Camar Corp. v. Preston Trucking Co.

• Decision Date: 06 June 2000
• Docket Number: No. 99-1007,N,99-1007
• Citation: 221 F.3d 271
• Parties: (1st Cir. 2000) CAMAR CORPORATION, PLAINTIFF, APPELLANT, V. PRESTON TRUCKING COMPANY, INC., DEFENDANT, APPELLEE. CAMAR CORPORATION, PLAINTIFF, APPELLEE, V. PRESTON TRUCKING COMPANY, INC., DEFENDANT, APPELLANT. o. 99-1008. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 271

221 F.3d 271 (1st Cir. 2000)

CAMAR CORPORATION, PLAINTIFF, APPELLANT,

V.

PRESTON TRUCKING COMPANY, INC., DEFENDANT, APPELLEE.

CAMAR CORPORATION, PLAINTIFF, APPELLEE,

V.

PRESTON TRUCKING COMPANY, INC., DEFENDANT, APPELLANT.

No. 99-1007, No. 99-1008.

United States Court of Appeals, For the First Circuit.

Heard June 6, 2000.

Decided August 15, 2000.

APPEALS FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

Hon. Nathaniel M. Gorton, U.S. District Judge.

Steven R. Maher for Camar Corporation.

Wesley S. Chused with whom Looney & Grossman was on brief for Preston Trucking Company, Inc.

Before Selya, Circuit Judge, Campbell, Senior Circuit Judge, and Lynch, Circuit Judge.

Campbell, Senior Circuit Judge.

Defendant-appellee Preston Trucking Company, Inc. ("Preston") lost a load of used marine equipment that it was transporting for plaintiff-appellant Camar Corporation ("Camar"). Camar sued Preston for damages under the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706. The district court awarded summary judgment to Camar on the issue of Preston's liability, but limited damages for the loss to the $215 that Camar had paid to purchase the equipment. Camar appeals, arguing that its damages should be $353,370, that being the amount for which it says it could have resold the equipment. In its cross-appeal, Preston contends that it is not liable at all under the Carmack Amendment or, in the alternative, that its liability is limited by the applicable tariff to a relatively inconsequential amount. We affirm.

I.

Camar is a company headquartered in Worcester, Massachusetts, that buys used and/or surplus naval equipment from the United States Navy's Defense Reutilization and Marketing Service ("DRMS"). It then refurbishes and resells that equipment, usually to foreign governments. In the past, Camar has resold DRMS goods to the Brazilian Navy at a very considerable mark-up above what it paid to DRMS.

Preston is a common carrier. During the two-year period preceding the events of this case, Preston transported approximately eighty shipments of freight for Camar. Camar prepared and delivered to Preston bills of lading for those shipments.

Around August, 1995, DRMS invited buyers to bid on used marine equipment located at a naval depot in California. The property was offered "as is" and prospective bidders were urged to inspect it. It was also described as "used - good condition." On August 29, 1995, Camar bid $215 for 156 pieces of equipment, including four turbines and other component parts, that ranged in age from nine to sixteen years old. The U.S. Navy had originally paid $275,000 to acquire the equipment. Camar did not inspect the used equipment, nor did it review maintenance records for it. On or about September 12, 1995, DRMS accepted Camar's $215 bid. Ninety days after the sale, according to its usual practice, DRMS destroyed the maintenance and repair records on the equipment.

Upon learning that it was the successful bidder, Camar arranged by telephone for Preston to transport the equipment from the Naval Supply Center in Oakland, California to Camar's facility in Worcester, Massachusetts. Camar sent Preston a letter of authorization to pick up the equipment, as well as a copy of the DRMS Notice of Award reflecting the successful $215 bid price. Neither Camar nor Preston prepared a bill of lading in connection with the shipment.

Preston then arranged for WestEx, Inc., the originating carrier, to pick up the equipment in Oakland. On or about October 11, 1995, WestEx took possession of Camar's equipment and transferred it to Preston. Preston then lost the entire shipment. At this time, a tariff published with the former Interstate Commerce Commission, ICC PRES 1000-L, was in effect. That tariff provided: "If consignor fails to declare a released value at time of shipment, shipment will be subject to the lowest released value herein." As applied to "Used machinery or parts," the lowest released value was ten cents per pound ("the released rate").

On or about October 25, 1995, Camar submitted a loss claim to Preston of $137,500. This figure represented one-half of what the U.S. Navy had originally paid to procure the equipment. On November 10, 1995, Preston refused to pay Camar's loss claim, stating that its liability was limited to ten cents per pound or a total of $60 in accordance with the applicable tariff.

In December, 1995, Preston asserted that it was still searching for the missing equipment, but that it could take up to 120 days to locate it. Camar contacted Preston in December and April concerning the search. On April 26, 1996, Camar filed an action in the United States District Court for the District of Massachusetts seeking damages of $137,500. After reviewing its records of past sales of similar goods, Camar amended its complaint to allege damages of $353,370, claiming it could have sold the equipment for this sum.

The parties cross-moved for summary judgment. In support of its motion, Camar argued that it was entitled to summary judgment with respect to Preston's liability because Preston admitted that it lost Camar's equipment, and that under the Carmack Amendment, damages should be awarded for Camar's "actual loss or injury." As to most of the equipment, Camar contended that actual loss should be measured by what foreign buyers had previously paid Camar for similar items.¹

In opposition to Camar's motion for summary judgment and in support of its cross-motion, Preston argued that Camar had not established a prima facie case under the Carmack Amendment because it could not prove "good origin condition" of the equipment. Preston also offered two alternative arguments: (1) even if Camar had made a prima facie case, its damages were limited to the release rate of ten cents per pound (a total of $60) based upon Preston's published tariff; and (2) even if Camar was entitled to recover for its actual loss, the only reliable evidence of such loss was the $215 Camar had paid for the equipment.

The district court allowed Camar's motion for summary judgment in respect to Preston's liability under the Carmack Amendment. See Camar Corp. v. Preston Trucking Co., Inc., 18 F. Supp.2d 112 (D. Mass. 1998). The court held that the undisputed facts demonstrated good origin condition and arrival in damaged -- i.e., non-existent --condition. Because Preston did not limit its liability for Camar's equipment, the court concluded that it was obligated to compensate Camar for its actual loss. The court limited the value of that loss, however, to the $215 Camar had paid to DRMS to purchase the equipment, deeming any greater amount to be speculative. Both parties now appeal.

II.

We review orders for summary judgment de novo, construing the record in the light most favorable to the non-movant and resolving all reasonable inferences in that party's favor. See Houlton Citizens' Coalition v. Town of Houlton, 175 F.3d 178, 184 (1st Cir. 1999).

The 1906 Carmack Amendment to the Interstate Commerce Act governs the liability of carriers for lost or damaged goods in interstate commerce:

A common carrier... subject to the jurisdiction of the Interstate Commerce Commission... shall issue a receipt or a bill of lading for property it receives for transportation.... That carrier... [is] liable to the person entitled to recover under the receipt or bill of lading. The liability imposed under this paragraph is for actual loss or injury to the property caused by (1) the receiving carrier, (2) the delivering carrier, or (3) another carrier over whose lines or route the property is transported into the United States....

49 U.S.C. App. §§ 10730, 11707 (repealed 1995).² To make a prima facie case under the Carmack Amendment, a plaintiff must show 1) delivery to the carrier in good condition; 2) arrival in damaged condition; and 3) the amount of damages caused by the loss. See Missouri Pac. R.R. Co. v. Elmore & Stahl, 377 U.S. 134, 137-38 (1964); D.P. Apparel Corp. v. Roadway Express, Inc., 736 F.2d 1, 2 (1st Cir. 1984).

Camar contends that the district court erred in holding that the purchase price it paid the DRMS for the lost goods was the correct measure of damages. It argues that its evidence of past sales of similar goods is a reasonable measure of the equipment's market value. Camar insists that as Preston was responsible for the loss and any consequent uncertainty as to the lost goods' value, the value should be determined in Camar's favor. Preston cross-appeals, arguing that the district court erred in determining that Camar had made out a prima facie case under the Carmack Amendment, and that in any event Preston had limited its liability under the applicable tariff. We turn to these points.

A. Good origin condition

In urging that Camar failed to establish a prima facie case under the Carmack Amendment, Preston contends that Camar did not prove good origin condition. While DRMS's invitation to bid described the equipment as "used--good condition," Preston maintains that this evidence is too vague and only reflects the condition of the goods at the time of the sale, not at the time Preston took control of them several weeks later.³

We find adequate evidence of good condition for purposes of a prima facie case. The district court correctly reasoned that the purpose of demonstrating delivery to the carrier in "good condition" and arrival in "damaged condition" is to show an adverse change in the condition of the goods while they were in the carrier's custody, thus implying that whatever harm occurred was caused by the carrier. See Missouri Pac. R.R. Co., 377 U.S. at 138 (stating that to rebut the prima facie case, a carrier must attribute the loss to a different cause).

Because the terms "good" and "damaged" are relative, Preston's suggestion that Camar must show "good condition" in absolute terms is unfounded. In the present case, the parties do not dispute that a...