The opinion of the court was delivered by: Wexler, District Judge.
Universal Manufacturing Corp. and Greg Jenkins, d/b/a Advanced Leasing
Corporation, ("plaintiffs") bring this suit for damage caused to a
driller-router machine ("the machine") while in transit from Aquebogue,
New York to Woodenville, Washington. Named as defendants are Associated
Rigging and Hauling Corp. ("Associated"), United Van Lines, Inc.
("UVL"), and Killmorgen Corporation, d/b/a Additive Products
("Additive"). Presently before the Court is defendant UVL's motion for
summary judgment, pursuant to Rule 56(c) of the Federal Rules of Civil
Procedure, on the ground that plaintiffs failed to commence this action
within two years and one day from the date of plaintiffs' receipt of
UVL's declination of the claim, as required by the bill of lading.
Plaintiff Jenkins purchased the machine at issue from Additive. On
August 12, 1988, Associated loaded the machine onto a trailer owned and
operated by UVL. UVL delivered the machine to Jenkins' lessee, plaintiff
Universal, at Woodenville, Washington on August 19, 1988.
On October 21, 1988, an attorney for plaintiffs, George S. Lundin
("Lundin"), filed a written claim with UVL for the sum of $30,000 in
alleged damage to the machine. On December 20, 1988, after consulting
with an outside firm retained to investigate the claim, UVL's staff
attorney Timothy M. Baer ("Baer") informed Lundin in writing that "United
Van Lines, Inc. denies any responsibility for the alleged damage."
Plaintiffs' counsel responded by letter dated December 28, 1988, which
read that "Your letter of December 20, 1988 denying my client's claim was
received in this office on December 17, 1988."
In a telephone conversation initiated by Lundin on January 4, 1989,
Baer agreed to further review the claim and requested Lundin to furnish
additional documentation to substantiate the alleged damages of $30,000.
This phone conversation was confirmed in a letter of the same from Baer
On August 14, 1989, Baer received a letter dated August 11, 1989 from
Lundin, which included a letter dated July 18, 1989 from Northwest
Calibration Systems to plaintiff Universal. These letters reported that
the machine was alleged to have two cracks in the base, in addition to
chips in one of the granite bases which had already been reported. This
was UVL's first notification of the alleged cracks in the base.
Thereafter, on March 19, 1991, UVL received service of the summons and
complaint in this action. As noted above, UVL currently moves for summary
A motion for summary judgment may be granted only when there is "no
genuine issue as to any material fact and ... the moving party is
entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); Celotex
Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265
(1986); Donahue v. Windsor Locks Bd. of Fire Comm'rs, 834 F.2d 54, 57 (2d
Cir. 1987). The burden is on the moving party to clearly establish the
absence of a genuine issue as to any material fact and "a court must
resolve all ambiguities and draw all reasonable inferences against the
moving party." Donahue, 834 F.2d at 57 (citations omitted). With these
principles in mind, this Court turns to address the instant motion.
UVL contends, and plaintiffs do not dispute, that this action involves
the interstate shipment of merchandise from New York to Washington and
that, consequently, the liability of UVL, if any, is governed by the
Carmack amendment to the Interstate Commerce Act, 49 U.S.C. § 11707.
The terms and conditions of UVL's Uniform Domestic Bill of Lading and its
applicable tariff filed with the Interstate Commerce Commission ("ICC")
require that any claim against a carrier for loss or damage must be filed
in writing within nine months of delivery, and that any suit against a
carrier must be instituted within two years and one day from the date of
the carrier's declination of the claim. See 49 U.S.C. § 11707 (e);
UVL's Notice of Motion at exhibit B. UVL claims that plaintiffs'
complaint is time barred because it was filed nearly three months after
the expiration of the two year and one day time limit. UVL also argues
that the counterclaims of the co-defendants are likewise time barred
because neither one filed a written claim within nine months of delivery
of the machine.
In order for the statute of limitations to begin running in cases
against a common carrier, the carrier's declination of claim must be
clear, final, and unequivocal. Combustion Engineering, Inc. v.
Consolidated Rail Corp., 741 F.2d 533, 536 (2d Cir. 1984) (citations
omitted); Polaroid Corp. v. Hermann Forwarding Co., 541 F.2d 1007, 1012
(3d Cir. 1976) (citations omitted). Plaintiffs herein argue that
there is a substantial issue of fact as to whether UVL met this clear,
final, and unequivocal standard in its letter of December 20, 1988, which
denied responsibility for the damage. In support of their argument,
plaintiffs rely upon Combustion Engineering, in which the Second Circuit
held that a carrier's letter which stated that "[c]laim as presented is
disallowed" was not sufficiently clear, final, or unequivocal to start
the statute of limitations running. 741 F.2d at 537. Plaintiffs claim
that if the statement in Combustion Engineering was held insufficient
under the test, then the one it received from UVL must also fail.*fn1
However, the statement in Combustion Engineering was rejected because the
court found that the use of the words "as presented, " accompanied with a
request for further supporting information, "failed unequivocally and
finally to reject" the claim. Id.
No such equivocation appeared in UVL's statement. Moreover, plaintiffs'
counsel seems clearly to have understood the significance of UVL's denial
of responsibility, since his own letter to UVL acknowledged receipt of
"[y]our letter denying my client's claim." Since UVL's denial of
responsibility made it clear "that the right of disallowance ha[d]
definitely been exercised," Combustion Engineering, 741 F.2d at 537, this
Court finds that it was sufficiently clear and final. Accordingly,
plaintiffs' cause of action against UVL is time barred.
Although there were settlement negotiations between the parties after
UVL's disallowance, such negotiations do not serve to vitiate the
effective disallowance of a claim. The purpose of a carrier's
disallowance of a claim is to commence the running of the statute of
limitations, not to discourage settlement negotiation. B.F. Goodrich Tire
Co. v. Louisville & Nashville R.R. Co., 439 F. Supp. 363, 365 (S.D.N Y
1977); White v. United Van Lines, Inc., 758 F. Supp. 1240, 1243
It is to be noted that the cross-claims of co-defendants Additive and
Associated are also time barred because they were not filed with UVL
within nine months of the delivery of the machine. See 49 U.S.C. § 11707
(e); UVL's Notice of Motion at B. The nine-month notice of claim
requirement cannot be circumvented by denominating a claim against a
carrier as one for indemnity or otherwise. Urban Elec. Co., Inc. v. Cable
Index, 735 F. Supp. 29, 32 (D.Mass. 1990); U.S. Steel Int'l, Inc. ...