Total Quality Logistics, L.L.C. v. Red Chamber Co.
Total Quality Logistics, L.L.C. v. Red Chamber Co.
Opinion
*65 {¶ 1} Defendant-appellant, Red Chamber Co. ("RC"), appeals a decision of the Clermont County Court of Common Pleas, granting summary judgment in favor of plaintiff-appellee, Total Quality Logistics, LLC ("TQL").
{¶ 2} In 2008, RC, a seafood distributor began using TQL's services as a freight broker to transport RC's products to its customers. In turn, as a broker, TQL contracted with third-party trucking companies to transport the products across the country. A credit agreement governed this working relationship, and provided:
Applicant understands motor carriers under contract with [TQL] are required to maintain cargo loss and damage liability insurance in the amount of $100,000.00 per shipment. Please sign below acknowledging that [l]oads valued in excess of $100,000[.00] will not be tendered without enough prior written notification to TQL to allow TQL and its carriers the opportunity to arrange for increased insurance limits. Failure to provide timely written notice will result in your loads not being insured to the extent the value exceeds $100,000.00.
{¶ 3} In April 2013, RC contracted with TQL to arrange the transport of RC's goods from California to Florida. In turn, TQL retained Wells Trucking to transport and deliver RC's goods. During transport, an unknown third-party stole the load of goods valued at $186,450, which RC never recovered. TQL brought this action against RC claiming it had breached the credit agreement by failing to pay for 13 other brokered shipments between April 2, 2013 and July 5, 2013, and alleged damages of $53,402, plus interest, collection costs, and attorney fees. RC counterclaimed, asserting the loss of the value of the stolen goods was a result of TQL's breach of contract, negligence, and negligent supervision and hiring. TQL filed a third-party complaint against Wells Trucking alleging negligence and seeking indemnification. Wells Trucking's insurance carrier settled with RC for $100,000. In so doing, RC agreed to indemnify Wells Trucking for any claims by any other party for damages resulting from the loss.
{¶ 4} TQL moved for summary judgment on its breach of contract claim and RC's counterclaims. In so doing, TQL argued RC's counterclaims were barred by the doctrine of circular indemnity, preempted by the Carmack Amendment, 49 U.S.C. 14706(a), to the ICC Termination Act of 1995, 49 U.S.C. 14501(b), and fail on their merits as a matter of law. With respect to its breach of contract claim, TQL asserted RC's counterclaim was an attempt to offset the damages from RC's nonpayment of the 13 other brokered shipments; therefore, TQL was entitled to judgment as a matter of law. The trial court granted summary judgment in favor of TQL on its claim and RC's counterclaims. The trial court found the ICCTA preempted RC's state law counterclaims.
*66 The trial court further found TQL met its burden of demonstrating an absence of a genuine issue of material fact regarding its claim, and that RC failed to rebut the evidence presented by TQL; therefore, TQL was entitled to judgment as a matter of law. This appeal followed.
{¶ 5} Assignment of Error No. 1:
{¶ 6} THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT FOR APPELLEE ON APPELLANT'S COUNTERCLAIM.
{¶ 7} RC contends the trial court erred by sua sponte granting summary judgment in favor of TQL on grounds not offered in TQL's motion for summary judgment thereby denying RC a meaningful opportunity to respond. Specifically, RC asserts the trial court erred by relying on the ICCTA in granting summary judgment on RC's counterclaims in favor of TQL because, at no point during the pendency of the matter, was that section of the statute presented as a basis for summary judgment.
{¶ 8} We review a trial court's ruling on a motion for summary judgment de novo.
Grizinski v. Am. Express Fin. Advisors, Inc.
,
{¶ 9} "A party seeking summary judgment must specifically delineate the basis upon which summary judgment is sought in order to allow the opposing party a meaningful opportunity to respond."
Mitseff v. Wheeler
,
{¶ 10} Thus, the inquiry requires this court to examine the substance of the motion for summary judgment in the context of the statute to determine whether
*67
such notice was present.
See
Ameriswiss Tech. v. Midway Line of Ill., Inc.
,
{¶ 11} Pursuant to well-established principles of transportation law, cargo damage claims against interstate motor carriers are determined under the Carmack Amendment to the ICCTA.
Chubb Group Ins. Cos. v. H.A. Transp. Sys., Inc.
,
[a] carrier providing transportation or service * * * shall issue a receipt or bill of lading for property it receives for transportation under this part. That carrier and any other carrier that delivers the property and is providing transportation or service * * * are liable to the person entitled to recover under the receipt or bill of lading. The liability imposed under this paragraph is for the actual loss or injury to the property caused by (A) the receiving carrier, (B) the delivering carrier, or (C) another carrier over whose line or route the property is transported in the United States * * *.
(Citations omitted.) 49 U.S.C. 14706(a)(1). Accordingly, the Carmack Amendment creates a federal statutory remedy on a bill of lading against both the originating and destination carrier. To assert a prima facie case pursuant to the Carmack Amendment, one must demonstrate (1) delivery to the carrier in good condition, (2) delivery failure or arrival in damaged condition, and (3) the amount of damages caused by the loss.
Camar Corp. v. Preston Trucking Co.
,
{¶ 12} "It is accepted * * * that the principal purpose of the [Carmack] Amendment was to achieve national uniformity in the liability assigned to carriers."
Rini v. United Van Lines
,
{¶ 13} The ICCTA provides, in pertinent part:
*68 a State * * * may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier * * * or any motor private carrier, broker , or freight forwarder with respect to the transportation of property.
(Emphasis added.) 49 U.S.C. 14501(c)(1). The two theories of preemption are not mutually exclusive, as one's claims may be preempted impliedly by the Carmack Amendment, expressly by the ICCTA, or both. Ameriswiss at 205-06 (demonstrating any claim brought against a party in its capacity as a carrier is preempted by the Carmack Amendment, whereas any claim brought against a party in its capacity as a broker is preempted by the ICCTA).
{¶ 14} In its motion for summary judgment, TQL thoroughly argued the application of the Carmack Amendment to preempt RC's state law counterclaims. TQL asserted the Carmack Amendment only applies to carriers and freight forwarders. Thus, as a broker, TQL fell outside the parameters of permissible claims brought pursuant to the Carmack Amendment. Further, since the Carmack Amendment preempts state law claims in situations where carriers are held liable for actual loss or injury to property, RC's counterclaims are preempted against TQL, even though it was a broker, because the claims stem from actual loss of property during transport by the carrier.
{¶ 15} The trial court declined to address TQL's preemption argument pursuant to the Carmack Amendment, and instead, found the ICCTA expressly preempted RC's state law counterclaims. Likewise, we need not address the validity of TQL's Carmack Amendment argument, and note, as the trial court found, the federal courts have inconsistently answered the question whether the Carmack Amendment extends to state law claims against brokers.
Compare
Ameriswiss
at 208 (holding state law tort claims against broker preempted impliedly and expressly),
with
Belnick, Inc. v. TBB Global Logistics, Inc.
,
{¶ 16} No such inconsistency exists with respect to express preemption for state law claims under the ICCTA, as courts have repeatedly found that holding a broker liable for a negligence claim is subject to express preemption.
See, e.g.
,
ASARCO LLC v. Eng. Logistics Inc.
,
{¶ 17} We next turn to the question of whether the trial court's finding deprived RC of a meaningful opportunity to respond under Civ.R. 56. Specifically, whether TQL's motion for summary judgment asserting implied preemption pursuant to the Carmack Amendment to the ICCTA provided sufficient notice of the possible applicability of the express preemption section of the statute. We find TQL's motion for summary judgment provided such notice.
*69
{¶ 18} As discussed above, a review of the statute itself and the supporting case law clearly indicates there are two avenues for federal preemption of state law claims related to actual loss or injury to property while in interstate transit. The well-established purpose behind preempting such state law claims is to achieve national uniformity in such cases where liability is imposed.
Rini v. United Van Lines
,
{¶ 19} Additionally, this court has previously addressed a similar set of facts and found the nonmoving party was not deprived of a meaningful opportunity to respond.
See
Hunter v. Wal-Mart Stores, Inc.
, 12th Dist. Clinton No. CA2001-10-035,
{¶ 20} Similar to our opinion in
Hunter
, the trial court did not deprive RC of a meaningful opportunity to respond to the federal preemption issue.
See
Revlock v. Lin
, 8th Dist. Cuyahoga No. 99243,
{¶ 21} Accordingly, RC's first assignment of error is overruled.
{¶ 22} Assignment of Error No. 2:
{¶ 23} THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT FOR APPELLEE ON THE COMPLAINT.
*70 {¶ 24} RC contends the trial court erred by granting summary judgment in favor of TQL because RC presented sufficient evidence to demonstrate a genuine issue of material fact existed for TQL's breach of contract claim. Specifically, RC contends there are three triable issues of fact in dispute: (1) whether TQL committed a breach in its role as a broker, (2) if yes, was it a material breach, and (3) whether such breach discharged RC's duty to perform relative to the 13 other brokered shipments.
{¶ 25} As discussed above, the moving party bears the initial burden of showing there is no genuine issue of material fact and that it is entitled to judgment as a matter of law.
Dresher v. Burt
,
{¶ 26} In support of its motion for summary judgment, TQL submitted the affidavit of Marc Bostwick, an operations manager for TQL, who averred that "[b]etween April 2, 2013 and July 5, 2013, TQL brokered transportation for 13 loads for [RC], aside from the [stolen] load * * * at issue in this case." Bostwick further averred RC had yet to pay the $53,402, plus interest, owed for those 13 loads. TQL further supported its motion with the credit application, including the terms and conditions for the 13 loads, as well as RC's statement of accounts demonstrating $53,402 due for unpaid shipments. The only evidence submitted by RC in opposition to TQL's motion for summary judgment was the affidavit of Eithel Yocupicio, traffic manager for RC, who averred to the procedure related to contracting for the stolen shipment. Yocupicio's affidavit does not provide any evidence to rebut the evidence related to TQL's breach of contract claim, but rather, supports RC's counterclaims. Therefore, the trial court properly found RC failed to meet its burden to demonstrate the existence of a genuine issue of material fact with respect to TQL's breach of contract claim, and TQL is entitled to judgment as a matter of law.
{¶ 27} Accordingly, RC's second assignment of error is overruled.
{¶ 28} Judgment affirmed.
HENDRICKSON, P.J., and RINGLAND, J., concur.
Reference
- Full Case Name
- TOTAL QUALITY LOGISTICS, LLC, Plaintiff-Appellee, v. RED CHAMBER CO., Et Al., Defendants-Appellants.
- Cited By
- 5 cases
- Status
- Published
- Syllabus
- Company was not denied a meaningful opportunity to respond before grant of summary judgment where it had notice of possible federal preemption of its state law claims.