United States District Court,N.D. Texas,Dallas Division.

LINCOLN GENERAL INSURANCE CO., Plaintiff,

v.

AUTOBUSES TIERRA CALIENTE, INC., Defendant.

Jan. 15, 2008.

MEMORANDUM OPINION AND ORDER

SAM A. LINDSAY, District Judge.

Before the court are: (1) Plaintiff’s Brief in Support of Court Vacating the September 13, 2005 Order, filed November 9, 2007; and (2) Defendant’s Position in Light of the 5th Circuit’s Decision in Garcia Tours, filed November 9, 2007. After considering these briefs and the applicable law, the court reopens this case, vacates in part its September 13, 2005 Memorandum Opinion and Order, and grants Lincoln General Insurance Company’s Motion for Summary Judgment, filed January 28, 2005.

Plaintiff in this case seeks a declaratory judgment that: (1) there is no coverage under an insurance policy for damages sought by injured persons who filed a state court action arising out of a bus accident in Mexico (the “Intervenors”);  and (2) it has no duty to defend Defendant Autobuses Tierra Caliente, Inc. for claims arising out of the accident in question. Pl.’s Orig. Compl. and Request for Decl. Relief (“Compl.”) ¶ 16. Because the parties agreed to stipulate to certain facts, the court issued a scheduling order that allowed the parties to move directly to summary judgment briefing. Scheduling Order (Oct. 28, 2004). Plaintiff moved for summary judgment on January 28, 2005, and argued that it was entitled to relief because a policy endorsement, the MCS-90B endorsement, does not apply to accidents that occur outside of the United States. On September 13, 2005, the court denied Plaintiff’s motion, found that the endorsement applied in this case, and ordered Defendant and Intervenors to file motions for summary judgment. Defendant and Intervenors filed motions for summary judgment on October 3, 2005.

Plaintiff seeks a declaration regarding the damages sought by plaintiffs in a state court action in the 298th Judicial District Court in Dallas, Texas. These plaintiffs are: Maria Lopez, individually and as next friend of Rolando Mejia, and Luis Enrique Alvarez, individually and as next friend of Vanessa Alanis and of Carlos Benitez, and as representative of Ramona Patricia Alanis and of Ramona Patricia Alanis’s unborn child. Lopez and Alvarez were granted leave to intervene as parties in this action on February 16, 2005.

On October 19, 2005, Plaintiff filed a motion to reconsider the denial of its summary judgment motion and argued that the court should reconsider its order in light of a decision in the Southern District of Texas in a case involving the same plaintiff and the same insurance endorsement. That court reached the opposite conclusion and held that the endorsement did not apply to the accident in that case. Before the court ruled on the motion for reconsideration, Plaintiff filed a motion to stay or abate, asking the court to stay the case because the Southern District case had been appealed to the Fifth Circuit Court of Appeals, in the case Lincoln General Insurance Co. v. Maria de la Luz Garcia (“Garcia Tours” ). The court denied without prejudice the motion for reconsideration, granted the motion to stay, and denied without prejudice Defendant and Intervenors’ pending motions for summary judgment. Intervenors then moved the court to reconsider its order on the motion to stay. The court denied this second motion to reconsider on August 28, 2006.

On July 3, 2007, the court administratively closed this case and directed the parties to inform it when the appellate court ruled in Garcia Tours.The court has now issued its decision in Garcia Tours, 501 F.3d 436 (5th Cir.2007). The court concluded:

Because the … accident occurred in Mexico, a place where the for-hire motor carrier was not subject to the minimum financial responsibility requirements of federal law, the MCS-90B endorsement is not applicable and does not provide coverage for the … accident. Thus, the district court did not err in concluding that the MCS-90B endorsement does not apply.

*2Id. at 442.The court informed the parties that it believed that the Garcia Tours decision required it to vacate its September 13, 2005 order and directed the parties to submit briefing on their positions. The parties’ briefing is now before the court.

Plaintiff argues that the court should vacate the September 13, 2005 order and grant its motion for summary judgment. Defendant attempts to distinguish Garcia Tours and argues that it is an improper party in the underlying state court action. Defendant states that the proper party is a Mexican entity named Autobuses de Guerrero, S.A. de C.V., and that Plaintiff has a duty to defend it because it is improperly named as a Defendant.

The court determines that Garcia Tours is directly on point and in light of this authority, it is clear that the MCS-90B endorsement does not apply to the accident in question and there is no coverage. Accordingly, there is no genuine issue of material fact that the MCS-90B endorsement does not apply and that Plaintiff has no duty to defend Defendant in the underlying state lawsuit, and Plaintiff is entitled to judgment as a matter of law.

Defendant’s eleventh-hour argument that the true issue is whether Plaintiff must defend it as an improperly-named party does not save the day. Defendant pleaded in its Answer that it was misnamed:

The state court action is mistakenly directed to Autobuses Tierra Caliente, Inc. The proper Defendant is a related company, Autobuses de Guerrero, S.A. de C.V., which operates all of the tours within Mexico, which maintains the necessary licenses to operate in Mexico and which has insurance for its operations in Mexico. If Defendant is actually the real party in the State Court Suit, then Plaintiff must provide coverage under applicable Federal law as described herein below and this matter should be decided in the state court.

Def.’s Amend. Orig. Answer and Counterclaim ¶ 18. Defendant stated in both its response to Plaintiff’s motion for summary judgment and its motion for summary judgment that once in Mexico, the bus was operated by the Mexican entity, and filed an affidavit in support of this statement. Its briefing, however, focuses on whether the Department of Transportation has jurisdiction outside of the United States, and whether the particular endorsement applies to an accident that occurred in Mexico. The issue of whether Defendant was the proper party was not briefed by the parties when the court considered Plaintiff’s or Defendant’s motion for summary judgment. Defendant’s focus was whether the endorsement applied, and it did not argue that Plaintiff had a duty to defend it as an improperly sued party.

The court determines that Defendant’s argument at this stage that it is an improperly-named party and that there is an issue regarding Plaintiff’s duty to defend it as an improperly-named party comes too late. Defendant failed to raise this issue-even though it had two distinct opportunities to do so: in responding to Plaintiff’s motion for summary judgment and in its own motion for summary judgment-until the appellate court held that its substantive position on the applicability of the endorsement was incorrect. Because Defendant did not raise this issue in response to Plaintiff’s motion for summary judgment or as part of its motion for summary judgment, the court concludes that its last minute attempt at a “Hail Mary” to save its defense comes too late and is waived. Moreover, even if Defendant did not waive this argument, it does not alter the outcome. If the policy does not does not provide for coverage of the bus accident in Mexico, that a party is properly or improperly named is of no moment, as it does not alter the nonapplicability of the policy endorsement.

The court directs the clerk of the court to reopen this case. The court determines that for the relief sought by Plaintiff in its original motion for summary judgment, the Garcia Tours decision mandates that the court vacate sections II(B)(2) and III of its September 13, 2005 Memorandum Opinion and Order. The court grants Plaintiff’s motion for summary judgment because there is no genuine issue of material fact regarding the applicability of the MCS-90B endorsement. Accordingly, the court determines that the MCS-90B endorsement does not apply to the bus accident in question and declares that: (1) there is no coverage under Policy Number LPA101811 for any damages claimed by: Maria Lopez, individually, and as next friend of Rolando Mejia, and Luis Enrique Alvarez, individually, and as next friend of Vanessa Alanis and of Carlos Benitez, and as representative of Ramona Patricia Alanis and of Ramona Patricia Alanis’s unborn child, and (2) Plaintiff has no duty to defend Defendant against any such claims under the terms of Policy Number LPA101811. The court will issue judgment by separate order pursuant to Rule 58 of the Federal Rules of Civil Procedure.

It is so ordered.

United States District Court,N.D. Texas,Dallas Division.

KNIGHT TRANSPORTATION, INC., Plaintiff-counterdefendant,

v.

WESTINGHOUSE DIGITAL ELECTRONICS, LLC, Defendant-counterplaintiff.

Jan. 22, 2008.

MEMORANDUM OPINION AND ORDER

SIDNEY A. FITZWATER, Chief Judge.

The question presented in this lawsuit arising from the shipment of goods under an interstate bill of lading is whether counterdefendant can recover attorney’s fees under state law or whether the Carmack Amendment controls and thus precludes such a recovery. The court holds that counterdefendant cannot recover attorney’s fees.

I

Plaintiff-counterdefendant Knight Transportation, Inc. (“Knight”), which had been hired to transport televisions by truck from California to Oklahoma, lost its shipment while en route. [Countercl. 2, Sch. A] Defendant-counterplaintiff Westinghouse Digital Electronics, LLC (“Westinghouse”), the shipper, asserts counterclaims against Knight for damages and attorney’s fees. Knight moves to dismiss the counterclaim for attorney’s fees.

Knight does not cite the rule under which the motion is filed, but the motion is necessarily one for dismissal under Fed.R.Civ.P. 12(b)(6), and Westinghouse in its response has treated it as a Rule 12(b)(6) motion.

II

It is undisputed that the Carmack Amendment, 49 U.S.C. § 14706, governs the parties’ rights in this case. The Carmack Amendment provides the “exclusive cause of action for loss or damages to goods arising from the interstate transportation of those goods by a common carrier.”Hoskins v. Bekins Van Lines, LLC, 343 F.3d 769, 778 (5th Cir.2003). This statute completely preempts the rights and remedies that would otherwise be available in such disputes under state law, id., including the right to recover attorney’s fees, Accura Systems, Inc. v. Watkins Motor Lines, Inc. 98 F.3d 874, 875 (5th Cir.1996) (“[A]ttorney’s fees authorized by state law are not available in Carmack Amendment actions.”).

Section 14101(b) does authorize a carrier, however, to “enter into a contract with a shipper … to provide specified services under specified rates and conditions.”Courts have explained that this provision allows parties to contract around the system of federal regulatory “default rules” that the Carmack Amendment established. Transit Homes of Am., Div. of Morgan Drive Away, Inc. v. Homes of Legend, Inc., 173 F.Supp.2d 1192, 1198 (N.D.Ala.2001) ( “[Section] 14101(b) in particular allows parties to avoid federal regulatory default rules.”(emphasis omitted)); Cent. Transp. Int’l, Inc. v. Alcoa, Inc., 2006 WL 2844097, at(E.D.Mich. Sept. 29, 2006) (“Section 14101 allows a carrier to enter into a contract with a shipper to opt out of the Carmack Amendment’s default rules.”).

III

Westinghouse maintains that there is a contract that governs certain terms of its relationship with Knight, but it concedes that the contract is silent on the issue of attorney’s fees. [Resp. 3] Therefore federal law-having completely occupied this field-must supply the default rule of decision. See Transit Homes of Am., 173 F.Supp.2d at 1198 (acknowledging that field is occupied by “federal regulatory default rules” (emphasis added); Cent. Transp. Int’l, 2006 WL 2844097, at(same). Because Westinghouse does not identify any federal provision that would support the claim for attorney’s fees, and instead bases its claim on a default rule derived from state law, the claim must fail.

Knight disputes that it was a party to this contract. For purposes of deciding this motion, the court will assume arguendo that it was.

Westinghouse’s reliance on Mastercraft Interiors, Ltd. v. ABF Freight Systems, Inc., 350 F.Supp.2d 686 (D.Md.2004), is misplaced. At most, Mastercraft supports the proposition that rules governing contract formation and interpretation derive from state law. See id. at 692 (applying state statute of frauds to determine whether contract entered into under § 14101(b) must be in writing). It does not suggest that the parties’ substantive rights derive from state law. And it in fact acknowledges the rule that federal provisions must govern the parties’ rights where a contract is silent. See id.(relying on Transit Homes of America, and noting its holding that “the importance of § 14101(b)(1) is that it enables carriers and shippers to contract around certain federal… default rules” (emphasis added)).

Westinghouse does not argue that the parties contracted to provide Westinghouse a right to recover attorney’s fees, nor has it pleaded any facts that would support such an argument. Westinghouse must therefore identify a provision of the Carmack Amendment that would support its claim for attorney’s fees, and because it has failed to do this, the counterclaim must be dismissed.

* * *

Knight’s October 31, 2007 motion to dismiss counterclaim is granted, and Westinghouse’s counterclaim for attorney’s fees is dismissed with prejudice.

SO ORDERED.