#2283 signed 10-29-96
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF KANSAS
AMERICAN FREIGHT SYSTEM, INC.,
AMERICAN FREIGHT SYSTEM, INC.,
THOMPSON & FORMBY,
ADV. NO. 90-7681
ORDER DENYING OPPOSING MOTIONS FOR SUMMARY JUDGMENT AND
REFERRING CERTAIN ISSUES TO THE SURFACE TRANSPORTATION BOARD
This proceeding is before the Court on the defendant's motion for partial summary judgment and
for referral to the Surface Transportation Board, and the plaintiff's cross-motion for summary
judgment. Defendant Thompson & Formby (Thompson) appears by counsel Barbara R.
Kueppers, Bruce J. Clark, and Anne L. Baker. Plaintiff-debtor American Freight System, Inc.
(AFS), appears by counsel Kurt Stohlgren, William M. Davison, and Joseph L. Steinfeld, Jr. The
Court has reviewed the relevant materials and is now ready to rule.
The pleadings disclose the following relevant facts and factual disputes. AFS seeks to recover freight charges based on transportation services it and affilate Smith's Transfer Corporation (Smith) provided to Thompson. Some time ago, the Court substantively consolidated AFS and Smith, so AFS alone is now pursuing the charges. For its own services, AFS claims $445,201.83; the bulk of these charges, $432,809.88, were for shipments occurring after June 3, 1987. For Smith's services, AFS claims $11,521.85.
Although neither party has clearly said so, it appears they agree AFS had certain tariffs on file with the ICC which would have called for Thompson to pay $445,201.83 more than it did for AFS's services unless some discount tariff was also applicable. Apparently earlier in this case, AFS believed Thompson had erroneously been billed at a 57% discount rate for all goods it shipped based on a discount tariff which actually covered some but not all of its goods or their destinations. However, AFS now concedes it is unable to produce the so-called "participation agreement" necessary for Thompson to be covered by that discount tariff. For its part, Thompson produced a participation agreement which authorized it to receive a 57% discount on all its shipments. In pertinent part, the agreement provides:
This constitutes an expression of the intent of my company to participate in the discount(s)
provided in the tariff item(s) listed below which will commence on the day following the day I
signed this request to participate. Acknowledgement of participation will be made by the Issuing
Officer of the tariff within 30 days after the date of this request.
TARIFF, SECTION AND ITEM NO.
AFSI 608-2 9501-57
AFSI 608-2 9305-57
AFSI 608-2 9301-57
Thompson's agent signed this agreement on May 8, 1987, and AFS's agent did so on May 26,
1987. AFS concedes this agreement entitled Thompson to a 57% discount on all its shipments,
but contends the agreement expired on June 3, 1987. To support this claim, AFS has produced
what it calls an "electronic sign-up letter" which consists of four pages, the last of which appears
to be identical to the one Thompson is relying on. The first three pages appear to be copies of the
portions of AFS's tariffs which are identified on the fourth page. Those three pages all contain the
notation "EXPIRES: 06 03 87" near their upper right-hand corners, but the fourth page does not.
The notation is isolated from the other information printed on each page, and nothing on any of
the four pages offers additional guidance to its significance. AFS's agent swears this notation
means the entire agreement expired on that date. Thompson's agent responds the notation more
likely means that the exceptions contained on the pages with the notation expired then.
DISCUSSION AND CONCLUSIONS
The materials the parties have submitted do not enable the Court to grant summary judgment for either of them. The meaning of the notation "EXPIRES: 06 03 87" is far from clear. As indicated, while AFS contends it means the participation agreement expires on that date, Thompson suggests it means the exceptions stated on each page containing the notation expire on that date. The Court perceives two other possible meanings. First, since each page with the notation appears to be a copy of a tariff item AFS had filed with the ICC, the notation could mean the tariff item expires. Second, since the four-page document is apparently AFS's offer to carry Thompson's freight at the specified discounts from the otherwise applicable rates, the notation may mean that offer expires on the specified date. The Court cannot resolve this ambiguity without either the presentation of evidence or the parties' agreement. Even without the affidavits Thompson submitted, the Court could not reject Thompson's argument that the notation means something different than AFS claims it does. Consequently, AFS's motions to strike Thompson's affidavits are moot.
Because this portion of the parties' dispute will require a trial, the Court believes it must stay this proceeding so that Thompson may present its unreasonable practice and unreasonable rate claims to the Surface Transportation Board (STB), successor to the Interstate Commerce Commission, claims within the agency's primary jurisdiction. Not more than sixty days from the date of this order, Thompson must provide proof that it has commenced before the STB a proceeding for that purpose, or it will be deemed to have waived those defenses. If such a proceeding is commenced, the stay of this proceeding will remain in effect until the STB proceeding is resolved.
IT IS SO ORDERED.
Dated at Topeka, Kansas, this _____ day of October, 1996.
JAMES A. PUSATERI
CHIEF BANKRUPTCY JUDGE