Menorah Insurance Co. appeals from an order granting summary judgment in favor of W.F. Whelan Co. Menorah argues that the district court erred when it limited its right of recovery to $50.00 per shipment. We AFFIRM.
Ortal Diecasting, Ltd., an Israeli company, manufactures and sells die-cast parts to customers in the United States and presumably elsewhere. To get its goods to its customers in the United States, Ortal ships its parts to Whelan, the defendant. Whelan then completes Ortal’s customs work, stores the parts in its warehouse, and ships the products to Ortal’s ultimate customer per Ortal’s instructions. On September 17, 2000, a fire occurred at Whelan’s warehouse in Romulus, Michigan, destroying Ortal’s products stored there. At the time of the fire, Ortal was insured by the Plaintiff, Menorah Insurance. Pursuant to their insurance agreement, Menorah paid Ortal $205,000. The value of the goods destroyed exceeded $300,000.
On May 3, 2001, Menorah, as subrogee, brought suit against Whelan alleging: (1) that Whelan’s negligence caused the fire; (2) that Whelan breached its duties as bailee and; (3) that Whelan breached its contract with Ortal. Whelan moved for summary judgment arguing that Ortal, by ratifying the terms in the invoices sent to Ortal after a shipment arrived, agreed to limit its right of recovery to $50.00 per shipment. The invoices contained certain “Terms and Conditions,” which, in relevant part, provide:
All shipments to or from the Customer, which terms shall include the exporter, importer, sender, receiver, owner, consignor, consignee, transfer or transferee of the shipments will be handled by the forwarder and/or customers broker (herein called “the Company”) on the following terms and conditions:
8. Limitation of Liability for Loss, etc. (a) The Customer agrees that the Company shall only be liable for any loss, damage, expense or delay to the goods resulting from the negligence or other fault of the Company; such liability shall be limited to an amount equal to the lesser of fifty dollars ($50.00) per entry or shipment or the fee(s) charged for the services, provided that, in the case of partial loss, such amount will be adjusted pro rata....
Both parties agree that the invoices are the only writings between Whelan and Ortal. “Under Michigan common law ‘[a]n insurer, as subrogee of its insured, has no greater rights against the tortfeasor than its insured.’ ” Automobile Club Ins. Ass’n v. LaPointe,
We review de novo the district court’s summary-judgment order. Bridgeport Music, Inc. v. Diamond Time, Ltd.,
Mich. Comp. Laws § 440.7204(2) provides that:
[djamages may be limited by a term in the warehouse receipt or storage agreement limiting the amount of liability in case of loss or damage, and setting forth a specific liability per article or item, or value per unit of weight, beyond which the warehousemen shall not be liable; provided however, that such liability may on written request of the bailor at the time of signing such storage agreement or within a reasonable time after receipt of the warehouse receipt be increased on part or all of the goods thereunder, in which event increased rates may be charged based on such increased valuation, but that no such increase shall be permitted contrary to a lawful limitation of liability contained in the warehouseman’s tariff, if any. No such limitation is effective with respect to the warehouseman’s liability for conversion to his own use.
(Emphasis added).
Menorah argues that the language in Mich. Comp. Laws § 440.7204(2) requires that liquidated-damaged provisions in storage agreements be signed by the party against whom the limitation is asserted. It argues that since Ortal did not sign the invoices when it paid them the liquidated-damages provision contained in the invoice is of no effect.
Storage agreements, unlike warehouse receipts, are not defined elsewhere in the Michigan Code, cf. Mich. Comp. Laws § 440.7202 (defining “warehouse receipts”), and there is no case law defining or applying the term. Thus, we are left to discern what the Michigan legislature intended by “storage agreement,” following the normal cannons of statutory analysis.
Both parties agree that this suit is governed by Michigan law. Sitting in diversity, our task is to interpret the statutory provision as would a Michigan court. Swix v. Daisy Mfg. Co., Inc.,
The Michigan legislature also used the term “however” in Mich. Comp. Laws § 440.7204(2). The statute seems to convey an assumption that contracting parties will use standardized forms for storage
Our interpretation is entirely consistent with Michigan law. The Michigan Supreme Court instructs that a court, when faced with an ambiguity in a Michigan statute, “should give effect to the interpretation that more faithfully advances the legislative purpose behind the statute.” People v. Adair,
In this case, Ortal, a sophisticated company, paid each invoice as it arrived, and it procured third-party insurance to cover its potential losses. We need not define the precise bounds of “storage agreement” in this case. We are firmly convinced that Ortal’s silent, consistent performance, which is undisputed, demonstrates that it agreed to be bound by the terms in the invoices. Accordingly, the judgment of the district court is AFFIRMED.
