United States District Court, S.D. Florida,

Miami Division.

LIBERTY SEGUARAS, S.A., as Subrogee of Alumaq Locacao Comercio De Maquinas, Plaintiff,

v.

NOBEL CARGO SYSTEMS, INC., Defendant.

No. 08-21643-CIV.

Feb. 24, 2009.

ORDER GRANTING DEFENDANT’S MOTION TO DISMISS

EDERICO A. MORENO, District Judge.

Plaintiff Liberty Seguaras, the subrogee of Alumaq Locado E Commerical de Maquinas de Solas, Ltd. (“Alumaq”), alleges that Alumaq’s 145 units of cargo and welding equipment were stolen while in Defendant Nobel Cargo Systems’ warehouse facility. Plaintiff paid its insured, Alumaq, for the stolen cargo. Thus, Plaintiff brought this action against Defendant for negligence (Count I) and breach of bailment contract (Count II) to recover the amount it paid its insured for the stolen cargo.

Defendant moves to dismiss Plaintiff’s Amended Complaint for failure to state a claim for subrogation, moves to dismiss Count I due to the economic loss rule, and moves for a more definite statement as to Count II. This Court finds that (1) Defendant’s Motion to Dismiss as to Count I is granted as Plaintiff’s claim for negligence is barred by the economic loss rule, and (2) Defendant’s Motion to Dismiss as to Count II is granted as Plaintiff has failed to properly state a claim for subrogation. Plaintiff is granted leave to amend (solely as to Count II) to properly state a claim for subrogation and to cure any remaining defects in its claim for breach of bailment contract.

I. Legal Standard

On a motion to dismiss, the Court must view the complaint in the light most favorable to the plaintiff. Glover v. Ligett Group, Inc., 459 F.3d 1304, 1308 (11th Cir.2006).“While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff’s obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1964-65, 167 L.Ed.2d 929 (2007) (citations omitted). A complaint must have “enough facts to state a claim to relief that is plausible on its face”; if it does not “nudge[ ] the[ ] claims across the line from conceivable to plausible, [it] must be dismissed.” Id. at 1974.Dismissal is appropriate when it appears beyond doubt that the plaintiff can prove no set of facts that would entitle him to relief. Milburn v. U.S., 734 F.2d 762, 765 (11th Cir.1984).

II. Legal Analysis

Defendant moves to dismiss Count I of Plaintiff’s Amended Complaint for negligence as Defendant alleges the claim is barred by the economic loss rule. The economic loss rule bars a tort action between parties in contractual privity if the only damages suffered are economic losses. Indemnity Ins. Co. of North America v. American Aviation, Inc., 891 So.2d 532, 536 (Fla.2004) ( “The prohibition against tort actions to recover solely economic damages for those in contractual privity is designed to prevent parties to a contract from circumventing the allocation of losses set forth in the contract by bringing an action for economic loss in tort.”). Accordingly, courts have held that a tort action is barred where a defendant has not committed a breach of duty apart from a breach of contract. Id. at 537;see Perfumeria Ultra, S.A. DE C.V. v. Miami Customs Service, Inc., 231 F.Supp.2d 1218 (S.D.Fla.2002). In the instant case, Plaintiff asserts a count for negligence and a count for breach of bailment contract. Plaintiff alleges that Defendant breached a duty of reasonable care by failing to provide adequate security for Alumaq’s cargo resulting in the theft of the cargo. As Plaintiff has not alleged a breach of duty in its negligence count apart from a breach of bailment contract, Plaintiff’s claim for negligence is barred by the economic loss rule. Thus, Defendant’s Motion to Dismiss as to Count I is granted.

Exceptions to the economic loss rule have been recognized where there has been personal injury, property damage, fraud in the inducement, professional malpractice, or negligent representation, among other things. See Casa Clara Condominium Ass’n v. Charley Toppino & Sons, 620 So.2d 1244, 1247 (Fla.1993); see Indemnity Ins. Co. of North America, 891 So.2d at 537;see PK Ventures, Inc. v. Raymond James & Ass., 690 So.2d 1296, 1297 (Fla.1997). None of the exceptions to the economic loss rule apply in the instant case.

Defendant moves to dismiss Plaintiff’s entire Amended Complaint for failure to allege sufficient facts to state a claim for subrogation. To state a claim for equitable subrogation, a plaintiff must allege that (1) the subrogee made the payment to protect his or her own interest; (2) the subrogee did not act as a volunteer; (3) the subrogee was not primarily liable for the debt; (4) the subrogee paid off the entire debt; and (5) subrogation would not work any injustice to the rights of a third party. Hollywood Lakes Country Club, Inc. v. Community Ass’n Services, Inc., 770 So.2d 716, 718 (Fla. 4th DCA 2000). In the instant case, Plaintiff merely alleges that “Plaintiff is legally and equitably subrogated to the Claimant, its insured, Alumaq.”Plaintiff’s allegations in its Amended Complaint are insufficient to state a claim for equitable subrogation. Thus, Plaintiff’s Amended Complaint must be dismissed with leave to amend (solely as to Count II) to properly state a claim for subrogation.

Finally, Defendant moves for a more definite statement as to Count II of Plaintiff’s Amended Complaint for breach of bailment contract as Defendant alleges that it is unclear whether Plaintiff’s claim is based upon an oral or written bailment contract or common law bailment. As Plaintiff’s Amended Complaint will be dismissed with leave to amend as stated above, Plaintiff may cure any remaining defects in its claim for breach of bailment contract. Thus, Plaintiff may plead the existence of an oral or written bailment contract, common law bailment, or both in the alternative.Plaintiff shall file its Second Amended Complaint by no later than March 13, 2009.

In addition, the Court suggests that Defendant, in its response to Plaintiff’s Second Amended Complaint, also strive to provide a more definite-or straightforward-statement. Defendant’s statement in its Reply that “Defendant never suggested the existence of a written contract” is disturbing given that Defendant’s Motion to Dismiss states “the cargo of Alumaq that was held by the Defendant when it was stolen was the subject of a written agreement and a course of dealing between Defendant and Alumaq which set forth the parties’ duties and responsibilities along with limits on those duties and liabilities.”

DONE AND ORDERED in Chambers at Miami, Florida, this 20th day of February, 2009.

United States District Court,

E.D. Pennsylvania.

Joseph C. LAMAZE, Administrator of the Estate of Michele LaMaze, Plaintiff

v.

VIDOV TRUCKING, INC., et al., Defendants.

Civil Action No. 09-158.

March 12, 2009.

MEMORANDUM

STENGEL, District Judge.

In this wrongful death and survival action, the defendants have moved to dismiss the claim for punitive damages. They argue that the plaintiff, Joseph LaMaze, failed to allege all necessary material elements for an award of punitive damages. (Defs.’ Mem. at 1 (Document # 4).) After reviewing the parties’ memoranda, I will deny the motion.

I. Background

On or about November 11, 2008, Robert Kostadinov, an employee of Vidov Truckin, Inc., was operating a flat bed tractor trailer carrying a cargo container in Lehigh County, Pennsylvania. (Compl.¶ 11.) He was driving the truck on State Route 22. (Id.)

In Lehigh County, State Route 22 is crossed by various bridges. One of these is the Fullerton Avenue Bridge. (Id. ¶ 13.)As Mr. Kostadinov drove the vehicle beneath the Fullerton Avenue Bridge, the cargo container struck the bottom of the bridge, was dislodged from its moorings, and slipped off of the truck bed onto the roadway. (Id. ¶ 14.)

Michele LaMaze was driving her car behind the tractor trailer. (Id. ¶ 15.)When the cargo container was ejected from the truck bed, it struck the driver’s side of her vehicle. (Id.) Ms. LaMaze suffered numerous internal and external injuries and died. (Id. ¶¶ 35-36.)

A sign on the Fullerton Avenue Bridge that was fully visible to all motor vehicle operators traveling in the same direction as Mr. Kostadinov and Ms. LaMaze read as follows: “Clearance, 13 ft. 10 in .” with two down arrows.(Id. ¶ 16.)This presumably warned all drivers of the maximum vehicle height. Mr. LaMaze has further alleged that the sign actually understates the maximum possible clearance, and has stated that “at its lowest point, [the bottom of the bridge is] at least 14 feet, 2 inches above the road surface.”(Id. ¶ 19.)Based on these facts, he believes that the vehicle’s total height exceeded 14 feet, 2 inches. (Id. ¶ 28.)

Pennsylvania law provides, “No vehicle, including any load, shall exceed a height of 13 feet 6 inches.”75 PENN. STAT. ANN.. § 4922 (West 2008). Those wishing to operate a vehicle exceeding the statutorily prescribed height must apply for special permits. Id. § 4961(a)(3). Mr. LaMaze alleges that the defendants knew (or had reason to know) of these state regulations and still did not secure the necessary permit. (Compl.¶ 22.) They knew, or had reason to know, their conduct created a serious risk of harm to the general public.(Id. ¶¶ 23, 27.)They failed to determine the height of the vehicle so as to allow for proper operation and route planning. (Id. ¶ 34(b).) They failed to observe the bridge clearance sign, which would have warned Mr. Kostadinov that the vehicle was too high. (Id. ¶ 34(e).) Finally, they improperly loaded the cargo container onto a vehicle that did not provide for proper securing and did not meet the state’s height requirements. (Id. ¶¶ 31-32.)The culmination of these allegedly reckless actions led to Ms. LaMaze’s death.

Mr. LaMaze’s complaint lists three counts: (1) a survival action against Mr. Kostadinov for the pain, suffering, mental anguish, and economic loss Ms. LaMaze endured and for the medical, funeral, and administrative expenses Mr. LaMaze has paid (Id. ¶¶ 33-39); (2) a similar survival action against Vidov Trucking (Id. ¶¶ 40-44); and (3) a wrongful death action brought on behalf of Ms. LaMaze’s thirteen-year-old son, Tyler LaMaze-Bridgwood (Id. ¶¶ 45-50.)

II. Standard of review

A motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief can be granted examines the legal sufficiency of the complaint. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). The factual allegations must be sufficient to make the claim for relief more than just speculative. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1965, 167 L.Ed.2d 929 (2007). In determining whether to grant a motion to dismiss, a federal court must construe the complaint liberally, accept all factual allegations in the complaint as true, and draw all reasonable inferences in favor of the plaintiff. Id. See also D.P. Enters. v. Bucks County Cmty. Coll., 725 F.2d 943, 944 (3d Cir.1984).

The Federal Rules of Civil Procedure do not require a plaintiff to plead in detail all of the facts upon which he bases his claim. Conley, 355 U.S. at 47. Rather, the Rules require a “short and plain statement” of the claim that will give the defendant fair notice of the plaintiff’s claim and the grounds upon which it rests. Id. The “complaint must allege facts suggestive of [the proscribed] conduct.” Twombly, 127 S.Ct. at 1969. Neither “bald assertions” nor “vague and conclusory allegations” are accepted as true. See Morse v. Lower Merion School Dist., 132 F.3d 902, 906 (3d Cir.1997); Sterling v. Southeastern Pennsylvania Transp. Auth., 897 F.Supp. 893 (E.D.Pa.1995). The claim must contain enough factual matters to suggest the required elements of the claim or to “raise a reasonable expectation that discovery will reveal evidence of” those elements. Phillips v. County of Allegheny, 515 F.3d 224, 234 (3d Cir.2008) (quoting Twombly, 127 S.Ct. at 1965)).

III. Discussion

The standard for awarding punitive damages is well-settled in Pennsylvania.“Punitive damages may be awarded for conduct that is outrageous, because of the defendant’s evil motive or his reckless indifference to the rights of others.” Hutchinson v. Luddy, 582 Pa. 114, 870 A.2d 766, 770 (Pa.2005) (quoting Feld v. Merriam, 506 Pa. 383, 485 A.2d 742, 747 (Pa.1984)). Their purpose is to punish the defendant for his actions and to deter other persons from engaging in like conduct. Thus, they are appropriate only when the defendant’s actions are “so outrageous as to demonstrate willful, wanton or reckless conduct.” Hutchinson, 870 A.2d at 770.

The defendant’s state of mind is a key factor to consider. It is not enough to show that “a reasonable person in the defendant’s position would have realized or appreciated the high degree of risk from his actions.” Burke v. Maassen, 904 F.2d 178, 181-82 (3d Cir.1990) (discussing how Pennsylvania courts have interpreted the required showing that a defendant displayed reckless indifference). Pennsylvania courts have unequivocally stated that the defendant must have subjectively appreciated the risk of harm to the plaintiff and acted (or failed to act) in conscious disregard of that risk. Hutchinson, 870 A.2d at 772. Indeed, the defendant’s conduct must be of an “intentional, reckless or malicious” nature. Id. at 771.Other factors the fact finder may consider are “the character of the defendant’s act, the nature and extent of the harm to the plaintiff that the defendant caused or intended to cause and the wealth of the defendant.”RESTATEMENT (SECOND) OF TORTS § 908(2) (1979); see also Feld, 485 A.2d at 747 (stating that Pennsylvania courts have adopted the Restatement (Second) of Torts § 908(2)).

I find that the complaint states sufficient facts to support a claim for punitive damages. The defendants allegedly knew their vehicle exceeded the statutorily permissible height. They did not secure the special permit needed to operate a vehicle exceeding that maximum height. They were aware of the safety purposes behind these regulations. They knowingly placed a cargo container onto a vehicle that was ill-equipped to secure it and could not be used for safe highway transport in this situation. They allegedly knew or had reason to know of the bridge’s clearance height and yet chose to proceed. If true, such a knowing disregard of unambiguous highway safety rules when their purpose and the dangers to be prevented are known can be evidence of a conscious disregard of a substantial, known risk of harm. Based on these allegations, the trier of fact could find that under the complaint’s factual allegations the defendants’ conduct was outrageous and represented a conscious disregard for the risk of harm to persons such as Ms. LaMaze.

The defendants have cited Burke v. Maassen, 904 F.2d 178 (3d Cir.1990), for the proposition that punitive damages may only be awarded when the defendant acted with reckless indifference. (Defs.’ Mem. at 4.) They analogize to the facts of that case where the Third Circuit reversed a jury award of punitive damages and urge me to do the same here. I decline to do so. I find Burke useful for its discussion of Pennsylvania law, but its persuasiveness ends there.

In Burke, the defendant, a truck driver, had fallen asleep while driving and killed the plaintiffs’ son. 904 F.2d at 179-80. On the day of the accident, the defendant had been driving for more than ten hours in violation of federal safety regulations. Id. The defendant had lied on his application about his truck driving experience. Id. at 180.After the incident, he attempted to cover up his errors by falsifying his driving logs and lying at his deposition. Id. at 183.The jury found for the plaintiff and awarded compensatory and punitive damages. Id. at 181.The district court denied the defendants’ motion for judgment notwithstanding the verdict on the punitive damages award. Id.

The Third Circuit reversed that decision. Upon review of the record, the court did not find sufficient proof that the driver had appreciated the risks of his actions. Id. at 183.Though he was aware of the existence of the applicable federal regulation, it was far from clear whether he knew or was aware of the safety purposes underlying it. Id. Evidence of the driver’s attempts to conceal his mistakes shed no light on whether he knew and appreciated the risks associated with his actions prior to the accident. Id. At most, those actions showed that he realized the risks of his conduct too late. Consequently, the Third Circuit determined that the punitive damages award was not supported by the necessary finding that the defendant’s conduct displayed reckless indifference.

The defendants’ proposed application of Burke is improper because the Third Circuit’s review was of a complete record containing evidence of the defendants’ states of mind. Here, it is unclear whether the defendants had acted in conscious disregard of the risks of their actions. The facts presented so far are limited and shed little light on the defendants’ actual states of mind. The complaint was drafted without the benefit of extensive discovery or other fact-finding. If true though, its allegations could support a punitive damages award. For these reasons, I find that Burke is factually distinguishable and does not control my decision here.

This ruling is not a determination of the merits or viability of Mr. LaMaze’s request. Deciding whether to award punitive damages is necessarily a fact-intensive inquiry requiring the fact-finder to probe the defendant’s state of mind. It would be premature to dismiss this claim when the complaint has alleged sufficient facts that, if proven, could establish the necessary recklessness for a punitive damages award. See Mulholland v. Gonzalez, 2008 WL 5273588, at(E.D.Pa. Dec.18, 2008) (denying a motion to dismiss a claim for punitive damages after finding that the complaint had alleged sufficient facts); Ferranti v. Martin, 2007 WL 184883, at(M.D.Pa. Jan.19, 2007) (“Because of the dangers [associated with the defendants’ conduct], discovery is necessary to determine whether defendants’ conduct and mental state were so reckless that they warrant awarding punitive damages.”). Even if the facts later show that the defendants did not exhibit the necessary state of mind, “discovery is necessary to help make this determination” and dismissal is premature at this stage. Young v. Westfall, 2007 WL 675182, at(M.D.Pa. Mar.1, 2007).

IV. Conclusion

For the foregoing reasons, I will deny the motion. An appropriate Order follows.

ORDER

AND NOW, this 12th day of March, 2009, upon consideration of the defendant’s Motion to Dismiss (Document # 4), it is hereby ORDERED that the motion is DENIED.