2019 WL 3368804

United States District Court, W.D. Pennsylvania.
PITTSBURGH LOGISTICS SYSTEMS, INC., Plaintiff,
v.
M R E – MONEY RUNNING ENTERPRIZE, LLC (D/B/A MRE TRUCKING); PROGRESSIVE CASUALTY INSURANCE COMPANY; and COVERWALLET, INC., Defendants.
Civil Action No. 18-1548
|
07/25/2019

Nora Barry Fischer, Senior U.S. District Judge

MEMORANDUM OPINION
*1 This case arises out of a contractual agreement between Plaintiff Pittsburgh Logistics Systems, Inc. (“PLS”) and Defendant MRE — Money Running Enterprize (“MRE”) pursuant to which MRE was to ship stainless steel tubes from Houston, Texas to Wellington, Ohio on behalf of PLS’ client but the goods were either lost or stolen during transit. (Docket No. 17). Despite being served, MRE did not appear and defend PLS’ breach of contract, fraud, negligent misrepresentation, and negligence claims, resulting in the recent entry of a default judgment against MRE in the amount of $88,909.15. (Docket No. 54). The instant disputes surround PLS’ remaining claims of fraud, negligent misrepresentation and negligence against Defendants Progressive Casualty Insurance Company (“Progressive”) and Coverwallet, Inc, (“Coverwallet”), which are MRE’s insurer and insurance agent. (Id.). In short, PLS reimbursed its client for the loss but its claim against MRE’s insurance policy with Progressive was denied because the policy was cancelled due to non-payment by MRE. (Id.). Presently before the Court are contested motions to dismiss filed by Progressive and Coverwallet and a motion by PLS seeking leave to file a Second Amended Complaint reinstating a statutory bad faith claim against these Defendants. (Docket Nos. 19; 21; 23). The motions have been exhaustively briefed and the Court heard oral argument, making them ripe for disposition. (Docket Nos. 19-25; 27; 30-31; 36; 40; 42; 46-47). After careful consideration of all of the parties’ arguments, and for the following reasons, Progressive and Coverwallet’s motions to dismiss [19], [21] will be granted, and PLS’ motion to amend [23] will be denied.

As the Court writes primarily for the parties, it dispenses with a lengthy recitation of the facts and only briefly references the well-established standards governing motions to dismiss under Rule 12(b)(6) and motions to amend under Rule 15(a), which are more fully set forth in other decisions by this Court. See e.g., Battle Born Munitions, Inc. v. Dick’s Sporting Goods, Inc., Civ. A. No. 18-1418, 2019 WL 1978429, at *4 (W.D. Pa. May 3, 2019). To this end, when reviewing a motion to dismiss under Rule 12(b)(6), the Court must “accept all factual allegations in the complaint as true, [and] construe the complaint in the light most favorable to the plaintiff,” see Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008), however, a complaint must be dismissed if it does not allege “enough facts to state a claim for relief that is plausible on its face,” see Bell Atlantic v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Leave to amend may be denied under Rule 15 if the proposed amended complaint would fail to state a plausible claim for relief. See Shane v. Fauver, 213 F.3d 113, 115 (3d Cir. 2000) (“Futility” in this context “means that the complaint, as amended, would fail to state a claim…”).

In this Court’s estimation, PLS has failed to state plausible claims for relief against Progressive and Coverwallet in both the operative First Amended Complaint and its proposed Second Amended Complaint, making this case subject to dismissal without leave to amend. See Twombly, 550 U.S. at 570; see also Shane, 213 F.3d at 115. The Court reaches these conclusions for several reasons.

*2 First, neither Progressive nor Coverwallet have any relationship with PLS, (contractual or otherwise), and it is settled law that injured parties generally have no direct cause of action against a tortfeasor’s insurer or insurance agent to recover a loss purportedly covered by an insurance policy, as PLS is attempting here. See e.g., Apalucci v. Agora Syndicate, 145 F.3d 630, 633 (3d Cir. 1998) (“It is well-settled that under Pennsylvania law, an injured party has no right to directly sue the insurer of an alleged tortfeasor unless a provision of the policy or a statute create such a right.”). Rather, the proper course of action is to bring claims against the insured tortfeasor, as PLS has done here by asserting various causes of action and obtaining a default judgment against MRE. Id.

Second, “[t]o sustain a claim for negligence under Pennsylvania law, Plaintiff must show that: (1) Defendants owed a duty to Plaintiff; (2) Defendants breached that duty; and (3) that breach was the proximate cause of Plaintiff’s injuries.” Chandler v. L’Oreal USA, Inc., 340 F. Supp. 3d 551, 562 (W.D. Pa. 2018), aff’d sub nom. Chandler v. L’Oreal USA, Inc, No. 18-3277, 2019 WL 2452331 (3d Cir. June 12, 2019). PLS’ allegations of negligence against Progressive and Coverwallet fail to state plausible claims for relief because the federal regulations cited by PLS, i.e., 49 C.F.R. §§ 387.15 and 387.313(d), do not establish that either entity owed a duty to PLS or other members of the public regarding the cancellation of MRE’s insurance policy; hence no such duties were breached nor was there any resulting harm to PLS. See id. To the contrary, the cited regulations pertain to MRE’s responsibilities as an interstate motor carrier to notify the Department of Transportation of its financial responsibility to protect the general public from losses caused by its interstate activities and require certain endorsements to be maintained as part of insurance policies if it provides proof of financial responsibility through a certificate of insurance. See e.g., McGirt v. Gulf. Ins. Co., 207 F. App’x 305, 307-08 (4th Cir. 2006) (explaining regulations). Relevant here, an MCS-90 endorsement essentially creates a suretyship by the insurer to protect the public from certain losses not covered by the insured’s policy but the endorsement is not triggered until a final judgment is reached against the tortfeasor and a claim is made against the endorsement. See e.g. Canal Ins. Co. v. Underwriters at Lloyd’s London, 435 F.3d 431, 442 (3d Cir. 2006) (“an insurer’s responsibilities under the endorsement are triggered when the policy to which it is attached does not provide coverage to the insured. The peculiar nature of the MCS–90 endorsement grants the judgment creditor the right to demand payment directly from the insurer, and simultaneously grants the insurer the right to demand reimbursement from the insured.”).

Further, cases have recognized that while the insurer is required to comply with the notice regulations and advise the Department of Transportation when a policy is cancelled, a failure to do so does not affect the policy terms, but could result in the MCS-90 endorsement being extended until compliance with the regulations is demonstrated. See e.g. Nat’l Indep. Truckers Ins. Co. v. Gadway, 860 F. Supp. 2d 946, 955 (D. Neb. 2012) (“The Court concludes that as to injured members of the public, the MCS–90 endorsement attached to the policy remains in effect at least until the notice requirement of 49 C.F.R. § 387.313(d) has been satisfied.”). In its various pleadings, all of which were submitted before the default judgment was entered, PLS has not referenced any policy endorsement nor made any claim as to same. (Docket Nos. 17; 23-1). Regardless, PLS cannot maintain a direct claim of negligence against Progressive or Coverwallet based on an alleged failure to comply with the federal notice regulations because those entities did not owe any duty to PLS as to same. See id. Thus, PLS’ negligence claims are subject to dismissal.

*3 Third, PLS’ fraud and negligent misrepresentation claims similarly fail due to its inability to sufficiently plead all of the essential elements of these claims. “In Pennsylvania, negligent misrepresentation requires proof of: (1) a misrepresentation of a material fact; (2) made under circumstances in which the misrepresenter ought to have known its falsity; (3) with an intent to induce another to act on it; and; (4) which results in injury to a party acting in justifiable reliance on the misrepresentation.” Fleming Steel Co. v. Jacobs Eng’g Grp., Inc., 373 F. Supp. 3d 567, 595 (W.D. Pa. 2019) (quotation omitted)). “To demonstrate fraud, the plaintiff must establish the following elements: (1) a representation; (2) which is material to the transaction at hand; (3) made falsely, with knowledge of its falsity or recklessness as to whether it is true or false; (4) with the intent of misleading another into relying on it; (5) justifiable reliance on the misrepresentation; and (6) the resulting injury was proximately caused by the reliance.” Waldschmidt v. NVR, Inc., No. CV 18-1372, 2018 WL 6433910, at *8 (W.D. Pa. Dec. 7, 2018) (quotation omitted). Even if PLS had sufficiently averred that these entities misrepresented that the policy had been cancelled, which it has not, PLS did not justifiably rely on same as it proceeded to file this lawsuit against MRE and obtained a default judgment in the amount of $88,909.15. See id. Therefore, PLS’ fraud and negligent misrepresentation claims are dismissed.

Fourth, PLS’ proposed amendment seeking to reinstate its statutory bad faith claim against Progressive and Coverwallet is also without merit. Pennsylvania precedent is clear that only the insured has a right to bring a bad faith claim against its insurer. See e.g., LeBoon v. Zurich Am. Ins. Co., 673 F. App’x 173, 176 (3d Cir. 2016) (“In that LeBoon plainly is not an Insured under the liability policy, he failed to state a plausible claim for relief on his allegations of bad faith.”); Grudkowski v. Foremost Ins. Co., 556 F. App’x 165, 170 (3d Cir. 2014) (quoting Toy v. Metro. Life Ins. Co., 593 Pa. 20, 928 A.2d 186, 199 (2007) (“The term “bad faith” in section 8371 concerns “the duty of good faith and fair dealing in the parties’ contract and the manner by which an insurer discharged its obligations of defense and indemnification in the third-party claim context or its obligation to pay for a loss in the first party claim context.”)); Vella v. State Farm Mut. Auto. Ins. Co., No. 1:17-CV-1900, 2018 WL 1907335, at *2 (M.D. Pa. Apr. 23, 2018) (“In Pennsylvania, it is well-settled law that a third-party claimant cannot bring a cause of action for bad faith against an alleged tortfeasor’s liability insurer.”) (citations omitted). PLS is not the insured and any statutory bad faith claim is rightly disposed of under Rule 12(b)(6) for failure to state a plausible claim for relief.

Finally, PLS’ motion for leave to amend must be denied as the proposed amendments are futile, for the reasons set forth above. Shane, 213 F.3d at 115. In addition, PLS has been provided with numerous opportunities to demonstrate that this case should move beyond the pleading stage, i.e., it has filed three separate versions of its complaint, submitted numerous briefs and presented oral argument, but none of its allegations nor any of its arguments have demonstrated to this Court that it has any plausible claims against Progressive or Coverwallet for negligence, negligent misrepresentation, fraud or statutory bad faith. (See Docket Nos. 1-2; 17; 23-2). Accordingly, PLS’ motion seeking leave to amend is denied.

For all of these reasons, Progressive and Coverwallet’s motions to dismiss [19], [21] are granted and PLS’ motion to amend [23] is denied. An appropriate Order follows.
s/Nora Barry Fischer

Nora Barry Fischer

Senior U.S. District Judge

Dated: July 25, 2019
cc/ecf: All counsel of record.

All Citations
Slip Copy, 2019 WL 3368804

2019 WL 3310084

United States District Court, M.D. Alabama, Southern Division.
Kendall PETERS and Sharon Dannen-Peters, Plaintiffs,
v.
LIBERTY BELL MOVING GROUP and Direct Van Line Services, Inc., Defendants.
CASE NO. 1:19-CV-182-WKW
|
Signed 07/23/2019
Attorneys and Law Firms
Joseph Earl Sawyer, Jr., J.E. Sawyer, Jr., Attorney at Law, Enterprise, AL, for Plaintiffs.
Chad Christopher Marchand, Wilbur Pemble DeLashmet, DeLashmet & Marchand, P.C., Mobile, AL, for Defendants.

MEMORANDUM OPINION AND ORDER
W. Keith Watkins, UNITED STATES DISTRICT JUDGE
*1 Before the court is Plaintiffs’ motion to remand. (Doc. # 6.) Plaintiffs argue that this action should be remanded to state court because this court lacks subject matter jurisdiction. For the reasons below, the motion is due to be denied.

I. BACKGROUND
In March 2018, Plaintiffs contracted with Defendants Liberty Bell Moving Group and Direct Van Lines to move Plaintiffs’ belongings from Fairfax, Virginia, to Coffee County, Alabama. Plaintiffs claim damages of $35,000 for property lost and damaged during the move. Plaintiffs initially filed this action on February 5, 2019, in the Circuit Court of Coffee County, Alabama.

Defendants removed the case to this court on March 13, 2019. (Doc. # 1.) On April 11, 2019, Plaintiffs moved to remand, claiming that the removal was improper because Plaintiffs’ claim neither exceeds the $75,000 required for diversity jurisdiction nor arises under a federal law. (Doc. # 6.) On April 26, 2019, Defendants filed a response to the motion to remand, arguing that “the Carmack Amendment preempts Plaintiffs’ state law claims and provide[s] a proper basis for removing this matter to federal court.” (Doc. # 12.)

II. LEGAL STANDARD
Federal courts are courts of limited jurisdiction. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994); Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994). Accordingly, they only have the power to hear cases over which the Constitution or Congress has given them authority. See Kokkonen, 511 U.S. at 377. Congress has empowered federal courts to hear cases removed by a defendant from state to federal court if the plaintiff could have brought the claims in federal court originally. See 28 U.S.C. § 1441(a); Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987). Federal courts may exercise diversity jurisdiction over civil actions where the amount in controversy exceeds $75,000 and the action is between citizens of different states. 28 U.S.C. § 1332(a)(1). For a claim to arise under federal law, the allegations in the plaintiffs’ complaint must establish that “federal law creates the cause of action asserted” or that the plaintiffs’ right to relief necessarily depends upon the resolution of a substantial question of federal law. Gunn v. Minton, 568 U.S. 251, 257 (2013). If “a federal court determines that it is without subject matter jurisdiction, [it] is powerless to continue” over a removed case and must remand the action to state court. Univ. of S. Alabama v. Am. Tobacco Co., 168 F.3d 405, 410 (11th Cir. 1999); see 28 U.S.C. § 1447(c).

The removing defendant bears the burden of establishing that the federal court has jurisdiction. See Diaz v. Sheppard, 85 F.3d 1502, 1505 (11th Cir. 1996). And although the Eleventh Circuit favors remand where federal jurisdiction is not absolutely clear, see Burns, 31 F.3d at 1095, “federal courts have a strict duty to exercise the jurisdiction that is conferred upon them by Congress.” Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716 (1996).

III. ANALYSIS
*2 Plaintiffs’ state law claim for breach of contract is completely preempted by the Carmack Amendment. 49 U.S.C. § 14706. The Carmack Amendment creates a uniform rule for carrier liability when goods are shipped in interstate commerce. Smith v. UPS, 296 F.3d 1244, 1246 (11th Cir. 2002) (citing N.Y., New Haven, & Hartford R.R. Co. v. Nothnagle, 346 U.S. 128, 131 (1953)). Plaintiffs argue that there is no federal jurisdiction over this action because of the “well-pleaded complaint rule, which provides that federal jurisdiction exists only when a federal question is present on the face of the plaintiff’s properly pleaded complaint.” (Doc. # 7, at 2.) But another judge on this court has ruled that the Carmack Amendment, through the “complete pre-emption doctrine,” provides federal question jurisdiction over a state law claim for loss and damage caused by an out-of-state moving company:
Defendants failed to deliver some of [the plaintiff’s] household items and … of those items that were delivered, some were damaged, with an ad damnum of more than $10,000. These alleged failures by the Defendants in transporting the household items from [another state] to Alabama relate to loss or damages to goods arising from the interstate transportation of those goods by a common carrier. Because Congress intended the Carmack Amendment to act as the exclusive cause of action for such claims, [the plaintiff’s] claim is completely preempted by the Carmack Amendment. Thus, this court has federal-question jurisdiction, and the case was properly removed to this court.
Morris v. Mayflower Transit, LLC, 18 F. Supp. 3d 1342, 1345 (M.D. Ala. 2014) (cleaned up). Although the Eleventh Circuit has not applied the Carmack Amendment to the precise type of claim in this action, Morris thoroughly analyzes relevant Supreme Court precedent and correctly applies the analyses of the Fifth and Ninth Circuits. See id. (citing Hoskins v. Bekins Van Lines, 343 F.3d 769, 771 (5th Cir. 2003); Hall v. N. Am. Van Lines, Inc., 476 F.3d 683, 688-89 (9th Cir. 2007)). Here, as in Morris, the amount in controversy exceeds the $10,000 jurisdictional requirement in Carmack Amendment cases. See 28 U.S.C. § 1445(b). Therefore, the Carmack Amendment applies to this action.

IV. CONCLUSION
For the reasons above, it is ORDERED that Plaintiffs’ motion to remand (Doc. # 6) is DENIED. It is further ORDERED that Plaintiffs shall file a response to Defendant Liberty Bell Moving Group’s motion to dismiss (Doc. # 2) on or before July 31, 2019.

DONE this 23rd day of July, 2019.

Attachment
A copy of this checklist is available at the website for the USCA, 11th Circuit at www.ca11.uscourts.gov Effective on December 1, 2013, the fee to file an appeal is $505.00

CIVIL APPEALS JURISDICTION CHECKLIST
1. Appealable Orders: Courts of Appeals have jurisdiction conferred and strictly limited by statute:
(a) Appeals from final orders pursuant to 28 U.S.C. § 1291: Final orders and judgments of district courts, or final orders of bankruptcy courts which have been appealed to and fully resolved by a district court under 28 U.S.C. § 158, generally are appealable. A final decision is one that “ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.” Pitney Bowes, Inc. v. Mestre, 701 F.2d 1365, 1368 (11th Cir. 1983) (citing Catlin v. United States, 324 U.S. 229, 233, 65 S.Ct. 631, 633, 89 L.Ed. 911 (1945)). A magistrate judge’s report and recommendation is not final and appealable until judgment thereon is entered by a district court judge. 28 U.S.C. § 636(b); Perez-Priego v. Alachua County Clerk of Court, 148 F.3d 1272 (11th Cir. 1998). However, under 28 U.S.C. § 636(c)(3), the Courts of Appeals have jurisdiction over an appeal from a final judgment entered by a magistrate judge, but only if the parties consented to the magistrate’s jurisdiction. McNab v. J & J Marine, Inc., 240 F.3d 1326, 1327-28 (11th Cir. 2001).
*3 (b) In cases involving multiple parties or multiple claims, a judgment as to fewer than all parties or all claims is not a final, appealable decision unless the district court has certified the judgment for immediate review under Fed.R.Civ.P. 54(b). Williams v. Bishop, 732 F.2d 885, 885-86 (11th Cir. 1984). A judgment which resolves all issues except matters, such as attorneys’ fees and costs, that are collateral to the merits, is immediately appealable. Budinich v. Becton Dickinson & Co., 486 U.S. 196, 201, 108 S.Ct. 1717, 1721-22, 100 L.Ed.2d 178 (1988); LaChance v. Duffy’s Draft House, Inc., 146 F.3d 832, 837 (11th Cir. 1998).
(c) Appeals pursuant to 28 U.S.C. § 1292(a): Under this section, appeals are permitted from the following types of orders:
i. Orders granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions; However, interlocutory appeals from orders denying temporary restraining orders are not permitted. McDougald v. Jenson, 786 F.2d 1465, 1472-73 (11th Cir. 1986);
ii. Orders appointing receivers or refusing to wind up receiverships; and
iii. Orders determining the rights and liabilities of parties in admiralty cases.
(d) Appeals pursuant to 28 U.S.C. § 1292(b) and Fed.R.App.P. 5: The certification specified in 28 U.S.C. § 1292(b) must be obtained before a petition for permission to appeal is filed in the Court of Appeals. The district court’s denial of a motion for certification is not itself appealable.
(e) Appeals pursuant to judicially created exceptions to the finality rule: Limited exceptions are discussed in cases including, but not limited to: Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546, 69 S.Ct. 1221, 1225-26, 93 L.Ed. 1528 (1949); Atlantic Fed. Sav. & Loan Ass’n v. Blythe Eastman Paine Webber, Inc., 890 F.2d 371, 376 (11th Cir. 1989); Gillespie v. United States Steel Corp., 379 U.S. 148, 157, 85 S.Ct. 308, 312, 13 L.Ed.2d 199 (1964).
2. Time for Filing: The timely filing of a notice of appeal is mandatory and jurisdictional. Rinaldo v. Corbett, 256 F.3d 1276, 1278 (11th Cir. 2001). In civil cases, Fed.R.App.P. 4(a) and (c) set the following time limits:
(a) Fed.R.App.P. 4(a)(1): A notice of appeal in compliance with the requirements set forth in Fed.R.App.P. 3 must be filed in the district court within 30 days after the order or judgment appealed from is entered. However, if the United States or an officer or agency thereof is a party, the notice of appeal must be filed in the district court within 60 days after such entry. THE NOTICE MUST BE RECEIVED AND FILED IN THE DISTRICT COURT NO LATER THAN THE LAST DAY OF THE APPEAL PERIOD – no additional days are provided for mailing. Special filing provisions for inmates are discussed below.
(b) Fed.R.App.P. 4(a)(3): “If one party timely files a notice of appeal, any other party may file a notice of appeal within 14 days after the date when the first notice was filed, or within the time otherwise prescribed by this Rule 4(a), whichever period ends later.”
(c) Fed.R.App.P. 4(a)(4): If any party makes a timely motion in the district court under the Federal Rules of Civil Procedure of a type specified in this rule, the time for appeal for all parties runs from the date of entry of the order disposing of the last such timely filed motion.
(d) Fed.R.App.P. 4(a)(5) and 4(a)(6): Under certain limited circumstances, the district court may extend or reopen the time to file a notice of appeal. Under Rule 4(a)(5), the time may be extended if a motion for an extension is filed within 30 days after expiration of the time otherwise provided to file a notice of appeal, upon a showing of excusable neglect or good cause. Under Rule 4(a)(6), the time to file an appeal may be reopened if the district court finds, upon motion, that the following conditions are satisfied: the moving party did not receive notice of the entry of the judgment or order within 21 days after entry; the motion is filed within 180 days after the judgment or order is entered or within 14 days after the moving party receives notice, whichever is earlier; and no party would be prejudiced by the reopening.
*4 (e) Fed.R.App.P. 4(c): If an inmate confined to an institution files a notice of appeal in either a civil case or a criminal case, the notice of appeal is timely if it is deposited in the institution’s internal mail system on or before the last day for filing. Timely filing may be shown by a declaration in compliance with 28 U.S.C. § 1746 or a notarized statement, either of which must set forth the date of deposit and state that first-class postage has been prepaid.
3. Format of the notice of appeal: Form 1, Appendix of Forms to the Federal Rules of Appellate Procedure, is a suitable format. See also Fed.R.App.P. 3(c). A pro se notice of appeal must be signed by the appellant.
4. Effect of a notice of appeal: A district court lacks jurisdiction, i.e., authority, to act after the filing of a timely notice of appeal, except for actions in aid of appellate jurisdiction or to rule on a timely motion of the type specified in Fed.R.App.P. 4(a)(4).
All Citations
Slip Copy, 2019 WL 3310084