Oak Harbor Freight Lines v. Sears Roebuck & Co.
| Decision Date | 02 March 2006 |
| Docket Number | No. C05-284Z.,C05-284Z. |
| Citation | 420 F.Supp.2d 1138 |
| Court | U.S. District Court — Western District of Washington |
| Parties | OAK HARBOR FREIGHT LINES, INC., a Washington Corporation, Plaintiff, v. SEARS ROEBUCK & CO., d/b/a Sears Contract Sales, a foreign Corporation; and National Logistics Corporation, a foreign corporation, Defendants. |
Kenneth W. Hart, Kara Michele Craig, Larson Hart & Shepherd, Seattle, WA, for Plaintiff.
Jeremy Robert Larson, Foster Pepper & Shefelman, Jody K. Reich, Stephen Leo Day, Steven William Block, Taro Kusunose, Betts Patterson & Mines, Seattle, WA, Jose A. Lopez, Jr., Paula Enid Litt, Schopf & Weiss, Chicago, IL, Daniel C. Sullivan, Matthew P. Barrette, Sullivan Hincks & Conway, Oak Brook, IL, for Defendants.
This case comes before the Court on cross-motions for summary judgment filed by Plaintiff Oak Harbor Freight Lines, Inc. ("Oak Harbor"), docket no. 55, Defendant Sears, Roebuck & Co. ("Sears"), docket no. 54, and Defendant National Logistics Corporation ("NLC"), docket no. 58.1 Having considered the briefs and declarations in support of and in opposition to the motions, and the oral argument of counsel on February 24, 2006, the Court now enters the following Order, holding Sears and NLC jointly and severally liable to Oak Harbor for $426,417.94, and holding NLC liable to Sears for $227,202.50 in the event Oak Harbor collects at least $227,202.50 from Sears on Oak Harbor's judgment against Sears and NLC.
Plaintiff Oak Harbor is a Washington corporation and a licensed motor carrier authorized under the Federal Motor Carrier Safety Act, 49 U.S.C. § 13102(12),2 to provide intrastate and interstate freight transportation services. Am. Compl., docket no. 47, at 1 ¶¶ 1.1, 2.1. Defendant Sears is a New York corporation that sells appliances and tools to builders and other bulk purchasers. Sears' Answer to Pl.'s Am. Compl., docket no. 50, at 2 ¶ 1.2; Sears' Cross-claim, docket no. 31, ¶ 7; Hart Decl., docket no. 56, Ex. E (Reed Dep.) at 18-19. Defendant NLC is an Illinois corporation and a licensed registered property broker authorized under the Federal Motor Carrier Safety Act, 49 U.S.C. § 13102(2),3 to arrange transportation by motor carrier for compensation. NLC's Answer to Pl.'s Am. Compl., docket no. 52, at 2 ¶ 1.3; NLC's Answer to Sears' Cross-claim, docket no. 35, ¶ 5.
The parties have a long history of doing business with each other, as described in more detail below. In summary, NLC performed brokerage services4 for Sears in arranging for Oak Harbor to haul Sears' freight. NLC also performed non-brokerage services5 for Sears in auditing Oak Harbor's freight bills and collecting funds from Sears to pay Oak Harbor's freight bills. Staton Decl., docket no. 59, ¶ 7.
Oak Harbor is suing Sears and NLC to recover $426,417.94 that all parties agree Oak Harbor is owed for transporting Sears' freight between approximately August 1, 2004, and November 12, 2004.6 Am. Compl., docket no. 47, ¶ 2.5. Oak Harbor incurred these freight charges in connection with 3,386 shipments that Oak Harbor billed to NLC. Hart Decl., docket no. 56, Ex. F (Fallon Dep.) at 30; Hobby Decl., docket no. 57, ¶¶ 3, 5. Sears and NLC each argue that the other party is liable to Oak Harbor for the payment. Sears argues that a contract signed in 1992 by NLC and Oak Harbor makes NLC solely liable for Oak Harbor's freight charges. NLC argues that the bills of lading used in connection with the shipments arranged by NLC constitute contracts between Sears and Oak Harbor and that these contracts make Sears solely liable for Oak Harbor's freight charges. As discussed below, the Court concludes that both Sears and NLC are liable under their respective contracts with Oak Harbor.
Sears has filed a cross-claim against NLC for $227,202.50, an amount that Sears asserts it has already paid NLC to cover Oak Harbor's freight charges. Sears' Cross-Claim, docket no. 31, at 4-5 ¶ 18; Hart Decl., docket no. 56, Ex. F (Fallon Dep.) at 29-31 (). NLC responds to Sears' cross-claim by asserting that Sears owes NLC over $2.9 million for freight hauling services rendered between 1995 and 2004. Staton Decl., docket no. 59, ¶¶ 35-43, Exs. C and D (NLC's invoices to Sears).
In 1989, Sears began using NLC as a broker to arrange inbound freight transportation services. Hart Decl., docket no. 56, Ex, A (Oct. 4, 1989 and Nov. 7, 1989 Letters of Understanding7) and Ex. G (Staton Dep.) at 11-12; Staton Decl., docket no. 59, ¶¶ 4-5. As the broker for inbound shipments, NLC identified carriers to move Sears' freight from Sears' vendors, such as GE, Whirlpool and Gold Star, to Sears' warehouses. Hart Decl., docket no. 56, Ex. G (Staton Dep.) at 12; Sears' Exhibits, docket no. 54, Ex. C (Francesconi Dep.) at 14, and Ex. E (Chapman Dep.) at 11.
In approximately 1990, Sears set up nine regional "mixing" warehouses (i.e., distribution centers) around the country, including a Seattle-based mixing warehouse, to accept inbound shipments from vendors and to arrange outbound shipments to Sears' customers. Sears' Exhibits, docket no. 61, Ex. A (Reed Dep.) at 225-227, and Ex. C (Francesconi Dep.) at 20; Hart Decl., docket no. 56, Ex. C (Baxley Dep.) at 155-57, and Ex. E (Reed Dep.) at 34-38, 172; Steinbach Decl., docket no. 61, ¶ 2. Sears owned the Seattle warehouse, and another company, APL Logistics, managed it. Hart Decl., docket no. 56, Ex. C (Baxley Dep.) at 12, and Ex. D (Steinbach Dep.) at 157.
In late 1991 or early 1992, Sears expanded the scope of brokerage services that it wanted NLC to provide, and Sears began using NLC as a broker to arrange outbound freight transportation services for its regional mixing warehouses around the country, including the Seattle warehouse. Hart Decl., docket no. 56, Ex. E (Reed Dep.) at 170-72, 181-82. As the broker for outbound shipments, NLC identified carriers to move Sears' freight from Sears' warehouses to freight transportation and delivery companies known as "crossdocks."8 Hart Decl., docket no. 56, Ex. D (Steinbach Dep.) at 54, Ex. E (Reed Dep.) at 177, and Ex. G (Staton Dep.) at 16, 19; Sears' Exhibits, docket no. 54, Ex. E (Chapman Dep.) at 12. NLC negotiated rates with the carriers, including Oak Harbor, on an annual basis. Hart Decl., docket no. 56, Ex. H (Hartmann Dep.) at 35; Staton Decl., docket no. 59, ¶ 16; Sears' Exhibits, docket no. 54, Ex. C (Francesconi Dep.) at 184, Ex. F (Hartmann Dep.) at 152, Ex. H (Jensen Dep.) at 47, and Exs. 15-17, 27, 34-35, 99, 131. NLC never operated as a motor carrier for Sears. Staton Decl., docket no. 59, ¶ 8. In 2001, Sears and NLC discussed a new written contract, but Sears never signed it. Id. ¶¶ 10-13, Ex. B; Barrette Decl., docket no. 65, Ex. C (correspondence); Hart Decl., docket no. 56, Ex. D (Steinbach Dep.) at 72-73.
In late 1991 or early 1992, when Sears began using NLC to arrange outbound shipments from Sears' Seattle warehouse, Sears instructed NLC to work with Oak Harbor. Hart Decl., docket no. 56, Ex. C (Baxley Dep.) at 19-20, 85, and Ex. G (Staton Dep.) at 26.9 Sears owned the goods that Oak Harbor hauled. Hart Decl., docket no. 56, Ex. C (Baxley Dep.) at 59, Ex. D (Steinbach Dep.) at 166, and Ex. E (Reed Dep.) at 219. On January 8, 1992, Oak Harbor and NLC signed a "National Logistics Corporation Carrier Contract" (the "Carrier Contract"). Hobby Decl., docket no. 57, Ex. B. Sears did not sign the Carrier Contract. Id. The Carrier Contract provides, in pertinent part:
This AGREEMENT between NATIOAL LOGISTICS CORPORATION (BROKER/SHIPPER), operating under ICC Broker No. MC205436 and Oak Harbor Freight Lines, Inc. (CARRIER), MC # 139763 engaged in the business of conducting the transportation of regulated commodities in Interstate Commerce over public highways, provides that NTIONAL LOGISTICS CORPORATION will offer a series of shipments to the CARRIER, which the CARRIER agrees to transport.... BROKER/SHIPPER and CARRIER agree rates governing shipments will be established to meet the schedules verbally agreed upon and verbal agreement will be reduced to writing by CARRIER submitting its invoice to BROKER/SHIPPER. SHIPPER agrees to pay CARRIER within a predetermined time from date of receipt regardless whether or not BROKER/SHIPPER has been paid for movement.... This AGREEMENT shall be effective on the date it is signed and will remain in full force and effect from the signing date for twelve (12) months. Agreement shall be automatically extended for successive twelve (12) month terms or until canceled by either party by giving written notice to the other party at least thirty (30) days prior to the date of termination.
Id. (emphasis added). The Carrier Contract thus identifies NLC as the "Broker/Shipper" and Oak Harbor as the "Carrier." Id. The Carrier Contract does not define "Shipper." Nowhere does the Carrier Contract mention Sears by name. Id. Sears had no input into the Carrier Contract. Sears' Exhibits, docket no. 54, Ex. I (Staton Dep.) at 56.
The parties used two different bills of lading for shipments arranged by NLC: (1) the Sears-generated bill of lading for outbound shipments, and (2) the Oak Harbor-generated bill of lading for return shipments.
The majority of the shipments for which Oak Harbor is seeking payment were outbound shipments arranged by NLC. A typical transaction for an outbound shipment transpired as follows. Sears received a purchase order from a customer and entered the data into Sears' computer system in Augusta, Georgia. Hart Decl., docket no. 56, Ex. C (Baxley Dep.) at 11-12, and ...
To continue reading
Request your trial
-
CSX Transp., Inc. v. Ken's Foods, Inc.
...441 ). When a bill of lading is marked "collect," the consignee is liable for freight charges. Oak Harbor Freight Lines v. Sears Roebuck & Co., 420 F.Supp.2d 1138, 1148 (W.D. Wash. 2006) ; see also Lee v. Arrowpac, Inc., 179 B.R. 10, 13 (D.P.R. 1995) ("A stamp of 'collect freight' on a bill......
-
Oak Harbor Freight Lines, Inc. v. Sears Roebuck
...FACTUAL AND PROCEDURAL HISTORY The district court's opinion recites the facts in detail. Oak Harbor Freight Lines, Inc. v. Sears Roebuck & Co., 420 F.Supp.2d 1138, 1140-45 (W.D.Wash.2006). Because the facts are uncontested, we rely on the district court's Oak Harbor, a Washington corporatio......
-
O2cool, LLC v. Tsa Stores, Inc. (In re Tsawd Holdings, Inc.)
...not required to obey O2Cool's Stop Shipment Notices under section 2–705(3)(d). See generally Oak Harbor Freight Lines, Inc. v. Sears Roebuck & Co., 420 F.Supp.2d 1138, 1148 (W.D. Wash. 2006) ("The bill of lading is the basic transportation contract between the shipper-consignor and the carr......
-
Phx. Capital Grp., LLC v. W. Express Inc.
...signed bills of lading with Oak Harbor, in a similar position as Phoenix in the instant case, creating written contracts. 420 F. Supp. 2d 1138, 1143-44(W.D. Wash. 2006). Oak Harbor then billed NLC, in a similar position to Western in the instant case, and Oak Harbor expected to be paid by N......