The opinion of the court was delivered by: DALZELL
The question before us is whether we may enforce a tariff provision assessing a fifty percent collection charge on delinquent freight charges, which would result in liquidated damages of $ 30,867.02, over six times the value of lawyers' time incurred to date.
From September 25, 1995 through December of 1995, Robins Motor Transportation, Inc. ("Robins Motor"), a common carrier, allegedly hauled goods in interstate commerce for Associated Rigging & Hauling Corporation ("Associated Rigging"). Associated Rigging has allegedly refused to pay for these services.
The contract between the parties, known in the shipping industry as the "tariff", provides in relevant part:
Item 409 - Charges - Payment of
When tariff charges are not paid within the maximum credit period of 30 calendar days permitted by ICC Regulations 49 CFR 1320, a penalty of 2 percent of the Freight Bill Amount will be assessed in addition to the original charges. Debtor will be responsible for attorneys fees and/or court costs associated with or as a result of suit as shown in item 435 (Collection Fees) of this tariff.
Item - 435 - Collection Fees
In the event it becomes necessary to employ the use of a collections agency and/or attorney in the collection of freight charges, an amount equal to 50 percent of the outstanding freight charges [or] $ 200.00 whichever is greater, shall be assessed in addition to applicable freight charges. To avoid imposition of these charges, shipper must pay invoices within the carrier's authorized credit period.
On July 30, 1996, Robins Motor served the summons and verified complaint in this case on defendants, demanding payment for the allegedly delinquent freight charges. When neither Associated Rigging nor Jonathan Krevat, a shareholder and officer of Associated Rigging, answered the complaint within the time permitted under Rule 12, Robins Motor filed a request to enter default judgment, see Fed. R. Civ. P. 55.
In its complaint and request for entry of default judgment, Robins Motor, pursuant to the quoted tariff provisions, seeks to collect from Associated Rigging allegedly delinquent freight charges of $ 60,523.57, accrued interest of $ 1,210.47, and collection charges of $ 30,867.02, the last sum, pursuant to Item 435 of the tariff, calculated at fifty percent of the overdue freight charges. Given the significant collection charges Robins Motor seeks, we ordered it to file a memorandum of law addressing the ...