Shonac Corp. v. Maersk, Inc.

• Decision Date: 30 March 2001
• Docket Number: No. C2-99-870.,C2-99-870.
• Parties: SHONAC CORPORATION, Plaintiff, v. MAERSK, INC., et al., Defendants.
• Court: U.S. District Court — Southern District of Ohio

159 F.Supp.2d 1020

SHONAC CORPORATION, Plaintiff, v. MAERSK, INC., et al., Defendants.

No. C2-99-870.

United States District Court, S.D. Ohio, Eastern Division.

March 30, 2001.

Juan Jose Gonzales Perez, Perez & Morris, Columbus, OH, for plaintiff.

John Patrick Gartland, Vorys Sater Seymour & Pease, Columbus, OH, Marc S. Blubaugh, Benesch Friedlander Coplan & Aronoff, Columbus, OH, Jeffrey A. Healy, Arter & Hadden, Cleveland, OH, Eric Larson Zalud, Benesch Friedlander Coplan & Aronoff, Cincinnati, OH, for defendant.

OPINION AND ORDER

SARGUS, District Judge.

This matter is before the Court for consideration of the Motion for Partial Summary Judgment filed by the Defendant and Third Party Plaintiff Fritz Companies, Inc.'s ("Fritz"). (Doc. # 39). Plaintiff Shonac Corporation contracted with Fritz for the delivery of leather shoes from Brazil, where the shoes were manufactured, to Columbus, Ohio, where Shonac is located. Fritz subcontracted with the other Defendants to assist in this delivery. The container in which the shoes were to have been shipped was empty at the time it arrived in Columbus. Shonac brings this suit to recover its damages. Fritz now seeks a partial judgment to establish that, in the event that Fritz is found liable, Shonac cannot recover its lost profits and certain marketing, administration, and processing costs. For the reasons that follow, the Court GRANTS IN PART and DENIES IN PART Fritz's Motion.

I. BACKGROUND.¹

Shonac is an Ohio corporation with its principle place of business in Franklin County, Ohio. In the summer of 1998, Shonac purchased 4,650 pairs of men's leather shoes (the "shoes") from Rada & Paula LTDA., a Brazilian company ("Rada & Paula"). The shoes were packaged in 475 cartons and put in a container to be delivered to Columbus, Ohio.

To transport the shoes, Shonac hired Fritz, which in turn contracted with various other entities to transport the shoes to Columbus, including Defendant Maersk, Inc. ("Maersk"). Both Fritz and Maersk issued bills of lading in connection with the shoes. Fritz issued a through bill of lading "STSMIA # 070092" dated July 18, 1998. (Doc. # 60, Exh. A). Similarly, Maersk issued a bill of lading "AEUNVM 008362" also dated July 18, 1998. (Doc. # 60, Exh. B). The shoes were purportedly transported in a sealed container "TRLU609730-1" (the "Container").

After Rada & Paula manufactured the shoes, and while under Fritz's care and control, the shoes were taken from Rada & Paula's factory in Brazil to two Brazilian carriers, Radial Transportes, S.A. and Fama Santista Transportes Amazena Gerain Terminal Ltda. and delivered to Maersk in Santos, Brazil. Maersk, by ocean liner, brought the Container to New Jersey, where it was delivered to Consolidated Rail Corporation ("Conrail"). Thereafter, Conrail, via rail, brought the Container to Columbus, where Freedom Transport, Inc., an Ohio corporation, picked it up. On or about August 11, 1998, Freedom Transport delivered the Container to Shonac in Columbus, Ohio. On August 12, 1998, Shonac employees broke the seal and found that the Container was empty. This lawsuit followed.

On January 6, 2000, the Court held a preliminary pretrial conference and the Court ordered Shonac to serve an itemized settlement demand upon the other parties by January 28, 2000. (Doc. #33). On January 28, 2000, Shonac served a settlement demand upon the parties seeking $179,095.91. Among other damages, Shonac's settlement demand included a claim for $41,568.70 in "lost profits" and a claim for $51,159.00 in "marketing, administration, and processing costs." Fritz filed this Motion for Partial Summary Judgment in order to obtain a ruling that Shonac may not recover for these alleged damages.

II. STANDARD FOR SUMMARY JUDGMENT.

The procedure for considering whether summary judgment is appropriate is set forth in Federal Rule of Civil Procedure 56(c), which provides:

The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.

The evidence must be viewed in the light most favorable to the nonmoving party. Adickes v. S. H. Kress & Co., 398 U.S. 144, 158-59, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). Summary judgment will not lie if the dispute about a material fact is genuine; "that is, if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Summary judgment is appropriate however, if the opposing party fails to make a showing sufficient to establish the existence of an element essential to that party's case and on which that party will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); see also Matsushita Electronic Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

The Sixth Circuit Court of Appeals has recognized that Liberty Lobby, Celotex, and Matsushita have effected "a decided change in summary judgment practice," ushering in a "new era" in summary judgments. Street v. J.C. Bradford & Co. 886 F.2d 1472, 1476 (6th Cir.1989). The court in Street identifies a number of important principles in new era summary judgment practice. For example, complex cases and cases involving state of mind issues are not necessarily inappropriate for summary judgment. Id. at 1479.

In addition, in responding to a summary judgment motion, the nonmoving party "cannot rely on the hope that the trier of fact will disbelieve the movant's denial of a disputed fact, but must `present affirmative evidence in order to defeat a properly supported motion for summary judgment.'" Id. (quoting Liberty Lobby, 477 U.S. at 257, 106 S.Ct. 2505). The nonmoving party must adduce more than a mere scintilla of evidence in order to overcome the summary judgment motion. Id. It is not sufficient for the nonmoving party to merely "`show that there is some metaphysical doubt as to the material facts.'" Id. (quoting Matsushita, 475 U.S. at 586, 106 S.Ct. 1348). Moreover, "[t]he trial court no longer has the duty to search the entire record to establish that it is bereft of a genuine issue of material fact." Id. That is, the nonmoving party has an affirmative duty to direct the court's attention to those specific portions of the record upon which it seeks to rely to create a genuine issue of material fact.

III. ANALYSIS.

A. Fritz's Motion is not Premised on Evidence Protected by Rule 408 of the Federal Rules of Evidence.

Shonac argues that Fritz's Motion for Partial Summary Judgment should be denied because it is based on Shonac's settlement demand required by the Court's Order and protected by Rule 408 of the Federal Rules of Evidence ("Rule 408"). According to Shonac, allowing Fritz's Motion would undermine the pro-settlement policy underlying Rule 408. In response, Fritz argues that the Shonac's settlement demand is unnecessary to Fritz's Motion because: (1) Shonac disclosed all documents attached to the settlement demand during discovery and (2) the Court need not rely on any particular statement by Shonac in order to rule that certain types of damages are not recoverable. In addition, Fritz argues that the pro-settlement policy underlying Rule 408 is not jeopardized by its Motion.

Rule 408 provides in pertinent parts as follows:

Evidence of (1) furnishing or offering or promising to furnish, or (2) accepting or offering or promising to accept, a valuable consideration in compromising or attempting to compromise a claim which was disputed as to either validity or amount, is not admissible to prove liability for or invalidity of the claim or its amount. Evidence of conduct or statements made in compromise negotiations is likewise not admissible. This rule does not require the exclusion of any evidence otherwise discoverable merely because it is presented in the course of compromise negotiations.

Fed.R.Evid. 408. Thus, evidence of compromise is inadmissible to dispute the amount of a claim unless the evidence is "otherwise discoverable."

In this case, Fritz relies on only two documents containing Shonac's settlement demand. Each of these two documents had already been produced in response to Fritz's discovery requests. First, Fritz relied on Shonac's invoice indicating the price that Shonac paid for the shoes in question in order to illustrate the loss profits being sought by Shonac. This invoice was produced in connection with Fritz's discovery request. (See Doc. # 44, Exh. A). In addition, Shonac disclosed in its Complaint that it sought the retail value of the shoes. (See Doc. # 1, at ¶¶ 5, 15). Second, Fritz relied on a document containing a reference to marketing, administration and processing costs. This document was also produced in connection with Fritz's discovery requests. (See Doc. # 44, Exh. B). Consequently, the Court concludes that Fritz's Motion is not barred by Rule 408 because, although it refers to Shonac's settlement demand, the settlement demand itself is not necessary to Fritz's Motion and the pertinent documents and information were otherwise discoverable. See Ramada Dev. Co. v. Rauch, 644 F.2d 1097, 1107 (5th Cir.1981)(stating that the "otherwise discoverable" language in Rule 408 "was intended to prevent one from being able to immunize from admissibility documents otherwise discoverable merely by offering them in a compromise negotiation.")

This conclusion is supported by the fact that Shonac does not allege that the figures stated in the settlement demand were in any way reduced from its actual damages in an effort to achieve a settlement. Indeed, although Shonac sought $179,095.91 in its settlement demand, it has now presented evidence that its actual damages were...