An individual shipper was awarded $133,533.00 in satisfaction of his actual damages and over $18,000 in attorneys’ fees plus pre- and post-judgment interest in a troubling case involving a residential interstate HHG move.[1]
The mover was ordered to pay a majority of the individual shipper’s attorneys’ fees, the increased price he was charged at delivery for his Oregon to Ohio move, cost of paying a second mover to unpack his goods and $108,348.00 representing the in transit loss and damage to his household goods and personal effects.
Background
Because the mover failed to answer or otherwise defend the case, the predicate facts on which the federal court relied on in ruling in the individual shipper’s favor were based exclusively on plaintiff’s allegations and evidence.
According to the opinion the mover –
► Told the individual shipper on move-day it would not honor its original estimate and increased the rate it charged by 33%;
► Unilaterally changed the delivery date causing a pre-planned family vacation to be cut short;
► Damaged a majority of the family’s personal belongings and failed to unpack the goods as promised; instead, leaving them in damaged boxes in which they were delivered;
► Failed to provide the individual shipper with a copy of the bill of lading at the time of the shipment or even later upon request; and
► “[W]holly failed to respond to the claim” for loss or damage filed after the move.
Plaintiff’s state law claims for breach of contract, negligence, gross negligence, fraud in the inducement and punitive damages were ruled preempted by the Carmack Amendment and dismissed from his case.
Shifting Burdens For Making and Defending a Carmack Amendment Claim
The court concluded plaintiff was able to make out a prima facie case under the Carmack Amendment – (1) delivery of the goods to the carrier in good condition, (2) the arrival of goods in damaged condition, and (3) the amount of damages measured by actual loss. In federal court, where the shipper establishes a prima facie case and amount in controversy for each bill of lading exceeds the threshold floor of $10,000, the burden of proof shifts to the carrier to show both that it was free from negligence and that the damage to the cargo was due to one of the five “excepted causes” of loss relieving the carrier of liability.[2]
The Takeaways
First, in this case, the absence of a legal defense may have resulted in the award of attorneys’ fees. As the court notes, attorneys’ fees are not generally available under the Carmack Amendment, “but it does authorize fee awards in limited circumstances to shippers of ‘household goods.’”[3] It is critical that when a mover offers interstate collect-on-delivery transportation of household goods, the mover can show it participates in a dispute settlement program meeting the requirements of federal law and provides the individual shipper with the required dispute resolution information in the form and at the specified times during and after the move to avert a judicial award of attorneys’ fees.[4] Significantly, attorneys’ fees are not in this writers experience covered by the mover’s liability insurance; assuming the insurer has afforded the mover a legal defense.
Second, neglecting legal service of process of a consumer’s lawsuit almost certainly will inevitably result in a default and default judgment; placing the mover in legal peril including disarming it of legal defenses – (See first takeaway above).
Dated: Sudbury, MA
Nov. 30, 2022
Andresen & Borovick, LLP
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[1] Renouf v. Aegis Relocation Company Corp., No. 5:22-cv-497 Memorandum Opinion and Order (N.D. OH Nov. 15, 2022).
[2] Citing Missouri Pacific R.R. v. Elmore & Stahl, 377 U.S. 134, 138 (1964). According to the Supreme Court, the Carmack Amendment codifies the common-law rule that, “a carrier, though not an absolute insurer, is liable for damages to goods transported by it unless it can show that the damage was caused by (a) the act of God; (b) the public enemy; (c) the act of the shipper himself; (d) public authority; (e) or the inherent vice or nature of the goods.” 377 U.S. 137-38. Note, Carmack permits a carrier, including household goods motor carrier to limit its liability for loss or damage; however that was not an issue in the case.
[3] Citing Osman v. Int’l Freight Logistics, Ltd., 405 F. App’x 991, 993 (6th Cir. 2011) and 49 U.S.C. § 14708(d) – Dispute settlement program for household goods carriers.
[4] See 49 C.F.R. 375.213(b)(3) and 49 U.S.C. 14708(d). According to the court in Renouf, the plaintiff “. . . satisfied the other requirements of [the federal statute permitting fee-shifting] in that he filed a claim with Aegis within 120 days, he prevailed on his Carmack Amendment claim, and there is nothing in the record to suggest that the parties’ dispute was subject to arbitration.” Id. n.2.