2020 WL 1289761

United States District Court, S.D. Ohio, Western Division.
TIFFANY BROWN, Plaintiff,
v.
TOTAL QUALITY LOGISTICS, LLC., Defendant.
Case No. 1:19-cv-574
|
03/18/2020

Karen L. Litkovitz, United States Magistrate Judge, UNITED STATES DISTRICT COURT, TIFFANY BROWN, Case No. :-cv-, Plaintiff, McFarland, J., Litkovitz, M.J.

ORDER AND REPORT AND RECOMMENDATION
Proceeding pro se, plaintiff Tiffany Brown brings this breach of contract action against defendant Total Quality Logistics (“TQL”). This matter is before the Court on defendant’s motion for judgment on the pleadings, or alternatively motion to dismiss (Doc. 5),1 plaintiff’s response in opposition (Doc. 7), and defendant’s reply memorandum (Doc. 12). This matter is also before the Court on two of plaintiff’s motions to receive service by email through the electronic case filing system (Docs. 2, 8) and plaintiff’s motion to access the electronic case filing system (Doc. 9).

I. Facts
Plaintiff filed her complaint in this Court on July 15, 2019. (Doc. 1). In her complaint, plaintiff alleges the following:
Plaintiff’s company, Tribute Contracting LLC, used the Defendant’s services on October 2017 for deliveries [sic] their substantial government contract. Plaintiff has signed a contract with Defendant. The first shipment arrived on time with the first supplier. The first shipment for 2nd supplier was one day late. This shipment caused the contract to be cancelled by the government agency. This has caused substantial financial damages to my client as the total value of the contract was $155 million. There has also been significant reputational damage that [h]as affected my client’s ability to conduct business in the industry. Plaintiff’s company received extremely negative press and is currently fighting an [sic] 7 year disbarment of irreputable harm personally as well professional[ly].
(Doc. 1 at 4). Based on these facts, plaintiff brings a breach of contract claim against TQL for the late delivery.2 Plaintiff states that she suffered $155 million in damages from the cancelled government contract, which she alleges was cancelled due to the late delivery. (Id.). Plaintiff attaches the following documents to her complaint: (1) a document from the Federal Emergency Management Agency (“FEMA”) terminating Tribute’s government contract due to late delivery of approved heater meals (Exhibit A), (2) an email between plaintiff and a TQL representative about the late delivery (Exhibit B), (3) a shipper/broker transportation agreement between Tribute and TQL (Exhibit C), and (4) a record showing that both plaintiff and Tribute are disbarred from receiving government contracts (Exhibit D). (Doc. 1-1).

II. TQL’s Motion to Dismiss (Doc. 5)

A. Standard
In deciding a motion to dismiss under Rule 12(b)(6), the Court must accept all factual allegations as true and make reasonable inferences in favor of the non-moving party. Keys v. Humana, Inc., 684 F.3d 605, 608 (6th Cir. 2012) (citing Harbin-Bey v. Rutter, 420 F.3d 571, 575 (6th Cir. 2005)). Only “a short and plain statement of the claim showing that the pleader is entitled to relief” is required. Id. (quoting Fed. R. Civ. P. 8(a)(2)). “[T]he statement need only give the defendant fair notice of what the…claim is and the grounds upon which it rests.” Id. (quoting Erickson v. Pardus, 551 U.S. 89, 93 (2007) (internal quotation marks omitted) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)). A plaintiff must “plead factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).

The Court must hold pro se pleadings to less stringent standards than those prepared by attorneys and must liberally construe them when determining whether they fail to state a claim. See, e.g., Martin v. Overton, 391 F.3d 710, 712 (6th Cir. 2004). However, the Sixth Circuit has recognized that the Supreme Court’s liberal construction case law has not had the effect of “abrogat[ing] basic pleading essentials” in pro se suits. Wells v. Brown, 891 F.2d 591, 594 (6th Cir. 1989).

B. Resolution
Defendant moves to dismiss plaintiff’s complaint under Fed. R. Civ. P. 12(b)(6) for three reasons. First, defendant argues that plaintiff fails to state a valid claim for relief against TQL because there is no privity of contract between plaintiff, Tiffany Brown, and TQL. (Doc. 5 at 5-7). Second, defendant argues that any potential claims arising out of Tribute’s relationship with TQL are compulsory counterclaims that plaintiff failed to litigate in a prior state court lawsuit and is therefore barred from asserting in this case. (Id. at 7-9). Third, defendant contends that under the Carmack Amendment, claims for late delivery, loss, or damage to cargo must be pursued against the motor carrier and not TQL since it is a freight broker. (Id. at 9-11).

As an initial matter, Ohio law governs plaintiff’s claim for breach of contract in this diversity action. See Equitable Life Assur., Soc. of U.S. v. Poe, 143 F.3d 1013, 1016 (6th Cir. 1998) (in actions brought in federal court invoking diversity jurisdiction, a court must apply the same substantive law that would apply if the action had been brought in a state court of the jurisdiction where the federal court is located) (citing Erie R.R. v. Tompkins, 304 U.S. 64 (1938)). To maintain a cause of action for breach of contract, Ohio law requires privity of contract. In Ohio, “privity of contract between parties…is a fundamental prerequisite to bringing suit for the breach of a contract.” Mark-It Place Foods, Inc. v. New Plan Excel Realty Tr., 804 N.E.2d 979, 990 (Ohio Ct. App. 2004). See also Cincinnati, H. & D. R. Co. v. Metro. Nat. Bank, 42 N.E. 700 (Ohio 1896). Ohio does not recognize any remedy or action in contract for two parties that lack privity. See Mahalsky v. Salem Tool Co., 461 F.2d. 581, 584 (6th Cir. 1972).

In ruling on a Rule 12(b)(6) motion to dismiss, the Court primarily considers the allegations in the complaint but may also consider exhibits attached to the complaint. Amini v. Oberlin Coll., 259 F.3d 493, 502 (6th Cir. 2001). Here, Exhibit C of plaintiff’s complaint shows the existence of a shipper/broker transportation agreement between Tribute and TQL for TQL to provide brokerage services for transportation of Tribute’s freight. (Doc. 1-1 at 7-13). Plaintiff’s company—not plaintiff herself—is a party to the contract at issue. Although plaintiff signed the agreement (Doc. 1-1 at 13), she did so in her capacity as the owner of Tribute. The Court therefore agrees with defendant that the contract attached to the complaint shows that there is no privity of contract between plaintiff and TQL.

In her brief in opposition, plaintiff argues that “Tribute Contracting LLC, is a single member LLC, so the persona of Tribute Contracting LLC and Plaintiff are intertwined.” (Doc. 7 at 4). This argument is unavailing. “[A] corporation is a distinct legal entity, separate and apart from the natural individuals who formed and own it.” Chafflose Corp. v. 3 M Innovation, No. 1:10-cv-2178, 2010 WL 4318872, at *1 (N.D. Ohio Oct. 27, 2010) (citations omitted). A corporation is a separate legal entity from its shareholders, even where the corporation has only one shareholder. Springfield v. Palco Invest. Co., Inc., 992 N.E.2d 1194, 1211 (Ohio Ct. App. 2013). “Because a corporation is a separate entity from its directors and officers, causes of action belonging to the corporation may not be litigated by the officers for their own benefit.” Chafflose Corp., 2010 WL 4318872, at *1. In her capacity as the owner of Tribute, plaintiff has no standing to bring a cause of action against TQL for breach of contract. Moreover, plaintiff’s argument that she is a third-party beneficiary to the contract between Tribute and TQL is equally unavailing. Under Ohio law, a third-party may recover damages from a contract only when the third-party is the intended beneficiary of the contract. G.R.P.L. Ents. Inc. v. Sethi, No. 09 MA 205, 2010 WL 5550680, at *2 (Ohio Ct. App. Dec. 16, 2010). To be an intended third-party beneficiary, the contract “must have been entered into directly or primarily for the benefit of that person.” Id. (internal citation omitted). Given that a corporation is a separate legal entity from its owners, “a party is not considered a third-party beneficiary merely because [s]he is a shareholder of one of the contracting parties.” Id. at *3. As the owner of Tribute, plaintiff is therefore not an intended third-party beneficiary to the contract between Tribute and TQL.

In sum, plaintiff cannot maintain this action against TQL because no privity of contract exists between plaintiff, as the owner of Tribute, and TQL. While Tribute may bring a breach of action against TQL under its corporate identity, plaintiff has no standing to bring such a claim on behalf of Tribute. Rowland v. California Men’s Colony, 506 U.S. 194, 202 (1993) (no one other than a licensed attorney can represent a corporation in federal court). Therefore, defendant’s motion to dismiss (Doc. 5) should be granted.3

III. Conclusion
Based on the foregoing, it is RECOMMENDED that:
1. Defendant’s motion to dismiss (Doc. 5) be GRANTED and this case be CLOSED on the docket of this Court.

It is ORDERED that:
1. Plaintiff’s motions to receive service by email through the electronic case filing system (Docs. 2, 8) are DENIED as MOOT.
2. Plaintiff’s motion to access the electronic case filing system (Doc. 9) is DENIED as MOOT.
Date: 3/18/2020 s/Karen L. Litkovitz

Karen L. Litkovitz

United States Magistrate Judge

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF OHIO WESTERN DIVISION

TIFFANY BROWN, Case No. 1:19-cv-574 Plaintiff, McFarland, J.

Litkovitz, M.J.

vs.

TOTAL QUALITY LOGISTICS, LLC, Defendant.

NOTICE
Pursuant to Fed. R. Civ. P. 72(b), WITHIN 14 DAYS after being served with a copy of the recommended disposition, a party may serve and file specific written objections to the proposed findings and recommendations. This period may be extended further by the Court on timely motion for an extension. Such objections shall specify the portions of the Report objected to and shall be accompanied by a memorandum of law in support of the objections. If the Report and Recommendation is based in whole or in part upon matters occurring on the record at an oral hearing, the objecting party shall promptly arrange for the transcription of the record, or such portions of it as all parties may agree upon, or the Magistrate Judge deems sufficient, unless the assigned District Judge otherwise directs. A party may respond to another party’s objections WITHIN 14 DAYS after being served with a copy thereof. Failure to make objections in accordance with this procedure may forfeit rights on appeal. See Thomas v. Arn, 474 U.S. 140 (1985); United States v. Walters, 638 F.2d 947 (6th Cir. 1981).

All Citations
Slip Copy, 2020 WL 1289761

Footnotes

1
The Court will apply the Rule 12(b)(6) motion to dismiss standard to defendant’s motion. A motion for judgment on the pleadings is premature without an answer filed by defendant. See Fed. R. Civ. P. 12(c) (“After the pleadings are closed—but early enough not to delay trial—a party may move for judgment on the pleadings.”).

2
In her memorandum in opposition to defendant’s motion to dismiss, plaintiff states that her claim is for breach of contract. (Doc. 7 at 1).

3
The Court declines to consider defendant’s second and third grounds for dismissal—that plaintiff failed to assert a compulsory counterclaim in state court and that plaintiff’s claims must be pursued against the motor carrier under the Carmack Amendment. The facts of plaintiff’s complaint and the attachments thereto clearly show that there is no privity of contract between plaintiff and TQL such that plaintiff cannot maintain a breach of contract claim against TQL.

2020 WL 1171947

United States District Court, S.D. Alabama, Southern Division.
SAMUEL L. ROLLASON, et al., Plaintiffs,
v.
ALL STATE VAN LINES RELOCATION, INC., et al., Defendants.
CIVIL ACTION NO. 1:18-cv-482-TFM-N
|
Filed 03/11/2020

MEMORANDUM OPINION AND ORDER
TERRY F. MOORER UNITED STATES DISTRICT JUDGE
*1 Pending before the Court is Plaintiffs’ Motion for Default Judgment. Doc. 20, filed June 26, 2019. Plaintiffs request the Court enter a default judgment in their favor and against Defendant All State Van Lines Relocation, Inc. Id. Having considered the motion and relevant law, the Court finds the Motion for Default Judgment is due to be GRANTED as to its claim for $70,000.00 in damages.

I. JURISDICTION
The Court has subject matter jurisdiction over the claims in this action pursuant to 28 U.S.C. § 1331 (federal question), 49 U.S.C. § 14706, and 28 U.S.C. § 1332 (diversity jurisdiction).

The Court has personal jurisdiction over Defendant All State Van Lines Relocation, Inc., because Plaintiffs allege it is a Florida corporation that conducts business in Baldwin County, Alabama, and it was served via certified mail. Doc. 1-2 at 18, 76; see also Prewitt Enters., Inc. v. Org. of Petroleum Exporting Countries, 353 F.3d 916, 925 n.15 (11th Cir. 2003) (“The concept of personal jurisdiction comprises two distinct components: amenability to jurisdiction and service of process. Amenability to jurisdiction means that a defendant is within the substantive reach of a forum’s jurisdiction under applicable law. Service of process is simply the physical means by which that jurisdiction is asserted.”).

Venue is proper in this Court because Plaintiffs allege all or a substantial part of the events or omissions that gave rise to Plaintiffs’ claim occurred in Baldwin County, Alabama, which is within this Court’s jurisdiction. Doc. 1-2 at 77.

II. PROCEDURAL AND FACTUAL BACKGROUND

A. Procedural Background
Plaintiffs Samuel H. Rollason and Kathleen M. Rollason (collectively, the “Plaintiffs”) originally filed this action in the Baldwin County Circuit Court on July 24, 2018, in which they brought claims of breach of contract (Counts 1 and 6), negligence and wantonness (Count 2), misrepresentation (Count 3), suppression (Count 4), and bad faith (Counts 5 and 7) against Defendants All State Van Lines Relocation, Inc. (“All State”); IXT, LLC (“IXT”); Relo Van Lines, LLC (“Relo”); and Unitrin Auto and Home Insurance Company (“Unitrin”). Doc. 1-1 at 12-20. Plaintiffs filed their First Amended Complaint on October 9, 2018, in which they dismissed Defendant IXT and added Defendant ITX, LLC (“ITX”), and retained the same claims. Doc. 1-1 at 3-11.

Defendant ITX removed this matter to this Court from the circuit court on November 15, 2018, pursuant to 28 U.S.C. §§ 1441 and 1446, based on diversity and federal question jurisdiction. See Doc. 1 at 1. Attached to the Notice of Removal is Defendant All State’s Consent to Removal, which is signed on behalf counsel for Defendant All State with permission. Doc. 1-3 at 2.

On November 15, 2018, Defendant ITX filed its Motion to Dismiss in which Defendant ITX requested the Court to dismiss, pursuant to Fed. R. Civ. P. 12(b), Plaintiffs’ state law claims because they were preempted by the Carmack Amendment to the I.C.C. Termination Act (“Carmack Amendment”), 49 U.S.C. § 14706. Doc. 2. On January 18, 2019, Plaintiffs filed their motion to remand and supporting brief in which they requested the Court remand this action pursuant to 28 U.S.C. § 1447 to the Baldwin County Circuit Court. Doc. 9. The Court granted the motion to dismiss to the extent the previously asserted state law claims of bad faith, breach of contract, misrepresentation, negligence and wantonness, and suppression were dismissed with prejudice and denied to the extent the claims survived as a Carmack Amendment claim. Doc. 15. The Court denied the Plaintiffs’ motion to remand. Id.

*2 On May 14, 2019, the Court granted Plaintiffs’ and Defendant Unitrin’s motion to dismiss Plaintiffs’ claims against Unitrin. Docs. 14, 16.

Based on the fact that Defendant All State had not filed a notice of appearance, responsive pleading, or request for an extension of time to respond to the Complaint, on June 13, 2019, the Court ordered Plaintiffs to file either a motion to dismiss Defendant All State pursuant to Fed. R. Civ. P. 41, a motion for default pursuant to Fed. R. Civ. P. 55 for Defendant All State’s failure to plead or otherwise defend, or a status report that detailed how Plaintiffs intended to proceed against Defendant All State. Doc. 16. In response to the Court’s June 13, 2019 Order, Plaintiffs filed their Motion for Default Judgment in which they requested the Court, pursuant to Fed. R. Civ. P. 55, enter a default judgment against Defendant All State. Doc. 20.

On July 2, 2019, the Court declared Defendant All State to be in default, held the Motion for Default Judgment in abeyance, and ordered Plaintiffs to file evidence in support of their motion. Doc. 25. On August 2, 2019, Plaintiffs filed their evidence in support of their Motion for Default Judgment. Doc. 30. Defendant All State has failed to appear in this matter or otherwise respond to Plaintiffs’ filings. See Docket Sheet. The motion is ripe for review and the Court finds an evidentiary hearing unnecessary, based on the evidence that was filed in support of the Motion for Default Judgment.

B. Factual Background
In May 2017, Plaintiffs employed Defendants All State, ITX, and Relo (collectively, the “Defendants”) to transport Plaintiffs’ furniture and other wares, which included antiques and works of art, from Santa Fe, New Mexico, to Plaintiffs’ home in Daphne, Alabama. Doc. 1-2 at 79. Plaintiffs agreed to pay $15,000.00 for the moving service. Id. Defendants Relo and ITX were employed by Defendant All State to transport the furniture to Daphne, Alabama, via trucks. Id. Defendants represented to Plaintiffs their furniture would be transported with care and would be protected from damage. Id.

The shipment arrived at its destination on June 5, 2017. Id. When the furniture and goods arrived at their destination, they were inspected and many of the pieces were found to be broken and damaged. Id.

III. STANDARD OF REVIEW
The Federal Rules of Civil Procedure establish a two-part process for obtaining a default judgment. FED. R. CIV. P. 55. If “a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend” the clerk of court “must enter the party’s default.” FED. R. CIV. P. 55(a). After default has been entered, if the “claim is for a sum certain or a sum that can be made certain by computation,” the clerk must enter default. FED. R. CIV. P. 55(b)(1). In all other circumstances, “the party must apply to the court for a default judgment.” FED. R. CIV. P. 55(b)(2). Also, a “default judgment must not differ in kind from, or exceed in amount, what is demanded in the pleadings.” FED. R. CIV. P. 54(c).
The Court of Appeals for the Eleventh Circuit has held that although “a default is not treated as an absolute confession by the defendant of his liability and of the plaintiff’s right to recover, a defaulted defendant is deemed to admit the plaintiff’s well-pleaded allegations of fact. The defendant, however, is not held to admit facts that are not well-pleaded or to admit conclusions of law.” Tyco Fire & Sec., LLC v. Alcocer, 218 Fed. App’x 860, 863 (11th Cir. 2007) (per curiam) citations and internal quotations omitted). Moreover, “before entering a default judgment for damages, the district court must ensure that the well-pleaded allegations of the complaint … actually state a cause of action and that there is a substantive, sufficient basis in the pleadings for the particular relief sought.” Id. (emphasis omitted). Therefore, [Plaintiff] must establish a “prima facie liability case” against the defendants. Pitts ex rel. Pitts v. Seneca Sports, Inc., 321 F. Supp. 2d 1353, 1357 (S.D. Ga. 2004) (citations omitted).
*3 Also, when assessing default judgment damages, the Court has “an obligation to assure that there is a legitimate basis for any damage award it enters.” Anheuser Busch, Inc. v. Philpot, 317 F.3d 1264, 1266 (11th Cir. 2007). Therefore, when ruling on a motion for default judgment, the Court must determine whether there is a sufficient factual basis in the complaint upon which a judgment may be entered. See Nishimatsu Constr. Co. v. Houston Nat’l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975).
Gray Cas. & Sur. Co. v. McConnell Contracting, LLC, Civ. Act. No. 11-0184-KD-N, 2012 U.S. Dist. LEXIS 48220, at *8-10, 2012 WL 1145186, at *3-4 (S.D. Ala. Apr. 5, 2012).

IV. DISCUSSION AND ANALYSIS
Upon review of the pleadings, the Court is satisfied the well-pleaded allegations state a basis for relief under the Carmack Amendment, as stated in the Court’s May 14, 2019 Memorandum Opinion and Order, and there is a substantive and sufficient factual basis for the relief sought by Plaintiffs. Specifically, Plaintiffs have provided sufficient evidence to support their claims that Plaintiffs employed Defendants to transport Plaintiffs’ furniture and other wares from Santa Fe, New Mexico, to Plaintiffs’ home in Daphne, Alabama, the furniture and goods were inspected when they arrived, and many of the pieces were found to be broken and damaged. Docs. 1-2 at 79, Doc. 30, Doc. 30-1, Doc. 30-2. In total, the replacement value and repair costs for Plaintiffs’ property is $72,171.94, which includes the replacement value of the property in the amount of $53,295.00 and repair costs in the amount of $18,876.94. Doc. 30 ¶¶ 2-4.

In support of Plaintiffs’ claims, they filed an “Appraisal Report” that was prepared by David L. Sanders, ISA, AM, in which Mr. Sanders appraised the replacement cost for some of Plaintiffs’ household items that were beyond repair. Doc. 30-1. Plaintiffs also filed invoices from Furniture Medic by Key Craftmanship for furniture repair service to Plaintiffs’ household items that were damaged, invoices for cabinet replacement services for cabinetry that was damaged, and an invoice for a mattress that was destroyed. Doc. 30-2 at 2-25.

Fed. R. Civ. P. 54(c) provides a “default judgment must not differ in kind from, or exceed in amount what is demanded in the pleadings.” FED. R. CIV. P. 54(c). In Plaintiffs’ First Amended Complaint and Motion for Default Judgment, they claim damages in the amount of $70,000.00 for the damage to their furniture. Doc. 1-2 at 79-81; Doc. 20 ¶ 5. However, in Plaintiffs’ evidence in support of their Motion for Default Judgment, they claim replacement value and repair costs of $72,171.94 as well as a refund of the moneys paid for the moving services in the amount of $15,463.32. Doc. 30 ¶¶ 4, 5. The Court notes the Carmack Amendment limits a carrier’s maximum liablity for household goods that are lost, damaged, or destroyed to “an amount equal to the replacement value of such goods, subject to a maximum amount equal to the declared value of the shipment and to rules issued by the Surface Transportation Board and applicable tariffs.” 49 U.S.C. § 14706.

Defendant All State has had ample time to appear or file a response to the instant motion for default judgment. This matter was removed from the circuit court on November 15, 2018, with the consent of Defendant All State by permission. Doc. 1; Doc. 1-3, at 2. The instant motion for default judgment was filed on June 26, 2019, and became ripe after Plaintiffs filed their evidence in support of their motion for default judgment on August 2, 2019. Docs. 20, 30. Since the motion for default judgment became ripe, approximately seven (7) months have elapsed and Defendant All State has yet to appear in this matter or respond to Plaintiffs’ motion for default judgment. See Docket Sheet.

*4 Accordingly, Plaintiffs’ Motion for Default Judgment will be granted insofar as Plaintiffs claim $70,000.00 in damages in their First Amended Complaint for the replacement value and repair costs for their furniture.

V. CONCLUSION
Accordingly, based on the foregoing analysis, Plaintiffs’ Motion for Default Judgment is GRANTED as to its claim for $70,000.00 in damages and default judgment is ENTERED in favor of Plaintiffs Samuel H. Rollason and Kathleen M. Rollason and against Defendant All State Van Lines Relocations, Inc., in the amount of $70,000.00.

DONE and ORDERED this the 11th day of March 2020.

All Citations
Slip Copy, 2020 WL 1171947