Opinion ID: 2972473
Heading Depth: 3
Heading Rank: 1

Heading: The Appropriate Statute of Limitations

Text: -7- No. 04-3151 Glenn Hunter & Assoc. v. Union Pacific R.R. Co. There appears to have been some confusion below about which statutory provision governs the contract at issue. On December 29, 1995, the Interstate Commerce Commission Termination Act (“the Act”), Pub.L. 104-88, was enacted. Among other things, the Act abolished the Interstate Commerce Commission and amended Title 49 “to minimize the need for Federal regulatory control over the rail transportation system” with the objective “to ensure the development and continuation of a sound rail transportation system with effective competition among rail carriers.” 49 U.S.C. § 10101(2) & (4). The Act included a statutory section, codified at 49 U.S.C. § 10709, that permits the following: One or more rail carriers providing transportation subject to the jurisdiction of the Board under this part may enter into a contract with one or more purchasers of rail services to provide specified services under specified rates and conditions. 49 U.S.C. § 10709(a). In short, if they choose to do so, parties can enter into contracts for interstate shipments that are free of oversight by the Surface Transportation Board (“the Board”). 49 U.S.C. § 10709(c)(1). In that case, “[t]he exclusive remedy for any alleged breach of a contract entered into under this section shall be an action in an appropriate State court or United States district court.” 49 U.S.C. § 10709(c)(2). Neither party now disputes that the contract at issue here is governed by § 10709. However, the district court took the two-year statute of limitation from another provision of the Interstate Commerce Act, 49 U.S.C. § 11706, which applies to those agreements subject to the oversight of the Board: A rail carrier may not provide by . . . contract . . . a period of . . . less than 2 years for bringing a civil action against it under this section. The period for bringing a civil -8- No. 04-3151 Glenn Hunter & Assoc. v. Union Pacific R.R. Co. action is computed from the date the carrier gives a person written notice that the carrier has disallowed any part of the claim specified in the notice. 49 U.S.C. § 11706(e). The reliance on this section by the district court is understandable, given that the complaint explicitly relied upon 49 U.S.C. § 11706 and 28 U.S.C. § 1337 for jurisdiction.1 Hunter prepared the bill of lading at issue and included reference to UPCQ 80152.000 as the rate authority. Had it not done so, then the freight would have moved in common carriage and been subject to those rates and tariffs. However, UPCQ 80152.000 expressly states, “This CONTRACT is made pursuant to 49 U.S.C. § 10709 and shall become binding on the parties upon acceptance by the shipper named above. Shipper may accept this CONTRACT either by written notice, or by tender of traffic under its terms.” By electing to proceed under 49 U.S.C. § 10709 Hunter received the benefit of lower shipping rates, but also knew, or should have known, that 49 U.S.C. § 11706, with its distinct set of rights and remedies, did not apply. Ohio law permits parties to negotiate for a shorter statute of limitations: The statute of limitations for an action upon a written contract is fifteen years. See R.C. 2305.06. We are also aware, and are in agreement with, the principle . . . that, “[g]enerally, in the absence of a controlling statute to the contrary, a provision in a contract may validly limit, as between the parties, the time for bringing an action on such contract to a period less than that prescribed in a general statute of limitations provided that the shorter period shall be a reasonable one.” Miller v. Progressive Cas. Ins. Co., 69 Ohio St. 3d 619, 624, 635 N.E.2d 317, 321 (1994) (striking down shortened limitations period in automotive insurance policies as against public policy but recognizing general principle in dictum) (citation omitted). Furthermore, a contracting party must 1 In response to an Order from this Court, Hunter has filed an amended complaint that premises jurisdiction on diversity of citizenship. -9- No. 04-3151 Glenn Hunter & Assoc. v. Union Pacific R.R. Co. make “a reasonable effort to know its contents [and] cannot, in the absence of fraud or mutual mistake, avoid the effect of the contract.” Pippen v. M.A. Hauser Enter., Inc., 111 Ohio App. 3d 557, 564, 676 N.E.2d 932, 937 (Ohio. App. 1996) (citations omitted). Turning to Hunter’s allegation that it remained ignorant of the contents of UPCQ 80152.000 and the Rules Circular, we note that a contracting party has an affirmative duty to familiarize itself with the terms and conditions contained in other documents incorporated by reference. For instance, in Haskins v. Prudential Ins. Co. of America, 230 F.3d 231 (6th Cir. 2000) (overruled on other grounds by Morrison v. Circuit City Stores, Inc., 317 F.3d 646 (6th Cir. 2003) (en banc)), this court considered whether an arbitration agreement that required an employee to arbitrate his Title VII claim was valid even though it incorporated provisions in the National Association of Securities Dealers Code that had not been explicitly communicated to the employee. We concluded that the arbitration provision was enforceable: [W]e adopt the standard . . . that absent a showing of fraud, duress, mistake, or some other ground upon which a contract may be voided, a court must enforce a contractual agreement to arbitrate. .... . . . The court is not prepared to abandon the long-standing principles of contract law, such as: [O]ne who accepts a written contract is conclusively presumed to know its contents and to assent to them, in the absence of fraud, misrepresentation, or other wrongful act by another contracting party. Thus, ignorance of the contents of a contract expressed in a written instrument does not ordinarily affect the liability of one who signs it or who accepts it otherwise than by signing it. 17A Am.Jur.2d Contracts § 224 (1991). - 10 - No. 04-3151 Glenn Hunter & Assoc. v. Union Pacific R.R. Co. Haskins, 230 F.3d at 239. Under the logic of Haskins, Hunter had an affirmative duty to familiarize itself with the terms of UPCQ 80152.000 and Rules Circular UP 6600-B. There was no testimony during trial that Hunter requested a copy of either document even though it prepared the bill of lading incorporating them. Under these circumstances, Hunter was bound by the one-year statute of limitations contained in the Rules Circular. That said, even under a one-year limitations period, Hunter’s complaint was timely filed. The Rules Circular provides that “All lawsuits must be filed within one (1) year of receipt of the first written notice from Railroad rejecting the claim, either in full or in part.” In turn, the Rules Circular refers to “railroad” as the “railroad or railroads party to the Agreement.” While Norfolk Southern is referred to in the bill of lading as a carrier,2 only Union Pacific was party to the bill of lading: it published UPCQ 80152.000 and drafted the Rules Circular at issue. We do not accept Union Pacific’s contention that the term “railroad” is defined by the following provision of the Rules Circular: ITEM 35 - TRANSPORTATION OBLIGATION The railroad or railroads party to the Agreement (subsequently referred to as Railroad) will provide linehaul transportation in accordance with the terms and conditions of the Agreement. Not only does this language appear in a separate section of the Circular, it makes no reference to a limitations period. At best the definition of “Railroad” as used in the section of the Circular that defines the statute of limitations is ambiguous. Because we must construe ambiguities in a contract against the drafting party, McKay Mach. Co. v. Rodman, 11 Ohio St. 2d 77, 80, 228 N.E.2d 304, 307 2 Under the heading “Routing,” appears “UP Chicago NS,” referring to Union Pacific and Norfolk Southern respectively. - 11 - No. 04-3151 Glenn Hunter & Assoc. v. Union Pacific R.R. Co. (1967), we read the contested provision in a manner most favorable to Hunter. In this case, the term “railroad” can be read to refer only to the railroad that is party to the contract or bill of lading. Under that interpretation, the statute of limitations began to run on April 20, 2001, when Union Pacific rejected Hunter’s damages claim. The complaint, which was filed the following November, therefore fell well within the one-year window imposed by the Circular.