Capitol Converting Equipment, Incorporated v. Lep Transport, Incorporated
965 F.2d 391
7th Cir.
1992
Check Treatment

*2 MANION, and Circuit Before RIPPLE ESCHBACH, Judges, Senior Circuit and Judge.

ESCHBACH, Judge. Circuit Senior (Cap- Equipment, Inc. Capitol Converting (LEP) to itol) Transport, hired transportation of certain arrange for the Genoa, Chicago, Italy to machinery machinery never Because the Illinois. LEP under Chicago, Capitol sued reached Amendment, 49 U.S.C. the Carmack of сontract under and for breach court law. Illinois summary judgment, hold- for LEP’s motion inap- Amendment ing that the Carmack and that LEP’s plicable to transaction un- liability Capitol is limited that fol- the reasons Illinois law. For der low, we affirm.

I. machinery Capitol markets industrial paper con- and manufacturers cardboard arranging includes tаiners; LEP’s business transpor- domestic for the international LEP have Capitol and goods. tation of approximately together since done business of transac- “hundreds engaging in In November during time.1 tions” 78,R. facts. facts is taken from 1. Our statement of uncontested Rule 12 statements Local may entrust the for Singer whom trans- president Norman handling storage and/or portation, LEP ar- requested that phoned LEP otherwise, subject to the im- crates conditions transportation of three range parties. carriers and other Chicago. posed No such machinery from Genoa *3 liability for lost regarding discussion ‍​‌‌​‌​​‌‌​​​​‌‌​​‌​​‌​‌​​​‌‌‌​‌​​‌​​‌‌​‌‌​​‌‌​‌​‍during the damaged goods occurred

or phone сall. zione, shipped from Genoa aboard machinery in its transit from Genoa cago; Although the the bill Virginia count, lar of the ocean issued the SPA house to on terms of January (Italian lading Ultimately, the by Italian Line to machinery arrived in carrier, house, shipment as Line). 6, 1986, machinery “shipper’s load and freight prepaid.” Italia Di machinery was were the bill vessel cover the noted on Norfolk, Naviga- to Chi- lading Pi- 5. from been responsible for each case the ny, directly not exceed $50.00 event the The its officers [*] suffered be by Company liability cause [*] the damages negligence any [*] whatsoever, shall not be liable or per package. proven employees, claim or demand [*] alleged Company to be caused the [*] unless in in which to have compa- shall [*] rea- Capitol. For shipment, delivered to was never As a result of the failed unclear, machin- began against the record leaves LEP as a Capitol sons this case by the United States Customs ery was sold of contract action in di one-count breach Subsequently, versity Service. Illinois law. under additional count Capitol under added рhone Capitol’s conversa- After LEP Amendment), (the Carmack U.S.C. 11707 tion, became apparently before either but (Contain defendant and also added another Capitol’s machinery, the fate of aware of ership) allegedly involved in who was for services LEP an invoice sent Virginia. No shipment once it reaсhed In transpor- machinery’s for the arranging granted court the district vember tation, charges had freight LEP and for counts, summary judgment on both LEP At bot- prepaid on behalf limiting liability to to $150.00 invoice of the front of this letter-size tom each). (three See boxes “SEE REVERSE appears the instructions v. LEP Equipment, Converting FOR TRADING CONDITIONS.” SIDE (N.D.Ill. F.Supp. 862 Transport, are nine standard the reverse side On entry of 1990). consented to an LEP then separately num- terms and conditions en against it for judgment $150.00.2 were paragraphs. These same terms bered eventually on litigation was terminated tire LEP each invoice on the included back grant the district court 1991when they during the time did busi- sent Containership summary judgment ed para- The two together. ness relevant followed; Capitol ap appeal This well. graphs state: summary judgments favor only peals no Company assumes 1. The of LEP. carrier, respon- to be and is not held a damage any loss or sible for II. only forwarded, but undertakes to be the district first address We in the selection of care use reasonable LEP grant of carriers, truckmen, court’s lightermen, forward- Amendment claim. Capitol’s Carmack on ers, and others to agents, warehousemen judgment against entry count judg- sent to Although points a out that Rule LEP 2. court, complaint, R. Capitol’s see never entered two of ment was jurisdiction summary oversight deprive granting Judge us of again this does Moran’s order is order other sources Containership, if it is from clear which concluded judgment Chicago Comp- First National Bank final. See litigation district court. R. in the Currency, F.2d 1360 troller Thus, jurisdiction under 28 U.S.C. have Here, Judge finality Moran's is evident regarding LEP’s con- order November summary F.Supp. 1566, court (M.D.Fla.1988), The district judgment grоund on the that the aff'd, Cir.1990). 901 F.2d 1034 inapplicable Amendment was a lading Whether bill of is a shipment governed by because it was a “through” lading bill of predominantly a “through” lading in foreign bill of issued See, question Marine, e.g., fact. Tokio country. F.Supp. Capitol, at 864- F.Supp. however, Capitol, at 1309. has agree 65. We is entitled to sum present ‍​‌‌​‌​​‌‌​​​​‌‌​​‌​​‌​‌​​​‌‌‌​‌​​‌​​‌‌​‌‌​​‌‌​‌​‍any quеs failed to conflict on this mary judgment on this issue. The Car 12(m)3 tion. LEP’s Rule sup statement mack Amendment is an amendment to the porting summary its motion judgment, imposes Interstate Commerce Act that lia undisputed it listed as key several facts bility on certain carriers for the loss of regarding First, the bill of *4 goods. 11707; 49 U.S.C. see Reider v. noted lading covering Capi that the bill of 113, 499, Thompson, 339 U.S. 70 S.Ct. shipment tol’s by was issued Italian Line in (1950). applies L.Ed. 698 It to “a common Italy, lading that the bill of shows Genoa providing transportation carrier or service place acceptance Chicago as the subject jurisdiction to the of the Interstate place delivery, and that the bill of I, subchapter Commerce Commission under lading freight was “house to house” with II, chapter or IV of 105 of this title.” 49 prepaid. precisely, More LEP also stated jurisdiction U.S.C. 11707. This does not lading that the “through bill of was a bill water, shipments by extend to rail or motor lading Line,” by issued the Italian foreign country carriers from a to the Unit that “no lading domestic bill of was еver States, 10501, 10521, ed see 49 U.S.C. §§ ¶¶ 10-12, shipment.” issued for this R. 78 10561, segment unless a domestic Capitol’s 12(n) Rule statement did shipment by separate is covered a domestic not controvert supplement these facts or Textiles, lading. bill of Inc. v. Wat Swift Further, them in manner. R. 81. See Lines, Inc., kins Motor 799 F.2d respond para it did not to the numbered (11th Cir.1986), denied, cert. 480 U.S. graphs 12(m) of LEP’s Rule statement as 107 S.Ct. 94 L.Ed.2d 768 requires, the Rule nor did it even touch on lading in foreign country bill issued a 12(n) lading the bill of issue. Id. Rule govern shipment throughout transpor a its specifically states that “all material facts tation from abroad to its final destination required set forth in the statement “through” in the United States is termed a moving party will be deemed to be “through” [LEP] bill of Because such a by admitted unless controverted the state lading separate bill of includes no domestic opposing party.” ment of the Rule Local segment above, as described the Carmack 12(n). past, In the upheld this court has inapplicable. Amendment is Tex See Swift 12(n). application thе strict tiles, 701; Rule See Reider, 799 F.2d at see also West, Appley (earlier atU.S. 70 S.Ct. at 501 version Cir.1991) (citations omitted). We do so of Carmack Amendment does not cover Summary judgment here as goods shipped through well. ‍​‌‌​‌​​‌‌​​​​‌‌​​‌​​‌​‌​​​‌‌‌​‌​​‌​​‌‌​‌‌​​‌‌​‌​‍on be under a bill of lad foreign country); appropriate Capi half of LEP was because issued Tokio tol failed to Hyundai Marine & Fire Insurance contest the fact that the bill of Co. Co., lading governing F.Supp. shipment Merchant Marine was a (N.D.Ill.1989); through Foliage lading foreign Fine Flor bill of issued in a ida, Inc., Transportation, country.4 Accordingly, Inc. v. Bowman the district court Capitol’s neglect 12 of the 3. Local Rule Northern District of Illi- 4. We note that of this bill-оf- lading Although appeal. issue continued on effective nois was amended 1990. The clearly district court based its decision on the 12(1) redesignated amendment former Rule lading’s “through” fact that the bill of status 12(m) 12(m) Rule and former Rule as Rule removed this transaction from the ambit of the 12(n). change Because the amendment did not Amendment, Capitol chose not to raise language provisions, of these we refer to appeal reply this issue on either in its initial or designations them their amended rather than Instead, Capitol arguments brief. addressed its the ones the used. "freight to whether LEP is a forwarder” within pursuant granting summary judgment correct in limita- provision the Carmack basis tion on back of its invoice. apply transac- Amendment does not to this agree LEP and both that this dis- tion. pute agreement arises from an oral made Capitol phoned LEP when in November

III. requesting arrange transporta- that it machinery of its tion from Genoa to Chica- court also go. undisputed party Also is that on its limitation neither liability during of con discussed the liability defense to breach issue claim, conversation, 78, 81, deciding phone that a R. making tract thus incorpo agreement LEP and their oral between silent on this term. liability limitation support rated LEP’s standard summary judg- of its motion for bargain Capitol. Capitol, ment, into its with See requirеd Rule submitted F.Supp. 12(m) statement, at 865-68. Whether a course incorporated which two parties to a exists between submitted, previously attesting affidavits question of fact. transaction is a Gord experience to its business Aubrey Mfg., Industrial Plastics Inc. v. 42, 76, 78, R. does not Ill.App.3d 59 Ill.Dec. contest the facts that it had done business *5 (5th Dist. 431 N.E.2d LEP since at leаst 1977 and had en- 1982). dealing “sequence A of is a course gaged in “hundreds of transactions” with parties previous conduct between the of during Capi- LEP that time. does Neither fairly to particular transaction which is dispute tol that each invoice it received establishing a common ba regarded as be (and paid) LEP cоntained the same understanding interpreting their sis of limiting liability per term LEP’s to $50.00 expressions and other conduct.” Ill.Rev. earlier, package. As noted we deem admit- ¶ 1-205(1).5 parties’ previ The ch. Stat. ted these uncontested material facts. Lo- meaning may give “particular ous conduct 12(n). only cal Rule The item that qualify of supplement to and or the terms opposition offers in to LEP’s motion is the ¶ 1-205(3). agreement.” In their later Id. president, Singer, affidavit of its Norman case, Capitol has failed to contest or this anyone Capi- at stating that neither he nor concern any refute material factual issue liability tol aware of LEP’s limitation. was of its cоurse ing the extent or nature Giving full credit to this claim as we must Accordingly, dealing with LEP. we of summary judgment, LEP’s motion for LEP is agree with the district court that that, stand- agree with the district court summary judgment on this issue entitled to alone, ing Singer’s affidavit is insufficient as well. genuine dispute factual over to create a liability dealing as to a a course of arguing that it was not re- whether Rather than Capi- LEP and limitation existed between misfortune of sponsible for the liability tol.6 machinery, sought to limit its Amendment, by analogy to non- meaning an commercial contracts and the of the Carmack Farnsworth, not, not, commercial contracts as well. See we need and do reach in this issue consistently to consider Contracts 7.13. case. We have refused brief, reply arguments the let withheld until See, arguments addressed even there. alone not imply awareness of a We do not that actual (7th O'Leary, e.g., Wilson v. particular relevant to contractual term is never 1990) (citations omitted). Consequently, deаling analysis. Cir. the facts of a course Qn challenge case, however, Capitol's alleged has waived to the district un- where regarding inapplicability of sharp court’s decision contrast alone in awareness stands showing basis of the Carmack Amendment on the detailed and unrefuted LEP’s spanning history nature of the bill of parties extensive business transactions, it is many years and hundreds dispute genuine factual dealing" provisions to create a are insufficient The "course of found regard- dealing existed over whether a course one of the Uniform Commercial Code in article liability time of the (as Illinois), at the LEP’s limitation adopted which means that it is Precisely question. when applies to all transaction not limited to the sale of but Instead of confronting its interpretive failure guidance on explicit terms to contest or refute LEP’s showing factual agreement. See Gord Industrial regarding parties’ practice, business Plastics, 164-65, 59 Ill.Dec. at 431 N.E.2d disagreement recasts its with thе (course at 449-50 dealing may supple- district court’s decision in the form of a ment contract supply a mold removal fee legal argument. Capitol contends that the on which silent); contract see also district court erroneously allowed to Farnsworth, (terms “sup- Contracts 7.13 modify unilaterally unambiguous oral plemеnt qualify” or ‍​‌‌​‌​​‌‌​​​​‌‌​​‌​​‌​‌​​​‌‌‌​‌​​‌​​‌‌​‌‌​​‌‌​‌​‍indicate that a course agreement with Capitol. Capitol’s argu dealing may have an beyond effect mere ment that LEP’s liability limitation of term interpretation terms). existing Here, “unilaterally parties’ agree modified” the parties’ supplemented course ment, however, misconceives the role a agreement their oral which was silent as to parties between may Capitol.7

play. course of dealing, rather than modifying agreement, may part become sum, Capitol’s arguments can agreement inception by “explic disguise the fact is entitled to provisions agreement tacit because has reсognition.” U.C.C. Official Comment 3. not overcome LEP’s overwhelming evi “bargain It reveals the dence of the par nature and extent of the fact,” 111-201(3), see informing the nature ties’ practice. business law, Commercial extent of the obligation to perhaps greater to a degree than other other. each Seе In re Elcona Homes areas, is a “magic mirror” —a norm-taker Corp., Cir.1988) (a norm-maker, as well as a reflecting com practice modify does not a contract but practice mercial as well as engineering it. may be obligation); evidence of an Kun See, Hall, e.g., Kermit L. Magic Mir Dick, Huber v. R.J. *6 ststoffwerk Alfred ror: Law in (1989). American History Inc., 560, (3d 621 Cir.1980)(course 564 LEP has made an affirmative and uncon dealing may establish a limitation of showing tested support in summary damages part term bargain as judgment motion fact). participated that it has parties Where, here, agree as type the same transaction, particular term, ment is silent on a commercial a course dealing may party, with the same terms, fill under the the void. This is same made clear the fact that since at a course of least 1977. dealing This transaction may “supplement or qualify” the terms should be treated no different: parties’ agreement as provide prior well as course of fairly to rе be under what exchange circumstances the gain of stan byproducts with Gruen included certain dard form contracts create a can catalogue’s production deal as well as the cat parties between two is a difficult issue alogues seeking themselves. to establish need not Step-Saver reaсh here. Sys Gruen, Data contract between itself and Latex Glove tems, Wyse 91, Technology, v. 939 F.2d 103- pointed price quotations to various and discus (3d Cir.1991); Int'l, 04 Trans-Aire Inc. v. North sions. But the non-parties court noted “that Co., ern Adhesive Cir.1989); 882 F.2d 1262-63 accepted both made and these various offers.” & Burch Biscuit Co. v. Schulze Thus, Tree Id. at 497 N.E.2d at 469. Latex Top, (7th Cir.1987); 714-15 Glove’s action was dismissed because it did not Ill.App.3d Barliant v. Follett Corp., 138 adequately allege any bargain between itself Ill.Dec. N.E.2d Gruen, usage not because trade could not be used to establish contours of bar that 491-93, gain. Capitol’s argument Id. at Latex N.E.2d at Be Glove Co. 469-71. Gruen, existed, underlying IIl.App.3d cause no contract 100 Ill.Dec. the court (1st Dist.1986), requirеs interpret N.E.2d constrained to Latex trade LEP’s .Glove's usage argument attempt similarly reversed is be ask the court complaint against "impose obligation flawed. Latex filling Glove's a new instead of Gruen (a printer) gap produce for breach of contract in the contract terms.” Id. at catalogues certain was dismissed for the N.E.2d at 470. failure Glove is thus distinct Latex Glove, to state a claim. seeking Latex Ill.Dec. this case in which the are 493, 497 N.E.2d at 471. Latex Glove underlying agree had establish the also contours of an that, asserted according ‍​‌‌​‌​​‌‌​​​​‌‌​​‌​​‌​‌​​​‌‌‌​‌​​‌​​‌‌​‌‌​​‌‌​‌​‍usage, to trade its bar- ment. establishing limi- garded as bargain. part of their

tation

Affirmed

RIPPLE, Judge, concurring in Circuit dissenting part.

part and majority’s conclusion with

I concur

respect applicability respectfully join

Act. I decline to the ma- genuine

jority’s conclusion that no issue of remains as to course

fact whether between LEP and incor- liability limitation

porated LEP’s standard bargain

into its ANDERSON,

Marlow Plaintiff-

Appellant, COMPANY,

STAUFFER CHEMICAL

Defendant-Appellee.

No. 91-1173. *7 Appeals,

United States Court

Seventh Circuit.

Argued Oct.

Decided June