#2234 signed 6-3-96
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF KANSAS
AMERICAN FREIGHT SYSTEM, INC.,
AMERICAN FREIGHT SYSTEM, INC.,
INTER-CITY PRODUCTS CORP. (USA),
ADV. NO. 90-7536
ORDER DENYING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
BUT GRANTING PARTIAL SUMMARY JUDGMENT TO PLAINTIFF
This proceeding is before the Court on a long-pending motion for summary judgment filed by
defendant Inter-City Products Corporation (USA), a.k.a. Heil Quaker Corporation. The Court
had assumed subsequent developments had rendered the motion moot, but the parties have
indicated it is not. The defendant appears by counsel Joseph M. Weiler. Plaintiff-debtor
American Freight System, Inc. (AFS), appears by counsel Kurt Stohlgren. The Court has
reviewed the relevant pleadings and is now ready to rule.
AFS has sued the defendant to recover charges allegedly owed for freight transportation services AFS provided on 3,453 separate occasions. The defendant has asserted counterclaims for misrepresentation and negligence. The defendant has now moved for summary judgment, submitting five supporting affidavits. AFS responded with one opposing affidavit, which the defendant promptly asked the Court to strike. Six months later, AFS asked the Court to strike the defendant's motion and all five affidavits. The Court concludes at least certain portions of AFS's affidavit are proper and are adequate to defeat the defendant's motion. This conclusion renders moot AFS's motions to strike.
The defendant argues AFS's entire affidavit must be stricken because the affiant was not personally involved in any negotiations with the defendant, and certain paragraphs in the affidavit must also be stricken because they contain factual and legal conclusions which are without foundation, self-serving, and irrelevant and immaterial. The Court deems it necessary to address only a few of the paragraphs, since they are sufficient to preclude summary judgment.
Paragraph 3 of the affidavit simply declares that AFS's claims: (1) are not all based on the absence from AFS's discount tariffs for the defendant of the specific National Motor Freight Classification (NMFC) numbers assigned to the commodities shipped, and (2) are not all for freight undercharges. Paragraph 6 mainly declares that only AFS's pricing department, under the affiant's direction, had authority to make and publish rates, and its sales representatives could only propose changes to the pricing department. Paragraph 10 denies that AFS ever "billed a lower negotiated rate" (presumably referring to a rate lower than the applicable filed tariff) which the defendant paid; instead, several other explanations of the genesis of AFS's claims are asserted. Paragraph 13 mainly asserts that only one of the nine documents--"discount allowance notices" according to the defendant and "electronic sign up letter forms" according to AFS--contained in Appendices B-1 to B-6 to the defendant's first affidavit is applicable to any of the claims AFS is making here. It appears the one is Appendix B-6. Paragraph 13a again disputes the defendant's characterization of AFS's claims as involving discounted rates billed to and paid by the defendant. The assertions in these paragraphs could all be drawn from AFS's records of the shipments and the audit of its freight bills, and from the affiant's claimed personal knowledge of the operations of the pricing department. Certainly AFS's affiant is free to dispute the defendant's view of the basis of AFS's claims. Paragraph 5 of the affidavit simply quotes from materials the defendant submitted in support of its motion. To the extent of these paragraphs, at least, the defendant's motion to strike must be denied.
These few paragraphs establish the following factual situation. Relying on the "discount allowance notices," the defendant alleges that certain discount tariffs covered all commodities AFS carried for the defendant. AFS concedes some unspecified number of its claims are based on one of those notices, but denies any of the others are relevant to its claims. AFS denies it billed the defendant based on negotiated, unfiled discounts which the defendant then paid. AFS claims its former sales representatives had no authority to bind it to rates they may have agreed to charge the defendant, but could only submit different rates to the pricing department for consideration.
The defendant relies on the following language in the one notice agreed to be relevant:
COMMODITIES: NMFC ITEMS RECEIVED BY HEIL QUAKER
The defendant's affiants declare this language meant all commodities were covered by the 50% discount specified in the document, while AFS's affiant contends it meant only items identified through the NMFC system by the two numbers were covered. The defendant's affiants also assert that AFS represented that the discounts applied to all NMFC items shipped or received by the defendant, and that if the applicable filed tariffs do not include the discounts, AFS misrepresented the filed tariffs or else negligently failed to file tariffs incorporating the discounts agreed to by the parties.
The defendant contends it is entitled to summary judgment that: (1) it does not owe AFS any
freight charges; (2) AFS is not entitled to prejudgment interest; and (3) the defendant is entitled to
recover damages from AFS for misrepresentation or negligence. AFS opposes all these
DISCUSSION AND CONCLUSIONS
The defendant's first argument arises from its interpretation of the documents labeled as Appendices B-1 to B-6 in its materials. As indicated, however, AFS responds that only one of those documents applies to any of the claims it is making. The Court does agree with the defendant that that one document is ambiguous, at least once one learns that the two numbers printed under "Commodities: NMFC Items Received by Heil Quaker" are NMFC item numbers. The document could be read to be limited to those two items, as contended by AFS, or simply to list them as examples, as contended by the defendant. The Court believes this dispute raises a genuine issue of material fact which cannot be resolved by summary judgment.
The defendant's second argument also cannot be resolved on the present showing. Although the Court has ruled that it would exercise its discretion to deny AFS prejudgment interest under certain circumstances, see AFS v. Flex-O-Lite, Inc. (In re AFS), Case No. 88-41050-11, Adv. No. 90-8226, Order Denying Request for Prejudgment Interest (Bankr.D.Kan. Oct. 15, 1991), AFS denies that those circumstances exist in this case, and the defendant has not shown that they necessarily do. That is, a genuine issue of material fact exists which precludes summary judgment on this issue.
The defendant's third argument can be resolved because it presents only a question of law. As recently as 1990, the Supreme Court reiterated that under the Interstate Commerce Act, in a common carrier's suit to recover transportation charges based on applicable shipping rates that were on file with the ICC, the so-called "filed rate doctrine" precludes a shipper from asserting equitable defenses or counterclaims based on the carrier's contract or tort. Maislin Industries, U.S., Inc., v. Primary Steel, Inc., 497 U.S. 116, 126-28 (1990). By seeking damages for AFS's misrepresentation of its filed rates or negligent failure to file agreed discounts, the defendant is trying to use AFS's agreement, misrepresentation, or negligence to avoid the filed tariff rates. Consequently, AFS is entitled to summary judgment that the defendant's misrepresentation and negligence defenses are ineffective here.(1)
For these reasons, the defendant's motion to strike AFS's supporting affidavit is denied to the extent noted above and its motion for summary judgment is denied. Summary judgment for AFS is hereby entered denying the relief sought in the defendant's counterclaims. AFS's motion to strike the defendant's motion and supporting affidavits is denied as moot.
IT IS SO ORDERED.
Dated at Topeka, Kansas, this _____ day of June, 1996.
JAMES A. PUSATERI
CHIEF BANKRUPTCY JUDGE
1.All the pleadings now under consideration were filed before the enactment of the Negotiated Rates Act of 1993. Pub. L. No. 103-180, 1993 U.S.C.C.A.N. (107 Stat.) 2044 to 2053 (codified at 49 U.S.C.A. §10701(f), in a note to §10701, and at scattered sections of title 49). Obviously, the parties did not address in their pleadings its possible effect on this proceeding, and the Court will not presume to resolve that question without the parties' input.