Neutral As of: June 19, 2020 4:52 PM Z
Underwriters at Interest v. All Logistics Grp., Inc.
United States District Court for the Southern District of Florida
May 25, 2020, Decided; May 25, 2020, Entered on Docket
Case No. 1:19-cv-21889-KMM
Reporter
2020 U.S. Dist. LEXIS 91810 *
UNDERWRITERS AT INTEREST, a/s/o High Liner Foods (USA) Inc., Plaintiff, v. ALL LOGISTICS GROUP, INC., Defendant/Third-Party Plaintiff, v. LAN CHILE, S.A., Third-Party Defendant.
Prior History: Underwriters at Interest v. All Logistics Grp., Inc., 2019 U.S. Dist. LEXIS 160033 (S.D. Fla., Sept. 17, 2019)
ORDER
THIS CAUSE came before the Court upon Plaintiff Underwriters at Interest’s (“Plaintiff’) Motion for Summary Judgment (“Pl.’s Mot.”) (ECF No. 77), Defendant and Third-Party Plaintiff All Logistics Group, Inc.’s (“All Logistics Group”) Motion for Summary Judgment (“All Logistics Group’s Mot.”) (ECF No. 79) and Third-Party Defendant Lan Chile, S.A.’s (“Lan Chile”) Motion for Summary Judgment1 (“Lan Chile’s Mot.”) (ECF No. 82). The Motions are now ripe for review.
I. BACKGROUND 2
This action arises out of an international shipment of salmon (the “Cargo”), that was exposed to elevated temperatures while in transport. Pl.’s 56.1 ¶¶ 5, 20-21. Lan Chile is an air carrier company that was responsible for shipping the Cargo from Chile to the Miami International Airport. All Logistics [*2] Group’s 56.1 ¶¶ 1, 3; Lan Chile’s Resp. to All Logistics Group’s 56.1 ¶¶ 1, 3. All Logistics Group is a motor-carrier transportation business that was responsible for transporting the Cargo from Miami International Airport to the Slade Gorton Warehouse in Fort Lauderdale, Florida. Pl.’s 56.1 ¶¶ 6-9. High Liner Foods was the consignee of the Cargo. See (“Air Waybills”) (ECF No. 79-1). Plaintiff is High Liner Food’s insurer. Pl.’s 56.1 ¶¶ 1, 26. Plaintiff paid High Liner Food’s claim for the loss of the Cargo and High Liner Foods assigned to Plaintiff its right to recover from the party responsible for the damage. Id. ¶ 26.
All Logistics Group agreed to pick up the Cargo on May 10, 2017 from the Miami International Airport and transport it to the Slade Gorton warehouse in Fort Lauderdale, Florida. Id. ¶¶ 6-9. However, due to an internal miscommunication, All Logistics Group did not pick up the Cargo from the Miami International Airport until May 13, 2017. Id. ¶¶ 9-10, 12-15; Lan Chile’s 56.1 ¶¶ 58-59, 64-66. The Cargo remained in the possession of Lan Chile at the Miami International Airport between May 10, 2017 and May 13, 2017. Lan Chile’s 56.1 ¶ 8. After picking up the Cargo on May [*3] 13, 2017, All Logistics Group stored the Cargo overnight and delivered the Cargo to the Slade Gorton warehouse on May 14, 2017. Pl.’s 56.1 ¶¶ 15, 18; All Logistics Group’s Resp. to Pl.’s 56.1 ¶¶ 15-16. Upon arrival at the Slade Gorton warehouse, High Liner Foods determined that the Cargo had been exposed to warm temperatures.3 Pl.’s 56.1 ¶¶ 20-21. High Liner determined that the Cargo was spoiled due to the Cargo’s exposure to warm temperatures.4 Id. ¶ 21.
On May 10, 2019, Plaintiff filed a complaint against All Logistics Group for the loss of the Cargo. See generally Complaint (“Compl.”) (ECF No. 1). In the Complaint, Plaintiff alleges claims for (1) breach of contract and (2) negligence against All Logistics Group. See generally id. On October 15, 2019, All Logistics Group filed a third-party complaint against Lan Chile. Third-Party Complaint (ECF No. 28). Subsequently, on December 6, 2019, All Logistics Group filed an Amended Third-Party Complaint against Lan Chile. (“Am. Third-Party Compl.”) (ECF No. 54). In the Amended Third-Party Complaint, All Logistics Group alleges two claims against Lan Chile: (1) negligence and (2) common law indemnification. See generally id.
Now, Plaintiff [*4] moves for summary judgment on its breach of contract claim against All Logistics Group. See generally Pl.’s Mot. Further, All Logistics Group moves for summary judgment against Lan Chile on the issue of liability. See generally All Logistics Group’s Mot. Finally, Lan Chile moves for summary judgment on All Logistics Group’s claims against Lan Chile for negligence and indemnification. See generally Lan Chile’s Mot.
II. LEGAL STANDARD
Summary judgment is appropriate where there is “no genuine issue as to any material fact [such] that the moving party is entitled to a judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986) (quoting Fed. R. Civ. P. 56). A genuine issue of material fact exists when “a reasonable jury could return a verdict for the nonmoving party.” Anderson, 477 U.S. at 248 (citation omitted). “For factual issues to be considered genuine, they must have a real basis in the record.” Mann v. Taser Int’l, Inc., 588 F.3d 1291, 1303 (11th Cir. 2009) (citation omitted). Speculation cannot create a genuine issue of material fact sufficient to defeat a well-supported motion for summary judgment. Cordoba v. Dillard’s, Inc., 419 F.3d 1169, 1181 (11th Cir. 2005).
The moving party has the initial burden of showing the absence of a genuine issue as to any material fact. Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). In assessing whether the moving party has met this burden, a court must view the movant’s [*5] evidence and all factual inferences arising from it in the light most favorable to the non-moving party. Denney v. City of Albany, 247 F.3d 1172, 1181 (11th Cir. 2001). Once the moving party satisfies its initial burden, the burden shifts to the non-moving party to present evidence showing a genuine issue of material fact that precludes summary judgment. Bailey v. Allgas, Inc., 284 F.3d 1237, 1243 (11th Cir. 2002); see also Fed. R. Civ. P. 56(e). “If reasonable minds could differ on the inferences arising from undisputed facts, then a court should deny summary judgment.” Miranda v. B & B Cash Grocery Store, Inc., 975 F.2d 1518, 1534 (11th Cir. 1992) (citation omitted). But if the record, taken as a whole, could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial, and summary judgment is proper. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986) (citation omitted).
III. DISCUSSION
A. Plaintiff’s Motion for Summary Judgment Against All Logistics Group
Plaintiff moves summary judgment on its claim for breach of contract against All Logistics Group. See generally Pl.’s Mot. Specifically, Plaintiff argues that All Logistics Group failed to pick up the Cargo on the date it contracted to do so, resulting in damage to the Cargo. Id. at 4-5. In response, All Logistics Group argues that (1) motor carriers are not liable for damage which occurred prior to the motor carrier’s receipt of the cargo; and (2) Plaintiff did not [*6] present evidence that the Cargo was actually damaged. All Logistics Group’s Resp. to Pl.’s Mot. at 4-7. For the reasons set forth below, the Court finds that Plaintiff has met its burden establishing that Plaintiff and All Logistics Group had a contract and All Logistics Group breached the contract. However, the Court fmds that Plaintiff has not met its burden establishing that (1) the breach damaged Plaintiff; and (2) that the damage award includes the full value of the Cargo.
Under Florida law, “[t]he elements of an action for breach of contract are: (1) the existence of a contract, (2) a breach of the contract, and (3) damages resulting from the breach.” Rollins, Inc. v. Butland, 951 So.2d 860, 876 (Fla. Dist. Ct. App. 2006) (citation omitted). “A party cannot recover damages for breach of contract unless it can prove that the damages were proximately caused by the breach.” Crowley Am. Transp., Inc. v. Richard Sewing Mach. Co., 172 F.3d 781, 784 (11th Cir. 1999) (citation omitted). “Damages recoverable by a party injured by a breach of contract are those that naturally flow from the breach and can reasonably be said to have been contemplated by the parties at the time the contract was entered into.” Mnemonics, Inc. v. Max Davis Assocs., Inc., 808 So.2d 1278, 1280 (Fla. Dist. Ct. App. 2002) (citation omitted). For damages to be foreseeable, the parties need not contemplate the precise injury which occurred so long as the actual [*7] consequences could have reasonably been expected to flow from the breach. Nat. Kitchen, Inc. v. Am. Transworld Corp., 449 So.2d 855, 860 (Fla. Dist. Ct. App. 1984) (citation omitted).
Here, Plaintiff has met its burden establishing that the Parties had a contract and All Logistics Group breached that contract. Namely, Plaintiff presented evidence establishing that the parties reached an agreement, through a broker, which included a date for performance. Pl.’s 56.1 ¶¶ 6-7, 9-10. And, it is undisputed that All Logistics Group failed to pick up the Cargo on the agreed upon date, which is a breach of the contract. Id. ¶¶ 10-15; Franconia Assocs. v. United States, 536 U.S. 129, 142-43, 122 S. Ct. 1993, 153 L. Ed. 2d 132 (2002) (“Failure by the promisor to perform at the time indicated for performance in the contract establishes an immediate breach.”) (citation omitted). Moreover, All Logistics Group does not dispute that the Parties had an agreement and All Logistics Group failed to perform. See generally All Logistics Group’s Resp. to Pl’s 56.1; All Logistics Group’s Resp. to Pl.’s Mot.; see Fed. R. Civ. P. 56(e) (“If a party . . . fails to properly address another party’s assertion of fact . . . the court may . . . consider the fact undisputed for purposes of the motion.”). Because Plaintiff has satisfied its initial burden, the burden shifts to All Logistics Group to present evidence showing [*8] a genuine issue of material fact that precludes summary judgment. Bailey, 284 F.3d at 1243; see also Fed. R. Civ. P. 56(e).
All Logistics Group has not shown that there is a genuine issue of material fact as to All Logistics Group’s breach of the contract. All Logistics Group argues that as a motor carrier, its liability is limited to damage which occurs to cargo in its possession. All Logistic Group Resp. to Pl. Mot. at 4. Specifically, All Logistics Group argues that Plaintiff is required to show that All Logistics Group received the Cargo in good condition for All Logistics Group to be liable for any damage to the Cargo. Id. However, All Logistics Group has not established that Florida state law limits the liability of motor carriers to damage to cargo which occurs in their possession.5
Specifically, the cases that All Logistics Groups relies upon do not establish that the liability of a motor carrier is limited to damage which occurs to cargo in its possession. The court in J & J Logistics, LLC v. Reilly Transp., Inc. held that a broker is not liable for damage to cargo which occurs after the broker successfully delivers the cargo to a motor carrier because the motor carrier [*9] assumes full responsibility for the cargo once it is in its possession. See No. 09-8069, 2009 U.S. Dist. LEXIS 139019, 2009 WL 10668955, at *4 (S.D. Fla. Dec. 30, 2009). Further, the court in Housel v. Ryder Truck Lines, Inc. held that a rebuttable presumption of negligence on the part of the motor carrier arises when the shipper shows that the goods were delivered to the carrier in good condition and delivered thereafter in bad condition. 233 So.2d 424 (Fla. Dist. Ct. App. 1970). As such, these cases do not establish that a motor carrier’s liability is limited to damage which occurs while the cargo is in the motor carrier’s possession. Therefore, All Logistics Group has not presented any evidence establishing that there is a genuine issue of material fact as to All Logistics Group’s liability for its breach of the contract.
Nevertheless, Plaintiff has not met its burden establishing what, if any, damages flowed from the breach. See Avante at Boca Raton, Inc. v. Senior Care Pharm. of Fla., LLC, 113 So. 3d 874, 879 (Fla. Dist. Ct. App. 2012) (“It is . . . the plaintiffs burden in a case to establish proof of damages by competent evidence.”) (citation omitted). Plaintiff argues that it is entitled to the full value of the Cargo as a result of All Logistics Group’s breach. Pl.’s Mot. at 6-7. In response, All Logistics Group argues that Plaintiff hasn’t established that the Cargo was actually damaged or needed to be discarded [*10] as a result of the Cargo’s exposure to warm temperatures. All Logistics Group’s Resp. to Pl.’s Mot. at 6-8. As set forth more fully below, the Court finds that there is a genuine issue as to whether (1) the Cargo was damaged as a result of its exposure to warm temperatures; and (2) if the Cargo was damaged, whether Plaintiff is entitled to the full value of the Cargo.
First, Plaintiff has not met its burden establishing that there is no genuine issue whether the Cargo was damaged as a result of the exposure to warm temperatures. See Avante at Boca Raton, Inc., 113 So. 3d at 879 (citation omitted). Plaintiff does not provide any direct evidence establishing that the Cargo was spoiled. For example, Plaintiff does not provide evidence that a test of the Cargo found bacterial growth or other indicators of spoilage. Rather, Plaintiff argues that the evidence that the Cargo was exposed to elevated temperatures conclusively establishes that the Cargo was unmarketable. Pl.’s Mot. at 6-7; Pl.’s Reply at 3-4. Plaintiff relies on guidance from the United States Food and Drug Administration (“FDA”) and Hazard Analysis Critical Control Point systems to establish that the exposure to warm temperatures rendered the Cargo unmarketable. Pl.’s [*11] Reply at 4. The FDA guidance provides a chart with recommended maximum cumulative time that seafood can be exposed to certain temperatures in order to limit the risk that a potentially hazardous condition develops, such as bacterial growth. See U.S. Food and Drug Admin., Fish and Fishery Products Hazards and Controls 421. As such, Plaintiff argues that the FDA guidance provides conclusive evidence that the Cargo had to be discarded as it was exposed to elevated temperatures which exceeded the recommended maximum time limit Pl.’s Reply at 4.
Although the FDA guidance is persuasive, it is not conclusive evidence that the Cargo was damaged. First, the guidance is not a mandatory regulation. See U.S. Food and Drug Admin., Fish and Fishery Products Hazards and Controls 417 (“This guidance represents the [FDA]’s current thinking on this topic. It does not create or confer any rights for or on any person and does not operate to bind the FDA or the public.”). If the guidance provided mandatory restrictions on selling seafood that had been exposed to elevated temperatures, then the FDA guidance would be conclusive evidence because Plaintiff would have been unable to sell the Cargo as a matter [*12] of law. Second, the guidance only provides that exposure to elevated temperatures creates a potential risk of hazardous conditions. Namely, the FDA guidance notes that “the food matrix effects bacterial growth . . . Consideration of such attributes is needed when using the table” that sets forth the recommended maximum exposure to elevated temperatures. Id. Therefore, although the guidance may establish a likelihood that the Cargo was at risk of bacterial growth, the guidance is not conclusive that the Cargo was spoiled. As such, taking all inferences in favor of All Logistics Group, there is a genuine issue whether the Cargo was damaged as a result of its exposure to warm temperatures.
Second, Plaintiff has not established that the damage to the Cargo was a result of the breach and, thus, that Plaintiff is entitled to the full value of the Cargo. See Prestige Dev. Group, Inc. v. Russell, 612 So.2d 691, 692 (Fla. Dist. Ct. App. 1993) (“The burden is on the plaintiff in a contract dispute to prove that his damages were caused by a breach of contract.”) (citation omitted). Specifically, Plaintiff has not established that an award of either general or special damages would include the full value of the Cargo. General damages are the damages which may fairly and reasonably [*13] be considered as arising in the usual course of events from the breach of contract itself. Keystone Airpark Auth. v. Pipeline Contractors, Inc., 266 So.3d 1219, 1222 (Fla. Dist. Ct. App. 2019) (citation omitted). “In contrast, special damages are those that do not necessarily result from the wrong or breach of contract complained of, or which the law does not imply as a result of that injury, even though they might naturally and proximately result from the injury. JP Morgan Chase Bank Nat. Ass ‘n v. Colletti Invs., LLC, 199 So. 3d 395 (Fla. Dist. Ct. App. 2016). To recover special damages, a plaintiff must establish that the damage “may reasonably be supposed to have been in contemplation of the parties at the time they made the contract.” Hardwick Props., Inc. v. Newbern, 711 So. 2d 35, 40 (citation omitted). Special damages require that the carrier has actual notice of the possibility of injury. Keystone Airpark Auth., 266 So.3d at 1222 (citation omitted).
Plaintiff has not established that an award of general damages includes the damage to the Cargo. Namely, there is dispute of fact whether the damage to the Cargo was the direct and necessary result of the breach. Id. (“General damages are ‘those damages which naturally or necessarily flow or result from the injuries alleged.’) (citation omitted). All Logistic Group’s breach was the failure to pick up the Cargo on the agreed upon date. A direct and necessary injury as a result of a delay in [*14] picking up cargo is, for example, if the delay results in perishable goods being delivered passed their expiration date. However, the damage to the Cargo was not clearly a direct result of the delay, rather, it was the result of the improper storage of the Cargo by a third party, Lan Chile. And, Plaintiff has not established that a third party’s improper storage of cargo is a direct and necessary result of a party’s delay in picking up the cargo. Therefore, there is a genuine issue whether the damages were a direct and necessary result of the breach such that an award of general damages includes the resulting damage to the Cargo.
Further, Plaintiff has not established that it is entitled to the full value of the Cargo as an award of special damages. See Prestige Dev. Group, Inc., 612 So.2d at 692. Plaintiff established that All Logistics Group had notice of the perishable nature of the Cargo and, thus, All Logistics Group was on notice that improper care of the Cargo may result in damage. See Keystone Airpark Auth., 266 So.3d at 1222 (citation omitted) (“[S]pecial damages are awarded only if actual notice were given to the carrier of the possibility of injury.”). However, Plaintiff has not established that notice of the perishable condition makes it foreseeable that [*15] a delay in picking up the Cargo would result in damage to the Cargo due to improper care by a third party. Nat. Kitchen, Inc., 449 So.2d at 860 (“For damages to be foreseeable, the parties need not contemplate the precise injury which occurred so long as the actual consequences could have reasonably been expected to flow from the breach.”) (citation omitted). Therefore, Plaintiff has not established that there is no genuine issue of fact as to the damage award resulting from the breach.
In conclusion, Plaintiff has met its burden establishing that there is no genuine dispute that All Logistics Group breached their contract. However, Plaintiff has not established what, if any, damages resulted from the breach of contract. Therefore, pursuant to Rule 56(g) of the Federal Rules of Civil Procedure, the Court finds that Plaintiff has established that All Logistics Group had a contract for All Logistics Group to pick up the Cargo on May 10, 2017 and All Logistics Group breached the contract by failing to pick up the Cargo. See Fed. R. Civ. P. 56(g) (“If the court does not grant all the relief requested by the motion, it may enter an order stating any material fact . . . that is not genuinely in dispute and treating the fact as established in the case.”). Accordingly, Plaintiffs Motion for Summary [*16] Judgment is GRANTED IN PART and DENIED IN PART.
B. Lan Chile and All Logistics Group’s Cross-Motions for Summary Judgment
Next, Lan Chile moves for summary judgment on All Logistics Group’s claims for negligence and indemnification. Additionally, All Logistics Group moves for summary judgment on the issue of Lan Chile’s liability. For the reasons set forth below, Lan Chile’s Motion is GRANTED and All Logistics Group’s Motion is DENIED.
L All Logistics Group’s Claim for Indemnification
Lan Chile moves for summary judgment on All Logistics Group’s claim for indemnification because All Logistics Group cannot prove that it was wholly without fault. Lan Chile’s Mot. at 14-15. In response, All Logistics Group argues that it is wholly without fault because the Cargo was damaged before All Logistics Group took possession of the Cargo. All Logistics Group Resp. to Lan Chile’s Mot. at 11-13.
To establish common law indemnity a plaintiff must establish that (1) the party seeking indemnity must be without fault; (2) the party from whom he is seeking indemnity is wholly at fault; and (3) the party seeking indemnity is liable to the injured party only because it is vicariously, constructively, derivatively, [*17] or technically liable for the wrongful acts of the party from whom he is seeking indemnity See Heapy Eng’g, LLP v. Pure Lodging, Ltd., 849 So. 2d 424, 425 (Fla. Dist. Ct. App. 2003) (citation omitted); Fla. Farm Bureau Gen. Ins. Co. v. Ins. Co. of N Am., 763 So.2d 429, 435 (Fla. Dist. Ct. App. 2000) (citation omitted).
Moreover, recovery for common law indemnity is precluded if both parties are at fault, no matter how slight the fault of the party seeking indemnity See Am. Home Assur. Co. v. Weaver Aggregate Transp., Inc., 990 F. Supp. 2d 1254, 1270 (M.D. Fla. 2013) (citation omitted). As such, a court will not weigh the relative fault of the parties, but rather will look to the party seeking indemnity to see if it is without fault. See Houdaille Indus., Inc. v. Edwards, 374 So.2d 490, 493 (Fla. 1979) (citation omitted). Therefore, it is immaterial whether the party against whom indemnification is sought is also with fault. See id. To be wholly without fault means that the basis of the claim for indemnification does not arise out of any conduct or act of the party seeking indemnification. See Auto-Owners Ins. Co. v. Ace Elec. Serv. Inc., 648 F. Supp. 2d 1371, 1379 (M.D. Fla. 2009).
Here, Lan Chile has met its burden establishing that there is no genuine dispute that All Logistics Group cannot prove that it is wholly without fault because All Logistics Group failed to pick up the Cargo on the agreed upon date. Lan Chile’s Mot. at 15; Lan Chile’s 56.1 ¶¶ 58-59. All Logistics Group argues that it is wholly without fault because the damage occurred prior to when it took possession of the Cargo, which is [*18] when its duty under the law to care for the Cargo arose. All Logistics Group Resp. to Lan Chile’s Mot. at 11-13. However, to be wholly without fault does not mean that the party seeking indemnity did not violate a legal duty. Rather, to be wholly without fault, the basis of the claim for indemnity must not arise out of any conduct or act of the party seeking indemnity See Auto-Owners Ins. Co., 648 F. Supp. 2d at 1379; Am. Home Assur. Co., 990 F. Supp. 2d at 1270 (citation omitted). And, it is undisputed that All Logistics Group’s conduct at least partially forms the basis of the indemnity claim. Namely, All Logistics Group failed to pick up the Cargo on the date that it agreed to do so, resulting in the Cargo being improperly stored. Pl.’s 56.1 ¶¶ 9-10, 12-15; Lan Chile’s 56.1 ¶¶ 58-59, 64-66. Therefore, taking all inferences in favor of All Logistics Group, there is no dispute that All Logistics Group is unable to establish an essential element of its claim for indemnification. See Denney, 247 F.3d at 1181. As such, summary judgment in favor of Lan Chile is warranted on All Logistics Group’s claim for indemnification.
ii. All Logistic Group’s Claim for Negligence
Next, Lan Chile moves for summary judgment on All Logistics Group’s claim for negligence because (1) if the Montreal Convention6 preempts [*19] All Logistics Group’s negligence claim, the claim is time-barred; and (2) alternatively, if Florida state law applies, All Logistics Group’s negligence claim fails as a matter of law because All Logistics Group only seeks economic damages. Lan Chile’s Mot. at 10-14. In response, All Logistics Group argues that the (1) Montreal Convention does not preempt its negligence claim; and (2) its negligence claim is permissible claim under Florida law. All Logistics Group’s Resp. to Lan Chile’s Mot. at 2, 5-6, 9. The Court addresses each argument in turn.
1. The Montreal Convention Does Not Preempt All Logistics Group’s Negligence Claim
Lan Chile argues that the Montreal Convention applies and preempts All Logistics Group’s negligence claim. Lan Chile’s Mot. at 3-5. Specifically, Lan Chile argues that the Montreal Convention preempts All Logistics Group’s negligence claim because it is a claim for damages. Id. In response, All Logistics Group argues that the Montreal Convention does not preempt its negligence claim because (1) All Logistics Group was not a party to the air waybills between High Liner Foods and Lan Chile; and (2) its negligence claim is not a claim for damages but a claim for [*20] a right of recourse. 7 All Logistics Group’s Resp. to Lan Chile’s Mot. at 2, 5-6. The Montreal Convention is “a multinational treaty that provides uniform rules for liability in international air carriage.” Underwriters at Lloyds Subscribing to Cover Note B0753PC1308275000 v. Expeditors Korea Ltd., 882 F.3d 1033, 1035 (11th Cir. 2018). The Montreal Convention governs the liability of air carriers in the “international carriage of persons, baggage, or cargo performed by aircraft for reward.” Montreal Convention art. 1. “For all air transportation to which the Montreal Convention applies, if an action for damages falls within one of the treaty’s damage provisions, then the treaty provides the sole cause of action under which a claimant may seek redress for his injuries.” Ugaz v. Am. Airlines, Inc., 576 F. Supp. 2d 1354, 1360 (S.D. Fla. 2008) (citing El Al Isr. Airlines, Ltd. v. Tsui Yuan Tseng, 525 U.S. 155, 176, 119 S. Ct. 662, 142 L. Ed. 2d 576 (1999)).
Article 35 of the Montreal Convention provides that “[t]he right to damages shall be extinguished if an action is not brought within a period of two years[.]” Montreal Convention art. 35. However, courts have held that the statute of limitation in Article 35 only applies to claims for damages and it does not apply to claims for a right of recourse. See, e.g., Chubb Ins. Co. of Europe S.A. v. Menlo Worldwide Forwarding, Inc., 634 F.3d 1023, 1026-1027 (9th Cir. 2011); Tokio Marine & Nichido Fire Ins. Co., Ltd. v. Danzas Corp., No. 17 C 7228, 2018 U.S. Dist. LEXIS 81803, 2018 WL 2214093, at *2-3 (N.D. Ill. May 15, 2018); AGCS Marine Ins. Co. v. Geodis Calberson Hungaria Logisztikai KFT, Case No. 16—CV-9710 (JMF), 2017 U.S. Dist. LEXIS 195270, 2017 WL 5891818, at *3 (S.D.N.Y. Nov. 28, 2017).
Neither Article [*21] 35 nor the remainder of the Montreal Convention expressly defines a “right to damages.” Tokio Marine & Nichido Fire Ins. Co., Ltd., 2018 U.S. Dist. LEXIS 81803, 2018 WL 2214093, at *2. (citation omitted). In Chubb, the United States Court of Appeals for the Ninth Circuit “engaged in a textual analysis and determined that when the Montreal Convention is read as a whole” then what a right for damages is becomes clear. Id. (quoting Chubb Ins. Co. of Europe S.A., 634 F.3d at 1026). The Ninth Circuit held that a claim for damages in Article 35 “is the cause of action under the Montreal Convention by which a passenger or consignor may hold a carrier liable for damages sustained to passengers, baggage, or cargo.” Chubb Ins. Co. of Europe S.A., 634 F.3d at 1026-27. Moreover, the Ninth Circuit noted that the Montreal Convention distinguishes between claims for damages and rights of recourse. Id. And, the Ninth Circuit held that because the Montreal Convention distinguishes between claims for damages and rights of recourse, the two-year statute of limitations in Article 35 only applies to claims for damages and does not apply to rights of recourse. Id. at 1027.
Further, the Ninth Circuit provided a broad definition of a right of recourse. Although in Chubb, the causes of action at issue were contribution and indemnification, the Ninth Circuit did not limit a right of recourse to be specific [*22] causes of action. Id. at 1027. Rather, the Ninth Circuit broadly defined rights of recourse as claims seeking secondary liability. Id. at 1026-27. That is, a claim seeking reimbursement for claims or liability that it has paid, rather than “damage sustained to passengers, baggage, or cargo.” Id. Therefore, claims for secondary liability, regardless of the specific type of cause of action, are not subject to the two-year statute of limitations in Article 35 of the Montreal Convention.
Here, All Logistics Group’s claim for negligence is not preempted by the Montreal Convention. Although a negligence claim is traditionally a claim for damages, All Logistics Group’s negligence claim is a not claim for the damage to the Cargo itself. Rather, All Logistics Group argues that Lan Chile is secondarily liable and should compensate All Logistics Group if All Logistics Group is found liable to Plaintiff, which is the functional equivalent of a claim for contribution.8 See Env. Progress, Inc. v. Met. Life Ins. Co., No. 12-cv-80907, 2013 U.S. Dist. LEXIS 191834, 2013 WL 12084488, at *3 (S.D. Fla. Apr. 1, 2013) (“While [the defendant] claims that it is pursuing relief in the form of negligence, it is ultimately seeking to have [the cross-claim defendant] pay for some or all of the costs associated with [*23] this case if it is found liable . . ., which is the functional equivalent [of] a claim for contribution.”) (citation omitted). Therefore, because All Logistics Group’s claim for negligence is seeking reimbursement for any damages All Logistics Group may have to pay if found liable, it is a claim for a right of recourse rather than a claim for damages. See Chubb Ins. Co. of Europe S.A., 634 F.3d at 1026-27. Thus, the Montreal Convention does not preempt All Logistics Group’s claim for negligence. Id.
2. All Logistics Group’s Negligence Claim is Barred by Florida State Law
Next, Lan Chile argues that, even if Florida law applies, All Logistics Group’s claim fails as a matter of law. Lan Chile’s Mot. at 10-14. Specifically, Lan Chile argues that there is no special relationship nor extraordinary circumstances such that Lan Chile owed All Logistics Group a duty to protect All Logistics Group’s economic interests. Id. In response, All Logistics Group argues that Lan Chile had a duty to properly care for the Cargo. All Logistics Group’s Resp. to Lan Chile’s Mot. at 9.
Under Florida law, plaintiffs are generally not permitted to recover “for purely economic losses when the plaintiff has sustained no bodily injury of property damage.” Curd v. Mosaic Fertilizer, LLC, 39 So.3d 1216, 1223-24 (Fla. 2010) (citation [*24] omitted). “The reasoning because this general rule is that if courts allowed compensation for all losses of economic advantages caused by a defendant’s negligence, a defendant would be subject to claims based on remote and speculative injures that he could not foresee.” Id. at 1224 (citation omitted). In our legal tradition, purely economic risks are normally left to private bargaining, and thus, more appropriately addressed by contractual principles rather than expanding the “social contract” created by negligence law to include a duty to care to protect against losses unconnected to bodily injury or property damage. See Monroe v. Sarasota Cty. Sch. Bd., 746 So.2d 530, 535 (Fla. Dist. Ct. App. 1999).
However, Florida “courts have occasionally expanded the tort of negligence by creating duties to protect plaintiffs in situations that do not result in personal injury or property damage.” Lucarelli Pizza & Deli v. Posen Constr., Inc., 173 So. 3d 1092, 1094 (Fla. Dist. Ct. App. 2015). But Florida courts have only created duties to protect economic interests “when specific circumstances have warranted a more liberal judicial rule and an expanded duty of care.” Id. (citation omitted). Therefore, to proceed on a common law negligence claim based solely on economic damages, there must be some sort of link between the parties or some other extraordinary circumstance which [*25] would justify the imposition of such a duty. Tank Tech Inc. v. Valley Tank Testing, L.L.C., 244 So.3d 383, 393 (Fla. Dist. Ct. App. 2018) (citation omitted). “Difficult economic loss cases all seem to examine the relationship between the parties to determine whether it warrants creating a duty to protect economic interests outside contract and statutory law.” Monroe, 746 So.2d at 534 n.6.
For example, in Curd, the Florida Supreme Court found a fertilizer company owed a duty to protect commercial fisherman’s economic interests where the fertilizer company polluted the body of water in which the commercial fisherman fished. 39 So.3d at 1228. The Florida Supreme Court found that the duty arose from the nature of the fertilizer company’s business and the special interest of the commercial fisherman. Id. First, the Florida Supreme Court noted that that the nature of the fertilizer company’s business involved the storage of pollutants and hazardous containments. Id. Thus, the Florida Supreme Court found that it was foreseeable that if these materials were released into the water, it would cause damage to marine and plant life, as well as human activities. Id. Second, the Florida Supreme Court emphasized that the commercial fisherman had a protectable economic interest. Id. Specifically, the commercial fisherman had a quasi-property [*26] right in the marine life, which was not shared with the general public as a whole. Id. The Florida Supreme Court further noted that the commercial fishermen were licensed to conduct commercial activities in those waters and were dependent on the waters to earn their livelihood. Id. Therefore, the Florida Supreme Court held that the fertilizer company owed the commercial fisherman a duty to protect the commercial fisherman’s economic interests.
In contrast, the court in Tank Tech found that the defendant did not owe a duty to protect the economic interests of the plaintiff. Tank Tech Inc., 244 So.3d at 394. In Tank Tech, the plaintiff had been hired to modify underground petroleum storage tanks and the defendant had been hired to test plaintiffs modifications. Id. at 386-87. The defendant damaged the tanks while testing them, and plaintiff was required to cover the repair costs due to its contract with the owner of the tanks. Id.
The court in Tank Tech found that there was no special relationship between the parties nor extraordinary circumstances which would justify a claim seeking only economic damages. Id. at 394. First, the court noted that there was no contract between the plaintiff and the defendant requiring the defendant to repair [*27] any damage or reimburse the plaintiff for repairing any damage. Id. Second, the court noted that the plaintiff did not have a special or unique interest that would constitute an extraordinary circumstance, similar to the commercial fisherman’s property right in Curd. Id. Third, the court noted that the plaintiff’s damages flowed from its contractual obligation to a third party, rather than from the damage to the tanks. Id. Central to the court’s decision in Tank Tech, the court found that the plaintiff was seeking to relieve itself of a bad bargain by shifting blame to the defendant, which is not permitted under tort law. Id. Thus, the court held that the defendant did not owe the plaintiff a duty to protect the plaintiff’s economic interests.
Here, Lan Chile has met its burden establishing that there is no special relationship nor extraordinary circumstances which warrants imposing a duty on Lan Chile to protect All Logistics Group’s economic interests. First, there is no contract between All Logistics Group and Lan Chile obligating Lan Chile to keep the salmon frozen or for Lan Chile to repay All Logistics Group for any expenses incurred pursuant to All Logistics Group’s contract [*28] with High Liner Foods. Lan Chile’s 56.1 ¶ 74; see also Tank Tech Inc., 244 So.3d at 394. All Logistics Group attempts to establish that Lan Chile had a duty to care for the Cargo due to the Air Waybills between Lan Chile and Plaintiff. All Logistics Group’s Resp. to Lan Chile’s Mot. 9-10. However, even if Lan Chile negligently damaged the Cargo, this does not automatically create a duty to protect against all economic losses which may occur as a result of Lan Chile’s negligence. See Curd, 39 So.3d at 1223-24 (“[I]f courts allowed compensation for all losses of economic advantages caused by a defendant’s negligence, a defendant would be subject to claims based upon remote and speculative injuries that he could not foresee.”). For example, in Tank Tech, the court declined to expand tort liability to include plaintiff’s economic losses, even though the defendant’s actions directly and solely caused the property damage. Tank Tech Inc., 244 So.3d at 394. Moreover, All Logistics Group could have negotiated a contract with the shipper to account for this economic risk and, therefore, this type of economic risk is better addressed by contract law rather than tort law. See Monroe, 746 So.2d at 537 (“[T]he existence of a contractual relationship is a good reason not to create a negligence cause of action [*29] shifting economic risks that the parties could have shifted through bargaining.”) (citations omitted).
Second, All Logistics Group does not have a special nor unique interest that would constitute an extraordinary circumstance warranting the imposition of a duty on Lan Chile. In Curd, the defendant’s duty to protect plaintiff’s economic interest arose from plaintiffs quasi-property right to the waters. 39 So.3d at 1228. However, All Logistics Group does not have a quasi-property right to the Cargo nor did any action by Lan Chile damage an economic expectancy of All Logistics Group. Moreover, All Logistics Group’s economic damages do not flow from the damage to the Cargo itself, but from its contractual obligation with Plaintiff. See Tank Tech, 244 So.3d at 394. Specifically, any damages All Logistics Group may owe to Plaintiff flow from its failure to perform pursuant to its contractual obligation. As such, “[t]his is simply a case of a party attempting to bring a tort claim to recover monies that it spent as a result of a contractual obligation to a third party[,]” which is not a permitted negligence claim under Florida state law. Id. Therefore, taking all inferences in favor of All Logistics Group, there is no genuine dispute [*30] of material fact that Lan Chile did not owe a duty to All Logistics Group to protect All Logistics Group’s economic interest. Thus, summary judgment is warranted in favor of Lan Chile on All Logistics Group’s negligence claim
In conclusion, Lan Chile has met its burden establishing that there is no genuine issue of material fact that All Logistics Group’s indemnification and negligence claims fail as a matter of law. Thus, Lan Chile’s Motion for Summary Judgment is GRANTED.9
IV. CONCLUSION
Accordingly, UPON CONSIDERATION of the Motions, the pertinent portions of the record, and being otherwise fully advised in the premises, it is hereby ORDERED AND ADJUDGED that Plaintiff’s Motion for Summary Judgment (ECF No. 77) is GRANTED IN PART and DENIED IN PART, Third-Party Defendant Lan Chile’s Motion for Summary Judgment (ECF NO. 82) is GRANTED, and Defendant/Third-Party Plaintiff All Logistics Group’s Motion for Summary Judgment (ECF No. 84) is DENIED. It is FURTHER ORDERED that the Clerk of Court is INSTRUCTED to TERMINATE Lan Chile as a third-party defendant.
DONE AND ORDERED in Chambers at Miami, Florida, this 25th day of May, 2020.
/s/ K. Michael Moore
K. MICHAEL MOORE
UNITED [*31] STATES CHIEF DISTRICT JUDGE
