Ameriswiss Tech., LLC v. Midway Line of Ill., Inc.

890 F.Supp.2d 189

AMERISWISS TECHNOLOGY, LLC

v.MIDWAY LINE OF ILLINOIS, INC.

Civil No. 11–cv–148–LM.

United States District Court, D. New Hampshire.

Nov. 15, 2012.

Frank J. Weiner, Deutsch Williams Brooks Derensis & Holland PC, Boston, MA, John F. Bisson, Cronin & Bisson PC, Manchester, NH, for Ameriswiss Technology, LLC.

Wesley S. Chused, Looney & Grossman LLP, Boston, MA, Mary K. Ganz, Ganz Law Office, Seabrook, NH, for C.H. Robinson Worldwide, Inc.

ORDER

LANDYA McCAFFERTY, United States Magistrate Judge.

On January 27, 2012, the clerk of the court entered a default against Midway Line of Illinois, Inc. (“Midway”) on a claim brought against it by Ameriswiss Technology, LLC (“Ameriswiss”), under the federal Carmack Amendment, 49 U.S.C. § 14706. That claim arises from a traffic accident in which thirteen machines that Midway was transporting for Ameriswiss were “damaged beyond repair.” Compl. (doc. no. 1) ¶ 23. Before the court is Ameriswiss's motion for entry of judgment pursuant to Rule 55(b)(2) of the Federal Rules of Civil Procedure (“Federal Rules”). In its motion, Ameriswiss asks the court to enter final judgment in its favor, against Midway, in the amount of $545,000. For the reasons that follow, Ameriswiss's motion is granted in part.

Discussion

By failing to respond to Ameriswiss's complaint as required by the Federal Rules, Midway has defaulted on Ameriswiss's Carmack Amendment claim. Ameriswiss is entitled to a default judgment as to liability given that its machines were delivered to Midway in good condition and were damaged while being transported by Midway. See Camar Corp. v. Preston Trucking Co., 221 F.3d 271, 274 (1st Cir.2000) (setting out elements of Carmack Amendment claim). When a motor carrier is liable for damaging a shipper's goods, the shipper is entitled to recover “the actual loss or injury to [its] property.” 49 U.S.C. 14706(a)(1). The issue here is the amount of Ameriswiss's actual loss.

“Within the meaning of the Carmack Amendment, ‘actual loss or injury to ... property’ is ordinarily measured by the reduction in market value at destination or by replacement or repair costs occasioned by the harm.” Camar, 221 F.3d at 277 (citing Fredette v. Allied Van Lines, Inc., 66 F.3d 369, 372 (1st Cir.1995)). “Although mathematical precision is not required ... a damages award must have a ‘rational basis in the evidence.’ ” Camar, 221 F.3d at 279 (quoting Thermo Electron Corp. v. Schiavone Constr. Co., 958 F.2d 1158, 1166 (1st Cir.1992); citing Jay Edwards, Inc. v. N.E. Toyota Distrib., Inc., 708 F.2d 814, 819 (1st Cir.1983)). In other words, an award of damages must be based on more than speculation. See Camar, 221 F.3d at 277.

Here, the evidence of the market value of the machines that Midway damaged is two-fold. First, it is undisputed that on September 20, 2010, less than a month before the accident that gave rise to Midway's liability, Ameriswiss paid $44,800 for thirteen machines,¹ including eleven used Model D6 Escomatic screw machines that were between twenty and thirty years old. Second, Ameriswiss has submitted an affidavit from one of its members (Paul Luscher) and an affidavit from an appraiser (Steven Beck), both stating that Ameriswiss's D6 Escomatics were worth $545,000. Those affidavits are supported by Beck's appraisal report which states that if Ameriswiss's eleven D6s had not been damaged, they would have had a fair market value of $545,000 as of April 4, 2012.²

Beck's report, however, says little of substance about how he determined the value of the damaged D6s. To be fair, the report indicates that Beck viewed photographs of them, “conducted an investigation into the market conditions for this type of equipment,” and “consulted with several new and used machinery dealerships as well as reports and periodicals.” Pl.'s Mot. for Entry of J., Ex. B (doc. no. 59–2), at 3. But, the report does not indicate what Beck learned from those sources that led him to determine the values of Ameriswiss's D6s. More specifically, the report includes no information about either attempted or completed sales of comparable machines.

As between the $44,800 Ameriswiss paid for the machines shortly before they were damaged and the $545,000 that Beck says they were worth, the court concludes that their fair market value is no more than $44,800. Beck's report defines fair market value as:

[a] professional opinion of the estimated most profitable price ... to be realized for property in an exchange between a willing buyer and a willing seller, with equity to both, neither being under any compulsion to buy or sell, and both parties fully aware of all relevant facts, as of the effective date of this appraisal report.

Pl.'s Mot. for Entry of J., Ex. B (doc. no. 59–2), at 4. Beck's professional opinion is that the machines had a fair market value of $545,000. But his report identifies no evidence supporting that opinion such as the prices asked by other willing sellers for similar equipment or the prices paid by other willing buyers. The fact that Beck's report mentions no other sales of used D6s from the 1980s suggests that sales of machines such as the ones Midway damaged occur infrequently enough to make any opinion concerning their market value inherently speculative. See Camar, 221 F.3d at 278 (pointing out, in connection with claim for lost profits, difference between markets for fungible new goods and markets for used goods). But, of course, the record does include evidence of one sale of used Escomatic D6 screw machines involving a willing buyer and a willing seller: Ameriswiss's purchase of the machines that Midway damaged, for $44,800.³

While the court has found no case that is directly on point, the First Circuit's opinion in Camar offers useful guidance as to the kind of evidence necessary to support an award of damages under the Carmack Amendment. In Camar, the plaintiff shipper was a company that, like Ameriswiss, bought used equipment and refurbished it for resale. See221 F.3d at 273. In August of 1995, Camar purchased 156 pieces of “used marine equipment located at a naval depot in California,” id., “from the United States Navy's Defense Reutilization and Marketing Service (‘DRMS'),” id. The “Navy had originally paid $275,000 to acquire the equipment,” id., but sold it to Camar for $215, id. Camar then contracted with Preston to transport its newly acquired equipment. Id. After Preston lost Camar's goods, “Camar submitted a loss claim to Preston of $137,500.” Id. When Preston did not pay that claim, Camar sued for $137,500, and later “amended its complaint to allege damages of $353,370, claiming it could have sold the equipment for [that] sum.” Id.

At summary judgment, “Camar contended that [its] actual loss should be measured by what foreign buyers had previously paid [it] for similar items.” Camar, 221 F.3d at 273–74. Regarding the legal aspect of Camar's argument, i.e., the correct measure of damages, the court of appeals held that the Carmack Amendment “permits recovery of lost profits unless they are speculative.” Id. at 277 (citing Pillsbury Co. v. Ill. Cent. Gulf R.R., 687 F.2d 241, 245–46 (8th Cir.1982); Hector Martinez & Co. v. S. Pac. Transp. Co., 606 F.2d 106, 108 (5th Cir.1979); Polaroid Corp. v. Schuster's Express, Inc., 484 F.2d 349, 351 (1st Cir.1973)).

The court of appeals then described Camar's attempt to prove its lost profits in the trial court:

To establish the dollar value of its loss, Camar submitted exhibits describing each type of lost equipment and comprising the record of its procurement and of Camar's previous sales of similar equipment to foreign buyers. For example, one exhibit includes a statement as follows:

This is a bearing turbine, similar to the four lost by Preston Trucking.... On July 21, 1995 Camar sold one of these to the Brazilian Navy for $59,830. If the goods had been delivered and Camar had been able to sell the missing four at that price, Camar would have earned $239,320 on the four bearing turbines Preston lost.

Procurement history data, including the identity of the vendor and the price paid by the U.S. government, follow. Next are invoices and other documents reflecting the sale of the allegedly similar equipment to the Brazilian Navy. The other exhibits are similar, except as to two categories of equipment in which the damages calculations are based solely on the procurement history.

Id. at 277. In the face of the foregoing evidence, including the price Camar received for a turbine the month before it purchased four similar turbines that Preston lost, “[t]he district court determined that the $215 Camar paid for the equipment was its value for purposes of ascertaining Camar's actual loss and that the evidence as to lost profits was too speculative.” Id. at 276–77. The court of appeals agreed “that the evidence of past sales on this record is too speculative to form the basis of a damages award greater than the $215 purchase price.” Id. at 277. The court continued:

Camar's evidence did not identify any prospective purchasers for the lost used equipment at prices like those paid for the previously sold equipment, or, indeed, at any price. In his deposition testimony, Camar's president, James Mercanti, admitted that Camar had no customer for the equipment at the time of the bid or at the time Preston lost the shipment. No evidence of subsequent customer demand was submitted.

Id. As the court of appeals explained, “we think the district court did not err in concluding that ‘[t]he DRMS Notice of Award indicating Camar's purchase price of $215 is the only non-speculative evidence of the market value of the lost equipment.” Id. at 278.

Here, the evidence concerning the fair market value of Ameriswiss's eleven used D6s is even less substantial than the evidence of lost profits the court held to be insufficient in Camar.⁴ In Camar, the plaintiff produced evidence of recent sales of equipment similar to the equipment lost by the...