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. e du/thir dc ir c uit_2001/104Filed 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 des ignation.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 f rom the judgment of the district court finding FFE liab le to Beta Spawn, Inc. for the value of a shipment of mushr oo m spawn damaged during transport. FFE contends that t he 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 t o the shipment at issue; and (3) that FFE had agreed to m aintain the temperature of its trailer at 34 degr ees Fahre nheit1 when transporting the spawn. Because we hold that t he 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 counte r claim to recover freight charges.

I. Background

Beta Spawn, a Pennsylvania corporation, supplies mushroom spawn to the mushroom industry. 2 At all t imes

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1. All references to "degrees" herein are to the Fa hrenheit scale.

2. "Spawn are the `fragments of mycelia used to sta rt 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 om itted).

2relevant to this case, Beta Spawn has been the excl usive

distributor of a variety of spawn from Italy known as Italspawn. FFE is a common carrier hired by Beta Sp awn to transport a shipment of Italspawn from Camarillo, California to Beta Spawn's facility in Pennsylvania

.

According to the district court's findings, mushroo m spawn are "living, breathing" or ganisms that must be maintained at a temperature of approximately 36 deg rees. Harry Testa, vice-president of Beta Spawn, testifie d that when spawn are exposed to higher temperatur es, the y begin to generate their own heat and to ferment. Sp awn that have begun to ferment are damaged and lose the ir viability. Once spawn are exposed to heat, attempts to recool the spawn will not be successful. Because spaw n 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 shipme nt in California, testified that some of the boxes contai ning the spawn were torn and crushed at the time of arrival. Nevertheless, Peterson used spawn out of those dama ged boxes to grow his first crop of mushr ooms.

In September 1997, Peterson agreed to sell 16,000 u nits of the Italspawn back to Beta Spawn. These spawn ha d been stored for three months in a facility that was nearby, but not on, the farm premises and, accor ding to Pe terson, had remained refrigerated the entir e time. Peterso n testified that about three weeks after the spawn wer e shippe d to Beta Spawn, he used a remaining portion of the June Shipment to grow a successful crop of mushrooms. Th at portion, however, was not stored in the same facili ty as the spawn sold to Beta Spawn.

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

mushroom farm.

3On behalf of Beta Spawn, Testa contacted Michael Co nn

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 i n a trailer maintained at 34 degrees.

On September 23, 1997, FFE entered into a bill of l ading /contract of carriage with Mushrooms, Etc. of Calif ornia for the transportation of the spawn to Pennsylvania. Mushrooms, Etc. requested that FFE pr ovide it with lessthan-truckload ("LTL"), "chilled" service. Beta Spa wn, as consignee, agreed to pay FFE $2,685.36 for the ship ment upon delivery. The bill of lading, prepar ed by Pet erson 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 car dboard dividers. Each cardboard box contained holes to per mit air

circulation. Peterson loaded the boxes into FFE's refrigerated trailer on 10 pallets, 40 boxes to a p allet. Initially, the boxes were only secured to the palle ts with clear plastic tape, but after the pallets wer e loa ded onto the truck, William Forbito, the driver for FFE, shrink- wrapped the boxes to prevent their falling over during tran sport.

Forbito testified that when he picked up the spawn, he asked Peterson at what temperature he was to mainta in the shipment. After Peterson responded "it goes chilled ,"

Forbito recorded the word "chill" on the bill of la ding. 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 in side 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 bo xes on every pallet "were bubbled out like they'r e gettin g ready to bust open. The boxes was [sic] torn, they were crus hed. And boxes open." Forbito did not recall seeing any actual torn bags of spawn. After observing the damaged con dition of the boxes, Forbito called his dispatcher and was told he could accept the load as long as he noted the damag e on

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

condition of the entire load by writing "400" on th e bill of lading.

Peterson testified that before the boxes wer e load ed onto FFE's trailer, he opened one of the boxes and remov ed 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 co ndition because there was no yellowish tint and no odor . P eterson also looked through cracks of the torn boxes in ord er 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 de grees 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 car ried the shipment from California to Chicago. When the drive r arrived in Chicago, approximately 100 boxes wer e c rushed, 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 bou nd for Pennsylvania. When the boxes left Chicago, appr oxi mately 20 of the boxes had "leaking product exposed."

The shipment of spawn arrived at Beta Spawn's facil ity 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 dis tinct 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 mea nt 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 frei ght

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

judgment in favor of Beta Spawn. This appeal follow ed.

II. Standard of Review

This court has plenary review over the district cou rt's choice and interpretation of legal standar ds and i ts 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 t he district court's findings of fact for clear error . See Coun try 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 ca rrier

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 o f 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 th is

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4. The district court found that this action was co ntrolled by the Carmack Amendment. The Carmack Amendment imposes li ability on a common carrier for the actual loss or injury to goo ds in an interstate commerce shipment. See 49 U.S.C. S 11706.

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

elements.

6circuit, 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. 1 973) ("Blue Bird I") appeal after remand, 492 F.2d 1329 (3rd Cir. 1974) ("Blue Bird II"). W e believe that FFE's reli ance on Blue Bird is misplaced.

Blue Bird I involved a shipper who r elied solely u pon 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 cond ition. See Blue Bird I, 474 F.2d at 104. The district cour t found such proof insufficient to establish the condition of the goods because the goods were in a sealed trailer an d therefore not open for inspection. Bluebird Food Pr ods. Co. v. Baltimore and Ohio R.R. Co., 329 F . Supp. 1116, 1118 (E.D. Pa. 1971), vacated 474 F.2d 102 (3rd Cir. 197 3). The district court stated rather broadly, however , tha t "[w]here merchandise is sealed in a trailer, and the content s are not open and visible, the plaintiff must establish by d irect evidence that the goods were delivered to the carri er in good order." Id. After initially r emanding the case for the district

court to determine whether the trailer was indeed s ealed, we affirmed the district court's finding that a bil l of lading was insufficient to prove the condition of goods wh ich had been in a sealed container. See Blue Bir d II, 492 F.2d at 1331. Nevertheless, because the shipper in Blue Bir d exclusively relied on the bill of lading, this cour t never reached the issue of what type of evidence--in addi tion to a clean bill of lading--would establish that the me rchandise had been delivered in good condition.6

Other courts, apparently focusing on the "direct ev idence" requirement in the district court's opinion, have c ited Blue

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6. We explicitly stated in Blue Bird II, "[t]he iss ue presented is whether the introduction of a bill of lading with the notat ion `Received . . . the property described below, in apparent good order . . .' is sufficient to establish the good condition of the lading at the t ime it was delivered by the shipper to the carrier." Blue Bir d II, 492 F.2 d at 1331.

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

visible, a shipper may present only dir ect evidenc e, as opposed to circumstantial evidence, in or der to es tablish the condition of its goods. See, e.g. , D.P. Appare l Corp. v. Roadway Express, Inc., 736 F.2d 1, 4 (1st Cir. 1984 ) ("In fact, where the contents of the shipment ar e not v isible or open for inspection, additional direct and affirmat ive proof is necessary to show that the cloth was in good con dition when delivered to Roadway") (citing, inter alia, Bl ue Bird I, 474 F.2d at 107-08); see also Ed Miniat, Inc. v. Ba ltimore and Ohio R.R. Co., 587 F.2d 1277, 1282 (D.C. Cir. 1 978) ("Under section 20(11) [of the Carmack Amendment], the burden of establishing the condition of the beef wh en entrusted to the railroad clearly lies on the shipp er and discharging this burden requir es some direct evide nce of this condition.") (citations omitted).

In our view, however, the holding in Blue Bird, and even the "must establish direct evidence" language in th e district court's opinion, were simply directed at making shi ppers produce evidence, other than a clean bill of lading , to establish the condition of goods which were not ope n and visible for the carrier's inspection. Accordingly, we reject the

view that Blue Bird renders all circumstantial evid ence 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 c ondition of goods when that evidence is substantial and r el iable."). Although a bill of lading, by itself, is not suffic ient 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 "suffi cient to establish by a preponderance of all the evidence th e

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

clean bill of lading alone where goods are not open and v isible, 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 Ci r. 1982) ("Where goods are shipped under seal, the condition of the goods cannot be within the carrier's knowledge."). It does not necessarily fol low, however, that

reliance on all other circumstantial evidence shoul d be disallowed.

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

F.2d at 244 (8th Cir. 1982). Thus, even assuming th at the shipment in the present case was not open and visib le,8 the only difference between Beta Spawn's evidentiary bu rden here, as opposed to in a case where goods are open and visible, is that Beta Spawn cannot rely solely on t he 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 tendere d the spawn to FFE in good condition. Instead, it mainly r elie s upon the testimony of Peterson, an officer and director of Mushrooms, Etc. Peterson testified that he successf ully 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 ecogniz e that Peterson's success is not conclusive proof as to th e condition of the spawn at issue because the two por tions of spawn were kept in separate facilities, it does car ry some weight in that all the spawn were stored under simi lar conditions. Peterson testified that the spawn--both on and off the farm--were refrigerated for the entire summ er and never removed from the coolers. Further more, the c ooler in which the spawn at issue were stored had a backup

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8. The district court made no finding as to whether the shipment of spawn was open and visible. FFE asserts in its brie f that the shipment was not open to inspection because the spawn wer e contained in closed boxes and because FFE's policy prohibited drivers f rom opening closed boxes. We do not agree that such evidence necessari ly 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 se aled 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, th ere is no evidence that FFE was prohibited by Beta Spawn from per forming s uch inspection. The only evidence that FFE would have been hinder e d from opening the boxes is that the boxes had been secured to the pal lets with tape wrapped around them. The boxes were not, however, s hrink wrapped when delivered to Forbito. Furthermor e, Forbito, F FE's driver, testified that when the boxes were loaded onto the truck, som e of the boxes' top lids were open such that he could see some of the b ags of spawn. Nonetheless, because we hold that Blue Bir d does n ot prohibit Beta Spawn from relying on circumstantial evidence, we n eed not affirmatively decide whether or not the spawn were open and visib le.

9generator 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 a t a proper temperature during the summer was corroborat ed to some degree by Forbito's testimony that when he rec eived the spawn, the temperature inside the boxes was 34 degrees and by evidence that the temperatur e was a t 34 degrees when the truck reached Chicago. As Testa te stified, once spawn is exposed to heat, an attempt to r e-co ol the spawn will not be successful. Therefore, the fact t hat the boxes were at 34 degrees on the day they were tende red to FFE and on the day they reached Chicago tends to sh ow that the spawn previously had been stor ed at the p roper temperature and were in good condition when tendere d to

FFE.

In addition, Peterson personally examined one of th e bags of spawn before it was loaded onto FFE's trailer. T here was no "characteristic odor" of spawn fermentation nor did the bag have a yellowish tint which signifies damaged s pawn. 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 evidenc e of the spawn's condition in the other bags, as the bags ha d all been stored and loaded together. FFE asserts that t here was insufficient proof that the spawn wer e in good condition in light of the fact that Forbito took ex ception to all four hundred boxes on the bill of lading and te stified 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 Spa wn, 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 sp awn were delivered to FFE in good condition.

10B. Applicability of FFE's Tariff

Once a plaintiff has established a prima facie case under the Carmack Amendment, the burden shifts to the car rier 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 t he goods." Missouri Pacific R.R Co. v. Elmore & Stahl, 377 U.S . 134, 137 (1964) (citation and internal quotation marks o mitted). The district court found that no such proof was off ered 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 Mat erial Co., 491 F. Supp. 46, 48 (E.D. La. 1980) ("A tariff confers rights and imposes duties as a matter of law. Carri ers, shippers, and consignees are bound by the pr ovisio ns of a tariff duly filed by the carrier.") (citations omit ted).

According to the record, FFE publishes a tariff tha t sets regulations for, inter alia, goods that are shipped with protective services. Section C of the tarif f provi des that an LTL shipment, shipped "cooler and so stated on the Bill of Lading by the shipper," must be maintained at an ai r temperature of between 35 and 60 degrees. The temperature inside the boxes of spawn when they rea ched Pennsylvania was between 48 and 58 degrees. Thus, F FE argued at trial that it provided the r equisite ser vices 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 n ot apply to the shipment.

On appeal, FFE maintains that the inclusion of the word "chill" on the bill of lading meant that the partie s agreed that the tariff provision regulating the transporta tion of LTL shipments of "cooler" commodities applied to the sh ipment of spawn. Yet, it is undisputed that the wor d "chi ll" is not found anywhere in FFE's tariff. FFE asserts that th e word "chill" is synonymous with "cooler" because FFE's C laims Director, Raymond Flemming testified that to him, t he word "chill" meant the same as "cooler." Although Flemmi ng's

11testimony may prove that Flemming understood the wo rd

"chill" to signify "cooler," it does not necessaril y 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 maint ain its trailer at 34 degrees while transporting Beta Spawn 's goods. The district court found that such agr eemen t existed based on (1) prior business dealings between FFE an d Beta Spawn involving the transport of spawn; (2) a "verb al agreement" between FFE and Beta Spawn that FFE woul d transport the spawn at 34 degrees; (3) the pr esenc e of the words "chill" and "34 degrees" noted on the bill of lading by Forbito; and (4) the temperature of FFE's trailer w hen 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 L ikewise, in its role as contract of carriage, the ter ms and pr ovisions of a bill of lading cannot be varied by extrinsic evid ence, and all negotiations leading up to the written agr eeme nt are presumed to be merged therein. See Internatio, Inc. v. M/V Yinka Folawiyo, 480 F. Supp. 1244, 1252 (E.D. Pa. 1 979); see also EF Operating Corp. v. American Bldgs, 993 F.2d 1046, 1050 (3rd. Cir. 1993) ("As a contract, [a bil l of lading] is subject to general rules of construction under c ontract law.") (citations omitted). Where a contract provis ion is ambiguous, however, extrinsic evidence may be prope rly admitted in an attempt to resolve the ambiguity. In re Herr's Estate, 161 A.2d 32, 34 (Pa. 1982).

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9. As the parties do not dispute that Pennsylvania law governs the interpretation of the agreement, we will apply Penn sylvania law.

12A contract is ambiguous if "it is reasonably or fai rly

susceptible of different constructions and is capab le of being understood in more senses than one and is obs cure 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. 198 1) (citation omitted). Upon examination of the bill of lading, we conclude that the words "chill" and "T emp. 34 degr ees" written by Forbito render the agreement ambiguous.1 0 To begin with, the word "chill" gives no indication as to the exact temperature intended by the parties, and ther e is no explanation of its meaning on the bill of lading. T he lack of clarity surrounding the word "chill" is demonstrate d by the parties' differing interpretations of the word. FFE asserts that "chill" meant that the parties intended that t he shipment be kept at the temperature requir ed under its

tariff for "cooler" commodities. Y et Forbito testi fied that when he wrote down "chill" after asking Peterson fo r the proper temperature to ship the spawn, he believed " chill" meant "34 to 37 degrees." Likewise, it is unclear w hether "Temp. 34 degrees" indicates the temperature inside the boxes at the time they were tendered to FFE or the

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10. FFE argues that we should not look to the words "chill" and "Temp. 34 degrees" on the bill of lading because, as an in dependent contractor, Forbito had no authority to enter into agreements t o bind FFE. The record reflects, however, that Forbito drove exclus ively 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 ship ment, we believe there is sufficient evidence that he had apparent a uthority 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 t o be established with a showing of (1) limited authority given to the age nt 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 be cause it argues in its brief that we should rely on the word"chill," writt en by Forbito, as evidence that the parties intended for FFE's tarif f to apply.

1311. Forbito testified that he took the temperature of some of the boxes at

the time they were loaded onto his truck in Califor nia 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 sp awn. Forbito's testimony supports both interpretations.1 1

Because we perceive ambiguity in the wor ds "chill" and "Temp. 34 degrees," we conclude that the district c ourt properly considered extrinsic evidence in determini ng the existence of an agreement to maintain the trailer a t 34 degrees. Accordingly, we agree with its findings th at FFE did not provide the requisite services under the ag reement and that FFE is not entitled to recover shipping ch arges.

IV. Conclusion

Based on the foregoing reasons, we affir m the judg ment of the district court in favor of Beta Spawn on its claim for damages and against FFE on its counterclaim to reco ver freight charges.

AFFIRMED.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

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