Appeal from the United States District Courtfor the Central District of CaliforniaTerry J. Hatter, Jr., District Judge, PresidingArgued and SubmittedOctober 8, 1999--Pasadena, CaliforniaFiled February 4, 2000Before: Betty B. Fletcher, Dorothy W. Nelson, andMelvin Brunetti, Circuit Judges.Opinion by Judge D.W. Nelson
_____________________________COUNSEL Howard L. Jacobs, Sands Narwitz Forgie Leonard & Lerner,Los Angeles, California, for the plaintiff-appellant.Michael W. Lodwick, Porter, Groff & Lodwick, Long Beach,California, for the defendant-appellee.
_____________________________OPINION D.W. NELSON, Circuit Judge:Insurance Company of North America (INA), in its effortto recover for the loss of $257,285.34 in stolen golf balls,appeals the district court's summary judgment order limitingthe liability of NNR Aircargo Service (NNR) to $50. INAmakes five arguments: (1) invoices are not contracts and therewas no course of dealing sufficient to infer the parties' com-mon understanding of the agreement; (2) there was uncer-tainty with respect to the meaning of the limitation term, "$50per shipment"; (3) actual possession of the invoice is requiredto enforce the limitation of liability term contained in it; (4)NNR is subject to the statutory requirements of CaliforniaCommercial Code S 7204(1) and the Carmack Amendment;and (5) the district court's summary judgment order is inade-quate to facilitate appellate review. Although INA also positsthat the trial judge failed to view the facts in the light mostfavorable to it, we do not address this issue as INA neglectsto substantiate its assertion.FACTUAL AND PROCEDURAL HISTORYDunlop Slazenger Corporation (Dunlop), a manufacturerand distributor of sporting goods equipment, contracted withNNR on 48 separate transaction occasions for services relatedto the importation of golf balls and other goods by ocean car-riage. These services included freight forwarding, customsbrokering, transporting from the Port of Long Beach toNNR's warehouse in Inglewood, California, and palletizing.On the occasion of the subject theft, Dunlop hired NNR toimport 2,703 cartons of golf balls from Kobe, Japan to LongBeach, California.On February 22, 1996, after completing the ocean carriage,NNR transported the golf balls from the Port of Long Beachto its warehouse in Los Angeles. Because NNR took longerthan anticipated to ready the balls for delivery to its final des-tination, South Carolina, NNR held the cargo for a few days.On February 25, NNR notified Dunlop that a container con-taining 1,350 cartons of golf balls was stolen from NNR'swarehouse. Two weeks after the theft, Dunlop received aninvoice for NNR's services.This invoice was identical in its terms and conditions tothose invoices sent by NNR to Dunlop for the 47 previoustransactions, the first of which was in November 1993. Thefront of the invoice states that "NNR handles shipments sub-ject to the terms and conditions set forth on the reverse sideof this invoice." Paragraph eight on the reverse side containsa limitation of liability term: Limitation of $50 Per Shipment. The Customer agrees that the Company shall in no event be liable for any loss, damage, expense or delay to the goods resulting from the negligence or other fault of the Company for any amount in excess of $50.00 per shipment (or the invoice value, if less) and any par- tial loss or damage for which the Company may be liable shall be adjusted pro rata on the basis of such valuation. The Customer has the option of paying a special compensation to increase the liability of the Company in excess of $50 per shipment in case of any loss, damage, expense or delay from causes which would make the Company liable, but such option can be exercised only by specific written agreement made with the Company prior to ship- ment, which agreement shall indicate the limit of the Company's liability and the special compensation for the added liability by it to be assumed subject to 19 CFR part 111.44.INA, Dunlop's insurer, contests the validity of this $50 liabil-ity limitation.On February 6, 1997, INA, standing in the shoes of Dunlopfiled a complaint against NNR, for damages arising from thetheft of the golf balls; INA paid Dunlop $257,285.34 for thenon-recovered golf balls and for duty and ocean freightcharges. INA then filed a Motion for Summary Judgment onSeptember 12, 1997. Seven days later, NNR responded by fil-ing its Motion for Partial Summary Judgment. The districtcourt granted NNR's motion and ordered that NNR's liabilitybe limited to $50. We affirm.STANDARD OF REVIEWWe review the district court's grant of summary judgmentde novo. See Margolis v. Ryan, 140 F.3d 850, 852 (9th Cir.1998). This review is governed by the same standard used bythe trial court under Federal Rule of Civil Procedure 56(c).See Ghotra v. Bandila Shipping, Inc., 113 F.3d 1050, 1054(9th Cir. 1997), cert. denied,
522 U.S. 1107
(1998). Viewingthe evidence in the light most favorable to the nonmovant, weconsider whether there are any genuine issues of material factand whether the district court correctly applied the relevantsubstantive law. See Margolis, 140 F.3d at 852.DISCUSSIONI. EXISTENCE OF CONTRACTPrior to the theft of the golf balls, Dunlop contracted withNNR on 47 separate occasions for the importation of itsgoods. For each transaction, NNR sent Dunlop an invoiceidentical in its terms and conditions. INA argues, however,that it should not be held to the liability limit of $50 containedin the invoice as the limitation term was not a part of Dun-lop's oral agreement with NNR. In so doing, INA asks us todisregard the invoices sent by NNR to Dunlop.[1] Liability is a term inherent to shipping contracts. See Inre CFLC, Inc., 166 F.3d 1012, 1018 (9th Cir. 1999). We havethus tacitly approved the use of a course of dealing analysisin interpreting such contracts where the agreement is silentwith respect to liability. See id. Today we rule that invoiceterms and conditions may supplement shipping agreements ifthere has been a sufficient course of dealing and thereby, findthat INA is subject to the terms and conditions of the invoicefor the stolen golf balls. In enforcing the $50 liability limit,we are in consonance with our sister circuits. See e.g. CapitolConverting Equip. Inc. v. LEP Trans., Inc., 965 F.2d 391,395-96 (7th Cir. 1992) (upholding a liability limit containedin an invoice); Calvin Klein Ltd. v. Trylon Trucking Corp.,892 F.2d 191, 195-96 (2d Cir. 1989) (enforcing the liabilityterms of an invoice); Transamerica Oil Corp. v. Lynes, Inc.,723 F.2d 758, 764-65 (10th Cir. 1983) (ruling that invoiceprovisions are relevant in defining a contract); Alcoa Steam-ship Co. v. Charles Ferran & Co., 383 F.2d 46, 54-55 (5thCir. 1967), cert. denied,
393 U.S. 836
(1968) (upholding alimitation of liability clause in an invoice delivered uponcompletion of the contract).[2] A course of dealing is "a sequence of previous conductbetween the parties to a particular transaction which is fairlyto be regarded as establishing a common basis of understand-ing for interpreting their expressions and other conduct." Cal.Com. Code S 1205(1) (1964). An inference of the parties'common understanding that is based upon a prior course ofdealing is a question of fact. See In re CFLC, Inc., 166 F.3dat 1017. Although INA contends that the invoice did not mod-ify the terms of the oral contract, we do not conflate a courseof dealing inquiry with a material alterations analysis where,as here, a transaction in goods is not at issue. See UCC S 2-102 (West 1999).[3] The germane inquiry is whether Dunlop's receipt of 47identical invoices for 47 separate transactions is sufficient toconstitute a course of dealing. We find our analysis withrespect to bills of lading most instructive because, likeinvoices, they can serve the dual purpose of billing customersand stipulating terms and conditions. In ascertaining the vol-ume of transactions necessary to presume a familiarity withthe terms contained in a bill of lading, we have found a courseof dealing based on the receipt of three to four bills of ladingwith identical limitation of liability terms. See Royal Ins. Co.v. Sea-Land Serv. Inc., 50 F.3d 723, 727 (9th Cir. 1995). Con-sistent with this reasoning, we find that 47 identical invoicessent by NNR over a period of three years put Dunlop onnotice of the terms and conditions contained in them.[4] INA contends that actual knowledge of the $50 liabilitylimit should be a determinative factor in whether we enforcethe invoice term. In doing so, INA mistakenly relies on a dis-trict court case, Independent Mach. v. Kuehne & Nagel, Inc.,867 F. Supp. 752 (N.D. Ill. 1994). The court, in enforcing aliability limit based on as few as five prior dealings, notes thatIndependent Machinery was aware of the invoice terms. Seeid. at 765. In its analysis, however, the court also emphasizesthat the course of dealing should have put IndependentMachinery on notice of the terms irrespective of whether ithad actual knowledge: [Independent Machinery] would be hard-pressed to [profess ignorance] with any credibility: Each invoice has a legend in capital letters and red print referring the reader to the terms and conditions on the reverse side, and each of the relevant clauses appears on the reverse side in a readily readable (though very small) typeface and is preceded by its title . . . in bold (though again small) print . . .Id. The invoices sent by NNR to Dunlop likewise state, "NNRhandles shipments subject to the terms and conditions setforth on the reverse side of this invoice" and the reverse sideis entitled in bold letters, "TERMS AND CONDITIONS OFSERVICE (Please Read Carefully)." Each of the clauses onthe reverse side is, moreover, explained in clear language andis preceded by a readily identifiable title. We therefore pre-sume INA's knowledge of the terms based on the prior deal-ings.II. DEFINITION OF "SHIPMENT"[5] INA contends that there was uncertainty with respect tothe meaning of the invoice phrase, "$50 per shipment," as theterm "shipment" could have meant any one of three alterna-tive definitions: (1) each of the 2,703 cartons of golf balls, (2)each of the 53,632 pounds of cargo, or (3) the entirety of thecargo referenced on the invoice. Because any uncertainty ina writing is construed most strongly against the party whocaused the uncertainty to exist, see Interpetrol Bermuda Ltd.v. Kaiser Aluminum Int'l. Corp., 719 F.2d 992, 998 (9th Cir.1984), INA asserts that we should read the limitation term,"shipment," to mean each of the 53,632 pounds of cargo.[6] INA is correct with respect to contract interpretation,but its legal argument lacks factual substantiation. Jean Ash-worth, transportation administrator for Dunlop, used the term"shipment" in a manner evincing a mutual understanding ofthe term: "[t]he shipment was one of two containers of golfballs, totaling 2,703 cartons of golf balls." INA does not pro-vide any evidence suggesting that Dunlop construed"shipment" to mean otherwise.III. IMPOSSIBILITY OF COMPLIANCEUnder the terms of the invoice, Dunlop had the option ofincreasing NNR's liability by written agreement prior to theshipment. INA argues, however, that Dunlop did not have theopportunity to declare a higher value as it did not receive theinvoice until two weeks after the theft. A contract conditionwhich is impossible to fulfill is void. See Cal. Civ. CodeS 1441 (1982).[7] Although sympathetic to INA's predicament, we do notbelieve that actual possession of the invoice is necessary toenforce a liability term where, as here, there has been a courseof dealing. We find that Dunlop's receipt of identical invoiceson 47 occasions prior to the theft of the golf balls is sufficientto presume its knowledge of the terms and conditions. Thisanalysis is consistent with our holdings in bill of lading cases.See Royal Ins. Co., 50 F.3d at 727 (ruling that actual posses-sion of the bill of lading is not required to enforce a limitationterm).We are not alone in relying on a course of dealing analysisto enforce invoice terms despite the absence of actual notice.In Calvin Klein Ltd., the Second Circuit considered a casewhere Calvin Klein was invoiced for a shipment subsequentto it being stolen from the goods carrier. See 892 F.2d at 192.Because Calvin Klein had contracted with the carrier to trans-port hundreds of prior shipments over a period of at leastthree years, the court determined that Calvin Klein had ampleopportunity to declare a higher value and enforced the liabil-ity limitation. See 892 F.2d at 196 (reasoning that because theparties were not dealing with each other for the first time norcontracting under new or changed terms, Calvin Klein wasaware of the terms and free to adjust the limitation). TheIndependent Machinery court likewise upheld a liability termalthough the client was invoiced only after the mishandling ofthe goods in question. See 867 F. Supp. at 765. The court rea-soned that the terms included in each of the prior dealingswere built into the parties' shipping agreement. See id. Usinga similar analysis, we reject INA's contention that compliancewith the invoice terms was impossible.IV. STATUTORY RESTRICTIONSA. California Commercial Code S 7204(1) [8] California Commercial Code S 7204(1) stipulates that awarehouseman is liable for damages to goods caused by thefailure to exercise reasonable care. See Cal. Com. CodeS 7204(1) (1990). A warehouseman is "a person engaged inthe business of storing goods for hire." See U.C.C. S 7-102(1)(h) (West 1999).[9] INA argues that NNR is subject to the purview ofS 7204(1) as it is a warehouseman. INA supports this claim byoffering as evidence a memo from T. Hayashi of SumitomoRubber Industries to Jean Ashworth which contains a crypticnote: "Noted the notify party on B/L should be NNR andNNR is not only forwarder but also broker & warehouse." Wehave no way of telling, however, who T. Hayashi is, howSumitomo is involved with the transaction, and who identifiedNNR as a warehouse. The depositions of NNR staff andmemos from NNR to Dunlop indicate only that Dunlop waspaying for the forwarding of cargo from Japan to Long Beach,customs clearing, drayaging, and palletizing. Other thanpointing out that NNR was holding the container of golf ballswhile preparing it to be picked up for delivery to South Caro-lina, INA fails to raise any facts of material relevance thatNNR was storing the goods for profit.B. Carmack Amendment[10] The Carmack Amendment subjects common carriersand freight forwarders transporting cargo in interstate com-merce to absolute liability for actual loss or injury to property.See 49 U.S.C.A. S 14706(a) (West Supp. 1999). We have nobasis for applying the Carmack Amendment here, however, asDunlop did not hire NNR to transport the golf balls in inter-state commerce. NNR was responsible only for importing thegolf balls by ocean carriage, transporting the cargo from thePort of Long Beach to NNR's warehouse, palletizing, andloading the golf balls onto a truck chosen by Dunlop. Thereis no evidence to indicate that NNR was to have any role intransporting the cargo from California to its intended finaldestination, South Carolina.V. ADEQUACY OF THE SUMMARY JUDGMENT ORDERThe district court, in granting summary judgment to NNR,issued an order brief in its length: The Court has considered Plaintiff's motion for summary judgment and Defendant's motion for par- tial summary judgment, together with the moving papers. It is Ordered that Plaintiff's motion be, and hereby is, Denied. It is Ordered that Defendant's motion be, and hereby is, Granted. It is Ordered, Adjudged and Decreed that judg- ment be, and hereby is, Entered in favor of Defen- dant and against Plaintiff as to limitation of liability. It is further Ordered, Adjudged and Decreed that Defendant's liability is limited to $50.00.INA contends that the order's brevity makes it inadequate forappellate review and asks us to remand this case for a state-ment of the district court's analysis. The federal rules do not,however, require a statement of reasons by a trial judge forgranting summary judgment. See Fed. R. Civ. P. 56. Rule52(a), in fact, specifically states that "[f]indings of fact andconclusions of law are unnecessary" when deciding Rule 56motions. Fed. R. Civ. P. 52(a).AFFIRMED.