GAINES MOTOR LINES INC. v. KLAUSSNER FURNITURE Indus. INC.
| Decision Date | 30 March 2011 |
| Docket Number | No. 1:09CV302,1:09CV302 |
| Court | U.S. District Court — Middle District of North Carolina |
| Parties | GAINES MOTOR LINES, INC., B.A.H. EXPRESS, INC., FREIGHTMASTER, INC., DAVID PHILLIPS TRUCKING CO., H.G. SMITH COMPANY, INC., TRIANGLE TRANSPORT AND DISTRIBUTION SERVICES, LLC, GRAHAM TRUCKING ENTERPRISES, INC., BIG BEN TRUCKING, LLC, and SOUTHLAND TRANSPORTATION COMPANY, Plaintiffs/Counter-Defendants, v. KLAUSSNER FURNITURE INDUSTRIES, INC., SALEM LOGISTICS TRAFFIC SERVICES, LLC, and SALEM LOGISTICS, INC., Defendants/Counter-Plaintiffs, and KLAUSSNER FURNITURE INDUSTRIES, INC., Third-Party Plaintiff, v. SALEM LOGISTICS, TRAFFIC SERVICES, LLC, SALEM LOGISTICS, INC., and ARK ROYAL CAPITAL, LLC, Third-Party Defendants. |
OPINION TEXT STARTS HERE
This matter comes before the Court on: (1) the summary judgment motion filed by Defendant Klaussner Furniture Industries, Inc. (Klaussner) (Docket No. 76); (2) the motion for partial summary judgment as to liability filed by Plaintiffs (Docket No. 74); and (3) the motion to strike filed by Defendant Klaussner (Docket No. 80). The parties have consented to the exercise of jurisdiction by the undersigned. (Docket No. 96.) For the reasons that follow, Defendant Klaussner's motion for summary judgment will be granted. The motion for partial summary judgment filed by Plaintiffs will be denied. Defendant Klaussner's motion to strike portions of the affidavit of Colin Barrett will be dismissed as moot.
Plaintiffs are federally licensed motor carriers who transported furniture from Defendant Klaussner's furniture factory in North Carolina to various cities across the country. Prior to the time period here in issue, Klaussner had contracted directly with Plaintiffs to transport its furniture and had paid them directly. .) Beginning in August 2007 and extending until January 2009, Klaussner contracted with Salem Logistics, Inc. ("Salem") to take over Klaussner's transportation business because Salem claimed that it could lower transportation costs and improve customer service. (Id. ¶¶ 6-8.) Plaintiffs
seek by this action to recover the costs of transporting shipments of Klaussner furniture during the time period that Salem was handling Klaussner's transportation business.
In the Summer of 2007, Salem sent each Plaintiff a written request for quotes to which each Plaintiff was required to respond before Salem would select it to haul for Klaussner. (Id. ¶ 7.) After receiving these quotes, Salem agreed to charge Klaussner uniform rates that were generally higher than the rates quoted by Plaintiffs. (Id. ¶ 8.) Klaussner agreed to these rates when it signed with Salem the Traffic Services Agreement. (Id.) Doyle Vaughn was a Klaussner employee who had arranged for transportation of shipments of Klaussner furniture on motor freight carriers during the time Klaussner worked directly with carriers. (Id. ¶ 4.) He avers in an affidavit that he "personally spoke with each" Plaintiff and "explained that the selection and payment of carriers for Klaussner loads would be handled by Salem going forward." (Id. ¶ 10.) He also states that Plaintiffs "were told that their invoices were to be sent to Salem in Winston-Salem and not to Klaussner in Asheboro." (Id.) Vaughn states that he told Plaintiffs, as of the end of September, 2007, that he no longer worked for Klaussner and that Salem had hired him. (Id.)
The request for quotes sent to Plaintiffs by Salem contained a letter dated July 12, 2007, from Ralph Raymond, Vice President of Logistics for Salem Logistics, Inc. (Aff. of Doyle Vaughn, ¶ 7 & attached Ex. 1.) This letter states that all "freight payment responsibilities" regarding Klaussner shipments will be "directly managed by Salem Logistics." (Id., Ex. 1.) Along with that letter was a memo on Klaussner letterhead signed
by Chuck Miller, Vice President-Supply Chain, which states that Klaussner has selected Salem Logistics as its third-party logistics company and that "[a]ll freight bills should be designed as a third party payment" and be sent to "Klaussner Furniture, c/o Salem Logistics, Inc." in Winston-Salem, N.C. (Id., Ex. 2.)
For each load that Salem assigned to a Plaintiff, Salem sent the carrier two documents: (1) a "Carrier Pickup and Delivery Schedule," and (2) a "Confirmation of Contract Carrier Verbal Rate Agreement." (Aff. of Doyle Vaughn ¶ 11.) The Pickup and Delivery Schedule lists the "Bill-To & Contact Information" as Salem Logistics, Inc. in Winston-Salem, N.C. (Id. & attached Ex. 4.) It provides the addresses and other information for pick up and delivery of the load. (Id.) The Confirmation of Agreement is signed by the carrier and Salem. (Id., Ex. 3.) This agreement sets the rate at which the shipment will move. (Id.)
Plaintiffs, for their part, allege that the bills of lading for each shipment are the contracts which bind Klaussner to pay it for the cost of shipments. (Docket No. 75 at 2 ().) Plaintiffs agree that each bill of lading for the disputed shipments contains two "non-recourse clauses." (Id. at 14 (); Docket No. 77, Ex. B & attached bill of lading.)
On each bill of lading in issue, the non-recourse language printed within the section which describes the shipment states as follows:
LAWFUL CHARGES. Klaussner Furniture Industries, Inc. By: CAM SMITH
(Id., attached bill of lading.)
In addition to the above language, each page of the bill of lading contains roughly the same language at the bottom in footnote-like form. (Id.) The only differences are that the language in the footnote includes the phrase "of the UCC" immediately following the word "conditions," and that provision is not signed in any manner by Klaussner. (Id.)
Most of the bills of lading also were marked by Klaussner as "pre-paid." (Id.) Each bill of lading contains language stating that "freight charges are prepaid unless marked otherwise." (Id.) The bills have an area to mark beside "Prepaid," "Collect," and "3rd Party." (Id.) Although most of the bills of ladings at issue were marked "prepaid," "very occasionally" all three blanks were not marked. (Docket No. 75, Ex. E ¶ 31 (Aff. of Colin Barrett).)
Summary judgment is appropriate only when no genuine issue of material fact exists. Shealy v. Winston, 929 F.2d 1009, 1011 (4th Cir. 1991). A genuine issue of fact exists if the evidence presented could lead a reasonable fact-finder to return a verdict in favor of the non-
moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). A court considering a motion for summary judgment must view all facts and draw all reasonable inferences from the evidence before it in a light most favorable to the non-moving party. (Id. at 255.) The proponent of summary judgment "bears the initial burden of pointing to the absence of a genuine issue of material fact." Temkin v. Frederick County Comm 'rs, 945 F.2d 716, 718 (4th Cir. 1991) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)). If the movant carries this burden, then the burden "shifts to the non-moving party to come forward with facts sufficient to create a triable issue of fact." (Id. at 718-19 (citing Anderson, 477 U.S. at 247-48).) A mere scintilla of evidence supporting the non-moving party's case is insufficient to defeat a motion for summary judgment. See, e.g., Shaw v. Stroud, 13 F.3d 791, 798 (4th Cir. 1994); see also Anderson, 477 U.S. at 248 ()
Defendant Klaussner moves for summary judgment on all of Plaintiffs' claims against it in Plaintiffs' second amended complaint. (Docket No. 76.) Klaussner contends that
Plaintiffs cannot recover freight charges as a matter of law because Klaussner signed1 a nonrecourse clause in the bills of lading. (Id.)
It is well settled that a signed non-recourse clause generally relieves the shipper/consignor of liability for freight charges to the carrier if the carrier delivers the shipment to the consignee before it receives payment and without a stipulation of payment following delivery. Illinois Steel Co. v. Baltimore & O.R. Co., 320 U.S. 508, 514 (1944) (); C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 479 (9th Cir. 2000). The plain language of the nonrecourse clause that Klaussner signed for each bill of lading is consistent with this conclusion.
Plaintiffs make several arguments in attempting to avoid the apparent effect of the non-recourse clause at issue in this action. Plaintiffs argue that because the bills of lading were marked both "prepaid" and "non-recourse," Klaussner is still required to pay the "line haul charges," or normal freight charges for a shipment. (Docket No. 79 at 5-9.) A
"prepaid" notation on a bill of lading, when the consignee has already paid its bill to the consignor, means that "the consignee is not liable to the carrier for payment of the freight charges."2 C.A.R. Transp. Brokerage Co., 213 F.3d at 479.
Plaintiffs rely upon Jones Motor Co. v. Teledyne, Inc., 732 F. Supp. 490 (D. Del. 1990). In ...
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