Phillips Electric Co. v. Seko Messenger Service, Inc.

602 N.E.2d 62, 235 Ill. App. 3d 513, 176 Ill. Dec. 755, 1992 Ill. App. LEXIS 1534
CourtAppellate Court of Illinois
DecidedSeptember 23, 1992
DocketNo. 1-91-1453
StatusPublished

This text of 602 N.E.2d 62 (Phillips Electric Co. v. Seko Messenger Service, Inc.) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Phillips Electric Co. v. Seko Messenger Service, Inc., 602 N.E.2d 62, 235 Ill. App. 3d 513, 176 Ill. Dec. 755, 1992 Ill. App. LEXIS 1534 (Ill. Ct. App. 1992).

Opinion

JUSTICE CERDA

delivered the opinion of the court:

Plaintiff, Phillips Electric Company, Inc. (Phillips), sued defendant, Seko Messenger Service, Inc. (Seko), for a breach of contract resulting from Seko’s failure to deliver an electrical bid by a specified time. Phillips sought consequential damages for its alleged loss of profits. Seko filed a motion for summary judgment, contending that its tariff, which was on file with the Illinois Commerce Commission, limited its liability to $100. The trial court granted the summary judgment. We affirm. The main issue in this case is whether a carrier is liable for consequential damages for loss of profits for failure to deliver a package on time when the carrier did not request the shipper to declare a value or inform it that its tariff limited claims for consequential damages.

At 8:20 a.m. on February 12, 1987, Phillips telephoned Seko, requesting that a bid package be delivered before 5 p.m. Seko’s ordertaker was told that the package would be ready after 12 noon that day. Seko agreed to deliver the package, which was a construction bid, to Balluff & Balluff Architect and Engineers in Elmhurst, Illinois. Seko did not tell Phillips that it needed to declare a value of the package or that its tariff barred claims for consequential damages.

Seko’s messenger picked up the package at 2 p.m. Nothing on the envelope stated it was deliverable before 5 p.m. or noted any urgency to deliver it by that time. There was a notation, however, on the dispatch notice that the package was to be delivered by 5 p.m. Seko did not give Phillips a copy of the bill of lading at the time of the pickup.

Seko’s messenger delivered the package to its destination at 5:05 p.m. Since the door was locked, the messenger called Phillips, who gave permission to slip the bid in Balluff & Balluff’s mail slot, which the messenger did at 5:15 p.m.

Balluff & Balluff refused to accept the bid package because it was received late. A few days later, Seko sent the bill of lading to Phillips. On the bill of lading’s reverse side were the liability release rates that are contained in Seko’s tariff.

Phillips sued Seko for a breach of contract, claiming consequential damages for lost profits allegedly suffered as a result of the late delivery. Seko filed a motion for summary judgment, contending that its tariff on file with the Illinois Commerce Commission limited its liability to $100. After reading the briefs and hearing arguments, the trial court granted the motion, stating that Phillips was bound by the limitations in Seko’s tariff.

On appeal, Phillips asserts that there is a genuine issue of fact sufficiently material to require reversal of the trial court’s order granting summary judgment in favor of Seko. In reviewing the summary judgment order, this court must consider all the facts in the record in the light most favorable to Phillips, which is the nonmoving party. (Maurice Transport Co. v. Amoco Oil Co. (1986), 144 Ill. App. 3d 156, 160.) A reviewing court will find summary judgment to have been properly granted when the issue is determinable solely as a matter of law. Maurice Transport Co., 144 Ill. App. 3d at 160.

Phillips’ first argument is that Seko’s tariff liability limitation of $100 does not apply to Phillips’ claim for consequential damages because one .tariff provision precludes any consequential damages while another limits its liability to $100 for physical damage or loss unless a higher amount is declared. Phillips argues that the trial court’s erroneous ruling, that the most Phillips could recover was $100, leads to the creation of an ambiguity in the tariff. If there is an ambiguity, Phillips contends that it should be resolved in favor of the shipper. National Starch & Chemical Corp.,v. McNamara Motor Express, Inc. (1963), 40 Ill. App. 2d 484, 486.

Seko replies that its tariff’s $100 limit applies to consequential damages. Seko notes that the reverse side of the bill of lading and its tariff effective as of July 10, 1986, both state:

“DECLARATION OF "VALUE. The shipper or consignor hereby declares that, unless otherwise specifically indicated, the value of no total shipment or no single piece, package, parcel, or articles in this delivery, including the contents thereof, exceeds $100.00 upon which declaration the charge for delivery is based. Any claim in excess of the said $100.00 is hereby released and discharged. When the declared value exceeds the maximum value of $100.00 per shipment, additional insurance charges for such greater valuation will be assessed at the rate of $0.50 per $100.00 or fraction thereof.” (Emphasis added.)

Seko contends that this language means that any claim, including a claim for consequential damages, is released and discharged for the amount stated. We agree.

Interpreting the Illinois statutory scheme, Seko asserts that it would be contrary to public policy to permit collection of consequential damages not allowed in a carrier’s tariff. Subjecting a carrier to the risk of incurring huge damages for minor delays in deliveries would impair an established carrier’s desire to continue to do business in Illinois or bankrupt the company. Therefore, the only reasonable basis for subjecting a carrier to damages is the tariff limitation. In that way, a carrier knows and can plan to meet the burden of paying for goods lost or damaged in transit and the customer can elect whether to use the carrier subject to reimbursement for accidental loss, damage, misdelivery, or late delivery.

Seko contends that the liability limitation preempts all other means of recovery, thus properly and validly permitting Seko to limit its liability to Phillips. We agree.

The Illinois legislature has given the Illinois Commerce Commission (Commission) the duty to supervise and regulate the carriage of property by motor vehicle within Illinois. (Ill. Rev. Stat. 1987, ch. 95½, par. 18c — 4101.) As a carrier, Seko must file a tariff with the Commission reflecting its rate schedule and any other information the Commission requires. Ill. Rev. Stat. 1987, ch. 95½, par. 18c — 3201.

The purpose of the tariff is to promote uniformity and to avoid rate discrimination among shippers. (Indiana Harbor Belt R.R. Co. v. Budd Co. (1982), 110 Ill. App. 3d 76, 79.) It is a public document setting forth the services of a carrier being offered, the rates and charges with respect to services, and governing rules and the regulations and practices relating to those services. Maurice Transport Co., 144 Ill. App. 3d at 162.

The contract between the carrier and shipper is the bill of lading plus the published tariff. (National Starch & Chemical Corp., 40 Ill. App. 2d at 486.) If there are conflicts between the bill of lading and the published tariff, the tariff controls (National Starch & Chemical Corp., 40 Ill. App. 2d at 486), having the force and effect of a statute. Illinois Central R.R. Co. v. Sankey Brothers, Inc. (1978), 67 Ill. App. 3d 435, 439.

The Commission tariffs are published and all parties have equal access to the tariff rates. (Illinois Central R.R. Co., 67 Ill. App. 3d at 439.) The law conclusively presumes that shippers are aware of the lawful tariff rates (Indiana Harbor Belt R.R. Co. v. Budd Co., 110 Ill. App.

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Related

Illinois Central Gulf Railroad v. Sankey Bros.
384 N.E.2d 543 (Appellate Court of Illinois, 1978)
Maurice Transport Co. v. Amoco Oil Co.
494 N.E.2d 738 (Appellate Court of Illinois, 1986)
Indiana Harbor Belt Railroad v. Budd Co.
441 N.E.2d 1301 (Appellate Court of Illinois, 1982)
National Starch & Chemical Corp. v. McNamara Motor Express, Inc.
189 N.E.2d 776 (Appellate Court of Illinois, 1963)
Koontz v. South Suburban Safeway Lines, Inc.
73 N.E.2d 919 (Appellate Court of Illinois, 1947)

Cite This Page — Counsel Stack

Bluebook (online)
602 N.E.2d 62, 235 Ill. App. 3d 513, 176 Ill. Dec. 755, 1992 Ill. App. LEXIS 1534, Counsel Stack Legal Research, https://law.counselstack.com/opinion/phillips-electric-co-v-seko-messenger-service-inc-illappct-1992.