Bits & Pieces

E and S Intern. Enterprises, Inc. v. Yellow Freight System, Inc.

United States District Court,

C.D. California.




No. CV 08-3224 PSG (JTSLx).


Jan. 27, 2009.


The Honorable PHILIP S. GUTIERREZ, District Judge.


Angela Bridges for WH Not Present n/a


Before the Court is Defendant’s motion for summary judgment. The Court finds the matter appropriate for decision without oral argument. Fed.R.Civ.P. 78; Local R. 7-15. After considering the moving and opposing papers, the Court hereby GRANTS Defendant’s motion.


I. Background


On May 11, 2007, E & S International Enterprises, Inc. (“Plaintiff”) contracted with Yellow Transportation System, Inc. (“Defendant”)  for the transportation of 2,200 iPods (“the cargo”) from Van Nuys, California to Canton, Ohio. Defendant accepted the cargo for transportation pursuant to the terms and conditions of Bill of Lading No. 1261633, as well as Yellow’s Rules and Conditions in effect at that time, which limited Yellow’s liability for loss or damage of cargo to $25.00 per pound. The bill of lading indicated that the weight of the cargo was 1265 pounds. It contained a handwritten notation, “Additional liability requested in the amount of $300,000.00.”Accordingly, Defendant arranged for coverage for the cargo in the amount of $300,000 through its excess insurer. Plaintiff was charged and paid for this additional coverage based upon the value of the cargo as indicated by Plaintiff.


Defendant Yellow Freight System, Inc. ceased to exist in 2002 through a name change to Yellow Transportation, Inc. Blaylock Decl . ¶ 3.


Defendant failed to deliver the cargo to its destination in Canton. After investigating, Defendant was unable to determine the cargo’s whereabouts. Therefore, Defendant paid Plaintiff $31,625, which represented Defendant’s maximum liability of $25.00 per pound, and an additional $300,000 through the excess insurance policy.


Plaintiff filed suit against Defendant in state court on April 8, 2008, and Defendant removed the action to this Court on May 15, 2008. On May 23, 2008, Plaintiff filed a first amended complaint (“FAC”) for liability pursuant to the Carmack Amendment and declaratory relief. On July 7, 2008, the Court granted Defendant’s motion to dismiss Plaintiff’s claim for declaratory relief. Defendant now moves for summary judgment on the remaining cause of action.


II. Legal Standard


Federal Rule of Civil Procedure 56(c) establishes that summary judgment is proper only when “the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.”Fed.R.Civ.P. 56(c). The moving party has the burden of demonstrating the absence of a genuine issue of fact for trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). If the moving party satisfies the burden, the party opposing the motion must set forth specific facts showing that there remains a genuine issue for trial. See id. at 257.


A non-moving party who bears the burden of proving at trial an element essential to its case must sufficiently establish a genuine dispute of fact with respect to that element or face summary judgment. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Such an issue of fact is a genuine issue if it reasonably can be resolved in favor of either party. See Anderson, 477 U.S. at 250-51. If the moving party seeks summary judgment on a claim or defense for which it bears the burden of proof at trial, the moving party must use affirmative, admissible evidence. Admissible declarations or affidavits must be based on personal knowledge, must set forth facts that would be admissible evidence at trial, and must show that the declarant or affiant is competent to testify as to the facts at issue. SeeFed.R.Civ.P. 56(e).


III. Discussion


Plaintiff is seeking damages of $44,195, a figure that allegedly represents the difference between the value of the cargo and the amount paid. Defendant admits that it did not deliver the cargo to its destination. However, it contends that it has met its obligations under Bill of Lading No. 1261633 and applicable law by paying Plaintiff its maximum liability of $25.00 per pound ($31,625) and $300,000 through the excess insurer, for a total of $331,625. Defendant argues that it is entitled to summary judgment on the grounds that the bill of lading validly limited its liability.


The Carmack Amendment, 49 U.S.C. § 14706(a), subjects a motor carrier transporting commerce in interstate commerce to absolute liability for “actual loss or injury to property.”See Hughes Aircraft Co. v. N. Am. Van Lines, Inc., 970 F.2d 609, 611 (9th Cir.1992). However, a carrier may limit its liability for any such damage pursuant to 49 U.S.C. § 14101(b)(1). In order to effectively limit its liability, the carrier must (1) give the shipper a reasonable opportunity to choose between two or more levels of liability; (2) obtain the shipper’s agreement as to its choice of carrier liability limit; and (3) issue a bill of lading prior to moving the shipment that reflects any such agreement. See Hughes, 970 F.2d at 611-612; Atlantic Mut. Ins. Co. v. Yasumtomi Warehousing & Distrib., Inc., 326 F.Supp.2d 1123, 1126 (C.D.Cal.2004). A “reasonable opportunity to choose between different levels of coverage” means that the shipper had reasonable notice of the liability limitation and the opportunity to obtain information necessary to making a deliberate and well-informed choice. Hughes, 970 F.2d at 612. The carrier has the burden of proving its compliance with these requirements.Id.


As the court noted in Atlantic, the ICC Termination Act abolished an additional element requiring carriers to maintain an approved tariff. See 326 F.Supp.2d at 1126 n. 2.


In the instant case, Plaintiff negotiated an agreement with Defendant for reduced freight charges, which carried a corresponding $25.00 per pound limitation of liability. UF ¶¶ 8, 10.It is undisputed that Plaintiff accepted and signed the bill of lading, which incorporated Defendant’s limitations of liability as set forth in Yellow Rules and Conditions Item 780. UF ¶¶ 9, 11-13. Moreover, Plaintiff requested and paid for excess liability coverage in the amount of $300,000. UF ¶¶ 14-15. Plaintiff would have had no reason to request and pay for excess liability coverage if it were unaware of Defendant’s limitation of liability. Thus, Plaintiff’s “purchase of insurance through [Defendant] makes it clear that Defendant’s limited liability contained in its usual bill of lading is valid and enforceable.” Atlantic, 326 F.Supp.2d at 1128.


Although Plaintiff filed an opposition brief and a “Separate Statement of Genuine Issues of Material Fact,” that statement does not track the movant’s statement of undisputed facts, indicating which are disputed and which are not, as required by the Court’s Standing Order. Standing Order at ¶ 6(c)(1) (“The Court will not wade through a document to determine whether a fact really is in dispute. To demonstrate that a fact is disputed, the opposing party must briefly state why it disputes the moving party’s asserted fact, cite to the relevant exhibit or other piece of evidence, and describe what it is in that exhibit or evidence that refutes the asserted fact.”). Therefore, the Court assumes that the facts set forth in Defendant’s Statement are uncontroverted.


Plaintiff apparently does not dispute that Defendant satisfied the requirements to limit its liability under the Carmack Amendment. Instead, Plaintiff argues that the facts of the case raise the inference that Defendant converted the cargo for its own benefit; therefore, Plaintiff claims, the “conversion doctrine” precludes Defendant from asserting a liability limitation. Under federal common law, an appropriation of property by the carrier for its own uses will vitiate limits on liability. Deiro v. Am. Airlines, Inc. ., 816 F.2d 1360, 1366 (9th Cir.1987) (citing Glickfeld v. Howard Van Lines, Inc., 213 F.2d 723, 727 (9th Cir.1954)). Plaintiff has not pointed to any case where the court applied the conversion doctrine to invalidate an otherwise valid limitation on liability under the Carmack Amendment.


The statute itself does not provide a conversion exception to liability limitation.


Assuming that the conversion doctrine applies to actions arising under the Carmack Amendment, the Court finds that Plaintiff has not established a genuine issue of material fact with respect to its allegations that Defendant misappropriated the cargo for itself. The only evidence Plaintiff has proffered to support its conversion theory are affidavits of a surveyor and of Plaintiff’s counsel, each of whom who made statements concerning the purported inadequacy of Defendant’s investigation and the “suspicious” circumstances surrounding the cargo’s disappearance. For example, the declaration of S.M. Wadhwani consists of his opinion as to what carriers “typically” do in the case of loss or theft of cargo, as well as his conclusions as to what steps Defendant took to investigate the loss. The Court notes, however, that Wadhwani appears to have no personal knowledge of Defendant’s internal investigation. Plaintiff insists that it is “likely” that Defendant stole the iPods based on their high value and Plaintiff’s apparent dissatisfaction with Defendant’s communications and investigation.But “[f]ederal courts do not presume a conversion, voiding the limitation of liability, to have occurred merely from a non-delivery.” Nippon Fire & Marine Ins. Co., Ltd. v. Holmes Transp., Inc., 616 F.Supp. 610, 612 (D.C.N.Y.1985).


Defendant maintains that if its investigation had suggested any irregularity or wrongdoing on the part of Defendant, its excess insurer would have demanded further investigation before issuing the $300,000 check.


Although it may be that Defendant has been less than forthcoming about its investigation and the circumstances surrounding the loss or theft of the cargo, a reasonable fact-finder could not conclude, based solely on the evidence before the Court, that Defendant misappropriated the cargo for its own use. Plaintiff’s “mere allegation and speculation do not create a factual dispute for purposes of summary judgment.” Nelson v. Pima Cmty. Coll., 83 F.3d 1075, 1081 (9th Cir.1996).


The conversion doctrine applies only when there has been a “true conversion, i.e., where the carrier has appropriated the property for its own use or gain.” Glickfeld, 213 F.2d at 727. It will not invalidate a liability limitation in cases of theft by third parties or even by the carrier’s own employees. Id.


IV. Conclusion


For the foregoing reasons, summary judgment is GRANTED for Defendant. Defendant shall submit a judgment within ten (10) days of the date of this order.



Dubose v. Transport Enterprise Leasing, LLC

United States District Court, M.D. Florida,

Orlando Division.

Gwendolyn DUBOSE and Harold Dubose, Plaintiffs,


TRANSPORT ENTERPRISE LEASING, LLC, Flawless Transportation, Inc., Thomas A. Collier, Jr., and Antonio Foster, Defendants.

No. 6:08-cv-385-Orl-31DAB.


Jan. 27, 2009.




GREGORY A. PRESNELL, District Judge.


This matter came before the Court without oral argument upon consideration of Defendant’s, Transport Enterprise Leasing, LLC (“Transport”), Motion for Summary Judgment (Doc. 29), Plaintiffs’, Gwendolyn Dubose and Harold Dubose (“Plaintiffs”), response in opposition thereto (Doc. 71), Transport’s Reply to Plaintiffs’ response in opposition to the Motion for Summary Judgment (Doc. 87), and Plaintiffs’ Notice of Filing Additional Documentation (Doc. 95).


I. Overview and Procedural History


In their Second Amended Complaint, Plaintiffs allege that they were involved in a car accident on January 17, 2007 (Doc. 45, ¶ 17). Specifically, Plaintiffs allege that a tractor (the “Tractor”) driven by Defendant Collier collided with Plaintiffs’ vehicle in a rear-end collision near the intersection of U.S. 441 and Michigan Street in Orlando, Florida (Doc. 45, ¶ 15). The Tractor was owned by Defendant Transport (Doc. 45, ¶ 12). Transport, however, had leased the Tractor to Defendant Antonio Foster, d/b/a Flawless Transportation (“Foster” or “Flawless”) pursuant to a three-year lease agreement (Doc. 45, ¶ 12).


Based on the foregoing allegations, Plaintiffs raised four substantive claims in their Second Amended Complaint. Count I asserts that Collier was negligent in operating and maintaining the Tractor. Count II asserts that Flawless was negligent in failing to maintain the minimum amounts of liability insurance, in failing to comply with various state and federal regulations, in operating a “lease-on”  operation, and in allowing an unqualified driver, Collier, to operate and maintain the Tractor. Court III asserts the same claim as Count II but is directed against Foster in his individual capacity. Count IV asserts that Transport was negligent in failing to ensure that its lessee, Flawless or Foster, carried the minimum amount of liability insurance, in leasing and delivering the Tractor to Foster when Transport knew or should have known that Foster was conducting a “lease-on” operation and using unqualified drivers.


According to Plaintiffs, a “lease-on” operation involves the scheduling of shipments carried by tractors which the operation does not own or lease and which are driven by independent drivers or employees of other trucking companies whom the operation does not ensure are qualified to drive (Doc. 45 at ¶ 21).


Defendants Collier, Flawless, and Foster have failed to answer the complaint or otherwise appear in this case and have been defaulted (Docs. 64 and 70). Defendant Transport has moved for summary judgement contending, inter alia, that it is entitled to a judgment as a matter of law on Count IV inasmuch as it is immune to suit pursuant to 49 U.S.C. § 30106 (the “Graves Amendment” or “ § 30106”).


The parties agree that Florida substantive law is applicable to Count IV of the Second Amended Complaint.The Court has jurisdiction pursuant to 28 U.S.C. § 1332.


On December 15, 2008, the Court ordered the parties to either stipulate as to the state law applicable to this case or, in the alternative, file supplemental briefs directed to the choice of law analysis (Doc. 89). With the exception of the Graves Amendment and certain other federal statutes and regulations, the parties agree that Florida substantive law applies to Count IV of the Second Amended Complaint. Although Plaintiffs also contend that Georgia’s financial responsibility and insurance laws should apply (in addition to Florida law), for the reasons discussed, infra, the Court need not reach that question.


II. Factual Background


Transport is in the business of the leasing tractors, trailers and other trucking equipment. On or about January 18, 2006, Transport entered into an eleven-page Commercial Vehicle Lease Agreement with Foster  (Doc. 29 at 27 and 30-40). Pursuant to the Commercial Vehicle Lease Agreement, Transport agreed to lease the Tractor, a 2004 Freightliner, to Foster for a period of thirty-six (36) months (Doc. 29 at 30). The Commercial Vehicle Lease Agreement specifically provided that:


Although the original lease was between Transport and Foster, Transport sent a letter to Foster on February 7, 2007, clarifying that the lease was between Transport and “Antonio Foster D/B/A Flawless Transportation” (Doc. 29 at 41). Transport and Foster executed this clarifying addendum on February 8, 2007 (Doc. 29 at 41).


VI. Repair and Maintenance


A. Lessee, at its expense, shall keep and maintain the [Tractor] in good operating condition and working order, and shall make all necessary repairs and replacements to such [Tractor] …


IX. Insurance


A. Lessee shall procure and maintain insurance covering the [Tractor] throughout the [term of the lease] with insurance companies satisfactory to the Lessor. Policies are to include the interest of both Lessor and Lessee and will provide limits of:


1._____________ per person for bodily injury.


2. _____________ per accident for bodily injury.


3. _____________ property damage.


4. _____________ deductible collision (Option # 1).


5. _____________ deductible Fire & Theft …


C. Lessor, Lessee, their employees and/or their agents shall comply with all terms and conditions of insurance policies covering the [Tractor].


(Doc. 29 at 38). Written diagonally across lines one through five in foregoing insurance provisions were the words “State Limits” or “Stated Limits” (Doc. 29 at 38 and Doc. 66-5 at 31).


At the time Transport actually entrusted the Tractor to Foster, Transport was provided with a U.S. Department of Transportation Common Carrier Certificate authorizing Flawless Transportation, Inc. d/b/a FTI to haul freight, and a Certificate of Liability Insurance stating combined single limit coverage for Flawless Transportation, Inc. d/b/a FTI in the amount of $1,000,000.00 (Doc. 29 at 28-34). Transport, however, did not inquire why these certificates were in the name of Flawless Transportation, Inc. d/b/a FTI and not in the name of Foster or Antonio Foster D/B/A Flawless Transportation. Transport did not verify that the Tractor it was leasing to Foster was actually listed as a vehicle under the schedule of insured vehicles covered by the certificate of insurance or whether the certificate was even valid (Doc. 66-5 at 33-34). Transport’s Director of Leasing, Fred Rhodes, testified that while Transport requires proof of $1,000,000.00 in liability coverage before it will turn over a tractor or other equipment to a prospective lessee, Transport does not take any specific steps to verify that the insurance coverage actually exists -it simply makes a copy of the proof of insurance for its records and follows-up with its lessees and the insurers as the expiration date on the proof of insurance draws near (Doc. 66-5 at 33). Nor does Transport check on driver qualifications-it simply relies on the terms of its lease agreement which require the lessee to use qualified drivers (Doc. 66-6 at 17).


In the absence of any other evidence presented by the parties, the Court has assumed that the entrustment occurred on the same day that the lease was executed (i.e., January 18, 2006).


According to Transport, because Foster had signed the lease as “Owner,” it simply assumed that Foster and Flawless Transportation, Inc. d/b/a FTI or “Antonio Foster D/B/A Flawless Transportation” were all one and the same (Docs. 66-5 at 35).


As Transport notes, however, the public records of the U.S. Federal Motor Carrier Safety Administration (the “FMCSA”) confirm that Flawless Transportation, Inc. d/b/a FTI had $1,000,000.00 of insurance coverage in place at the time that Transport entrusted the Tractor to Foster (Doc. 87 at 6). Importantly, though, the FMCSA’s records do not indicate whether the Tractor was actually insured by Foster at the time he received it from Transport. Neither Transport nor Plaintiffs have provided any evidence to the Court indicating whether Foster had insurance on the Tractor at the time he received it from Transport.


Transport’s Managing Partner, Paul D. Carmichael, testified that it is not uncommon for leasing companies such as his to only require a certificate of insurance and not a specific schedule of tractors that are covered by the certificate of insurance (Doc. 66-6 at 4-5). Because trucking companies frequently alter their fleets based on monthly gross receipts, they generally “add and delete vehicles [on the schedule] at the end of the month. And [insurers] cover whatever you pick up and whatever you drop off. So it’s not uncommon to accept a certificate of insurance and say [sic] any scheduled auto and not make them produce that specific auto” (Doc. 66-6 at 5).


Sometime after Transport leased the Tractor to Foster, Foster permitted Collier to operate the Tractor. On January 17, 2007, less than one year into the Commercial Vehicle Lease Agreement, Collier rear-ended the Plaintiffs’ vehicle while driving the Tractor in Orlando, Florida (Doc. 81-2 at 1). As a consequence, Plaintiffs were injured (Doc. 81-2 at 1). Other than some limited cargo insurance, there was no insurance coverage in effect on the Tractor at the time of the accident (Doc. 66-4 at 1). The Florida Traffic Crash Report indicates that Collier was cited for careless driving in violation of FLA. STAT. § 316.1925, that Plaintiffs’ vehicle was stopped on U.S. 441 preparing to turn left onto Michigan Street, and that Collier failed to stop, colliding with the rear of Plaintiff’s vehicle (Doc. 88-2 at 1-4). Notwithstanding that fact that Transport had no obligation to maintain the Tractor, Plaintiffs have adduced no evidence indicating that the Tractor was not properly maintained or not functioning properly at the time of the accident.


III. Standard of Review


A party is entitled to summary judgment when it can show that there is no genuine issue as to any material fact. FED. R. CIV. P. 56(c); Beal v. Paramount Pictures Corp., 20 F.3d 454, 458 (11th Cir.1994). Which facts are material depends on the substantive law applicable to the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The moving party bears the burden of showing that no genuine issue of material fact exists. Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir.1991); Watson v. Adecco Employment Svc., Inc., 252 F.Supp.2d 1347, 1352 (M.D.Fla.2003).


When a party moving for summary judgment points out an absence of evidence on a dispositive issue for which the non-moving party bears the burden of proof at trial, the non-moving party must “go beyond the pleadings and by [its] own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is a genuine issue for trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 324-25, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (internal quotations and citation omitted). Thereafter, summary judgment is mandated against the non-moving party who fails to make a showing sufficient to establish a genuine issue of fact for trial. Id. at 322, 324-25; Watson, 252 F.Supp.2d at 1352. The party opposing a motion for summary judgment must rely on more than conclusory statements or allegations unsupported by facts. Evers v. Gen. Motors Corp., 770 F.2d 984, 986 (11th Cir.1985) (“conclusory allegations without specific supporting facts have no probative value”); Broadway v. City of Montgomery, Ala., 530 F.2d 657, 660 (5th Cir.1976).


IV. Analysis


Transport contends that it is immune to suit pursuant to the Graves Amendment, which generally exempts the owner of a leased motor vehicle from liability for harm to persons or property arising out of the operation of the vehicle by a lessee. 49 U.S.C. § 30106(a). Plaintiffs do not challenge the general applicability of the Graves Amendment and concede that any claim predicated on a theory of vicarious liability or Florida’s dangerous instrumentality doctrine would be preempted by the Graves Amendment (Doc. 71 at 1, 3-4). Instead, Plaintiffs argue that the Grave’s Amendment does not preempt their negligence claim because the savings clause in § 30106(a)(2) permits Plaintiffs to assert that Transport was itself negligent in leasing the Tractor to Foster


Plaintiffs also invite the Court to re-consider its decision in St. Paul Fire and Marine Ins. Co. v. Lee, Case. No. 07-CV-756, 2008 WL 1897602 (M.D. Fla. April 28, 2008), which held that the Florida’s financial responsibility law governing long-term leases, FLA. STAT. § 324.021(9)(b)(1), was not compulsory and was therefore preempted by the Graves Amendment (Doc. 71 at 7). Similarly, Plaintiffs contend that Georgia’s financial responsibility law, GA.CODE ANN. § 33-34-4, is not preempted by the Graves Amendment. While no Court appears to have squarely addressed whether GA. CODE ANN. § 33-34-4 is compulsory in light of the Graves Amendment, even in the context of short-term leases, Georgia’s financial responsibility regime does not require lessors to provide insurance if the lessee already has insurance. See, e.g., Ryan v. Boyd, 911 F.Supp. 524, 527 (M.D.Ga.1996) (citing Atlanta Rent-A-Car, Inc. v. Jackson, 204 Ga.App. 448, 419 S.E.2d 489 (Ga.Ct.App.1992)). Furthermore, based on the clear and unambiguous definitions included in GA.CODE ANN. § 33-34-2, it is the longterm lessee-not the lessor-who is the “Owner” that is required to maintain the insurance minimums putatively mandated by GA.CODE ANN. § 33-34-4. Accordingly, the Court concludes that the savings clause in § 30106(b) of the Graves Amendment is inapplicable to the instant case under both Florida and Georgia’s financial responsibility laws.


In pertinent part, the Graves Amendment provides:


(a) In general-An owner of a motor vehicle that rents or leases the vehicle to a person (or an affiliate of the owner) shall not be liable under the law of any State or political subdivision thereof, by reason of being the owner of the vehicle (or an affiliate of the owner), for harm to persons or property that results or arises out of the use, operation, or possession of the vehicle during the period of the rental or lease, if-


(1) the owner (or an affiliate of the owner) is engaged in the trade or business of renting or leasing motor vehicles; and


(2) there is no negligence or criminal wrongdoing on the part of the owner (or an affiliate of the owner).


(b) Financial responsibility laws-Nothing in this section supercedes the law of any State or political subdivision thereof-


(1) imposing financial responsibility or insurance standards on the owner of a motor vehicle for the privilege of registering and operating a motor vehicle; or


(2) imposing liability on business entities engaged in the trade or business of renting or leasing motor vehicles for failure to meet the financial responsibility or liability insurance requirements under State law …


49 U.S.C. § 30106.


While numerous courts have passed on the constitutionality and general applicability of the Graves Amendment, only a handful have considered the applicability of the savings clause in § 30106(a)(2).See Berkan v. Penske Truck Leasing Canada, Inc., 535 F.Supp.2d 341 (W.D.N.Y.2008) (granting lessor’s motion for summary judgment where plaintiffs failed to adduce any evidence of lessor’s negligence, including lessor’s failure to maintain brakes on 2003 Freightliner tractor-trailer); Vedder v. Cox et al., 859 N.Y.S.2d 900 (N.Y.Sup.Ct.2008) (granting defendantlessor’s motion to dismiss where, inter alia, plaintiff failed to supply any legal authority imposing a legal duty on lessors to investigate lessees’ driving records); Novovic v. Greyhound Lines, Inc., No. CV-08-390, 2008 WL 5000228 (E.D.N.Y. Nov.19, 2008) (relying on Colon v. Bernabe, infra, and concluding that plaintiff could assert claim for negligent maintenance against bus leasing company where leasing company agreed to maintain bus in lease agreement); Colon v. Bernabe, No. 07-CV-3369, 2007 WL 2068093 (S.D.N.Y. July 19, 2007) (conducting cursory examination of Grave’s Amendment legislative history and concluding that, where lease agreement requires a lessor to maintain vehicle, § 30106(a)(2) permits a plaintiff to assert a negligence claim against the lessor for failure to maintain vehicle, but also expressing concern that “plaintiffs can defeat the spirit of § 30106” on a motion to dismiss by merely alleging that the leasing company was negligent in maintaining the vehicle); Escaleria v. Powell, No. CV065004566S, 2007 WL 4210982 (Conn.Super.Ct. Nov.6, 2007) (granting motion to strike plaintiff’s negligence claim against defendant-lessor where State law did not require lessor to ensure that lessee maintained insurance coverage and where defendant-lessor’s failure to ensure that lessee maintained adequate insurance was not, as a matter of law, a proximate cause of plaintiff’s injury).0 Absent some evidence of a lessor’s failure to properly maintain a vehicle which it has expressly agreed to maintain pursuant to a lease agreement, or some similar active negligence on the part of the lessor, the conclusion reached by these courts is that § 30106(a)(2) is rarely applicable and should be cautiously applied in light of Congress’ clear intent to forestall suits against vehicle leasing companies.Id. Indeed, unless a State specifically imposes a legal duty on lessors to ensure that their lessees maintain adequate insurance or to ensure that their lessees have adequate driving records, § 30106(a)(2) only appears to apply to claims predicated on criminal wrongdoing and negligent maintenance claims-not claims of negligent entrustment. Id. This Court concurs in the foregoing precedents and proceeds under a similar analytical framework.


See, e.g., Garcia v. Vanguard Car Rental USA, Inc., 540 F.3d 1242 (11th Cir.2008) (upholding the constitutionality of the Graves Amendment under the Commerce Clause and concluding that while States may subject owners to legal judgments for failure to maintain insurance on their vehicles, they cannot impose such judgments against rental car companies based on the negligence of their lessees); Dupuis v. Vanguard Car Rental USA, Inc., 510 F.Supp.2d 980 (M.D.Fla.2007) (finding, inter alia, that Graves Amendment preempted Florida’s dangerous instrumentality doctrine), Johnson v. Agant, 480 F.Supp.2d 1, 5 (D.D.C.2006) (holding that Graves Amendment preempts vicarious liability claims against lessors under the law of any State); see also Liberty Mut. Ins. Co. v. TCF Equipment Finance., Inc., Case. No. 06-CV-1567, 2007 WL 4557204 (M.D. Fla.2007); Seymour v. Penske Truck Leasing Co., L.P., Case. No. 407-CV-015, 2007 WL 2212609 (S.D.Ga.2007); see generally Beth B. Holliday, Annotation, Validity, Construction, and Application of Graves Amendment, 29 A.L.R. FED.2D 223 (2008) (discussing legislative history and collecting cases).


0. The parties failed to cite any of these non-binding, but persuasive decisions to the Court.


In the case at bar, it is undisputed that the lease agreement required the lessee, Foster, to maintain the Tractor and to ensure that there was adequate insurance in effect. Even assuming, then, that Plaintiffs had offered some evidence that the Tractor was not properly maintained, Plaintiffs cannot assert a negligence claim against Transport for failure to maintain the Tractor. With respect to insurance coverage, Plaintiffs have failed to provide the Court with any legal authority which would require a lessor to maintain insurance on a leased vehicle. Nor have Plaintiffs offered any authority which would impose a legal duty on a long-term lessor to ensure that its lessee maintained adequate insurance on a leased vehicle. Similarly, Plaintiffs have failed to provide the Court with any legal authority which would require a long-term lessor to investigate a potential lessee’s driving record, or on the facts of this case, the lessee’s trucking operation, before entrusting a vehicle to a lessee. On the contrary, there is no duty to investigate or determine an individual’s competency to operate an automobile before making a sale or entering into a lease. See, e.g., Boutilier v. Chrysler Ins. Co., No. 8:99-CV2270T26, 2001 WL 220159 (M.D.Fla. Jan.31, 2001) (citing Horne v. Vic Potamkin Chevrolet, Inc., 533 So.2d 261 (Fla.1988)). Although Transport had Foster’s valid U.S. Department of Transportation Common Carrier Certificate at the time of the entrustment and therefore had no reason to question his competency, Transport was under no duty to even request the certificate or investigate Foster’s driving record or trucking operation before entrusting the Tractor to Foster.


In short, Plaintiffs ignore the ownership interest inherent in a long-term lease and the clear intent of the Graves Amendment. Absent a reservation of some indicia of ownership in the lease agreement (e.g., the lessor agrees to maintain the vehicle), once a lessee takes possession of the vehicle, the lessor relinquishes its ownership interest. At that point, any duty owed by the lessor to the public at large ceases to exist. It is the duty of the lessee, as the “owner,” to properly maintain the vehicle and comply with applicable State and federal financial responsibility laws. Thus, where the lessor does not reserve any indicia of ownership in the lease, the negligence savings clause in § 30106(a)(2) is clearly inapplicable. To hold otherwise would render the entire statute illusory.


Accordingly, the Court concludes that Transport is entitled to a judgment as a matter of law on Plaintiffs’ negligence claim. Inasmuch as Plaintiffs have failed to reveal any issue of disputed material fact concerning the applicability of the Graves Amendment, the Court finds that Transport is immune to suit pursuant to 49 U.S.C. § 30106.


V. Conclusion


Based on the foregoing, it is ORDERED that Defendant’s, Transport Enterprise Leasing, LLC, Motion for Summary Judgment (Doc. 29) is GRANTED.It is FURTHER ORDERED that Plaintiffs’, Gwendolyn Dubose and Harold Dubose, Motion for Partial Summary Judgment on Defendant’s Affirmative Defenses (Doc. 82), and Defendant’s, Transport Enterprise Leasing, LLC, Motion for Physical Examination (Doc. 110), are DENIED as MOOT.


The Clerk of the Court is directed to enter judgment in favor of Defendant, Transport Enterprise Leasing, LLC, on Count IV in the Second Amended Complaint.



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