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W.C. SMITH, INC. v. YELLOW FREIGHT SYS.

September 28, 1983

W.C. SMITH, INC.
v.
YELLOW FREIGHT SYSTEMS, INC. v. PRICE CANDY COMPANY



The opinion of the court was delivered by: VANARTSDALEN

 VanARTSDALEN, J.

 This case involves a claim for damages in excess of $20,000 to a certain piece of machinery that defendant Yellow Freight Systems, Inc. transported by motor freight. Yellow Freight has moved for partial summary judgment, seeking to limit its liability to $400.00, the released value of the goods, pursuant to 49 U.S.C. § 10730. For the reasons that follow, the motion will be granted.

 Plaintiff W.C. Smith, Inc. purchased the machinery in question from third-party defendant Price Candy Company. The machinery was located at Price Candy's place of business in or near Kansas City, Missouri, and was to be shipped by motor freight common carrier to Smith's place of business in Philadelphia, Pennsylvania. Richmond Transfer, Inc., not a party to this action, received the machinery from Price Candy and delivered it to Yellow Freight in Kansas City, Missouri. Yellow Freight was the connecting carrier for transportation to Philadelphia. Richmond delivered the machinery to Yellow Freight upon a Uniform Straight Bill of Lading which stated that the shipper was Price Candy, and that the goods were consigned to W.C. Smith & Sons, Inc. Upon arrival in Philadelphia, the machinery was damaged extensively. Smith, the owner, sued Yellow Freight for the loss.

 The printed form bill of lading provides in part:

 
Where the rate is dependent on value, shippers are required to state specifically in writing the agreed or declared value of the property. The agreed or declared value of the property is hereby specifically stated by the shipper to be not exceeding per .

 No one filled in the blank spaces declaring the value of the goods. The goods are described on the face of the bill of lading only as "9 crates - machinery," and the weight is declared as "4000."

 The bill of lading further provides:

 
Shipper hereby certifies that he is familiar with all of the terms and conditions of the said bill of lading, including those on the back thereof, set forth in the classification or tariff which governs the transportation of this shipment, and the said terms and conditions are hereby agreed to by the shipper and accepted for himself and his assigns.

 At all times in question, Yellow Freight had properly established and filed approved tariffs with the I.C.C. in the form of Supplement 102 to Tariff 533-E of the Eastern Central Motor Carriers Association, Inc. The tariff provides four different rates for used machinery, such as the one in question, based on the machinery's released value. The lowest rate and tariff is based on a "released . . . value not exceeding ten cents per pound," which is "ninety two percent of applicable Class Rates." The tariff further provides that "if the consignor [in this case Price Candy] fails to declare a released value at the time of shipment, shipment will be subject to the lowest released value herein." Because the lowest released value is ten cents per pound, application of the tariff in the present case would limit Yellow Freight's liability for the 4000 pounds of machinery to $400.00.

 The Carmack Amendment to the Interstate Commerce Act imposes absolute liability upon carriers for the value of goods lost or damaged during shipment, but permits carriers to limit their liability pursuant to section 10730. 49 U.S.C. § 11707(c)(4). Section 10730 provides in part:

 
a motor common carrier providing transportation or service . . . may . . . establish rates for the transportation of property . . . under which the liability of the carrier for such property is limited to a value established by written declaration of the shipper or by written agreement between the carrier and shipper if that value would be reasonable under the circumstances surrounding the transportation.

 49 U.S.C. § 10730(b)(1). In addition, section 10730 permits the I.C.C. to require carriers to maintain a rate for service that does not limit the carrier's liability. 49 U.S.C. § 10730(b)(2). A carrier, therefore, may limit its liability if it maintains and charges I.C.C. approved lower rates, obtains the shipper's agreement to the released value in writing, and provides the shipper with a reasonable opportunity to pay a higher rate and thereby increase the carrier's liability. Anton v. Greyhound Van Lines, Inc., 591 F.2d 103 (1st Cir. 1978); Flying Tiger Line v. Pinto Trucking Service, 517 F. Supp. 1108 (E.D. Pa. 1981).

 It is undisputed that Yellow Freight maintained an approved rate schedule that provided four progressively lower rates in exchange for greater degrees of limitation upon its liability. Plaintiff Smith, however, asserts that none of these tariff rates came into effect in the present case because no released value was filled in the blank spaces on the bill of lading. Plaintiff, therefore, contends that there was no agreement in writing between the shipper, Price Candy, and Yellow ...


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