(netherlands) v. Petitioner
| Decision Date | 14 February 2011 |
| Docket Number | No. 08 Civ. 2387(PGG).,08 Civ. 2387(PGG). |
| Citation | 765 F.Supp.2d 472 |
| Parties | AIG EUROPE (NETHERLANDS), N.V., Plaintiff,v.UPS SUPPLY CHAIN SOLUTIONS, INC., Defendant. |
| Court | U.S. District Court — Southern District of New York |
OPINION TEXT STARTS HERE
David Thomas Maloof, Thomas Mark Eagan, Jacqueline M. James, Maloof Browne & Eagan LLC, Rye, NY, for Plaintiff.Vincent M. Deorchis, William Edward Lakis, Deorchis, & Partners, LLP, New York, NY, for Defendant.
Plaintiff AIG Europe (Netherlands), N.V. (“AIG”) asserts contract, bailment, and tort claims in this subrogation action against Defendant UPS Supply Chain Solutions, Inc. (“UPS”) arising out of damage to an x-ray machine during shipment from the Netherlands to San Angelo, Texas. AIG insured the shipment.
UPS has moved for summary judgment concerning Plaintiff's tort claim, and for partial summary judgment as to liability, arguing that pursuant to the contract between the shipper and UPS, its liability is limited to $9,479.61. AIG has cross-moved for summary judgment, arguing that there was no enforceable agreement between the shipper and UPS as to liability, and that in any event any such limitation provision would be unenforceable under the Carmack Amendment, 49 U.S.C. § 14706(d), and the material deviation doctrine.
The Court's consideration of these motions has been hampered by the parties' failure, in their briefing and supporting affidavits and exhibits, to provide many of the most basic facts concerning the relationship between UPS and the shipper—Philips Medical Systems Nederlands, B.V. (“Philips”)—as of March 9, 2004, when the loss occurred. Because the contractual relationship—if any—between UPS and Philips at that time is critical, disputed, and entirely unclear, the parties' motions for summary judgment—except as to Plaintiff's tort claim—will be denied. Defendant's motion for summary judgment concerning Plaintiff's tort claim—which is unopposed—will be granted.
As best as can be gleaned from the record, it appears that at some point prior to 2004, Philips sent various carriers a Request for Quote (“RFQ”).1 The RFQ seeks information from “logistics providers” who can provide “door to room transportation [and] inside delivery services ....” (Pltf. R. 56.1 Stat. ¶ 1; 2 Gill Decl., Ex. 6 at 2) In plain English, Philips appears to have been seeking to select a carrier (or carriers) who could transport or arrange for the transportation of Philips' products from Best, Netherlands, to locations in the United States and Canada. The RFQ seeks extensive information from carriers concerning, inter alia, their facilities, operational capabilities, equipment, manpower, quality control, billing, and pricing. (Gill Deck, Ex. 6) The RFQ also asks responding carriers to list their project teams, and key personnel, and to set forth how they “plan to approach implementation (short and medium term) of the operations” to be undertaken for Philips. ( Id. at 25–26)
The RFQ states that Philips wants the carrier “to manage shipments under Philips transportation contract for both Sea and Airfreight from ... Best [,] Netherlands to customer room in USA or Canada,” and envisions that the selected carrier will “arrange and pay for ... Sea freight ... Airfreight and inland haulage.” (Gill Decl., Ex. 6 at 5) The RFQ contains a “tentative schedule” providing that (1) the RFQ will be sent out by Philips on November 8, 2002; (2) carriers will respond by November 24, 2002; (3) Philips will select a “short list” of carriers by December 9, 2002; (4) carriers will be required to submit “final rates” by December 13, 2002; and (5) Philips will make a “final decision” concerning its “logistics provider” in January 2003. (Gill Decl., Ex. 6 at 2) Whether any or all of these dates were adhered to is not revealed by the record or addressed by the parties.
Emery Air Freight—which later became Menlo World Wide Logistics (“Menlo”), which in turn was purchased by UPS (collectively, “UPS”)—was one of the companies that responded to the RFQ.3 (Pltf. R. 56.1 Stat. ¶¶ 2, 4; Gill Decl., Ex. 6) UPS's response to Philips' RFQ—which includes both Philips' queries and UPS's answers—consumes forty-three pages. The response is undated and unsigned. In its response to the RFQ, UPS confirms that it can provide the services Philips seeks, including “management of Sea Freight and inland haulage.” (Gill Decl., Ex. 6 at 5)
Philips' RFQ contains the following provision concerning liability:
4.10. Liability
Please define your company's liability and responsibility with respect to errors, damages, shortages and total loss and your proposals for extended liability. Our current coverage is $5.00 per pound, per package.
( Id. at 21 (emphasis in original)) UPS (then Emery) responded as follows:
As noted in the scope of this RFQ, shipments will be moved via air from Best Netherlands to USA and Canada, for K–Van[ 4] distribution throughout the USA and Canada. Shipments moved via air will be subject to Emery's standard Terms and Conditions of Contract, section XVI Limitations of Liability of the attached.
Emery's K–Van service will honor Philips' current coverage of $5.00 per pound, per package; however, we will require further clarification as to what “errors” will entail.(Gill Decl., Ex. 6 at 21 (emphasis in original))
What happened after Emery submitted its response to Philips's RFQ is entirely unclear. Whether Emery or one of its successors, Menlo or UPS, was selected to serve as Philips' “logistics provider,” whether Philips agreed to Emery's proposal in whole or in part, whether the parties engaged in further negotiations concerning, for example, the limitation on liability discussed above, whether Emery or its successors performed services for Philips and, if so, on what terms, is not addressed by the parties and is unknown to this Court.5 As discussed below, what is clear is that the parties disagree as to whether the RFQ, and Emery's response, constitute a binding contract.
According to the deposition testimony of Steven Holic, Senior Director of Philips Medical Systems's General Purchasing, Forwarding and Distribution Department, no scope of service contract was entered into after Emery submitted its response to the RFQ, but UPS issued a “standard operating procedure document” (“SOP”) to Philips concerning the services it would provide:
Q. [W]as there a scope of service contract entered into after this invitation to tender an offer was submitted?
A. Not a scope of service contract. But a scope of service which we call standard operating procedure document.
Q. And the standard operating procedure document, is that something that was—was that in place here?
A. Yes.
(Gill Decl., Ex. 1 (Holic Tr.) at 8, 92)
The SOP, which is dated October 24, 2003, is unsigned, has no effective date, and does not address liability. (Eagan Decl., Ex. B; Gill Decl., Ex. 1 (Holic Tr.) at 92–95) Concerning the services UPS would provide, the SOP states, in part:
3. RESPONSIBILITY OF ORIGIN SERVICE CENTER
...
b. Emery Ocean Service is responsible for booking the shipment with Steamship Company, and for transportation to the pier.
...
c. Emery Ocean Service will confirm that goods have been received at the pier....
...
h. Emery Ocean Service must communicate all pertinent information, and any abnormalities with Philips Best ... as soon as they are known ... and the KVAN desk as soon as they are known.
4. RESPONSIBILITY OF KVAN SPECIAL PRODUCTS GROUP
a. KVAN special Products Group will be the primary point of contact for Philips Medical at the United States and ... will coordinate the activities of the delivery crews, Menlo Worldwide Forwarding, and other entities related to delivery execution.
...
i. KVAN special Products Group will prepare a Delivery order with BTT [trucking company] for pickup of container from Maersk and transportation to hospital delivery site location.
...
j. KVAN Special Products Group will coordinate with the destination gateways as to when the freight will be picked up.
...
n. KVAN Special Products Group will arrange for BTT to be at the hospital site one hour prior to scheduled delivery.
....
(Eagan Decl., Ex. B)
The next event addressed by the parties is a January 19, 2004 e-mail from Philips employee Jeroen Van Nistelrooij to numerous Emery, Menlo and, Philips employees concerning the shipment of a Philips cardiovascular x-ray machine from Best, Netherlands, to the San Angelo Community Hospital in San Angelo, Texas. (Damage to this machine occurred later during transport and provides the basis for this lawsuit.) The e-mail reads as follows:
Attached you'll find another “planned order to Bill questionnaire”. By sending you this questionnaire, we ask you to pickup, transport, inside deliver, and unpack a C/V [cardiovascular x-ray] system, consolidate the packing materials with the materials of at least one other shipment and return them to Best.
With Best Regards,
Operations C/V logistic engineer and Planned order to Bill co-leader
....
Whether the parties intended this shipment to be governed by the terms set forth in the RFQ, by the SOP, by a combination of the two documents, or otherwise is not clear. There is no evidence as to Emery/Menlo's response to this e-mail.
In February 2004, UPS “transported” or “arranged for the transportation” of twenty-nine boxes and crates containing the x-ray machine from the Netherlands to the San Angelo Community Hospital in Texas. (Pltf. R. 56.1 Stat. ¶ 17; Def. Resp. to Pltf. R. 56.1 Stat. ¶ 17) The parties dispute whether UPS transported the x-ray machine or merely arranged for its transportation. AIG asserts that UPS hired American President Lines (“APL”)—an ocean carrier—to transport the x-ray machine across the...
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