APPA Seafood, Inc. v. Obetz Transportation, Inc. et al
Filing
56
OPINION AND ORDER granting 42 Motion for Summary Judgment & denying 50 Motion for Partial Summary Judgment. Signed by Magistrate Judge Terence P Kemp on 4/10/2014. (kk2)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
APPA Seafood, Inc.,
:
Plaintiff,
:
v.
:
Case No. 2:12-CV-1095
:
Obetz Transportation, Inc.,
et al.,
Defendants.
MAGISTRATE JUDGE KEMP
:
OPINION AND ORDER
This matter is before the Court on a motion for summary
judgment on all counts filed by Defendant Devinder Singh d/b/a
McKee Transport (“McKee”) (Doc. #42) and a cross-motion for
partial summary judgment filed by Plaintiff APPA Seafood, Inc.
d/b/a APPA Fine Foods (“APPA”) (Doc. #50).
For the reasons set
forth below, McKee’s motion for summary judgment will be granted,
and APPA’s cross-motion for partial summary judgment will be
denied.
I. Background
This is a motor carrier case relating to the shipment of
food.
APPA, a food distributor, claims that a shipment of
chicken was not kept at the proper temperature during transport
and, consequently, it had to be destroyed.
APPA sued McKee and
Obetz Transportation, Inc. (“Obetz”) to recover for the loss of
the shipment, claiming that they were responsible for the proper
shipment of the goods from Denison, Iowa to Corona, California.
More specifically, in an amended complaint filed on November 13,
2013, APPA alleges that it engaged Fire & Ice Transport, Inc.
(“Fire & Ice”) as a motor carrier to transport the chicken and
that Fire & Ice brokered the load to McKee, as motor carrier or a
surface freight forwarder, without its knowledge.
APPA alleges
that McKee then “re-brokered the load” to Obetz, as a motor
carrier, again without its knowledge.
(Doc. #39 at ¶18).
According to APPA
The Goods were picked up in good condition on or about
May 25, 2012 in Denison, Iowa, at minus ten degrees
(-10E) Fahrenheit.
APPA notified the driver that the
equipment for his refrigerated trailer, which held the
Goods, must be kept at minus ten degrees (-10E)
Fahrenheit.
In addition, McKee and Fire & Ice had
documents, which they shared with Obetz about APPA’s
refrigeration requirements. The driver signed the Bill
of Lading (the “BOL”) governing the carriage of the Goods
on May 25, 2012. On or about May 29, 2012, the Goods
arrived at APPA’s facility in Corona, California, at a
temperature of 49.1 degrees Fahrenheit. The Goods were
rejected at delivery.
Id. at ¶¶20-23.
APPA claims that damages arising from the lost
load are in excess of $100,253.90.
In its amended complaint, APPA brings one claim against both
McKee and Obetz and three claims solely against McKee.
APPA does
not name Fire & Ice as a defendant in the amended complaint.
In
count one, APPA alleges that McKee and Obetz are liable under the
Carmack Amendment, 49 U.S.C. §14706, for their failure to deliver
the load in good condition.
In count two, APPA alleges that
McKee entered into a contract to transport and/or to arrange to
transport the goods and that McKee breached its obligations under
the contract, resulting in damages.
In count three, APPA alleges
that McKee entered into an implied contract to transport the
goods and/or to arrange to transport the goods and that McKee
breached the implied contract, resulting in damages.
Finally, in
count four, APPA asserts a negligence claim against McKee,
alleging that it breached its duty to properly transport and/or
properly arrange for transport of APPA’s goods, which proximately
caused APPA to suffer damages.
McKee denies liability and has moved for summary judgment on
all of APPA’s claims (Doc. #42).
APPA filed a response in
opposition to McKee’s motion for summary judgment (Doc. #49), in
2
addition to filing a cross-motion for partial summary judgment on
its Carmack Amendment claim against McKee (Doc. #50).
McKee
filed a combined reply in its support of its motion and
memorandum in opposition to the cross-motion for partial summary
judgment (Doc. #54).
Finally, APPA filed a reply in support of
its cross-motion for partial summary judgment (Doc. #55).
Thus,
the motions have been briefed fully, and they are now ripe for
review.
II. Motion for Summary Judgment Standard
Summary judgment is not a substitute for a trial when facts
material to the Court’s ultimate resolution of the case are in
dispute. It may be rendered only when appropriate evidentiary
materials, as described in Fed.R.Civ.P. 56(c), demonstrate the
absence of a material factual dispute and the moving party is
entitled to judgment as a matter of law.
Poller v. Columbia
Broadcasting Systems, Inc., 368 U.S. 464 (1962).
The moving
party bears the burden of demonstrating that no material facts
are in dispute, and the evidence submitted must be viewed in the
light most favorable to the nonmoving party.
Kress & Co., 398 U.S. 144 (1970).
Adickes v. S.H.
Additionally, the Court must
draw all reasonable inferences from that evidence in favor of the
nonmoving party.
(1962).
United States v. Diebold, Inc., 369 U.S. 654
The nonmoving party does have the burden, however, after
completion of sufficient discovery, to submit evidence in support
of any material element of a claim or defense on which that party
would bear the burden of proof at trial, even if the moving party
has not submitted evidence to negate the existence of that
material fact.
See Celotex Corp. v. Catrett, 477 U.S. 317
(1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986).
course, since “a party seeking summary judgment . . . bears the
initial responsibility of informing the district court of the
basis for its motion, and identifying those portions of [the
3
Of
record] which it believes demonstrate the absence of a genuine
issue of material fact,”
Celotex, 477 U.S. at 323, the
responding party is only required to respond to those issues
clearly identified by the moving party as being subject to the
motion.
It is with these standards in mind that the instant
motions must be decided.
III. Discussion
The Court first examines APPA’s claim arising under the
Carmack Amendment.
After doing so, the Court next examines
APPA’s state law claims for breach of contract, breach of implied
contract, and negligence.
A. Carmack Amendment Claim
Count one of APPA’s amended complaint arises under the
Carmack Amendment to the Interstate Commerce Commission Act, 49
U.S.C. §14706, which establishes the obligations of interstate
motor carriers.
The Supreme Court has described the Carmack
Amendment as follows
[T]he statute codifies the common-law rule that a
carrier, though not an absolute insurer, is liable for
damage to goods transported by it unless it can show that
the damage was caused by (a) the act of God; (b) the
public enemy; (c) the shipper himself; (d) public
authority; (e) or the inherent vice or nature of the
goods.
Missouri Pac. R.R. Co. v. Elmore and Stahl, 377 U.S. 134, 138
(1964)(internal quotations omitted).
A plaintiff sets forth a
prima facie case under the Carmack Amendment when it demonstrates
delivery of the cargo to the carrier in good condition, arrival
of the cargo in damaged condition, and damages.
Plough, Inc. v.
Mason and Dixon Lines, 630 F.2d 468, 470 (6th Cir. 1980); see
also Great West Casualty Co. v. Flandrich, 605 F. Supp. 2d 955,
966 (S.D. Ohio 2009) (setting forth the prima facie elements of a
Carmack Amendment claim).
Once the shipper has set forth a prima
facie case, “the burden of proof is upon the carrier to show both
4
that it was free from negligence and that the damage to the cargo
was due to one of the excepted causes relieving the carrier of
liability.”
Id.
In its motion for summary judgment, McKee argues that APPA
cannot set forth a prima facie case under the Carmack Amendment
because it never accepted custody of the cargo.
McKee admits
that it entered into a contract with Fire & Ice related to the
transport captioned “Freight Forwarder – Contract Carrier –
Contract,” dated May 25, 2012.
However, McKee claims that
“shortly later, [it] discovered that its refrigeration equipment
was not performing adequately, and it immediately advised . . .
Fire & Ice that would not be able to transport the shipment.”
(Doc. #42 at 5).
McKee alleges that it
advised Fire & Ice that another company named defendant
Obetz might have a truck available in the area of
Denison, Iowa. [McKee]’s owner, Devinder Singh, knew the
owner of defendant Obetz and he contacted defendant Obetz
to see if they had availability. Mr. Singh advised Fire
& Ice to contact defendant Obetz directly to make
arrangements.
Id. at 6.
McKee maintains that Devinder Singh did not hire or
retain Obetz.
Indeed, it claims that “[a]fter putting the two in
touch with one another, [Mr. Singh] had no further involvement in
the shipment.”
Id.
Based upon these facts, McKee argues that it
cannot be liable to APPA under the Carmack Amendment.
In its cross-motion, APPA does not dispute that McKee was
unable to transport the load due to a refrigeration unit
breakdown.
According to APPA, however, liability under the
Carmack Amendment extends beyond the motor carrier which actually
provides the transportation, and makes any carrier that provides
a service related to the transportation liable.
In this case,
APPA argues that McKee is liable under the Carmack Amendment
because it “made the arrangements . . . by making telephone
calls, passing along information, and booking the load” to be
5
transported by Obetz.
(Doc. #49 at 4).
Based upon these facts,
APPA argues that reasonable minds can find that McKee acted as a
motor carrier with respect to APPA’s goods.
In response, McKee argues that APPA is “playing fast and
loose with the facts” in arguing that McKee arranged for
transportation of the cargo.
(Doc. #54 at 2).
According to
McKee, it advised Fire & Ice “that it must itself directly secure
the services of another motor carrier, which it did both verbally
and through the issuance of a bill of lading and exchange of a
rate confirmation, neither of which reference [McKee] in any
manner whatsoever.”
Id.
(internal citations omitted).
McKee
further alleges that, consistent with these facts, it did not
issue an invoice or receive any compensation.
Consequently,
McKee argues that “there can be no serious dispute that the
original transportation agreement was terminated and substituted
with an entirely new transaction between [APPA], through its
agent Fire & Ice and defendant Obetz.”
Id.
In reply, APPA argues that the following is without dispute
“(1) Defendant McKee contracted to transport APPA’s Goods; (2) it
was provided all documents for such transport, including the
Dispatch Rate/Confirmation Agreement; and (3) when it was unable
to transport the Goods, Defendant McKee took action right away
and told Fire & Ice that Obetz Transportation could do it.”
(Doc. #55 at 1-2)(internal quotations omitted).
Consequently,
APPA argues that, “[r]eviewing all of the facts and evidence,
reasonable minds can only conclude that Defendant McKee provided
transportation or service with respect to APPA’s Goods, and
therefore, it should be held liable under the Carmack Amendment
as a matter of law.”
Id. at 2 (internal quotations omitted).
Most of the facts relevant to this claim are not in dispute.
In particular, there is no dispute that McKee agreed to transport
the load but was unable to do so due to a refrigeration equipment
6
failure.
There is likewise no dispute that McKee contacted Obetz
to inquire as to whether Obetz could transport the load once
McKee realized that it was unable to do so.
Further, there is no
dispute that, thereafter, Fire & Ice issued a written “Dispatch
Confirmation/Rate Agreement” to Obetz, and that APPA issued a
bill of lading naming Obetz as the motor carrier.
The parties do
not dispute that Obetz transported the goods, which were rejected
upon delivery.
The disagreement between APPA and McKee pertains
to what involvement, if any, McKee had with the transportation of
the goods beyond its initial telephone call to Obetz.
APPA is correct that liability under the Carmack Amendment
may extend beyond the carrier which physically transported the
goods.
Pursuant to the statute, a “motor carrier” is a “person
providing motor vehicle transportation for compensation.”
U.S.C. §13102(14).
49
“Transportation” is defined to include, inter
alia, “services related to that movement, including arranging
for, receipt, delivery, elevation, transfer in transit,
refrigeration, icing, ventilation, storage, handling, packing,
unpacking, and interchange of passengers and property.”
§13102(23)(B).
Id. at
See, e.g., Land O’Lakes, Inc. v. Superior Serv.
Transp. of Wis., Inc., 500 F. Supp. 2d 1150, 1155 (E.D. Wisc.
2007) (finding defendant was a “motor carrier” under the Carmack
Amendment despite the fact that defendant did not physically
transport and goods and arranged for another entity to broker the
transport).
Thus, McKee did not need to ship the goods in this
case in order to be subject to potential liability under the
Carmack Amendment.
Merely because McKee may be liable under the Carmack
Amendment, however, does not mean that APPA has demonstrated the
absence of a genuine issue of material fact as to this claim.
Indeed, in this case, the totality of the evidence does not lead
to a reasonable inference that McKee could be liable for its
7
actions under the Carmack Amendment.
Mr. Singh testified in his
deposition that he called Amir Ullah of Obetz to see if that
company would be able to make the transport.
He testified that
he instructed Obetz to engage in negotiations with Fire & Ice
independent of him, and that McKee had no further involvement.
Consistent with Mr. Singh’s contention that McKee had no further
involvement, Fire & Ice issued a written “Dispatch
Confirmation/Rate Agreement” to Obetz, and APPA issued a bill of
lading naming Obetz as the motor carrier.
APPA’s offers little evidence that McKee should be subject
to liability.
In a footnote in its memorandum in opposition to
McKee’s motion for summary judgment, APPA states that, in
addition to McKee’s own Dispatch Rate/Confirmation Agreement with
Fire & Ice, “McKee had in its possession, and produced in
discovery, another Dispatch Rate/Confirmation Agreement” which
“had Defendant Obetz’s name instead of defendant McKee.”
#49 n.1).
(Doc.
APPA also argues that
[a]fter the Goods were rejected by APPA, the evidence
supports that Defendant McKee played a role in moving the
Goods to a U.S. Cold Storage Facility in Bakersfield,
California – the same city where Defendant McKee is
located. The individual in charge at U.S. Cold Storage
Facility is Frank Garcia.
Although Defendant McKee’s
owner failed to acknowledge any involvement with
Plaintiff’s load after it was rejected, in discovery,
Defendant McKee produced a document from its file that
contains a handwritten name ‘Frank’ next to Defendant
McKee’s fax number.
Id. at 5.
This evidence alone, in light of all of the other
evidence in the record, would not allow a trier of fact
reasonably to infer that McKee arranged for the transport of the
goods by Obetz and, consequently, that it would be subject to
liability under the Carmack Amendment.
Further, the Court has considered the authority cited by
APPA in support of its position and finds the cases to be
8
factually distinguishable from this case.
Lakes, Inc., 500 F. Supp. 2d at 1155
See, e.g., Land-O-
(finding Carmack Amendment
applicable where, pursuant to a contract, defendant arranged for
another party to broker the load to the trucking company which
transported the goods); Mach Mold, Inc. v. Clover Assoc. Inc.,
383 F. Supp. 2d 1015 (N.D. Ill. 2005) (holding Carmack Amendment
was applicable where plaintiff authorized defendant to ship the
machine, and that defendant did so by contracting with another
party to help); Advantage Freight Network v. Sanchez, No. CV-F07-827-LJO-SMS, 2008 U.S. Dist. LEXIS 81816 (E.D. Cal. Sept. 10,
2008)(determining that the Carmack Amendment was applicable where
defendant agreed to transport the goods and arranged for their
transportation through his driver).
As McKee argues, “the cases
relied upon by plaintiff are misplaced, as they rely on fact
patterns where a motor carrier accepted responsibility for a
shipment and simply sub contracted its own work responsibilities
– an altogether different situation.”
(Doc. #54 at 6).
Based on
the foregoing, the Court will grant McKee’s motion for summary
judgment on the Carmack Amendment claim and will deny APPA’s
cross-motion for partial summary judgment on the same claim.
B. State Law Claims
The Court now turns to APPA’s state law claims for breach of
contract, breach of implied contract, and negligence.
In count
two of the amended complaint, APPA alleges that “[i]n the event
McKee is found not to be a carrier, it should be found to be a
broker with respect to the Shipment of Goods.”
¶38).
(Doc. #39 at
APPA states that it was the intended beneficiary of the
contract pertaining to the transport of the goods and,
consequently, McKee is liable to it for breaching its obligations
as a broker under the contract.
McKee argues that it is entitled
to summary judgment on this claim because “not only is there (1)
no basis in fact or law to suggest McKee Transport was ever a
9
freight broker, but (2) there was never any contractual
relationship or proximate causation, in any event.”
(Doc. #42 at
11).
In count three of the amended complaint, APPA alleges that
McKee is liable to it for breaching its obligations as a broker
under an implied contract intended to benefit APPA.
In response,
McKee argues again that it “clearly never acted in the capacity
of a freight broker.”
Id. at 14.
McKee also contends that “this
claim is barred as a matter of law by (1) federal preemption,
both implied and express, and (2) even if it were not preempted,
there is no basis under Ohio law to sustain a claim for breach of
implied contract” under the facts presented in this case.
Id.
In count four of the amended complaint, APPA alleges that
McKee breached its duties as a broker by failing properly to
transport and/or arrange for the transportation of the goods.
APPA further alleges that McKee’s negligence proximately caused
the destruction of APPA’s goods, resulting in damages believed to
be in excess of $100,253.90.
is barred by preemption.
McKee again argues that this claim
Alternatively, McKee contends that,
even if this claim is not preempted, it “fails on all essential
elements as a matter of law.”
(Doc. #42 at 18).
More
specifically, McKee argues that even if it “acted as a broker,
then there is still no factual basis upon which to support a
common law claim for negligence because [it] cannot be held
liable for the negligence of defendant Obetz in failing to
maintain the desired temperature.”
Id.
In its memorandum in opposition to McKee’s motion for
summary judgment, APPA does not dispute that the Carmack
Amendment preempts state law claims that fall within the scope of
that statute.
However, APPA argues that “if Defendant McKee is
deemed a broker, APPA’s state law claims fall outside the scope
of the Carmack Amendment and, therefore, are not subject to
10
federal preemption.”
(Doc. #49 at 12).
APPA also argues that it
has enforceable rights under the contract between Fire & Ice and
McKee, despite the fact that it is not named in the contract.
For purposes of resolving McKee’s motion for summary
judgment, even if the Court assumes for the sake of argument,
without deciding, that APPA’s claims are not preempted and that
APPA had enforceable rights under the contract, McKee would still
be entitled to summary judgment on APPA’s claims for breach of
contract, implied breach of contract, and negligence.
Simply
stated, APPA fails to set forth facts to support its state law
claims for relief.
Although Fire & Ice and McKee had a written
contract for McKee to transport APPA’s goods, the evidence
permits only one inference – that those parties mutually agreed
to terminate that contract when McKee was unable to perform.
Thus, the evidence supports a finding of mutual rescission or
abandonment, followed by Fire & Ice’s creating a new contract
with Obetz.
See, e.g., Nebco & Assoc., 23 Cl. Ct. 635, 642
(1991)(observing that parties may mutually agree to rescind a
contract by conduct which indicates intent by both parties to
abandon the contract)(citing Restatement (Second) of Contracts
§283, comment a).
Furthermore, the plain language of the
contract between Fire & Ice and McKee placed McKee in the
position of a carrier, and it did not allow McKee to arrange for
transportation of the goods without prior written consent.
#50, Ex. 2 at ¶12).
(Doc.
APPA fails to set forth any argument or
evidence suggesting that Fire & Ice provided such written
consent.
Because the totality of the evidence does not support a
reasonable inference that McKee either had a contract to
transport the goods which survived the new arrangement made with
Obetz or that it owed any duty to APPA which could lead to tort
liability, McKee’s motion for summary judgment on these claims
will be granted.
11
IV. Conclusion
For the reasons set forth above, McKee’s motion for summary
judgment is granted (Doc. #42) and APPA’s cross-motion for
partial summary judgment is denied (Doc. #50).
IT IS SO ORDERED.
/s/ Terence P. Kemp
United States Magistrate Judge
12
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?