Chubb Seguros Argentina S.A. v. UPS

Background

AMX Argentina S.A. purchased telecommunications equipment from Comtech and arranged for it to be transported from Tempe, Arizona, to Argentina. Savino del Bene Argentina handled the overall logistics and subcontracted with Savino del Bene U.S.A. Inc., which subcontracted with Ground Logistics & Transportation, Inc. Ground Logistics then subcontracted with UPS to transport the equipment by truck from Tempe to Miami, Florida.

A separate package carried by UPS fell on the equipment while it was in transit. The equipment was damaged, could not feasibly be repaired, and was treated as a total loss. Chubb Seguros Argentina S.A., acting as AMX’s subrogor, sued UPS, Savino USA, and Ground Logistics for $203,298 under the Carmack Amendment, a federal law governing carriers’ liability for lost or damaged goods. Chubb also asserted state-law bailment and contract claims, but withdrew its state-law claims against UPS because it acknowledged that those claims were preempted by the Carmack Amendment.

UPS’s Motions

UPS moved for summary judgment, which asks the court to decide a claim without a trial when the record shows no genuine dispute requiring a trial. UPS argued that Chubb lacked standing to sue under the Carmack Amendment because AMX was not listed as the consignee on the bill of lading. UPS also moved for partial summary judgment on whether an enforceable limitation on liability applied to AMX’s claims.

The bill of lading listed UPS Freight as the carrier, Comtech EF Data as the shipper, and Savino USA as the consignee. Savino USA therefore had standing as the named consignee. The court also considered whether Savino USA acted as AMX’s agent when it contracted with Ground Logistics and UPS. The opinion states that UPS knew Savino USA was not the ultimate consignee or real party in interest.

Standing Ruling

The court denied UPS’s motion for summary judgment. It held that AMX had standing under the Carmack Amendment because Savino USA acted as AMX’s agent when contracting with Ground Logistics and UPS. The court relied on the principle that an undisclosed principal may enforce a contract made for its benefit, even when the other contracting party did not know the principal’s identity. Because Chubb sued as AMX’s subrogor, the court treated Chubb as able to pursue the claims at issue.

Liability Limitation

The Carmack Amendment permits a carrier to limit its liability only if the shipper receives a fair opportunity to choose between higher and lower liability levels by paying a correspondingly higher or lower charge. AMX argued that neither it nor Comtech received such a choice from UPS. UPS argued that the limitation should apply because AMX knew carriers sometimes limit liability, had insurance for the shipment, and did not instruct Savino Argentina to obtain additional coverage.

The court denied UPS’s motion for partial summary judgment because the record did not establish that the limitation was effective. AMX’s general knowledge that carriers sometimes limit liability, and its decision not to pay for additional coverage, did not by themselves establish an effective limitation. The limitation could apply to AMX if it was effectively made applicable to Savino USA or Savino Argentina through their agency relationship with AMX, but the court could not determine that issue on the existing record.

The opinion states that the record did not show what negotiations occurred between Ground Logistics and Savino USA, whether Savino USA had an opportunity to choose between different levels of coverage, whether either Savino entity knew about the separate private agreement between Ground Logistics and UPS, or whether either entity had constructive notice of the limitation. Because those factual questions remained unresolved, the court could not decide as a matter of law that UPS had effectively limited its liability to Savino USA, Savino Argentina, or AMX.

Disposition

Judge Alvin K. Hellerstein denied the motions for summary judgment and partial summary judgment. The Clerk of Court was directed to terminate the motion, and the parties were ordered to appear for a status conference on May 27, 2022.