United States District Court,
S.D. New York.
Susan and Larry BRODY, Plaintiffs,
v.
LIFFEY VAN LINES, INC., Allied Van Lines, Inc., Sirva, Inc., and New York Self Storage Inc., Defendants.
No. 13 Civ. 5719(CM).
Signed May 29, 2014.
AMENDED DECISION AND ORDER
McMAHON, District Judge.
*1 The following allegations, taken from the complaint, are deemed true on this motion for judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c):
Susan and Larry Brody moved their household goods from New York City to a new home in Palm Beach Gardens, Florida. They engaged Liffey Van Lines FN1 to pack, store, ship and deliver their household goods from 15 West 63 rd Street in Manhattan. The complaint alleges that some of the household goods were to be delivered to an address in Palm Beach Gardens and some to “a second home in New York City.” (Cplt.¶ 8).
FN1. In a previous version of this opinion, I erroneously stated (based on the Brodys’ complaint) that Liffey was “a subsidiary of Allied Van Lines (which is itself a subsidiary of SIRVA. Inc.).” Counsel for Allied Van Lines and SIRVA wrote to the Court to inform me that although SIRVA is the parent company of Allied Van Lines, the two corporations have no relationship with Liffey Van Lines.
Liffey packed and stored the furniture and other household goods in its warehouse for some months; plaintiffs paid the monthly storage fees via checks made payable to New York Self Storage, Inc. (Cplt.¶ 11). When plaintiffs contacted Liffey about moving “some” of their goods to Florida, they signed a second contract with Liffey’s parent corporation, Allied Van Lines, which transported the goods to Florida. Plaintiffs allege that they were “forced” to sign this contract, because their possessions were “held hostage” by Liffey. (Cplt.¶¶ 12–15)
When the goods arrived in Florida, they were damaged. (Cplt.¶ 17).
The Brodys decided that they no longer had faith in Liffey and sought to pick up their possessions from Liffey’s warehouse on West 121 st Street in Manhattan. Liffey refused to release Plaintiffs’ possessions until they signed a “Release Statement,” no copy of which has been provided to the court. (Cplt.¶ ¶ 20–21)
When plaintiffs took control of the goods that had never left New York City, they found that these items, too, were damaged. (Cplt.¶ 22)
The total amount of damages to plaintiffs’ goods was $273,362 for a total of 22 items. $42,500 of that amount was attributable to the damage to the goods that never left New York City. (Cplt ¶¶ 22, 25)
At every step along the way, the Brodys had indicated that they wanted extra care taken with their goods. They obtained extra insurance coverage for up to $400,000 in connection with their original contract with Liffey, and selected and prepaid for the “Extra Care Protection Plan” in connection with their contract with Allied. (Cplt.¶¶ 14, 10)
Allied, after investigating the damage claims, cut plaintiffs a check for $13,118.38, which it claimed to be the limit of its liability for the goods it had transported. (Cplt.¶ 26) Plaintiffs have refused to accept or deposit this check.
The Brodys brought this action in the New York State Supreme Court on July 17, 2013. They asserted twelve claims, all under state law, including claims for breach of contract, something called “Recovery Upon Liability” (which seems to have to do with the fact that defendants induced plaintiffs to purchase additional insurance-I cannot tell from the complaint whether claims have been made to the relevant insurers), damage to property, “personal injury” (the emotional distress that plaintiffs have suffered as a result of this ordeal), negligence, and fraud (which appears to be barred by their claims for breach of contract as a matter of state law). Three of plaintiffs’ claims are asserted twice-once in relation to the property that was delivered to Florida, and separately in relation to the property that remained in the warehouse in New York City.
*2 Allied Van Lines and SIRVA immediately removed the action to this court, asserting that all the claims against them were barred by the Carmack Amendment-a federal law that limits the liability of interstate carriers for shipments in interstate commerce. This position was ultimately adopted by Liffey as well.
Defendant New York Self Storage, Inc., has been served through the Secretary of State but has never appeared in this action. As the Carmack Amendment does not apply to storage companies—only to the interstate transportation of goods by motor carriers—any claims against NYSS necessarily arise under state law. Those claims are, however, cognizable in this court under principles of supplemental jurisdiction. See 28 U.S.C. § 1367(a). There is no indication that NYSS consented to removal, but the removal statute, 28 U.S.C. 1441(c), does not require that a defendant against which only state law claims lie consent to removal.FN2 Liffey and SIRVA, the two defendants aside from Allied that might be impacted by the Carmack Amendment, did consent to removal. (Notice of Removal, Docket # 1, at ¶ 6)
FN2. The statute is oddly drafted. It permits the removal of an action in which there is a claim that “arises under” federal law, even if joined with a claim over which the court could assert neither original nor supplemental jurisdiction, but requires any such claim to be severed and remanded to the state court. It then goes on to say that only defendants against whom a federal “arising under” claim are alleged need to consent to removal—in this case, Liffey and SIRVA (which is probably not a viable defendant in any case, since I imagine it will be hard to pierce any corporate veil between it and Allied). This means that New York Self Storage-against which only state law claims are asserted, but which is plainly subject to supplemental jurisdiction-can be forced to litigate in a federal court without its consent, which has not been obtained and which apparently does not need to be obtained. In any event, New York Self Storage, which has been served with process, is in default.
Allied, SIRVA and Liffey have now moved for judgment on the pleadings. SIRVA’s and Allied’s motions are granted, albeit for different reasons; Liffey’s motion is granted in part and denied in part.
Judgment on the Pleadings
A motion for judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c) is governed by the same standards as a motion to dismiss for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6).
First and foremost, the Court must liberally construe all claims, accept all factual allegations in the complaint as true, and draw all reasonable inferences in favor of the plaintiff. See Cargo Partner AG v. Albatrans, Inc., 352 F.3d 41, 44 (2d Cir.2003); see also Roth v. Jennings, 489 F.3d 499, 510 (2d Cir.2007).
To survive a motion to dismiss, “a complaint must contain sufficient factual matter … to ‘state a claim to relief that is plausible on its face.’ “ Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). “While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff’s obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555 (internal quotations, citations, and alterations omitted). Thus, unless a plaintiff’s well-pleaded allegations have “nudged [its] claims across the line from conceivable to plausible, [the plaintiff’s] complaint must be dismissed.” Id. at 570; Iqbal, 129 S.Ct. at 1950–51.
*3 Additionally, any claims sounding in fraud must meet Rule 9(b)’s heightened pleading standard. See Fed.R.Civ.P. 9(b). To comply with Rule 9(b), a complainant “must: (1) specify the statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3) state where and when the statements were made, and (4) explain why the statements were fraudulent.” Lerner v. Fleet Bank, N.A., 459 F.3d 273, 290 (2d Cir.2006) (quoting Mills v. Polar Molecular Corp., 12 F.3d 1170, 1175 (2d Cir.1993) (internal quotation marks omitted).
Finally, in deciding a motion to dismiss, this Court may consider the full text of documents that are quoted in or attached to the complaint, or documents that the plaintiff either possessed or knew about and relied upon in bringing the suit. Rothman v. Gregor, 220 F.3d 81, 88–89 (2d Cir.2000) (citing Cortec Indus. Inc. v. Sum Holding L.P., 949 F.2d 42 (2d Cir.1991), cert. denied, 503 U.S. 960 (1992)); San Leandro Emergency Med. Group Profit Sharing Plan v. Philip Morris Cos., 75 F.3d 801, 808 (2d Cir.1996). “Plaintiffs’ failure to include matters of which as pleaders they had notice and which were integral to their claim-and that they apparently most wanted to avoid—may not serve as a means of forestalling the district court’s decision on the motion.” Cortec, 949 F.2d at 44; see also I. Meyer Pincus & Assocs. P .C. v. Oppenheimer & Co., 936 F.2d 759, 762 (2d Cir.1991) ( “[P]laintiff cannot evade a properly argued motion to dismiss simply because plaintiff has chosen not to attach the [document] to the complaint or to incorporate it by reference.”).
1. SIRVA’S Motion for Judgment on the Pleadings is Granted
No viable claim is asserted against SIRVA; literally the only allegation against it is that it is Allied’s (and, erroneously, Liffey’s) parent corporation. There is no allegations that it had anything to do with the transactions at issue, and no allegation of fact that would justify piercing the corporate veil between it and its subsidiaries. The allegations are insufficient to support a request for jurisdictional discovery; this court will not authorize a fishing expedition when plaintiffs have not offered a scintilla of support for piercing the corporate veil between Allied and its corporate parent. For that reason, SIRVA’s motion for judgment on the pleadings is granted and the complaint is dismissed as against it, with prejudice and without leave to replead.
2. The Carmack Amendment
The Carmack Amendment, 49 U.S.C. § 14706 et seq., addresses the liability of common carriers for goods lost or damaged during a shipment over which the Interstate Commerce Commission (now the Surface Transportation Board) has jurisdiction. It states that a motor carrier is liable “for the actual loss or injury to the property” and specifically allows a shipper to recover for the actual loss or injury caused by any of the carriers involved in the shipment. Id. §§ 14706(a)(1) & (d)(2).
*4 Because Congress intended the Carmack Amendment to create a uniform nationwide scheme of statutory remedies for carrier liability, the statute preempts state liability rules pertaining to cargo carriage, under either statutory or common law. As the Supreme Court long ago held, “Almost every detail of the subject is covered so completely [by the Carmack Amendment] that there can be no rational doubt but that Congress intended to take possession of the subject and supersede all state regulations with reference to it .” Adams Express Co., v. Croninger, 226 U.S. 491 (1913). The Second Circuit more recently said exactly the same thing, in Cleveland v. Beltman North American Co., Inc., 30 F.3d 373, 374 (2d Cir.1994), where it held that claims by a shipper for damages to good in interstate commerce is an “area of interstate commerce law that has been fully occupied by Congress’ passage of a statute delineating what remedies are available, leaving no room for additional state of federal common law causes of action.”
The shipper’s sole remedy under Carmack is a statutory cause of action against the carrier for breach of the transportation agreement. Furthermore, Carmack applies both to claims of damage or loss while goods are in interstate transit, but also to related services, including arranging for, receiving, delivering, storing, handling, packing and unpacking such goods.
Contrary to not providing plaintiffs with a remedy, as they seem to fear, the Carmack Amendment “imposes something akin to strict liability on shippers.” Mitsui Sumitomo Insurance Co. Ltd. v. Evergreen Marine Corp., 621 F.3d 215, 216 (2d Cir.2010). It does, however, bar claims for emotional distress and fraud and claims relating to the claims process itself (including claims for insurance coverage), to cite several examples of plainly barred causes of action that are pleaded in the Brodys’ complaint. Rini v. United Van Lines, 104 F.3d 502 (1st Cir.1997).
3. Allied’s Motion for Judgment on the Pleadings is Granted
On the allegations of the complaint, plaintiffs’ claims against Allied Van Lines are limited to a statutory cause of action under Carmack. According to the complaint, Allied picked up the goods at Liffey’s warehouse and transported them to Palm Beach Gardens, Florida. Plaintiffs’ effort to “plead around” Carmack fails. The first count of the complaint is deemed amended to assert a claim against Allied (not SIRVA) for the value of the goods that were delivered to Palm Beach Gardens in damaged condition under Carmack. All other causes of action against Allied are dismissed.
4. Liffey’s Motion for Judgment on the Pleadings is Granted in Part and Denied in Part
So we turn to Liffey, the party with whom plaintiffs originally contracted.
To the extent that Liffey picked up the goods that eventually ended up in Florida at plaintiffs’ New York City apartment, stored and delivered them to Allied for transit, its activities plainly fall within the ambit of the Carmack Amendment, and plaintiffs’ claim is limited to a statutory action for breach of the transportation agreement. With respect to those goods, it was plaintiffs’ intent from the outset to ship them out-of-state, and Liffey’s activities, even if they took place entirely in New York State, were but one leg of a journey to out-of-state destinations. Bilyou v. Dutchess Beer Distributors, 300 F.3d 217 (2d Cir.2002). Plaintiffs are bound by the allegation of their First Cause of Action, in which they alleged that they entered into an express contract with “defendants” (a term that includes Liffey) “for the safe transport of their possessions from New York City to Palm Beach Gardens, Florida.” (Cplt. ¶ 35; see also Cplt. ¶ 8). Plaintiffs cannot now contend that Liffey was not engaged in interstate carriage with respect to their goods, and any state law claims against Liffey relating to that interstate carriage are preempted by Carmack. Therefore, Counts 1, 2, 4, 6, 8, 9, and 11—all of which relate specifically and exclusively to the goods shipped to Florida—are dismissed against Liffey as well.
*5 Plaintiffs specifically allege, however, that only some of the goods it picked up from their apartment were headed to Florida; the rest was allegedly to be stored in Liffey’s warehouse here in New York City, until such time as plaintiffs were ready to move their furniture into a new home here in New York City. Indeed, plaintiffs allege that this was the deal they originally made with Liffey. (Cplt.¶ 8). Plaintiffs argue that, at the very least, their state law claims with respect to this subset of their goods—asserted in the Third, Seventh and Tenth causes of action FN3—cannot be dismissed at the pleadings stage, because this aspect of their transaction between them and Liffey dealt entirely with intrastate pick-up, delivery and storage, and so is not preempted by Carmack.
FN3. At least one of these state law claims, and possibly two of them, will have to be dismissed eventually, since the same conduct cannot be both a breach of contract and a tort. See Wildenstein v.. 5H & Co, Inc., 950 N.Y.S.2d 3, 7 (1st Dep’t 2012).
Liffey counters that Carmack applies even to the intrastate portion of the transaction, for two reasons.
First, Liffey argues that Carmack applies to any carriage and related activities, even to intrastate carriage and attendant services, as long as the carriage is being performed by an “interstate carrier.” However, it does not appear that Liffey’s assertion about the reach of the Carmack Amendment is correct. 49 U .S.C. § 13501 sets out the reach of the Surface Transportation Board’s authority over motor carrier transportation and its procurement. By the statute’s terms the Board’s jurisdiction does not extend to all activities of “interstate carriers,” but rather to what I will call “interstate carriage.” The statute applies to transportation by motor carrier from one place in a state to another only when that transportation goes through another states (§ 13501(1)(B)). Margetson v. United Van Lines, Inc., 785 F.Supp. 917 (D.N.M.1991)—the only authority cited by Liffey for the proposition that wholly intrastate activities fall within Carmack if performed by an interstate carrier—says nothing of the sort. In fact, the carriage in Margetson was from Dallas, TX to Santa Fe, NM—interstate carriage.
There is no allegation in the Brodys’ complaint that so much of their household goods as were to be (1) removed from one New York City apartment, (2) stored in a New York City warehouse, and then (3) delivered to a different New York City apartment ever traveled outside of New York State. Nor is there any logical reason why these goods should have been shipped out of state. For this reason, plaintiffs argue that they have successfully pleaded around Carmack at least as to that limited portion of their goods.
Not so, counters Liffey. It notes that the Second Circuit has held that, where multiple carriers are responsible for different legs of a generally continuous shipment, the determination as to whether Carmack applies is based on the intended final destination of the shipment as that intent existed when the shipment commenced. Project Hope v. M/V Ibn Sina, 250 F.3d 67 (2d Cir.2001). And indeed, that is true—the Court of Appeals has held that, if the shipper’s intention to have goods delivered out-of-state was fixed before a motor carrier began transporting those goods as part of the “continuous movement of goods in interstate commerce,” then the fact that any particular carrier merely transported and/or stored those goods in a single state along the way does not take that carrier out of the ambit of Carmack. In other words, one looks to the entirety of the journey to decide whether interstate carriage or intrastate carriage is involved, and one considers what the shipper intended from the beginning.
*6 It should be obvious that I cannot grant Liffey’s motion for judgment on the pleadings on that ground, because it is not at all clear from the record before me that the Brodys had a fixed intention at the time they contracted with Liffey to ship all of their goods out of New York, or that all of their goods (as opposed to the portion of their goods entrusted to Allied) were ever put into a “continuous movement … in interstate commerce.” The paper record, while confusing, can be read to belie any such assertion.
In addition to the allegations of the complaint, which are to the effect that Liffey was hired to move all goods into intrastate storage and thereafter to deliver some to Florida and some within New York, I have (at Liffey’s particular request) examined the contract and related documents between Liffey and the Brodys. These documents were provided in their most legible form by plaintiffs’ counsel and are filed on ECF (Docket # 26 May 7, 2014).
In the January 26, 2010 quote letter that appears to be the first contract document, under the legend “Please Note,” it says, “If 1/2 of items shipped to West Palm Beach area at later date, estimated shipping charge of $4580 (delivery out of storage for local portion would be reduced accordingly ).” (Emphasis added). This letter, written by Liffey’s Director of Sales, Jim Clogston, seems to confirm the Brodys’ claim that they advised Liffey in advance that some of their goods were NOT going to be shipped out of state, but were a “local portion.” Additionally, there is no explicit mention of delivery to Palm Beach Gardens in the actual February 11, 2010 formal estimate, which all parties agree is the contract between Liffey and plaintiffs; the only additional stop specifically mentioned in Hewlitt, New York, on Long Island. Another estimate, dated February 23, 2010, advises that Liffey was to deliver a sofa and loveseat from storage to Brooklyn-again, within New York State. Even the first bill of lading indicating a destination in Palm Beach Gardens, FL, specifically references the fact that other furniture (including at least 2 couches) and 2 boxes will be delivered “at a later date;” the fair import of those words is that those particular pieces and boxes were not to be sent to Florida along with the bulk of the Brodys’ possessions.FN4
FN4. On the copy of this document, initialed 5/21/10, there is typing on top of typing under “Other Services Requested,” and I cannot make out the entire writing.
All of this differs from the bill of lading (464504) with Allied Van Lines, which specifies Florida delivery and contain no reference to partial shipments or the withholding of certain goods for later delivery. From the facts alleged in the complaint, I infer that Allied was brought in to handle the interstate portion of the move. There is no allegation that Allied was ever given custody of the goods that are referenced as needing to be delivered later, or that are alleged to have been intended as a “local portion.” One can interpret the paper record as indicating that Liffey kept a portion of the Brodys’ goods separate and apart from the goods that were intended to go to Florida. What I know of the transaction today suggests that it was a bifurcated deal, with Allied handling the interstate portion and Liffey the in-state portion.FN5
FN5. I am somewhat confused by a Liffey Van Lines Order dated July 19, 2010, which specifies that Liffey is to deliver a wall unit to Mrs. Brody, whose address is listed as 21 Walsh Lane in Greenwich, CT. Greenwich is not in New York State. Until the record is more fully developed, I cannot tell whether the Brodys’ new summer home (for I surmise that the Florida house is their winter home) really is in New York City, as alleged in the complaint, or is out of state. No doubt this will all be fleshed out during discovery.
*7 In short, whether Carmack bars the assertion of state law claims against Liffey cannot be determined on the pleadings. After discovery, it may be that Liffey will have a viable motion for summary judgment. If it does, I trust that its counsel will cite to some cases involving a single shipper who simultaneously consigns to a single carrier goods that are intended from the outset for two separate destinations: one out-of-state and one in-state.
I do sua sponte dismiss the claim for fraud relating to the New York “local portion” of the goods (Count 12) against Liffey, for failure to plead with particularity under Rule 9(b). This dismissal is of course without prejudice to repleading. However, plaintiffs and their counsel are warned: this court will be inclined to sanction the filing of any frivolous fraud pleading. The claim seems to be that plaintiffs were fraudulently induced to obtain insurance coverage for their goods, which has not been forthcoming. Plaintiffs need to plead the precise representations that were made to them. Also, it is not clear whether Liffey was self-insuring plaintiffs’ goods for full value or whether outside insurance was involved; and “insurance policy” is specifically pleaded. (Cplt.¶ 102).
CONCLUSION
The motions are decided as follows:
• All claims dismissed against SIRVA
• First Cause of Action: deemed repleaded as a Carmack claim against Allied and Liffey;
• Second Cause of Action: dismissed as against both Allied and Liffey
• Third Cause of Action: dismissed as against Allied but not Liffey
• Fourth Cause of Action: dismissed as against both Allied and Liffey
• Fifth Cause of Action: dismissed as against both Allied and Liffey
• Sixth Cause of Action: dismissed as against both Allied and Liffey
• Seventh Cause of Action: dismissed as against Allied but not Liffey
• Eighth Cause of Action: dismissed as against both Allied and Liffey
• Ninth Cause of Action: dismissed as against both Allied and Liffey
• Tenth Cause of Action: dismissed as against Allied but not Liffey
• Eleventh Cause of Action: dismissed as against both Allied and Liffey
• Twelfth Cause of Action: dismissed as against both Allied and Liffey.
All dismissals are with prejudice except for the dismissal of the Twelfth Cause of Action against Liffey, which may be repleaded. All other claims that are dismissed against both Allied and Liffey are barred by the Carmack Amendment.
This constitutes the decision and order of the Court. The Clerk of the Court is directed to remove Docket No. 13 from the Court’s list of pending motions.
