Total Quality Logistics, LLC v. Red Chamber Co., CA2016–09–062
| Decision Date | 19 June 2017 |
| Docket Number | NO. CA2016–09–062,CA2016–09–062 |
| Citation | 2017 Ohio 4369,92 N.E.3d 62 |
| Parties | TOTAL QUALITY LOGISTICS, LLC, Plaintiff–Appellee, v. RED CHAMBER CO., et al., Defendants–Appellants. |
| Court | Ohio Court of Appeals |
Lindhorst & Dreidame, Barry Fagel and Matthew Curran, 312 Walnut Street, Suite 3100, Cincinnati, Ohio 45202, for plaintiff-appellee
David Prince and Miles Prince, 1912 East Vernon Avenue, Suite 100, Los Angeles, California 90058, for defendant-appellant
Durkee and Uhle, Richard Uhle, Jr., 285 E. Main Street, Batavia, Ohio 45103, for defendant-appellant
{¶ 1} Defendant-appellant, Red Chamber Co. ("RC"), appeals a decision of the Clermont County Court of Common Pleas, granting summary judgment in favor of plaintiff-appellee, Total Quality Logistics, LLC ("TQL").
{¶ 2} In 2008, RC, a seafood distributor began using TQL's services as a freight broker to transport RC's products to its customers. In turn, as a broker, TQL contracted with third-party trucking companies to transport the products across the country. A credit agreement governed this working relationship, and provided:
Applicant understands motor carriers under contract with [TQL] are required to maintain cargo loss and damage liability insurance in the amount of $100,000.00 per shipment. Please sign below acknowledging that [l]oads valued in excess of $100,000[.00] will not be tendered without enough prior written notification to TQL to allow TQL and its carriers the opportunity to arrange for increased insurance limits. Failure to provide timely written notice will result in your loads not being insured to the extent the value exceeds $100,000.00.
{¶ 3} In April 2013, RC contracted with TQL to arrange the transport of RC's goods from California to Florida. In turn, TQL retained Wells Trucking to transport and deliver RC's goods. During transport, an unknown third-party stole the load of goods valued at $186,450, which RC never recovered. TQL brought this action against RC claiming it had breached the credit agreement by failing to pay for 13 other brokered shipments between April 2, 2013 and July 5, 2013, and alleged damages of $53,402, plus interest, collection costs, and attorney fees. RC counterclaimed, asserting the loss of the value of the stolen goods was a result of TQL's breach of contract, negligence, and negligent supervision and hiring. TQL filed a third-party complaint against Wells Trucking alleging negligence and seeking indemnification. Wells Trucking's insurance carrier settled with RC for $100,000. In so doing, RC agreed to indemnify Wells Trucking for any claims by any other party for damages resulting from the loss.
{¶ 4} TQL moved for summary judgment on its breach of contract claim and RC's counterclaims. In so doing, TQL argued RC's counterclaims were barred by the doctrine of circular indemnity, preempted by the Carmack Amendment, 49 U.S.C. 14706(a), to the ICC Termination Act of 1995, 49 U.S.C. 14501(b), and fail on their merits as a matter of law. With respect to its breach of contract claim, TQL asserted RC's counterclaim was an attempt to offset the damages from RC's nonpayment of the 13 other brokered shipments; therefore, TQL was entitled to judgment as a matter of law. The trial court granted summary judgment in favor of TQL on its claim and RC's counterclaims. The trial court found the ICCTA preempted RC's state law counterclaims.
The trial court further found TQL met its burden of demonstrating an absence of a genuine issue of material fact regarding its claim, and that RC failed to rebut the evidence presented by TQL; therefore, TQL was entitled to judgment as a matter of law. This appeal followed.
{¶ 5} Assignment of Error No. 1:
{¶ 6} THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT FOR APPELLEE ON APPELLANT'S COUNTERCLAIM.
{¶ 7} RC contends the trial court erred by sua sponte granting summary judgment in favor of TQL on grounds not offered in TQL's motion for summary judgment thereby denying RC a meaningful opportunity to respond. Specifically, RC asserts the trial court erred by relying on the ICCTA in granting summary judgment on RC's counterclaims in favor of TQL because, at no point during the pendency of the matter, was that section of the statute presented as a basis for summary judgment.
{¶ 8} We review a trial court's ruling on a motion for summary judgment de novo. Grizinski v. Am. Express Fin. Advisors, Inc. , 187 Ohio App.3d 393, 2010-Ohio-1945, 932 N.E.2d 381, ¶ 14 (12th Dist.). "De novo review means that this court uses the same standard that the trial court should have used, and we examine the evidence to determine whether as a matter of law no genuine issues exist for trial." Morris v. Dobbins Nursing Home , 12th Dist. Clermont No. CA2010-12-102, 2011-Ohio-3014, 2011 WL 2449008, ¶ 14. Summary judgment is proper if there are no genuine issues of material fact to be litigated, the moving party is entitled to judgment as a matter of law, and reasonable minds can come to only one conclusion, and that conclusion is adverse to the nonmoving party. Civ.R. 56(C) ; Williams v. McFarland Properties, LLC , 177 Ohio App.3d 490, 2008-Ohio-3594, 895 N.E.2d 208, ¶ 7 (12th Dist.). The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Dresher v. Burt , 75 Ohio St.3d 280, 293, 662 N.E.2d 264 (1996). If the moving party meets its burden, the nonmoving party has a reciprocal burden to set forth specific facts showing a genuine issue for trial. Id.
{¶ 9} "A party seeking summary judgment must specifically delineate the basis upon which summary judgment is sought in order to allow the opposing party a meaningful opportunity to respond." Mitseff v. Wheeler , 38 Ohio St.3d 112, 526 N.E.2d 798 (1988), paragraph one of the syllabus. The moving party must state with particularity the areas of the opposing party's claim that do not raise a genuine issue of material fact and such assertion may be supported by evidence as allowed by Civ.R. 56(C). Id. at 115, 526 N.E.2d 798. A trial court, generally, may not sua sponte grant summary judgment upon grounds not raised by the prevailing party. Marshall v. Aaron , 15 Ohio St.3d 48, 50–51, 472 N.E.2d 335 (1984). Thus, a grant of summary judgment is improper when the nonmoving party has not had notice summary judgment may be entered against him. Ballinger v. Leaniz Roofing, Ltd. , 10th Dist. Franklin No. 07AP-696, 2008-Ohio-1421, 2008 WL 802722, ¶ 22. However, a trial court does not deprive a party of a meaningful opportunity to respond where the party has notice of an issue. See Revlock v. Lin , 8th Dist. Cuyahoga No. 99243, 2013-Ohio-2544, 2013 WL 3155286, ¶ 12 ; Ballinger at ¶ 23.
{¶ 10} Thus, the inquiry requires this court to examine the substance of the motion for summary judgment in the context of the statute to determine whether such notice was present. See Ameriswiss Tech. v. Midway Line of Ill., Inc. , 888 F.Supp.2d 197, 206 (D.N.H.2012) (). RC contends TQL argued its motion for summary judgment pursuant to only the Carmack Amendment, without any mention of the other sections of the ICCTA, and therefore, RC did not have notice of the issue upon which the trial court ruled, depriving RC of a meaningful opportunity to respond. Whereas, TQL asserts RC had such notice, as TQL specifically argued federal preemption pursuant to an amendment to the ICCTA, and in so doing, cited several cases that thoroughly examined both the Carmack Amendment and the ICCTA.
{¶ 11} Pursuant to well-established principles of transportation law, cargo damage claims against interstate motor carriers are determined under the Carmack Amendment to the ICCTA. Chubb Group Ins. Cos. v. H.A. Transp. Sys., Inc. , 243 F.Supp.2d 1064, 1068–69 (C.D.Cal.2002). Whereas the amendment does not specifically govern brokers in the scheme of interstate cargo loss and damage liability. Id. The ICCTA provides two potential theories of preemption. Ameriswiss at 204. The Carmack Amendment provides that:
[a] carrier providing transportation or service * * * 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 in the United States * * *.
(Citations omitted.) 49 U.S.C. 14706(a)(1). Accordingly, the Carmack Amendment creates a federal statutory remedy on a bill of lading against both the originating and destination carrier. To assert a prima facie case pursuant to the Carmack Amendment, one must demonstrate (1) delivery to the carrier in good condition, (2) delivery failure or arrival in damaged condition, and (3) the amount of damages caused by the loss. Camar Corp. v. Preston Trucking Co. , 221 F.3d 271, 274 (1st Cir.2000).
{¶ 12} "It is accepted * * * that the principal purpose of the [Carmack] Amendment was to achieve national uniformity in the liability assigned to carriers." Rini v. United Van Lines , 104 F.3d 502, 504 (1st Cir.1997) (). Thus, the "Carmack Amendment impliedly preempts state regulations related to damages for the loss or destruction of property during the course of interstate shipment." Ameriswiss at 204 (), citing Fitzgerald v. Harris , 549 F.3d 46, 52 (1st Cir.2008). Additio...
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