May 2024

Smallwood v. ACE Property & Casualty Ins. Co.

United States District Court, E.D. Virginia.

GEORGE SMALLWOOD, et al., Plaintiffs,

ACE PROPERTY & CASUALTY INSURANCE CO., et al., Defendants.

Civil Action No. 3:23cv67 (RCY)

Filed 04/23/2024

MEMORANDUM OPINION

Roderick C. Young United States District Judge

*1 This is a declaratory judgement action brought by Plaintiff George Smallwood (“Plaintiff” or “Smallwood”), seeking a determination of insurance coverage.¹ The case is before the Court on Defendant ACE Property & Casualty Insurance Company’s (“ACE”) Motion to Dismiss the Amended Complaint (ECF No. 36). The motion has been fully briefed, and the Court dispenses with oral argument because the facts and legal contentions are adequately presented in the materials before the Court, and oral argument would not aid in the decisional process. E.D. Va. Loc. Civ. R. 7(J). For the reasons stated below, the Court will grant ACE’s Motion to Dismiss.

I. BACKGROUND

When deciding a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, the Court “accept[s] as true the plaintiff’s well-pleaded allegations and views all facts and draws all reasonable inferences in the light most favorable to plaintiff.” Philips v. Pitt Cnty. Mem’l Hosp., 572 F.3d 176, 180 (4th Cir. 2009). Such a standard, however, does not require accepting any unreasonable inferences or plaintiff’s legal conclusions. Id. Additionally, a court may consider any documents attached to the complaint. E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 448 (4th Cir. 2011); Phillips v. LCI Int’l Inc., 190 F.3d 609, 618 (4th Cir. 1999) (stating that “a court may consider [a document outside the complaint] in determining whether to dismiss the complaint” where the document was “integral to and explicitly relied on in the complaint” and there was no authenticity challenge). Applying these standards, the Court construes the facts in the Complaint, including any attached documents, as follows.

A. Plaintiff’s Injury

In June of 2016, Kelley & Associates Construction Management, Inc. (“Kelley & Associates”) hired Plaintiff to oversee the transport of materials that it had purchased to construct an Express Oil Change in Mechanicsville, Virginia (the “Express Oil Change”). Am. Compl. ¶ 17, ECF No. 14; see Am. Compl. ¶¶ 9, 12, 14–17. Plaintiff was acting in that capacity on June 16, 2016, when he requested that Bell Nurseries and Alsop Trucking, Inc. (“Alsop”) each provide a driver and flatbed tractor trailer (“tractor trailer(s)” or “truck(s)”) to assist him in picking up and transporting construction materials to the Express Oil Change. Id. ¶¶ 17, 19. Thereafter, Plaintiff “oversaw the successful loading of … construction materials in Winchester, Virginia” onto the three tractor trailers, and “coordinate[d their] same day delivery” to the Express Oil Change. Id. ¶ 21.

*2 Plaintiff and the drivers of the other tractor trailers encountered limited parking when they arrived at the Express Oil Change construction site. Id. ¶¶ 22–23. There was also limited space for Plaintiff and the other drivers to offload the materials they had in tow. Id. ¶ 23. As a result, each tractor trailer was “required to pull into a narrow area, off-load one side of its trailer, then turn around and be re-positioned so that the other side of the trailer could be off-loaded.” Id. Plaintiff first assisted the Bell Nurseries driver in successfully offloading both sides of the tractor trailer. Id. ¶ 24. Plaintiff did so by utilizing a truck-mounted Moffett forklift. Id. ¶ 25.

Plaintiff then turned his attention to the Alsop tractor trailer which was “loaded with concrete block [sic] on one side and bags of cement topped with rebar bundles on the other.” Id. ¶ 27; see id. ¶¶ 26–27. Plaintiff first used hand signals to assist Alsop’s driver in positioning his tractor trailer for offloading. Id. ¶ 26. Plaintiff then successfully offloaded the concrete block with a Moffett forklift. Id. ¶ 28. Next, Plaintiff assisted Alsop’s driver in repositioning the Alsop tractor trailer so that the remainder of the construction materials could be offloaded. Id. It soon became apparent that the remainder of the load—the bags of cement topped with rebar bundles—was too tall for the Moffett forklift. See id. ¶ 29. Plaintiff asked Paul Stevens (“Stevens”), the site supervisor, if he had anything on site capable of reaching the rebar bundles. Id. Stevens offered to assist Plaintiff by using an on-site Bobcat skid steer loader (“Bobcat”) despite lacking the proper training to do so. Id. ¶ 30. Unaware that Stevens was not properly trained to operate the Bobcat, Plaintiff accepted Stevens’s assistance. Id. ¶ 31.

Soon thereafter, Stevens left the Alsop tractor trailer and “returned driving a Bobcat … fitted with ‘tines’ or ‘forks[.]’ ” Id. ¶ 32. Plaintiff then climbed atop the Alsop trailer and instructed Stevens, using voice commands and hand signals, on how to properly navigate the Bobcat over to the Alsop trailer. Id. ¶¶ 29, 33–34. Once the Bobcat was loaded with rebar from the Alsop trailer, Plaintiff climbed down off the trailer to continue helping Stevens maneuver the Bobcat. See id. ¶¶ 35–36. Using hand signals once again, Plaintiff assisted Stevens with turning the Bobcat around so that it would face the delivery site where they would be dropping off the rebar. Id. ¶¶ 37–38. Plaintiff then turned to face the delivery site and began walking toward it, maintaining a distance of about ten feet from the Bobcat while continuing to give Stevens hand-signal guidance. See id.; Am. Compl. Ex. 4 (“Chesterfield County Compl.”) ¶ 34, ECF No. 14-4. However, Stevens improperly failed to “lower the hydraulic lift cylinder to balance the weight of the load.” Am. Compl. ¶ 38. When Stevens then attempted to move forward without lowering the hydraulic lift cylinder, it caused the Bobcat to jolt forward, resulting in a weight shift that toppled the Bobcat. Id. ¶ 40; see id. ¶¶ 41–43. As the Bobcat tipped over onto its front tires and extended forks, the rebar fell off the loader, “striking [Plaintiff] and pinning him to the ground.” Id. ¶ 41. Plaintiff was then trapped under the rebar for several minutes, suffering a “fractured left ankle, fractured arm requiring surgery, and permanent crush injuries to his left foot.” Id. ¶ 42.

B. The ACE Policy

At the time of the June 16, 2016, incident, the Alsop tractor trailer was covered by a Commercial Auto Policy, Policy No. H08673494, issued by ACE (the “Policy”). Id. ¶ 16; see Mem. Supp. Mot. Dismiss Ex. A (“ACE Policy”) 56–57², ECF No. 37-1.³ The Policy provided liability and uninsured/underinsured motorist coverage for the Alsop tractor trailer. Id. The provisions of the Policy most relevant for present purposes are excerpted below:

*3 UNINSURED MOTORISTS ENDORSEMENT (VIRGINIA)

A. Words And Phrases With Special Meaning

The following words and phrases have special meaning throughout this endorsement and appear in quotation marks when used:

* * *

6. “Covered auto” means a motor vehicle or a “temporary substitute”, with respect to which the “bodily injury” or “property damage” liability coverage of the policy applies.

* * *

8. “Insured” means any person or organization qualifying as an insured in the Who Is An Insured section of this endorsement.

* * *

11. “Occupying” means in, upon, using, getting in, on, out of or off.

* * *

13. “Underinsured motor vehicle” means a motor vehicle when, and to the extent that, the total amount of “bodily injury” and “property damage” coverage applicable to the operation or use of the motor vehicle and “available for payment” for such “bodily injury” or “property damage”, including all bonds or deposits of money or securities made pursuant to Article 15 (Section 46.2-435 et seq.) of Chapter 3 of Title 46.2 of the Code of Virginia, is less than the total amount of uninsured motorist coverage afforded any person injured as a result of the operation or use of the motor vehicle.

14. “Uninsured motor vehicle” means a motor vehicle:

a. For which:

1. There is no “bodily injury” liability insurance and “property damage” liability insurance in the amounts specified by Section 46.2-472 of the Code of Virginia.

2. There is such insurance but the insurer writing the insurance denies coverage for any reason whatsoever, including failure or refusal of the insured to cooperate with the insurer.

3. There is no bond or deposit of money or securities in lieu of such insurance.

4. The owner of the vehicle has not qualified as a self-insurer under the provisions of Section 46.2-368, or

5. The owner or operator of the motor vehicle is immune from liability for negligence under the laws of the Commonwealth or the United States. A motor vehicle shall be deemed uninsured if its owner or operator is unknown. If the owner or operator of any motor vehicle that causes “bodily injury” or “property damage” to the “insured” is unknown, and if the damage or injury results from an “accident” where there has been no contact between that motor vehicle and the motor vehicle occupied by the “insured”, or where there has been no contact with the person of the “insured” if the “insured” was not “occupying” a motor vehicle, then for the “insured” to recover under this endorsement pursuant to Paragraph a. of this definition, the “accident” shall be reported promptly to either:

1. The insurer or;

2. A law enforcement officer having jurisdiction in the county or city in which the “accident” occurred. If it is not reasonably practicable to make the report promptly, the report shall be made as soon as reasonably practicable under the circumstances.

b. Which is an “underinsured motor vehicle”.

* * *

D. Who Is Insured

* * *

2. Anyone else “occupying” a “covered auto”.

ACE Policy 56–57.

*4 To reiterate, the Policy covered only the Alsop tractor trailer. Am. Compl. ¶ 16. It is unclear, however, whether the Bobcat that ultimately tipped over and pinned Plaintiff was insured at the time of the incident. Plaintiff makes no explicit allegations regarding the Bobcat’s insurance, alleging only that it was owned by Envirostruct, LLC. Chesterfield County Compl. ¶ 34.⁴

II. LEGAL STANDARD

“A motion to dismiss under Rule 12(b)(6) tests the sufficiency of a complaint; importantly, it does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.” Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992) (citing 5A Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1356 (1990)). Dismissals under Rule 12(b)(6) are generally disfavored by the courts because of their res judicata effect. Fayetteville Invs. v. Com. Builders, Inc., 936 F.2d 1462, 1471 (4th Cir. 1991). Federal Rule of Civil Procedure 8 only requires that a complaint set forth “ ‘a short and plain statement of the claim showing that the pleader is entitled to relief,’ in order to ‘give the defendant fair notice of what the … claim is and the grounds upon which it rests.’ ” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). While the complaint’s “[f]actual allegations must be enough to raise a right to relief above the speculative level,” “detailed factual allegations” are not required in order to satisfy the pleading requirement of Federal Rule 8(a)(2). Id. (citations omitted). “[A] motion to dismiss for failure to state a claim should not be granted unless it appears certain that the plaintiff can prove no set of facts which would support its claim and would entitle it to relief.” Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993). The plaintiff’s well-pleaded allegations are assumed to be true, and the complaint is viewed in the light most favorable to the plaintiff. Id. (citations omitted); see also Martin, 980 F.2d at 952.

However, “[t]o 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 (2009) (quoting Twombly, 550 U.S. at 570). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. “Labels and conclusions,” a “formulaic recitation of the elements,” and “naked assertions” without factual enhancement are insufficient. Id.

III. DISCUSSION

The present dispute centers around whether Plaintiff qualifies as an insured under the ACE Policy. See Mem. Supp. Mot. Dismiss (“Mem. Supp.”) 12–19, ECF No. 37; Pl.’s Mem. Opp’n Def.’s Mot. Dismiss (“Mem. Opp’n”) 8–15, ECF No. 43. If Plaintiff cannot qualify as an insured under the Policy, his Complaint must be dismissed for failure to state a claim. Alternatively, if the alleged facts support Plaintiff’s claim to “insured” status, his Complaint will survive the Rule 12(b)(6) stage. For the reasons outlined below, the Court finds that Plaintiff has no viable avenue to establishing his status as an “insured” under the Policy. The Court will therefore dismiss Plaintiff’s Complaint.

A. Plaintiff Does Not Qualify as an Insured Under the Policy

*5 Plaintiff’s argument for coverage is as follows: that he was “using” and/or “occupying” the Alsop tractor trailer at the time of the incident, and, therefore, he is an “insured” entitled to uninsured or underinsured motorist coverage under the Policy. Am. Compl. ¶¶ 85–87, 89; see Mem. Opp’n 8–15. This argument fails at the first step.

1. Insurance Contract Interpretation

Before analyzing the Policy itself, a brief outline of the relevant legal principles is in order. To begin with, “[a] federal court sitting in diversity jurisdiction must apply the choice-of-law rules of the forum state.” Phila. Indem. Ins. Co. v. Assoc’d Univs., Inc., 2021 WL 4484556, at *5 (W.D. Va. Sept. 29, 2021) (citing Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941)). Here, the forum state is Virginia, and “[i]n insurance coverage disputes, the general rule in Virginia is that ‘the law of the place where an insurance contract is written and delivered controls issues as to its coverage.’ ” Id. (quoting Buchanan v. Doe, 246 Va. 67, 70 (1993)). Here, the Policy was formed and issued in Virginia, and the parties do not dispute the application of Virginia law. See Mem. Supp. 5–6, 8–10, 12; Mem. Opp’n 8–15. Virginia, in turn, has adopted the Eight Corners Rule under which the Court may “look primarily at the underlying complaints and the insurance policy to determine if there is a potential for coverage.” CACI Int’l, Inc. v. St. Paul Fire & Marine Ins. Co., 566 F.3d 150, 155 (4th Cir. 2009); Am. Online, Inc. v. St. Paul Mercury Ins. Co., 207 F. Supp. 2d 459, 465 (E.D. Va. 2002) (“[T]he ‘eight corners rule’ requires review of ‘(1) the policy language to ascertain the terms of the coverage and (2) the underlying complaint to determine whether any claims alleged therein are covered by the policy.’ ”).

2. Plaintiff Was Not “Using” or “Occupying” the Alsop Tractor Trailer at the Time of the Incident

Cognizant of these principles, the Court turns to the parties’ arguments. ACE argues that Plaintiff was not “using” the insured vehicle (the Alsop tractor trailer) because (a) there was no causal connection between the Alsop tractor trailer and Plaintiff’s injuries, and (b) Plaintiff’s unrelated activities with respect to the Bobcat affirmatively demonstrate that he was not using the Alsop tractor trailer. See Mem. Supp. 13–18. Consequently, ACE argues that Plaintiff is not entitled to coverage under the Policy. See id. at 12. Plaintiff responds that he is entitled to coverage because he was “using” the Alsop tractor trailer as contemplated by Virginia Code § 38.2-2206. Mem. Opp’n 8, 10; see Mem. Opp’n 10–13. Plaintiff also argues that he entitled to coverage because he was “occupying” the Alsop tractor trailer pursuant to the Policy. Mem. Opp’n 8, 10, 12–14; see Mem. Opp’n 10–14. The Court considers these arguments below.

a. “Use”

Virginia Code § 38.2-2206(A) mandates that motor vehicle liability insurance policies provide uninsured and underinsured coverage to persons insured under those policies. See VA. CODE ANN. § 38.2-2206(A). In turn, § 38.2-2206(B) defines an “insured” as “any person who uses the motor vehicle to which the policy applies, with the express or implied consent of the named insured.” Id. § 38.2-2206(B) (emphasis added). The “critical inquiry” in determining whether a person has “used” a vehicle such as to render them an “insured” involves assessing “whether there was a causal relationship between the incident and the employment of the insured vehicle as a vehicle.” Slagle v. Hartford Ins. Co., 267 Va. 629, 635 (2004).

*6 Turning to the parties’ arguments, Defendant urges dismissal of Plaintiff’s Complaint on the grounds that Plaintiff was not “using” the Alsop tractor trailer when he was injured. Mem. Supp. 12. Defendant raises three main points in support of this contention. See id. at 13–18. First, Defendant argues that the Complaint fails to allege facts demonstrating a causal relationship between the Alsop tractor trailer and Plaintiff’s injuries. See id. at 13–15. Defendant relies heavily on United States Fire Insurance Company v. Parker for this portion of its argument. See id. at 13–14 (citing U.S. Fire Ins. Co. v. Parker, 250 Va. 374 (1995)). Defendant next argues that Plaintiff’s use of hand signals to direct the Bobcat—a separate vehicle—does not show that he was “using” the Alsop tractor trailer. Id. at 15–16. In so arguing, Defendant distinguishes the instant facts from those of Slagle v. Hartford Insurance Company of the Midwest. See id. (citing Slagle, 267 Va. at 637–38). In Slagle, the Supreme Court of Virginia held that directing an insured vehicle with hand signals can constitute use of such vehicle. See Slagle, 267 Va. at 637–38. Defendant contrasts the facts from Slagle with the present ones by emphasizing that Plaintiff’s hand signals were directed at the Bobcat rather than the insured Alsop tractor trailer. Mem. Supp. 15–16. Lastly, Defendant contends that Plaintiff’s actions at the time of the accident (i.e., directing the Bobcat) confirm he was not using the Alsop tractor trailer. See id. at 16–18.

Plaintiff counters that the caselaw does support his position that he was “using” the Alsop tractor trailer at the time he was injured. Specifically, Plaintiff relies on Bratton v. Selective Insurance Company of America and an alternative reading of Slagle to argue that an individual need not be “using” a vehicle in the strictest sense of the word for their actions to nevertheless qualify as “use” under Virginia Code § 38.2-2206(B). See Mem. Opp’n 8–10. Plaintiff also questions the Parker holding, suggesting that it “might be decided differently today” in light of the “Moore [v. Progressive Universal Insurance Company], Bratton, and Slagle holdings.” Id. at 10. Plaintiff then turns to the facts alleged here and argues that his “numerous and extensive interactions with the Alsop tractor trailer, the Alsop driver, and the trailer, satisfy the critical inquiry as to whether there was a causal relationship between the incident resulting in [his] injuries and the employment of the Alsop tractor trailer.” Id. at 10; see id. at 10–12. Finally, Plaintiff argues that his “ ‘use’ of the Alsop trailer is consistent with a number of other Virginia Supreme Court holdings.” Id. at 12; see id. at 12–13 (citing Great Am. Ins. Co. v. Cassell, 239 Va. 421 (1990); Edwards v. Gov’t Emps. Ins. Co., 256 Va. 128 (1998); Randall v. Liberty Mut. Ins. Co., 255 Va. 62 (1998)).

Before proceeding to its more substantive analysis, the Court first notes that the Policy, in accordance with Virginia Code § 38.2-2206(B), included an “Uninsured Motorists Endorsement.” See ACE Policy 56. Pursuant to that endorsement, any person “occupying” a covered motor vehicle is considered an “insured” under the Policy. Id. at 57. “Occupying” is further defined as “in, upon, using, getting in, on, out of or off.” Id. at 56 (emphasis added). Thus, consistent with the Virginia Code mandate, any person “using” a covered motor vehicle is considered an “insured” under the ACE Policy. See id. Importantly, “whether the obligation is found in the insurance policy itself, or can be found only in the Code, the meaning of ‘use’ or ‘using’ is the same because ‘[t]he provisions of … Code § 38.2-2206 are part of the contract of insurance.’ ” Bratton v. Selective Ins. Co. of Am., 290 Va. 314, 329 (2015) (quoting Dyer v. Dairyland Ins. Co., 267 Va. 726, 731 (2004)).

Under Virginia law, the “critical inquiry” in determining whether a person has “used” a vehicle such as to render them an “insured” involves assessing whether there exists a causal relationship between the incident and the “employment of the insured vehicle as a vehicle.” Slagle, 267 Va. at 635. Because resolution of the “use” inquiry necessarily depends upon the specific factual circumstances of a case, it is not amenable to “resolution by strict guidelines or a set formula.” Id. The Supreme Court of Virginia has nevertheless established general guidelines for analyzing “use” in the context of the Virginia Code. See Moore v. Progressive Univ. Ins. Co., 661 F. Supp. 3d 469, 476 (E.D. Va. 2023) (discussing Supreme Court of Virginia caselaw). These guidelines include that (1) “[t]he injured person must be using a vehicle as a vehicle and as an integral part of [the user’s] mission”; (2) “[a]ctual use of the vehicle as a vehicle is not restricted to its transportation function”; and (3) “[u]se of the vehicle need not be the direct, proximate cause of the injury in the strict legal sense.” Bratton, 290 Va. at 330 (quoting Slagle, 267 Va. at 636); see Moore, 661 F. Supp. 3d at 476.

*7 Acknowledging the “infinite variety of factual patterns in which the question arises,” the Supreme Court of Virginia has declined to further delineate the parameters of the terms “use” or “using” for the purposes of a motor vehicle insurance policy. Bratton, 290 Va. at 330. Instead, the Supreme Court of Virginia has noted that “adequate guidance … can be found by reviewing [its] prior decisions on the issue of ‘using’ a vehicle.” Id. (citing Simpson v. Va. Mun. Liab. Pool, 279 Va. 694, 699–701 (2010); Slagle, 267 Va. at 634–37). Heeding this guidance, the Court shifts its focus to the relevant caselaw. Importantly, the Court “need not review the full body of case law pertaining to whether an individual was ‘using’ a vehicle.” See Bratton, 290 Va. at 330. Rather, the Court will focus on several cases that present “factual situations particularly instructive for the facts of this case.” Id.

The first of those cases is Cassell. There, fire fighters—including Cassell—parked a pumper truck and tanker truck, the insured vehicles, on a city street near a disabled car that was on fire. Cassell, 239 Va. at 422. Cassell rode to the scene in the pumper truck “that was parked with its lights burning 20 to 25 feet from the car.” Id. The fire trucks were positioned to “restrict or influence the flow of traffic and to provide a protective barrier for the fire fighters.” Id. Additionally, a fire hose connected to Cassell’s pumper truck was used to extinguish the fire. Id. Cassell later used a crowbar from the same truck to open the hood of the disabled car. Id. Shortly thereafter, Cassell was struck and killed by a hit-and-run driver. When he was hit, Cassell was standing in the street approximately twenty to twenty-five feet from his truck completing a required report using a clipboard from his truck. Id. at 423.

The Supreme Court of Virginia ultimately held that Cassell was “using” the pumper truck pursuant to Virginia Code § 38.2-2206(B). Id. at 424. Several facts apparently compelled such a conclusion. See id. First, the Court noted that the fire fighters had parked the pumper and tanker trucks on opposite sides of the disabled car to “creat[e] a barrier to control traffic and protect the fire fighters.” Id. Next, the Court noted that Cassell’s truck was “used to pump water (which was stored on the truck) through hoses to extinguish the fire.” Id. Further, the clipboard and pad that Cassell used to complete the required fire report were transported to the scene in the insured fire truck and to be returned to said fire truck afterward. Id. And in fact, “[i]tems … taken from Cassell’s truck to extinguish the fire were being returned to the truck when the accident occurred.” Id. Taken together, these facts indicate that the “use of the fire truck … was an integral part of the fire fighters’ mission,” a mission that had “not yet been completed when the accident occurred.” Id. Thus, because Cassell was “engaged in a transaction essential to the use of the fire truck when he was killed,” the Supreme Court of Virginia held that he was in fact “using” the truck pursuant to Virginia Code § 38.2-2206(B). Id.

In reaching this conclusion, the Cassell Court contrasted its facts with those of Insurance Company of North America v. Perry. See id. (citing Ins. Co. of N. Am. v. Perry, 204 Va. 833 (1964)). In Perry, the decedent, Peterson, was an on-duty police officer who had left his police car to serve a warrant. Perry, 204 Va. at 834. Peterson parked his cruiser, placed the keys in his pocket, and exited the vehicle. Id. He and another officer walked down the road approximately 164 feet away from the police cruiser. Id. Peterson was then struck and killed by another driver. Id. On appeal, the Supreme Court of Virginia held that Peterson was not “using” the insured cruiser because at the time he was struck and killed, he was (1) 164 feet away from the parked cruiser, and (2) engaged in a separate transaction (i.e., serving a warrant). Id. at 838. Later clarifying the import of Perry’s facts, the Casell Court noted that Cassell—unlike Peterson—was using the insured vehicle because he “was engaged in a transaction essential to [the use of the insured vehicle] when he was killed.” Cassell, 239 Va. at 424.

*8 Five years after the Cassell decision, the Supreme Court of Virginia revisited “use” in Parker. Parker, a landscape gardener, drove a pickup truck loaded with her co-workers, cabbages, and landscaping tools to a worksite where they were to plant the cabbages. Parker, 250 Va. at 376. A two-way radio was installed in the pickup truck, and the workers were required to leave the radio “on” at all times, “enabling them to receive messages from their supervisor.” Id. Upon arrival at the worksite, and without having received any instructions to do so, Parker “parked the truck … in such a position as to provide a ‘safety barrier’ to protect” her and her co-workers from speeding motorists. Id. Parker also left a door of the truck open while planting cabbages so that she and the others could hear the radio. Id. Sometime later, an individual named Healy was driving through the same area when he “lost control of [the] motor vehicle he was operating[,] … struck the truck [Parker had driven,] and then struck Parker as she was digging a hole in a flower bed 12 to 15 feet from the truck.” Id. At the time Parker was struck, the workers had not yet completed their task; some cabbages remained in the truck, and they still needed to clean up the area. Id.

Following this incident, Parker sued Healy. Id. at 375. Healy’s insurance company then initiated a declaratory judgment action against Parker seeking a declaration that Parker was not an insured under the underinsured motorist portions of Healy’s policy. Id. The lower court ruled in Parker’s favor, but the Supreme Court of Virginia reversed. See id. at 377–78. In so doing, the Parker Court distinguished the facts in front of it from those in Cassell:

Unlike the deceased in Cassell, the claimant in the present case was not engaged in a transaction essential to the use of the pickup truck when she was injured … [because] she was not utilizing the truck as a vehicle at that time. She was 12 to 15 feet away from the truck with her foot on a shovel in the act of digging a hole when struck. The facts that the workers, independently and not because of any requirement by [their employer], positioned the truck (which had no special, emergency warning lights) as a barrier, and that the radio was operating at the time … do[ ]not bring this case within the Cassell precedent. In Cassell, the fire truck’s lights were burning, a hose connected to the truck used water carried on the truck to extinguish the fire, and emergency vehicles suitable for use to control traffic were utilized as barriers at the scene. Here, the truck merely was used as a means of transportation so that Parker could complete her landscaping duties.

Id. at 378. For these reasons, the Parker Court entered judgment in favor of the insurer “declaring that it does not owe underinsured motorist coverage to Parker under the statutorily mandated provisions of its insurance contract.” Id.

Two more recent instances of the Supreme Court of Virginia examining “use” are Slagle and Bratton. Slagle involved a scenario wherein the Plaintiff, Slagle, used hand signals to direct the driver of an insured tractor trailer. Slagle, 267 Va. at 631–32. The driver of the tractor trailer observed Slagle’s hand signals via the tractor’s side view mirror while Slagle himself stood about ten to thirty feet behind the vehicle. Id. at 632. While Slagle was directing the tractor trailer into the desired position, he was struck and injured by a separate vehicle. Id. Slagle proceeded to file a declaratory judgment action against Hartford Insurance Company of the Midwest, the insurer of the tractor trailer, seeking a “declaration that he was an insured under the underinsured motorist provisions of the policy Hartford had issued to Vico,” the owner of the tractor trailer. Id.

Ultimately, the Supreme Court of Virginia held that “Slagle was [‘]using[’] the tractor[ ]trailer in a manner contemplated by Code § 38.2-2206(B).” Id. at 638. The Court first stated that the tractor trailer was “clearly … being used as a ‘vehicle,’ ” as it was “being employed to transport and … position … construction equipment.” Id. at 637. The bigger issue, per the Court, concerned “whether Slagle [himself] was using it in that capacity.” Id. Finding that he was so “using” the tractor trailer, the Court noted that “Slagle’s hand signals to the driver effectively determined the direction and movement of the tractor[ ]trailer and were required for the driver for the completion of the intended maneuver of the vehicle.” Id. In other words, “there was a causal relationship between the incident in which Slagle was injured and the employment of the tractor[ ]trailer as a vehicle.” Id. Given that “the critical inquiry in determining the issue of use … [concerns] whether there was a ‘causal relationship between the incident and the employment of the insured vehicle as a vehicle,’ ” the Court was satisfied that Slagle’s hand signals qualified as a “use” of the tractor trailer. Id. at 637–38 (citing Parker, 250 Va. at 377).

*9 Finally, Bratton involved a paving superintendent at a construction site who regularly used his pickup truck as a “safety tool” by placing it between the workers and the traffic, outfitting it with a flashing and spinning safety strobe light, turning on its headlights and hazard lights, and periodically moving it to remain near workers on the site. Bratton, 290 Va. at 320–21. When Slone, a dump truck operator working on the site, exited his dump truck to check for spillage, he was struck and killed by a drunk driver. Id. The Court determined that Slone was “using” the paving superintendent’s pickup truck at the time of accident, even though he was approximately 200 feet away from the pickup when he was struck by the passing car. Id. at 331. Because the purpose of the superintendent’s pickup truck was to protect the workers, functioning as “a rolling barricade … among all the other safety equipment at the [jobsite],” and because its equipment made it a specialized vehicle “designed to be used for more than simply transportation,” Slone was held to be “using” it for his road construction mission. Id. Thus, the Court held that Slone and his estate were entitled to underinsured motorist coverage. Id.

With a full picture of the relevant caselaw now before it, the Court holds that the facts alleged are insufficient to establish that Plaintiff was “using” the Alsop tractor trailer at the time he was injured. Simply, the alleged facts align much more closely with the likes of Parker⁵and Perry than any of Cassell, Slagle, or Bratton.

Plaintiff, like Parker, was (1) less than twenty feet away from the insured vehicle at the time he was injured, see Parker, 250 Va at 376; and (2) engaged in a transaction separate from—and nonessential to the use of—the insured vehicle (here, directing the Bobcat; in Parker, planting the cabbages), see id. at 377–78. Accordingly, Plaintiff, like Parker, was “not utilizing the [Alsop] truck as a vehicle”—i.e., “using” it—at the time he was injured. Id. at 378. Rather, Plaintiff and his coworkers had merely utilized the Alsop tractor trailer to transport construction materials to the site. Compare id. (“Here, the truck merely was used as a means of transportation so that Parker could complete her landscaping duties.”), with Am. Compl. ¶ 19 (“Alsop … provided a driver and [truck] to pick up and transport … construction materials to the site.”).

To be sure, Plaintiff’s overall mission was “not complete until all construction material[s] were safely off-loaded to the … ‘drop zone.’ ” Am. Compl. ¶ 19. However, the broad task of “pick[ing] up and transport[ing] … construction materials” to the Express Oil Change site is distinct from the more discrete task of “using” the Alsop tractor trailer. See id. The Parker holding crystallizes this point: though Parker and her coworkers had taken the insured truck to the site and would, like Plaintiff, need to return to it to retrieve necessary materials, Parker herself was not “using” the truck at the time she was injured because she was engaged in a separate, distinct task—planting the cabbages. See Parker, 250 Va. at 376–78. So too here. It is immaterial that Plaintiff would have needed to return to the Alsop tractor trailer to continue the process of offloading construction materials. Instead, all that matters for purposes of the “use” inquiry is that Plaintiff was engaged in a different task—directing Stevens’s operation of the Bobcat—when he was injured. Because that task was not “a transaction essential to the use of [the Alsop tractor trailer],” id. at 378, Plaintiff was not “using” the Alsop tractor trailer at that time. Further bolstering this conclusion is the fact that use of the Alsop tractor trailer was no longer an “integral part” of Plaintiff’s mission at the time he was injured. Bratton, 290 Va. at 330 (quoting Slagle, 267 Va. at 636). Rather, Plaintiff and Stevens had already safely retrieved construction materials from the tractor trailer. Thus, by the time Plaintiff was injured, his mission had undoubtedly shifted to transporting such materials to their drop zone. The only vehicle integral to that mission was the Bobcat.

*10 For the reasons outlined above, Plaintiff’s allegations are insufficient to establish the requisite causal connection between his “employment of the insured vehicle as a vehicle” on the one hand, and his injuries on the other. Slagle, 267 Va. at 635; see Bratton, 290 Va. at 329. Further comparison of the present facts to those in the other cases outlined above reinforces this point. For instance, in Perry, the decedent was deemed to not be using his police cruiser because he was 164 feet away from his insured cruiser and in the process of serving a warrant when he was struck and killed by another vehicle. Perry, 204 Va. at 838. It did not matter that he had emerged from his cruiser to engage in this task, nor that he would return to it shortly after completing the task. See id. The same is true here—at the time he was injured, Plaintiff was spatially distant from the Alsop tractor trailer (albeit to a lesser degree) and had begun the distinct task of directing the Bobcat operator to the drop zone after he had already retrieved the construction materials.

By contrast, the plaintiffs (and/or their decedents) in Cassell, Slagle, and Bratton were held to be “using” their respective insured vehicles. In each instance, some combination of the following was true: (1) the plaintiff/decedent was using something that had been retrieved from the insured vehicle, see Cassell, 239 Va. at 424 (noting that Cassell was filling out a required fire report that had been transported to the scene in the insured pumper truck); (2) the insured vehicle was outfitted for some special purpose and the plaintiff/decedent was explicitly utilizing it for that purpose at the time of the incident, see id. (observing that Cassell’s fire truck had its emergency lights burning and that it was overtly used as a barrier to control traffic and protect the fire fighters), Bratton, 290 Va. at 320–21, 330 (stating that the express purpose of the superintendent’s truck, which was outfitted with a spinning safety strobe light and hazard lights, was to protect the workers); and (3) the plaintiff was actively engaged with and/or exercising control over the insured vehicle or its operator, see Slagle 267 Va. at 631–32 (observing that plaintiff was using hand signals to direct the driver of the insured vehicle).

Here, only the first of the above is present, insofar as Plaintiff was directing a separate vehicle that had retrieved supplies from the insured vehicle. However, as Parker instructs, that fact alone is insufficient to establish use. See Parker 375–78 (holding that the plaintiff was not using the insured truck even though she was (a) planting cabbages that were transported to the worksite in the truck, and (b) would need to return to the truck to retrieve and plant the remainder of the cabbages). Conversely, the other two factual elements are plainly missing. As to (2), Plaintiff was not utilizing the Alsop tractor trailer for any purpose at the time of his injury. At most, the Alsop tractor trailer was being passively employed to hold the remaining construction materials. Such is insufficient to establish Plaintiff’s “use” of the vehicle. See id. (holding that Plaintiff was not using the insured truck when it was only being employed to hold the remaining cabbages). And in any event, Plaintiff’s injury did not stem from that utilization. Instead, he had begun an entirely new task—directing Stevens’s operation of the Bobcat—when he was injured. Finally, as to (3), Plaintiff was indeed actively engaged with a vehicle (the Bobcat) and its operator (Stevens), just not the one he seeks coverage from. That fact takes this case outside of Slagle’s reach.⁶ See Slagle, 267 Va. at 631–32

*11 At bottom, even when viewed in the light most favorable to Plaintiff, the allegations here are insufficient to establish a “causal relationship between the incident and the employment of the [Alsop tractor trailer] was a vehicle.” Id. Failing this “critical inquiry” proves fatal to Plaintiff’s claim that he was “using” the Alsop tractor trailer.

b. “Occupying”

The Court now turns its focus to the Policy’s alternative requirement that an individual “occupy[ ]” the insured vehicle to be deemed an insured. The Policy defines “occupying” as “in, upon, using, getting in, on, out of or off.” ACE Policy 56. Having already determined that Plaintiff was not “using” the Alsop tractor trailer at the time he was injured, the Court would need to find that Plaintiff was nevertheless “occupying” it for him to be entitled to coverage under the Policy.

The parties only briefly argue the issue of whether Plaintiff was “occupying” the Alsop tractor trailer. Defendant argues that Plaintiff was not “occupying” the Alsop tractor trailer because “at the time of the [a]ccident, he was not ‘vehicle oriented’ relative to the [Alsop tractor trailer].” Reply Supp. Mot. Dismiss (“Reply”) 10, ECF No. 44. Defendant distinguishes the instant facts from those of Bratton and Moore in support of its position. See id. Defendant argues that, unlike the plaintiffs in those cases, Plaintiff had sufficient time to begin an activity separate from getting out of or off the insured vehicle. See id. at 10–11. Defendant cites two additional Supreme Court of Virginia cases—Pennsylvania National Mutual Casualty Insurance Company v. Bristow and Edwards v. Government Employees Insurance Company—for the proposition that the sort of fleeting, incidental contact with an insured vehicle at issue here does not rise to the level of “occupying” a vehicle. See id. at 12. For his part, Plaintiff briefly references Bratton’s interpretation of the term “occupying” and then points to a number of prior contacts between Plaintiff and the Alsop tractor trailer to argue that Plaintiff was using and/or occupying the vehicle at the time he was injured. See id. at 13–15. Plaintiff relies on these prior contacts to argue that he was still “vehicle oriented” to the Alsop tractor trailer when he was injured. See id. at 13–14.

To reiterate, the Policy covers anyone “occupying” the Alsop tractor trailer, defined by the Policy as meaning “in, upon, using, getting in, on, out of or off.” ACE Policy 56. In considering the issue of occupancy, Virginia courts have eschewed bright lines rules in favor of a “totality of the circumstances” inquiry. See Bratton, 290 Va. at 325; Moore, 661 F. Supp. 3d at 479 (summarizing Virginia law). This analysis necessarily considers facts such as “the individual’s proximity to the vehicle, the duration of time during which the individual acts, the particular actions taken, the situation in which the individual is acting, the motivation for the individual’s actions, and the purpose of the policy’s coverage.” Id. Further, Virginia courts interpret the word “upon” in relation to the word “occupying,” meaning that “to be ‘upon’ an insured vehicle is to have some connection with ‘occupying’ it.” Penn. Mut. Cas. Ins. Co. v. Bristow, 207 Va. 381, 385 (1966). The Supreme Court of Virginia has also clarified that “the ordinary understanding of the process of ‘getting out of’ a vehicle does not necessitate ongoing physical contact with that vehicle.” Bratton, 290 Va. at 325. Rather, the inquiry hinges on whether the totality of the circumstances establish that the individual was still “vehicle-oriented” at the time in question. Id. at 325–26. If those circumstances “establish that the individual was no longer ‘vehicle oriented,’ then the act of ‘getting out of’ the vehicle was complete.” Id. at 326. (citation omitted).

*12 Ultimately, the Court finds that the facts alleged are insufficient to establish that Plaintiff was “occupying” the Alsop tractor trailer at the time he was injured. While there is no factual analog that fits quite as neatly as Parker did in the “use” inquiry, standard tools of interpretation and a comparison of the instant facts with the relevant caselaw nevertheless compel this conclusion.

Returning first to the language of the Policy, “occupying” is defined as “in, upon, using, getting in, on, out of or off.” At the time he was injured, Plaintiff alleges he was standing roughly ten feet away from the insured Alsop tractor trailer, directing Stevens’s operation of the Bobcat with hand signals. Am. Compl. ¶¶ 39–41; Chesterfield County Compl. ¶ 47. For that reason, Plaintiff was clearly not “in” or “getting in” the Alsop tractor trailer. See In, MERRIAM-WEBSTER’S DICTIONARY (defining “in” as both “within a particular place” and “a function word [used] to indicate inclusion, location, or position within limits”) (emphasis added).⁷ Plaintiff’s position relative to the Alsop tractor trailer and his contemporaneous direction of Stevens likewise reveal that he was not in the process of “getting on … or off” the truck at the time he was injured. See On, MERRIAM-WEBSTER’S DICTIONARY (defining “on” as both “in … a position of contact with an upper surface” and “a function word [used] to indicate a position in contact with and supported by the top surface of”); Off, MERRIAM-WEBSTER’S DICTIONARY (defining “off” as “so as to be separated from support,” and noting adverb synonyms of “down” and “out”). And the Court has already established that Plaintiff was not “using” the Alsop tractor trailer at the time he was injured. See supra Part IV.A.2.a.

In view of the above, Plaintiff’s only remaining avenues to establish he was “occupying” the Alsop tractor trailer hinge on his ability to show that he was either “upon” or “getting out of” the vehicle at the time he was injured. See ACE Policy 56–57. Beginning with the former, Virginia courts have observed that “a person may be said to be ‘upon’ a vehicle when he is in a status where he is not actually ‘in,’ or is not in the act of ‘entering into or alighting from,’ the vehicle, but whose connection therewith immediately relates to his ‘occupying’ it.” Bristow, 207 Va. at 385. The Supreme Court of Virginia considered this term in both Bristow and Edwards. In Bristow, the Court held that the plaintiff was not “upon” the insured vehicle because “he had not occupied [it], … nor did he intend to occupy it. His touching of the vehicle was merely incidental to his kindly act as a Good Samaritan.” Id. Similarly, the Edwards Court held that the plaintiff was not “upon” the insured vehicle because his “act of attempting to replace the tire on the insured vehicle was not an act immediately related to the occupancy of the vehicle.” Edwards v. Gov’t Emps. Ins. Co., 256 Va. 128, 135 (1998). Instead, the plaintiff’s “actions at the time of the incident immediately related to his attempt to change the flat tire.” Id. Also relevant to the Supreme Court of Virginia’s conclusion in Edwards was that the plaintiff’s “actions did not constitute a physical presence in or on the insured vehicle.”

*13 Here, Plaintiff was likewise not “upon” the Alsop tractor trailer. Just like the plaintiff in Edwards, Plaintiff’s actions at the time he was injured—directing Stevens’s operation of the Bobcat—were not “immediately related to the occupancy” of the Alsop tractor trailer. See id. at 135. Instead, Plaintiff’s actions were immediately related to the task of transporting construction materials to their designated drop zone. And just like the plaintiff in Bristow, any interaction Plaintiff had with the Alsop tractor trailer was “merely incidental” to his true purpose—again, transporting the construction materials to their drop zone. Bristow, 207 Va. at 385. Solidifying this conclusion is the fact that Plaintiff—like the plaintiff in Bristow—“had not occupied [the insured vehicle], … nor did he intend to occupy it.” Id. Such circumstances preclude a finding that Plaintiff was “upon” the Alsop tractor trailer.

Plaintiff’s only remaining avenue to coverage thus depends on the “getting out of” language of the Policy. In determining whether an individual is “getting out of” a vehicle, Virginia courts must “consider the totality of the circumstances.” Bratton, 290 Va. at 325. The touchstone of this inquiry concerns whether “the individual was … vehicle-oriented” as to the insured vehicle at the time they were injured. Id. at 326 (internal quotations and citations omitted). If the totality of the circumstances “establish that the individual was no longer ‘vehicle-oriented,’ the act of ‘getting out of’ the vehicle was complete.” Id. (quoting Robert Roy, Annotation, What Constitutes “Entering” or “Alighting From” Vehicle Within Meaning of Insurance Policy, or Statute Mandating Insurance Coverage, 59 A.L.R. 4th 149, § 2(a) (2012)).

Both Bratton and Moore considered insurance policies with “getting out of” language akin to that at issue here. In Bratton, a construction worker, Slone, was filling the front-end loader of a dump truck with asphalt while periodically exiting to check for spills. Id. at 319. Shortly before being struck by another vehicle, Slone (1) lowered the dump truck bed; (2) left the truck cab and closed the door with the engine still running; and (3) walked at least nine feet to check the rear tires for spills. Id. at 327–28. In light of these circumstances, the Bratton court determined that Slone was “still vehicle-oriented” at the time of the collision, and therefore still “in the process of ‘getting out of’ the dump truck.” Id. at 328. This Court grappled with the same issue just last year in Moore. See Moore, 661 F. Supp. 3d at 478–80. Moore was a tow truck driver who was struck and injured by another vehicle while he was in the process of hooking the insured’s disabled RV to his tow truck. Id. at 472–73. On the issue of whether Moore was “occupying” the RV, this Court considered the totality of the circumstances and held that Moore was indeed occupying the insured RV at the time he was injured. Id. at 480. Critical to that determination were the following facts: (1) Moore was in close proximity to the vehicle, touching and entering it frequently; (2) Moore was acting to return the vehicle to an operable state, and was acting to move and control the RV in furtherance of that end; and (3) the entire process of preparing the RV for transportation was “involved and careful, requiring a sustained period of time to complete.” Id.

Neither Bratton nor Moore help Plaintiff. Plainly, the circumstances here reveal that Plaintiff was not “vehicle-oriented” as to the Alsop tractor trailer at the time he was injured. See Bratton, 290 Va. at 327–28. To begin, Plaintiff’s only interactions with the Alsop tractor trailer involved unloading construction materials that were on it. He did not drive the tractor trailer, he was never in the tractor trailer, and he was only very briefly on the tractor trailer. Moreover, even Plaintiff’s brief time on the tractor trailer was in furtherance of a discrete activity—helping Stevens load the Bobcat—separate from the one he was engaged in at the time he was injured, i.e., directing Stevens to the drop zone. Thus, even if Plaintiff’s prior presence on the tractor trailer meant he was occupying it at that time, any such occupation of the truck had ended when Plaintiff’s new task off and away from the truck began.

*14 The totality of these circumstances stands in stark contrast to both Bratton and Moore. In the former, Slone had actually been inside the insured vehicle, and his actions at the time he was struck remained clearly directed toward the insured vehicle. See Bratton, 290 Va. at 327–28. Moreover, he “did not have enough time to begin a new activity separate from getting out of the vehicle.” Id. at 328. In other words, he was still vehicle-oriented as to the insured vehicle. See id. The same is true for Moore; at the time he was struck, he was close to the insured vehicle, touched and entered it frequently, and his overall mission remained directed toward it. See Moore, 661 F. Supp. 3d at 478–80. The same cannot be said here. At the time Plaintiff was injured, he was roughly ten feet away from the Alsop tractor trailer and had already begun the entirely separate activity of directing Stevens to the drop zone. It would defy common sense to hold that actions so spatially, operationally, and temporally removed from the insured vehicle still qualify as “getting out of” the Alsop tractor trailer. See Bratton, 290 Va. at 328 (holding that Slone was still vehicle-oriented and “getting out of” the dump truck because he “did not have enough time to begin a new activity separate from getting out of the vehicle”).

For the reasons outlined above, Plaintiff was not “in, upon, using, getting in, on, out of or off” the Alsop tractor trailer at the time he was injured. Plaintiff was therefore not “occupying” the Alsop tractor trailer pursuant to the Policy, foreclosing that potential avenue to insured status.

c. Summary

To summarize, Plaintiff’s path to being deemed an “insured” under the ACE Policy depends upon his “using” and/or “occupying” the insured Alsop tractor trailer. However, Plaintiff was not “using” the Alsop tractor trailer at the time he was injured because there exists no causal relationship between his injuries and the employment of the Alsop tractor trailer as a vehicle. Likewise, Plaintiff was not “occupying” the Alsop tractor trailer because (1) his actions did not fall within the plain language of the Policy’s definition of the term, and (2) a comparison of the instant facts to the relevant caselaw establishes Plaintiff was not otherwise occupying the vehicle. Because Plaintiff was not “using” or “occupying” the Alsop tractor trailer at the time of his injuries, his claim to “insured” status is a nonstarter. The Court will therefore dismiss Plaintiff’s Complaint for failing to state a claim that he is entitled to coverage under the Policy.

3. Plaintiff Has Not Sufficiently Alleged That He Was Injured by an Uninsured or Underinsured Motor Vehicle

For the reasons outlined above, Plaintiff has no viable path to claiming “insured” status under the ACE Policy. But in an abundance of caution, the Court considers the next step for entitlement to uninsured or underinsured motor vehicle coverage—whether Plaintiff was injured by an uninsured motor vehicle. Unfortunately for Plaintiff, the result on this issue is functionally identical to that in the “using” and “occupying” inquiry.

Under the ACE Policy—and in accordance with Virginia law—ACE agreed to pay “all sums the ‘insured’ is legally entitled to recover as damages from the owner or operator of an ‘uninsured motor vehicle.’ ” ACE Policy 56 (emphasis added); see Virginia Code § 38.2-2206(B). Per the Policy, “uninsured motor vehicle” also includes “underinsured motor vehicle[s],” as defined in the Policy. See id. at 56–57. The benefits of such uninsured motorist coverage, however, extend only to those “injured by uninsured or underinsured motorists.” Santens v. Progressive Gulf Ins. Co., 56 F. Supp. 3d 788, 792 (E.D. Va. 2014) (quoting Jefferson v. Harco Nat’l Ins. Co., 2009 WL 1765670, at *3 (E.D. Va. 2009)); see also Grossman v. Glens Falls Ins. Co., 211 Va. 195, 197–98 (Va. 1970); White v. Nat’l Union Fire Ins. Co. of Pittsburgh, 913 F.2d 165, 169 (4th Cir. 1990).

As discussed supra, Plaintiff is not an “insured” under the ACE Policy, and the analysis can begin and end there. But even if Plaintiff were an insured, he would still need to need to show that the vehicle that caused his injuries (the Bobcat) was either an “uninsured motor vehicle” or “underinsured motor vehicle” in order to establish his entitlement to coverage. See ACE Policy 56–57; Virginia Code § 38.2-2206(B). However, there is no evidence in the existing record about the insurance—or lack thereof—extending coverage to the Bobcat. Without further information, there is no way to ascertain whether the Bobcat would be considered an “uninsured motor vehicle” pursuant to the ACE Policy or Virginia law. Instead, all the Court knows from the pleadings is that Envirostruct, LLC owned the Bobcat, Chesterfield County Compl.¶ 34, and that Stevens was operating the Bobcat at the time of the incident. Am. Compl. ¶ 29—30. Such allegations either do not counsel in favor of coverage, or are plainly insufficient for the Court to determine whether coverage under the Policy exists. See, e.g., ACE Policy 57 (extending coverage to an “insured” on the basis of (1) the “owner or operator” of a vehicle that causes injury to an “insured” being “unknown,” and/or (2) the insurance carrier for such vehicle denying coverage to the “insured” for “any reason whatsoever”).

*15 Put another way, the crux of this issue concerns whether any insurance policy specifically provides coverage for the Bobcat. The pleadings provide the Court with no answers as to that issue. Setting aside the independently dispositive finding that Plaintiff does not qualify as an insured under the Policy, dismissal of his Complaint is warranted for the independent, additional reason that he has pleaded insufficient facts relating to the insured/uninsured status of the Bobcat.⁸

B. Reformation of the Policy Is Unnecessary

Plaintiff initially asked that the Court alternatively “reform the ACE Policy” such as to provide uninsured and/or underinsured motorist coverage as required by Virginia law. See Am. Compl. ¶ 92. However, the parties now appear to agree that reformation is unnecessary because the terms of the Policy incorporate and comport with Virginia law. Compare Mem. Supp. 12 (“In compliance with Virginia law, the ACE Policy defines an ‘insured’ as anyone ‘occupying’ a ‘covered auto,’ and the term ‘occupying’ includes ‘using.’ ”) (quoting ACE Policy 56), and Mem. Supp. 12 (“Regardless of whether the obligation to cover persons ‘using’ a covered motor vehicle is found in the ACE Policy itself, or can be found only in the Virginia Code, the meaning of ‘using’ is the same because ‘the provisions of Code § 38.2–2206 are part of the contract of insurance.’ ”) (quoting Bratton, 290 Va. at 329), with Mem. Opp’n 15–16 (“ACE states the ‘regardless of whether the obligation to cover persons ‘using’ a covered motor vehicle is found in … the Policy itself, or can be found only in the Virginia Code, the meaning of ‘using’ is the same …. Taking this representation as true, there would be no need to reform the [Policy].”) (quoting Mem. Supp. 12). The Court will therefore treat Plaintiff’s reformation claim as having been withdrawn.⁹

IV. CONCLUSION

For the reasons detailed above, ACE’s Motion to Motion to Dismiss (ECF No. 36) will be granted.

An appropriate Order shall issue.

Richmond Virginia

All Citations

Slip Copy, 2024 WL 1742240

Footnotes

The case was initially brought by Smallwood against Builders Mutual Insurance Company (“Builders Mutual”), BD Joint Ventures, LLC, VA Express, LLC, Williams Contracting, Inc., Paul Stevens, Kelley & Associates Construction Management, Inc., and David Jordan LLC. Pursuant to this Court’s Order on August 10, 2023, all parties other than Builders Mutual have been realigned as plaintiffs. Order, ECF No. 13. Pursuant to that same Order, Smallwood was permitted to amend his Complaint to include claims against ACE Property & Casualty Insurance Company (“ACE”) and Alsop Trucking, Inc. See id. Thereafter, Plaintiff amended his Complaint to add an additional declaratory judgment count against ACE. See Am. Compl. ¶¶ 83–92, ECF No. 14. This Court recently dismissed Plaintiff’s claims against Builders Mutual. See Smallwood v. Builders Mut. Ins. Co., 2024 WL 844868, at *13–19 (E.D. Va. Feb. 28, 2024). Therefore, the only remaining claims lie against ACE. See Am. Compl. ¶¶ 83–92.
For this and all other filings, the Court utilizes the pagination assigned by the CM/ECF system and not the pagination appearing on the original document.
ACE attached a copy of the Policy to its Memorandum in Support of its Motion to Dismiss. See generally ACE Policy. The Court may consider this document in conjunction with its Rule 12(b)(6) analysis because the Policy itself is “integral to and explicitly relied on in the [C]omplaint,” and Plaintiff has not challenged its authenticity. Phillips v. LCI Int’l Inc., 190 F.3d 609, 618 (4th Cir. 1999); see Am. Chiropractic Ass’n v. Trigon Healthcare, Inc., 367 F.3d 212, 234 (4th Cir. 2004) (quoting Phillips, 190 F.3d at 618).
The Court notes that this specific allegation comes from Plaintiff’s Complaint in a related state court case. The Court may nevertheless consider such allegation because Plaintiff attached that Complaint to his Amended Complaint in the instant matter. See E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 448 (4th Cir. 2011).
Plaintiff curtly dismisses the import of Parker, even suggesting that it might be decided differently today “[g]iven the Moore, Bratton, and Slagle holdings.” Mem. Opp’n 9–10. The Court disagrees for several reasons. Perhaps most important is the fact that Parker has been cited approvingly on numerous occasions in the years since it has been decided. See, e.g., Randall v. Liberty Mut. Ins. Co., 255 Va. 62, 65–67 (1998) (“Two of our prior cases, [Cassell and Parker,] provide the analytical framework for determining whether a permissive user of an insured vehicle who is injured while away from the vehicle qualifies as an insured.”); Slagle, 267 Va. at 635 (“In Parker, we observed that the critical inquiry in determining the issue of use … is whether there was a causal relationship between the incident and the employment of the insured vehicle as a vehicle.”) (internal citations omitted). Indeed, Parker was even cited approvingly in some of the decisions that Plaintiff suggests would lead to it being decided differently today. See, e.g., Slagle, 267 Va. at 635; Bratton, 290 Va. at 330. The Court is therefore satisfied that Parker remains good law. The Court also notes that Plaintiff’s reference to Moore as altering the use inquiry is peculiar, insofar as Moore is a decision of this Court interpreting Virginia law. See Moore, 661 F. Supp. 3d at 475. Such a decision has little, if any, influence on how Virginia courts—let alone the Supreme Court of Virginia—would interpret “use” under Virginia law.
In other words, Slagle would be on point if the insured vehicle central to the instant analysis was the Bobcat—i.e., the vehicle Plaintiff was actively directing at the time of his injury. See Slagle, 267 Va. at 637–38. However, because Plaintiff instead alleges that he was “using” the Alsop tractor trailer, Slagle is inapposite.
“Virginia courts customarily turn to dictionaries for help in deciphering a term’s plain meaning.” Travelers Indem. Co. of Am. v. Portal Healthcare Sols., LLC, 35 F. Supp. 3d 765, 770 (E.D. Va. 2014).
Notably, Defendant devotes an entire section of its briefing to arguing that Plaintiff has failed to adequately plead facts related to the uninsured status of the Bobcat. See Mem. Supp. 18–19. Plaintiff does not appear to respond to this argument in its opposition briefing. See Mem. Opp’n 8–15. Even assuming Plaintiff’s failure to respond does not constitute waiver on this issue, Defendant’s position is the correct one.
In any event, the Policy certainly comports with Virginia law and need not be reformed. Virginia Code § 38.2-2206 provides that insurers must provide uninsured motorist coverage to those that “use the motor vehicle to which the policy applies.” VA. CODE ANN. § 38.2-2206(A), (B). The ACE Policy does so here by (1) extending coverage to those who “occupy[ ]” the insured vehicle, and (2) considering those who “use” the vehicle to be “occupying” the vehicle. ACE Policy 56; see Bratton, 290 Va. at 329 (“Accordingly, the [policy], like many motor vehicle insurance policies, includes ‘use’ or ‘using’ as a type of ‘occupying’ a ‘covered auto.’ But whether the obligation is found in the insurance policy itself, or can be found only in the Code, the meaning of ‘use’ or ‘using’ is the same because ‘[t]he provisions of … Code § 38.2–2206 are part of the contract of insurance, and we will not consider language in a policy that, arguably, is inconsistent with the statute as we have construed it.’ ” (cleaned up)).

End of Document

Scheuer v. Rado Express Logistics, Inc.

United States District Court, N.D. Illinois, Eastern Division.

Glenn SCHEUER and Linda Scheuer, Plaintiffs,

RADO EXPRESS LOGISTICS, INC. and Trinity Relocation Group, LLC, Defendants.

Case No. 23-cv-00531

Signed March 28, 2024

Attorneys and Law Firms

Aisha Abid, Haley Marie Loutfy, Christopher James Pickett, Lindsay, Pickett & Postel, LLC, Chicago, IL, for Plaintiffs.

Alexander Moskovic, Moskovic & Associates, Arlington Heights, IL, for Defendant Rado Express Logistics, Inc.

MEMORANDUM OPINION AND ORDER

John Robert Blakey, United States District Judge

*1 Plaintiffs Glenn Scheuer and Linda Scheuer (“Plaintiffs”) sue Rado Express Logistics, Inc. for violations of 49 C.F.R. § 375.401 et seq. (Count I), the Carmack Amendment, 49 U.S.C. 14706 (Count II), and the Illinois Consumer Fraud and Deceptive Business Practices Act (“ICFA”), 815 ILCS 505/1 et seq. (Count IV), and for fraudulent misrepresentation (Count III), and breach of contract (V).¹ Rado moves to dismiss all five counts against it. [24]. For the reasons explained below, this Court grants in part, and denies in part, Rado’s motion.

I. The Complaint’s Allegations²

This case arises from an interstate move gone wrong. On June 7, 2022, Plaintiffs contacted Trinity Relocation Group, LLC (“Trinity”), a broker for shippers and interstate carriers, regarding a move from their Ohio residence to their Florida residence. [1] ¶ 8. A Trinity customer representative assisted Plaintiffs to evaluate their household items and create a detailed inventory. Id. ¶¶ 8–9. Based on that inventory, Trinity provided Plaintiffs with an initial binding estimate of $12,1770.00 for 1,367 cubic feet of property to be shipped. Id. ¶¶ 9–11. Shortly thereafter, Plaintiffs updated their inventory, and Trinity provided an updated binding estimate of $13,381.41 for 1,496 cubic feet of property (the “Binding Estimate”). Id. ¶ 12.

The Binding Estimate reflected a “move date” of August 25, 2022 and August 26, 2022. Id. ¶ 13. Plaintiffs conveyed to Trinity that they needed their property packed and loaded by the end of the day on August 26, 2022 because the buyer of their Ohio home would be arriving on the morning of August 27, 2022. Id. ¶¶ 15, 18. Trinity assured Plaintiffs that it could accommodate this schedule and that the property could be delivered to their Florida home by September 1, 2022, as the Plaintiffs also requested. Id. ¶¶ 14–15. In its capacity as a broker, Trinity researched carrier options and ultimately recommended Defendant Rado to Plaintiffs as the interstate carrier that would perform the move. Id. ¶ 16.

By August 24, 2022, Plaintiffs had not heard from Rado regarding the pick-up scheduled for the following day, so Mr. Scheuer called Trinity. Id. ¶ 17. Trinity assured Plaintiffs that Rado’s movers would arrive at their Ohio residence between 9:00 a.m. and 10:00 a.m. the following morning. Id. ¶ 19. The next day, on August 25, 2022, Mr. Scheurer waited all day for Defendant’s movers to arrive. Id. ¶¶ 20–21. Rado’s movers finally showed up at 5:00 p.m. Id. ¶ 22. The Rado movers worked from approximately 8:30 p.m. to 10:30 p.m. and assured Plaintiffs before leaving that night that they would be back early the next morning to complete the move by end of day, still on schedule. Id. ¶¶ 23–24.

*2 On August 26, 2022, the Rado movers did not arrive at Plaintiffs’ Ohio residence until approximately 11:00 a.m. Id. ¶ 27. The movers continued to work for the remainder of the day, but by 4:00 p.m., a “vast amount of work” remained to be done. Id. ¶ 31–32. To ensure the move would be completed on time, Mr. Scheuer began to help the movers he was paying. Id.

At 3:30 a.m. on the morning of August 27, 2022, while Mr. Scheuer and the Rado movers were still working, and after most of Plaintiffs’ possessions had already been loaded onto the moving truck, the Rado movers approached Mr. Scheuer to renegotiate Rado’s Interstate Bill of Lading Contract (“Rado Contract”), now that they had a “better feel” of the amount of property they were moving. Id. ¶¶ 33, 35.

The re-negotiated Rado Contract charged Plaintiffs $34,132.30, nearly three times the Binding Estimate, based in part upon an updated volume of items amounting to 3,800 cubic feet. Id. ¶ 34. The Rado movers told Plaintiffs that this price was “final” if they “wanted their belongings delivered.” Id. ¶ 39. In addition, the Rado movers told Mr. Scheuer that his belongings would not arrive to his Florida residence by September 1, 2022, as previously promised. Id. ¶ 36. As a result, “out of fear” that their possessions would not arrive on time, Plaintiffs agreed to a $5,700 “expedited delivery charge.” Id. ¶ 37.

Despite the expedited delivery charge, Plaintiffs’ property did not arrive in Florida on September 1, 2022. Id. ¶ 41. Instead, it arrived two days later and with no crew to unload it. Id. The unloading crew arrived the next day, September 4, 2022, demanding the full balance of the Rado Contract, including the expedited delivery charge, before any property would be unloaded. Id. ¶¶ 42–43. Left with little option, Plaintiffs complied and paid the full balance demanded. Id. ¶ 44. Adding insult to injury, while unpacking their belongings, Plaintiffs discovered that various items had been damaged. Id. ¶ 45. Plaintiffs then initiated this lawsuit.

II. Legal Standard

To survive a Rule 12(b)(6) motion, a complaint must not only provide Defendants with fair notice of a claim’s basis, but it must also be “facially” plausible. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). A claim has facial plausibility when the plaintiff pleads “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. Although the complaint need not include detailed factual allegations, plaintiff’s obligation to provide the grounds for his entitlement to relief requires more than mere labels and conclusions, and a “formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555. Rather, “the plaintiff must give enough details about the subject-matter of the case to present a story that holds together.” Swanson v. Citibank, N.A., 614 F.3d 400, 404 (7th Cir. 2010).

On a motion under Rule 12(b)(6), this Court accepts as true all well-pled facts in the complaint and draws all reasonable inferences from those facts in the plaintiff’s favor. AnchorBank, FSB v. Hofer, 649 F.3d 610, 614 (7th Cir. 2011). The Court “need not accept as true statements of law or unsupported conclusory factual allegations.” Bilek v. Fed. Ins. Co., 8 F.4th 581, 586 (7th Cir. 2021).

III. Discussion & Analysis

*3 Rado argues that the Carmack Amendment preempts Counts I, III, IV, and V [24-1] at 4–5, and alternatively, that the Federal Aviation Administration Authorization Act (FAAAA), 49 U.S.C. § 14501 preempts Counts III–V. [24-1] at 4–6. Rado further argues that all claims must be dismissed because an Agreement between Rado and Plaintiffs provides that, as a condition precedent to recovery in a lawsuit, all claims must first be filed with Rado’s support team, and Plaintiffs have not complied with this prerequisite. Finally, Rado argues that Plaintiffs’ claims in Counts I – V fail to otherwise state a claim. Id. 6–13.

Because preemption presents a threshold issue, the Court will address it first, before turning to whether Counts I–V plausibly allege viable claims to relief.

A. Preemption Under the Carmack Amendment

The Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706 et seq., provides shippers with the statutory right to recover for actual losses or injuries to their property caused by carriers involved in the shipment. See 49 U.S.C. 14706(a)(1). The purpose of the Carmack Amendment was to create a “nationally uniform rule of carrier liability” for interstate shipments. N. Am. Van Lines, Inc. v. Pinkerton Sec. Systems, Inc., 89 F.3d 452, 454 (7th Cir. 1996).

To accomplish this goal—despite the statute’s ostensible limitation to recovery of damages caused to property itself—the Supreme Court, from its earliest interpretations has “consistently construed the Amendment as imposing much more.” Am. Nat. Fire Ins. Co. ex rel. Tabacalera Contreras Cigar Co. v. Yellow Freight Sys., Inc., 325 F.3d 924, 931 (7th Cir. 2003) (citing Air Prods. & Chems., Inc. v. Illinois Cent. Gulf R.R. Co., 721 F.2d 483, 485 (5th Cir. 1983)).

In New York, Philadelphia, & Norfolk Railroad Company v. Peninsula Produce Exchange of Maryland, the Supreme Court held that the Amendment’s language is “comprehensive enough to embrace all damages resulting from any failure to discharge a carrier’s duty with respect to any part of the transportation to the agreed destination.” 240 U.S. 34, 38 (1916). Thus, the Court held that the Amendment imposes liability for a delay in shipment without any physical damage to the property being transported. See id.; Southeastern Express Co. v. Pastime Amusement Co., 299 U.S. 28, 29 (1936) (applying Carmack Amendment to suit for damages caused by late delivery); see also Adams Express Co. v. Croninger, 226 U.S. 491, 505–06 (1913) (“Almost every detail of [interstate commerce carrier liability] is covered so completely that there can be no rational doubt that Congress intended to take possession of the subject, and supersede all regulation with reference to it.”).

Following these cases, courts have consistently held that the Carmack Amendment’s preemptive sweep extends to cases alleging liability for delay or misdelivery of household goods, even in the absence of permanent loss or actual damage to the property. See, e.g., Chen v. Mayflower Transit, Inc., No. 99-C-626, 2022 WL 1632412, at *14 (N.D. Ill. July 22, 2002) (collecting cases); ABT Elecs., Inc. v. Airgroup Corp., No. 17-cv-2801, 2018 WL 905504, at *5 (N.D. Ill. Feb. 15, 2018) (Carmack Amendment preempted claims even though the only “damage” flowed from “delay in delivering” the goods); see also Moffit v. Bekins Van Lines Co., 6 F.3d 305, 306 (5th Cir. 1993) (Carmack Amendment preempted state law claims arising out of carrier’s failure to deliver goods to shipper’s new address in time for Christmas).

The Seventh Circuit most directly examined the preemptive scope of the Carmack Amendment in Gordon v. United Van Lines, Inc., 130 F.3d 282, 294 (7th Cir. 1997). Gordon involved claims by an elderly woman who hired a shipping company to move her belongings from Florida to Chicago. 130 F.3d at 284. The driver promised to deliver the plaintiff’s goods to her daughter but paid an agent $40 to deliver them instead; the agent then pocketed the money and threw the goods away. Id. at 285. Following this failure, United repeatedly lied to the plaintiff and her daughter about the safety of her belongings during the claims process. Id. As a result, the plaintiff brought Carmack Amendment and state law claims against United. Id. at 284. Before trial, the district court dismissed the state law claims as preempted by the Carmack Amendment. Id.

*4 Reviewing whether the district court correctly dismissed the state law claims, the court held that the Carmack Amendment “preempts all state law claims based upon the contract of carriage, in which the harm arises out of the loss of or damage to goods.” Gordon, 130 F.3d 282, 294 (7th Cir. 1997) (citing Hughes v. United Van Lines, 829 F.2d 1407, 141 (7th Cir. 1987)). Significantly, the court also held that the Amendment does not preempt claims that allege liability on a ground “separate and distinct from” loss of, or damages to goods. Gordon, 130 F.3d at 289. In other words, to escape the Carmack Amendment, the carrier’s conduct must be “sufficiently distinct from the contract of carriage that a separate and independent claim arises.” Id. at 290.

Under Gordon, the courts narrowly define “separate and distinct” claims. As the court explained, claims for liability arising under a statute prohibiting deceptive trade practices, or for torts, which are not dependent upon the existence of a contract of carriage, would be “separate and distinct,” and thus not preempted. Gordon, 130 F.3d at 289 (citing Pinkerton, 89 F.3d at 452). Likewise, claims of assault or intentional infliction of emotional distress alleging harm to a shipper rather than his property, would not be preempted. Id. (citing Rini v. United Van Lines, Inc., 104 F.3d 502, 506 (1st Cir. 1997)).

Applying these principles, the Gordon court held that the plaintiff’s breach of contract and willful and wanton misconduct claims were “clearly preempted” because the plaintiff alleged damage to property in these claims covered by the Amendment. Id. at 289. Additionally, the court determined that the plaintiff’s common law fraud claim, based upon fraud in the inducement was preempted, because claims relating to the making of a contract for carriage are “so closely related to the performance of the contract,” and the “measure of damages for such claims” is likely to be the “loss or damage to the goods.” Id. For similar reasons, the court concluded that the plaintiff’s ICFA claim alleging fraudulent inducement to contract was also preempted, deferring to an Illinois appellate court decision saying so. Id. (citing Nowalski v. American Red Ball Transit Co., 680 N.E.2d 441 (1997)). But the plaintiff’s IIED claim was separate and distinct, and thus not preempted. Id. at 289.

Based upon Gordon, this Court first rejects Rado’s argument that the Carmack Amendment preempts Count I, which alleges a violation of 49 C.F.R. § 375.401 et seq. The Amendment’s preemptive power only extends to state and common law claims, not other federal claims. See Starr Indem. & Liab. Co. v. YRC, Inc., No. 15-cv-6902, 2017 WL 168179, at *5 (N.D. Ill. Jan. 17, 2017) (rejecting defendant’s argument that plaintiff’s claims under 49 U.S.C. § 14702(a)(2) were preempted because “the Carmack Amendment preempts state law and common law, not other federal statutes”); Pinkerton, 89 F.3d at 453 (noting that Carmack Amendment preempts “all state and common law remedies covering this subject”); Hughes Aircraft Co. v. N. Am. Van Lines, Inc., 970 F.2d 609, 613 (9th Cir. 1992) (observing that the Carmack Amendment preempts state common law).

Turning to Plaintiffs’ state and common law claims, Plaintiffs’ breach of contract claim (Count V) is clearly preempted. This claim alleges that Rado breached the contract for carriage itself (the Rado Contract) when it failed to load Plaintiffs’ property on time, and then failed to deliver their property by the date agreed. [1] ¶¶ 92–93. Plaintiffs seek damages incurred as a result of this breach. Id. at 94.

Plaintiffs argue that this claim escapes preemption because it does not seek to recover for property damage or loss (Plaintiff seeks such damages, but in other claims). See [29] at 4. But as described above, the Supreme Court has broadly defined the “loss or damage” falling with the Carmack Amendment’s preemptive scope as including damages for delay in delivery of a shipper’s property. See, e.g., Chen, 2002 WL 1632412, at *14 (collecting cases); Peninsula Produce, 240 U.S. at 231 (Carmack Amendment preempted claim for delayed transport without physical damage to property); Moffit v. Bekins Van Lines Co., 6 F.3d 305, 305–06 (5th Cir. 1993) (Amendment preempted breach of contract claim for failure to deliver property by a certain date); Hall v. N. Am. Van Lines, Inc., 476 F.3d 683, 688–89 (9th Cir. 2007) (Amendment preempted plaintiffs’ breach of contract claim for refusal to release property until plaintiffs paid additional charges).

*5 And Rado’s failure to load Plaintiff’s property at the time agreed concerns, and contributed to, this delayed delivery. See [1] ¶¶ 92–93. Accordingly, like the breach of contract claim in Gordon, the damage alleged in this claim qualifies as “loss or damage” covered by the Carmack Amendment. See Gordon, 130 F.3d at 284 (finding plaintiff’s breach of contract claim “clearly” preempted because damage plaintiff alleged was damage to property covered under Carmack Amendment).

Moreover, courts have applied these principles to preempt claims like Plaintiffs’ claims here, which allege harm due to a carrier’s failure to pick up the belongings by a certain date. See, e.g., Lewis v. Atlas Van Lines, Inc., 542 F.3d 403, 407–08 (3rd. Cir. 2008) (noting that plaintiffs “correctly conceded” that Carmack Amendment preempted their state law claims for defendant’s “failure to live up to its promise” to move plaintiffs’ household belongings by date agreed); see also American Synthetic Rubber Corp. v. Louisville & Nashville Railroad Co., 422 F.2d 462, 464–65 (6th Cir. 1970) (noting “when damages are sought against a common carrier for failure to properly perform, or for negligent performance of, an interstate contract of carriage, the Carmack Amendment governs”). In short, the Carmack Amendment preempts Count V.

Plaintiffs’ fraudulent misrepresentation (Count III) and ICFA claim (Count IV) present a closer call, insofar as they do not directly allege liability for loss, damage, or delay. These counts allege that Rado fraudulently: (1) increased the cost of the binding estimate when no additional items were added; and (2) charged Plaintiffs an improper “expedited delivery” charge despite knowing it could not deliver by the date agreed. [1] ¶¶ 64–74, 77–84. As alleged, these extra payments amounted to extortion, because Rado: presented the price increase after Plaintiffs’ possessions were already loaded on the truck, indicated that the price was final “if they wanted their belongings delivered,” and subsequently held Plaintiffs’ property “hostage” by refusing to unload or deliver the property until payment was made. Id. ¶¶ 35, 69, 81.

The Court finds ABT Electronics, Inc. v. Airgroup Corporation, No. 17-cv-2801, 2018 WL 905504 (N.D. Ill. Feb. 15, 2018), instructive. There, a plaintiff brought a Carmack Amendment claim against a shipping company alleging that the company’s delay in delivery caused damages. Id. at *4. As in this case, the plaintiff brought claims for common law fraud and violation of the ICFA, alleging that the shipping company inflated the invoice with improper delivery and service charges. Id. at *3. The plaintiff argued these fraud allegations were “independent from any shipping of goods and independent from any loss or damage from shipped goods.” Id. The court disagreed, finding these claims “ ‘so closely related’ to the performance of the shipping contract between the parties as to be preempted by the Carmack Amendment.” Id. (quoting Gordon, 130 F.3d at 289). These improper charges pertained to the “same interstate transactions” at issue in the plaintiffs’ Carmack Amendment claim, and therefore related to the “same goods” that were “damaged” by the failure to deliver them at the agreed-upon time. ABT Electrs., 2018 WL 905504, at *3.

Similarly, in Neely v. Mayflower Transit, LLC, No. 2-cv-9347, 2003 WL 23648655 (N.D. Ill. Aug. 4, 2003), the plaintiff sued a moving company for violation of the ICFA after it charged him $2,000 more than the initial binding estimate at the time of delivery. The movers told the plaintiff they would not deliver his belongings if he did not pay “on the spot,” so the plaintiff begrudgingly paid the higher amount, and subsequently discovered damage to his possessions when he unpacked. Id. at *2. Relying on Gordon, the court found the plaintiff’s ICFA claims preempted, because they were “contingent on and derived from the shipping contract.” Id. at *3. Compare id., with, Pinkerton, 89 F.3d at 458 (noting that a shipper might be liable under a statute prohibiting deceptive trade practices (and the claim not preempted) if the claim did not depend on the existence of a contract of carriage).

*6 Persuaded by ABT Electronics and Neely, this Court concludes that the Carmack Amendment preempts Plaintiffs’ fraudulent misrepresentation and ICFA claims. These claims remain based upon the existence of a contract for carriage, the Rado Contract, and they are directly related to Rado’s performance of the duties arising under that contract. See Gordon, 130 F.3d at 289 (citing Pinkerton, 89 F.3d at 452); Peninsula Produce, 240 U.S. at 38; see also V.R. Compounding, 2000 WL 1368045 at *4 (“of paramount importance in determining whether the Carmack Amendment applies is whether the damage resulted from the breach of a duty under a transportation contract.”). Further, like the fraud claims in Gordon, these claims are “so closely related to the performance of the contract” for carriage, and the measure of damages for such claims will be based, at least in part, on the “loss” to the goods. And ABT Electronics and Nelly teach that where a plaintiff’s claim against a carrier is based upon both overcharges and loss or damage to property, the claims are preempted. See ABT Elecs., 2018 WL 905504, at *5 (holding claims preempted where plaintiffs alleged “Defendant damages their goods and then subsequently overcharged them for delivery”); Neely, 2003 WL 23648655, at *3 (claims preempted where plaintiffs alleged defendant overcharged them and then plaintiffs discovered property damage). Therefore, the Carmack Amendment preempts Counts III and IV.

In sum, the conduct giving rise to Counts III, IV, and V is not “sufficiently distinct from the contract of carriage” as to escape the Carmack Amendment’s preemptive scope. See Gordon, 130 F.3d at 290. Accordingly, this Court dismisses these claims.³

B. Effect of Plaintiffs’ Agreement to File Claims with Rado’s Claims Department

Next, Defendant argues that Counts I–V must be dismissed because Plaintiffs never filed a claim with Rado’s Claims Department prior to filing this lawsuit, a contractual prerequisite to suit. [24-1] at 6; [24-2] at 46. But Plaintiffs represent that they did file a claim, and that Rado merely referred them to Rado’s outside counsel. [29] at 9. The parties may duke this factual issue out during discovery. At the pleading stage, however, these counts cannot be dismissed on this basis.

C. Violation of Federal Motor Carrier Safety Regulations, 49 C.F.R. § 375.401 et seq. (Count I)

In Count I, the Complaint alleges that Rado violated Federal Motor Carrier Safety Regulations set forth in 49 C.F.R. § 375.401 et seq., which govern household goods carriers. [1] at ¶¶ 46–55. The Motor Carrier Act, 49 U.S.C. § 14104(a), authorizes the Department of Transportation to issue such regulations, which are designed to protect individual shippers, like Plaintiffs, who hire motor carriers to transport their household goods interstate. See Meryvyn v. Atlas Van Lines, Inc., 882 F.3d 680, 680 (7th Cir. 2018) (citing 49 U.S.C. § 14104(a)). To meet this aim, Section 14704(a)(2) of the Act provides shippers with a cause of action for damages against carriers that violate the Regulations. 49 U.S.C. § 14704(a)(2); see also Mervyn, 882 F.3d at 682 (noting that individuals may bring civil actions against carriers for violations of legal rights established under 49 U.S.C. § 14104(a) and related federal regulations).

*7 Relevant here, the Regulations detail procedures governing price estimates for the shipment of household goods. See 49 C.F.R. §§ 375.401, 375.403. Under these regulations, carriers must provide shippers of household goods with either a binding or non-binding written estimate of the total charges before shipment of the goods. 49 C.F.R. § 375.401(b). A “binding estimate” is an agreement made in advance between the shipper and the carrier that “guarantees the total cost of the move.” § 375.401(b)(1). A carrier may not amend a binding estimate after loading the shipment. § 375.401(i).

Although binding estimates are generally “binding,” the regulations do not require carriers to honor a binding estimate where it appears that the shipper has tendered additional household goods or requires additional services that were not identified in the binding estimate. § 375.403 (a)(6). In such an instance, the carrier may negotiate a revised estimate with the shipper, and if agreement cannot be reached, the carrier is not required to service the shipment. Id. If, however, the carrier chooses to service the shipment, it must do one of the three things before loading the shipment: (1) reaffirm the binding estimate; (2) prepare a revised written binding estimate which accurately lists the additional goods or services in detail; or (3) mutually agree with the shipper, in writing, that the original binding estimate will be considered to be a non-binding estimate. § 375.403(a)(6)(i)-(iii).

Here, Plaintiffs allege that Rado required them to pay more than the amount on the binding estimate, even though Plaintiffs did not add to the load or request additional services. [1] at ¶¶ 46–55. As alleged, such conduct violates § 375.401. In addition, Plaintiffs allege that even if Plaintiffs had added items or requested additional services, Rado failed to provide a new binding estimate before loading the shipment, and instead approached Plaintiffs at 3:00 in the morning on August 27, 2022, after Rado had already loaded the shipment. [1] at ¶¶ 46–55. Taken as true, this conduct also violates § 375.401(i), which prohibits carriers from amending an estimate after loading the shipment, and § 375.403(a)(6), which requires carriers to take one of the actions outlined if they choose to service a shipment containing additional items or requiring additional services.

In support of dismissal, Rado argues that the exhibits Plaintiffs annexed to the Complaint undermine their claim. Rado directs the Court to the Revised Binding Estimate signed by Plaintiff Glenn Scheuer on August 26, 2022, which it claims shows that the Revised Estimate was presented to Plaintiff prior to loading. [24-1] at 6. On the Revised Estimate, Plaintiff initialed boxes indicating that he approved the revised total before loading, and that this new total was based upon the addition of goods or services. See id. Rado contends that it is “obvious” from the Descriptive Inventory included in the Revised Estimate, and the increased packing material charges, that more items and boxes were packed than were included in Plaintiffs’ original estimate. Id. at 7. Plaintiffs counter that Rado’s “factual references” cannot serve as the basis for the Complaint’s dismissal because this Court must accept the Complaint’s allegations as true. [29] at 7.

At this stage in the case, this Court must accept allegations as true and “construe all inferences in the plaintiff’s favor.” Forrest v. Universal Savings Bank, F.A., 507 F.3d 540, 542 (7th Cir. 2007). But this Court may also “consider any facts set forth in the complaint that undermine the plaintiff’s claim,” including “exhibits attached to the complaint.” Bogie v. Rosenberg, 705 F.3d 603, 609 (7th Cir. 2013). If “an exhibit incontrovertibly contradicts the allegations in the complaint, the exhibit ordinarily controls, even when considering a motion to dismiss.” Id. (citing Forrest, 507 F.3d at 542).

*8 Here, the Court cannot say that the exhibits annexed to the Complaint incontrovertibly contradict the Complaint’s allegations. The Complaint attaches both the applicable binding estimate before the Rado movers arrived, [1-2] at 8, and the Revised Binding Estimate, [1-3] at 6–8. Having compared the “Articles List” in the binding estimate to the “Descriptive Inventory” in the Revised Estimate, the relevant material fails to show that Rado packed more items and boxes than were included in the initial estimate. While the “Descriptive Inventory” may appear longer at first glance, this inventory lists each chair, cushion, or box individually. See, e.g., [1-3] at 7 (listing each “box” on an individual line). By comparison, the “Articles List” inventories household goods by category and quantity, i.e., “20 BOX MEDIUM (3C.F) CARRIER PACKED.” See [1-1] at 8. Accepting as true Plaintiffs’ allegations that no additional household items or services were added, Plaintiffs have stated a claim under § 375.401 because Rado failed to honor the binding estimate and jacked up the price without a basis to do so.

As for whether Rado presented the Revised Binding Estimate to Plaintiffs before or after loading, the fact that Plaintiff Glenn Scheuer may have signed the Revised Binding Estimate on August 26, 2022 rather August 27, 2022, does not undermine the Complaint’s allegation that Rado presented the revised estimate “after Rado had already loaded the shipment.” See [1] ¶¶ 35, 55. Whether presented on August 26^th or August 27^th at 3:00 a.m., an attempt by Rado to amend the binding estimate after loading would violate § 375.401(i) and § 375.403.

Finally, Mr. Scheuer’s initialing of boxes on the Revised Binding Estimate is not a basis to toss the claim at this point. Taking the Complaint’s allegations as true, the Rado movers presented the Revised Binding Estimate to Mr. Scheuer in the middle of the night, after he had been working alongside them for several hours, and with just hours to spare before Plaintiffs had to surrender the property to its new owner. The movers effectively told Mr. Scheuer that, if they wanted their belongings moved, as scheduled, they needed to pay more, including paying an “expedited delivery charge.” Id. ¶¶ 37, 39. As alleged, Plaintiffs had to concede to Rado movers’ new proposal, or risk the Rado movers holding their “property hostage.” Id. ¶ 69. Under these circumstances, Rado cannot now use the Revised Binding Estimate to defeat Plaintiffs’ claims. The Court denies Rado’s motion to dismiss Count I.

D. Carmack Amendment Claim (Count II)

In Count II, the Complaint alleges that Rado violated the Carmack Amendment by causing at least $2,000 in damage to their property. [1] ¶¶ 57–61. As explained above, the Carmack Amendment grants shippers a cause of action to recover against motor carriers for “actual loss of injury” to their property during interstate shipment. See REI Transp., Inc. v. C.H. Robinson Worldwide, Inc., 519 F.3d 693, 697 (7th Cir. 2008) (quoting 49 U.S.C. 14706(a)(1)). To state a claim under the Carmack Amendment, Plaintiffs must allege: “(1) delivery [to the carrier] in good condition; (2) arrival in damaged condition; and (3) the amount of damages.” REI Transp., 519 F.3d at 699 (quoting Am. Nat’l Fire Ins. Co. v. Yellow Freight Sys., 325 F.3d 924, 929 (7th Cir. 2003)); Tokio Marine & Fire Inc. Group v. J.J. Phoenix Exp., Ltd., 156 F.Supp.2d 889, 894 (N.D. Ill. 2001).

Here, the Compliant contains factual allegations sufficient to state a claim under the Carmack Amendment. The Complaint alleges that the goods arrived in a damaged condition, that Plaintiffs “discovered” damage to various items while unpacking their belongings, and that this damage occurred “while the property was in Rado’s care.” [1] ¶¶ 45, 60. Rado’s argument that no “damage symbols” were found on the Descriptive Inventory is unavailing, because the Complaint alleges that Plaintiffs observed the damage after being presented with the Descriptive Inventory, while unpacking. See id. ¶ 45.

The Complaint also sufficiently alleges the third element: an amount of damage to their household goods. Rado argues, citing no authority, that the Complaint fails to state a Carmack Amendment claim because “there are no specifications in Count II regarding the property damaged, or how Plaintiffs arrived at the figure of ‘at least $2,000.00.’ ” [24-1]. But the Complaint alleges that “Plaintiffs are able to establish the value of the damaged goods,” which they estimate to be “at least $2,000.00.” [1] ¶¶ 59, 61. Nothing more is required at this preliminary stage. See Coyote Logistic, LLC v. MPJ Trucking, Inc., No. 18-cv-1332, 2018 WL 4144628, at *2–3 (N.D. Ill. Aug. 30, 2018) (rejecting defendant’s argument on motion to dismiss that plaintiff “did not provide a factual basis for damages to the freight” when plaintiff alleged that defendant “damaged the freight, causing an actual loss of $36,189.92”); H. Kramer & Co. v. CDN Logistics, Inc., No. 13-CV-5790, 2014 WL 3397161, at *2 (N.D. Ill. July 11, 2014) (holding allegations that plaintiff “tendered the goods, in good order and condition” to defendant, “the goods and the trailer were stolen,” and the “value of the goods was $148,646.20” sufficient to state a claim under the Carmack Amendment).

*9 Finally, Rado’s “waiver” argument remains unconvincing. Rado contends that Plaintiffs signed a waiver which limits Rado’s liability to $0.60 per pound article, and therefore Plaintiffs are unable to claim $2,000 for any allegedly damaged items. But Plaintiffs’ ability to recover the entire sum of the pleaded damages due to a possible waiver is irrelevant at this stage; as explained above, what matters for pleading purposes is that the Complaint alleges an amount of damage to the household goods that Rado transported interstate. See, e.g., Tokio Marine, 156 F.Supp.2d at 894.

Because the Complaint sufficiently pleads a viable claim under the Carmack Amendment, the Court denies Defendant’s motion to dismiss Count II.

IV. Conclusion

For the reasons explained above, this Court grants in part, and denies in part Rado’s motion to dismiss, [24]. The Court dismisses with prejudice Plaintiffs’ fraudulent misrepresentation (Count III), Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1 et seq. (Count IV) and breach of contract (V) claims as preempted by the Carmack Amendment. Plaintiffs’ claims for violations of 49 C.F.R. § 375.401 et seq. (Count I) and the Carmack Amendment, 49 U.S.C. 14706 (Count II) may proceed.

All Citations

Slip Copy, 2024 WL 1328818

Footnotes

Plaintiffs also sued Trinity Relocation Group, LLC, see [1], but it voluntarily dismissed the claims against this Defendant. See [33], [35].
This Court draws the facts from Plaintiffs’ Complaint [1], and the exhibits attached to it, which it takes as true at this stage. Bogie v. Rosenberg, 705 F.3d 603, 609 (7th Cir. 2013).
Plaintiffs’ claims in Count III and IV also fail for the independent reason that they are preempted under the Federal Aviation Administration Authorization Act (FAAAA). The Seventh Circuit has held that the FAAAA preempts a claim if a state has “enacted or attempted to enforce a law” and that law relates to carrier “rates, routes, or services ‘either by expressly referring to them, or by having a significant economic effect on them.’ ” 74 F.4th 453, 458 (7th Cir. 2023), cert. denied, 144 S. Ct. 564 (2024) (quoting Nationwide Freight Sys., Inc. v. Illinois Com. Comm’n, 784 F.3d 367, 373 (7th Cir. 2015)). Plaintiffs’ fraudulent misrepresentation and IFCA relate to Rado’s services, and thus fall squarely within the type of claim that is preempted by the FAAAA. See S.C. Johnson & Son, Inc. v. Transp. Corp. of Am., 697 F.3d 544, 557 (7th Cir. 2012) (finding fraudulent misrepresentation claim preempted by FAAAA and noting that the FAAAA preempts state laws prohibiting deceptive or unfair business practices); American Airlines v. Wolens, 513 U.S. 219, 228, 236 (1995) (finding ICFA claims preempted by nearly identical preemption provision in Airline Deregulation Act). In contrast, Plaintiffs’ breach of contract claim (Count V) is based upon “privately ordered obligations,” not state-imposed obligations, and is thus not preempted by the FAAAA. See Wolens, 513 U.S. at 232.

End of Document