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CASES (2022)

Category: CASES (2022)

Lewis v. Wieber

Court of Appeal of Louisiana, Fourth Circuit

July 6, 2022, Decided

NO. 2021-CA-0476 CONSOLIDATED WITH: NO. 2021-CA-0477

Reporter

2022 La. App. LEXIS 1094 *; 2021-0476 (La.App. 4 Cir. 07/06/22); 2022 WL 2448246

RICO LEWIS AND KIM LEWIS VERSUS ERIN WIEBER, PROGRESSIVE DIRECT INSURANCE COMPANY, ACME TRUCK LINE, INC., AND XYZ INSURANCE COMPANY CONSOLIDATED WITH: ERIN WIEBER, WIFE OF/AND SCOTT WIEBER, INDIVIDUALLY AND ON BEHALF OF THEIR MINOR CHILDREN MACKENZIE WIEBER AND AIDAN WIEBER, AND BRENNAN WIEBER VERSUS ACME TRUCK LINE, INC., RICO LEWIS, JR., HUDSON INSURANCE COMPANY, ABC INSURANCE COMPANY AND XYZ INSURANCE COMPANY

Notice: THIS DECISION IS NOT FINAL UNTIL EXPIRATION OF THE FOURTEEN DAY REHEARING PERIOD.

Prior History:  [*1] APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH. NO. 2019-04835, DIVISION “M”. Honorable Paulette R. Irons, Judge.

Disposition: AFFIRMED.

Core Terms

workers’ compensation, settlement, parties, trial court, res judicata, employment status, civil suit, summary judgment, cause of action, doctrine of res judicata, subject matter, occurrence, asserts, damages, workers’ compensation benefits, injuries, summary judgment motion, time of an accident, final judgment, Truck, judgment of dismissal, mover, exclusive remedy, tort action, tort claim, passenger, insurer, pain

Case Summary

Overview

HOLDINGS: [1]-Plaintiff was precluded from asserting claims against defendant in tort when she entered into the court approved settlement because she made multiple assertions that she was in the course and scope of her employment at the time of the accident, she did not appeal the judgment of dismissal, and the Louisiana Workers’ Compensation Act was the exclusive remedy; [2]-The trial court did not err in determining that res judicata under La. Rev. Stat. Ann. § 13:4231(1) precluded plaintiff from asserting a claim in tort because the causes of action in the present tort action existed when the judgment of dismissal in the first litigation was issued and the parties were the same.

Outcome

Judgment affirmed.

LexisNexis® Headnotes

Civil Procedure > … > Summary Judgment > Entitlement as Matter of Law > Appropriateness

Civil Procedure > Judgments > Summary Judgment > Entitlement as Matter of Law

Civil Procedure > … > Summary Judgment > Summary Judgment Review > Standards of Review

Civil Procedure > Appeals > Standards of Review > De Novo Review

Civil Procedure > … > Summary Judgment > Entitlement as Matter of Law > Genuine Disputes

HN1  Entitlement as Matter of Law, Appropriateness

The appellate court applies a de novo standard of review in examining a trial court’s ruling on summary judgment. Accordingly, the appellate court uses the same criteria that governs a trial court’s consideration of whether summary judgment is appropriate. A motion for summary judgment shall be granted if the motion, memorandum, and supporting documents show that there is no genuine issue of material fact and that the mover is entitled to judgment as a matter of law. La. Code Civ. Proc. Ann. art. 966(A)(3). Factual inferences reasonably drawn from the evidence must be construed in favor of the party opposing the motion and all doubts must be resolved in the opponent’s favor. In determining whether an issue is genuine, courts cannot consider the merits, make credibility determinations, evaluate testimony, or weigh evidence.

Civil Procedure > … > Summary Judgment > Burdens of Proof > Absence of Essential Element

Civil Procedure > Judgments > Summary Judgment > Burdens of Proof

Civil Procedure > … > Summary Judgment > Burdens of Proof > Movant Persuasion & Proof

Civil Procedure > … > Summary Judgment > Burdens of Proof > Nonmovant Persuasion & Proof

Civil Procedure > Judgments > Summary Judgment > Entitlement as Matter of Law

HN2  Burdens of Proof, Absence of Essential Element

La. Code Civ. Proc. Ann. art. 966(D)(1) governs the mover’s burden on a motion for summary judgment: The burden of proof rests with the mover. Nevertheless, if the mover will not bear the burden of proof at trial on the issue that is before the court on the motion for summary judgment, the mover’s burden on the motion does not require him to negate all essential elements of the adverse party’s claim, action, or defense, but rather to point out to the court the absence of factual support for one or more elements essential to the adverse party’s claim, action, or defense. The burden is on the adverse party to produce factual support sufficient to establish the existence of a genuine issue of material fact or that the mover is not entitled to judgment as a matter of law.

Civil Procedure > Appeals > Standards of Review > Questions of Fact & Law

Workers’ Compensation & SSDI > Compensability > Arising Out of Employment

HN3  Standards of Review, Questions of Fact & Law

To recover in a workers’ compensation action, the claimant must establish personal injury by accident rising out of and in the course and scope of his employment. The determination of whether an injury occurred in the course and scope of employment is a mixed question of law and fact.

Business & Corporate Compliance > … > Workers’ Compensation & SSDI > Exclusivity > Employees & Employers

Workers’ Compensation & SSDI > Defenses > Exclusivity Provisions

HN4  Workers’ Compensation, Employees & Employers

In general, under the Louisiana Workers’ Compensation Act, an employee’s exclusive remedy against his employer is workers’ compensation benefits. La. Rev. Stat. Ann. § 23:1032(A).

Business & Corporate Compliance > … > Workers’ Compensation & SSDI > Exclusivity > Employees & Employers

Workers’ Compensation & SSDI > Remedies Under Other Laws > Common Law

Workers’ Compensation & SSDI > Defenses > Exclusivity Provisions

HN5  Workers’ Compensation, Employees & Employers

The Louisiana Supreme Court has explained Louisiana’s Workers’ Compensation Act as follows: Under the workers’ compensation law, the employee relinquishes his right to be made whole in a civil suit, while the employer cedes his available tort defenses. Generally speaking, the workers’ compensation regime represents a quid pro quo compromise of interests, whereby the employee receives an absolute right to recover limited benefits in exchange for the employer’s tort immunity.

Workers’ Compensation & SSDI > Exclusivity > Exceptions

HN6  Exclusivity, Exceptions

The Louisiana legislature intended La. Rev. Stat. Ann. § 23:1032 to exclude all non-intentional tort claims of an employee against an employer for injuries, including those that resulted from the conditions of the employer’s leased premises.

Workers’ Compensation & SSDI > Remedies Under Other Laws > Common Law

Workers’ Compensation & SSDI > Administrative Proceedings > Settlements

HN7  Remedies Under Other Laws, Common Law

As a matter of policy, to permit an employee to recover against her employer pursuant to Louisiana’s Workers’ Compensation Act by way of settlement, and then later dispute her employment status for the purpose of recovering additional damages in tort offers no incentive for employers to settle an employee’s workers’ compensation claim.

Business & Corporate Compliance > … > Workers’ Compensation & SSDI > Exclusivity > Employees & Employers

Workers’ Compensation & SSDI > Defenses > Exclusivity Provisions

HN8  Workers’ Compensation, Employees & Employers

The Louisiana Workers’ Compensation Act provides the exclusive remedy for an employee against her employer where the terms of the statute are met.

Civil Procedure > Judgments > Preclusion of Judgments > Res Judicata

HN9  Preclusion of Judgments, Res Judicata

In general, the doctrine of res judicata precludes re-litigation of claims and issues arising out of the same circumstances when there is a final judgment. The following elements must be satisfied to invoke the doctrine of res judicata and bar a second action: (1) the judgment is valid; (2) the judgment is final; (3) the parties are the same; (4) the cause or causes of action asserted in the second suit existed at the time of final judgment in the first litigation; and (5) the cause or causes of action asserted in the second suit arise out of the transaction or occurrence that was the subject matter of the first litigation.

Civil Procedure > Judgments > Preclusion of Judgments > Res Judicata

HN10  Preclusion of Judgments, Res Judicata

Pursuant to La. Rev. Stat. Ann. § 13:4231(1), if the judgment is in favor of the plaintiff, all causes of action existing at the time of final judgment arising out of the transaction or occurrence that is the subject matter of the litigation are extinguished and merged in the judgment. While ordinarily premised on a final judgment, the doctrine of res judicata also applies where there is a compromise or settlement of a disputed claim or matter that has been entered into between the parties. Thus, a compromise precludes the parties from bringing a subsequent action based upon the matter that was compromised. La. Civ. Code Ann. art. 3080.

Civil Procedure > Judgments > Preclusion of Judgments > Res Judicata

HN11  Preclusion of Judgments, Res Judicata

The third requirement of res judicata is that the parties in both suits must be the same. There must be identity of parties in order to find the doctrine of res judicata will preclude a subsequent suit. This requirement does not mean that the parties must have the same physical identity, but that the parties must appear in the same capacities in both suits.

Civil Procedure > Appeals > Reviewability of Lower Court Decisions > Preservation for Review

HN12  Reviewability of Lower Court Decisions, Preservation for Review

The appellate court may consider an issue that is raised for the first time on appeal if its resolution is necessary to render a just, legal and proper judgment. The Official Revision Comments of La. Civ. Code Ann. art. 2164 also state that the appellate court has complete freedom to do justice on the record irrespective of whether a particular legal point or theory was made, argued, or passed on by the court below.

Civil Procedure > Judgments > Preclusion of Judgments > Res Judicata

Insurance Law > Liability & Performance Standards > Settlements > Policy Limits

HN13  Preclusion of Judgments, Res Judicata

The insured and the insurer not only share the same quality as parties, but in essence their identities are virtually merged into one, to the extent of the policy limits.

Civil Procedure > Judgments > Preclusion of Judgments > Res Judicata

HN14  Preclusion of Judgments, Res Judicata

In the context of res judicata, the inquiry is whether the second action asserts a cause of action which arises out of the transaction or occurrence which was the subject matter of the first action. La. Rev. Stat. Ann. § 13:4231—Official Revision Comments (a) (1990).

Counsel: Michael C. Ginart, Jr., Joyce D. Young, Nicholas N.S. Cusimano, John C. Ginart, LAW OFFICES OF MICHAEL C. GINART, JR. & ASSOCIATES, Chalmette, LA, COUNSEL FOR PLAINTIFF/APPELLANT.

S. Daniel Meeks, Laurence R. DeBuys, IV, Kristen E. Meeks, MEEKS & ASSOCIATES, LLC, Metairie, LA, COUNSEL FOR DEFENDANT/APPELLEE.

Judges: Court composed of Chief Judge Terri F. Love, Judge Edwin A. Lombard, Pro Tempore Judge Madeline Jasmine.

Opinion by: Madeline Jasmine

Opinion

[Pg 1] In this personal injury suit, plaintiff Kim Lewis (“Mrs. Lewis”) seeks appellate review of the trial court’s granting of summary judgment in favor of Defendant Acme Truck Line, Inc. (“Acme”).

On appeal, we find Mrs. Lewis’ workers’ compensation settlement was dispositive of her employment status at the time of the motor vehicle accident; thus, as an employee of Acme, Mrs. Lewis’ exclusive remedy against Acme was in workers’ compensation. Moreover, in that the doctrine of res judicata applies where there is a compromise or settlement, we find, for the reasons addressed herein, that Mrs. Lewis is barred from recovering against Acme in tort. [*2]  Accordingly, we affirm the trial court’s judgment granting summary judgment in favor of Acme.


FACTUAL BACKGROUND AND PROCEDURAL HISTORY

[Pg 2] On December 12, 2018, defendant Erin Wieber (“Ms. Wieber”) drove her vehicle into a tractor-trailer rig, driven by plaintiff Rico Lewis (“Mr. Lewis”) and in which Mr. Lewis’ wife, Mrs. Lewis, was a passenger. At the time of the incident, both Mr. and Mrs. Lewis were employed by Acme, and Acme leased the tractor-trailer owned by Mr. Lewis.

As a result of the accident, the Lewis’ claimed they suffered bodily injuries. In January 2019, the Lewises filed a workers’ compensation claim against Acme and its insurer, Continental Indemnity Company (“Continental”) for benefits for injuries they allegedly sustained in connection with the December 2018 accident. In May 2019, the Lewises filed a separate civil action, asserting negligent tort claims against Ms. Wieber and Acme.

During the pendency of the civil suit, in July 2019, a Joint Petition to Compromise Disputed Claim for Workers’ Compensation Benefits (“Petition to Compromise”) was filed in the workers’ compensation case on behalf of Mrs. Lewis1 , Acme, and its insurer Continental. In conjunction with [*3]  the Petition to Compromise, Mrs. Lewis executed a Receipt, Release and Indemnification Agreement (“Release”). Pursuant to the Petition to Compromise, Mrs. Lewis settled her workers’ compensation claim against Acme for $35,000.00 in exchange for a release of all claims against Acme. The workers’ compensation judge approved the compromise and settlement and entered a judgment of dismissal on [Pg 3] July 29, 2019, dismissing Mrs. Lewis’ claims with prejudice. Mrs. Lewis did not appeal the judgment of dismissal.

Thereafter, in November 2020, Acme filed a motion for summary judgment in the civil suit, alleging Mrs. Lewis’ tort claims should be dismissed because: (1) as an employee of Acme, Mrs. Lewis’ exclusive remedy against Acme was in workers’ compensation; and (2) the approved settlement in the workers’ compensation case (“the Settlement”) was dispositive of the issue of Mrs. Lewis’ employment status; therefore, res judicata barred Mrs. Lewis from pursuing a tort action against Acme. Mrs. Lewis filed an opposition, and in March 2021, a hearing was held on Acme’s motion for summary judgment. On April 14, 2021, the trial court granted summary judgment in favor of Acme and against Mrs. [*4]  Lewis.2 It is from this ruling, Mrs. Lewis seeks appellate review.


STANDARD OF REVIEW

HN1 We apply a de novo standard of review in examining a trial court’s ruling on summary judgment. Hare v. Paleo Data, Inc., 11-1034, p. 9 (La. App. 4 Cir. 4/4/12), 89 So.3d 380, 387. Accordingly, we use the same criteria that governs a trial court’s consideration of whether summary judgment is appropriate. Id. “[A] motion for summary judgment shall be granted if the motion, memorandum, and supporting documents show that there is no genuine issue of material fact and that the mover is entitled to judgment as a matter of law.” La. C.C.P. art. 966(A)(3). “Factual inferences reasonably drawn from the evidence must be [Pg 4] construed in favor of the party opposing the motion and all doubts must be resolved in the opponent’s favor.” Fiveash v. Pat O’Brien’s Bar, Inc., 15-1230, p. 7 (La. App. 4 Cir. 9/14/16), 201 So.3d 912, 917 (quoting Quinn v. RISO Investments, Inc., 03-0903, p. 3 (La. App. 4 Cir. 3/3/04), 869 So.2d 922, 926). In “determining whether an issue is genuine, courts cannot consider the merits, make credibility determinations, evaluate testimony, or weigh evidence.” Id. (quoting (quoting Quinn, 03-0903, p. 3-4, 869 So.2d at 926).

HN2 La. C.C.P. art. 966(D)(1) governs the mover’s burden on a motion for summary judgment:

The burden of proof rests with the mover. Nevertheless, if the mover will not bear the burden of proof at trial on the issue that is before the court on the motion for summary judgment, the mover’s burden on the motion does not require him [*5]  to negate all essential elements of the adverse party’s claim, action, or defense, but rather to point out to the court the absence of factual support for one or more elements essential to the adverse party’s claim, action, or defense. The burden is on the adverse party to produce factual support sufficient to establish the existence of a genuine issue of material fact or that the mover is not entitled to judgment as a matter of law.

Id.


DISCUSSION

Mrs. Lewis raises two assignments of error on appeal. First, she claims the trial court erred in finding that the Settlement in the workers’ compensation case is dispositive of her employment status at the time of the accident. Second, Mrs. Lewis avers that the trial court erred when it found res judicata barred her tort claim against Acme.


Effect of the Settlement

HN3 [Pg 5] “To recover in a workers’ compensation action, the claimant must establish ‘personal injury by accident rising out of and in the course and scope of his employment.'” Gibson v. Wal-Mart La., LLC, 20-0033, p. 2 (La. App. 4 Cir. 8/27/20), ___ So.3d ___, 2020 La. App. LEXIS 1278, 2020 WL 5078504, *5 (quoting Lenig v. Textron Mar. & Land Systems, 13-0579, p. 6 (La. App. 4 Cir. 8/7/13), 122 So.3d 1097, 1100). The determination of whether an injury occurred in the course and scope of employment is a mixed question of law and fact. J.C. on Behalf of N.C. v. St. Bernard Parish Sch. Bd., 21-0111, p. 12 (La. App. 4 Cir. 2/4/22), 336 So.3d 92, 100, writ denied, 22-00372 (La. 4/26/22),     So.3d    , 2022 La. LEXIS 906, 2022 WL 1222776.

In the workers’ compensation proceedings, Mrs. Lewis obtained [*6]  a settlement from Acme based on her admission that she was in the course of her employment at the time of the accident. In the instant civil suit, however, Mrs. Lewis takes the contrary position that at the time of the accident, she was not acting within the course of her employment with Acme, but merely accompanying her husband. Mrs. Lewis claims the trial court erroneously found her admissions in the workers’ compensation case dispositive of her employment status. In support of her claim, Mrs. Lewis directs this Court to Dye v. Ipik Door Co., Inc., 570 So.2d 477, 479 (La. App. 5th Cir. 1990) and Harris v. State ex rel. Dep’t of Pub. Safety & Corr., 05-2647 (La. App. 1 Cir. 11/3/06), 950 So.2d 795.

In Dye, the plaintiff received workers’ compensation benefits for injuries sustained after he was electrocuted while performing repair work on the defendant’s premises. Id., 570 So.2d at 478. The plaintiff also filed a suit for tort [Pg 6] damages relating to his injuries. Id. The trial court granted defendant’s motion for summary judgment, and on appeal, the Fifth Circuit reversed. The issue in Dye was whether the plaintiff’s acceptance of workers’ compensation benefits barred him from pursuing an action in tort.

Similarly, in Harris, the plaintiff, a respiratory therapist, began receiving workers’ compensation benefits after she was attacked in the hospital parking lot on her way to work. [*7]  Id., 05-2647, p. 3, 950 So.2d at 798. The plaintiff filed a civil suit, alleging intentional tort by the defendant inmate, who had escaped the hospital before he attacked her, and negligence on the part of other named defendants, including the Department of Public Safety and Corrections (“DPSC”). Id. Although the plaintiff received workers’ compensation benefits, she did not file suit against her employer pursuant to the Workers’ Compensation Act. DPSC moved for summary judgment, arguing that the plaintiff’s “exclusive mode of recovery” was in workers’ compensation, not tort litigation. Id.

Dye and Harris both held that acceptance of benefits does not constitute the recipient’s admission or confession of employment status at the time the recipient sustained injuries. Mrs. Lewis contends that Dye and Harris are applicable because the plaintiffs received workers’ compensation benefits and were also permitted to seek an action in tort for damages against the defendant who paid the benefits.

In granting Acme’s motion for summary judgment, the trial court disagreed with the assertion that Dye and Harris are analogous to the present matter. The [Pg 7] trial court noted that the issue in Dye and Harris involved the acceptance of workers’ compensation benefits, [*8]  not, as presented here, the full and final settlement of a workers’ compensation claim. We agree.

The present case is factually distinguishable from Dye and Harris. Unlike Mrs. Lewis, the plaintiffs in Dye and Harris did not file formal workers’ compensation claims against their employers in workers’ compensation court. The plaintiffs did not file pleadings, under oath, representing that he or she was in the course and scope of his or her employment at the time of their injuries. Moreover, they did not obtain a final judgment of dismissal approving a settlement of their workers’ compensation claims based on the plaintiffs’ status as employees of the defendants and being injured in the course of their employment.

Mrs. Lewis further asserts that determination of her employment status calls for a legal conclusion that the court must decide based on the facts of the case; therefore, any opinion Mrs. Lewis or Acme has relating to her employment status at the time of the accident is irrelevant. Because the parties settled the workers’ compensation claim, and the trial court found the Settlement dispositive of her employment status, Mrs. Lewis avers that no court has conducted a proper analysis to determine [*9]  whether she was in the course and scope of her employment at the time of the accident.3 According to Mrs. Lewis, had the trial court conducted the proper analysis, it would have found that she was not acting in the course and [Pg 8] scope of her employment at the time of the accident; and therefore, it would have also found summary judgment inappropriate.

Acme maintains, however, that the trial court did, in fact, conduct the proper legal analysis in that the trial court reviewed the evidence submitted on summary judgment and determined the issue of Mrs. Lewis’ employment status was res judicata. Acme asserts that the Petition for Compromise, the Release, and Mrs. Lewis’ Answers to Interrogatories establish that Mrs. Lewis “unequivocally” stated she was in the course and scope of her employment.

The Petition for Compromise stated that “[o]n December 12, 2018, while working within the course and scope of her employment with Acme Truck Line, Inc., [Mrs. Lewis] was a passenger in Rico Lewis’ vehicle.” In connection with the Petition for Compromise, Mrs. Lewis executed an affidavit certifying that all the facts alleged in the Petition to Compromise were true and correct to the best of her [*10]  knowledge, information, and belief. Similarly, the Release, which she also personally executed, states that “[Mrs. Lewis] acknowledges that she was working within the course and scope of her employment with Acme Truck Line, Inc. when the subject accident occurred….” In her Answers to Interrogatories, Mrs. Lewis indicated again that she was acting in the course and scope of her employment. Moreover, she detailed the duties she performed in connection with her employment. Mrs. Lewis stated, “[o]n December 12, 2018, [she] wrote up the paper work, helped secure the load, fueled the truck, and communicated with terminal 37. . . .” [Pg 9] Mrs. Lewis suggests that the multiple admissions she made as to her employment status are inconsequential. We disagree. Such a position not only ignores the multiple assertions made in the workers’ compensation proceedings upon which the Settlement was based, but it also ignores the express language of Louisiana’s Workers’ Compensation Act.

HN4 In general, under the Louisiana Workers’ Compensation Act, an employee’s exclusive remedy against his employer is workers’ compensation benefits. See La. R.S. 23:1032(A). Subsection (A)(1)(a) states:

Except for intentional acts provided for in Subsection [*11]  B, the rights and remedies herein granted to an employee… for which he is entitled to compensation under this Chapter, shall be exclusive of all other rights, remedies, and claims for damages…

La. R.S. 23:1032(A)(1)(emphasis added). The statute was amended in 1989, and added subsection (A)(1)(b), which provides that “[t]his exclusive remedy is exclusive of all claims, including any claims that might arise against his employer, or any principal or any officer, director, stockholder, partner, or employee of such employer or principal under any dual capacity theory or doctrine.” HN5 La. R.S. 23:1032(A)(1)(b) The Louisiana Supreme Court explained Louisiana’s Workers’ Compensation Act as follows:

Under the workers’ compensation law, the employee relinquishes his right to be made whole in a civil suit, while the employer cedes his available tort defenses. Deshotel v. Guichard Operating Co., Inc., 03-3511 (La. 12/17/04), 916 So.2d 72, 77. Generally speaking, the workers’ compensation regime represents a quid pro quo compromise of interests, whereby “the employee receive[s] an absolute right to recover limited benefits in exchange for the employer’s tort immunity.” See Harris v. State, Dept. of Public Safety & Corrections, 05-2647 (La. App. 1 Cir. 11/3/06), 950 So.2d 795, 799, writ denied, 06-2817 (La. 3/9/07), 949 So. 2d 440.

[Pg 10] Benoit v. Turner Indus. Grp., L.L.C., 11-1130, p. 7 (La. 1/24/12), 85 So.3d 629, 634.

In this civil suit, Mrs. Lewis alleges that Acme was negligent and at fault for: (1) failing to provide a safe working environment; (2) failing to [*12]  adequately supervise and maintain its property; (3) failing to provide adequate policies and procedures for the safety of those on its property; (4) failing to follow the policies and procedures in place to provide for the safety of those on its property; and (5) any and all other acts of negligence that may be proven at trial. HN6 However, Louisiana courts have consistently held that the legislature intended La. R.S. 23:1032 “to exclude all non-intentional tort claims of an employee against an employer for injuries, including those that resulted from the conditions of the employer’s leased premises.” Sam v. Villavaso, unpub., (La. App. 4 Cir. /06), 943 So. 2d 1279, 2006 WL 6913029 *3 (emphasis added); See also Bates v. King, 04-1591 (La. App. 3 Cir. 4/6/05), 899 So.2d 202; Dufrene v. Ins. Co. of State of Pa., 01-47 (La. App. Cir. 5 Cir. 5/30/01), 790 So.2d 660; Martin v. Stone Container Corp., 31,544 (La. App. 2 Cir. 2/24/99), 729 So.2d 726; and Douglas v. Hillhaven Rest Home, Inc., 97-0596 (La. App. 1 Cir. 4/8/98), 709 So.2d 1079.

HN7 We further note that as a matter of policy, to permit an employee to recover against her employer pursuant to the workers’ compensation act by way of settlement, and then later dispute her employment status for the purpose of recovering additional damages in tort offers no incentive for employers to settle an [Pg 11] employee’s workers’ compensation claim. Additionally, such a scenario frustrates the legal efficacy of the law of compromise and settlement.

Mrs. Lewis avers that Acme relies on the Settlement to shield itself in this civil suit because whether she was in [*13]  the course and scope of her employment is a fact issue. She notes that Acme cannot produce any payroll records for the days prior to and including the date of the accident. She further claimed that she did not have a license to drive a tractor trailer, like the one involved in this accident. She alleges that she was simply a passenger on the date of the accident and did not help Mr. Lewis in any material way. Furthermore, Mr. Lewis was the only one paid for the trip.

Nevertheless, this case is distinguishable from the cases Mrs. Lewis cites. In Dye and Harris, there was no settlement or order approving settlement like in this case. Mrs. Lewis, while represented by counsel in the workers’ compensation proceedings, made multiple assertions that she was in the course and scope of her employment at the time of the accident. She acknowledged that she understood the Release she signed, and that by signing the Release she was waiving all claims she had or may have against Acme. Consequently, the workers’ compensation judge entered an order of approval and judgment of dismissal based on Mrs. Lewis’ statements as to her employment status and her acknowledgment that she understood the contents of the [*14]  Settlement and the legal effects of settling her workers’ compensation claim. The order of approval also included a reservation by Acme of its immunity defense pursuant to La. R.S. 23:1032, in the event Mrs. [Pg 12] Lewis sought remedies in tort. The July 29, 2019 judgment of dismissal, dismissed Mrs. Lewis’ claims with prejudice.

Mrs. Lewis did not appeal the judgment of dismissal, and therefore, it became a final, valid judgment. HN8 The Louisiana Workers’ Compensation Act provides the exclusive remedy for an employee against her employer where the terms of the statute are met. Pursuant to La. R.S. 23:1032, Mrs. Lewis’ remedy was limited to workers’ compensation. Thus, Mrs. Lewis was precluded from asserting claims against Acme in tort when she entered into the court approved settlement.

We find the trial court was correct to find Mrs. Lewis’ employment status was established pursuant to the Settlement in the workers’ compensation case.


The Doctrine of Res Judicata

Mrs. Lewis next contends that the trial court erred in finding that the doctrine of res judicata barred her tort claims against Acme. Specifically, Ms. Lewis argues that the doctrine of res judicata does not apply to her tort action because: (1) the parties [*15]  do not appear in the same capacities in both actions; and (2) the “thing demanded” is not the same.

HN9 “In general, the doctrine of res judicata precludes re-litigation of claims and issues arising out of the same circumstances when there is a final judgment.” R&N Ursuline Family Ltd. P’ship v. Pas a Vendre, LLC, 17-0646, p. 4 (La. App. 4 Cir 5/19/18), 294 So.3d 1, 3. The following elements must be satisfied to invoke the doctrine of res judicata and bar a second action:

(1) the judgment is valid; (2) the judgment is final; (3) the parties are the same; (4) the cause or causes of action asserted in the second suit [Pg 13] existed at the time of final judgment in the first litigation; and (5) the cause or causes of action asserted in the second suit arise out of the transaction or occurrence that was the subject matter of the first litigation.

Schiff v. Pollard, 16-0801, p. 9-10 (La. App. 4 Cir. 6/28/17), 222 So.3d 867, 875.

HN10 Pursuant to La. R.S. 13:4231(1), “[i]f the judgment is in favor of the plaintiff, all causes of action existing at the time of final judgment arising out of the transaction or occurrence that is the subject matter of the litigation are extinguished and merged in the judgment.” This Court explained that “while ordinarily premised on a final judgment, the doctrine of res judicata also applies where there is a compromise or settlement of a disputed claim or matter that has been [*16]  entered into between the parties.” Joseph v. Huntington Ingalls Inc., 18-02061, p. 3 (La. 1/29/20), ___ So.3d ___, 2020 La. LEXIS 211, 2020 WL 499939, *3 (citing Ortego v. State, Dept. of Transp. and Development, 96-1322, p. 7 (La. 2/25/97), 689 So.2d 1358, 1363). Thus, “a compromise precludes the parties from bringing a subsequent action based upon the matter that was compromised.” La. C.C. art. 3080.

It is undisputed that the workers’ compensation order of approval and judgment of dismissal is a valid and final judgment. Therefore, we determine whether the remaining elements to invoke the doctrine of res judicata are met in this case.


Identity of Parties

HN11 The third requirement of res judicata is that the parties in both suits must be the same. There must be “identity of parties” in order to find the doctrine of res judicata will preclude a subsequent suit. Burguieres v. Pollingue, 02-1385, p. 8 (La. 2/25/03), 843 So.2d 1049, 1054. “This requirement does not mean that the [Pg 14] parties must have the same physical identity, but that the parties must appear in the same capacities in both suits.” Id.

In Burguieres, the testator’s children brought an action to annul a probated testament against the testator’s sister in her capacity as the executrix of her brother’s succession. Id., 02-1385, p. 11, 843 So.2d at 1055. The testator’s children later sued the testator’s sister and her husband for breach of fiduciary duties that occurred prior to the testator’s death and allegedly tortious acts committed as executrix. Id. The Louisiana Supreme [*17]  Court held that because the second suit involved the sister’s actions before the testator died, the second suit did not implicate her in her capacity as executrix of her brother’s succession. Id. “Because of this difference in capacities, there is a lack of identity of the parties between the two suits.” Id., 02-1385, p. 12, 843 So.2d at 1056.

Mrs. Lewis claims that res judicata does not apply because she did not sue Acme in the same capacity in the instant lawsuit as in the workers’ compensation case.4 Mrs. Lewis argues that she sued Acme as her employer in the workers’ compensation case. By contrast, she contends that she sued Acme, in this civil suit, for its failure to have adequate policies and procedures in place to provide for the safety of those on its property and its failure to adequately supervise and maintain its property. As previously mentioned, however, courts have routinely held that the legislature intended La. R.S. 23:1032 to limit the injured employee’s [Pg 15] remedy to workers’ compensation for all non-intentional tort claims against an employer, “including those that resulted from the conditions of the employer’s leased premises.” Sam, unpub., 943 So. 2d 1279, 2006 WL 6913029 *3.

A review of the Petition to Compromise and the Petition for [*18]  Damages demonstrate that Mrs. Lewis sued Acme in both actions in its individual capacity as a trucking company for its allegedly tortious actions and/or inactions committed on December 12, 2018.

Additionally, Mrs. Lewis asserts that the parties in the workers’ compensation case are different from those in the present civil suit. She states that in the workers’ compensation case she sued Acme’s workers’ compensation carrier, Continental; whereas, in her civil suit she sued Acme’s liability carrier, Hudson Insurance Company (“Hudson”). Mrs. Lewis claims there is no identity of parties because Hudson was not a party to the workers’ compensation suit.

This same argument was rejected by the appellate court in Roland v. Owens, 00-1846 (La. App. 5 Cir. 4/24/01), 786 So.2d 167. In Roland, the Fifth Circuit concluded that the insurer’s involvement stemmed from its relationship as the insurer of the defendant. Id., 00-1846, p. 5, 786 So.2d at 170. HN13[] The court in Roland held that “the insured and the insurer not only share the same quality as parties, but in essence their identities are virtually merged into one, to the extent of the policy limits.” Id. (quoting Arthur v. Zapata Haynie Corp., 95-956 (La. App. 3rd Cir. 1/22/97), 690 So.2d 86, 90). In this case, Acme and Hudson, as Acme’s liability carrier, “share the same quality as parties” for the purpose of res judicata. Therefore, we find [*19]  no merit to Mrs. Lewis’ argument that res judicata does not apply because Hudson was not a party to the workers’ compensation suit.

[Pg 16] The Second Action Asserts a Cause of Action Arising out of the Transaction or Occurrence which was the Subject Matter of the First Action

Finally, Mrs. Lewis claims res judicata does not apply because the damages sought in the workers’ compensation case are not the same as in the tort action. According to Mrs. Lewis, her workers’ compensation claim sought damages for medical expenses and loss of earnings, whereas in the tort action, she sought damages for past, present, and future physical and mental pain and suffering. Because workers’ compensation law does not allow plaintiffs to demand the same relief, Mrs. Lewis avers that the quality of her demands cannot be considered the same. In support, Mrs. Lewis relies on Dornak v. Lafayette Gen. Hosp., 399 So.2d 168 (La. 1981). Acme correctly notes that Mrs. Lewis’ reliance on Dornak is misplaced in that the proposition for which Mrs. Lewis cites Dornak is based on an earlier and outdated version of La. R.S. 13:4231. Therefore, Dornak has no bearing on the instant matter.

Prior to La. R.S. 13:4231‘s revision in 1990, a “second action would be barred by the defense of res judicata only when the plaintiff [sought] [*20]  the same relief based on the same cause or grounds.” See La. R.S. 13:4231—Official Revision Comments (a)(1990). This interpretation of res judicata was determined to be “too narrow to fully implement the purpose of res judicata which is to foster judicial efficiency and also to protect the defendant from multiple lawsuits.” Id.

La. R.S. 13:4231 was amended to eliminate the requirement that the relief demanded be the same. Burguieres, 02-1385, p. 7, 843 So.2d at 1053. Specifically, La. R.S. 13:4231 was amended to include “all causes of action…arising out of the transaction or occurrence that is the subject matter of the litigation.” See La. R.S. 13:4231. HN14[] The inquiry is “whether the second action [Pg 17] asserts a cause of action which arises out of the transaction or occurrence which was the subject matter of the first action.” La. R.S. 13:4231—Official Revision Comments (a)(1990). The official comments further state:

For purposes of res judicata it would not matter whether the cause of action asserted in the second action was the same as that asserted in the first or different as long as it arose out of the transaction or occurrence that was the subject matter of the first action.

Id.

In the Petition for Compromise that Mrs. Lewis filed in the workers’ compensation suit, Mrs. Lewis stated:

On December 12, [*21]  2018, while working within the course and scope of her employment with Acme Truck Line, Inc., Claimant was a passenger in Rico Lewis’ vehicle. As they were attempting to make a U-turn, their vehicle was struck by another vehicle. As a result of this collision, Claimant alleges she suffered injuries including headaches, neck pain, back pain, knee pain, and left shoulder pain.

Subsequently, Mrs. Lewis filed a civil suit, alleging she sustained injuries arising out of the same occurrence on December 12, 2018. In her Petition for Damages, Mrs. Lewis detailed the following:

On or about December 12, 2018, Petitioner RICO LEWIS, was driving an 18-wheeler tractor-trailer for ACME TRUCK LINE, INC. when he was turning onto private property. At the time, KIM LEWIS, was a passenger in the 18-wheeler tractor trailer. At or around the same time, Defendant ERIN WIEBER was driving northbound on Paris Road when suddenly and without warning she struck the 18-wheeler tractor-trailer containing RICO LEWIS and KIM LEWIS at a high rate of speed.

The December 12, 2018 accident is the subject matter of both Mrs. Lewis’ workers’ compensation suit and the subject matter of the present action in tort. Therefore, [*22]  the requirement that the cause of action asserted in Mrs. Lewis’ civil suit arise out of the same occurrence as the subject matter of her workers’ compensation suit has been met.

[Pg 18] The record reflects that the requirements of res judicata are satisfied in this case considering: the July 29, 2019 judgment is a valid and final judgment; the parties are the same; the causes of action asserted in the present tort action existed on July 29, 2019, when the workers’ compensation judge issued the judgment of dismissal in the first litigation filed by Mrs. Lewis; and the causes of action asserted in this litigation arose out of the same transaction or occurrence that was the subject of the workers’ compensation suit. Thus, we find the trial court did not err when it determined that res judicata precludes Mrs. Lewis from asserting a claim in tort.


DECREE

For the above reasons, we find the trial court properly granted Acme’s motion for summary judgment. Accordingly, we affirm the trial court’s granting of summary judgment as reflected in the April 14, 2021 judgment, as amended on April 21, 2022.5

AFFIRMED


End of Document

1 Although Mrs. Lewis states that the Petition to Compromise was entered into between Acme and both her and her husband, the record reflects that the compromise was entered into between Mrs. Lewis and Acme.

2 This Court ordered the trial court to amend its judgment because it lacked the necessary decretal language indicating the name of the party against whom the relief was awarded in addition to the relief that was awarded. The trial court signed an amended judgment on April 21, 2022, and filed proof of compliance with this Court on or about May 18, 2022.

3 To the extent Mrs. Lewis argues the workers’ compensation court erred in confirming the compromise and settlement of her workers’ compensation claim without conducting an independent analysis on the issue of her employment status, we find the issue is not properly before us. The workers’ compensation court entered a Judgment of Dismissal on July 29, 2019. Mrs. Lewis did not appeal the judgment and therefore, the judgment is final.

4 Acme argues that Mrs. Lewis never specifically argued in the trial court that res judicata does not apply because she sued Acme in different capacities; thus, Acme asserts that Mrs. Lewis is precluded from challenging the application of res judicata on appeal. HN12[] This Court has held, that “the appellate court may consider an issue that is raised for the first time on appeal if its resolution is necessary to render a just, legal and proper judgment.” Keeping Our Legacy Alive, Inc. v. Cent. St. Matthew United Church of Christ, 17-1060, p. 13 (La. App. 4 Cir. 10/31/18); 318 So.3d 130, 138 (internal quotation omitted). The Official Revision Comments of La. C.C. art. 2164 also state that “the appellate court has complete freedom to do justice on the record irrespective of whether a particular legal point or theory was made, argued, or passed on by the court below.” Id., 17-1060, p. 14, 318 So.3d at 138-39 (internal quotation omitted).

5 Supra, footnote 2.

Kelly v. FedEx Corp. Servs.

United States District Court for the District of North Dakota

May 31, 2022, Decided; May 31, 2022, Filed

Case No. 3:22-cv-50

Reporter

2022 U.S. Dist. LEXIS 117221 *

Fallon Kelly, Plaintiff, vs. FedEx Corporate Services, Inc.,1 Defendant.

Core Terms

damages, removal, amended complaint, state court, amount in controversy, notice, rifle, preempted, subject matter jurisdiction, federal court, asserts, transport, district court, recoverable, interstate, firearms, carrier, exceeds, costs

Counsel:  [*1] For Fallon Kelly, Plaintiff: Fallon M. Kelly, LEAD ATTORNEY, Jones and Kelly, Attorneys at Law, PC, Lisbon, ND.

For FedEx Ground Package System, Inc., Defendant: Courtney A. Presthus, LEAD ATTORNEY, Ebeltoft Sickler Lawyers PLLC, Dickinson, ND.

Judges: Alice R. Senechal, United States Magistrate Judge.

Opinion by: Alice R. Senechal

Opinion


REPORT AND RECEOMMENDATION

Plaintiff Fallon Kelly initiated this action in state court, alleging claims arising from damage to a rifle during its transportation by defendant FedEx Ground Package System, Inc. FedEx removed the case to federal court, asserting Kelly’s causes of action are preempted by the Carmack Amendment to the Interstate Commerce Act and federal courts have exclusive jurisdiction over Kelly’s claims. (Doc. 1). FedEx now moves to dismiss the complaint for failure to state a claim upon which relief could be granted. (Doc. 5). Kelly opposes the motion to dismiss and moves for remand. (Doc. 10; Doc. 11).


Background

Kelly commenced the state action on February 25, 2022, by service of a summons and complaint on FedEx. (Doc. 1-2, p. 8). The complaint alleges breach of contract, repudiation of contract, a right to declaratory relief, and bad faith. Kelly requests damages [*2]  of not less than $50,000. Id. at 3-7.

On March 23, 2022, Kelly filed a motion for default judgment in state court, along with an affidavit in support of the motion, a sworn statement of costs, and a proposed judgment on default. (Doc. 1-2, pp. 11-14). In those documents, Kelly requested $2,500 in damages and $125 in fees and costs. The state court had not ruled on Kelly’s motion for default judgment before FedEx filed its March 24, 2022 notice of removal.

On March 25, 2022, the day after FedEx filed its notice of removal, Kelly filed an amended complaint in state court. The amended complaint eliminated the bad faith claim and lowered the request for damages to an amount not exceeding $7,500. (Doc. 10-1).

In the complaint, Kelly states he purchased a rifle from a firearms dealer in New York for $2,545. After receipt of the rifle, he determined the caliber was not what he had ordered and hired FedEx to transport the rifle back to the firearms dealer. (Doc. 1-2, pp. 3-4). Kelly states that “at the formation of the contract with FedEx,” he declared the value of the rifle as $2,500 and paid $54.90 for its shipment. Id. He states that according to “FedEx publication(s) the declared value represents [*3]  the maximum liability in connection with a shipment of that package.” Id. Kelly alleges FedEx damaged the rifle during transportation to the firearms dealer, he filed a claim with FedEx, and FedEx denied the claim “citing the status of the item as a firearm as justification.” Id. at 3-4. Kelly asserts “FedEx’s terms and conditions permit[ ] firearms to be shipped within the U.S. from individuals to licensed dealers” but “FedEx has refused to make payment for the loss.” Id. at 4.

Kelly’s breach and repudiation of contract claims request damages of $2,500, equal to the declared value of the rifle. Id. Kelly’s claim for declaratory relief states there are “issues . . . regarding the existence of a contract and/or insurance contract (and therefore an insurance policy).” Id. at 5. Kelly’s bad faith claim asserts FedEx failed in its duties to investigate his claim of damage to the rifle during shipment, to not “unreasonably withhold benefits” under the alleged insurance policy, and to construe any ambiguity in his favor. He alleges FedEx’s conduct was “malicious, oppressive, fraudulent[,] and undertaken knowingly or in reckless disregard of [his] rights and interests.” Id. Kelly’s bad faith [*4]  claim alleges “substantial compensable losses, including benefits withheld and economic losses, such as court costs and other incidental losses.” Id. at 6. It also alleges he “suffered embarrassment, humiliation, and emotional distress and discomfort,” resulting in damages in an amount “not fully ascertained.” Id.


Law and Discussion

The court first addresses subject matter jurisdiction. A case is properly removed from state to federal court only if “the district courts of the United States have original jurisdiction.” 28 U.S.C. § 1441(a). FedEx asserts this court has jurisdiction under the 1906 Carmack Amendment to the Interstate Commerce Act. As the party asserting removal jurisdiction and opposing remand, FedEx has the burden to establish the case is properly before this court.

The Carmack Amendment, 49 U.S.C. § 14706, provides “the exclusive cause of action for interstate-shipping contract claims alleging loss or damage to property.” Hall v. N. Am. Van Lines, Inc., 476 F.3d 683, 688 (9th Cir. 2007). “[W]hen 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.” Fulton v. Chi., Rock Island & Pac. R.R. Co., 481 F.2d 326, 332 (8th Cir. 1973) (citation omitted).

The preemptive effect of the Carmack Amendment is broad. It embraces “all losses resulting from any failure to discharge a carrier’s [*5]  duty as to any part of the agreed transportation.” Ga., Fla., & Ala. Ry. Co. v. Blish Milling Co., 241 U.S. 190, 196 (U.S. 1916). “Courts of Appeals have . . . unanimously held that the Carmack Amendment ‘preempts all state or common law remedies available to a shipper against a carrier for loss or damage to interstate shipments.'” Certain Underwriters at Interest at Lloyd’s of London v. UPS of Am., 762 F.3d 332, 336 (3d Cir. 2014) (quoting N. Am. Van Lines, Inc. v. Pinkerton Sec. Sys., Inc., 89 F.3d 452, 456 (7th Cir. 1996)). Courts have held the Carmack Amendment preempts various state and common law claims, including contract and bad faith claims. Id. at 336 n.3; Hall, 476 F.3d at 687-88; Marshall W. Nelson & Assocs., Inc. v. YRC Inc., No. 11-C-0401, 2011 U.S. Dist. LEXIS 85718, 2011 WL 3418302, at *4 (E.D. Wisc. Aug. 3, 2011).

Federal district courts have original jurisdiction over a civil action arising under any Act of Congress regulating commerce, including the Carmack Amendment, if the amount in controversy exceeds $10,000. 28 U.S.C. § 1337(a); Iowa Beef Processors, Inc. v. Ill. Cent. Gulf. R.R. Co., 685 F.2d 255, 259 (8th Cir. 1982); Pelican Plumbing Supply, Inc. v. Fox, No. 4:20CV00477, 2010 U.S. Dist. LEXIS 47276, 2010 WL 1936190, at *1 (E.D. Mo. May 13, 2010). Section 1337(a) specifically provides that “the district courts shall have original jurisdiction of an action brought under section 11706 or 14706 of title 49[, the Carmack Amendment], only if the matter in controversy for each receipt or bill of lading exceeds $10,000, exclusive of interest and costs.” (Emphasis added).


1. Removal and Remand

A party seeking removal and opposing remand has the burden to establish federal subject matter jurisdiction. In re Bus. Men’s Assurance Co. of Am., 992 F.2d 181, 183 (8th Cir. 1993). A district court is “required to resolve all doubts about federal jurisdiction in favor of remand.” Id.

Kelly asserts remand is required because the amended complaint requests damages in an amount not exceeding $7,500. He argues the federal [*6]  court does not have jurisdiction because the amount in controversy, under the amended complaint, does not exceed the $10,000 threshold amount established by 28 U.S.C. §1337(a). (Doc. 10, pp. 1-2).

As discussed above, Kelly filed the amended complaint in state court after FedEx filed its notice of removal. Kelly attached the amended complaint as an exhibit to his response to the motion to dismiss and his motion to remand but has not sought leave to amend the complaint in this court. FedEx argues Kelly’s attempted post-removal amendment does not defeat this court’s jurisdiction. (Doc. 15, pp. 1-2).

Removal is effected by filing a notice in state court, after which the state court is prohibited from further proceeding unless the case is remanded. 28 U.S.C § 1446(d); see also Anthony v. Runyon, 76 F.3d 210, 214 (8th Cir. 1996) (concluding “removal is effected when the notice of removal is filed with the state court and at no other time”).

Here, Kelly filed the amended complaint in state court a day after FedEx filed its notice of removal. The amended complaint is therefore not properly before this court. See Borns Grp., Inc. v. Old Dominion Freight Line, Inc., No. 1:21-CV-01005-CBK, 2021 WL 4392550, at *1 (D.S.D. Sept. 23, 2021) (“The amended complaint filed in state court after the notice of removal was filed is a nullity [*7]  as the state court no longer had jurisdiction after the filing of the notice of removal.”). The court therefore does not consider the amended complaint in determining whether this court has subject matter jurisdiction.


2. Jurisdictional Threshold

In considering whether the jurisdictional threshold is satisfied, the amount in controversy is determined by the damages pled in the complaint as it existed at the time the notice of removal was filed. Browitt v. Elec. Ins. Co., No. 09-03342-CV-S-DGK, 2010 WL 11619501, at *2 (W.D. Mo. Jan. 26, 2010); see also Pullman Co. v. Jenkins, 305 U.S. 534, 537, 59 S. Ct. 347, 83 L. Ed. 334 (1939) (holding a second amended complaint, filed after a notice of removal, should not have been considered in determining a right to remove). FedEx argues that “at the time of removal, the amount in controversy was at least $50,000, which exceeds the minimum amount required to give rise to federal question jurisdiction involving Carmack claims.” (Doc. 15, p. 3). But FedEx makes no distinction between damages sought for Kelly’s preempted state and common law claims and any potential damages recoverable under the unpled Carmack Amendment claim.

The Carmack Amendment “provides that a carrier is liable for the actual loss or injury it causes to a shipper’s property.” Cont’l Grain Co. v. Frank Seitzinger Storage, Inc., 837 F.2d 836, 839 (8th Cir. 1988). Special or consequential damages are recoverable only if they were reasonably foreseeable to the carrier when [*8]  it undertook to transport the goods. See Union Pacific R.R. Co. v. Beemac Trucking, LLC, 929 F. Supp. 2d 904, 917-918 (D. Neb. 2013); see also Dahlsten Truck Line, Inc. v. T.J. Marquart & Sons, Inc., No. 9:14CV54, 2015 U.S. Dist. LEXIS 195480, 2015 WL 13849219, at *4 (D. Neb. May 18, 2015) (collecting cases).

In Dees v. Coleman American Moving Services, Inc., the plaintiffs alleged the defendants, who contracted to move the plaintiffs’ property, damaged the property during transport but refused to pay for the damage. Civ. No. 17-0292-WS-N, 2017 WL 4838845, at *1 (S.D. Ala. Oct. 26, 2017). The plaintiffs filed a complaint in state court alleging bad faith, breach of contract, fraud, negligence, and wantonness, the defendants removed the action to federal court asserting the Carmack Amendment preempted the plaintiffs’ state law claims, and the plaintiffs then filed an amended complaint in federal court which added a Carmack Amendment claim and demanded $6,130 for that claim. After filing their amended complaint, the plaintiffs moved to remand, arguing the amount in controversy did not exceed $10,000. The defendants argued the complaint sought both compensatory and punitive damages, the complaint alleged the plaintiffs insured the moved property for $75,000, and prior to removal, the plaintiffs made a settlement offer of $22,500. Id. at *2. The court concluded neither punitive damages nor emotional distress damages were recoverable under the Carmack Amendment,2 the insurance policy limit did not establish the amount in controversy, [*9]  and the settlement offer was entitled to little weight since there was no explanation for how it was derived. Acknowledging the amount in controversy is determined at the time of removal, the court viewed the amended complaint as post-removal evidence of the amount in controversy at that time because it was the first time the plaintiffs had identified the damages sought solely for the single claim—the Carmack Amendment claim—on which removal was based. Id. at *3-4. The court concluded the defendants had not met their burden of showing the amount in controversy under the Carmack Amendment claim exceeded $10,0000 and therefore remanded the case for lack of subject matter jurisdiction.

In a very recent case, Nepo v. Prime Meridian Moving, the plaintiffs filed a complaint alleging the defendants caused damage to their belongings during an interstate move. No. 21-CV-9827, 2022 WL 1004185, at *1 (S.D.N.Y. Mar. 30, 2022). The plaintiffs filed their complaint in federal court, alleging one Carmack Amendment claim and four state law claims. The court sua sponte raised the issue of subject matter jurisdiction, noting that though the complaint alleged an amount in excess of $10,000 at issue, review of the complaint demonstrated that was not correct. Id. at *2. The court determined the state law claims were preempted and [*10]  noted the complaint repeatedly stated the amount of damage to the plaintiffs’ belongings was $8,750. Thus, the court concluded it could not exercise subject matter jurisdiction over the action because the amount in controversy as to the Carmack Amendment claim did not exceed $10,000 and all other claims were preempted. Id.

As discussed above, federal district courts have original jurisdiction over Carmack Amendment claims “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). While neither party provided a receipt or bill of lading, it is undisputed the value of the rifle was $2,545. Additionally, Kelly’s contract claims, which most closely resemble a Carmack Amendment claim, sought only $2,500 in damages, as did his state court motion for default judgment. Considering these circumstances, in addition to the allegations of the complaint, this court concludes FedEx has not met its burden of establishing the amount in controversy for the unpled Carmack Amendment claim exceeds $10,000. In reaching this conclusion, the court also considered that Kelly’s state and common law claims are preempted by the Carmack Amendment, that the damages sought in the complaint were for alleged violations of state and common [*11]  law and not for a Carmack Amendment claim, but that only reasonably foreseeable damages are recoverable under a Carmack Amendment claim. The only reasonably foreseeable damages recoverable under the Carmack Amendment total less than $10,000. Because FedEx has not met its burden of establishing this court’s subject matter jurisdiction, the case should be remanded.


Recommendation

For the reasons discussed above, Kelly’s motion to remand, (Doc. 11), should be GRANTED and FedEx’s motion to dismiss, (Doc. 5), should be found MOOT.

Dated this 31st day of May, 2022.

/s/ Alice R. Senechal

Alice R. Senechal

United States Magistrate Judge


End of Document

1 Defendant states it is incorrectly named as FedEx Corporate Services, Inc., and submitted evidence supporting its contention. (Doc. 1, pp. 1-2; Docs. 1-3 to -6). Kelly has not disputed that contention. The Clerk is therefore directed to correct the docket to reflect FedEx Ground Package System, Inc., as defendant.

2 The court noted the Eleventh Circuit had not addressed the issue but other courts of appeals reached differing conclusions, with a majority of the courts and the more recent decisions ruling that punitive and emotional distress damages are not recoverable under the Carmack Amendment. Dees, 2017 WL 4838845, at *3. The court stated that the defendants did not acknowledge or make any reasoned argument why it should follow the older, minority view, so the defendants had not met their burden of showing those damages were recoverable under the Carmack Amendment. Id.

The Eighth Circuit has not addressed the issue, and this court’s research has not identified any district court case within the Eighth Circuit in which the issue was squarely addressed. But in a District of Minnesota case alleging a Carmack Amendment claim and other claims, the district court identified the plaintiff’s claim for lost wages and expenses as having stemmed in part from her emotional distress. Hall v. Aloha Int’l Moving Servs., Inc., Civ. No. 98-1217, 2002 WL 1835469, at *10 (D. Minn. Aug. 6, 2002). The court determined that the lost wages damages stemming from emotional distress were not recoverable as special damages because the defendants did not have notice that their actions related to transportation of the plaintiff’s property would result in lost wages and expenses due to the plaintiff’s mental suffering. Id.

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