Siren Inc. v. Estes Express Lines
| Decision Date | 10 May 2001 |
| Docket Number | 11,0012001 |
| Parties | SIREN, INC., Plaintiff-Appellee, v. ESTES EXPRESS LINES, Defendant-Appellant.United States Court of Appeals, Eleventh Circuit |
| Court | U.S. Court of Appeals — Eleventh Circuit |
Appeal from the United States District Court for the Southern District of Florida. (No. 99-01326-CV-EBD), Edward B. Davis, Judge.
Before CARNES and MARCUS, Circuit Judges, and HAND1, District Judge.
This matter is before the Court on the Appeal of Estes, a motor carrier, from the district court's order granting a directed verdict in favor of Siren, the shipper, in the amount of $46,982.16. The issue on appeal is whether the parties agreed in writing to limit the liability of Estes in accordance with 49 U.S.C. § 14706(c)(1)(A). We conclude the parties did make such an agreement, and Estes' liability is limited to $8,309.00. Accordingly, the district court is due to be REVERSED. The district court's order granting Siren's motion for a directed verdict is VACATED and this matter is REMANDED to the district court with instructions to modify the final judgement in favor of Siren to reflect a recovery in the amount of $8,309.00.
On April 16, 1998, Estes picked up Siren's 700 pound shipment of razor blades in Miami, Florida for transport to Dunn, North Carolina. The bill of lading was prepared by the shipper, Siren. The bill of lading contained very little information other than the absolute essentials (shipper's name, consignee's name, carrier's name, the destination, a brief description of the commodities). However, the shipper indicated twice that the commodities should travel under "Class 85".
At trial, Estes introduced uncontroverted evidence that "Class 85" was understood throughout the trucking industry to mean, among other things, that the carrier's liability would be limited to $11.87 per pound.2 Estes maintains a tariff which specifically states that a "Class 85" shipment will limit Estes' liability to $11.87 per pound. Siren received, and knew that it received, an average discount from motor carriers of approximately 60% off of their full freight rates. For this particular shipment, Siren was aware that it received a freight rate which was discounted 62% from Estes' full freight rate. Siren knew the designation "Class 85" would be used by Estes to determine the freight rate. Siren could have chosen a different Class for this shipment and, in return, received a different rate along with a different limitation of Estes' liability. Siren never asked for and never received a copy of Estes' tariff.
Estes lost the shipment and offered to pay Siren $8,309, which is equal to 700 lbs X $11.87/lb. Siren sued Estes for recovery of the full value of the commodity ($46,982.16). After hearing all the evidence during a jury trial, the district court rendered a directed verdict in favor of Siren for $46,982.16, finding that "there [was] no showing that Plaintiff knew or reasonably should have known that the Class 85 designation carried with it the limitation of liability set forth in Defendant's tariff."3
However, it is important to point out that this finding of fact by the district court is not determinative of the legal issue in this case, because we find as a matter of law that even if Siren did not know of the terms of the Estes tariff, Estes had a right to rely on the limitation of liability aspect of the term "Class 85" used by Siren. Based on the above stated facts, and for the reasons set forth below, the order of the district court is due to be VACATED.
When the district court entered its directed verdict in favor of Siren, it focused its attention on whether the bill of lading incorporated by reference the Estes tariff. Indeed most of the parties' arguments to this Court focus on that very issue. That, however, is not the only issue in this case. Obviously, if Siren did incorporate the Estes tariff into the bill of lading, then Estes would prevail because the limitation of liability is found within that tariff. On the other hand, if Siren did not incorporate the Estes tariff into the bill of lading, does this necessarily mean that there is no limitation of liability? The district court would answer this question in the affirmative but this Court disagrees.
The applicable law is found at 49 U.S.C. § 14706. As a general rule, when a motor carrier loses or injures the property it is carrying the carrier is liable for "the actual loss or injury to the property." 49 U.S.C. § 14706(a)(1). However, there is an exception to this general rule found at 49 U.S.C. § 14706(c)(1)(A), which allows a carrier to limit its liability "to a value established by ... written agreement between the carrier and shipper...."
One way a carrier and shipper might agree in writing to a limitation of liability is if a) the carrier prepares a bill of lading which incorporates the carrier's tariff by reference, b) that tariff contains an applicable limitation of liability provision and c) the shipper agrees to and signs the bill of lading. See e.g., Atwood, v. U W Freight Line, Inc., 127 F.Supp.2d 1155 (D.Idaho 1999). Likewise, the shipper might prepare a similar bill of lading that the parties agree to and sign. See e.g., Nieman Marcus Group, Inc. v. Quast Transfer, Inc. (N.D.Ill.); Mechanical Technology Inc., v. Ryder Truck Lines, Inc., 776 F.2d 1085 (2d. Cir.1985).
Surely, the concept of a carrier and shipper who agree in writing to limit the carrier's liability is not bounded by a requirement that the carrier's tariff somehow be incorporated into the bill of lading. The statute merely requires that the carrier and shipper agree in writing to a reasonable value, above which the carrier will not be liable. 49 U.S.C. § 14706(c)(1)(A). In other words, the statute requires nothing more than a valid written contract between the parties establishing a reasonable value for the purpose of limiting the liability of the carrier. Id. Although it is true that this Court and other courts have expounded at length on the various requirements imposed upon a carrier who drafts the contract seeking to limit its own liability, those requirements were intended to protect shippers from carriers who would take advantage of their own superior knowledge and leverage when dealing with unwary shippers.
This Court does not deem it proper or necessary to protect shippers from themselves. We arrive at this conclusion upon an examination of the case law from federal courts across the country spanning more than a century. We note that every case, except one, cited by Siren in support of its position involved a carrier who prepared the bill of lading and presented it to the shipper. Adams Express Co. v. Croninger, 226 U.S. 491, 33 S.Ct. 148, 57 L.Ed. 314 (1913); Asset Mgt. & Control, Inc. v. ABF Freight System, Inc., 18 F.Supp 2d 187 (N.D.N.Y.1998); Bio-Lab, Inc. v. Pony Express Courier Corp., 911 F.2d 1580 (11th Cir.1990)4; Carmana Designs Ltd. v. North American Van Lines, Inc., 943 F.2d 316 (3rd Cir.1991); Hughes v. United Van Lines, Inc., 829 F.2d 1407 (7th Cir.1987); Jackson v. Brook Ledge, Inc., 991 F.Supp. 640 (E.D.Ky.1997); New York, N.H. & Hartford Railroad Co. v. Nothnagle, 346 U.S. 128, 73 S.Ct. 986, 97 L.Ed. 1500 (1953); Robinson v. Ralph G. Smith, Inc., 735 F.2d 186 (6th Cir.1984); Rohner Gehrig Co., Inc. v. Tri-State Motor Transit, 950 F.2d 1079 (5th Cir.1992); Tempel Steel Corp. v. Landstar Inway, Inc., 211 F.3d 1029 (7th Cir.2000); Toledo Ticket Co. v. Roadway Express, Inc. ., 133 F.3d 439 (6th Cir.1998).
The one case cited by Siren wherein the shipper drafted the bill of lading is Nieman Marcus Group, Inc. v. Quast Transfer, Inc. (N.D.Ill.1999). In that case, the court determined that the carrier's liability was properly limited. Furthermore, the Nieman Marcus court expressly stated that the shipper's drafting of the bill of lading was important to the decision. Nieman Marcus (it is "especially true [that the parties agreed to the limitation of liability] when the shipper itself prepared the bill of lading....").
This Court has found other cases wherein the shipper drafted the bill of lading. See e.g. Mech. Tech. Inc. v. Ryder Truck Lines, Inc., 776 F.2d 1085 (2nd Cir.1985); Hughes Aircraft Co. v. N. Am. Van Lines Inc., 970 F.2d 609 (9th Cir.1992); Am. Cyanamid Co. v. New Penn Motor Express, Inc., 979 F.2d 310 (3rd Cir.1992). In each of these cases the courts limited the carrier's liability, in part because the shipper drafted the bill of lading. Mech. Tech. Inc., 776 F.2d at 1087 (); Hughes Aircraft, 970 F.2d at 612 ( ); Am. Cyanamid, 979 F.2d at 314 ().
Dealing with an ever-so-slightly different issue, this Court previously expressed a reluctance to protect a shipper from itself when it drafted a bill of lading. See Swift Textiles, Inc., v. Watkins Motor Lines, Inc., 799 F.2d 697 (11th Cir.1986). In Swift, this Court enforced a two year statute of limitations contained within the carrier's tariff, irrespective of the fact that the shipper had no actual knowledge of the limiting provision in the tariff. Id. We explained,
that the courts should be ...
To continue reading
Request your trial