Heller, Inc. v. United Parcel Service, Inc.

• Decision Date: 08 June 2000
• Citation: 754 A.2d 689
• Parties: TODD HELLER, INC., Appellant, v. UNITED PARCEL SERVICE, INC., Appellee.
• Court: Pennsylvania Superior Court

754 A.2d 689

TODD HELLER, INC., Appellant, v. UNITED PARCEL SERVICE, INC., Appellee.

Superior Court of Pennsylvania.

Argued April 12, 2000.

Filed June 8, 2000.

Howard B. Miller, St. Davids, for appellant.

Gordon A. Einhorn, Harrisburg, for appellee.

Before CAVANAUGH and EAKIN, JJ., and CERCONE, President Judge Emeritus. CERCONE, President Judge Emeritus:

¶ 1 Appellant, Todd Heller Incorporated, challenges the Trial Court's order entering summary judgment in favor of Appellee, United Parcel Service. After review, we affirm.

¶ 2 The learned Trial Judge, The Honorable William F. Moran Jr. of Northampton County, has very ably summarized the facts giving rise to this appeal as follows:

[Appellant] is in the glass recycling business and sells recycled glass for a variety of industrial purposes. In December 1997, [Appellant] became aware that the Indiana Department of Transportation ("INDOT") was soliciting bids from glass suppliers for the purchase of glass beads to be used in making the reflective paint used to paint lines on its state highways. The bid specifications obtained by [Appellant] stated that bidders were required to submit certain documentation and three samples of glass beads to INDOT no later than December 17, 1997.

[Appellant] prepared the documentation and samples. [Appellant] then contacted UPS and made arrangements for four packages to be picked up for shipment on December 16, 1997, one day before the bidding deadline. [Appellant] had an account with UPS and had previously shipped packages via UPS and other carriers at an average of at least four packages per year. There is some suggestion of record that such shipments were significantly more frequent.

As had been arranged, a UPS truck arrived at [Appellant's] facility on December 16, 1997, to pick up the packages. [Appellant] specifically requested next day delivery and actually informed the drivers of the importance of the delivery. The shipping documents were filled out by the UPS drivers. Before UPS's employees left with the four packages, a shipping document was completed for each package. Each of these way bills was signed by ... [Appellant's] office manager. [Appellant's Office Manager] looked at the documents to check that it provided for next day air and to check the address, but she did not check a value for declared value of contents.

The UPS Next Day Air/UPS Worldwide Shipping Document [which the Office Manager signed] is a preprinted form upon which certain information is entered, including information about the shipper, the recipient, the type of service desired, and the declared value of the contents. The document clearly states that the contents are automatically protected up to $100.00. [Appellant's Office Manager] did not declare a greater value because the intrinsic value of the glass samples was about $8.00.

Among the preprinted information on the shipping documents are certain terms and conditions of shipment, including a statement that "[t]he carrier shall not be liable for any special, incidental, or consequential damages." This language appears in very small black type on the front of the form, immediately to the left of the area where ... [the Office Manager] signed each shipping document. The reverse side of the shipping document identically restates this limitation of liability under a paragraph entitled "Responsibility for Loss or Damage." [The Office Manager] did not note the limitation of liability on either side. She missed the small language on the front and although she had the opportunity to read the entire document, she did not read the reverse side.

The following day, December 17, 1997, UPS delivered three of the four packages to INDOT. The fourth package, one of the boxes containing sample glass beads, was not delivered until the following day, December 18, 1997. INDOT later informed [Appellant] that it did not consider [Appellant's] bid to be responsive to the bid solicitation due to the fact that the last package did not arrive until after the bid deadline. INDOT is unable to say that [Appellant] would have been awarded the contract had the box arrived in a timely manner. While Appellant's bid was apparently the lowest bid received, the bid specifications also required that the bead samples meet certain criteria and because the Department of Transportation never tested [Appellant's] samples, it [is] not a certainty that these specifications were met.

Trial Court Opinion, filed 9/30/99 at 2-3.

¶ 3 As a result of losing the bid, Appellant commenced the present action against UPS for negligently failing to deliver the package containing the glass beads in a timely manner. Appellant sought $395,581.54 in pecuniary damages, which is the value of the profits that it contends it would have earned if it had been awarded the contract by the Indiana Department of Transportation. Both parties subsequently filed cross-motions for summary judgment. Thereafter the Trial Court granted UPS's motion for summary judgment and entered an order limiting Appellant's recovery to $100.00, the amount provided for in the shipping invoice when no greater value had been declared by the shipper. Appellant filed a timely notice of appeal of this order.

¶ 4 Appellant presents one issue to our Court for our review:

Is a disclaimer of liability for consequential damages in a shipping contract enforceable as a matter of law even though it is deliberately obscure and does not put the shipper on reasonable notice that there is a limitation of liability for consequential damages?

Appellant's Brief at 3.

¶ 5 Our standard of review of a grant of a motion for summary judgment is well settled. We will only reverse the trial court's entry of summary judgment in instances where there was an abuse of discretion or an error of law by the trial court. Sebelin v. Yamaha Motor Corp., 705 A.2d 904, 906 (Pa.Super.1998). Summary judgment may be properly entered only where (1) there is no genuine issue of material fact as to a necessary element of the cause of action which could be established by additional discovery or an expert report, or (2) after completion of discovery and production of expert reports, an adverse party who will bear the burden of proof at trial has failed to produce evidence of facts essential to the cause of action. Campanaro v. Pennsylvania Electric Company, 738 A.2d 472, 475-476 (Pa.Super.1999), appeal denied, ___ Pa. ___, 751 A.2d 183 (Pa. 2/1/2000) citing Pa.R.C.P. 1035.2

¶ 6 An appellate court's scope of review of the grant of a motion for summary judgment is plenary. Washington v. Baxter 553 Pa. 434, 441, 719 A.2d 733, 737 (1998). As a result,

[I]n making [the] determination [of whether the entry of summary judgment was proper], we must examine the record in the light most favorable to the non-moving party, who is entitled to the benefit of all reasonable inferences. All doubts as to the existence of a factual dispute must be resolved in favor of the non-moving party and the entry of summary judgment is appropriate only in the clearest of cases.

Borough of Mifflinburg v. Heim, 705 A.2d 456, 465 (Pa.Super.1997), appeal denied, ___ Pa. ___, ___ A.2d. ___, 1999 WL 147921 (1999); Kingston Coal Co. v. Felton Mining Co., 456 Pa.Super. 270, 690 A.2d 284, 287 (1997), appeal denied, 549 Pa. 702, 700 A.2d 441 (1997).

¶ 7 As the parties to this appeal and the Trial Court all agree, the liability of an interstate common carrier such as United Parcel Service for the loss, damage or delay of goods in transit is determined by Federal common law. First Pennsylvania Bank v. Eastern Airlines Inc., 731 F.2d 1113, 1115 (3d Cir.1984); Arkwright-Boston Mfrs. Mut. Ins. Co. v. Great Western Airlines, Inc., 767 F.2d 425, 427 (8th Cir.1985); McCall-Thomas Engineering Co. v. Federal Express Corp., 81 F.3d 28, 30 (4th Cir.1996); Uniden v. Federal Express Corp., 642 F.Supp. 263, 265 (M.D.Pa.1986); Commodities Recovery Corp. v. Emery Worldwide, 756 F.Supp. 210, 212 (D.C.N.J.1991); St. Paul Fire & Marine Ins. v. Federal Express Corp., 145 Misc.2d 801, 548 N.Y.S.2d 422, 424 (1989); Burlington Air Express Inc. v. Georgia Pacific Corporation, 211 Ga.App. 113, 438 S.E.2d 97, 98 (1993); Butler Intern., Inc. v. Central Air Freight, Inc., 102 N.C.App. 401, 402 S.E.2d 441, 445 (1991).

¶ 8 Federal common law has long recognized that a shipper and carrier may contractually agree to a specific value for the property the shipper wishes the carrier to deliver. Once there is an agreed upon value of the shipped property this in turn determines the shipping rate, since the shipping cost is contingent on the condition that the carrier's liability for loss, damage, or delay will be limited to the extent of the shipped property's agreed upon valuation. This is known as the "released value doctrine." This doctrine enables the carrier to limit its liability for actual damages resulting from its negligence. Husman v. Purolator Courier, 832 F.2d 459, 461 (8th Cir.1987).

In order for a [carrier's] limitation of liability to be valid under the "released value doctrine," the carrier must present the shipper with a reasonable opportunity to declare a value for the shipment above the maximum value set by the carrier, pay an additional fee, and thereby be insured at a higher rate should the shipment go awry. It is not necessary that an employee of the carrier explain the option to declare a higher value to the shipper. Rather, the carrier must provide only reasonable notice of the opportunity to declare a higher value.

Id. (citations omitted); Norton v. Jim Phillips Horse Transportation, Inc., 901 F.2d 821, 825 (10th Cir.1989); Accord Hampton v. Federal Express, 917 F.2d 1119, 1121 (8th Cir.1990). "[T]he obligation of the carrier must be determined solely from the recitals of the written contract itself." Uniden, 642 F.Supp. at 266. The specific provisions limiting a carrier's liability are found in the bill of lading or shipping invoice, which serves as the...