J&N Agency LLC v. National Superior Express Limited

• Court: District Court, D. Arizona
• Decided: November 10, 2020
• Docket: 2:19-cv-05691
• Status: Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 J&N Agency LLC, No. CV-19-05691-PHX-ROS

10 Plaintiff, ORDER

11 v.

12 National Superior Express Limited, et al.,

13 Defendants. 14 15 Plaintiff J&N Agency LLC (“J&N”) leased a $25,000 printer from a company in 16 New Jersey. Defendant National Superior Express, Ltd. (“NSE”) transported the printer 17 from New Jersey to Arizona. J&N alleges the printer was damaged in transport and brings 18 claims under the Carmack Amendment and a theory of negligence against both the carrier, 19 NSE, and the shipper who packaged the printer, Defendant Pedowitz Machinery Movers 20 of N.J., Inc. (“Pedowitz”). Pedowitz now moves for summary judgment on both claims 21 J&N alleged. J&N separately moves for summary judgment on the Carmack Amendment 22 claim against NSE. For the reasons set forth below, Pedowitz and J&N’s motions will both 23 be granted. 24 BACKGROUND 25 Unless otherwise noted, the following facts are undisputed. In November 2018, J&N 26 leased an industrial printer (the “Printer”) used to print large signs from a company known 27 as Geneva Capital. (Docs. 41 at 2; 55 at 1). J&N then arranged, through a third-party, 28 Frieghtquote.com, Inc. (“Freightquote”), for Pedowitz to package the Printer and NSE to 1 transport the Printer from New Jersey to Arizona. (Docs. 41 at 2; 55 at 1). On November 2 20, 2018, Pedowitz brought the Printer, undamaged, from its original location to 3 Pedowitz’s warehouse in New Jersey where it was photographed, packaged, and loaded 4 onto a skid. (Docs. 41 at 3; 55 at 2). 5 The events surrounding the transfer of the Printer from Pedowitz to NSE are 6 partially disputed. On December 3, 2018, NSE’s driver, Ismael Guardado picked up the 7 undamaged Printer from Pedowitz’s warehouse. (Docs. 55 at 2; 41 at 3). Bruce Fozman, a 8 Pedowitz employee, loaded the Printer into NSE’s truck and took photographs. (Doc. 41 at 9 3). Fozman says he twice advised Guardado, and Guardado twice refused, to strap down 10 the Printer within the truck. (Doc. 41 at 3). NSE states that Guardado will testify contrary 11 to Fozman’s Affidavit (Doc. 55-1 at Ex. 5) but does not include any such testimony in the 12 record. (Doc. 58 at 2). NSE’s Safety Manager Dorothy Kawula says the Printer was “secure 13 within the oversized pallet” and “did not need to be secured within the trailer;” instead, 14 Kawula claims the Printer was “incorrectly placed on the pallet.” (Doc. 68-1 at 1–2). NSE 15 insists that the Printer should have been “secured to the pallet, before being loaded onto 16 NSE’s truck.” (Doc. 58 at 2). 17 On December 10, 2018, the Printer arrived in Arizona severely damaged, rendering 18 the Printer unusable. (Docs. 41 at 4; 55 at 3). Initially, J&N sought to return the damaged 19 printer, but the return attempt failed. (Doc. 55 at 3). In May 2019, J&N notified 20 Freightquote the Printer had been damaged in transit. (Doc. 55 at 3). On July 31, 2019, 21 Freightquote sent NSE a “Standard Form for Presentation of Loss Claim and Damage.” 22 (Doc. 55 at 3). The parties do not disclose any additional interactions before J&N filed this 23 lawsuit. 24 On November 26, 2019, J&N filed a complaint against NSE alleging NSE’s liability 25 for damage to the Printer under the Carmack Amendment, 49 U.S.C. § 14706. (Doc. 1 at 26 4–5). After filing an answer, NSE stated at a scheduling conference on March 20, 2020, 27 that NSE had not settled the case because it intended to name a non-party at fault. (Doc. 28 19). The Court ordered NSE to name the non-party at fault by March 23, 2020 and J&N to 1 amend its complaint to add the non-party by March 27, 2020.1 (Doc. 19). The parties 2 complied and J&N filed its First Amended Complaint adding Pedowitz as a defendant. 3 (Doc. 22). The Amended Complaint alleged NSE and Pedowitz were liable under both the 4 Carmack Amendment and a theory of negligence. (Doc. 22 at 5). 5 On July 2, 2020, Pedowitz filed a motion for summary judgment against J&N for 6 the Carmack Amendment claim and the negligence claim. (Doc. 40). 7 On July 15, 2020, J&N separately filed a motion for summary judgment against 8 NSE solely on the claim under the Carmack Amendment. (Doc. 50). 9 LEGAL STANDARD 10 The moving party is entitled to summary judgment if the evidence, viewed in the 11 light most favorable to the non-moving party, shows “there is no genuine dispute as to any 12 material fact” and the moving party “is entitled to judgment as a matter of law.” Fed. R. 13 Civ. P. 56(a); see also Ellison v. Robertson, 357 F.3d 1072, 1075 (9th Cir. 2004); Margolis 14 v. Ryan, 140 F.3d 850, 852 (9th Cir. 1998). At summary judgment, the court cannot weigh 15 the evidence nor make credibility determinations. Dominguez-Curry v. Nevada Transp. 16 Dep’t, 424 F.3d 1027, 1035 (9th Cir. 2005). The moving party initially bears the burden of 17 proving the absence of a genuine dispute of material fact. Celotex Corp. v. Catrett, 477 18 U.S. 317, 321–25 (1986). To do so, “[t]he moving party must either produce evidence 19 negating an essential element of the non-moving party’s claim or defense or show that the 20 non-moving party does not have enough evidence of an essential element to carry its 21 ultimate burden of persuasion at trial.” Nissan Fire & Marine Ins. Co. v. Fritz Companies, 22 Inc., 210 F.3d 1099, 1102 (9th Cir. 2000). The burden then shifts to the non-moving party 23 to demonstrate the existence of a factual dispute that might affect the outcome of the suit. 24 Saddiq v. Trinity Servs. Grp., 198 F. Supp. 3d 1051, 1055 (D. Ariz. 2016). Non-movants 25 “must show a genuine issue of material fact by presenting affirmative evidence from which 26 a jury could find in his favor.” F.T.C. v. Stefanchik, 559 F.3d 924, 929 (9th Cir. 2009) 27 1 It is unclear why J&N was ordered to amend its complaint to include the non-party. 28 Subsequent events would show that J&N does not, in fact, believe that the non-party should be held liable for damaging the printer. 1 (emphasis in original) (citing Anderson v. Liberty Lobby, 447 U.S. 242, 257 (1986). “A 2 non-movant’s bald assertions or a mere scintilla of evidence in his favor are both 3 insufficient to withstand summary judgment.” Id. (citing Galen v. Cty. of Los Angeles, 477 4 F.3d 652, 658 (9th Cir. 2007)). 5 Regarding the evidence, the district court “need consider only the cited materials.” 6 Fed. R. Civ. P 56(c)(3). Thus, “where the evidence is not set forth in the opposing papers 7 with adequate references so that it could conveniently be found” “[t]he district court need 8 not examine the entire file for evidence establishing a genuine issue of fact.” Wyatt Tech. 9 Corp. v. Smithson, 345 F. App’x 236, 239 (9th Cir. 2009) (quoting Carmen v. San Fran. 10 Unified Sch. Dist., 237 F.3d 1026, 1031 (9th Cir. 2001)). That said, the district court may 11 consider materials in the record not cited by the parties. Fed. R. Civ. P 56(c)(3). 12 ANALYSIS 13 I. NSE’S LIABILITY 14 All parties agree the Carmack Amendment, 49 U.S.C. § 14706, applies to this 15 dispute. The Carmack Amendment governs liability for all losses, damages, or injuries to 16 goods transported in interstate commerce. ASARCO v. England Logistics, 71 F. Supp. 3d 17 990, 994 (D. Ariz. 2014); see also Chubb Grp. of Ins. Cos. v. H.A. Transp. Sys., 243 F. 18 Supp. 2d 1064, 1068 (C.D. Cal. 2002). The statute “subjects common carriers . . . 19 transporting cargo in interstate commerce to absolute liability for actual loss or injury to 20 property.” ASARCO at 994. Courts interpreting the Carmack Amendment have established 21 a burden-shifting regime where the shipper seeking to recovery must first establish a prima 22 facie case, after which the burden shifts to the carrier to try to avoid liability. Missouri Pac. 23 R.R. v. Elmore & Stahl, 377 U.S. 134, 138 (1964) (citations omitted). A prima facie case 24 is established by proving three elements: “delivery [to the carrier] in good condition, arrival 25 in damaged condition, and the amount of damages.” Id.; see also Alfonso v. Pasha Grp., 26 933 F.2d 1013 (9th Cir. 1991). The burden of proof then moves to “the carrier to show both 27 that it was free from negligence and that the damage to the cargo was due to one of the 28 excepted causes relieving the carrier of liability.” Missouri Pac. at 138 (citations omitted). 1 The Carmack Amendment limits recovery to actual damages. 49 U.S.C. § 14706(a)(1). 2 A. Carmack Amendment 3 J&N moves for summary judgment against NSE under the Carmack Amendment. 4 (Doc. 50). No party disputes that NSE is a common carrier subject to the Carmack 5 Amendment. Thus, the initial burden is on J&N to prove a prima facie case. 6 J&N has shown the Printer was delivered in good condition to NSE. Evidenced by 7 photographs and Fozman’s Affidavit, the Printer was not damaged when it arrived at 8 Pedowitz’s warehouse on November 20, 2018 nor when the Printer was loaded onto NSE’s 9 truck on December 3, 2018. (Docs. 55 at 2; 55-1 at Exs. 5 at 2, A, B). NSE does not dispute 10 these facts. J&N has established the Printer was delivered in good condition to NSE and 11 the first element of a prima facie case is met. 12 J&N has shown the Printer arrived in damaged condition. Photographs in the record, 13 as well as J&N Chief Executive Officer Joseph Bui’s Declaration, show the Printer was 14 delivered to J&N in damaged condition. (Doc. 55-1 at Exs. 9, 10). NSE does not dispute 15 this fact. J&N has established the Printer arrived in damaged condition and the second 16 element of a prima facie case is met. 17 J&N has shown the amount of damages to be $31,829.29. As a result of the damaged 18 Printer, J&N lost the $25,000 cost of the Printer, $3,250 of rigging and packaging costs, 19 and $3,579.29 of shipping costs. (Doc. 55 at 4).2 NSE does not dispute these facts. J&N 20 has established damages of $31,829.29 and the third element of a prima facie case is met. 21 Because J&N has shown the Printer was in good condition when delivered to NSE, 22 the Printer was damaged upon arrival in Arizona, and the amount of damages, J&N has 23 established a prima facie Carmack Amendment claim. Therefore, the burden shifts to NSE 24 to try to avoid liability. 25 B. Act of the Shipper

26 2 Shipping and handling costs are recoverable as actual damages under the Carmack Amendment. See Contempo Metal Furniture Co. of California. v. E. Texas Motor Freight 27 Lines, 661 F.2d 761, 764 (9th Cir. 1981); F. J. McCarty Co. v. S. Pac. Co., 428 F.2d 690, 693 (9th Cir. 1970); see also Alitalia v. Arrow Trucking, 977 F. Supp. 973, 978 (D. Ariz. 28 1997). 1 After a prima facie case is established, the burden of proof moves to “the carrier to 2 show both that it was free from negligence and that the damage to the cargo was due to one 3 of the excepted causes relieving the carrier of liability.” Missouri Pac. at 138 (citations 4 omitted). One of those expected causes is known as the “Act of the Shipper” defense. 5 Missouri Pac. at 137 (citations and internal quotations omitted). NSE invokes this defense 6 and asserts the shipper, Pedowitz, improperly loaded the Printer on NSE’s truck excusing 7 NSE’s liability. Because this case is at summary judgment, the question is whether NSE 8 can point to evidence establishing a genuine dispute of material fact regarding this defense. 9 NSE cannot. 10 When improper loading is alleged, the inquiry collapses from two steps into one: 11 which party is responsible for avoiding negligence? Drawing on tort law principles, the 12 Fourth Circuit described this inquiry in United States v. Savage. 209 F.2d 442 (4th Cir. 13 1953), cert. denied, 347 U.S. 952 (1954); see Alitalia v. Arrow Trucking, 977 F. Supp. 973, 14 984 (D. Ariz. 1997); Thousand Springs Trout Farms v. IML Freight, 558 F.2d 539, 543 15 (9th Cir. 1977). When a shipper, such as Pedowitz, loads property onto the carrier’s motor 16 vehicle, a shipper is liable for latent and concealed defects, while the carrier, such as NSE, 17 remains liable for any apparent defect. Savage, 209 F.2d at 445. In maintaining carrier 18 liability for apparent defects, the Savage Court reasoned carriers retain responsibility when 19 the carrier “had the last clear chance to avoid the accident.” Id. at 447. 20 NSE states the Printer did not need to be “secured” because the Printer was heavy 21 and on an oversized pallet. (Doc. 66 at 4). The only evidence provided by NSE is Kawula’s 22 Declaration, which says the printer “was secure within the oversized pallet” and the “pallet 23 did not need to be secured within the trailer.” (Doc. 68-1 at 1). NSE then argues that the 24 damage was Pedowitz’s fault because the Printer was improperly placed on thin steel 25 beams, which caused the damage.3 (Doc. 66 at 4). NSE points to photographs of the Printer 26 on thin steel beams as evidence of its improper placement. (Doc. 66 at 4).

27 3 Kawula’s Declaration states that the “damage was the result of the printer being incorrectly placed on the pallet,” but does not mention the thin steel beams. (Doc. 68-1 at 28 2). The Court finds no additional evidence in the record tending to show it was improper to place the Printer on thin steel beams. 1 On the evidence provided, a jury could not find in NSE’s favor. NSE bears the 2 burden to prove Pedowitz was responsible for improper loading. See Savage, 209 F.2d at 3 445. As a non-movant, NSE must present “affirmative evidence from which a jury could 4 find in his favor.” Stefanchik, 559 F.3d at 929. “‘[C]onclusory, self-serving affidavit[s], 5 lacking detailed facts and any supporting evidence,’ are insufficient to create a genuine 6 issue of material fact.” Hexcel Corp. v. Ineos Polymers, 681 F.3d 1055, 1063–64 (9th Cir. 7 2012) (quoting F.T.C. v. Publ’g Clearing House, 104 F.3d 1168, 1171 (9th Cir. 1997)). 8 Here, NSE asserts the Printer was secure, both within the pallet and the trailer, but provides 9 no affirmative evidence supporting that assertion. NSE then asserts the Printer was 10 improperly placed on thin steel beams without evidence. Because NSE failed to meet its 11 burden to present sufficient affirmative evidence, summary judgment for J&N will be 12 granted. 13 But assuming NSE provided sufficient evidence to show the Printer did not need to 14 be secured and the thin steel beams were improper, NSE still cannot withstand summary 15 judgment because NSE was liable for any apparent defects in loading. Apparent defects 16 are the responsibility of the carrier. Savage at 445. In the photographs that NSE points to, 17 the thin steel beams were apparent, not latent nor concealed. (Doc. 55-1 at Exs. A, 9). The 18 beams are visible in photographs before and after interstate transport. (Doc. 55-1 at Exs. 19 A, 9). Because the beams were apparent, even if improper, NSE still remains liable for the 20 defect. As such, J&N will be granted summary judgment against NSE for its Carmack 21 Amendment claim. 22 C. Negligence 23 J&N also asserts a negligence claim against NSE, and J&N did not move for 24 summary judgment on this claim. Normally, the Court cannot grant summary judgment on 25 a claim not argued without giving notice and an opportunity to respond. Fed. R. Civ. P. 26 56(f). However, the negligence claim fails as a matter of law such that notice would be 27 futile. It is well-established that the Carmack Amendment preempts “any state common 28 law action” against a common carrier. Hartford Fire Ins. v. 3DL Design Incorporation, No. 1 CV-17-02937-PHX-GMS, 2018 WL 2387930, at *3 (D. Ariz. May 25, 2018) (citing 2 Hughes Aircraft v. North American Van Lines, 970 F.2d 609, 613 (9th Cir. 1992)). As such, 3 J&N’s negligence claim against NSE will be dismissed. 4 II. PEDOWITZ’S LIABILITY 5 A. Carmack Amendment 6 Pedowitz moves for summary judgment on the Carmack Amendment claim. 7 Pedowitz asserts that it is not subject to the Carmack Amendment as Pedowitz did not 8 transport the Printer interstate. (Doc. 40 at 5–8). J&N concedes this point. (Doc. 56 at 3). 9 Accordingly, Pedowitz will be granted summary judgment on J&N’s Carmack 10 Amendment claim. 11 B. Negligence 12 As described above, state law negligence claims are preempted by the Carmack 13 Amendment. However, even if the negligence claim against Pedowitz was not preempted, 14 there is no evidence in the record of Pedowitz’s negligence. Thus, Pedowitz will be granted 15 summary judgment on the issue. 16 III. ATTORNEY’S FEES 17 J&N argues for attorney’s fees, costs, and expenses under Arizona Revised Statues 18 § 12-349. Attorney’s fees are not available under Arizona state law for alleged misconduct 19 in federal district court proceedings. In re Larry’s Apartment, 249 F.3d 832, 837-39 (9th 20 Cir. 2001) (holding that Arizona Revised Statutes § 12-349 could not be a basis for fee 21 award in federal court proceeding). As such, any motion seeking attorney’s fees must have 22 an alternative basis. 23 Accordingly, 24 IT IS ORDERED Pedowitz’s Motion for Summary Judgment (Doc. 40) is 25 GRANTED. 26 IT IS FURTHER ORDERED J&N’s Motion for Summary Judgment (Doc. 50) is 27 GRANTED. The parties shall confer within seven days of this Order and, if they can reach 28 agreement, no later than November 17, 2020, they shall file a stipulation regarding the 1 || amount of the judgment to be entered against NSE. If they cannot agree, no later than November 17, 2020, J&N shall file a motion seeking final judgment which identifies the 3 || exact amount requested. NSE shall file its response no later than November 24, 2020 and 4|| J&N shall file its reply no later than December 1, 2020. 5 IT IS FURTHER ORDERED J&N’s claim against Pedowitz for Negligence 6 || (Count I) is DISMISSED. 7 Dated this 10th day of November, 2020. 8 fo . 9 ( ——

1 Senior United States District Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

-9-