The opinion of the court was delivered by: Aspen, District Judge:
MEMORANDUM OPINION AND ORDER
Plaintiff, Star-Kist Foods ("Star-Kist"), brought this
action against the Chicago, Rock Island and Pacific Railroad
Company ("Rock Island") and Kansas City Terminal Railway
Company ("KCT") to recover for alleged loss in transit of four
carloads of pet food transported on defendants' railroad
during the months of December, 1979, and January, 1980.
Jurisdiction is asserted pursuant to 28 U.S.C. § 1337 and the
Carmack Amendment, 49 U.S.C. § 11707. Presently before the
Court is KCT's motion to dismiss or for summary judgment. For
reasons set forth below, KCT's motion for summary judgment is
Rock Island operated as a rail carrier pursuant to § 77 of
the Bankruptcy Act, Title 11 U.S.C. from March 17, 1975, until
October 4, 1979. KCT, pursuant to Emergency Directed Service
Order No. 1396, as authorized by 49 U.S.C. § 11125, commenced
operations over the Rock Island as directed carrier on October
5, 1979, and continued such operations until March 31,
Star-Kist commenced a civil action against Rock Island in
the Superior Court of the County of Los Angeles, California on
July 21, 1982.*fn2 On March 8, 1983, the Superior Court
granted Rock Island's motion to quash service of summons.
Plaintiff filed the present action on August 5, 1983.*fn3
Defendants have attached to their pleadings several exhibits
in support of their motion to dismiss, including two denials
of claim for damages and additional correspondence between the
parties. Under Fed.R.Civ.P. 12(b)(6), however, the Court may
not consider extrinsic evidence in determining motions to
dismiss. Grand Opera Co. v. Twentieth Century Fox Film Corp.,
235 F.2d 303, 307 (7th Cir. 1956). Under Fed.R.Civ.P. 56,
summary judgment may be granted to a defendant if there exists
no genuine issue of fact material to a judgment in its favor as
a matter of law. Cedillo v. International Association of Bridge
and Structural Iron Workers, Local Union No. 1, 603 F.2d 7, 10
(7th Cir. 1979), and such a motion is not appropriate where
issues arise concerning the intent of a particular party.
Staren v. American Nat. Bank & Tr. Co. of Chicago,
529 F.2d 1257, 1261 (7th Cir. 1976); Conrad v. Delta Air Lines,
Inc., 494 F.2d 914, 918 (7th Cir. 1974). We therefore treat
KCT's motion as one for summary judgment, and have considered
relevant extrinsic evidence.
KCT argues that Star-Kist's suit is barred by the Carmack
Amendment, 49 U.S.C. § 11707,*fn4 and § 2(b) of the Uniform
Bill of Lading,*fn5 which provides that suit may only be
instituted against the carrier within two years and one day
from the date when the carrier gives the claimant written
notice that the claim has been disallowed.
A carrier's valid contract governs the nature and extent of
the rights and liabilities of the shipper and carrier and is
subject to the applicable provisions of the Carmack Amendment.
49 U.S.C. § 11707(e) provides no statute of limitations;
rather, it imposes a reasonable period of limitations a carrier
may impose. Westhemeco, Ltd. v. New Hampshire Insurance Co.,
484 F. Supp. 1158, 1161 (S.D.N.Y. 1980).
The parties are in disagreement as to which action in a
series of correspondence constituted "notice of disallowance"
to the claimant. Although the Supreme Court has not clearly
delineated the sufficiency of a "notice of disallowance," the
decisions in this area have uniformly held that the word
"disallowed" need not be used in the notice as long as the
terms used adequately convey to the claimant that the claim is
disallowed. Burns v. Chicago, 100 F. Supp. 405 (W.D.Mo. 1951);
Cordingley v. Allied Van Lines, Inc., 563 F.2d 960, 964 (9th
Cir. 1977); Westhemeco, Ltd. v. New Hampshire Ins. Co., 484
F. Supp. at 1163.
By the relevant terms of the bill of lading and of the
statute, Star-Kist's suit is barred only if KCT's letter of
December 5, 1980, constituted a disallowance so as to commence
the running of the limitations period. Although Star-Kist
argues that KCT's written inquiry of April 2, 1982, served to
toll the limitation period, negotiations subsequent to a
denial or disallowance of claim will not toll the running of
the limitations period. Burns v. Chicago, 100 F. Supp. at 406;
Cammack v. Trans World Airlines, 482 F. Supp. 914, 917
(W.D.Missouri 1979). In B.F. Goodrich Tire Company v.
Louisville & Nashville R.R. Co., the court determined that
"[t]he purpose for a formal denial of claim is to start the
statute of limitations machinery . . . rather than the
discouragement of meaningful negotiations between parties."
439 F. Supp. 363, 365 (S.D.N.Y. 1977).
Regarding the letter of disallowance, it must be "clear,
final and unequivocal." Polaroid Corp. v. Hermann Forwarding
Co., 541 F.2d 1007, 1012 (3d Cir. 1976). The Seventh Circuit
has further supplemented this standard by inquiring "whether
the notice made it clear that the claim as submitted would not
be honored," John Morrell & Co. v. Chicago, Rock Island and
Pac. R.R. Co., 495 F.2d 331, 333 (7th Cir. 1974), and considers
whether the letter of disallowance lacked or possessed a "clear
finality" so as to constitute a qualified or unqualified
disallowance for purposes of applying the statute of
limitations. Id. The Court of Appeals in Morrell held the
carrier's disallowance as qualified and therefore did not serve
to commence the running of the limitations period.
Morrell, however, is distinguishable from the present case.
The carrier in Morrell qualified its initial disallowance to
the extent it did not possess sufficient information to achieve
a final determination of liability. The subsequent
correspondence with the shipper noted a concession by the
carrier for partial liability which ultimately invited further
negotiations and inquiry into the claim. Id. at 332. Throughout
the series of correspondence in Morrell, the carrier made no
reference to the initial disallowance until almost two years
later, when it asserted the shipper's claim was time barred.
Id. at 333.
In the present case, the initial disallowance displayed no
necessity for clarification for the letter did not invite
further correspondence from the shipper for purposes of
ascertaining liability. KCT's December 5, 1980, notice of
disallowance did not suggest partial liability, nor did its
subsequent correspondence. The disallowance cannot be
considered qualified, as one lacking "clear finality," as the
denial was effectively reiterated on September ...