Tokio Marine & Fire Ins. v. J.J. Phoenix Exp.

• Decision Date: 30 March 2001
• Docket Number: No. 99 C 6439.,99 C 6439.
• Citation: 156 F.Supp.2d 889
• Court: U.S. District Court — Northern District of Illinois
• Parties: TOKIO MARINE & FIRE INSURANCE GROUP, as Subrogee of Tanita Corp. of America Plaintiff, v. J.J. PHOENIX EXPRESS, LTD., and Airco International, Inc., Defendants, and Airco International, Inc. Cross-claimant, v. J.J. Phoenix Express, Ltd. Cross-defendant, and Airco International, Inc. Third-party claimant, v. Nissin International Transport U.S.A., Inc., Third-party defendant.

Page 889

156 F.Supp.2d 889

TOKIO MARINE & FIRE INSURANCE GROUP, as Subrogee of Tanita Corp. of America Plaintiff, v. J.J. PHOENIX EXPRESS, LTD., and Airco International, Inc., Defendants, and Airco International, Inc. Cross-claimant, v. J.J. Phoenix Express, Ltd. Cross-defendant, and Airco International, Inc. Third-party claimant, v. Nissin International Transport U.S.A., Inc., Third-party defendant.

No. 99 C 6439.

United States District Court, N.D. Illinois, Eastern Division.

March 30, 2001.

Stephen C. Veltman, Frances M. Chua, Pretzel & Stouffer, Chtd., Chicago, IL, for Plaintiff.

Thomas F. Ging, Kevin R. Sido, Peter Herbert Carlson, Hinshaw & Culbertson, Chicago, IL, Stephen P. Eisenberg, Howard B. Randell, Leahy, Eisenberg & Fraenkel, Chicago, IL, Kathleen Veronica Crowe, Chuhak & Tecson, Chicago, IL, Daniel Patrick Dawson, Nisen & Elliot, Chicago, IL, Robert B. Christie, Henderson & Lynn, Chicago, IL, Ian T. Matyjewicz, Sudekum, Rosenberg & Cassidy, Chtd., Chicago, IL, Frederick John Sudekum, III, Sudekim, Rosenberg, Cassidy, Chtd., Chicago, IL, for Defendants.

MEMORANDUM OPINION AND ORDER

LEFKOW, District Judge.

Nissin International Transport U.S.A., Inc. ("Nissin"), third-party defendant, moves for summary judgment on Airco International, Inc.'s ("Airco") First Amended Third Party Complaint for indemnity and contribution from Nissin. For the reasons stated below, the court grants the motion.

BACKGROUND

This case involves the issue of where liability will ultimately lay for cargo that was to be transported from Illinois to Minnesota but was stolen before it arrived at its destination. Plaintiff, Tokio Marine & Fire Insurance Group ("Tokio"), as subrogee of Tanita Corp. of America ("Tanita"), has sued defendants J.J. Phoenix Express, Ltd. ("J.J.Phoenix") and Airco International, Inc. ("Airco"), incorrectly named as Airco, Inc., in a First Amended Complaint (hereafter "amended complaint") alleging claims against both defendants under the Carmack Amendment, 49 U.S.C. § 14706, as well as common law claims of bailment and negligence. Tokio alleges that on or about November 18, 1997, Tanita, through its agent, contracted with Airco, a common carrier, and/or¹ J.J. Phoenix, a common carrier, to transport a cargo of scales which weigh a human's body fat from Nissin's warehouse in Illinois to Glencoe, Minnesota. (Am. Compl.¶¶ 3-4, 7, 18.) The same day, Airco and/or J.J. Phoenix issued a Bill of Lading acknowledging receipt of these goods from the Nissin warehouse for delivery to Minnesota, loaded and signed for the cargo and then transported it to their terminal in Elk Grove Village, Illinois. The cargo was to remain there until the next morning when it was to be delivered to Minnesota. (Id. at ¶¶ 8-9, 18-19.) The Bill of Lading lists Airco as the carrier and "Tanita Corp. c/o Nissin Int'l" as the shipper. (Id. at Ex. A.) At the time that Airco and/or J.J. Phoenix received the cargo, it was in good order and condition, but the cargo was not delivered in like good order and condition but, rather, was lost and never recovered. (Id. at ¶¶ 10, 12, 20, 22.) Tokio alleges that as a result of the loss, Tanita was damaged in the amount of $121,400. (Id. at ¶¶ 13, 23.)

Airco filed a cross-claim against J.J. Phoenix. Airco also filed a third party complaint against Nissin for reimbursement alleging that Nissin negligently issued the Bill of Lading and failed to handle the cargo to avoid loss or was otherwise negligent. Nissin moved to dismiss the third party complaint, and Judge Shadur dismissed with leave to replead if Airco could do so in good faith. See Tokio Marine & Fire Ins. Group v. J.J. Phoenix Express, Ltd., 104 F.Supp.2d 946, 949 (N.D.Ill.2000). Subsequently, Airco filed a First Amended Third Party Complaint (hereafter "amended third party complaint"), the complaint at issue here, against Nissin for indemnity and contribution alleging that Nissin is a freight forwarder under the Carmack Amendment and strictly liable for any loss that Airco incurs to Tokio. In the amended third party complaint, Airco alleges the following facts: Airco is a broker of transportation services and Nissin is a freight forwarder that uses brokers and common carriers in the transportation of goods. Nissin received two shipments of scales from Tanita to assemble and assume responsibility for the shipment of the cargo to its destination in Minnesota. Nissin contacted Airco to select a carrier for the transportation of the cargo, and, Airco, inturn, selected and contracted with J.J. Phoenix to pick up the cargo from Nissin's warehouse. Nissin issued a bill of lading for transportation of the cargo from its warehouse in Illinois to Glencoe, Minnesota. On the evening of November 18, 1997, a J.J. Phoenix driver arrived with a trailer at Nissin's warehouse in Wood Dale, Illinois, Nissin loaded the cargo on the trailer, J.J. Phoenix signed the bill of lading and transported the cargo to its terminal in Elk Grove Village, Illinois where it was to remain until the next morning, but on the morning of November 19, the trailer and its cargo were discovered missing and believed stolen. (First Am. Third Party Compl. ¶¶ 4-12.)

Nissin moves for summary judgment arguing that (1) there is no strict liability third party claim for indemnity or contribution under the Carmack Amendment but Airco must plead and prove negligence, which Airco cannot do because it is undisputed that the cargo was stolen while in the J.J. Phoenix's possession; and (2) even under the strict liability theory alleged by Airco, Nissin was not acting as a freight forwarder for the cargo.² Because this court considers resolution of Nissin's first argument dispositive of the motion, it does not reach the second argument.

SUMMARY JUDGMENT STANDARDS

Summary judgment obviates the need for a trial where there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). To determine whether any genuine issue of material fact exists, the court must pierce the pleadings and assess the proof as presented in depositions, answers to interrogatories, admissions, and affidavits that are part of the record. Fed R. Civ. P. 56(c) Advisory Committee's notes. The party seeking summary judgment bears the initial burden of proving there is no genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In response, the non-moving party cannot rest on bare pleadings alone but must use the evidentiary tools listed above to designate specific material facts showing that there is a genuine issue for trial. Id. at 324, 106 S.Ct. 2548; Insolia v. Philip Morris Inc., 216 F.3d 596, 598 (7th Cir.2000). A material fact must be outcome determinative under the governing law. Insolia, 216 F.3d at 598-599. Although a bare contention that an issue of fact exists is insufficient to create a factual dispute, Bellaver v. Quanex Corp., 200 F.3d 485, 492 (7th Cir.2000), the court must construe all facts in a light most favorable to the non-moving party as well as view all reasonable inferences in that party's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

DISCUSSION

Airco's amended third party complaint seeks indemnity and contribution from Nissin under the Carmack Amendment for any liability it may incur to Tokio.³ In Count I, Airco seeks indemnity to the extent Airco is found liable to Tokio and in Count II, Airco seeks contribution from Nissin for the amount beyond Airco's pro rata share. As an initial matter, although Airco asserts in its amended third party complaint that it is a broker in its relationship with Nissin, this designation is irrelevant to Airco's indemnity and contribution claims against Nissin under the Carmack Amendment for Carmack liability it may incur to Tokio since (as set forth in more detail herein) only carriers or freight forwarders can be liable to shippers under the Carmack Amendment.⁴ As such, the court must assume that if Airco sustains any Carmack liability to Tokio, it will be because Airco has been determined to be either a carrier or a freight forwarder. Because Tokio only alleges in its complaint that Airco was a carrier and not a freight forwarder, the issue is narrowed even further to whether Airco, as a carrier potentially liable to Tokio, can proceed on its indemnity and contribution claims under the Carmack Amendment or whether Nissin is entitled to summary judgment on these claims.⁵

The Carmack Amendment provides:

§ 14706. Liability of carriers under receipts of bills of lading

(a) General Liability.—

(1) Motor carriers and freight forwarders. — A carrier providing transportation or service subject to jurisdiction under subchapter I or III of chapter 135 shall issue a receipt or bill of lading for property it receives for transportation under this part. That carrier and any other carrier that delivers the property and is providing transportation or service ... are liable to the person entitled to recover under the receipt or bill of lading. The liability imposed under this paragraph is for the actual loss or injury to the property caused by (A) the receiving carrier, (B) the delivering carrier, or (C) another carrier over whose line or route the property is transported.... A delivering carrier is deemed to be the carrier performing the line-haul transportation nearest the destination but does not include a carrier providing only a switching service at the destination.

(2) Freight Forwarder. — A freight forwarder is both the receiving and delivering carrier....

(b) Apportionment. — The carrier issuing the receipt or bill of lading under subsection (a) of this section or delivering the property for which the receipt or bill of lading was issued is entitled to recover from the carrier over whose line or route the loss or injury occurred the amount required to be paid to the owners of the...