King Jewelry, Inc. v. Federal Exp. Corp.
| Decision Date | 13 September 2001 |
| Docket Number | No. CV 00-13401-RC.,CV 00-13401-RC. |
| Citation | 166 F.Supp.2d 1280 |
| Parties | KING JEWELRY, INC. v. FEDERAL EXPRESS CORP., et al. |
| Court | U.S. District Court — Central District of California |
Joseph Daneshrad, Los Angeles, CA, for Plaintiff.
Robert J. Taitz, Shane & Taitz, San Francisco, CA, for Defendant.
PROCEEDINGS: (IN CHAMBERS) DEFENDANT'S MOTION FOR PARTIAL SUMMARY JUDGMENT
On August 16, 2001, defendant Federal Express Corporation filed a notice of motion and motion for partial summary judgment on the ground "FedEx is ... entitled to judgment ... as a matter of law as the contract of carriage governing the shipment at issue limits plaintiff's recovery, if any, to a maximum of $500.00," Notice of Motion at 2:5-7, with a supporting memorandum of points and authorities, the declaration of Steve T. Foster, with exhibits, and a separate statement of undisputed facts. On August 29, 2001, plaintiff King Jewelry, Inc. filed a memorandum of points and authorities in opposition to defendant's motion for partial summary judgment, with supporting declarations and exhibits, objections to evidence submitted by defendant in connection with its motion for partial summary judgment, and a statement of genuine issues. On September 5, 2001, defendant FedEx filed its reply and the supplemental declaration of Steve T. Foster, with exhibits. The parties have consented to proceed before Magistrate Judge Rosalyn M. Chapman pursuant to 28 U.S.C. § 636(c).
Due to the closure of the federal courthouse on September 12, 2001, and pursuant to Rule 78 and Local Rule 7.11, this matter is decided in Chambers without oral argument.
On November 21, 2000, plaintiff King Jewelry, Inc., a California corporation ("King"), filed a complaint against defendant Federal Express Corporation ("FedEx") in the Superior Court for the County of Los Angeles, setting forth three claims: (1) breach of contract; (2) violation of Insurance Code; and (3) tortious breach of contract. King seeks compensatory damages in the amount of $37,000.00, general damages according to proof, punitive damages in the amount of $1 million, interest, attorney's fees, and other relief. On December 26, 2000, the state court action (case no. BC 240549) was removed to this court on diversity of citizenship and federal question grounds, 28 U.S.C. §§ 1331 and 1332. On January 3, 2001, FedEx answered the complaint and raised eight affirmative defenses.
The evidence submitted by the parties establishes the following undisputed facts:
1. On an undetermined date, Yehouda Hanasab, president and sole shareholder of King, bought a pair of marble and brass statues with candelabra from Elegant Reflections, a purveyor of jewelry and object d'art located in Florida, for $37,500.00. Hanasab Decl., ¶¶ 2-3, Exh. 5.
2. Elegant Reflections hired Raymond Reppert, a "professional packager and crater" with 12 years experience, to package, crate and ship the statues and candelabra to King. Hanasab Decl., ¶ 4; Reppert Decl., ¶ 1.
3. Reppert packaged and crated the statues and candelabra in three wooden crates, with directional markings and signs stating "Fragile-Handle with Care." Reppert Decl., ¶¶ 3-4.
4. On February 5, 2000, Reppert shipped the statues and candelabra via FedEx airbill no. 804817669184 ("King airbill"), which stated that the shipper was Raymie's, 110 N.W. First Street, # 9, Dania, FL 33004 and the recipient was King Jewelry, 653 S. Hill Street, Los Angeles, CA 90014. Foster Decl., ¶ 4, Exh. B;1 Reppert Decl., ¶¶ 3, 11, Exh. 1.
5. Reppert or the shipper noted on the King airbill that the shipment consisted of three packages, weighing 344 pounds, with a declared value of $37,000.00. Ibid.
6. To ship the statues and candelabra, Reppert paid FedEx $684.50 (transportation charge in the amount of $485.04, declared value charge in the amount of $185.00, and fuel surcharge in the amount of $14.55), and in exchange received invoice no. 7-868-75298. Reppert Decl., ¶¶ 7, 12, Exh. 2.2
7. The statues and candelabra were delivered to King on February 7, 2000, at which time King discovered that both statues had been broken in transit. Foster Decl., ¶ 12, Exh. E; Hanasab Decl., ¶ 6.
8. FedEx was originally granted an air carrier certificate by the Federal Aviation Administration on March 7, 1972, and the certificate was reissued on May 14, 1998. Foster Decl., ¶ 3, Exh. A.
Federal Rule of Civil Procedure 56(c) authorizes the granting of summary judgment "if 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." The moving party bears the initial burden of identifying the elements of the claim in the pleadings, or other evidence, which the moving party "believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986); Adickes v. S.H. Kress and Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970). The burden then shifts to the nonmoving party to establish, beyond the pleadings, that there is a genuine issue for trial. Celotex Corp., 477 U.S. at 324, 106 S.Ct. at 2553.
"[I]n ruling on a motion for summary judgment, the nonmoving party's evidence is to be believed, and all justifiable inferences are to be drawn in [that party's] favor." Hunt v. Cromartie, 526 U.S. 541, 552, 119 S.Ct. 1545, 1551-52, 143 L.Ed.2d 731 (1999) (citation and internal quotation marks omitted); Diruzza v. County of Tehama, 206 F.3d 1304, 1314 (9th Cir.2000), cert. denied, 531 U.S. 1035, 121 S.Ct. 624, 148 L.Ed.2d 533 (2000). However, more than a "metaphysical doubt" is required to establish a genuine issue of material fact. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986); Brinson v. Linda Rose Joint Venture, 53 F.3d 1044, 1048 (9th Cir.1995). Rather, "the nonmoving party must come forward with `specific facts showing that there is a genuine issue for trial.'" Matsushita, 475 U.S. at 587, 106 S.Ct. at 1356 (citation omitted).
Federal Express is a federally certified all-cargo air carrier operating under the authority granted it by the Federal Aviation Administration. Federal Express Corp. v. Cal. Pub. Util. Comm'n, 936 F.2d 1075, 1076 (9th Cir.1991), cert. denied, 504 U.S. 979, 112 S.Ct. 2956, 119 L.Ed.2d 578 (1992); Finding 8. As such, FedEx's liability for the loss of, or damage to, goods shipped in interstate transit is governed by federal common law. Read-Rite Corp. v. Burlington Air Express, Ltd. ., 186 F.3d 1190, 1195-98 (9th Cir.1999); Deiro v. American Airlines, Inc., 816 F.2d 1360, 1365 (9th Cir.1987); Sam L. Majors Jewelers v. ABX, Inc., 117 F.3d 922, 926-29 (5th Cir.1997); see also Insurance Co. of North America v. Federal Express Corp., 189 F.3d 914, 926 (9th Cir.1999) (Wm.Fletcher, J., Concurring) (); Kemper Ins. Cos. v. Federal Express Corp., 252 F.3d 509, 512 (1st Cir.2001) . In fact, "state law regulating the scope of air carrier liability for loss or damage to cargo is preempted by the [Airline Deregulation Act of 1978 (`ADA')]." Read-Rite, 186 F.3d at 1197; see also Insurance Co. of North America, 189 F.3d at 925 . As the Ninth Circuit has held:
Under established federal common law, if a carrier wishes to enforce a limited liability provision, its contract must offer the shipper (1) reasonable notice of limited liability, and (2) a fair opportunity to purchase higher liability. Limited liability provisions are prima facie valid if the face of the contract (or, in this case, air waybill) recites the liability limitation and "the means to avoid it." The burden then shifts to the shipper to prove that it did not have a "fair opportunity" to purchase greater liability coverage.
Read-Rite, 186 F.3d at 1198 (citations omitted).
Here, King, as the assignee of Reppert or Raymies's rights under the shipping agreement, Reppert Decl., ¶ 10, is able to enforce the contract as Raymies would. Lite-On Peripherals, Inc. v. Burlington Aire Express, Inc., 255 F.3d 1189, 1192 (9th Cir.2001). The reverse side of the King airbill sets forth the terms and conditions of shipping under the King airbill, and by those terms and conditions, specifically incorporates FedEx's Service Guide. Foster Decl., ¶¶ 4-5, Exhs. B-C. The terms and conditions of the King airbill provide for limitations on FedEx's liability, and specifically limit "items of extraordinary value" to $500.00. Id. Further, "items of extraordinary value" are defined to "include shipments containing such items as artwork, jewelry, furs, precious metals, negotiable instruments, and other items listed in our Service Guide." Id. The March 15, 1999, edition of the FedEx Service Guide is incorporated into the King airbill. Foster Decl., ¶ 6, Exh. D. That FedEx Service Guide provides, in relevant part:
Declared Value and Limits of Liability
A. The declared value of any shipment represents our maximum liability in connection with a shipment.... [¶] Exposure to and risk of any loss in excess of the declared value is either assumed by the shipper or transferred by the shipper to an insurance carrier through the purchase of an insurance policy. You should contact an insurance agent or broker if insurance coverage is desired. WE DO NOT...
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