MATTHEW SHELSON, Plaintiff, v SECURA INSURANCE COMPANY, Defendant-Appellant, and GREAT WEST CASUALTY COMPANY, Defendant-Appellee.

 

No. 318762

 

COURT OF APPEALS OF MICHIGAN

 

2015 Mich. App. LEXIS 1058

 

 

May 19, 2015, Decided

 

 

NOTICE:    THIS IS AN UNPUBLISHED OPINION. IN ACCORDANCE WITH MICHIGAN COURT OF APPEALS RULES, UNPUBLISHED OPINIONS ARE NOT PRECEDENTIALLY BINDING UNDER THE RULES OF STARE DECISIS.

 

PRIOR HISTORY:     [*1] Sanilac Circuit Court. LC No. 12-034648-NF.

 

JUDGES: Before: BECKERING, P.J., and JANSEN and BOONSTRA, JJ. BOONSTRA, J. (concurring).

 

OPINION

PER CURIAM.

Plaintiff was injured in a motor-vehicle accident and sued defendants Secura Insurance Company and Great West Casualty Company for no-fault benefits. Secura and Great West disputed which company was responsible to pay plaintiff’s claim. The trial court granted plaintiff’s motion for summary disposition, holding that Secura was responsible. Secura applied for leave to appeal in this Court; this Court denied the application. Shelson v Secura Ins Co, unpublished order of the Court of Appeals, entered September 9, 2013 (Docket No. 314322). On the day that trial was set to commence, the parties settled the case, with Secura preserving the right to appeal the trial court’s determination that it rather than Great West was responsible to pay plaintiff’s claim. The trial court thereafter entered an order dismissing the case with prejudice. We now affirm the trial court’s determination that plaintiff did not own the vehicle at issue.

Plaintiff owned two personal vehicles insured by Secura. He worked as a driver for Sam Forrest & Sons, a trucking company, which was [*2]  owned by Sam Forrest. Plaintiff testified that he was an independent contractor, not an employee of Sam Forrest & Sons, although he worked exclusively for the company. Plaintiff would find his own trucking jobs and Forrest would provide a semi truck for the job. Plaintiff would receive 25 percent of the gross; the company received the remaining 75 percent.

There was no particular truck that plaintiff drove at all times. As he explained, “I’d drive one for a little while and then I’d get into another one, whichever one was available. I mean it was months at a time–stretches in the same vehicle.” Plaintiff would take a truck to his house “[e]very once in a while,” but usually he would return the trucks to Forrest to service them. Plaintiff testified that Forrest paid for gas and major repairs to the trucks, while he paid for some minor repairs and oil while he was on the road.

For three or four months before the accident that gave rise to the present case, plaintiff had been driving a Freightliner FLD-120, which was insured by Great West. The Freightliner was registered in Forrest’s name and plaintiff was not on the title to the vehicle. Plaintiff testified that he could not use the Freightliner [*3]  for personal errands.

After the accident, plaintiff sued Secura and Great West for personal injury protection (PIP) benefits. Plaintiff thereafter moved for summary disposition, arguing that Secura was responsible to pay his no-fault benefits. In response, Secura moved for summary disposition, arguing that because plaintiff owned the Freightliner and was self-employed, Great West rather than Secura was responsible to pay no-fault benefits.

The trial court ruled that plaintiff did not own the Freightliner, explaining:

 

[T]he owner of the truck is the one that controls who uses the truck from day to day. . . . Plaintiff has no exclusive use of the truck, no unfettered use of the truck, doesn’t take it home with him, so I think . . . he is not the owner . . . under the statute . . . .

 

 

On appeal, Secura argues only that the trial court erred by determining that plaintiff did not own the Freightliner. We review de novo a trial court’s decision on a motion for summary disposition. Tenneco Inc v Amerisure Mut Ins Co, 281 Mich App 429, 443; 761 NW2d 846 (2008). We review de novo questions of statutory interpretation. Hoffman v Boonsiri, 290 Mich App 34, 39; 801 NW2d 385 (2010).

Under the no-fault act, MCL 500.3101 et seq., the general rule is that a person who is injured in a motor-vehicle accident recovers benefits from his own insurer. MCL 500.3114(1); Frierson v West American Ins Co, 261 Mich App 732, 735; 683 NW2d 695 (2004). An exception [*4]  to the general rule is found at MCL 500.3114(3), which states:

 

An employee, his or her spouse, or a relative of either domiciled in the same household, who suffers accidental bodily injury while an occupant of a motor vehicle owned or registered by the employer, shall receive personal protection insurance benefits to which the employee is entitled from the insurer of the furnished vehicle.

 

 

In Celina Mut Ins Co v Lake States Ins Co, 452 Mich 84, 89; 549 NW2d 834 (1996), our Supreme Court held that under MCL 500.3114(3), a self-employed person who is injured in a motor-vehicle accident while operating a vehicle owned by his business recovers benefits from the insurer of the business vehicle, not the insurer of his personal vehicles. See also Vitale v Auto Club Ins Ass’n, 233 Mich App 539, 542; 593 NW2d 187 (1999).

In the present case, the trial court held that plaintiff did not own the Freightliner. Secura argues that this holding was erroneous.

Under MCL 500.3101(2)(h), an “owner” is defined as:

 

(i) A person renting a motor vehicle or having the use thereof, under a lease or otherwise, for a period that is greater than 30 days.

(ii) A person who holds the legal title to a vehicle, other than a person engaged in the business of leasing motor vehicles who is the lessor of a motor vehicle pursuant to a lease providing for the use of the motor vehicle by the lessee for a period that is [*5]  greater than 30 days.

(iii) A person who has the immediate right of possession of a motor vehicle under an installment sale contract.

 

 

Secura argues that because plaintiff used the Freightliner for greater than 30 days, he should be considered an “owner” under MCL 500.3101(2)(h)(i).

In Ardt v Titan Ins Co, 233 Mich App 685, 690; 593 NW2d 215 (1999), this Court was charged with deciding “whether any degree of usage for more than thirty days satisfies the statutory definition of ‘owner,’ . . . or whether the definition requires something more.” The Court held “that ‘having the use’ of a motor vehicle for purposes of defining ‘owner’ . . . means using the vehicle in ways that comport with concepts of ownership.” Id. The Court explained that MCL 500.3101(2)(h)(i) “does not equate ownership with any and all uses for thirty days, but rather equates ownership with ‘having the use’ of a vehicle for that period.” Ardt, 233 Mich App at 690. The Court added that because “the phrase ‘having the use thereof’ appears in tandem with references to renting or leasing,” the implication is “that ownership follows from proprietary or possessory usage, as opposed to merely incidental usage under the direction or with the permission of another.” Id. at 690-691 (emphasis in original). The Court in Ardt concluded that on the facts of that case, [*6]  there remained a genuine issue of fact regarding whether the injured driver qualified as an owner.1

 

1   Specifically, one witness testified that the injured driver exhibited a “spotty and exceptional pattern of . . . usage,” whereas another witness testified that he exhibited a “regular pattern of unsupervised usage.” Ardt, 233 Mich App at 691.

In Kessel v Rahn, 244 Mich App 353, 357-358; 624 NW2d 220 (2001), the plaintiff’s mother bought the car at issue and was the title owner. The plaintiff’s mother had bought the car “with the intent that [the] plaintiff was to use it,” and gave the plaintiff permission to use the car “conditioned on plaintiff’s maintaining insurance on the vehicle . . . .” Id. The plaintiff had used the car for more than a year and “indicated that she ‘pretty much’ had exclusive use of the vehicle during that time, using the vehicle to go to work, transport her kids, and for any other use that she needed it for.” Id. at 357. This Court determined that, under the circumstances, the plaintiff had exhibited “a sufficient proprietary or possessory use of the vehicle for more than thirty days, thus coming within the definition of ‘owner’ under § 3101.” Id. at 358.

In Chop v Zielinski, 244 Mich App 677, 680-682; 624 NW2d 539 (2001), the plaintiff’s ex-husband was the title owner of the car, although the plaintiff believed that she had [*7]  been awarded the car in the divorce judgment. Between the divorce and the accident that gave rise to the case, a period of approximately five months, the plaintiff “kept the car parked at her apartment complex, . . . drove the car to and from work on a daily basis, and used the car for other personal errands.” Id. at 680-681. This Court found that the “[p]laintiff’s use of the car in such a manner was possessory use that comports with the concepts of ownership.” Id. at 681. The Court explained that there was “no indication that plaintiff used the car under the specific direction of her ex-husband or with her ex-husband’s permission.” Id.

In Detroit Med Ctr v Titan Ins Co, 284 Mich App 490, 491; 775 NW2d 151 (2009), the injured driver, Maria Jimenez, “may have lived with” Jose Gonzalez, the father of her two children and the title owner of the car. Id. at 491-492. This Court recounted her usage of the car:

 

[T]he car was kept at Jimenez’s residence; she used the vehicle, primarily for grocery shopping, approximately seven times over the course of about a month; she had to get permission and the keys from Gonzalez to use the vehicle, although permission may never have been denied; she fueled the car, but Gonzalez was otherwise responsible for maintenance; and he had stopped using the vehicle, as he had [*8]  use of another. [Id. at 492.]

 

 

This Court found that under these facts, Jimenez did not own the car under MCL 500.3101(2)(h)(i):

Here, Jimenez did not “hav[e] the use” of the vehicle “for a period that is greater than 30 days.” There was no transfer of a right of use, but simply an agreement to periodically lend. The permission was not for a continuous 30 days, but sporadic. Similar to the vehicle in Chop, the car was kept at Jimenez’s residence. Moreover, she clearly had a significant relationship with Gonzalez such that permission to use the vehicle apparently was never denied. However, unlike the driver in Ardt, there was no evidence that Jimenez had “regular” use of the car. Also, contrary to the plaintiff in Chop, Jimenez did not believe that she had any right of ownership and she did not have unfettered use. She had to ask permission and had to be given the keys. While there are facts in common with Chop and Ardt, these facts, by themselves, do not establish ownership. The need for permission distinguishes this case from Chop . . . , and the lack of any evidence of regular use distinguishes this case from Ardt. [Detroit Med Ctr, 284 Mich App at 493-494.]

 

 

In the case at hand, plaintiff had been driving the Freightliner for three or four months before [*9]  the accident. However, there was no one particular truck that plaintiff drove all the time. As he explained, “I’d drive one for a little while and then I’d get into another one, whichever one was available. I mean it was months at a time–stretches in the same vehicle.” Plaintiff received Forrest’s permission before using one of his trucks for a job. Plaintiff would take a truck to his house “[e]very once in a while,” but usually would return the trucks to Forrest “so he could do service on them when we got back.” Plaintiff testified that Forrest generally paid for gas and repairs to the trucks, although plaintiff would pay for minor repairs and oil when he was on the road. Plaintiff denied having any ownership interest in the Freightliner. He testified that he also did not have personal use of the Freightliner.

Given the foregoing facts, plaintiff did not qualify as an owner of the Freightliner under MCL 500.3101(2)(h)(i). Although he had used the Freightliner for more than 30 days, his use of the vehicle did not comport with concepts of ownership. Plaintiff did not have proprietary or possessory use of the Freightliner.

We affirm the trial court’s determination that plaintiff was not the owner of the vehicle.2 [*10]  Appellee Great West, as the prevailing party, may tax its costs pursuant to MCR 7.219.

 

2   Our holding is limited to whether plaintiff was the owner of the Freightliner. We do not consider whether plaintiff was self-employed, an employee of Forrest, or an independent contractor, which issues are not before this Court on appeal. Nor do we consider any other issue regarding the applicability of MCL 500.3114(3).

/s/ Jane M. Beckering

/s/ Kathleen Jansen

 

CONCUR BY: Mark T. Boonstra

 

CONCUR

BOONSTRA, J. (concurring).

I concur in the majority opinion. I write separately because I would go farther than does the majority in addressing the issues and in interpreting the language of the pertinent statute. While affirming the trial court, the majority ostensibly limits its holding to the trial court’s determination that plaintiff was not the owner of the vehicle. It specifically declines to consider whether plaintiff was self-employed, an employee of Sam Forrest & Sons (Forrest), or an independent contractor, or any other issue regarding the applicability of MCL 500.3114(3).

But it is clear, in my view, that plaintiff was an independent contractor, and not an employee of Forrest.1 First, Secura Insurance Company (Secura), plaintiff’s insurer, conceded as much in [*11]  its initial brief on appeal (describing plaintiff as “a self-employed independent contractor doing business as a sole proprietor”), just as it had conceded the point in the trial court. Second, while Secura later sought to backtrack from that position in its reply brief on appeal, it did so by analogy to here-inapplicable language found in the Worker’s Disability Compensation Act, MCL 418.01 et seq. Third, the case on which Secura relies in attempting to make that analogy has since been reversed by our Supreme Court. See Auto-Owners Insurance Co v All Star Lawn Specialists Plus, Inc, 497 Mich 13; 857 NW2d 520 (2014). Therefore, since Forrest was not plaintiff’s employer, Forrest’s insurer is not obligated under MCL 500.3114(3).

 

1   If plaintiff were an employee of Forrest while an occupant of the Forrest-owned vehicle, then Great Lakes, as Forrest’s insurer, would be the responsible insurer under MCL 500.3114(3).

As set forth in its initial brief on appeal, Secura’s primary position is that plaintiff was both an “employee” and an “employer”; that is, he was a self-employed independent contractor and employed himself in that capacity. By that reasoning, according to Secura, plaintiff is an “employee” under MCL 500.3114(3) such that he is entitled to “receive personal protection insurance benefits . . . from the insurer of the furnished vehicle.” [*12]  Id. According to Secura, that insurer is Great Lakes, because it insured the vehicle furnished by Forrest.

MCL 500.3114(3) states:

 

An employee, his or her spouse, or a relative of either domiciled in the same household, who suffers accidental bodily injury while an occupant of a motor vehicle owned or registered by the employer, shall receive personal protection insurance benefits to which the employee is entitled from the insurer of the furnished vehicle.

 

 

The language of the statute must be read as a whole, and we must where possible give effect to all of its parts. Chico-Polo v Dep’t of Corrections, 299 Mich App 193, 198; 829 NW2d 314 (2013). As applied to this case, the statute in essence provides that “an employee . . . who suffers . . . injury while an occupant of a motor vehicle owned . . . by the employer, shall receive . . . benefits . . . from the insurer of the furnished vehicle.” Id. In other words, when an employer furnishes a vehicle for the employee’s use, and the employee is injured while an occupant of the vehicle, the insurer of the vehicle furnished by the employer must provide benefits.

Secura’s reading, by contrast, would divorce the term “employer” from the term “furnished vehicle.” And it would render meaningless the term “employee.” That is, under Secura’s [*13]  interpretation, an employee of himself (as a self-employed independent contractor) may recover benefits not from his own insurer (as either employee or employer), but instead from the insurer of a third party who happened to furnish the vehicle. But, in my view, reading the statute as a whole, it is implicit in the statutory language that the party “furnishing” the vehicle and the “employer” are one and the same. Here, the “employer” did not “furnish the vehicle.” Moreover, Secura’s reading of the statute would render nugatory its requirement that the person be an “employee,” because the same outcome would obtain even if the person were an “independent contractor.” See Robinson v City of Lansing, 486 Mich 1, 21; 782 NW2d 171 (2010). I would therefore reject Secura’s strained interpretation of the statutory language.2

 

2   Secura’s reliance of Celina Mut Ins Co v Lake States Ins Co, 452 Mich 84, 89; 549 NW2d 834 (1996), is misplaced. In that case, unlike here, it was the self-employed business owner (not a third party) who had furnished the vehicle.

In any event, Secura’s argument still fails because, as the majority properly holds, plaintiff was not an “owner” of the vehicle under MCL 500.3101(2)(h). I therefore concur in the majority opinion, and offer these additional reasons for affirming the trial court’s grant of summary disposition in favor [*14]  of plaintiff and against Secura.

/s/ Mark T. Boonstra

 

ROBERT D. GIBSON, Plaintiff and Appellant, v. UNITED PARCEL SERVICE, INC., Defendant and Respondent.

 

A141645

 

COURT OF APPEAL OF CALIFORNIA, FIRST APPELLATE DISTRICT, DIVISION ONE

 

2015 Cal. App. Unpub. LEXIS 2860

 

 

April 22, 2015, Opinion Filed

 

 

JUDGES: Humes, P. J.; Dondero, J., Banke, J. concurred.

 

OPINION BY: Humes, P. J.

 

OPINION

Robert D. Gibson appeals from the trial court’s dismissal of his action against United Parcel Service, Inc. (UPS) after the court sustained without leave to amend UPS’s demurrer to Gibson’s second amended complaint. We affirm.

 

FACTUAL AND PROCEDURAL

 

BACKGROUND

Gibson initiated this case by filing a complaint against UPS in March 2013. UPS demurred to the complaint, but Gibson filed a first amended complaint before the trial court ruled on the demurrer. In the first amended complaint, Gibson alleged he instructed a member of his family to post a parcel from Sacramento to an address in Charlotte, North Carolina. The family member posted the parcel at a UPS store in Sacramento for overnight delivery by next-day air service. The parcel weighed 67 pounds, cost $373.45 to ship, was assigned parcel No. 53596568, and was given a tracking number.

Exhibit A to the first amended complaint is an investigation report authored by Special Agent Brian Fichtner of the State Bureau of Narcotic Enforcement (Bureau). In it, Agent Fichtner states he received a call from a UPS security representative at the UPS [*2]  shipping facility in Sacramento and was told that a parcel had been audited and found to contain money. Agent Fichtner went to the facility and was presented with parcel No. 53596568, which he described as a heavily-taped, brown cardboard box approximately 18 inches in cubic dimensions. The box listed the sender as “Josh Howell,” with the return address as the UPS Store at Natomas Crossing Drive in Sacramento, and the recipient was listed as “Jeff Howell” at an address in Charlotte, North Carolina.1 Agent Fichtner saw, in plain view inside the box, nine large, clear vacuum-packed, heat-sealed, food-saver bags containing United States currency. He deployed his narcotic trained dog to sniff the parcel, and the dog alerted positively to the presence of a narcotic odor. Agent Fichtner then photographed the money, gave a property receipt to UPS personnel, and took the parcel to the Bureau’s Sacramento office for safekeeping. The money was later transported to the Bank of America where it was counted and converted to a cashier’s check in the amount of $658,830.2 Agent Fichtner referred the case to the United States Attorney’s Office for purposes of forfeiture.3

 

1   In the first amended complaint, [*3]  Gibson alleged that he is otherwise known as “Jeff Howell.”

2   Although the report concludes the owner of the money has yet to be identified, Fichtner described in his report how in the days immediately following his seizure of the parcel he received telephone calls from an individual identifying himself as both “Jason Howell” and “Jeff Howell” asking about the whereabouts of the parcel. But when Agent Fichtner finally told the caller that damage to the parcel had revealed it contained money, the caller hung up and did not call back, and Agent Fichtner was unable to reach him.

3   Subsequently, the United States filed a verified complaint for forfeiture in rem against the $658,830. Gibson filed a claim to the currency and an answer to the complaint for forfeiture. On October 15, 2012, the United States District Court for the Eastern District of California entered a final judgment of forfeiture in favor of the United States and ordered “all right, title, and interest of Robert D. Gibson” in the currency “shall be forfeited to the United States.” This judgment was later affirmed by the Ninth Circuit Court of Appeals.

The first amended complaint alleged that UPS personnel acted as “agents of law [*4]  enforcement, and without a court’s order or warrant did actively entered [sic] into a conspiracy with law enforcement.” It asserted causes of action for breach of contract, fraudulent transfer of property, conspiracy to defraud, constructive trust, “assumpsit bailee contract,” and damages for bailment and conversion in the amount of “$658,830.00 and 25% interest per annum.”

UPS filed a demurrer to the first amended complaint contending that the claims were vague and conclusory; that the state-law claims were preempted by federal law; that Gibson lacked standing to assert a claim against UPS; and that Gibson could not recover for shipment of prohibited items. The trial court sustained the demurrer. Although it gave leave to amend, it ordered Gibson not to “allege causes of action not alleged in the first amended complaint. Most importantly, Plaintiff shall allege facts to show he has standing to sue and that his claims are not barred by federal law and the terms of the UPS shipping contract which prohibits shipment of prohibited items.”

Gibson then filed a second amended complaint. In it, he alleged he had instructed his brother and other family members to pack up and arrange for the [*5]  shipping of his deceased father’s household goods and the liquidation of his assets. He asserted that “During this process there was a mix up and or misunderstandings as to the cash proceeds, and the wrong property was shipped via UPS. The Plaintiff Robert Gibson filled out/addressed the Broker Agreement and signed it, without full knowledge or express agreement that Cash/Currency was a prohibited item, under the Defendant’s policy/tariff, because it was never the deliberate intent by the Plaintiff to ship currency.” Gibson also alleged that the shipping terms were not “clear and conspicuous and intelligible,” and he did not knowingly agree to any waiver of liability in regard to “Prohibited Items.” Gibson asserted standing under 49 United States Code section 13102(18) as a “shipper” because “this Plaintiff is the lawful assignee based upon the seller[‘]s receipt and order.”4

 

4   “The term ‘individual shipper’ means any person who–[¶] (A) is the shipper, consignor, or consignee of a household goods shipment; [¶] (B) is identified as the shipper, consignor, or consignee on the face of the bill of lading; [¶] (C) owns the goods being transported; and [¶] (D) pays his or her own tariff transportation charges.” (49 U.S.C.A. § 13102(13).)

UPS filed a demurrer [*6]  on the same grounds it had demurred to the first amended complaint. It noted that Gibson had, contrary to the trial court’s directions, added new causes of action, including a claim for intentional infliction of emotional distress. After briefing was complete, the court issued a tentative ruling in UPS’s favor. Gibson contested the tentative ruling and appeared in propria persona by telephone at the hearing.5 After hearing oral argument, the trial court filed an order entitled “Order, Demurrer Sustained” the same day, in which it affirmed its tentative ruling, sustained the demurrer, denied leave to amend, and dismissed the case. The order stated, “After several opportunities Plaintiff has failed to state facts sufficient to constitute a cognizable cause or causes of action against Defendant. Most importantly, Plaintiff has failed to allege facts to show he has standing to sue and that his claims are not barred by federal law and the terms of the UPS shipping contract which prohibits shipment of prohibited items.” UPS filed a notice of entry of order on demurrer and dismissal of the case on April 21, 2014.6

 

5   No reporter’s transcript of the hearing appears in the appellate record.

6   An appeal [*7]  may not ordinarily be taken from an order sustaining a demurrer but only from the order of dismissal or final judgment that follows. (Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, 1032, fn. 1.) Although no separate order of dismissal or final judgment appears to have been issued in this case, the challenged order states in pertinent part, “The case is DISMISSED.” Thus, we construe the challenged order as an appealable order of dismissal.

 

DISCUSSION

 

A. Standards of Review

In an appeal from a judgment entered upon a demurrer sustained without leave to amend, we review the operative complaint de novo to determine whether it alleges facts sufficient to state a cause of action under any legal theory. (McClain v. Octagon Plaza, LLC (2008) 159 Cal.App.4th 784, 791-792.) In doing so, we must assume the truth of “(1) all facts properly pleaded by the plaintiff, (2) all facts contained in exhibits to the complaint, (3) all facts that are properly the subject of judicial notice, and (4) all facts that reasonably may be inferred.” (Neilson v. City of California City (2005) 133 Cal.App.4th 1296, 1305.) But we do not accept the truth of legal contentions, conclusions of law, or deductions drawn from those contentions or conclusions. (Ibid.) We may affirm on any basis stated in the demurrer, regardless of the ground on which the trial court based its ruling. (Carman v. Alvord (1982) 31 Cal.3d 318, 324.)

We review the court’s refusal [*8]  to allow leave to amend under the abuse of discretion standard. (Zelig v. County of Los Angeles (2002) 27 Cal.4th 1112, 1126.) In applying this standard, “we decide whether there is a reasonable possibility that the defect can be cured by amendment: if it can be, the trial court has abused its discretion and we reverse; if not, there has been no abuse of discretion and we affirm.” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)

 

B. The Trial Court Properly Sustained the Demurrer

In his second amended complaint, Gibson alleges UPS is liable for the seizure by law enforcement officials of the contents of the parcel, and he seeks damages under multiple causes of action under state contract and tort law. We conclude, however, that the trial court properly sustained UPS’s demurrer without leave to amend because Gibson’s claims are preempted by federal law, and Gibson cannot amend the complaint to state a claim under federal law.

UPS handled the package as either a motor carrier and freight forwarder because the parcel was seized before it was shipped by air or as an air carrier because the delivery service purchased was UPS next-day air service. If UPS was acting as a motor carrier and freight forwarder, any claim against it is governed by the federal Carmack Amendment to the Interstate Commerce Act (49 U.S.C. § 14706). If UPS was acting as an air carrier, [*9]  any claim against it is governed by the preemptive provisions of the federal Airline Deregulation Act (ADA) (49 U.S.C. § 41713) and federal common law. In either case, Gibson’s state-law claims are preempted.

The Carmack Amendment governs the liability of motor carriers under receipts and bills of lading and provides “‘a uniform national liability policy for interstate carriers.'” (Hall v. North American Van Lines, Inc (9th Cir. 2007) 476 F.3d 683, 687.) Thus, if UPS acted as a motor carrier in transporting the parcel to its shipping facility in Sacramento, all state claims against it related to the loss, damage, or delay of the parcel are completely preempted by the Carmack Amendment. (Hall, at p. 689 [“It is well settled that the Carmack Amendment constitutes a complete defense to common law claims alleging all manner of harms[,]” including “delay,” “mistaken delivery,” “loss,” and “fraud and conversion”]; see White v. Mayflower Transit, L.L.C. (9th Cir. 2008) 543 F.3d 581, 584-585 [Carmack Amendment “completely preempts state[-]law claims alleging delay, loss, failure to deliver and damage to property” and “constitutes a complete defense to common law claims against interstate carriers for negligence, fraud and conversion”].) Similarly, if UPS acted as an air carrier in accepting the parcel for delivery by next-day air service, any claim against it is governed by the ADA. (Cf. Power Standards Lab, Inc. v. Federal Express Corp. (2005) 127 Cal.App.4th 1039, 1044-1045 [essence of Federal Express [*10]  service is the transportation of freight by air, plaintiff’s lawsuit is “clearly founded on the unsatisfactory manner in which Federal Express performed that service,” therefore lawsuit was “related to a service of an air carrier” for purposes of ADA preemption].) The ADA preempts all state “law[s], regulation[s], or other provision[s] having the force and effect of law related to a price, route, or service of an air carrier” (49 U.S.C. § 41713(b)(1)), including state common-law rules and causes of action where, as here, they relate to an air carrier’s service of shipping parcels by air. (See Northwest, Inc. v. Ginsberg (2014) ___ U.S. ___ [134 S.Ct. 1422, 1430] [concluding that “‘other provision having the force and effect of law’ [under ADA] includes common-law claims”].) Thus, regardless of UPS’s status, the trial court properly sustained the demurrer on federal preemption grounds.

Because Gibson’s state-law claims are preempted under applicable federal law, any claim Gibson has against UPS lies, if at all, under the Carmack Amendment or federal common law.7 (Read-Rite Corp. v. Burlington Air Express, Ltd. (1999) 186 F.3d 1190, 1195 [“federal common law applies to loss of or damage to goods by interstate common carriers by air”].)8 Gibson cannot establish such a claim for several reasons.

 

7   For purposes of analysis only, we assume Gibson could establish standing to assert a federal claim, a point [*11]  which UPS hotly disputes.

8   Whereas courts have developed the contours of Carmack Amendment preemption, the amendment itself specifically provides a remedy enforceable in state court for loss or damage to goods limited to “the actual loss or injury to the property.” (See 49 U.S.C.A. § 11706(a), (d)(1).) In comparison, the ADA specifically preempts state laws relating to the service of an air carrier but contains a savings clause preserving “any other remedies provided by law” (49 U.S.C. § 40120(a), (c)), which courts have construed as “preserving the clearly established federal common law cause of action against air carriers for lost shipments.” (Sam L. Majors Jewelers v. ABX, Inc. (5th Cir. 1997) 117 F.3d 922, 929; see Power Standards Lab, Inc. v. Federal Express Corp., supra, 127 Cal.App.4th at pp. 1050-1051.)

First, to establish a prima facie claim against UPS under federal law, Gibson must prove (1) delivery of goods in good condition, (2) goods arrived in damaged condition or were lost, and (3) damages. (See Missouri Pacific Railroad Co. v. Elmore & Stahl (1964) 377 U.S. 134, 138.) Here, Gibson cannot amend the complaint to state a viable claim for damages because any possessory interest Gibson may have had in the goods (i.e., the currency seized) has been forfeited to the federal government. (See fn. 3, ante.)

In addition, under well-settled federal common law, a common carrier is not an absolute insurer, but “is liable for damage to goods transported by it unless it can show [*12]  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.'” (Missouri Pacific Railroad Co. v. Elmore & Stahl, supra, 377 U.S. at p. 137, italic added.) In this case, the cause of any “loss” was the seizure of the currency by a law enforcement official who believed it was “for the purchase of, or . . . the proceeds from the sales of narcotics.” Because any loss was due to an act of public authority, Gibson cannot amend the complaint to state a viable claim against UPS. (See ibid. [under federal common law, carrier is not liable for loss to goods transported if loss was caused by one of five “excepted causes relieving the carrier of liability,” including “public authority”]; see also Beta Spawn, Inc. v. FFE Transportation Services, Inc. (3d Cir. 2001) 250 F.3d 218, 226 [“Once a plaintiff has established a prima facie case under the Carmack Amendment, the burden shifts to the carrier to prove that it was free from negligence and that the damage was caused solely” by public authority or other excepted cause].)9 Thus, Gibson has failed to show the trial court abused its discretion in sustaining the demurrer without leave to amend. (See Gutkin v. University of Southern California (2002) 101 Cal.App.4th 967, 976 [“[I]f no liability exists as a matter of law, we must affirm that part of the judgment sustaining the demurrer, and [*13]  if the plaintiff cannot show an abuse of discretion, the trial court’s order sustaining the demurrer without leave to amend must be affirmed. [Citation.] ‘The burden is on the plaintiff . . . to demonstrate the manner in which the complaint might be amended'”].)

 

9   Furthermore, we note under federal common law that the carrier’s tariff “governs not only the nature and extent of [the carrier’s] liability but also the nature and extent of the shipper’s right of recovery.” (North American Phillips Corp. v. Emery Air Freight Corp. (2nd Cir. 1978) 579 F.2d 229, 233; see also King Jewelry, Inc. v. Federal Express Corp. (9th Cir. 2003) 316 F.3d 961, 964 [airbill and service guide formed the contract between the parties].) Here, the applicable UPS tariff (effective July 12, 2010) is included in the clerk’s transcripts. We do not consider it, however, because it was not a part of the relevant complaint, and the trial court did not take judicial notice of it. Still, while the tariff is not a basis for affirming the trial court ruling on the demurrer, we cannot help but observe that it appears to be another insurmountable impediment to a federal common law claim for contract damages.

In sum, the trial court properly granted UPS’s demurrer to the second amended complaint and did not abuse its discretion in denying further leave to amend.10

 

10   In his reply brief, Gibson [*14]  contends we “must view this entire case under the analysis of the Fourth Amendment” and argues that seizure of the package by the Bureau of Narcotics Enforcement after an “unlawful drug dog sniff” violated the Fourth Amendment. This argument, raised for the first time in the reply brief, is irrelevant to any claim against UPS in this appeal.

 

DISPOSITION

The judgment is affirmed.

Humes, P. J.

We concur:

Dondero, J.

Banke, J.