W. Home Transp., Inc. v. Hexco, LLC

• Decision Date: 27 June 2014
• Docket Number: Case No. 4:13–cv–076.
• Court: U.S. District Court — District of North Dakota
• Parties: WESTERN HOME TRANSPORT, INC., Plaintiff, v. HEXCO, LLC d/b/a/ HC Company, Defendant.

28 F.Supp.3d 959

WESTERN HOME TRANSPORT, INC., Plaintiff,

v.HEXCO, LLC d/b/a/ HC Company, Defendant.

Case No. 4:13–cv–076.

United States District Court, D. North Dakota, Northwestern Division.

Signed June 27, 2014

Motions denied. Benjamin J. Williams, Ryan C. McCamy, Nilles Law Firm, Fargo, ND, for Plaintiff.

Thomas M. Jackson, Jackson, Thomason & Weiler, P.C., Bismarck, ND, for Defendant.

ORDER DENYING MOTION TO DISMISS ON RULE 19 GROUNDS AND DENYING MOTION FOR SUMMARY JUDGMENT

CHARLES S. MILLER, JR., United States Magistrate Judge.

Before the court are pending motions by plaintiff Western Home Transport, Inc. (“Western”) for summary judgment and defendant Hexco, LLC, doing business as HC Company (“Hexco”) to dismiss for failure to join an indispensable party. The court held a telephonic hearing on the motions on April 25, 2014. The facts are either uncontested or stated most favorably for Hexco.

I. BACKGROUND

In October 2011, Hexco obtained a quote from Stone Creek Homes, Inc. (“Stone Creek”) to acquire six modular homes for delivery to Hexco's project site in Williston, North Dakota. The total cost for the six units according to the quote letter originated by Stone Creek was $571,752.00, which included $7,000.00 per modular home for transport FOB Williston. (Doc. No. 25–3).

While the facts are somewhat sketchy, it appears Hexco decided to finance the acquisition of the modular units using lease-purchase financing. On October 31, 2011, Hexco signed a lease-purchase agreement with Midwest Leasing, Inc. (“Midwest Leasing”) that was accepted on November 7, 2011. (Doc. No. 37–1). Also, on November 7, Stone Creek invoiced Midwest Leasing the sum of $285,876.00 towards the purchase of the homes, and Midwest Leasing wire-transferred the money to Stone Creek. The invoice reflected that the $285,876.00 was 1/2 of the total purchase price of $571,752.00. In addition, Stone Creek's invoice provided a breakdown of what was included in the total purchase price consistent with the quote it had provided earlier to Hexco. Relevant here is the fact that the breakdown of the total purchase price included transport charges of $7,000.00 per unit for a total of $42,000.00. (Doc. No. 25–2).

Midwest Leasing paid Stone Creek the remaining amount due on the total purchase price by wire transfers of $228,700.80 on February 14, 2012, and $57,175.20 on April 2, 2012. Midwest Leasing stated that Stone Creek required the final payments before it would ship the modular homes. Midwest Leasing states in an affidavit that the cost for transportation was Stone Creek's obligation, consistent with its invoice. (Doc. No. 37).

Western is a corporation that specializes in over-the-road transport of modular and manufactured homes and, as already noted, is the plaintiff in this action. Western claims that it transported five of the modular homes from a location in Central City, Nebraska to Hexco's project site in Williston, North Dakota on various dates beginning in late March 2012, with the last home delivered in the later part of May 2012. (Doc. No. 22, ¶ 3). Western claims its shipping charge for each of the homes was $15,855.00, that none of the charges have been paid, and that it is now owed $79,275.00 plus prejudgment interest. (Doc. No. 22).¹

To support its claim, Western has proffered for each of the modular homes it claims to have transported a document entitled “Freight Bill and Bill of Lading” (herein “bill” or “bill of lading”). It appears Western originated the five bills of lading because they contain Western's logo and other company-specific information. For one of the bills, Western provided only an unsigned copy. For the other four, there is both an unsigned copy and a fully executed copy. (Doc. Nos. 23–1 to 23–5).

Each of the bills of lading identified Stone Creek as the shipper and payor and Hexco (referred to as HC–Company) as the consignee. Each of the bills had a section that was filled in with the following printed information:

Shipper's Name

STONE CREEK HOMES

City

State

Zip

Cust Code

Amount to Bill Shipper

Shipper's Address

1201 W. MARKLEY RD

PLYMOUTH

IN

46563

1761

Consignee's Name

HC–COMPANY

City

State

Zip

Cust Code

To collect from Consignee

Consignee's Address

13481 60TH ST N.W.

WILLISTON

ND

58801

1307

Payor's Name

STONE CREEK HOMES

City

State

Zip

Cust Code

Amount to bill payor

Payor's Address

913 N 17TH AVE

CENTRAL CITY

NE

68826

1711

$15,855.0 0

Why Hexco and not Midwest Leasing was listed as the consignee is not entirely clear, but it may reflect the reality of its lease simply being a financing mechanism. Also, unclear is how the $15,855.00 shipping charge was arrived at. Hexco denies any involvement with or responsibility for the shipping and professes not to know, and most likely this was something that Stone Creek arranged with Western. In any event, the shipping charge of $15,855.00 set forth in the bills of lading was more than twice the amount that Stone Creek included as part of the purchase price. Finally, and perhaps most significantly with respect to the discussion that follows, the space entitled to “To collect from Consignee” in the foregoing matrix was left blank in each of the five bills and the space entitled “Amount to bill payor” ( i.e., Stone Creek) was filled in with the amount of Western's transportation charge.

Immediately below the above section, there appears in the bills of lading the following:

                Subject to Section 7 of conditions, if this shipment is to be delivered to the consignee without recourse on the shipper, the shipper shall sign the following statement: the carrier shall not make delivery of this shipment without payment of freight and all other lawful charges
                Collect Prepaid Charge
                                                                                
                Shipper Sign Here
                 Collect on Delivery $
                And Remit to
                 Purchase Order
                 Street
                City
                State
                08–* * *

In each of the bills, the Shipper did not sign in the space provided and the box where the words “Collect,” “Prepaid Charge,” or perhaps “Collect Prepaid Charge” (the printed language is unclear as to how the bills are to be read) was left blank. The words “Purchase Order” were printed in the box immediately below in each of the bills, and what this relates to is not explained. In the next box in the same column, there appears a number in each of the bills beginning with “08” that most likely was Stone Creek's serial number for the homes based on other documents in the record.

There next appears in each of the bills information about the load. In a column labeled “tariff,” the letters “ICC” have been inserted. On its face, this does not make sense since the ICC was abolished and replaced by the Surface Transportation Board with the passage by Congress of the Interstate Commerce Commission Termination Act (“ICCTA”) in 1995. Also, the ICCTA substantially deregulated the motor carrier industry by eliminating tariff-filing requirements for motor carriers except for the transportation of household goods and goods moved by or with the assistance of a water carrier in noncontiguous domestic travel, neither of which appears to be applicable here. See Transit Homes of America, Div. of Morgan Drive Away, Inc. v. Homes of Legend, Inc., 173 F.Supp.2d 1185, 1188–90 (N.D.Ala.2001) (discussing the 1995 deregulation and observing that the carrier made no claim that the manufactured homes transported in that case were the subject of the ICCTA's limited tariff requirements); 49 U.S.C. ch. 137. Western's affidavits and briefs filed in support of its motion for summary judgment are notably silent on whether Western's freight charges are the subject of a federally-established tariff.

In the column next to that provided for the tariff, there is space to fill in the mileage. In each of the bills of lading, the number 1750 has been inserted. This appears to be roughly twice the actual mileage between the place from where the transport originated in Central City, Nebraska to Hexco's site in Williston, North Dakota. But, whether this has anything to do with the amount of Western's freight charge and, if so, whether it is properly calculated on the total mileage operated by Western's truck as opposed to the mileage of the transported modular home is not explained.

Each of the five bills contained a statement “PAYOR IS LIABLE FOR ALL TIRES, TUBES, MECHANICAL FAILURES AND/OR STRUCTURAL DEFECTS” just above the space provided for signature. The possible significance of this is discussed later. Finally, each of the bills has a space at the bottom for signatures as follows:

                I hereby make the declarations of value (if any) and agree to the foregoing contract terms and conditions
                Date
                                                
                SHIPPER SIGN HERE
                 Foregoing shipment received subject to declaration (if any) or release terms and conditions herein
                Date
                                                
                WESTERN HOME TRANSPORT, INC
                DRIVER OR AGENT SIGNATURE
                NO PERSONAL CHECKS ACCEPTED
                RECEIVED the above described property in good condition except as noted above and agree to the foregoing contract terms and conditions
                Date
                Time
                                                
                CONSIGNEE OR AGENT
                AM PM
                SIGN AT DELIVERY Notes
                POINT (Sign here)
                 

(Doc. Nos. 23–1 to 23–5). Notably, Western's form appears to authorize the driver to execute the bill of lading on its behalf.

For the four bills for which Western tendered a fully-executed copy, there appear signatures which, purportedly, are on behalf of the shipper ( i.e., Stone Creek) and Western. In the space for the signature of the consignee or its agent, Hexco states that two of the four bills were signed by Ted McConnachie, who was an employee of Hexco at the site. McConnachie states in an affidavit he was under the impression after reading the bills that Stone Creek was responsible for the shipping charges. He states that the driver who delivered the homes told him the same thing and asked that he sign the bills only to acknowledge delivery....