PNS Jewelry, Inc. v. Dunbar Armored, Inc., B196067 (Cal. App. 11/30/2007), B196067
| Decision Date | 30 November 2007 |
| Docket Number | B196067 |
| Court | California Court of Appeals Court of Appeals |
| Parties | PNS JEWELRY, INC., Plaintiff and Appellant, v. DUNBAR ARMORED, INC., Defendant and Respondent. |
Appeal from an order of the Superior Court of Los Angeles County, No. BC346559, Victor Person, Judge. Reversed and remanded with directions.
Shernoff Bidart Darras, Michael J. Bidart, Ricardo Echeverria, Steven Schuetze for Plaintiff and Appellant.
Glassman, Browning, Saltsman & Jacobs, Inc., Alexander Rufus-Isaacs for Defendant and Respondent.
This appeal concerns an interpretation of the Carmack Amendment, a federal law governing the liability of interstate motor carriers. We conclude that the law does not apply when an imposter purporting to be an interstate carrier's employee steals goods before the carrier receives them. The goods never came into the interstate carrier's possession: the carrier did not provide a bill of lading reflecting its receipt of the goods and memorializing the terms of the transportation agreement. The jewelry seller who sustained the loss in this case has alleged a viable negligence claim under state law based on the interstate carrier's failure to implement adequate security measures.
PNS Jewelry, Inc. (PNS) sells jewelry in downtown Los Angeles, under the name Oro Diamante. Since 1999, PNS has used the services of Dunbar Armored, Inc. (Dunbar) to transport jewelry to shows and exhibitions. In 2005, PNS arranged for Dunbar to pick up jewelry valued at over $1.5 million, for transport to the Phoenix jewelry show. Only Dunbar employees knew that January 28 was the date scheduled for the jewelry pickup at PNS's business in Los Angeles. Dunbar established security arrangements for collecting the jewelry from PNS.
On January 27, 2005, a Dunbar shipping coordinator telephoned PNS to advise that the jewelry pickup would occur early in the morning on January 28. At 8:40 a.m. on January 28, an individual carrying a dolly and wearing clothing identical to that worn by Dunbar employees rang the entry buzzer and stated only, "Dunbar." This is "the exact same" security procedure used by Dunbar since 1999. The putative Dunbar employee received the merchandise and gave PNS a multi-page air waybill, which Dunbar always provided to PNS.
Because no one but Dunbar and PNS knew of the scheduled pickup on January 28, PNS released the jewelry to the individual who PNS believed was employed by Dunbar. Shortly after the individual took the jewelry and departed, PNS received a call from Dunbar saying that the "pick-up was coming." PNS advised Dunbar that the jewelry was already picked up. Dunbar informed PNS that it would verify whether a Dunbar employee had collected the jewelry and instructed PNS not to contact the police. After 45 minutes, Dunbar called to say that the signature on the air waybill did not belong to a Dunbar employee. PNS was again advised not to contact police until Dunbar could review a security tape. After Dunbar reviewed the security tape, and 2.5 hours after the potential breach was first identified, PNS contacted the police.
PNS asserts a single claim of negligence, alleging that Dunbar owed a duty to PNS to establish security protocols and to prevent a breach of those protocols so that PNS would be protected from an unauthorized pickup of its valuables by an imposter purporting to be a Dunbar employee. PNS asserts that Dunbar negligently disclosed its protocols to unknown third parties, whereby it revealed: the date and time frame of the scheduled pickup at PNS; the method of ringing the entry buzzer and saying only "Dunbar"; and the type of clothing worn by Dunbar employees. Dunbar failed to establish appropriate and unique measures—such as notification, identification and verification—to ensure that anyone purporting to be a Dunbar employee was in fact a Dunbar employee, to prevent unauthorized pickups. Moreover, Dunbar failed to establish a means of immediately determining that an unauthorized pickup was made, without requiring a time-consuming investigative delay. Finally, Dunbar negligently instructed PNS not to contact the police. As a result of these negligent acts, PNS lost $1.5 million in jewelry.
Dunbar demurred to the pleading on the grounds that PNS's claims are preempted by federal law. The court sustained the demurrer without leave to amend. On November 8, 2006, the court signed an order dismissing PNS's complaint with prejudice.
Appeal is taken from the dismissal of PNS's first amended complaint. (Code Civ. Proc., § 581, subd. (f)(1).) The signed dismissal order is an appealable final judgment. (Code Civ. Proc., § 581d; Desai v. Farmers Ins. Exchange (1996) 47 Cal.App.4th 1110, 1115.) We review de novo the trial court's ruling, exercising our independent judgment to determine whether, as a matter of law, a claim has been stated. (Ibid.) The factual allegations of the complaint are accepted as true. (Construction Protective Services, Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal.4th 189, 193.)
Dunbar asserts that PNS's negligence action under California law is preempted by federal law. Dunbar relies upon the Carmack Amendment to the Interstate Commerce Act, 49 United States Code section 14706.2 The purpose of Carmack is to "establish uniform federal guidelines designed in part to remove the uncertainty surrounding a carrier's liability when damage occurs to a shipper's interstate shipment." (Hughes v. United Van Lines, Inc. (7th Cir. 1987) 829 F.2d 1407, 1415.) When Carmack applies to a transaction, it preempts state law claims and constitutes the exclusive remedy against an interstate carrier for loss of or damage to transported cargo. (Adams Express Co. v. Croninger (1913) 226 U.S. 491, 505-506; Charleston Car. R. R. v. Varnville Furniture Co. (1915) 237 U.S. 597; Atchison & Topeka Ry. v. Harold (1916) 241 U.S. 371, 378.)
"The Carmack Amendment applies only when the packages are transported exclusively by motor carrier." (Desardouin v. United Parcel Service, Inc. (D.Conn. 2003) 285 F.Supp.2d 153, 164, fn. 11.) "[F]ederal common law governs where packages are transported by air." In short, Carmack does not apply to air shipments. (Arkwright-Boston Mfrs. v. Great Western Airlines (8th Cir. 1985) 767 F.2d 425, 427-428; Kemper Ins. Companies v. Federal Exp. Corp. (1st Cir. 2001) 252 F.3d 509, 514, fn. 5.)
PNS alleges that it received an air waybill from an imposter, the same type of multi-page air waybill that Dunbar always provided to PNS. (Insurance Co. of North America v. Federal Express (9th Cir. 1999) 189 F.3d 914, 916, fn. 2.) In its brief on appeal, Dunbar asserts that because it issued air waybills in the past to PNS, we must infer that Dunbar issued the air waybill involved in the present case. Dunbar observes in a footnote that "[a]n air waybill serves as the bill of lading for goods transported by air." On page 20 of its brief, Dunbar writes that an air waybill "is `a written document describing the shipping arrangement between the air carrier and the shipper,'" adding, "if the parties make arrangements for an interstate shipment by air, the court can infer that the carrier will normally issue an air waybill to the shipper."
After examining the complaint and the briefs, we sent a letter to the parties expressing our concern that Carmack does not apply to this case at all, even if the parties and the trial court relied upon it, because the case appears to involve an air shipment, not a motor carrier shipment. After receiving our letter, the parties took divergent paths. PNS argues that federal common law applies to this intended air shipment. And Dunbar (while conceding that Carmack does not apply to air shipments) is now arguing that the jewelry shipment—had it been picked up by Dunbar—would have traveled by ground transportation, despite the references in Dunbar's original brief to air waybills and air carriers.3 Thus, the parties do not agree whether the shipment was to be made by air or by ground.
Assuming, for purposes of argument, that the shipment was to be made by motor carrier instead of air carrier, we still conclude that Carmack does not apply, based on the allegations in the complaint.
Carmack states that (§ 14706, subd. (a)(1).) Carmack "requires a carrier to issue a bill of lading and subject it to absolute liability for actual loss incurred during transportations . . . ." (Dictor v. David & Simon, Inc. (2003) 106 Cal.App.4th 238, 247.)
In this case, Dunbar is not a "receiving carrier," or a "delivering carrier," or any other type of carrier. There is no allegation that Dunbar ever took possession of PNS's...
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