Roadway Exp., Inc. v. Fuente Cigar, Ltd.

• Decision Date: 05 October 1990
• Docket Number: No. 87-1423-CIV-RYSKAMP.,87-1423-CIV-RYSKAMP.
• Citation: 749 F. Supp. 248
• Parties: ROADWAY EXPRESS, INC., Appellant/Defendant, v. FUENTE CIGAR, LTD., Appellee/Plaintiff.
• Court: U.S. District Court — Southern District of Florida

749 F. Supp. 248

ROADWAY EXPRESS, INC., Appellant/Defendant, v. FUENTE CIGAR, LTD., Appellee/Plaintiff.

No. 87-1423-CIV-RYSKAMP.

United States District Court, S.D. Florida.

October 5, 1990.

Kenneth E. Cohen, Lawrence J. Roberts, Miami, Fla., for appellant/defendant.

Lansing C. Scriven, Richard Benjamin Wilkes, Tampa, Fla., for appellee/plaintiff.

ORDER ON APPEAL

RYSKAMP, District Judge.

I. INTRODUCTION

This cause is before the court on appeal from a final judgment entered by United States Magistrate Samuel J. Smargon upon conclusion of a non-jury trial.¹ The magistrate entered final judgment for damages in the amount of $28,424.75 in favor of the appellee, defendant below, Fuente Cigar, Ltd. "Fuente" or "the shipper" and against the appellant, plaintiff below, Roadway Express, Inc. "Roadway" or "the carrier". After careful consideration of the parties' briefs, the transcript of the proceedings below, and having had the benefit of oral argument, the court concludes that the judgment in favor of Fuente must be reversed and judgment entered in favor of Roadway.

II. BACKGROUND

Fuente is a manufacturer of high quality, hand made cigars with a factory located in Santiago, Dominican Republic. In May of 1986, a customer of Fuente's, Cigars by Santa Clara "Santa Clara" or "the consignee", requested a shipment of cigars. Fuente manufactured and packaged the cigars, which were valued at $28,424.75, and transported them to Miami, Florida, via air carrier on June 3, 1986.

On June 6, 1986, Fuente's freight forwarder delivered the shipment to Roadway, an interstate truck carrier. Roadway accepted the shipment for delivery from Miami to the consignee, Santa Clara, located in Fairfield, New Jersey. Roadway's truck driver signed the bill of lading prepared by Fuente stating that the shipment was accepted in apparent good condition.

Roadway concedes that a commercially reasonable time for transporting the shipment was five days. Thus, the cigars should have been delivered to Santa Clara on June 10, 1986. Unfortunately, the shipment was misrouted in transit and delayed approximately three weeks.² On June 30, 1986, however, the goods arrived in Patterson, New Jersey. Transcript at 160. On July 2, 1986, Fuente was advised that the carrier was prepared to effect delivery, but Fuente instructed Roadway not to deliver the shipment to the consignee because the cigars had been in transit too long. Transcript at 208. At Fuente's request, the carrier agreed to return the cigars to Fuente for inspection to determine the extent of the damage, if any. Transcript at 173-175. Five days later, on July 7, 1986, Fuente advised the carrier not to return the cigars to Fuente because it would not accept the return shipment. Transcript at 210.

Consequently, the shipment was held in abeyance from July 2, 1986, until July 10, 1986, when Roadway decided to attempt delivery to the consignee. Transcript at 74. Although Roadway tendered the cigars on July 10th, the president of Santa Clara, Mr. Lewis Rothman, refused delivery without inspecting the shipment. Mr. Rothman testified that he refused delivery because an extended shipping period would cause the cigars to lose their moisture content, and would cause tobacco weevil larvae to incubate and infest the shipment.³ Because both the shipper and the consignee refused delivery, Roadway forwarded the shipment to an overage warehouse in Akron, Ohio.

Finally, on August 25, 1986, the shipment was returned to Fuente's Tampa office where Fuente inspected the cigars for damage. Randy Fuente, an employee of Fuente, testified that the cigars were "very dry" at that time and of no value. Approximately two weeks later, Carlos Fuente, another Fuente employee, examined the shipment and arrived at the same conclusion.

Thereafter, Fuente filed a three-count complaint for damages against Roadway alleging a violation of the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 11707(a)(1), "Carmack Amendment", breach of contract, and negligence. At trial, Roadway moved for involuntary dismissal pursuant to Rule 41(b) of the Federal Rules of Civil Procedure on the ground that Fuente failed to establish a prima facie case under the Carmack Amendment. The trial court denied the motion and ultimately entered final judgment in favor of Fuente for the full amount of damages. This court now reverses.

III. LEGAL ANALYSIS

A carrier's liability for damage to an interstate shipment of goods is governed by the Carmack Amendment, 49 U.S.C. § 11707(a)(1), formerly 49 U.S.C. § 20(11).⁴ To establish a prima facie case under the Carmack Amendment, a shipper must prove the following three elements: (1) delivery of the shipment in good condition; (2) arrival of the shipment in damaged condition; and (3) the amount of damages. Missouri Pac. R.R. Co. v. Elmore & Stahl, 377 U.S. 134, 137-38, 84 S.Ct. 1142, 1144-45, 12 L.Ed.2d 194, 198 (1964); Offshore Aviation v. Transcon Lines, Inc., 831 F.2d 1013, 1014 (11th Cir.1987). If the shipper establishes its prima facie case, a presumption of negligence arises against the carrier and the burden of proof shifts to the carrier "to show both that it was free from negligence and that the damage to the cargo was due to one of the excepted causes relieving the carrier of liability." Missouri Pac. R.R. Co., 377 U.S. at 138, 84 S.Ct. at 1144-1145, 12 L.Ed.2d at 198.⁵

Roadway contends that the trial court erred in denying its Rule 41(b) motion for involuntary dismissal because Fuente failed to establish a prima facie case under the Carmack Amendment. The trial court's decision to deny Roadway's Rule 41(b) motion must be reviewed under an abuse of discretion standard. See, e.g., D.P. Apparel Corp. v. Roadway Express, Inc., 736 F.2d 1, 3 (1st Cir.1984). Furthermore, the trial court's findings of fact must be accepted unless clearly erroneous. See, e.g., Thousand Springs Trout Farms, Inc. v. IML Freight, Inc., 558 F.2d 539, 542 (9th Cir.1977).

A. Delivery of the Shipment in Good Condition

The first element a shipper must prove under the Carmack Amendment is delivery of the shipment in good condition. To support its conclusion that Fuente established this element, the trial court made the following findings of fact:

a. The quality control standards of Fuente's Santiago factory are equipped to detect any cigar which is stale, hard, or dry and discard it from any shipment.

b. Because consumer demand exceeds Fuente's ability to produce cigars, Fuente does not keep inventory at its Santiago factory for more than a week after manufacture, and thus Fuente's cigars do not have an opportunity to become stale while in the control of Fuente.

c. The cigars were transported in one day from Santiago to Miami, and delivered to Roadway within approximately two days thereafter.

d. The bill of lading covering the shipment recites that the contents were in apparent good order upon receipt by Roadway in Miami.

Final Judgment at 5.

Roadway argues that even if these findings are accepted, they are insufficient to satisfy Fuente's burden of proving that it delivered the shipment to Roadway in good condition. Specifically, Roadway contends that evidence regarding the quality control standards employed at Fuente's Santiago factory, and evidence of a clean bill of lading, is insufficient to establish delivery in good condition. Thus, Roadway maintains that in the absence of direct proof that Fuente delivered the cigars in good condition, the shipper cannot establish a prima facie case under the Carmack Amendment.

Contrary to Roadway's assertion, Fuente was not required to present direct proof to establish this element. In Fine Foliage of Florida, Inc. v. Bowman Transp., Inc., 901 F.2d 1034, 1038 (11th Cir.1990), the Eleventh Circuit made clear that a shipper is not required to present eyewitness or other direct evidence to establish delivery in good condition. Rather, this element may be established by circumstantial evidence that is substantial and reliable. Id. See also, Frosty Land Foods Int'l, Inc. v. Refrigerated Transport Co., 613 F.2d 1344 (5th Cir.1980) (circumstantial evidence was sufficient to support finding that goods were delivered to carrier in good condition).

To support its finding that the cigars were delivered in good condition, the trial court relied on evidence Fuente presented regarding the quality control procedures employed at its Santiago factory, the expeditious delivery of the shipment, and language contained in the bill of lading stating that the cigars were received in apparent good condition. However, as Roadway points out, no evidence was presented to establish the conditions under which the cigars were maintained after manufacture but prior to acceptance by Roadway, i.e., while the cigars were in transit from the factory to the Santo Domingo airport, on the air carrier, and in the freight forwarder's custody.⁶ Nevertheless, this court concludes that the circumstantial evidence Fuente presented was sufficient to establish that the cigars were delivered to Roadway in good condition. Thus, Fuente established the first element of its prima facie case.

B. Arrival of the Shipment in Damaged Condition

To establish a prima facie case under the Carmack Amendment, a shipper must also prove that the carrier delivered the goods in damaged condition. Thus, Fuente was required to establish that the cigars were in damaged condition when Roadway delivered them to the consignee. The trial court's findings of fact as to this element are expressed in their entirety as follows:

Fuente established that the shipment was in damaged condition both when it was offered for delivery to Santa Clara on July 10, 1986, and when it was returned to Fuente, on August 25, 1987 (sic), in that the entire shipment was stale, hard, and dry. Significantly, this is the exact type of damage to be expected as a result of the delay in delivery. Mr. Rothman's reasons for rejecting the shipment because of

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