1. If the customer signed and said that the fruit was fine, how does Frye end up being responsible for the damaged goods?

2. What is the significance of the temperature tale in shipping contracts?

3. What do you learn about the importance of prompt inspection from this case?

Total Quality Logistics, LLC (plaintiff/TQL), hired Frye Trucking, LLC (defendant/Frye), to transport fruit to TQL’s customer’s facility in Georgia. Frye’s driver picked up the fruit in New Jersey and Pennsylvania and transported the fruit to Georgia over a period of three days.

 The driver received bills of lading for the fruit when he picked them up and, after delivery, he received the three bills of lading after they were stamped as approved by the customer. Each bill of lading has a stamp and notation from the customer that shows all cases were received, no cases were damaged, and no cases were rejected. The bills of lading also listed the pulp temperature of the fruit upon arrival.

After the driver had left the customer’s premises, the customer noticed that the fruit was not in good condition and requested an inspection by the USDA. The USDA prepared three reports on March 2, 2012, the delivery date, which stated that the fruit was spoiled and evidenced decay and other issues. TQL then unsuccessfully tried to salvage the shipment of fruit, but it was determined that the fruit was in too poor of a condition to salvage. TQL filed a claim with Frye on March 13, 2012. Frye’s insurance company denied an insurance claim filed for the lost fruit product because it believed that the fruit was delivered to Frye in damaged condition. TQL filed suit and both parties moved for summary judgment.

JUDICIAL OPINION

BOYLE, District Judge…Defendant relies exclusively on the following facts. The driver delivered the fruit and plaintiff’s customer stamped and signed the bills of lading after testing the temperature of the fruit and then returned the bills of lading to the defendant’s driver. Defendant argues that plaintiff’s customer provided clean bills of lading showing receipt of undamaged goods from defendant which defeats plaintiff’s claim that the goods arrived damaged. The Court disagrees. The circumstances presented in this case are largely analogous to those presented in Great Am. Ins. Co. v. USF Holland, Inc., 937 F.Supp.2d 376 (S.D.N.Y.2013). There, as here, defendant carrier delivered goods and received clean bills of lading and then the recipient of the goods conducted a thorough inspection of the goods shortly after the delivery driver departed. The inspection revealed damaged goods that were unsalvageable. The court in USF Holland granted summary judgment in favor of plaintiffs because a “clean delivery receipt merely establishes a presumption of good condition and is subject to rebuttal by evidence of damage,” and the court found that the plaintiff proffered sufficient rebuttal evidence. Here, plaintiff also offers sufficient rebuttal evidence to defeat the presumption.

First plaintiff is armed with the USDA inspection reports that were requested an hour after defendant’s driver left the plaintiff’s customer’s facility. The USDA reports showed that all of the shipment failed to grade according to USDA standards, that the inspection was requested at 8:10 A.M., the inspections were initiated at the same time, and that the inspections were completed at 10:09 A.M.

Plaintiff further offers evidence of the likely cause of the damage to the fruit, the temperature tale for the load. A temperature tale is a device that records the temperature of the product during transportation. The temperature tale here reveals that during the transit period, the temperature was always above 39 degrees and fluctuated between 39 and 52 degrees and even reached 70 degrees. The rate confirmation shows that the product was to be kept at a continuous ……………………