                                                             FIRST DIVISION
                                                             FEBRUARY 25, 2008




No. 1-07-1953

MARX TRANSPORT, INC.,                                        )      Appeal from the
                                                             )      Circuit Court of
                      Plaintiff-Appellant,                   )      Cook County.
                                                             )
       v.                                                    )
                                                             )
AIR EXPRESS INTERNATIONAL CORPORATION,                       )      No. 03 M2 2904
d/b/a Danzas AEI, and CORNING, INC.,                         )
                                                             )
                      Defendants-Appellees                   )
                                                             )
(North American Expediting, Inc.,                            )      Honorable
                                                             )      Mary K. Rochford,
                      Defendant).                            )      Judge Presiding.


       JUSTICE ROBERT E. GORDON delivered the opinion of the court:

       Marx Transport, Inc. (Marx), a motor carrier, brought this action in the circuit

court of Cook County seeking to recover freight charges relating to over-the-road

shipments of goods picked up from a facility owned by Corning, Inc. (Corning), located

in Harrodsburg, Kentucky, and shipped to two airports for overseas delivery between

January 30, 2003, and May 8, 2003. North American Expediting, Inc. (North American),

contacted Marx to transport the goods to the airports, and Air Express International

Corporation, d/b/a Danzas AEI (Danzas), was hired by Corning to coordinate the

movement of the overseas shipments. Danzas contacted North American to handle the
No. 1-07-1953


over-the-road shipments from the Corning facility to two domestic airports. 1 Marx

obtained a $50,070 default judgment against North American, which failed to appear and

was insolvent, and proceeded to trial against Danzas and Corning. After a bench trial, the

trial court found in favor of Corning and Danzas and against Marx. Marx now appeals.

                                      BACKGROUND

       On November 13, 2003, Marx filed a verified complaint seeking to recover

damages against North American, Danzas and Corning. Marx alleged that between

January 30, 2003, and May 8, 2003, Corning retained Danzas as its agent to arrange for

the transportation of goods from Corning’s facility and that Danzas, in turn, retained

North American, which arranged for over-the-road transportation by contracting with

Marx for about 60 separate shipments from Corning’s Kentucky facility to O’Hare

International Airport in Chicago, Illinois, and to the Northern Kentucky International

Airport in Erlanger, Kentucky. Marx sought damages in the amount of $47,690, along

with prejudgment interest.

       In its verified answer, Corning admitting that it had a written or oral contract with

Danzas for the shipment of its goods, but denied that it had requested or retained Marx to

handle the shipments. Corning also pled as an affirmative defense that it was not in

privity of contract with Marx and that Marx had contracted only with North American.

Marx filed its verified reply denying Corning’s affirmative defense.


       1
           When applicable, Corning and Danzas will sometimes collectively be referred to

as defendants.

                                              2
No. 1-07-1953


        Thereafter, Marx filed an amended verified complaint that was not substantially

different from its original verified complaint.

        On September 15, 2005, Danzas and Corning filed a combined motion for

summary judgment on the grounds that Marx never had a contract or agreement with

either Corning or Danzas and that Marx understood that it was to look solely to North

American for payment. The trial court denied the defendants’ motion for summary

judgment on March 28, 2006.

        Thereafter, the defendants filed a motion to reconsider. Marx filed a response and

a cross-motion for summary judgment. The defendants filed a reply in support of their

motion to reconsider. The trial court denied both motions on November 2, 2006, and the

case proceeded to trial.

        Before trial, the defendants filed a trial brief, which included the parties’

stipulations, exhibits and the deposition testimony of Marx’s corporate president.

        On June 15, 2007, the trial court conducted a bench trial. The record contains no

transcript of the record of proceedings. The following discussion is based on the

stipulations between the parties.

        Prior to January 30, 2002, Corning hired Danzas to coordinate the movement of

certain shipments of Corning’s goods from its facility in Harrodsburg, Kentucky, to

various overseas destinations. These shipments were to be transported by ground from

Harrodsburg, Kentucky, to O’Hare International Airport in Chicago, Illinois, or to the

Northern Kentucky International Airport in Erlanger, Kentucky, for transport by air.


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No. 1-07-1953


          At various times between January 30, 2003, and May 8, 2003, Danzas hired North

American to handle the movement of some of these shipments. A letter from the district

manager for Danzas stating that all invoices for shipments moved to North American and

handled by Marx had been paid in full to North American was included in the parties’

stipulation.

          As is customary in the shipping industry, North American was allowed to

transport the goods over-the-road on its own or to contract the shipments to other

carriers. Corning and Danzas had knowledge that Marx performed some of the

shipments.

          Corning prepared documents entitled “shipper’s letters of instruction” for the

shipments to provide the shipping details to Danzas and to authorize Danzas to execute

the necessary documents for the movement of Corning’s goods. Attached as Exhibit 2 to

the parties’ stipulation was a representative “shipper’s letters of instruction,” which

stated:

                  “On receipt of the shipment described below, Danzas *** is

          requested by and authorized to prepare and issue the necessary air waybill

          or bill of lading in the name of the undersigned, consign such shipment for

          carriage to destination or for onward carriage and deliver by any other

          transportation organization in accordance with the terms and conditions

          contained in the air waybill or bill of lading, tariffs, rules and regulations,




                                                  4
No. 1-07-1953


        and to prepare and execute in shipper’s name any documents requested for

        export.”

Marx was referenced in the lower right hand corner of a number of the documents

entitled “shipper’s letters of instruction.”

        The representative “shipper’s letters of instruction” identified Corning as

exporter, its Kentucky facility as the place of pickup, one of Corning’s overseas affiliates

as the “ultimate consignee,” and the final destination. None of the shipper’s letters of

instruction prepared by Danzas identified O’Hare International Airport or the Northern

Kentucky International Airport as a “stop” or “destination.”

        The terms of the agreements between Marx and North American relating to the

shipments performed by Marx were memorialized in documents prepared by Marx on its

letterhead after each shipment. One of these agreements was attached to the stipulations

as Exhibit 3. The agreement stated that “[North American] agrees to pay [Marx] for the

transportation of the following,” followed by a description of the goods shipped.

        Neither Corning nor Danzas retained Marx. When Marx completed its shipments,

it submitted invoices for payment to North American. A copy of a Marx invoice was

attached to the stipulation as Exhibit 4. Marx never submitted an invoice to either

Danzas or Corning.

        Corning paid Danzas for all transportation services that Danzas provided to it.

Danzas paid North American for its services. Copies of the checks issued to Danzas and




                                               5
No. 1-07-1953


made payable to North American in excess of $89,000 were attached as Exhibit 5 to the

parties’ stipulations. North American did not pay Marx for its freight services.

        Also attached to the parties’ stipulation was the discovery deposition of Mark

Jakubowski, Marx’s corporate president. Jakubowski testified that he was responsible

for booking freight and dealing with customers and drivers. Carl Sprock of North

American originally contacted Jakubowski in regard to the shipments. Jakubowski

negotiated the rates for the shipments directly with Sprock, and never negotiated with

Corning or Danzas. Jakubowki described North American as a “freight forwarder” in his

deposition testimony. He also stated that Marx never entered into a written contract with

Danzas or Corning.

        Jakubowski stated that the “shipper’s letters of instruction” attached to the

parties’ stipulation as Exhibit 2 was not a bill of lading and that there were no bills of

lading for the shipments. The letters of instruction were prepared prior to or at the time

that Marx’s drivers were sent to pick up a shipment at Corning’s facility and were given

to the drivers upon their departure.

        The “shipper’s letters of instruction” did not state what Marx was to be paid for

the shipment. The letter did not provide where Marx was to transport the shipment.

        The drivers signed the shipper’s letter for each shipment after they arrived at the

Corning facility in Kentucky. These drivers were not Marx employees but independent

contractors. No employees of Marx had personal contact with Danzas; only the contract

drivers had contact with Danzas.


                                               6
No. 1-07-1953


       Jakubowski stated that he believed North American would have terminated Marx

had Marx contacted anyone from Danzas or Corning without North American’s

permission. Marx’s only contact with Danzas came on two occasions when Marx

delivered shipments to the wrong airline and the respective drivers called Danzas to

inquire as to which airline the shipments should have been delivered to. Marx’s only

contact with Corning came when Marx received an incorrect shipping number from

North American.

       Marx never sent an invoice to or sought payment from Danzas or Corning.

Jakubowski stated that the agreement (Exhibit 3) was intended for North American and

had no signature line for Danzas or Corning.

       In finding for the defendants and against Marx, the trial court specifically relied

on Jackson Rapid Delivery Service, Inc. v. Thompson Consumer Electronics, Inc., 210 F.

Supp. 2d 949 (N.D. Ill. 2001), and found that “if Exhibit 2 is a Bill of Lading, it did not

set out the terms of the contract between Danzas/Corning and Marx and that the court

must look beyond the document to the parties’ dealings per Jackson.” Finally, the trial

court found that “[w]hen the court looks at the parties’ dealings it is evident that Marx

was to be paid by [North American]” and that Danzas and Corning were therefore not

liable to Marx for the charges.

       Marx appeals the judgment of the trial court.




                                               7
No. 1-07-1953


                                          ANALYSIS

        As noted, this appeal was taken from the final judgment of the trial court after a

bench trial. Before addressing the merits of this appeal, we must discuss Marx’s failure

to file a report of proceedings with this court. The burden rests on the appellant to

provide a sufficient record to support a claim of error, and in the absence of such a

record, the reviewing court will presume that the trial court’s order was in conformity

with established legal principles and had a sufficient factual basis. Foutch v. O’Bryant,

99 Ill. 2d 389, 391-92 (1984). “[I]n the absence of a proper record a reviewing court may

dismiss an appeal or, in the alternative, summarily affirm the judgment of the trial court.”

Landau & Associates, P.C. v. H. Daniel Kennedy, 262 Ill. App. 3d 89, 92 (1987). On the

other hand, “[t]he ‘failure to present a report of proceedings does not require automatic

dismissal or affirmance where issues can be resolved on the record as it stands.’ ”

Laudau, 262 Ill. App. 3d at 92, quoting Frisch Contracting Service Co. V. Personnel

Protection, Inc., 158 Ill. App. 3d 218, 221 (1987). We find that dismissal or summary

affirmance is not necessary in this case, as the issues on appeal can be resolved on the

record as it stands. Included in the record are the parties’ stipulations at trial and the trial

court’s order stating its reasons for finding in favor of defendants and against Marx.

        We now proceed to address the issues raised by Marx on appeal. The trial court

found that “if Exhibit 2 is a Bill of Lading, it did not set out the terms of the contract

between Danzas/Corning and Marx and that the court must look beyond the document to

the parties’ dealings” and that “[w]hen the court looks at the parties’ dealings it is evident


                                               8
No. 1-07-1953


that Marx was to be paid by [North American]” and that Danzas and Corning were

therefore not liable to Marx for the charges. Although not stated in the trial court’s order,

we assume that the trial court found that the document attached to the parties’ stipulation

as Exhibit 2 was ambiguous before moving on to a consideration of the parties’ dealings

to explain the terms of the document.

       The parties agree that the applicable standard of review from the findings and

decisions of the trial judge after a bench trial is whether the findings and decisions of the

trial court were against the manifest weight of the evidence. A decision is against the

manifest weight of the evidence only if the opposite conclusion is clearly evident.

Eychaner v. Gross, 202 Ill. 2d 228, 252 (2002). However, we review de novo that part of

the trial court’s decision that involved contract interpretation; specifically, we review de

novo the trial court’s finding of ambiguity in the document attached to the parties’

stipulation as Exhibit 2. Nicor, Inc. v. Associated Electric & Gas Insurance Services

Ltd., 223 Ill. 2d 407, 416 (2006) (stating that whether a contract is ambiguous is a

question of law, subject to de novo review).

       In its complaint, Marx alleged that Corning and Danzas breached a contract when

they did not pay Marx for its carrier services. Defendants assert that the facts

demonstrate that a contract was never formed between themselves and Marx. In their

brief to this court, defendants tread carefully to avoid labeling the document attached as

Exhibit 2 to the parties’ stipulations as a bill of lading. Defendants argue that the

“shipper’s letters of instruction” served only as receipts and do not represent an


                                               9
No. 1-07-1953


agreement between themselves and Marx. Marx argues that the representative document

attached as Exhibit 2 is a bill of lading and as such constituted a direct contract between

defendants and Marx.

        We find that the representative document attached as Exhibit 2 to the parties’

stipulations is a bill of lading. A “bill of lading” is defined as “a document

acknowledging the receipt of goods by a carrier” and as “a document that indicates the

receipt of goods for shipment and that is issued by a person engaged in the business of

transporting or forwarding goods.” Black’s Law Dictionary 176 (8th ed. 2004). Exhibit

2 was produced by Danzas and was intended to represent a receipt of the goods that

Danzas received from Corning for shipment. The document lists the consigner Corning,

the shipper Danzas, and the ultimate consignee, Corning’s overseas affiliate. The

document describes the goods released into the possession of the shipper, Danzas, and

specifically authorizes Danzas to:

        “prepare and issue the necessary air waybill or bill of lading in the name

        of the undersigned, consign such shipment for carriage to destination or

        for onward carriage and deliver by any other transportation organization in

        accordance with the terms and conditions contained in the air waybill or

        bill of lading, tariffs, rules and regulations, and to prepare and execute in

        shipper’s name any documents requested for export.”

        We also find that Marx’s relationship with defendants and North American is

governed by the bills of lading. The drivers that were hired by Marx to deliver Corning’s


                                              10
No. 1-07-1953


goods signed some of the bills of lading as evidenced by the representative bill of lading

attached to the parties’ stipulations as Exhibit 2. Furthermore, the name Marx Transport

is handwritten into the space provided on the representative bill of lading for the truck

line that was to convey the goods from Corning’s Kentucky facility to O’Hare

International Airport in Chicago, Illinois.

        Our operative concern however, is not whether Exhibit 2 is a bill of lading or if

Marx is a party to it, but rather whether there was a contract between either Corning or

Danzas and Marx that would obligate Corning or Danzas to repay for services for which

they have already paid North American. As the court in Jackson Rapid Delivery Service

(specifically relied upon by the trial court in the case at bar) stated, “[p]ut simply, a

shipper will be liable to a contract carrier if it agreed to pay the carrier.” Jackson Rapid

Delivery Service, Inc. v. Thompson Consumer Electronics Inc., 210 F. Supp. 2d 949, 952

(2001), citing Louisville & Nashville R.R. Co. v. Central Iron & Coal Co., 265 U.S. 59,

66, 68 L. Ed. 900, 902-03, 44 S. Ct. 441, 442 (1924). Exhibit 2 is important, however,

since it operates as our starting point for the determination of whether Corning or Danzas

has an obligation to pay Marx for its freight services. “To determine if there is a

contractual promise to pay [courts] look primarily to the bills of lading; bearing in mind

that the instrument serves both as receipt and as a contract.” Jackson Rapid Delivery

Service, 210 F. Supp. 2d at 952. The consigner, in this case Corning, generally remains

primarily liable unless the bill of lading or a course of dealing provides otherwise.

Jackson Rapid Delivery, 210 F. Supp. 2d at 952, citing Southern Pacific Transportation


                                               11
No. 1-07-1953


Co. v. Commercial Metals Co., 456 U.S. 336, 343, 72 L. Ed. 2d 114, 121, 102 S. Ct.

1815, 1820 (1982).

        Responsibility for payment can be shifted from the consigner to a third party.

Jackson Rapid Delivery, 210 F. Supp. 2d at 952, citing Missouri Pacific R.R. Co. v.

Center Plains Industries, Inc., 720 F.2d 818 (5th Cir. 1982) (noting that the customary

means for a consigner to avoid responsibility for payment is through a nonrecourse

clause in the bill of lading). The parties to a shipping agreement are free to contract

when and who will pay the freight charges. Jackson Rapid Delivery, 210 F. Supp. 2d at

952, citing C.A.R. Transportation Brokerage Co. v. Darden Restaurants, Inc., 213 F.3d

474, 479 (9th Cir. 2000).

        The bills of lading in this case are ambiguous in that nothing in the bills of lading

indicates how much Marx was to be paid for its services or who would pay the charges

for the services. This ambiguity raises questions about the payment arrangement, and as

a result, the trial court correctly found that it must look beyond the bills of lading to

determine whether Corning, Danzas, or North American was responsible for payment to

Marx.

        Neither party to the instant suit has done other than what it was expected to do;

Marx transported the goods as arranged by North American, and defendants paid North

American when billed.

        As the court in Jackson Rapid Delivery observed, when a shipper or consigner

pays the freight-forwarder, in this case North American, and the payments are not sent on


                                              12
No. 1-07-1953


to the carrier, here Marx, one of two innocent parties will be the loser. Jackson Rapid

Delivery, 210 F. Supp. 2d at 953. Courts have taken different views as to whom the loser

should be. National Shipping Co. of Saudi Arabia v. Omni Lines, Inc., 106 F.3d 1544,

1545 (11th Cir. 1997).

       Some courts lean toward a “semi-strict” liability for shippers. National Shipping

Co. of Saudi Arabia, 106 F.3d at 1546. These decisions reason that unless the carrier

intends to release the shipper from its duty to pay under the bill of lading, the shipper

remains liable to the carrier, irrespective of the shipper’s payment to a freight forwarder.

National Shipping Co. of Saudi Arabia, 106 F.3d at 1546.

       Other courts have reasoned that the carrier should be the party that suffers the

loss. National Shipping Co. of Saudi Arabia, 106 F.3d at 1545-46. One view holds that

the doctrine of equitable estoppel bars carriers from recovering freight charges where the

shippers were justified in believing that the carriers have been paid for their services.

National Shipping Co. of Saudi Arabia, 106 F.3d at 1546, citing Olson Distributing

Systems, Inc. v. Glasurit American, Inc., 850 F.2d 295, 296 (6th Cir. 1988). The other

view holds that the carrier should suffer the loss because the carrier extended credit to the

freight forwarder, in which case the carrier’s only recourse should be against the

forwarder. National Shipping Co. of Saudi Arabia, 106 F.3d at 1545, citing Compania

Sud Americana de Vapores v. Atlantic Caribbean Shipping Co., 587 F. Supp. 410, 413

(S.D. Fla. 1984).




                                              13
No. 1-07-1953


       Without expressing an opinion as to the best approach to be applied in all

circumstances, we find that the facts of this case warrant application of the last view. We

conclude, based on the evidence in this case, that the trial court’s determination that

defendants have no obligation to pay again was not against the manifest weight of the

evidence.

       The parties’ interactions are most informative in determining the parties’

responsibilities to each other. A review of the record, including the parties’ stipulations

and all attached exhibits, makes clear that Danzas expected to be paid by Corning, that

North American expected to be paid by Danzas, and that Marx expected to be paid by

North American. Among other evidence, the deposition of Mark Jakubowski, Marx’s

corporate president, is most helpful.

       As noted, Jakubowski testified that he was responsible for booking freight and

dealing with customers and drivers. He stated that Carl Sprock of North American

originally contacted him in regard to the shipments at issue in the case at bar. He

negotiated the rates for the shipments directly with Sprock and never negotiated with

Corning or Danzas. Despite our determination to the contrary, Jakubowski stated that

Exhibit 2 was not a bill of lading and that there was no written contract with Marx and

either defendant.

       The terms of the agreements between Marx and North American relating to the

shipments performed by Marx were memorialized in documents prepared by Marx on its

letterhead after each shipment. Those documents stated that “[North American] agrees to


                                             14
No. 1-07-1953


pay [Marx] for the transportation of the following,” followed by a description of the

goods shipped.

       Neither Corning nor Danzas retained Marx. When Marx completed its shipments,

it submitted invoices for payment to North American. Marx never submitted an invoice

to either Danzas or Corning, and there was no evidence presented that the defendants

were to be guarantors for payment.

       Corning paid Danzas for all transportation services that Danzas provided to it.

Danzas paid North American for its services.

       To summarize, Marx dealt with North American as an independent contractor and

permitted balances to build up over approximately 60 deliveries, without any notification

to Corning or Danzas. Marx created the risk of loss by its credit practices and, having

accepted North American as the obligor, cannot now recast the transaction. Jackson

Rapid Delivery Service, 210 F. Supp. 2d at 953.

       Marx has made no argument in its brief that North American acted as either

defendant’s agent when contracting with Marx or when receiving money from the

defendants. As a consequence, these arguments are waived. 210 Ill. 2d R. 341(h)(7).

                                     CONCLUSION

       For the foregoing reasons, the judgment of the circuit court of Cook County is

affirmed.

       Affirmed.

       WOLFSON and GARCIA, JJ., concur.


                                            15
                REPORTER OF DECISIONS - ILLINOIS APPELLATE COURT
                       (Front Sheet to be attached to each Opinion)
_________________________________________________________________
Please use the ]
following form:]
              ]     M ARX TR ANSPOR T, IN C.,
              ]
              ]                       Plaintiff-Appellant,
              ]              v.
              ]
              ]     AIR EXPRESS INTERNATIONAL CORPORATION,
              ]     d/b/a D anzas AEI, a nd CO RNING, INC.,
              ]
              ]                       Defendants-Ap pellees
              ]
              ]     (North Am erica n Expeditin g, In c.,
              ]
              ]                       Defendant).
Complete       ]
  TITLE        ]
of Case.       ]
_________________________________________________________________
Docket No.     ]           No. 1-07-1953
               ]     Appellate Court of Illinois
COURT          ]   First District, First Division
               ]
               ]         FEBRUARY 25, 2008

Opinion Filed ]        (Month, Day and Year)
_________________________________________________________________
               ]
JUSTICES       ] JUSTICE ROBERT E. GORDON delivered the opinion
               ] of the court.
               ]
               ] WOLFSON and GARCIA, JJ., concur.
_________________________________________________________________
APPEAL from the] Lower Court and Trial Judge(s) in form indicated
Circuit Court ] in margin:
of Cook County;] Appeal from the Circuit Court of Cook County.
the Hon:______ ]
Judge Presiding] Honorable Mary K. Rochford, Judge Presiding.

_________________________________________________________________
For APPELLANTS ]Indicate if attorney represents APPELLANTS or
John Doe of    ]APPELLEES and include attorneys of counsel.
Chicago.       ]Indicate the word NONE if not represented.
For APPELLEES, ]_________________________________________________
Smith and      ]    Kurt E. Vragel, Jr., P.C.
Smith, of      ]    Glenview, Illinois 60025
Chicago.       ]    Attorney for Appellant
Brown,         ]    Attn: Kurt E. Vragel, Jr.
of Counsel.    ]           OF COUNSEL
               ]
               ]    SmithAmundson, LLC
               ]    Chicago, Illinois   60601
               ]    Attorneys for Appellees
               ]    Attn: Michael Resis and John C. Neel
No. 1-07-1953


               ]          OF COUNSEL
Also add atty. ]
for third party]
appellants     ]
or appellees. ]
               ]
___________________(USE REVERSE SIDE IF NEEDED___________________




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