Emerson Elec. Supply Co. v. Estes Express Lines

• Decision Date: 29 June 2004
• Docket Number: No. CIV.A. 03-0885.,CIV.A. 03-0885.
• Citation: 324 F.Supp.2d 713
• Parties: EMERSON ELECTRIC SUPPLY COMPANY, Plaintiff v. ESTES EXPRESS LINES CORPORATION, Defendant.
• Court: U.S. District Court — Western District of Pennsylvania

324 F.Supp.2d 713

EMERSON ELECTRIC SUPPLY COMPANY, Plaintiff v.ESTES EXPRESS LINES CORPORATION, Defendant.

No. CIV.A. 03-0885.

United States District Court, W.D. Pennsylvania.

June 29, 2004.

Dennis J. Kusturiss, William A. Gray, Vuono & Gray, LLC, Pittsburgh, PA, for Plaintiff.

Lawrence J. Roberts, Coral Gables, FL, for Defendant.

MEMORANDUM OPINION

CONTI, District Judge.

Pending before this court are cross-motions for summary judgment filed by plaintiffEmerson Electric Supply Company("plaintiff") and defendantEstes Express Lines Corporation("defendant").This action arises under the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706, et seq.("Carmack Amendment").The Carmack Amendment imposes absolute liability upon a carrier for the value of goods lost or damaged during shipment, but it has a narrow exception that permits a carrier to limit its liability so long as the carrier meets certain requirements.49 U.S.C. §§ 14706(a)(1), (c)(1)(A).Here, defendant, a motor carrier, delivered goods that plaintiff alleges were damaged while defendant was transporting them.The parties dispute whether defendant limited its liability in accordance with the Carmack Amendment.Specifically, the parties dispute whether defendant was required to provide plaintiff with an opportunity to choose between two or more rates and if so, whether defendant met that requirement.¹

Defendant argues that its liability is limited to ten cents ($.10) per pound for the 10,200 pounds of electronic goods that it was carrying for plaintiff.In other words, defendant asserts that even if defendant is liable to plaintiff, defendant's liability is limited to a total of $1,020.00.Plaintiff, on the other hand, argues that defendant is liable for $155,190.80 — the total value of the electronic goods, which plaintiff was shipping to a third-party customer.Plaintiff argues that defendant failed to limit its liability to the $.10 per pound because defendant failed to offer plaintiff the opportunity to choose between rates and to have an opportunity to pay a higher rate with a greater amount of liability coverage.Alternatively, plaintiff argues that if defendant's tariff limits defendant's liability, the "extraordinary value" tariff that expressly limits defendant's liability to $7.90 per pound (which in this case would result in defendant being liable in the amount of $80,580) should apply in this case.Plaintiff reasons that the actual value of the shipment was $158,360, and since that amount exceeds the released value rate that is set forth in the "extraordinary value" category, the "extraordinary value" tariff should apply.

Thus, the central issues raised by the parties' summary judgment motions and the oral argument that took place on April 29, 2004 before this court are:

(1) whether there is a material, factual dispute as to the condition of the electronic goods at the time that they were delivered to defendant carrier?

(2) whether the recent changes to the Carmack Amendment eliminated the requirement that defendant carrier must offer plaintiff shipper more than one rate?

(3) whether defendant carrier is required to offer plaintiff shipper more than one rate, did defendant carrier satisfy that obligation?

(4) whether defendant carrier satisfied the requirements for limiting its liability, which tariff item applies, i.e. the $.10 per pound or the $7.90 per pound?

The court finds that plaintiff failed to offer any evidence that the goods delivered to defendant carrier were in good condition at the time of their delivery.Therefore, plaintiff's motion for summary judgment(Doc. No. 12) is DENIED without prejudice.The court further finds that a carrier is required to provide a shipper with a fair opportunity to choose between two or more rates and defendant carrier failed to meet that obligation.Therefore, defendant's partial motion for summary judgment to limit liability (Doc. No. 10) is DENIED.

Standard of Review

Federal Rule of Civil Procedure 56(c) provides that summary judgment may be granted if, drawing all inferences in favor of the non-moving party, "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."Fed.R.Civ. P. 56(c).A motion for summary judgment will not be defeated by the mere existence of some disputed facts, but will be defeated when there is a genuine issue of material fact.Anderson v. Liberty Lobby, Inc.,477 U.S. 242, 247-248, 106 S.Ct. 2505, 91 L.Ed.2d 202(1986).In determining whether the dispute is genuine, the court's function is not to weigh the evidence or to determine the truth of the matter, but only to determine whether the evidence of record is such that a reasonable jury could return a verdict for the non-moving party.Id. at 249, 106 S.Ct. 2505.

Facts Not in Dispute For Purposes of Deciding the Motion

Plaintiff acts as a "middleman" and sells electrical supplies, equipment and parts produced by various manufacturers to its customers.Affidavit of Phil Picciotto ("Picciotto Aff.")¶ 3.²Plaintiff works together with Electrical Component Sales, Inc.("ECS") in the sale of electrical equipment to plaintiff's customers.Id.at ¶ 4.ECS is a manufacturer's representative that provides technical and engineering services in connection with the plaintiff's sale of electrical equipment to customers.Id.One example of a manufacturer that ECS represents is OEM Rowan, Inc. d/b/a Oil Field-Electric-Marine ("OEM Rowan").Affidavit of Keith Rypczyk ("Rypczyk Aff.")¶ 3.³

On or about September 12, 2002, a customer of plaintiff, Sharon Tube Company("Sharon Tube"), placed an order with plaintiff for an OEM Rowan L.V. # 1 Switchgear, purchase price of $77,560, and OEM L.V. # 2 Switchgear, purchase price of $80,800 (the "switchgears").The switchgears were sold for a total of $158,360.PicciottoAff. ¶ 5.The shipping of the switchgears was arranged by Keith Rypczyk("Rypczyk"), an employee for ECS, who provided consulting and engineering services in relation to the sale of the switchgears.Id.at ¶ ¶ 4, 6;RypczykAff. ¶ 5.

On or about December 6, 2002, Rypczyk called defendant and requested a quotation for transportation of the switchgears.RypczykAff. ¶ 14.Rypczyk informed defendant: (1) that there would be four pieces being shipped, (2) about the approximate dimensions of each piece, (3) about the approximate weight of each piece (2,500 pounds), and (4) that the items being shipped were electrical switchgears.Id.That same day, defendant sent Rypczyck a facsimile that included a quotation of $450.00 for the cost of shipping the switchgears from Houston, Texas to West Middlesex, Pennsylvania.RypczykAff. ¶ 16;Joint Statement¶ 17; Joint Exhibit 2.⁴Defendant and Rypczyk did not discuss a released value, limitations of liability, the value of the shipment, the manner in which the shipment was to be handled, defendant's tariffs, the preparation of the bill of lading, or insurance.Joint Statement¶ ¶ 14, 16, 18, 19, 20, 21;RypczykAff. ¶ 15, 17.

On January 6, 2003, Rypczyk sent a four-page facsimile to defendant, requesting defendant to transport the switchgears from Houston, Texas to Sharon, Pennsylvania.RypczykAff. ¶ 19;Joint Statement¶ 1.Pursuant to this request, on or about that same day, defendant picked up a shipment from OEM Rowan in Houston, Texas.Joint Statement¶ 2.OEM Rowan prepared and signed a bill of lading, which designated the cosignee as "Chadderton Trucking c/o Sharon Tubing Co." in Sharon, Pennsylvania.Id.at ¶ 3; Joint Exhibit 1.The bill of lading listed OEM Rowan as the shipper and specified that the tariff classification of the shipment was class 77.5.Joint Exhibit 1.The bill of lading also contained a section that provided:

Note: Where the rate is dependant on value, shippers are required to state specifically in writing the agreed or declared value of the property.The agreed or declared value of the property is hereby specifically stated by the shipper to be not exceeding $ ____ per.

Id.OEM Rowan completed the bill of lading but did not fill in the blanks in the aforementioned section.Joint Statement¶¶ 3, 11.ECS, who was working with plaintiff, through its employee, Rypczyk, was responsible for all of the shipping arrangements, including payment.Joint Statement¶¶ 9-10.

The bill of lading form was a generic bill of lading selected by the shipper but not produced by defendant.Defendant, however, accepted the bill of lading as indicated by the application of defendant's pro sticker onto the bill of lading.Joint Statement¶ 8; Joint Exhibit 1;Affidavit of Albert D. Wilder, Jr. ("Wilder Aff.")¶ 5.⁵Defendant's pro-sticker specifically states: "DRIVER'S SIGNATURE ACKNOWLEDGES RECEIPT OF FREIGHT ONLY.TERMS OFEXLA-105 RULES TARIFF APPLY."Joint Exhibit I. Defendant's tariff terms were available online at the time of the shipment at defendant's website, www.estes-express.com. Joint Statement¶ 32.

The terms of "TariffEXLA 105-H," which were in effect at the time plaintiff used defendant to ship goods to its customer, states at Item 848-15 that "Uncrated New Equipment and Machinery ... will only be accepted for transportation when the Shipper releases the value of the property to a value not exceeding 10 cents per pound...."Joint Statement¶ 30; Joint Exhibit 8.Specifically, the relevant portion of the defendant's Tariff 105-H at Item 848-15 provides:

Item848-15 RELEASED VALUE — USED EQUIPMENT AND MACHINERY OR UNCRATED NEW EQUIPMENT AND MACHINERY

If the shipper fails or declines to release the value of the property to a value not exceeding 10 cents per pound, or designates a value exceeding 10 cents per pound, shipment will not be accepted, but if shipment is inadvertently accepted, it will be considered as being released to a value...