2001 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

5-15-2001

Beta Spawn Inc v. FFE Transp Ser Inc

Precedential or Non-Precedential:

Docket 00-1332

Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2001

This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova

University School of Law Digital Repository. It has been accepted for inclusion in 2001 Decisions by an authorized administrator of Villanova

University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.

Recommended Citation

"Beta Spawn Inc v. FFE Transp Ser Inc" (2001). 2001 Decisions. Paper 104.

http://digitalcommons.law.villanova.edu/thirdcircuit_2001/104
Filed May 15, 2001 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

No. 00-1332 

BETA SPAWN, INC. 

v. 

FFE TRANSPORTATION SERVICES, INC., 

Appellant 

ON APPEAL FROM THE 

UNITED STATES DISTRICT COURT FOR THE 

EASTERN DISTRICT OF PENNSYLVANIA 

(Dist. Court No. 99-CV-00815) 

District Court Judge: William H. Yohn, Jr. 

Argued on March 8, 2001 

Before: ALITO, McKEE, and KRAVITCH,* 

Circuit Judges. 

(Opinion Filed: May 15, 2001) 

 ROBERT C. HOUPT, ESQ. 

 (ARGUED) 

 Houpt & Wolffe, Ltd. 

 45 Darby Road 

 Paoli, PA 19301 

Counsel for Appellee 

_________________________________________________________________ 

* The Honorable Phyllis A. Kravitch, Senior Judge, United States Court 

of Appeals for the Eleventh Circuit, sitting by designation. 
 JACK L. COKE, JR., ESQ. 

 (ARGUED) 

 Suite 800 

 8117 Preston Rd 

 Dallas, TX 75225 

 CHARLES L. HOWARD 

 Gollatz, Griffin, & Ewing, P.C. 

 16th Floor, Two Penn Center Plaza 

 Philadelphia, PA 19102 

 Counsel for Appellant 

OPINION OF THE COURT 

KRAVITCH, Circuit Judge: 

FFE Transportation Services, Inc. ("FFE") appeals from 

the judgment of the district court finding FFE liable to Beta 

Spawn, Inc. for the value of a shipment of mushr oom 

spawn damaged during transport. FFE contends that the 

district court erred in finding (1) that Beta Spawn

established a prima facie case under the Car mack 

Amendment to the Interstate Commerce Act, 49 U.S.C.

S 11706; (2) that FFE's tariff was not applicable to the 

shipment at issue; and (3) that FFE had agreed to maintain 

the temperature of its trailer at 34 degr ees Fahrenheit1 

when transporting the spawn. Because we hold that the 

district court ruled correctly on all thr ee issues, we affirm 

the judgment of the district court in favor of Beta Spawn on 

its claim for damages and against FFE on its counter claim 

to recover freight charges. 

I. Background 

Beta Spawn, a Pennsylvania corporation, supplies 

mushroom spawn to the mushroom industry. 2 At all times 

_________________________________________________________________ 

1. All references to "degrees" herein are to the Fahrenheit scale. 

2. "Spawn are the `fragments of mycelia used to start a mushroom 

culture.' " Beta Spawn v. FFE T ransp. Servs., Inc., No. 99-0815, 2000 WL 

288332, at *1 (E.D. Pa. Mar. 17, 2000) (citation omitted). 

 2 
relevant to this case, Beta Spawn has been the exclusive 

distributor of a variety of spawn from Italy known as 

Italspawn. FFE is a common carrier hired by Beta Spawn to 

transport a shipment of Italspawn from Camarillo, 

California to Beta Spawn's facility in Pennsylvania. 

According to the district court's findings, mushroom 

spawn are "living, breathing" or ganisms that must be 

maintained at a temperature of approximately 36 degrees. 

Harry Testa, vice-president of Beta Spawn, testified that 

when spawn are exposed to higher temperatur es, they 

begin to generate their own heat and to ferment. Spawn 

that have begun to ferment are damaged and lose their 

viability. Once spawn are exposed to heat, attempts to recool the spawn will not be successful. Because spawn are 

fragile, they must breathe filtered air to avoid 

contamination. For that reason, spawn ar e packaged in 

clear, plastic bags with air filters on each bag. 

Condensation and yellow discoloration are signs of 

contaminated spawn. Damaged spawn also have a 

characteristic odor similar to that of vinegar . 

In June 1997, Beta Spawn sold a truckload shipment of 

Italspawn (the "June Shipment") to Peterson's Ranch in 

Camarillo, California.3 Louis Peterson, an officer and 

director of Mushrooms, Etc. who received the shipment in 

California, testified that some of the boxes containing the 

spawn were torn and crushed at the time of arrival.

Nevertheless, Peterson used spawn out of those damaged 

boxes to grow his first crop of mushr ooms. 

In September 1997, Peterson agreed to sell 16,000 units 

of the Italspawn back to Beta Spawn. These spawn had 

been stored for three months in a facility that was nearby, 

but not on, the farm premises and, accor ding to Peterson, 

had remained refrigerated the entir e time. Peterson testified 

that about three weeks after the spawn wer e shipped to 

Beta Spawn, he used a remaining portion of the June

Shipment to grow a successful crop of mushrooms. That 

portion, however, was not stored in the same facility as the 

spawn sold to Beta Spawn. 

_________________________________________________________________ 

3. Peterson's Ranch, also known by the name "Mushrooms, Etc.," is a 

mushroom farm. 

 3 
On behalf of Beta Spawn, Testa contacted Michael Conn 

of FFE to arrange for the shipment of the spawn fr om 

California to Beta Spawn's facility in Pennsylvania. During 

their conversation, Testa and Conn verbally agreed that 

FFE would transport the spawn at a temperatur e of 

approximately 34 degrees. FFE had shipped spawn for Beta 

Spawn before and had always transported the spawn in a 

trailer maintained at 34 degrees. 

On September 23, 1997, FFE entered into a bill of lading 

/contract of carriage with Mushrooms, Etc. of California for 

the transportation of the spawn to Pennsylvania. 

Mushrooms, Etc. requested that FFE pr ovide it with lessthan-truckload ("LTL"), "chilled" service. Beta Spawn, as 

consignee, agreed to pay FFE $2,685.36 for the shipment 

upon delivery. The bill of lading, prepar ed by Peterson 

Ranch, called for the transport of 16,000 units of spawn, 

packed in 400 boxes. The spawn were packed in clear

plastic bags, three bags to a box, separated by cardboard 

dividers. Each cardboard box contained holes to permit air 

circulation. Peterson loaded the boxes into FFE's 

refrigerated trailer on 10 pallets, 40 boxes to a pallet. 

Initially, the boxes were only secured to the pallets with 

clear plastic tape, but after the pallets wer e loaded onto the 

truck, William Forbito, the driver for FFE, shrink-wrapped 

the boxes to prevent their falling over during transport. 

Forbito testified that when he picked up the spawn, he 

asked Peterson at what temperature he was to maintain the 

shipment. After Peterson responded "it goes chilled," 

Forbito recorded the word "chill" on the bill of lading. 

Forbito also wrote the words "T emp. 34 degrees" on the bill 

of lading. At trial, Forbito explained that when he accepted 

the spawn in California, he took the temperature inside one 

of the boxes and found it to be 34 degrees. 

Forbito also gave testimony regarding the condition of the 

boxes. He stated that the bottom "two layers" of boxes on 

every pallet "were bubbled out like they'r e getting ready to 

bust open. The boxes was [sic] torn, they were crushed. 

And boxes open." Forbito did not recall seeing any actual 

torn bags of spawn. After observing the damaged condition 

of the boxes, Forbito called his dispatcher and was told he 

could accept the load as long as he noted the damage on 

 4 
the bill of lading. Forbito then took exception to the 

condition of the entire load by writing "400" on the bill of 

lading. 

Peterson testified that before the boxes wer e loaded onto 

FFE's trailer, he opened one of the boxes and removed a 

bag of spawn for inspection. Peterson's inspection of that 

bag consisted of a visual examination of the spawn's 

coloring and a "sniff test" through the air filter on the bag 

for the odor of spawn fermentation. Based on these tests, 

Peterson determined that the spawn wer e in good condition 

because there was no yellowish tint and no odor . Peterson 

also looked through cracks of the torn boxes in order to see 

whether the bags in those boxes were ripped or open. 

Peterson testified that he saw no open bags. 

Forbito set the temperature of the trailer at 34 degrees 

and transported the shipment of spawn to Cudahy, 

California, where he loaded it onto another trailer that was 

also set at 34 degrees. A different driver then carried the 

shipment from California to Chicago. When the driver 

arrived in Chicago, approximately 100 boxes wer e crushed, 

but the temperature of the product was 34 degrees. In 

Chicago, boxes were removed from the truck, placed in a 

warehouse and later reloaded onto another truck bound for 

Pennsylvania. When the boxes left Chicago, appr oximately 

20 of the boxes had "leaking product exposed." 

The shipment of spawn arrived at Beta Spawn's facility in 

Pennsylvania on September 29, 1997. Testa, who was 

present when it arrived, described the shipment as a "big 

mess." Specifically, he stated that "the bags were broke [sic] 

on quite a few boxes" and that "[t]her e were a distinct odor 

that the spawn had started to sour." T esta checked the 

temperature of the spawn in approximately 10 boxes and 

found it to be between 48 and 58 degrees, which meant the 

spawn were no longer viable. Thus, Testa refused to accept 

delivery and notified FFE of Beta Spawn's claim for

damages. 

Beta Spawn originally brought its claim against FFE for 

damage to its freight in the Court of Common Pleas of 

Delaware County, Pennsylvania. FFE removed the case to 

federal court and filed a counterclaim for its freight 

 5 
charges. The district court held a bench trial and granted 

judgment in favor of Beta Spawn. This appeal followed. 

II. Standard of Review 

This court has plenary review over the district court's 

choice and interpretation of legal standar ds and its 

application of those standards to the facts of the case. See 

Louis W. Epstein Family P'ship v. Kmart Corp., 13 F.3d 762, 

765-66 (3rd Cir. 1994); Polselli v. Nationwide Mut. Fire Ins. 

Co., 23 F.3d 747, 750 (3rd Cir . 1994). We review the district 

court's findings of fact for clear error . See Country Floors, 

Inc. v. P'ship of Gepner and Ford, 930 F .2d 1056, 1062 (3rd 

Cir. 1991) (citing Fed. R. Civ. P. 52(a)). 

III. Discussion 

A. Beta Spawn's Prima Facie Case 

To establish a prima facie case against a common carrier 

under the Carmack Amendment to the Interstate 

Commerce Act, 49 U.S.C. S 11706,4 a plaintiff must prove 

the following three elements: "(1) delivery of the goods to 

the initial carrier in good condition, (2) damage of the goods 

before delivery to their final destination, and (3) the amount 

of damages." Conair Corp. v. Old Dominion Fr eight Line, Inc., 

22 F.3d 529, 531 (3rd Cir. 1994) (citation omitted); see also 

Missouri Pacific R.R. Co. v. Elmore & Stahl , 377 U.S. 134, 

138 (1964). After a bench trial, the district court found that 

Beta Spawn succeeded in establishing each of these 

elements. 

FFE's main argument on appeal is that ther e was no

competent evidence for the trial court to find that the 

spawn were delivered to FFE in good condition.5 

Specifically, FFE contends that under the law of this 

_________________________________________________________________ 

4. The district court found that this action was controlled by the 

Carmack Amendment. The Carmack Amendment imposes liability on a 

common carrier for the actual loss or injury to goods in an interstate 

commerce shipment. See 49 U.S.C. S 11706. 

5. FFE does not contest the district court'sfindings as to the last two 

elements. 

 6 
circuit, a shipper must prove by "dir ect evidence" that the 

merchandise was in good condition when tender ed to the 

carrier if such merchandise was not visible or open to 

inspection at the time it was tendered. In support of its 

contention, FFE points to Blue Bird Food Prods. Co., v. 

Baltimore & Ohio R.R. Co., 474 F.2d 102 (3rd Cir. 1973) 

("Blue Bird I") appeal after remand, 492 F.2d 1329 (3rd Cir. 

1974) ("Blue Bird II"). W e believe that FFE's reliance on Blue 

Bird is misplaced. 

Blue Bird I involved a shipper who r elied solely upon a 

bill of lading, which represented that the carrier had 

received the shipment in "apparent good order," in order to 

prove that the goods had been tendered in good condition. 

See Blue Bird I, 474 F.2d at 104. The district court found 

such proof insufficient to establish the condition of the 

goods because the goods were in a sealed trailer and 

therefore not open for inspection. Bluebird Food Prods. Co. 

v. Baltimore and Ohio R.R. Co., 329 F . Supp. 1116, 1118 

(E.D. Pa. 1971), vacated 474 F.2d 102 (3rd Cir. 1973). The 

district court stated rather broadly, however , that "[w]here 

merchandise is sealed in a trailer, and the contents are not 

open and visible, the plaintiff must establish by direct 

evidence that the goods were delivered to the carrier in good 

order." Id. After initially r emanding the case for the district 

court to determine whether the trailer was indeed sealed, 

we affirmed the district court's finding that a bill of lading 

was insufficient to prove the condition of goods which had 

been in a sealed container. See Blue Bir d II, 492 F.2d at 

1331. Nevertheless, because the shipper in Blue Bird 

exclusively relied on the bill of lading, this court never 

reached the issue of what type of evidence--in addition to 

a clean bill of lading--would establish that the merchandise 

had been delivered in good condition.6 

Other courts, apparently focusing on the "direct evidence" 

requirement in the district court's opinion, have cited Blue 

_________________________________________________________________ 

6. We explicitly stated in Blue Bird II, "[t]he issue presented is whether 

the introduction of a bill of lading with the notation `Received . . . the 

property described below, in apparent good order . . .' is sufficient to 

establish the good condition of the lading at the time it was delivered by 

the shipper to the carrier." Blue Bir d II, 492 F.2d at 1331. 

 7 
Bird for the proposition that wher e goods are not open and 

visible, a shipper may present only dir ect evidence, as 

opposed to circumstantial evidence, in or der to establish 

the condition of its goods. See, e.g. , D.P. Apparel Corp. v. 

Roadway Express, Inc., 736 F.2d 1, 4 (1st Cir. 1984) ("In 

fact, where the contents of the shipment ar e not visible or 

open for inspection, additional direct and affirmative proof 

is necessary to show that the cloth was in good condition 

when delivered to Roadway") (citing, inter alia, Blue Bird I, 

474 F.2d at 107-08); see also Ed Miniat, Inc. v. Baltimore 

and Ohio R.R. Co., 587 F.2d 1277, 1282 (D.C. Cir. 1978) 

("Under section 20(11) [of the Carmack Amendment], the 

burden of establishing the condition of the beef when 

entrusted to the railroad clearly lies on the shipper and 

discharging this burden requir es some direct evidence of 

this condition.") (citations omitted). 

In our view, however, the holding in Blue Bird, and even 

the "must establish direct evidence" language in the district 

court's opinion, were simply directed at making shippers 

produce evidence, other than a clean bill of lading, to 

establish the condition of goods which were not open and 

visible for the carrier's inspection. Accordingly, we reject the 

view that Blue Bird renders all circumstantial evidence 

irrelevant where the goods are not open and visible.7 See 

Fine Foliage of Fla., Inc. v. Bowman Transp., Inc., 901 F.2d 

1034, 1038 (11th Cir. 1990) ("Wefind no support for [the 

carrier's] assertion that a judge may not r ely on 

circumstantial evidence to establish the original condition 

of goods when that evidence is substantial and r eliable."). 

Although a bill of lading, by itself, is not sufficient to 

establish the condition of goods that were neither visible 

nor open to inspection, a shipper may rely on other reliable 

evidence--direct or circumstantial--which is "sufficient to 

establish by a preponderance of all the evidence the 

_________________________________________________________________ 

7. It is logical that courts would prohibit a shipper's reliance on a 

clean 

bill of lading alone where goods are not open and visible, because the 

condition of such goods are unknown to the carrier. See Pillsbury v. 

Illinois Cent. Gulf R.R., 687 F.2d 241, 244 (8th Cir. 1982) ("Where goods 

are shipped under seal, the condition of the goods cannot be within the 

carrier's knowledge."). It does not necessarily follow, however, that 

reliance on all other circumstantial evidence should be disallowed. 

 8 
condition of the goods upon delivery." Pillsbury Co., 687 

F.2d at 244 (8th Cir. 1982). Thus, even assuming that the 

shipment in the present case was not open and visible,8 the 

only difference between Beta Spawn's evidentiary burden 

here, as opposed to in a case where goods are open and 

visible, is that Beta Spawn cannot rely solely on the bill of 

lading to establish the spawn's condition. 

Unlike the plaintiff in Blue Bird , Beta Spawn does not 

rely on the bill of lading as proof that it tendered the spawn 

to FFE in good condition. Instead, it mainly r elies upon the 

testimony of Peterson, an officer and director of 

Mushrooms, Etc. Peterson testified that he successfully 

used a portion of the remaining Italspawn fr om the original 

June Shipment three weeks after the 16,000 units of spawn 

were shipped to Pennsylvania. Although we r ecognize that 

Peterson's success is not conclusive proof as to the 

condition of the spawn at issue because the two portions of 

spawn were kept in separate facilities, it does carry some 

weight in that all the spawn were stored under similar 

conditions. Peterson testified that the spawn--both on and 

off the farm--were refrigerated for the entire summer and 

never removed from the coolers. Further more, the cooler in 

which the spawn at issue were stored had a backup 

_________________________________________________________________ 

8. The district court made no finding as to whether the shipment of 

spawn was open and visible. FFE asserts in its brief that the shipment 

was not open to inspection because the spawn wer e contained in closed 

boxes and because FFE's policy prohibited drivers from opening closed 

boxes. We do not agree that such evidence necessarily establishes that 

the spawn were not visible and open to inspection. In contrast to the 

goods in Blue Bird, the spawn here were not in a sealed trailer.See Blue 

Bird II, 492 F.2d at 1332-33. Although FFE's policy did not permit 

drivers to inspect the contents of closed boxes, there is no evidence that 

FFE was prohibited by Beta Spawn from per forming such inspection. 

The only evidence that FFE would have been hinder ed from opening the 

boxes is that the boxes had been secured to the pallets with tape 

wrapped around them. The boxes were not, however, shrink wrapped 

when delivered to Forbito. Furthermor e, Forbito, FFE's driver, testified 

that when the boxes were loaded onto the truck, some of the boxes' top 

lids were open such that he could see some of the bags of spawn. 

Nonetheless, because we hold that Blue Bir d does not prohibit Beta 

Spawn from relying on circumstantial evidence, we need not affirmatively 

decide whether or not the spawn were open and visible. 

 9 
generator in case of power outage. Peterson visited the 

facilities where the spawn were stor ed every three to four 

days. 

Peterson's assertion that he maintained the spawn at a 

proper temperature during the summer was corroborated to 

some degree by Forbito's testimony that when he received 

the spawn, the temperature inside the boxes was 34 

degrees and by evidence that the temperatur e was at 34 

degrees when the truck reached Chicago. As Testa testified, 

once spawn is exposed to heat, an attempt to r e-cool the 

spawn will not be successful. Therefore, the fact that the 

boxes were at 34 degrees on the day they were tendered to 

FFE and on the day they reached Chicago tends to show 

that the spawn previously had been stor ed at the proper 

temperature and were in good condition when tendered to 

FFE. 

In addition, Peterson personally examined one of the bags 

of spawn before it was loaded onto FFE's trailer. There was 

no "characteristic odor" of spawn fermentation nor did the 

bag have a yellowish tint which signifies damaged spawn. 

Peterson's testimony that the bag contained good pr oduct 

was direct evidence only as to the condition of the spawn in 

that particular bag, but was circumstantial evidence of the 

spawn's condition in the other bags, as the bags had all 

been stored and loaded together. FFE asserts that there 

was insufficient proof that the spawn wer e in good

condition in light of the fact that Forbito took exception to 

all four hundred boxes on the bill of lading and testified 

that the bottom two layers of boxes on every pallet were 

crushed, torn or open. Peterson testified, however, that he 

looked through the cracks where the boxes were torn and 

did not see any ripped bags. In addition, Peterson testified 

that even if boxes were torn, it was still possible for the 

spawn to remain undamaged. In fact, when Peterson 

initially received the June Shipment fr om Beta Spawn, he 

successfully used spawn which had arrived in tor n boxes to 

grow his first crop of mushrooms. 

Thus, considering all the evidence presented to the

district court, we hold that the court did not err in finding 

that Beta Spawn met its burden of proof that the spawn 

were delivered to FFE in good condition. 

 10 
B. Applicability of FFE's Tariff 

Once a plaintiff has established a prima facie case under 

the Carmack Amendment, the burden shifts to the carrier 

to prove that it was free from negligence and that the 

damage was caused solely by "(a) the act of God; (b) the 

public enemy; (c) the act of the shipper himself; (d) public 

authority; (e) or the inherent vice or natur e of the goods." 

Missouri Pacific R.R Co. v. Elmore & Stahl, 377 U.S. 134, 

137 (1964) (citation and internal quotation marks omitted). 

The district court found that no such proof was offered at 

trial. FFE does not directly challenge thatfinding, but in an 

apparent attempt to rebutt Beta Spawn's prima facie case 

and to recover its freight charges, argues that its tariff 

regulated the temperature at which the trailer was to be 

maintained. See City of New Orleans v. S. Scrap Material 

Co., 491 F. Supp. 46, 48 (E.D. La. 1980) ("A tariff confers 

rights and imposes duties as a matter of law. Carriers, 

shippers, and consignees are bound by the pr ovisions of a 

tariff duly filed by the carrier.") (citations omitted). 

According to the record, FFE publishes a tariff that sets 

regulations for, inter alia, goods that are shipped with 

protective services. Section C of the tarif f provides that an 

LTL shipment, shipped "cooler and so stated on the Bill of 

Lading by the shipper," must be maintained at an air 

temperature of between 35 and 60 degrees. The 

temperature inside the boxes of spawn when they reached 

Pennsylvania was between 48 and 58 degrees. Thus, FFE 

argued at trial that it provided the r equisite services in that 

the spawn arrived at a temperature that fell within the 

range prescribed by the tariff. The district court rejected 

this argument on the ground that FFE's tariff did not apply 

to the shipment. 

On appeal, FFE maintains that the inclusion of the word 

"chill" on the bill of lading meant that the parties agreed 

that the tariff provision regulating the transportation of LTL 

shipments of "cooler" commodities applied to the shipment 

of spawn. Yet, it is undisputed that the wor d "chill" is not 

found anywhere in FFE's tariff. FFE asserts that the word 

"chill" is synonymous with "cooler" because FFE's Claims 

Director, Raymond Flemming testified that to him, the word 

"chill" meant the same as "cooler." Although Flemming's 

 11 
testimony may prove that Flemming understood the word 

"chill" to signify "cooler," it does not necessarily establish 

Peterson's understanding of the word. Accor dingly, we hold 

that the district court did not err by finding that FFE's tariff 

was not applicable to the shipment in this case. 

C. Agreement to Maintain Temperature at 34 Degrees 

FFE also argues that it was clearly err oneous for the 

district court to find that FFE had agreed to maintain its 

trailer at 34 degrees while transporting Beta Spawn's 

goods. The district court found that such agr eement existed 

based on (1) prior business dealings between FFE and Beta 

Spawn involving the transport of spawn; (2) a "verbal 

agreement" between FFE and Beta Spawn that FFE would 

transport the spawn at 34 degrees; (3) the pr esence of the 

words "chill" and "34 degrees" noted on the bill of lading by 

Forbito; and (4) the temperature of FFE's trailer when it 

arrived in Chicago. FFE objects to this reliance on extrinsic 

evidence by the district court because the bill of lading, as 

prepared by Peterson, did not contain an agreement to 

maintain the trailer at 34 degrees. 

Under Pennsylvania law, "[w]here the contract or 

agreement is unambiguous, parole evidence of prior 

inconsistent terms or negotiations is inadmissible to 

demonstrate intent of the parties." Harley-Davidson, Inc. v. 

Morris, 19 F.3d 142, 148 (3rd Cir . 1994); see also Gianni v. 

Russell & Co., Inc., 126 A 791, 792 (Pa. 1924). 9 Likewise, in 

its role as contract of carriage, the ter ms and provisions of 

a bill of lading cannot be varied by extrinsic evidence, and 

all negotiations leading up to the written agr eement are 

presumed to be merged therein. See Internatio, Inc. v. M/V 

Yinka Folawiyo, 480 F. Supp. 1244, 1252 (E.D. Pa. 1979); 

see also EF Operating Corp. v. American Bldgs, 993 F.2d 

1046, 1050 (3rd. Cir. 1993) ("As a contract, [a bill of lading] 

is subject to general rules of construction under contract 

law.") (citations omitted). Where a contract provision is 

ambiguous, however, extrinsic evidence may be properly 

admitted in an attempt to resolve the ambiguity. In re 

Herr's Estate, 161 A.2d 32, 34 (Pa. 1982). 

_________________________________________________________________ 

9. As the parties do not dispute that Pennsylvania law governs the 

interpretation of the agreement, we will apply Pennsylvania law. 

 12 
A contract is ambiguous if "it is reasonably or fairly 

susceptible of different constructions and is capable of 

being understood in more senses than one and is obscure 

in meaning through indefiniteness of expr ession or has a 

double meaning." State Highway and Bridge Auth. v. EJ 

Albrecht Co., 430 A.2d 328, 230 (Pa. Commw. Ct. 1981) 

(citation omitted). Upon examination of the bill of lading, we 

conclude that the words "chill" and "T emp. 34 degrees" 

written by Forbito render the agreement ambiguous.10 To 

begin with, the word "chill" gives no indication as to the 

exact temperature intended by the parties, and there is no 

explanation of its meaning on the bill of lading. The lack of 

clarity surrounding the word "chill" is demonstrated by the 

parties' differing interpretations of the word. FFE asserts 

that "chill" meant that the parties intended that the 

shipment be kept at the temperature requir ed under its 

tariff for "cooler" commodities. Y et Forbito testified that 

when he wrote down "chill" after asking Peterson for the 

proper temperature to ship the spawn, he believed "chill" 

meant "34 to 37 degrees." Likewise, it is unclear whether 

"Temp. 34 degrees" indicates the temperature inside the 

boxes at the time they were tendered to FFE or the 

_________________________________________________________________ 

10. FFE argues that we should not look to the words "chill" and "Temp. 

34 degrees" on the bill of lading because, as an independent contractor, 

Forbito had no authority to enter into agreements to bind FFE. The 

record reflects, however, that Forbito drove exclusively for FFE, was 

given authority by FFE to transport the shipment of spawn, specifically 

asked Peterson at what temperature the spawn was to be shipped, and 

was the only representative of FFE to sign the bill of lading. Thus, even 

assuming Forbito had no actual authority to add ter ms to the bill of 

lading regarding the proper temperature of the shipment, we believe 

there is sufficient evidence that he had apparent authority to do so. See 

Leidigh v. Reading Plaza Gen'l, Inc., 636 A.2d 666, 667-68 (Pa. Super. Ct. 

1994) ("[T]his court has found apparent authority to be established with 

a showing of (1) limited authority given to the agent by the principal; 

and 

(2) conduct of the agent which demonstrates to the third-party the 

agent's apparent authority to bind the principal."). FFE apparently 

recognizes such authority on the part of Forbito because it argues in its 

brief that we should rely on the word"chill," written by Forbito, as 

evidence that the parties intended for FFE's tarif f to apply. 

 13 
11. Forbito testified that he took the temperature of some of the boxes at 

the time they were loaded onto his truck in California and found it to be 

34 degrees. But, when asked on cross-examination, "And when you write 

on here, chill, temperature 34, that's to keep the product at 34 

degrees?," Forbito replied, "At 34 degrees, right."

temperature at which FFE agreed to transport the spawn. 

Forbito's testimony supports both interpretations.11 

Because we perceive ambiguity in the wor ds "chill" and 

"Temp. 34 degrees," we conclude that the district court 

properly considered extrinsic evidence in determining the 

existence of an agreement to maintain the trailer at 34 

degrees. Accordingly, we agree with its findings that FFE 

did not provide the requisite services under the agreement 

and that FFE is not entitled to recover shipping charges. 

IV. Conclusion 

Based on the foregoing reasons, we affir m the judgment 

of the district court in favor of Beta Spawn on its claim for 

damages and against FFE on its counterclaim to recover 

freight charges. 

AFFIRMED. 

A True Copy: 

Teste: 

 Clerk of the United States Court of Appeals 

 for the Third Circuit 

 14