Complete Distribution Servs., Inc. v. All States Transp., LLC
| Decision Date | 30 September 2015 |
| Docket Number | Case No. 3:13-cv-00800-SI |
| Court | U.S. District Court — District of Oregon |
| Parties | COMPLETE DISTRIBUTION SERVICES, INC., Plaintiff, v. ALL STATES TRANSPORT, LLC, Defendant. |
John A. Anderson and Keven M. Anderson, ANDERSON & YAMADA, P.C., 9755 SW Barnes Road, Suite 675, Portland, OR 97225. Of Attorneys for Plaintiff.
Flavio A. Ortiz and Martin M. Rall, LACHENMEIER ENLOE RALL & ORTIZ, 9600 SW Capitol Highway, Suite 200, Portland, OR 97219. Of Attorneys for Defendant.
Plaintiff Complete Distribution Services, Inc., ("CDS") is a registered freight broker; it arranges for the transportation of freight but does not transport any freight itself. Defendant All States Transport, LLC ("AST") is an interstate motor carrier registered with the Federal Motor Carrier Safety Administration; it offers motor vehicle transportation for hire. This dispute arose after an AST long-haul truck crashed while transporting goods for one of CDS's customers. CDS moves for summary judgment on its first claim for relief under the Carmack Amendment, itssecond claim for relief for breach of contract, and its third claim for relief for offset. Dkt. 86. CDS also moves for summary judgment dismissing AST's counterclaims for breach of contract, money had and received, and consequential damages. Id. After considering the parties' arguments and evidence, the Court DENIES CDS's Motion for Summary Judgment.
A party is entitled to summary judgment if the "movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The moving party has the burden of establishing the absence of a genuine dispute of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The court must view the evidence in the light most favorable to the non-movant and draw all reasonable inferences in the non-movant's favor. Clicks Billiards Inc. v. Sixshooters Inc., 251 F.3d 1252, 1257 (9th Cir. 2001). Although "[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge . . . ruling on a motion for summary judgment," the "mere existence of a scintilla of evidence in support of the plaintiff's position [is] insufficient . . . ." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 255 (1986). Thus, "[w]here the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citation and quotation marks omitted).
In December 2012, CDS contracted with Pacific Nutritional, Inc. ("PNI") to arrange for transport of two shipments of vitamins and nutritional supplements from PNI's Vancouver, Washington, facility. CDS hired AST to transport one of the shipments to Clearwater, Florida, and the other to Tampa, Florida.
On December 7, 2012, AST picked up the shipments in two separate trucks. Without informing CDS or PNI, AST later combined the two shipments onto one truck for transport. The next day, December 8, 2012, the AST truck carrying PNI's shipments crashed on Interstate 84 in eastern Oregon. PNI claimed the crash resulted in $169,844.47 of damages to its products.
CDS voluntarily paid to PNI the full amount of PNI's claims in return for a full and complete release and assignment of PNI's claims arising out of the crash. CDS then forwarded the assigned claims to AST's cargo insurance carrier, Certain Underwriters at Lloyds, London ("Lloyds"). Lloyds agreed to pay CDS $88,392.50 pursuant to AST's policy limit of $100,000 on an individual truck.1 In return for the payment, CDS granted a full release to Lloyds, but CDS retained all rights and claims for the remaining balance of what it had already paid to PNI.
On May 13, 2013, standing in the shoes of PNI under the Carmack Amendment, 49 U.S.C. § 14706, CDS filed suit against AST for freight loss and damages. CDS seeks the remaining balance of the PNI claims. CDS also brought claims for breach of contract and offset. AST filed its answer, including affirmative defenses and counterclaims. CDS moved to dismiss AST's counterclaim for negligence and to strike a number of AST's affirmative defenses. United States Magistrate Judge Dennis J. Hubel issued his Findings and Recommendation ("F&R") , which this Court adopted in part, dismissing AST's counterclaim for negligence, striking AST's affirmative defenses of negligence and fault of others, and dismissing CDS's breach of contract claims for 89 other alleged instances in which AST allegedly combined multiple loads onto one truck.
CDS now moves for summary judgment on its three remaining claims for relief: its claims under the Carmack Amendment, breach of contract, and offset. CDS also moves for summary judgment dismissing AST's counterclaims for breach of contract, money had and received, and consequential damages.
The Carmack Amendment to the Interstate Commerce Act governs all interstate contract shipping claims concerning "delay, loss, failure to deliver and damage to property." White v. Mayflower Transit, L.L.C., 543 F.3d 581, 584 (9th Cir. 2008); see 49 U.S.C. § 14706. Under the Carmack Amendment, "in an action to recover from a carrier for damage to a shipment, the shipper establishes his prima facie case when he shows delivery in good condition, arrival in damaged condition, and the amount of damages." Mo. Pac. R. Co. v. Elmore & Stahl, 377 U.S. 134, 138 (1964). After the shipper, or other person entitled to recover under the bill of lading,2 makes out this prima facie case, "the burden of proof is upon the carrier to show both that it was free from negligence and that the damage to the cargo was due to one of the excepted causes relieving the carrier of liability." Id. The United States Supreme Court recognizes only five excepted causes: "(a) the act of God; (b) the public enemy; (c) the act of the shipper himself; (d) public authority; (e) or the inherent vice or nature of the goods." Id. at 137 (quotation marks omitted).
Measuring a party's damages is an imprecise science. Liability under the Carmack Amendment extends to "actual loss or injury to the property." 49 U.S.C. § 14706. The Carmack Amendment incorporates the common law principles of damages. See Wesley S. Chused, The Evolution of Motor Carrier Liability Under the Carmack Amendment into the 21st Century, 36 Transp. L.J. 177, 187 (2009). The Ninth Circuit has emphasized that "[t]he general rule for determining the amount of damages is the difference between the market value of the property in the condition in which it should have arrived at its destination and its market value in the condition in which it did arrive." Contempo Metal Furniture Co. of Cal. v. E. Tex. Motor Freight Lines, Inc., 661 F.2d 761, 764 (9th Cir. 1981); see also F. J. McCarty Co. v. S. Pac. Co., 428 F.2d 690 (9th Cir. 1970). This rule, however, "is not absolute" and should not be applied "where it is demonstrated that another rule will better compute actual damages." F. J. McCarty Co. 428 F.2d at 692 (quotation marks omitted). For instance, "[r]eplacement cost is an appropriate measure of damages where the injured party could mitigate the loss by replacing the goods." Neptune Orient Lines, Ltd. v. Burlington N. & Santa Fe Ry. Co., 213 F.3d 1118, 1120 (9th Cir. 2000). The appropriate measure of damages is thus often dependent on the special circumstances of an individual case.
Although the Carmack Amendment allows for general damages, it does not usually allow for special or consequential damages. The Ninth Circuit defines "special damages" in this context as "those that the carrier did not have reason to foresee as ordinary, natural consequences of a breach when the contract was made." Contempo, 661 F.2d at 765. Damage is "foreseeable by the carrier if it is the proximate and usual consequence of the carrier's action." Travelers Prop. & Cas. Co. v. Interstate Heavy Hauling Co., 2000 WL 900482, at *7 (D. Or. Feb. 16, 2000). A plaintiff cannot recover special damages unless it can show "that the carrier had noticeof the special circumstances from which such damages would flow." Contempo, 661 F.2d at 765. Notice of special damages such as labor costs must generally occur before the parties form a contract. Id. A carrier's actions may, however, imply notice. Id.
It is sometimes unclear whether certain categories of losses qualify as actual losses under the Carmack Amendment or as excluded special damages. For example, the Circuits differ in whether they allow recovery for freight charges as part of actual losses.3 The Ninth Circuit has allowed recovery of freight charges where the plaintiff "received no benefit from the delivery." Contempo, 661 F.2d at 764. This Court has also found that expected profits qualify as actual losses rather than special damages. Travelers, 2000 WL 900482, at *10.
Considering the evidence viewed in the light most favorable to AST, the non-moving party, the Court finds that CDS has not established a prima facie case under the Carmack Amendment for purposes of summary judgment because CDS has not proven the third element, damages.4 AST concedes the first two elements: delivery in good condition and arrival in damaged condition. AST, however, raises a genuine dispute as to the third element, the amount of damages.
CDS argues that the claim documents presented by PNI should serve as the correct amount of damages.5 The amount of damages in these claim documents is calculated based not just on PNI's product invoices, but also on computations made by PNI's Comptroller, James Kilcup. See Dkt. 86-2 at 1-7. Kilcup's spreadsheets purportedly demonstrate the full amount of PNI's loss. AST responds that these...
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