Supreme Judicial Court of Maine.

CASTINE ENERGY CONSTRUCTION, INC.

v.

T.T. DUNPHY, INC.

Argued: Sept. 21, 2004.

Decided: Oct. 26, 2004.

RUDMAN, J.

Castine Energy Construction, Inc. appeals from a judgment entered in the Superior Court (Somerset County, Studstrup, J.), upon a jury verdict finding that T.T. Dunphy, Inc. was free from negligence, and that Castine proximately caused the damages that were the subject of its complaint. Castine contends that the court erred by failing to grant its motion for judgment as a matter of law, allowing Dunphy’s expert to testify as to how the relevant safety regulations should be interpreted, and by denying its request to instruct the jury that it had no duty to warn Dunphy of the possible dangers in improperly securing the freight it was hired to transport. We disagree and affirm the judgment.

I. BACKGROUND

Castine is a construction company that specializes in air pollution control systems. At some time prior to July 10, 2000, Castine was hired by a Virginia company (Covanta Fairfax, Inc.) to fabricate and deliver several devices known as “steel baghouse covers.” These covers are steel industrial filters, approximately 11 feet x 11 feet, each weighing 2000 pounds. Castine was to fabricate these covers at its facility in Fairfield, Maine, and then deliver them to Virginia. Castine, in turn, contracted with World Transport Services, Inc., who in turn subcontracted with Dunphy to deliver the covers from Castine’s facility in Maine to Virginia. Castine decided that the best way to transport the covers would be in an “A-frame” configuration. In order to facilitate the loading of the covers onto the trailer, Castine welded iron cross bars onto the covers. These cross bars were “stitch welded” onto the A-frame structures. Castine testified that these cross bars were intended only for the purposes of loading the trailer and were never meant to be used in securing the covers once loaded. On July 7 and 8, 2000, Castine placed the sixteen covers onto the trailer for transport to Virginia. The covers were placed on the flatbed trailer in the A-frame configuration designed by Castine.

On Saturday, July 8, 2000, Dunphy’s driver arrived at Castine’s facility to pick up the trailer. At that time the covers were in good condition. The driver proceeded to secure the covers onto the trailer in preparation for transporting them to Virginia. In order to secure the load the driver used chains, which he attached to the iron cross bars that Castine had left welded to the A-frames. The driver issued a bill of lading to Castine, and then set off for Virginia. While traveling on highway I-290 through Massachusetts, the covers came loose after the driver drove over a bump in the road. All of the covers spilled onto the highway and were irreparably damaged.

Castine filed a two-count complaint against Dunphy, sounding in strict liability, under a federal transportation liability statute, and in negligence. Prior to trial, Castine moved for a summary judgment, arguing that Dunphy was negligent per se for violating certain federal safety regulations while transporting the covers. The court (Marden, J.) denied Castine’s motion concluding that a genuine issue of material fact existed as to whether Dunphy was negligent. A jury trial was held before the Superior Court.

At the close of evidence, Castine renewed its insistence that the case involved no genuine issue of material fact, and moved for judgment as a matter of law. Castine asserted that it was undisputed that Dunphy had violated a safety statute and was therefore negligent per se. The court denied this motion and held that even if Dunphy did violate a safety statute, such a violation is merely “one of many factors [the jury] can consider in determining whether there was negligence.”

The jury was asked to answer two factual questions: whether Dunphy was free from negligence and whether Castine proximately caused the damages. The jury returned a verdict specifically finding that Dunphy was free from negligence and also that Castine proximately caused the damages to the covers. The court entered a judgment in favor of Dunphy. Castine made a motion for a new trial, arguing that the trial court had erred in allowing Dunphy’s expert witness to testify to the effect of certain transportation regulations, and for denying its request that the court instruct the jury that it had no duty to warn Dunphy of the danger in securing the cargo using the cross bars. The court denied this motion. This appeal followed.

II. DISCUSSION

A. Judgment as a Matter of Law

Federal law governing the liability of shippers and carriers controls this case. Pursuant to 49 U.S.C.A. § 14706 (1997 & Supp.2004), known as the Carmack Amendment, once a carrier accepts property it receives for transportation, it issues a bill of lading and is thereafter responsible for damages to the property. [FN1] 49 U.S.C.A. § 14706(a) (1997). The Supreme Court has explained the effect of the statute:

FN1. Under the Carmack amendment:

A common carrier … subject to the jurisdiction of the Interstate Commerce Commission … shall issue a receipt or a bill of lading for property it receives for transportation …. That carrier … [is] liable to the person entitled to recover under the receipt or bill of lading. The liability imposed under this paragraph is for actual loss or injury to the property caused by (1) the receiving carrier, (2) the delivering carrier, or (3) another carrier over whose lines or route the property is transported into the United States ….

49 U.S.C.A. § § 10730, 11707 (repealed 1995), now contained at 49 U.S.C.A. § 14706(a)(1) (2004).

It is settled that this statute has two undisputed effects crucial to the issue in this case: First, the statute codifies the common-law rule that a carrier, though not an absolute insurer, is liable for damage to goods transported by it unless it can show that the damage was caused by “(a) the act of God; (b) the public enemy; (c) the act of the shipper himself; (d) public authority; (e) or the inherent vice or nature of the goods.”

Mo. Pac. R.R. Co. v. Elmore & Stahl, 377 U.S. 134, 137 (1964). Under the statute a shipper must first establish a prima facie case. “To make a prima facie case under the Carmack Amendment, a plaintiff must show 1) delivery to the carrier in good condition; 2) arrival in damaged condition; and 3) the amount of damages caused by the loss.” Camar Corp. v. Preston Trucking Co., Inc., 221 F.3d 271, 274 (1st Cir.2000) (citing Mo. Pac. R.R. Co., 377 U.S. at 137-38); see also D.P. Apparel Corp. v. Roadway Express, Inc., 736 F.2d 1, 2 (1st Cir.1984).

Once the shipper establishes a prima facie case the burden shifts to the carrier to show, first, that it was free from negligence, and second, that the damages were caused by one of the stated exceptions. [FN2] Mo. Pac. R.R. Co., 377 U.S. at 138. In this case the parties agree that Castine established a prima facie case. The key issue, therefore, became whether Dunphy was free from negligence. If Dunphy was not free from negligence, then Castine was entitled to recover its damages as a matter of law pursuant to the Carmack Amendment.

FN2. As stated above, the exceptions include: “(a) the act of God; (b) the public enemy; (c) the act of the shipper himself; (d) public authority; (e) or the inherent vice or nature of the goods.” Mo. Pac. R.R. Co. v. Elmore & Stahl, 377 U.S. 134, 137 (1964).

We review “the trial court’s denial of a motion for a judgment as a matter of law by examining the evidence in the light most favorable to the nonmoving party to determine whether any reasonable view of the evidence, including all justifiable inferences to be drawn therefrom, could sustain the verdict.” St. Francis De Sales Fed. Credit Union v. Sun Ins. Co. of N.Y., 2002 ME 127, ¶ 25, 818 A.2d 995, 1003. “The burden is on the moving party to show that the adverse verdict is clearly and manifestly wrong.” Schiavi v. Goodwin, 542 A.2d 367, 368 (Me.1988); quoting Bowie v. Landry, 108 A.2d 314, 315 (1954).

Contrary to Castine’s position, violation of a safety statute or regulation is merely evidence of negligence, not negligence per se. Town of Stonington v. Galilean Gospel Temple, 1999 ME 2, ¶ 10, 722 A.2d 1269, 1272; French v. Willman, 599 A.2d 1151, 1152 (Me.1991). Though this case involves a federal law, state law governs most issues related to the admissibility and effect of evidence. See M.R. Evid. 101 (“These rules govern proceedings in the courts of this state.”); see also Elliott v. S.D. Warren Co., 134 F.3d 1, 5 (1st Cir.1998) (holding, in the context of a diversity case, that “the evidentiary effect accorded the violation of a safety rule is a matter of state law”).

Moreover, even if federal case law does govern the evidentiary effect of a violation of a safety statute, it is unlikely that the negligence per se doctrine would apply. In Pradico v. Portland Terminal Co., 783 F.2d 255 (1st Cir.1985), the case relied upon by Castine, the First Circuit applied the negligence per se doctrine to a set of facts arising under the Federal Employers’ Liability Act (FELA), 45 U.S.C.A. § § 51–60 (1982). The First Circuit has subsequently retreated from this position:

At the time this court decided Pradico, we had very little guidance from our sister circuits. In the past twelve years, however, at least four other courts of appeals have considered when, if ever, a violation of an OSHA regulation might constitute negligence per se. Three of these four courts have held squarely that, because the OSH Act does not create a private right of action, a violation of an OSHA regulation never can be equated with negligence per se. The Sixth Circuit, like the Fifth, leaves open the possibility that a violation of an OSHA regulation may, in some cases governed by federal law, constitute negligence per se, but it is rare in either circuit for a court actually to uphold a finding of negligence per se on this basis. Silhouetted against this backdrop, the Pradico holding is of questionable validity … [f]or present purposes, it suffices to note that Pradico involved an FELA claim and the case’s holding is properly limited to causes of action brought under that statute.

Elliott, 134 F.3d at 4 (internal citations omitted). [FN3] Therefore the continuing vitality of the negligence per se doctrine articulated in Pradico is questionable even under FELA. As clarified by the First Circuit, the holding in Pradico cannot be extended beyond its immediate statutory context. Because the alleged violations of the regulations were merely evidence of negligence, Castine must demonstrate that the contrary verdict was manifestly wrong. Viewing the evidence in the light most favorable to Dunphy, it cannot be said that there was not a genuine issue of material fact with respect to whether Dunphy was negligent. Therefore, the trial court did not err by denying Castine’s motion for judgment as a matter of law.

FN3. Castine notes that the First Circuit’s holding makes a distinction between cases brought under the federal law and those brought under Maine law. While the First Circuit does make a distinction, it ultimately holds that the negligence per se doctrine of Pradico is strictly limited to cases brought under FELA, and it strongly implies that the doctrine will not be expanded. Elliott v. S.D. Warren Co., 134 F.3d 1, 4 (1st Cir.1998).

B. Expert Testimony

In order to show that it was free from negligence, Dunphy called a retired Maine State Trooper to testify with respect to safety issues. Castine asserts that the court erred by allowing Dunphy’s expert to testify as to whether Dunphy’s federal regulations were complied with. [FN4] Castine further contends that Dunphy’s witness was not qualified as an expert.

FN4. Castine argues that the trooper testified at trial to matters that he had not previously indicated he would address, and therefore, it was unfairly surprised at trial. Generally, a continuance is the appropriate remedy when a party seeks to admit “surprise” evidence at trial. Because Castine did not seek a continuance, however, it may not now claim unfair surprise. See Pettitt v. Lizotte, 454 A.2d 329, 332-33 (Me.1982) (holding that there was no abuse of discretion in allowing a defendant’s surprise fact witness to testify because the plaintiff did not request a continuance).

Experts may generally testify if they possess “specialized knowledge” that will assist the trier of fact in determining a fact in issue. M.R. Evid. 702. Moreover, an expert opinion “is not objectionable because it embraces an ultimate issue to be decided by the trier of fact.” M.R. Evid. 704. Therefore, an expert witness may state his opinion on an ultimate factual issue in a case so long as his testimony satisfies all the requirements for the admission of expert testimony. “Thus, under Rule 704, whether to allow into evidence an opinion on an ultimate issue rests within the sound discretion of the presiding Justice.” Minott v. F.W. Cunningham & Sons, 413 A.2d 1325, 1330 (Me.1980).

The trial court did not err in finding that the trooper qualifies as an expert witness. “We defer to the trial court on the determination of whether the expert’s qualifications are sufficient to allow the expert to testify.” State v. Cookson, 2003 ME 136, ¶ 22, 837 A.2d 101, 108. The expert is a retired Maine State Police lieutenant who spent thirty years on the force, twenty-five of them in the commercial vehicle enforcement unit that enforces transportation safety regulations. Because he had extensive experience with enforcing safety regulations, the trooper’s knowledge was useful with respect to safety standards and issues.

The trooper’s testimony touched upon an issue that, while not strictly the “ultimate issue,” [FN5] was clearly of vital importance to the parties. This alone, however, is an insufficient ground for an objection. The trooper did not merely give an opinion as to a “principle of law” as suggested by Castine. The trooper gave his opinion, based on the trial exhibits and testimony, as to what steps would have been required to properly secure the covers before transporting them. This testimony addressed mixed questions of fact and law. While courts may not permit an expert to give an “opinion that amounts to no more than choosing up sides,” it is permissible for an expert to testify regarding factual issues that also concern legal standards. Field & Murray, Maine Evidence § 704.1 at 377-78 (2000 ed.); see also Pierce v. Cent. Me. Power Co., 622 A.2d 80, 83 (Me.1993) (allowing an expert to testify as to the forseeability of an accident even though foreseeability was a legal concept used in the jury instructions). In this case, due to the discretion possessed by the court in allowing expert testimony, and because the testimony itself was not dispositive of the ultimate issue of negligence, the court did not err in allowing the trooper’s testimony.

FN5. Because violation of a safety regulation is evidence of negligence, and not negligence per se, the question of whether Dunphy violated a regulation, while significant, cannot be characterized as the ultimate issue at trial.

C. Jury Instructions

Castine notes that responsibility for securing the cargo resided with the carrier pursuant to the Carmack Amendment [FN6] and argues that the court abused its discretion by failing to instruct the jury that it had no duty to warn Dunphy that the cross bars it welded to the A-frame structure were not intended for use in securing the freight during transport. Over Castine’s objection, the court failed to give the requested instruction. We review jury instructions “in their entirety to determine whether they fairly and correctly apprised the jury in all necessary respects of the governing law.” Lee v. Scotia Prince Cruises Ltd., 2003 ME 78, ¶ 15, 828 A.2d 210, 214. We have explained:

FN6. Castine cites to regulations effective at the time of the accident, which state that the carrier must assure itself that hardware used in the tiedown assembly is as strong as the tiedown itself. 49 C.F.R. § § 392.9(b)(1), 393.102(c) (effective until 2002).

On appellate review, a party can demonstrate entitlement to a requested instruction only where the instruction was requested and not given by the court and it: (1) states the law correctly; (2) is generated by the evidence in the case; (3) is not misleading or confusing; and (4) is not otherwise sufficiently covered in the court’s instructions. In addition, the refusal to give the requested instruction must have been prejudicial to the requesting party.

Clewley v. Whitney, 2002 ME 61, ¶ 8, 794 A.2d 87, 90 (citation omitted).

Contrary to Castine’s assertion, the court did not exceed the bounds of its discretion by failing to give the requested instruction. Even though a carrier generally assumes liability for cargo upon the issuance of a bill of lading, it is not responsible for latent defects in the configuration of the cargo when the shipper caused these defects, and it was otherwise free from negligence:

The primary duty as to the safe loading of property is therefore upon the carrier. When the shipper assumes the responsibility of loading, the general rule is that he becomes liable for the defects which are latent and concealed and cannot be discerned by ordinary observation by the agents of the carrier; but if the improper loading is apparent, the carrier will be liable notwithstanding the negligence of the shipper.

United States v. Savage Truck Line, Inc., 209 F.2d 442, 445 (4th Cir.1953), see also Franklin Stainless Corp. v. Marlo Transp. Co., 748 F.2d 865 (4th Cir.1984). Had the court instructed the jury that Castine had no duty to warn Dunphy about the danger of using the cross bars to secure the cargo, it may have implied that Dunphy had a duty to discover latent defects, hence confusing the jury. Further, if the defect was indeed latent, an issue of fact, then Castine may have had an obligation to warn Dunphy. Because the requested instruction is misleading, and does not accurately convey the legal standard, the court did not exceed the bounds of its discretion in refusing to give it.

Judgment affirmed.

United States District Court, M.D. Florida,

Jacksonville Division.

ALTADIS USA, INC., individually and for the use and benefit of Gulf Life

Insurance Co., Plaintiffs,

v.

NPR, INC., doing business as Navieras de Puerto Rico; B-Right Intermodal

Transport, Inc.; B-Right Trucking, Inc.; Key Bank, N.A.; National Union

Insurance Company of Pittsburgh, Defendants.

Nov. 10, 2004.

ORDER

 

MOORE, District J.

Before the Court is Altadis USA, Inc.’s (“Altadis”) Motion for Entry of Judgment Against National Union Insurance Company in Accordance with Ohio Statute 3929.06 or Florida Statute 627.4136 (Dkt.191), to which National Union Insurance Company (“National”) filed a Memorandum in Opposition (Dkt.200). The parties have submitted documentary evidence to the Court, and the Court heard oral argument from the parties on October 12, 2004.

As there are only two remaining parties in this case [FN1], and the Court finds that there are no pending issues for a factfinder to decide during jury trial, the Court will also sua sponte revisit and reconsider its previous Order (Dkt.165) denying National’s Motion for Summary Judgment (Dkt.105). The Court will therefore now rule on the remaining legal issues in this case and enter judgment accordingly.

I. Background

The Plaintiffs filed their fifteen-count Second Amended Complaint (Dkt.84) on February 13, 2004, stating claims against the various Defendants for breach of contract, third party beneficiary of contract, negligence, breach of fiduciary duty, conversion, theft, and intentional interference with business relations. The claims arise out of a scheduled July 3, 2001 shipment of 2,505 cartons of cigars from Puerto Rico, where they were delivered to common carrier NPR (Navieras), to Tampa, Florida, where they were to be received by Altadis, which was the holder of the bill of lading and owner of the shipment.

According to the Plaintiffs, NPR agreed to ship the cigars to Tampa, but it failed to deliver the cargo in like condition, as the entire shipment was instead lost by the Defendants. Altadis alleges that it also contracted with B-Right Intermodal Transport, Inc. and B-Right Trucking, Inc. (collectively referred to as “B-Right”) on July 6, 2001 to transport the 40-foot container of cigars from the NPR terminal at Blount Island, Jacksonville, Florida, to the Altadis warehouse in Tampa, Florida. The cargo was allegedly stolen somewhere between Jacksonville and Tampa when it was negligently left by B-Right in an unattended parking lot over the weekend.

The Plaintiffs further allege that B-Right received settlement funds for the lost cargo from its insurance company, National. These funds were allegedly to be paid to Altadis, but B-Right failed to pay the settlement to Altadis as the owner of the lost shipment. In Count XV of the Second Amended Complaint, the only count remaining in this case, the Plaintiffs assert a right to receive these funds as a third party beneficiary of the insurance contract between B-Right and National. The Plaintiffs allege that B-Right nonetheless kept possession of the funds and refused to pay Altadis or hold the funds in trust for its benefit, instead ultimately depositing the funds in B-Right’s regular checking accounts at Key Bank.

Other than the third party beneficiary of contract theory, there are no other causes of action that have been properly pled against National in this case. However, the Plaintiffs moved at oral argument for leave to further amend their Complaint to properly state their current legal theories against the insurance company. The Plaintiffs claim that these legal theories only recently developed and ripened upon judgment being entered against B-Right (pursuant to a default, see Dkts. 90, 131). Accordingly, they claim that the parties have stipulated to the remaining outstanding legal issues–namely, whether Altadis can now proceed against the insurer (National) for payment of B-Right’s judgment in a “supplemental” action or as part of this action pursuant to Florida or Ohio law. In effect, it appears that the Plaintiffs have abandoned their third party beneficiary of contract theory against National, instead now arguing that they have the right to recover the judgment entered against B-Right directly from National as its insurer.

The Plaintiffs argue that they are entitled to judgment as a matter of law against National under either Section 627.4136, Florida Statutes, or Section 3929.06 of the Ohio Code. They claim that in any event, they gained the right to have a judgment entered against National thirty days after the entry of the default judgment against the B-Right companies. They argue that they now have a procedural right to proceed directly against National to enforce the judgment against its insured. The Court will address these arguments further below. [FN2]

II. Discussion

A. Altadis’ Motion for Entry of Judgment Against National

Altadis argues that thirty days after entry of the judgment against B-Right, it gained the substantive right to have judgment entered directly against National under the procedural method laid out in the Ohio statute. Section 3929.06 of the Ohio Code provides that if a final judgment is entered for the Plaintiff’s loss of property, the Plaintiff “is entitled as judgment creditor to have an amount up to the remaining limit of liability coverage provided in the judgment debtor’s policy of liability insurance applied to the satisfaction of the final judgment.” The statute states that this right accrues if, within thirty days after entry of the final judgment, the insurer has not paid the remainder of the policy limits to the judgment creditor, and the Plaintiff points out that a “supplemental complaint”against the insurer is allowed to proceed “in the same manner as the original civil action” against the insured. Section 3929.06, Ohio Code. The insurer is allowed to assert any coverage defenses it would have against the insured in this supplemental action.

Altadis therefore argues that since thirty days have passed since judgment was entered against B-Right, and Altadis has not been paid for its loss, it is now entitled to pursue National for a judgment up to the limits of its policy with B-Right, or up to $500,000. Altadis argues that Florida law is similar to Ohio law, allowing an injured party to seek a judgment directly against the insurer as a third party beneficiary, and procedurally providing for the joinder of the insurer immediately upon entry of a final judgment against the insured. See, e.g., Everglades Marina, Inc. v. American Eastern Development Corp., 374 So.2d 517 (Fla.1979); Fla Stat. § 627.4136(4). In other words, while Ohio law provides for a “supplemental action” against the insurer, Altadis claims that Florida law simply allows for joinder of the insurer in the original action once a judgment is entered.

In either event, Altadis claims that it is now entitled to judgment against National, as judgment has been entered against B-Right for the loss and all issues as to its liability for the cargo loss are now res judicata. Therefore, Altadis claims that National is collaterally estopped from “re-litigating” issues as to its insured’s liability, since it chose not to provide a defense for B-Right prior to a judgment being entered. See, e.g., Grange Mut. Cas. Co. v. Rosko, 146 Ohio App.3d 698, 767 N.E.2d 1225 (Ohio Ct.App.2001); Motorists Ins. Cos. v. BFI Waste Mgmnt., 133 Ohio App.3d 368, 728 N.E.2d 31 (Ohio Ct.App.1999); Patterson v. Tice, 91 Ohio App.3d 414, 632 N.E.2d 962 (Ohio Ct.App.1993).

Furthermore, Altadis claims that there are no coverage defenses that National could have raised against B-Right, or the defenses have now been waived because National paid B-Right Trucking $375,012.22. See, e.g., Leader Nat’l Ins. Co. v. Eaton, 119 Ohio App.3d 688, 696 N.E.2d 236 (Ohio Ct.App.1997); Sanderson v. Ohio Edison Co., 69 Ohio St.3d 582, 635 N.E.2d 19 (Ohio 1994). Altadis argues that this payment to B-Right Trucking was made in error, as that company did not suffer any loss and was not the actual carrier of the shipment. [FN3] Nonetheless, Altadis argues that the error does not create a coverage defense or prevent National from being liable for payment up to its $500,000 policy limit to the correct party, even though it has already paid the wrong party. Altadis accordingly urges the Court to enter judgment in its favor directly against the insurer, National, for payment of the judgment against B-Right up to the $500,000 policy limits.

National, of course, vehemently argues that entering judgment in favor of Altadis is entirely inappropriate in this case, as there is no legal basis for entry of such a judgment and the insurance company has completely met its obligations under its policy with the insured. Initially, National points out that the only claim against it is a third-party beneficiary claim in Count XV of the Second Amended Complaint, and therefore Altadis is now improperly attempting to pursue causes of action under Florida and Ohio law that were never pled in this action. As neither Ohio nor Illinois law recognize a cause of action based on a third-party beneficiary of insurance contract theory, National therefore argues that Altadis’ Motion must be denied and its sole claim against National must be dismissed. Dkt. 200, pg. 2. [FN4]

Moreover, even though Altadis claims that the parties have stipulated to its current legal claims and moves to amend the complaint, National argues that any amendment would be futile because Altadis cannot state a claim for judgment against the insurer under either Ohio or Illinois law. Id. at pp. 2-3, 635 N.E.2d 19; see also Mar San v. Ins. Co. of North America, 86 Ill.App.3d 64, 41 Ill.Dec. 471, 407 N.E.2d 969 (Ill.1980). National argues that Illinois law requires that the execution against the insured (B-Right) be returned unsatisfied prior to any direct action against the insurer, while the Ohio statute applies only to tortfeasors, and the only basis for the Plaintiffs’ claims against B-Right is under the Carmack Amendment. See 215 IL. CS § 5/388; Ohio Rev.Code § 3929.06; Kwait, McClatchy, Chaisson & Buchman, Inc. v. Expo Homes, Inc., 1980 Ohio App. LEXIS 13722 (1980); Smith v. United Parcel Service, 296 F.3d 1244, 1247 (11th Cir.2002); 49 U.S.C. § 11707(a)(1); AIG Europe, S.A. v. M/V MSC Lauren, 940 F.Supp. 925 (E.D.Va.1996). Accordingly, National argues that the Plaintiffs’ Motion must be denied as there is no basis for either a direct or supplemental action against the insurer for cargo loss under the applicable law.

In addition, although Altadis attempts to claim that it is entitled to judgment under Section 627.4136, Florida Statutes, National asserts that there is no basis for application of Florida law. National points out that Florida’s choice of law rules prohibit the application of Florida law, as the policy at issue in this case was issued in Illinois for delivery in Ohio. See, e.g., Fioretti v. Mass. Gen. Life Ins. Co., 53 F.3d 1228, 1236 (11th Cir.1995); Lumbermass Mut. Cas. Co. v. August, 530 So.2d 293, 295 (Fla.1988). As such, National argues that there is no basis for judgment under Section 627.4136, Florida Statutes.

In any event, National argues that there is absolutely no basis for imposing liability for the judgment upon it, as it had no duty to defend B-Right in this action, and any contractual duties it may have had were extinguished once it paid the proceeds to its insured and obtained a signed release of all rights from B-Right. National points out that the policy at issue in this case merely gives it the right to provide a defense for its insured, and as such the contract does not impose an affirmative duty upon National. See, e.g., Ohio Cas. Ins. Co. v. Carman Cartage Co., Inc., 262 Neb. 930, 636 N.W.2d 862 (Neb.2001); Centennial Ins. Co. v. Transitall Servs., Inc., 2001 WL 289879 (N.D.Ill.2001). Therefore, because National chose not to defend B-Right in this action (and in fact was never requested to do so by B-Right), but instead simply paid the claim to its insured, National argues that it had no further duty under the contract and there is no basis for liability for the judgment against B-Right. National also highlights the fact that B-Right breached its own duties by converting the funds for its own use instead of paying them to Altadis, and therefore Altadis cannot recover from National when its insured, B-Right, breached the policy provisions. See also DeRosa v. Aetna Ins. Co., 346 F.2d 245, 247 (7th Cir.1965); Reisman v. Delgado, 117 Ill.App.3d 331, 73 Ill.Dec. 77, 453 N.E.2d 902, 904 (Ill.App.Ct.1983).

National also contends that the Sworn Statement in Proof of Loss, signed by B-Right requesting funds to be paid to it, demonstrates that National was discharged of any further duties and released from any further claims once it sent the check for $375,012.22 to B-Right. Dkt. 200, pg. 15. National argues that B-Right had an insurable interest in the policy, and therefore it was entirely proper for it to send the check directly to B-Right as its insured. Because National properly insured against B-Right’s liability and then paid for that liability, it therefore argues that Altadis is not entitled to a judgment against it to pay for the judgment previously entered against B-Right.

The Court finds that the entry of a judgment against National is not appropriate under either Florida or Ohio law. First, while Altadis attempts to classify the Florida statute regarding obtaining a judgment directly against the insurer as “procedural” in nature, and therefore applicable in this Court, the Court agrees with National that Florida law has no application to the claim against it, and therefore the only basis for Altadis’ judgment would be the Ohio statute. Since Ohio is the place where the policy was delivered, and it is the only other basis upon which Altadis claims it is entitled to judgment, the Court must determine whether Altadis can pursue a judgment pursuant to Section 3929.06 of the Ohio Code. This determination is in accord with Florida’s choice of law principles. See, Fioretti, 53 F.3d at 1236; Lumbermass, 530 So.2d at 295.

Moreover, although Altadis takes great pain to distinguish B-Right Trucking and B-Right Intermodal as separate entities, thereby enhancing its argument that the “wrong party” was paid by National, the Court does not find this argument persuasive. National correctly points out that both of the B-Right companies were insured under the subject policy, and Altadis does not dispute that B-Right Trucking was the whole owner of B-Right Intermodal. National also adds that both were run by the same president and officers, operated out of the same office, and both benefitted from the payment of the insurance proceeds. As such, the Court will not base the entry of judgment against National on some sort of mistake or error it allegedly made in paying the wrong entity. While B-Right Intermodal may have been the actual carrier in this case, payment was made to its parent (also an insured), and the insurance proceeds were used for the carrier’s operating expenses. Altadis’ attempts to distinguish these entities for purposes of National’s liability therefore lack merit.

In addition, National persuasively argues that because the only claim against it is in Count XV of the Second Amended Complaint (third party beneficiary of contract), Altadis is attempting to improperly file an untimely dispositive motion based on theories that have never been properly pled in this case. National asserts that this attempt by Altadis to skirt around the procedural requirements in this case is because it realizes that neither Ohio nor Illinois law would support a claim based on a third party beneficiary of contract theory. Since Altadis has moved to amend the pleadings and contends that the parties have acknowledged the remaining legal theories in this case, however, the Court will not deny Altadis’ Motion solely on this procedural ground. Even so, the Court notes that it provides additional persuasive justification for the denial of judgment against National.

In any event, the Court agrees with National that Altadis has not demonstrated that there is a basis to impose liability on the insurer for B-Right’s judgment under the Ohio statute. There is nothing to demonstrate that National had a duty to defend B-Right in this action prior to judgment being entered, and there is no evidence that B-Right ever requested such a defense. Therefore, the Court agrees that National properly paid its insured, B-Right, for the loss under the policy, and then obtained a release from B-Right. See, e.g., Ohio Cas. Ins. Co., 636 N.W.2d at 862; Centennial Ins. Co., 2001 WL at 289879. That fact that B-Right apparently converted the insurance funds for its own use instead of paying them to Altadis does not change the fact that National properly paid those funds to the named insured under its policy. See DeRosa, 346 F.2d at 247; Reisman, 73 Ill.Dec. 77, 453 N.E.2d at 904.

The Court also agrees that National did not legally pay the “wrong party,” because B-Right, as its named insured, had an insurable interest in the policy. Courts have agreed that common carriers, such as B-Right in this case, can be held liable for shipments of goods, and therefore they have an insurable interest in the goods. Such an interest can be insured for the carrier’s own benefit or for the benefit of the owner. See, e.g., Couch on Insurance, § 42:16. In this case, while B-Right should have held the funds in trust for Altadis, it had its own insurance policy with National, which properly paid the funds directly to B-Right. The Court therefore cannot hold National liable for the improper conduct of B-Right and the subsequent judgment entered against it. The Court will accordingly deny Altadis’ Motion for Entry of Judgment. [FN5]

B. National’s Motion for Summary Judgment

Although the Court previously denied National’s Motion, it has indicated to the parties that since only legal issues remain in this case, it is appropriate to return to National’s arguments for judgment as a matter of law to determine which party is entitled to judgment in this case. National previously argued that judgment should be granted in its favor because under Ohio law, Altadis could not seek direct damages against National as a non-insured under a policy held solely by B-Right. See, e.g., Prime Ins. Syndicate, Inc. v. B.J. Handley Trucking, Inc., 363 F.3d 1089 (11th Cir.2004); Fioretti v. Mass. Gen. Life Ins. Co., 53 F.3d 1228, 1235-36 (11th Cir.1995); Kwait, McClatchy, Chaisson & Buchman, Inc. v. Expo Homes, Inc., 1980 Ohio App. LEXIS 13722 (1980).

National argued that the Plaintiffs are not third-party beneficiaries under the policy of insurance, and therefore National owed no duty to these non-insureds. Similar to its arguments in response to Altadis’ current Motion for Entry of Judgment, National previously claimed that its responsibility under the policy was discharged at the time it made payment to B-Right, its insured, without any objection from the Plaintiffs. According to National, B-Right notified the insurer of the theft of cigars on July 9, 2001, forwarding demand letters from both NPR and Altadis related to the lost cargo, which was valued at $375,012.22. In November 2001, B-Right then sent a letter to National requesting that the settlement check be made payable to B-Right, and National subsequently cut a check payable to B-Right in the amount of $375,012.22. National claims that Altadis’ agent was made aware that payment was being made directly to B-Right, and he did not specifically object to this method of payment, even though he was aware that B-Right had an outstanding monetary dispute with NPR. Dkt. 105, pp. 5-6; Roberta Ansell Deposition; Ladner Deposition.

As neither the Plaintiffs nor NPR were parties to the insurance policy between B-Right and National, and neither were intended beneficiaries of this policy, National therefore claimed that they cannot seek breach of contract damages based on its failure to pay the proceeds directly to Altadis and/or NPR. National pointed to the policy as explicitly stating that no party other than the insured shall benefit from the insurance, and any settlement of losses will be solely between the insurer and the insured, with the insured retaining the “privilege, but not the obligation,” to settle its loss with the owner of the cargo. Dkt. 105, pp. 7-8; see also Brockway-Smith Co. v. Boston & Maine Corp., 497 F.Supp. 814 (D.Mass.1980). As such, National concluded that any obligations it had under the contract were properly extinguished upon payment of the settlement proceeds to its named insured, B-Right. Dkt. 105, pp. 12-13; see also Bennett v. Swift & Co., 170 Ohio St. 168, 163 N.E.2d 362 (Ohio 1959).

Although the Court previously held that issues of fact remained to be decided as to the law that would apply, and as to whether National properly made payment to B-Right, the Court now finds that National did make proper payment for the loss to its insured, B-Right. There being no basis for Altadis to obtain a judgment against National under Ohio law, as explained above, summary judgment in favor of National is now appropriate. National correctly points out that Altadis has presented no authority to allow this Court to hold that it was a third-party beneficiary entitled to recover under the insurance contract under Ohio law, and therefore there is no legal basis to support Count XV of the Second Amended Complaint.

As explained above, Altadis has presented no legal authority or factual evidence to demonstrate that National should be liable for B-Right’s judgment when the insurance company simply paid its insured for the loss as dictated by its policy with B-Right. Nor has Altadis presented any evidence to show that there was an agreement between National and its insured that payment would be made to Altadis as owner of the cargo and third-party beneficiary of the policy. In short, as highlighted above in discussing the Plaintiffs’ current Motion, the Court has no justification for holding National liable for failing to either pay the $375,012.22 in proceeds directly to Altadis, or for failing to ensure that the settlement funds were paid to Altadis. While these options most certainly would have avoided this drawn-out litigation, particularly if National had simply listed Altadis’ or NPR’s name on the settlement check, there is no basis for the Court to now impose liability for B-Right’s judgment upon National merely because it failed to take a more prudent route in settling the claim for cargo loss. Judgment will therefore be entered in National’s favor.

Accordingly, upon due consideration, it is hereby ORDERED and ADJUDGED that:

1. Altadis USA, Inc.’s Motion for Entry of Judgment Against National Union Insurance Company in Accordance with Ohio Statute 3929.06 or Florida Statute 627.4136 (Dkt.191) is DENIED.

2. The Court’s previous Order (Dkt.165) denying National’s Motion for Summary Judgment is hereby VACATED in part in that National’s Motion (Dkt.105) is hereby GRANTED. Separate judgment will be entered accordingly.

3. The following pending motions previously filed by the parties in advance of trial in this case are hereby DENIED as moot: Dkts. 153, 156, 171, 172, 173, 174, 175, 176, 177, 178, 179, and 186.

ORDER

Before the Court is the Plaintiffs’ Motion for Rehearing and Motion for Relief from Order Granting National Union’s Motion for Summary Judgment and Denying Plaintiffs’ Motion for Judgment and Request for Ruling on Motion to Supplement Pleadings (Dkt.216). In effect, the Plaintiffs are requesting reconsideration of the Court’s Order pursuant to Rule 59, Federal Rules of Civil Procedure, followed by relief from that Order pursuant to Rule 60, Federal Rules of Civil Procedure.

The Court finds that reconsideration of its previous Order (Dkt.214) is not warranted. Motions for reconsideration under Rule 59, Federal Rules of Civil Procedure, are only granted in rare circumstances to “correct manifest errors of law or fact or to present newly discovered evidence.” In re Managed Care Litigation, 2002 WL 135734 (S.D.Fla.2002); Z.K. Marine v. M/V Archigetis, 808 F.Supp. 1561, 1563 (S.D.Fla.1992). The Plaintiffs must present strong reasons for why the Court should reconsider its prior decision, setting forth facts or law of a “strongly convincing nature to induce the court to reverse its prior decision.” In re Managed Care, 2002 WL 1359734, at *1; Sussman v. Salem, Saxon & Nielsen, P.A., 153 F.R.D. 689, 694 (M.D.Fla.1994); Scelta v. Delicatessen Support Svcs., 89 F.Supp.2d 1311, 1319 (M.D.Fla.2000). A motion for reconsideration is not a vehicle to present authorities available at the time of the court’s first decision or to simply reiterate arguments previously made. Z.K. Marine, 808 F.Supp. at 1563. As such, motions under Rule 59— to be used only when a court has made a manifest error of fact or law–are rarely granted. See id.

Here, the Plaintiffs’ current Motion simply reiterates and reargues the same issues they previously discussed in conjunction with National Union Company of Pittsburgh’s (“National”) Motion for Summary Judgment (Dkt.105), including arguments made at oral argument before the Court and therefore considered by the Court prior to making its ruling in National’s favor. The Plaintiffs further attempt to raise bases for their claims against National which should have, and could have, been previously raised. See id. The Plaintiffs certainly express dismay with the Court’s Order granting judgment in favor of National, and they again attempt to argue that they should now be allowed (for the third time ) to amend their pleadings in an attempt to state claims against National.

Nonetheless, the Court has already found that there is no basis for this lawsuit against National, and the Plaintiffs have offered nothing to justify reconsideration of the Court’s previous Order. Accordingly, upon due consideration, the Plaintiffs’ Motion for Rehearing and Motion for Relief from Order, and Request for Ruling on Motion to Supplement Pleadings (Dkt.216) is DENIED.

FN1. Altadis is pursuing its claim for the benefit of its insurer, Gulf Life, which has allegedly already paid Altadis’ claim for the cargo loss in this case. As discussed below, a default judgment was previously entered against the B-Right entities. Atladis has settled its claims against Defendant NPR, and the Court previously granted summary judgment in favor of Key Bank (Dkt.165).

FN2. The Defendant initially argues that the Plaintiffs’ current Motion should be stricken by the Court as an untimely dispositive motion. As the Court explained at oral argument, however, there are no factual issues remaining in this case, and both parties have continued to pursue legal theories in their filings and motions in limine. Accordingly, the Court denied the Defendant’s attempt to strike the Plaintiffs’ current motion.

FN3. Altadis marshals great effort to differentiate the B-Right entities, arguing that while B-Right Trucking is the owner of B-Right Intermodal, they are separate and distinct entities, and B-Right Intermodal is the actual carrier of the cigar shipment in this case. B-Right Trucking, the Plaintiff contends, was merely the owner of the vehicle involved, not the carrier of the shipment, and therefore should not under any condition have received payment for the loss of cargo. Moreover, National never received a release after payment. Altadis therefore argues that National is liable for this mistake and must now pay the judgment against B-Right Intermodal. The Court refers to both entities collectively as “B-Right,” however, because National correctly points out that B-Right Trucking is the parent company of B-Right Intermodal, and both entities were named insureds under the National policy. National also points out that both were run by the same president and officers, operated out of the same office, and while the insurance funds were paid to B-Right Trucking, they were used for B-Right Intermodal’s expenses.

FN4. National points out that the insurance policy in this case was issued in Illinois and delivered to B-Right in Ohio, making either Illinois or Ohio the proper choice of laws in this action.

FN5. National also persuasively argues that the Ohio judgment statute applies only to tortfeasors, and because the only basis for the Plaintiffs’ claims against B-Right is under the Carmack Amendment, the Ohio statute cannot apply to this case. Although this may be an additional ground to deny Altadis’ Motion, the Court notes that the claims in the Second Amended Complaint are based on B-Right’s negligence, a tort, and National has not sought dismissal of those claims based on an improper legal theory or failure to state a claim. As such, the Court does not rely on this argument in denying Altadis’ current Motion