Annett Holdings Inc v. A1 Trucking Service LLC
ORDER granting in part and denying in part 19 Motion for Summary Judgment. The Court GRANTS the Motion for Summary Judgment (Dkt. No. 19 ) as to the Carmack Amendment claim and DENIES the motion as to the remaining state claims. Signed by the Honorable Richard M. Gergel on 8/24/2015. (hcic, )
n~ THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
Annett Holding, Inc., d/b/a TMC
A I Trucking Service, LLC,
Civil Action No. 4: 14-cv-3948-RMG
This matter is before the Court on Plaintiffs Motion for Summary Judgment (Dkt. No.
19). For the reasons set forth herein, the Court hereby GRANTS in part and DENIES in part the
Motion for Summary Judgment.
On a motion for summary judgment pursuant to Federal Rule of Civil Procedure 56, the
Court must construe all inferences and factual disputes in favor of the nonmoving party.
However, here there is no apparent disagreement about any of the facts.
Plaintiff is a transportation logistics company incorporated under the laws of the State of
Iowa whose corporate offices and principle place of business is in Des Moines, Iowa.
Defendant, Al Trucking Service, LLC (AI), is a motor carrier incorporated in South Carolina
and located in Timmonsville, South Carolina. Al appears to be owned and/or operated by Mr.
Ed Szczucki and Ms. Cindy Szczucki, whose depositions, along with the contracts between the
parties, provide the factual basis of the summary judgment filings.
On October 19,2013, the Okonite Company contracted with PlaintiffTMC Logistics
(TMC) to transport twenty-one (21) reels of cable from South Carolina to North Carolina. TMC
contracted with Al to haul the load, and the two parties signed a Contract Carrier Agreement on
December 19,2013. (Dkt. No. 19 at 1; Dkt. No. 19 at 1). The Agreement is attached to the
Motion for Summary Judgment as Exhibit 2. (Dkt. No. I9~2). On December 20,2013, the
parties signed a Rate Confirmation sheet and Al picked up the freight from Okonite in
Orangeburg, SC. Al then transported the freight to its trucking yardin Timmonsville, SC.
Finding a mechanical issue with the tractor that was intended to haul the load, Mr.
Szczucki disconnected the trailer from the tractor and took the tractor to be repaired. The trailer
and the reels were stolen from AI's unlocked trucking yard on the morning of December 23,
2013. (Dkt. No. 19 at 5, citing C. Szczucki Dep. 56:25-27). Okonite then demanded payment
for the stolen freight and TMC reimbursed Okonite $110,703.19. (Dkt. No. 19 at 2). TMC
requested that Al reimburse it for the stolen freight and Al refused to do
Plaintiff then filed
this suit, alleging five causes of action: (1) Breach of Contract; (2) violation of the Carmack
Amendment to the Interstate Commerce Act; (3) Negligence; (4) Contractual Indemnity; and (5)
Equitable Indemnity. (Dkt. No.1).
A. Legal Standard
Summary judgment is only appropriate if a party "shows that there is no genuine dispute
as to any material fact" and that the movant is entitled to judgment as a matter of law. Fed. R.
Civ. P. 56(a). In other words, summary judgment should be granted "only when it is clear that
there is no dispute concerning either the facts of the controversy or the inferences to be drawn
from those facts." Pulliam Inv. Co. v. Cameo Props., 810 F.2d 1282, 1286 (4th Cir. 1987). "In
determining whether a genuine issue has been raised, the court must construe all inferences and
ambiguities in favor of the nonmoving party." HealthSouth Rehab. Hosp. v. Am. Nat 'f Red
Cross, 101 F.3d 1005, 1008 (4th Cir. 1996). The party seeking summary judgment shoulders the
A 1 also advises that it has reported a claim to its insurer, which has not honored the claim. (Dkt. No. 21 at 2).
initial burden of demonstrating to the court that there is no genuine issue of material fact.
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the moving party has made this
threshold demonstration, the non-moving party, to survive the motion for summary judgment,
may not rest on the allegations averred in his pleadings. Id. at 324. Rather, the non-moving
party must demonstrate that specific, material facts exist that give rise to a genuine issue. Id.
Under this standard, "[c]onclusory or speculative allegations do not suffice, nor does a 'mere
scintilla of evidence'" in support of the non-moving party's case. Thompson v. Potomac Elec.
Power Co., 312 F.3d 645,649 (4th Cir. 2002) (quoting Phillips v. CSX Transp., Inc., 190 F.3d
285,287 (4th Cir. 1999)).
B. Plaintiff's Claims
Plaintiff has moved for summary judgment on all five of its claims. Defendant has filed a
very short brief in response, addressing the Carmack Amendment claim directly, and the contract
and negligence-related claims more broadly. Because it appears that the contract and negligence
causes of action are preempted by federal law pursuant to the Carmack Amendment, the parties'
arguments with respect to the state claims are considered only insofar as the negligence analysis
is relevant to liability under the Carmack Amendment.
1. The Carmack Amendment
The Carmack Amendment is a law governing motor carrier liability, initially adopted by
Congress as an amendment to the Interstate Commerce Act of 1887. It is "a comprehensive
exercise of Congress's power to regulate interstate commerce. As a result it has long been
interpreted to preempt state liability rules pertaining to cargo carriage, either under statute or
common law ... 'there can be no rational doubt but that Congress intended to take possession of
the subject and supersede all state regulation with reference to it.'" 5K Logistics, Inc. v. Daily
Exp., Inc., 659 F.3d 331,335 (4th Cir. 2011) (quoting Adams Express Co. v. Croninger, 226 U.S.
491,505-06 (1913)). The Cannack Amendment provides that a carrier is liable "for the actual
loss or injury to the [transported] 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 or from a place in the United States to a place in an adjacent foreign country ...."
Courts have generally interpreted the Cannack Amendment's language to impose
"something close to strict liability" upon carriers. See, e.g. 5K Logistics, Inc. v. Daily Exp., Inc.,
659 F.3d 331,335 (4th Cir. 2011) (quoting Mitsui Sumitomo Ins. Co., Ltd. v. Evergreen Marine
Corp., 621 F.3d 215,217 (2d Cir. 2010) (quoting Rankin v. Allstate Ins. Co., 336 F.3d 8, 9 (1st
Cir.2003))). According to the Supreme Court, a party seeking to recover must establish a prima
facie case, whereupon the burden shifts to the carrier to prove that they were free from
negligence and that the damage or loss resulted from a statutorily excepted cause such as an act
of god, war, or the inherent vice of the goods. Missouri Pac. R.R. Co. v. Elmore & Stahl, 377
U.S. 134, 138 (1964).
Here, there is no dispute that the freight arrived at AI' s facility in good condition, and
that before leaving the carrier's possession, it was lost in its entirety. According to Plaintiff,
these facts are therefore sufficient to meet the three required elements of a prima facie case: 1)
delivery of goods in good condition to the carrier; 2) arrival to their destination in damaged
condition; and 3) the amount of damages. (Dkt. No. 19 at 5, citing Missouri Pac. R.R. Co, 377
U.S. at 138; Duck Head Footwear v. Mason and Dixon Lines, Inc., 41 Fed. App'x 692, 698 (4th
Defendant makes two arguments defending itself from Cannack Amendment liability in
its Response to the Motion for Summary Judgment. First, it contends that the Amendment "has
no application, in this action, as all parties acknowledge that the cable was stolen." (Dkt. No. 21
at 3). Second, it argues that it was not negligent in leaving the freight unattended while its
tractor was being repaired. (Id.).
As to whether the Carmack Amendment is applicable where goods have been stolen, or
are alleged to have been stolen, the clear language of the statute indicates that it is intended to
address impose liability for "the actual loss or injury to the property caused by" the carrier. 42
U.S.C. § 14706. The cargo, having disappeared from Defendant's property, was certainly
subject to an "actual loss" of the most severe variety. Defendant argues that because the prima
facie elements as they are normally recited require that the plaintiff show "damaged" goods
rather than "lost" goods, that Carmack Amendment cannot apply where goods are stolen. This
interpretation is overly formalistic, and neglects the plain meaning of the statute, which was
clearly intended to address instances of loss as well as damage. The statute was written to
consolidate the handling of carrier-related claims, and it includes carefully crafted exemptions
for certain extreme scenarios. Reading an additional exemption into the law for a rather
commonplace occurrence would have the perverse effect of multiplying the number and
confusion of cases brought under state law against carriers. Plaintiffs view, which invokes the
Carmack Amendment to claims for stolen goods, is also widely accepted by the courts. See, e.g.
AIG Europe, S.A. v. Locust Point Terminal Corp., 1998 WL 1347, *2 (4th Cir. 1998) (applying
the Carmack Amendment in a case of stolen goods and explaining that "to establish a prima facie
case for recovery against [Defendant], [Plaintiff] must prove: (1) that intact containers were
delivered to [Defendant] and (2) that [Defendant] delivered less than intact containers" to their
Having found that Plaintiff has succeeded in presenting a prima facie case, the burden is
therefore on Defendant to show 1) that its negligence did not cause the loss of the freight; and 2)
that one of the statutory exemptions (an act of god, an act of war or a public enemy, an act or
default of the shipper, an act of public authority, or the inherent vice or nature of the goods
transported) applies. See Missouri Pac. R. Co. v. Elmore & Stahl, 377 U.S. 134, 139 (1964)
(noting that even where damage to freight resulted from "other causes, such as the acts ofthird
parties," there is no exception from carrier liability under the Carmack Amendment). Defendant
has argued that the question of whether a particular set of actions constitute negligence is
normally a question for the jury, inappropriate for resolution on a Rule 56 motion. See Vaughn
v. A. E. Green Co" 277 S.C. 392, 393 (1982), (finding that where two witnesses gave affidavits
testifying that defendant's employees knew that using gasoline to clean around a pilot light was
dangerous and nonetheless used gasoline and started a fire, the question of whether such
behavior was negligent was for the jury) (citing cases collected at West's S.c. Digest, Key No.
181(2)). However, the Response includes no discussion of the statutory exemptions. Because no
evidence has been presented, and no argument made, that could carry Defendant's burden to
show an applicable exemption from Carmack Amendment liability, the Court hereby grants
summary jUdgment to Plaintiff on its Carmack Amendment claim.
2. State Negligence and Contract Claims
Plaintiff acknowledges in its Motion for Summary Judgment that the Carmack
Amendment preempts its state claims, but presents the state claims as alternative grounds for
relief in the event that the Court finds the Carmack Amendment inapplicable. (Dkt. No. 19 at 6,
citing 5K Logistics, Inc. 659 F.3d 331at 335). Having found the Carmack Amendment the
appropriate remedy for Plaintiff's alleged injuries, the Court denies Plaintiff's Motion for
Summary Judgment as to the remaining state claims,
The Court GRANTS the Motion for Summary Judgment (Dkt. No. 19) as to the Carmack
Amendment claim and DENIES the motion as to the remaining state claims,
AND IT IS SO ORDERED.
Richard Mark Gergel
United States District Court Judge
August ~, 2015
Charleston, South Carolina
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