Eagle Transport Services, Inc. v. Gentile Brothers Co.

Full title: EAGLE TRANSPORT SERVICES, INC., Plaintiff, v. GENTILE BROTHERS CO.…

Court: Court of Common Pleas of Ohio

Date published: Apr 18, 2012

A1107085 (Ohio Com. Pleas Apr. 18, 2012)

Opinion

A1107085

04-18-2012

EAGLE TRANSPORT SERVICES, INC., Plaintiff, v. GENTILE BROTHERS CO., Defendant.

BETH A. MYERS, JUDGE

DECISION

This case is before the Court on Plaintiffs Motion for Summary Judgment and Defendant's Cross Motion for Summary Judgment. For the reasons discussed below, summary judgment is granted in favor of Plaintiff on its Interstate Commerce Act claim, and denied as to the breach of contract and unjust enrichment claims. Summary judgment is granted in favor of Defendant on the breach of contract and unjust enrichment claims, but denied on the Interstate Commerce Act Claim.

STANDARD

Summary judgment is appropriate when there are no genuine issues of material fact that remain to be litigated and the moving party is entitled to judgment as a matter of law. Civ. R. 56(C); Celotex Corp. v. Catrett (1986), 477 U.S. 317. Summary judgment should be granted if the pleadings, depositions, answers to interrogatories, written admissions, affidavits, transcripts of evidence in the pending case, if any, timely filed in the action and construed most strongly in favor of the non-moving party, show that there is no genuine issue as to any material fact. Civ. FL 56(C). The burden of establishing that the material facts are not in dispute, and that no genuine issue of fact exists, is on the party moving for summary judgment. Vahila v. Hall (1997), 77 Ohio St.3d 421, 674 N.E.2d 1164. If the moving party asserts that there is an absence of evidence to establish an essential element of the non-moving party's claim, the moving party cannot discharge this burden with a conclusory allegation, but must specifically point to some part of the record which affirmatively demonstrates this absence of evidence. Dresher v. Burt (1996), 75 Ohio St.3d 280, 662 N.E.2d 264.

The Ohio Supreme Court has established three factors to be considered upon a motion for summary judgment. These three factors are:

(1) That there is no genuine issue as to any material fact; (2) that the moving party is entitled to judgment as a matter of law; and (3) that reasonable minds can come to but one conclusion, and that the conclusion is adverse to the party against whom the motion for summary judgment is made, who is entitled to have the evidence construed most strongly in his favor.

Bostic v. Connor (1988), 37 Ohio St.3d 144, 146 N.E.2d 881 (quoting Harless v. Willis Day Warehousing Co. (1978), 54 Ohio St.2d 64, 375 N.E.2d 46).

Once a motion for summary judgment has been made and supported as provided in Civ. R. 56(C), the nonmoving party then has a reciprocal burden to set forth specific evidentiary facts showing the existence of a genuine issue for trial and cannot rest on the allegations or denials in the pleadings. Wing v. Anchor Media, Ltd. of Texas (1991), 59 Ohio St.3d 108, 111, 570 N.E.2d 1095.

BACKGROUND/FACTS

Defendant Gentile purchased three shipments of vine ripe tomatoes from two locations in California. Defendant hired 7 Hills Logistics, a third party broker, to arrange for the transportation of the shipments from California to Ohio. 7 Hills retained Plaintiff Eagle Transportation to transport the shipments to Defendant. Plaintiff transported the shipments to Defendant, where the shipments were accepted in good condition. The bills of lading and invoices identify Defendant as the consignee of the shipments and the party to be invoiced.

Plaintiffs freight charges amounted to $12, 200.00. Defendant paid the freight charges to 7 Hills Logistics. 7 Hills did not pay Plaintiff the freight charges owed. Plaintiff now seeks to recover the freight charges from Defendant, the consignee.

DISCUSSION

Plaintiff seeks summary judgment on its claims under the Interstate Commerce Act, its breach of contract claim and its unjust enrichment claim. Defendant seeks summary judgment on these claims as well.

A. Interstate Commerce Act Claims

A consignee, such as Defendant, is liable for freight charges under 49 U.S.C. §13706(a). The statute states:

Liability for payment of rates for transportation for a shipment of property by a shipper or consignor to a consignee other than the shipper or consignor, is determined under this section when the transportation provided by motor carrier under this part. When the shipper or consignor instructs the carrier transporting the property to deliver it to a consignee that is an agent only, not having beneficial title to the property, the consignee is liable for rates billed at the time of delivery for which the consignee is otherwise liable...

A consignee has been found to be liable for freight charges even when there is no contract between the parties. Spedag Americas, Inc. v. Petters Hospitality and Entertainment Group, LLC, (S.D. Fla. 2008), 2008 U.S. Dist. LEXIS 62911. The Spedag Court found when a consignee accepts a shipment, the consignee is liable unless the bill of lading has been marked "pre-paid" or contains some other non-recourse language. Id. at *6-7 (citing cases from the 5th 9^th and 11^lh Federal Circuits).

In Spedag, the consignee had paid a logistics broker for the freight charges, and the money had not been forwarded to the carrier. Id. at *4. The Court found that when there are two innocent parties, a consignee who has paid a broker and a carrier who has performed its obligation, the shipper should bear the risk when it chooses to pay freight charges through a broker rather than directly to the carrier. Id. at * 15-16 (citing cases from the 4th, 5th, 9 and 11^th Federal Circuits). This liability was appropriately placed because the shipper is in the best position to avoid liability for double payment. Id. at * 16-17. The Court found that the same logic applies to allocation of the risk as it pertains to consignees. Id. at * 17. When using a freight forwarder, the consignee assumes the risk that the forwarder may not pay the carrier. Id.

Additionally, it has been held in Ohio that a consignee cannot accept delivery without occurring liability for the carriers' charges, not matter what relationship exists between the consignee and carrier. Burnham Van Service v. Egan, (5^th Dist. Oh 1978), 1978 WL 217505 at *1 (citing Western & Atlantic Railroad Co. v. Underwood, (N.D. GA 1922) 281 F. 891). A consignee who accepts a shipment is liable for the payment of the freight charges without regard to any contract, even though the party may have relied on third party promise. Id. at *2.

There is no dispute as to the facts in this case. Plaintiff transported the shipments to Defendant, who accepted the shipments in good condition. Defendant paid 7 Hills Logistics for the freight charges, and 7 Hills did not forward these freight charges to Plaintiff. Defendant did not pay Plaintiff directly for the services. There is no genuine issue of material fact.

In this case, there are two innocent parties. Defendant, as the consignee, properly bore the risk that 7 Hills would not pay the freight charges on its behalf. Defendant was in the best position to protect itself from the risk of double payment, and therefore, Defendant assumed the risk that 7 Hills would not forward payment on its behalf.

Upon acceptance of the three shipments from Plaintiff, Defendant became liable for the applicable freight charges. As such, Plaintiff is entitled to summary judgment on its Interstate Commerce Act claim in the amount of $12, 200. Summary judgment is denied as to Defendant on this claim.

B. Breach of Contract

A bill of lading that designates a consignee as the party liable for the freight does not alone create a contractual relationship between the carrier and consignee. Waterman Steamship Corp. v. 350 Bundles of Hardboard, (D. Mass. 1984), 603 F.Supp 490; see also Consolidated Freight ways Corp. of Delaware v. Peacock Engineering, (1^st Dist. Ill. 1993), 628 N.E.2d 300. Rather the consignee, as discussed above, becomes liable when the obligation arises from presumptive ownership, acceptance of the goods or services and the benefits conferred. Waterman at 492.

In this case, the bill of lading designates Defendant as the consignee. Plaintiff designated Defendant as the party to invoice for the freight charges. There was no contract negotiated between the parties. The only contract that was negotiated relating to the shipments was between Plaintiff and 7 Hills Logistics. There is no genuine issue of material fact as to the existence of a contract in this case.

The bills of lading designating Defendant as the party liable for the freight charges do not form a contract between the parties. Defendant's liability for the freight charges instead arose, as discussed above, from Defendant's acceptance of the shipment. As there is no contract between the parties, Defendant is entitled to summary judgment on the breach of contract claim. Summary judgment is denied as to Plaintiff on this claim.

C. Unjust Enrichment

A shipper or consignee who has paid the freight charges in full to a broker is not unjustly enriched when receiving a shipment for which the carrier has not been paid for, as the shipper or consignee did not receive a benefit without making payment. Jackson Rapid Delivery Service v. Thomson Consumer Electronics, (N.D. Ill. 2001), 210 F.Supp.2d 949, 954-955.

Defendant has already paid for the shipping charges, and therefore did not receive the benefit of goods without payment. Therefore, Plaintiff is unable to recover under its claim of unjust enrichment, and summary judgment is granted in favor of Defendant on this claim. Summary judgment is denied as to Plaintiff on this claim.

CONCLUSION

There is no genuine issue of material fact in this case. As a matter of law, Plaintiff is entitled under the Interstate Commerce Act to recover its freight charges from Defendant. Summary Judgment is granted in favor of Plaintiff and denied as to the Defendant on this claim. On Plaintiffs second and third claims, there is no contract to breach and there was no unjust enrichment, and summary judgment is granted in Defendant's favor, and denied as to Plaintiffs motion. Plaintiff is entitled to judgment in the amount of $12, 200.

The parties are referred to Local Rule 17 for preparation of an entry.