Continental Grain Co. v. Frank Seitzinger Storage, Inc.

Citation837 F.2d 836
Decision Date28 January 1988
Docket NumberNo. 87-5113,87-5113
PartiesCONTINENTAL GRAIN COMPANY, v. FRANK SEITZINGER STORAGE, INC., Appellant, v. BURLINGTON NORTHERN RAILROAD COMPANY, a/k/a Burlington Northern Railway, Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals (8th Circuit)

Roger C. Malm, Hallock, Minn., for appellant.

Barry McGrath, St. Paul, Minn., for appellee.

Before HEANEY, BOWMAN and WOLLMAN, Circuit Judges.

WOLLMAN, Circuit Judge.

Frank Seitzinger Storage, Inc., (Seitzinger) appeals from a summary judgment entered in favor of Burlington Northern Railroad Company (BN) on its claim that BN was liable for the loss of 926,520 pounds of wheat in transit. We reverse and remand.

I.

In November 1983, Seitzinger entered into a contract for the sale of 83,000 bushels of wheat to Continental Grain Company (Continental), the weight to be certified upon arrival at destination. Seitzinger loaded the wheat into a twenty-six car unit train at its Kennedy, Minnesota, facility on November 25, 1983. The grain was shipped via BN on November 28, 1983, and arrived at Continental in Superior, Wisconsin, on December 10, 1983.

Seitzinger claims to have loaded approximately 198,000 pounds of wheat into each of the twenty-six C-6 type covered hopper cars that comprised the unit train, for a total of 5,150,720 pounds. 1 Continental claims to have unloaded 4,224,200 pounds of wheat from the unit train. The difference of 926,520 pounds translates into an equivalent loss of four to five hopper cars of wheat.

Seitzinger asserts that the wheat in every sixth car, four hopper cars in total, was loaded by truck. The fully-loaded trucks were weighed on Seitzinger's truck scale and then driven to belt conveyers, which transferred the wheat to the hopper cars. The empty trucks were driven back to the truck scale and weighed again. The remaining twenty-two cars were filled directly from bins to an estimated 198,000 pounds each, using a system of cubic measurements and reference to the four truck-loaded hopper cars.

Seitzinger's truck scale, which was uncovered and exposed to the elements, was not certified as official or supervised under the United States Grain Standards Act, 7 U.S.C. Sec. 71, et seq. The truck scale was certified as accurate, however, by the state of Minnesota. Continental, on the other hand, weighed the wheat on a track scale at its Superior facility that had been certified under the United States Grain Standards Act.

Based on the weights submitted by Continental, BN assessed Continental additional freight charges of $4,969.26 because the unit train had "dead freight," which meant the unit train failed to meet the minimum weight applicable to lower freight charges. Continental subsequently commenced an action against Seitzinger in state court for payment of the $4,969.26. Seitzinger answered and counterclaimed for the value of the lost grain, $59,451.77, contending that Continental was negligent in its care, custody, control and weighing of the grain. Seitzinger also impleaded BN for the dead freight charges and the alleged grain loss, totaling $64,421.03, contending that BN was negligent in the care, custody, control and delivery of the grain. The action was removed to district court on the ground that it arose under 49 U.S.C. Sec. 11707 (Carmack Amendment) and 49 U.S.C. Secs. 81-122, and on the additional ground of diversity.

In granting BN's motion for summary judgment, the district court relied on 49 C.F.R. Sec. 1037.1, which provides as follows:

PART 1037--RULES FOR THE HANDLING OF BULK GRAIN AND GRAIN PRODUCTS IN INTERSTATE COMMERCE, AND THE FILING, INVESTIGATION, AND DISPOSITION OF CLAIMS FOR LOSS AND DAMAGE INCIDENT THERETO, WHICH SUPERSEDE THE RULES PRESCRIBED IN EX PARTE NO. 263, LOSS AND DAMAGE CLAIMS, 340 I.C.C. 515 (37 FR 20943)

* * *

* * *

Sec. 1037.1 Weights and weighing.

(a) How determined--Accuracy of the weights used in determining the quantity of grain and grain products received for transportation by carriers and delivered by them to consignees being of primary and fundamental importance, the use of estimated weights based upon the cubical contents of the load and the test weight per bushel of the grain and grain products, or otherwise, will not be accepted. All shipments shall be carefully weighed by competent weighers upon scales that are known to be accurate within the limits of tolerance stated in scale specifications.

* * *

* * *

(e) A difference in weights at origin and destination, both of which are based on supervised scales, establishes prima facie that the loss occurred in transit and that the railroad is liable. * * * When a difference in weights is based in part on an unsupervised weight, * * * a prima facie case of railroad liability for loss in transit has not been established. Such difference in weights is a factor, however, to be considered in connection with other evidence that a clear-record car arrived at destination with seals intact and unbroken or that the shipper made a written complaint that any car placed for loading was defective, in response to which the railroad filed a written report after investigation of the complaint.

49 C.F.R. Sec. 1037.1 (1986) (emphasis in original).

II.

In reviewing the district court's grant of summary judgment, we apply the same standard as that applied by the district court. Lomar Wholesale Grocery, Inc. v. Dieter's Gourmet Foods, Inc., 824 F.2d 582, 585 (8th Cir.1987), cert. denied, --- U.S. ---, 108 S.Ct. 707, 98 L.Ed.2d 658 (1988). Under the Federal Rules of Civil Procedure, summary judgment is proper only "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits * * * 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." Fed.R.Civ.P. 56(c). To preclude the entry of summary judgment, the nonmovant must make a sufficient showing on every essential element of its case on which it has the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986); Hegg v. United States, 817 F.2d 1328, 1331 (8th Cir.1987).

Summary judgment is not a substitute for trial on disputed factual issues. Wilson v. Myers, 823 F.2d 253, 256 (8th Cir.1987). It "is not designed to weed out dubious claims, but to eliminate those claims with no basis in material fact." Id. The jury, not the judge, is to make credibility determinations, weigh the evidence, and draw legitimate inferences from the facts. Hegg, 817 F.2d at 1331. Accordingly, the appropriate inquiry is whether reasonable jurors, viewing the facts and all reasonable inferences derived therefrom in the light most favorable to the nonmoving party, could find for the nonmovant by a preponderance of the evidence. Id.

Seitzinger's claim falls under the "Carmack Amendment" to the Interstate Commerce Act, which essentially provides that a carrier is liable for the actual loss or injury it causes to a shipper's property. 2 In an action to recover for goods lost in transit, a shipper must show the following to establish a prima facie case: (1) delivery of a quantity of goods to the carrier, (2) arrival at destination of a lesser quantity, and (3) the amount of damages. Johnson & Johnson v. Chief Freight Lines Co., 679 F.2d 421, 421 (5th Cir.1982); Humphrey Feed & Grain, Inc. v. Union Pac. R.R. Co., 199 Neb. 189, 257 N.W.2d 391, 396 (1977); see Missouri Pac. R.R. Co. v. Elmore & Stahl, 377 U.S. 134, 138, 84 S.Ct. 1142, 1144-45, 12 L.Ed.2d 194 (1964). Once the shipper has established a prima facie case, to avoid liability the carrier must prove that it was not negligent and that the damage was caused by an act of God, the public enemy, the act of the shipper himself, public authority, or the inherent vice or nature of the goods. Missouri Pac., 377 U.S. at 136-38, 84 S.Ct. at 1143-45; Johnson & Johnson, 679 F.2d at 422.

Seitzinger argues that the district court erred by relying on 49 C.F.R. Sec. 1037.1 in granting BN's motion for summary judgment. The district court held that Seitzinger's claim was barred by section 1037.1(a) to the extent it was based on estimated weights. Citing 49 C.F.R. Sec. 1037.1(e), the district court also held that Seitzinger had not established a prima facie case relative to the four truck-loaded cars because a difference between the unsupervised weight at origin and the supervised weight at destination alone does not establish a prima facie case for railroad liability. Seitzinger does not dispute the fact that the weight at origin was not supervised. Rather, it contends that this regulation applies only to the voluntary settlement of claims.

In Association of American Railroads v. Interstate Commerce Commission, 600 F.2d 989 (D.C.Cir.1979), the court determined that 49 C.F.R. Sec. 1005.7, an Interstate Commerce Commission (ICC) regulation that requires the comparison of net weights in the settlement of claims involving the loss of scrap iron and steel in transit, 3 was inapplicable in the civil litigation of Carmack Amendment claims. "If a railroad does not want to settle a claim in accordance with the net weight regulation, it is free to take the matter to court, where it can offer into evidence all relevant facts." Id. at 993. BN attempts to distinguish American Railroads on the ground that 49 C.F.R. Sec. 1005.7 addresses the settlement of claims, while 49 C.F.R. Sec. 1037.1 does not specifically mention settlement. We find this distinction to be without significance.

The ICC intended the regulations in 49 C.F.R. pt. 1037 to supplement the rules prescribed in 49 C.F.R. pt. 1005, entitled "Principles and Practices for the Investigation and Voluntary Disposition of Loss and Damage Claims and Processing Salvage." In entering its order adopting 49 C.F.R. pt. 1037, the ICC stated that it had "jurisdiction to prescribe rules for settlement of loss and damage claims on grain...

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