190 F. Supp.2d 91 (2001) | Cited 0 times | D. Massachusetts | September 11, 2001


The plaintiff, Great Northern Insurance Company ("GNIC"), brings thisaction to recover damages against McCollister's Moving & Storage, Inc.("McCollister's"). GNIC seeks these damages to cover losses that GNIC'sinsured, Orbotech, Inc. ("Orbotech") sustained after McCollister'sdisposed of certain computer equipment without Orbotech's permission.

The defendant now moves for summary judgment on the grounds that (1)Orbotech's and the plaintiff's claims are preempted, as a matter of law,by the Carmack Amendment to the Interstate Commerce Act of 1887,49 U.S.C. § 14706; and (2) that plaintiff failed to file suit withintwo-years-and-one-day of McCollister's written disallowance of Orbotech'sclaim pursuant to the bill of lading. I agree with both of thesearguments. Thus for the reasons set forth below, defendant's Motion forSummary Judgment [docket entry # 10] is GRANTED and this action is herebyDISMISSED.


On December 23, 1996, Orbotech entered into an agreement withMcCollister's for the transportation and temporary storage of Orbotech'sVision 206 Computer Circuitry Board Inspection Unit ("V206").McCollister's issued a uniform bill of lading, which stated the V206 wasreceived subject to McCollister's rules, regulations, rates, andcharges. Specifically, the bill of lading stated,

As a condition precedent to recovery, a claim for any loss or damage, injury or delay, must be filed in writing with carrier within nine (9) months after delivery to consignee as shown on face hereof, or in case of failure to make delivery, then within (9) months after reasonable time for delivery has elapsed; and suit must be instituted against carrier within two (2) years and one (1) day from the date when notice is given by carrier to the claimant that carrier has disallowed the claim or any part or parts thereof specified in notice. Where a claim is not filed or suit is not instituted thereon in accordance with the foregoing provisions, carrier shall not be liable and such claim will not be paid.

McCollister's subsequently received the V206 from another shipper inStaffordville, Connecticut, and shipped the equipment to its facility inNorth Reading, Massachusetts, for storage in its warehouse.

In May 1997, Orbotech discovered that McCollister's disposed of theV206 without Orbotech's permission. On May 8, 1997, Orbotech submitted atimely claim to McCollister's via a letter facsimile requesting the valueof the scrapped V206.

On May 9, 1997, McCollister's vice president, Eric Isenberger("Isenberger"), denied Orbotech's claim by letter, stating thatMcCollister's had scrapped the V206 at the direction of Orbotech.McCollister's letter stated:

Based on [the above] facts we must deny your claim of $220,000 to recoup the loss of this machine. I would be happy to discuss this matter with anyone at your office, or if you choose, interview any of the people I have mentioned. I too value the long relationship [between Orbotech and McCollister's].

Isenberger then sent a second letter on May 19, 1997, which stated thatthe scrapping of the V206:

[I]s . . . unfortunate for both our companies [sic] perspectives. This was definitely a case of human error, although we haven't been able to fully determine the guilty party. I do not believe it is in anyone's best interest to point fingers at this point, as what's done is done. . . . We have spoken with our insurance carrier, Vanliner Insurance, regarding the missing piece. As the shipment was delivered to storage, the basic storage coverage would be all we had in place. The maximum liability on storage shipments is limited to sixty (60) cents per pound. In the case of this shipment we are talking about 6,358 pounds or $3,814.80.

Pursuant to an agreement between Orbotech and GNIC, GNIC paid Orbotechfor the scrapped V206 and inherited Orbotech's claims and demands againstMcCollister's. GNIC filed suit against McCollister's in the MassachusettsSuperior Court on May 25, 1999. Subsequently, on July 9, 2000, pursuantto 28 U.S.C. § 1331, 1337(a), and 1441, McCollister's removed thecase to this Court.


In ruling on a summary judgment motion, the Court must view the recordand draw inferences in a light most favorable to the non-moving party.Pignons S.A. de Mecanique de Precision v. Polaroid Corp.,657 F.2d 482, 486 (1st Cir. 1981). Fed.R.Civ.P. 56(c) "mandates theentry of summary judgment, after adequate time for discovery and uponmotion, against a party who fails to make a showing sufficient toestablish the existence of an element essential to that party's case, andon which that party will bear the burden of proof at trial." CelotexCorp. v. Catrett, 477 U.S. 317, 322-23 (1986). In other words, the issueis simply whether there is any evidence upon which a jury could properlyproceed to find a verdict in the plaintiff's favor. Caputo v. BostonEdison Co., 924 F.2d 11, 13 (1st Cir. 1991) (citing De Arteaga v. PallUltrafine Filtration Corp., 862 F.2d 940, 941 (1st Cir. 1988)).

"The Carmack Amendment to the Interstate Commerce Act of 1887 governsthe liability of common carriers for loss of damage to goods shipped ortransported in interstate commerce." Calka v. North American Van Lines,Inc., 2001 U.S. Dist. Lexis 5157 *4 (S.D.N.Y.) (citations omitted).Essentially, Congress intended the Carmack Amendment "to create anational uniform policy regarding the liability of carriers under a billof lading for goods lost or damaged in shipment." Analog Devices v.Allied Van Lines, Inc., 1996 U.S. Dist. LEXIS 5649 *6 (D.Mass. 1996)citing Adams Express Co. v. Croninger, 226 U.S. 491,505 (1913).

GNIC's complaint alleges four counts against McCollister's, includingbreach of contract, negligence, breach of the duty of good faith and fairdealing, and violation of Mass.Gen.Laws. ch. 93A. The First Circuit hasheld that "all state laws that impose liability on carriers based on theloss or damage of shipped goods are preempted." Rini v. United Van LinesInc., 104 F.3d 502, 506 (1st Cir. 1997). Here, it is undisputed that thedamage to the V206 occurred while in McCollister's custody after it hadtraveled interstate from Connecticut to Massachusetts.1

Rini specified that "[p]reempted state law claims . . . include allliability stemming from damage or loss of goods, liability stemming fromthe claims process, and liability related to the payment of claims."Rini, 104 F.3d at 506 (emphasis added). The dispute in the case at handdeals specifically with the payment of claims. If any remedy is availableto the plaintiff, therefore, it is derived from the Carmack Amendment,49 U.S.C. § 14706.

The Carmack Amendment requires common carriers, like McCollister's, toissue a receipt or bill of lading for goods it receives fortransportation. 49 U.S.C. § 14706(a)(1). Such a receipt or bill oflading allows anyone bound by the terms of the agreement to sue thecommon carrier for loss or damage of the goods. Id.

The Carmack Amendment to the ICC Termination Act of 1995,49 U.S.C. § 14706(e)(1), specifies:

A carrier may not provide by rule, contract, or otherwise, a period of less than 9 months for filing a claim against it under this section and a period of less than 2 years for bringing a civil action under this section. The period for bringing a civil action is computed from the date the carrier gives a person written notice that the carrier has disallowed any part of the claim specified in the notice.

In the case before me, it is undisputed that the V206 was shipped ininterstate commerce and that McCollister's issued a billof lading to Orbotech. The bill of lading issued by McCollister's statedthat Orbotech would have ninety days to file a claim and two years andone day to file suit if McCollister's denied the claim. Orbotech clearlymet the first requirement by making a claim on May 8, 1997. McCollister'salleges that Orbotech failed to meet the second requirement to file suitwithin two years and one day from the time the claim was disallowed onMay 9, 1997, because the suit was not filed until May 25, 1999.2

The real issue here is whether the May 9, 1997, letter fromMcCollister's sufficiently communicated a disallowance of Orbotech'sclaim to trigger the limitations period specified in the bill of ladingand, in turn, render this action untimely under the parties' bill oflading.

"A carrier's notice of disallowance [of a claim] must be clear, final,and unequivocal." Burtman Iron Works v. Conway Transportation Services,97 F. Supp.2d 122 (D.Mass. 2000) quoting Combustion Engineering, Inc. v.Consolidated Rail Corp., 741 F.2d 533, 536 (2d Cir. 1984). Here,McCollister's argues that its May 9, 1997 letter, which stated "based onthese facts we must deny your claim of $220,000 to recoup the loss ofthis machine" was sufficiently clear, final, and unequivocal as a matterof law to disallow GNIC's claim.

GNIC seeks to avoid the Carmack Amendment by arguing that McCollister'sMay 9, 1997, denial of its claim was nothing more than a qualifieddisallowance. In support of this argument, GNIC relies on CombustionEngineering, Inc. v. Consolidated Rail Corp., 741 F.2d 533 (2d Cir.1984).

Unfortunately for GNIC, however, the facts of Combustion Engineeringare very different from those here. First, the letter notifyingdisallowance of the claim in Combustion Engineering indicated that (1)there was insufficient documentation to process the claim and requestedfurther information and (2) that the plaintiff's claim "as presented" wasdisallowed. Id. at 537. Second, in the twenty-one months following thedefendant's supposed disallowance of the claim in CombustionEngineering, the plaintiff received several status reports categorizingthe claim as "active." Id. at 538.

The situation here is quite different. First, even though McCollister'sstated that insurance would cover a certain amount of damages for theV206 in the second letter dated May 19, 1997,3 there was no requestfor additional information or documentation regarding the plaintiff'sclaim. Second, after receiving a letter on May 9, 1997, which stated"[b]ased on these facts we must deny your claim . . ." Orbotech receivedthe May 19, 1997, letter, which never suggested that the plaintiff's casewas still open, that the case would be reopened, or was still "active" inany way. This second letter cannot be reasonably interpreted to indicatethat the investigation was ongoing or that more information was desired.

If anything, the subsequent correspondence via the second letterreflects McCollister's' desire to maintain a good business relationshipwith Orbotech:

Our goal at McCollister's is to continue that relationship and insure we deliver quality service on every order we handle. Along those lines, we have instituted a policy regarding any items we are asked to scrap. Effective immediately, nothing will be disposed of without written authorization from you or your designated staff. This authorization will include order number (ours and yours), description of the piece and serial number. Hopefully, this alone, should eliminate the problem that occurred with the V206.

Thus, the May 19, 1997, letter suggests nothing more than McCollister's'desire to stay on good terms with Orbotech by preventing similar problemsfrom arising in the future.

In short, when McCollister's stated that "[it] must deny [Orbotech's]claim of $220,000 to recoup the loss of [the] machine," the claim wasclearly, finally, and unequivocally disallowed. Because I find that thedisallowance of Orbotech's claim was clear, final, and unequivocal,plaintiff's claim against McCollister's is untimely.4


Accordingly, for the reasons stated above, the defendant's Motion forSummary Judgment [docket entry #10] is GRANTED and Plaintiff's action isDISMISSED.


1. The Carmack Amendment defines "transportation" under49 U.S.C. § 13102(19) to include warehouses and storage. Therefore, Ifind that the case at hand falls within the scope of coverage under theCarmack Amendment.

2. The two year and one day suit filing limitation is fairlyestablished as the standard in the trucking industry. See Swift Textilesv. Watkins Motor Lines, 799 F.2d 697, 703-04 (11th Cir. 1986) Reh'ddenied, 804 F.2d 681, cert. denied, 480 U.S. 935 (1986).

3. Further, I note that this second letter, too, was sent more than twoyears and a day before GNIC filed this action.

4. No evidence is provided to show that Orbotech or GNIC could not— for whatever reason — meet the deadline to file suit.Neither Orbotech nor GNIC suggested any extenuating circumstance whichwould have prevented the filing of the suit.

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