United States District Court,

N.D. Illinois,

Eastern Division.

WEST WIND EXPRESS, Plaintiff,

v.

OCCIDENTAL FIRE & CASUALTY COMPANY OF NORTH CAROLINA, Defendant.

 

No. 10 cv 6263.

July 23, 2012.

 

Christopher Dean Willis, Kathryn I. Beck, Edward K. Grasse, Busse, Busse & Grasse, P.C., Chicago, IL, for Plaintiff.

 

Gary Feiereisel, Bradley James Jeanblanc, Frank Kasbohm, Feiereisel & Kasbohm, LLC, Chicago, IL, for Defendant.

 

MEMORANDUM OPINION AND ORDER

ROBERT M. DOW, JR., District Judge.

*1 In this diversity case, Plaintiff West Wind Express filed a complaint against Defendant Occidental Fire & Casualty Company of North Carolina seeking, among other things, a declaration that West Wind is not obligated to reimburse Occidental for payments it made to settle third-party claims following a December 2005 motor vehicle accident. Before the Court is West Wind’s motion [45] for summary judgment as to Count I. For the reasons explained below, the motion [45] is granted.

 

I. BackgroundFN1

 

FN1. The Court takes all relevant facts primarily from the parties’ Local Rule 56.1 statements. [See 46, 55, 56, 59.] To the extent that the parties’ responses do not comply with Local Rule 56.1, the Court has disregarded them. See Malec v. Sanford, 191 F.R.D. 581, 584 (N.D.Ill.2000) (“[Local Rule 56.1(b)(3)(C) ] provides the only acceptable means of * * * presenting additional facts.”) (internal quotation omitted).

 

Unlike most cases at the summary judgment stage, here, the facts are brief and undisputed. Occidental, a North Carolina corporation with its principal place of business in Raleigh, issued a policy of insurance to West Wind, an Illinois corporation engaged in interstate trucking, with its principal place of business in Chicago. [55 at ¶¶ 1–2, 11.] The policy contained an “MCS– 90” endorsement, which is designed to comply with regulations promulgated under the Motor Carrier Act of 1980.FN2 [55 at ¶ 12.] The MCS– 90 endorsement provides:

 

FN2. “MCS– 90” refers to the form prepared by the Federal Motor Carrier Safety Administration. See Carolina Cas. Ins. Co. v. Yeates, 584 F.3d 868, 873–74 (10th Cir.2009).

 

In consideration of the premium stated in the policy to which this endorsement is attached, [Occidental] agrees to pay, within the limits of liability described herein, any final judgment recovered against [West Wind] for public liability resulting from negligence in the operation, maintenance or use of motor vehicles subject to the financial responsibility requirements of Sections 29 and 30 of the Motor Carrier Act of 1980 regardless of whether or not each motor vehicle is specifically described in the policy and whether or not such negligence occurs on any route or in any territory authorized to be served by [West Wind] or elsewhere. * * * [West Wind] agrees to reimburse [Occidental] for any payment made by [Occidental] on account of any accident, claim or suit involving a breach of the terms of the policy, and for any payment that [Occidental] would not have been obligated to make under the provisions of the policy except for the agreement contained in this endorsement.

[55 at ¶ 13 (emphasis added).]

 

On December 23, 2005, a truck displaying West Wind placards and operating authority numbers was involved in an accident with another truck. [59 at ¶ 1.] Following the accident, three lawsuits were filed against West Wind. [55 at ¶ 14.] Occidental denied coverage for the claims arising from the accident, asserting that the West Wind truck was not an “owned auto.” [55 at ¶ 15, 59 at ¶ 2.] Occidental also advised West Wind that: (1) Occidental believed that the MCS– 90 applied; (2) although Occidental “ha[d] no duty to make any payment unless or until there is a final judgment,” it would attempt to settle the claims prior to final judgment; and (3) Occidental would seek reimbursement from West Wind for “any money paid as a result of the accident.” [59 at ¶¶ 4–5.]

 

Occidental resolved the claims for a total of $122,524.34 pursuant to settlements reached with the claimants; the payments were not made pursuant to a verdict, court order, or final judgment. [55 at ¶¶ 16–30, 59 at ¶ 10.] Thereafter, Occidental sought reimbursement from West Wind. [55 at ¶ 31.] West Wind refused to reimburse Occidental.

 

*2 West Wind subsequently filed its complaint. In Count I (declaratory judgment), West Wind seeks a declaration that it is not obligated to repay any sums to Occidental as a result of the December 23, 2005, accident. In Count II (bad faith insurance practices), West Wind seeks a finding that Occidental’s conduct in pursuing reimbursement constitutes bad faith pursuant to the Illinois Insurance Code, 215 ILCS 5/155, as well as monetary damages. Previously, this Court granted West Wind’s request that discovery proceed in two phases, based on the limited initial discovery targeted at Count I. [See 20.] Thereafter, West Wind moved for summary judgment on Count I.[45.]

 

II. Legal Standard

Summary judgment is proper where “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c). In determining whether there is a genuine issue of fact, the Court “must construe the facts and draw all reasonable inferences in the light most favorable to the nonmoving party.” Foley v. City of Lafayette, 359 F.3d 925, 928 (7th Cir.2004).

 

To avoid summary judgment, the opposing party must go beyond the pleadings and “set forth specific facts showing that there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (internal quotation omitted). A genuine issue of material fact exists if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id. at 248. The party seeking summary judgment has the burden of establishing the lack of any genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In turn, summary judgment is proper against “a party who fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.” Id. at 322. And the non-moving party “must do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). In other words, “[t]he mere existence of a scintilla of evidence in support of the [non-movant’s] position will be insufficient; there must be evidence on which the jury could reasonably find for the [non-movant].” Anderson, 477 U.S at 252.

 

III. Analysis

As previously discussed, here, the facts are undisputed. The only question is a legal one: Does the MCS– 90 require West Wind to reimburse Occidental for payments made pursuant to settlements? The Seventh Circuit addressed this question in a similar case and answered, “No.” See Auto Owners Ins. Co. v. Munroe, 614 F.3d 322 (7th Cir.2010). This binding precedent begins and ends our inquiry.

 

In Munroe, after a severe tractor-trailer accident, the claimants entered a settlement agreement that released the allegedly liable motor carrier from any individual liability above its liability insurance coverage. Id. at 323. The insurer brought a declaratory judgment action to establish that the policy limited coverage to $1,000,000. Id. After the district court sided with the insurer, the claimants appealed, arguing that the coverage limit was higher either: (1) under the terms of the policy or (2) under the Motor Carriers Act, as implemented through the MCS– 90 endorsement. Id. at 323, 326. As to the second issue, the court explained that, “because the [claimants] have agreed to release [the motor carrier] from any liability beyond what the insurance policy provides, there will never be an unpaid final judgment in this case.” Id. at 327. For that reason, the court held that the MCS– 90 endorsement was not triggered and therefore did not affect the insurer’s liability. Id. at 328.

 

*3 Occidental attempts to limit the applicability of Munroe by arguing that the “final judgment” language might have been dicta and that Munroe’ s facts might be distinguishable. [See 54 at 7.] Neither argument is convincing. First, the Seventh Circuit rejected the claimants’ second argument because “[the MCS– 90] applies only if triggered by an unpaid final judgment against [the motor carrier],” which was not present in that case. Id. at 328. Thus, the court’s “final judgment” language clearly was not dicta. Second, although Occidental is correct that, in Munroe, the insurer was not seeking reimbursement from the motor carrier, Occidental fails to explain why this distinction is material. As here, the issue in Munroe was whether the MCS– 90 endorsement is triggered by settlements. In short, the Court concludes that this case is controlled by Munroe and thus the Court may not consider a contrary decision from another circuit— T.H.E. Ins. Co. v. Larsen Intermodal Servs., Inc., 242 F.3d 667 (5th Cir.2001)—on which Occidental relies.

 

But, even if this Court were not required to follow Munroe, it would respectfully decline to follow Larsen. In that case, the Fifth Circuit gave three reasons for its holding: (1) there is no reason why an insurer could not seek a settlement instead of waiting for a final judgment; (2) the court had previously held that an insurer who paid a settlement because of the requirements of the MCS– 90 was entitled to reimbursement; and (3) the reimbursement provision of the MCS– 90 permits the insurer to recover “any payment,” not just final judgments. See id. at 676. None of these reasons are persuasive.

 

The Fifth Circuit’s first point involves the MCS– 90’s purpose and public policy. “[T]he MCS– 90 endorsement operates * * * as a surety in the event judgment against the carrier is for some reason unsatisfied.” Carolina Cas. Ins. Co. v. Yeates, 584 F.3d 868, 880–81 (10th Cir.2009). Thus, the MCS– 90 shifts the risk of non-payment from the claimant/injured party to the insurer. See id. at 881 (“[I]f, for example, the carrier fails to maintain insurance * * * and fails to pay out of its own pocket for its liability to the injured party, the MCS– 90 * * * would effectuate a minimum level of recovery for the injured party from the MCS– 90 provider.”). However, this risk of non-payment applies only if there is a final judgment against the motor carrier; a settlement, by contrast, provides no risk that the injured party will not be compensated. See id. (“Conceivably, the motor carrier may carry adequate insurance coverage * * * [o]r, the carrier may choose to pay the judgment out of its own pocket. In either of these cases, the purposes behind the MCS– 90 are satisfied, and the endorsement is unnecessary.”). Furthermore, if the MSC–90 were triggered by settlements, insurers who deny coverage would have little incentive to negotiate a fair settlement because they would be negotiating with the motor carrier’s money (unless, of course, the motor carrier is insolvent).

 

*4 The Fifth Circuit’s second justification relies on its past precedent, namely, Canal Insurance Co. v. First General Insurance Co., 889 F.2d 604 (5th Cir.1989). However, the court in Canal Insurance did not analyze the relevant issue. Rather, it summarily concluded that “First General must reimburse Canal for, and in the amount of, judgments and settlements paid by Canal on behalf of Custom in the related state court actions.” Id. at 612 (emphasis added).

 

The Fifth Circuit’s third argument concerns the endorsement’s plain language. To repeat, the MCS– 90 provides that “[West Wind] agrees to reimburse [Occidental] * * * for any payment that [Occidental] would not have been obligated to make under the provisions of the policy except for the agreement contained in this endorsement.” (Emphasis added.) Occidental denied coverage and therefore would not have been obligated to make payments except under the MCS– 90. But Occidental was only obligated under the MCS– 90 “to pay, within the limits of liability described herein, any final judgment recovered against [West Wind].” (Emphasis added.) There were no final judgments, so Occidental was not obligated to do anything, which renders the reimbursement clause inapplicable.FN3 For these reasons, the Fifth Circuit’s decision in Larsen would not be persuasive authority, even in the absence of Munroe. FN4

 

FN3. Indeed, after the accident, Occidental advised West Wind that Occidental “ha[d] no duty to make any payment unless or until there is a final judgment.” Occidental contends that West Wind never objected to Occidental pursuing settlements but fails to explain why, assuming this fact were true, it is material. [See 54 at 4.]

 

FN4. The Court recognizes that its disposition may be viewed as providing West Wind with a wind-fall. But this is not a reason to disregard binding precedent or the MCS– 90 endorsement’s plain language. In drafting that endorsement, Occidental may have put the cart before the horse, taking on unnecessary financial obligations.

 

IV. Conclusion

For the foregoing reasons, Plaintiff’s motion [45] is granted. Judgment will be entered for Plaintiff on Count I. Discovery may now proceed as to Count II.

United States District Court, M.D. Florida,

Fort Myers Division.

Gary W. LAING and Sandra Laing, Plaintiffs,

v.

Frank CORDI, III, as President for and d/b/a Pack & Ride; Pack & Ride, Inc., a Virginia Corporation; Robert W. Estes, Jr., as President for Estes Express Lines, Inc.; and Estes Express Lines, Inc., a Virginia corporation, Defendants.

 

No. 2:11–cv–566–FtM–29SPC.

July 23, 2012.

 

Robert M. Burrell, UAW Legal Services Plan, Clearwater, FL, for Plaintiffs.

 

Frank Cordi, III, Midlothian, VA, pro se.

 

Lawrence J. Roberts, Lawrence J. Roberts & Associates, PA, Coral Gables, FL, for Defendants.

 

OPINION AND ORDER

JOHN E. STEELE, District Judge.

*1 This matter comes before the Court on Defendant Estes Express Lines, Inc.’s Motion to Dismiss Counts III–IX of the Amended Complaint (Doc. # 5) filed on October 10, 2011, and Defendant Robert W. Estes, Jr.’s Motion to Dismiss Counts III–IX of the Amended Complaint (Doc. # 6), adopted by Defendant Frank Cordi, III (Doc. # 7), filed on October 11, 2011. Plaintiffs filed a Memorandum in Opposition to the Motion to Dismiss Counts III–IX of the Amended Complaint as to Defendant Frank Cordi, III and Robert W. Estes, Jr. (Doc. # 8) on November 1, 2001. Plaintiffs then filed a Motion to Drop Defendant, Robert W. Estes, Jr. (Doc. # 11) on November 10, 2011, which was subsequently granted by the Court (Doc. # 12).

 

I.

The nine-count Amended Complaint (Doc. # 2) sets forth claims arising from the transportation of plaintiffs’ household goods from Michigan to Florida in 2009. In addition to two federal claims under the Interstate Commerce Act, 49 U.S.C. § 13101, et seq., the Amended Complaint sets forth seven state law claims of civil theft, breach of contract, conversion, extortion, fraud in the inducement, fraudulent misrepresentation, and unjust enrichment. (Doc. # 2.)

 

Estes Express Lines’ Motion to Dismiss asserts that plaintiffs’ state law claims are preempted by the Interstate Commerce Act. (Doc. # 5, p. 3.) Frank Cordi, III’s Motion to Dismiss asserts that the Carmack Amendment’s preemption extends to carrier employees and that plaintiffs’ Amended Complaint is an impermissible shotgun pleading. (Doc. # 6, pp. 3–4.) In response, plaintiffs contend that the claims against Frank Cordi, III should not be preempted because he is employed by a “broker” and the Carmack Amendment does not apply to brokers. (Doc. # 8, p. 2.)

 

II.

The liability of a carrier for the loss of, or damage to, an interstate shipment of goods is governed by the Carmack Amendment. Adams Express Co. v. Croninger, 226 U.S. 491, 503–04, 33 S.Ct. 148, 57 L.Ed. 314 (1913). The Carmack Amendment provides that a shipper may recover “for the actual loss or injury to the property” caused by a carrier. 49 U.S .C. § 14706(a)(1); Malloy v. Allied Van Lines, Inc., 267 F.Supp.2d 1246, 1251 (M.D.Fla.2003); see also A.I.G. Uru. Compania de Seguros, S.A. v. AAA Cooper Transp., 334 F.3d 997, 1003 (11th Cir.2003). The term “carrier,” or in this case, a “motor carrier,” is “a person providing motor vehicle transportation for compensation.” 49 U.S.C. § 13102(14). The Carmack Amendment creates a uniform rule governing carrier liability when goods are shipped in interstate commerce by preempting “state law claims arising from failures in the transportation and delivery of goods.” Smith v. UPS, 296 F.3d 1244, 1246 (11th Cir.2002); see Adams Express, 226 U.S. at 505–06 (“Almost every detail of the subject is covered so completely that there can be no rational doubt but that Congress intended to take possession of the subject, and supersede all state regulations with reference to it.”). Situations may exist in which the Carmack Amendment does not preempt all state and common law claims, but the claims must be “based on conduct separate and distinct from the delivery, loss of, or damage to goods escape preemption.” Smith, 296 F.3d at 1249.

 

*2 The Carmack Amendment applies to “carriers” and “freight forwarders,” but not “brokers.” FN1 49 U.S.C. § 14706(a); see also Hewlett–Packard Co. v. Brother’s Trucking Enters., 373 F.Supp.2d 1349, 1351 (S.D.Fla.2005). The distinction between a broker and a carrier is often blurry. The key distinction is whether the party has “accepted and legally bound themselves to transport” a shipment, in which case it is considered a carrier. 49 C.F.R. § 371.2(a); see also CGU Int’l Ins., P.L.C. v. Keystone Lines Corp., No. C–02–3751 SC, 2004 U.S. Dist. LEXIS 8123, at *5 (N.D.Cal. May 3, 2004). If the party is a carrier, the Carmack Amendment will apply and preempt any state law claims related to the delivery of the goods; however, if the party is a broker, the state law claims will not be preempted. See Hewlett–Packard, 373 F.Supp.2d at 1352; Chubb Group of Ins. Cos. v. H.A. Transp. Sys., 243 F.Supp.2d 1064, 1069 (C.D.Cal.2002).

 

FN1. A broker is “a person, other than a motor carrier or an employee or agent of a motor carrier, that as a principal or agent 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).

 

After reviewing the Amended Complaint (Doc. # 2), the Court cannot resolve the substantive issues because the Amended Complaint is a shotgun pleading. A shotgun pleading is a pleading that “incorporate[s] every antecedent allegation by reference into each subsequent claim for relief or affirmative defense.”   Wagner v. First Horizon Pharm. Corp., 464 F.3d 1273, 1279 (11th Cir.2006). As a result, most of the counts in a typical shotgun complaint “contain irrelevant factual allegations and legal conclusions.” Strategic Income Fund, L.L.C. v. Spear, Leeds & Kellogg Corp., 305 F.3d 1293, 1295 (11th Cir.2002).

 

Plaintiffs’ Amended Complaint incorporates all of the facts and allegations contained in the preceding paragraphs into each count (Doc. # 2, ¶¶ 39, 42, 46, 51, 57, 60, 64, 70, 76), but fails to distinguish which facts are relevant to establish each count, leaving the reader to wonder which of the prior paragraphs support the elements of the claim.FN2 See Magluta v. Samples, 256 F.3d 1282, 1284 (11th Cir.2001) (“Each count incorporates by reference the allegations made in a section entitled ‘General Factual Allegations’ … while also incorporating the allegations of any count or counts that precede it. The result is that each count is replete with factual allegations that could not possibly be material to that specific count, and that any allegations that are material are buried ….”); see also Wagner, 464 F.3d at 1279 (plaintiffs’ shotgun pleading failed to establish the connection between the substantive counts and the asserted facts). The Eleventh Circuit has routinely and explicitly condemned “shotgun pleadings,” Davis v. Coca–Cola Bottling Co. Consol., 516 F.3d 955, 979 n. 54 (11th Cir.2008), and has stated that neither the district courts nor the defendants are required to “sift through the facts presented and decide for itself which were material to the particular cause of action asserted.” Beckwith v. Bellsouth Telecoms. Inc., 146 F. App’x 368, 372 (11th Cir.2005) (quoting Strategic Income Fund, 305 F.3d at 1296 n. 9 (citations omitted)).

 

FN2. For instance, in Count VI of the Amended Complaint, plaintiffs assert that “[t]he Defendants extorted the Plaintiffs with the telephone threats as detailed above.” (Doc. # 2, ¶ 62.) Without additional information, the defendants and the court must sift through the previous sixty-one paragraphs to determine what telephone threats were made and which defendant(s) made them, only to learn that the facts allege two separate calls, but only one of the paragraphs names a defendant. (Doc. # 2, ¶¶ 26, 36.)

 

*3 Furthermore, by indiscriminately lumping defendants together, plaintiffs have failed to comply with Federal Rule of Civil Procedure 8. Rule 8(a) requires that a complaint contain “a short and plain statement of the claim showing that the pleader is entitled to relief,” and that each allegation be pleaded in a “simple, concise, and direct” manner. Fed.R.Civ.P. 8(a)(2), (d)(1). Although a complaint against multiple defendants is usually read as making the same allegation against each defendant individually, Crowe v. Coleman, 113 F.3d 1536, 1539 (11th Cir.1997), factual allegations must give each defendant “fair notice” of the nature of the claim and the “grounds” on which the claim rests. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 n. 3, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Accordingly, at times, a plaintiff’s “grouping” of defendants in a complaint may require a more definite statement. See Veltmann v. Walpole Pharm., 928 F.Supp. 1161, 1164 (M.D.Fla.1996); Lane v. Capital Acquisitions & Mgmt., Co., No. 04–60602, 2006 WL 4590705, at *5 (M.D.Fla. Apr.14, 2006) (“By lumping all the defendants together in each claim and providing no factual basis to distinguish their conduct, the [ ] Complaint fails to satisfy the minimum standards of Rule 8.”).

 

Here, plaintiffs’ Amended Complaint names four defendants FN3 and alleges nine separate counts; however, only the first two counts are specific as to any defendant. In the remaining counts, plaintiffs simply assert that the “Defendants” are responsible for the particular cause of action. It is unclear whether plaintiffs are alleging Counts III—IX against all of the defendants or only certain defendants. See Magluta, 256 F.3d at 1284 (“The complaint is replete with allegations that ‘the defendants’ engaged in certain conduct, making no distinction among the fourteen defendants charged, though geographic and temporal realities make plain that all of the defendants could not have participated in every act complained of.”). For example, in Count IV, plaintiffs allege that the “Defendants agreed to a valid email contract” (Doc. # 2, ¶ 53), but nowhere in the complaint does it indicate which parties agreed to the contract.

 

FN3. The allegations against Defendant Robert W. Estes, Jr. were dropped by plaintiffs on November 10, 2011. (Doc. # 12.)

 

When faced with a shotgun pleading, a district court should require the party to file an amended complaint rather than allow such a case to proceed to trial. Byrne v. Nezhat, 261 F.3d 1075, 1133 (11th Cir.2001). Therefore, the Amended Complaint will be dismissed without prejudice and with leave to amend.

 

Accordingly, it is now

 

ORDERED:

 

1. Defendants Estes Express Lines, Inc. (Doc. # 5) and Frank Cordi, III’s Motions to Dismiss Counts III–IX of Amended Complaint (Doc. # 6) are GRANTED, and the Amended Complaint (Doc. # 2) is dismissed without prejudice.

 

2. Plaintiffs may file a second amended complaint WITHIN TWENTY ONE (21) DAYS of this Opinion and Order.

 

DONE AND ORDERED.