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Alterra America Ins. Co. v. Daily Express, Inc.

United States District Court, E.D. Pennsylvania

September 5, 2017

DAILY EXPRESS, INC., et al. Defendants


          STENGEL, C. J.

         This is an action under the Carmack Amendment, a federal law regulating interstate shipping. Plaintiff Alterra America Insurance Company, brings its claim as the subrogee of Dozier Crane & Machinery, Inc. (“Dozier Crane”), a company that sells and leases construction equipment. In the Spring of 2014, Dozier Crane hired Defendant Daily Express, Inc. (“DXI”), to transport several components of a crane from Iowa to Georgia. Near the end of the trip, the defendant's driver discovered that one of the components had been damaged. The plaintiff is seeking compensation for the cost of the damaged part.

         The parties have filed cross motions for summary judgment: the plaintiff requests partial summary judgment on its prima facie case and the defendant moves for summary judgment in full. For the following reasons, I will grant the plaintiff's motion and deny the defendant's motion.


         In the Spring of 2014, Dozier Crane bought a crane and several boom components from RTL Equipment, Inc., a company that, like Dozier Crane, sells and leases construction equipment. (Pl.'s Mot. for Part. Summ. J. Ex. D (Goodwin Dep.) 7:16-18, Doc. No. 43-7; id. Ex. C (Email Chain, Mar. 31, 2014), Doc. No. 43-6; id. Ex. A (Watson Dep.) 10:11-18, Doc. No. 43-3.) Dozier Crane then hired DXI, a carrier, to transport the parts from two RTL facilities in Iowa to two of Dozier Crane's customers' facilities in South Carolina and Georgia. (Watson Dep. 10:11-18).

         Steven Wilkinson, a truck driver for the defendant, picked up the boom components from RTL on April 1, 2014, in Grimes, Iowa. (Id. Ex. H (Wilkinson Dep.) 7:20-9:12, Doc. No. 43-10). He looked over the parts and saw no damage. Id. at 12:23- 13:4, 13:20-14:13, 15:4-15. He signed a bill of lading, [1] and did not note any damage. (Def.'s Mot. for Summ. J. 24 & Ex. D (Grimes Bill of Lading, Apr. 1, 2014), Doc. No. 53-4.)[2] The bill of lading stated that the shipper “hereby certifies that he is familiar” with and agrees to the carrier's applicable tariffs. Id. One of those tariffs stated that the carrier's liability was limited to $5, 000 per ton of cargo weight. (Id. & Ex. E (Tariff: Released Value-Released Rates, Item 848-15, issued Sept. 19, 1995, revised Mar. 1, 2012), Doc. No. 53-5).

         While loading the truck, Wilkinson observed that the ties meant to prevent a large cable that ran through the boom from swinging or rubbing against the other equipment appeared inadequate for the task. (Wilkinson Dep. 17:2-11, 39:10-20). The straps were narrow plastic zip ties. Id. at 17:1-11. Wilkinson voiced his concern to the RTL employees and they reportedly replied, “That's the way we always do it.” Id. at 39:17.

         During the drive, Wilkinson frequently checked that the load was secure. (Wilkinson Dep. 96:5-97:17). He did not notice that anything was loose or broken until he arrived in South Carolina. Id. at 43:10-15, 48:21-49:24, 52:2-53:14. There, after removing some of the parts from his truck, he saw a rub mark on the boom and a cable hanging beside the mark. (Id. at 35:15-36:21; Pl.'s Mot. for Part. Summ. J. Ex. L (Photographs of Boom, Georgia), Doc. Nos. 43-14 & 43-15). He surmised-and experts later confirmed-that the cable had broken loose from the plastic zip ties and rubbed against the boom, wearing away paint and metal. (Wilkinson Dep. 25:4-13, 34:7-17;[3]Watson Dep. 37:16-21; Goodwin Dep. 31:12-20; Pl.'s Mot. for Part. Summ. J. Ex. K (Rowe Dep.) 8:1-6, Doc. No. 43-23; Ex. N (Shores Memo), Doc. No. 43-18).

         Wilkinson called his supervisor and reported the damage. (Wilkinson Dep. 68:24- 69:11). The worn spot on the boom made it unsafe for use, and Dozier Crane would have to order a replacement. (Pl.'s Mot. for Part. Summ. J. Ex. O (Kobelco Bulletin), Doc. No. 43-19 (warning that damage that reduces a metal strut's radius by more than eleven percent is irreparable); Ex. M (Brack Dep.) 10-25, Doc. No. 43-17 (explaining that he measured the struts of the boom and the radius had been reduced by more than eleven percent), Ex. N (Shores Memo), Doc. No. 43-18, Ex. P (Heavy Iron, LLC Estimate, Apr. 15, 2014), Doc. No. 43-20).

         Dozier Crane's employee Rhonda Barkley emailed one of the defendant's claims adjusters, Vicki Witter, about the damage. (Pl.'s Br. in Opp. to Def.'s Mot. for Summ. J. Ex. P (Emails between Barkley and Witter, Apr. 4, 2014), Doc. No. 57-15 (describing the damage, to which Witter responded with follow-up questions). The defendant then investigated the incident. (Id. Ex. Q (Witter's Claims Log), Doc. No. 57-16 (describing the arrangement of an investigation into the damage)). At the conclusion of the investigation, Dozier Crane sent the defendant an estimate that stated that the cost of replacing the damaged parts was $59, 994.75. (Id., Ex. R (Estimate by Heavy Iron, LLC, Apr. 15, 2014), Doc. No. 57-17; Witter's Claims Log, Doc. No. 57-16 (noting the estimated cost)).

         Dozier Crane filed a claim with its insurer, Plaintiff Alterra America Insurance Company, which now brings this action under the Carmack Amendment as Dozier Crane's subrogee.


         Summary judgment is appropriate when “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A dispute is “material” only if it might affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). For a dispute to be “genuine, ” a reasonable fact-finder must be able to return a verdict in favor of the non-moving party. Id.

         A party moving for summary judgment bears the initial burden of informing the court of the basis for its motion and identifying those portions of the record that it believes demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A party asserting that a fact cannot be genuinely disputed must support the assertion by citing relevant portions of the record, including depositions, documents, affidavits, or declarations, or showing that the materials cited do not establish a genuine dispute, or showing that an adverse party cannot produce admissible evidence to support the fact. Fed.R.Civ.P. 56(c). The court must decide “not whether . . . the evidence unmistakably favors one side or the other but whether a fair-minded jury could return a verdict for the plaintiff on the evidence presented.” Anderson, 477 U.S. at 252.

         In reviewing a motion for summary judgment, the court does not make credibility determinations and must view facts and inferences in the light most favorable to the party opposing the motion. Siegel Transfer v. Carrier Express, 54 F.3d 1125, 1127 (3d. Cir. 1995); Anderson, 477 U.S. at 255 (explaining that the court must draw “all justifiable inferences” in favor of the nonmoving party). The nonmoving party, however, cannot avert summary judgment with speculation or conclusory allegations; rather it must present clear evidence from which a jury can reasonably find in its favor. Ridgewood Bd. of Educ. v. N.E. for M.E., 172 F.3d 238, 252 (3d Cir. 1999).


         The Carmack Amendment to the Interstate Commerce Act makes interstate carriers strictly liable to the shipper for damages to the property they transport unless they can prove certain defenses. See 49 U.S.C. § 14706[4]; Certain Underwriters at Lloyd's of London v. UPS of Am., Inc., 762 F.3d 332, 335 (3d Cir. 2014). The plaintiff moves for summary judgment against the defendant carrier on its prima facie case under the Carmack Amendment, arguing that there is no genuine dispute that the boom the carrier transported was damaged during the trip. The defendant opposes the plaintiff's motion and moves for summary judgment in its own right, arguing that the plaintiff has not presented sufficient evidence for a reasonable jury to conclude that the damage occurred during, rather than before, the boom was transported; that it is entitled to judgment as a matter of law on its “act of shipper” defense; that the plaintiff did not satisfy the Carmack Amendment's notice requirement; that the plaintiff did not suffer an injury; and that damages are limited by the defendant's tariff.

         I conclude that the record before me does not support the defendant's arguments. Rather, I hold that the plaintiff is entitled to summary judgment on its prima facie case, and the parties are permitted to proceed to trial on the issues raised in the defendant's motion, as well as any other applicable defenses.

         I. Prima Facie Case

         “To establish a prima facie case against a carrier under the Carmack Amendment, a shipper must prove (1) delivery of goods to the initial carrier in good condition, (2) damage of the goods before delivery to their final destination, and (3) amount of the damages.” Paper Magic Group, Inc. v. J. B. Hunt Transp., Inc., 318 F.3d 458, 461 (3d Cir. 2003). The parties agree that the plaintiff has presented uncontroverted evidence supporting the second and third elements, but the defendant challenges the plaintiff's ability to show that there is no dispute about the first element-that the parts were delivered to the defendant in good condition.[5]

         On the evidence before me, I find that there is no genuine dispute about the first element either. The plaintiff presents uncontroverted evidence from Steven Wilkinson that the boom was not damaged when he picked it up in Iowa. (Wilkinson Dep. 12:23- 13:4.) His inspection in Grimes consisted of “looking at it [and] walking all the way around it.” Id. 13:20-14:13. When he was strapping the boom to his truck, he looked at it again. Id. “There was no bends, no cuts, nothing like that in it.” Id. When he made the second stop in Swisher, Iowa, he further handled the boom in order to attach additional equipment, and again saw no defects. Id. 15:4-15. He signed the bill of lading without noting any damage because “there was nothing other than normal scratches and rust and stuff . . . . Nothing was damaged.” Id. 77:23-78:22. The photos he took of the parts on his truck in Iowa do not reveal any damage. (Id. 19:11-16; Pl.'s Mot. for Part. Summ. J. Ex. J (Photographs of Boom, Iowa), Doc. Nos. 43-12 & 43-13).

         When he reached South Carolina three days later and removed some of the parts from his truck, he saw a black “rub mark” on the otherwise yellow-painted boom. (Id. Ex. L (Photographs of Boom, Georgia), Doc. Nos. 43-24 & 43-15; Wilkinson Dep. 36:18-21). He called his supervisor and reported the damage. Id. 68:24-69:11. He then delivered the boom to one of Dozier Crane's customers in Pooler, Georgia. When the customer saw the boom, he noted “an obvious fresh rub mark where the paint had been rubbed off down to the bare metal and it was shiny bare metal so it was-you know, appeared to have just happened.” (Rowe Dep. 8:1-6).

         The defendant argues that this evidence does not conclusively show that the boom was in good condition when Wilkinson loaded it in Grimes; rather, it argues that a reasonable jury could conclude that Wilkinson did not notice the damage before the trip because the damage could not be observed without specialized inspection. But the testimony that the defendant uses to support its argument is not about a boom's hidden damage. The testimony of RTL's corporate representative, Mark Watson, is about the proper way to evaluate the damage that occurred after the travel. He was asked the following question:

Q: And I think you said earlier, to your mind the photographs weren't good enough to allow you to determine how badly damaged the boom was?

(Watson Dep. 57:2-4.) At this point in Watson's testimony, there had been no discussion of the boom being damaged before the trip. It is therefore clear that this question refers to the damage observed after the trip. Mr. Watson responded:

A: That is correct. A photograph-you cannot determine that information from photographs. You would have to put say ...

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