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#2119 signed 4-14-95

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF KANSAS

In Re:

AMERICAN FREIGHT SYSTEM, INC.,

DEBTOR(S)

NO. 88-41050-11

CHAPTER 11

AMERICAN FREIGHT SYSTEM, INC.,

PLAINTIFF(S),

v.

CARLON COMPANY,

DEFENDANT(S),

ADV. NO. 90-7906

ORDER DENYING MOTION FOR SUMMARY JUDGMENT

This proceeding is before the Court on the motion of Carlon Company, a division of Lamson & Sessions Company, (Carlon), for summary judgment. Carlon appears by counsel Robert L. Baer and Susan L. Mauch. American Freight System, Inc. (AFS), the plaintiff-debtor, appears by counsel Kurt Stohlgren. The Court has reviewed the relevant pleadings and is now ready to rule.

AFS filed this proceeding to collect certain freight charges from Carlon. In its motion, Carlon separates the charges into seven categories and concedes it owes the charges in five of them. Carlon alleges the numbers AFS used to identify the shipments in the one of the remaining categories do not match those for any shipments AFS transported for it, so Carlon does not owe the amounts sought. It labels this category as "unknown." AFS responds that it has provided Carlon with copies of the freight bills for all these shipments and adequately identified them as ones it transported for Carlon. AFS seeks $4,851.45 for these shipments. The other remaining category includes the bulk of the charges. AFS claims $76,878.47 is owed for these shipments because they originated in Mantua, Ohio, rather than the nearby town of Aurora. AFS had a tariff on file with the ICC which granted a discount on shipments originating in Aurora, and applied it in billing Carlon for these shipments. AFS contends this was a mistake and Carlon should have been billed and should have paid the amounts AFS now seeks in addition to the amounts originally billed. Carlon contends Aurora and Mantua are in the same "commercial zone" as defined by the ICC in 49 C.F.R. §1048.101(c) (1994), so the discount did apply and it owes no more money.

Federal Rule of Civil Procedure 56, governing grants of summary judgment, is made applicable to bankruptcy proceedings by Federal Rule of Bankruptcy Procedure 7056. Rule 56 provides that this Court must grant summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." In considering a motion for summary judgment, the Court must examine all the evidence in the light most favorable to the party against whom summary judgment is sought. Summary judgment is inappropriate if an inference can be deduced from the facts which would allow the nonmovant to prevail. The court must consider factual inferences tending to show triable issues in the light most favorable to the existence of those issues. Where different ultimate inferences may properly be drawn, summary judgment should be denied. United States v. O'Block, 788 F.2d 1433, 1435 (10th Cir. 1986).

The affidavit AFS submitted in support of its response to Carlon's motion is adquate to raise a genuine issue of material fact that precludes summary judgment on the shipments Carlon labelled as "unknown." Carlon has not established either that the shipments cannot be identified as ones AFS transported for it or that AFS transported them for some other company.

The regulation Carlon relies on to negate its added liability for the shipments originating in Mantua, 49 C.F.R. §1048.101 (1994), was enacted under the authority of 49 U.S.C.A. §10526. Subsection b of that statute provides in pertinent part:

Except to the extent the Commission finds it necessary to exercise jurisdiction to carry out the transportation policy of section 10101 of this title, the Commission does not have jurisdiction under this subchapter over--

(1) transportation provided entirely in a municipality, in contiguous municipalities, or in a zone that is adjacent to, and commercially a part of, the municipality or municipalities [with certain exceptions.]

This provision makes transportation within certain areas, including "commercial zones," exempt from ICC regulation. See New York City Transit Authority v. United States, 834 F.2d 302, 304 (2d Cir. 1987). Consequently, the ICC, logically enough, determined it should pass regulations to inform transportation providers when they were operating within this exemption; 49 C.F.R. Part 1048 was the result. Section 1048.101 is a part of this scheme. It provides in part: "The commercial zone of each municipality in the United States . . . within which the transportation of passengers or property . . . is exempt from all provisions of part II, Interstate Commerce Act . . . shall be deemed to consist of: [areas specified in subsections (a) through (d).]" By itself, this regulation does nothing but define where transportation must begin and end to be exempt from ICC regulation under §10526(b). It does not purport to declare that a reference in a carrier's filed tariff to a municipality such as Aurora, Ohio, is actually a reference to the entire "commercial zone" that may surround Aurora. The Court imagines some other regulation or a tariff itself might incorporate this regulation's definition for such a purpose, but Carlon has not pointed to any that applies in this case and AFS contends the regulation does not apply.

For these reasons, Carlon's motion for summary judgment is hereby denied.

IT IS SO ORDERED.

Dated at Topeka, Kansas, this _____ day of April, 1995.













__________________________________

JAMES A. PUSATERI

CHIEF BANKRUPTCY JUDGE

 

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