MEMORANDUM OPINION

Court of Appeals of Texas,

San Antonio.

CELADON TRUCKING SERVICES, INC., Appellant

v.

LUGO’S SECURITY AGENCY, d/b/a County Wide Security, Appellee.

Sept. 28, 2005.

MEMORANDUM OPINION

Opinion by SANDEE BRYAN MARION, Justice.

In the underlying litigation, Celadon Trucking Services, Inc. sued Lugo’s Security Agency d/b/a County Wide Security for damages resulting from the theft of a trailer loaded with computers. Celadon asserted claims for breach of contract, negligence, and breach of express warranties. Lugo’s counter-claimed for breach of contract. Lugo’s filed a no-evidence motion for summary judgment on all of Celadon’s claims, which the trial court granted without stating its grounds. The trial court severed Celadon’s claims from Lugo’s counter-claim, and this appeal by Celadon ensued. We reverse the trial court’s judgment in favor of Lugo’s on Celadon’s breach of contract and negligence claims, and affirm trial court’s judgment in favor of Lugo’s on Celadon’s breach of express warranty claim.

FACTUAL BACKGROUND

Celadon operates a trucking company with a terminal in Laredo, Texas. Lugo’s operates a security service in Laredo. There is no dispute that the parties entered into a written contract under which Lugo’s agreed to provide security services to Celadon. There is also no dispute that the agreement commenced on August 31, 1998 and expired on August 30, 1999. On November 22, 2000, a trailer loaded with computer parts was stolen from Celadon’s Laredo terminal. An investigation into the theft revealed that a gate pass, which allowed the trailer to leave Celadon’s terminal, contained the purported signature of Celadon dispatcher Michael Villareal. However, Villareal was not on duty when the trailer left the yard. Celadon alleged it provided to Lugo’s a list of signature exemplars and the signature on the gate pass did not match Villareal’s exemplar. Lugo’s security guard on duty on November 22nd admitted he did not compare the signature on the gate pass with Villareal’s exemplar. Although the trailer was later found, the cargo was not recovered.

STANDARD OF REVIEW

We review a no-evidence summary judgment de novo by construing the record in the light most favorable to the non-movant and disregarding all contrary evidence and inferences. Reynosa v. Huff, 21 S.W.3d 510, 512 (Tex.App.-San Antonio 2000, no pet.). A party may move for a no-evidence summary judgment on the ground that there is no evidence of one or more essential elements of a claim or defense on which an adverse party would have the burden of proof at trial. Tex.R. Civ. P. 166a(i). A no-evidence summary judgment motion is improperly granted when the non-movant brings forth more than a scintilla of probative evidence that raises a genuine issue of material fact. Id.; Gomez v. Tri City Cmty. Hosp., Ltd., 4 S .W.3d 281, 283 (Tex.App.-San Antonio 1999, no pet.). More than a scintilla of evidence exists if the evidence would allow reasonable and fair-minded people to differ in their conclusions. Forbes, Inc. v. Granada Biosciences, Inc., 124 S.W.3d 167, 172 (Tex.2003). Less than a scintilla of evidence exists if the evidence is so weak as to do no more than create a mere surmise or suspicion of a fact. Id.

BREACH OF CONTRACT

Lugo’s moved for summary judgment on Celadon’s breach of contract claim, asserting there was no evidence of the existence of a valid, enforceable written or oral contract; no evidence that Lugo’s breached any contract; and no evidence that any breach caused Celadon’s damages.

A. Existence of contract

Celadon asserted its contractual relationship with Lugo’s continued past August 30, 1999 because the parties continued to act as if the agreement was still in effect.

A contract provision for an exact date of performance can be waived by the parties. Sieber & Calicutt, Inc. v. La Gloria Oil & Gas Co., 66 S.W.3d 340, 347 (Tex.App.-Tyler 2001, pet. denied) (Sieber continued to perform maintenance services at a refinery owned by La Gloria well after the contract had expired by its own terms, and La Gloria continued to pay the invoices for those services). An extension of time for performance can be either implied or express. Id.

An implied contract arises when circumstances disclose that, according to the parties’ course of conduct and common understanding, there was a mutual intent to contract. See Double Diamond, Inc. v. Hilco Elec. Coop., Inc., 127 S.W.3d 260, 267 (Tex.App.-Waco 2003, no pet.); City of Houston v. First City, 827 S.W.2d 462, 473 (Tex.App.-Houston [1st Dist.] 1992, writ denied). Whether mutual assent to contract exists is a question of fact. City of Houston, 827 S.W.2d at 473. When the evidence consists of the conduct of the parties and their course of dealing with one another, then mutual agreement may be inferred from the circumstances, in which event the contract is said to be “implied” as opposed to being an “express” contract. Double Diamond, 127 S.W.3d at 267. The existence of an implied contract, involving as it does an inference from circumstantial evidence, is a question of fact. Id.

Celadon presented summary judgment evidence that Lugo’s continued to provide services to Celadon until January 2001, and that Lugo’s invoiced Celadon for its security services. Lugo’s does not dispute that its employee, Rene Estrada, was on duty as a security guard on the night of the theft, November 22, 2000. We conclude Celadon’s summary judgment evidence is more than a scintilla of probative evidence sufficient to raise a genuine issue of material fact on the issue of whether a contractual relationship between Celadon and Lugo’s was in existence on the date of the theft.

B. Breach of Contract

Alternatively, Lugo’s argued that Celadon’s breach of contract sounded in tort, and not in contract, and it was therefore entitled to summary judgment as a matter of law, an argument we review under the standard applicable to traditional motions for summary judgment. See Casso v. Brand, 776 S.W.2d 551, 556 (Tex.1989); Nixon v. Mr. Property Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex.1985). The parties’ contractual relationship may create duties under both contract and tort law. Jim Walter Homes, Inc. v. Reed, 711 S.W.2d 617, 618 (Tex.1986). We look to the substance of the cause of action, and not the manner in which it is pleaded, to determine the type of action brought. Id. at 617-18.

The nature of the injury suffered usually determines which duty or duties are breached. Id. at 618. Tort obligations are generally “obligations that are imposed by law–apart from and independent of promises made and therefore apart from the manifested intention of the parties–to avoid injury to others.” Southwestern Bell Tel. Co. v. DeLanney, 809 S.W.2d 493, 494 (Tex .1991) (citation omitted). We conclude Lugo’s conduct could give rise to liability under either an express or implied contract; therefore, the trial court erred in granting summary judgment on the grounds that Celadon’s claim sounded only in tort.

In response to Lugo’s motion for summary judgment, Celadon asserted Lugo’s breached its duty to ensure that only authorized individuals took trailers from the yard, and breached its duty to guard the property against theft. Lugo’s contends Celadon has not determined whether the theft was committed by a person who was not authorized to enter and leave the premises, and there is no evidence Lugo’s employees were obligated to prohibit unauthorized persons from leaving the premises. According to Lugo’s, Celadon can show, at most, only that the authorized or unauthorized person acted outside their authority in taking possession of the trailer. Lugo’s also asserts it had no duty to prevent all theft, and it did no more than agree to guard the property. Lugo’s argues that Celadon’s interpretation of the contract would make it the de facto insurer of Celadon’s entire facility and all property that passed through Celadon’s shipping operation. Finally, Lugo’s contends any duty to verify signatures may not have been instituted until six days after the theft, sometime around November 28th.

Celadon presented summary judgment evidence that Lugo’s security personnel performed general duties, as required under the contract, as well as additional duties agreed to by Celadon and Lugo’s. Among the general duties was the agreement that Lugo’s would “[p]ermit only duly authorized persons to enter the premises.” Celadon presented no evidence that any person who was not “duly authorized” entered the premises.

Additional duties took the form of “post orders.” Celadon alleged one of the post orders required the guard to compare the signature on the gate pass with the exemplars. A Lugo’s representative testified in deposition that the exemplars were not given to Lugo’s until after the theft of the truck. Estrada testified he did not ensure that the signature on the gate pass matched the exemplar “because we didn’t have the signatures.” However, Celadon’s representative, Jose Benavides, testified that Lugo’s was given a list of currently employed dispatchers and exemplars of their signatures. Benavides said a post order was in effect in November 2000 that required the security guards to verify the dispatcher’s signature on the gate pass with the exemplars of their signatures. Benavides said the order was created after a load of tires was stolen in the summer of 2000, and the post order was communicated to Lugo’s. Although Benavides could not say he saw Villareal’s signature on a list on November 22nd because he was on vacation on the day of the theft, when challenged about how he could remember whether the post order was in place on November 22nd, he explained:

FN3. In its reply to Celadon’s response, Lugo’s objected to the testimony of Benavides as incompetent. On appeal, Lugo’s contends Benavides was not competent to testify because he did not have personal knowledge with regard to whether certain security procedures were in effect at the time of the theft. Lugo’s did not obtain a written ruling on its objection. Lugo’s admits it did not obtain a ruling but asserts the trial court granted its motion for summary judgment. We construe this as an argument that the court’s granting of the summary judgment resulted in an implicit ruling sustaining its objection, an argument this court has expressly rejected. See Well Solutions, Inc. v. Stafford, 32 S.W.3d 313, 316-17 (Tex.App.-San Antonio 2000, no pet.). However, objections to a substantive defect in an affidavit may be raised for the first time on appeal. Id. at 317. Therefore, if Benavides’ affidavit was substantively defective, then his affidavit was not entitled to evidentiary consideration despite Lugo’s failure to obtain a ruling. On the other hand, if Benavides’ affidavit was defective in form, then his affidavit remains part of the summary judgment record. The failure to object to the form of an affidavit on the ground that it does not show personal knowledge results in waiver of the complaint. See Grand Prairie Indep. Sch. Dist. v. Vaughan, 792 S.W.2d 944, 945 (Tex.1990); Garcia v. John Hancock Variable Life Ins., 859 S.W.2d 427, 433 (Tex.App.-San Antonio 1993, writ denied). Because Lugo’s did not obtain a ruling on its objection and there is no ruling in the summary judgment order, Lugo’s objection is waived for purposes of this appeal, and Benavides’ affidavit remains part of the summary judgment record for our consideration.

I can tell you I know that there was something in place there because we put it in place after we had the incident with the first trailer, to verify signatures. Because at that time, this company just went in there, a duck [sic] company, and just took it out and nobody questioned it. And there was also a piece of paper, I believe, for it, if I’m not mistaken.

Benavides testified that, sometime between November 28th and November 30th as part of the investigation into the theft, the exemplar list was taken from the security station in order to make a copy of the signatures. At this time, he saw Villareal’s signature on the list.

We conclude Celadon’s summary judgment evidence is more than a scintilla of probative evidence sufficient to raise a genuine issue of material fact on the issue of whether Lugo’s breached the contract by failing to compare the gate pass signature with an exemplar.

C. Causation

Celadon asserted the theft would not have occurred had Lugo’s guarded against theft because the driver would not have been able to leave the yard with the trailer but for Lugo’s breach of the contract. When asked whether the procedures that were in place in November 2000 would have prevented the theft if followed, Benavides responded:

No, they [the theft] wouldn’t never occurred.

…

Very simple. That security guard that was in place there, because he had been there such a long time, it should’ve been obvious. Here’s a trucking company and it’s out of the norm and they’re pulling out a northbound trailer, that was one, and the signature for Mike. He worked there every day, he was already used to seeing Mike’s signature. If he would’ve paid attention to the pass and the little signature that was there, that wasn’t Mike’s signature. So if he would’ve caught that and questioned it, he would’ve probably prevented the trailer from leaving the facility.

Lugo’s asserts it is responsible for only those damages that result from a breach of the contract if the theft was a natural, probable, and foreseeable consequence of Lugo’s failure to perform its contractual duties. According to Lugo’s, Benavides’ testimony suggests only the “possibility,” and not a “probability,” that adherence to the terms of the contract would have prevented the trailer from leaving the premises.

In an action for a breach of contract, actual damages may be recovered when the loss is the natural, probable, and foreseeable consequence of the defendant’s conduct. Mead v. Johnson Group, Inc., 615 S.W.2d 685, 687 (Tex.1981). Here, there is more than a scintilla of evidence in the summary judgment record to indicate that damages of this nature were contemplated or foreseeable as a consequence of Lugo’s actions. First, Celadon presented more than a scintilla of evidence that one of the additional duties agreed to by Celadon and Lugo’s was that Lugo’s security guards would verify the signature on the gate pass against the exemplars provided to Lugo’s. Second, Celadon presented more than a scintilla of evidence that Lugo’s was provided with an exemplar of Villareal’s signature on or before the date of the theft. Finally, Estrada admitted he did not ensure that the signature on the gate pass matched Villareal’s exemplar. Celadon’s alleged damages, i.e., the theft of a trailer allowed to leave the Celadon yard because a security guard failed to verify the gate pass signature, was a foreseeable consequence of Lugo’s purported breach of the security agreement.

We conclude Celadon’s summary judgment evidence is more than a scintilla of probative evidence sufficient to raise a genuine issue of material fact on the issue of whether Celadon’s loss was the natural, probable, and foreseeable consequence of Lugo’s conduct.

NEGLIGENCE

Lugo’s moved for summary judgment on Celadon’s negligence claim, asserting there was no evidence that it breached a duty owed to Lugo’s or that any breach caused Celadon’s damages.

A. Breach of Duty

Contrary to Lugo’s assertion on appeal, it did not specifically challenge the existence of a duty owed by it to Celadon. Although Lugo’s motion for summary judgment listed the essential elements of a negligence claim, including the existence of a duty, the motion alleged only that there was no evidence to support the breach and causation elements. A no-evidence motion for summary judgment “must state the elements as to which there is no evidence.” See Tex.R. Civ. P. 166a(i). The comments to rule 166a(i), which are “intended to inform the construction and application of the rule,” state: “The motion must be specific in challenging the evidentiary support for an element of a claim or defense; paragraph (i) does not authorize conclusory motions or general no-evidence challenges to an opponent’s case.” See Tex.R. Civ. P. 166a(i) cmt. A no-evidence motion for summary judgment is legally insufficient as a matter of law if it is not specific in challenging a particular element or is conclusory. Callaghan Ranch, Ltd. v. Killam, 53 S.W.3d 1, 3 (Tex.App.- San Antonio 2000, pet. denied). Lugo’s assertion in its motion for summary judgment that “there is no evidence to support the essential elements of Plaintiff’s negligence claims,” is conclusory and legally insufficient.

Celadon alleged Lugo’s security guards allowed a trailer to be taken from its yard by a driver lacking authority from the on-duty dispatcher. Celadon alleged the failure to utilize signature exemplars caused Lugo’s security guard to accept as valid a gate pass bearing the signature of a dispatcher who was not on-duty.

Benavides testified that only Celadon tractors were allowed to take north-bound trailers that were loaded with cargo. According to Benavides, north-bound Mexican carriers were allowed to pull out only empty trailers. However, he said this policy was verbal and he could not remember when the policy was created or implemented. Later in his deposition, when Benavides was asked if he was “absolutely positive” that a policy had been implemented prior to November 2000 that prohibited north-bound Mexican carriers to leave with a loaded trailer, he responded, “Yes. But I would need to go back through files and documentation.” He also stated the policy was communicated to Lugo’s and to Celadon dispatchers. Benavides later appeared to contradict his earlier testimony when he said there was a list of authorized Mexican carriers that could leave the premises with a north-bound trailer, and he could not remember if the procedures were reduced to writing in November 2000.

We conclude Benavides’ testimony is more than a scintilla of probative evidence sufficient to raise a genuine issue of material fact on the issue of whether Lugo’s breached a duty to prevent an unauthorized north-bound Mexican carrier from leaving with a loaded trailer. For the reasons stated above, we also conclude Celadon’s summary judgment evidence is more than a scintilla of probative evidence sufficient to raise a genuine issue of material fact on the issue of whether Lugo’s breached a duty to compare the gate pass signature with an exemplar.

B. Causation

Celadon’s and Lugo’s arguments here are the same as their respective arguments under the causation element of a breach of contract claim. To prevail on a negligence cause of action, a plaintiff must establish the existence of a duty, a breach of that duty, and damages proximately caused by the breach. Doe v. Boys Clubs of Greater Dallas, Inc. 907 S.W.2d 472, 477 (Tex.1995). Proximate cause comprises two elements: cause in fact and foreseeability. Id. These elements cannot be supported by “mere conjecture, guess, or speculation,” id., but may be based on either direct or circumstantial evidence. Havner v. E-Z Mart Stores, Inc., 825 S.W.2d 456, 459 (Tex.1992). Foreseeability means that a person of ordinary intelligence would have anticipated the danger his or her negligence creates. El Chico Corp. v. Poole, 732 S.W.2d 306, 313 (Tex.1987). The test for cause in fact, or “but for cause,” is whether “the act or omission was a substantial factor in causing the injury” without which the harm would not have occurred. Boys Clubs, 907 S.W.2d at 477 (citation omitted).

Celadon’s alleged damages, i.e., the theft of a trailer allowed to leave the Celadon yard because a security guard failed to verify the gate pass signature, was a foreseeable consequence of Lugo’s purported breach of the security agreement. Also, although Benavides articulated his determination that the security guard’s failure to verify the gate pass signature in terms such as “he would’ve caught that” and “he would’ve probably prevented the trailer from leaving the facility,” we conclude that Benavides’ testimony is more than a scintilla of probative evidence sufficient to raise a genuine issue of material fact on the issue of whether Celadon’s damages were proximately caused by Lugo’s conduct.

BREACH OF EXPRESS WARRANTIES

Lugo’s moved for summary judgment on Celadon’s breach of express warranties claim, asserting there was no evidence that any representation made by Lugo’s became part of the basis of the bargain between the parties; no evidence that Lugo’s breached any warranty; and no evidence that Celadon suffered any injury as a result of a breach of warranty.

In its petition, Celadon relied on the following language in the contract: (1) a header that states: “Crime Prevention Is Our Business,” and (2) a paragraph that states: “This agency maintains a security service and has the means, equipment and employees for the surveillance and protection of property against theft, burglary, fire, pilferage, malicious injury or destruction against property.” Celadon alleged Lugo’s breached an express warranty by failing to utilize or by not having the means, equipment, and/or employees for the surveillance and protection of its property, and by failing to utilize or have expertise in crime prevention. We will assume for the purpose of this appeal that the language relied upon by Celadon constituted a warranty that became part of the basis of the bargain between the parties. Therefore, we next consider whether Celadon adduced more than a scintilla of evidence to raise a genuine issue of material fact on the issue of whether Lugo’s breached this warranty.

In support of its argument that Lugo’s breached an express warranty, Celadon relies on its assertion that Lugo’s failed to guard its property and permitted unauthorized persons to enter and exit its yard. We have already determined that Celadon presented no evidence that any person not authorized to enter the yard did so. Assuming that Celadon’s evidence supports a finding that Lugo’s failed to “guard” its property, there is no evidence in the record that Lugo’s did not actually have “the means, equipment and employees for the surveillance and protection of property against theft, burglary, fire, pilferage, malicious injury or destruction against property.” Therefore, we conclude Celadon failed to bring forth more than a scintilla of probative evidence to raise a genuine issue of material fact on one of the elements of its breach of warranty claim.

CONCLUSION

We reverse the trial court’s judgment in favor of Lugo’s on Celadon’s breach of contract and negligence claims and we remand those claims to the trial court for further proceedings. We affirm the trial court’s judgment in all other respects.

United States District Court,

D. Nebraska.

NEBRASKA TURKEY GROWERS COOPERATIVE ASSOCIATION, Plaintiff,

v.

ATS LOGISTICS SERVICES, INC., Defendant.

Oct. 13, 2005.

 

REPORT AND RECOMMENDATION

This matter comes before the court on the plaintiff’s Motion to Remand and for Costs, Expenses and Fees (Filing No. 33). The plaintiff filed a brief (Filing No. 34) in support thereof. The defendant filed a brief (Filing No. 39) opposing the motion. For the reasons set forth below, the undersigned magistrate judge recommends the plaintiff’s motion to remand be granted and motion for costs be denied.

FN1. The court is entering a report and recommendation in this matter in light of the split in court decisions over whether a magistrate judge has authority to rule on a motion to remand under 28 U.S.C. § 636(b). Compare Vogel v. U.S. Office Prods. Co., 258 F.3d 509, 517 (6th Cir.2001) (finding “remand motions are dispositive and, as such, can only be entered by district courts”), with White v. State Farm Mut. Auto. Ins. Co., 153 F.R.D. 639 (D.Neb.1993) (concluding remand of a case to the state court was not an Article III function and could be ordered by a magistrate judge). In Vogel, the court concluded:

[W]e apply a functional equivalency test to see if a particular motion has the same practical effect as a recognized dispositive motion. Applying that test, … we too find that a remand order is the functional equivalent of an order to dismiss. The practical effect of remand orders and orders to dismiss can be the same; in both, cases are permitted to proceed in state rather than federal court.

Vogel, 258 F.3d at 517; accord First Union Mortgage Corp. v. Smith, 229 F.3d 992 (10th Cir.2000); In re U.S. Healthcare, 159 F.3d 142, 145 (3d Cir.1998); and Estate of Haag v. Hartford Life & Accident Ins. Co., 188 F.Supp.2d 1135, 1136 (D.Minn.2002). The undersigned magistrate judge finds a report and recommendation is the most appropriate course of action in this matter.

BACKGROUND

This matter arises out of a dispute between the parties regarding a shipment of frozen turkeys the plaintiff sought to have transported from Buffalo County, Nebraska, to Riviera Beach, Florida. The plaintiff hired the defendant to transport or arrange for the transport of the frozen turkey shipment. The plaintiff alleges such turkey shipment never arrived at its destination. In its amended complaint, the plaintiff alleges an injury of $29,345.74 as a result of the defendant’s failure to deliver or to have delivered the frozen turkey shipment as provided for by a September 9, 2004 oral contract between the parties. Filing No. 30, p. 1-3.

FN2. The plaintiff is a Nebraska corporation with its principal place of business in Gibbon, Buffalo County, Nebraska. Filing No. 30, p. 1.

FN3. The defendant is a Delaware corporation with its principal place of business in Minnesota, engaged in business as a transportation broker throughout the United States. Filing No. 8, p. 1.

FN4. Once “a plaintiff has filed an amended complaint, federal courts must resolve questions of subject matter jurisdiction by examining the face of the amended complaint.” Karnes v. Poplar Bluff Transfer Co. (In re Atlas Van Lines, Inc.), 209 F.3d 1064, 1067 (8th Cir.2000) (“It is well-established that an amended complaint supercedes an original complaint and renders the original complaint without legal effect.”) (citing Washer v. Bullitt County, 110 U.S. 558, 562, 4 S.Ct. 249, 28 L.Ed. 249 (1884)).

Attached to the defendant’s March 8, 2005 Notice of Removal (Filing No. 1) is a copy of the plaintiff’s complaint filed with the County Court of Buffalo County, Nebraska. On August 3, 2005, the plaintiff filed an Amended Complaint (Filing No. 30). The plaintiff’s amended complaint alleges breach of contract as its First Claim, and in the alternative, a Second Claim of negligence. On August 12, 2005, the defendant filed its Answer to the Amended Complaint (Filing No. 31).

The defendant removed the matter to the United States District Court for the District of Nebraska pursuant to this court’s original jurisdiction provided for by 28 U.S.C. § 1331, federal question jurisdiction, and 28 U.S.C. § 1337, commerce regulation jurisdiction. The defendant contends the court has original jurisdiction over this civil action because the initial complaint alleges a claim arising under 49 U.S.C. § 14706, the Carmack Amendment (Carmack Amendment) to the Interstate Commerce Act, 49 U.S.C. § § 10101 et seq. (ICA), or under the federal common law as it applies to the interstate carriage of goods, and the amount in controversy exceeds $10,000. See 28 U.S.C. § 1337(a). The defendant contends the court can exercise jurisdiction over the plaintiff’s Second Claim of Negligence under the court’s pendant jurisdiction.

The plaintiff moves the court to remand the case to the County Court of Buffalo County and to order the defendant to pay the actual expenses incurred as a result of the removal. The plaintiff argues it appears the court lacks subject matter jurisdiction. The plaintiff argues no federal cause of action applies to its Claims because the defendant argues in its defense that the Carmack Amendment does not apply in this case.

The defendant opposes the motion to remand. The defendant argues the court has original jurisdiction because it must determine whether a federal question exists under the well-pleaded complaint rule and the artful pleading doctrine, and the court may not consider the defendant’s defenses in so doing.

ANALYSIS

Any civil case of which a federal district court would have original jurisdiction based upon the presence of a federal question is removable without regard to the citizenship or residence of the parties. 28 U.S.C. § 1441(a), (b). The party seeking removal and opposing remand has the burden of establishing federal subject matter jurisdiction. Green v. Ameritrade, Inc., 279 F.3d 590, 596 (8th Cir.2002). A district court is required to resolve doubts concerning federal jurisdiction in favor of remand, strictly construing the removal statute. Transit Cas. Co. v. Certain Underwriters at Lloyd’s of London, 119 F.3d 619, 625 (8th Cir.1997); In re Bus. Men’s Assurance Co. of Am., 992 F.2d 181, 183 (8th Cir.1993). Since removal to federal court is a statutory right, and not one granted under the Constitution, removal jurisdiction must be narrowly construed in favor of the non-removing party. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 107-09, 61 S.Ct. 868, 85 L.Ed. 1214 (1941). “In general, federal courts give considerable deference to a plaintiff’s choice of forum.” Terra Int’l, Inc. v. Miss. Chem. Corp., 119 F.3d 688, 695 (8th Cir.1997).

Section 1331 of Title 28 of the United States Code provides that the “district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.” Section 1337 of Title 28 of the United States Code provides, in relevant part, that the

[D]istrict courts shall have original jurisdiction of any civil action or proceeding arising under any Act of Congress regulating commerce or protecting trade and commerce against restraints and monopolies: Provided, however, That the district courts shall have original jurisdiction of an action brought under [49 U.S.C. § 14706, et al.], only if the matter in controversy for each receipt or bill of lading exceeds $ 10,000, exclusive of interest and costs.

28 U.S.C. § 1337(a). “In all respects other than amount in controversy, Section 1337 and Section 1331 are read alike and the same tests apply in determining whether a case is one ‘arising under’ federal law.” First Nat’l Bank of Aberdeen v. Aberdeen Natl. Bank, 627 F.2d 843, 849 n. 14 (8th Cir.1980) (quoting 13 Charles Alan Wright & Arthur R. Miller & Edward M. Cooper, Federal Practice and Procedure § 3574, at 503 (1975)); see also First Fed. Sav. & Loan Ass’n of Harrison, Ark. v. Anderson, 681 F.2d 528, 532 (8th Cir.1982).

The court must look to the well-pleaded complaint rule to determine if the court has federal-question jurisdiction in a case.

A district court’s federal-question jurisdiction … extends over only those cases in which a well-pleaded complaint establishes either that federal law creates the cause of action or that the plaintiff’s right to relief necessarily depends on resolution of a substantial question of federal law, in that federal law is a necessary element of one of the well-pleaded claims.

Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 808, 108 S.Ct. 2166, 100 L.Ed.2d 811 (1988) (internal quotation marks and citations omitted); see also Gore v. TWA, 210 F.3d 944, 948 (8th Cir.2000) (“the well-pleaded complaint rule provides that a federal question must be presented on the face of the properly pleaded complaint to invoke federal court jurisdiction”) (citing Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987)). “Congress has long since decided that federal defenses do not provide a basis for removal.” Gore, 210 F.3d at 948 (citing Caterpillar Inc., 482 U.S. at 392); see also Rivet v. Regions Bank of La., 522 U.S. 470, 472, 118 S.Ct. 921, 139 L.Ed.2d 912 (1998) (“Congress has not authorized removal based on a defense or anticipated defense federal in character.”). “To bring a case within the [federal-question removal] statute, a right or immunity created by the Constitution or laws of the United States must be an element, and an essential one, of the plaintiff’s cause of action.” Rivet, 522 U.S. at 475 (quoting Gully v. First Nat. Bank in Meridian, 299 U.S. 109, 57 S.Ct. 96, 81 L.Ed. 70 (1936)); Christianson, 486 U.S. at 810 (stating federal law must be “essential” to each alternative theory for relief).

The defendant argues the court has original jurisdiction because it must determine whether a federal question exists under the well-pleaded complaint rule and the artful pleading doctrine, and the court may not consider the defendant’s defenses in so doing. The undersigned magistrate judge agrees: “it is well settled that the federal question upon which [a] plaintiff relies for original federal jurisdiction, or [a] defendant for removal jurisdiction, must not have entered the case by way of defense.” First Nat’l Bank of Aberdeen, 627 F.2d at 850.

The plaintiff argues that, because it can raise a lack of subject matter jurisdiction at any time prior to final judgment, 28 U.S.C § 1447(c), the court should consider the defendant’s defense that the defendant is not a “motor carrier” for purposes of Carmack Amendment and determine the court lacks subject matter jurisdiction. The plaintiff’s argument is misguided. As the United States Supreme Court has explained, 28 U.S.C. § 1447 establishes certain procedures that the federal courts must follow after removal; § 1447 does not deal “with the question of what is removable.” Wis. Dep’t of Corr. v. Schacht, 524 U.S. 381, 392, 118 S.Ct. 2047, 141 L.Ed.2d 364 (1998). The Court explains:

In substance, [§ 1447] differentiates between removals that are defective because of lack of subject matter jurisdiction and removals that are defective for some other reason, e.g., because the removal took place after relevant time limits had expired. For the latter kind of case, there must be a motion to remand filed no later than 30 days after the filing of the removal notice. § 1447(c). For the former kind of case, remand may take place without such a motion and at any time. Ibid. The provision, then, helps to specify a procedural difference that flows from a difference in the kinds of reasons that could lead to a remand.

524 U.S. at 392. Therefore, any defense advanced by the defendant is irrelevant to the court’s determination of whether original jurisdiction in federal court exists in this case.

A federal question does not appear on the face of the amended complaint. Yet the defendant urges the court to find the First Claim pleaded by the plaintiff is completely preempted by the Carmack Amendment and, therefore, original jurisdiction is proper pursuant to 28 U.S.C. § 1337 and the artful pleading doctrine. The Supreme Court has explained that even if a federal question does not appear on the face of the plaintiff’s complaint such that the well-pleaded complaint rule is satisfied, the artful pleading doctrine may allow a federal court to properly exercise its jurisdiction over causes of action where the state-law claims are “completely preempted” by federal statute. Rivet, 522 U.S. at 475-76.

[A] state claim may be removed to federal court in only two circumstances– when Congress expressly so provides … or when a federal statute wholly displaces the state-law cause of action through complete pre-emption. When the federal statute completely pre-empts the state-law cause of action, a claim which comes within the scope of that cause of action, even if pleaded in terms of state law, is in reality based on federal law.

Beneficial Nat’l Bank v. Anderson, 539 U.S. 1, 8, 123 S.Ct. 2058, 156 L.Ed.2d 1 (2003); cf., e.g., Aetna Health Inc. v. Davila, 542 U.S. 200, 124 S.Ct. 2488, 159 L.Ed.2d 312 (2004) (holding the Employee Retirement Income Security Act of 1974 completely preempts state laws regarding employee benefit plan regulation).

Review of the case lawpersuades the undersigned magistrate judge that the Carmack Amendment completely preempts state law causes of action for purposes of holding a “carrier” or “freight forwarder” liable for damages as a result of shipments transported in interstate commerce. See Just Take Action, Inc. v. GST (Ams.) Inc., No. 04-3024, 2005 U.S. Dist. LEXIS 8432, at *10-12 (D.Minn. May 6, 2005) (“[t]he Carmack Amendment serves as a shipper’s exclusive remedy for damaged property and preempts common law causes of actions”); Hall v. Aloha Int’l Moving Servs., Inc., No. 98-1217, 2002 U.S. Dist. LEXIS 14868, at *17 (D.Minn. Aug. 6, 2002) (“Courts that have examined the scope of Carmack Amendment preemption have consistently held that the Carmack Amendment preempts state law under almost all circumstances.”). Contra Ben & Jerry’s Homemade, Inc. v. KLLM, Inc., 58 F.Supp.2d 315, 319 (D.Vt.1999) (relying upon a holding of the United States Court of Appeals for the Second Circuit that the range of the complete preemption doctrine is “extremely narrow” to hold the Carmack Amendment does not preempt state law causes of action); but cf. NK”http://www.westlaw.com/Find/Default.wl?rs=dfa1.0&vr=2.0&DB=4637&FindType=Y&ReferencePositionType=S&SerialNum=2002390650&ReferencePosition=1237″Hoover v. Allied Van Lines, Inc., 205 F.Supp.2d 1232, 1237 (D.Kan.2002) (finding the courts “equally divided” on the question of whether the Carmack Amendment completely preempts state law causes of action).

The United States Court of Appeals for the Eighth Circuit has explained: “In adopting the Carmack Amendment, Congress intended to impose a single uniform federal rule upon the obligations of carriers operating in interstate commerce.” Rocky Ford Moving Vans, Inc. v. United States, 501 F.2d 1369, 1372 (8th Cir.1974) (“Such statutory provisions supercede ‘the diverse requirements of state legislation and decisions’ … and render invalid all ‘agreement[s] in derogation of them ….” ‘) (citing N.Y., New Haven & Hartford R.R. Co. v. Nothnagle, 346 U.S. 128, 73 S.Ct. 986, 97 L.Ed. 1500 (1953); Atchison, Topeka & Santa Fe Ry. Co. v. Harold, 241 U.S. 371, 36 S.Ct. 665, 60 L.Ed. 1050 (1916)); Sw. Sugar & Molasses Co. v. River Terminals Corp., 360 U.S. 411, 79 S.Ct. 1210, 3 L.Ed.2d 1334 (1959); S. Ry. Co. v. Prescott, 240 U.S. 632, 36 S.Ct. 469, 60 L.Ed. 836 (1916)); Adams Express Co. v. Croninger, 226 U.S. 491, 33 S.Ct. 148, 57 L.Ed. 314 (1913); see also Chi. & N.W. R.R. Co. v. Union Packing Co., 514 F.2d 30, 35 (8th Cir.1975) (explaining that Congress’s intent in passing the Carmack Amendment was “to bring about a uniform rule of responsibility for shipments passing in interstate commerce”) (citing Atchison, Topeka & Santa Fe Ry. Co., 241 U.S. at 378). With regard to the Carmack Amendment, the Eight Circuit Court of Appeals announced:

Congress must be deemed to have determined that the rule laid down and the means provided to enforce it are sufficient and that no other regulation is necessary. Its power to regulate such commerce and all its instrumentalities is supreme; and, as that power has been exerted, state laws have no application. They cannot be applied in coincidence with, as complementary to or as in opposition to, federal enactments which disclose the intention of Congress to enter a field of regulation within its jurisdiction.

Fulton, 481 F.2d at 332 (quoting Mo. Pac. R.R. Co. v. Porter, 273 U.S. 341, 345-46, 47 S.Ct. 383, 71 L.Ed. 672 (1927)).

While the undersigned magistrate agrees the Carmack Amendment preempts state law causes of action, it is not clear from the plaintiff’s amended complaint that the plaintiff alleges a cause of action which is preempted by the Carmack Amendment. The Carmack Amendment expressly controls causes of actions against “common carriers” and “freight forwarders” and does not expressly include causes of actions against other categories of actors such as “brokers.” 49 U.S.C. § 14706(a); Karnes, 209 F.3d at 1066 (“The Carmack Amendment regulates the liability of common carriers engaged in interstate commerce.”) (citing Adams Express Co., 226 U.S. at 503-05) (emphasis added); Fulton, 481 F.2d at 332 (“The cases make it clear that when damages are sought against a common carrier for failure to properly perform, or for negligent performance of, an interstate contract of carriage, the Carmack Amendment governs.”) (quoting Am. Synthetic Rubber Corp., 422 F.2d at 466) (emphasis added); Just Take Action, Inc., 2005 U.S. Dist. LEXIS 8432, at *10-12 (“Under the Carmack Amendment, only ‘carriers’ and ‘freight forwarders,’ not ‘brokers’ can be liable to the shipper of goods for damages during transit.”) (citing Chubb Group of Ins. Cos. v. H.A. Transp. Sys. Inc., 243 F.Supp.2d 1064, 1068 (C.D.Cal.2002)).

On the amended complaint’s face, the plaintiff does not categorize the defendant as anything, let alone as a “freight forwarder” or a “motor carrier”–the categories of parties to which the Carmack Amendment applies. Moreover, the plaintiff’s amended complaint does not indicate the defendant (as opposed to another party) picked up the turkey shipment for transport, nor does it indicate the turkey shipment was ever picked up such that it was transported in interstate commerce as required by the Carmack Amendment. Cf. Counter v. United Van Lines, 935 F.Supp. 505, 508 (D.Vt.1996) (holding the Carmack Amendment did not preempt state law causes of action where the plaintiffs’ complaint was that the defendants failed to transport the goods, not that the defendants lost or damaged the plaintiffs’ goods during transport). Instead, the face of the amended complaint states that the plaintiff seeks recovery from the defendant because the defendant failed to effectuate the delivery of a turkey shipment to Riviera Beach, Florida, pursuant to a September 9, 2004 oral contract.

In light of the foregoing, the undersigned magistrate judge cannot find the removing party met its heavy burden of proving to the court the plaintiff’s cause of action is “completely preempted” by the Carmack Amendment. The defendant may only remove a case on the basis of facts alleged in the complaint; “attempts to justify removal on the basis of facts not alleged in the complaint” are insufficient to invoke the artful pleading doctrine. See Caterpillar, Inc., 482 U.S. 397. Nor is the fact that the defendant may ultimately prove the Carmack Amendment preempts the plaintiff’s claims sufficient to justify removal. See id. at 398. Therefore, the undersigned magistrate judge recommends granting the plaintiff’s motion to remand.

*6 The defendant also moves the court to order the defendant to compensate the plaintiff for actual expenses incurred as a result of the removal. The undersigned magistrate judge finds no award is warranted in this matter and, therefore, recommends denying the plaintiff’s motion for costs, expenses and fees.

Upon consideration,

IT IS RECOMMENDED TO JUDGE RICHARD G. KOPF that:

The plaintiff’s Motion to Remand and for Costs, Expenses and Fees (Filing No.33) be granted with respect the plaintiff’s motion to remand, and denied with respect to the plaintiff’s motion for costs, expenses and fees.

ADMONITION

Pursuant to NECivR 72.3 any objection to this Report and Recommendation shall be filed with the Clerk of the Court within ten (10) days after being served with a copy of this Report and Recommendation. Failure to timely object may constitute a waiver of any objection. The brief in support of any objection shall be filed at the time of filing such objection. Failure to file a brief in support of any objection may be deemed an abandonment of the objection.