[Cite as Total Quality Logistics, L.L.C. v. Red Chamber Co., 2017-Ohio-4369.]



                                     IN THE COURT OF APPEALS

                           TWELFTH APPELLATE DISTRICT OF OHIO

                                          CLERMONT COUNTY




TOTAL QUALITY LOGISTICS, LLC,                           :
                                                                    CASE NO. CA2016-09-062
        Plaintiff-Appellee,                             :
                                                                            OPINION
                                                        :                    6/19/2017
   - vs -
                                                        :

RED CHAMBER CO., et al.,                                :

        Defendants-Appellants.                          :



       CIVIL APPEAL FROM CLERMONT COUNTY COURT OF COMMON PLEAS
                           Case No. 2013-CVH-1841



Lindhorst & Dreidame, Barry Fagel and Matthew Curran, 312 Walnut Street, Suite 3100,
Cincinnati, Ohio 45202, for plaintiff-appellee

David Prince and Miles Prince, 1912 East Vernon Avenue, Suite 100, Los Angeles, California
90058, for defendant-appellant

Durkee and Uhle, Richard Uhle, Jr., 285 E. Main Street, Batavia, Ohio 45103, for defendant-
appellant



        S. POWELL, J.

        {¶ 1} Defendant-appellant, Red Chamber Co. ("RC"), appeals a decision of the

Clermont County Court of Common Pleas, granting summary judgment in favor of plaintiff-

appellee, Total Quality Logistics, LLC ("TQL").

        {¶ 2} In 2008, RC, a seafood distributor began using TQL's services as a freight
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broker to transport RC's products to its customers. In turn, as a broker, TQL contracted with

third-party trucking companies to transport the products across the country. A credit

agreement governed this working relationship, and provided:

              Applicant understands motor carriers under contract with [TQL]
              are required to maintain cargo loss and damage liability
              insurance in the amount of $100,000.00 per shipment. Please
              sign below acknowledging that [l]oads valued in excess of
              $100,000[.00] will not be tendered without enough prior written
              notification to TQL to allow TQL and its carriers the opportunity to
              arrange for increased insurance limits. Failure to provide timely
              written notice will result in your loads not being insured to the
              extent the value exceeds $100,000.00.

        {¶ 3} In April 2013, RC contracted with TQL to arrange the transport of RC's goods

from California to Florida. In turn, TQL retained Wells Trucking to transport and deliver RC's

goods. During transport, an unknown third-party stole the load of goods valued at $186,450,

which RC never recovered. TQL brought this action against RC claiming it had breached the

credit agreement by failing to pay for 13 other brokered shipments between April 2, 2013 and

July 5, 2013, and alleged damages of $53,402, plus interest, collection costs, and attorney

fees. RC counterclaimed, asserting the loss of the value of the stolen goods was a result of

TQL's breach of contract, negligence, and negligent supervision and hiring. TQL filed a third-

party complaint against Wells Trucking alleging negligence and seeking indemnification.

Wells Trucking's insurance carrier settled with RC for $100,000. In so doing, RC agreed to

indemnify Wells Trucking for any claims by any other party for damages resulting from the

loss.

        {¶ 4} TQL moved for summary judgment on its breach of contract claim and RC's

counterclaims. In so doing, TQL argued RC's counterclaims were barred by the doctrine of

circular indemnity, preempted by the Carmack Amendment, 49 U.S.C. 14706(a), to the ICC

Termination Act of 1995, 49 U.S.C. 14501(b), and fail on their merits as a matter of law. With

respect to its breach of contract claim, TQL asserted RC's counterclaim was an attempt to

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offset the damages from RC's nonpayment of the 13 other brokered shipments; therefore,

TQL was entitled to judgment as a matter of law. The trial court granted summary judgment

in favor of TQL on its claim and RC's counterclaims. The trial court found the ICCTA

preempted RC's state law counterclaims. The trial court further found TQL met its burden of

demonstrating an absence of a genuine issue of material fact regarding its claim, and that

RC failed to rebut the evidence presented by TQL; therefore, TQL was entitled to judgment

as a matter of law. This appeal followed.

       {¶ 5} Assignment of Error No. 1:

       {¶ 6} THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT FOR

APPELLEE ON APPELLANT'S COUNTERCLAIM.

       {¶ 7} RC contends the trial court erred by sua sponte granting summary judgment in

favor of TQL on grounds not offered in TQL's motion for summary judgment thereby denying

RC a meaningful opportunity to respond. Specifically, RC asserts the trial court erred by

relying on the ICCTA in granting summary judgment on RC's counterclaims in favor of TQL

because, at no point during the pendency of the matter, was that section of the statute

presented as a basis for summary judgment.

       {¶ 8} We review a trial court's ruling on a motion for summary judgment de novo.

Grizinski v. Am. Express Fin. Advisors, Inc., 187 Ohio App.3d 393, 2010-Ohio-1945, ¶ 14

(12th Dist.). "De novo review means that this court uses the same standard that the trial

court should have used, and we examine the evidence to determine whether as a matter of

law no genuine issues exist for trial." Morris v. Dobbins Nursing Home, 12th Dist. Clermont

No. CA2010-12-102, 2011-Ohio-3014, ¶ 14. Summary judgment is proper if there are no

genuine issues of material fact to be litigated, the moving party is entitled to judgment as a

matter of law, and reasonable minds can come to only one conclusion, and that conclusion is

adverse to the nonmoving party. Civ.R. 56(C); Williams v. McFarland Properties, LLC, 177
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Ohio App.3d 490, 2008-Ohio-3594, ¶ 7 (12th Dist.). The moving party bears the initial

burden of demonstrating the absence of a genuine issue of material fact. Dresher v. Burt, 75

Ohio St.3d 280, 293, 1996-Ohio-107. If the moving party meets its burden, the nonmoving

party has a reciprocal burden to set forth specific facts showing a genuine issue for trial. Id.

       {¶ 9} "A party seeking summary judgment must specifically delineate the basis upon

which summary judgment is sought in order to allow the opposing party a meaningful

opportunity to respond." Mitseff v. Wheeler, 38 Ohio St.3d 112 (1988), paragraph one of the

syllabus. The moving party must state with particularity the areas of the opposing party's

claim that do not raise a genuine issue of material fact and such assertion may be supported

by evidence as allowed by Civ.R. 56(C). Id. at 115. A trial court, generally, may not sua

sponte grant summary judgment upon grounds not raised by the prevailing party. Marshall v.

Aaron, 15 Ohio St.3d 48, 50-51 (1984). Thus, a grant of summary judgment is improper

when the nonmoving party has not had notice summary judgment may be entered against

him. Ballinger v. Leaniz Roofing, Ltd., 10th Dist. Franklin No. 07AP-696, 2008-Ohio-1421, ¶

22. However, a trial court does not deprive a party of a meaningful opportunity to respond

where the party has notice of an issue. See Revlock v. Lin, 8th Dist. Cuyahoga No. 99243,

2013-Ohio-2544, ¶ 12; Ballinger at ¶ 23.

       {¶ 10} Thus, the inquiry requires this court to examine the substance of the motion for

summary judgment in the context of the statute to determine whether such notice was

present. See Ameriswiss Tech. v. Midway Line of Ill., Inc., 888 F.Supp.2d 197, 206

(D.N.H.2012) (stating applicability of the preemption statute hinges on the subject matter and

effect of each claim). RC contends TQL argued its motion for summary judgment pursuant to

only the Carmack Amendment, without any mention of the other sections of the ICCTA, and

therefore, RC did not have notice of the issue upon which the trial court ruled, depriving RC

of a meaningful opportunity to respond. Whereas, TQL asserts RC had such notice, as TQL
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specifically argued federal preemption pursuant to an amendment to the ICCTA, and in so

doing, cited several cases that thoroughly examined both the Carmack Amendment and the

ICCTA.

       {¶ 11} Pursuant to well-established principles of transportation law, cargo damage

claims against interstate motor carriers are determined under the Carmack Amendment to

the ICCTA. Chubb Group Ins. Cos. v. H.A. Transp. Sys., Inc., 243 F.Supp.2d 1064, 1068-69

(C.D.Cal.2002). Whereas the amendment does not specifically govern brokers in the

scheme of interstate cargo loss and damage liability. Id. The ICCTA provides two potential

theories of preemption. Ameriswiss at 204. The Carmack Amendment provides that:

              [a] carrier providing transportation or service * * * shall issue a
              receipt or bill of lading for property it receives for transportation
              under this part. That carrier and any other carrier that delivers
              the property and is providing transportation or service * * * are
              liable to the person entitled to recover under the receipt or bill of
              lading. The liability imposed under this paragraph is for the
              actual loss or injury to the property caused by (A) the receiving
              carrier, (B) the delivering carrier, or (C) another carrier over
              whose line or route the property is transported in the United
              States * * *.

(Citations omitted.) 49 U.S.C. 14706(a)(1). Accordingly, the Carmack Amendment creates a

federal statutory remedy on a bill of lading against both the originating and destination carrier.

To assert a prima facie case pursuant to the Carmack Amendment, one must demonstrate

(1) delivery to the carrier in good condition, (2) delivery failure or arrival in damaged

condition, and (3) the amount of damages caused by the loss. Camar Corp. v. Preston

Trucking Co., 221 F.3d 271, 274 (1st Cir.2000).

       {¶ 12} "It is accepted * * * that the principal purpose of the [Carmack] Amendment was

to achieve national uniformity in the liability assigned to carriers." Rini v. United Van Lines,

104 F.3d 502, 504 (1st Cir.1997) (stating the preemptive effect of the Carmack Amendment

over state law claims is well-established). Thus, the "Carmack Amendment impliedly


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preempts state regulations related to damages for the loss or destruction of property during

the course of interstate shipment." Ameriswiss at 204 (stating Congress impliedly preempts

state law by creating a federal regulation scheme so pervasive so there is a reasonable

inference Congress intended to leave no room for the State to supplement it), citing

Fitzgerald v. Harris, 549 F.3d 46, 52 (1st Cir.2008). Additionally, Congress may expressly

preempt state law by including "language in the federal statute that reveals an explicit

congressional intent to pre-empt state law." Fitzgerald at 52. In addition to the Carmack

Amendment, the ICCTA expressly preempts state regulation of interstate transportation of

goods. Ameriswiss at 204, discussing 49 U.S.C. 14501.

      {¶ 13} The ICCTA provides, in pertinent part:

             a State * * * may not enact or enforce a law, regulation, or other
             provision having the force and effect of law related to a price,
             route, or service of any motor carrier * * * or any motor private
             carrier, broker, or freight forwarder with respect to the
             transportation of property.

(Emphasis added.) 49 U.S.C. 14501(c)(1). The two theories of preemption are not mutually

exclusive, as one's claims may be preempted impliedly by the Carmack Amendment,

expressly by the ICCTA, or both. Ameriswiss at 205-06 (demonstrating any claim brought

against a party in its capacity as a carrier is preempted by the Carmack Amendment,

whereas any claim brought against a party in its capacity as a broker is preempted by the

ICCTA).

      {¶ 14} In its motion for summary judgment, TQL thoroughly argued the application of

the Carmack Amendment to preempt RC's state law counterclaims. TQL asserted the

Carmack Amendment only applies to carriers and freight forwarders. Thus, as a broker, TQL

fell outside the parameters of permissible claims brought pursuant to the Carmack

Amendment.     Further, since the Carmack Amendment preempts state law claims in

situations where carriers are held liable for actual loss or injury to property, RC's
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counterclaims are preempted against TQL, even though it was a broker, because the claims

stem from actual loss of property during transport by the carrier.

       {¶ 15} The trial court declined to address TQL's preemption argument pursuant to the

Carmack Amendment, and instead, found the ICCTA expressly preempted RC's state law

counterclaims. Likewise, we need not address the validity of TQL's Carmack Amendment

argument, and note, as the trial court found, the federal courts have inconsistently answered

the question whether the Carmack Amendment extends to state law claims against brokers.

Compare Ameriswiss at 208 (holding state law tort claims against broker preempted impliedly

and expressly), with Belnik, Inc. v. TBB Global Logistics, Inc., 106 F.Supp.3d 551, 560

(M.D.Pa.2015) (holding state law tort claims against broker only expressly preempted).

       {¶ 16} No such inconsistency exists with respect to express preemption for state law

claims under the ICCTA, as courts have repeatedly found that holding a broker liable for a

negligence claim is subject to express preemption. See, e.g., ASARCO LLC v. Eng.

Logistics Inc., 71 F.Supp.3d 990, 1006-07 (D.Ariz.2014) (finding that holding a broker liable

for negligence "would certainly have more than a tenuous, remote or peripheral effect on

rates and services"); AIG Eur. Ltd. v. General Sys., Inc., 2014 U.S. Dist. LEXIS 99152, *12

(D.Md.2014) (July 22, 2014) (finding ICCTA expressly preempts negligence claim against

broker who allegedly failed to select a carrier with sufficient insurance, as the "claim clearly

relates to the service provided by a broker"); Ameriswiss at 206-07 (citing a series of cases

finding ICCTA expressly preempts state law claims against a broker). Therefore, the trial

court properly found the ICCTA expressly preempted RC's counterclaims.

       {¶ 17} We next turn to the question of whether the trial court's finding deprived RC of a

meaningful opportunity to respond under Civ.R. 56. Specifically, whether TQL's motion for

summary judgment asserting implied preemption pursuant to the Carmack Amendment to the

ICCTA provided sufficient notice of the possible applicability of the express preemption
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section of the statute. We find TQL's motion for summary judgment provided such notice.

       {¶ 18} As discussed above, a review of the statute itself and the supporting case law

clearly indicates there are two avenues for federal preemption of state law claims related to

actual loss or injury to property while in interstate transit. The well-established purpose

behind preempting such state law claims is to achieve national uniformity in such cases

where liability is imposed. Rini v. United Van Lines, 104 F.3d 502, 504 (1st Cir.1997). A

review of authority relating to preemption pursuant to the Carmack Amendment and the

ICCTA indicates review of one necessitates review of the other, because they are often

interrelated and analyzed together. Contrary to RC's claim otherwise, the trial court did not

deprive RC of a meaningful opportunity to respond because TQL's motion extensively cited

authority demonstrating such interrelatedness.

       {¶ 19} Additionally, this court has previously addressed a similar set of facts and found

the nonmoving party was not deprived of a meaningful opportunity to respond. See Hunter v.

Wal-Mart Stores, Inc., 12th Dist. Clinton No. CA2001-10-035, 2002-Ohio-2604, ¶ 13. In

Hunter, the plaintiff filed a negligence action against Wal-Mart in a slip-and-fall case. Id. at ¶

1. In moving for summary judgment, Wal-Mart exclusively asserted the "open and obvious"

defense.    Id. at ¶ 12.    The trial court rejected the "open and obvious" defense, but

nevertheless, granted summary judgment in favor of Wal-Mart because the plaintiff failed to

present credible evidence that Wal-Mart received constructive notice of the presence of a

substance on the floor. Id. at ¶ 12. The plaintiff made the only mention of the constructive

notice issue during the briefing stage of summary judgment and we upheld the trial court's

grant of summary judgment on the issue in favor of Wal-Mart. Id. at ¶ 13. In so doing, we

found the trial court did not deprive the plaintiff of a meaningful opportunity to respond where

the moving party did not raise the issue in its motion. Id.

       {¶ 20} Similar to our opinion in Hunter, the trial court did not deprive RC of a
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meaningful opportunity to respond to the federal preemption issue. See Revlock v. Lin, 8th

Dist. Cuyahoga No. 99243, 2013-Ohio-2544, ¶ 12 (finding party was not deprived of a

meaningful opportunity to respond where party briefed the rescue doctrine and the trial court

granted summary judgment on an exception to the rescue doctrine); Ballinger v. Leaniz

Roofing, Ltd., 10th Dist. Franklin No. 07AP-696, 2008-Ohio-1421, ¶ 23 (finding plaintiff must

have been on notice his own fault was at issue where defendant raised assumption of risk

defense). Contrary to RC's claim otherwise, the trial court's grant of summary judgment

based on express preemption versus implied preemption does not demonstrate RC did not

have sufficient notice of the issue of possible federal preemption applicable to the facts of

this case. Rather, RC briefed the matter regarding applicability of the Carmack Amendment,

which as discussed above, is so interrelated to the ICCTA that one would not likely consider

preemption under one, but not the other. Thus, the trial court's declining to reach a decision

on the applicability of the Carmack Amendment to brokers, in favor of correctly applying the

express preemption section of the statute, does not constitute reversible error.

       {¶ 21} Accordingly, RC's first assignment of error is overruled.

       {¶ 22} Assignment of Error No. 2:

       {¶ 23} THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT FOR

APPELLEE ON THE COMPLAINT.

       {¶ 24} RC contends the trial court erred by granting summary judgment in favor of

TQL because RC presented sufficient evidence to demonstrate a genuine issue of material

fact existed for TQL's breach of contract claim. Specifically, RC contends there are three

triable issues of fact in dispute: (1) whether TQL committed a breach in its role as a broker,

(2) if yes, was it a material breach, and (3) whether such breach discharged RC's duty to

perform relative to the 13 other brokered shipments.

       {¶ 25} As discussed above, the moving party bears the initial burden of showing there
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is no genuine issue of material fact and that it is entitled to judgment as a matter of law.

Dresher v. Burt, 75 Ohio St.3d 280, 293 (1996). If the moving party meets its burden, the

nonmoving party has a reciprocal burden to set forth specific facts showing a genuine issue

for trial. Id. The nonmoving party may not rest upon the mere allegations of its pleadings,

but must set forth evidence of specific facts showing the existence of a genuine triable issue.

Mootispaw v. Eckstein, 76 Ohio St.3d 383, 385 (1996).

       {¶ 26} In support of its motion for summary judgment, TQL submitted the affidavit of

Marc Bostwick, an operations manager for TQL, who averred that "[b]etween April 2, 2013

and July 5, 2013, TQL brokered transportation for 13 loads for [RC], aside from the [stolen]

load * * * at issue in this case." Bostwick further averred RC had yet to pay the $53,402, plus

interest, owed for those 13 loads.      TQL further supported its motion with the credit

application, including the terms and conditions for the 13 loads, as well as RC's statement of

accounts demonstrating $53,402 due for unpaid shipments. The only evidence submitted by

RC in opposition to TQL's motion for summary judgment was the affidavit of Eithel Yocupicio,

traffic manager for RC, who averred to the procedure related to contracting for the stolen

shipment. Yocupicio's affidavit does not provide any evidence to rebut the evidence related

to TQL's breach of contract claim, but rather, supports RC's counterclaims. Therefore, the

trial court properly found RC failed to meet its burden to demonstrate the existence of a

genuine issue of material fact with respect to TQL's breach of contract claim, and TQL is

entitled to judgment as a matter of law.

       {¶ 27} Accordingly, RC's second assignment of error is overruled.

       {¶ 28} Judgment affirmed.


       HENDRICKSON, P.J., and RINGLAND, J., concur.




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