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Active Media Services, Inc., D/B/A Active International v. Cac American Cargo Corp.

September 26, 2012

ACTIVE MEDIA SERVICES, INC., D/B/A ACTIVE INTERNATIONAL, PLAINTIFF,
v.
CAC AMERICAN CARGO CORP., ALL WORLD INTERNATIONAL SHIPPING, INC., D/B/A AWIS, DEFENDANTS. :



The opinion of the court was delivered by: Ramos, D.J.:

OPINION AND ORDER

Plaintiff Active Media Services, Inc. ("AMS"), contracted with Defendant All World International Shipping, Inc. ("AWIS"), to arrange for a shipment of televisions to be transported from New York to Florida. AWIS hired Defendant CAC American Cargo Corp. ("CAC") to transport the shipment by truck. The televisions were stolen en route.

AMS then sued CAC and AWIS, claiming that both were liable under the Carmack Amendment, 49 USC § 14706, a federal statute which regulates carriers. AMS also claimed that AWIS was liable under New York state law for negligence. Both AMS and AWIS have filed cross-motions for summary judgment. For the reasons set forth below, the Court GRANTS summary judgment to AWIS on the Carmack Amendment claim and DENIES summary judgment to AMS on the same. The Court DENIES summary judgment to both Parties on the negligence claim.

I. BACKGROUND

A. Facts

AMS, a Delaware corporation with its principal place of business in Pearl River, New York, sought to transport a shipment of televisions from Ellenville, New York to a hotel in Miami, Florida in January 2008. The value of the shipments was approximately $250,000. To arrange the shipment, AMS retained AWIS, a corporation with its principal place of business in Florida, to broker the transaction. AWIS in turn chose CAC to serve as the carrier for AMS's shipment. Pl.'s Rule 56.1 Statement ¶ 1; Def.'s Response ¶ 1.

AWIS admits that it had never used CAC as a carrier prior to the AMS shipment, Pl.'s Rule 56.1 Statement ¶ 2; Def.'s Response ¶ 2, but nonetheless contends it conducted sufficient due diligence on CAC. For example, AWIS confirmed that CAC was licensed to operate by the Federal Motor Carrier Safety Administration (FMCSA), Def.'s Rule 56.1 Statement ¶ 7; Pl.'s Response ¶ 7, and obtained a copy of CAC's insurance certificate. Pl.'s Rule 56.1 Statement ¶ 15; Def.'s Response ¶ 15. However, AWIS did not obtain a copy of CAC's insurance policy, id. ¶ 15; Def.'s Response ¶ 15, and failed to verify that the particular truck that transported AMS's shipment was covered under CAC's insurance policy.*fn1 See id. ¶ 11; Def.'s Response ¶ 11.

Between 2005 and the date when CAC picked up AMS's shipment in January 2008, the FCMSA had revoked CAC's license to operate as a common carrier on four separate occasions. Compl., Ex. A at 9. However, the report AWIS retrieved during its due diligence revealed only three revocations. Pl.'s Rule 56.1 Statement ¶ 18; Def.'s Response ¶ 18.

During the course of the negotiations AWIS recommended that AMS pay extra for a that second driver, and Johnny Gonzalez, an AMS representative, conceded in his deposition AMS chose not to pay for a two-person team of drivers. See Deposition of Johnny Gonzalez at 13; see also Def.'s Ex. 6.*fn2

CAC picked up the shipment on January 4, 2008. Pl.'s Rule 56.1 Statement ¶ 4; Def.'s Response ¶ 4. But the shipment never got to Miami. The driver reported to the police that the truck had been stolen at a truck stop near Brunswick, Georgia. Martin Dec., Ex. D. CAC's insurer denied the claim for loss on the ground that the vehicle listed in the police report was not covered under CAC's insurance policy. Martin Dec., Ex. J.

B. Procedural History

AMS filed its Complaint on July 14, 2008. It alleged two causes of action: (1) "carrier liability" under the Carmack Amendment to the Interstate Commerce Act, 49 USC § 14706, against CAC and AMS, and (2) "broker liability for negligent entrustment" under New York state law against AWIS. Compl. ¶¶ 9-10, 20. AWIS answered and filed a cross-claim against CAC.*fn3

CAC failed to answer or otherwise respond, and on April 14, 2009, the district court entered a judgment of $250,595.87 plus interest and fees against CAC.

After discovery was completed, the Parties cross-moved for summary judgment. The case was then reassigned to this Court.

II. DISCUSSION

A. Summary Judgment ...


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