Diebold Contract Services, Inc. v. Morgan Drive Away, Inc.

• Decision Date: 23 September 1980
• Docket Number: No. 4259,4259
• Citation: 95 N.M. 9,617 P.2d 1330,1980 NMCA 135
• Parties: DIEBOLD CONTRACT SERVICES, INC., Plaintiff-Appellant, v. MORGAN DRIVE AWAY, INC. and Liberty Mutual Insurance Company, Defendant-Appellee.
• Court: Court of Appeals of New Mexico

Page 1330

617 P.2d 1330

95 N.M. 9

DIEBOLD CONTRACT SERVICES, INC., Plaintiff-Appellant, v. MORGAN DRIVE AWAY, INC. and Liberty Mutual Insurance Company, Defendant-Appellee.

No. 4259.

Court of Appeals of New Mexico.

Sept. 23, 1980.

Pickett & Bates, Las Cruces, for plaintiff-appellant

Reginald C. Woodard, Albuquerque, for defendant-appellee.

OPINION

ANDREWS, Judge.

This action was brought after a shipper's merchandise was damaged while being transported by a motor carrier. After the shipper's (Diebold) goods were damaged on July 26, 1976, defendant-carrier gave written notice of its denial of Diebold's claim on November 12, 1976, thereby beginning the running of a two-year contractual limitation period. On July 13, 1977, Diebold filed an action in New York. In a stipulation dated January 13, 1978, the parties agreed to discontinue the New York action without prejudice as to any forum other than New York. Plaintiff did not institute the present action in New Mexico until eleven months later, December 1, 1978. The District Court of Dona Ana County accepted affidavits from both parties on a motion to dismiss based on the running of the contractual limitation period. That court then treated the matter as a motion for summary judgment and dismissed the complaint.

The shipping agreement included a provision which limited the period in which suit might be brought to two years and one day. If this limitation period is effective, the December 1, 1978, filing was two weeks over the allowable time limit. Plaintiff contends, however, that the limitation period created by the contract should be tolled for the period of the pendency of the action in the New York courts due to the stipulation that the action was to be dismissed without prejudice. The issues presented are: (1) in a negligence action against a carrier regulated by the Interstate Commerce Act, 49 U.S.C. §§ 10101 et seq., which law is controlling as to the effect the pendency of a foreign action has on a contractual limitations period-that of the state in which the action is brought, or 49 U.S.C. § 11706 which mandates a two-year limitation in actions involving charges between a regulated carrier and a shipper; and, (2) if New Mexico law is to be applied, does the pendency of an action in another jurisdiction toll a contractual limitation period where the parties entered into a voluntary stipulation dismissing the suit without prejudice?

Since the statutory limitation period is the same as that provided by the contract, the differentiation between limitation periods is not an issue here. However, in order to establish the applicable law-state or federal-we must determine whether the statutory or contractual limitation period controls. It is clear that in New Mexico, a contractual provision as to a limitation on actions will be enforced unless there is a showing that it is against public policy. Wiseman v. Arrow Freightways, Inc., 89 N.M. 392, 552 P.2d 1240 (Ct.App.1976). Thus, the issue before us is whether the limitation period set out in the Interstate Commerce Act precludes enforcement of the contractual period.

An analogous situation was presented in Minton v. General Shale Products Corp., 371 S.W.2d 808, 52 Tenn.App. 60 (1962), where the court examined the nature and extent of the limitation period under the predecessor to § 11706 in response to defendant's assertion that the two-year limitation period provided in Section 304a, Title 49 U.S.C. ¹ was applicable. Sec. 304a provides:

(1) All actions at law by common carriers by motor vehicle subject to this chapter for the recovery of their charges or any part thereof, shall be begun within two years from the time the cause of action accrues and not after.

In that case, like the one before us here, counsel cited no decisions upholding his contention, but argued that Bottemueller v. Wilson & Co., 57 F.Supp. 766 (W.D.Mo.1944), appeared to support his theory. The Tennessee court disagreed:

In the Bottemueller case, which was decided before Congress passed Sec. 304a, the plaintiff, a contract motor carrier engaged in interstate commerce, brought suit against a shipper to recover the difference between the transportation charges set out in the contract and the published schedules. The defendant moved for a summary judgment on the ground that the action was barred by the three-year limitation placed by the State of Kansas, where the obligation originated, on liabilities created by the statute. In denying the motion, the court said:

* * * the plaintiff in this case was within his rights to sue on the contract. He has done that. It was his contract and not the statute which created the liability. It was the hauling service that he performed for the defendant and not the statute which gave him the right to claim compensation. All the statute did was to regulate and fix the amount of compensation to be charged and to forbid the plaintiff from collecting a lesser amount. (Emphasis added.)

371 S.W.2d at 815.

As this language demonstrates, Section 11706 of the Interstate Commerce Act is not intended to establish a uniform statute of limitation for all possible types of claims. The section only restricts the application of the two-year limitation to actions for recovery of charges by common carriers, and does not apply to negligence actions brought by contract motor carriers engaged in interstate commerce. See Minton v. General Shale Products Corp. supra, 371 S.W.2d at 815.

More importantly, in the absence of a statutory limitation on...