United States District Court,

N.D. Illinois, Eastern Division.

LIG Insurance Company, Plaintiff,

v.

ZP Transport Inc., et al., Defendants.

Civil Action No. 14 CV 4007 | Signed July 31, 2015

Attorneys and Law Firms

Jonathan Rowan Walton, Cozen O’Connor, Timothy S. McGovern, Swanson, Martin & Bell, LLP, Chicago, IL, for Plaintiff.

Tomasz Koziol, Kurt E. Vragel, Jr., Kurt E. Vragel, Jr., PC, Glenview, IL, Kevin Matthew Anderson, Anderson and Yamada, P.C., Portland, OR, Kevin M. Phillips, Allyson E. Feary, Donald W. Devitt, Scopelitis, Garvin, Light, Hanson & Feary, P.C., Paula S. Kim, Mark A. Brand, Nicole A. Poulos, Sangmee Konicek, Polsinelli PC, Chicago, IL, for Defendants.

 

 

OPINION AND ORDER

CHARLES RONALD NORGLE, Judge, United States District Court

*1 In this subrogation action, Plaintiff LIG Insurance Company (“Plaintiff”) seeks reimbursement of the $796,559.17 insurance claim that it paid to its insureds, among other relief. Plaintiff insures LG Electronics, Inc.; LG Electronics Columbia Ltda.; LG Electronics Peru S.A.; LG Electronics Panama, S.A.; LG Electronics Chile Ltda.; and Brightstar Fueguina S.A. Plaintiff filed this action against Defendants ZP Transport Inc. (“ZP Transport”); J & T Trucking of Tampa Bay Inc. (“J & T Trucking”); FNS, Inc. (“FNS”); and Tomas Hernandez (“Mr.Hernandez”) after a shipment of electronics was stolen. Before the Court are two separate motions for summary judgment, one filed by J & T Trucking and the other filed by ZP Transport. For the following reasons the motions are denied.

 

 

I. BACKGROUND1

The companies insured by Plaintiff make consumer electronics such as cell phones and televisions. This case involves one of their international shipments of electronics (“the shipment”), which went missing after being loaded onto a semi-trailer truck that departed from a warehouse near O’Hare International Airport in Chicago, Illinois. The shipment, which contained mostly cell phone parts, has not yet been recovered. The electronics companies planned to ship their goods from Seoul, South Korea to Chicago by air, then have the goods transferred to a motor carrier that would drive the goods to Miami, Florida. Finally, the goods were to be sent to Tierra Del Fuego, Argentina. The truck carrying the shipment never arrived at its intended destination in Miami.

 

In accordance with the air waybill, the shipment left Seoul in the care and custody of Pantos Logistics Co. Ltd. (“Pantos”). After arriving in Chicago on September 9, 2013, the shipment was stored at a warehouse operated by FNS, a subsidiary of Pantos. Next, Chung Mo Yang, an employee for FNS, contacted Eric Pae (“Mr.Pae”), the Chicago branch manager at ZP Transport, to arrange transportation for the shipment from the FNS warehouse in Franklin Park, Illinois (a short distance from O’Hare International Airport) to Miami.

 

Mr. Pae then used Internet TruckStop, a web-based service for the transportation industry, to advertise his company’s need for a trucking company to haul the shipment and requested that any interested parties contact him. Mr. Pae was contacted by a company called “J & T Trucking Company of Tampa Bay, Inc.,” but he missed the initial phone call. Pl.’s Schedule of Exs. Supp. its Resp. in Opp’n to Defs.’ Mot. for Summ. J., Ex. P–1 ¶ 16 [hereinafter, “Mr. Pae’s Aff.”]. He called the company back on the number it had listed, (813) 727–6967, but no one answered. Later that day, Mr. Pae received a call from someone purporting to be an agent of J & T Trucking, but on a different phone number listed as (813) 465–3629. The individual confirmed that J & T Trucking was interested in hauling the shipment to Miami. Not much later, Mr. Pae received a fax including J & T Trucking’s Certificate of Liability Insurance, IRS Form W–9, and the Federal Motor Carrier Safety Administration Certificate; he began processing the paperwork to arrange for the transport. See Mr. Pae’s Aff. at ¶¶ 14, 18, and pp. 23–25. A representative of J & T Trucking signed, and faxed back to Mr. Pae, an agreement in which J & T Trucking was to be paid $2,800 to move the freight. Mr. Pae also needed the name of the driver and the trailer number, so he called J & T Trucking back on the company’s (813) 465–3629 phone number. While no one initially answered his call, someone named “Frank,” later known as Frank Diaz, returned Mr. Pae’s phone call and gave him the information he needed. Mr. Pae’s Aff. at ¶ 19. Mr. Pae informed FNS of J & T Trucking’s involvement. By the end of the day on September 9, 2013, everything was set for J & T Trucking to pick up the shipment from the FNS warehouse on the morning of September 11, 2013, and deliver it to Miami.

 

*2 When the 11th arrived, so did the truck from J & T Trucking. Mr. Pae also went to the FNS warehouse to ensure that the shipment was loaded properly and to be available if any unexpected problems arose. Mr. Pae says that because ZP Transport had never contracted with J & T Trucking before, he “took pictures of the truck, the trailer, its authority, and its license plates.” Mr. Pae’s Aff. at ¶ 25. Mr. Hernandez’s Pennsylvania-issued commercial driver’s license was also photocopied. See Mr. Pae’s Aff. at 33–34. The shipment, containing approximately 4,691 kilograms of electronics, was loaded onto a blue truck with a placard stating:

J & T Trucking

of Tampa Bay, Inc.

USDOT# 2368096

MC# 812134C

KYU# 324427

VIN# 876310

GW 80,000

Id. at pp. 35–36. The driver, ostensibly Tomas Hernandez, signed the bill of lading titled the “Straight Bill of Lading.” ZP Transport’s Rule 56(c)(1)(A) Statement of Facts, Ex. 1 at 27. The Straight Bill of Lading designated the route from Franklin Park to Miami, named ZP Transport as the “Carrier,” and contained Mr. Hernandez’s signature verifying that the shipment was received in good condition. Id. At that point, nothing about transporting the shipment seemed out of the ordinary. The truck left for Miami but never reached its intended destination.

 

The overall chain of control is allegedly Pantos, to FNS, to ZP Transport, to J & T Trucking. When the shipment was reported stolen, the incident was investigated. Nothing was recovered and Plaintiff ultimately reimbursed its insureds for the lost electronics. The parties have not informed the Court regarding the status of any criminal investigation or prosecutions related to this matter, if any.

 

J & T Trucking disputes that it was ever involved in the transportation of the missing goods, claiming that this is a case of identity theft. J & T Trucking avers that it never employed a Tomas Hernandez. It only owns one truck, which is white in color. And it only employed one driver, Mijail Zerquera (“Zerquera”), who was in Louisville, Kentucky with the white truck on September 11, 2013.

 

As subrogee, Plaintiff filed this lawsuit alleging two causes of action. The first cause alleges that ZP Transport, J & T Trucking, and Mr. Hernandez violated the Carmack Amendment, 49 U.S.C. § 14706, acted negligently, and breached their obligations as bailees. The second cause alleges that FNS negligently failed to verify Mr. Hernandez’s identity and credentials. Defendant J & T Trucking has filed a motion for summary judgment, arguing that it was not actually involved in the shipment; therefore, judgment should be entered in its favor. Defendant ZP Transport filed a separate motion for partial summary judgment, arguing that a clause in the air waybill limits its liability to $20 per kilogram of goods shipped; thus its potential liability should be capped at $93,820. The motions are now fully briefed and before the Court.

 

 

II. DISCUSSION

A. Standard of Decision

“Summary judgment is appropriate only ‘if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” ’ Advance Cable Co. LLC v. Cincinnati Ins. Co., LLC, 788 F.3d 743, 746 (7th Cir. June 11, 2015) (quoting Fed.R.Civ.P. 56(a)). “A fact is ‘material’ if it is identified by the law as affecting the outcome of the case. An issue of material fact is ‘genuine’ if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Hess v. Bresney, 784 F.3d 1154, 1158 (7th Cir.2015) (internal quotation marks and citations omitted). When ruling on a summary judgment motion, the Court must “construe all facts and reasonable inferences in the light most favorable to the nonmoving party.” Id. The Court does not “assess the credibility of witnesses, choose between competing reasonable inferences, or balance the relative weight of conflicting evidence.” Stokes v. Bd. of Educ. of the City of Chi., 599 F.3d 617, 619 (7th Cir.2010).

 

 

B. J & T Trucking’s Motion for Summary Judgment

*3 J & T Trucking denies any involvement in the transportation of the missing shipment. It argues that the Carmack Amendment is inapplicable because it did not contract to transport the shipment and no theory of agency can hold it liable. The Carmack Amendment “has been interpreted by the Supreme Court and [the Seventh Circuit] to provide that a common carrier is liable for all losses which occurred while the goods were being transported by it, unless the carrier can demonstrate it is free from fault.” Allied Tube & Conduit Corp. v. S. Pac. Transp. Co., 211 F.3d 367, 369 (7th Cir.2000) (internal quotations and citations omitted). To recover damages, “a plaintiff must first establish a prima facie case by providing evidence that (i) the goods in question had been delivered to the carrier in good condition; (ii) the goods had arrived at the final destination in a damaged or diminished condition, and (iii) the damages can be specified.” Pharma Bio, Inc. v. TNT Holland Motor Exp., Inc., 102 F.3d 914, 916 (7th Cir. 1996). Once a plaintiff meets its burden, a carrier’s defenses are limited by statute and it can avoid liability only if “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.’ ” Id. (quoting Mo. Pac. R.R. Co. v. Elmore & Stahl, 377 U.S. 134, 138 (1964)).

 

To support its contention that it never contracted with ZP Transport, J & T Trucking submits the following evidence: (1) an affidavit from Francisco J. Jimenez, the president and sole shareholder of J & T Trucking; (2) an affidavit from Tamara Chirino, one of the dispatchers that worked for J & T Trucking in September 2013; (3) a picture of the placard on its truck; (4) its Certificate of Liability Insurance; (5) driving records and time logs for Zerquera for September 2013, one of which, has a handwritten note that Zerquera was off-duty in Louisville from September 9th to 11th; (6) and a background check on Zerquera conducted by a private third-party, which includes on-line articles about Zerquera’s conviction in 2010 for stealing a truck load of Jim Beam and other alcohol; (7) and a deposition transcript for Jack Han, a representative of FNS. J & T Trucking urges the Court to accept its version of the facts, asserting that Mr. Hernandez never worked for the company and it never contracted to transport the electronics. However, this is something the Court cannot do at the summary judgment stage of the litigation. Hess, 784 F.3d at 1158; see also Payne v. Pauley, 337 F.3d 767, 770 (7th Cir.2003) (The Court “must look therefore at the evidence as a jury might, construing the record in the light most favorable to the nonmovant and avoiding the temptation to decide which party’s version of the facts is more likely true.”).

 

Viewing the evidence in the light most favorable to the nonmovant, the Court finds that a contract existed between J & T Trucking and ZP Transport for the transportation of the shipment from Franklin Park to Miami. Mr. Pae, an employee of ZP Transport advertised and extended an offer to any interested trucking company. A representative claiming to be an employee of J & T Trucking contacted Mr. Pae and agreed to move the shipment. A signed formal agreement even reflects that J & T Trucking was paid $2,800. The placard on the truck that picked up the shipment is an identical match to the placard that J & T Trucking now submits (even the font and arrangement of the text appear to be the same). The insurance certificate faxed to Mr. Pae is also an exact match to the insurance certificate now submitted by J & T Trucking. Furthermore, the address on the insurance certificate and the IRS Form W–9 is 4541 W. Henry Ave., Tampa FL 33614, which J & T Trucking does not deny is its address. The evidence shows that there was an offer, acceptance, and consideration; sufficient to establish that J & T Trucking contracted to transport the shipment. J & T Trucking’s defense of fraud and identity theft is one that will have to be tried to a jury. Therefore, the Carmack Amendment applies to this case.

 

*4 To establish its prima facie case under the Carmack Amendment, Plaintiff submits a bill of lading stating that the shipment was in good condition when delivered to the carrier, signed by Hernandez who purported to be an employee of J & T Trucking. The shipment never arrived at the final destination, diminishing the value of the shipment to zero. And Plaintiff has invoices from the sale of the electronics that support its damages amount of $796,559.17. Therefore, Plaintiff has met its burden. J & T Trucking’s argument, essentially a factual dispute, does not assert a statutorily acceptable defense. J & T Trucking’s evidence may be weighed by the jury, but it does not resolve this litigation at the summary judgment stage. The Court finds that a reasonable jury could return a verdict for Plaintiff and denies J & T Trucking’s motion for summary judgment.

 

 

C. ZP Transport, Inc.’s Motion for Partial Summary Judgment

ZP Transport argues that its liability should be limited to $93,820 on the basis that section four of the air waybill limits the carrier’s liability to $20 per kilogram of lost or damaged goods. ZP Transport was not a party to the air waybill, but argues that the air waybill applies regardless, because it was an agent hired by Pantos. Thus, the damages for approximately 4,691 kilograms of lost goods should be limited to $93,820. For legal authority, ZP Transport’s initial motion relies solely on HIH Marine Ins. Servs., Inc. v. Gateway Freight Servs., 116 Cal.Rptr.2d 893 (Cal.Ct.App.2002). Plaintiff responds that the Carmack Amendment applies because ZP Transport was a party to the Straight Bill of Lading, a bill of lading separate from the air waybill. Thus, ZP Transport is liable for the full amount of loss. In its reply, ZP Transport adds to its argument, relying on Kawasaki Kisen Kaisha Ltd. v. Regal–Beloit Corp., 561 U.S. 89 (2010) and Norfolk Southern Railway Co. v. Kirby, 543 U.S. 14 (2004). ZP Transport contends that the Carmack Amendment does not apply in this case because this was an international shipment pursuant to a single bill of lading called a “through” bill of lading.

 

The Carmack Amendment, an amendment to the Interstate Commerce Act, governs domestic, not foreign shipments. Capitol Converting Equip., Inc. v. LEP Transp., Inc., 965 F.2d 391, 394 (7th Cir.1992). To determine the route of a shipment, and the applicability of the Carmack Amendment, courts look to a shipment’s bill of lading. Id. A “through” bill of lading is “issued in a foreign country to govern a shipment throughout its transportation from abroad to its final destination in the United States,” and does not fall under the Carmack Amendment. Id. “Whether a bill of lading is a ‘through’ bill of lading is predominantly a question of fact.” Id.

 

In this case, ZP Transport has submitted to the Court a Straight Bill of Lading, which is a domestic bill of lading separate from the air waybill. See ZP Transport’s Rule 56(c)(1)(A) Statement of Facts, Ex. 1 at 27. The route on the bill of lading begins at the FNS warehouse in Franklin Park and ends in Miami. The Straight Bill of Lading names ZP Transport as the carrier. It also does not have a limitation of liability clause. ZP Transport’s contention disregards its own evidence. The Court finds that the domestic segment of the shipment was covered by a separate domestic bill of lading, which invokes the Carmack Amendment. Capitol Converting Equip., Inc., 965 F.2d at 394 (The Carmack Amendment’s “jurisdiction does not extend to shipments by water, rail or motor carriers from a foreign country to the United States, see 49 U.S.C. §§ 10501, 10521, 10561, unless a domestic segment of the shipment is covered by a separate domestic bill of lading.”) (emphasis added).

 

The cases cited by ZP Transport are distinguishable because the facts of those cases involved “through” bills of lading. Kawasaki Kisen Kaisha Ltd., 561 U.S. at 93 (“These cases concern through bills of lading covering cargo for the entire course of shipment, beginning in a foreign, overseas country and continuing to a final, inland destination in the United States.”); Norfolk S. R.R. Co., 543 U.S. at 18–19 (“This controversy arises from two bills of lading (essentially, contracts) … to arrange for delivery by ‘through’ (i.e., end-to-end) transportation.”); HIH Marine Ins. Servs., Inc., 116 Cal.Rptr.2d at 895 (“These [international] air waybills … represented the only documentation of the contract of carriage”). Thus, the Court finds them unpersuasive.

 

*5 Furthermore, ZP Transport’s legal argument completely disregards Supreme Court precedent; which states that the Carmack Amendment “makes carriers liable for the full actual loss, damage or injury … caused by them to property they transport, and declares unlawful and void any contract, regulation, tariff, or other attempted means of limiting this liability.” Mo. Pac. R.R. Co., 377 U.S. at 137 (internal quotation omitted). ZP Transport’s argument is akin to the argument of the dissenting justice in Missouri, whom believed that the contract between the parties and the relevant tariff should have controlled; however, that was the minority opinion. Accordingly, ZP Transport will be “liable for the full actual loss” it caused unless it can show it was not at fault. Mo. Pac. R.R. Co., 377 U.S. at 137; see also Allied Tube & Conduit Corp., 211 F.3d at 369; Pharma Bio, Inc., 102 F.3d at 916.

 

 

III. CONCLUSION

The evidence viewed in the light most favorable to Plaintiff shows that J & T Trucking contracted to transport the shipment and Plaintiff established its prima fade case under the Carmack Amendment. Therefore, J & T Trucking’s motion for summary judgment is denied. The Carmack Amendment governs the allegations against ZP Transport; therefore, ZP Transport’s motion for partial summary judgment is denied.

 

IT IS SO ORDERED.

 

All Citations

Slip Copy, 2015 WL 4725004

 

 

Footnotes

 

1

 

The Court takes the undisputed facts from the parties’ Local Rule 56.1 statements and notes disputed facts, if any, within the text.

 

 

United States District Court,

N.D. Illinois, Eastern Division.

The Custom Companies, Inc., an Illinois corporation, Plaintiff,

v.

Azera, LLC, a Texas limited liability Company, Vakil Mammadov, an Individual, ISD Enterprises, LLC, a Georgia Limited liability company d/b/a ISD Transporation and Gramercy Insurance Company, a Texas corporation, Defendants.

No. 12 C 2590 | Signed July 21, 2015

Attorneys and Law Firms

Jennifer H. Sarhaddi, Michael A. Abramson, Christopher S. Naveja, Megan Pike Toth, Sharilee Kempa Smentek, Arnstein & Lehr, LLP, Chicago, IL, for Plaintiff.

Azera LLC, Chicago, IL, pro se.

Vakil Mammadov, Atlanta, GA, pro se.

Gramercy Insurance Company, Chicago, IL, pro se.

ISD Enterprises, LLC, Chicago, IL, pro se.

 

 

MEMORANDUM OPINION AND ORDER

REBECCA R. PALLMEYER, United States District Judge

*1 Plaintiff in this case, The Custom Companies, Inc., entered into a ground-shipping contract with Defendant Azera LLC d/b/a Hun Logistics. The driver Defendant hired to transport Plaintiff’s goods from California to Pennsylvania was involved in a roll-over vehicle accident about midway through the journey, resulting in losses exceeding $100,000. This action, for the value of Plaintiff’s lost cargo, followed. Defendant Azera LLC d/b/a Hun Logistics is in default.

 

Plaintiff has now moved for summary judgment [58] against Defendant Vakil Mammadov, the sole member of Azera. Plaintiff asks the court to find Mr. Mammadov personally liable for its damages, arguing that Azera LLC forfeited its corporate existence (and accompanying liability protections) prior to the accident. For the reasons discussed below, the court grants Plaintiff’s motion.

 

 

BACKGROUND1

 

I. Contract and Accident

Plaintiff, The Custom Companies, Inc. (“Custom”), is an Illinois freight transportation corporation that has its principal place of business in Illinois. (See Pl. 56.1 Stat. of Mat. Facts, hereinafter “Pl. 56.1” [59], ¶ 1.) Azera LLC d/b/a Hun Logistics is a “common carrier in the business of receiving, shipping, transporting, and delivering goods” throughout the United States. (Def. Answer [14] to Pl. First Am Comp. [13], ¶ 3.) In August 2011, Custom and Hun Logistics agreed to a shipping deal: Custom would pay Hun to transport Custom’s goods–a “collection of different shipments” valued at more than $100,000–from California to Pennsylvania. (Pl. 56.1 ¶ 7; Dep. of Jeffrey Guthman, Ex. 6 to Pl. 56.1 [59–6], 10:3–9.) On August 20, Custom delivered the goods, “in good condition and otherwise undamaged at the time of delivery,” to a Hun agent in California. (Pl. 56.1 ¶¶ 9–10; see Pl. Resp. [72] to Def. 56.1 Stat. of Mat. Facts, hereinafter “Def. 56.1,” ¶ 4.) Hun arranged for its affiliate, Defendant ISD Enterprises, LLC, a Georgia limited liability company d/b/a ISD Transportation (“ISD”) and operating under Hun’s contract carrier authority,2 to move the goods. (Def. Answer to Pl. First Am Comp. ¶¶ 5–6, 13; First Am. Compl. ¶ 7.) On August 22, the driver hauling Custom’s goods from California to Pennsylvania was involved in a non-fatal rollover accident near the Kansas–Oklahoma border, causing significant damage to the goods. (Pl. 56.1 ¶¶ 11, 14.) Mammadov admits that the driver’s negligence caused the accident. (Pl. Resp. to Def. 56.1 ¶ 5.) After the accident, between October 2011 and June 2012, Custom submitted several claims to Hun for the damaged goods, but Hun refused to pay. (Pl. 56.1 ¶ 13.)

 

*2 Prior to entering the contract, on June 3, 2011, Hun had faxed to Custom a Certificate of Liability Insurance listing Defendant Gramercy Insurance Company (“Gramercy”)3 as Hun’s insurer. (Def. Answer to Pl. First Am Comp. ¶ 16.) The Gramercy policy provided $100,000 worth of coverage to Hun for the period from September 28, 2010 through September 28, 2011. (Id.) The pending summary judgment motion does not involve Count III, which requests a declaratory judgment against Gramercy. That Count will be resolved at a later date, though the court notes that Gramercy was placed in receivership on December 4, 2012, so Custom’s ability to recover any of its damages from Gramercy is uncertain. (See Gramercy Ins. Co. Receivership FAQ, http:// www.gicreceivership.com/pdf/GramercyFAQrevised8–28–12.pdf (last visited July 21, 2015).)

 

 

II. Defendant’s Corporate Status

On December 10, 2008, Mammadov formed Azera LLC d/b/a Hun Logistics under Texas law. (See Pl. 56.1 ¶ 15; Certificate of Formation, Ex. 7 to Pl. 56.1 [59–7].) Mammadov is the sole member included in the company’s Certificate of Formation, which lists both Azera’s business address and Mammadov’s home address in Arlington, Texas. (Id.) As of December 9, 2014, Mammadov lives in Smyrna, Georgia. (See Dep. of Mammadov, Ex. 5 to Pl. 56.1 [59–5], 8:11–21.) It is undisputed that Azera LLC ceased to be an active Texas company by the time the accident occurred: On November 19, 2010, the State of Texas terminated Azera’s corporate existence for failure to pay annual registration fees; as of January 2015, the company had not been reinstated. (Forfeiture Notice, Ex. 9 to Pl. 56.1 [59–9]; Mammadov’s Answers to Pl.’s First Set of Interrogatories, Ex. 10 to Pl. 56.1 [59–10], ¶ 10.)

 

The parties dispute whether Mammadov successfully converted Azera LLC d/b/a Hun Logistics from a Texas company to a Georgia one before the accident. On November 30, 2009, the State of Georgia granted Azera LLC a “Certificate of Authority” to transact business as a “foreign” limited liability company in the state. (Certificate of Authority, Ex. 8 to Pl. 56.1 [59–8].) Mammadov maintains, however, that he successfully converted the company’s status to a Georgia “domestic” limited liability company before he signed the carrier contract with Custom. (Aff. of Vakil Mammadov, Def. Resp to Pl. Mem. in Supp. of Summ. Judg. [76], ¶ 3.) Attached as an exhibit to his response to Plaintiff’s motion is a “Certificate of Conversion,” date-stamped on November 10, 2010 by Georgia’s Secretary of State. (See Ex. 2 to Aff. of Vakil Mammadov.)4 In addition, Mammadov states that “[f]rom 2010 to 2013, Azera filed registrations with the Georgia Secretary of State indicating [he] was the Registered Agent for Azera, LLC.” (Aff. of Vakil Mammadov ¶ 4.) Other exhibits he tendered appear to corroborate this fact: in 2010, Mammadov submitted his annual registration fee and identified Azera LLC’s address as in Arlington Texas. (Ex. 3 to Aff. of Vakil Mammadov.) The annual registration documents for 2011 through 2013, on the other hand, list Azera LLC’s business address as located in Georgia. (Id.)

 

*3 It is not clear from these documents, however, whether Mammadov successfully effected a conversion of his company’s state legal status. Custom has produced copies of Georgia Secretary of State’s online records, for instance, that state that Azera LLC’s status as a “domestic” limited liability company has been classified as “flawed/deficient” since November 8, 2010 (well before Custom and Azera entered into their contract in August 2011). (Georgia Sec’y of State Online Records, Ex. B. to Pl. Resp to Def. 56.1 ¶ 7 [72–2].) These online records state elsewhere that the registration fees Azera LLC paid were in connection with the company’s status as a “foreign” limited liability company. (Id.) Azera LLC’s status as a “foreign” limited liability company is currently classified, without further explanation, as “active/noncompliance.” (Id.)

 

 

III. Procedural History

Custom filed an amended complaint on June 12, 2012, against Azera LLC, Mammadov in his personal capacity, ISD, and Gramercy. (See generally First Am. Compl.) The complaint asserts three counts against the defendants, all stemming from the August 2011 accident. (See id. at 4–7.) Count I, against Azera and ISD, alleges violations of the Carmack Amendment, which governs liability of common carriers to shippers for damages resulting from interstate shipments. (Id. ¶ 28). Count III seeks a declaratory judgment that Gramercy is required to provide coverage for Custom’s damages related to the shipping accident. (Id. ¶ 46.) Count II, the subject of the current motion for summary judgment [58], alleges that Defendant Mammadov is personally liable for Custom’s damages under Texas law because Azera LLC forfeited its corporate status (and accompanying liability protections) before the accident took place. (Id. ¶¶ 33–34.) Custom tallies its damages in the amount of $116,469.44, plus pre-judgment interest and costs. (Id. ¶¶ 35–36.) On May 6, 2014, this court entered an Order of Default against Defendants Azera LLC, ISD, and Gramercy for failure to appear in this case. (See May 6, 2014 Order [45].)

 

 

DISCUSSION

I. Standard of Review

The court will grant a motion for summary judgment when “there is no genuine dispute as to any material fact” such that “the movant is entitled to judgment as a matter of law.” FED. R. CIV. P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). The court “construe[s] all facts and draw[s] reasonable inferences in the light most favorable to the nonmoving party.” Righi v. SMC Corp., 632 F.3d 404, 408 (7th Cir.2011). The court will grant summary judgment against a party that does not produce evidence that would allow a reasonable jury to find in its favor on a material question. McGrath v. Gillis, 44 F.3d 567, 569 (7th Cir.1995). Summary judgment “is the put up or shut up moment in a lawsuit, when a party must show what evidence it has that would convince a trier of fact to accept its version of the events.” Springer v. Durflinger, 518 F.3d 479, 484 (7th Cir.2008) (internal quotation marks and citation omitted).

 

 

II. Carmack Amendment Claim

The Carmack Amendment “created a nationally uniform rule of carrier liability concerning interstate shipments.” North Am. Van Lines v. Pinkerton Sec. Sys., 89 F.3d 452, 454 (7th Cir.1996). The purpose of the Carmack Amendment is to “relieve cargo owners ‘of the burden of searching out a particular negligent carrier from among the often numerous carriers handling an interstate shipment of goods.’ ” Kawasaki Kisen Kaisha Ltd. v. Regal–Beloit Corp., 561 U.S. 97 (2010) (quoting Reider v. Thompson, 339 U.S. 113, 119 (1950)). Under the Act, a carrier of property in interstate commerce is liable for “the actual loss or injury to the property caused by” the carrier. 49 U.S.C. § 14706(a)(1).

 

To establish a prima facie Carmack Amendment claim, a shipper must demonstrate (1) delivery of the shipment to the carrier in good condition; (2) loss or damage to the shipment; and (3) the amount of damages. REI Transport, Inc. v. C.H. Robinson Worldwide, Inc., 519 F.3d 693, 699 (7th Cir.2008). Once a prima facie case is established, the carrier has the burden to show both that it was free from negligence and that the damage to the cargo was due to one of the excepted causes relieving the carrier of liability. Allied Tube & Conduit Corp. v. S. Pac. Transp. Co., 211 F.3d 367, 370–71 (7th Cir.2000).5

 

*4 In this case, the parties agree that Custom “delivered goods into the possession and control of Azera and the goods were in good condition and otherwise undamaged at the time of delivery.” (Pl. Resp. to Def. 56.1 ¶ 4.) The parties further agree that Hun failed to deliver the goods to their final destination because of the accident, and that the accident destroyed or otherwise damaged Custom’s goods. (See id. ¶ 7; Answer to First Am. Compl. ¶ 32.) Custom alleges damages of $116,469.44 in its Amended Complaint, and while Mammadov has not admitted the amount of damages, he does not challenge Custom’s calculations. (Answer to First Am. Compl. ¶ 22.) Custom, therefore, has established a prima facie case under the Carmack Amendment, and Mammadov, in admitting that his driver was negligent, effectively concedes that Azera is liable for Custom’s damages. See Allied Tube, 211 F.3d at 370–71. For the purposes of this ruling, the court concludes that Azera LLC d/b/a Hun Logistics is liable to Custom for its damages stemming from the accident.

 

 

III. Mammadov’s Personal Liability

The thrust of Custom’s claim against Mammadov is that, before the accident, Azera LLC d/b/a Hun Logistics (a) forfeited its corporate existence in Texas and was never reinstated, and (b) never successfully re-organized its corporate existence in Georgia. Therefore, Custom urges, Mammadov is personally liable for Custom’s damages in this case. (Pl. Mem. in Supp. of Summ. Judg. at 1.)

 

Custom cites § 171.255(a) of the Texas Tax Code for support. That provision reads as follows:

(a) If the corporate privileges of a corporation are forfeited for the failure to file a report or pay a tax or penalty, each director or officer of the corporation is liable for each debt of the corporation that is created or incurred in this state after the date on which the report, tax, or penalty is due and before the corporate privileges are revived. The liability includes liability for any tax or penalty imposed by this chapter on the corporation that becomes due and payable after the date of the forfeiture.

Tex. Tax Code Ann. § 171.255. This statute applies to limited liability companies organized under the laws of Texas. See Bruce v. Freeman Decorating Servs., Inc., No. 14–10–00611–CV, 2011 WL 3585619, *2 (Tex App. Aug. 11, 2011). If the statute applies here, Mammadov is subject to personal liability for Custom’s damages, see supra Discussion, Part. II, because the following facts are not in dispute:

1. Mammadov formed Azera LLC d/b/a Hun Logistics under the laws of Texas on December 10, 2008. (See Certificate of Formation, Ex. 7 to Pl. 56.1.)

2. Mammadov is the sole member of Azera LLC. (Id.)

3. The company forfeited its corporate existence in Texas on November 19, 2010, by failing to pay its annual registration fees. (Forfeiture Notice, Ex. 9 to Pl. 56.1 [59–9]; Def. Answer to Pl. Interrogatories ¶ 10.)

4. Azera LLC, as of January 20, 2015, has not been reinstated as a corporate entity in Texas. (Id.)

Mammadov can escape personally liability under Texas law, though, if he successfully reincorporated Azera LLC in Georgia. He claims he did (see Resp. to Pl. Mot. for Summ. Judg. [76], 2), but the facts are not in his favor. For one, Azera LLC’s status as a Georgia “domestic” limited liability company, is currently “flawed/deficient,” and has been since November 8, 2010—nearly a year before the accident giving rise to the damages in this case. (Id.) In fact, it is unclear whether the company has ever been in good standing as a “domestic” company organized under the laws of Georgia. Mammadov did file a Certificate of Conversion with Georgia’s Secretary of State in an attempt to effect a change in his company’s state corporate charter. (See Certificate of Conversion, Ex. 2 to Resp. to Pl. Mot. for Summ. Judg.) And the court recognizes that Azera LLC filed timely registrations with Georgia’s Secretary of State from 2010 to 2013. But as Custom points out, Georgia Secretary of State’s online records show that Mammadov filed those annual registrations in connection with Azera LLC’s status as a “foreign,” and not “domestic,” limited liability company. (See id. (citing Ex. B [72–2].) Mammadov also received a “Certificate of Authority” from the State of Georgia on November 30, 2009, but again, this Certificate allowed Azera LLC to conduct business in Georgia as a “foreign” company only. (See Certificate of Authority, Ex. 8 to Pl. 56.1 [59–8].) The fact that Azera LLC’s status was foreign is important because, under Georgia law, “[t]he laws of the jurisdiction under which a foreign limited liability company is organized govern its organization and internal affairs and the liability of its managers, members, and other owners, regardless of whether the foreign limited liability company procured or should have procured a certificate of authority under this chapter.” Ga.Code Ann. § 14–11–701. This provision potentially dooms Mammadov: under Texas law, as discussed above, Mammadov is personally liable for Custom’s damages, because Azera LLC forfeited its corporate existence there, and Mammadov is the company’s sole member.

 

*5 Whether Mammadov can survive the motion turns, then, on Azera LLC’s corporate status under Georgia law. Section 14–11–212 of the Georgia Code provides a “foreign limited liability company … may elect to become a limited liability company” by “delivering a certificate of conversion to the Secretary of State for filing.” Ga.Code Ann. § 14–11–212(a)–(b). The requirements to effect a conversion are manifold, and the record does not reveal why Azera LLC’s status was classified as “flawed/deficient” prior to, and since, November 8, 2010. This court does not review the Georgia regulators’ decision, however. For our purposes, the salient point is that Mammadov never successfully incorporated Azera LLC as a “domestic” limited liability company in Georgia. Therefore, because Azera LLC at all times remained, at most, a “foreign” limited liability company in Georgia, Mammadov’s company was subject to the laws of Texas. See Ga.Code Ann. § 14–11–701 (“The laws of the jurisdiction under which a foreign limited liability company is organized govern its organization and internal affairs and the liability of its managers, members, and other owners[.]”) And under Texas law, because Azera LLC d/b/a Hun Logistics forfeited its corporate existence for failing to pay its registration fees nearly a year before it entered into its contract with Custom, § 171.255(a) of the Texas Tax Code mandates that Mammadov be personally liable for the company’s debts. As there is no dispute that Azera is liable to Custom for the damages resulting from the accident, it follows that Mammadov is personally obligated to pay those damages to Custom.

 

 

CONCLUSION

For the reasons discussed above, Custom’s motion for summary judgment [58] on Count II of its First Amended Complaint is granted. A further status conference will be set for August 4, 2015, at 9:00 a.m., at which time Plaintiff is invited to submit a proposed order of judgment against Defendants Azera and Mammadov.

 

All Citations

Slip Copy, 2015 WL 4467020

 

 

Footnotes

 

1

 

The court has jurisdiction pursuant to 28 U.S.C. § 1331 and 28 U.S.C. § 1337(a), as this case is governed by the Carmack Amendment, 49 U.S.C. § 14706, and the amount in controversy exceeds $10,000.00, exclusive of interest and costs.

 

2

 

ISD’s articles of organization list Mammadov as a co-“organizer” for the business. (See ISD Articles of Organization, Ex. 10 to Mammadov Dep. [59–5], 106.) While ISD remains a defendant in this case, the present motion seeks summary judgment against Mammadov only. The parties have not explained whether Azera and ISD’s business arrangement matters for the purposes of determining either parties’ liability. In the record, the only contract Custom entered into was signed with Azera, not ISD. (See Ex. A to First Am. Compl. at 8.) This suggests Azera is responsible for ISD’s actions under general respondeat superior principles. In any event, ISD’s liability will be determined at a later date, if necessary.

 

3

 

Gramercy is a commercial property, casualty and motor cargo insurance company incorporated under the laws of the State of Texas with its principal place of business in Norcross, Georgia. (Def. Answer to First Am. Compl. ¶ 8.)

 

4

 

Custom is correct that Mammadov did not submit his affidavit and exhibits in accordance with Local Rule 56.1. (See Pl. Reply in Favor of Summ. Judg. [71], 7.) And the court recognizes that even pro se litigants must comply, as a general matter, with the Local Rules. See, e.g., Greer v. Board of Educ. of City of Chicago, 267 F.3d 723, 727 (7th Cir.2001) (pro se plaintiff’s failure to comply with Local Rule 56.1 renders moving party’s statements of fact undisputed). Regardless, as it appears Custom has not been prejudiced by Mammadov’s procedurally deficient submissions, the court will consider the materials in resolving this motion.

 

5

 

Those excepted causes, not implicated here, present some decidedly high bars: they include “acts of God, the public enemy, the act of the shipper himself, public authority, or the inherent vice or nature of the goods.” Allied Tube, 211 F.3d at 369 n.2 (quoting Missouri Pacific Railroad Co. v. Elmore & Stahl, 377 U.S. 134, 137 (1964)).