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COMMERCIAL UNION INS. CO. v. FORWARD AIR

June 14, 1999

COMMERCIAL UNION INSURANCE CO., PLAINTIFF,
v.
FORWARD AIR, INC., DEFENDANT.



The opinion of the court was delivered by: Schwartz, District Judge.

OPINION AND ORDER

Before the Court are (1) defendant's motion for summary judgment, or, in the alternative, partial summary judgment, and (2) plaintiff's motion to dismiss defendant's eleventh affirmative defense. For the reasons stated herein, (i) defendant's motion for summary judgment is DENIED; (ii) defendant's motion for partial summary judgment is GRANTED; and (iii) plaintiff's motion is DENIED.

FACTUAL BACKGROUND

The material facts are not in dispute for the purposes of this motion. Plaintiff Commercial Union Insurance Inc. ("Commercial") is a corporation incorporated in and with its principal place of business in Massachusetts. (Compl. ¶ 1.) Defendant Forward Air, Inc. ("Forward") is a corporation incorporated in and with its principal place of business in Tennessee. (Compl. ¶ 2; Answer ¶ 2.) Forward was at all pertinent times a broker duly licensed by the Interstate Commerce Commission. (Defendant's Rule 56.1 Statement ("Def.56.1") ¶ 2.)

New England Circuit Sales purchased 125 packages of computer hard drives (the "Shipment") from Computec America. (Compl. ¶ 6; Plaintiff's Response to Defendant's Notice to Admit, No. 1 ("Pl.Resp."), annexed as Exhibit 2 to the Affidavit of Ilene J. Feldman ("Feldman Aff.") at ¶ 1.) Plaintiff is the subrogated underwriter of New England Circuit Sales. (Compl. ¶ 3.) The Shipment was delivered to defendant Forward for shipment from Miami to Boston. (Compl. ¶ 7.) Forward did not actually transport the Shipment, nor did it act as a "carrier" under federal law with respect to the shipment. (Def. 56.1 ¶¶ 8, 9.) Forward was acting as a property broker, arranging for the Shipment's transportation by truck. (Affidavit of Julia M. Moore ¶ 8.)

The subject shipment weighed 3,356 pounds. (Def. 56.1 ¶ 3.) Forward took custody of the Shipment in Miami, and issued Airfreight waybill No. 2113785 ("Waybill"). (Compl. ¶ 7; Def. 56.1 ¶ 4.) The Waybill provided that:

  Unless otherwise agreed to in writing, the maximum
  liability for shortage or physical damage shall be
  fifty cents ($0.50) per pound. If the declared value
  of the shipment shown on the reverse side exceeds
  fifty cents ($0.50) per pound, an insurance surcharge
  of sixty-five cents ($0.65) per one hundred dollars,
  or portion thereof, excess value shall be assessed.

(Id. ¶ 7.) No value was declared on the Waybill. (Id. ¶ 5.) The parties dispute who filled out the Waybill. (Pl.Resp. ¶ 5.) Plaintiff alleges that the Shipment disappeared in transit while in Forward's custody, at a loss of approximately $380,000. (Compl. ¶¶ 9, 10.)

Plaintiff instituted the present action on September 25, 1998 seeking damages for the loss of the Shipment. Defendant moves for (1) summary judgment pursuant to Federal Rule of Civil Procedure 56 ("Rule 56"), asserting that as a broker, it is lot liable for the loss of the Shipment; or (2) partial summary judgment, pursuant to Rule 56, asserting that, based on the limited liability provision of the Waybill, defendant's maximum liability is fifty cents per pound on the shipment. Plaintiff moves to strike defendant's eleventh affirmative defense, which is based on the limited liability provision of the Waybill.

DISCUSSION

A court may grant summary judgment if it is satisfied that "there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The initial burden rests on the moving party to demonstrate the absence of a genuine issue of material fact, and all inferences and ambiguities are resolved in favor of the party against whom summary judgment is sought. Gallo v. Prudential Residential Servs., Ltd. Partnership, 22 F.3d 1219, 1223 (2d Cir. 1994) (citations omitted). Because there are no material issues of fact remaining in this case with regard to the applicability of the limitation of liability provision of the Waybill, summary judgment is appropriate on that issue.*fn1

I. Federal Law Permits a Claim to be Asserted Against
  Defendant.

Defendant asserts that, because it is a broker, it is not subject to suit for plaintiff's loss. The Court disagrees.

Federal statutory law on this subject is governed largely by the Carmack Amendment to the Interstate Commerce Act of 1887. See Cleveland v. Beltman North American Co., Inc., 30 F.3d 373, 377 (2d Cir. 1994). The Carmack Amendment was passed in 1906, and addresses the "subject of carrier liability for goods lost or damaged during shipment, and most importantly provides shippers with the statutory right to recover ...


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