Peter Condakes Co., v. Southern Pacific Co.

• Citation: 512 F.2d 1141
• Decision Date: 27 March 1975
• Docket Number: 74-1607,Nos. 74-1606,s. 74-1606
• Parties: PETER CONDAKES COMPANY, INC., Plaintiff-Appellee, v. SOUTHERN PACIFIC COMPANY et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1141

512 F.2d 1141

PETER CONDAKES COMPANY, INC., Plaintiff-Appellee, v. SOUTHERN PACIFIC COMPANY et al., Defendants-Appellants.

Nos. 74-1606, 74-1607.

United States Court of Appeals, Seventh Circuit.

Argued Jan. 10, 1975.

Decided March 27, 1975.

Anna M. Kelly, Chicago, Ill., for appellant.

Melvin S. Cahan, Chicago, Ill., for appellee.

Before HASTINGS, Senior Circuit Judge, SWYGERT and CUMMINGS, Circuit Judges.

CUMMINGS, Circuit Judge.

Plaintiff is a wholesale dealer in perishable produce and is located in Boston, Massachusetts. It sued the Penn Central Transportation Company, the delivering railroad, to recover the market loss it suffered on 21 separate carload shipments of perishable produce moving from various points in California, Arizona and Florida to plaintiff in the Boston area. The complaint was filed under Section 20(11) of the Interstate Commerce Act (49 U.S.C. § 20(11)). Plaintiff claims that it suffered a market loss on each shipment because defendant did not transport them "with reasonable dispatch and due diligence." Some $9500 in damages were claimed on the ground that the going price on the Boston market on the day the goods were allegedly due was higher than on the day they were actually available for sale.

In March 1973, the Southern Pacific Company, the Seaboard Coast Line Railroad Company and the Florida East Coast Railroad Company were named additional defendants. However, the claims involving the latter two railroads were settled for some $1600. Therefore, those defendants and the eight shipments they handled were dismissed. The remaining thirteen shipments were of lettuce, carrots and grapefruit from California and Arizona to Boston and were accepted by defendant Southern Pacific Company as the initial carrier and delivered by Penn Central as the delivering carrier.

As to the thirteen shipments still in the case, plaintiff moved for summary judgment. In support of its motion, plaintiff relied on the admission of certain facts by Southern Pacific and Penn Central and an affidavit of Richard Watson, plaintiff's traffic agent, which attached various price quotations from the United States Department of Agriculture's Fresh Fruit and Vegetable Market News (Boston Report). According to a chart attached to Watson's affidavit, the total loss due to delay was $5,703.16.

Penn Central filed an opposing affidavit of Donald R. Steinman, a senior claim account representative, asserting that the applicable tariff permitted carriers a 24-hour cushion for paying market claims. ¹ Steinman's affidavit also stated that the applicable perishable freight schedules provided for a normal traveling time from California to Boston market of eight days from the date of shipment. Plaintiff does not contest the eight-day travel time. Consequently, according to Steinman, none of the shipments in question was unduly delayed except for one involving an alleged $351.51 loss on carrots shipped from Coachella, California, to Everett, Massachusetts. As to this shipment, Steinman asserted that the four-day delay was due to a strike on the originating carrier, Southern Pacific Company. He added that the contract terms of the bill of lading prohibit liability against a carrier where time is lost on account of a strike. ² In addition to the grounds contained in Steinman's affidavit, the Penn Central opposed summary judgment on the ground that no proof of the market value of the goods involved had been presented. ³

In an unreported memorandum opinion and order, the district court entered summary judgment against defendants in the amount of $5,703.16, which was the amount claimed in the chart accompanying the affidavit supporting plaintiff's motion for summary judgment. The district judge noted that plaintiff was complaining that defendants did not transport its commodities "with reasonable dispatch," ⁴ so that the plaintiff As to the carrier's contention that eleven of the thirteen shipments were timely because of the one-day grace period allowed by Note 2 of the freight tariff (see note 1, supra), the district court invalidated this tariff provision because Section 20(11) of the Interstate Commerce Act provides in part " * * * no contract, receipt, rule, regulation, or other limitation of any character whatsoever shall exempt such common carrier, railroad, or transportation company from the liability imposed." The opinion noted that subsequent to its 1970 approval of this tariff, the Interstate Commerce Commission now holds that such 24-hour grace periods are invalid as contrary to Section 20(11). See Provisions on Vegetables and Melons, Transcontinental, No. 35341, 340 I.C.C. 807, 813 (1972). ⁵

missed the benefit of the market upon the day when, according to defendants' operating schedules, the commodities should have been available for sale. See Condakes v. Southern Pacific Co., 295 F.Supp. 121 (D.Mass.1969).

As to claim 2 for $351.51 involving a four-day carrier delay, which defendants assert was due to a strike on the Southern Pacific and therefore excusable under the bill of lading (see note 2, supra), the court ruled that the delay was not excusable because defendants had not shown that the "delay did not result from its (Southern Pacific) own negligence."

As to defendants' contention that since the record contained no origin inspection reports of the Department of Agriculture, plaintiff had not proved the market value of the goods involved, the district court agreed with plaintiff's position that said Department's auction sales reports adequately measured the damage plaintiff suffered because of a declining market where defendants have failed to transport with reasonable dispatch.

The liability issue in this case depends principally upon the validity of the 24-hour grace period contained in defendants' tariffs. For the reasons given in Judge Parsons' attached opinion, the pertinent portion of which we adopt as our own, we affirm the district court's determination of defendants' liability, except with respect to the shipment of carrots assertedly delayed by a strike. As to that shipment, the statement in Steinman's affidavit that a strike on the Southern Pacific caused the delay was sufficient to put plaintiff on notice that defendants were blaming the delay on the strike, which, if proven, would constitute a defense (see note 2, supra). The parties, should they still desire it, are entitled to a trial of this defense.

As to the district court's award of damages, we agree with defendants that such an award was premature. Nothing in the plaintiff's affidavits or in the defendants' admissions states either that plaintiff suffered actual damages in the amount claimed or that the produce was of sufficiently high quality so that the Agriculture Department's quotations submitted by plaintiff would apply. Since defendants failed to put forth any reason why the well-recognized market differential measure of damages should not be employed, the district court was correct in holding it applicable. However, in order to rely upon the price quotations for "good" quality produce in the Department of Agriculture's publication, Fresh Fruit and Vegetable Market News (Boston Market), plaintiff must show either (1) that its produce was "good" quality or (2) that, even if of inferior quality, the differential for "good" produce Affirmed in part; reversed in part.

                between the day expected and the actual day of arrival is the same for lesser quality produce.  Plaintiff makes the latter argument in its brief, but nothing in the record supports this contention.  Absent such a showing, a court might award damages that would be correct only for "good" produce, without any proof that plaintiff's produce could be so qualified.  6  See Great Atlantic & Pacific Tea Co. v. Atchison, Topeka and Santa Fe Railway Co., 333 F.2d 705, 508-710 (7th Cir. 1964)
                

MEMORANDUM OPINION AND ORDER

This case is before me for ruling on plaintiff's motion for summary judgment. Plaintiff, Peter Condakes Company, Inc., a wholesale dealer of perishable produce, shipped carloads of tomatoes, tangerines, lettuce, carrots and grapefruit for sale at the Boston Auction Market. The defendants, the originating carriers, contracted to transport plaintiff's goods to the Market by rail. The plaintiff, in its claim for delay brought under 49 U.S.C. § 20(11), complains that the defendants or their connecting carriers did not transport its commodities with reasonable dispatch in that it missed the benefit of the Market upon the day when, according to the defendants' operating schedules, the commodities should have been available for sale. Plaintiff further complains that the failure to promptly transport the commodities resulted in a lower market value at destination by which it has been damaged in the amount of $9,617.53.

Plaintiff, supporting its motion with an affidavit from its Traffic Agent, the United States Department of Agriculture market quotations, and its Request for Admissions under Rule 36, contends that (a) the defendants are common carriers by rail within the meaning of Section 20(11) of the Interstate Commerce Act, 49 U.S.C. § 20(11); (b) it is the lawful holder of the Bills of Lading; (c) written notice of its claim and suit were seasonably filed; (d) the commodities in question were delivered to the defendants for transportation by rail in interstate commerce; (e) the defendants carelessly failed to transport the goods with reasonable dispatch; and (f) the plaintiff suffered a pecuniary loss by reason thereof.

The defendants, supporting their response to the motion with an affidavit from one of their Senior Claim Account Representatives, argue that the plaintiff is not entitled to summary judgment because at the time the shipments in question moved there was in effect a tariff applicable to the bills of lading which governed delays for market decline purposes. That tariff, the defendants contend, allowed them a 24-hour grace period...