Opinion ID: 768826
Heading Depth: 2
Heading Rank: 2

Heading: Validity of the Waivers in Allocating Liability for the Freight Charges

Text: 9 CAR argues that the district court erred in granting summary judgment and holding that the ICA does not bar the parties' allocation of liability for the freight charges through use of the waivers and that the Carriers' drivers had ostensible authority to sign the waivers. In CAR's view, the provisions of the bills of lading used for the transportation of the shrimp either confer absolute liability on Appellees for the freight charges or are in conflict with the provisions of the waivers, thus producing ambiguity in the contract for transportation that should be interpreted in favor of CAR as the nondrafting party. CAR also argues that the drivers did not have ostensible authority to sign the waivers because the Carriers did not know about the waivers and did not explicitly make representations to Appellees concerning the scope of the drivers' authority. The district court's grant of summary judgment is reviewed de novo. See Sameena Inc. v. United States Air Force, 147 F.3d 1148, 1151 (9th Cir. 1998).
10 The Board requires the issuance of a receipt or bill of lading containing certain information for all interstate or foreign shipments by motor carrier. See 49 C.F.R. S 373.101. Although motor carriers are not required to use the Uniform Straight Bill of Lading prescribed for rail and water common carriers, see 49 C.F.R. S 1035.1(a), the parties here have adapted it for their purposes, see 49 C.F.R.S 1035 apps. A & B. The bill of lading is the basic transportation contract between the shipper-consignor and the carrier; its terms and conditions bind the shipper and all connecting carriers. See Southern Pac., 456 U.S. at 342 (citation omitted). 5 The bill of lading provides that the owner or consignee shall pay the freight and all other lawful charges upon the transported property and that the consignor remains liable to the carrier for all lawful charges. 6 See Illinois Steel Co. v. Baltimore & Ohio R.R., 320 U.S. 508, 512-13 (1944). The bill of lading, however, also contains nonrecourse and prepaid provisions that, if marked by the parties, release the consignor and consignee from liability for the freight charges. If the nonrecourse clause is signed by the consignor and no provision is made for the payment of freight, delivery of the shipment to the consignee relieves the consignor of liability. See id. at 513, 64 S.Ct.322. Similarly, when the prepaid provision on the bill of lading has been marked and the consignee has already paid its bill to the consignor, the consignee is not liable to the carrier for payment of the freight charges. See Missouri Pac. R.R. Co. v. National Milling Co., 409 F.2d 882, 883-84 (3d Cir. 1969); In re Penn-Dixie Steel Corp., 6 B.R. 817, 822 (Bankr. S.D.N.Y. 1980), aff'd 10 B.R. 878 (S.D.N.Y. 1981). 11 Although the bill of lading contains default terms allocating liability for freight charges, the Supreme Court's description of the bill of lading as the basic transportation contract between the shipper-consignor and the carrier, Southern Pacific, 456 U.S. at 342, did not purport to characterize the bill of lading as the exclusive means of creating a contract. A-Transport Northwest Co. v. United States, 36 F.3d 1576, 1583 (Fed. Cir. 1994). Subject to the rule that prohibits discrimination, the parties are free to contract when or by whom the freight charges should be paid. See Louisville & Nashville R.R. v. Central Iron & Coal Co., 265 U.S. 59, 66 (1924); Illinois Steel Co. v. Baltimore & Ohio R.R., 320 U.S. 508, 512 (1944). It is only where the parties fail to agree or where discriminatory practices are present that the ICA's default terms bind the parties. See In re Roll Form Products, Inc., 662 F.2d 150, 154 (2d Cir. 1981). In the face of other provisions, the liability allocation presumptions on the bill of lading are unnecessary. See Fikse & Co. v. United States, 23 Cl. Ct. 200, 204 (1991). 12 Clearly, the ICA's purpose of eliminating all forms of rate discrimination on interstate shipments is not implicated in this case. There is no allegation that the freight terms agreed to by the parties improperly deviate from filed common carrier tariffs or discriminate. Because an external contract, entered into by the Carriers, lawfully allocated liability for the freight charges, resort to the allocation presumptions on the bill of lading is unnecessary. The waivers signed by the drivers lawfully operated to waive the Carriers' rights against Appellees for the freight charges.
13 California law controls the issue of whether the Carriers' drivers had ostensible authority 7 to sign the waivers. See Mallot & Peterson v. Director, Office of Workers' Comp. Programs, 98 F.3d 1170, 1173 n.2 (9th Cir. 1996). An agent acting within his apparent or ostensible authority binds the principal where the principal has intentionally or negligently allowed others to believe the agent has authority. See Kaplan v. Coldwell Banker Residential Affiliates, Inc., 69 Cal. Rptr. 2d 640, 642-43 (Ct. App. 1998). Section 2317 of the Civil Code of California provides that [o]stensible authority is such as a principal, intentionally or by want of ordinary care, causes or allows a third person to believe the agent to possess. Cal. Civ. Code S 2317. 14 An agent's authority may be implied from the circumstances of a particular case and may be proved by circumstantial evidence. Kelley v. R.F. Jones Co., 77 Cal. Rptr. 170, 174 (Ct. App. 1969). However, unless only one conclusion may be drawn, existence of an agency and the extent of an agent's authority is a question of fact and should not be decided on summary judgment. See American Cas. Co. v. Krieger, 181 F.3d 1113, 1121 (9th Cir. 1999). 15 Contrary to CAR's claims, to establish ostensible authority, the principal's consent need not be express. See Tomerlin v. Canadian Indem. Co., 394 P.2d 571, 575 (Cal. 1964). While it is true that the ostensible authority of an agent cannot be based solely upon the agent's conduct, see Kaplan, 69 Cal. Rptr. 2d at 643, it is not true that the principal must make explicit representations regarding the agent's authority to the third party before ostensible authority can be found. For example, ostensible authority may be proven through evidence of the principal transacting business solely through the agent, see Kelley, 77 Cal. Rptr. at 174, the principal knowing that the agent holds himself out as clothed with certain authority but remaining silent, see Krieger, 181 F.3d at 1121, the principal's representations to the public in general, see Kaplan, 69 Cal. Rptr. 2d at 643, and the customs and usages of the particular trade in question, see Correa v. Quality Motor Co., 257 P.2d 738, 741 (Cal. Dist. Ct. App. 1953); Auto Auction, Inc. v. Riding Motors, 10 Cal. Rptr. 110, 11314 (Ct. App. 1960) (finding that a car salesman had ostensible authority to close an automobile sale based on the circumstances of the case as well as in the light of the customs and usages of the particular trade of which we may take judicial notice). 16 Appellees had the burden of proving the authority of the Carriers' drivers to sign the waivers. See Inglewood Teachers Ass'n v. Public Employment Relations Bd., 278 Cal. Rptr. 228, 234 (Ct. App. 1991)(stating that the burden rests upon the party asserting the existence of the agency and seeking to charge the principal with the representation of the agent). When the party moving for summary judgment would bear the burden of proof at trial, it must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial. Houghton v. South, 965 F.2d 1532, 1536 (9th Cir. 1992)(citation and quotations omitted). In such a case, the moving party has the initial burden of establishing the absence of a genuine issue of fact on each issue material to its case. See id. at 1537. Once the moving party comes forward with sufficient evidence, the burden then moves to the opposing party, who must present significant probative evidence tending to support its claim or defense. Intel Corp. v. Hartford Accident & Indem. Co., 952 F.2d 1551, 1558 (9th Cir. 1991)(citation omitted).A motion for summary judgment may not be defeated, however, by evidence that is `merely colorable' or `is not significantly probative.'  Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 249-50 (1986)). 17 The district court found that the drivers had ostensible authority to sign the waivers based on the following factors: 1) the drivers executed all contractual documents on behalf of the Carriers governing the transport of the shrimp, including the bills of lading; 2) there is no evidence that anything placed Trans-Pac on notice that the drivers lacked authority to execute waivers for the Carriers; 3) the drivers were the only representatives of the Carriers with whom Trans-Pac dealt; 4) Trans-Pac did not even know the identity of the company that was going to haul a particular shipment until the driver arrived to transport it; and 5) the declaration of Frank DiGennaro, Trans-Pac's shipping manager, states that carriers' truck drivers routinely bind their principals to waiver agreements, agreements regarding liability for loss or damage to goods shipped, and other such provisions. In addition, the waiver executed on behalf of Don Senske Trucking, Inc. was signed by Don Senske himself and the district court found that because the business beared his name, he was vested with apparent authority. 18 Clearly, Appellees came forward with sufficient evidence of ostensible authority to entitle them to a directed verdict if the evidence went uncontroverted at trial. To counter the evidence that Appellees produced, CAR merely offered the declaration of its General Manager, Clifford Riggins, who asserted that he has spent forty years in the trucking industry and is not aware of any law that says a truck driver can bind his trucking company as to a waiver of its claims for transportation charges as a common carrier under federal law. The district court found that Riggins's declaration did not raise a question of fact concerning the drivers' apparent authority to waive the Carriers' claim for freight charges against Appellees. The district court reasoned that CAR failed to raise any material question of fact because the Riggins declaration addressed the issue of whether a specific law authorizes drivers to sign waivers on their carriers' behalf; an issue that is obviously irrelevant to whether industry custom and practice vests drivers with apparent authority to bind their carriers to terms in bills of lading and waivers of the right to collect freight charges from consignors and consignees. 19 We agree with the district court that CAR's supposed evidence refuting Appellees' showing of the drivers' ostensible authority did not set forth specific facts showing that there is a genuine issue for trial. Riggins's affidavit, the only evidence that CAR submitted, is simply not significantly probative evidence sufficient to defeat Appellees' motion for summary judgment.