IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF OHIO

EASTERN DIVISION

Central Marketing Associates, Inc.,

Plaintiff

 v.

Robert E. Cresap d/b/a Robert Cresap

Trucking and Daily Underwriters of

America,

Defendant

:

:

:

:

:

Civil Action 2:12-cv-01109

Magistrate Judge Abel

ORDER

This matter is before the Court on defendants Robert E. Cresap d/b/a Robert

Cresap Trucking (“Cresap”) and Daily Underwriters of America’s (“DUOA”) June 3,

2013 motion for partial summary judgment (doc. 18) and plaintiff Central Marketing

Associates’ (“CMA”) June 3, 2013 motion for partial summary judgment (doc. 20).

I. Allegations in the Complaint

The complaint pleads a claim under the Carmack Amendment for losses Central

Marketing Associates, Inc. suffered when perishable goods were allegedly damaged

during shipment. It makes the following allegations. The bill of lading advised Cresap

Trucking that the shipment comprised perishable food that required a temperature of

32 - 34 degrees at all times. The consignee of the shipment, Meijer of Tipp City, Ohio

rejected the entire shipment due to spoilage caused by temperature abuse. Investigation

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revealed that due to a malfunction and breakdown the transport refrigeration unit

permitted temperatures in excess of 34 degrees. Central Marketing Associates, Inc.'s loss

was $53,308.

II. Arguments of the Parties

A. Defendants Robert E. Cresap d/b/a Robert Cresap Trucking and

Daily Underwriters of America

Defendants argue that the material facts of record clearly establish that the loss

complained of was caused by something other than a mechanical breakdown of the

refrigeration unit and outside the finite and clearly-expressed limitations of the cargo

liability insurance policy’s refrigeration breakdown endorsement. Defendants maintain

that CMA has misapprehended the meaning and the coverage of the refrigeration

breakdown endorsement

DUOA provided Cresap with a Motor Truck Cargo Liability Form, which was

modified and supplemented by a Commercial Marine Refrigeration Breakdown

Endorsement. The Endorsement provides that DUOA will pay for a loss to covered

property due to spoilage resulting from malfunction or mechanical breakdown of a

temperature control and/or refrigeration unit attached to any vehicle carrying the

covered property.

Based on Cresap’s report that the trailer chute had been knocked down, DUOA

advised Cresap that the loss was not covered by the Endorsement because ThermoKing, the manufacturer of the refrigeration unit stated that a trailer chute is not

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considered to be part of the refrigeration unit. The chute is sold separately as an

accessory and is not needed to cool the contents of the trailer. 

Defendants maintain that the refrigeration unit performed as expected and did

not suffer from any malfunction or mechanical breakdown. Temperature recorders

were inserted with the cherries in the trailer to record the temperature inside the trailer

for the duration of the trip from Yakima, Washington to Tipp City, Ohio. One

temperature recorder was placed at the front of the trailer and one at the rear. The

recorder at the front of the trailer recorded temperatures between 32 and 34 degrees

Fahrenheit. The unit at the back of the trailer recorded temperatures warmer than that. 

Defendants contend that the trailer chute is an air handling system that is

separate and distinct from an air chilling or a mechanical refrigeration unit. The chute

and refrigeration unit provide separate and distinct roles. Defendants maintain that the

chute is not part of the refrigeration unit, and a malfunction of the chute does not

equate to a breakdown of the refrigeration unit. 

Defendants argue that plaintiff has the burden of proving that the loss was

caused by a peril insured against in the cargo policy. Defendants maintain that there is

no evidence of a mechanical breakdown. The refrigeration unit performed flawlessly

and continuously throughout the trip, maintaining the inside temperature of the front

of the trailer at a constant 32-34 degrees Fahrenheit as required by the bill of lading and

evidenced by the temperature recording. Cresap stated that he entered the trailer after

the load was rejected and found that the clips holding the chute had broken. He

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believes that chute was torn when the pallets of cherries were loaded onto the trailer.

Cresap picked up a frozen load the day after the load of cherries was rejected, and

delivered it to Iowa without any problems maintaining the temperature. 

B. Plaintiff Central Marketing Associates

Plaintiff CMA argues that the Refrigeration Breakdown Endorsement provides

coverage in the event of any “malfunction” or “mechanical breakdown” of a

temperature control and/or refrigeration unit. In the alternative, plaintiff argues that

the Motor Truck Cargo Liability Coverage Form covers any damage to cargo for any

non-excluded cause, none of which are present here. The policy also contains Physical

Damage Coverage, which provides coverage where the cause of loss involved a

collision with an object such as a cargo loading device.

Plaintiff argues that according to industry experts, the chute is part of the

refrigeration unit. A refrigeration unit is not complete without all temperature control

elements properly functioning, including the chute.

Plaintiff maintains that the language of the contract does not support a denial of

coverage. Defendant chose to delineate its loss coverage by using certain vague and

undefined terms in addition to using the term “or”, creating four possible losses. As a

result, “malfunction” is not the same as “mechanical breakdown”, and “temperature

control” unit is not the same as “refrigeration unit.” Plaintiff maintains that in order to

defeat coverage DUOA must establish not only that the policy is capable of its

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interpretation of the policy, but that its interpretation is the only one that can fairly be

placed on the language in question.

Plaintiff further argues that the to the extent that DUOA attempts to argue that

the chute was knocked off the system by an impact at the loading dock, this event

would trigger coverage under the provision providing for “collision” coverage. 

III. Summary Judgment

Summary judgment shall be granted “if the movant shows that there is no

genuine dispute as to any material fact and the movant is entitled to judgment as a

matter of law.” Fed. R. Civ. P. 56(a). A party asserting the absence or presence of a

genuine dispute must support that assertion by either “(A) citing to particular parts of

materials in the record, including depositions, documents, electronically stored

information, affidavits or declarations, stipulations (including those made for purposes

of the motion only), admissions, interrogatory answers, or other materials”; or “(B)

showing that the materials cited do not establish the absence or presence of a genuine

dispute, or that an adverse party cannot produce admissible evidence to support the

fact.” Fed. R. Civ. P. 56(c)(1).

A party may object that the cited material “cannot be presented in a form that

would be admissible in evidence,” and “[t]he burden is on the proponent to show that

the material is admissible as presented or to explain the admissible form that is

anticipated.” Fed. R. Civ. P. 56(c)(2); Fed. R. Civ. P. 56 advisory committee’s note. If a

party uses an affidavit or declaration to support or oppose a motion, such affidavit or

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declaration “must be made on personal knowledge, set out facts that would be

admissible in evidence, and show that the affiant or declarant is competent to testify on

the matters stated.” Fed. R. Civ. P. 56(c)(4).

While the court must consider the cited materials, it may also consider other

materials in the record. Fed. R. Civ. P. 56(c)(3). However, “[i]n considering a motion for

summary judgment, the district court must construe the evidence and draw all

reasonable inferences in favor of the nonmoving party.” Revis v. Meldrum, 489 F.3d 273,

279 (6th Cir. 2007) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,

587 (1986)). “The central issue is ‘whether the evidence presents a sufficient

disagreement to require submission to a jury or whether it is so one-sided that one party

must prevail as a matter of law.’” Id., 489 F.3d at 279–80 (citing Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 251–52 (1986)).

IV. Discussion

The parties appear to agree on the basic facts underlying this case. Plaintiff CMA

was hired by its customer, Meijer, to obtain transportation for a shipment of bing

cherries from its point of origin in Yakima, Washington to its point of destination in

Meijer, in Tipp City, Ohio. On July 2, 2012, defendant Cresap Trucking took possession

of the shipment. Meijer issued a bill of lading that advised Cresap Trucking to maintain

the cherries at a temperature of 32-34 degrees Fahrenheit. Upon delivery to its point of

destination, Meijer of Tipp City, Ohio rejected the entire shipment due to spoilage

caused by not being maintained at the proper temperature. 

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Cresap made a demand upon DUOA to provide insurance coverage in

accordance with his insurance policy. On July 26, 2012, DUOA denied coverage on the

basis that its Refrigeration Breakdown Endorsement did not include any loss associated

with the chute. 

Although Cresap speculated that the chute was damaged when the cherries were

loaded, what damaged the chute and caused it to fail to function properly is unknown.

The parties, however, agree, that the refrigeration unit in the front of the trailer

mechanically functioned properly as evidenced by the temperature readings taken from

the front of the trailer. 

This case turns on the interpretation of the Commercial Marine Refrigeration

Breakdown Endorsement, which provides in pertinent part:

We will pay for “loss” to Covered Property when its due to spoilage,

change in flavor, wet or dampness, being spotted, discolored, molded,

rusted, frosted or rotten IF resulting from a malfunction or mechanical

breakdown of a temperature control and/or refrigeration unit attached to

any vehicle covering the Covered Property.

Doc. 20-11. Specifically, the Court must determine whether the failure of the chute to

properly circulate the refrigerated air constitutes a “malfunction” of a “temperature

control”. 

The interpretation of an insurance contract is a question of law. GenCorp, Inc. v.

American Int’l Underwriters, 178 F.3d 804 (6th Cir. 1999). To determine the intent of the

parties, the Court looks at the plain and ordinary meaning of the language in the

contract to determine the intent of the parties. Safeco Ins. Co. Of Am. v. White, 122 Ohio

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St. 3d 562, 567 (2009). Ambiguous provisions in an insurance contract must be

construed against the insurer. Id.

Defendant argues that the separation of the chute from the trailer wall cannot

constitute a malfunction or mechanical breakdown of the refrigeration unit. Plaintiff

contends, that the chute is a “temperature control” unit that malfunctioned. What the

Court must decide is whether the air flow system, i.e., the chute, is a temperature

control unit. The chute does not provide refrigeration, rather it circulates the

refrigerated air. 

For mechanical refrigeration to properly maintain the desired temperature in the

trailer, an air circulation system is necessary. See doc. 20-1 at PageID# 342; UNITED

STATES DEPT. OF AGRICULTURE, Protecting Perishable Foods During transport by Truck,

(Handbook No. 669, Sept, 1995) (“Air circulation is one of the most important factors in

protecting refrigerated loads of perishable foods. Refrigeration capabilities are

meaningless if the refrigerated air is not properly circulated to maintain product

temperature.”). Although defendants seem to contend that a temperature control unit

and a refrigeration unit are synonymous, the contractual language does not support

that interpretation. Here, coverage is provided for malfunctioning of a temperature

control unit and/or a refrigeration unit. The use of “and/or” indicates that these two

units are separate and distinct from one another and that one or both of those units

could malfunction. The function of the chute is to control the temperature throughout

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the trailer. Here, a malfunction of the chute resulted in the spoilage of the cherries. I

conclude that this loss is covered under the Refrigeration Breakdown Endorsement. 

V. Conclusion

For the reasons stated above, defendants Robert E. Cresap d/b/a Robert Cresap

Trucking (“Cresap”) and Daily Underwriters of America’s (“DUOA”) June 3, 2013

motion for partial summary judgment (doc. 18) is DENIED and plaintiff Central

Marketing Associates’ (“CMA”) June 3, 2013 motion for partial summary judgment

(doc. 20) is GRANTED.

s/Mark R. Abel 

United States Magistrate Judge

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