Sni Solutions, Inc. v. Mining Int'l, LLC
| Decision Date | 18 August 2015 |
| Docket Number | Appeal No. 3-14-0552 |
| Parties | SNI SOLUTIONS, INC., an Illinois Corporation, Plaintiff-Appellant, v. MINING INTERNATIONAL, LLC an Illinois Limited Liability Company, Defendant-Appellee. |
| Court | United States Appellate Court of Illinois |
NOTICE: This order was filed under Supreme Court Rule 23 and may not be cited as precedent by any party except in the limited circumstances allowed under Rule 23(e)(1).
Appeal from the Circuit Court of the 14th Judicial Circuit, Henry County, Illinois,
Circuit No. 11-L-20
Honorable Richard A. Zimmer Judge, Presiding.
¶ 1 Held: Trial court erred when it found that plaintiff did not establish the elements of bailment where evidence demonstrated an agreement, delivery and loss of plaintiff's property. The trial court properly denied defendant's request for demurrage.
¶ 2 Plaintiff SNI Solution, Inc. brought this bailment action against defendant Mining International, seeking damages from Mining's alleged breach of the bailment and for demurragecharges. The trial court, following a trial, found in favor of Mining. SNI appealed. We reverse and remand on the bailment action and affirm on the denial of demurrage.
¶ 4 Plaintiff SNI Solutions, Inc. purchased deicing salt from Caterpillar, which arranged for shipment of the salt to New Orleans onboard a ship called the Zebra Wind. SNI used Mid-Ship Logistics, a shipping company, to transfer the salt from the Zebra Wind to barges for transport to various Midwest ports. SNI planned to store some of the salt at the Port of Will County, which was operated by defendant Mining International. SNI and Mining had an agreement, signed on November 2, 2009, that Mining would (1) unload and stockpile SNI's salt; (2) load authorized amounts of salt onto trucks for pickup by SNI customers, as authorized by SNI; (3) provide documentation of the amounts removed; and (4) not load tonnage beyond the authorized amounts. Mid-Ship provided an estimated time of arrival (ETA) notice to Mining on October 30, 2012, informing Mining of when the barges were due to arrive. Mining sent a second ETA on November 12, informing Mining of a November 12 arrival.
¶ 5 The barges arrived at the Will County port on November 12, 2009. They could not be unloaded, however, because Mining had not finished installing the equipment necessary to unload the salt. SNI rerouted some of the barges to other ports. The remaining barges were unloaded beginning on November 15 and it took five days to complete the unloading. Mid-Ship's records indicate 15,462.299 standard tons of salt were on the barges that were unloaded at the Joliet port. Mid-Ship billed SNI $21,600 in demurrage charges for fees incurred in the unloading delays. Mid-Ship's invoice showed there were 51 days of demurrage at $300 per barge, per day, for a total of $15,300 attributed to the delays at the Will County port. SNI received a total of $11,450 in credits from Mid-Ship against the demurrage charges.
¶ 6 Mining stored the salt, and as authorized by SNI, loaded it for SNI customers. In 2011, Mining informed SNI it would no longer provide storage and loading services. After SNI removed the remaining salt, both SNI and Mining discovered a shortfall of 1,486 tons between what was delivered to Mining and the amount of salt Mining loaded for SNI customers. In September 2011, SNI filed a complaint against Mining, and in its second amended complaint, alleged that Mining was negligent in its bailment (count I) and that SNI incurred demurrage charges as a result of Mining's negligence (count II). SNI sought $111,450 for damages under count I and $15,300 in damages under count II. Mining filed an answer and counter-claim, alleging that SNI had an unpaid balance of $13,029. SNI did not dispute that it did not pay the outstanding charges from Mining.
¶ 7 A bench trial took place and the following evidence was submitted. Steven Jackson, who had been a commodity trader for Caterpillar World Trade, purchased the salt and arranged its sale to SNI. He also hired Mid-Ship to place the loads on the barges and transport it to the various ports for SNI. He ordered draft weight surveys on SNI's behalf for the barges. A draft weight survey, a/k/a draft weight or engineered-weight, determines the weight of the cargo on a barge using engineering principles. An engineer-survey weight is accepted in the industry as weight delivered.
¶ 8 When the barges were unloaded in Will County, Mining did not reweigh the salt. It relied on the ETA notices that showed the amount of salt on each barge. The ETAs included the engineer-measure draft weights calculated by Mid-Ship. The ETAs were admitted as plaintiff's exhibit #2 and established that 15,462.299 standard tons of salt were on the barges assigned for unloading and storage at the Will County port. Mining used the ETA notices to charge SNI forunloading and storage of 15,462.299 standard tons of salt. SNI paid the invoice of $38,655.75 based on the 15,462.299 standard ton amount.
¶ 9 Thereafter, per their contract, Mining would fill salt orders for SNI customers as authorized by SNI. Mining weighed the salt it loaded for them and there were no reported discrepancies with SNI's customers between the loaded amount and the billed amount. Mining created salt tickets and invoices evidencing the salt transactions. In early 2011, Mining requested SNI remove the salt from its property because it needed the space. SNI contracted with Ozinga, which removed the salt from Mining for storage at an Ozinga facility. The evidence demonstrated that authorized sales and the salt removed by Ozinga totaled 13,976.299 standard tons, leaving a shortfall of 1,486 tons.
¶ 10 Mike Bellovics, SNI's president, contacted Mining about the shortfall. Wendy Weitzel, the controller who handled the accounting for Mining, including billing, prepared a document called "reconciliation" dated June 16, 2011. The "reconciliation" showed 15,462.299 tons of salt were offloaded; 97 tons of salt were cash sales; 100 tons were left on site; and 464 tons were attributed to 3% shrinkage rate. Mining could not account for 742 tons of salt. The cash sales were not specifically authorized by SNI and it never received the proceeds from them. In the bulk materials industry, the industry custom is that shrinkage is not allowed unless it is expressly provided for in the contract. The agreement between SNI and Mining did not allot for shrinkage.
¶ 11 Mining presented evidence regarding its storage and care of the salt and the security at its property. The property was completely fenced and all access points were gated. The property was bordered by a road, the Des Plaines River, a waste disposal facility, and another business that was protected by Homeland Security. All equipment keys were locked up when the port was not open. Mining also presented evidence that SNI owed it $13,029 on its final bill forloading SNI customers. Mining introduced Exhibits 24 and 31, which were documents Mid-Ship used in its transaction with Caterpillar. The documents showed the tonnage on each barge in both metric and standard tons. The metric tons on some columns on Exhibits 24 and 31 did not match the metric tons on the ETAs.
¶ 12 The trial court found that the salt was valued at $75 per ton and that SNI did not prove the amount of salt delivered to Mining by a preponderance of the evidence. It noted the metric tonnage on exhibits 24 and 31 were larger than the standard ton quantities, leading the court to surmise that two conversions were done and one was in error. The trial court further surmised that a calculation error occurred previously in the delivery chain, which was carried forward. The trial court also found that Mining rebutted any presumption of negligence, determining that Mining properly cared for the salt. The trial court further found that SNI's demurrage claim failed because demurrage was not provided for in the contract. Lastly, it also found there was no unreasonable delay in Mining's unloading of the barges.
¶ 13 The trial court entered judgment in favor of Mining on both counts of SNI's claim and on its counter-claim against SNI for its unpaid account balance in the amount of $13,029. SNI moved to reconsider on both counts. On reconsideration, the trial court found that Mining owed SNI for the unauthorized cash sales of 97 tons of salt. The trial court awarded SNI $7,275 and set off that amount against Mining's counter-claim of $13,029, resulting in a final award in favor of Mining in the amount of $5,754. SNI appealed.
¶ 15 SNI presents two issues for our review: whether the trial court erred when it found that Mining was not negligent in its bailment of SNI's salt and when it denied SNI demurrage charges.
¶ 16 We begin with the bailment issue. SNI argues Mining breached the bailment, asserting that it proved beyond a preponderance of the evidence that 15,462.299 standard tons of salt were delivered to Mining and 13,976.200 standard tons were authorized for removal, leaving 1,486 tons unaccounted for. It challenges the trial court's failure to afford proper weight to the business records showing delivery; its conclusion that Mining rebutted the presumption of negligence; and its determination that SNI did not establish negligence.
¶ 17 The elements necessary to sustain an action for a bailment include (1) an agreement, either express or implied, to create a bailment; (2) delivery of the property in good condition; (3) acceptance of the property by the bailee; and (4) failure by the bailee to return the property or the bailee's return of the property in a damaged condition. Tucker v. Soy Capital Bank & Trust Co., 2012 IL App (1st) 103303, ¶ 56 (quoting American Ambassador Casualty Co. v. Jackson, 295 Ill. App. 3d 485, 490 (1998)).
¶ 18 When a plaintiff has established a prima facie case, a rebuttable...
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