Swift-Eckrich, Inc. v. Advantage Systems, Inc.

• Decision Date: 08 June 1999
• Docket Number: No. 97-4077-SAC.,97-4077-SAC.
• Citation: 55 F.Supp.2d 1280
• Parties: SWIFT-ECKRICH, INC., Plaintiff, v. ADVANTAGE SYSTEMS, INC. and D & S Trucking, Inc., Defendant.
• Court: U.S. District Court — District of Kansas

55 F.Supp.2d 1280

SWIFT-ECKRICH, INC., Plaintiff, v. ADVANTAGE SYSTEMS, INC. and D & S Trucking, Inc., Defendant.

No. 97-4077-SAC.

United States District Court, D. Kansas.

June 8, 1999.

COPYRIGHT MATERIAL OMITTED

John H. Stauffer, Jr., Goodell, Stratton, Edmonds & Palmer, Topeka, KS, Peter A. Greene, Thompson, Hine & Flory, Washington, DC, for Swift-Eckrich Inc.

Justice B. King, Fisher, Patterson, Sayler & Smith, Topeka, KS, Ryan E. Karaim, Franke & Schultz, P.C., Kansas City, MO, Thomas R. Buchanan, McDowell, Rice, Smith & Gaar, Kansas City, MO, for Advantage Systems Inc.

Ryan E. Karaim, Franke & Schultz, P.C., Kansas City, MO, John L. Mullen, Franke & Schultz, P.C., Kansas City, MO, for D & S Trucking Inc.

MEMORANDUM AND ORDER

CROW, Senior District Judge.

On April 21, 1997, Swift-Eckrich, Inc., a Delaware corporation engaged in the distribution of food products, commenced this action under 49 U.S.C. § 14706¹ against Advantage Systems, Inc. and D & S Trucking, Inc. Swift-Eckrich hired Advantage Systems to transport its products. Advantage Systems apparently is a transportation broker who engaged the services of trucking companies to actually haul the cargo. On June 20, 1996, Advantage Systems accepted a shipment from Co-Pack Foods, Inc. in Iowa for delivery to a refrigerated storage facility in Kansas. The shipment consisted of 2260 cases of turkey, ham and bologna which required refrigeration at 22 degrees during transportation. Advantage Systems engaged the services of D & S to transport the meat. Swift-Eckrich's complaint alleges that when the shipment arrived in Kansas on June 21, 1996, the temperature of the meats ranged between 52 and 65 degrees. Swift-Eckrich's complaint alleges that the failure to maintain the temperature of the meats at 22 degrees while in transit rendered the shipment worthless for their intended purpose of human consumption. Swift-Eckrich seeks total damages in the amount of $26,032.79.

Both defendants contest Swift-Eckrich's claims, arguing that the shipment was not damaged as alleged. Advantage Systems asserts a counterclaim against Swift-Eckrich for $9,103.80 it has not paid Advantage Systems for the shipment of other products. Advantage Systems also asserted a crossclaim against D & S, essentially aiming that D & S is contractually obligated to defend and indemnify it for any losses incurred in this case. That crossclaim has since been resolved.²

This case comes before the court upon the following motions:

1. Swift-Eckrich's "Motion for Enforcement of Settlement Agreement" (Dk.47).

2. Swift-Eckrich's "Motion for Summary Judgment" (Dk. 37).

1. Swift-Eckrich's "Motion for Enforcement of Settlement Agreement" (Dk.47).

According to Swift-Eckrich and D & S, all parties reached an agreement which not only settled Swift-Eckrich's claim for damages, but also closed this case as Advantage Systems agreed to the dismissal of its counterclaim against Swift-Eckrich without prejudice. Advantage Systems responds, arguing that it never authorized its attorney to settle the case in a manner that would permit Swift-Eckrich to setoff the claim it asserts in this case against any other claim asserted by D & S.

Legal Standards

"A trial court has the power to summarily enforce a settlement agreement entered into by the litigants while the litigation is pending before it." United States v. Hardage, 982 F.2d 1491, 1496 (10th Cir.1993). "`Once it is shown that an attorney has entered into an agreement to settle a case, a party who denies that the attorney was authorized to enter into the settlement has the burden to prove that authorization was not given.'" Trujillo v. State of New Mexico, 172 F.3d 63, 1999 WL 63885, *2 (10th Cir.1999) (quoting Turner v. Burlington N. R. Co., 771 F.2d 341, 345-46 (8th Cir.1985)). Whether the party has met its burden is a question of fact. Id. "Whether an evidentiary hearing is required to resolve material facts concerning the existence or terms of a settlement agreement is to be determined on a case-by-case basis." Johnson v. Landmark Plaza, Ltd., 16 F.3d 416, 1994 WL 36773 (10th Cir.1994) (Table).

"Questions regarding the enforceability or validity of ... [settlement] agreements are determined by federal law — at least where the substantive rights and liabilities of the parties derive from federal law." Mid-South Towing Co. v. Har-Win, Inc., 733 F.2d 386, 389 (5th Cir.1984); see Petition of Mal de Mer Fisheries, Inc., 884 F.Supp. 635, 639 n. 4 (D.Mass.1995) ("Federal law applies to the issue of an attorney's authority to settle a civil action brought under federal law.") (citing Michaud v. Michaud, 932 F.2d 77, 80 n. 3 (1st Cir.1991)). See also Snider v. Circle K Corp., 923 F.2d 1404, 1407 (10th Cir.1991) (applying federal common law to Title VII settlement agreement).

"Settlement agreements are a type of contract and are therefore governed by contract law." Bamerilease Capital Corp. v. Nearburg, 958 F.2d 150, 152 (6th Cir.), cert. denied, 506 U.S. 867, 113 S.Ct. 194, 121 L.Ed.2d 137 (1992). "A district court does not have the power to impose a settlement agreement when there was never a meeting of the minds." Wang Laboratories, Inc. v. Applied Computer Sciences, Inc., 958 F.2d 355, 359 (Fed.Cir. 1992) (citing Ozyagcilar v. Davis, 701 F.2d 306, 308 (4th Cir.1983)). Nor does the court have "the power to make an agreement for the parties or to decide, contrary to the facts and the law, that a draft settlement agreement was binding when the parties did not agree on it." Id.

"It is fundamental that an attorney does not by reason of his employment have authority to compromise his client's cause of action absent an emergency requiring prompt action." Hayes v. Eagle-Picher Industries, Inc., 513 F.2d 892, 893 (10th Cir.1975). "[W]here clients unequivocally repudiate an unauthorized agreement immediately after learning of it (and this means a few days or reasonable time), the compromises are to be set aside." Id. at 894.

Analysis

Although the court always encourages the parties to settle their disputes on mutually agreeable terms, in this case it does not appear that all parties agreed to all of the essential terms of the purported settlement agreement. The court agrees that the proposed settlement would, in essence, permit Swift-Eckrich to setoff the claim it asserts in this case against Advantage Systems' claim for $9,103.80 in any subsequent litigation. Advantage Systems did not assent to that material provision of the settlement agreement and has apparently consistently taken that position since learning of the purported settlement. Consequently, the court does not believe that there was ever a meeting of the minds on all of the essential terms of the settlement agreement and that it would be improper to hold Advantage Systems to an agreement it did not make.

Based upon its review of the materials provided by the parties, the court does not believe that an evidentiary hearing would serve any meaningful purpose. The court denies Swift-Eckrich's "Motion for Enforcement of Settlement Agreement" (Dk.47).

2. Swift-Eckrich's "Motion for Summary Judgment" (Dk.37).

Swift-Eckrich seeks summary judgment on its claim against Advantage Systems and D & S, arguing that no genuine issue of material fact precluding summary judgment exists. The defendants respond, arguing that genuine issues of material fact preclude summary judgment. The defendants also note that Swift-Eckrich has not complied with the requirements of D.Kan. Rule 56.1. Nevertheless, the defendants respond to the essential points raised in Swift-Eckrich's motion. Swift-Eckrich did not file a reply.

Liability of the Common Carrier

"The Carmack Amendment to the Interstate Commerce Act imposes liability for nondelivery of goods on "`carriers'" and "`freight forwarders.'" Chemsource, Inc. v. Hub Group, Inc., 106 F.3d 1358, 1361 (7th Cir.1997) (quoting 49 U.S.C. §§ 14706, 13102(3) and (8)).

The Carmack Amendment has been interpreted by the Supreme Court and this Court to provide that "a common carrier is liable for all losses which occurred while the goods were being transported by it, unless the carrier can demonstrate it is free from fault." See Jos. Schlitz Brewing Co. v. Transcon Lines, 757 F.2d 171, 176 (7th Cir.1985), certiorari denied, 474 U.S. 848, 106 S.Ct. 143, 88 L.Ed.2d 118. In order to recover damages under the Carmack Amendment, a plaintiff must first establish a prima facie case by providing evidence that (i) the goods in question had been delivered to the carrier in good condition; (ii) the goods had arrived at the final destination in a damaged or diminished condition; and (iii) the damages can be specified. See Missouri Pacific Railroad Co. v. Elmore & Stahl, 377 U.S. 134, 138, 84 S.Ct. 1142, 1144-1145, 12 L.Ed.2d 194; Schlitz, 757 F.2d at 173; S.C. Johnson & Son, Inc. v. Louisville & Nashville Railroad Co., 695 F.2d 253, 256 (7th Cir.1982). Once the plaintiff has satisfied these requirements, the defendant carrier will be liable for damage to the goods in question, unless it can show that it was free from negligence and that the damage was caused by "(a) the act of God; (b) the public enemy; (c) the act of the shipper himself; (d) public authority; (e) or the inherent vice or nature of the goods." Missouri Pacific, 377 U.S. at 137, 84 S.Ct. at 1144 (citations omitted); Schlitz, 757 F.2d at 173; S.C. Johnson, 695 F.2d at 256.

Pharma Bio, Inc. v. TNT Holland Motor Exp., Inc., 102 F.3d 914, 916 (7th Cir. 1996).

D.Kan. 56.1

The court agrees that Swift-Eckrich's motion for summary judgment does not comply with the requirements of D.Kan. 56.1. Among other transgressions, Swift-Eckrich has not set forth its statement of uncontroverted facts in separately numbered paragraphs. D.Kan. Rule 56.1 is not merely an advisory recommendation regarding the manner in which summary judgment motions should be prepared. Its requirements embody a set of rules proven by time and experience to benefit...