Mercer Transportation Co. v. Greentree Transportation Co.

F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
AUG 25 2003
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT
MERCER TRANSPORTATION
COMPANY,
Plaintiff-Appellee,
v.
GREENTREE TRANSPORTATION
CO.,
Defendant-Appellant, No. 01-1380
and
McCLELLAN ENTERPRISES, INC.,
Defendant-Third-
Party-Plaintiff,
v.
LEROY LANXON,
Third-Party-Defendant.
Appeal from the United States District Court
for the District of Colorado
(D.C. No. 98-D-1387)
James Attridge, Scopelitis, Garvin, Light & Hanson, San Francisco, California
(Jerry N. Jones, Moye, Giles, O’Keefe, Vermeire & Gorrell, LLP, with him on the
brief), for Plaintiff-Appellee.
Alan Epstein, Hall & Evans, L.L.C., Denver, Colorado (Anthony Melonakis,
Sutton, Melonakis & Gulley, P.A., with him on the briefs), for Defendant-
Appellant.
Before MURPHY, BALDOCK, and O’BRIEN, Circuit Judges.
MURPHY, Circuit Judge.
I. Introduction
Appellee, Mercer Transportation Co. (“Mercer”) brought a lawsuit against
appellant, Greentree Transportation Co. (“Greentree”) seeking compensation for
the contents of a tractor-trailer truck which were damaged in a one-vehicle
accident. The district court granted summary judgment for Mercer, concluding
that Greentree was liable for the damage because its placards and other
identification were displayed on the truck at the time of the accident. The district
court concluded that the liability issue was controlled by this court’s holding in
Rodriguez v. Ager, 705 F.2d 1229 (10th Cir. 1983). The district court also
granted summary judgment to Mercer on the issue of damages. Greentree then
brought this appeal. Exercising jurisdiction pursuant to 28 U.S.C. § 1291, we
-2-
reverse the grant of summary judgment on liability and vacate the district court’s
order granting summary judgment on damages.
II. Factual Background
On January 29, 1997, Mobile Tool International, Inc. (“Mobile”) contacted
Mercer, a flatbed carrier and licensed transportation broker, to arrange
transportation for a load of six aerial lifts from Colorado to Massachusetts. The
next day, Mercer brokered the load to McClellan Enterprises, Inc. (“McClellan”).
Mercer’s load quote/confirmation sheet designated McClellan as the carrier and
Larry Lanxon (“Lanxon”) as the driver. On January 2, 1997, however, Lanxon
had entered into a leasing agreement with Greentree. Pursuant to the terms of this
lease agreement, Lanxon permanently leased his tractor-trailer to Greentree and
drove the equipment for Greentree. The parties dispute whether McClellan
brokered the Mobile shipment to Greentree or made arrangements directly with
Lanxon.
Mobile prepared a bill of lading associated with the shipment of the aerial
lifts. The bill of lading was signed by Lanxon and the shipment was then
tendered to him. On January 31, 1997, the aerial lifts were damaged when
Lanxon was involved in a one-vehicle accident. At the time of the accident, the
truck bore Greentree’s placards which feature Greentree’s name, logo, and license
numbers.
-3-
Mobile filed a claim against Mercer for the full value of the damaged aerial
lifts. Mercer settled the claim for $150,453.12. As part of the settlement, Mobile
assigned to Mercer its right to pursue any claims against McClellan, Greentree,
and Lanxon arising out of the loss of the property. Mercer then filed a lawsuit in
federal court against Greentree and McClellan pursuant to the Carmack
Amendment to the Interstate Commerce Act (the “Carmack Amendment”), 49
U.S.C. § 14706. 1 Mercer asserted three claims in its complaint. The first claim
arose under 49 U.S.C. § 14706(a) and was asserted by Mercer as Mobile’s
assignee against both McClellan and Greentree. The third claim, a claim for
indemnification pursuant to 49 U.S.C. § 14706(b), was asserted only against
Greentree by Mercer in its individual capacity.
Mercer settled with McClellan for $82,988.54. 2 Mercer and Greentree then
filed cross-motions for summary judgment with respect to both liability and
damages. The district court granted summary judgment in favor of Mercer on the
1
McClellan filed a cross-claim against Greentree and a third-party
complaint against Lanxon. McClellan’s cross-claim was dismissed by stipulation
of the parties. McClellan’s third-party complaint against Lanxon was dismissed
by the court.
2
In addition, Mercer assigned its right to pursue claims relating to the
incident to McClellan’s insurer, Albany Insurance Company (now known as
Liberty Mutual Insurance Company). Although Mercer’s right to pursue these
claims has been assigned to Albany, Mercer and Albany further agreed to jointly
prosecute the claims. The suit is being maintained in Mercer’s name pursuant to
Rule 25(c) of the Federal Rules of Civil Procedure.
-4-
issue of liability, concluding that Greentree was liable for the damage to the aerial
lifts because Lanxon’s tractor-trailer bore Greentree’s logo at the time of the
accident. The district court relied on this court’s decision in Rodriguez v. Ager,
705 F.2d 1229 (10th Cir. 1983), as controlling precedent for its conclusion.
With respect to the issue of damages, the district court concluded that under
the Carmack Amendment, a carrier’s liability could be limited through tariff rates
included in the bill of lading. See 49 U.S.C. § 14706(c)(1)(A). Although the bill
of lading signed by Lanxon limited liability to Mercer’s tariff rate, the district
court denied summary judgment because a genuine issue of material fact existed
as to whether Mobile had actual knowledge of Mercer’s tariff rate. After the
district court entered its ruling, the parties stipulated that Mobile did not actually
know Mercer’s tariff rate and then again filed cross-motions for summary
judgment on damages. The district court granted Mercer’s motion in part,
concluding that Mercer’s tariff was not binding. The court entered judgment
against Greentree in the amount of $70,018.20. The amount of damages reflected
the court’s conclusion that Greentree was entitled to a setoff for the settlement
payment made by McClellan to Mercer.
Greentree then brought this appeal arguing first that it is not liable for the
damage to the aerial lifts and, alternatively, that either its tariff or Mercer’s tariff
should have been applied to limit the amount of its liability.
-5-
III. Discussion
This court reviews a grant of summary judgment de novo. Simms v.
Oklahoma ex rel. Dep’t of Mental Health & Substance Abuse Servs., 165 F.3d
1321, 1326 (10th Cir. 1999). We view the record in the light most favorable to
the non-moving party and affirm when “the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show
that there is no genuine issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law.” Fed. R. Civ. P. 56(c); Hysten v.
Burlington N. & Santa Fe Ry. Co., 296 F.3d 1177, 1180 (10th Cir. 2002).
Mercer asserts that the district court correctly concluded that Greentree is
strictly liable for the damage to the aerial lifts because its logo was displayed on
the tractor-trailer at the time of the accident. In support of this argument, Mercer
relies on this court’s decision in Rodriguez v. Ager, 705 F.2d 1229 (10th Cir.
1983). Rodriguez involved a civil action seeking damages for fatal and nonfatal
injuries suffered by the occupants of an automobile involved in a collision with a
tractor-trailer truck. Id. at 1230. The truck had been leased to the defendant, a
motor carrier, and at the time of the accident it bore the defendant’s placards. Id.The driver, however, was not operating the truck for the benefit of the defendant
and the defendant was unaware that the truck was being used to pick up a load for
a third party. Id. at 1230-31.
-6-
This court first discussed the regulations of the Interstate Commerce
Commission governing leasing arrangements between interstate carriers and
private owners of trucks used in interstate commerce applicable at the time of the
accident. Id. at 1231-32. One of these regulations provided that the lessee of
trucking equipment assumed complete responsibility for the control and use of the
equipment during the term of the lease. Id. at 1231; 49 C.F.R. § 1057.4(a)(4)
(1978). A second regulation provided that the lessee was responsible for
removing its insignia and other identification from the equipment upon the
termination of the lease. Rodriguez, 705 F.2d at 1231; 49 C.F.R. § 1057.4(d)(1)
(1978). The court then examined congressional findings indicating that the
purpose of regulating interstate truck leasing arrangements was “to establish
responsibility for protection of the public in the lessee of the equipment.”
Rodriguez, 705 F.2d at 1232. The court concluded that Congress intended to
eliminate “fly-by-night contracting” and a carrier’s use of leased equipment to
circumvent federal safety regulations by imposing responsibility for accidents
involving leased equipment on the carrier whose insignia was displayed on the
equipment at the time of the accident. Id. at 1236.
Consistent with congressional intent, the Rodriguez court imposed liability
for the accident on the defendant because it had not removed its placards from the
truck and, therefore, was irrebuttably deemed to be the lessee of the equipment
-7-
and the statutory employer of the driver. 3 Id. at 1236. The court acknowledged
that the defendant’s liability existed only by virtue of the leasing regulations. Id.
at 1231. The court’s interpretation of the regulations to impose liability on the
defendant furthered “‘the policy of protecting the public and providing it with an
identifiable and financially accountable source of compensation for injuries
caused by leased tractor-trailers.’” Id. at 1234 (quoting Carolina Cas. Ins. Co. v.
Ins. Co. of N. America, 595 F.2d 128, 137 n.29 (3d Cir. 1979)).
Greentree argues that Rodriguez has no application in this case because it
involves only damage to property and not personal injuries. 4 We agree. Cf.
Empire Fire & Marine Ins. Co. v. Guar. Nat’l Ins. Co., 868 F.2d 357, 363 (10th
Cir. 1989) (“Rodriguez is instructive on the issue of a lessee’s responsibilities to
injured parties under ICC regulations, but it is not relevant to the issue of how
liability should be allocated between two insurance companies, both of which
arguably have insured the same event.”). The holding in Rodriguez was clearly
driven by this court’s conclusion that the truck leasing regulations should be
interpreted to protect members of the public who suffer personal injuries in
3
The holding in Rodriguez is commonly referred to as the “logo liability”
rule.
Greentree also argues that amendments made to the leasing regulations
4
relied upon by the court in Rodriguez call into question the continued viability of
the logo liability rule. Because we conclude, infra, that Rodriguez does not
control the disposition of this case, it is unnecessary to address this argument.
-8-
accidents involving leased equipment. Rodriguez, 705 F.2d at 1236 (“Trucking
equipment such as that here present has a capability for bringing about terrible
injuries and damages to life.” (emphasis added)). The policy considerations that
underlie the rule adopted in Rodriguez do not exist in causes of action brought
pursuant to the Carmack Amendment. Such suits involve only the issue of carrier
liability for property lost or damaged in shipment; they do not involve personal
injuries sustained by members of the public as a result of a driver’s tortious
conduct. The leasing regulations relied upon by the Rodriguez court do not
govern the imposition or allocation of liability for property damage under the
Carmack Amendment.
In addition, the Carmack Amendment itself establishes a separate liability
scheme, thereby rendering application of the Rodriguez rule to property damage
cases unnecessary. A shipper pursuing a claim under the Carmack Amendment is
relieved of the burden of demonstrating which of several carriers actually or
proximately caused the loss to the property. See 49 U.S.C. § 14706(a). Instead,
the shipper establishes a prima facie case against either the initial carrier or the
delivering carrier by proving: (1) delivery of the property to the carrier in good
condition; (2) arrival of the property at the destination in damaged or diminished
condition; and (3) the amount of its damages. Mo. Pac. R.R. Co. v. Elmore &
Stahl, 377 U.S. 134, 138 (1964). The burden then shifts to the carrier to
-9-
demonstrate both that it was not negligent and that the damage was caused by an
event excepted at common law. 5 Ensco, Inc. v. Wiecker Transfer & Storage Co.,
689 F.2d 921, 925 (10th Cir. 1982). The shipper’s damages, however, are limited
to the actual loss or injury to the property. See 49 U.S.C. § 14706(a)(1).
“The purpose of the Carmack Amendment was to relieve shippers of the
burden of searching out a particular negligent carrier from among the often
numerous carriers handling an interstate shipment of goods.” Reider v.
Thompson, 339 U.S. 113, 119 (1950). This court has stated that the “principal
function” of the Carmack Amendment “is to permit a shipper in interstate
commerce to bring an action against the initial carrier to recover for damages to
the shipment whether such damages occurred while the goods were in the hands
of the initial carrier or connecting carriers.” L.E. Whitlock Truck Serv., Inc. v.
Regal Drilling Co., 333 F.2d 488, 490 (10th Cir. 1964), overruled on other
grounds, Underwriters at Lloyds of London v. N. Am. Van Lines, 890 F.2d 1112,
1115 (10th Cir. 1989) (en banc). Thus, a carrier can be held liable to a shipper
for damage to cargo without regard to fault. Because the Carmack Amendment
permits a shipper whose property is diminished or destroyed to recover its actual
5
This includes damage “caused by (a) the act of God; (b) the public enemy;
(c) the act of the shipper himself; (d) public authority; (e) or the inherent vice or
nature of the goods.” Mo. Pac. R.R. Co. v. Elmore & Stahl, 377 U.S. 134, 137
(1964) (quotation omitted); see also A.T. Clayton & Co. v. Missouri-Kansas-
Texas R.R., 901 F.2d 833, 834 (10th Cir. 1990).
-10-
damages from a carrier without demonstrating actual or proximate cause, there is
no need to extend the logo liability rule to suits brought pursuant to 49 U.S.C. §
14706(a). The interests of shippers are adequately protected by the liability
scheme set out in the statute itself.
If a carrier is held liable to the shipper under § 14706(a), it may, in turn,
seek to recover from the carrier whose negligence caused the loss. 49 U.S.C. §
14706(b) (“The carrier issuing the receipt or bill of lading . . . or delivering the
property for which the receipt or bill of lading was issued is entitled to recover
from the carrier over whose line or route the loss or injury occurred . . . .”). We
discern no reason to extend the rule articulated in Rodriguez to indemnification
suits brought pursuant to 49 U.S.C. § 14706(b). Mercer has not provided this
court with a citation to a single case in which the Rodriguez rule was extended to
an indemnification suit brought pursuant to the Carmack Amendment and has
failed to advance any argument why the rule should be so extended or why such
suits should not be governed by traditional burdens of proof.
Accordingly, we conclude that the district court erred when it determined
that Greentree was liable for the damage to the aerial lifts simply because
Lanxon’s truck bore Greentree’s placards at the time of the accident. Because the
parties concede that disputed issues of material fact exist as to whether Greentree
is liable under either 49 U.S.C. § 14706(a) or 49 U.S.C. §14706(b), we reverse
-11-
the district court’s grant of summary judgment to Mercer on liability and vacate
its ruling on damages. This matter is remanded to the district court for further
proceedings not inconsistent with this opinion.
-12-