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Certain Lloyds Underwriters Subscribing To Policy Number v. Baldwin Distribution Services

December 2, 2011

CERTAIN LLOYDS UNDERWRITERS SUBSCRIBING TO POLICY NUMBER MC-13159 PLAINTIFF,
v.
BALDWIN DISTRIBUTION SERVICES, LTD., A CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Otis D. Wright II United States District Judge

I. INTRODUCTION

ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT [15] AND DENYING DEFENDANT'S CROSS MOTION [13]

This subrogation action arises from damage to a cargo shipment during interstate transit. Certain Lloyds Underwriters Subscribing to Policy Number MC-13159 ("Plaintiff") insured a cargo of wireless routers shipped by its insured, Netgear, Inc. ("Netgear") from California to Ohio. Defendant Baldwin Distribution Services, LTD. ("Baldwin"), sub-contracted by Federal Express, Inc. ("FedEx") to deliver the routers, damaged them during transit. Plaintiff paid Netgear $218,224.78 to cover the loss and, by such payment, became subrogated to the rights of Netgear.

Baldwin concedes liability for the loss, but contends its liability is limited to $5 per pound, or $33,435 in total. Plaintiff disagrees and, consequently, the parties have filed cross motions for summary judgment. (Docket No. 13 [Baldwin's]; Docket No. 16 [Plaintiff's].) The Court considers both motions in tandem.

II. FACTS

Netgear owned, and Plaintiff insured, a shipment of wireless routers ("Cargo"). (Joint Stipulation of Undisputed Facts "SUF" 1, 2). On or around June 11, 2010, Netgear contracted FedEx to ship the Cargo by truck from City of Industry, California, to a Best Buy Store in Findlay, Ohio. (SUF 3.) FedEx prepared Bill of Lading No. 06064490004677375 for this shipment. (SUF 4; Exh. A.) This was the only Bill of Lading issued for the shipment. (SUF 17.) FedEx sub-contracted carriage of the Cargo to Defendant Baldwin. (SUF 8) ("Baldwin did not invoice Netgear for any of the transportation services rendered by Baldwin, and Netgear did not directly pay Baldwin for any of the transportation services rendered.").

"The contract between Baldwin and FedEx under which Baldwin provided transportation services for the [Cargo] is entitled the Master Transportation Services Agreement [Master Agreement]." (SUF 9; Exh. B.) On June 11, 2010, Baldwin picked up the Cargo in good order and condition and Baldwin's driver signed the FedEx Bill of Lading. (SUF 11, 12.) The Cargo was damaged thereafter "when the Baldwin tractor fell off the roadway and overturned on Interstate 40 in Oklahoma." (SUF 13) ("As a result of the overturn, the [C]argo shifted drastically and both trailers were completely destroyed . . . The routers were a total loss."). Plaintiff obtained a salvage payment for the damaged goods in the amount of $17,933.60. (SUF 15.)

Pursuant to its insurance policy, Plaintiff was obligated, and did indemnify Netgear for this loss. (SUF 16.) Plaintiff paid Netgear the sum of $218,224.78, reflecting the invoice value of the damaged goods, plus freight charges, minus the salvage value received. (Id.) On April 27, 2011, Plaintiff brought the instant action against Baldwin for full recovery of the monies paid to Netgear.

The parties primarily disagree about the application and effect of certain contractual provisions found in the Master Agreement and Bill of Lading, "in conjunction with the operative provisions of the FedEx Tariff incorporated therein ...." (SUF 5.)

The Master Agreement between FedEx and Baldwin, under which Baldwin provided transportation services for the Cargo, provides in relevant part:

Section 8. Claims and Liability Standards. (a) Carrier shall assume all risk of loss and liability in the transportation of any goods for FedEx from the time of Carrier's receipt of such goods from FedEx until proper delivery of the same has been made . . . All liability standards and burdens of proof will be governed by the common law applicable to common carriers and by the provisions of 49 U.S.C. 14706 (the Carmack Amendment).

(b) Carrier shall be liable for the full actual loss incurred, unless FedEx declares a lesser value in writing on a Bill of Lading. The loss shall be calculated on the destination market value, and not on the "depreciated value" of the goods lost or damaged. In any event Carrier's liability shall be limited to a maximum liability of $250,000 per single trailer. (SUF 9, Exh. B.) Other provisions shall be discussed as necessary.

II. DISCUSSION

A. Legal Standard: Summary Judgment Rule 56(c)quires summary judgment for the moving party when the evidence, viewed in the light most favorable to the nonmoving party, shows that there is no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56© The moving party bears the initial burden of establishing the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). That burden may be met by "'showing' -- ...


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