Filed: Aug. 28, 2013
Latest Update: Feb. 12, 2020
Summary: UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 13-1019 RUSH INDUSTRIES, INC., Plaintiff - Appellant, v. MWP CONTRACTORS, LLC; BRANN’S TRANSPORT SERVICES, INC., Defendants - Appellees. Appeal from the United States District Court for the Middle District of North Carolina, at Greensboro. Thomas D. Schroeder, District Judge. (1:08-cv-00810-TDS-LPA) Submitted: July 25, 2013 Decided: August 28, 2013 Before NIEMEYER, GREGORY, and DIAZ, Circuit Judges. Affirmed by unpublished per
Summary: UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 13-1019 RUSH INDUSTRIES, INC., Plaintiff - Appellant, v. MWP CONTRACTORS, LLC; BRANN’S TRANSPORT SERVICES, INC., Defendants - Appellees. Appeal from the United States District Court for the Middle District of North Carolina, at Greensboro. Thomas D. Schroeder, District Judge. (1:08-cv-00810-TDS-LPA) Submitted: July 25, 2013 Decided: August 28, 2013 Before NIEMEYER, GREGORY, and DIAZ, Circuit Judges. Affirmed by unpublished per ..
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 13-1019
RUSH INDUSTRIES, INC.,
Plaintiff - Appellant,
v.
MWP CONTRACTORS, LLC; BRANN’S TRANSPORT SERVICES, INC.,
Defendants - Appellees.
Appeal from the United States District Court for the Middle
District of North Carolina, at Greensboro. Thomas D. Schroeder,
District Judge. (1:08-cv-00810-TDS-LPA)
Submitted: July 25, 2013 Decided: August 28, 2013
Before NIEMEYER, GREGORY, and DIAZ, Circuit Judges.
Affirmed by unpublished per curiam opinion.
Kenneth L. Jones, CARRUTHERS & ROTH, P.A., Greensboro, North
Carolina, for Appellant. Kenneth J. Gumbiner, HIGGINS BENJAMIN,
PLLC, Greensboro, North Carolina, for Appellee MWP Contractors,
LLC. Stanley F. Hammer, WYATT, EARLY, HARRIS & WHEELER, LLP,
High Point, North Carolina, for Appellee Brann’s Transport
Services, Inc.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Appellant Rush Industries, a furniture manufacturing
company, challenges the district court’s decision in favor of
Appellee MWP Contractors, who coordinated shipping of a used
panel saw that failed to operate upon arrival at Rush
Industries’ manufacturing plant. Finding no error, we affirm
the district court’s ruling.
I.
In late 2006, Rush Industries purchased a used Italian-made
Gabbiani panel saw through an internet auction for $14,300.
Michael Rush, the owner of Rush Industries, purchased the saw
for use at the company’s plant in Americus, Georgia. An expert
witness testified at trial that the twelve-year-old saw was
already beyond its expected useful life. The bill of sale
provides that Rush Industries made its purchase of the saw “AS
IS, WHERE IS, WITH ALL FAULTS.” After purchasing the saw, Rush
traveled to South Boston, Virginia, where the saw was located in
the facility of a defunct business called D-Scan. After Rush
videotaped an operator make a successful demonstration cut using
the saw, he made arrangements with MWP to disassemble, package,
coordinate shipping, and install the saw at Rush Industries’
Americus plant. Rush sent a check to MWP on December 8, 2006,
for an initial payment of $5,300.
2
The saw remained in D-Scan’s facility until January 8th,
2007. During that time, MWP made basic repairs to the saw at
Rush Industries’ request. MWP contracted with Appellee Brann’s
Transport Services to move the saw to Americus. MWP employees
loaded the saw onto two Brann’s trucks. However, MWP did not
request that Brann’s tarp the load.
Upon arrival, Rush and MWP’s foreman discovered that the
saw’s ten ribbon cables and connectors had been damaged.
Nonetheless, Rush accepted the shipment, and directed MWP to
unload and install the saw, which was not operational without
new connectors. MWP offered to locate new connectors. During
January 2007, Rush contacted MWP at least twice to inform the
company that he needed MWP to make the saw operational
immediately to avoid losing orders that required use of the saw.
According to MWP, because there were only a limited number of
these saws manufactured overseas over a decade prior, it was
difficult, yet important, to obtain the right replacement parts.
Vicki Rush, Rush’s wife, caused further delay when she provided
MWP with the wrong serial number for the damaged parts.
On February 28, 2007, MWP sent Rush Industries a statement
for the remaining $4,000 balance due for shipment. On April 9,
2007, Rush Industries filed a lawsuit against MWP in North
Carolina state court. Unaware of the suit, Anthony Wilson, an
employee for MWP, contacted Rush to arrange a time to install
3
proper connectors which he was finally able to locate. Rush
explained that he had filed a lawsuit against MWP “for a million
dollars” and refused to speak with Wilson or accept the cables
and connectors he had obtained.
In January 2008, Rush’s wife purchased replacement ribbon
cables and connectors off the internet for $103.60, plus $14.63
for shipping. Rush’s employees installed the cables and
connectors. While the control panel for the saw lit up, the saw
remained dysfunctional. Rush testified that he subsequently
engaged several electricians and service companies in an attempt
to diagnose and fix the problem. However, none could make the
saw operational. Rush testified that the saw has no value in
its current dysfunctional state because the cost to haul the
metal exceeds the scrap value of the saw.
Also in January 2008, Rush Industries added Appellee
Brann’s as a defendant. This constituted Brann’s first notice
that the saw it had transported was not operational and that
Rush Industries had filed a lawsuit. The complaint against MWP
and Brann’s alleged breach of contract, negligence, and bailment
claims. Rush Industries sought recovery for value of the
damaged equipment, lost income and profits, and additional
consequential damages. MWP filed a counterclaim against Rush
4
Industries for unpaid invoices. 1 The Defendants removed the case
to federal court in November 2008 on the basis that it fell
under the purview of the Carmack Amendment to the Interstate
Commerce Act, 49 U.S.C. § 14706.
On Defendants’ motion for summary judgment, the district
court dismissed Rush Industries’ state-law claims for lost
profits and its negligence claims insofar as they did not arise
from bailment. It deferred judgment on the application of the
Carmack Amendment. The parties tried the remaining issues in a
bench trial in October 2012. The district court found that the
Carmack Amendment preempted all state-law claims arising out of
damage occurring during transportation of the saw. After re-
characterizing state-law claims as federal-law claims, the
district court awarded damages to Rush Industries in the amount
of $118.23 for the cost of replacement ribbons and connectors,
and to MWP for $6,388.59 for unpaid invoices. The district
court dismissed all claims against Brann’s.
Rush Industries’ filed a timely appeal of which we have
jurisdiction pursuant to 28 U.S.C. § 1291.
1
Brann’s and MWP also filed cross-claims for
indemnification against any damages the court awarded. These
cross-claims are not at issue here.
5
II.
We review a district court’s judgments at a bench trial
under a mixed standard: factual findings for clear error and
conclusions of law de novo. Helton v. AT & T, Inc., 709 F.3d
343, 350 (4th Cir. 2013).
A.
Rush Industries first argues that the district court erred
when it determined that its claims against MWP are covered by
the Carmack Amendment. Specifically, Rush Industries contends
that the services provided by MWP fall outside the parameters of
the Carmack Amendment because Brann’s, not MWP, provided actual
transport of the saw, and because MWP’s services did not involve
transport.
The Carmack Amendment is a “comprehensive exercise of
Congress’s power to regulate interstate commerce” that creates
“a national scheme of carrier liability for goods damaged or
lost during interstate shipment under a valid bill of lading.”
5K Logistics, Inc. v. Daily Exp., Inc., 659 F.3d 331, 335 (4th
Cir. 2011) (internal quotations and citations omitted). It
preempts all state or common law claims available to a shipper
against a carrier for loss or damage associated with interstate
shipments. Shao v. Link Cargo (Taiwan) Ltd.,
986 F.2d 700, 704-
05 (4th Cir. 1993).
6
Contrary to Rush Industries’ argument, the Carmack
Amendment goes beyond the physical act of transportation to
include associated services. See 49 U.S.C. § 13102(23).
Further, it applies to a company, such as MWP, that is in
contract with a shipper to handle the movement of property and
subcontracts the actual physical shipping of the property in
question. See, e.g., Land O’Lakes, Inc. v. Superior Serv.
Transp. of Wis., Inc., 500 F. Supp. 2d 1150, 1155 (E.D. Wis.
2007) (“Liability under the Carmack Amendment . . . extends
beyond the carrier who actually provides the transportation.”);
Mach Mold, Inc. v. Clover Assocs., Inc.,
383 F. Supp. 2d 1015,
1029 (N.D. Ill. 2005) (explaining that the Carmack Amendment
applies to a company that coordinates transportation, but does
not actually transport the property in question). Even though
Brann’s may have owned and controlled the trucks that
transported the saw, MWP’s overall coordination of the shipping
places it within the confines of the Carmack Amendment. 2 As
such, we agree with the district court that the Carmack
Amendment applies and preempts all tort and common law claims
against MWP. See
Shao, 986 F.2d at 704-05.
2
While MWP’s repair work and installation of the saw
arguably falls outside the parameters of the Carmack Amendment,
Rush Industries puts forward no evidence establishing that
damage to the saw occurred during repair or installation.
7
B.
Rush Industries next argues that the district court erred
when it granted partial summary judgment dismissing its claims
for lost profits and negligence not arising out of the bailment.
Given that the Carmack Amendment preempts Rush Industries’ state
and common law claims, we do not directly address this argument.
Instead, we review the district court’s treatment of the claims
as re-characterized federal claims under the Carmack Amendment. 3
See Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 66-67 (1987)
(explaining that a lawsuit that purports to raise only state law
claims may be construed as raising federal law claims where
complete preemption exists); Darcangelo v. Verizon Commc’ns,
Inc.,
292 F.3d 181, 195 (4th Cir. 2002) (construing state claims
as federal claims where ERISA preempted state claims).
The Carmack Amendment establishes that a carrier is
“liab[le] . . . for the actual loss or injury to the property”
that occurs during shipping. 49 U.S.C. § 14706. This includes
“all damages resulting from any failure to discharge a carrier’s
3
To recover under the Carmack Amendment, a plaintiff must
make out a prima facie case establishing: (1) delivery to the
carrier in good condition; (2) arrival in damaged condition,
and; (3) amount of damages. Oak Hall Cap & Gown Co., Inc. v.
Old Dominion Freight Line, Inc., 899 F.2d 291, 294 (4th Cir.
1990). The district court correctly found that Rush Industries
had established the first two prongs of the prima facie case.
Thus, we discuss only the third prong related to damages.
8
duty with respect to any part of the transportation to the
agreed destination.” Se. Express Co. v. Pastime Amusement Co.,
299 U.S. 28, 29 (1936). As such, a plaintiff shipper can
recover all reasonably foreseeable consequential damages and
lost profits that are not speculative. Am. Nat. Fire Ins. Co.
ex rel. Tabacalera Contreras Cigar Co. v. Yellow Freight Sys.,
Inc.,
325 F.3d 924, 931 (7th Cir. 2003).
Rush Industries argues that the saw sustained irreparable
damage because MWP “withheld replacement parts for some eight
months” after it installed the saw at the Americus plant.
Appellant’s Br. 19. Because no individual or company can now
fix the broken saw, Rush Industries urges that we find that it
is entitled to the value of a comparable brand new saw.
Further, Rush Industries claims that it is entitled to lost
profits from contracts it could not fulfill because the saw was
not made operable.
Rush Industries failed to present evidence establishing
that any undue delay in replacing the ribbons and connectors
caused the saw’s permanently irreparable condition. At trial,
Rush Industries presented only a single witness, Mr. Rush, who
had extremely limited technical knowledge of the saw. In
essence, Mr. Rush could say little more than that the saw was
working when he saw it in South Boston and did not work after it
arrived in Americus. MWP, on the other hand, presented several
9
witnesses with relevant specialized knowledge who explained that
the saw, and particularly the saw’s computer system, were
obsolete and past expected functioning life. Further, an MWP
witness who serviced this particular saw when D-Scan owned it
testified that it was uncertain whether the saw would survive
transportation from South Boston to Americus because “there are
a lot of variables that happen during shipment,” and that the
vibrations during transport could cause problems with the saw’s
circuit board.
Even if Rush could have established that the inoperable
condition of the saw was caused by MWP’s lag in replacing the
cables and connectors, Rush Industries’ damages claim would
result in an exorbitant windfall. Rush Industries purchased an
outdated piece of machinery manufactured overseas in a small
batch “AS IS, WHERE IS, WITH ALL FAULTS” for $14,300. A new
replacement saw costs over a quarter-million dollars. Surely,
MWP could not foresee that its failure to repair damage which
occurred during shipping would require that it purchase a brand
new saw.
Nor should MWP be held liable for Rush Industries’ alleged
lost profits in the aftermath of the January 2007 delivery.
Rush Industries presented no evidence that the saw would have
worked had MWP immediately replaced the cables and connectors.
In other words, there is not sufficient evidence to conclude
10
that the problems with the saw upon arrival in Americus were
limited to the cables and connectors.
There is also no viable evidence in the record that Rush
Industries informed MWP that it had a “million-dollar contract,”
or any other contract for that matter, hinging on the timely
delivery and operability of the saw. In fact, MWP did nothing
to guarantee the operability of the saw after transport.
Moreover, given the age, foreign origin, and limited number of
these saws, it would have been difficult for MWP to obtain the
appropriate replacement parts had Rush Industries provided
correct information. However, Vicki Rush provided the wrong
serial number to MWP, further delaying MWP’s efforts to repair
the saw. When MWP’s representative finally contacted Rush to
notify him that he had found the correct parts and to arrange
for installation, Rush shunned his efforts.
The only damages that Rush Industries has established as
attributable to MWP are for replacement cables and connectors.
As such, we find that the district court correctly found that
MWP’s liability is limited accordingly. 4
4
Rush Industries’ failure to establish damages beyond the
replacement cost of the cables and connectors applies also to
its claims against Brann’s. Additionally, we agree with the
district court that MWP and Rush Industries’ claims against
Brann’s are time barred because neither informed Brann’s of any
claims or problems with the panel saw until January 25, 2008,
well after the applicable nine-month notice requirement expired.
(Continued)
11
III.
Rush Industries next argues that the district court erred
when it refused to excuse its obligation to pay MWP for services
rendered. 5 MWP satisfied its contractual obligations pursuant to
its agreement with Rush Industries. MWP conducted repair work
on the saw in South Boston per Rush Industries’ request. After
shipment, MWP employees complied with Rush’s instructions to
unload and assemble the saw in Americus in spite of the damaged
state of the cables and connectors. We find no error in the
district court’s determination that Rush Industries must pay its
past due bills to MWP.
IV.
Rush Industries took a risk in purchasing an outdated, used
saw at a huge discount and then shipping it some 600 miles.
Unfortunately for Rush Industries, the risk did not pay off.
However, there is no legal basis for pushing the repercussions
onto the company it enlisted to help with shipment. We find no
See 49 C.F.R. pt. 1035, App. B (“As a condition precedent to
recovery, claims must be filed in writing with the . . .
delivering carrier . . . within nine months after delivery has
elapsed.”).
5
MWP counterclaims for $2,388.59 for pre-shipment repairs
it made to the saw in South Boston and $4,000 for unloading the
saw and assembling it in Americus.
12
error in the district court’s handling of this case and
therefore affirm.
AFFIRMED
13
