2020 WL 1430608

United States District Court, W.D. Kentucky.
SECURA INSURANCE, A MUTUAL COMPANY A/S/O KIEL THOMSON PLAINTIFF
v.
OLD DOMINION FREIGHT LINE, INC. DEFENDANT
CIVIL ACTION NO. 3:18-CV-00780-CRS
|
Filed 03/23/2020

MEMORNADUM OPINION
Charles R. Simpson III, Senior Judge United States District Court

I. Introduction
*1 This case is before the Court on Defendant Old Dominion Freight Line Inc.’s (“ODFL”) motion for summary judgment. DN 27. Plaintiff Secura Insurance (“Secura”) filed a response. DN 28. ODFL replied. DN 30. The matter is ripe for review. For the following reasons, the Court will grant ODFL’s motion for summary judgment.

II. Factual Background
This case arises out of damage sustained to a shipment of glass windows. Kiel Thomson, one of Secura’s insureds, ordered custom glass windows from Zeluck Architectural Windows & Doors. DN 1 at 2. Thomson contracted with ODFL, a commercial motor carrier, to have the windows transported from Brooklyn, New York to Louisville, Kentucky. Id. The parties agreed ODFL would transport the windows pursuant to ODFL’s Internet Straight Bill of Lading (“Bill of Lading”). DN 27-1 at 2; DN 27-2 at 15–16. The Bill of Lading was governed by ODFL’s Rules 100 Tariff. DN 27-1 at 2. ODFL’s Rules 100 Tariff, in relevant part, provides that “Carrier must receive all claims for cargo loss or damage including all supporting documentation within nine (9) months of the date of delivery, or, if lost, the date delivery was anticipated.” DN 27-2 at 8.

When the windows arrived on July 19, 2017, Thomson discovered that the windows were damaged. DN 1 at 2. That same day, Thomson sent an email to ODFL (“July 19, 2017 email”) stating:
Bill of lading #07906084756 BKN has arrived with some damage. We are documenting the damage with pictures. Please advise as to the insurance liability, and the process required when making a claim.
DN 27-2 at 12. ODFL responded: “Please note that on the Security Divider service-we are not Liable [sic] for any damages-since it was a shipper load and off load.” Id. at 13. Thomson filed a claim with Secura, who paid $21,076.83 pursuant to Thomson’s insurance policy. DN 1 at 2. Thirteen months after Thomson’s email to ODFL, Secura’s counsel sent a letter (“August 21, 2018 letter”) to ODFL claiming $21,076.83 in damages. Id. ODFL denied Secura’s claim as untimely because Seucra submitted the August 21, 2018 letter after the nine-month window as required by ODFL’s Rules 100 Tariff. DN 27-1 at 3. Following ODFL’s denial, Secura filed this lawsuit.

Secura originally brought three claims against ODFL: (1) a statutory claim for damages under the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706, (2) bailment, and (3) breach of contract. DN 1. ODFL moved for judgment on the pleadings for the bailment and breach of contract claims. DN 11. This Court granted that motion and held that Secura’s bailment and breach of contract claim were preempted by the Carmack Amendment. DN 13. The statutory claim under the Carmack Amendment is Secura’s sole remaining claim.

III. Legal Standard
Summary judgment is appropriate when the moving party can show that “there is no genuine dispute as to any material fact and the movant is entitled to a judgment as a matter of law.” FED. R. CIV. P. 56(a). “[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48 (1986). A genuine issue for trial exists when “there is sufficient evidence favoring the non-moving party for a jury to return a verdict for that party.” Id. In undertaking this analysis, the Court must view the evidence in the light most favorable to the non-moving party. Scott v. Harris, 550 U.S. 372, 378 (2007).

*2 The party moving for summary judgment bears the burden of proof for establishing the nonexistence of any issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). They can meet this burden by “citing to particular parts of materials in the record” or “showing that the materials cited do not establish the…presence of a genuine dispute.” Fed. R. Civ. P. 56(C)(1). This burden can also be met by demonstrating that the nonmoving party “fail[ed] to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.” Celotex, 477 U.S. at 322. The nonmoving party also “must do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).

IV. Discussion
In 1906, Congress enacted the Carmack Amendment to the Interstate Commerce Act of 1877. See 49 U.S.C. § 14706. The Carmack Amendment spells out rights, duties, and liabilities of shippers and carriers when it comes to cargo loss. Regulations promulgated pursuant to the Secretary of Transportation’s authority govern the presentation and adjudication of claims under the Carmack Amendment. See 49 C.F.R.§ 370.1. These regulations provide the minimum filing requirements for a claim of loss or damage to cargo. 49 C.F.R. § 370.3 (b). ODFL argues that Secura failed to submit a claim that substantially complied with the requirements of § 370.3 (b) and is therefore entitled to summary judgment. DN 27-1 at 8. Secura responds with three arguments: (1) Thomson’s email from July 19, 2017 constituted a claim that substantially complied with the requirements of § 370.3 (b), (2) ODFL’s response to Thomson’s alleged claim was deficient, and (3) ODFL’s tariff was not incorporated by reference into the Bill of Lading, and Thomson was not the “shipper” for the purposes of the Bill of Lading. See DN 28. The Court will address each argument.

A. Thomson’s July 19, 2017 Email
The July 19, 2017 email was Thomson’s and Seucra’s only contact with ODFL prior to the August 21, 2018 letter from Secura’s counsel. ODFL argues that this email did not substantially comply with the requirements of § 370.3 (b) and therefore did not constitute a claim under the regulation. Consequently, ODFL argues that the August 21, 2018, correspondence from Secura’s counsel requesting $21,076.83 in damages was outside of the nine-month window in which ODFL’s Rules 100 Tariff requires claimants to submit all claims for cargo loss or damage. Even viewing the facts in the light most favorable to the Secura, the July 19, 2017 email did not substantially comply with the requirements of § 370.3 (b). Accordingly, since it is undisputed that the August 21, 2018 correspondence from Secura’s counsel did not fall within the nine-month window, ODFL is entitled to summary judgment.

Section 370.3 (b), in relevant part, provides:
(b) Minimum filing requirements. A written communication from a claimant, filed with a proper carrier within the time limits specified in the bill of lading or contract of carriage or transportation and:
(1) Containing facts sufficient to identify the baggage or shipment (or shipments) of property,
(2) Asserting liability for alleged loss, damage, injury, or delay, and
(3) Making claim for the payment of a specified or determinable amount of money, shall be considered as sufficient compliance with the provisions for filing claims embraced in the bill of lading or other contract of carriage; Provided, however, that procedures are established to ensure reasonable carrier access to supporting documents
49 C.F.R. § 370.3 (b) (emphasis added).

*3 In the Sixth Circuit, a claim for loss or damage must substantially comply with 49 C.F.R. § 370.3 (b)1 or else recovery is precluded. Trepel v. Roadway Express, Inc., 194 F.3d 708, 713 (6th Cir. 1999). The requirements “provide the carrier with notice of the nature of the baggage or property that is lost or damaged, the fact that the claimant intends to hold the carrier responsible, and a reasonably accurate indication of the value of the claim.” Id. Further, “the purpose of the claim regulation is not to permit the carrier to escape liability but to insure [sic] that the carrier has enough information to begin processing the claim.” Id. The Sixth Circuit held that a plaintiff’s claim that stated damages were “to be determined but not to exceed $150,000” substantially complied with the “specified” or “determinable” amount of money requirement under § 370.3 (b). Id.

Even viewing the facts in the light most favorable to Secura, the July 19, 2017, email does not substantially comply with the requirements of 49 C.F.R. § 370.3 (b). The email is three sentences long:
“Bill of lading #07906084 BKN has arrived with some damage. We are documenting the damage with pictures. Please advise as to the insurance liability, and the process required when making a claim.”
DN 27-2 at 12. The email does not include a specified or determinable amount of money that Thomson was seeking from ODFL. Indeed, there is no damage estimate included whatsoever. Without any reference to any amount Thomson was seeking, the email cannot comply with 49 C.F.R. § 370.3 (b), even under the more lenient substantial compliance standard articulated by the Sixth Circuit. Therefore, ODFL is entitled to summary judgment.

Secura argues that the email substantially complied § 370.3 (b). Secura contends that by stating there was damage in the July 19, 2017 email, and subsequently providing a particularized damage estimate in the August 21, 2018 correspondence, the email provided ODFL enough information to start its investigation into the claim. In other words, Secura argues Thomson’s initial email provided a placeholder for a more specified claim and satisfied the nine-month filing requirement provided in ODFL’s Rules 100 Tariff.2 It is true that § 370.3 (b) does not define “specified” or “determinable” with regard to the amount of money in a claim. But, Secura’s argument would effectively erase those words from the regulation. Further, Secura provides no authority for the proposition that an “initial notice of claim” can act as a placeholder for a more definite claim and ultimately satisfy the requirements of § 370.3 (b). This interpretation would effectively replace the substantial compliance standard articulated by the Sixth Circuit with a minimal compliance standard. Without clear support from Sixth Circuit precedent, the Court refuses to endorse Secura’s interpretation of 49 C.F.R. § 370.3 (b) and its application of the substantial compliance standard.

B. ODFL’s Response to the July 19, 2017 Email
Secura argues that granting ODFL’s motion for summary judgment when ODFL failed to provide an insurance claim form in response to the July 19, 2017 email would “reward them for circumventing the proper claims process that the Plaintiff’s Insured specifically requested to be made aware of.” DN 28 at 5. This argument is easily disposed of.

ODFL responded to Thomson’s July 19, 2017 email by stating “Please note that on the Security Divider Service-we are not liable for any damages-since it was a shipper load and off load.” DN 27-2 at 13. First, ODFL’s response does not negate the deficiency of the July 19, 2017 email. Second, Secura cites no authority for the proposition that a carrier’s initial denial of liability excuses a claim’s requirements under § 370.3 (b) or excuses a claimant from the terms and conditions of a carrier’s tariff. Accordingly, Secura’s argument is without merit.

C. ODFL’s Tariff and Bill of Lading
*4 Secura further argues that, regardless of whether the July 19, 2017, email constituted a valid claim, (1) ODFL’s tariff was not incorporated by reference into the Bill of Lading, and (2) Secura was “not the shipper” for purposes of the Bill of Lading and cannot be bound by ODFL’s Rules 100 Tariff. Both arguments are without merit.

First, Secura tepidly insinuates that the ODFL’s Rules 100 Tariff is not incorporated by reference into the Bill of Lading because it cannot read the Bill of Lading provided by ODFL. See DN 28 at 6, footnote 1. Secura asks ODFL to produce a more legible copy to dispel any confusion. Id. The Court is sympathetic to Secura’s plight; the submitted Bill of Lading is exceedingly difficult to read. But, “OD Rules 100,” referencing ODFL’s Rules 100 Tariff, is included twice under the section “Accessorial Services Requested.” DN 27-2 at 5. Further, Geoff Stephany’s declaration supports the assertion that ODFL’s Rules 100 Tariff is incorporated by reference and governed the terms of the shipment. DN 27-2 at 1 ¶ 6. It is clear that the Bill of Lading incorporated ODFL Rules 100 Tariff by reference and the ODFL Rules 100 Tariff governed the terms of the shipment. Accordingly, Secura’s argument is without merit.

Second, Secura contends that ODFL’s reliance on Fireman’s Fund McGee vs. Landstar Ranger, Inc., 250 F. Supp. 684, 689 (S.D. Tex. 2003) in its motion for summary judgment is misplaced. The court in McGee stated that a “shipper” must request a copy of the carrier’s tariff if the “shipper is unaware of the ‘rate, classifications, rules and practices…agreed to between the shipper and carrier.’ ” Id. Secura correctly notes that Thomson was the consignee, not the “shipper,” for the transaction at issue. DN 28 at 6. Presumably, while Secura did not fully articulate this argument in its response, Secura argues that as the consignee, Thomson did not have an affirmative obligation to request a copy of ODFL’s Rules 100 Tariff. And, therefore, Thomson cannot be bound by the terms of ODFL’s Rules 100 Tariff because Thomson had no knowledge of the tariff’s terms.

As a consignee, Thomson is presumed to know the effect and applicability of ODFL’s Rules 100 Tariff. “[C]onsignors, carriers and consignees are all presumed to know the existence, effect and applicability of tariff provisions.” Atchison, T.&S.F. Ry. Co. v. Springer, 172 F.2d 346, 349 (7th Cir. 1949) (citing American Railway Express Co. v. Daniel, 269 U.S. 40, 42 (1925)); see also Howe v. Allied Van Lines, 622 F.2d 1147, (3d Cir. 1980), cert. denied, 449 U.S. 992, 101 (1980) (holding military servicemen consignees were limited to remedies available under the contract negotiated by the government and carriers). Further, both the Bill of Lading and ODFL’s Rules 100 Tariff bind Thomson as the consignee. The Bill of Lading provides that “any additional party with an interest to any of said property” and “every service to be performed hereinafter” is subject to ODFL’s Rules 100 Tariff. DN 27-2 at 5. Further, ODFL’s Rules 100 Tariff provides, “[t]he person and/or entity who tenders the shipment to ODFL represents and warrants it has the authority to bind itself, and any other person and/or entity with an interest in the cargo transportation, to the limitation of liability and other terms set forth in this Tariff.” DN 30-1 at 7. Even considering Secura’s implied argument, Secura presents no authority for the proposition that a consignee is exempt from a carrier’s tariff if the consignee did not have knowledge of the tariff’s terms. Accordingly, Secura’s argument is without merit.

V. Conclusion
*5 Thomson’s July 19, 2017 email did not substantially comply with 49 C.F.R. § 370.3 (b). The August 21, 2018 correspondence from Secura’s counsel to ODFL was outside of the nine-month window in which ODFL’s Rules 100 Tariff requires all claims for cargo loss or damage to be submitted. Therefore, neither Thomson or Secura filed a valid claim under the Carmack Amendment for the damage sustained to the glass windows. For the reasons stated herein, the Court will grant ODFL’s motion for summary judgment.

A separate order will be entered in accordance with this opinion.

March 20, 2020

All Citations
Slip Copy, 2020 WL 1430608

Footnotes

1
In Trepel, the Sixth Circuit discussed 49 C.F.R. § 1005.2 rather than 49 C.F.R. § 370.3. The regulations found in 49 C.F.R. § 370.3 went into effect in 1997 and are also found in 49 C.F.R. § 1005.2. The two provisions are identical.

2
The Court also notes that even Secura’s counsel refers to the July 19, 2017 email as “their initial notice of claim.” DN 28 at 5.

2020 WL 1069731

United States District Court, M.D. Alabama, Southern Division.
KENDALL PETERS and SHARON DANNEN-PETERS, Plaintiffs,
v.
LIBERTY BELL MOVING GROUP and DIRECT VAN LINES SERVICES, INC., Defendants.
CASE NO. 1:19-CV-182-WKW
|
Filed 03/05/2020

MEMORANDUM OPINION AND ORDER
W. Keith Watkins UNITED STATES DISTRICT JUDGE
*1 Before the court is Defendant Liberty Bell Moving Group’s motion to dismiss for failure to state a claim and for improper venue. (Doc. # 2.) A review of that motion and Plaintiffs’ response to it (Doc. # 16) reveals that this action, which arises out of the interstate transportation of household goods, needs a roadmap. Defendant Direct Van Lines Services, Inc., the motor carrier that transported and allegedly damaged and lost Plaintiffs’ personal property, has been off the map for more than eleventh months without any service (of process). Plaintiffs and Liberty are operating with a map, but the jurisdictional coordinates are wrong. The parties are making little progress on the litigation roadway. A repleading of the complaint to update the roadmap, as well as proper service, will go a long way in aiding the navigation of this case.

I. BACKGROUND
Plaintiffs allege that, in March 2018, they contracted with Defendant Liberty Bell Moving Group (“Liberty”) and Direct Van Lines Services, Inc. (“Direct Van Lines”) to move their personal belongings 834 miles from Fairfax, Virginia, to Coffee County, Alabama. When Direct Van Lines showed up belatedly with the delivery, many of Plaintiffs’ belongings were lost or damaged. Plaintiffs sued Liberty and Direct Van Lines for breach of contract in the Circuit Court of Coffee County, Alabama. Liberty promptly removed the action, contending that a federal question existed based upon the complete preemptive effect of the Carmack Amendment to the Interstate Commerce Commission Termination Act (“ICCTA”), 49 U.S.C. § 14706, or, alternatively, under the preemption provision of the Federal Aviation Administration Authorization Act (“FAAAA”), 49 U.S.C. § 14501(c)(1).1 Denying Plaintiffs’ motion to remand, the court found that removal jurisdiction was proper under the Carmack Amendment. (Doc. # 13.) Liberty now moves to dismiss the claim against it for failure to state a claim or, alternatively, for improper venue based on a contractual forum-selection clause.

II. DISCUSSION
The purpose of this Order is to give the parties step-by-step directions on how to get this case back on the litigation route. Plaintiffs must file an amended complaint alleging proper grounds for jurisdiction and claims that comply with notice pleading. They also must serve Direct Van Lines or risk the dismissal of this defendant.

First, a prior order established the jurisdictional highway (Doc. # 13), but Plaintiffs have not amended their complaint to reflect the circumstances. In their complaint, Plaintiffs allege a state-law, breach-of-contract claim against Direct Van Lines. But, as previously explained, Direct Van Lines is a carrier to which the Carmack Amendment applies. See Essex Ins. Co. v. Barrett Moving & Storage, Inc., 885 F.3d 1292, 1300 (11th Cir. 2018) (“[T]he Carmack Amendment preempts state-law claims against interstate motor carriers who ‘provide motor vehicle transportation or service subject to jurisdiction under [the Interstate Commerce Act]’ and replaces those state-law claims with its strict-liability provision.”). The breach-of-contract claim against Direct Van Lines is to be replaced by the Carmack Amendment claim, which confers federal question jurisdiction. Plaintiffs never filed an amended complaint. The complaint remains in its original format.

*2 Second, Plaintiffs must replead the breach-of-contract claim against Liberty. Plaintiffs plead that Liberty is a broker. (See Doc. # 1-1, ¶ 7 (alleging that Liberty is “the brokerage company that contracted the business out to Plaintiffs” and “is … responsible and liable for the damaged and missing property”).) The Carmack Amendment “does not apply to brokers”; it only applies to carriers. Essex Ins. Co., 885 F.3d at 1300. While Liberty advanced the FAAAA as an alternative jurisdictional route for removal, there is caselaw that this Act does not preempt state-law, breach-of-contract claims against brokers. See Chatelaine, Inc. v. Twin Modal, Inc., 737 F. Supp. 2d 638, 642–43 (N.D. Tex. 2010) (finding that the FAAAA preempted state-law claims arising from the interstate transportation of goods other than for breach of contract). Liberty cites no authority to the contrary; its briefing is silent on this point. Hence, the state-law, breach-of-contract claim against Liberty remains, but the jurisdictional route is 28 U.S.C. § 1367. Plaintiffs must amend the complaint to add § 1367 as a jurisdictional basis.

Third, the parties’ briefing has uncovered that two contracts are at issue, not one as implied by the complaint. (See Doc. # 2-1, 2-2.) As Liberty points out, and as Plaintiffs acknowledge, there was an interstate bill of lading between Kendall Peters and Direct Van Lines, and there was a Binding Moving Estimate between Kendall Peters and Liberty. Plaintiffs must specify which contracts are the bases for which claims.

Fourth and relatedly, Plaintiffs must identify the basis for Plaintiff Sharon Dannen-Peters’s claims. There is no mention of her in the contracts.

Fifth, Liberty represents that it is now named Relocate US, LLC, but that it was formerly known as Liberty Moving Group, LLC. Plaintiffs should explore whether Liberty needs a new description in the complaint.

Sixth, the Binding Moving Estimate contains a forum-selection clause, which Liberty has invoked. (Doc. # 2.) Plaintiffs gave short shrift to the forum-selection clause. (Doc. # 16, at 7.) Because the state-law, breach-of-contract claim against Liberty is not preempted, Liberty’s enforcement of the forum-selection clause appears to stand on solid footing. Cf. Kawasaki Kisen Kaisha Ltd. v. Regal–Beloit Corp., 561 U.S. 89, 98 (2010) (stating in dicta that, “if [the Carmack Amendment’s] terms apply to the bills of lading here, the cargo owners would have a substantial argument that the Tokyo forum-selection clause in the bills is preempted by Carmack’s venue provisions”).

Plaintiffs must amend the complaint to identify (1) a short and plain statement of the grounds for the court’s jurisdiction, (2) a short and plain statement of the Carmack Amendment claim against Direct Van Lines, showing that each Plaintiff is entitled to relief, and (3) a short and plain statement of the state-law, breach-of-contract claim against Liberty (with Liberty’s correct legal name), showing that each Plaintiff is entitled to relief. See Fed. R. Civ. P. 8(a).

Liberty’s motion to dismiss will be denied without prejudice. However, should Liberty reassert its venue argument, Plaintiffs should be prepared to respond. The court will not extend deadlines further, absent extraordinary circumstances. Finally, Plaintiffs must address the status of Direct Van Lines.

III. CONCLUSION
Based on the foregoing, it is ORDERED as follows:
(1) Plaintiffs are GRANTED to and including March 31, 2020, to file an amended complaint that complies with the Federal Rules of Civil Procedure and the requirements set out in this Order;
(2) Defendant Liberty’s motion to dismiss (Doc. # 2) is DENIED without prejudice to reassert any arguments that may be relevant to the amended complaint; and
(3) Plaintiffs are DIRECTED to show cause, on or before March 31, 2020, why their action against Defendant Direct Van Lines, should not be dismissed without prejudice pursuant to Rule 4(m) of the Federal Rules of Civil Procedure.

*3 DONE this 5th day of March, 2020.

All Citations
Slip Copy, 2020 WL 1069731

Footnotes

1
Hereafter, 49 U.S.C. § 14706 is referred to as the “Carmack Amendment,” and 49 U.S.C. § 14501(c)(1) is referred to as “FAAAA.”