation as follows.

REPORT

I.

Background.

Plaintiff Robert Atwood, d/b/a Northwest Carbide Sales & Service, conducts business in Emmett, Idaho. On April 23, 1997, Atwood contracted with Defendant carriers U W Freight Line, Inc and/or Roadway Express, Inc. to transport a grinder from Emmett to Kirkland, Washington under the terms of a bill of lading. It is not disputed that U W Freight moved the grinder from Emmett to Boise, at Roadway's request, and Roadway moved it from Boise to Kirkland. The grinder arrived in Kirkland on May 1, 1997, but arrived in a damaged condition which Plaintiff alleges occurred while in the course of transportation due to the intentional, wilful, or negligent action of the carriers. However, there is not a strong factual dispute between the carriers that there did not appear to be any damage to the grinder at the time it was delivered to Roadway in Boise by U W Freight or that Roadway accepted the machine from U W Freight without question as to its condition. In the notice of cargo loss and damage claim, Plaintiff stated that the machine was improperly placed on an unstable pallet and that no lanyards were used to secure the pallet to the inside of the trailer. Consequently the machine toppled over during shipment. Roadway responded to Plaintiff's loss claim by issuing a check in the amount of $2,031.93, which covered a refund of the shipping fees and damage caused to the grinder paid at the rate of $1 per pound or $1,450.

Plaintiff alleges damages in the amount of $80,192.85 (the cost to replace the grinder) and for other consequential damages such as the costs Plaintiff incurred in hiring additional workmen to keep up with his client's requests for saw sharpening services without the use of the grinder. Plaintiff has demanded payment from both Defendants and both have refused to pay.

Defendants' position is that they have fully compensated Plaintiff for the loss in accordance with the bill of lading and tariffs which applied to this particular shipment. Defendants' further deny that they are liable for any consequential damages. They have also filed cross claims against one another for indemnification if either is found liable for damages.

II.

Summary judgment standard.

Motions for summary judgment are governed by Fed.R.Civ.P. 56. Rule 56, which provides in pertinent part, that judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."¹

The United States Supreme Court has made it clear that under Rule 56, summary judgment is required if the nonmoving party fails to make a showing sufficient to establish the existence of an element which is essential to his case and upon which he/she will bear the burden of proof at trial.² If the nonmoving party fails to make such a showing on any essential element of his case, "there can be `no genuine issue as to any material fact,' since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial."³

Under Rule 56 it is clear that an issue, in order to preclude entry of summary judgment, must be both "material" and "genuine." An issue is "material" if it affects the outcome of the litigation. An issue is "genuine" when there is "sufficient evidence supporting the claimed factual dispute ... to require a jury or judge to resolve the parties' differing versions of the truth at trial,"⁴ or when the "evidence is such that a reasonable jury could return a verdict for the nonmoving party."⁵ The Ninth Circuit cases are in accord.⁶

In ruling on summary judgment motions, the court does not resolve conflicting evidence with respect to disputed material facts, nor does it make credibility determinations.⁷ Moreover, all inferences must be drawn in the light most favorable to the nonmoving party.⁸ As the Ninth Circuit Court of Appeals has stated, "[p]ut another way, if a rational trier of fact might resolve the issue in favor of the nonmoving party, summary judgment must be denied."⁹

III.

Plaintiff's motion for summary judgment.

Plaintiff seeks summary judgment on the grounds that there are no genuine issues of material fact concerning: 1) that the saw grinder was damaged while in possession of the motor carrier during shipment; and 2) the liability of the motor carrier was not limited because there was no written agreement or other declaration to limit liability pursuant to 49 U.S.C. § 14706(c)(1)(A) to $1 per pound as asserted by the Defendants.

In 1906 Congress enacted the Carmack Amendment to the federal motor carriers statute so as to create a national policy regarding an interstate carrier's liability for property loss. At least eight circuits have held that the Carmack Amendment preempts state and common law claims and remedies for cargo damaged in interstate transport. See, e.g., Hughes Aircraft Co. v. North American Van Lines, Inc., 970 F.2d 609, 613 (9th Cir.1992). The Carmack Amendment absolutely forbade carriers to limit their liability to shipper for damage to goods. As a result of this legislation, the carriers increased shipping rates sharply. In 1915 Congress reacted to this rate increase by enacting the so-called Cummins Amendment¹⁰, now codified at 49 U.S.C. § 14706(c)(1)(A), which allows a carrier to limit its liability if it maintains appropriate tariffs.

Broadly, where freight has been damaged while in the possession of the motor carrier, the carrier is liable for the "actual loss or injury to the property caused by (A) the receiving carrier, (B) the delivering carrier, or (C) another carrier over whose line or route the property is transported in the United States.." 49 U.S.C. § 14706(a)(1). The Cummins Amendment allows carriers to limit their liability "to a value established by written or electronic declaration of the shipper or by written agreement between the carrier and the shipper if that value would be reasonable under the circumstances surrounding the transportation." 49 U.S.C. § 14706(c)(1)(A).

There are four requirements which must be met in order for a carrier to effectively limit its liability. The carrier must: (1) maintain a tariff in compliance with the requirements of the Interstate Commerce Commission; (2) give the shipper a reasonable opportunity to choose between two or more levels of liability; (3) obtain the shipper's agreement as to his choice of carrier liability limit; and (4) issue a bill of lading prior to moving the shipment that reflects any such agreement. Hughes Aircraft Co. v. North American Van Lines, Inc., 970 F.2d 609, 611-612 (9th Cir.1992), citing Rohner Gehrig Co., Inc. v. Tri-State Motor Transit, 950 F.2d 1079, 1081 (5th Cir.1992) (en banc); and Hughes v. United Van Lines, Inc., 829 F.2d 1407, 1415 (7th Cir.1987), cert. denied, 485 U.S. 913, 108 S.Ct. 1068, 99 L.Ed.2d 248 (1988). In order for the bill of lading form to establish limited liability by the carrier, it must contain what has been referred to as an "inadvertence clause." Rohner Gehrig Co., Inc. v. Tri-State Motor Transit, 950 F.2d 1079, 1082 (5th Cir.1992). The inadvertence clause specifies the release rate and states that such a rate will apply unless the shipper declares otherwise. Id. This gives the shipper the required opportunity to choose between levels of carrier liability, thereby giving the carrier a concomitant opportunity to limit its liability to the shipper for damage or loss.¹¹ By bargaining with the extent of the limitation to be placed on the carrier's liability, the shipper can negotiate a reduced rate of transportation. The carrier has the burden of proving that it has complied with these requirements. Hughes Aircraft Co. v. North American Van Lines, Inc., 970 F.2d 609, 612 (9th Cir.1992), citing Carmana Designs, Ltd. v. North American Van Lines, Inc., 943 F.2d 316, 319 (3d Cir.1991); and Flying Tiger Line v. Pinto Trucking Svc., 517 F.Supp. 1108, 1112 (E.D.Pa.1981). However, the shipper is charged with knowledge of what the tariff contains. American Ry. Express Co. v. Daniel, 269 U.S. 40, 41-42, 46 S.Ct. 15, 70 L.Ed. 154 (1925).

In this case, there is no dispute that the first and fourth requirements to limit liability were met. The dispute instead focuses on whether the second and third requirements of the Hughes test were fulfilled in...