Quiz 20: Title, Risk, and Insurable Interest

Business

In the case of Spray-Tek Inc. v. Robbins Motor Transportation, Inc., 426 F.Supp.2d 875 (2006) the District Court held that Robbins was liable for replacement costs of the damaged chamber. The elements for establishing a prima facie case under the Carmack Amendment are: 1. Delivery to the carrier in good condition. 2. Arrival in damaged condition. 3. The amount of damages. The exceptions are: 1. Acts of God. 2. The public enemy. 3. Acts of the shipper himself. 4. Public authority. 5. The inherent vice or nature of the goods. The freight term F.O.B. or free on board, means that the buyer pays for transportation charges from the destination. In this case, the destination is points of manufacture in the U.S.A. That means that the buyer, Spray-Tek, assumed ownership of the chamber at the time that it was loaded upon the carrier. Spray-Tek was able to prove its prima facie case under the Carmack Amendment by meeting all of the elements because the chamber was F.O.B. manufacturer in Hudson, Wisconsin. Therefore the carrier was found liable for replacement costs. The F.O.B. destination been Spray-Tek's facility in Bethlehem, Pennsylvania, Spray-Tek would not have met the burden of proof under the Carmack Amendment because it would not have taken ownership while the chamber was in the possession of the carrier.

In the case of Pride v. Mackey, a trial court would probably find that Pride was in possession and ownership of the Greenie product and therefore could not pass the liability on to the buyer. Before title and risk of loss can pass from the seller to the buyer the goods must be in existence and identified to the contract. The contract was formed upon Pride's promise to of prompt shipment but could title could not pass because the goods were not identified. Pride had not separated the goods for shipment and retained ownership until the carrier picked up the shipment from Pride's docks. The contract was a shipment contract as was evidenced by the F.O.B. Pride's city. The risk of loss would have passed to Mackey once Fast Freight assumed possession of the shipment. The elements for establishing a prima facie case under the Carmack Amendment are: 1. Delivery to the carrier in good condition. 2. Arrival in damaged condition. 3. The amount of damages. The exceptions are: 1. Acts of God. 2. The public enemy. 3. Acts of the shipper himself. 4. Public authority. 5. The inherent vice or nature of the goods. The freight term F.O.B. or free on board, means that the buyer pays for transportation charges from the destination. In this case, the destination is Pride's city. That means that the buyer, Mackey, would have assumed ownership of the shipment at the time that it was loaded upon the carrier. The shipment was never delivered to the carrier, so a prima facie case would not be established in favor of Pride.

In the case of Spray-Tek Inc. v. Robbins Motor Transportation, Inc. , 426 F.Supp.2d 875 (2006) the District Court held that Court held that Robbins was liable for replacement costs of the damaged chamber. The elements for establishing a prima facie case under the Carmack Amendment are: 1. Delivery to the carrier in good condition. 2. Arrival in damaged condition. 3. The amount of damages. The exceptions are: 1. Acts of God. 2. The public enemy. 3. Acts of the shipper himself. 4. Public authority. 5. The inherent vice or nature of the goods. The element that states arrival in damaged condition was met because the record clearly stated that it was an undisputed fact that the drying chamber was damaged when it struck an overpass and became dislodged from Robbins' vehicle. Additionally, it was undisputed that after the accident the drying chamber was inspected and declared a total loss. Accordingly, the fact that the drying chamber never arrived at Spray-Tek's facility was irrelevant because the record clearly demonstrated that there was an adverse change in the condition of the drying chamber while it was in Robbins' custody.

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