Mac R. Behnke Rentals got into an accident while transporting a shipment for Denso, damaging some of the cargo, and a court said the dispute would have to be resolved by a “fact finder” in trial and not in a summary judgement proceeding.
Denso, a Japanese motor vehicle component manufacturer with its American headquarters in Southfield, Mich., contracted with Mac R. Behnke Rentals to transport blower motors to be used in truck defrost systems from an ASMO manufacturing plant in North Carolina to a Denso facility in Michigan.
The shipment was insured with Mitsui Sumitomo, which filed an insurance subrogation action seeking recovery for a loss of $114,473.66 by Denso. The motors were packaged in cardboard cartons and Behnke supplied a trailer equipped with air ride suspension for the transport in order to minimize vibration and shock.
But while traveling from North Carolina to Michigan, Behnke’s truck veered off a road, hit a concrete embankment and entered a field, where it stopped.
The trailer with the shipment was hauled to a shop in Ohio for repair. Behnke dispatched a separate trailer to Ohio and had the cartons of motors transloaded into a new trailer and brought to Denso’s facility in Michigan. Within days of delivery, Denso observed damage to some of the shipment and contacted Behnke.
While 2,912 motors were placed into production, both parties agreed that Denso should isolate any part of the shipment that had not entered production. Denso and Behnke agreed the trucker would take the blower motors to its facility for inspection and storage.
Mitsui, standing in Denso’s shoes, alleged a claim under the Carmack Amendment and bailment. Behnke made a motion for summary judgment. Mitsui filed a response and cross-motion for summary judgment.
The court denied Behnke’s motion for summary judgment and granted Mitsui’s cross motion on the Carmack Amendment claim. The court did grant Behnke’s bailment claim when Mitsui failed to respond on that issue. (Mitsui Sumitomo Insurance Company of America v. Mac R Behnke Rentals, Ltd. U.S. District Court, Western Michigan. 15-cv-798. Oct. 20.)
The court explained that in order for a plaintiff to establish a prima facie Carmack case, it must show three elements:
• The initial or “receiving” carrier received the cargo in good condition;
• The cargo was lost or damaged;
• And the amount of actual loss or damages.
If the plaintiff can show those elements, the burden shifts to the carrier. To win, a carrier must show both that it was not negligent and that the damage was instead due to one of five excepted causes: (1) an act of God; (2) an act of terrorism or war; (3) an act of the shipper itself; (4) an act of public authority; or (5) the inherent vice or nature of the goods.
Behnke argued that Mitsui had not shown that its goods were undamaged when it received them, and that Mitsui had failed to identify any witness that could testify on this issue. But the court said Benke’s argument “ignores the record evidence, all of which establishes, either directly or by reasonable inference, that the goods were undamaged when received by the defendant.”
According to the court, a declaration by Denso’s director of quality assurance detailed the manufacturer’s packaging and handling procedures to ensure that the blower motors are free from defects and protected from damage prior to installation in vehicles. The declaration expressly stated ASMO inspected the cargo before packaging the motors for transportation to ensure adherence to those quality standards, and indicated ASMO delivered the cargo to Behnke in good order and condition and that no party identified any damage to the cargo or packaging in which the motors were carried.
Behnke accepted the cargo without noting any exceptions to the condition of the motors or packaging, and the court said the company’s “argument to the contrary is based on no discernable foundation.”
The court also said Mitsui presented evidence to establish elements two and three of its Carmack Amendment claim—that the cargo was lost or damaged and the amount of actual loss or damages. But Behnke argued Mitsui had not demonstrated a legitimate loss because the “actual value” of the motors at delivery was the same as it was at the time of shipment. Denso’s refusal to warrant the goods created an injury not based on physical damages, but “based on pure speculation that all of the motors must have been damaged in transit because some of the motors were damaged,” the company said.
Behnke relied on expert inspection by LWG Consulting, which found only 32 motors with actual physical damage. LWG indicated additional testing, as necessary, should be performed by the motor manufacturer, which would have testing stations already in place. Behnke said there was no evidence that such additional testing was performed.
Mitsui presented evidence “that the only means of testing the entirety of the cargo to ensure it was free from defect would require dismantling of the blower motors, i.e., destruction. The cargo was accordingly ultimately destroyed.” Mitsui’s expert also contended LWG’s report was incorrect and misleading.
“The parties’ expert opinions are at odds,” the court said. “If the evidence plaintiff proffers on summary judgment, and most particularly, witness testimony, proves to be credible, the court has little doubt that plaintiff will succeed on its claim for damages based on the alleged loss of $114,473.66.”
But because Behnke presented evidence that only 32 motors were damaged, the court said the dispute would have to be resolved by a “fact finder” in a trial and not in a summary judgment proceeding.
