2020 WL 1503455

United States District Court, S.D. New York.
FEDERAL INSURANCE COMPANY, Plaintiff,
v.
CLE TRANSPORTATION, INC., Defendant.
18-CV-11119 (JPO)
|
Signed 03/30/2020
Attorneys and Law Firms
James Paul Krauzlis, Casey & Barnett, LLC, New York, NY, for Plaintiff.

ORDER
J. PAUL OETKEN, District Judge:
*1 Plaintiff Federal Insurance Company, as subrogee of Cranston Trucking Co., brings this action against Defendant CLE Transportation, Inc. for losses arising out of CLE’s failure to deliver a toothsome shipment of confections and potables from New York to California. CLE has entirely failed to appear in this proceeding. Federal Insurance therefore moves for entry of default judgment. For the reasons that follow, the motion is granted.

I. Background
The following facts are taken from the complaint. (See Dkt. No. 1 (“Compl.”).)

Plaintiff Federal Insurance Company is an insurance provider for Cranston Trucking Co. (Compl. ¶ 3.) In 2017, Cranston Trucking contracted with Defendant CLE Transportation, Inc. to transport a trailer of “confections, energy drinks, snacks and candies” from New York to California. (Compl. ¶ 6.) CLE accepted the trailer containing the sundry treats on November 30, 2017. (Compl. ¶ 8.) After arriving in California, CLE parked the trailer in an unsecured location for storage over the weekend. (Compl. ¶ 9.) When CLE returned to retrieve the trailer, it was discovered that the ambrosial cargo had vanished. (Compl. ¶ 10.) Accordingly, the shipment was never delivered, causing Cranston Trucking to suffer a loss of $96,850.35. (Compl. ¶¶ 10, 13.) The loss was covered by Cranston Trucking’s insurance policy with Federal Insurance. (Compl. ¶ 13.)

In 2018, Federal Insurance filed this action against CLE for breach of contract, breach of bailment, and negligence. (Compl. ¶¶ 18–32.) Federal Insurance seeks $96,850,35 in damages, as well as interest and costs. (Compl. ¶ 7.) To date, however, CLE has neither filed an answer nor otherwise appeared in this proceeding. The Clerk of Court entered a certificate of default on March 15, 2019. (Dkt. No. 11.) Federal Insurance has moved for entry of default judgment.

II. Legal Standard
A litigant has defaulted when she “has failed to plead or otherwise defend” against a claim “for affirmative relief.” Fed. R. Civ. P. 55(a). “[A] default is an admission of all well-pleaded allegations against the defaulting party.” Vt. Teddy Bear Co. v. 1-800 Beargram Co., 373 F.3d 241, 246 (2d Cir. 2004). As a general matter, then, “a court is required to accept all of the … factual allegations [of the nondefaulting party] as true and draw all reasonable inferences in its favor.” Finkel v. Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009). Nonetheless, a district court must still determine whether the well-pleaded facts establish “liability as a matter of law.” Id.

III. Discussion
The Court first considers the question of jurisdiction, then analyzes the merits of Federal Insurance’s claims, and then finally turns to the issue of damages.

A. Jurisdiction
Before granting a motion for default judgment, a court must first assure itself that it has subject-matter jurisdiction over the action. See City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 125–26 (2d Cir. 2011). The jurisdictional statement in Federal Insurance’s complaint explicitly premises this Court’s jurisdiction on 28 U.S.C. § 1337, which provides for “original jurisdiction of any civil action or proceeding arising under any Act of Congress regulating commerce … if the matter in controversy for each receipt or bill of lading exceeds $10,000.” (See Compl. ¶ 1.) The jurisdictional statement further avers that Federal Insurance “seeks damages … under the Carmack Amendment to the Interstate Commerce Act” — a provision creating a cause of action against motor carriers responsible for loss or damage to goods transported in interstate commerce. See 49 U.S.C. § 14706(d)(3). At first glance, then, it seems federal jurisdiction is availing.

*2 Curiously, though, the rest of the complaint expressly pleads only state-law causes of action for “breach of contract” (Compl. ¶¶ 18–22), “breach of bailment” (Compl. ¶¶ 23–27), and “negligence” (Compl. ¶¶ 28–32). There is no explicit reference to the federal cause of action created by the Carmack Amendment. (See Compl. ¶¶ 6–32.) Thus, the existence of federal jurisdiction turns on whether Federal Insurance has in fact pleaded a claim under the Carmack Amendment. If so, then jurisdiction exists because the case “aris[es] under [an] Act of Congress regulating Commerce.” § 1337(a). Otherwise, jurisdiction is lacking.1

Federal Rule of Civil Procedure 8(a)(2) requires a “short and plain statement of the claim” that must “give the defendant fair notice of what the … claim is and the grounds upon which it rests.” Arista Records, LLC v. Doe 3, 604 F.3d 110, 119 (2d Cir. 2010) (alteration in original) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 545 (2007)). Here, the complaint states that it seeks “damages for injury to freight shipped in interstate commerce under the Carmack Amendment.” (Compl. ¶ 1 (emphasis added).)2 The complaint also states, at various points, that CLE “owed a contractual and statutory duty” to Cranston Trucking and that the breach of that “statutory” duty led to the complained-of losses. (Compl. ¶ 20 (emphasis added).) The Court concludes that these statements placed CLE on sufficient notice of Federal Insurance’s intent to assert a claim under the Carmack Amendment. Accordingly, federal jurisdiction over the claim exists under § 1337.

B. Liability
Although Federal Insurance3 pleads claims under both state law and the federal Carmack Amendment, only the federal claim can be maintained. The state-law claims are preempted by the Carmack Amendment, which “preempts all state law on the issue of interstate carrier liability.” Aviva Trucking Special Lines v. Ashe, 400 F. Supp. 3d 76, 79 (S.D.N.Y. 2019).

Under the Carmack Amendment, a plaintiff “establishes his prima facie case when he shows delivery in good condition, arrival in damaged condition, and the amount of damages.” Mo. Pac. R. Co. v. Elmore & Stahl, 377 U.S. 134, 138 (1964). In the complaint, Federal Insurance alleges that the shipment of confections, drinks, and candy were initially delivered to CLE in “good order and condition.” (Compl. ¶ 19.) The complaint also alleges that CLE failed entirely to deliver the bequeathed bonbons to California. (Compl. ¶ 20.) Pursuant to its obligations under the insurance contract, Federal Insurance paid at least $96,850.35 for the losses suffered by Cranston Trucking. (Compl. ¶¶ 17–19, 22.) Thus, Federal Insurance has sufficiently alleged the elements of a claim under the Carmack Amendment against CLE.

C. Damages
*3 “Even when a default judgment is warranted based on a party’s failure to defend,” the plaintiff still has the burden to prove damages with a “reasonable certainty.” Credit Lyonnais Secs. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999). Federal Insurance seeks damages in the amount of $96,850.35 for losses paid out to Cranston Trucking. In support of this amount, Federal Insurance submits an affidavit from Charlie Edgerton, an officer of Cranston Trucking, who avers that the lost cargo comprised four shipments valued at $12,792.60, $28,002.90, $40,305.18, and $15,749.67. (Dkt. No. 19 ¶¶ 8, 10, 12, 14.) Edgerton attaches invoices for each of the shipments, as well as a copy of the agreement in which Federal Insurance assented to cover the loss in the amount of $96,850.35. The Court concludes that Edgerton’s affidavit, along with the attached exhibits, supports Federal Insurance’s claim for damages.

Further, Federal Insurance seeks prejudgment interest from December 5, 2017 (the date of both the loss and expected delivery) to the date of this judgment. (Dkt. No. 19 ¶ 23; Dkt. No. 19-2.) Generally, an award of prejudgment interest is within the Court’s discretion. See Endico Potatoes, Inc. v. CIT Group/Factoring, Inc., 67 F.3d 1063, 1071 (2d Cir. 1995). Such an award is warranted in this case, as the Court “is aware of no reason why prejudgment interest would be inappropriate.” Atl. Mut. Ins. Co. v. Napa Transp., Inc., 399 F. Supp. 2d 523, 526 (S.D.N.Y. 2005). As for the applicable interest rate, Federal Insurance asserts — sans citation — that it is entitled to “the legal rate of interest of 8% per annum.” (Dkt. No. 19 ¶ 23.) But courts in Carmack Amendment cases have typically employed the rate provided by 28 U.S.C. § 1961. See Atl. Mut. Ins., 399 F. Supp. 2d at 527.4

Accordingly, Federal Insurance is awarded prejudgment interest at the statutory rate under § 1961 from December 5, 2017, the date of the expected delivery,5 to the date of this judgment.

IV. Conclusion
For the foregoing reasons, Plaintiff’s motion for entry of default judgment is GRANTED. Plaintiff is awarded $96,850.35 in compensatory damages, as well as prejudgment interest at the federal statutory rate from December 5, 2017, to the date of judgment. The Clerk of Court shall enter judgment accordingly.

The Clerk of Court is directed to close the motion at Docket Number 18, and to close this case.

SO ORDERED.

All Citations
Slip Copy, 2020 WL 1503455

Footnotes

1
Diversity jurisdiction is unavailing because Federal Insurance has failed to allege CLE’s citizenship. The complaint itself contains no allegation about CLE’s citizenship. (See Compl. ¶ 4.) The motion for default judgment is accompanied by an affidavit stating that CLE’s principal place of business is located in California. (Dkt. No. 19 ¶ 2.) But “a corporation shall [also] be deemed to be a citizen of any State by which it has been incorporated.” 28 U.S.C. § 1332(c)(1). In the absence of any information concerning CLE’s state of incorporation, the Court cannot determine whether diversity jurisdiction exists.

2
It matters not that this statement appears in the complaint’s jurisdictional statement. Under Rule 8, “[n]o technical form is required,” and “[p]leadings must be construed so as to do justice.” See also Amron v. Morgan Stanley Inv. Advisors Inc., 464 F.3d 338, 343 (2d Cir. 2006) (“The fundamental command of the Federal Rules of Civil Procedure is ‘never to exalt form over substance.’ ” (quoting Phillips v. Girdich, 408 F.3d 124, 128 (2d Cir. 2005))).

3
Federal Insurance is an insurer-subrogee and therefore stands in the shoes of Cranston Trucking, its insured. See Gibbs v. Hawaiian Eugenia Corp., 966 F.2d 101, 106 (2d Cir. 1992).

4
Under § 1961, the interest rate is calculated “from the date of the entry of the judgment, at a rate equal to the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the calendar week preceding[ ] the date of the judgment.” 28 U.S.C. § 1961(a).

5
Some courts have held that prejudgment interest under the Carmack Amendment “begin[s] accruing as of date [the] subrogee pa[ys] subrogor’s claim.” Fireman’s Fund Ins. Co. v. Never Stop Trucking, Inc., No. 08-CV-3445, 2009 WL 3297780, at *3 (E.D.N.Y. Oct. 13, 2009). This Court finds that the better rule is to calculate interest from the date of expected delivery, as a subrogee “should have the same rights” as the insured, and the insured “would no doubt be entitled to prejudgment interest from the date of expected delivery.” Atl. Mut. Ins., 399 F. Supp. 2d at 526.

2020 WL 1493662

United States District Court, N.D. Texas, Dallas Division.
Barry SEINFELD and Marsha Seinfeld
v.
ALLIED VAN LINES, INC.
CIVIL ACTION NO. 3:19-CV-0849-S
|
Signed 03/27/2020
Attorneys and Law Firms
Mark S. Humphreys, Mark S. Humphreys PC, Grand Prairie, TX, for Barry Seinfeld, Marsha Seinfeld.
Vic H. Henry, Emileigh Stewart Hubbard, Henry Oddo Austin & Fletcher PC, Dallas, TX, for Allied Van Lines Inc.

MEMORANDUM OPINION AND ORDER
KAREN GREN SCHOLER, UNITED STATES DISTRICT JUDGE
*1 This Memorandum Opinion and Order addresses Defendant Allied Van Lines, Inc.’s Motion for Summary Judgment [ECF No. 23]. For the following reasons, the Court denies the Motion.

I. BACKGROUND
In 2017, Plaintiffs Barry and Marsha Seinfeld (“Plaintiffs”) contracted with Defendant Allied Van Lines, Inc. (“Defendant”) to ship their personal property from Dallas, Texas, to Sarasota, Florida. See First Am. Compl. ¶¶ 7-11. Plaintiffs claim that some of their property was lost or damaged in transit. See id. ¶¶ 24, 27, 29-30.

Plaintiffs notified Defendant of this loss on a Statement of Claim, which Defendant received on May 31, 2017. See Def.’s App. 4-5. Plaintiffs’ Statement of Claim lists several damaged items, but it does not itemize their losses or specify the amount lost. Rather, it merely states, “[a]ll … Furniture Entire House damaged[,] Missing [and] destroyed.” Id. at 5.

Plaintiffs also attest that they submitted to Defendant their “proof of loss” on May 31, July 13, and August 10, 2017. See Br. in Supp. of Pls.’ Resp. to Def.’s Mot. for Summ. J. (“Resp.”) Exs. 1, 2. These subsequent mailings included a “[l]ist” that identified 53 items purportedly broken or lost during the move. See id. Resp. Ex. 2. For 36 of those items, Plaintiffs listed the original cost, totaling approximately $449,500. The list does not identify the original price of the remaining 17 items, and it does not identify the cost of repairing or replacing any of the 53 purportedly broken or damaged items. See id.

After Defendant allegedly “refused to pay for damages and losses they caused,” Plaintiffs filed this action for breach of contract in Texas state district court in Dallas County. See Notice of Removal 1; First Am. Compl. ¶¶ 34-40. Defendant removed the case to this Court, see Notice of Removal, and filed the present Motion, which is now ripe and before the Court.

II. LEGAL STANDARDS
Courts “shall grant summary judgment if the movant shows 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); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). In making this determination, courts must view all evidence and draw all reasonable inferences in the light most favorable to the party opposing the motion. United States v. Diebold, Inc., 369 U.S. 654, 655 (1962). The moving party bears the initial burden of informing the court of the basis for its belief that there is no genuine issue for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

III. LAW AND ANALYSIS

A. The Carmack Amendment
The Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706, and its implementing regulations promulgated by the Department of Transportation, 49 C.F.R. §§ 1005.1-.7,1 collectively control the processing of claims of lost or damaged property transported by motor carriers. See Salzstein v. Bekins Van Lines, Inc., 993 F.2d 1187, 1189 (5th Cir. 1993). To state a prima facie claim under the Carmack Amendment, a claimant must file “allegations or proof of (a) delivery in good condition, (b) arrival in damaged condition, and (c) the amount of damages.”2 Berlanga v. Terrier Tramp., Inc., 269 F. Supp. 2d 821, 831-32 (N.D. Tex. 2003) (citing Accura Sys., Inc. v. Watkins Motor Lines, 98 F.3d 874, 877 (5th Cir. 1996)). At a minimum, such a filing must: “(1) [c]ontain[ ] facts sufficient to identify the baggage or shipment (or shipments) of the property; (2) assert[ ] liability for alleged loss, damage, injury, or delay, and (3) mak[e] a claim for payment of a specified or determinable amount of money….” 49 C.F.R. § 1005.2(b). Only the third element is at issue.

*2 The third prong of 49 C.F.R. § 1005.2(b) is a “disjunctive test” that allows claims to proceed under two different methods. Williams v. N. Am. Van Lines of Tex., Inc., 731 F.3d 367, 370 (5th Cir. 2013), “The purpose of this disjunctive test is to permit claims to proceed when, even if a specified total amount is not listed, the amount requested can be determined by calculating the values of the individual items.” Id. (citing Salzstein, 993 F.2d at 1190). Claimants may either assert a specific total or list individualized damages which can be aggregated. See id. at 369-70; Salzstein, 993 F.2d at 1190 (finding that a “determinable” claim “ ‘means an amount determinable, as a matter of mathematics, from a perusal of the documents submitted in support of the notice of a claim.’ ” (quoting Bobst Div. of Bobst Camplain, Inc. v. IML-Freight, Inc., 566 F. Supp. 665, 669 (S.D.N.Y. 1983))). In Williams, the Fifth Circuit also clarified that an “estimate of the value” of damaged items could satisfy 49 C.F.R. § 1005.2(b), while an “estimate of the damage [claimant] was seeking” could not. Id. at 369.

The “Carmack Amendment incorporates common law principles for the calculation of damages,” such that the measure of damages will be determined by the “method [that] more accurately reflect[s] the loss actually suffered by the plaintiff.” Nat’l Hispanic Circus, Inc. v. Rex Trucking, Inc., 414 F.3d 546, 552 (5th Cir. 2005) (citations omitted). While replacement cost may be the default measure of damages, see Maass Flanges Corp. v. Totran Tramp. Serv. Inc., Civ. A. No. H-13-1090, 2014 WL 29006, at *4 (S.D. Tex. Jan. 2, 2014) (collecting authorities), the Court has found no authorities claiming that it is the exclusive measure under the Carmack Amendment.

B. Existence of a Specified or Determinable Claim
The Defendant’s Motion focuses only on the third prong of § 1005.2(b). Here, three documents have been offered as evidence of whether Plaintiffs provided the requisite notice: (1) the “List” of damages (referred to by Plaintiffs as their “proof of loss”); (2) the “Statement of Claim” dated May 31, 2017; and (3) an estimate from Cypress Design Group of “some items to be replaced.” See Resp. Ex. 2; Def.’s App. 4-7. Viewing this evidence and drawing all reasonable inferences in the light most favorable to Plaintiffs, the Court finds that the List alone demonstrates the existence of a specified or determinable claim.

The List specifically identified the value of the property allegedly lost that, when aggregated, provided Defendant with a claim of $449,500. See Resp. Ex. 2. Moreover, the amount claimed in the List closely parallels the $441,850 requested in the First Amended Complaint. See First Am. Compl. ¶ 45. See Williams 731 F.3d at 370 (noting that a district court correctly concluded that § 1005.2(b) “ ‘does not require [claimants] to state a specific amount for any items when a claim is first reported,’ but only ‘require[s] her to provide a “specific or determinable amount” in writing for her claim at some point before the nine-month period had passed.’ ” (citation omitted in original)). By sending the List, Plaintiffs were not “hiding the ball,” but were properly advising Defendant of their claim, which helps achieve the goal of the Carmack Amendment—the incentivization of settlements. See Salzstein, 993 F.2d at 1190-91 (identifying the “regulatory purpose” of the Carmack Amendment as “encouraging voluntary settlement”). Although Defendant disputes the authenticity or admissibility of the List as evidence,3 the Court finds that, in the light most favorable to Plaintiffs, the list creates a genuine dispute of material facts that requires the denial of summary judgment.

*3 The Defendant’s arguments that it is entitled to summary judgment because of Plaintiffs’ failure to list a claim in the “Amount Claimed” section of the Statement of Claim, or that the List is insufficient under § 1005.2(b) because it is a mere estimate, are unavailing. While case law before Williams provided some support for Defendant’s argument, see Landess, 977 F. Supp. at 1281 (explaining a purported Fifth Circuit rule that “an estimate is not specific enough”), Defendant’s argument cannot be maintained post-Williams. In Williams, the Fifth Circuit held that an “estimate of the value” of damaged items was sufficiently specific, while an “estimate of the damage [claimant] was seeking” is insufficiently vague. Id. at 369 (emphasis added). Even if the List’s figures qualify as “estimates” within the meaning of Williams, the itemized figures would be estimates of value, rather than estimates of what Plaintiffs were seeking. Nothing contained within the List or the supporting documents suggests that Plaintiffs were claiming $449,500 more or less. See id. (holding that a claim was an estimate of value because it did not make a claim “of damage ‘more or less’ ”).

Finally, the Court finds that the List advised Defendant of a specific or determinable claim even though it only listed the original purchase cost of the allegedly damages items. The Carmack Amendment incorporates common law principles on the measure of damages and dictates that the measure of damages will be determined by the “method [that] more accurately reflect[s] the loss actually suffered by the plaintiff.” Rex Trucking, Inc., 414 F.3d at 552 (citations omitted). The Court has found no authorities suggesting that replacement cost is the exclusive measure of damages. While the use of original costs may suggest that the List’s figures are estimates, that conclusion has little impact post-Williams. Accordingly, viewing all evidence and drawing all reasonable inferences in the light most favorable to Plaintiffs, the Court finds that Defendant is not entitled to summary judgment.

IV. CONCLUSION
For the foregoing reasons, the Court denies Defendant’s Motion for Summary Judgment.

SO ORDERED.

All Citations
Slip Copy, 2020 WL 1493662

Footnotes

1
Although the First Amended Complaint only raises state law claims, see First Am. Compl. 3-4 ¶¶ 34-40, the Court resolves this Motion according to the Carmack Amendment and its attendant regulations, because the Carmack Amendment “ ‘so forcibly and completely displace[s] state law that [Plaintiffs’] cause of action is either wholly federal or nothing at all.’ ” See Hoskins v. Bekins Van Lines, 343 F.3d 769, 773 (5th Cir. 2003) (second alteration added) (quoting Carpenter v. Wichita Fails Indep. Sch. Dist., 44 F.3d 362, 366 (5th Cir. 1995)).

2
Notably, carriers “may contractually limit the time for filing claims.” Salzstein, 993 F.2d at 1189 (citing 49 U.S.C. § 11707(e)). Here, the parties contracted for a nine-month deadline for filing claims. See Def.’s App. 4-5, ¶ 11 (“As a condition precedent to recovery, a claim for any loss, damage, injury, or delay, must be filed electronically … within (9) months after delivery[.]”). Accordingly, only claims filed within nine months of delivery can satisfy the filing requirements. See Landess v. N. Am. Van Lines, Inc., 977 F. Supp. 1274, 1278-80 (E.D. Tex. 1997). As such, Plaintiffs’ Complaint, filed well outside of the nine-month limitations period, does not satisfy Plaintiffs’ obligation to file a claim for specified or determinable amount of money

3
Defendant challenges the admissibility of this evidence, arguing that the List has not been properly authenticated and that the supporting affidavit contains inadmissible hearsay. See Reply 3-4 (citing Pegram v. Honeywell, Inc., 361 F.3d 272, 285 (5th Cir. 2004)). The Court, however, finds that the List is competent summary judgment evidence because nothing suggests that it “is not capable of being admitted at … trial.” Maurer v. Independence Town, 870 F.3d 380, 384 (5th Cir. 2017) (citing LSR Consulting, LLC v. Wells Fargo Bank, N.A., 835 F.3d 530, 534 (5th Cir. 2016)). Indeed, the Court finds that the List likely will be admitted. The Court does not resolve Defendant’s hearsay objection, however, because it does not affect the disposition of the present Motion.