Top Worldwide LLC v. Midwest Molding Inc
330366
| Mich. Ct. App. | Apr 20, 2017Background
- Plaintiff (a freight broker) arranged transport for parts G & B bought from Midwest, paid carriers, and billed G & B for ~35 shipments after G & B went out of business.
- Plaintiff obtained a default judgment against G & B and sued Midwest to recover unpaid freight charges that carriers assigned to plaintiff.
- Midwest prepared and signed the bills of lading for each shipment and listed itself as "shipper" on those documents; bills were marked to bill G & B "collect."
- Midwest argued it was not liable because the parties’ course of dealing allocated payment responsibility to G & B and because bills of lading should not control liability.
- The trial court granted plaintiff’s summary disposition; Michigan Court of Appeals affirmed, holding bills of lading are contracts that create a presumption of shipper liability and Midwest failed to rebut that presumption.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are the bills of lading enforceable contracts that can create shipper liability? | Bills of lading are contracts; they bind the shipper and carriers and support plaintiff’s contract claim. | Bills of lading were mere receipts/shipping manifests and not controlling legal instruments after abolition of filed-rate doctrine. | Held: Bills of lading are contracts under common-law principles and are enforceable; ICCTA/abolition of filed-rate doctrine does not negate state-law contract claims. |
| Does listing Midwest as "shipper" on the bill of lading make Midwest presumptively liable for freight? | Yes; shipper-consignor is presumptively liable for freight charges identified on the bill of lading. | No; parties’ course of dealing and billing to G & B show G & B was intended to be solely liable. | Held: Midwest, named as shipper, is presumptively liable; Midwest failed to present clear evidence to rebut presumption. |
| Can the parties’ course of dealing (G & B paid plaintiff routinely) rebut shipper liability? | Plaintiff: course of dealing does not clearly show carrier agreed to release Midwest; payment history alone insufficient. | Midwest: routine payments by G & B and operational control by G & B show intent to place liability on G & B. | Held: Course of dealing did not clearly indicate the carrier intended to release Midwest; payment practice alone insufficient to rebut presumption. |
| Was the carriers’ assignment of collection rights to plaintiff illusory or insufficient to recover broker commissions? | Plaintiff: broker–carrier agreements assign the carrier’s right to collect to plaintiff once plaintiff pays the carrier. | Midwest: assignment was illusory; damages awarded include broker commissions beyond carriers’ rights. | Held: Court did not reach full merits of this late-raised argument; on the record, the assignment language was effective and not illusory; Midwest abandoned/failed to adequately preserve the damages argument. |
Key Cases Cited
- Norfolk S. Ry. Co. v. Kirby, 543 U.S. 14 (bills of lading serve as receipt, state terms of carriage, and evidence of contract)
- Southern Pac. Transp. Co. v. Commercial Metals Co., 456 U.S. 336 (bill of lading is basic transportation contract; shipper presumptively liable)
- Louisville & Nashville R.R. Co. v. Central Iron & Coal Co., 265 U.S. 59 (shipper presumptively liable unless carrier knew shipper not acting on its own behalf and intended liability shift)
- CSX Transp., Inc. v. Meserole St. Recycling, 618 F. Supp. 2d 753 (presumption of shipper liability; must show carrier agreed to release shipper to rebut)
- Bestway Sys., Inc. v. Gulf Forge Co., 100 F.3d 31 (preparer/signatory of bill of lading who failed to sign nonrecourse clause held liable as consignor)
- Thunderbird Motor Freight Lines v. Seaman Timber Co., 734 F.2d 630 (seller not liable where it was not the consignor and had no role in carrier contracting)