2020 WL 1915254

United States District Court, N.D. Ohio, Eastern Division.
EMCO CORPORATION, et al., PLAINTIFFS,
v.
MILLER TRANSFER & RIGGING CO., DEFENDANT.
CASE NO. 5:19-cv-2418
|
04/20/2020

HONORABLE SARA LIOI, UNITED STATES DISTRICT JUDGE

MEMORANDUM OPINION AND ORDER
*1 Before the Court is the motion to dismiss (Doc. No. 9 (“Mot.”)) filed by defendant Miller Transfer & Rigging Co. (“Miller”). Plaintiffs EMCO Corporation (“EMCO Corp.”), EMCO Maier GmbH (“EMCO Maier”), and Generali Versicherung AG (“Generali”) (collectively, “EMCO”) filed a memorandum in opposition (Doc. No. 11 (“Opp’n”)) and Miller filed a reply (Doc. No. 12 (“Reply”)). For the reasons set forth herein, the motion is denied.

I. Standard on a Motion to Dismiss
A complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief[.]” Fed. R. Civ. P. 8(a)(2). Although this pleading standard does not require great detail, the factual allegations in the complaint “must be enough to raise a right to relief above the speculative level….” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007) (citing authorities). In other words, “Rule 8(a)(2) still requires a ‘showing,’ rather than a blanket assertion, of entitlement to relief.” Id. at 555, n.3 (criticizing the Twombly dissent’s assertion that the pleading standard of Rule 8 “does not require, or even invite, the pleading of facts”) (internal citation omitted).

“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009) (quoting Twombly, 550 U.S. at 570). Rule 8 does not “unlock the doors of discovery for a plaintiff armed with nothing more than conclusions.” Id. at 678–79. “While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.” Id. at 679. “The court need not, however, accept unwarranted factual inferences.” Total Benefits Planning Agency, Inc. v. Anthem Blue Cross & Blue Shield, 552 F.3d 430, 434 (6th Cir. 2008) (citing Morgan v. Church’s Fried Chicken, 829 F.2d 10, 12 (6th Cir. 1987)).

II. Discussion
On October 16, 2019, EMCO filed its complaint against Miller, stating: “This is an action for breach of contract of interstate motor carriage arising from damage to [cargo] owned by EMCO Maier and EMCO Corp., insured by Generali, and tendered for packaging and interstate motor carriage to [Miller].” (Doc. No. 1, Complaint [“Compl.”] ¶ 1.) Miller is identified as “registered with the United States Department of Transportation as an interstate carrier with U.S.D.O.T. number 120707.” (Id. ¶ 9.) EMCO alleges that this Court “has jurisdiction and venue is proper pursuant to 49 U.S.C. § 14706(d) (the ‘Carmack Amendment’) and 28 U.S.C. § 1331.” (Id. ¶ 12.)

In a series of “background” paragraphs, EMCO alleges the following relevant facts:
15. In October 2017, EMCO agreed to hire Miller to carry and package the
Cargo pursuant to the [provided] quotes…and, thereafter, arranged for Miller to pick up the Cargo on 16 October 2017.
*2 16. On 16 October 2017, Miller…picked up, received, and accepted the Cargo, then in good order and condition, at EMCO’s facility in Cuyahoga Falls, Ohio, issued or accepted certain bills of lading to cover the subject shipment, and agreed to carry the Cargo to Clarion Warehouse in Dover, Ohio to be packaged there in seaworthy packaging.
17. On 16 October 2017, the Cargo was rigged and loaded onto Miller’s truck in Cuyahoga Falls.
18. Once the Cargo was rigged and loaded onto Miller’s truck, Miller transported the Cargo to its Clarion Warehouse in Dover for packaging.
19. Upon its arrival in Dover, Miller unloaded the Cargo into its facility and, thereafter, packaged the Cargo by wrapping it in protective film, loading it into two separate wooden crates, and nailing the crates shut.
20. On or about 14 November 2017, Miller loaded the carted Cargo onto one of its trucks and departed for the Port of Baltimore.
21. Miller delivered the Cargo at the Port of Baltimore to EMCO’s nominated ocean carrier on 15 November 2017.
22. On or before 29 November 2017, EMCO’s nominated ocean carrier loaded the Cargo aboard the M/V DRIVE GREEN HIGHWAY (“Vessel”), which thereafter departed for the Port of Bremerhaven.
23. The Vessel arrived at the Port of Bremerhaven on 15 December 2017 and discharged the Cargo on or before 19 December 2017.
24. The Cargo was subsequently collected by EMCO’s nominated inland carrier, which delivered it headquarters [sic] in Hallein, Austria.
25. Once delivered, the Cargo was inspected and discovered to have corroded and been water damaged during transit.
26. As a result, EMCO suffered losses totaling $347,497.92, as nearly as can now be determined.
(Id. ¶¶ 15–26.)

EMCO then sets forth one “cause of action” under the heading “BREACH OF CONTRACT OF MOTOR CARRIAGE.” (capitalization in original.) Here, EMCO incorporates by reference all previous allegations and then alleges:
31. As motor carrier of goods for hire, Miller was obligated by the Carmack Amendment, the terms of the bills of lading, and its agreement with EMCO to properly and safely package, transport, handle, carry, keep, care for, discharge, and deliver the Cargo.
32. Miller breached those duties by failing to adequately package the Cargo, which resulted in the Cargo being delivered in damaged condition.
33. As a direct and proximate cause of Miller’s breach of its duties under the Carmack Amendment, the terms of the bills of lading, and its agreement with ECMO, Plaintiffs sustained damages, as nearly can now be determined, no part of which has been paid although duly demanded, in the sum of $347,497.92.
(Id. ¶¶ 31–33.)

Miller argues in its motion that the complaint must be dismissed in its entirety because the Carmack Amendment preempts any state law breach of contract claim. It argues, in the alternative, that the complaint fails to plead a proper Carmack Amendment claim. The Court finds both of Miller’s arguments lacking.

First, notwithstanding the heading that describes the only cause of action in the complaint, the allegations themselves, which supply the substance of any complaint, allege solely federal question jurisdiction, with no mention of supplemental jurisdiction over any state law cause of action.

Second, as the parties agree,
under federal law, in an action to recover from a carrier [defendant] for damage to a shipment, the shipper [plaintiff] establishes his prima facie case when he shows delivery in good condition, arrival in damaged condition, and the amount of damages.
*3 Missouri Pac. R. Co. v. Elmore & Stahl, 377 U.S. 134, 138, 84 S. Ct. 1142, 12 L. Ed. 2d 194 (1964); see also Mot. at 38; Opp’n at 54–55. Here, EMCO alleged all three elements of its prima facie case and alleged sufficient facts to support a facially-plausible claim (see, e.g., Compl. ¶¶ 16, 25–26), placing Miller on notice of the nature of EMCO’s Carmack Amendment claim. Therefore, Miller’s argument in its reply brief that “[t]he Court and Miller should not be left to guess what the claim is from the outset[,]” (Reply at 62) is unavailing.

The Court also rejects Miller’s argument in its reply brief that EMCO “present[ed] no exhibits with their [c]omplaint[,]” (Reply at 63) to show “some proof that a domestic bill of lading was issued.” (Id., citing Am. Road Serv. Co. v. Consol. Rail Corp., 348 F.3d 565, 569 (6th Cir. 2003).) But American Road Service was decided on summary judgment, when proof of an appropriate bill of lading is required. Here, EMCO alleged that “Miller…issued or accepted certain bills of lading to cover the subject shipment[.]” (Comp. ¶ 16.) At this juncture, that allegation is sufficient to withstand a motion to dismiss.

Miller argues, however, that mere assertion of the existence of a bill of lading without attaching a copy to the complaint is fatal and constitutes “another independent ground for dismissal[.]” (Mot. at 64.) Miller quotes Dials v. Watts Bros. Moving & Storage Sys., No. C2-03-513, 2003 WL 23208987 (S.D. Ohio Nov. 24, 2003) as follows:
Here, the Bill of Lading between NAVL and [p]laintiffs is integral to [p]laintiffs’ claim that NAVL violated 49 U.S.C. § 14706. In order for there to be a cause of action under § 14706, there must be a Bill of Lading. Indeed, the very title of § 14706 is “Liability of carriers under receipts and Bills of Lading.” 49 U.S.C. § 17706 (2003). The bill of lading creates NAVL’s duty to [p]laintiffs, its terms are absolutely essential to the issue of whether NAVL is liable to [p]laintiffs for violating the bill.
Id. at *3. But Miller is citing Dials entirely out of context. The issue before the court in Dials was whether a motion to dismiss must be converted to a motion for summary judgment because it included a copy of the bill of lading cited in, but not attached to, the complaint. The court held that conversion was not necessary, for the reasons quoted by Miller. Id. (citing Weiner v. Klais & Co., 108 F.3d 86, 89 (6th Cir. 1997) (adopting the Seventh Circuit’s approach that “[d]ocuments that a defendant attaches to a motion to dismiss are considered part of the pleadings if they are referred to in the plaintiff’s complaint and are central to her claim.” Venture Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 431 (7th Cir. 1993)). The court in Dials did not hold that the bill of lading had to be attached to the complaint to sufficiently state a claim under the Carmack Amendment for purposes of surviving a motion to dismiss.

Miller also cites the Carriage of Goods by Sea Act (“COGSA”), 46 U.S.C. § 1300, et seq., for the proposition that any damage to the cargo that occurred outside the United States would not be covered by the Carmack Amendment—another basis for dismissal. (Mot. at 39 n.3.)1 EMCO does not seem to dispute that legal assertion, but argues that the damages arose “from acts or omissions caused during interstate ‘transportation’ of [the] cargo, with ‘transportation’ statutorily defined to include (as here), inter alia, ‘the movement of…property’ and ‘services related to that movement, including…packing…of…property.’ ” (Opp’n at 54, quoting 49 U.S.C. § 13102(23) (emphasis and alterations in opposition brief).) These are factual matters for another day; at this juncture, it is sufficient that EMCO has alleged damage to cargo caused by Miller’s actions or inactions during the entire course of the interstate transport of the cargo.

*4 Finally, Miller asserts that damage, if any, was not discovered until the cargo arrived in Austria some time after December 19, 2017. (Mot. at 38–39; Reply at 63.) Since EMCO admits that Miller turned the cargo over to “EMCO’s nominated ocean carrier” on November 15, 2017 in Baltimore, Maryland (Compl. ¶ 21), Miller argues that EMCO cannot establish that Miller caused the water damage discovered one month later overseas. (Mot. at 39.) Miller claims that, because the cargo was not in its control after November 15, 2017, it cannot be liable for any damage. Again, EMCO asserts that Miller’s liability arises from its breach of the duty to package the cargo in a manner that would make it seaworthy. These, too, are questions of fact for another day.

III. Conclusion
For the reasons set forth herein, the Court concludes that the allegations of the complaint are sufficient to survive Miller’s motion to dismiss and the same (Doc. No. 9) is denied.

IT IS SO ORDERED.

Dated: April 20, 2020

HONORABLE SARA LIOI

UNITED STATES DISTRICT JUDGE
All Citations
Slip Copy, 2020 WL 1915254

Footnotes

1
Miller also reserves all rights to reassert this argument at a later time.

2020 WL 1536615

United States District Court, S.D. Mississippi, Northern Division,
Northern Division.
Clemit HAYMORE d/b/a CT Trucking, Plaintiff
v.
SHELTER GENERAL INSURANCE COMPANY and Shelter Mutual Insurance Company, Defendants
CIVIL ACTION NO. 3:19CV365TSL-RHW
|
Signed 03/30/2020
Attorneys and Law Firms
David Randall Wade, Wade & Associates, Jeffrey Gray Baker Houston, Jeff G. Houston, Attorney at Law, Flowood, MS, Ernest W. Stewart, Stewart & Associates, PLLC, Madison, MS, for Plaintiff.
Mark C. Carroll, Michael Brady Mitchell, II, Carroll Bufkin, PLLC, Ridgeland, MS, for Defendants.

MEMORANDUM OPINION AND ORDER
Tom S. Lee, UNITED STATES DISTRICT JUDGE
*1 This cause is before the court on the motion of defendant Shelter Mutual Insurance Company (Shelter Mutual) for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. Plaintiff Clemit Haymore d/b/a CT Trucking has responded in opposition to the motion. The court, having considered the memoranda of authorities, together with attachments, submitted by the parties, concludes the motion should be denied as to plaintiff’s claim for policy benefits but granted as to his claim for punitive damages.

In June 2017, plaintiff made a claim for benefits under his Shelter Mutual inland marine (cargo) policy for the loss of cargo when his Peterbilt tractor-truck and Timpte hopper trailer full of corn were stolen. Shelter Mutual denied his claim for the reason that theft was not a covered peril under his policy. Plaintiff filed this suit seeking benefits under the policy, which he claims were wrongly denied, and demanding punitive damages for Shelter Mutual’s alleged bad faith denial of his claim.

Shelter Mutual claims it is entitled to summary judgment because plaintiff’s cargo policy did not list theft as a covered peril, and since theft is not a covered peril under the policy, then plaintiff has no valid claim against Shelter Mutual. Plaintiff contends, though, that the policy is ambiguous with regard to whether theft is a covered peril and that this ambiguity must be construed against Shelter Mutual, so that it is not entitled to summary judgment. Plaintiff further argues that Shelter Mutual’s unreasonable delay in its investigation warrants the imposition of punitive damages.

Summary judgment is proper when the pleadings and evidence on file show “that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). “[T]he substantive law will identify which facts are material.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). A genuine issue of material fact exists “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id. The movant makes a showing that there is no genuine issue of material fact by informing the court of the basis of its motion and by identifying the portions of the record which reveal there are no genuine material fact issues. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986); Fed. R. Civ. P. 56.

When reviewing the evidence on a motion for summary judgment, the court must decide all reasonable doubts and inferences in the light most favorable to the non-movant. See Walker v. Sears, Roebuck & Co., 853 F.2d 355, 358 (5th Cir. 1988). The court cannot make a credibility determination in light of conflicting evidence or competing inferences. Anderson, 477 U.S. at 250. As long as there appears to be some support for the disputed allegations such that “reasonable minds could differ as to the import of the evidence,” the motion for summary judgment must be denied. Id. at 250.

*2 Under Mississippi law, “[q]uestions concerning the construction of contracts are questions of law that are committed to the court rather than questions of fact committed to the fact finder”. In re Estate of Fitzner, 881 So.2d 164, 169 (Miss. 2003). It is thus for the court to determine whether the policy is ambiguous. Royer Homes of Miss., Inc. v. Chandeleur Homes, Inc., 857 So. 2d 748, 751 (Miss. 2003). In construing an insurance policy, the “ ‘policy must be considered as a whole, with all relevant clauses together’; but, any ‘ambiguities must be resolved in favor of the non-drafting party’ ”. S. Ins. Co. v. Affiliated FM Ins. Co., 830 F.3d 337, 344 (5th Cir. 2016) (quoting United States Fid. & Guar. Co. of Miss. v. Martin, 998 So. 2d 956, 963 (Miss. 2008)). “ ‘Ambiguities exist when a policy can be logically interpreted in two or more ways, where one logical interpretation provides for coverage, … [but] do not exist simply because two parties disagree over the interpretation of a policy.’ ” Id. (quoting Martin, 998 So. 2d at 963).

In the court’s view, the policy is ambiguous with respect to whether it covers theft. The policy lists nine covered perils and six excluded perils; theft is not in either list. Language preceding the list of covered perils states, “We cover your legal liability for direct physical loss to covered cargo caused by …”. But this language does not explicitly limit coverage to the listed perils. The list of excluded perils is preceded by the following:
We do not pay for a loss if one or more of the following excluded perils apply to the loss, regardless of other causes or events that contribute to or aggravate the loss, whether such causes or events act to produce the loss before, at the same time as, or after the excluded peril. We do not pay for a loss that results from …
In the case of Arrow Industrial Carriers, Inc. v. Continental Insurance Company of New Jersey, 232 N.J. Super. 324, 556 A.2d 1310 (Law. Div. 1989), the court, considering coverage for a loss resulting from collision under an inland marine policy, observed:
While the policy itemizes eight exclusions from coverage as well as eight conditions for coverage, it does not expressly indicate that coverage is not afforded for cargo damage resulting from a collision between the cargo and another object even though there is no collision between the conveying vehicle and another object.
Rather, Continental seeks to preclude coverage by specifying those events for which it is afforded and urging that this specification bars coverage for other events. In essence, Continental is attempting to itemize positive events affording coverage and imply from that a negative, that non-itemized events do not result in coverage, even though it particularized a list of coverage exclusions. That is illogical.
Id. at 329, 556 A.2d at 1313.

Shelter argues that reading the “Perils Covered” and “Perils Excluded” sections together, it is clear that the Perils Excluded section is not an exhaustive list of perils not covered under the Policy. While that may be a reasonable interpretation, it is not the only reasonable interpretation.

Shelter Mutual also argues that plaintiff’s application for the subject policy “shows Haymore declined to purchase theft coverage for the cargo, which would have been an additional expense.” It does not identify what, specifically, it relies on in the application in support of this contention. Left to its own devices, the court finds nothing in the application itself that could fairly be said to show that plaintiff declined anything. The application, coupled with additional supporting and explanatory evidence, or a more informative citation to the application, might well tend to show that Shelter Mutual’s policy form included as an option an endorsement for theft coverage and might also show plaintiff was offered but rejected such an endorsement. However, no such additional and explanatory evidence or citation has been offered.1

*3 While Shelter Mutual’s motion centers on its contention that theft is not covered under the policy, it adds in a footnote that plaintiff’s claimed loss is excluded from coverage because the truck with cargo remained at plaintiff’s property for over 72 hours, and the policy, under the “Property Excluded” section, states, “Shelter Mutual does not cover cargo on a vehicle after it has remained at any location for more than 72 hours.” The only evidence it cites for this proposition is the policy itself and thus, this defendant has not demonstrated that it is entitled to summary judgment. The court does note that in connection with a separate summary judgment motion by Shelter Mutual’s codefendant, a wealth of evidence has been presented by the parties. However, it is far from clear from that evidence how long the truck/trailer with cargo was at plaintiff’s property before the theft occurred.

For the foregoing reasons, the court will deny Shelter Mutual’s motion for summary judgment as to plaintiff’s claim for benefits under the policy. However, the court concludes that Shelter Mutual had a legitimate or arguable reason to deny the claim and is therefore entitled to summary judgment on plaintiff’s claim for punitive damages. See United States Fid. & Guar. Co. of Miss. v. Martin, 998 So. 2d 956, 971 (Miss. 2008) (holding that “an insurance company could legitimately deny coverage under a policy that has ambiguous provisions for coverage”).2

Based on the foregoing, it is ordered that Shelter Mutual’s motion for summary judgment is denied as to plaintiff’s claim for policy benefits but granted as to his claim for punitive damages.

SO ORDERED this 30th day of March, 2020.

All Citations
Slip Copy, 2020 WL 1536615

Footnotes

1
Such evidence could be relevant in resolving ambiguity in the policy. See Page v. Hudson, 187 So. 3d 1072, 1077 (Miss. Ct. App. 2016) (“If, after considering the four corners of the document, and after applying a meaning more favorable to the non-drafting party, the court determines that the language is ambiguous, only … then can extraneous evidence of its meaning be considered.”); Infinity Ins. Co. v. Patel, 737 So. 2d 366, 369 (Miss. Ct. App. 1998) (stating that “[t]he standard analytical process for contract interpretation is that only if the meaning of a term is ambiguous will resort to extraneous evidence be permitted.”); Prudential Ins. Co. of Am. v. Smith, 762 F.2d 476, 480 (5th Cir. 1985) (recognizing that extraneous evidence is admissible to clear ambiguity).

2
The court acknowledges plaintiff’s assertion that punitive damages are appropriate based on Shelter Mutual’s delay in investigation and denial of his claim. He has offered no evidence that would sustain his burden to prove his allegations in this regard.