PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

MCCALL-THOMAS ENGINEERING

COMPANY, INCORPORATED,

Plaintiff-Appellant,

No. 95-1920

v.

FEDERAL EXPRESS CORPORATION,

Defendant-Appellee.

Appeal from the United States District Court

for the District of South Carolina, at Orangeburg.

Charles E. Simons, Jr., Senior District Judge.

(CA-93-850-5-6)

Argued: February 1, 1996

Decided: April 8, 1996

Before HALL and ERVIN, Circuit Judges, and BLAKE,

United States District Judge for the District of Maryland,

sitting by designation.

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Affirmed by published opinion. Judge Ervin wrote the opinion, in

which Judge Hall and Judge Blake joined.

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COUNSEL

ARGUED: Thomas Braxton Bryant, III, BRYANT, FANNING &

SHULER, Orangeburg, South Carolina, for Appellant. Cynthia Joyce

Collins, FEDERAL EXPRESS CORPORATION, Memphis, Tennessee, for Appellee.

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OPINION

ERVIN, Circuit Judge:

Appellant McCall-Thomas Engineering Co., Inc., engaged appellee

Federal Express Corporation to deliver a shipment C.O.D. and

instructed the carrier to collect a cashier's check. The cashier's check

Federal Express returned to McCall-Thomas turned out to be fraudulent. In McCall-Thomas's suit to recover the amount of the bogus

check, the district court granted summary judgment in favor of Federal Express on the ground that Federal Express fully performed

under the terms of the contract. Finding no error in the decision

below, we affirm.

I.

McCall-Thomas is a South Carolina company that sells computers

and computer equipment. In February, 1993, it accepted an order for

twenty computers from Medicomp Medical Supplies, which was in

fact a sham operation. McCall-Thomas contracted with Federal

Express to ship the computers C.O.D. to Medicomp. By way of Federal Express's standard C.O.D. Airbill, a preprinted form, McCallThomas instructed Federal Express to collect a cashier's check in the

amount of $84,464.55. The Airbill directed delivery to Ron Stevens,

Medicomp Medical Supplies, 1250 Long Beach Blvd., Los Angeles,

CA, 90021.

The face of the Airbill specifically incorporated the terms printed

on the back of the form, as well as the terms of a separate publication:

"Use of this airbill constitutes your agreement to the service conditions in our current Service Guide available upon request. SEE BACK

OF SENDER'S COPY OF THIS AIRBILL FOR INFORMATION."

The back of the Airbill included the following terms:

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AGREEMENT TO TERMS

By giving us your package to deliver, you agree to all the

terms on this Airbill and in our current Service Guide,

which is available on request. If there is a conflict between

the current Service Guide and this Airbill, the Service Guide

will control. No one is authorized to alter or modify the

terms of our Agreement.

C.O.D. SERVICE/C.O.D. AMOUNT

C.O.D. Service consists of our carriage of goods to your

recipient, collection of a check or money order issued by or

on behalf of your recipient made payable to you, and return

delivery of the check or money order to you. . . . All checks

and money orders are collected at your risk, including risk

of non-payment and forgery. . . .

The Service Guide contained a similar provision relating to the

C.O.D. Service, and further provided that "Performance of the C.O.D.

Service will not constitute us as the shipper's agent for any purpose,

including, but not limited to, completion of the sale of the goods by

the shipper to the recipient."

On Saturday, February 6, and again on Monday, February 8, Federal Express unsuccessfully attempted to deliver the computers. The

building located at 1250 Long Beach Blvd. was an office complex

surrounded by a locked gate; entry was to be obtained by calling a

specific suite number. The Airbill did not list a suite number, and the

office complex directory included no listing for Medicomp or Ron

Stevens. Someone apparently called Federal Express looking for the

computers later that day, so Federal Express again tried to deliver.

The carrier, Marc Wilson, met someone outside the office complex's

locked gate; this person identified himself as T. Johnson and said he

was expecting the shipment. He presented a cashier's check in the

amount of $85,000, drawn on Pacific Overseas Bank, Port Vila,

Vanuatu (in the Fiji Islands). After attempting to cash the check,

McCall-Thomas learned that the check was bogus and the bank nonexistent.

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Federal Express denied McCall-Thomas's claim for reimbursement

based on the waiver printed on the Airbill. McCall-Thomas filed suit

in the Court of Common Pleas of Orangeburg County, South Carolina, on March 11, 1993. Federal Express removed to the district court

based on federal question jurisdiction,* and on March 29, 1995, the

district court granted summary judgment in favor of Federal Express.

The court concluded that "Federal Express fully complied with its

contractual obligations by collecting a cashier's check in an amount

sufficient to cover the specified C.O.D. Amount." McCall-Thomas

timely filed its notice of appeal.

II.

Summary judgments are reviewed de novo on appeal. Higgins v.

E.I. DuPont de Nemours & Co., 863 F.2d 1162, 1167 (4th Cir. 1988);

Felty v. Graves-Humphreys Co., 818 F.2d 1126, 1127-28 (4th Cir.

1987). Summary judgment is appropriate in cases in which "there is

no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c); see

Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970).

Both parties agree that forms such as Federal Express's Airbill may

constitute the contract between the shipper and the carrier. See

Southern Pac. Transp. Co. v. Commercial Metals Co. , 456 U.S. 336,

342-43 (1982). McCall-Thomas argues that Federal Express breached

the contract by collecting an invalid cashier's check and failing to

verify the check in light of suspicious circumstances. We do not

believe the contract imposes any such duty. See, e.g., Caporicci Footwear, Ltd. v. Federal Express Corp, 894 F. Supp. 258, 261 (E.D. Va.

1995) ("To impose such a requirement [of investigating suspicious

circumstances surrounding delivery] would make Federal Express

plaintiff's agent for purpose of completing the transaction between it

and the recipient. The Service Guide clearly states that no such

agency relationship exists.").

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*Claims involving shipments in interstate commerce by air carriers are

governed by federal law. See Arkwright-Boston Mfrs. Mut. Ins. Co. v.

Great W. Airlines, Inc., 767 F.2d 425, 427 (8th Cir. 1985); First Pa.

Bank v. Eastern Airlines, Inc., 731 F.2d 1113, 1115 (3d Cir. 1984).

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Federal Express's only duty under this contract was to collect a

facially valid cashier's check. See, e.g., National Diamond Syndicate,

Inc. v. United Parcel Serv., Inc., 897 F.2d 253, 264 (7th Cir. 1990)

(where it was established that carrier was acting as shipper's agent in

collecting a C.O.D. payment, carrier did not breach its duty of reasonable care by not verifying facially valid cashier's checks in the

absence of suspicious circumstances); Comark, Inc. v. United Parcel

Serv., Inc., 701 F. Supp. 641 (N.D. Ill. 1988) (in case decided on other

grounds, court observed that carrier which accepted what appeared to

be a cashier's check, later determined to be forged, would be within

its authority; "to hold otherwise would call on UPS drivers to be

moonlighting law students, skilled in the arcane mysteries of the

UCC"). The check in this case appeared to fit the definition of a cashier's check: its drawer was a bank and the check was drawn upon the

bank's own account. See Ross v. Peck Iron & Metal Co., 264 F.2d

262, 269 (4th Cir. 1959).

McCall-Thomas assumed all risk of fraud in connection with Federal Express's C.O.D. service. The Restatement of Agency's rule that

"[u]nless otherwise agreed, an agent employed to collect . . . has a

duty of using reasonable care and skill," Restatement 2d of Agency

§ 426 (1957), does not apply because Federal Express expressly

declined to act as McCall-Thomas's agent for the purpose of this

C.O.D. delivery. See Littleton Stamp & Coin Co. v. Delta Airlines,

Inc., 778 F.2d 53, 57 (1st Cir. 1985) ("A shipper which decides to

gamble by accepting other than cash should not be able to simply shift

the increased risk to the carrier--particularly if the evidence shows

that the carrier specifically declined such a burden."). Even if some

duty were found to exist, Federal Express satisfied that duty by collecting a facially valid cashier's check. We do not believe that the

nonexistence of the bank on which the cashier's check was supposedly drawn and the fact that the check was for greater than the amount

specified by McCall-Thomas compel a different conclusion.

Federal Express's unambiguous contractual provisions are to be

given effect. Here, as in the usual case, the shipper was in a far better

position to verify the honesty and creditworthiness of its customers;

if questions had arisen, the shipper could have insisted on advance or

cash payment. Federal Express was contractually obligated to collect

a facially valid and authorized form of payment, but not to take inde-

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pendent steps to verify the instrument. Federal Express performed its

end of the bargain, and is not liable for losses that McCall-Thomas

sustained because of the Medicomp fraud.

III.

Because Federal Express fully performed under the terms of its

C.O.D. contract with McCall-Thomas, we affirm the district court's

entry of summary judgment in favor of Federal Express.

AFFIRMED

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