CASES (2024)

HMD America, Inc. v. Q1, LLC,

United States District Court, S.D. Florida.

HMD AMERICA, INC., F/U/B/O CERTAIN FAR EAST UNDERWRITERS WITH FUBON INSURANCE CO., LTD., its lead underwriter, Plaintiffs,

Q1, LLC, and Aldon Mega, Inc., Defendants.

Civil Action No. 23-21865-Civ-Scola

Signed January 12, 2024

Entered January 16, 2024

Attorneys and Law Firms

Michael Charles Black, Michael C. Black, P.A., Miami, FL, for Plaintiffs.

Beata Shapiro, Pro Hac Vice, Wilson Elser Moskowitz Edelman & Dicker LLP, Boston, MA, Mirelis Castilla, Wilson, Elser, Moskowitz, Edelman & Dicker LLP, Miami, FL, for Defendant Q1, LLC.

Kelly L. Kesner, Luks Santaniello Petrillo & Jones, Miami, FL, Spencer Michael Mayer, Lewis Brisbois Bisgaard and Smith, LLP, Coral Gableas, FL, Todd Randall Ehrenreich, Lewis Brisbois Bisgaard & Smith LLP, Coral Gables, FL, for Defendant Aldon Mega, Inc.

Order Granting Motion to Dismiss

Robert N. Scola, Jr., United States District Judge

*1 Plaintiff HMD America, Inc., on behalf of its insurer, Certain Far East Underwriters, seeks to recover from Defendants Q1, LLC and Aldon Mega, Inc. over $3 million in losses it incurred by way of a stolen cargo shipment of 16,000 cellphones belonging to HMD. (Am. Compl., ECF No. 34.) HMD lodges three counts in its complaint: breach of contract and negligence against Q1 (counts one and three, respectively) and breach of contract and/or duties under the Carmack Amendment against Aldon Mega (count two). (Id.) In response, Q1 has filed a motion to dismiss (Def.’s Mot. to Dismiss, ECF No. 39), submitting (1) HMD’s claims against Q1 are preempted under federal law and (2) HMD fails to state a claim for either breach of contract or negligence against Q1. (Pl.’s Resp., ECF No. 46.)¹ HMD has responded to the motion (Pl.’s Resp., ECF No. 46), Q1 has replied (Def.’s Reply, ECF No. 50), and the motion is now ripe for review. Having considered the parties’ briefing, the record, and the relevant legal authorities, the Court, for the following reasons, grants Q1’s motion to dismiss the claims against it (ECF No. 34).

1. Background²

It appears HMD regularly stored a stock of its merchandise at Q1’s distribution warehouse in Orlando, Florida. (Am. Compl. ¶ 4.) In conjunction with that storage, HMD and Q1 also agreed, through a written contract executed in August 2021, that Q1 would perform various logistic-related services for HMD based on certain terms and conditions. (Id. ¶ 15; Agmt., ECF No. 45-3, 2.) In March 2022, HMD asked Q1 to “arrange and transport” a shipment of twenty pallets of HMD’s Nokia cellphones (amounting to 16,000 cellphones) from Q1’s Orlando warehouse to a consignee in Jeffersonville, Indiana. (Am. Compl. ¶¶ 2, 4, 6.) Q1 then, in turn, subcontracted the transportation of the cellphones with its truck broker (and non-party), World Wide Express Corp. (Id. ¶¶ 7, 28.) Thereafter, World Wide contracted with Aldon Mega (now also a third-party plaintiff) to transport the twenty pallets of cellphones. (Id. ¶¶ 8, 28.) Aldon Mega then subcontracted the actual transportation of the shipment to RPM Corp. (now a third-party defendant and counter claimant). (Id. ¶ 29.) Although the shipment was picked up from Q1’s warehouse, on March 11, 2022, apparently by RPM, it was stolen before it reached its destination in Indiana. (Id. ¶¶ 10, 11.) HMD says it was damaged in excess of $3,392,000 based on the loss. (Id. ¶ 12.)

As set forth in the agreement between HMD and Q1, Q1 was obligated “perform all Services with highest degree of care, diligence, skill and judgement.” (Id. ¶ 16; Agmt., Appx. 1, ¶ 7.) The agreement also provides that Q1 was “responsible for the coordination of all HMD shipments from any origin to any destination” and required to “arrange the shipment to the final destination with the best possible carrier.” (Am. Compl. ¶ 17; Agmt., Appx 2, ¶ 5.)

*2 As to count one, the breach-of-contract claim, HMD contends that, based on the theft, Q1 breached the parties’ agreement “by failing to deliver the shipment in accordance with their contract, by failing to adequately arrange for the proper delivery of the shipment, by failing to arrange the shipment with the best possible carrier, and by failing to appoint a well-qualified carrier that had adequate insurance coverage for transporting cell phones.” (Am. Compl. ¶ 18.) HMD also maintains that, “because Q1 was managing the outbound transportation of the shipment, Q1 was responsible for and had the risk of loss of the subject cargo from the moment the goods are received by Q1 into its warehouse until the goods were delivered to the consignee.” (Id. ¶ 16.)

As to count three, the negligence claim, HMD complains that “Q1 failed to use reasonable care in transporting the subject shipment and/or failing to appoint the best possible carrier for the subject shipment,” and, as a result, “the subject shipment was stolen, and there was no insurance coverage for the carrier to pay for the loss.” (Id. ¶ 30.)

2. Legal Standard

A court considering a motion to dismiss, filed under Rule 12(b)(6), must accept all the complaint’s allegations as true, construing them in the light most favorable to the plaintiff. Pielage v. McConnell, 516 F.3d 1282, 1284 (11th Cir. 2008). Although a pleading need only contain a short and plain statement of the claim showing that the pleader is entitled to relief, a plaintiff must nevertheless articulate “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not shown—that the pleader is entitled to relief.” Ashcroft v. Iqubal, 556 U.S. 662, 679 (2009) (quoting Fed. R. Civ. P. 8(a)(2)) (internal punctuation omitted). A court must dismiss a plaintiff’s claims if she fails to nudge her “claims across the line from conceivable to plausible.” Twombly, 550 U.S. at 570.

3. Analysis

A. HMD’s negligence claim against Q1 is preempted.

Q1 argues that both HMD’s negligence and breach-of-contract claims against it are preempted under the Federal Aviation Administration Authorization Act. (Def.’s Mot. at 8–9.) In response, HMD submits its claims are not preempted because (1) the FAAAA only applies to intrastate, and not interstate transportation; and (2) the FAAAA does not apply to Q1 because Q1, as the shipper, was not a licensed broker and was not a broker for HMD’s shipment. (Pl.’s Resp. at 4–5.) While the Court is persuaded that preemption applies to HMD’s negligence claim, it finds Q1’s argument as to HMD’s breach-of-contract claim lacking.

As a starting point, Q1 has failed to cite any legal authority, and the Court itself is aware of none, supporting its position that HMD’s breach-of-contract claim is preempted. Indeed, as HMD points out, case law supports the contrary: “Between the narrow reach of the statute and Congress’s intent to only reach state regulation, it is clear that private contractual disputes are not completely preempted by the FAAAA.” Indep. Serv. Provider, LLC v. Aponte, 6:21-CV-558-GAP-GJK, 2021 WL 2828323, at *2 (M.D. Fla. May 24, 2021) (noting that “the Supreme Court has already held that the ADA’s preemption clause—which has broader scope than the FAAAA’s—does not preempt breach of contract claims”) (emphasis in original) (citing Am. Airlines, Inc. v. Wolens, 513 U.S. 219, 228–29 (1995)); Porter Capital Corp. v. Johns Manville, Inc., 2:12-CV-00925-RDP, 2013 WL 3153519, at *5 n. 3 (N.D. Ala. June 14, 2013) (finding common law breach of contract claim not preempted under the FAAAA); Barber Auto Sales, Inc. v. United Parcel Services, Inc., 494 F. Supp. 2d 1290, 1293 (N.D. Ala. 2007) (implicitly acknowledging that “routine breach of contract claims are not preempted by the FAAAA”) (cleaned up); Custom Stud, Inc. v. Meadow Lark Agency, Inc., 566 F. Supp. 3d 950, 954–55 (D. Minn. 2021) (“[T]he FAAAA does not preempt suits alleging breach of a party’s own self-imposed undertakings because these do not constitute a violation of state-imposed obligations.”) (cleaned up). Without further support or analysis then, from Q1, the Court declines to find HMD’s breach-of-contract claim in this case preempted.

*3 Next, in evaluating Q1’s preemption argument with respect to HMD’s negligence claim, the Court begins with the overarching principle that “state law that conflicts with federal law is without effect.” Cipollone v. Liggett Group, Inc., 505 U.S. 504, 516 (1992) (cleaned up). This preemption can operate, generally, when either (1) Congress explicitly states an intent to preempt state law; (2) a state law “actually conflicts with federal law”; or (3) a “federal law so thoroughly occupies a legislative field” that one can reasonably infer “that Congress left no room for the States to supplement it.” Id. Regardless of how preemption applies in a given case, any preemption assessment “starts with the assumption that the historic police powers of the States are not to be superseded by Federal Act unless that is the clear and manifest purpose of Congress.” Id. With that backdrop in mind, the Court turns to the FAAAA itself.

The FAAAA’s express preemption provision provides, in relevant part, that a state “may not enact or enforce a law … related to a price, route, or service of any … broker … with respect to the transportation of property.” 49 U.S.C. § 14501(c)(1). Under the FAAAA, “transportation” is defined to include “services related to” “the movement of … property.” 49 U.S.C. § 13102(23). And “broker” is defined to mean one who “sells, offers for sale, negotiates for, or holds itself out by solicitation, advertisement, or otherwise as selling, providing, or arranging for, transportation by motor carrier for compensation.” 49 U.S.C. § 13102(2). “The phrase ‘related to’ … embraces state laws having a connection with or reference to carrier rates, routes, or services, whether directly or indirectly.” Dan’s City Used Cars, Inc. v. Pelkey, 569 U.S. 251, 260 (2013) (cleaned up). Despite the breadth of the phrase, however, the Supreme Court has nonetheless cautioned that “that § 14501(c)(1) does not preempt state laws affecting carrier prices, routes, and services in only a tenuous, remote, or peripheral manner.” Id. at 261 (cleaned up).

In rejecting Q1’s preemption arguments, HMD argues that the FAAAA simply doesn’t apply to its claims. First, HMD says, the FAAAA, based on its title—“Federal authority over intrastate transportation”—doesn’t apply here because the goods were to be transported interstate, from Florida to Indiana. (Pl.’s Resp. at 4 (emphasis added) (quoting 49 U.S.C. § 14051’s title).) HMD’s position, however, is contrary to the very reason the FAAAA was enacted: Congress’s concern “that state regulation impeded the free flow of trade, traffic, and transportation of interstate commerce.” Dan’s City, 569 U.S. at 263 (cleaned up) (emphasis added). Indeed, as Q1 points out, the FAAAA has been broadly and repeatedly applied to preempt state-law claims related to interstate transportation of property. See, e.g., Aspen Am. Ins. Co. v. Landstar Ranger, Inc., 65 F.4th 1261, 1268 (11th Cir. 2023) (affirming dismissal of state tort claims based on “allegations of negligence and gross negligence against a transportation broker for its selection of a motor carrier to transport property in interstate commerce,” from Colorado to Maryland); Luccio v. UPS, Co., 9:16-CV-81703-RLR, 2017 WL 412126, at *2 (S.D. Fla. Jan. 31, 2017) (Rosenberg, J.) (“[C]ase law and statutory interpretation support the conclusion that the FAAAA was intended to apply to intrastate as well as interstate shipping unless otherwise exempted.”).

Second, HMD argues that the FAAAA doesn’t apply to Q1 because Q1 is a shipper and not a licensed broker or broker for the cellphone shipment in this case. (Pl.’s Resp. at 4–5.) The Court is not persuaded. Instead, the Court agrees with Q1 that FAAAA preemption applies to HMD’s tort claim against Q1 because that claim relates to Q1’s alleged negligence in arranging for the transportation of cargo and Q1’s alleged negligent selection of a motor carrier. In short, the Court finds HMD’s claim against Q1 is an attempt, whether directly or indirectly, to regulate broker and carrier services. See, e.g., Rowe v. New Hampshire Motor Transp. Ass’n, 552 U.S. 364, 372 (2008) (preempting state law that requires a shipper to choose a certain kind of delivery service because although the state regulation “tells shippers what to choose rather than carriers what to do,” the effect of the regulation is to regulate carrier delivery services); Lee v. Werner Enterprises, Inc., 3:22 CV 91, 2022 WL 16695207, at *4 (N.D. Ohio Nov. 3, 2022) (“[N]egligence claims brought against a shipper and broker fall squarely within the preemption of the FAAAA.”); Creagan v. Wal-Mart Transp., LLC, 354 F. Supp. 3d 808, 813 n. 6 (N.D. Ohio 2018) (finding a negligent hiring claim against a defendant shipper preempted because “the negligent hiring claim against [the shipper] stem[med] entirely from [the defendant] broker[’s] services”). Accordingly, the Court finds HMD’s negligence claim against Q1, based on Q1’s alleged failure “to use reasonable care in transporting the subject shipment and/or by failing to appoint the best possible carrier for the subject shipment,” preempted by the FAAAA.

B. HMD fails to state a breach-of-contract claim against Q1.

*4 With the Court’s finding that HMD’s negligence claim is preempted, remaining for resolution is only whether HMD has stated a plausible claim for breach of contract. Q1 does not dispute the existence of an agreement, but maintains that HMD’s allegations of breach are far too conclusory and vague to support a claim for breach of contract. (Def.’s Mot. at 9–11.) In response, HMD stands on its pleading, insisting, without elaboration, that it “sufficiently alleges the existence of a valid contract[,] several of the material provisions of the contract, that Q1 breached the material terms of that contract, and that [it] suffered damages as a result.” (Pl.’s Resp. at 5.) After careful review, the Court agrees with Q1: the complaint fails to sufficiently articulate enough facts to state a plausible claim for breach of contract.

“For a breach of contract claim, Florida law requires the plaintiff to plead and establish: (1) the existence of a contract; (2) a material breach of that contract; and (3) damages resulting from the breach.” Vega v. T-Mobile USA, Inc., 564 F.3d 1256, 1272 (11th Cir. 2009). Because the parties do not dispute the first element, the Court’s analysis is trained on whether HMD has sufficiently alleged a material breach that resulted in HMD’s damages.

Within its breach-of-contract count, HMD specifically identifies two provisions of its contract with Q1: paragraph seven (labeled “Liability”) from appendix one; and paragraph five (labeled “Transport Concept”) of appendix two.³ (Am. Compl. ¶¶ 16, 17.) In its complaint, HMD describes paragraph seven as obligating Q1 “to perform all of its services with the highest degree of care, diligence, skill and judgment.” (Am. Compl. ¶ 16.) And it describes paragraph five as rendering Q1 “responsible for the coordination of all HMD shipments from any origin to any destination” and for the arrangement of “the shipment to the final destination with the best possible carrier.” (Id. ¶ 17.) Additionally, without referencing a particular provision of the contract, HMD also alleges, in its complaint, that “because Q1 was managing the outbound transportation of the shipment, Q1 was responsible for and had the risk of loss of the subject cargo from the moment the goods are received by Q1 into its warehouse until the goods were delivered to the consignee.” (Id. ¶ 16.) HMD then presents the entirety of its breach allegations in one short paragraph, alleging that Q1 failed to (1) “deliver the shipment in accordance with [the] contract”; (2) “adequately arrange for the proper delivery of the shipment”; (3) “arrange the shipment with the best possible carrier”; and (4) “appoint a well-qualified carrier that had adequate insurance coverage for transporting cell phones.” (Id. ¶ 18.)

The Court agrees with Q1 that these allegations are inadequate. The specific breach allegations, confined to paragraph eighteen of HMD’s complaint, are purely conclusory and devoid of any concrete facts. HMD’s position seems to be that, simply because the cargo was stolen, Q1 must have somehow failed to uphold its end of the bargain. But, HMD fails to actually connect these dots—the theft and the contract—and ultimately its allegations leave the Court with more questions than answers: Which provision of the contract did Q1 breach when the cell phones were not delivered because they were stolen from the motor carrier? What was inadequate about the way Q1 coordinated the shipment? What facts support HMD’s claim that Q1 failed to arrange the shipment with the “best possible carrier”? Is it HMD’s position that the best possible carrier would be wholly impervious to all thefts? What facts show that the carrier Q1 appointed was not “well-qualified”? Which contract provision required Q1 to appoint a carrier that had adequate insurance coverage for transporting cell phones?

*5 Notably, HMD has not presented any factual allegations supporting its claim that Q1 breached either of the provisions it specifically references. As to the liability provision (paragraph seven of appendix one), HMD proffers no facts showing that Q1 failed to perform its duties “with [the] highest degree of care, diligence, skill and judgment,” as required by the contract. (Agmt., Appx. 1, ¶ 7.) Similarly, the complaint fails to set forth any facts that would support a claim that Q1 breached the transport provision (paragraph five of appendix two) as well. As applicable here, the transport provision renders Q1 “responsible for the coordination of all HMD shipments” and requires Q1 to “arrange the shipment to the final destination with the best possible carrier and routing within agreed lead[ ]time.” (Id. Appx. 2, ¶ 5.) But none of HMD’s allegations supply any facts showing that the theft of the cargo from the carrier resulted from Q1’s failure to comply with these duties under the contract.

Further undermining the viability of HMD’s breach-of-contract claim, as Q1 points out, HMD’s allegations also mischaracterize the parties’ agreement. HMD’s position appears to be that the contract provides for absolute liability against Q1 for cargo that failed to reach its destination in Indiana after leaving Q1’s warehouse in Florida—regardless of whether Q1 was at fault. That is, according to HMD’s reading of the agreement, even without any showing that the in-transit loss was within Q1’s control, Q1, despite not being the actual carrier of the goods, nonetheless bore all the risk of that loss, whatever the cause. HMD fails, however, as Q1 points out, to reference any actual contract language that warrants HMD’s interpretation. Accordingly, the Court finds HMD’s unsupported speculation, that “Q1 was responsible for and had the risk of loss of the subject cargo from the moment the goods are received by Q1 into its warehouse until the goods were delivered to the consignee,” unavailing. (Id. ¶ 16.)

Indeed, other provisions in the contract appear to indicate the contrary: that Q1 was in fact not absolutely liable for any such loss during transport by the carrier. For example, the contract explicitly holds each party “fully liable” to the other for damages arising out of any “gross negligence or willful act or omission.” (Agmt., Appx. 1, ¶ 7.) The agreement further specifies that Q1 is “responsible for” and bears “the risk of the Goods from the moment the Goods are taken in charge of [Q1] until such Goods are released to HMD’s carrier if HMD is managing the outbound transportation”; and, if Q1 “is managing the outbound transportation, the outbound goods will be insured under HMD Global’s insurance freight carrier.” (Id.) These provisions would not make sense if the parties’ agreement was that Q1 was to remain fully liable for any loss of the shipment, regardless of Q1’s fault or ability to prevent the loss. The same logic applies to the agreement’s force majeure clause, absolving Q1 for any liability for “events beyond the control of the Party which occur after entering into agreement for Services and which were not reasonably foreseeable at that time and whose effects are not capable of being overcome without unreasonable expense and/or loss of time.” (Amgt., Appx. 1, ¶ 15.) HMD’s contention that, under the contract, Q1 had the full “risk of loss of the subject cargo” until it was delivered to the consignee (Am. Compl. ¶ 16) is irreconcilable with this force majeure provision. This is especially so where the complaint is devoid of facts from which the Court could conclude or even infer that the theft of the cargo was the result of Q1’s own actions or inactions.

Lastly, HMD’s efforts to insert new allegations, in opposition to Q1’s motion to dismiss are also unavailing. In its response, HMD points to a contract provision that renders Q1 “fully responsible and liable for the actions of its subcontractors.” (Pl.’s Resp. at 5–6 (referencing Agmt., Appx. 1, ¶ 3).) HMD then argues that World Wide’s failure “to appoint the best possible carrier that had sufficient insurance to cover the loss is directly attributable to Q1.” (Pl.’s Resp. at 6.) HMD’s position here suffers from several defects. First, HMD did not set forth this basis for Q1’s liability in its complaint and therefore it is not properly raised. Huls v. Llabona, 437 F. App’x 830, 832 n. 5 (11th Cir. 2011) (noting that a plaintiff may not amend his complaint through argument raised in a response to a motion to dismiss). Second, even if HMD had included these allegations in its complaint, they would be unavailing: HMD supplies no facts showing that World Wide failed to appoint the best possible carrier, that the appointed carrier was required to have insurance sufficient to cover the theft of the cargo, or that World Wide’s actions or inactions otherwise resulted in the theft.

*6 In sum, the Court finds HMD (1) has not supplied factual allegations in its complaint, as opposed to bare conclusions, showing that Q1 breached any of the contractual provisions HMD explicitly identifies; (2) fails to identify any other contractual provisions that Q1 breached; and (3) improperly proffers allegations in response to Q1’s motion to dismiss that were not included in HMD’s complaint. Accordingly, the Court agrees with Q1 that HMD’s breach-of-contract claim should be dismissed. See, e.g., Stepakoff v. IberiaBank Corp., 637 F. Supp. 3d 1309, 1313 (S.D. Fla. 2022) (Bloom, J.) (“In order to allege a material breach in accordance with the pleading standards required under the Federal Rules of Civil Procedure, the plaintiff must allege which provision of the contract has been breached.”); Siedle v. Nat’l Ass’n of Sec. Dealers, Inc., 248 F. Supp. 2d 1140, 1143 (M.D. Fla. 2002) (“Contract construction is a matter of law, and dismissal is appropriate where the cited language in the contract unambiguously demonstrates that the Plaintiff is not entitled to the relief sought.”).

4. Conclusion

For the reasons set forth above, the Court grants Q1’s motion (ECF No. 39) and dismisses HMD’s claims against Q1 with prejudice: HMD’s state-law negligence claim is barred by § 14501(c)(1) and HMD fails to state a claim for breach of contract.

Additionally, the Court dismisses HMD’s claims against Q1 without leave to amend, denying its cursory request to amend, inserted as an afterthought, at the end of its response to Q1’s motion to dismiss. (Pl.’s Resp. at 6.) The request is both procedurally defective and lacking in substantive support. First, the request is untimely and HMD fails to supply good cause, or even any cause, that would warrant an extension of the deadline to amend the pleadings. And second, the request is improperly presented, introduced perfunctorily and thoroughly devoid of any legal support. See Newton v. Duke Energy Florida, LLC, 895 F.3d 1270, 1277 (11th Cir. 2018) (“[W]here a request for leave to file an amended complaint simply is imbedded within an opposition memorandum, the issue has not been raised properly.”); Avena v. Imperial Salon & Spa, Inc., 740 F. App’x 679, 683 (11th Cir. 2018) (“[W]e’ve rejected the idea that a party can await a ruling on a motion to dismiss before filing a motion for leave to amend.”) (noting also that “a motion for leave to amend should either set forth the substance of the proposed amendment or attach a copy of the proposed amendment”) (cleaned up). Finally, HMD has already amended its complaint once, in response to Q1’s first motion dismiss, and yet still failed to set forth a viable claim against Q1.

Done and ordered in Miami, Florida, on January 12, 2024.

All Citations

Slip Copy, 2024 WL 167374

Footnotes

Aldon Mega has answered the complaint (ECF No. 36) and so count two is not at issue with respect to this order.
The Court accepts the complaint’s factual allegations, as set forth below, as true for the purposes of evaluating the motion to dismiss. Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 1369 (11th Cir. 1997).
Although the amended complaint references the agreement as being attached as an exhibit to the complaint, HMD acknowledges having inadvertently neglected to file it. Both parties appear to agree, however, that the Court can consider the contract—central to HMD’s claim and undisputed (later filed by both HMD (Agmt., ECF No. 45-3) and Q1 (Agmt., ECF No. 39, 14–21))—without converting Q1’s motion to dismiss into one for summary judgment.

End of Document

Int’l Cargo Loss Prevention, Inc. v. Mediterranean Shipping Co

United States District Court, S.D. New York.

INTERNATIONAL CARGO LOSS PREVENTION, INC., Plaintiff,

MEDITERRANEAN SHIPPING CO. (USA) INC. and Mediterranean Shipping Co. S.A., Defendants.

23-CV-1312 (JGLC)

Signed January 3, 2024

Attorneys and Law Firms

James Edward Mercante, Michael Evan Stern, Rubin, Fiorella, Friedman & Mercante LLP, New York, NY, Douglas Karl Scheller, Jr., Nicoletti, Hornig & Sweeney, New York, NY, for Plaintiff.

Mark A. Beckman, Gordon & Rees, LLP, New York, NY, for Defendants.

OPINION AND ORDER

JESSICA G. L. CLARKE, United States District Judge:

*1 Plaintiff International Cargo Loss Prevention, Inc. (“Plaintiff”) brings this action under the Carriage of Goods by Sea Act (“COGSA”) against Mediterranean Shipping Company (USA) Inc. (“MSC USA”) and Mediterranean Shipping Company S.A. (“MSC S.A.”) (collectively, “Defendants”), alleging that Defendants breached their contractual obligations. See ECF No. 19 (“FAC”). Defendants move to dismiss the Amended Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. For the reasons herein, Defendants’ motion to dismiss is GRANTED in part and DENIED in part.

BACKGROUND

Plaintiff is the insurer of a shipment of frozen shrimp that Defendants, common carriers, were contracted to transport from Ennore, India to Chicago, Illinois. FAC ¶¶ 2, 5, 9–10. The terms of the carriage agreement are memorialized in Sea Waybill No. MEDUMQ297290 (the “Sea Waybill”). Id. ¶ 10. The Sea Waybill is signed by the shrimp supplier and MSC USA as agent for MSC S.A. ECF No. 25 (“Beckman Decl.”), Ex. 1 at 3.

According to Plaintiff, Defendants delivered the shipment to Chicago, Illinois on or about September 15, 2021 in damaged condition. FAC ¶ 11. In response, Plaintiff sought to bring suit against Defendants for damages. ECF No. 26 (“Pl.’s Mem.”) at 5. As COGSA’s statute of limitation extends only one year from the date of an alleged breach, Plaintiff asked Defendants for an extension of time to file their complaint. Id. at 5, 7–8. Defendants twice extended the filing deadline for the Complaint, providing a date and time by which Plaintiff needed to file suit. Id. at 4, 8. Though the parties agree on the date of the deadline, they disagree on whether Defendants’ time portion of the deadline was according to the Central European time zone or Central Standard time zone. Id. at 10; ECF No. 24 (“Defs.’ Mem.”) at 6.

Plaintiff filed the initial Complaint against MSC S.A. and MSC USA on February 15, 2023, at 5:32 p.m. Eastern Standard Time (“EST”). See ECF No. 1 (“Compl.”). On February 16, 2023, the Clerk of Court notified Plaintiff that the Complaint was deficient because the attorney signature was incomplete and the civil cover lacked sufficient information. See ECF No. 2. The Clerk of Court requested that Plaintiff re-file the Complaint, and Plaintiff did so later that same day. See ECF Nos. 2–4.

On May 12, 2023, Defendants filed a motion to dismiss. See ECF No. 12. In their supporting papers, Defendants argued that Plaintiff’s claims were time-barred by COGSA’s statute of limitations and that Plaintiff failed to state a claim against MSC USA because it failed to allege that MSC USA was a party to the Sea Waybill. ECF No. 13 at 3, 5. Plaintiff requested leave to file an amended complaint, which the Court granted on May 23, 2023. See ECF No. 16. The Amended Complaint, filed on June 2, 2023, adds that both MSC USA and MSC S.A. issued the Sea Waybill. FAC ¶ 10.

On June 23, 2023, Defendants moved to dismiss the Amended Complaint pursuant to Rule 12(b)(6), based on similar grounds as those in their initial motion to dismiss. See Defs’ Mem. at 1–2. Defendants argue that the suit is time-barred by COGSA’s statute of limitations because Plaintiff filed the Complaint after Defendants’ filing extension expired, and that Plaintiff fails to state a claim against MSC USA because MSC USA, as an agent of MSC S.A., cannot be held liable for breaches of the Sea Waybill. Id. at 3, 8. Accompanying their motion to dismiss, Defendants attached five exhibits, none of which were attached to Plaintiff’s Complaint or Amended Complaint. See Beckman Decl.

LEGAL STANDARD

I. Motion to Dismiss

*2 Defendants’ motion to dismiss is brought pursuant to Rule 12(b)(6). In reviewing a motion to dismiss under Rule 12(b)(6), the Court must “constru[e] the complaint liberally, accepting all factual allegations in the complaint as true, and drawing all reasonable inferences in the plaintiff’s favor.” Goldstein v. Pataki, 516 F.3d 50, 56 (2d Cir. 2008) (internal quotation marks omitted). A claim will survive a Rule 12(b)(6) motion only if the plaintiff alleges facts sufficient “to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556). “Determining whether a complaint states a plausible claim for relief will … be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679.

II. Submission of Additional Documents

Typically, “[i]n deciding a motion under Rule 12(b)(6), the Court may consider only the facts stated on the face of the complaint, and in documents appended to the complaint or documents incorporated by reference in the complaint.” AIM Int’l Trading, L.L.C. v. Valcucine S.p.A., 02-CV-1363 (PKL), 2003 WL 21203503, at *3 (S.D.N.Y. May 22, 2003) (citing Schnall v. Marine Midland Bank, 225 F.3d 263, 266 (2d Cir. 2000)). Where a party on a motion to dismiss introduces documents outside the pleadings and not integral to the complaint, the Court must “either exclude the additional material and decide the motion on the complaint alone or convert the motion to one for summary judgment ….” Friedl v. City of New York, 210 F.3d 79, 83 (2d Cir. 2000) (quoting Fonte v. Board of Managers of Continental Towers Condominium, 848 F.2d 24, 25 (2d Cir. 1988) (internal quotation marks omitted)).

However, the Court “may nevertheless consider” a document outside of the complaint “where the complaint ‘relies heavily upon its terms and effect,’ which renders the document ‘integral’ to the complaint.” Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002) (quoting Int’l Audiotext Network, Inc. v. Am. Tel. & Tel. Co., 62 F.3d 69, 72 (2d Cir. 1995)). “[W]hen a plaintiff chooses not to attach to the complaint or incorporate by reference a prospectus upon which it solely relies and which is integral to the complaint, the defendant may produce” the same in its motion to dismiss. Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 47 (2d Cir. 1991); see also Broder v. Cablevision Sys. Corp., 418 F.3d 187, 196 (2d Cir. 2005) (“Where a plaintiff has relied on the terms and effect of a document in drafting the complaint, and that document is thus integral to the complaint, we may consider its contents even if it is not formally incorporated by reference.”) (cleaned up).

Here, Defendants submitted documents in connection with their moving papers that were not attached to the Complaint, including: (1) the Sea Waybill; (2) the email exchanges documenting the extensions Defendants granted Plaintiff to file their complaint (“Extension Emails”); (3) a copy of the ECF receipt of the filing of Plaintiff’s Complaint on February 15, 2023; and (4) screenshots of the results of a Google search for “CET time” (“Google Screenshots”). Beckman Decl. Exs. 1–5.

The Court may properly consider the Sea Waybill in the context of this Rule 12(b)(6) motion because its breach forms the basis of Plaintiff’s suit. “Courts frequently consider contracts like this one in a motion to dismiss” without “transform[ing] [the] motion into one for summary judgment.” KiSKA Const. Corp.US v. G & G Steel, Inc., No. 04-CV-9252 (CSH), 2005 WL 1225944, at *3 (S.D.N.Y. May 20, 2005); see also Chambers, 282 F.3d at 153–54 (finding that the district court on a 12(b)(6) motion properly considered, without converting the motion into one for summary judgment, contracts not included in plaintiff’s pleadings that were “integral to the Amended Complaint”); Cortec Indus., Inc., 949 F.2d at 48 (holding that the district court was entitled to consider a written agreement defendant attached to a motion to dismiss without converting the motion to one for summary judgment); AIM Int’l Trading, L.L.C., 2003 WL 21203503, at *3–4 (declining to convert motion to dismiss into summary judgment motion but opting to consider agreements underlying plaintiff’s breach of contract claim). Accordingly, the Court will consider the Sea Waybill.

*3 The Court, however, declines to consider the remaining documents in deciding the current motion. Defendants attached these documents in support of their argument that Plaintiff’s Complaint is time-barred because it was filed after Defendants’ extension period expired. The parties, however, dispute the meaning of terms used in the extension emails and whether terms used were ambiguous in light of the circumstances in this case. These questions are not suited for resolution on a motion to dismiss. JGB (Cayman) Newton, Ltd. v. Sellas Life Scis. Grp. Inc., No. 18-CV-3095(DLC), 2018 WL 5266877, at *8 (S.D.N.Y. Oct. 23, 2018). (“If an ambiguity exists, then a court may consider extrinsic evidence to determine its meaning …. Because such evidence involves factual disputes, however, it is generally inappropriate for resolution on a motion to dismiss or for judgment on the pleadings.”) Because of this dispute, the Court declines to consider the remaining exhibits with respect to this motion.

DISCUSSION

Defendants assert three arguments in support of their motion to dismiss. The first is that Plaintiff’s claims are barred by COGSA’s statute of limitations because Plaintiff had to re-file its Complaint a day after the statutory period expired as Plaintiff’s initial Complaint was procedurally deficient. Next, Defendants argue that even if Plaintiff’s Complaint was filed on the day the statutory period expired, it is nonetheless still time-barred since it was filed hours after Defendants’ alleged deadline expired. In support of this argument, Defendants attached the Extension Emails and Google Screenshots. Finally, Defendant argues that Plaintiff failed to state a claim against MSC USA.

Because Defendants’ second argument relies entirely on extraneous exhibits that the Court will not consider, the Court will not address the argument at this time. For the reasons explained below, the Court finds that despite its procedural deficiencies, Plaintiff filed its Complaint on the date of the deadline, but that Plaintiff has failed to state a claim against MSC USA.

I. The Court Cannot Conclude That Plaintiff’s Claim Is Time-Barred

Defendants contend that Plaintiff’s claims are time-barred by COGSA’s statute of limitations because its “operative Complaint” was not filed until February 16, 2023. Defs.’ Mem. at 4. Plaintiff filed their Complaint on February 15, 2023, the parties’ agreed upon deadline. On February 16, 2023, the Clerk of Court notified Plaintiff that the Complaint was deficient because “the pleading was not signed by the attorney” and “the civil cover sheet [wa]s not correct.” See ECF No. 2. That same day, Plaintiff re-filed the Complaint with a signature and corrected civil cover sheet. See ECF Nos. 3–4. According to Defendants, because Plaintiff’s initial filing did not “comply with the rules,” the operative filing date is February 16, 2023, which is outside the statute of limitations. Defs.’ Mem. at 4–5.

Defendant’s argument is without merit. “A complaint is deemed filed when the Clerk of Court receives it.” Abusikin v. City of New York, No. 18-CV-4582 (AT), 2021 WL 930349, at *3 (S.D.N.Y. Mar. 11, 2021) (quoting Kalican v. Dzurenda, 583 F. App’x 21, 23 (2d Cir. 2014)). Plaintiff’s filing error does not void the February 15, 2023 filing date for statute of limitations purposes. A complaint filed without a proper signature “does not invalidate the timely filing of the Complaint.” Rodriguez v. City of New York, No. 10-CV-1849 (PKC), 2011 WL 4344057, at *3, (S.D.N.Y. Sept. 7, 2011). “[C]ourts regularly deem timely complaints filed before the statute of limitations expires but rejected by the Clerk of Court due to a lack of proper signature, and then promptly refiled correctly.” Abusikin, 2021 WL 930349, at *3. Here, Plaintiff promptly remedied its deficient Complaint on the same day it was notified of its mistakes. See ECF No. 3.

*4 Defendants rely on Davis v. Lenox Hill Hospital to support their argument that the filing date should be February 16, 2023 rather than February 15, 2023. No. 03-CV-3746 (DLC), 2004 WL 1926086, at *8 (S.D.N.Y. 2004). The situation in Davis is distinguishable. There, the plaintiff failed to immediately remedy her filing error and instead allowed nearly a month to elapse before correcting the error. Id. Further, the misfiled document was returned to the plaintiff twice more for failing to comply with the local rules and the plaintiff twice more allowed weeks to pass before attempting to remedy the mistake. Id. All told, it took the plaintiff in Davis over four months to correct her filing error. Id. Here, Plaintiff correctly re-filed its pleadings on the same day that it was notified of the deficiencies. See ECF No. 3.

Accordingly, Plaintiff’s Complaint was commenced on January 15, 2023 and is not time-barred.

II. Plaintiff Fails to State a Claim Against MSC USA

Defendants argue that Plaintiff failed to state a claim against MSC USA. Defs.’ Mem. at 8. Plaintiff’s Amended Complaint alleges that both MSC S.A. and MSC USA issued and breached the Sea Waybill. FAC ¶¶ 10, 12. According to Defendants, however, “MSC USA, as agent for MSC SA, had no involvement with the instant issues, is the wrong party, and thus cannot be held liable here.” Defs.’ Mem. at 8. Pointing to the Sea Waybill, Defendants highlight that “it was issued only by MSC SA.” Defs.’ Mem. at 8.

Plaintiff does not dispute that MSC USA is the agent of MSC. S.A., but asserts that it “sufficiently pled [ ] that both MSC USA and MSC SA are the liable parties” since it “list[ed] MSC USA as a defendant and party to the action” and alleged that it breached the Sea Waybill. Pl.’s Mem at 14. As “[f]urther proof that MSC USA was a party to the Sea Waybill,” Plaintiff states that MSC USA “was charged with administering the loss under contract” and “had the power to bind both MSC SA and MSC USA in accordance with the damage to the shipment.” Id. On this last point, though the Complaint alleges that MSC USA and MSC S.A. issued and breached the Sea Waybill, the Complaint does not allege that MSC USA “was charged with administering the loss under contract” or that “it had the power to bind MSC S.A.” Accordingly, the Court will not consider those allegations as facts for the purpose of this motion.

“[C]ommon law rules of agency” apply to interpretation of maritime contracts. CMA-CGM (Canada), Inc. v. World Shippers Consultants, Ltd., 921 F. Supp. 2d 1, 6 (E.D.N.Y. 2013). Thus, “if an agent executes a contract on behalf of its principal, and if the agent has properly disclosed its principal, then the agent is not itself a party to the contract and is not liable for claims arising out of it.” Mediterranean Shipping Co. (USA) Inc. v. Am. Cargo Shipping Lines, Inc., No. 13–CV–6357 (ER), 2014 WL 4449796, at *4 (S.D.N.Y. 2014). The agent, however, may be held liable for a breach of the contract if the agent “clearly manifests an intent to be so bound, ‘instead of, or in addition to, its principal.’ ” CMA-CGM, 921 F. Supp. 2d at 6 (quoting Ariel Mar. Grp., Inc. v. Zust Bachmeier of Switzerland, Inc., 762 F. Supp. 55, 60 (S.D.N.Y. 1991)).

Here, MSC USA’s signature on the Sea Waybill plainly states that it is signing “as Agent on behalf of the Carrier MSC Mediterranean Shipping Company S.A.” Beckman Decl. Ex. 1 at 3. And Plaintiff has acknowledged that MSC USA is the agent of MSC S.A. See Pl.’s Mem. at 14. In this case, MSC USA can be found liable only if it manifested an intent to be bound to the contract. See CMA-CGM, 921 F. Supp. 2d at 6. Plaintiff does not allege any facts to support that MSC USA manifested an intent to be bound to the Sea Waybill. Instead, the only allegation specific to MSC USA is that it, along with MSC S.A., issued the Sea Waybill. Plaintiff also included a conclusory statement that MSC S.A. and MSC USA “breached, failed and violated the contract of carriage and their duties and obligations as common carriers …” FAC ¶ 12. These allegations are insufficient to state a claim against MSC USA. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation omitted) (“Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.”).

*5 Finally, Plaintiff has requested leave to amend the Amended Complaint if the Court finds that Plaintiff has failed to sufficiently state a claim against MSC USA. Pl.’s Mem. at 14–15. Plaintiff, however, has already been afforded the opportunity to remedy the Complaint’s insufficient allegations against MSC USA. It amended the complaint after Defendants raised this very issue in a motion to dismiss Plaintiff’s initial Complaint. ECF Nos. 13; 19. Plaintiff failed to plead any facts to address Defendants’ argument in this regard or indicate in any way that it has facts to support such an allegation. As such, Plaintiff’s request to file a second amended complaint is denied.

CONCLUSION

For the foregoing reasons, Defendants’ motion to dismiss is GRANTED in part and DENIED in part. Defendant MSC USA is dismissed from the case.

All Citations

Slip Copy, 2024 WL 37072

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