Total Quality Logistics, L.L.C. v. Red Chamber Co.
2017 Ohio 4369
| Ohio Ct. App. | 2017Background
- Red Chamber Co. (RC), a seafood distributor, used Total Quality Logistics (TQL) as a freight broker; the parties operated under a credit agreement requiring carriers to maintain $100,000 cargo insurance per shipment and warning loads over that value would not be tendered without prior written notice.
- In April 2013 TQL brokered transport of a load valued at $186,450; the load was stolen in transit and not recovered. Wells Trucking was the carrier; Wells’ insurer later paid RC $100,000 and RC indemnified Wells against other claims.
- TQL sued RC for breach of the credit agreement, seeking $53,402 for 13 unpaid brokered shipments between April 2 and July 5, 2013; RC counterclaimed alleging TQL breached its obligations (negligence, negligent hiring/supervision) relating to the stolen load.
- TQL moved for summary judgment on its breach claim and on RC’s counterclaims, arguing federal preemption (Carmack Amendment / ICCTA) and that RC could not offset nonpayment with claims arising from the stolen load.
- The trial court granted summary judgment for TQL, finding RC’s state-law counterclaims were preempted by the ICCTA and that TQL proved no genuine issue of material fact on its breach claim; RC appealed.
Issues
| Issue | Plaintiff's Argument (TQL) | Defendant's Argument (RC) | Held |
|---|---|---|---|
| Whether RC’s state-law counterclaims are preempted by federal law | Carmack Amendment / ICCTA preempt state-law claims arising from interstate cargo loss | Court’s sua sponte reliance on ICCTA preemption deprived RC of notice; only Carmack was argued | Court held RC’s claims are expressly preempted by ICCTA; TQL’s briefing gave sufficient notice so no denial of opportunity to respond |
| Whether TQL’s motion deprived RC of meaningful opportunity to respond by relying on a preemption theory not expressly raised | TQL argued federal preemption (cited interrelated Carmack/ICCTA authority) and thus provided notice | RC said TQL only argued Carmack, not express ICCTA preemption, so trial court erred by deciding on ICCTA | Court held TQL’s motion and cited authority put RC on notice; treating Carmack and ICCTA together was reasonable |
| Whether TQL proved entitlement to judgment on its breach-of-contract claim for unpaid shipments | TQL produced affidavit, account statements, and the credit application showing $53,402 owed | RC offered affidavit addressing carriage of stolen shipment but no evidence disputing nonpayment | Court held TQL met its Dresher burden; RC failed to produce specific facts creating a genuine issue, so summary judgment for TQL was proper |
| Whether RC could offset TQL’s breach claim by asserting TQL’s alleged breach related to the stolen load | TQL argued RC’s counterclaims could not offset the unpaid-balance claim and were preempted | RC argued any broker breach discharged its payment obligation on the other shipments | Court rejected RC’s offset theory and sustained summary judgment for TQL; federal preemption barred counterclaims |
Key Cases Cited
- Chubb Group Ins. Cos. v. H.A. Transp. Sys., Inc., 243 F. Supp. 2d 1064 (C.D. Cal. 2003) (describing Carmack Amendment framework for interstate cargo claims)
- Ameriswiss Tech. v. Midway Line of Ill., Inc., 888 F. Supp. 2d 197 (D.N.H. 2012) (analyzing interplay of Carmack Amendment and ICCTA preemption theories)
- Rini v. United Van Lines, 104 F.3d 502 (1st Cir. 1997) (discussing Carmack Amendment’s goal of national uniformity and preemptive effect)
- Camar Corp. v. Preston Trucking Co., 221 F.3d 271 (1st Cir. 2000) (elements required to state a Carmack Amendment claim)
- Fitzgerald v. Harris, 549 F.3d 46 (1st Cir. 2008) (explaining implied and express federal preemption in transportation context)
- Dresher v. Burt, 75 Ohio St.3d 280 (Ohio 1996) (movant’s burden on summary judgment and reciprocal burden of nonmovant)
- Mitseff v. Wheeler, 38 Ohio St.3d 112 (Ohio 1988) (requiring specificity in a summary judgment motion to give opposing party meaningful opportunity to respond)
- Marshall v. Aaron, 15 Ohio St.3d 48 (Ohio 1984) (trial court generally may not grant summary judgment on grounds not raised by prevailing party)
- ASARCO LLC v. Eng. Logistics Inc., 71 F. Supp. 3d 990 (D. Ariz. 2014) (finding ICCTA expressly preempts negligence claims against brokers)