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SCHWARZ v. NATIONAL VAN LINES

June 22, 2005.

SOFIA SCHWARZ, Plaintiff,
v.
NATIONAL VAN LINES, INC., DWAYNE SCHIESSER, and APEX RELOCATION SPECIALISTS, INC., Defendants.



The opinion of the court was delivered by: AMY J. ST. EVE, District Judge

MEMORANDUM OPINION AND ORDER

Plaintiff Sofia Schwarz ("Schwarz") sued Defendant National Van Lines, Inc. ("National"), under a number of theories. The Court has dismissed all of Schwarz's claims except her federal claim for breach of contract under 49 U.S.C. § 14706 (the "Carmack Amendment"), and her state law claims of intentional and negligent infliction of emotional distress. See Schwarz v. National Van Lines, No. 03 C 7096, 2004 WL 1166632, *1 (N.D. Ill. May 21, 2004); Schwarz v. National Van Lines, No. 03 C 7096, 2004 WL 1497804, *1 (N.D. Ill. July 2, 2004). National now moves for summary judgment, contending that the Carmack Amendment preempts Schwarz's two remaining state law claims, and, alternatively, that Schwarz cannot establish the underlying essential elements of those claims. For the reasons discussed below, the Court denies National's motion. BACKGROUND

I. The Parties

  Schwarz is a resident and citizen of Oregon. (R. 92-1; Pl.'s Resp. to Def.'s Stmt. Mat. Facts ("Def.'s SMF"), Ex. 1 at 4.). National, an Illinois corporation, is an authorized motor carrier engaged in the business of transporting household goods. (R. 80-1; Def.'s SMF at ¶ 1.) Defendant Dwayne Schiesser ("Schiesser") is a resident and citizen of Texas. (R. 3-1; First Am. Compl. ¶ 3.) Defendant Apex Relocation Specialists, Inc. ("Apex") is a defunct Texas corporation that provided interstate shipping of household goods as an agent of National and on its own behalf. (Id. at ¶¶ 4, 48.) Neither Apex nor Schiesser has answered the Complaint, and the Court entered default judgment against both parties. (R. 33-1; Ord. Granting Default J.)

  II. Schwarz's Move from Scottsdale, Arizona to Salem, Oregon

  In December 2000, Schwarz, a widow and 65 years old at the time, hired National to transport her personal household belongings from Scottsdale, Arizona to Salem, Oregon; Schwarz tendered her belongings under a Uniform Household Goods Bill of Lading & Freight Bill (the "Bill of Lading"). (R. 80-1; Def.'s SMF at ¶¶ 7, 8; R. 92-1; Pl.'s Stmt. Additional Mat. Facts ("Pl.'s SAMF") at ¶ 1.) Two years prior, Schwarz had moved from her home in the Pacific Northwest to Scottsdale to attend the Scottsdale Culinary Institute. (R. 92-1; Pl.'s SAMF at ¶ 1.) After completing school and obtaining experience in a professional kitchen at the Four Seasons hotel in Scottsdale, Schwarz planned to move to Salem to open her own business, a café and pastry shop. (Id.) National did not transport Schwarz's shipment itself, but rather consigned the Bill of Lading to Apex. (Id. at ¶ 2.)

  In performing its transportation services, National typically operates through a network of agents and drivers. (Id. at ¶ 3.) When, as in Schwarz's case, National has sold a move, but does not have an agent available to transport it, National will use what it refers to as an "interline carrier," such as Apex, rather than one of its own agents. (Id. at ¶¶ 4, 7.) To become an "interline carrier" for National, a company contacts National and requests to haul shipments for them. (Id. at ¶ 6.) The carrier then enters into an "interline agreement" with National — a document that primarily sets forth the terms of compensation between National and the carrier, rather than the carrier's obligations toward National's customers. (Id.) When the interline agreement is executed, National, as a matter of policy, is supposed to verify that the carrier has both appropriate insurance and the requisite authority to operate as an interstate carrier. (Id.) After execution, National does not periodically reassess whether that interline carrier's authority and insurance remain in good standing. (Id.) As to Apex specifically, National did not verify that Apex had appropriate authority or insurance, other than when Apex executed its interline agreement in December 1999. (Id. at ¶¶ 9, 10.) In addition, National did not check to see if anyone had filed a complaint against Apex with the Department of Transportation or the Better Business Bureau before entering into an interline agreement with Apex and giving it possession of Schwarz's belongings. (Id. at ¶ 9.) At the time of Schwarz's shipment, Apex's insurance had been cancelled and the United States Department of Transportation had revoked Apex's interstate operating authority.*fn1 (Id. at ¶ 11.)

  Although National claims it expects the same level of customer service from an "interline carrier" that it would from its own agents, it does not communicate any rules, requirements, or standards of service to such carriers beyond what is contained in the interline agreement. (Id. at ¶ 8; id., Ex. 5 at 2 (a sample interline agreement stating only that the interline carrier "shall promptly, safely and expeditiously perform the [transportation] service . . .").) Further, while National's drivers and agents undergo criminal and employment background checks, (id. at ¶ 3), National does not conduct a similar review of interline carrier agents and drivers. (Id. at ¶ 5) National also does not verify that drivers for an interline carrier meet the "stringent" requirement imposed by federal regulations for background checks and other screening. (Id.) Even so, National remains responsible for all shipments that it assigns to an "interline carrier." (Id. at ¶ 4.)

  For her move from Arizona to Oregon, Schwarz contacted National's local agent, Carl Carter of Central Moving and Storage ("Central"). (Id. at ¶ 12.) Although National agreed to pick up Schwarz's belongings between December 26 and December 30, 2000, no one arrived during that five-day period to pick them up. (Id.) On December 31, 2000, Schwarz called Carter several times to inquire when the driver would arrive to pick up her belongings. (Id. at ¶ 13.) After representing to Schwarz that he had spoken with National's headquarters, Carter informed her that the driver would arrive momentarily. (Id.) Several hours later, the driver still had not arrived. (Id. at ¶ 14.) Schwarz called Carter again to inform him that she had slept in her clothes the night before (having expected National to have already picked up her belongings), that she had no food, and that she had to vacate her residence by the end of the day. (Id.) Carter reassured Schwarz that the driver, Schiesser, had worked for National for nine years and during that time National had "never" had a problem with him. (Id.) Several hours later, Schwarz spoke with Carter again to request that he put her belongings into storage until National could find a more reliable driver. (Id. at ¶ 15.) Carter again assured Schwarz that Schiesser was "reliable," and, although Central was prepared to store Schwarz's belongings, Carter continued to reassure Schwarz that Schiesser would arrive. (Id.) At some point thereafter, Schiesser arrived in a Ryder rental truck. (Id. at ¶ 16.) Central's employees helped Schiesser load Schwarz's belongings, even though, as Carter testified, the use of a rental truck was not normal procedure. (Id.) After Central and Schiesser loaded Schwarz's belongings on the truck, Schiesser asked Schwarz for $400 cash, a proposition that National admits is improper. (Id. at ¶ 17.) Moreover, Schiesser did not deliver Schwarz's goods as scheduled. (Id. at ¶ 36.)

  III. Schwarz's Attempt to Retrieve Her Goods

  After Schiesser failed to deliver the shipment, Schwarz spoke with Bob Donnelly, National's Manager of Operations, who was unwilling to provide Schwarz with information regarding National's investigation into the whereabouts of Schiesser or Schwarz's property. (Id. at ¶ 19.) In addition, National's Safety Director, Rand Walker, who was "primarily responsible" for locating Schwarz's shipment, did not review National's files for information about Apex until Schwarz's shipment had been missing for several weeks. (Id. at ¶¶ 20, 23, Ex. 3 at 22.) Those files, in fact, contained contact information for Apex and Schiesser, including the location where Schwarz's belongings were ultimately located four months later. (Id. at ¶ 20.) After reviewing these files, National thus had reason to believe that Schiesser had taken Schwarz's belongings to his residence in Weatherford, Texas. (Id. at ¶ 22.) Walker, however, could not recall whether he had relayed this information to the police, Schwarz, or her attorneys. (Id.) Ten days after Schiesser picked up the shipment, Schwarz's son, Peter Frease, contacted Walker to determine what actions National was taking to locate the shipment. (Id. at ¶ 23.) Walker assured Frease that National was doing "everything in its power to locate and effect delivery of the shipment." (Id., Ex. 3 at 125.) National, however, had not yet called the police to report the shipment as missing. (Id. at ¶ 23.) National finally called the police on January 22, 2001. (Id. at ¶ 24.) Because Schwarz's shipment traveled interstate, National could have contacted the FBI, but did not, even though National told Schwarz that it had done so. (Id. at ¶ 26.)

  National's Vice President of Operations testified that "standard procedure" when it could not locate a truck included sending out a bulletin to all members of the American Moving & Storage Association to remain on the look-out for the missing truck. (Id. at ¶ 27.) National, however, did not issue such a bulletin regarding Schwarz's missing shipment. (Id.)

  Although National had never had a driver disappear with one of its shipments before, neither Walker nor National's corporate designee could recall meeting with their supervisees to determine what could be done to recover Schwarz's shipment. (Id. at ¶ 30.) By January 24, 2001, Walker recommended to National that it make a more coordinated effort to try and locate Schwarz's goods. (Id. at ¶ 31.) He testified, however, that National did not follow his recommendation. (Id.) Since at least February 8, 2001, National had identified a Weatherford, Texas address (where Schwarz's belongings ultimately were found) as one of Apex's business addresses. (Id. at ¶ 32.) National, however, did not report this address to police, did not try to contact anyone at that address, and did not ask its agents in Texas to inspect that location. (Id. at ¶¶ 27, 32.)

  Amid these events, National stopped payment on a check to Apex for moving services it had performed prior to Schwarz's move and for which Apex properly was entitled to payment. (Id. at ¶ 33.) After stopping payment, National received a phone call from Bret West, an associate of Apex, who said he knew the location of Schwarz's property, and offered to deliver it if National would reverse the stop-payment order. (Id.) National failed to inform Schwarz about Apex's offer. (Id.)

  On March 12, 2001, Schwarz called National requesting information and assistance regarding her lost shipment. (Id. at ¶ 35.) She told National in a voicemail message that she was "on the brink of a nervous breakdown," and that she felt she was "being tortured by National Van Lines for the third time." (Id.) Schwarz further described feeling that National was treating her as a "non-entity," and told National, "I can't take it anymore." (Id.) Schwarz specifically requested to speak with Walker about what National was doing to locate her belongings. (Id.) Walker did not return the call. (Id.) Providing an apt backdrop for this message, Daniel Johnson, Director of National's Claims Department, testified that, based on his work with three carriers for over 25 years, "[t]he fact that [a shipment] was delivered . . . four months late I know instinctively would be very upsetting to Ms. Schwarz. Moves are probably one of the most stressful things that happen in our lifetime. So, yes, I would instinctively know that she would be upset and be very upset because of that." (Id., Ex. 17 at 148-50.) For his part, National's corporate designee testified that because Schwarz's "household goods were missing, I'm sure she was upset. I would be, too." (Id., Ex. 2 at 98.)

  Schwarz's belongings ultimately turned up in Weatherford, Texas. (Id. at ¶ 36.) At first, National promised to pay for the cost of Schwarz's round-trip airfare to travel to identify and inspect her belongings, but after six months of delay, National offered to pay only 50% of her ticket. (Id. at ¶ 37.) Schwarz rejected the scaled-back offer. (R. 98-1; Def.'s Resp. to Pl.'s SAMF at ¶ 37.) In any event, Schwarz's shipment arrived in Salem, Oregon on April, 22, 2001 — approximately four months after it was originally scheduled to arrive. (R. 92-1; Pl.'s SAMF at ¶ 38.)

  IV. Schwarz's Emotional Reaction to National's Conduct

  Before receiving her goods, Schwarz was "despondent" and "depressed" and "lacked energy [or] interest in anything." (Id. at ¶ 45.) On April 22, 2001, when the shipment arrived, Schwarz was hysterical, and immediately began hyperventilating, shaking, and crying. (Id. at ¶ 46.) In response to this reaction, Schwarz sought medical treatment. (Id.) Even so, Schwarz's depression continued after her belongings arrived. (Id. at ¶ 45.) Indeed, in the months after her property was discovered, Schwarz's sister observed that she became still more distant and disconnected. (Id.)

  Dr. Robert Davies, Schwarz's personal physician, is a licensed physician and board certified in internal medicine who has been trained to treat acute psychotic problems and has treated patients for psychiatric and psychological conditions such as depression and acute anxiety reaction. (Id. at ¶ 47.) On April 24, 2001, Dr. Davies conducted a mental examination of Schwarz and concluded that Schwarz's anxiety reaction might be a precursor to post-traumatic stress syndrome. (Id.) Dr. Davies believes that Schwarz suffered the acute anxiety reaction as a result of the events related to her move by National. (Id.) The parties' experts agree that Schwarz continues to suffer from an "adjustment disorder," although disagreeing, not surprisingly, as to the severity of that disorder. (Id., Ex. 10 at 65-67, Ex. 26 at 166-67, Ex. 27 at 50-52.)

  V. Schwarz's Claim with National On May 16, 2001, Schwarz filed a formal claim with National. (Id. at ¶ 40.) On May 21, National sent the claim to its insurance carrier, Vanliner, Inc. ("Vanliner"), but did not follow up with Vanliner regarding Schwarz's claim. (Id.) Over three months later, on August 23, 2001, Vanliner responded to Schwarz's claim, offering $738.34 to compensate Schwarz for the loss and damage to her property. (Id. at ¶ 41.) This offer did not include Schwarz's claims for delay or other damages. (Id.) National did not review these lingering claims until October 2001. (Id. at ¶ 42.) Thereafter, National offered to settle these claims, deducting freight charges from the amount of reimbursement to which Schwarz otherwise would have been entitled. (Id. at ¶ 43.) Schwarz declined the offer. (Id.) In response, National sued Schwarz in Arizona seeking a declaratory judgment that any claims for damages against National were time-barred. (Id. at ¶ 44.) National further sought an award of attorneys' fees and costs. (Id.) After learning that National had sued her, Schwarz reacted with hysteria, crying, and shaking, and she almost fainted. (Id. at ¶ 48.) Schwarz's hysterical episodes continue to the present. (Id.) Schwarz also suffers from recurring nightmares, twitching in a limb, and eczema, none of which was present prior to her move. (Id.)

  ANALYSIS

  I. Legal Standard

  Summary judgment is proper 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(c). A genuine issue of material fact exists only if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202 (1986). In determining whether a genuine issue of material fact exists, the Court must construe all facts in a light most favorable to the non-moving party and draw all reasonable and justifiable inferences in favor of that party. Id. at 255. The party seeking summary judgment has the burden of establishing the lack of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 2552, 91 L. Ed.2d 265 (1986). The existence of a factual dispute is not sufficient to defeat a summary judgment ...


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