Cargill, Incorporated v. Merit Distribution Services, Inc.

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-02-00718-CV
Cargill, Incorporated, Appellant
v.
Merit Distribution Services, Inc., Appellee
FROM THE COUNTY COURT AT LAW NO. 3 OF BELL COUNTY
NO. 45,601, HONORABLE GERALD M. BROWN, JUDGE PRESIDING
MEMORANDUM OPINION
Appellant Cargill, Incorporated1 hired appellee Merit Distribution Services, Inc. to
haul raw unfrozen turkey product from Waco to a Boar’s Head Provisions Co. facility in Forest City,
Arkansas. Merit delivered an empty trailer to Cargill’s plant, and Cargill loaded the trailer and
sealed it. The turkey product was wrapped in plastic and packed in twenty bins that were loaded into
the front forty-eight feet of Merit’s fifty-three foot long trailer. Merit picked up the sealed trailer and
hauled it to Arkansas, where Boar’s Head accepted thirteen of the bins, slightly more than half, and
rejected the rest. The seven rejected bins were returned to Waco and upon inspection, Cargill found
1
The underlying transaction was between Merit Distribution Services, Inc. and Plantation
Foods, Inc. Plantation Foods has since been merged into Cargill, and Merit filed its suit against
Cargill. For clarity, we will refer only to Cargill in this opinion, regardless of whether the action was
taken by Cargill or Plantation Foods.
that the product had been compressed and contaminated with aluminum slivers. Boar’s Head
withheld $26,419.08 from Cargill, Cargill withheld that amount from Merit, and Merit brought this
suit on a sworn account. Cargill asserted that the Merit driver’s sudden braking caused a load shift
that damaged the turkey product and asked for a $26,419.08 offset against Merit’s cause of action.
The trial court granted summary judgment in favor of Merit, and Cargill appeals. We affirm the
judgment.
Rule 166a governs both “traditional” and “no-evidence” motions for summary
judgment. Tex. R. Civ. P. 166a. In reviewing the grant of summary judgment, we view the evidence
in the light most favorable to the non-moving party and make every reasonable inference and resolve
all doubts in that party’s favor. Holmstrom v. Lee, 26 S.W.3d 526, 530 (Tex. App.—Austin 2000,
no pet.). To be entitled to a traditional summary judgment, the moving party must establish that it
is entitled to judgment as a matter of law and that there are no genuine issues of material fact. Tex.
R. Civ. P. 166a(c); Holmstrom, 26 S.W.3d at 530. A party may also, after “adequate time for
discovery,” move for summary judgment asserting there is no evidence to support one or more
essential elements on which the non-moving party has the burden of proof, and the trial court must
grant the motion unless the non-moving party produces more than a scintilla of evidence raising a
genuine issue of fact as to those elements. Tex. R. Civ. P. 166a(i); Holmstrom, 26 S.W.3d at 530.
Merit sought both a traditional and a no-evidence summary judgment. See Tex. R.
Civ. P. 166a(c), (i). Merit asserted that because Cargill packed and loaded the turkey product in a
sealed trailer, it was responsible for any damage suffered during shipment. Merit further asserted
that no evidence supported Cargill’s allegation that Merit was responsible for the damage. Merit
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relied on the Bill of Lading Act, 49 U.S.C.A. §§ 80101-80116 (West 1997), and the Carmack
Amendment, 49 U.S.C.A. § 14706 (West 1997 & Supp. 2002), in support of its argument.
Under the Carmack Amendment, carriers such as Merit are liable for goods damaged
during transport unless the damage was the result of an act of God, the public enemy or public
authority, the shipper itself, or the inherent vice or nature of the goods. Missouri Pac. R.R. Co. v.
Elmore & Stahl, 377 U.S. 134, 137 (1964). A shipper, in this case Cargill, establishes a prima facie
right to recover from a carrier if it shows delivery to the carrier in good condition, arrival in damaged
condition, and the amount of damages. Id. The carrier then bears the burden of showing that it was
free from negligence and that the damage was the result of one of the Carmack exceptions. Id. A
carrier is not liable for damage caused by the shipper’s improper loading. Solway Metal Sales, Ltd.
v. Baltimore & Ohio R.R. Co., 344 F.2d 568, 569 (D.C. Cir. 1965).
The general rule is that the party that loads the goods is liable for any damage caused
by improper loading unless the defect is evident upon reasonable inspection. American Foreign Ins.
Ass’n v. Seatrain Lines of Puerto Rico, Inc., 689 F.2d 295, 299 (1st Cir. 1982). When a shipper
loads the merchandise, the carrier’s duty to discover any improper loading generally is limited to
discovery of apparent defects. Fluor Eng’rs & Constructors, Inc. v. Southern Pac. Transp. Co., 753
F.2d 444, 453 (5th Cir. 1985); see also Accura Sys., Inc. v. Watkins Motor Lines, Inc., 98 F.3d 874,
878 (5th Cir. 1996) (quoting Spartus Corp. v. S/S Yafo, 590 F.2d 1310, 1319 (5th Cir. 1979)) (bill
of lading is prima facie evidence of delivery in good condition, but notation of “apparent good order”
is evidence only as to portions of goods that are visible and open to inspection). If a bill of lading
includes the language “shipper’s load, weight, count and seal,” the shipper bears the burden of
showing that it loaded the goods properly. Fluor Eng’rs, 753 F.2d at 453 n.13. If the shipper cannot
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make such a showing, it may only recover from the carrier if it can show that the carrier’s
independent act of negligence contributed to the damage. Id.The Court of Appeals for the Fifth Circuit has held that a shipper’s evidentiary burden
when goods are shipped under seal or are otherwise not open to inspection is one of “adequate proof”
or by a preponderance of the evidence. Accura Sys., 98 F.3d at 878. Delivery in good condition can
be shown by circumstantial evidence. Id. at 878-79. General evidence of plant conditions and
quality control may support a finding of delivery in good condition, as may evidence of packaging
materials in good condition at delivery and damaged condition at arrival, along with a history of
problem-free packing. Id. at 879-80. Other courts, however, have required direct and affirmative
proof. Id. at 878 (quoting D.P. Apparel Corp. v. Roadway Exp., Inc., 736 F.2d 1, 4 (1st Cir. 1984));
see Ed Miniat, Inc. v. Baltimore & Ohio R.R. Co., 587 F.2d 1277, 1283 (D.C. Cir. 1978).
In summary, Merit’s argument was that although Cargill alleged that the damage was
caused when the load shifted during transit, Merit was not liable for any load shifting. Merit
contended that because Cargill delivered the goods in a pre-packed and sealed container, it could not
produce evidence that the goods were delivered to Merit in good condition. Merit further contended
that a witness “with first-hand knowledge of the packing is necessary,” and that Cargill could not
produce any such witness. Finally, Merit asserted that Cargill could not show that the turkey product
was packed in a manner fit for the contemplated shipment. See Eastern Motor Express, Inc. v. A.
Maschmeijer, Jr., Inc., 247 F.2d 826, 828 (2d Cir. 1957).
Cargill filed two responses to Merit’s motions for summary judgment. The first, titled
“Defendant’s Response to Plaintiff’s Motion for Summary Judgment,” reads in its entirety:
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Now comes Cargill Incorporated, Defendant, and files the following affidavits in
support of its response opposing the Motion for Summary Judgment of Plaintiff:
1. Affidavit of Peter Brown;
2. Affidavit of William Eugene Foitek;
3. Exhibit B to the affidavit of William Eugene Foitek.
Wherefore Defendant prays the Court that the Plaintiff’s Motion for Summary
Judgment be denied.
Cargill’s second response, titled “Cargill, Incorporated’s Affidavits In Support of Its Motion to
Transfer Venue and In Opposition to Plaintiff Merit Distribution Services, Inc.’s Motion for
Summary Judgment,” reads in its entirety:
Now comes Cargill, Incorporated and moves that the following affidavit’s [sic] in
support of its Motion to Transfer Venue and in opposition to Plaintiff Merit
Distribution Services, Inc.’s Motion for Summary Judgment be filed of record:
1. Affidavit of William Eugene Foitek, subscribed on October 8, 2002.
2. Affidavit No. 1 of Peter Brown, subscribed on October 8, 2002.
3. Affidavit No. 2 of Peter Brown, subscribed on October 8, 2002.
4. Affidavit No. 3 of Peter Brown, subscribed on October 8, 2002.
5. Affidavit of Pat Beard certifying to excerpts from the deposition of Robert
Lofton, subscribed on October 8, 2002.
Cargill presented no argument or explanation that makes reference to any evidence.
A motion for summary judgment must stand or fall on the grounds expressly
presented in the motion, and a trial court considering such a motion is restricted to issues presented
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in the motion, response, and replies. McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337,
341-42 (Tex. 1993); Alder v. Laurel, 82 S.W.3d 372, 375-76 (Tex. App—Austin 2002, no pet.); see
City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678-79 (Tex. 1979) (“[p]leadings do
not constitute summary judgment proof” and “non-movant must now, in a written answer or
response to the motion, expressly present to the trial court those issues that would defeat the
movant’s right to a summary judgment and failing to do so, may not later assign them as error on
appeal”) (emphasis added). We disagree with Cargill’s contention that McConnell and its progeny
have no application to no-evidence motions for summary judgment.2 See Alder, 82 S.W.3d at 375-
76; Tex. R. Civ. P. 166a(i) cmt. (“To defeat a motion made under paragraph (i), the respondent is
not required to marshal its proof; its response need only point out evidence that raises a fact issue
on the challenged elements. The existing rules continue to govern the general requirements of
summary judgment practice.”) (emphasis added). Cargill was not required to set out in its response
the evidence it argued raised fact issues, nor was it required to note exactly where in the evidence
2
We also disagree with Cargill’s contention that McConnell should not be considered
authority for the proposition that a party must raise its summary judgment issues and defenses in a
motion, response, or reply, and that courts should not rely on issues raised only in briefs filed in
support of such motions or replies. See McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337,
341-42 (Tex. 1993). Although we acknowledge that McConnell was a plurality decision, subsequent
cases from the supreme court and courts of appeals across the State have followed that decision and
applied the same rule. See Science Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 912 (Tex. 1997);
Stiles v. Resolution Trust Corp., 867 S.W.2d 24, 26 (Tex. 1993); Alder v. Laurel, 82 S.W.3d 372,
375-76 (Tex. App.—Austin 2002, no pet.); Fletcher v. Edwards, 26 S.W.3d 66, 74 (Tex.
App.—Waco 2000, pet. denied); Lewis v. Adams, 979 S.W.2d 831, 835 (Tex. App.—Houston [14th
Dist.] 1998, no pet.); Feldman v. Kohler Co., 918 S.W.2d 615, 626-27 (Tex. App.—El Paso 1996,
writ denied); Newman v. Tropical Visions, Inc., 891 S.W.2d 713, 717 (Tex. App.—San Antonio
1994, writ denied); Bean v. Bluebonnet Sav. Bank FSB, 884 S.W.2d 520, 522 (Tex. App.—Dallas
1994, no writ); Oden v. Marrs, 880 S.W.2d 451, 454 (Tex. App.—Texarkana 1994, no writ);
Robbins v. HNG Oil Co., 878 S.W.2d 351, 363 (Tex. App.—Beaumont 1994, writ dism’d w.o.j.);
Marchal v. Webb, 859 S.W.2d 408, 418 (Tex. App.—Houston [1st Dist.] 1993, writ denied).
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such fact issues could be found. See Wilson v. Burford, 904 S.W.2d 628, 629 (Tex. 1995); Simplified
Telesys, Inc. v. Live Oak Telecom, L.L.C., 68 S.W.3d 688, 691 (Tex. App.—Austin 2000, pet.
denied). However, Cargill was required to respond in such a way as to satisfy the general rules
applying to summary judgment practice. See Tex. R. Civ. P. 166a(i) cmt.; Clear Creek Basin Auth.,
589 S.W.2d at 678-79. Having failed to present such a response to Merit’s motion for summary
judgment, Cargill is limited on appeal to attacking the sufficiency of Merit’s no-evidence motion.
See Cuyler v. Minns, 60 S.W.3d 209, 213 (Tex. App.—Houston [14th Dist.] 2001, pet. denied);
Callaghan Ranch, Ltd. v. Killam, 53 S.W.3d 1, 3 (Tex. App.—San Antonio 2000, pet. denied).
Even if we consider Cargill’s responses as sufficient, the trial court did not err in
granting Merit’s motion for summary judgment. In its petition, Merit alleged that it had performed
shipping services for Cargill and, thus, was owed payment for those services. Cargill’s defense to
Merit’s claim was that the turkey product was properly loaded but damaged and contaminated by
Merit’s handling and, therefore, Cargill was entitled to an offset of the value of the damaged product.
Merit’s motion for summary judgment alleged that there was no evidence that the turkey product was
properly loaded or delivered in good condition or that Merit was responsible for the damage.
The parties are in agreement that Cargill loaded the turkey product into the trailer,
sealed it, and had Merit pick up and transport the sealed trailer. During the trip, the driver was
forced to brake sharply when a truck pulled out in front of him. In his deposition, he stated that he
was already slowing down from fifty-five miles an hour as he approached the intersection and
probably braked until the truck was going about twenty-five miles an hour. He said the truck did not
skid and the brakes did not lock but that it would be hard to make the truck skid because it weighed
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about 80,000 pounds. He believed that the load shifted when he braked. When he reached Arkansas
and the trailer was unsealed at the Boar’s Head facility, he saw that some of the load was pushed
forward and that the eight circular bins closest to the cab of the truck had compressed into ovals.
He said they were not fully compressed, but compressed enough to change their shape. Boar’s Head
refused the seven bins closest to the cab, saying it was too much work and too time consuming to
take them; the driver did not understand the reasons for Boar’s Head’s refusal. The driver testified
that one bin was lying on its side but the other six bins were still upright. After a careful inspection,
the driver did not see any meat touching the floor of the trailer and saw that the plastic containing
the meat was still intact. The driver did not know how metal could have gotten into the turkey
product because six of the seven bins were still standing and were still wrapped in plastic; the turkey
had come out of the tipped bin but was “still on that plastic. No meat ever touched the ground.”
As evidence, Cargill attached an affidavit by William Foitek, who stated that he was
shipping distribution supervisor for Cargill and that he had supervised the loading of “approximately
8000 loads of raw unfrozen turkey product with the same loading procedure used” in this case. The
turkey is packed into twenty bins, each “a cardboard rectangular box 48" by 40" with rounded
corners and 48" high loaded on a wooden pallet.” The bins are filled almost full, packed with ice,
covered with plastic tops, and then wrapped in two layers of plastic. He stated that it was his
understanding that the trailer was loaded with 20 bins and described how the bins are supposed to
be packed. He stated that the “pallets and bins are loaded in a very precise manner,” attaching a
sketch of how the bins are to be packed into a trailer, and said that he “train[s] the workmen who
actually load the trailers.” He stated that he believed that Cargill’s loading method is standard for
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the industry and said that other than this incident, he had never known of any load shift for “products
loaded as described herein”; Merit had never complained about Cargill’s loading in the past.
The “Loading/Delivery Report” for this shipment contains the notations of “Shipper
Load & Count” and “Pre Loaded.” The dispute is clearly whether the damage to the load was caused
by improper loading or by the driver’s braking to avoid an accident. Merit was not under an
obligation to break the seal and inspect the load before beginning the haul. See Spartus Corp., 590
F.2d at 1319; Ed Miniat, 587 F.2d at 1283. Cargill’s evidence established only that shipments such
as the one in question were traditionally loaded in a particular manner and that there had never before
been any problem with such a loading practice. Although that may be considered in determining
whether the goods were delivered to Merit in good condition, see Accura Systems, 98 F.3d at 878-80,
it does not establish that the goods were not contaminated with metal shavings before being packed
and loaded. Cargill did not produce any evidence establishing the condition of the turkey product
before being loaded or of the plant’s condition and quality control procedures. Nor was there any
evidence that the packaging was in good condition when delivered to Merit or that it was packed and
loaded properly for the contemplated shipment. Cargill did not produce evidence raising a fact issue
as to delivery or loading in good condition. Therefore, the trial court did not err in granting Merit’s
no-evidence motion for summary judgment.3 Further, the driver’s deposition testimony stated that
3
Cargill also argues in its reply brief that Merit, by failing to state in its no-evidence motion
that there had been “adequate time for discovery,” had not made all necessary assertions to warrant
a no-evidence summary judgment. Although a no-evidence motion may not be granted unless there
has been adequate time for discovery, rule 166a(i) does not require the moving party to recite that
allegation in its motion, nor does the supreme court’s comment imply such a requirement. See Tex.
R. Civ. P. 166a(i) cmt. Merit filed its original petition in July 2001, its amended petition in July
2002, its motion for summary judgment in May 2002, and its amended motion in October 2002. The
record does not reflect that Cargill complained of insufficient time for discovery before the trial
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the plastic wrapping covering the turkey product was intact, only one pallet or container was tipped
over and touching the floor of the trailer, and that the turkey was still inside its plastic bag. The other
containers were merely compressed into oval shapes. Cargill did not produce any evidence to rebut
the driver’s testimony that it did not appear that the metal shavings could have been mixed into the
turkey product as a result of the load shift. Further, although in one of Cargill’s affidavits it is stated
that the metal shavings were mixed into the turkey product “as if product had been spilled on the
floor and then been put back in the bins,” there is no evidence that the driver scooped up any spilled
product. In fact, the driver stated that he broke the seal when he pulled into the Arkansas facility to
allow the Boar’s Head personnel to unload the bins and did not see the condition of the compressed
bins until Boar’s Head told him they would not accept all the bins. We hold that Cargill’s evidence
did not raise a fact issue sufficient to defeat Merit’s traditional motion for summary judgment. We
overrule Cargill’s first and second issues on appeal.
In its third issue, Cargill complains that the trial court erred in awarding Merit
attorney’s fees because such fees are barred by federal statute.
Merit requested attorney’s fees in its petition and its motion for summary judgment,
attaching an affidavit from its attorney to support its request. Cargill requested attorney’s fees in its
answer. Cargill did not produce any evidence to rebut Merit’s showing of attorney’s fees, nor did
it put forth any argument related to such an award. None of Cargill’s affidavits attached to its
purported responses to Merit’s motion for summary judgment mentions attorney’s fees at all. In its
appellee’s brief, Merit states that Cargill did not raise its complaint related to attorney’s fees until
court. We overrule Cargill’s complaint as to the sufficiency of the time for discovery.
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the morning of the summary judgment hearing, when Cargill’s attorney handed Merit’s attorney a
copy of the Accura Systems case.4 Cargill has not produced a reporter’s record from the summary
judgment hearing; therefore we do not know whether or the extent to which this issue was presented
to the trial court. We hold that Cargill has waived this issue. We overrule Cargill’s third issue on
appeal.
Having overruled Cargill’s issues on appeal, we affirm the judgment of the trial court.
__________________________________________
Jan P. Patterson, Justice
Before Justices Kidd, Yeakel and Patterson
Affirmed
Filed: May 30, 2003
4
The Interstate Commerce Act does not provide for recovery of attorney’s fees in a suit to
recover unpaid shipping charges. Missouri Pac. R.R. Co. v. Center Plains Indus., Inc., 720 F.2d 818,
819 (5th Cir. 1983). Merit brought suit on a sworn account, a cause of action for which the recovery
of attorney’s fees is explicitly provided in section 38.001 of the civil practice and remedies code.
Tex. Civ. Prac. & Rem. Code Ann. § 38.001(7) (West 1997). Section 13103 provides that “[e]xcept
as otherwise provided in this part [related to motor carriers], the remedies provided under this part
are in addition to remedies existing under another law or common law.” 49 U.S.C.A. § 13103 (West
1997). Section 13103 notwithstanding, Texas courts have generally held that the Carmack
Amendment preempts Texas’s attorney’s fees statute. See, e.g., Accura Sys., Inc. v. Watkins Motor
Lines, Inc., 98 F.3d 874, 876-77 (5th Cir. 1996); Strickland Transp. Co. v. American Distrib. Co.,
198 F.2d 546, 547 (5th Cir. 1952); Earl’s Offset Sales & Svc. Co. v. Bekins/EDC, Inc., 903 F. Supp.
1148, 1150-51 (S.D. Tex. 1995). But see Tallyho Plastics, Inc. v. Big M Constr. Co., 8 S.W.3d 789,
796 (Tex. App.—Tyler 1999, no pet.) (“Until its revision in 1996, . . . attorney’s fees were not
recoverable under the [Carmack] Amendment.”).
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