Shull v. UPS

• Decision Date: 07 July 1999
• Docket Number: No. 04-98-00485-CV,04-98-00485-CV
• Citation: 4 S.W.3d 46
• Parties: (Tex.App.-San Antonio 1999) John C. SHULL, Appellant, v. UNITED PARCEL SERVICE, Appellee.
• Court: Texas Court of Appeals

Page 46

4 S.W.3d 46 (Tex.App.-San Antonio 1999)

John C. SHULL, Appellant, v. UNITED PARCEL SERVICE, Appellee.

No. 04-98-00485-CV.

Court of Appeals, Fourth District of Texas.

July 7, 1999.

Rehearing Overruled Aug. 24, 1999.

From the County Court at Law No. 3, Bexar County, Texas Trial Court No. 218974 Honorable Shay T. Gebhardt, Judge Presiding

[Copyrighted Material Omitted]

Before Stone, Green, and Angelini, JJ.

O P I N I O N

Opinion by: Catherine Stone, Justice

John Shull brought suit against United Parcel Service ("UPS") seeking damages for a computer that Shull contends UPS damaged while shipping. Summary judgment was granted against Shull in the trial court. In nine points of error, Shull challenges the trial court's judgment. Because we conclude that the Carmack Amendment preempts all of Shull's claims except as to actual damages and that he has failed to support his claim for actual damages, we affirm.

Factual and Procedural Background

In January of 1994, Shull hired United Parcel Service ("UPS") to deliver Shull's computer and accessories to Micromax. On the shipping receipt, Shull declared the value of the computer at $2000. UPS was unable to deliver the package and returned it to Shull. Shull claims that the computer was damaged by UPS in the course of shipment and now seeks damages.

Shull filed suit on July 19, 1994, and UPS answered on October 12, 1994. Shull obtained a post-answer default judgment on August 22, 1995 when UPS failed to appear at the initial hearing. UPS contends that it was never given notice of the hearing and that it did not learn of the default judgment until October 25, 1995. UPS filed a motion for new trial and an evidentiary hearing was held on November 3, 1995. The trial court set aside the default judgment and granted a new trial.

UPS filed a motion for summary judgment on March 7, 1996. The trial court granted the motion and found that Shull's claims originating on or subsequent to the date of completion of the shipping record were limited to relief provided under the Carmack Amendment. On March 19, 1998, UPS filed a second motion for summary judgment. The trial court granted the motion and found that all of Shull's state law claims, including claims for punitive damages and attorneys' fees, were barred. Shull appeals from this judgment.

Summary Judgment

The appellate court reviews an order for summary judgment de novo. Summary judgment is proper when the movant establishes that there are no genuine issues of material fact such that the movant is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(c); Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548 (Tex. 1985). In deciding whether a genuine issue of material fact is at issue, we view as true all evidence favorable to the non-movant and indulge every reasonable inference, and resolve all doubts, in its favor. Nixon, 690 S.W.2d at 548-49; Cedillo v. Gaitan, 981 S.W.2d 388, 390 (Tex. App. San Antonio 1998, no pet.).

Carmack Amendment

In his first points of error, Shull complains that UPS has not met the requirements of the Carmack Amendment necessary to limit liability, and that even if applicable, the statute does not preempt his state and federal claims. The Carmack Amendment, 49 U.S.C.A. § 14706 (West Supp. 1998), establishes a uniform national liability policy for interstate carriers, and it is well settled that the Amendment preempts state common law actions. See Hughes Aircraft Co. v. North American Van Lines, 970 F.2d 609, 613 (9th Cir. 1992). "The Carmack Amendment . . . subjects a motor carrier transporting cargo in interstate commerce to absolute liability for 'actual loss or injury to property.'" Id. at 611. Liability may be limited, however, to the value established by written declaration of the shipper or by agreement. See id. In order to limit liability in this manner, the carrier must (1) maintain a tariff in compliance with the requirements of the Interstate Commerce Commission; (2) give the shipper a reasonable opportunity to choose between two or more levels of liability; (3) obtain the shipper's agreement as to his choice of carrier liability limit; and (4) issue a bill of lading prior to moving the shipment that reflects any such agreement. Hughes Aircraft Co., 970 S.W.2d at 611-12.

Shull has not controverted UPS' evidence showing that UPS maintained a tariff in compliance with the requirements of the ICC or that UPS issued a bill of lading prior to moving the shipment reflecting the agreement. Accordingly, the focus of this point of error lies within the second and third factors. Shull argues that because UPS placed a value cap on computer equipment, he was not given a reasonable opportunity to choose between two or more levels of liability. Shull also complains that UPS employees could not explain particular phrases in the bill of lading nor did they know how to comply with the Carmack Amendment. As a result, he was not sufficiently informed to make a decision regarding liability.

The Carmack Amendment only requires that a shipper be given a reasonable opportunity to choose between two levels of liability or more. "A reasonable opportunity to choose between different levels of coverage means that the shipper had both reasonable notice of the liability limitation and the opportunity to obtain information necessary to making a deliberate and well informed choice." Id. at 612 (citing Bio-Lab, Inc. v. Pony Express Courier Corp., 911 F.2d 1580, 1582 (11th Cir. 1990)). The summary judgment evidence shows that Shull was given the opportunity to declare the value of his computer at whatever value he assessed. There is no indication that Shull was not given adequate options of liability when he could have assessed the value of his computer at whatever cost he saw fit. And while Shull complains that the value cap on computer equipment limited his choice, he does not assert that the value of his equipment was more than the value cap and cannot show how this cap unreasonably limited his choice. See Shorts v. United Parcel Service, 1999 WL 118791, *5 (N.D. Tex. 1999) (holding that giving a shipper blank space to declare value of package contents was sufficient to limit carrier's liability under the Carmack Amendment). Further, the determination of whether Shull made an informed decision is not dependent on UPS employees' ability to explain particular phrases in the bill of lading or their knowledge of the Carmack Amendment. See Rohner Gehrig Company, Inc. v. Tri-State Motor Transit, 950 F.2d 1079, 1085 (5th Cir. 1992) (holding that it is error to administer the second and third prongs on the basis of subjective qualities of the shipper or employee, such as sophistication). The evidence clearly shows that Shull was given a reasonable opportunity to choose between levels of liability and that UPS obtained Shull's agreement as to his choice of carrier liability since it was Shull who determined the declared value of the goods he was shipping. Accordingly, we conclude that UPS complied with all the requirements necessary to limit liability under the Carmack Amendment.

State and Federal Preemption

Because UPS is in compliance with the Carmack Amendment, we next consider whether all of Shull's claims are preempted. In Shull's original petition, he asserts causes of action for negligence, violation of the Deceptive Trade Practices Act, and breach of contract and good faith. He seeks actual damages, exemplary damages, and attorney's fees.

While applicable case law on the Carmack Amendment within the Texas courts is limited, the Fifth Circuit has been clear in its position that the Carmack Amendment preempts all of Shull's claims. In Moffit v. Bekins Van Lines Co., a carrier failed to ship household goods on time to the shipper. 6 F.3d 305, 306 (5th Cir. 1993). The Fifth Circuit held that all of the shipper's claims against the carrier were barred except for the actual loss or injury to the property. Id. at 307. The barred claims included (1) the tort of outrage; (2) intentional and negligent infliction of emotional distress; (3) breach of contract; (4) breach of implied and express warranties; (5) violation of the Texas Deceptive Trade Practices Act; (6) misrepresentation and fraud; and (7) negligence and gross negligence. Id. at 306. See also Accura Systems, Inc. v. Watkins Motor Lines, Inc., 98 F.3d 874, 876 (5th Cir. 1996) (noting that attorney's fees were preempted by the Carmack Amendment); Hughes Aircraft Co., 970 F.2d 609 (9th Cir. 1992) (holding that claims of negligence were preempted).

Shull relies on Brown v. American Transfer & Storage for the position that his causes of action under the DTPA are viable. Brown provides a very limited exception to the Carmack preemption. See Brown v. American Transfer & Storage, 601 S.W.2d 931, 938 (Tex. 1980). In that case, the Texas Supreme Court held that the Carmack Amendment did not preempt a DTPA cause of action when the DTPA was predicated upon pre-contractual representations. Id.

Shull's claims in the present case are not based on pre-contractual dealings. Accordingly, his causes of action for negligence, violation of the DTPA, breach of contract and good faith, are all barred, and he is prevented from recovering attorney's fees or punitive damages. The Carmack Amendment limits liability to the declared value of the shipped goods, in this case, no more than $2000. See Air Products & Chemicals, Inc. v. Illinois Central Gulf Railroad Co., 721 F.2d 483, 485 (5th Cir. 1983). However, Shull has also failed to present evidence supporting his claim for actual damages in response to UPS's "no-evidence" motion for summary judgment. See Tex. R. Civ. P. 166a(i) (allowing for summary judgment on ground that there is no evidence on one or more essential elements of a claim on which an adverse party would have the burden of proof at trial). As a result, the trial court did not err in barring Shull's claim for actual damages as well. Accord...