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Ridley Electric Co., Inc. v. Liebert Corp.

United States District Court, N.D. New York

February 3, 2014

LIEBERT CORP. and CON-WAY FREIGHT, INC., [1] Defendants.


LAWRENCE K. KAHN, District Judge.


Before the Court are Defendants Con-way Freight, Inc. ("Con-way") and Liebert Corporation's ("Liebert") (collectively, "Defendants") Motions for summary judgment. Dkt. Nos. 20 ("Con-way Motion"); 20-2 ("Con-way Memorandum"); 21 ("Liebert Motion"); 21-21 ("Liebert Memorandum"). Plaintiff Ridley Electric Company, Inc. ("Plaintiff") brought federal law claims in New York Supreme Court against Con-way under the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706, and state law claims against Liebert for breach of contract, which the Defendants removed.[2] Dkt. No. 1; 1-1. Plaintiff then filed an Amended Complaint, which is the operative pleading in this action. Dkt. No. 13 ("Amended Complaint"). Defendants have each moved for summary judgment, Plaintiff responded to each Motion, and Defendants replied. Dkt. Nos. 31 ("Plaintiff's Con-way Response"); 33 ("Plaintiff's Liebert Response"); 40 ("Con-way Reply"); 41 ("Liebert Reply"). For the following reasons, the Court denies both Motions.


Responding to a sales quote, Plaintiff submitted a purchase order to Liebert requesting, inter alia, two Liebert Precision Power Centers ("Power Centers") to complete an expansion project for Time Warner Cable ("TWC"). Dkt No. 21-1 ("Liebert SMF") ¶ 6.[3] Liebert successfully tested the two Power Centers prior to shipment-in the presence of a TWC representative-at its Delaware, Ohio, facility. Id . ¶¶ 11-14. Liebert then issued an invoice, stating that the order would be "F.O.B. Point of Shipment" with Con-way as the "Carrier." Id . ¶¶ 8, 16. On September 30, 2011-the date that the Power Centers shipped-the Shipping Order, executed by Con-way, provided that the Power Centers were in "good order." Id . ¶¶ 19-20. Liebert "boxed, shrink wrapped, and loaded" the Power Centers onto Con-way's truck. Dkt. No. 20-1 ("Con-way SMF") ¶ 3. Con-way did not know the content or its condition. Id . ¶ 4.

Con-way delivered the Power Centers to Plaintiff's warehouse. Liebert SMF ¶ 21. Plaintiff accepted the shipment and signed a receipt stating that it had received the boxed Power Centers in good condition without noting cargo loss or damage. Con-way SMF ¶ 6. Plaintiff held the boxed Power Centers at its warehouse for 27 days, until it moved them to the TWC job site. Id . ¶ 9; Liebert SMF ¶ 22; Dkt. No. 31 ("Pl.'s Con-way SMF") ¶ 18. Upon unboxing the Power Centers, Plaintiff discovered damage to one unit and requested repair from Liebert. Liebert SMF ¶¶ 22-24. Liebert completed the repairs at cost to Plaintiff. Id . ¶¶ 26-29. Plaintiff submitted a claim to Conway for cargo loss and damage. Con-way SMF ¶¶ 9-10. Con-way denied the claim on the basis that Plaintiff had signed a "clean" delivery receipt. Id . ¶ 11.


A. Summary Judgment

Summary judgment is proper where "there is no genuine issue as to any material fact, " and thus "the movant is entitled to judgment as a matter of law." Celotex Corp. v. Catrett , 477 U.S. 317, 322-23 (1986). "An issue of fact is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Niagara Mohawk Power Corp. v. Hudson River-Black River Regulating Dist. , 673 F.3d 84, 94 (2d Cir. 2012). If the moving party will not bear the burden at trial, it may, in order to meet its summary-judgment burden of production, either: (1) "submit affirmative evidence that negates an essential element of the nonmoving party's claim"; or (2) "demonstrate to the Court that the nonmoving party's evidence is insufficient to establish an essential element of the nonmoving party's claim." Celotex , 477 U.S. at 330-32 (Brennan, J., dissenting). If the moving party carries its burden of production, the nonmoving party must raise some genuine issue of material fact; "metaphysical doubt as to material facts" is not enough. Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 586 (1986). However, the burden of persuasion remains at all times with the moving party, who must affirmatively demonstrate entitlement to judgment as a matter of law. Celotex , 477 U.S. at 332.

B. Breach of Contract[4]

Under Ohio law, a plaintiff alleging breach of contract must show that (1) "a contract existed"; (2) "the plaintiff fulfilled his obligations"; (3) "the defendant unlawfully failed to fulfill his obligations"; and (4) "damages resulted from this failure." Mikulski v. Centerior Energy Corp. , 501 F.3d 555, 561 n.3 (6th Cir. 2007). Claims arising out of contracts for the sale of goods are governed by Article 2 of the Uniform Commercial Code ("UCC"). See Radio Parts Co. v. Invacare Corp., 897 N.E.2d 228, 234 (Ohio Ct. App. 2008). If a buyer accepts a shipment of goods, "[t]he burden is on the buyer to establish any breach with respect to the goods accepted." OHIO REV. CODE ANN. § 1302.65(D). Additionally, "F.O.B. Point of Shipment" contracts shift title and the risk of loss from the buyer to the seller as soon as the goods are shipped. See, e.g., European Pastries, Inc. v. Sichel Bakery Equip. Co., No. C-74428, 1975 WL 181875, at *2 (Ohio Ct. App. July 14, 1975).

C. Carmack Amendment

Claims against a carrier for injury sustained to goods shipped in interstate commerce are governed solely by the Carmack Amendment. A plaintiff must prove three elements: (1) the goods were delivered to the carrier in good condition; (2) the goods were damaged upon receipt at the destination; and (3) the value of damages sustained. See 49 U.S.C. § 11707(a)(1); Project Hope v. M/V Ibn Sina , 250 F.3d 67, 73 n.6 (2d Cir. 2001). There are affirmative defenses available to the carrier including: (1) acts of God; (2) crime; (3) acts of the shipper; (4) public ...

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