United States District Court,

S.D. Ohio,

Western Division.

STEVENS TRANSPORT TL, INC., Plaintiff,

v.

GREAT AMERICAN INSURANCE COMPANY, Defendant.

 

No. 1:11–CV–00236.

May 2, 2012.

 

Dena L. Mathis, Kimberly A. Lucas, Dallas, TX, Ronna Sue Lucas, John E. Stillpass, Attorneys at Law, Cincinnati, OH, for Plaintiff.

 

Gregory Alan Harrison, Cincinnati, OH, David P. Andis, The Woodlands, TX, James L Sowder, Thompson Coe Cousins & Irons, Dallas, TX, for Defendant.

 

ORDER AND OPINION

S. ARTHUR SPIEGEL, Senior District Judge.

This matter is before the Court on Defendant’s Motion for Judgment on the Pleadings (doc. 19), the responsive memoranda, and Plaintiff’s Motion for Leave to File Amended Complaint (doc. 23), and the responsive memoranda. For the reasons that follow, the Court GRANTS Defendant’s motion (doc. 19), thus rendering Plaintiff’s motion moot.

 

I. Background

The facts of this matter, which for the purposes of the instant motions are taken to be true, are alleged in Plaintiff’s complaint as follows. Plaintiff is a freight broker and entered into a broker/carrier agreement with FBT, Inc. Pursuant to that agreement, Plaintiff brokered the transportation of a load of butter from Land O’ Lakes to FBT, which, in turn, brokered it to Billings Transport. The load originated in Ohio and was bound for California. Plaintiff is the originating carrier on the bill of lading. Billings Transport’s driver picked up the load and signed the bill of lading. After picking up the load, the driver was involved in a single vehicle rollover accident on or about October 14, 2008. The cargo was returned to the loading facility for inspection, and it was determined that a majority of the load was destroyed because of the accident and the sensitive nature of the product.

 

Neither FBT, Inc., nor Land O’Lakes, nor Billings Transport is a party to this suit.

 

As it was required to do, Plaintiff paid Land O’ Lakes $57,679.94 on May 1, 2009, thus becoming subrogated to Land O’ Lakes’ rights as the shipper to recover from Billings Transport, the delivering carrier. On June 2, 2009, Plaintiff filed suit against Billings Transport and FBT, Inc., and on July 14, 2010, Plaintiff obtained a judgment against Billings Transport. On December 20, 2010, Plaintiff obtained a turnover order against Billings Transport from a Texas judge, which required Billings Transport to turn over any claims it had against Defendant, which, at the time of the accident, insured Billings Transport.

 

On June 15, 2009, Defendant issued to Billings Transport a disclaimer of coverage, effectively denying Billings Transport’s claim for insurance coverage for the accident. On February 7, 2011, Defendant sent Plaintiff a copy of that denial. On February 15, 2011, Plaintiff initiated the instant suit in a Texas state court, and the case was removed to federal court and then transferred here. Through its original complaint, Plaintiff sought relief under Texas’ insurance code and for breach of contract and breach of good faith and fair dealing. Through its proposed amended complaint, Plaintiff seeks declaratory relief under Ohio law and alleges claims for breach of contract and breach of the duty to act in good faith and engage in fair dealings.

 

Defendant moves the Court for Judgment on the Pleadings on the basis that Plaintiff’s contractual claims fail as a matter of law because the contract contains a suit-limitation clause, which bars Plaintiff’s suit. In addition, Defendant argues that Plaintiff’s Texas-based claims fail for lack of a connection to Texas and for failure to state a claim under Texas’ insurance code.

 

Plaintiff seeks to remedy the Texas-law issue with its amended complaint, which removes all Texas-law claims and bases the claims in Ohio law. The amended complaint does not address the suit-limitation clause, but Plaintiff argues that the contractual language is, minimally, ambiguous and therefore should be construed in its favor.

 

Defendant’s motion for judgment on the pleadings and Plaintiff’s motion for leave to file an amended complaint are each ripe for the Court’s decision.

 

II. The Applicable Standards

The Court may grant a party’s motion for judgment on the pleadings under Federal Rule 12(c) if it determines that the moving party is entitled to judgment as a matter of law. In arriving at such determination, “all well-pleaded material allegations of the pleadings of the opposing party must be taken as true, and the motion may be granted only if the moving party is nevertheless clearly entitled to judgment.” Tucker v. Middleburg–Legacy Place, 539 F.3d 545, 549 (6th Cir.2008). In its evaluation, the Court may consider the “pleadings, which consist of the complaint, the answer, and any written instruments attached as exhibits.” Felix v. Dow Chemical Co., No. 2:07–CV–971, 2008 WL 207857,(S.D.Ohio Jan.23, 2008). The Court may also “consider materials in addition to the pleadings without converting the motion to one for summary judgment if the materials are public records or are otherwise appropriate for the taking of judicial notice.” Id. The same standard of review applies to both 12(c) motions for judgment on the pleadings and 12(b)(6) motions to dismiss. Tucker, 539 F.3d at 549.

 

With respect to the motion for leave to file an amended complaint, Federal Rule of Civil Procedure 15(a) provides in pertinent part:

 

A party may amend the party’s pleading once as a matter of course at any time before a responsive pleading is served…. Otherwise a party may amend the party’s pleading only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires.

 

Fed.R.Civ.P. 15(a). The United States Supreme Court has held that motions for leave to amend pleadings should be liberally granted unless the motions are brought in bad faith or the proposed amendments would cause undue delay, be futile, or unfairly prejudice the opposing parties. Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962); see also Moore v. City of Paducah, 790 F.2d 557, 561 (6th Cir.1986) (quoting Tefft v. Seward, 689 F.2d 637, 639–40 (6th Cir.1982)).

 

III. Discussion and Conclusion

Plaintiff’s proposed amended complaint addresses the Texas-law related problems with its original complaint. The Court sees no evidence of bad faith here and further finds that allowing Plaintiff to amend the complaint would not cause undue delay or be unfairly prejudicial to Defendant. However, because the suit-limitation clause bars Plaintiff’s suit, and the proposed amended complaint does not correct that fatal flaw, allowing Plaintiff to file its proposed amended complaint would be futile.

 

The contract language at issue is found in the Commercial Inland Marine Conditions section of the insurance policy  and reads: “No one may bring legal action against [Defendant] under this Coverage Part unless: … The action is brought within 2 years after you first have knowledge of the direct loss or damage.” The critical questions that must be answered in order to determine whether Plaintiff’s suit is barred by this contractual provision are: (i) Does “direct loss or damage” mean only loss or damage to the insured property, as Defendant asserts, or does “damage” reference damage to Billings Transport—i.e., the damage suffered when Defendant denied coverage to Billings, as Plaintiff asserts? and (ii) Does the fact that the provision is found in the Commercial Inland Marine Conditions section mean that it only limits actions brought under that section, as Plaintiff asserts, or does it apply to the contract as a whole, as Defendant asserts?

 

Although the insurance contract between Billings Transport and Defendant was not attached to either the complaint or the answer, the Court may nonetheless properly consider the insurance policy without converting the instant motion to a motion for summary judgment because the policy is incorporated into the complaint by reference and is an integral part of the complaint. See Rondigo, L.L.C. v. Township of Richmond, 641 F.3d 673, 681 (6th Cir.2011) (without converting a motion to dismiss to one for summary judgment, court may consider exhibits attached to the complaint, public records, items appearing in the record of the case and exhibits attached to the defendant’s motion to dismiss so long as they are referred to in the complaint and are central to the claims contained therein). Here, the complaint not only references the insurance policy, but the breach of contract and breach of good faith and fair dealings claims are predicated on it.

 

The Court has no trouble reaching the conclusion that “loss or damage” refers to loss of or damage to the load of butter and not, as Plaintiff asserts, the damage the insured suffered when Defendant denied coverage under the policy. It is abundantly clear from reading the policy that the policy insures against loss to the “Covered Property,” which term is used throughout the contract. That term is defined in the Motor Truck Cargo Coverage Form as follows: “We will pay for ‘loss’ to Covered Property from any of the Covered Causes of Loss. 1. Covered Property means property of others that you have accepted for transportation as a motor carrier under your tariff and bill of lading or other written contract.” The contract then goes on to clarify that property will only be covered while it is “contained in or on a land vehicle while in ‘transit’ and/or during ‘loading’ and ‘unloading’ ….” The only reasonable interpretation of the language and purpose of the insurance policy is that the load of butter was the Covered Property, and Billings Transport was insured against damage or loss to the load of butter.

 

Interestingly, Plaintiff itself seems to recognize that “loss” refers to the loss or damage to the butter cargo: Plaintiff uses the term “loss” in its filings-including its original complaint, its proposed amended complaint, and its response to Defendant’s motion-to refer to the loss of the butter cargo. For example, Plaintiff states, “At the time of the loss [referring to the damaged load of butter], Great American insured Billings” (docs.1, 23, 24). Why does Plaintiff refer to the damage to the butter load as “the loss”? Because that is the natural and obvious meaning of the word and is reflective of the purpose of the insurance contract. It simply strains the meaning of the term “loss” and would upend the purpose of the insurance contract to read “loss” to mean financial damage suffered upon the denial of a claim on the policy. Plaintiff’s attempts to expand the meaning of the word and the purpose of the contract are not well-taken.

 

As to whether the suit-limitation clause applies to the whole policy, the Court similarly finds that the contract is clear. The limitation provision is, indeed, found in the Commercial Inland Marine Conditions. Plaintiff asserts that the Motor Truck Cargo Coverage Form should control here, and the Commercial Inland Marine Conditions form is inapplicable. However, the “Additional Conditions” section of the Motor Truck Cargo Coverage Form explicitly incorporates the provisions of the Commercial Inland Marine Conditions form: “The following conditions apply in addition to the Commercial Inland Marine Conditions and Common Policy Conditions….” In addition, as Defendant notes, the Motor Truck Cargo Coverage modifies the Commercial Inland Marine Conditions in explicit ways (e.g., “The following is added to Commercial Inland Marine Loss Condition J….”), lending further support for the finding that the Commercial Inland Marine Conditions are an integral part of the insurance policy, and the provisions set forth therein, including the suit-limitation clause, are binding on the parties.

 

Because the suit-limitation clause applies to any suit brought on the contract, and because “loss or damage” refers to loss of or damage to the load of butter, the two-year clock started ticking on October 14, 2008, which was the date of the accident that damaged the load. Plaintiff’s suit was filed on February 15, 2011, well-outside the two-year limitation agreed to by Defendant and Billings Transport.

 

The fact that Plaintiff did not have standing to bring the suit until it received the turnover order from the Texas judge does not save Plaintiff’s case because, when Plaintiff did receive the order, it acquired only the same rights as Billings Transport had. Billings Transport was subject to the suit-limitation defense, which necessarily means that Plaintiff, standing in Billings Transport’s shoes, is likewise subject to that defense. See, e.g., Citizens Fed. Bank, F.S.B. v. Brickler (1996), 114 Ohio App.3d 401, 683 N.E.2d 358, 364 (“[T]he assignee of a contract takes that contract with all rights of the assignor and subject to all defenses that the obligor may have had against the assignor. The assignee stands in the shoes of the assignor and has no greater rights against the obligor than the assignor had.”).

 

Because Plaintiff’s proposed amended complaint does not cure the defects discussed herein, granting Plaintiff leave to amend would be futile. Therefore, for the foregoing reasons, the Court GRANTS Defendant’s Motion for Judgment on the Pleadings (doc. 19) and DENIES Plaintiff’s Motion for Leave to File Amended Complaint (doc. 23).

 

SO ORDERED.

United States District Court,

E.D. Louisiana.

Tyrone WILSON

v.

KIRBY CORPORATION, a/k/a Kirby Inland Marine Transportation Company.

 

Civil Action No. 12–0080.

May 1, 2012.

 

Spiro G. Latsis, U.S. Attorney’s Office, New Orleans, LA, for Tyrone Wilson.

 

Keith John Guidry, Sr., Cut Off, LA, for Kirby Corporation, a/k/a Kirby Inland Marine Transportation Company.

 

ORDER AND OPINION

STANWOOD R. DUVAL, JR., District Judge.

Before the Court are the “Motion to Remand” filed on behalf of plaintiff Tyrone Wilson (Doc. 12) and the “Motion to Dismiss” filed on behalf of defendant T.T. Coatings, Inc. (Doc. 4). Having reviewed the pleadings, memoranda, and relevant law, the Court, for the reasons assigned, GRANTS the motion to dismiss and DENIES the motion to remand.

 

Background

Tyrone Wilson filed suit in state court against Kirby Corporation a/k/a Kirby Inland Marine Transportation Company (“Kirby”) and T.T. Coatings, Inc. (“T.T.Coatings”) seeking to recover damages for personal injuries sustained in the course and scope of his employment. Mr. Wilson alleged that while working to repair a barge owned by Kirby, at a facility allegedly owned and operated by T.T. Barge Service, Inc., Ran Van Tran, a T.T. Coatings’s supervisor, ordered him to use a pair of plyers to remove a test rod that was stuck in stainless steel shaft, while a co-employee heated the test rods and the steel tube on the other end of the shaft. Mr. Wilson further alleges that he was hurt when the “test rod exploded out of the open end of the steel shaft” and struck his hand and wrist. Doc. 1, ¶ VI. Mr. Wilson alleged that he was an employee of T.T. Coatings, and that “[o]rdering employees [sic] to engage in a dangerous and hazardous employment activity, knowing that harm to Plaintiff was substantially certain to follow [sic] an intentional Tort [sic] under Louisiana law.” Id., at ¶ VIII.

 

With the consent of T.T. Coatings, Kirby timely removed the suit to this Court based on diversity jurisdiction, 28 U.S.C. § 1332, asserting that T.T. Coatings, a Louisiana corporation, had been improperly joined. Shortly thereafter T.T. Coatings filed its motion to dismiss. Plaintiff then filed his motion to remand the suit asserting that because T.T. Coatings was a Louisiana corporation diversity jurisdiction was lacking.

 

Motion to Dismiss

In Bell Atlantic Corporation v. Twombly, 550 U.S. 544, 563, 127 S.Ct. 1955, 1969, 167 L.Ed.2d 929 (2007), the Supreme Court “retired” the Conley v. Gibson, 355 U.S. 41, 45–46, 78 S.Ct. 99, 101–102, 2 L.Ed.2d 80 (1957), standard for analyzing a motion to dismiss under Rule 12(b)(6) which held that a district court may not dismiss a complaint for failure to state a claim “unless it appears beyond a doubt that plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Noting that the Conley pleading standard “is best forgotten as an incomplete, negative gloss on an accepted pleading standard,” the Supreme Court announced that “once a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations of the complaint. Id., 127 S.Ct. at 1969. A complaint does not “suffice if it tenders ‘naked assertion[s] devoid of ‘further factual enhancement.’ “ Ashcroft v. Iqbal, 556 U.S. 662, 677, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. at 570, 127 S.Ct. at 1955. “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim that is plausible on its face.’ “ Id. A claim is facially plausible when the plaintiff pleads facts that allow the court to “draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. A court should not accept as true a plaintiff’s conclusory allegations, unwarranted factual inferences, or unsupported legal conclusions. In re Great Lakes Dredge & Dock Co., 624 F.3d 201, 210 (5th Cir.2010).

 

T.T. Coatings seeks to dismiss the claim against it pursuant to Federal Rule of Evidence 12(b)(6) urging that plaintiff has no facially plausible claim for intentional tort against it. The sole claim alleged by plaintiff in the complaint against T.T. Coatings is one for intentional tort.

 

T.T. Coatings urges that plaintiff is covered by the LHWCA and that he cannot state a claim of intentional tort because he has alleged insufficient facts against T.T. Coatings. The case law under the LHWCA has carved out an exception of employer immunity for injuries caused by intentional torts. See e.g., Johnson v. ODECO Oil & Gas Co., Inc., 679 F.Supp. 604 (E.D.La.1987); Davis v. Rockwell International Corp., 596 F.Supp. 780 (N.D.Ohio 1984); Houston v. Bechtel Assoc. Professional Corp., 522 F.Supp. 1094 (D.D.C.1981); Austin v. Johns–Manville Sales Corp., 508 F.Supp. 313 (D.ME.1981). Although those cases have refused to extend liability for acts which are merely willful, wanton, or reckless, they have indicated that liability would be extended for acts which evidence a “specific intent to injure the employee.” Based on that exception federal courts have examined comparable state workmen compensation acts to determine whether the exception is satisfied.

 

Both federal courts and Louisiana courts agree that there must be a substantial certainty that a party will suffer harm to prevail on a claim of intentional tort. Davis v. Rockwell International Corp ., supra; Bazley v. Tortorich, 397 So.2d 475 (La.1981). Under Louisiana law, an allegation that an employer “knew or should have known” that an employee’s injuries were substantially certain to follow is not a talisman which, by mere recital, can convert mere allegations into a credible claim of a valid intentional tort against an employer. Gallon v. Vaughan Contractors, Inc., 619 So.2d 746 (La.App.4th Cir.1993). Moreover, under Louisiana law, the intentional tort exception to the exclusive remedy provision of the workers’ compensation statute is to be given a narrow interpretation. King v. Schulykill Metals Corporation, 581 So.2d 300, 302 (La.App. 1st Cir.1991). Thus, the standard for prevailing on a claim of intentional tort under Louisiana law is extremely high. In Faridina v. Ecolab, Inc., 593 So.2d 936 (La.App. 4th Cir.1992), the court of appeals held that the fact that the employer knew that the employee’s injuries were substantially certain to follow work place exposure to chemicals, due to the employer’s superior knowledge of the effects of chemical exposure was insufficient evidence of intent to satisfy the intentional tort exception to the exclusivity of worker’s compensation remedies. Even knowledge of a high degree of probability that injury will occur is insufficient to establish that the employer was substantially certain that injury would occur so as to impute intent to him within the intentional tort exception to the worker’s compensation statute exclusive remedy provisions. King v. Schuykill Metals Corp, 581 So.2d at 303 (La.App. 1st Cir.1991). “Substantial certainty requires more than a reasonable probability that an injury will occur; this term has been interpreted as being equivalent to inevitable, virtually sure and incapable of failing.” Id. at 302 (internal citations omitted).

 

Although plaintiff alleged specific facts with respect to the method being utilized to remove the rod from the shaft, plaintiff has not pleaded any specific facts with respect to his employer’s intent; he simply alleged that employees were ordered “to engage in a dangerous and hazardous employment activity, knowing that harm to Plaintiff was substantially certain to follow an intentional Tort under Louisiana law.” Doc. 1–2, ¶ VIII. Plaintiff’s allegations are mere “naked assertions devoid of further factual enhancement. Nor has plaintiff alleged any fact that when accepted as true permit the Court to draw a reasonable inference that the method being used to remove the rod from the shaft would inevitably result in injury to the plaintiff or that plaintiff was virtually sure to be injured. Measuring plaintiff’s allegations against the standards utilized in the cited cases, the Court finds that plaintiff’s allegations are insufficient to state a claim for intentional tort under either federal law or Louisiana law.

 

In his memorandum opposing the motion to dismiss, plaintiff requests that should the Court determine his pleadings fail to state a claim that he be give the opportunity to amend his complaint. A district judge has discretion to grant leave to amend, and leave to amend shall be freely given “when justice so requires.” Fed.C.Civ .P. 15(a)(2). Jamieson By and Through Jamieson v. Shaw, 772 F.2d 1205, 1208 (5th Cir.1985). However, a district court does not abuse its discretion when it denies leave to amend because the amendment would be futile. See Stripling v. Jordan Production Co., L.L.C., 234 F.3d 863, 872–73 (5th Cir.2000). An amendment is futile if “the amended complaint would fail to state a claim upon which relief could be granted.” Id. Having reviewed the record and the law, the Court concludes that any amendment in this case would be futile. Therefore, the Court dismisses plaintiff’s claim against T.T. Coatings.

 

For the same reasons, amending the suit to name the proper employer would also be futile with respect to the motion to remand.

 

Motion to Remand

A defendant may remove a civil action filed in state court to a federal district court if the federal court would have had original jurisdiction. 28 U.S.C. § 1441(a).

 

The removing party bears the heavy burden of proving that non-diverse defendants have been fraudulently joined to defeat diversity, either by showing that (1) there has been outright fraud in the plaintiff’s recitation of the jurisdictional facts, or (2) there is no possibility that the plaintiff would be able to establish a cause of action against the non-diverse defendants in state court.

 

Burden v. General Dynamics Corp., 60 F.3d 213, 217 (5th Cir.1995). The test for assessing whether a party had been improperly joined  is “whether the defendant has demonstrated that there is no possibility of recovery by the plaintiff against an in-state defendant, which stated differently means that there is no reasonable basis for the district court to predict that the plaintiff might be able to recover against an in-state defendant.” Smallwood v. Illinois Central Railroad Company, 385 F.3d 568, 573 (5th Cir.2004). In determining whether plaintiff has improperly joined a defendant, a summary injury is appropriate “to identify the presence of discrete and undisputed facts that would preclude plaintiff’s recovery against the in state defendant.” Id. at 573–74.

 

In Smallwood v. Illinois Central Railroad Company, 385 F.3d 568, 571, n. 1 (5th Cir.2004), the Fifth Circuit adopted “the term ‘improper joinder’ as being more consistent with the statutory language than the term ‘fraudulent joinder.’ “

 

T.T. Coatings contends that plaintiff has no possibility of recovery against it because it did not employ plaintiff and because there is no reasonable basis to predict that plaintiff might be able to recover against it for an intentional tort. T.T. Coatings has submitted an affidavit by Raymond B. Greenwell, the president of T.T. Barge Service Inc. Mile 125, who also serves as a trustee for the trust that owns T.T. Coatings, Inc., in which Mr. Greenwell attests that:

 

• “Tyrone Wilson was employed by T.T. Barge Service Inc., Mile 125;

 

• “[a]t all times pertinent to the lawsuit filed by Tyrone Wilson, all of Mr. Wilson’s co-workers and supervisors, including but not limited to Ran Van Tran and Wilfredo Rodas were employed by T.T. Barge Service Inc., Mile 125”;

 

• “[a]t all times pertinent to the lawsuit filed by Tyrone Wilson, T.T. Barge Service, Inc. Mile 125 leased the property and owned all of the improvements at the facility at which Mr. Wilson was performing services on the barge referenced in the lawsuit”;

 

 

• “T.T. Coatings, Inc. had no employees at the facility at which Mr. Wilson was working at the time of his alleged accident and had absolutely no involvement in the barge repair being done at the time”;

 

• “T.T. Coatings, Inc. did not own, maintain, operate or repair any equipment, including barges, involved in Mr. Wilson’s injury”;

 

• “T. T. Coatings, Inc. did not own, operate, or control at any time the facility at which Mr. Wilson alleges he was injured”;

 

• “[a]t no time pertinent to this lawsuit was Tyrone Wilson an employee of T.T Coatings, Inc.; and

 

• “There is no parent-subsidiary relationship between T.T. Coatings, Inc. and T.T. Barge Service, Inc., Mile 125.

 

Doc. 16–1, Ex. A. T.T. Coatings also submitted a copy of Tyrone Wilson’s Form W–2 Wage and Tax Statement 2010 which indicates that at the time of the accident “T.T. Barge Services Inc. Mile 125” employed Mr. Wilson. Plaintiff has not offered any evidence disputing any of the cited statements. Based on those submissions there is no reasonable possibility that plaintiff can recover against T.T. Coatings. T.T. Coatings did not employ Mr. Wilson, nor any of his supervisors or co-employees at the time of the accident. Moreover, T.T. Coatings did not own, maintain, operate or repair the barge being repaired at the time of the accident or any of the equipment being used at the time of the accident. Given that plaintiff has no reasonable possibility of recovery against T.T. Coatings, the Court concludes that plaintiff improperly joined T.T. Coatings and orders that it be dismissed. It is undisputed that there is complete diversity between the remaining parties.

 

Accordingly, the Court denies the motion to remand.