55. Paragraph B is "applicable to the transportation of all commodities except those in Paragraph A."
56. In paragraph A dealing with banking documents, in exchange for the carrier's liability to be "released to a value not to exceed $ 25,000 in the aggregate per shipment," the shipper pays the base transportation rate.
57. Paragraph A provides that the shipper has the option to declare a value in excess of $ 25,000 in the aggregate per shipment but not to exceed $ 50,000 in the aggregate per shipment, and in exchange the shipper pays the base transportation rate plus a value charge of 50 cents for each $ 100, or fraction thereof, of value in excess of the valuation to which the base rate applies.
55. In paragraph B dealing with all commodities not named in paragraph A, the carrier's liability can be released to a value not exceeding $ 250.00 per shipment, with the shipper paying the base transportation rate. The shipper can declare a value exceeding $ 250.00 per shipment but not to exceed $ 5,000 and in exchange, pay the base transportation rate plus a value charge of 50 cents for each $ 100, or fraction thereof, of value in excess of the valuation to which the base rate applies.
56. The two Bills of Lading with Purolator's name on them -- for the October 31, 1988, and May 18, 1989, shipments -- bore a $ 250 limitation of liability provision, which corresponds to the released value of Paragraph B, non-cash letter, non-banking commercial papers, in Item 20 of the tariff.
57. The three Bills of Lading bearing the name Emery & Purolator Worldwide Courier and Cargo, for the May 24, 1989, and May 26, 1989, shipments, state a $ 100 limitation of liability, which is not included anywhere in the tariff of the carrier.
58. Purolator has stipulated to the entry of judgment against it on Count III of the complaint, alleging excess charges for the carrier service, in the amount of $ 6,087.09. This amount reflects a $ 900 credit to Purolator based upon FNB's monthly bill of $ 412.57.
1. Jurisdiction and Parties
Subject matter jurisdiction in this case is based on diversity of citizenship under 28 U.S.C. § 1332(a)(1).
Defendants claim that Purolator is the only proper defendant in this case, Consolidated Freightways being merely a holding company with no contractual relation with plaintiff and Emery & Purolator Worldwide Courier and Cargo being only a trade name. The May 24 and May 26, 1989, bills of lading do bear the name Emery & Purolator Worldwide Courier and Cargo, as does some other correspondence received by plaintiff. The Commonwealth has certified, however, that "Emery & Purolator Worldwide and Cargo" is not registered as a corporation or fictitious name in Pennsylvania. Plaintiff's witnesses testified that the courier service drivers displayed Purolator emblems on their uniforms and their vehicle.
While plaintiff may have corresponded with persons identified as employees of Emery or Consolidated Freightways, plaintiff's evidence is insufficient to allow the court to infer that Emery & Purolator Worldwide Courier and Cargo is a separate corporate entity from Purolator, and that it, instead of Purolator, provided courier service to FNB. The fact that Purolator stock is owned by Emery Air Freight, whose stock is, in turn, owned by Consolidated Freightways does not prove plaintiff's assertion that a different legal entity from Purolator provided courier service to FNB during the time period here at issue. Purolator has claimed that no one but it is responsible for carriage of all five shipments. I agree. The liability for damages assessed in this case will run against only Purolator.
2. Purolator's Common Carrier Liability
As a common carrier, transporting FNB's shipments between points in Pennsylvania, Purolator's liability is governed by the Pennsylvania Public Utilities Code, 66 Pa.C.S. § 101, et.seq. Section 2304(a) of that Code sets out the general rule for common carriers engaging in intrastate shipments. The statute provides:
Every common carrier that receives property for transportation between points within this Commonwealth shall be liable to the lawful holder thereof for any loss, damage, or injury to such property caused by it, or any other common carrier to which such property may be delivered, or over whose line such property may be transported. No contract, receipt, rule or regulation shall exempt such common carrier from the liability hereby imposed. The commission may, by regulation or order, authorize or require any common carrier to establish and maintain rates related to the value of shipments declared in writing by the shipper, or agreed upon in writing as the release value of such shipments; such declaration or agreement to have no effect other than to limit liability and recovery to an amount not exceeding the value so declared or released. Any tariff filed pursuant to such regulation or order shall specifically refer thereto.
66 Pa.C.S. § 2304(a) (Emphasis supplied).
Purolator claims that its liability is limited under 66 Pa.C.S. § 2304(a) to $ 800.00, the total of the released values
on the five bills of lading at issue. It contends that because it filed a tariff, which included released-value limitation-of-liability provisions, and because plaintiff signed bills of lading containing those released value provisions, its liability is limited to the released value. Plaintiff counters that defendant is fully liable for all losses incurred because it did not comply with the requirements of § 2304 to limit their liability. Specifically, among other things, plaintiff claims that because defendant charged a flat monthly amount for the same-day service to FNB, instead of charging the tariff rate corresponding to the released value
of the package, Purolator cannot rely on the tariff to limit its liability.
The statute provides that common carriers are strictly liable for any loss, damage, or injury to the shipper's property, caused by the carrier. The only way a common carrier can limit its liability is to establish rates that relate to the value of the shipment. If the shipper declares the value of the shipment in writing on the bill of lading, the carrier's liability is limited to that declaration of value. If the released value is printed on the bill of lading, and the shipper evidences its agreement with that released value by signing the bill of lading, for example, the carrier's liability is limited to that released value printed on the bill of lading.
The statutory scheme gives the shipper -- here, FNB -- a choice between paying the lower rate corresponding to the released value on the bill of lading and assuming more liability for loss, or paying a higher rate corresponding to the value it declares and leaving full liability for loss on the carrier. "In order to make the limited liability provisions of the Public Utility Code applicable, all of the specific requirements must be satisfied." Gastwirth v. Mashbitz & Sons, Inc., 414 Pa. 445, 448, 200 A.2d 766, 767 (1964).
The Pennsylvania cases under § 2304(a) are few and generally inapposite to the issues here presented. However, federal caselaw, under the similar, in pari materia, Interstate Commerce Commission (" ICC") statutes,
provides useful guidance in this area, since the only distinction is that ICC statutes apply in the interstate rather than intrastate context. I find them persuasive authority.
The general rule is to hold common carriers liable for the actual injury to goods shipped; thus, arrangements attempting to limit liability are strictly construed against the carrier. See Anton v. Greyhound Van Lines, Inc., 591 F.2d 103, 109 (1st Cir. 1978); Flying Tiger Line v. Pinto Trucking Service, 517 F.Supp. 1108, 1112 (E.D.Pa. 1981). Accordingly, the carrier has the burden of establishing that its liability is limited. See Carmana Designs Ltd. v. North American Van Lines Inc., 943 F.2d 316, 319 (3d Cir. 1991). Here, plaintiff has proven that Purolator did not timely deliver its shipments; therefore, it will be entitled to damages for actual loss, unless Purolator carries its burden of proving that its liability was limited.
A carrier may limit its liability if it complies with the ICC, or in this case PUC, statutory requirements. It must: 1) maintain a valid tariff and charge the approved lower rates; 2) give the shipper a reasonable opportunity to choose between two or more levels of liability, allowing the shipper to pay a higher rate and thereby increase the carrier's liability; 3) obtain the shipper's agreement to the released value in writing; and 4) issue a bill of lading, before moving the shipment, that reflects the agreement. See Carmana Designs Ltd. v. North American Van Lines Inc., 943 F.2d 316, 319 (3d Cir. 1991); Anton v. Greyhound Van Lines, Inc., 591 F.2d 103 (1st. Cir. 1978); W.C. Smith, Inc. v. Yellow Freight Systems, Inc., 596 F.Supp. 515 (E.D.Pa. 1983).
In the case at bar, Purolator has generally met two of these requirements. It met the third requirement, by obtaining the signature of the shipper on three of the five bills of lading with the released value provision. It also met the fourth requirement, by issuing the bills of lading prior to the shipment. However, Purolator failed to show that it met the first two requirements of the statute: 1) that the carrier maintain and charge tariff rates; and 2) that the shipper be provided an opportunity to choose between different rates based on value.
While the language of 66 Pa.C.S. § 2304(a) does not include the requirement that the carrier "charge" the tariff rate in order to limit liability, the plain reading of the statute, the cases interpreting the parallel ICC statutes, and the common law convince me that that requirement is implicit in the statute. Courts have allowed carriers to limit their liability when the rate charged is dependent upon the value of the property, because the "agreed upon value merely constituted an estoppel against the unfairness of asserting a larger amount as the true value when the carrier was sued for damages in spite of the fact that a smaller value had been used to calculate the rate." First Pennsylvania Bank v. Eastern Airlines, Inc., 731 F.2d 1113, 1116 (3d Cir. 1984).
When the amount charged is not a tariff rate, dependent on the value of the property, but a flat amount, bearing no discernible relationship to the tariff rate schedule, the shipper is not given a reasonable opportunity to choose between higher and lower rates. Hence, the carrier's liability cannot be limited by citing to the released-value provision in the tariff and the bill of lading. Polyplastics, Inc. v. Transconex, Inc., 827 F.2d 859, 863 (1st Cir. 1987); Acro Automation Systems v. Iscont Shipping Ltd., 706 F.Supp. 413 (D.Md. 1989); Emily Shops, Inc. v. Inter-State Truck Line, Inc., 207 Misc. 557, 139 N.Y.S.2d 561 (1955), aff'd, 2 N.Y.2d 405, 161 N.Y.S.2d 46, 141 N.E.2d 560, cert. denied, 355 U.S. 827, 2 L. Ed. 2d 40, 78 S. Ct. 36 (1957).
The evidence at bar shows that plaintiff was billed at a flat monthly fee of $ 412.57. Defendant presented no evidence that the flat fee was in any way related to the tariff rate schedule or that FNB and Purolator had negotiated an agreement that factored in the value of the property shipped and the limitation of the carrier's liability. In a case where the shipper disregarded the tariff and charged a flat amount, the court in Emily Shops, Inc. v. Inter-State Truck Line, Inc., 207 Misc. 557, 139 N.Y.S.2d 561 (1955), aff'd, 2 N.Y.2d 405, 161 N.Y.S.2d 46, 141 N.E.2d 560, cert. denied, 355 U.S. 827, 2 L. Ed. 2d 40, 78 S. Ct. 36 (1957), determined that the carrier would not be allowed to take advantage of the limitation of liability provisions in the tariff, noting:
The difficulty with the defendant's position is that its charge . . . was not merely an excessive rate. It was no rate at all. The charge was "a flat sum of $ 115.00." A flat sum is not a rate. It is the opposite of a rate. The defendant, in doing what it did, acted as if there were no rates or tariffs and no regulatory law. Having completely ignored the law, the defendant should not be permitted to profit by the limited liability provisions contained in the law. . . .