Talbots, Inc. v. Dynasty Int'l, Inc.

• Decision Date: 23 August 2011
• Docket Number: Civil Action No. 10–10395–JLT.
• Citation: 808 F.Supp.2d 351,2011 A.M.C. 2750
• Parties: The TALBOTS, INC. and National Union Fire Insurance Company of Pittsburgh, PA, Plaintiffs, v. DYNASTY INTERNATIONAL, INC. and CSX Transportation, Inc., Defendants.
• Court: U.S. District Court — District of Massachusetts

2011 A.M.C. 2750

808 F.Supp.2d 351

The TALBOTS, INC. and National Union Fire Insurance Company of Pittsburgh, PA, Plaintiffs,

v.DYNASTY INTERNATIONAL, INC. and CSX Transportation, Inc., Defendants.

Civil Action No. 10–10395–JLT.

United States District Court, D. Massachusetts.

Aug. 23, 2011.

Seth S. Holbrook, Holbrook & Murphy, Boston, MA, for Plaintiffs.

Bertram E. Snyder, Patrick O. McAleer, Gabriel T. Dym, Looney & Grossman LLP, Boston, MA, David J. Farrell, Jr., Nancy E. Zimmer, Law Office of David J. Farrell, Jr., S. Chatham, MA, for Defendants.

MEMORANDUM

TAURO, District Judge.I. Introduction

The Talbots, Inc. (the “Talbots”) and Dynasty International, Inc. (“Dynasty”) entered into a series of contracts for the shipment of goods. The goods were allegedly damaged or stolen by the time the Talbots received them. The Talbots, along with their insurer, National Union Fire Insurance Company of Pittsburgh, PA, (collectively “Plaintiffs”) sued both Dynasty and CSX Transportation, Inc. (“CSXT”) (collectively “Defendants”), alleging negligence and breach of contract.¹ Defendant CSXT filed a counterclaim against the Talbots.² Defendants have moved for summary judgment, arguing, inter alia, that Plaintiffs' claims are time-barred.

Presently at issue are Dynasty's Motion for Summary Judgment Against Plaintiffs [# 22], CSXT's Motion for Summary Judgment Against Plaintiffs [# 26], Plaintiffs' Motion to Amend Complaint to Add CSX Intermodal Terminals, Inc. as a Defendant [# 34], and CSXT's Motion to Strike Plaintiffs' Opposition to CSXT's Motion for Summary Judgment and Affidavit of C.R. McCauley [# 39]. For the following reasons, Dynasty's Motion for Summary Judgment and CSXT's Motion for Summary Judgment are ALLOWED, Plaintiffs' Motion to Amend Complaint is DENIED, and CSXT's Motion to Strike is DENIED AS MOOT.

II. Background ³

Plaintiffs do not dispute that Dynasty operates in one of two ways. Dynasty sometimes operates as a non-vessel-operating common carrier (“NVOCC”), in which case Dynasty assumes responsibility as a principal for the carriage of goods and issues a bill of lading.⁴ Alternatively, Dynasty, instead of operating as a carrier, issues a Forwarder's Cargo Receipt (“FCR”) and operate as a freight forwarder.⁵ As a freight forwarder, Dynasty only assumes responsibility as an agent for using reasonable care in selecting third parties to handle the transportation of goods.⁶

The Talbots contracted with Dynasty for two shipments of goods (carrying cartons of women's clothing) from China to Massachusetts.⁷ The two shipments contained fourteen containers.⁸ Between February 12, 2009 and March 9, 2009, Dynasty issued fourteen documents, one document to govern each of the fourteen containers.⁹ Two of the governing documents were labeled at the top as “bill[s] of lading.” ¹⁰ The remaining twelve documents were designated as “forwarder's cargo receipt[s]” (“the twelve FCRs”).¹¹

The twelve FCRs contained terms and conditions on the back, which included two particularly relevant sections. Section One of the twelve FCRs' terms and conditions precluded Dynasty for any liability for loss, damage, expense or delay to the goods, unless Dynasty carried, stored, or otherwise physically handled the shipment.¹² Section Nine of the twelve FCRs' terms and conditions required both that (a) any claim for loss be presented to Dynasty within ninety days of the incident and (b) any suit be filed within six months after the presentations of the claim.¹³

The two shipments (consigned to the Talbots) were transported by CSXT to the Talbot's premises in Massachusetts.¹⁴ CSXT's role was only providing an engine and engineer that pulled the trains containing the rail cars that contained the subject shipments.¹⁵ CSXT does not load or unload containers or place or remove seals from containers.¹⁶ CSXT could only be engaged to transport the shipments here through CSX Intermodal, Inc. (“CSXI”).¹⁷ CSXI is a broker that acts as a shipper's agent that arranges rail services for its customers on railroads, such as CSXT.¹⁸ CSXT's services were provided for by a contract that CSXI and CSXT had entered into—the “Exempt Rail Services Contract Between CSXT and CSXI.” ¹⁹ This contract was fully in effect at the time of the shipments at issue.²⁰ Any transportation by CSXT was also subject to the contract that CSXI had executed with its customers, which was the “2009 CSXI Service Directory 1.” ²¹

Neither CSXT nor CSXI were (a) notified of any shortages in Plaintiffs' shipments within 24 hours of the shipments' delivery to Plaintiffs nor (b) provided any written claims for either of the two subject shipments.²²

Some of the cartons of clothing in the shipments were allegedly damaged, missing, or stolen by the time they arrived at the Talbot's place of business in Massachusetts.²³ Plaintiffs allege that the damage or theft of the clothing occurred on CSXT's premises.²⁴ Plaintiffs further claims that the clothing was damaged or lost because of Defendants' negligence or breach of contract.²⁵

Dynasty first received written notice of a claim on March 25, 2009, at least as to the first shipment.²⁶ Notice of loss as to the second shipment was sent on April 17, 2009.²⁷

Well over six months later, on March 5, 2010, Plaintiffs brought breach of contract and negligence claims against Defendants.²⁸

On January 29, 2011, Dynasty filed its Motion for Summary Judgment Against Plaintiffs [# 22]. And on January 31, 2011, CSXT filed its Motion for Summary Judgment Against Plaintiffs [# 26]. Nearly two months after Defendants' motions, on March 19, 2011, Plaintiffs filed a Motion to Amend Complaint to Add CSX Intermodal Terminals, Inc. As a Defendant [# 34]. Finally, on April 4, 2011, CSXT filed a Motion to Strike Plaintiffs' Opposition to CSXT's Motion for Summary Judgment and Affidavit of C.R. McCauley [# 39].

III. Discussion

Summary judgment is appropriate when the moving party demonstrates “that there is no genuine dispute as to any material fact and the [moving party] is entitled to judgment as a matter of law.” ²⁹ A “ ‘genuine’ issue is one that could be resolved in favor of either party, and a ‘material fact’ is one that has the potential of affecting the outcome of the case.” ³⁰ The moving party bears the burden of showing that there is no genuine issue of material fact.³¹

A. Dynasty's Motion for Summary Judgment

Dynasty moves for summary judgment, arguing that Plaintiffs' suit is time-barred and that Plaintiffs' have failed to allege cognizable damages.³² Plaintiffs reply that their suit is not time-barred mainly because there are genuine issues of material fact in that Dynasty had issued bills of lading.³³

1. Freight Forwarder

A freight forwarder generally arranges for the movement of cargo at the request of a client.³⁴ A non-vessel operating common carrier (“NVOCC”), in contrast, consolidates cargo from numerous shippers into larger groups for shipment by an ocean carrier.³⁵ A NVOCC issues a bill of lading to each shipper and if anything happens to the goods during the voyage, then the NVOCC is liable to the shipper “because of the bill of lading that [the NVOCC] issued.” ³⁶ But a freight forwarder, because it does not issue a bill of lading, is not liable to the shipper for anything that occurs to the goods as long as the freight Forwarder limits it role to arranging for transportation.³⁷

If a party labels itself as a “freight forwarder” but is nonetheless performing the function of a carrier, then the burden of demonstrating any deviation from what freight forwarders normally do in the maritime context rests on the party seeking to demonstrate such deviation. ³⁸ In determining whether a party acted exclusively as a freight forwarder, a court may consider the following factors: “(1) the way the party's obligation is expressed in documents pertaining to the agreement;”

39 (2) “the history of dealings between the parties;” ⁴⁰ (3) “issuance of a bill of lading,” ⁴¹ and (4) “how the party made its profit.” ⁴²

This court concludes that Dynasty was acting as a freight forwarder for twelve of the fourteen containers. The material facts underlying this issue are not in dispute: the Parties do not contest the authenticity of the fourteen documents produced to this court.⁴³ These documents and the four factors noted above reveal that for twelve of the fourteen containers, Dynasty was acting as a freight forwarder.

The first factor supports this court's conclusion because the twelve documents unambiguously express (a) that Dynasty was acting not as a carrier but as a “freight forwarder” ⁴⁴ and (b) refer to the terms and conditions printed on the reverse of the FCRs, which limited Dynasty's liability to that typical of forwarding agents.⁴⁵

The third factor also strongly supports this court's conclusion because the documents were clearly labeled with the title “forwarder's cargo receipt.” ⁴⁶

The other factors do not cut against this court's conclusion. Neither Party presents any arguments regarding the second factor. Plaintiff's only argument perhaps pertains to the fourth factor. Specifically, Plaintiff argues that Dynasty was hired to “move the referenced goods” and was the receiver of the goods.⁴⁷ Insofar as Plaintiff implies that Dynasty did more than act as agent of the shipper and in fact was a carrier by picking up or delivering the package, this implication finds no support in the record. The role that Dynasty had for the containers governed by the bills of lading should not be conflated with the role that Dynasty had for the twelve FCR containers. ⁴⁸ For instance, in stark contrast to the two bills of lading, the twelve FCRs do not refer to Dynasty as the appropriate contact for delivery of the goods.⁴⁹

This court, however, cannot conclude that Dynasty was acting as a freight forwarder with regard to the containers governed by the two bills of lading.⁵⁰ Those two bills of lading are notably distinguishable from the twelve FCRs. The two bills of...