Ameriswiss Technology, LLC v. Midway Line of Illinois, Inc. et al
Filing
60
ORDER granting in part 59 Motion for Judgment. So Ordered by Magistrate Judge Landya B. McCafferty.(gla)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
Ameriswiss Technology, LLC
v.
Civil No. 11-cv-148-LM
Midway Line of Illinois, Inc.
O R D E R
On January 27, 2012, the clerk of the court entered a
default against Midway Line of Illinois, Inc. (“Midway”) on a
claim brought against it by Ameriswiss Technology, LLC
(“Ameriswiss”), under the federal Carmack Amendment, 49 U.S.C. §
14706.
That claim arises from a traffic accident in which
thirteen machines that Midway was transporting for Ameriswiss
were “damaged beyond repair.”
Compl. (doc. no. 1) ¶ 23.
Before
the court is Ameriswiss’s motion for entry of judgment pursuant
to Rule 55(b)(2) of the Federal Rules of Civil Procedure
(“Federal Rules”).
In its motion, Ameriswiss asks the court to
enter final judgment in its favor, against Midway, in the amount
of $545,000.
For the reasons that follow, Ameriswiss’s motion
is granted in part.
Discussion
By failing to respond to Ameriswiss’s complaint as required
by the Federal Rules, Midway has defaulted on Ameriswiss’s
Carmack Amendment claim.
Ameriswiss is entitled to a default
judgment as to liability given that its machines were delivered
to Midway in good condition and were damaged while being
transported by Midway.
See Camar Corp. v. Preston Trucking Co.,
221 F.3d 271, 274 (1st Cir. 2000) (setting out elements of
Carmack Amendment claim).
When a motor carrier is liable for
damaging a shipper’s goods, the shipper is entitled to recover
“the actual loss or injury to [its] property.”
14706(a)(1).
49 U.S.C.
The issue here is the amount of Ameriswiss’s
actual loss.
“Within the meaning of the Carmack Amendment, ‘actual loss
or injury to . . . property’ is ordinarily measured by the
reduction in market value at destination or by replacement or
repair costs occasioned by the harm.”
Camar, 221 F.3d at 277
(citing Fredette v. Allied Van Lines, Inc., 66 F.3d 369, 372
(1st Cir. 1995)).
“Although mathematical precision is not
required . . . a damages award must have a ‘rational basis in
the evidence.’”
Camar, 221 F.3d at 279 (quoting Thermo Electron
Corp. v. Schiavone Constr. Co., 958 F.2d 1158, 1166 (1st Cir.
1992); citing Jay Edwards, Inc. v. N.E. Toyota Distrib., Inc.,
708 F.2d 814, 819 (1st Cir. 1983)).
In other words, an award of
damages must be based on more than speculation.
See Camar, 221
F.3d at 277.
Here, the evidence of the market value of the machines that
Midway damaged is two-fold.
First, it is undisputed that on
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September 20, 2010, less than a month before the accident that
gave rise to Midway’s liability, Ameriswiss paid $44,800 for
thirteen machines,1 including eleven used Model D6 Escomatic
screw machines that were between twenty and thirty years old.
Second, Ameriswiss has submitted an affidavit from one of its
members (Paul Luscher) and an affidavit from an appraiser
(Steven Beck), both stating that Ameriswiss’s D6 Escomatics were
worth $545,000.
Those affidavits are supported by Beck’s
appraisal report which states that if Ameriswiss’s eleven D6s
had not been damaged, they would have had a fair market value of
$545,000 as of April 4, 2012.2
Beck’s report, however, says little of substance about how
he determined the value of the damaged D6s.
To be fair, the
report indicates that Beck viewed photographs of them,
“conducted an investigation into the market conditions for this
type of equipment,” and “consulted with several new and used
machinery dealerships as well as reports and periodicals.”
Pl.’s Mot. for Entry of J., Ex. B (doc. no. 59-2), at 3.
But,
the report does not indicate what Beck learned from those
sources that led him to determine the values of Ameriswiss’s
1
That price consisted of $40,000 for the previous owner of
the machines plus a twelve-percent commission for the auctioneer
who handled their sale.
2
Without any readily apparent explanation, Beck valued ten
of the D6s at $50,000 apiece, while assigning a value of $45,000
to the other one.
3
D6s.
More specifically, the report includes no information
about either attempted or completed sales of comparable
machines.
As between the $44,800 Ameriswiss paid for the machines
shortly before they were damaged and the $545,000 that Beck says
they were worth, the court concludes that their fair market
value is no more than $44,800.
Beck’s report defines fair
market value as:
[a] professional opinion of the estimated most
profitable price . . . to be realized for property in
an exchange between a willing buyer and a willing
seller, with equity to both, neither being under any
compulsion to buy or sell, and both parties fully
aware of all relevant facts, as of the effective date
of this appraisal report.
Pl.’s Mot. for Entry of J., Ex. B (doc. no. 59-2), at 4.
Beck’s
professional opinion is that the machines had a fair market
value of $545,000.
But his report identifies no evidence
supporting that opinion such as the prices asked by other
willing sellers for similar equipment or the prices paid by
other willing buyers.
The fact that Beck’s report mentions no
other sales of used D6s from the 1980s suggests that sales of
machines such as the ones Midway damaged occur infrequently
enough to make any opinion concerning their market value
inherently speculative.
See Camar, 221 F.3d at 278 (pointing
out, in connection with claim for lost profits, difference
between markets for fungible new goods and markets for used
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goods).
But, of course, the record does include evidence of one
sale of used Escomatic D6 screw machines involving a willing
buyer and a willing seller: Ameriswiss’s purchase of the
machines that Midway damaged, for $44,800.3
While the court has found no case that is directly on
point, the First Circuit’s opinion in Camar offers useful
guidance as to the kind of evidence necessary to support an
award of damages under the Carmack Amendment.
In Camar, the
plaintiff shipper was a company that, like Ameriswiss, bought
used equipment and refurbished it for resale.
273.
See 221 F.3d at
In August of 1995, Camar purchased 156 pieces of “used
marine equipment located at a naval depot in California,” id.,
“from the United States Navy’s Defense Reutilization and
Marketing Service (‘DRMS’),” id.
The “Navy had originally paid
$275,000 to acquire the equipment,” id., but sold it to Camar
for $215, id.
Camar then contracted with Preston to transport
its newly acquired equipment.
Id.
3
After Preston lost Camar’s
In response to the summary judgment motion filed by former
defendant C.H. Robinson Worldwide, Inc., Ameriswiss produced
evidence that it was prepared to offer $200,000 for the
equipment Midway later damaged, and that Paul Luscher was
surprised that the auctioneer accepted his offer of $40,000.
See Mem. of Law (doc. no. 49-1), at 6. But, as in Camar, “[t]he
low price for which [Ameriswiss] obtained the equipment suggests
. . . that in the eyes of the seller and of other [potential
purchasers] the market for it remained quite questionable and
uncertain.” 221 F.3d at 278. That is, Luscher may believe he
got a great deal on the D6s, but there is no objective evidence
from the marketplace to corroborate his belief.
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goods, “Camar submitted a loss claim to Preston of $137,500.”
Id.
When Preston did not pay that claim, Camar sued for
$137,500, and later “amended its complaint to allege damages of
$353,370, claiming it could have sold the equipment for [that]
sum.”
Id.
At summary judgment, Camar contended that [its] actual loss
should be measured by what foreign buyers had previously paid
[it] for similar items.”
Camar, 221 F.3d at 273-74.
Regarding
the legal aspect of Camar’s argument, i.e., the correct measure
of damages, the court of appeals held that the Carmack Amendment
“permits recovery of lost profits unless they are speculative.”
Id. at 277 (citing Pillsbury Co. v. Ill. Cent. Gulf R.R., 687
F.2d 241, 245-46 (8th Cir. 1982); Hector Martinez & Co. v. S.
Pac. Transp. Co., 606 F.2d 106, 108 (5th Cir. 1979); Polaroid
Corp. v. Schuster’s Express, Inc., 484 F.2d 349, 351 (1st Cir.
1973)).
The court of appeals then described Camar’s attempt to
prove its lost profits in the trial court:
To establish the dollar value of its loss, Camar
submitted exhibits describing each type of lost
equipment and comprising the record of its procurement
and of Camar’s previous sales of similar equipment to
foreign buyers. For example, one exhibit includes a
statement as follows:
This
lost
1995
Navy
is a bearing turbine, similar to the four
by Preston Trucking . . . . On July 21,
Camar sold one of these to the Brazilian
for $59,830. If the goods had been
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delivered and Camar had been able to sell the
missing four at that price, Camar would have
earned $239,320 on the four bearing turbines
Preston lost.
Procurement history data, including the identity of
the vendor and the price paid by the U.S. government,
follow. Next are invoices and other documents
reflecting the sale of the allegedly similar equipment
to the Brazilian Navy. The other exhibits are
similar, except as to two categories of equipment in
which the damages calculations are based solely on the
procurement history.
Id. at 277.
In the face of the foregoing evidence, including
the price Camar received for a turbine the month before it
purchased four similar turbines that Preston lost, “[t]he
district court determined that the $215 Camar paid for the
equipment was its value for purposes of ascertaining Camar’s
actual loss and that the evidence as to lost profits was too
speculative.”
Id. at 276-77.
The court of appeals agreed “that
the evidence of past sales on this record is too speculative to
form the basis of a damages award greater than the $215 purchase
price.”
Id. at 277.
The court continued:
Camar’s evidence did not identify any prospective
purchasers for the lost used equipment at prices like
those paid for the previously sold equipment, or,
indeed, at any price. In his deposition testimony,
Camar’s president, James Mercanti, admitted that Camar
had no customer for the equipment at the time of the
bid or at the time Preston lost the shipment. No
evidence of subsequent customer demand was submitted.
Id.
As the court of appeals explained, “we think the district
court did not err in concluding that ‘[t]he DRMS Notice of Award
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indicating Camar’s purchase price of $215 is the only nonspeculative evidence of the market value of the lost equipment.”
Id. at 278.
Here, the evidence concerning the fair market value of
Ameriswiss’s eleven used D6s is even less substantial than the
evidence of lost profits the court held to be insufficient in
Camar.4
In Camar, the plaintiff produced evidence of recent
sales of equipment similar to the equipment lost by the trucking
company.
Here, there is no evidence of any sales of equipment
comparable to the machines that Midway damaged.
Unsupported by
such evidence, Beck’s opinion, while rendered by an expert in
the field, cannot be regarded as anything more than wellinformed speculation about a “market [that is] quite
questionable and uncertain,” Camar, 221 F.3d at 278.
Thus, the
price Ameriswiss paid for the equipment that Midway damaged is
the only non-speculative evidence of the market value of that
equipment.
Having determined that Ameriswiss’s adequately supported
damages do not exceed the $44,800 it paid for the equipment that
4
While Ameriswiss is not seeking lost profits, the court
notes that based on the evidence in the summary judgment record
concerning the lack of identified customers for the D6s that
Midway hauled, see Mot. Summ. J., Ex. 1, Luscher Dep. (doc. no.
41-4), at 138, any claim for such damages would be as unavailing
as the lost-profits claim in Camar, see 221 F.3d at 277 (“In his
deposition testimony, Camar’s president, James Mercanti,
admitted that Camar had no customer for the equipment at the
time of the bid or at the time Preston lost the shipment.”).
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Midway hauled, the court turns to one final issue.
has a duty to mitigate its losses.
Ameriswiss
See Paper Magic Grp., Inc.
v. J.B. Hunt Transp., Inc., 318 F.3d 458, 463 (3d Cir. 2003)
(citing M. Golodetz Export Corp. v. S/S Lake Anja, 751 F.2d
1103, 1112 (2d Cir. 1985)).
For that reason, and because
Ameriswiss has retained the damaged machines, its losses are
limited to the fair market value of those machines less their
salvage value.
See Paper Magic, 318 F.3d at 465 (explaining
that where shipper retains damaged goods, it is entitled to fair
market value less salvage value, and where carrier retains such
goods, shipper is entitled to full fair market value); Eastman
Kodak Co. v. Trans Western Express, Ltd., 765 F. Supp. 1484,
1486 (D. Colo. 1991); see also B&D Appraisals v. Gaudette Mach.
Movers, Inc., 733 F. Supp. 505, 508-09 (D.R.I. 1990) (ruling
that jury committed no error in Carmack Amendment case by
awarding damages based on fair market value of damaged
machinery, reduced by net salvage value).
Allowing Ameriswiss the full market value of its machines
with no deduction for their salvage value, while it retains the
machines, would give Ameriswiss a partial double recovery, cf.
Paper Magic, 318 F.3d at 465, a result that is not permitted
under the Carmack Amendment.
The Carmack Amendment allows a
“shipper [to] recover ‘all damages resulting from’ the carrier’s
negligence.”
Am. Nat’l Fire Ins. Co. ex rel. Tabacalera
9
Contreras Cigar Co. v. Yellow Freight Sys., Inc., 325 F.3d 924,
935 (7th Cir. 2003) (quoting Se. Express Co. v. Pastime Amus.
Co., 299 U.S. 28, 29 (1936)).
But, “the shipper cannot recover
more than ‘the injury suffered.’”
American National, 325 F.3d
at 935 (quoting Ill. Cent. R.R. Co. v. Crail, 281 U.S. 57, 63
(1930)).
A shipper that recovers the full market value of its
damaged goods from a carrier, while retaining the goods, and
thus their salvage value, would recover more than the injury it
suffered, in the amount of that salvage value.
At summary judgment, former defendant C.H. Robinson
Worldwide, Inc. produced evidence that Ameriswiss had obtained
information on the scrap value of its machines, but had no other
information about their salvage value.
See Mot. Summ. J., Ex.
1, Luscher Dep. (doc. no. 41-4), at 147-48.
Before the court
can determine the damages to which Ameriswiss is entitled,
Ameriswiss must produce evidence of the salvage value of its
damaged equipment.
Conclusion
For the reasons described above, Ameriswiss’s motion for
entry of judgment, document no. 59, is granted to the following
extent: Ameriswiss is entitled to judgment against Midway in the
amount of $44,800, less the salvage value of the damaged
equipment.
The court will enter final judgment against Midway
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upon submission of evidence establishing the salvage value of
the thirteen machines Midway damaged.
The court concludes by
noting that in the event Ameriswiss opts for a salvage value
based on scrapping its machines, it would be well advised to
produce competent evidence that it would not be able to make
appreciably more money by engaging in some other form of
salvage, such as selling undamaged components individually and
selling as scrap only those pieces that are too badly damaged to
be reused.
SO ORDERED.
__________________________
Landya McCafferty
United States Magistrate Judge
November 15, 2012
cc:
John F. Bisson, Esq.
Wesley S. Chused, Esq.
Fredric Paul Gallin, Esq.
Mary K. Ganz, Esq.
Frank J. Weiner, Esq.
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