Court Opinion

ID: 2836655
Source: CourtListenerOpinion
Date Created: 2015-09-02 20:53:50.076362+00
Date Added: 2024-06-11T15:11:32.829374
License: Public Domain

Opinion issued February 6, 2003.

In The
Court of Appeals
For The
First District of Texas

NO. 01-01-01209-CV

PRIME PRODUCTS, INC., Appellant

V.

CON-WAY TRANSPORTATION SERVICES, INC., Appellee

On Appeal from the 151st District Court
Harris County, Texas
Trial Court Cause No. 99-38305

O P I N I O N

          This is an appeal from a partial summary judgment which awarded appellant,
Prime Products, Inc., $180 for damage to property that occurred while the property
was being shipped by appellee, Con-way Transportation Services, Inc..  In its sole
point of error, Prime argues that the trial court erred by limiting damages to $180. 
We affirm.
Background
          Prime Products is the owner of an 1,800 pound mold used to make parts for the
drinkware industry.  Prime entered into a business relationship with a manufacturing
company, S.S.I. Plastics, Inc., in which S.S.I. produced parts for drinkware using
Prime’s mold, and Prime paid S.S.I. a fee for production.  When the mold needed
repairs in December 1997, S.S.I. arranged for the mold to be repaired on the premises
of Burco Precision Products, Inc..  After the repairs were completed, S.S.I. arranged
for Con-way to pick the mold up from Burco’s facility and return it to S.S.I.’s facility. 
          The Con-way driver arrived at Burco and loaded the mold onto his truck.  The
driver asked Janelle Burch, the officer manager of Burco, to fill out and sign a blank
bill of lading for the shipment of the mold back to S.S.I..  The bill of lading, filled out
by Burch, stated that the mold was to be shipped collect to S.S.I., that the shipment
was “per Richard Burch,” and that the mold weighed 800 pounds.  A handwritten
notation briefly described the mold as a “Cup Liner Mold” with an internal inventory
number and the comment “Prime Products, Inc..”
          The bill of lading contained three pertinent provisions:
NOTE—Where the rate is dependent on value, shippers are required to
state specifically in writing the agreed or declared value of the property. 
The agreed or declared value of the property is hereby specifically stated
by the shipper to be not exceeding $  per  
 
. . .
 
Carrier Liability: Shipments valued at more than $25.00 per pound are
of extraordinary value.  Carrier’s maximum liability is $25.00 per pound
per package subject to $250,000.00 maximum total liability per
shipment, unless the Shipper declares excess value on the Bill of
Lading, requests excess liability coverage and pays an additional charge. 
The agreed value on household goods, used machinery or personal
effects does not exceed ten cents per pound, unless otherwise specified.

          . . .
 
Shipper hereby certifies that he is familiar with all the terms and
conditions of the bill of lading, governing tariffs, pricing schedules,
rules, and classifications; the said terms and conditions are hereby
agreed to by the shipper and accepted for himself and his assigns.

(emphasis added). 
          Burch signed the bill of lading but she did not request excess liability coverage,
nor did she specify a value for the mold in the space provided.  
          The Con-way driver did not close the back door of the truck before driving
away from the Burco facility.  When the truck drove away from Burco, the mold fell
out of the truck and landed in the road.  As it lay in the roadway, the mold was hit by
a pick-up truck and sustained damage.  The Con-way driver was informed by the
driver of another car that the mold had fallen out of the truck.  He returned to pick it
up, and the mold was eventually returned to the Con-way facility, and then brought
back to S.S.I. in its damaged condition.
          Prime brought suit against S.S.I., Burco, and Con-way, alleging various causes
of action, including negligence, gross negligence, and breach of contract.  Prime non-suited Burco on November 16, 1999.  Con-way, moved for partial summary judgment
based on the limitation of liability contained in the bill of lading signed by Janelle
Burch.  Con-way argued that, because a value for the mold had not been declared on
the bill of lading, the default liability provisions on the bill of lading applied and
limited any recovery by Prime to 10 cents per pound of weight.  The trial court
initially denied, then granted, Con-way’s motion for partial summary judgment and
limited Prime’s recovery to $180.00, pursuant to the stated liability contained in the
bill of lading of 10 cents per pound for used machinery.  The trial  court also
eventually granted summary judgment in favor of S.S.I. and severed Prime’s claims
against Con-way and S.S.I..  The final judgment signed by the trial court on
November 27, 2001 awarded Prime damages against Con-way but, incorporating the
earlier partial summary judgment, limited the damages recovered by Prime to
$180.00.  Con-way did not appeal the judgment against it.
DiscussionIn its sole point of error, Prime argues that the trial court erred by granting
Con-way’s motion for partial summary judgment and limiting Prime’s damages to
$180.00.  Prime argues that this limitation was improper because (1) Prime was not
a party to the bill of lading; (2) the language on the bill of lading that limited Con-way’s liability in the absence of a declared value was not conspicuous; (3) Prime was
not afforded an opportunity, as the owner of the mold, to declare a higher value for
the mold on the bill of lading; and (4) the limitation of damages is against public
policy.  
          We review the appeal under the usual standards of review applicable to
motions for summary judgment.  In deciding whether there is a fact issue raised to
preclude summary judgment, we accept all evidence favorable to the nonmovant as
true, indulge the nonmovant with every favorable reasonable inference, and resolve
any doubt in the nonmovant’s favor.  Nixon v. Mr. Prop. Mgmt. Co., Inc, 690 S.W.2d
546, 548-49 (Tex. 1985).  We disregard all conflicts in the evidence and accept as
true all evidence supporting the nonmovant. Fought v. Solce, 821 S.W.2d 218, 219
(Tex. App.Houston [1st Dist.] 1991, writ denied).  All doubts as to the existence
of a genuine issue of material fact are resolved against the movant. Id.             
          The trial court did not err by granting Con-way’s motion for partial summary
judgment because, even accepting all of Prime’s factual assertions as true, Con-way
established that it was entitled to a limitation of its liability as a matter of law.  Under
Texas law, the duties and liability of a carrier and the remedies against the carrier are
the same as under the common law, and a carrier for hire may not limit its common-law liability “unless the limitation is in conspicuous writing in a written arrangement
for transportation.” Tex. Transp. Code Ann. § 5.001(a) (Vernon 2001).  Damages
for a carrier’s violation of its duty of care may be limited to a specified amount by
such conspicuous contractual provisions if:  (1) the carrier’s rates are dependent upon
the value of the item shipped; and (2) the consignor is afforded an opportunity to
declare a higher value for the item, either by virtue of alternative rates in the carrier’s
tariff or by being informed of such an opportunity.  Tex. Bus. & Com. Code Ann. §
7.309(b) (Vernon 2001).
          As a matter of law, Con-way was entitled to the partial summary judgment
limiting its liability because (1) the liability limitation language on the bill of lading
was conspicuous; (2) Con-way’s rates were dependent on the value of the cargo
shipped; and (3) the consignor, Janelle Burch of Burco, was given an opportunity to
declare a higher value, but did not.  In support of its motion for partial summary
judgment, Con-way provided the trial court with uncontroverted evidence which
established the following: Con-way is a common carrier which, pursuant to Texas
Transportation Code section 5.001(a), has limited its liability by the publication of
tariffs and by noting such limitations on the face of its bills of lading; the rates which
Con-way charges, as contained in its published tariffs, vary according to the value of
the item shipped; and the bill of lading in question was signed by Janelle Burch, and
Burch was afforded an opportunity to fill in a value for the mold but did not, thus
triggering the default release value for a shipment of used machinery. 
          In response to Con-way’s motion for partial summary judgment, Prime argued
that the language on the bill of lading that limited Con-way’s liability to 10 cents per
pound was not conspicuous.  The conspicuousness of a liability release is a question
of law to be determined by the court.  “Conspicuousness” requires that the release 
be written in such a manner that a reasonable person against whom it is to operate
should have seen it.  Dresser Indus., Inc. v. Page Petroleum, Inc., 853 S.W.2d 505,
507-09 (Tex. 1993).  In Ranger Ins. Co. v. American Intern. Specialty Lines Ins. Co., 
this Court, relying on Dresser, held that the indemnity provisions on the front of a
drilling contract were sufficiently conspicuous when all the clauses were contained
on the front of the contract, the provisions were clearly labeled, and the language used
was clear. 78 S.W.3d 659, 655 (Tex. App.Houston [1st Dist.] 2002, no pet.).  The
bill of lading signed by Janelle Burch contained liability limitations which were
sufficiently conspicuous to put a reasonable person on noticethe spacing, layout
and typeface of the bill of lading make the language in which the limitations are
contained reasonably noticeable, all three relevant provisions are contained on the
face of the bill of lading, and the language used is sufficiently clear.  We conclude
that Prime did not present the trial court with any evidence that gave rise to a material
fact precluding a partial summary judgment limiting Con-way’s liability.
          In both its brief on appeal and at trial, Prime argues that, because it was not a
party to the bill of lading, it should not be bound by the bill of lading’s limitation of
liability.  In support of its argument, Prime relies on Nationwide Horse Carriers, Inc.
v. Johnston, 519 S.W.2d 163 (Tex. App.—Houston [1st Dist.] 1975, writ ref’d n.r.e.). 
In Nationwide, this Court upheld an award in excess of $25,000 for injuries sustained
by a pregnant mare during transport, despite a provision on the bill of lading that
limited the carrier’s damages to the horse’s declared value of $200.  The mare had
been bought at auction in Florida and transport from the auction facility was arranged
by the buyers’ agent.  With the agent’s permission, instead of directly shipping the
mare from Florida to Texas, the transport company brought the mare to a local stables
to be boarded until a full truckload of horses could be arranged for shipment to Texas. 
When the time came to ship the mare to Texas, the manager of the boarding stables
signed a bill of lading stating that the value of the mare was $200.00.  In upholding
the jury’s award of damages to the buyers in excess of the value stated on the bill of
lading, this Court reasoned that “the jury could have reasonably concluded that [the
buyers’ agent] had not arranged transportation ‘in accordance with the bill of lading’
and that [the stable manager] had acted entirely without the authority of either [the
buyers or their agent] in signing the bill of lading as shipper.” 519 S.W.2d at 166. 
The facts of Nationwide are distinguishable from the facts presented here: in
Nationwide, because the buyers’ agent and the shipper’s agent had reached an
agreement before the shipment commenced, this Court agreed that the subsequent bill
of lading signed by an unauthorized third party was not binding upon the buyers. 
Here, although some evidence was presented via affidavits submitted by Prime that
Prime’s owner had discussed with Burco’s owner what repairs were to be made to the
mold, no evidence was produced to show that Prime’s owner had ever discussed
terms of shipping with anyone at Burco, nor was any evidence produced to show that
Prime’s owner communicated with the Con-way driver or any agent for Con-way
about the shipment of the mold from Burco to S.S.I..  Nationwide, therefore, is
inapposite here.
          Prime further argues that its recovery should not be limited by the bill of lading
because it was not afforded, as the owner of the mold, an opportunity to choose
between rates and to declare a higher value for the mold.  The bill of lading is a
contract between the shipper, Burco, and the carrier, Con-way.  Texas Business and
Commerce Code section 7.309(b) requires that Burco be given an opportunity to
declare an alternative value on the bill of lading.  See Banos v. Eckerd Corp., 997
F. Supp. 756 (E.D. La. 1998) (applying similar provisions of the Interstate Commerce
Act, and holding that customer who delivered family photographs to a retail store, and
whose photographs were then shipped pursuant to a bill of lading to a photography
laboratory for processing, stood in the shoes of the retail store shipper and could not
recover any damages for the loss of the photographs beyond those permitted by the
bill of lading).  Prime did not contest Con-way’s assertion that Janelle Burch had
been given an opportunity on the bill of lading to fill in an alternative value for the
mold. 
Conclusion
          Accordingly, we overrule Prime’s sole point of error and affirm the
judgment of the trial court.        

 
George C. Hanks, Jr.
                                                                        Justice

Panel consists of Chief Justice Radack, and Justices Nuchia and Hanks.