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PITTSBURGH LOGISTICS SYSTEMS, INC., Appellant v. B. KEPPEL TRUCKING, LLC

PITTSBURGH LOGISTICS SYSTEMS, INC., Appellant v. B. KEPPEL TRUCKING, LLC

 

No. 1943 WDA 2015

 

SUPERIOR COURT OF PENNSYLVANIA

 

2016 Pa. Super. Unpub. LEXIS 4513

 

 

December 13, 2016, Decided

December 13, 2016, Filed

 

 

NOTICE:    NON-PRECEDENTIAL DECISION — SEE SUPERIOR COURT I.O.P. 65.37

 

PRIOR HISTORY:     [*1] Appeal from the Order December 1, 2015. In the Court of Common Pleas of Allegheny County. Civil Division at No(s): G.D. 13-18152.

 

JUDGES: BEFORE: BENDER, P.J.E., RANSOM, J., and MUSMANNO, J. MEMORANDUM BY RANSOM, J.

 

OPINION BY: RANSOM

 

OPINION

MEMORANDUM BY RANSOM, J,:

Pittsburgh Logistics Systems, Inc. (Appellant) appeals from the order entered December 1, 2015, granting B. Keppel Trucking, LLC’s (Appellee) petition to confirm an arbitration award and granting judgment thereon. We affirm.

Appellant is a third-party logistics company that, among other services, brokers transportation of freight between shippers and trucking companies. See Pet. To Stay Arbitration 9/10/13. In September of 2009, Appellant began doing business with Appellee, a large trucking company. Keppel Dep., 12/3/15, 21:25. That month, an employee of Appellant called to offer Appellee a load for pick-up. Spears Dep., 1/31/14, 8:23-9:10. The parties orally agreed on the price of the shipment. Id. at 7:10. Appellee then received a “carrier set-up packet” containing various forms, as well as the Motor Carrier Service Contract (“MCSC”). Id. at 10:20-11:9. Appellee signed and returned the documents to Appellant. Id. at 12:1-4.

Other carriers used Appellant’s [*2]  web-based system, which enables carriers to bid on loads posted by Appellant on behalf of its customers. Homan Dep., 12/6/13, 23:5-16. If a carrier is awarded a shipment, the carrier receives an email confirmation that contains a hyperlink to the Appellant’s Carrier Terms of Use (“Terms of Use”). The Terms of Use do not include an arbitration clause. See Carrier Terms of Use.

Regarding this first job, Appellee did not bid via the online system; Appellant contacted Appellee directly. Spears Dep. at 8:23-9:10. Nevertheless, twelve days after Appellee completed delivery, Appellant emailed an award confirmation containing a hyperlink to the Terms of Use. Id. at 9:11-20.

In May of 2012, Appellant contacted Appellee for assistance with another client, Streamlite. Id. at 14:25, 15:1-25, 16:1-6. Appellant called Appellee and other carriers for their pricing and ultimately awarded Appellee the job. Id. Thereafter, Appellant received weekly email confirmations arranging shipments for the following week. Keppel Dep. at 68:1-25, 69:1-6. This practice continued until June 2012, when Streamlite abruptly went out of business and Appellant stopped paying Appellee for shipments. Id. at 19:22-20:14. Appellant [*3]  pursued legal action against Streamlite and was able to recover a portion of Streamlite’s unpaid balance. See Affidavit of Ryan Boushell 5/13/14 at ¶ 10. Appellant offered Appellee $9,812.87, 19% of the $50,513.15 owed to Appellee. Id. at ¶ 12.

Appellee refused payment and, on July 23, 2013, filed a demand for arbitration against Appellant seeking payment of the full $50,513.15. Appellant brought a Petition to Stay Arbitration pursuant to 42 Pa.C.S.A. § 7304(b), which the lower court denied. See Petition to Stay Arbitration, 10/21/13. The parties proceeded to arbitration, and ultimately Appellee was awarded $50,952.09, plus $637.50 in costs. See Arbitration Award 2/20/15. Appellant filed a Petition to Vacate the Arbitration Award. On April 10, 2015, the Petition to Vacate was denied. Appellant filed an appeal, which was quashed as premature. On December 1, 2015, the lower court granted Appellee’s Petition to Confirm the Arbitration Award and entered judgment in its favor. This appeal followed.

Appellant timely filed a court-ordered PA.R.A.P. 1925(b) statement. The trial court issued a responsive opinion.

Appellant raises the following issue for review:

 

Did the Court of Common Pleas err in its denial of Appellant’s Petition [*4]  to Stay arbitration and in its subsequent confirmation of the arbitration award were [sic] there was no enforceable arbitration agreement between the parties?

 

 

Appellant’s Brief at 5.

Appellant contends the trial court erred in compelling arbitration of Appellee’s claim for damages.1 Appellate courts employ a two-part test to determine whether a trial court should have compelled arbitration: the court must determine (1) whether a valid agreement to arbitrate exists, and (2) whether the dispute is within the scope of the agreement. Pisano v. Extendicare Homes, Inc., 2013 PA Super 232, 77 A.3d 651, 654 (Pa. Super. 2013).

 

1   Appellee asserts that Appellant has waived consideration of the claim it presents on appeal, suggesting that (1) its claim first arose in the context of interlocutory orders issued by the trial court, thus precluding appellate consideration now, (2) Appellant asserts arguments contrary to those raised before the trial court, and (3) Appellant has either omitted or stated issues vaguely. See Appellant’s Brief at 11-14. We disagree. First, Appellant could not pursue his appeal until entry of a final order or judgment, at which time, all previous, interlocutory issues may be raised. See McNeil v. Jordan, 586 Pa. 413, 894 A.2d 1260, 1266-67 (Pa. 2006). (noting that an appeal from “the entry of judgment will be viewed as drawing into question any prior non-final orders that produced the judgment”). Second, Appellant has consistently maintained that the MCSC does not constitute a binding agreement to arbitrate. See Petition to Stay, 10/8/13, ¶ 38. Thus, we decline to dismiss Appellant’s claim as waived.

Appellant challenges the first part of this test. According to Appellant, an arbitration award should not be enforced where it contemplates execution by both parties, but not all parties sign. Appellant’s Brief at 16 (citing in support Bair v. Manor Care of Elizabethtown, PA, LLC, 2015 PA Super 9, 108 A.3d 94 (Pa. Super. 2015)). Here, Appellant argues, it never signed the MCSC. Thus, according to Appellant, the MCSC was merely a draft agreement and not binding on the parties. Moreover, Appellant suggests that the parties never operated under the terms of the MCSC. Appellant’s Brief at 16. Rather, according to Appellant, the Carrier Terms of Use governed their relationship. Id.

An agreement to arbitrate is a contract. United Steelworkers of America, AFL-CIO v. Westinghouse Elec. Corp (Bettis Atomic Power Lab.), 413 Pa. 358, 196 A.2d 857, 859 (Pa. 1964). Our standard of review [*5]  is de novo, and our scope is plenary. Bair, 108 A.3d at 96 (quoting Bucks Orthopaedic Surgery Assocs., P.C. v. Ruth, 2007 PA Super 151, 925 A.2d 868, 871 (Pa. Super. 2007)). The touchstone of any valid contract is mutual assent and consideration. Bair, 108 A.3d at 96; Weavertown Transp. Leasing Inc. v. Moran, 2003 PA Super 385, 834 A.2d 1169, 1172 (Pa. Super. 2003).

Appellant’s reliance on Bair is misplaced. In Bair, following the death of her mother, plaintiff, as executrix of her mother’s estate, commenced a wrongful death action against the operator of her mother’s healthcare facility. Bair, 108 A.3d at 95. The healthcare facility sought to enforce an arbitration agreement signed by the plaintiff acting under power of attorney. Id. Despite a signature line for both parties, the healthcare facility never signed the agreement. Id. at 97. The trial court declined to enforce the agreement, and the healthcare facility appealed. Id. at 96. This Court affirmed, concluding that the failure of the defendant to sign the arbitration agreement precluded the defendant from enforcing the agreement against the plaintiff. Id. at 97. However, as noted by Appellee, this Court’s decision was not rooted solely in the healthcare facility’s mere failure to sign the arbitration agreement.

 

“[t]he issue is not whether the arbitration agreement was signed by the party sought to be bound, but whether there was a meeting of the minds, that is, whether the parties agreed in a clear and unmistakable [*6]  manner to arbitrate their disputes.”

 

 

Appellee’s Brief at 17 (quoting Bair, 108 A.3d at 97; emphasis omitted).

Here, the lack of Appellant’s signature does not render the MCSC invalid. The court in Bair noted, “[T]he absence of signatures is not fatal unless required by law or by the intent of the parties…” Bair, 108 A.3d at 98; Shovel Transfer Storage, Inc., v. Pa. Liquor Control Bd., 559 Pa. 56, 739 A.2d 133, 136 (Pa. 1999) (“As a general rule, signatures are not required unless signing of contract is expressly required by law or the intent of the parties.”).

The contract language set forth in the MCSC does not explicitly require Appellant’s signature. In the MCSC, the line preceding the signature lines state, “In witness whereof, the parties, intending to be legally bound, have set their hands and seals the day and year first above written.” See MCSC Agreement at 12. This statement is not an express requirement for both parties’ signatures. The phrase “legally bound” constitutes consideration for the contract. Socko v. Mid-Atlantic Sys. Of CPA, Inc., 126 A.3d 1266 (Pa. 2015) (holding that the term “legally bound” is interpreted by 33 P.S. § 6 to supply the necessary consideration for an agreement.)

Appellant also references Franklin Interiors v. Wall of Fame Mgmt. Co. Inc., 510 Pa. 597, 511 A.2d 761 (Pa. 1986) and Commonwealth v. On-Point Tech. Sys., Inc., 821 A.2d 641 (Pa. Commw. Ct. 2003) in support of its argument that the MCSC is merely a draft, as Appellants did not sign the agreement. However, both cases are distinguishable, as the contracts at issue [*7]  included explicit language requiring a signature. For example, in Franklin Interiors, the Supreme Court determined that an explicit requirement flowed from contractual language stating, “[t]his document does not become a final contract until approved by an officer of Franklin Interiors.” Franklin 511 A.2d at 763. Similarly, in On-Point Tech., the Commonwealth Court rejected a party’s contention that a binding contract was formed, where the contracted language expressly required signatures. On-Point Tech, 821 A.2d at 643.

Moreover, there is clear evidence of Appellant’s intent to be bound by the terms of the MCSC. At the beginning of their relationship, a representative from Appellant’s company contacted Appellee and provided them with the MCSC to sign and return. Furthermore, Appellant informed Appellee that until Appellee signed and returned the MCSC, they would not receive payment. Spears Dep. at 12:13-17. In contrast, Appellee did not receive the Carrier Terms of Use agreement until two weeks after they completed their delivery.

Appellant suggests that the Carrier Terms of Use controlled the parties. We disagree. There is no evidence that the parties operated under the Terms of Use agreement. During the course of their business, Appellee never [*8]  placed a bid via Appellant’s online system. Appellee did not receive the Terms of Use in advance of their first job, and there is no evidence that the Terms of Use were negotiated or accepted. Rather, the terms were forwarded to Appellee as a hyperlink in an email received by Appellee after the job was accepted and completed. Based on the language in the MCSC and the business practices between the two parties, the Terms of Use agreement does not constitute a contract.

The MCSC constitutes a valid agreement to arbitrate and is binding upon the parties. Thus, the trial court did not err in denying Appellant’s Petition to Stay and confirming the subsequent arbitration award.

Order affirmed.

Judgment Entered.

Date: 12/13/2016

HOUSTON SPECIALTY INSURANCE COMPANY, ET AL. VERSUS FREIGHTZ TRANSPORTATION, INC, ET AL.

HOUSTON SPECIALTY INSURANCE COMPANY, ET AL. VERSUS FREIGHTZ TRANSPORTATION, INC, ET AL.

 

CIVIL ACTION NO.: 14-00576-BAJ-EWD

 

UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF LOUISIANA

 

2016 U.S. Dist. LEXIS 162345

 

 

November 22, 2016, Decided

November 22, 2016, Filed

 

 

PRIOR HISTORY: Houston Specialty Ins. Co. v. Freightz Transp., 2015 U.S. Dist. LEXIS 121221 (M.D. La., Sept. 11, 2015)

 

COUNSEL:  [*1] Houston Specialty Insurance Company As subrogee for other Marquis Medical, LLC, Plaintiff: Jeffrey Scott Loeb, LEAD ATTORNEY, Lauren Fajoni Bartlett, Loeb Law Firm, Mandeville, LA.

 

For Freightz Transportation, Inc., Defendant: Michael W Rutledge, LEAD ATTORNEY, Salley, Hite & Mercer, LLC, New Orleans, LA; Erika Lynn Mullenbach, Salley, Hite, Mercer & Resor, LLC, New Orleans, LA.

 

For YRC Worldwide, Inc., Defendant: Charles Edward Riley, IV, LEAD ATTORNEY, Kaile Ann LeBlanc, Simon, Peragine, Smith & Redfearn, LLP, New Orleans, LA; David M. Buffo, PRO HAC VICE, Berkowitz Oliver LLP, Kansas City, MO.

 

JUDGES: BRIAN A. JACKSON, UNITED STATES DISTRICT JUDGE.

 

OPINION BY: BRIAN A. JACKSON

 

OPINION

 

RULING AND ORDER

Before the Court is Plaintiff Houston Specialty Insurance Company’s (“Houston Specialty”) Motion for Summary Judgment (Doc. 46) and YRC Worldwide, Inc.’s (“YRC”) Motion for Partial Summary Judgment (Doc. 47). Houston Specialty seeks a ruling that, as a matter of law, YRC owes Houston Specialty $167,000 in damages. (Doc. 46 at p. 1). YRC seeks a ruling from this Court setting the maximum liability, if any. (Doc. 47 at p. 1). For reasons explained fully herein, Houston Specialty’s Motion for Summary Judgment (Doc. 46) [*2]  IS DENIED and YRC’s Motion for Partial Summary Judgment (Doc. 47) is GRANTED.

 

  1. BACKGROUND

This case arises from the damage to a 2005 Siemens Biograph 16 High Resolution PET/CT Scanner — NISR4029, Serial No. 001334 (“scanner”) during shipment from Minneapolis, Minnesota to Denham Springs, Louisiana. (Doc. 46-1 at p. 1). Marquis Medical owned the Scanner, and Houston Specialty insured Marquis Medical. (Id.). YRC transported the scanner, with Freightz Transportation, Inc. (“Freightz”) acting as intermediary between YRC and Marquis Medical. (See Id.). The vendor that sold the Scanner to Marquis Medical was Clinical Health Systems, Inc. (“CHS”) (Doc. 1 at p. 3). It is uncontroverted in the cross motions that the scanner was in working order prior to being loaded for the shipment, but became dislodged in its shipping container at some point during the delivery process and became damaged beyond repair. (Id. at 3).

Marquis Medical, after unsuccessfully seeking payment from Freightz and YRC, then submitted an insurance claim with Houston Specialty. (Id. at 5). Houston Specialty paid for the value of the scanner, minus the salvage value. (Id.). Houston Specialty then brought suit against Freightz, YRC, CHS, [*3]  and the unknown insurance companies of the three defendants. (See Doc. 1). The claims against Freightz were severed and transferred to the United States District Court for the Middle District of Florida. (Doc. 36). Subsequently, the Clerk of Court entered a default against CHS for failing to plead or otherwise defend the suit. (Doc. 43). Afterward, Houston Specialty and YRC filed cross motions for summary judgment. (Docs. 46, 47).

 

  1. LEGAL STANDARD

Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and that the movant is entitled to a judgment as a matter of law.” Fed. R. Civ. P. 56(a). “[W]hen a properly supported motion for summary judgment is made, the adverse party must set forth specific facts showing that there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986) (quotation marks and footnote omitted).

In determining whether the movant is entitled to summary judgment, the Court “view[s] facts in the light most favorable to the non-movant and draw[s] all reasonable inferences in her favor.” Coleman v. Houston Indep. Sch. Dist., 113 F.3d 528, 533 (5th Cir. 1997). At this stage, the Court does not evaluate the credibility of witnesses, weigh the evidence, or resolve factual disputes. Int’l Shortstop, Inc. v. Rally’s, Inc., 939 F.2d 1257, 1263 (5th Cir. 1991), cert. denied, 502 U.S. 1059, 112 S. Ct. 936, 117 L. Ed. 2d 107 (1992). However, if the evidence in the record is such that [*4]  a reasonable jury, drawing all inferences in favor of the non-moving party, could arrive at a verdict in that party’s favor, the motion for summary judgment must be denied. Int’l Shortstop, Inc., 939 F.2d at 1263. On the other hand, the non-movant’s burden is not satisfied merely upon a showing of “some metaphysical doubt as to the material facts, by conclusory allegations, by unsubstantiated assertions, or by only a scintilla of evidence.” Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994).

In sum, summary judgment is appropriate if, “after adequate time for discovery and upon motion, [the non-movant] fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). Summary judgment will lie only “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits if any, show that there is no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law.” Sherman v. Hallbauer, 455 F.2d 1236, 1241 (5th Cir. 1972).

 

III. DISCUSSION

This case arises under the Carmack Amendment, which provides the sole remedy to shippers for the actual loss or damage to their goods that occurs in interstate transit. Hoskins v. Bekins Van Lines, 343 F.3d 769, 777 (5th Cir. 2003). Under the statute a carrier is liable to a shipper for [*5]  the damage of goods, but such liability can be subject to liability limitations. Tran Enterprises, LLC v. DHL Exp. (USA), Inc., 627 F.3d 1004, 1011 (5th Cir. 2010). “[A] carrier may limit its liability if it: (1) maintains a tariff …;(2) obtains the shipper’s agreement as to her choice of liability; (3) gives the shipper a reasonable opportunity to choose between two or more levels of liability; and (4) issues a receipt or bill of lading prior to moving the shipment.” Id. (internal citation omitted).

Finally, when an intermediary is involved–such as in this case–courts evaluate whether liability is limited based on the relationship between the intermediary and the carrier. See Norfolk S. Ry. Co. v. Kirby, 543 U.S. 14, 33, 125 S. Ct. 385, 160 L. Ed. 2d 283 (2004) (“When an intermediary contracts with a carrier to transport goods, the cargo owner’s recovery against the carrier is limited by the liability limitation to which the intermediary and carrier agreed.”); Werner Enterprises, Inc. v. Westwind Mar. Int’l, Inc., 554 F.3d 1319, 1323-24 (11th Cir. 2009) (holding that a cargo owner is bound by the liability limitation agreed to between the intermediary and the carrier). Thus, the question for this case is, whether under the Carmack Amendment, YRC properly limited its liability in its relationship with the intermediary Freightz?

The Court is persuaded that pursuant to the standards of the Fifth Circuit, it has done so. The first factor is whether the carrier has [*6]  maintained a tariff. Tran Enterprises, LLC, 627 F.3d at 1011. Here, it is uncontroverted that YRC has done so, and therefore, the first element is met. (Doc. 47 at pp. 2-3 ¶¶3-15).

As instructed in Trans Enterprises, the second factor is whether the carrier (or intermediary) obtained the shipper’s agreement as to the choice of liability. See 627 F.3d at 1011. Here, Tariff 100 item 780 and Tariff 299 offered different levels of liability. (Doc. 47 at p. 2 ¶¶10). In this case, Freightz, as intermediary for Marquez Medical, agreed to the liability for $.50 per pound limitation for used goods, and paid the applicable rate for such liability. (Doc. 47 at p. 2 ¶¶3-11). Thus, the second element is met.

The third factor is whether the shipper provided a reasonable opportunity to choose between two or more levels of liability. 627 F.3d at 1011. Freightz utilized YRC’s online tool to request specific pricing that featured a corresponding liability limit, and the correlating tariff could have been requested or viewed online by the intermediary. (Doc. 47 at p. 2 ¶¶3-11, p. 3 ¶¶17-18, pp. 4-5 ¶¶20-25). Marquis Medical’s intermediary was also provided a Volume Quote Confirmation, and this set forth the agreed upon rate and the tariff which set forth the limitations of [*7]  liability. (Id. at p. 4 ¶¶22).

The final factor is whether the carrier issued a bill of lading prior to moving the shipment. 627 F.3d at 1011. Here, a bill of lading was issued prior to shipment. (Doc. 47 at p. 3 ¶14). Thus, the final factor is met. The Court concludes that YRC properly limited its liability.

As a result, the Court also concludes that Houston Specialty’s motion for summary judgment, which asks the Court to find that liability has not been limited, must be denied.

 

  1. CONCLUSION

Accordingly,

IT IS ORDERED that the Plaintiff Houston Specialty Insurance Company’s Motion for Summary Judgment (Doc. 46) is DENIED.

IT IS FURTHER ORDERED that Defendant YRC Worldwide, Inc.’s Motion for Partial Summary Judgment (Doc. 47) is GRANTED.

IT IS FURTHER ORDERED that Defendant YRC Worldwide, Inc.’s liability is limited to $.50 per pound for used commodities with a maximum liability of $10,000 per incident.

Baton Rouge, Louisiana, this 22nd day of November, 2016.

/s/ Brian A. Jackson

BRIAN A. JACKSON, CHIEF JUDGE

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF LOUISIANA

 

 

 

 

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