S.D. Ohio,

Western Division.

GREAT AMERICAN INSURANCE COMPANY, Plaintiff,

v.

L & S TRUCKING COMPANY, INC., et al., Defendant.

No. 1:14–CV–669. | Signed March 30, 2015.

 

 

ORDER

SANDRA S. BECKWITH, Senior District Judge.

*1 This matter is before the Court on the motion to dismiss filed by Defendants L & S Trucking Company, Inc. and John and Robin Walbert. Doc. No. 55. For the reasons that follow, Defendants’ motion to dismiss on the grounds of lack of jurisdiction over the person is well-taken and is GRANTED. The complaint as to these Defendants is DISMISSED WITHOUT PREJUDICE.

 

The facts indicated in the complaint show that in October 2013, Plaintiff Great American Insurance Company (“Great American”) issued a motor carrier broker bond for Defendant L & S Trucking Company, Inc. (“L & S”) in the penal sum of $75,000. L & S and Defendants Walbert Trucking, Inc. (“Walbert Trucking”), John Walbert, and Robin Walbert (collectively “the Walberts”) entered into agreements to indemnify Great American in the event it incurred any losses, costs, or expenses in connection with executing the bond. The complaint alleges that Great American has received claims against the bond from motor carriers in excess of the penal sum of the bond. The complaint alleges further that L & S, Walbert Trucking, and the Walberts have refused to honor their obligations under the indemnity agreements.

 

Great American’s complaint, therefore, has two aspects to it. First, Great American has an interpleader claim to resolve the various motor carriers’ claims against the bond. The complaint names eighteen interpleader defendants and three more interpleader defendants were added to the case via motions to intervene. The interpleader defendants are scattered throughout the United States, but none is located or resides in Ohio. Second, Great American asserts claims against L & S, Walbert Trucking, and the Walberts for indemnity and specific performance of their obligations under the indemnity agreements. L & S, Walbert Trucking, and the Walberts all reside in Glasgow, Kentucky, which is located in the Western District of Kentucky. The case as to Walbert Trucking, however, is stayed due to its Chapter 11 bankruptcy filing.

 

L & S and the Walberts have filed a motion to dismiss the complaint on the grounds of lack of subject matter jurisdiction, lack of jurisdiction over the person, and improper venue. Doc. No. 55. As the plaintiff, Great American bears the burden of proving that the Defendants are subject to personal jurisdiction in Ohio. Air Products & Controls, Inc. v. Safetech Int’l, Inc., 503 F.3d 544, 549 (6th Cir.2007). Upon reviewing the complaint, the motion to dismiss and the related briefs, the Court is persuaded that it lacks personal jurisdiction over these Defendants.

 

The Court first notes that Great American has made no showing at all that the Defendants are subject to general jurisdiction in Ohio, that is, that their contacts are continuous and systematic such that “that the state may exercise personal jurisdiction over the defendant even if the action is unrelated to the defendant’s contacts with the state.” Third Nat’l Bank in Nashville v. WEDGE Group Inc., 882 F.2d 1087, 1089 (6th Cir.1989). Accordingly, the Court must decide whether specific personal jurisdiction over the Defendants exists.

 

*2 In a specific jurisdiction case, “a State exercises personal jurisdiction over a defendant in a suit arising out of or related to the defendant’s contacts with the forum.” Id. Assuming the Defendants are subject to Ohio’s long-arm personal jurisdiction statute, the Court must determine whether exercising personal jurisdiction over the Defendants comports with the Due Process Clause. In Bird v. Parsons, 289 F.3d 865 (6th Cir.2002), the Sixth Circuit set forth the requirements for the proper assertion of specific personal jurisdiction by the trial court:

First, the defendant must purposefully avail himself of the privilege of acting in the forum state or causing a consequence in the forum state. Second, the cause of action must arise from the defendant’s activities there. Finally, the acts of the defendant or consequences caused by the defendant must have a substantial enough connection with the forum state to make the exercise of jurisdiction over the defendant reasonable.

Id. at 874 (citing Southern Mach. Co. v. Mohasco Ind., Inc., 401 F.2d 374, 381 (6th Cir.1968)). Great American must establish all three parts of the Mohasco test for the Court to assert personal jurisdiction over the Defendants. Id.; Bridgeport Music, Inc. v. Still N The Water Publ’g, 327 F.3d 472, 477 (6th Cir.2003). Because the Court is deciding the issue of personal jurisdiction without discovery or an evidentiary hearing, Great American only needs to make a prima facie showing that the Court has jurisdiction over the Defendants. Nationwide Mut. Ins. Co. v. Tryg Int’l Ins. Co., 91 F.3d 790, 792 (6th Cir.1996). Additionally, the Court must construe the pleadings in the light most favorable to Great American. Id. at 793.

 

Great American’s case for personal jurisdiction fails on the first Mohasco element, because, even viewing the record in its favor, it has not made a prima facie showing that the Defendants purposefully availed themselves of the privilege of acting in Ohio. The Court cannot assert personal jurisdiction over the Defendants merely because they entered into indemnity agreements with Great American. CompuServe, Inc. v. Patterson, 89 F.3d 1257, 1265 (6th Cir.1996). By entering into the indemnity agreements, the Defendants arguably created a continuing obligation with an Ohio resident-one fact that supports finding personal jurisdiction-but there is no admissible evidence as to which party initiated the contact leading to the formation of the agreements and no admissible evidence on the course of the parties’ negotiations and/or course of dealing such that the Court can conclude that they purposefully established contact with Ohio. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477 (1985). In other words, evidence (or even inferences that can reasonably be made from the complaint’s factual allegations) as to the quality of the Defendants’ contacts with Ohio is completely lacking. See Calphalon Corp. v. Rowlette, 228 F.3d 718, 722 (6th Cir.2000) (in assessing the “purposeful availment” requirement, “the quality rather than the quantity of the contacts is the proper subject of review”). The indemnity agreements do not even contain a choice-of-law clause. A choice-of-law clause, if present, would support finding personal jurisdiction. LAK, Inc. v. Deer Creek Enter., 885 F.2d 1293, 1295 (6th Cir.1989). In short, this record does not support a prima facie showing that the Defendants are subject to personal jurisdiction in Ohio.

 

 

Conclusion

*3 In summary, Great American has failed to make a prima facie showing that Defendants L & S Trucking Company, Inc. and John and Robin Walbert are subject to personal jurisdiction in Ohio. Accordingly, their motion to dismiss under Rule 12(b)(2) of the Federal Rules of Civil Procedure is well-taken and is GRANTED. The complaint as to Defendants L & S Trucking Company, Inc. and John and Robin Walbert is DISMISSED WITHOUT PREJUDICE.

 

IT IS SO ORDERED

United States District Court,

D. Maryland.

AIG EUROPE LTD., Plaintiff,

v.

GENERAL SYSTEM, INC., et al., Defendant.

Civil Action No. RDB–13–0216. | Filed March 19, 2015.

 

 

MEMORANDUM OPINION & ORDER

RICHARD D. BENNETT, District Judge.

*1 Presently pending before this Court is TBB Global Logistics, Inc.’s Motion to Dismiss Defendant General System, Inc.’s Cross–Claim (ECF No. 53). The parties’ submissions have been reviewed and no hearing is necessary. See Local Rule 105.6 (D.Md .2014). For the reasons that follow, TBB Global Logistics Inc.’s (“TBB Global”) Motion to Dismiss (ECF No. 53) is GRANTED, and TBB Global is dismissed from this action.

 

 

BACKGROUND

This Court accepts as true the facts alleged in the defendant’s crossclaim. See Aziz v. Alcolac, Inc., 658 F.3d 388, 390 (4th Cir.2011). Initially, this action pitted Plaintiff AIG Europe Ltd. (“AIG Europe”) against Defendant General System, Inc. (“General System”) for a claim arising under the Carmack Amendment to the Interstate Commerce Act (“Carmack Amendment”),1 49 U.S.C. § 14706, due to General System’s alleged loss of a tractor trailer filled with pharmaceuticals.

 

Specifically, TBB Global, a transportation brokerage service, arranged for General System to transport shipments for TBB Global’s clients. Crosscl. ¶¶ 5–6, ECF No. 52. General System obtained insurance for its cargo, with a limit of $100,000 per occurrence, and General System alleges that TBB Global “agreed” to refrain from arranging transportation of any shipment exceeding that insurance coverage. Id. ¶¶ 9, 10.

 

On October 11, 2011, TBB Global directed General System to pick up a shipment of pharmaceuticals from Actavis Elizabeth, LLC (“Actavis”)2 and deliver it to UPS in Louisville, Kentucky. Id. ¶ 11. TBB Global did not inform General System that the value of the shipment exceeded the $100,000 limit of General System’s insurance coverage or that the shipment contained controlled substances. Id. ¶¶ 12–16. A driver for General System picked up the shipment that same day. Id. ¶ 17. In route, the driver stopped at a truck stop to purchase cigarettes around 11:00 p.m. Id. ¶ 18. When he emerged from the store, both the truck and trailer were gone. Id. The truck was eventually located, but the goods had been removed from the trailer and were not recovered. Id. ¶ 19. Actavis made a claim against its insurance carrier, AIG Europe, for the loss of the goods, and one of the terms for payment of the claim was that Actavis subrogated its rights to AIG Europe. Id. ¶ 20.

 

The pending motion marks the parties’ third attempt to asserts claims against TBB Global in this litigation. In this instance, it is General System that has attempted to bring a cross-claim against TBB Global in order to assert a breach of contract claim. Specifically, after AIG Europe filed the pending action in this Court on January 22, 2013 against General System, see generally Pl.’s Compl., ECF No. 1, General System sought to file a third party complaint against TBB Global, National Insurance Agency, Inc. (“National”), and Marine MGA, Inc. (“Marine MGA”) asserting breach of contract and negligence claims.. See Mot. Leave File Third Party Compl., ECF No. 10. On June 26, 2013, this Court granted the Motion, and Global System filed its Third Party Complaint (ECF No. 12) against TBB Global and the other third-party defendants that same day. Subsequently, TBB Global moved to dismiss the Third Party Complaint for failure to state a claim and improper venue. See generally TBB Global’s Mem. Supp. Mot. Dismiss Counts I and II, ECF No. 19. This Court granted that motion and dismissed TBB Global from the action. See generally Order Granting TBB’s Mot. Dismiss, ECF. No. 38.

 

*2 Subsequently, Plaintiff AIG Europe filed an Amended Complaint naming TBB Global as a defendant to AIG Europe’s original action. See generally Pl.’s Am. Compl., ECF No. 39. In response, TBB Global filed a motion to dismiss AIG Europe’s claim against it (Count II of the Amended Complaint). See TBB Global’s Mot. Dismiss Count II, ECF No. 45. Thereafter, General System filed a Cross-claim against TBB Global. See ECF No. 52. In essence, General System asserted that this Court could claim supplemental jurisdiction over its cross-claim against TBB Global despite this Court’s previous order to dismiss the AIG Europe’s claim against TBB Global. See Def.’s Cross-claim ¶ 1, ECF No. 52. TBB Global then filed the currently pending Motion to Dismiss General System’s Cross-claim. See generally TBB Global’s Mem. Supp. Mot. Dismiss Cross-claim, ECF No. 57; TBB Global’s Reply, ECF No. 60. On July 22, 2014, while the pending motion to dismiss General System’s cross-claim remained unripe, this Court granted TBB Global’s motion to dismiss AIG Europe’s claim against it. See Mem. Op., ECF No. 58.

 

 

STANDARD OF REVIEW

TBB Global seeks to be dismissed from this matter pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Under Federal Rule of Civil Procedure 8(a)(2), a complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.”

 

As the legal sufficiency of the complaint is challenged under a Rule 12(b)(6) motion, the court must accept as true all the factual allegations contained in the complaint, but legal conclusions drawn from those facts are not afforded such deference. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (stating that “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice” to plead a claim); see also Wag More Dogs, LLC v. Cozart, 680 F.3d 359, 365 (4th Cir.2012) (“Although we are constrained to take the facts in the light most favorable to the plaintiff, we need not accept legal conclusions couched as facts or unwarranted inferences, unreasonable conclusions, or arguments.” (internal quotation marks omitted)). Rule 12(b)(6) authorizes dismissal of a complaint must if it does not allege “a plausible claim for relief.” Iqbal, 556 U.S. at 679.

 

Rule 13(g) permits a litigant to file crossclaims against co-parties “if the claim arises out of the same transaction or occurrence that is the subject matter of the original action.” Fed.R.Civ.P. 13(g). Crossclaims are not compulsory, and the court retains discretionary power over their assertion in any particular action. See Arguetta v. McGill Airflow, LLC, Civ. A. No. JKB–11–1102, 2012 WL 34049, at *2 (Jan. 4, 2012) (“The decision whether to allow a crossclaim that meets the test of subdivision (g) is a matter of judicial discretion.” (quoting Charles Allan Wright, et al., 6 Fed. Prac. & Proc. Civ. § 1431 (3d ed.))); see also Charles Allan Wright, et al., 6 Fed. Prac. & Proc. Civ. § 1433 (3d ed.) (“Of course, as is true for other claims involving supplemental jurisdiction, the assertion of jurisdiction is discretionary and the court may determine that although the crossclaim meets the transaction standard, jurisdiction should not be exercised.”).

 

 

ANALYSIS

*3 General System’s cross-claim is based on Federal Rule of Civil Procedure 13(g). In its Response brief, General System acknowledged that its crossclaim was proper if, and only if, this Court found that AIG alleged a viable cause of action against TBB Global. Def. General System’s Opp’n to TBB Global’s Mot. Dismiss at 3, ECF No. 57 (“TBB asserts that if this Court dismisses AIG’s Complaint against TBB, it must also dismiss GSI’s Crossclaim since TBB will no longer be a co-party. GSI does not disagree with TBB’s general statement.”). This Court declined to exercise jurisdiction, under Federal Rule of Civil Procedure 14, over AIG’s cause of action against TBB Global and dismissed the claim. See Mem. Op., ECF No. 37. As a result of that determination, TBB Global is no longer a “co-party” to Defendant General System, and General System has conceded that it would be inappropriate for it to maintain its crossclaim under these circumstances.3

 

Indeed, additional considerations weigh in favor of this Court’s dismissal of General System’s crossclaim. Due to the parties’ procedural wrangling, this case has been stalled in the preliminary pleading stage for quite some time. Inclusion of TBB Global in this litigation would only slow this case further. As is clear from the parties’ briefs on the pending motion, General System’s crossclaim would require the Court to address disputes of fact and complicated issues of Pennsylvania law regarding contract formation and integration. These issues are totally separate from whether General System is strictly liable to AIG Europe pursuant to the Carmack Amendment-the main issue raised by the Plaintiff’s Complaint in this case. Accordingly, this Court finds that consideration of General System’s crossclaim would be inappropriate in this action, and the crossclaim will be dismissed without prejudice.

 

 

CONCLUSION

Accordingly, for the reasons stated above, it is this 19th day of March, 2015, ORDERED that:

 

1. Defendant TBB Global Logistics, Inc.’s Motion to Dismiss General System’s Cross-claim (ECF No. 53) is GRANTED, and TBB Global is DISMISSED from this case; and

 

2. The Clerk of the Court transmit copies of this Order to Counsel.

 

 

 

Footnotes

 

1

 

Congress passed the Carmack Amendment in 1906 in order to create “a nationally uniform system of liability for common carriers shipping goods within the stream of interstate commerce.” Brightstar Int’l Corp. v. Minuteman Int’l, No. 10–C–230, 2011 U.S. Dist. LEXIS 114149, at *5 (E.D.Ill. Oct. 4, 2011). While the Carmack Amendment relieves carriers from the burden of differing state regulations, “it also facilitates claims by shippers, requiring them to make only a prima facie case in order to shift the burden to the carrier to prove that it was not negligent and that the damage was caused by an event excepted by the common law.” 5K Logistics, Inc. v. Daily Exp., Inc., 659 F.3d 331, 335 (4th Cir.2011).

 

2

 

The Third–Party Complaint identifies the shipper as “Actavis Elizabeth, LLC.” Third Party Compl. ¶ 18. AIG Europe’s original complaint, however, identifies the shipper as “Actavis, Inc.” Pl.’s Compl. ¶ 2. The precise identity of the shipper does not appear to be disputed however.

 

3

 

The Court notes that there is some authority to support the notion that a crossclaim may still be maintained against a party who has been dismissed from an action. See Charles Allan Wright, et al., 6 Fed. Prac. & Proc. Civ. § 1431 (3d ed.) (“No crossclaim may be brought against a person who has been eliminated or who has withdrawn from the action, since that person no longer is a party. The subsequent dismissal of the original claim itself, or the dismissal of that claim against the coparty, does not require that a previously interposed crossclaim also be dismissed, however.” (internal footnotes omitted) (citing, inter alia, Adams v. NVK Homes, Inc., 135 F.Supp.2d 675, 708 (D.Md.2001))). In this case, however, AIG Europe’s claims against TBB Global were already subject to an unripe motion to dismiss at the time General System filed its cross-claim, and the case was (and still remains) at the initial pleading stage.