PNH Corp. v. Hullquist Corp.

• Decision Date: 09 December 1987
• Docket Number: No. 87-1584,87-1584
• Citation: PNH Corp. v. Hullquist Corp., 843 F.2d 586 (1st Cir. 1987)
• Parties: PNH CORPORATION, Plaintiff, Appellee, v. HULLQUIST CORPORATION, Defendant, Appellant. Garvey Transport, Inc., et al., Defendants, Appellees. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 586

843 F.2d 586

PNH CORPORATION, Plaintiff, Appellee, v. HULLQUIST CORPORATION, Defendant, Appellant Garvey Transport, Inc., et al., Defendants, Appellees.

No. 87-1584.

United States Court of Appeals First Circuit.

Heard Dec. 9, 1987.

Decided March 30, 1988.

Robert J. Baum with whom Edward R. Wiest and Bradley, Barry & Tarlow, P.C., Boston, Mass., were on brief, for defendant, appellant.

Andrew F. Lane with whom William Hewig, III and Gaston Snow & Ely Bartlett, Boston, Mass., were on brief, for defendants, appellees Maersk Line Ltd., Maersk Container Service Co., Inc. and Moller S.S. Co., Inc.

William J. Doyle, Jr., with whom James D. Casey and Law Office of James D. Casey, Boston, Mass., were on brief, for defendant, appellee Garvey Transport, Inc.

Before COFFIN, BOWNES and TORRUELLA, Circuit Judges.

COFFIN, Circuit Judge.

This is the Case of the Missing Freeze Dried Coffee. A shipper, P.N.H. Corp., purchased 2146 cases of Taster's Choice Freeze Dried Coffee from the Kendall Confectionery Co. in Cambridge, Massachusetts. The shipper contracted with Maersk Line to transport the coffee to Jeddah (Jidda), Saudi Arabia. The Maersk ship on which the coffee was to be transported was in Port Newark, New Jersey. The coffee therefore had to be transferred from Cambridge to Port Newark. En route, the container in which the coffee was stored was in the possession of three separate entities. When the container was finally opened in Port Newark, the coffee had disappeared. The mystery to be solved is where along the line of transport the coffee was pilfered. All of the evidence is circumstantial. The district court concluded that two of the three suspects had airtight alibis, and that therefore the mystery had only one possible solution. On that basis, the court granted summary judgment in favor of all other defendants against the middle, or second, carrier, Hullquist Corporation. We now vacate and remand, because we find that the alibi of the final carrier, Maersk, cannot be evaluated definitively at the summary judgment stage. A jury will have to sift the clues to determine whodunit.

I.

The evidence, which is undisputed except as noted, is as follows. P.N.H. purchased the coffee from Kendall on April 8, 1985. Maersk ¹ could not pick up the coffee in Cambridge, so it instructed P.N.H. to transfer the coffee to a container interchange facility in Everett, Massachusetts owned by defendant Hullquist. P.N.H. arranged for defendant Garvey Transport, Inc. to transfer the coffee from Cambridge to Hullquist. Maersk was to pick up the coffee at Hullquist and take it to Port Newark. The chain of custody was, therefore, Garvey to Hullquist to Maersk.

On April 9, 1985, a driver for Garvey picked up at Hullquist an empty container in which the coffee was to be stored. The Garvey driver arrived at the Kendall location in Cambridge at approximately 12:30 p.m. The 2146 cartons of coffee were hand-loaded into the container by the Garvey driver and two P.N.H. employees. Neither Garvey nor P.N.H. had remembered to provide a seal with which to secure the loaded container. Because it cannot be removed and restored without noticeable damage, a seal would normally provide some measure of protection against casual pilferage. The Garvey driver promised to seal the container once it arrived at Hullquist's facility in Everett, and to call P.N.H. with the identification number of the seal once it was applied.

The Garvey driver then drove the container to the Hullquist facility in Everett. The trip took approximately 40 minutes. There is no evidence that the contents of the container were checked upon arrival in Everett. The Garvey driver and a Hullquist employee applied Hullquist seal No. 15388, and prepared and signed a receipt to that effect. The Garvey driver phoned P.N.H. to notify them of the seal number.

Hullquist had been commissioned by Maersk to hold the container temporarily until a Maersk driver could pick it up to take it to New Jersey. The understanding was that the Maersk driver was to pick up the container that same afternoon. However, the driver called the Hullquist terminal late in the afternoon to inform Hullquist that he would not be able to pick up the container until the following day, due to mechanical difficulties. Normally, Hullquist did not store loaded containers overnight; its normal practice was to move such containers to more secure facilities in Malden, Massachusetts. On April 9th, however, Hullquist found out too late that such removal would be necessary, because the trucking company used by Hullquist to move containers ceased operations at 4:00 p.m. When informed of this state of affairs, a Maersk representative asked that Hullquist store the container overnight. Hullquist acceded to this request. The record is incomplete as to the nature of the agreement between Hullquist and Maersk as to overnight storage. To protect the container, Hullquist placed one end against a row of empty containers and moved another empty container against the other end. The coffee container could not be opened without moving one of the empty containers and breaking seal No. 15388. Because Hullquist was not in the business of overnight storage, it seemingly did not have any facilities available with which better to secure the container.

At 8:20 a.m. the next morning, the Maersk driver arrived at Hullquist to transport the container to Port Newark. Both the Maersk driver and a Hullquist employee testified in their affidavits that the Maersk driver placed an additional seal on the container, Brooks seal No. 1035050. The Maersk driver also signed a receipt, later submitted to the court, stating that Hullquist seal No. 15388 was still intact on the container. However, he later claimed in an affidavit and deposition that he had not in fact checked the seal to confirm the identification on the receipt.

The Maersk driver then drove to Port Newark. His trip took five hours, normal driving time for that distance. When he arrived in Port Newark, the driver placed another Maersk seal, No. 113406, on the container. At this time, apparently no one at Maersk checked the identification of the other seals. The truck and container were then weighed, and the container was disconnected from the truck and stored overnight at the Maersk yard. Maersk did not undertake to check the seals or open the container until the next morning. That morning a clerk, who had noticed a weight discrepancy the day before, reweighed the load and confirmed the unexplained weight shortage, which seemed to indicate that the container was empty. Maersk employees claim to have then broken the seals, opened the container, and discovered that the coffee was missing. The employees then checked the three seals they had removed from the container. In addition to the Brooks seal No. 1035050 and the Maersk seal No. 113406, the Maersk employees claim to have found Hullquist seal No. 18218. Hullquist seal No. 15388, that originally affixed in Everett, was not found, according to the Maersk employees. Despite knowing that the coffee had been heisted, and that the Hullquist seal was not that indicated on the receipt, Maersk apparently misplaced the seals. The Maersk defendants did submit a photograph of the broken, unattached seals, taken before they were lost.

P.N.H. filed an action against all of the carriers under the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. Sec. 11707. Subsection (a) of Sec. 11707 provides that a shipper may recover the amount lost because of theft or damage of goods from either the initial carrier issuing the bill of lading or the carrier delivering the goods to their final destination, even if the goods were lost or damaged on those portions of the route handled by other carriers. The Carmack Amendment was enacted to "relieve shippers of the burden of searching out a particular negligent carrier from among the often numerous carriers handling an interstate shipment of goods." Reider v. Thompson, 339 U.S 113, 119, 70 S.Ct. 499, 502, 94 L.Ed. 698 (1950). P.N.H. established a prima facie case against the initial carrier, Garvey, by showing that the goods had properly been delivered to Garvey in Cambridge. The district court granted summary judgment against Garvey, and ordered payment to P.N.H. in the amount of its damages, $115,884. That judgment has not been appealed.

Subsection (b) of the Carmack Amendment allows the initial carrier found strictly liable under subsection (a) to be indemnified by the carrier "over whose line or route the loss or injury occurred...." ² In response to the action by P.N.H., each of the defendants, Garvey, Hullquist, and Maersk, asserted cross-claims against each of the others. Garvey moved for summary judgment against Hullquist and Maersk, and Hullquist moved for summary judgment against Maersk and Garvey. No Maersk defendant has at any time filed a motion for summary judgment.

On May 20, 1987, the district court issued a memorandum and order granting Garvey's motion for summary judgment against Hullquist, and denying Hullquist's summary judgment motion against Garvey. The court found that "[t]he only plausible conclusion I can draw from the undisputed facts is that the loss of the coffee occurred while the cargo container was in Hullquist's care and custody." Because of this conclusion, the court denied Garvey's motion for summary judgment against Maersk. Finally, rather than ruling directly on Hullquist's motion for summary judgment against Maersk, the court sua sponte dismissed all cross-claims against the Maersk defendants. The court based these judgments on its conclusion that the coffee must have disappeared at the Hullquist facilities. It directed entry of judgment for Garvey against Hullquist for the entirety of the judgment entered in favor of P.N.H. against Garvey. In response to Hullquist's motion for reconsideration, the court reaffirmed its judgments in a memorandum and order...