Court of Appeal of Louisiana,

Fifth Circuit.

Beatrice A. MULLER

v.

A-1 MOBILE SHREDDING, L.L.C., Stanley J. Pausina, John Doe, Jim Doe and ABC Insurance Company.

No. 09-CA-869.

 

Feb. 9, 2010.

 

Panel composed of Judges SUSAN M. CHEHARDY, FREDERICKA HOMBERG WICKER, and JUDE G. GRAVOIS.

 

JUDE G. GRAVOIS, Judge.

 

Defendant, Colony Insurance Company (Colony), commercial general liability (CGL) insurer for defendant, A-1 Mobile Shredding, L.L.C. (A-1), appeals the trial court’s grant of plaintiff’s motion for partial summary judgment, which found that Colony’s CGL policy provided coverage for plaintiff Beatrice A. Muller’s injuries. We also consider here Colony’s writ No. 09-C-818, which involves the denial of Colony’s cross motion for summary judgment, which sought a ruling that its policy’s automobile exclusion applied, precluding coverage for Mrs. Muller’s injuries.

 

The two judgments were rendered on the same day following one hearing for both motions. Colony filed a writ application, no. 09-C-818, seeking review of the trial court’s denial of its cross motion for summary judgment. After Colony’s appeal from the judgment granting of Muller’s motion for partial summary judgment was lodged, by order of this court the writ application was referred to the panel assigned to hear the appeal. The two matters were not consolidated, however.

 

For the following reasons, we affirm the trial court’s judgment on appeal. Likewise, we deny the relief sought in Colony’s writ application.

 

FACTS AND PROCEDURAL HISTORY

 

Mrs. Muller contracted with A-1 to shred the papers of her late husband. A-1’s business was conducted in the back of a converted box truck, which traveled to its customers’ locations and then parked there while conducting its shredding activities. The shredding equipment was located inside of the box on the back of the truck and was bolted to the body of the truck. All shredding was conducted inside of the box. The shredding equipment was powered by a generator, not the truck’s engine. The operation of the shredding equipment required that the box be ventilated, which was accomplished through a large exhaust fan that also required that a side door on the box remain open during shredding operations.

 

A-1 came to Mrs. Muller’s home on April 8, 2008. The truck parked in front of her house with the engine turned off, the usual practice. A-1’s two employees went onto Mrs. Muller’s property and retrieved boxes of papers to be shredded and moved them to the truck. The day was windy. The side door on the box that was required to be open for ventilation purposes during shredding operations was secured open by a strap connecting the door latch and the side mirror mount on the truck. Mrs. Muller, who was 72 years old, was injured as she approached the truck with an additional box of papers to be shredded. Possibly because of the wind, the strap holding the side door open became loose or disconnected, allowing the door to swing free and into Mrs. Muller, knocking her to the ground next to the truck. She fractured her hip, which required surgery and physical therapy. This suit followed.

 

Plaintiff filed a motion for partial summary judgment, seeking a declaration that coverage for the incident in question was provided by the Colony CGL policy. Colony filed a cross motion for summary judgment, seeking a declaration that coverage was excluded under its policy by virtue of the automobile exclusion contained therein. The motions were heard together on September 14, 2009. The trial court ruled from the bench in favor of Mrs. Muller, finding coverage under the Colony CGL policy under the “unique facts” of the case. The trial court, in a separate judgment, denied Colony’s cross motion for summary judgment. Colony’s timely appeal and writ application followed.

 

APPLICABLE LAW-SUMMARY JUDGMENT AND INTERPRETATION OF INSURANCE POLICIES

 

An appellate court reviews a district court’s decision to grant a motion for summary judgment de novo, using the same criteria that govern the district court’s consideration of whether summary judgment is appropriate. Smith v. Our Lady of the Lake Hosp., Inc., 93-2512 (La.7/5/94), 639 So.2d 730, 750. Summary judgment shall be rendered if there is no genuine issue as to material fact and the mover is entitled to judgment as a matter of law. LSA-C.C.P. art. 966(B). A summary judgment may be rendered on the issue of insurance coverage alone, although there is a genuine issue as to liability or damages. See LSA-C.C.P. art. 966(E).

 

When the issue before the court on the motion for summary judgment is one on which the party bringing the motion will bear the burden of proof at trial, the burden of showing there is no genuine issue of material fact remains with the party bringing the motion. See LSA-C.C.P. art. 966(C)(2); Buck’s Run Enterprises, Inc. v. Mapp Const., Inc., 99-3054 (La.App. 1 Cir. 2/16/01), 808 So.2d 428, 431. An insurer seeking to avoid coverage through summary judgment bears the burden of proving some exclusion applies to preclude coverage. See Smith v. Reliance Ins. Co. of Illinois, 01-888 (La.App. 5 Cir. 1/15/02), 807 So.2d 1010.

 

An insurance policy is a contract between the parties and should be construed employing the general rules of interpretation of contracts set forth in the Louisiana Civil Code. Reynolds v. Select Properties, Ltd., 93-1480 (La.4/11/94), 634 So.2d 1180, 1183. Words and phrases used in a policy are to be construed using their plain, ordinary, and generally prevailing meaning, unless the words have acquired a technical meaning. See LSA-C.C. art.2047. Where the language in the policy is clear, unambiguous, and expressive of the intent of the parties, the agreement must be enforced as written. See LSA-C.C. art.2046.

 

The purpose of liability insurance is to afford the insured protection for damage claims. Policies therefore should be construed to effect, and not to deny, coverage. Thus, a provision which seeks to narrow the insurer’s obligation is strictly construed against the insurer, and if the language of the exclusion is subject to two or more reasonable interpretations, the interpretation which favors coverage must be applied. Reynolds, 634 So.2d at 1183. However, subject to the above rules of interpretation, insurance companies have the right to limit coverage in any manner they desire, so long as the limitations do not conflict with statutory provisions or public policy. Id. The rule of strict construction does not authorize a perversion of language or the exercise of inventive powers for the purpose of creating an ambiguity where none exists. Doiron v. Louisiana Farm Bureau Mut. Ins. Co., 98-2818 (La.App. 1st Cir.2/18/00), 753 So.2d 357, 363.

 

ANALYSIS

 

On appeal, Colony argues that the trial court did not correctly apply Louisiana law regarding the construction of insurance policies; and specifically, that Mrs. Muller’s motion for summary judgment was premised entirely upon Endorsement U159-0702 to the Colony policy. Colony argues that the trial court’s misinterpretation of this endorsement had the effect of rendering inoperative the automobile exclusion included in A-1’s GCL policy.

 

Section I(1)(b) of Colony’s General Liability Coverage policy provides:

 

b. This insurance applies to “bodily injury” and “property damage” only if:

 

(1) The “bodily injury” or “property damage” is caused by an “occurrence” that takes place in the “coverage territory”;

 

(2) The “bodily injury” or “property damage” occurs during the policy period; and

 

(3) Prior to the policy period, no insured listed under Paragraph 1. of Section II-Who Is An Insured and no “employee” authorized by you to give or receive notice of an “occurrence” or claim, knew that the “bodily injury” or “property damage” had occurred, in whole or in part. If such a listed insured or authorized “employee” knew, prior to the policy period, that the “bodily injury” or “property damage” occurred, then any continuation, change or resumption of such “bodily injury” or “property damage” during or after the policy period will be deemed to have been known prior to the policy period.

 

Endorsement U159-0702 of Colony’s GLC policy, at issue here, provides:

 

LIMITATION OF COVERAGE

 

TO

 

BUSINESS DESCRIPTION

 

This endorsement modifies insurance provided under the following:

 

COMMERCIAL GENERAL LIABILITY COVERAGE PART

 

SCHEDULE

 

BUSINESS DESCRIPTION: PAPER SHREDDING AND RECYCLING

 

A. SECTION I-COVERAGES, COVERAGE A BODILY INJURY AND PROPERTY DAMAGE LIABILITY, 1. Insuring Agreement, b. is amended and the following added:

 

(4) The “bodily injury” or “property damage” is caused by or results from the business described in the Schedule.

 

B. SECTION I-COVERAGES, COVERAGE B PERSONAL AND ADVERTISING INJURY LIABILITY, 1. Insuring Agreement, b. is amended and the following added:

 

This insurance applies to “personal and advertising injury” caused by an offense in the course of the business described in the Schedule.

 

ALL OTHER TERMS AND CONDITIONS OF THE POLICY REMAIN UNCHANGED.

 

In light of the above-quoted policy provisions, Endorsement U159-0702 adds a fourth condition to the three coverage prerequisites set out in Section I(1)(b) of the policy’s Commercial General Liability Coverage Form, that the “bodily injury” or property damage” be caused by or result from the “PAPER SHREDDING AND RECYCLING” business described in Endorsement U159-0702’s Schedule.

 

Colony argues that the trial court’s misinterpretation of this endorsement somehow reads out or renders inoperative the following “auto” exclusion in its policy:

 

2. Exclusions

 

This insurance does not apply to:

 

* * *

 

g. Aircraft, Auto or Watercraft

 

“Bodily injury” or “property damage” arising out of the ownership, maintenance, use or entrustment to others of any aircraft, “auto” or watercraft owned or operated by or rented or loaned to any insured. Use includes operation and “loading or unloading”. This exclusion applies even if the claims against any insured allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by that insured, if the “occurrence” which caused the “bodily injury” or “property damage” included the ownership, maintenance, use or entrustment to others of any aircraft, “auto” or watercraft that is owned or operated by or rented or loaned to any insured.

 

“Auto” is defined in Colony’s GLC policy as follows:

SECTION V-DEFINITIONS

 

* * *

 

2. “Auto” means:

 

a. A land motor vehicle, trailer or semitrailer designed for travel on public roads, including any attached machinery or equipment; or

 

b. Any other land vehicle that is subject to a compulsory or financial responsibility law or other motor vehicle insurance law in the state where it is licensed or principally garaged.

 

When the trial court ruled from the bench, it stated:

 

I find that due to the unique nature of this business and limited to the facts of this case, I am going to find that there is coverage under the business policy-business liability policy, and deny defendant’s motion for summary judgment and grant plaintiff’s motion for summary judgment….

 

It is clear from the transcript as a whole that the trial court focused not on the endorsement itself but rather on the facts surrounding this accident to determine whether the automobile exclusion applied.

 

From the record before us, it is clear that all four coverage prerequisites were met, including the additional one found in the Endorsement, that the bodily injury was caused by or results from the business described in the Endorsement’s Schedule, which is paper shredding and recycling. Colony argued, however, that the automobile exclusion applied because the shredding, in this case and always, takes place in their box truck, which meets the definition of automobile under the policy, thereby triggering the “auto” exclusion provisions of its policy.

 

The trial court asked Colony’s counsel what activity, if any, would be covered under its policy given that the shredding always takes place in A-1’s shredding truck. Counsel answered that the policy would provide coverage, for instance, if A-1’s employees went onto a customer’s property to obtain the documents to be shredded and caused any harm while on or inside the customer’s property. When the trial court opined that there would be no coverage for the actual business that A-1 does, shredding in its shredding truck, Colony agreed that there would not be coverage under its policy for any activity inside the truck, since it involved use of an “auto,” which is why A-1 purchased a commercial auto policy from another insurer.

 

According to the briefs and record, A-1 purchased a business automobile liability policy from Gemini Insurance Company. Mrs. Muller sued Gemini in addition to Colony, and apparently settled with Gemini. Colony filed a motion to strike in this court, objecting to Muller’s discussion of this settlement in her brief. Whether or not plaintiff settled with Gemini and with what terms is entirely irrelevant to this court’s determination whether coverage is afforded under the Colony policy.

 

In support of its interpretation of the endorsement adding the fourth condition to coverage, Colony cites Maradiago v. Castle, 2009 WL 3150160 (E.D.La.9/28/09) (not reported in F.Supp.). In that case, the plaintiffs sought coverage under a CGL policy that Colony issued to the defendant that contained a very similar endorsement to the policy in this case that was also added to the policy after the adoption of the auto exclusion endorsement. The district court held that the endorsement did not “expand” the policy’s coverage so as to render the automobile exclusion endorsement ineffective or inapplicable. In that case, a tractor trailer operated by defendant insured and driven by its employee collided with a vehicle in which plaintiffs’ decedent was a passenger.

 

This court agrees that endorsement U159-0702 in the instant policy does not render the auto exclusion ineffective or inapplicable. Maradiago is distinguishable from the instant case on the facts, however, in that the plaintiffs’ death in Maradiago arose from a vehicular collision as Colony’s insured’s vehicle was being driven and collided with the vehicle in which the plaintiff was riding.

 

Ryder v. Darby, 09-122 (La.App. 3 Cir. 6/3/09), 11 So.3d 745, which Colony also cites for support, is also distinguishable. In that case, Colony issued a CGL policy to the “Smoker Friendly” store, which sold alcohol and tobacco products. Plaintiff was a passenger in a vehicle driven by another defendant who was underage and had purchased alcohol at Smoker Friendly. The vehicle crashed and plaintiff sustained serious injuries. Colony filed a motion for summary judgment denying coverage based on the “liquor liability exclusion” contained in the policy. Plaintiff opposed the motion arguing that an amending endorsement expanded the coverage afforded under the policy. Colony argued that the endorsement merely gave a fourth requirement for coverage and that all exclusions were still effective. This is the same argument Colony makes in this case.

 

In Ryder, the business was described in the endorsement as “tobacco products store.” The liquor liability exclusion excluded bodily injury caused by the insured’s furnishing of alcoholic beverages to a person “under the legal drinking age …” Plaintiffs argued that since the sale of alcoholic beverages fell within Smoker Friendly’s business description, the Colony policy should provide coverage because plaintiff’s injuries arose out of the store’s sale of alcohol. The trial court disagreed and found no coverage, which the court of appeal affirmed. Under plaintiffs’ theory, the court of appeal held, the exclusions listed in the Colony policy after the coverage section would be completely ignored.

 

The exclusion’s applicability in this case turns on whether the plaintiff’s injuries arose “out of the ownership, maintenance, use or entrustment to others of any aircraft, ‘auto’ or watercraft owned or operated by or rented or loaned to any insured. Use includes operation and ‘loading or unloading’.” In the instant case, A-1’s shredding truck was not being used to transport, load or unload persons or cargo for transport. It was parked and the engine was turned off. The shredding machinery was powered by a generator, not the truck’s engine. The employees were in the back of the truck, not the cab, engaged in the shredding of Mrs. Muller’s documents, when the door strap became disengaged causing the door to strike Mrs. Muller. The door was strapped open for the ventilation necessary for the shredding machinery to operate properly, and was never open while the truck was being driven.

 

We agree with the trial court that under the unique facts of this case and the type of business in which A-1 engaged, Mrs. Muller’s injuries did not arise from the use of an auto, or loading or unloading. Her injuries clearly arose from A-1’s business activity described in the policy’s Endorsement Schedule, which was paper shredding and recycling.

 

This reasoning in this case is similar to this Court’s in Terminix Services, Inc. v. State Farm, 01-720 (La.App. 5 Cir. 11/27/01), 803 So.2d 198, which interpreted an automobile liability policy and a CGL policy issued to the same insured to determine whether coverage was afforded for the plaintiff’s injuries under the automobile policy. Terminix filed suit against Reichert Iron Works for fire damages to its building. Terminix had engaged Reichert to perform renovation and repairs to its building. The fire was caused by sparks from a cutting torch used by Reichert’s employees. Terminix argued that the fire arose out of the use of a vehicle insured by State Farm, since the torch was powered by fuel tanks located on the bed of the insured truck.

 

The court affirmed the trial court’s denial of coverage under the auto policy, holding that “In order for the conduct to arise out of the use of the vehicle, the automobile must be essential to the theory of liability. The specific duty breached by the insured must flow from use of the automobile. If the specific duty breached by the insured existed independently of the automobile, then liability does not arise out of use even though the duty could have been performed by use of the automobile,” citing W.S. McKenzie and H.A. Johnson, Louisiana Civil Law Treatise, Volume 15, Insurance Law and Practice, § 65 (1986).

 

The court in Terminix further noted that “Louisiana courts have held that when automobiles covered under automobile liability policies are not being used for locomotion or transport purposes, but rather for purposes usually associated with the type of risks normally covered by a CGL policy, the CGL policy will provide coverage.” (cite omitted)

 

The Terminix court did find that the two policies at issue, the CGL policy and the auto policy, were structured to be mutually exclusive. We make no such determination here, not having the Gemini policy before us, as the Terminix court had both the CGL and the auto policies.

 

We accordingly find no merit to Colony’s argument that the trial court applied the endorsement to render the automobile exclusion ineffective. We agree with the trial court that under the unique facts of this case, Colony’s CGL policy provides coverage to Mrs. Muller because her injuries clearly arose out of A-1’s shredding business and not from the use of an automobile as described in the policy’s automobile exclusion or as interpreted by other courts of this state.

 

CONCLUSION

 

For the reasons set forth above, we affirm the trial court’s grant of plaintiff’s motion for partial summary judgment. Likewise, for these same reasons, we deny Colony’s writ application no. 09-C-818.

 

AFFIRMED

United States District Court,

S.D. California.

FNS, INC., Plaintiff,

v.

BOWERMAN TRUCKING, INC.; Vision X-Press, Inc.; N.E.W.S. Logistics, LLC; Victoria Lee Baine; and Does 1 through 20, inclusive, Defendants.

No. 09-CV-0866-IEG (PCL).

 

Feb. 9, 2010.

 

ORDER:

 

(1) GRANTING IN PART AND DENYING IN PART DEFENDANT’S MOTION TO DISMISS (Doc. No. 27); and

 

(2) GRANTING DEFENDANT’S MOTION TO STRIKE (Doc. No. 28).

 

IRMA E. GONZALEZ, Chief Judge.

 

Presently before the Court are Defendant Bowerman Trucking, Inc.’s (“Bowerman”) motion to dismiss Plaintiff’s first amended complaint (Doc. No. 27) and motion to strike portions of Plaintiff’s first amended complaint. (Doc. No. 28.) Plaintiff filed an opposition to each motion, and Bowerman filed replies.

 

The Court finds the motions suitable for disposition without oral argument pursuant to Local Civil Rule 7.1(d)(1). For the reasons stated herein, the Court GRANTS IN PART and DENIES IN PART the motion to dismiss, and GRANTS the motion to strike.

 

FACTUAL BACKGROUND

 

This matter involves a shipment of cargo allegedly lost by the defendants. The following facts are drawn from the First Amended Complaint (“FAC”).

 

Plaintiff FNS, Inc. (“Plaintiff”) is a logistics company that provides freight forwarding, logistics, and transportation services, among other things. (FAC ¶ 8.) Plaintiff entered into an agreement with LG Electronics Mobilecomm U.S.A., Inc., to provide transport and freight forwarding services for shipments of consumer electronics. (FAC ¶ 9.) About June 30, 2008, Plaintiff and Bowerman entered into a contract under which Bowerman agreed to provide transportation services. (FAC ¶ 10.) Plaintiff alleges Bowerman, acting through its agent Defendant Victoria Lee Baine (“Baine”), undertook to transport a shipment of LG Electronics cellular phones. (FAC ¶ 11.)

 

Plaintiff alleges Bowerman’s subcontractor or agent Defendant Vision X-Press, Inc. (“Vision”), picked up the shipment in Calexico, California, on June 30, 2008. (FAC ¶ 12.) According to Plaintiff, Vision left the shipping container containing the shipment of cellular phones unattended at a public area, and the shipment was stolen. (FAC ¶ 14.)

 

LG Electronics has claimed against Plaintiff the value of the shipment of cellular phones, believed to be in excess of $1,926,540. (FAC ¶ 17.) Plaintiff has partially or fully paid LG Electronics. (FAC ¶ 17.) Subsequently, Plaintiff brought suit against the defendants for indemnity, in addition to other claims.

 

PROCEDURAL BACKGROUND

 

On February 18, 2009, Plaintiff filed suit in the Superior Court of the State of California, County of Imperial against Defendants Bowerman, Vision, N.E.W.S. Logistics, LLC, Baine, and Does 1 through 20. (Doc. No. 1.) On April 24, 2009, Bowerman removed the action to this Court. (Doc. No. 1.) Bowerman filed an answer and a cross-claim against the other defendants. (Doc. Nos. 3 & 4.) On May 21, 2009, the Clerk of Court entered default as to all defendants except Bowerman, pursuant to Plaintiff’s request. (Doc. No. 7.)

 

On November 9, 2009, upon being granted leave of the Court, Plaintiff filed the FAC. (Doc. No. 25.) Plaintiff’s FAC sets forth seven causes of action: (1) negligence; (2) indemnity under the Carmack Amendment, 49 U.S.C. § 14706; (3) indemnity under state common-law; (4) contribution; (5) declaratory relief; and (6-7) two separate causes of action for breach of contract.

 

On December 1, 2009, Defendant Bowerman filed the instant motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure (Doc. No. 27), and motion to strike pursuant to Rule 12(f) (Doc. No. 28).

 

DISCUSSION

 

I. Motion to Dismiss

 

A. Legal Standard

 

A complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a) (2009). A motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure tests the legal sufficiency of the claims asserted in the complaint. Fed.R.Civ.P. 12(b)(6); Navarro v. Block, 250 F.3d 729, 731 (9th Cir.2001). The court must accept all factual allegations pled in the complaint as true, and must construe them and draw all reasonable inferences from them in favor of the nonmoving party. Cahill v. Liberty Mutual Ins. Co. ., 80 F.3d 336, 337-38 (9th Cir.1996). To avoid a Rule 12(b)(6) dismissal, a complaint need not contain detailed factual allegations, rather, it must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A claim has “facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, — U.S. —-, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (citing Twombly, 550 U.S. at 556).

 

However, “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.” Twombly, 550 U.S. at 555 (citation omitted). A court need not accept “legal conclusions” as true. Ashcroft v. Iqbal, — U.S. —-, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009). In spite of the deference the court is bound to pay to the plaintiff’s allegations, it is not proper for the court to assume that “the [plaintiff] can prove facts that [he or she] has not alleged or that defendants have violated the … laws in ways that have not been alleged.” Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983).

 

B. Analysis of Motion to Dismiss

 

Bowerman moves to dismiss Plaintiff’s FAC for failure to state a claim upon which relief may be granted, on the ground that the Carmack Amendment preempts Plaintiff’s state law claims. The Carmack Amendment is the federal statutory regime governing recovery of damages against an interstate carrier by a shipper. See49 U .S.C. § 14706.

 

1. Carmack Amendment

 

Congress enacted the Carmack Amendment in 1906 as a response to the varying and diverse state laws addressing liability to shippers for carriers who transported goods across state lines. See Adams Express Co. v. Croninger, 226 U.S. 491, 505, 33 S.Ct. 148, 57 L.Ed. 314 (1913). The scheme of the Amendment is “comprehensive enough to embrace responsibility for all losses resulting from any failure to discharge a carrier’s duty as to any part of the agreed transportation.” Georgia, Florida, & Alabama Ry. Co. v. Blish Milling Co., 241 U.S. 190, 196, 36 S.Ct. 541, 60 L.Ed. 948 (1916).

 

The Carmack Amendment imposes strict liability for “actual loss or injury to property.” 49 U.S.C. § 14706(a). Additionally, the Carmack Amendment allows the “initial carrier found strictly liable under subpart (a) to be indemnified by the carrier ‘over whose line or route the loss or injury occurred.” PNH Corp. v. Hullquist Corp., 843 F.2d 586, 589 (1st Cir.1988); see49 U.S .C. § 14706(b). The statute applies to two types of parties involved in the carriage of interstate cargo: “carriers” and “freight forwarders.” Id. § 14706(a). The Carmack Amendment does not apply to parties who are neither carriers nor freight forwarders; for example, it does not apply to brokers, defined as persons who sell, provide, or arrange for transportation by carriers .See Chubb Group of Ins. Cos. v. H.A. Transp. Sys., Inc., 243 F.Supp.2d 1064, 1069 (C.D.Cal.2002) (holding that the Carmack Amendment does not apply to brokers); Intercargo Ins. Co. v. Burlington Northern-Santa Fe R.R., 185 F.Supp.2d 1103, 1113 (C.D.Cal.2001) (applying California law where the company was neither a carrier nor a freight forwarder).

 

Section 14706(b), titled “Apportionment,” provides: “The carrier issuing the receipt or bill of lading under subsection (a) of this section or delivering the property for which the receipt or bill of lading was issued is entitled to recover from the carrier over whose line or route the loss or injury occurred the amount required to be paid to the owners of the property, as evidenced by a receipt, judgment, or transcript, and the amount of its expenses reasonably incurred in defending a civil action brought by that person.” 49 U.S.C. § 14706(b). Although titled “Apportionment,” courts have interpreted § 14706(b) as a “statutory indemnity” provision. See, e.g, PNH Corp., 843 F.2d at 589.

 

There are three types of carriers: motor carriers, water carriers, and freight forwarders. 49 U.S.C. § 13102(3). A “motor carrier” is “a person providing motor vehicle transportation for compensation.” Id. § 13102(14). A “water carrier” is “a person providing water transportation for compensation.” Lastly, a “freight forwarder” is “a person holding itself out to the general public (other than as a pipeline, rail, motor, or water carrier) to provide transportation of property for compensation” and who performs some break-bulk or consolidation operations within the course of its business. Id. § 13102(8).

 

A “broker” is defined as “a person, other than a motor carrier or an employee or agent of a motor carrier, that as a principal or agent sells, offers for sale, negotiates for, or holds itself out by solicitation, advertisement, or otherwise as selling, providing, or arranging for, transportation by motor carrier for compensation.” 49 U.S.C. § 13102(2). The term “broker” is further limited under the Federal Motor Carrier Safety Administration’s regulations: “Motor carriers … are not brokers within the meaning of this section when they arrange or offer to arrange the transportation of shipments which they are authorized to transport and which they have accepted and legally bound themselves to transport.” 49 C.F.R. § 371.2(a) (West 2010).

 

2. Preemptive Effect of the Carmack Amendment

 

“A fundamental principle of the Constitution is that Congress has the power to preempt state law.” Crosby v. Nat’l Foreign Trade Council, 530 U.S. 363, 372, 120 S.Ct. 2288, 147 L.Ed.2d 352 (2000). United States Supreme Court precedent establishes three situations in which state law is preempted. Congress may preempt state law with an express provision for preemption, or Congress may implicitly preempt state law by field preemption or conflict preemption. Id. at 372-73. A federal statute will preempt state action in an entire field where “the scope of a statute indicates that Congress intended federal law to occupy a field exclusively,” Freightliner Corp. v. Myrick, 514 U.S. 280, 287, 115 S.Ct. 1483, 131 L.Ed.2d 385 (1995).

 

The Supreme Court has held that when the Carmack Amendment was passed, Congress intended to supersede the diverse state and common law remedies against interstate carriers. See Missouri Pacific R.R. Co. v. Elmore & Stahl, 377 U.S. 134, 137, 84 S.Ct. 1142, 12 L.Ed.2d 194 (1964); see also New York, New Haven & Hartford R.R. Co. v. Nothnagle, 346 U.S. 128, 131, 73 S.Ct. 986, 97 L.Ed. 1500 (1953). Accordingly, the Ninth Circuit has held that the Carmack Amendment completely preempts state law claims against interstate carriers. See Hall v. N. Am. Van Lines, Inc., 476 F.3d 683, 688-89 (9th Cir.2007) (holding that the Carmack Amendment is the “exclusive cause of action” against a carrier of interstate goods, and this extends to “all manner of harms” arising from loss or damage to the shipment); Hughes Aircraft Co. v. N. Am. Van Lines, Inc., 970 F.2d 609, 613 (9th Cir.1992) (rejecting the argument that the Carmack Amendment does not preempt state law causes of action where the carrier is operating on a contract basis); see also White v. Mayflower Transit, LLC, 481 F.Supp.2d 1105, 1109 (C.D.Cal.2007) (holding that the Carmack Amendment preempted claims against a carrier for fraud, insurance coverage, general negligence, property damage, and intentional infliction of emotional distress).

 

3. Preemption of Plaintiff’s State Law Claims

 

Bowerman argues that the Carmack Amendment preempts claims against interstate carriers for harm arising from loss or damage to a shipment, and therefore supersedes every cause of action pleaded in Plaintiff’s FAC.

 

Plaintiff does not dispute that this is a lawsuit for harm arising from loss of an interstate shipment, and that Plaintiff acted as a freight forwarder. (FAC ¶¶ 9, 11.) Rather, Plaintiff argues that the issue is whether Bowerman acted as a “carrier” or a “broker.” If Bowerman acted as a “carrier,” Plaintiff contends, then liability for loss to the cargo is limited to that which is available under the Carmack Amendment. If, however, Bowerman acted as a “broker,” the Carmack Amendment does not apply, and state common-law causes of action would be appropriate. Plaintiff argues that this determination is for the trier of fact, citing to several cases in which summary judgment motions were denied because, in each, there was a genuine issue of material fact as to whether the defendant acted as a “carrier” or a “broker.”

 

The Court agrees that the Carmack Amendment does not preempt state law claims against brokers, and there may be an issue of material fact as to whether Bowerman acted as a “carrier” or “broker.” However, as Bowerman points out, Plaintiff unambiguously alleges throughout the FAC that Bowerman was a carrier. Plaintiff alleges Bowerman “[p]rior to 2006 and continuing thereafter … held itself out to the public and to Plaintiff FNS as a carrier” (FAC ¶ 10); Bowerman and Vision “agreed to and did act as carriers” (FAC ¶ 19); Plaintiff “entered into a contract with” the defendants to “act as carriers” (FAC ¶ 36); and, again, that Bowerman “held itself out to the public and to Plaintiff FNS as a carrier (FAC ¶ 43).” Plaintiff incorporates these allegations in each cause of action. (FAC ¶¶ 18, 24, 30, 32, 35, 42.)

 

The sole mention of the word “broker” in the FAC is in Plaintiff’s third cause of action for indemnity, wherein Plaintiff alleges Defendants breached “their obligations as brokers and/or bailees for hire.” (FAC ¶ 28.) However, this allegation must be viewed in conjunction with Plaintiff’s other allegations that Bowerman held itself out to be and acted as a carrier. Plaintiff itself argues that the standard for determining the status of the party is “not … what the company labels itself, but by how it represents itself to the world and its relationship to the shipper.” Nowhere in the FAC does Plaintiff allege, in the alternative, that Bowerman acted as a broker. Accordingly, based on the facts alleged in the FAC, Plaintiff’s state law claims are preempted.

 

 

On the other hand, Plaintiff’s cause of action for indemnity under § 14706(b) of the Carmack Amendment (second cause of action) is properly pled. Plaintiff alleges it was required to pay the owners of the lost shipment for the loss, and that Bowerman was the carrier responsible for the loss. (FAC ¶¶ 22, 23.) In addition, because Plaintiff states a valid Carmack Amendment claim, Plaintiff’s cause of action for declaratory relief as to the parties’ respective status under the Carmack Amendment (fifth cause of action) also survives. (FAC ¶ 34.)

 

C. Conclusion

 

The Carmack Amendment preempts Plaintiff’s state law claims, and therefore the Court DISMISSES WITHOUT PREJUDICE Plaintiff’s causes of action for negligence, indemnity, and contribution, as well as both causes of action for breach of contract (Plaintiff’s first, third, fourth, sixth, and seventh causes of action, respectively). The Court DENIES Bowerman’s motion to dismiss with respect to Plaintiff’s causes of action for indemnity under the Carmack Amendment and for declaratory relief (second and fifth causes of action, respectively).

 

II. Motion to Strike

 

Also before the Court is Bowerman’s motion to strike pursuant to Rule 12(f) of the Federal Rules of Civil Procedure. Bowerman moves to strike Plaintiff’s prayer for attorney’s fees as unavailable under the Carmack Amendment, which allows recovery of attorney’s fees only in limited circumstances.

 

A. Legal Standard

 

Under Rule 12(f), the Court may “strike from a pleading … any redundant, impertinent, or scandalous matter.” Fed.R.Civ.P. 12(f) (2009). A Rule 12(f) motion helps to avoid the time and expense of litigating spurious issues. Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir.1993), rev’d on other grounds,510 U.S. 517, 114 S.Ct. 1023, 127 L.Ed.2d 455 (1994). In ruling on a motion to strike, as with a motion to dismiss for failure to state a claim, courts must view the pleadings under attack in the light more favorable to the pleader. See, e.g., Lazar v. Trans Union LLC, 195 F.R.D. 665, 669 (C.D.Cal.2000) (citing California v. United States, 512 F.Supp. 36, 39 (N.D.Cal.1981)). Motions to strike are generally viewed with disfavor and “are generally not granted unless it is clear that matter to be stricken could have no possible bearing on the subject matter of litigation.” Id. (citing LeDuc v. Kentucky Cent. Life Ins. Co., 814 F.Supp. 820, 830 (N.D.Cal.1992)).

 

A motion to strike under Rule 12(f) may be granted, however, where the complaint contains a prayer for relief “where the damages sought are not recoverable as a matter of law.” Bureerong v. Uvawas, 922 F.Supp. 1450, 1479 n. 34 (C.D.Cal.1996).

 

B. Analysis of Motion to Strike

 

Plaintiff requests: (1) attorney’s fees incurred in defense of the previous suit against it for the loss of the shipment (FAC at 13:6-11), and (2) attorney’s fees pursuant to statute or written contract (FAC at 13:17). Bowerman moves to strike Plaintiff’s prayer for attorney’s fees, arguing that the Carmack Amendment preempts any state law claim for attorney’s fees, and the Carmack Amendment only allows recovery of attorney’s fees where the shipment is of household goods.

 

Plaintiff contends that attorney’s fees are recoverable based on two theories: (1) a party seeking apportionment under the Carmack Amendment may recover attorney’s fees in defense of a prior action against the party seeking apportionment, and (2) a prevailing party may recover attorney’s fees in California under California Civil Code Section 1717. The Court addresses each argument in turn.

 

1. Attorney’s Fees Under the Carmack Amendment

 

It is a long-established rule in the United States that “the prevailing litigant is ordinarily not entitled to collect a reasonable attorneys’ fee from the loser.” Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 247, 95 S.Ct. 1612, 44 L.Ed.2d 141 (1975). Departure from this rule has been allowed upon a “determination that ‘Congress intended to set aside this longstanding American rule of law.’ “ Key Tronic Corp. v. U.S., 511 U.S. 809, 815, 114 S.Ct. 1960, 128 L.Ed.2d 797 (1994) (quoting Runyon v. McCrary, 427 U.S. 160, 185-186, 96 S.Ct. 2586, 49 L.Ed.2d 415 (1976)). In the Carmack Amendment, Congress expressly authorized the recovery of attorney’s fees by a shipper of “household goods,” if that shipper of household goods timely files a claim and prevails in court.49 U.S.C. § 14708(d). Otherwise, the Carmack Amendment limits liability to “actual loss or injury to the property.” Id.§ 14706(a)(1).

 

Under the Carmack Amendment, the term “household goods” is defined as

 

personal effects and property used or to be used in a dwelling, when a part of the equipment or supply of such dwelling, and similar property if the transportation of such effects or property is-

 

(A) arranged and paid for by the householder, except such term does not include property moving from a factory or store, other than property that the householder has purchased with the intent to use in his or her dwelling and is transported at the request of, and the transportation charges are paid to the carrier by, the householder; or

 

(B) arranged and paid for by another party.

 

49 U.S.C. § 13102(10). Neither Plaintiff nor Bowerman argue that the shipment that is the subject of this action consisted of “household goods” as defined under the Carmack Amendment.

 

Plaintiff does not allege that it is entitled to attorney’s fees as a shipper of household goods. Rather, Plaintiff argues that the apportionment provision in § 14706(b) allows a carrier to seek attorney’s fees from the carrier who actually caused the loss. Section 14706(b) states: “[t]he carrier issuing the receipt or bill of lading … is entitled to recover from the carrier over whose line or route the loss or injury occurred … the amount of its expenses reasonably incurred in defending a civil action brought by [the owners of the property lost or injured].” Id.§ 14706(b) (emphasis added).

 

However, the cases that have recognized the availability of attorney’s fees under the Carmack Amendment relate only to § 14708, which authorizes the recovery of attorney’s fees by a shipper of “household goods.” Mosso v. Dependable Auto Shippers, Inc., 2007 WL 2746723, at(E.D.Cal. Sept.19, 2007) (citing to Campbell v. Allied Van Lines Inc., 410 F.3d 618 (9th Cir.2005); Drucker v. O’Brien’s Moving and Storage Inc., 963 F.2d 1171 (9th Cir.1992); Yakubu v. Atlas Van Lines, 351 F.Supp.2d 482 (W.D.Va.2004); Nichols v. Mayflower Transit, LLC, 368 F.Supp.2d 1104 (D.Nev.2003)). Other district courts in California have held that § 14706 does not provide for attorney’s fees, Mosso, 2007 WL 2746723, at *4;OneBeacon Ins. Co. v. Haas Industries, Inc., 2008 WL 4291506, at(N.D.Cal. Sept.19, 2008), and Plaintiff does not cite to any case law to the contrary.

 

Because Plaintiff’s prayer for relief is unavailable under the Carmack Amendment, the Court grants Bowerman’s motion to strike Plaintiff’s request for “attorney’s fees incurred by FNS, INC. in defending against claims against FNS, INC. for loss of the Cargo.” (FAC at 13:6-11.)

 

2. Attorney’s Fees Provided in State Statute or Contract

 

Plaintiff’s FAC also contains a prayer for attorneys’ fees “pursuant to statute or contract.” (FAC at 13:7.) Plaintiff argues in its opposition that California Civil Code section 1717 allows a prevailing party to recover attorney’s fees under a written contract that expressly provides for such an award. Section 1717 provides:

 

In any action on a contract, where the contract specifically provides that attorney’s fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney’s fees in addition to other costs.

 

Cal. Civ.Code § 1717(a) (West 2009). Bowerman correctly notes that Section 1717 allows recovery of attorney’s fees only where the written contract “specifically provides” such fees are recoverable. However, Plaintiff has not alleged, nor argued in its opposition, that the contract at issue specifically authorized attorney’s fees. Even assuming Plaintiff can recover attorney’s fees under its surviving Carmack Amendment claims pursuant to state statute, Plaintiff has not alleged facts to support its entitlement to attorney’s fees under Section 1717.

 

Accordingly, the Court GRANTS Bowerman’s motion to strike Plaintiff’s prayer for “[a]ttorneys’ fees pursuant to statute or written contract.” (FAC 13:17.)

 

CONCLUSION

 

For the foregoing reasons, the Court HEREBY ORDERS:

 

(1) Bowerman’s motion to dismiss is GRANTED with respect to Plaintiff’s first, third, fourth, sixth, and seventh causes of action for negligence, indemnity, contribution, and breaches of contract, respectively.

 

(2) Bowerman’s motion to dismiss is DENIED with respect to Plaintiff’s second and fifth causes of action for indemnity under the Carmack Amendment and for declaratory relief, respectively.

 

(3) Bowerman’s motion to strike Plaintiff’s prayer for attorney’s fees is GRANTED.

 

(4) The Court grants Plaintiff leave to amend. Plaintiff shall file the amended complaint no later than 20 days from the filing date of this order.

 

IT IS SO ORDERED.