
    TOTAL QUALITY LOGISTICS, LLC, Plaintiff, v. BALANCE TRANSPORTATION, LLC, Defendant
    NO. 2017-CVH-000970
    Court of Common Pleas of Ohio, Clermont County, Ohio.
    Filed April 1, 2019
    David T. Bules and Alexandra R. Forkosh, Calfee Halter & Griswold LLP, 2800 First Financial Center, 255 East Fifth Street, Cincinnati, Ohio 45202, Attorneys for Plaintiff
    John C. Scott and Tracy E. Schwetschenau, Faulker & Tepe, LLP, One West Fourth Street, Ste. 2050, Cincinnati, Ohio 45202, and Robert S. Crowder, Tressler LLP, 1901 Avenue of the Stars, Ste. 450, Los Angeles, California 90067, Attorneys for Defendant
    DECISION AND ENTRY
    Richard P. Ferenc, Judge Before the Court for determination, are cross-motions for summary judgment filed by Plaintiff, Total Quality Logistics, LLC ("TQL") and Defendant, Balance Transportation, LLC. ("Balance"). For the detailed reasons set forth below, the Court grants Balance's motion as to the three claims asserted against it by TQL, and thereby denies TQL's motion as to the same claims. The Court grants TQL's motion as to Balance's counterclaim and thereby denies Balance's motion as to its counterclaim.
    Factual and Procedural Background
    TQL is an interstate freight broker who is in the business of facilitating the transportation of freight It locates motor carriers to pick up and deliver the freight of its customers at times and places specified by them. Balance is an interstate motor carrier. On August 10, 2009, TQL entered into a Broker/Carrier Agreement (the "Agreement") with Balance for the latter to provide freight services to TQL's customers. The Agreement, in part, required Balance, as a carrier, to timely and properly deliver each load tendered to it by TQL.
    In June, 2016, in accord with the Agreement, TQL arranged with Balance to deliver one truckload of granite for its customer C & C North America, Inc. ("C & C"). TQL claims that Balance breached this Agreement by failing to properly deliver the cargo and/or refusing to pay the amounts due TQL. Specifically, TQL alleges that Balance failed to timely and properly deliver the cargo, a load of granite slabs, to the intended destination in good condition as required by the Agreement.
    C & C submitted a cargo claim to TQL for the cost of its damaged cargo in the amount of $ 30,641.11. TQL paid that amount to C & C. In exchange, C & C's released and assigned its claim against Balance to TQL. Under an offset provision of the Agreement, TQL applied an open invoice due Balance, $ 1,900, as partial payment of the C & C claimed loss. This offset reduced TQL's claim to $ 28,741.11. TQL seeks judgment in this amount, with interest, attorney's fees, expenses, and costs.
    TQL's complaint, filed August 7, 2017, alleges the following: Count I, recovery in accord with the Carmack Amendment; Count II, Breach of Contract; and Count III, Breach of Bailment Duty. In its counterclaim, filed October 6, 2017, Balance seeks recovery of the $ 1,900 open invoice, alleging it was misappropriated by TQL as partial payment for C & C's claimed loss.
    Both parties now seek summary judgment on their respective claims and counterclaim. (Individually, referred to as "TQL MSJ" and "Balance MSJ" and collectively referred to as "the Motions").
    Summary Judgment Standard
    Summary judgment is proper when: (1) no genuine issue of material fact remains to be litigated; (2) the moving party is entitled to judgment as a matter of law, and (3) reasonable minds can come to but one conclusion, and that conclusion is adverse to the nonmoving party, said party being entitled to have the evidence construed most strongly in its favor.
    Ward v. Graue , 12th Dist., 2013-Ohio-1107, 987 N.E.2d 760, ¶¶ 10-11.
    The party moving for summary judgment bears the burden of showing that there is no genuine issue of material fact and that he is entitled to judgment as a matter of law. Id. at ¶ 11, citing, Dresher v. Burt , 75 Ohio St.3d 280, 293, 662 N.E.2d 264 (1996).
    Ohio law further requires that when the moving party has met its burden under Dresher , the nonmoving party may not rest upon the mere allegations of his or her pleadings, but the response, by affidavit or otherwise, must set forth specific facts showing the existence of a genuine triable issue. Mootispaw v. Eckstein , 76 Ohio St.3d 383, 385, 667 N.E.2d 1197 (1996).
    The following evidentiary materials are properly before the Court for consideration pursuant to Civ. R. 56(C) : i) the affidavit of TQL's Risk Manager, Marc Bostwick, executed February 13, 2019; ii) Marc Bostwick's deposition of September 5, 2018; iii) Amber Simons' deposition of January 28, 2019; iv) Adrian Bernal's deposition of August 30, 2018; and v) Jose Bernal, Sr.'s deposition of August 30, 2018.
    The Motions
    A. TQL MSJ
    TQL's first count asserts it is entitled to judgment under the Carmack Amendment, 49 U.S.C. § 14706. The sub-section applicable here is (a)(1), which, in pertinent part reads as follows:
    [a] carrier providing transportation or service ... shall issue a receipt or bill of lading for property it receives for transportation under this part That carrier and any other carrier that delivers the property and is providing transportation or service ... are liable to the person entitled to recover under the receipt or bill of lading. The liability imposed under this paragraph is for the actual loss or injury to the property caused by (A) the receiving carrier, (B) the delivering carrier, or (C) another carrier over whose line or route the property is transported in the United States ....
    In TQL v. Red Chamber Co. , 12th Dist., 2017-Ohio-4369, 92 N.E.3d 62, at ¶ 11, the court held:
    Accordingly, the Carmack Amendment creates a federal statutory remedy on a bill of lading against both the originating and destination carrier. To assert a prima facie case pursuant to the Carmack Amendment, one must demonstrate (1) delivery to the carrier in good condition, (2) delivery failure or arrival in damaged condition, and (3) the amount of damages caused by the loss. Camar Corp. v. Preston Trucking Co. , 221 F.3d 271, 274 (1st Cir. 2000).
    Of the evidentiary materials before the Court identified above, it is clear that the only evidence relative to the material events giving rise to this litigation is found in the deposition testimony of Adrian Bernal.
    Adrian was employed as a truck driver for Balance and delivered the cargo at issue on its behalf. He picked up fee cargo at La Porte, Texas and delivered it to Sun City Granite ("Sun City") in El Paso, Texas. After the shipper loaded the cargo on Balance's flatbed trailer, Adrian strapped the load and signed the bill of lading acknowledging the carrier's, Balance, receipt of the cargo in good condition. Balance does not dispute the fact that the cargo was in good condition upon its receipt in La Porte. Adrian T 18-22. Therefore, TQL has satisfied the first factor of Red Chamber.
    TQL's satisfaction of Red Chamber's second factor, delivery failure or arrival in damaged condition, requires closer scrutiny of the credible evidence before the Court at this juncture.
    Adrian transported the cargo from La Porte to Sun City in El Paso. When he arrived, he parked his truck on the street in front of Sun City's building. He did not immediately unstrap the cargo upon his arrival at Sun City. Rather, he immediately went to Sun City's office. There, he met a lady employed by Sun City. (the "Sun City lady"). He presented the bill of lading to her, she signed and dated it June 17, 2016, and gave it back to him. The Sun City lady signing fee bill of lading did not write anything else on the bill of lading at that time. Adrian T. at 48-49, 70-71. Adrian then sent a photocopy of this bill of lading to Balance reflecting the acceptance by the Sun City lady. Id. at 80. The Sun City lady then instructed Adrian to move his truck forward a short distance from where he had parked and that "they were going to unload me." Id. at 69.
    Adrian returned to his truck, moved it forward a few feet as instructed, parked it and unstrapped the entire load from the flatbed trailer. He placed all of the straps inside his truck. For a while, he observed Sun City's employees unloading the granite then returned to his truck's cab. He remained there for a few minutes when he heard a loud noise. He stepped out of the cab and looked back toward his trailer. He saw slabs toward the front of the trailer falling off. These, in turn, caused slabs toward the rear of the trailer to begin falling too. In addition, he also saw a forklift, being used by a Sun City's employee, backing away from his trailer holding an unbroken slab. Id. At 32-38.
    
      
      Adrian Bernal will be referenced hereafter as "Adrian." References to his deposition will be "Adrian T at 1" etc.
    
    
      
      This version of the bill of lading appears at Ex. 8, the third page (Bal0025), of the deposition of Jose Bernal, Sr.
    
   After the dust settled, literally, the Sun City lady asked Adrian to return the bill of lading to her. Adrian testified that the Sun City lady tried to alter the bill of lading she had signed immediately upon his arrival and presentment to her. He was uncertain of the means she used to try to alter this bill. Id. at 72-74.

After the Sun City lady made those changes to the front of the bill of lading, Adrian made a written statement on the reverse, in Spanish. The Sun City lady then wrote her own statement below his, also in Spanish. [Ex. 8 to Jose Bernal, Sr.'s deposition, sixth page (Bal0028) ]

There exists a third version of the bill of lading. Jose Bernal, Sr. ("Jose") is the owner of Balance. He testified that it is his company's policy to require its drivers to send a picture of the bill of lading to Balance's office once the consignee of the shipment has signed it, verifying the shipment has been received by them. According to Jose, a copy of the bill of lading is then sent to Balance's factoring company, Sierra Finance, which places the stamp on the bill of lading stating: "Balance Transportation." The various versions of the bill of lading all contain the signature of the Sun City lady.

The signature of the Sun City lady on the bill of lading is critical to the resolution of the second factor of Red Chamber. There is no credible evidence before the Court to controvert Adrian's testimony that the Sun City lady signed the bill of lading immediately upon his arrival at its location and his presentment to her. This signature, acknowledging acceptance of the cargo, was executed prior to the unstrapping of the cargo by Adrian and the unloading of it by Sun City.

The receipt of delivery by the consignee, Sun City, is contemplated by the Agreement Paragraph 8 of the Agreement provides, in part:

Unless otherwise agreed in writing, CARRIER shall become fully responsible/liable for the height when it takes/receives possession thereof, and the trailer(s) is loaded, regardless of whether a bill of lading has been issued, and/or signed, and/or delivered to CARRIER, and which responsibility/liability shall continue until delivery of the shipment to the consignee and the consignee signs the bill of lading or delivery receipt. (Emphasis added.)

In TQL v. Dadir, LLC , Case No. 2016-CVH-0705, (Jan. 10, 2018), this Court found a similarly worded version of paragraph 8 of the Agreement here, imposed responsibility for a damaged shipment on the carrier up to the time the consignee signs the bill of lading , regardless of the fact that damages to the cargo may have been caused by the consignee. (Emphasis added.)

Dadir involved damage to a load of spinach and arugula caused by its exposure to temperatures outside the range as specified in the bill of lading. When the consignee signed the bill of lading it noted that its receipt was under protest due to warm temperatures. There was evidence that the consignee itself had exposed the load to higher temperatures for approximately four hours before taking temperature readings and signing the bill of lading rejecting the shipment This Court held that paragraph 8 clearly placed the risk of loss upon the carrier until delivery of the shipment to the consignee and the consignee signs the bill of lading or delivery receipt . (Emphasis added.) This last clause requiring the consignee to sign the bill of lading or delivery receipt is a condition precedent to relieving the carrier of its liability under paragraph 8.

The same result occurs here, with paragraph 8 inuring to the benefit of the carrier, Balance. When Sun City signed the bill of lading, delivery was completed and Balance's responsibility/liability under the Agreement ended. This acceptance of delivery by Sun City is satisfactory proof that there was no failure of delivery and the cargo did not arrive in a damaged condition. Even if TQL was able to prove that some action of Balance was responsible for the damage to the cargo, the risk of loss for any cargo damage had shifted from Balance to the consignee by the unambiguous terms of the Agreement. Therefore, TQL cannot satisfy the second factor required by Red Chamber, supra.

Nevertheless, TQL argues that even though Sun City had signed the bill of lading, its signing did not mark the end of Balance's responsibility for the cargo loss. TQL asserts that delivery was not completed until after the bill of lading was first signed by the Sun City lady. It argues that when the bill of lading was first signed by the Sun City lady, Adrian still had to move the truck, re-park it, and unstrap the granite. Assuming those tasks had to be completed before delivery was complete, the uncontroverted evidence is those tasks were, in fact, completed before damage occurred to the cargo after Sun City started to unload it More importantly, the unambiguous language of paragraph 8 of the Agreement does not require such an event or series of events, to occur before the risk of loss is shifted to the consignee.

TQL relies upon Merchants Terminal Corp. v. L & O Transport, Inc. , U.S. Dist. Ct. D. Maryland, No. SAG-09-cv-2065, 2012 WL 1416631 (Apr. 20, 2012), to support it claim that Balance had not completed its delivery before the damage occurred. In Merchants , the carrier was transporting a truckload of salmon from a customer's Delaware warehouse to its facility in Baltimore. The shipment arrived after the Baltimore location had closed. The customer permitted the carrier to make after-hours drops. It provided the carrier with a key to a chain lock that secured the gate of a 7'-8' high chain link fence enclosure. The carrier was to position its trailer against a loading dock so there was no way the trailer doors could be opened. The carrier was also to secure its trailer with a kingpin lock, a devise that prevents another rig from hooking up to the trailer and pulling it away. The kingpin lock was secured and unsecured with a key that remained with the carrier. Id. at *4-5. The carrier followed the directions but, nonetheless, someone cut the lock to the gate and stole the trailer. Id. at *6.

The carrier argued its delivery had been completed before the theft so it was not liable under Carmack. Id. at *7. The district court disagreed. It found the carrier, L & O, had not surrendered the goods to the customer's possession, custody and control because the trailer was secured by a kingpin lock for which only the carrier had the key. Id. at *10. In addition, the customer accepted delivery of shipments only after breaking the seal on the shipment, inspecting the goods and comparing the driver's paperwork with its own. Id. at* 11. Just dropping the container at the customer's loading dock was not enough to constitute delivery because possession, custody and control of the goods were not transferred to the customer. Id.

The facts here are quite different from those in Merchants . Here, Sun City signed the bill of lading accepting delivery of the cargo. Immediately upon signing, Sun City evidenced control of the cargo by directing Adrian where to move his truck, even if it was not a significant distance. There is no evidence to contradict Adrian's testimony that it is customary for the shipper's driver to unstrap a delivered load. Adrian T. at 58. This act does not evidence Balance still was in control of the load. Someone had to unstrap the cargo to allow it to be unloaded. Adrian simply followed his customary practice, because Sun City was unquestionably taking control of the cargo to unload it. Sun City further evidences control of its cargo by having its employee begin to unload it without any direction or supervision of Adrian.

Accordingly, as to Count 1, Balance's MSJ is granted and TQL's is denied.

In its second count, TQL argues that it is proper for parties to expressly adopt the Carmack Amendment into a broker/carrier agreement It contends that the parties have done so by operation of paragraph 8 of the Agreement at its fourth sub-paragraph. Therefore, "TQL can establish Defendant's liability for breaching the Agreement by establishing a prima facie case under the Carmack Amendment." (TQL* MSJ, p 12.) The Court disagrees.

This Court has already found, under Count 1, that TQL cannot establish a prima facie case under Carmack because of its inability to prove delivery failure or arrival in a damaged condition. Without a prima facie Carmack case, TQL's breach of contract claim fails. Accordingly, as to Count 2, TQL's MSJ is denied and Balance's MSJ is granted.

TQL's third count contends, that among the claims assigned to it by C & C by operation of the Release and Assignment if has a claim for bailment against Balance. As TQL properly states, to establish a prima facie case for breach of a bailment duty, one of the elements it must prove is that the bailed property was redelivered in a damaged condition at the termination of the bailment Again, the Court has determined that TQL establish that the cargo was damaged upon delivery. Accordingly, as to Count 3, TQL's MSJ is denied and Balance's MSJ is granted.

Balance's MSJ

In its counterclaim, Balance seeks judgment against TQL for $ 1,900. This is the amount of Balance's open invoice that TQL applied to the amount it alleged Balance owed it due to the cargo loss. Balance claims the amount was misappropriated by TQL. There exists no genuine issue of material fact regarding TQL's conduct. In its complaint, TQL concedes that in arriving at the net amount Balance owed it for the damaged cargo, it deducted Balance's open invoice of $ 1,900 it owed to Balance.

The Agreement, at paragraph 8, subparagraph 4, reads: "BROKER reserves the right to offset any claim(s) with pending invoices." Therefore, TQL's actions were not wrongful as Balance alleges. In computing the amount of its alleged claim against Balance, TQL acknowledged that the amount of Balance's liability was subject to a $ 1,900 credit. Now that TQL's claim has been dismissed, any issue concerning the credit has become moot. Balance's $ 1,900 open invoice remains open and due. Accordingly, TQLs MSJ as to Balance's counterclaim is granted and Balance's MSJ is denied.

On September 7, 2018, the Court issued a scheduling order establishing a trial date and other deadlines to file a variety of motions. The Parties have also filed a number of motions in limine in accord with this order. As the Court has determined the summary judgment motions, these motions are rendered moot.

Based upon the above analysis;

IT IS HEREBY ORDERED that Balance is granted summary judgment against TQL as to all three claims asserted by TQL and TQL's motion summary judgment as to its three claims against Balance is denied.

IT IS FURTHER ORDERED that TQL's motion for summary judgment as to Balance's counterclaim is granted and Balance's motion for summary judgment as to its counterclaim is denied.

IT IS FURTHER ORDERED that the pending motions in limine filed by the parties are denied as befog moot.

IT IS FURTHER ORDERED that this Decision and Entry shall constitute the final entry in this matter and, as all issues have been resolved, it is a final appealable order and there is no just cause for delay. Further, as Balance is the prevailing party in this matter, costs are taxed to TQL. 
      
      The alteration of the original bill of lading by the Sun City lady contained the following: "Friday at 3:30 all slabs are broke. Fell of (sic) truck after driver unstrapped." [Ex. 8 to Jose Bernal's deposition, fifth page (Bal0027) ]
     
      
      Adrian translated his and the Sun City lady's handwritten comments on the bill of lading at p. 82-84. Adrian's comments were defending his actions and the Sun City lady's were shifting the fault of the cargo falling to Adrian.
     
      
      A copy of the bill of lading sent to Balance by Adrian at 3:05 p.m. on 6/17/2016, is at the fourth page, (Bal0026), of Ex. 8 of Jose's deposition
     
      
      A copy of this decision is attached.
     