Man Roland, Inc. v. Kreitz Motor Exp., Inc.

• Decision Date: 26 January 2006
• Docket Number: No. 04-20982.,04-20982.
• Citation: 438 F.3d 476
• Parties: MAN ROLAND, INC., Plaintiff-Appellant, v. KREITZ MOTOR EXPRESS, INC., et al., Defendants, ASCO USA, LLC, doing business as ASCO Freight Management, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

438 F.3d 476

MAN ROLAND, INC., Plaintiff-Appellant, v. KREITZ MOTOR EXPRESS, INC., et al., Defendants ASCO USA, LLC, doing business as ASCO Freight Management, Defendant-Appellee.

No. 04-20982.

United States Court of Appeals, Fifth Circuit.

January 26, 2006.

John Hatchett McFarland (argued), Winstead, Sechrest & Minick, Houston, TX, for Plaintiff-Appellant.

Michael W. Magee, Shannon Robbie Ramirez (argued), Lisa Causey Mayr, Hays, McConn, Rice & Pickering, Houston, TX, for Defendants.

Appeal from the United States District Court for the Southern District of Texas.

Before REAVLEY, HIGGINBOTHAM and GARZA, Circuit Judges.

EMILIO M. GARZA, Circuit Judge:

Plaintiff-Shipper MAN Roland Inc. ("MAN") appeals from the district court's grant of summary judgment in favor of Defendant-Carrier ASCO USA, L.L.C. ("ASCO"), holding ASCO not liable for weather-related damage to a printing press during shipment.

I

MAN, a distributor of commercial printing presses, contracted for the sale of a printing press to Texas Tech University ("Texas Tech") in Lubbock, Texas. MAN retained Kreitz Motor Express, Inc., d/b/a KMX International ("KMX"), who hired ASCO to package, load, and transport the press from the Port of Houston to Lubbock. ASCO, in turn, hired Kellogg Brown & Root, d/b/a Joe D. Hughes Transportation ("Joe D. Hughes"), to provide transportation by flatbed trailer.

The press was broken down into twenty-two separate packages; some of the press pieces were in crates while others were enclosed in metallic vacuum packaging. Although the crates could be transported safely aboard a flatbed trailer, ASCO recommended that the vacuum-packaged pieces be shipped separately by covered van or, if transported by flatbed trailer, that they be covered with a "hood box." It feared that, absent such protections, the vacuum packaging would tear in the heavy winds and rain expected during the trip to Lubbock and expose the press to the elements. MAN declined this recommendation. Instead, MAN requested that the trailer be "properly tarped."

As requested, ASCO employees placed the vacuum-packaged press pieces on a flatbed trailer, and both Joe D. Hughes and ASCO employees covered them with multiple canvas and nylon tarpaulins. During the trip to Lubbock, rain and heavy winds buffeted the trailer. Upon arrival, Texas Tech discovered tears in the vacuum packaging, determined that the press was damaged, and refused to accept delivery.

MAN sued ASCO, KMX, and Joe D. Hughes in district court, alleging a violation of the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706 (1996) (formerly codified at 49 U.S.C. § 20(11) and 49 U.S.C. § 11707) ("Carmack Amendment"), breach of contract, and common law negligence.¹ ASCO moved for summary judgment, arguing that federal law preempted the common law claim and that it was not liable for damages under the Carmack Amendment because: (1) it was not negligent in loading, strapping, or covering the press; and (2) MAN caused the damage to the printing press by demanding the use of tarpaulins. MAN opposed ASCO's motion and filed a cross-motion for summary judgment. Acknowledging that the Carmack Amendment provided its exclusive remedy, MAN nevertheless argued that ASCO's motion should be denied and its motion granted because: (1) MAN had established its prima facie case under the Carmack Amendment; and (2) ASCO could not meet its burden of proving both that it was free from negligence and that MAN was the sole cause of the damage to the press.

The district court granted ASCO's motion for summary judgment without opinion, but did not expressly dispose of MAN's cross-motion for summary judgment. The district court later denied MAN's motion for reconsideration "[b]ecause ASCO transported the press as MAN Roland had instructed." It also denied MAN's motion for findings of fact and conclusions of law. The district court entered final judgment and MAN appeals.

II

MAN contends that the district court's grant of summary judgment should be reversed because ASCO failed to meet its burden under the Carmack Amendment to show that it was free from negligence and that MAN was the sole cause of the damage to the press.

We review the district court's order granting summary judgment de novo, applying the same legal standard as the district court. Hoskins v. Bekins Van Lines, 343 F.3d 769, 778 (5th Cir.2003) (citing Mowbray v. Cameron County, Tex., 274 F.3d 269, 278 (5th Cir.2001)); Wyatt v. Hunt Plywood, Co., 297 F.3d 405, 408 (5th Cir.2002). We affirm the judgment if there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. FED.R.CIV.P. 56(c). In determining whether there is a dispute regarding a material fact, we consider all the evidence in the record but do not make credibility determinations or weigh the evidence. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000). In reviewing the evidence, "all justifiable inferences will be made in the nonmoving party's favor." Morris v. Covan World Wide Moving, Inc., 144 F.3d 377, 380 (5th Cir. 1998) (citing Anderson v. Liberty Lobby Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)).

The Carmack Amendment to the Interstate Commerce Act provides that "[a] carrier . . . [is] liable . . . for the actual loss or injury to the property caused by (A) the receiving carrier, (B) the delivering carrier, or (C) another carrier over whose line or route the property is transported. . . ." 49 U.S.C. § 14706(a)(1). To recover, a shipper must establish a prima facie case of negligence by demonstrating: (1) delivery of the goods in good condition; (2) receipt by the consignee of less goods or damaged goods; and (3) the amount of damages. Hoskins, 343 F.3d at 778; Accura Sys., Inc. v. Watkins Motor Lines, Inc., 98 F.3d 874, 877 (5th Cir.1996); Johnson & Johnson v. Chief Freight Lines Co., 679 F.2d 421, 421 (5th Cir.1982). If the shipper establishes a prima facie case,² there is a rebuttable presumption of negligence. Frosty Land Foods Int'l v. Refrigerated Transp. Co., 613 F.2d 1344, 1346-47 (5th Cir.1980). The carrier can overcome this presumption by showing that it was free from negligence and that the damage was due to the inherent nature of the goods or attributable to an act of God, public enemy, the shipper, or public authority. Mo. Pac. R.R. v. Elmore & Stahl, 377 U.S. 134, 137, 84 S.Ct. 1142, 12 L.Ed.2d 194 (1964).

A

ASCO argues that it was not negligent because "it did everything it could have done to protect the press given MAN Roland's instructions" to use an unsuitable method of transport—flatbed trailers covered by tarpaulins. ASCO contends that, as a matter of law, it was not negligent because no amount of care would have protected the press from damage.

ASCO relies on A.J. Tebbe & Sons Co. v. Brown Express, 161 Tex. 456, 341 S.W.2d 642 (1961), in which the Supreme Court of Texas stated in dicta that "[t]he shipper who knowingly accepts and uses an unsuitable car supplied by the carrier instead of requesting and obtaining a proper vehicle when the latter course is reasonably available to him is deemed in law to have selected the one used and cannot subject the carrier to liability for damages. . . ." Id. at 648. ASCO's reliance on A.J. Tebbe & Sons is wholly misplaced.

First, A.J. Tebbe & Sons is state law and we have found no federal case that has held that a carrier is relieved of its duty of care under the Carmack Amendment under these circumstances. Second, ASCO's argument fails because it rests on the faulty premise that an instruction to use an unsuitable means of transport automatically relieves a carrier of its duty to exercise ordinary care. Under Elmore & Stahl, "the burden of proof is upon the carrier to show . . . that it was free from negligence. . . ." Id. at 138, 84 S.Ct. 1142. This requires proof that the carrier "exercise[d] reasonable care[] under the circumstances." Federated Dep't Stores v. Brinke, 450 F.2d 1223, 1227 (5th Cir.1971). MAN's instruction to use allegedly "unsuitable" tarpaulins was but one such circumstance. Advised of MAN's choice, ASCO had a continuing obligation to act reasonably, under the prevailing circumstances, to prevent damage to the press in whole or in part. See Gordon H. Mooney, Ltd. v. Farrell Lines, Inc., 616 F.2d 619, 625 (2d Cir.1980) (holding that shipper negligence does not absolve a carrier of liability if damage would not have occurred but for the "concurrent fault" of the carrier); Johnson v. Chicago, M., St. P. & P. R.R., 400 F.2d 968, 972 (9th Cir.1968) ("[I]f the carrier's negligence mingles with the excepted cause as an active or cooperating cause, there is liability on the carrier.").³ Governed only by MAN's instruction to "properly tarp[]" the load, ASCO was obliged to "furnish suitable equipment" and exercise reasonable care in selecting tarpaulins and attaching them to the trailer. Federated Dep't Stores, 450 F.2d at 1226.⁴

Moreover, ASCO failed to establish that the tarpaulins were patently unsuitable as contemplated in A.J. Tebbe & Sons. Clearly, the summary judgment record contains some evidence that tarpaulins would not protect vacuum-packaged items in stormy conditions. Specifically, an ASCO employee testified that he had never shipped vacuum-packaged equipment protected only by tarpaulins. Also, a Joe D. Hughes employee testified that the ideal method for shipping vacuum-packaged equipment is with hood boxes or covered vans and that covering the press with tarpaulins in a manner different from that employed would not have prevented damage to the press. Although MAN does not dispute that covered vans and hood boxes would have provided greater protection from the rain and wind, it contends that an appropriate combination of tarpaulins and related materials would have afforded sufficient protection from the elements.⁵ MAN produced evidence establishing that it had used...