The opinion of the court was delivered by: JOHN A. NORDBERG
This is an action arising out of incidents resulting in damage to goods being shipped by Taft Equipment Sales Company ("Taft"), the original Plaintiff. Several trucking or transportation companies have become parties to this action as those involved have tried to sort out the liability for the damaged goods. Currently before the Court is the Motion for Summary Judgment of Aero Trucking, Inc. ("Aero"), the Fourth-Party Defendant. The motion is contested by the Fourth-Party Plaintiff, Truckers Express, Inc. ("TEI"). The motion is granted.
The original Plaintiff in this action, Taft, sought to transport imported printing press units from Baltimore, Maryland to Columbus, Ohio. To that effect, Taft contracted with the original Defendant, Ace Transportation, Inc. ("Ace"). On January 9, 1989, and January 20, 1989, Ace, or agents acting on Ace's behalf, accepted possession of the printing press units in Baltimore. Anchor International, a custom broker, issued a bill of lading, number 76484, for the transportation of the subject goods.
In two separate incidents, on January 10, 1989, and on January 21, 1989, some of the subject goods were damaged in transit. The instant motion relates to only the January 21, 1989 incident. On that date, some of Taft's printing press units were damaged while being transported on a truck driven by a Mr. Danny Estep in the state of North Carolina. He had received the goods from TEI in Maryland for transport to Columbus, Ohio. The truck was owned by independent owner/operator Gary Estep, Danny Estep's brother and employer. The truck was leased, on a permanent basis, to Aero in two leases, one for the truck's tractor, one for its trailer. At all relevant times in this case, the truck bore Aero's name and Interstate Commerce Commission ("ICC") number. However, there is no evidence that Danny Estep had permission form Aero to carry the subject load. In fact, he had not been issued a release number from Aero.
On March 22, 1991, based on the incidents of January 10 and January 21, Taft sued Ace, and later filed an Amended Complaint adding TEI as a defendant.
On May 17, 1991, Ace answered the Taft complaint by stating that it acted merely as a truck broker for the disputed transaction, not as the carrier of Taft's goods. That same day, Ace filed a Third-Party Complaint against TEI. Similarly, TEI answered, on June 28, 1991, by stating that it too acted merely as a truck broker and not as a carrier with respect to Taft's goods. That same day, TEI filed a Fourth-Party Complaint against Aero. Aero answered on August 29, 1991, claiming that it had no relation to the disputed transaction. It did, however, file a Fifth-Party Complaint against Gary Estep, claiming that if it, Aero, was held liable, it was entitled to indemnification from Gary Estep, the actual carrier.
On January 22, 1993, several of the parties agreed to a stipulated dismissal in which Taft's action against Ace and TEI was dismissed. The case now consists of Ace's action against TEI, TEI's action against Aero, and Aero's action against Gary Estep. Before the Court is Aero's Motion for Summary Judgment on TEI's claim against it. Aero contends that it is entitled to judgment as a matter of law because TEI failed to timely notify it of TEI's claim and because TEI has failed to present a prima facie case.
Summary judgment is appropriate when:
The pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.
Fed. R. Civ. P. 56(a). A party moving for summary judgment bears the initial burden of informing the district court, and the nonmoving party, of the basis for its motion. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). This requirement necessitates that the moving party point to those portions of the opposing party's case which it believes indicate the absence of a genuine issue of material fact and which it believes entitles it to judgment as a matter of law. Id. Once the moving party has carried its initial burden of pointing to defects in the nonmoving party's case, the nonmoving party must come forward with evidence sufficient to create an issue of fact or law regarding a challenged material element of its case. See Celotex Corp. v. Catrett, 477 U.S. at 322-23.
The standard for granting summary judgment "mirrors" the standard for a directed verdict under Rule 50(a) of the Federal Rules of Civil Procedure. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). That is, summary judgment is appropriate when there can be but one reasonable conclusion as to the verdict. Id. However, where reasonable minds could differ as to what conclusion is dictated by the evidence, summary judgment should be denied. Id. at 250-51. In determining whether reasonable persons could differ as to the evidence, the Court must consider whether the nonmovant has put forth sufficient evidence to satisfy the substantive evidentiary standard for its case. Id. at 255. Here, TEI must prove its case by a preponderance of the evidence.
TEI's claim against Aero is based on a statute commonly called the Carmack Amendment, which is currently codified at 49 U.S.C. § 11707 (1988). Under the Carmack Amendment, carriers may be held liable for damage to property transported by the carriers, without extensive inquiry into how the property was damaged. 49 U.S.C. § 11707(a)(1) (1988).
TEI contends that it need only show that Aero had actual knowledge of its claim. TEI argues that Aero received actual notice of its claim when Danny Estep contacted a Mr. Robert Cox shortly after the accident. TEI once believed Cox to be an Aero employee but now agrees that Cox was an employee of Transport Adjustment Systems which was under contract with Aero to investigate and settle liability claims. Whether Cox's knowledge is attributable to Aero, the Court need not decide. In the opinion of the Court, actual knowledge of the type had by Cox, even if it were attributable to Aero, is insufficient to satisfy any notice requirement.
TEI contends that under Hopper Paper Co. v. Baltimore & O. R. Co., 178 F.2d 179 (7th Cir. 1949), cert. denied, 339 U.S. 943, 94 L. Ed. 1359, 70 S. Ct. 797 (1950), actual notice is all that is required in the Seventh Circuit. This argument fails for several reasons. First, it is unclear why the Seventh's Circuit's interpretation of the Carmack Amendment should govern this case, particularly when the states encompassed in that jurisdiction have no relation to the facts of this case. Given that Hopper Paper has been widely criticized by Courts in other Circuits, TEI must demonstrate to the Court why Hopper Paper should govern; it has not done so. Second, Hopper Paper has been strictly limited, even in this Circuit. See, e.g., Wisconsin Packing Co. v. Indiana Refrigerator Lines, 618 F.2d 441, 448-53 (7th Cir.) (Sprecher, J., dissenting), cert. denied, 449 U.S. 837, 66 L. Ed. 2d 44, 101 S. Ct. 112 (1980); Sentry Ins. Co. v. Transcon Lines, 1989 U.S. Dist. LEXIS 7690, 1989 WL 76011 (N.D. Ill. July 5, 1989). While the Hopper Paper decision has not been overruled and is still applied by courts in the Northern District of Illinois, it generally is limited to cases where the carrier had actual notice and perhaps some other form of notice which, by itself, was insufficient, and acting on that notice actually investigated the disputed incident. See Wisconsin Packing Co. v. Indiana Refrigerator Lines, 618 F.2d 441 (7th Cir.), cert. denied, 449 U.S. 837, 66 L. Ed. 2d 44, 101 S. Ct. 112 (1980); Bergen Const. Corp. v. Yellow Freight Sys., Inc., 1992 U.S. Dist. LEXIS 17927, NO. 92- C-4769, 1992 WL 350695 (N.D. Ill. Nov. 23, 1992); Marine Office of Am. Corp. v. NYK Lines, 638 F. Supp. 393 (N.D. Ill. 1985); see also Intech, Inc. v. Consolidated Freightways, Inc., 836 F.2d 672 (1st Cir. 1987) (requiring "full awareness in order for actual knowledge to be sufficient notice). Where, as here, there is no evidence that the Plaintiff made any attempt to notify the Defendant, and where the Defendant, based on scant knowledge, took no steps to investigate, Cox's actual notice was insufficient notice of TEI's claim. However, despite this conclusion, Aero is not entitled to summary judgment on the notice issue, on this record. Aero has failed to demonstrate that notice was required within a particular time.
The Carmack Amendment, in relevant part, says:
a carrier or freight forwarder may not provide by rule, contract, or otherwise, a period of less than 9 months for filing a claim ...