In route from Florida to Kentucky, the tractor/trailer caught fire andJackson's horse burnt to death. Jackson sued for negligence in killinghis horse. The defendant claimed that under federal law its liability waslimited to the $1,000 value of the horse as stated in the bill of lading.The United States District Court agreed with the argument.
It found that the groom had authority from the trainer, who had authorityfrom Jackson to sign the bill of lading. It further found that the billof lading complied with federal law and was therefore effective in limitingthe defendant's liability. Therefore, the court found that the defendantwas liable but only for the $1,000 declared value.
This matter is before the court upon the motion of defendant for summaryjudgment [docket entry # 37]. The plaintiff filed a response in oppositionto said motion [docket entry # 50], to which defendant has replied [docketentry # 53]. Accordingly, this matter is ripe for review.
II. FACTUAL BACKGROUND
This action arises from the transportation of a standardbred filly named"Dream Fulfilled," which resulted in the horse's demise. [FN1] The eventswhich lead up to the death of the filly are as follows.
Plaintiff, Kenneth A. Jackson d/b/a Kentuckiana Racing Stable ("Jackson"),at all relevant times to this litigation, was the owner of Dream Fulfilled.Germane to this litigation is the fact that Jackson is a practicing attorneyas well as a horseman. He has been a member of the U.S. Trotting Associationsince 1988. In 1993, Jackson became a 50% shareholder in an S corporationthat acquired one-third of the shares of Kentuckiana Farms General Partnership("Kentuckiana Farms"), a newly formed entity that bought the assets offormer Kentuckiana Farms. Thereafter, he became a member of the managementteam of Kentuckiana Farms. In 1995, Jackson formed Kentuckiana Racing Stables,a business of racing standardbred and thoroughbred horses of which he isthe sole owner. Through these two entities, Jackson owns approximately100 horses. As a lawyer, he has specialized training and knowledge in thearea of commercial litigation and equine law as well as being educatedin the Uniform Commercial Code and contracts. Despite his intertwined experiencewith the law and horses, Jackson attests that before November 1995, hehad never been involved with arranging horse transportation by a commercialcompany and had never seen a bill of lading from a horse shipping companyor a trucking company. [FN2] Moreover, he submits that he had never heardof the Carmack Amendment of the Interstate Commerce Act ("Carmack Amendment").
Beginning in October 1994, Jackson employed Gene Daisey ("Daisey") asthe trainer of Dream Fulfilled. [FN3] Daisey has been a trainer since 1955.For the past fifteen (15) years Daisey has been the owner of Daisey Stablesat the South Florida Trotting Center located near Palm Beach, Florida.Pertinent to this action is the fact that Daisey has shipped horses bothcommercially and personally, signed bills of lading, and has used BrookLedge as many as 100 times to commercially ship horses. Nevertheless, Daiseysubmits that previously he "[n]ever read the thing[s]," and never had anydiscussion about the liability limitation therein. With respect to thetransportation of Dream Fulfilled prior to November 1995, it appears thatDaisey used his own horse transportation trailers or those of KentuckianaFarms.
Daisey brought Dream Fulfilled to the Florida training center. Whilein Florida, Daisey, in his capacity as trainer, employed Roderick Watson("Watson") to assist in the care of Dream Fulfilled as the standardbred'sgroom. Watson has been employed in the horse industry since 1981.
In early November, 1995, Daisey contacted a Brook Ledge, Inc. ("BrookLedge") agent to arrange for the transportation of Dream Fulfilled fromPalm Beach, Florida, to Lexington, Kentucky, for a routine rest period.The transfer was to occur on or about November 8, 1995. Jackson was notinvolved in arranging the transfer of Dream Fulfilled.
Brook Ledge was at the time, and currently is, an interstate motor carrierin the business of transporting horses in interstate commerce, and transportsapproximately 20,000 horses annually. Antecedent to the date of the fatalaccident, Brook Ledge had transported horses for Kentuckiana Farms GeneralPartnership on occasion and consequently bills of lading had previouslybeen executed by the shipper or the shipper's agent. All of these saidbills of lading contained a limitation of liability provision and a lineon which the shipper could declare a value in excess of the stated value.[FN4]
On November 8, 1995, Brook Ledge dispatched Anthony Mariano ("Mariano")with tractor No. 79 and trailer No. 266, to pick up Dream Fulfilled. Marianoarrived at the South Florida Trotting Center as scheduled. Upon hearingthe Brook Ledge truck arrive, Watson retrieved Brook Ledge to meet Mariano.Watson assisted Mariano in loading Dream Fulfilled into the trailer. Marianofilled out the bill of lading and presented the same to Watson, who Marianothought was the trainer. [FN5] He instructed Watson to sign where the "X"was. Watson signed the bill of lading as the shipper but did not insertan excess declared value in the column on the bill of lading entitled "DeclaredValue of Each Animal ($1,000) unless declared otherwise)". [FN6] Watsonsubmits that he has never read a bill of lading, although he has signedthem before. Watson attests that he simply followed Mariano's instructionsto sign the document. He states that there was no discussion regardingthe bill of lading.
On November 9, 1995, with Dream Fulfilled in tow, Mariano, a reliefdriver, and an attendant traveled from South Florida to Ocala, Florida,where other horses were loaded into the trailer. The group proceeded onto Kentucky, where in Rockcastle County, Kentucky, the trailer in whichthe horses were riding caught fire. The relief driver, Jim Kerrigan ("Kerrigan"),stopped when he saw sparks coming out of the trailer. [FN7]
There were two fire extinguishers on board. Kerrigan emptied the fireextinguisher which was in the tractor, but no one could reach the fireextinguisher in the trailer due to the flames which engulfed it. The drivers'and attendant's efforts were for naught; all but one horse burned to deathand sadly the horse that escaped was killed when it ran into traffic.
III. PROCEDURAL HISTORY
On August 19, 1996, Jackson filed suit in the Fayette County CircuitCourt against Brook Ledge. In his complaint Jackson alleges that the deathof Dream Fulfilled was caused by Brook Ledge's negligence, recklessness,and gross negligence. In his original complaint, Jackson sought damagesfor the aforementioned state torts as well as for breach of contract. OnSeptember 6, 1996, Brook Ledge removed plaintiff's action to this Courtbased upon federal question jurisdiction over the Carmack Amendment, 49U.S.C. § 11707, et seq.. Thereafter, plaintiff filed an amended complaintto include a cause of action under the Carmack Amendment.
IV. DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
Defendant moves the court for summary judgment. In sum, Brook Ledgeargues that plaintiff's state law claims should be dismissed, as they arepreempted by the Carmack Amendment. Furthermore, under federal law, BrookLedge concedes liability for the loss incurred by Jackson but challengesthe extent of recovery sought, which defendant claims is not consistentwith the Carmack Amendment or the bill of lading which defendant contendslimits the liability of Brook Ledge to $1,000. In short, plaintiff doesnot dispute that the Carmack Amendment preempts plaintiff's state law claimsbut does argue that Brook Ledge's bill of lading does not operate to limitBrook Ledge's liability for several reasons and thus said motion shouldbe denied.
Under Rule 56(c) of the Federal Rules of Civil Procedure, summary judgmentis proper "if the pleadings, depositions, answers to interrogatories, andadmissions on file, together with the affidavits, if any, show that thereis no genuine issue as to any material fact and that the moving party isentitled to a judgment as a matter of law." See Celotex Corp. v. Catrett,477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In reviewinga motion for summary judgment, "this Court must determine whether 'theevidence presents a sufficient disagreement to require submission to ajury or whether it is so one-sided that one party must prevail as a matterof law.' " Patton v. Bearden, 8 F.3d 343, 346 (6th Cir.1993) (quoting Andersonv. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 106 S.Ct. 2505, 91 L.Ed.2d202 (1986)). The evidence, all facts, and any inferences that may permissiblybe drawn from the facts must be viewed in the light most favorable to thenonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).
Once the moving party shows that there is an absence of evidence tosupport the nonmoving party's case, the nonmoving party must present "significantprobative evidence" to demonstrate that "there is [more than] some metaphysicaldoubt as to the material facts." Moore v. Phillip Morris Co., 8 F.3d 335,340 (6th Cir.1993). Conclusory allegations are not enough to allow a nonmovingparty to withstand a motion for summary judgment. Id. at 343. "The mereexistence of a scintilla of evidence in support of the [nonmoving party's]position will be insufficient; there must be evidence on which the jurycould reasonably find for the [nonmoving party]." Anderson, 477 U.S. at252. "If the evidence is merely colorable, or is not significantly probative,summary judgment may be granted." Id. at 249-50 (citations omitted).
There are several issues for the Court to address in deciding whethersummary judgment should be granted in favor of the defendant, to wit, (1)whether plaintiff's common law claims for negligence, recklessness, andgross negligence, and for breach of agreement are preempted by the CarmackAmendment; and (2) whether the bill of lading at issue limits Brook Ledge'sliability to Jackson for the loss of the filly to $1,000. The Court takeseach issue in turn.
1. The Carmack Agreement preempts plaintiff's state common law claims.
In 1906, Congress enacted the Carmack Amendment so as to create a nationalpolicy regarding an interstate carrier's liability for property loss. SeeNew York, New Haven & Hartford Railroad Co. v. Nothnagle, 346 U.S.128, 131, 73 S.Ct. 986, 97 L.Ed. 1500 (1953). With enactment of the samecame uniformity of law with respect to damaged cargo and the rights andliabilities of all those involved. Id.; Hughes v. United Van Lines, Inc.,829 F.2d 1407, 1413 (7th Cir.1987), cert. denied, 485 U.S. 913, 108 S.Ct.1068, 99 L.Ed.2d 248 (1988). The Sixth Circuit, along with seven othercircuits, have held that the Carmack Amendment preempts state and commonlaw claims and remedies for cargo damaged in interstate transport. Seee.g., W.D. Lawson & Co. v. Penn Central Co., 456 F.2d 419, 421 (6thCir.1972); Shao v. Link, Cargo (Taiwan) Limited, 986 F.2d 700, 706-707(4th Cir.1993); Hughes Aircraft Co. v. North American Van Lines, Inc.,970 F.2d 609, 613 (9th Cir.1992); Underwriters of Lloyds of London v. NorthAmerican Van Lines, 890 F.2d 1112, 1113 (10th Cir.1989); Intech, Inc. v.Consolidated Freightways, Inc., 836 F.2d 672, 677 (1st Cir.1987); Hughes,829 F.2d at 1415; Hopper Furs, Inc. v. Emery Air Freight Corp., 749 F.2d1261, 1264 (8th Cir.1984); and Air Products and Chemicals, Inc. v. IllinoisCentral Gulf Railroad Co., 721 F.2d 483, 486 (5th Cir.1983). Accordingly,the Carmack Amendment provides the exclusive remedy for an action for damagesagainst a delivering carrier.
The situation at bar mandates that this Court dismiss plaintiff's commonlaw claims, to wit, negligence, recklessness, and gross negligence, andbreach of agreement, as plaintiff's claims fall squarely within the exclusiveambit of the Carmack Amendment. Plaintiff, through his agents, requestedthat Brook Ledge, a common motor carrier engaged in transporting horsesin interstate commerce, transport Dream Fulfilled from Florida to Kentucky.In transport, Dream Fulfilled was fatally injured. The case law dictatesthat the statutory federal remedy provided in the Carmack Amendment, 49U.S.C. § 11707, precludes plaintiff from pursuing his common law claims.
2. Brook Ledge limited its liability to Jackson to $1, 000 via the billof lading.
The Carmack Amendment limits a shipper's recovery of damages for damagedor lost goods to the "actual loss or injury to the property" occurringto the goods while in the possession of an interstate carrier, unless thecarrier limits its liability under 49 U.S.C. § 10730. 49 U.S.C. §11707 [FN8]; see also, North American Van Lines, Inc. v. Pinkerton SecuritySystems, Inc., 89 F.3d 452, 456 (7th Cir.1966). In brief, a carrier maylimit its liability for loss or injury to the "value established by a writtendeclaration of the shipper or by a written agreement between the carrieror freight forwarder and shipper [that evidences an absolute, deliberateand well informed choice by the shipper] if that value would be reasonableunder the circumstances surrounding transportation." 49 U.S.C. § 10730[FN9]; Carmana Designs Ltd. v. North American Van Lines, Inc., 943 F.2d316, 319 (3rd Cir.1991). By bargaining with the extent of the limitationto be placed on the carrier's liability, the shipper can negotiate a reducedrate of transportation. See, e.g., Robinson v. Ralph G. Smith, Inc., 735F.2d 186, 190 (6th Cir.1984).
In order to effectively limit its liability, a carrier must jump throughthe requisite hoops. Carmana Designs, 943 F.2d at 319 ("courts ... carefullyscrutinize agreements purporting to limit such liability.") To wit, thecarrier must: (1) maintain a tariff within the prescribed guidelines ofthe Interstate Commerce Commission ("ICC"); (2) obtain the shipper's agreementas to his/her choice of liability; (3) give the shipper reasonable opportunityto choose between two or more levels of liability; and (4) issue a receiptor bill of lading prior to moving the shipment that reflects such agreement.Norton v. Jim Phillips Hose Transp., Inc., 901 F.2d 821, 827 (10th Cir.1989)(quoting Hughes, 829 F.2d at 1415-16); Hughes Aircraft Company, 970 F.2dat 611-12. The carrier bears the burden of establishing that it has meteach of the above-stated prerequisites. Carmana, 943 F.2d at 319.
The Court examines whether defendant has met each prerequisite in turnbelow.
i. At all times relevant to this action, Brook Ledge maintained a tariffwithin the prescribed guidelines of the ICC.
Due to a major change in the statutory framework of the law in the areaof carriers, this Court finds that the first prong of the test is no longerapplicable. The Trucking Industry Regulatory Reform Act of 1994 ("TIRRA"),eliminated the requirement that Brook Ledge maintain a tariff on file withthe ICC, effective August 26, 1994. 49 U.S.C. § 13710(a). Thus, asof that date, all tariffs then on file with the ICC were declared nulland void. 49 U.S.C. § 13710(a)(4). Congress replaced the tariff requirementwith the following mandate:
At all times relevant to this action, Brook Ledge maintained a tariffwhich contained the terms and conditions under which shipment would occurdespite the fact that it was no longer required by law to file its tariffwith the ICC. [FN10] In accordance with its tariff, in its bill of lading,Brook Ledge set forth the terms and conditions of shipment as well as thecharges for shipment applicable in the event no excess declared value wasidentified by the shipper. Specifically, the bill of lading provided that:"The Carrier's [Brook Ledge's] Basic Rate per animal is determined by itsapplicable tariff including supplements in effect at the time of shipment.All tariffs with supplements have been accepted by the Interstate CommerceCommission or applicable state agency and are matters of public record."Furthermore, in its bill of lading, Brook Ledge stated that there wouldbe "an additional charge, to wit $0.50 for each $100 or a fraction thereofof such excess valuation for each hundred miles or fraction thereof ofdistance between points of origin and destination, for shipments in whicha value is in excess of $1,000.00."
In light of the foregoing, the Court finds that Brook Ledge would havemet the first requirement of the original four-prong test, if the samewere applicable. Furthermore, with respect to the replacement prong ofthe test, the Court finds that because the shipper did not request a copyof the rate, classification, rules, and practices, upon which any rateapplicable to its shipment or agreed to between the shipper and carrieris based, Brook Ledge was not required to supply the same. However, BrookLedge could have furnished such information, if it were solicited, as suchinformation was contained in its tariff on file with the ICC as disclosedby Brook Ledge's bill of lading. Accordingly, the Court finds that BrookLedge has satisfied the new first prong of the test.
ii. Brook Ledge obtained the shipper's agreement as to his choice ofliability.
In the case subjudice, Brook Ledge obtained the signature of the groomof Dream Fulfilled, Watson, on the Bill of Lading prior to the movementof the filly. Watson signed off on the $1,000.00 liability limitation provision.At first blush, it appears that Watson signed away the fate of plaintiff'slawsuit without knowledge of the contents of the contract into which heentered on behalf of plaintiff. However, this case demands a closer lookat the issues of informed consent and the binding authority created bythe principles of agency, so as to determine whether Brook Ledge obtainedthe shipper's agreement as to his choice of liability.
The Court must first decide whether Watson had the authority to signthe bill of lading for plaintiff and thus bind the latter to the termsof the liability limitation. It is clear from the nature of the arrangementbetween Jackson and his hired trainer, Daisey, that the latter, actingas Jackson's agent, had the authority to transport Dream Fulfilled. Additionally,according to the current case law, Watson, the groom hired by Daisey andthus Jackson's sub-agent, had the authority to perform acts related tothe transportation of Jackson's horses which consequently bound Jackson.Norton, 901 F.2d at 828-9 (in general, in the horse transportation industry,horse owner's agents have the authority to enter into bill of lading typecontracts which limit a carrier's liability); Robinson, 735 F.2d at 191.Accordingly, the Court finds that Watson had the authority to sign forand thus bind Jackson to the terms of the bill of lading at issue. [FN11]
With respect to the issue of informed consent, plaintiff and his agents,as experienced shippers, are presumed to have constructive knowledge ofthe liability limitation provisions applicable to shipments in interstatecommerce. Norton, 901 F.2d at 828; Anton v. Greyhound Van Lines, Inc.,591 F.2d 103, 108 (1st Cir.1978) ("Shippers are charged with notice ofterms, conditions, and regulations contained in the tariff schedule pertainingto a carrier's liability which in turn affect the rates charged with carriageof goods."). Moreover, plaintiff and his agents were given specific constructiveknowledge of the terms and conditions of shipment in the bill of ladingwhich contains the agreement of the carrier and shipper as to the limitationon Brook Ledge's liability. Robinson, 735 F.2d at 191 (1984). Finally,the Court notes that "one who signs a contract in the absence of fraudor deceit cannot avoid it on the grounds that he did not read it or thathe took someone else's word as to what it contained". Chandler v. AeroMayflower Transit Co., Inc., 374 F.2d 129, 136 (4th Cir.1967). In lightof the foregoing, the Court finds that in theory, Watson made an informeddecision to opt for the lesser shipping rate in exchange for limiting thecarrier's liability to $1,000.00.
Thus, the Court finds that Brook Ledge satisfied the second prong ofthe test, in that it obtained the shipper's agreement as to his choiceof liability.
iii. Brook Ledge gave the shipper reasonable opportunity to choose betweentwo or more levels of liability.
Similar to the charging of knowledge to the shipper as discussed above,Courts have found that with respect to the requirement that the carriergive the shipper a reasonable opportunity to choose between two or morelevels of liability, the shipper is charged with the knowledge of the applicabletariff provisions and the consequences which stem from leaving the releasedvalue spaces blank. W.C. Smith, Inc. v. Yellow Freight Systems, Inc., 596F.Supp. 515, 517 (E.D.Pa.1983). See also, Robinson, 735 F.2d 186; HusmanConstr. Co. v. Purolator Courier Corp., 832 F.2d 459, 461 (8th Cir.1987)("It is not necessary that an employee of the carrier explain the optionto declare a higher value to the shipper.... Rather, the carrier must provideonly reasonable notice of the opportunity to declare a higher value.").Moreover, plaintiff was put on notice of his choice by the content of thebill of lading at issue, which has been previously discussed, signed byWatson, Jackson's sub- agent.
Accordingly, the Court finds that insofar as Jackson knew, via the constructiveknowledge of his sub-agent, about the levels of liability as set forthin Brook Ledge's tariff as well as in its bill of lading which would applyto the amount of coverage afforded to Dream Fulfilled, Brook Ledge providedthe shipper reasonable opportunity to choose between two or more levelsof liability.
iv. Brook Ledge issued a receipt or bill of lading prior to moving theshipment that reflects the relevant agreement.
It is not disputed that prior to transporting Dream Fulfilled from Floridato Kentucky, Brook Ledge employee Mariano presented to Watson a bill oflading, which had been completed by the carrier. After Watson signed thebill of lading, Mariano separated the four-part bill of lading and gaveWatson the "shipper's copy". Thus, Brook Ledge issued a bill of ladingand met the last requirement of the four-part test.
For the aforementioned reasons, the Court finds plaintiff's common lawclaims for negligence, recklessness, and gross negligence, and for breachof agreement are preempted by the Carmack Amendment and that the bill oflading at issue in this case effectively limits Brook Ledge's liabilityto Jackson to $1,000. Hence, the Court, being otherwise fully and sufficientlyadvised, the HEREBY ORDERS that plaintiff's motion for summary judgment[docket entry 37] IS GRANTED, AND A JUDGMENT SHALL BE ENTERED CONTEMPORANEOUSLYWITH THIS ORDER IN FAVOR OF THE DEFENDANT, BROOK LEDGE, INC.
In accordance with the Opinion and Order entered contemporaneously withthis Summary Judgment, the Court hereby ORDERS AND ADJUDGES:
(1) summary judgment is entered in favor of the defendant, Brook Ledge,Inc., (2) this matter is DISMISSED WITH PREJUDICE; (3) this judgment isfinal and appealable, and no just cause for delay exists; and (4) thismatter is STRICKEN from the active docket.
FN1. The trotter earned over $60,000 in racing purses during her two-yearold season in 1995, the season preceding her passing.
FN2. Apparently, Jackson had previously transported his horses in privatetrailers owned by Jackson himself, his farm(s)/stable(s), and/or his respectivetrainers.
FN3. Daisey did not acquire an ownership interest in Dream Fulfilled.
FN4. As customary in the industry, Brook Ledge maintains transportationrates for shipments in which no excess declared value is indicated on thebill of lading. When a shipper declares an excess value the charge to transportthe shipment increases.
FN5. Mariano states that he was in the practice of having a traineror owner sign the bill of lading.
FN6. The bill of lading stated in red bold print: THE AGREED OR DECLAREDVALUE OF THE PROPERTY IS HEREBY SPECIFICALLY STATED BY THE SHIPPER OR SHIPPER'SAGENT TO BE NOT EXCEEDING $1,000 PER ANIMAL UNLESS SPECIFIED OTHERWISEHEREIN. Shipper is encouraged to obtain its own insurance for any amountgreater than the $1,000 declared value, it being acknowledged and understoodby all parties hereto that animals transported may have an actual valuein excess of the declared value ... If no valuation is declared in writingherein, the maximum liability is $1,000 per animal.
FN7. The trailer was not equipped with an intercom for the attendantto communicate with the truck driver. However, in place was a warning lightsystem. The attendant could press a switch which would turn on a lightoutside the trailer that the driver could see in the rear view mirror.Apparently, the driver did not see the warning light, if in fact it wasactivated.
FN8. The nuts and bolts of the liability provision of the Carmack Amendmentare as follows:
(a)(1) A common carrier providing transportation or service subjectto the jurisdiction of the Interstate Commerce Commission under subchapterI, II, or IV of chapter 105 of this title shall issue a receipt or billof lading for property it receives for transportation under this subtitle.That carrier and any other common carrier that delivers the property andis providing transportation or service subject to the jurisdiction of theCommission under subchapter I, II, or IV, are liable to the person entitledto recover under the receipt or bill of lading. The liability imposed underthis paragraph is for the actual loss or injury to the property causedby (1) the receiving carrier, (2) the delivering carrier, or (3) anothercarrier over whose line or route the property is transported in the UnitedStates ... when transported under a through bill of lading and appliesto property reconsigned or diverted under a tariff field under subchapterIV of Chapter 107 of this Title. Failure to issue a receipt or bill oflading does not effect the liability of a carrier or freight forwarder.... (c)(4) A common carrier may limit its liability for loss or injuryof property transported under section 10730 of this title. 49 U.S.C. §11707.
FN9. The limitation provision of the Carmack Amendment provides in pertinentpart:
49 U.S.C. § 10730.
FN10. While the TIRRA provision rendered all tariffs then on file withthe ICC null and void, TIRRA did not prevent carriers from maintainingits tariffs and operating pursuant thereto as long as carriers also compliedwith the new statutory provisions of the TIRRA.
FN11. If Watson did not have the authority to sign the bill of lading,the Court questions why Daisey was not at work to sign the bill of ladinghimself on the day he knew that Brook Ledge was scheduled to pick up thefilly or why he did not make arrangements for someone with authority tosign the bill of lading.