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Bits & Pieces

Carolina Cas. Ins. Co. v. Tony’s Towing, Inc.

United States District Court,

S.D. Alabama,

Southern Division.

CAROLINA CASUALTY INS. CO. and Martha E. Valencia d/b/a Goni Trucking, Plaintiffs,

v.

TONY’S TOWING, INC., Defendant.

 

No. CA 11–0299–C.

Sept. 22, 2011.

 

K. Donald Simms, Whitaker, Mudd, Simms, Luke & Wells, LLC, Birmingham, AL, for Plaintiffs.

 

Charles Lloyd Clay, Jr., Atlanta, GA, David P. Shepherd, Shepherd & Gober, Fairhope, AL, for Defendant.

 

MEMORANDUM OPINION AND ORDER

 

The parties in this matter have expressly consented to the undersigned United States Magistrate Judge conducting all proceedings in this case, including trial, the entry of final judgment, and all post-trial proceedings. (See Docs. 10 & 11; see also Doc. 13 (order of reference).).

 

WILLIAM E. CASSADY, United States Magistrate Judge.

Pending before the Court are the defendant’s motion to dismiss pursuant to Rules 12(b)(1) and 12(b)(6) and brief in support thereof (Doc. 6), filed July 8, 2011; the plaintiffs’ opposition (Doc. 14), filed August 8, 2011 (see Docs. 9 & 12); and the defendant’s reply in support (Doc. 17), filed August 23, 2011. For the reasons set forth below, the Court finds that it lacks subject matter jurisdiction over this lawsuit, and the motion (Doc. 6) is, accordingly, GRANTED.

 

Because of an “inadvertent oversight,” the defendant filed its motion one day after the deadline set by the Court’s July 19, 2011 (Doc. 12). It also filed, simultaneously, a motion for leave to file the reply out of time (Doc. 15), which is due to be GRANTED. Cf. United States v. McCall, No. 2:10–CR–19–WKW, 2011 WL 1869188, atn. 1 (M.D.Ala. May 16, 2011) (“McCall’s reply was accompanied with a motion for leave to file out of time … because computer difficulty caused the reply to be filed one day late. The motion for leave to file out of time is due to be granted.”).

 

Background

 

Because the defendant’s motion is based, in part, on Rule 12(b)(6), and such a motion questions the legal sufficiency of a complaint (or portions of a complaint), the Court must assume that all the factual allegations set forth in the complaint are true. See, e.g., United States v. Gaubert, 499 U.S. 315, 327 (1991); Powell v. Lennon, 914 F.2d 1459, 1463 (11th Cir.1990). All factual allegations, moreover, are to be construed in the light most favorable to the plaintiff. See, e.g., Brower v. County of Inyo, 489 U.S. 593, 598 (1989).

 

The events giving rise to the plaintiffs’ complaint (Doc. 1), filed June 7, 2011, started on May 7, 2011, when a tractor-trailer—operated by plaintiff Martha E. Valencia d/b/a Gonia Trucking and insured by plaintiff Carolina Casualty—was involved in a single-vehicle accident on or near Interstate 10. Defendant Tony’s Towing was dispatched to the scene by the Alabama Department of Public Safety, and upon arrival, was instructed by the State Trooper(s) to remove the cargo being transported and then transport the cargo and the tractor-trailer to Tony’s terminal in Fairhope. Tony’s then submitted an invoice to Carolina Casualty for $28,905.00, which Carolina Casualty disputes in part, conceding that it, on behalf of its insured, is responsible for payment of $13,480.00. Carolina Casualty further states that neither it nor its insured ever consented or agreed “to pay for the overpriced and excessive rates and hours and methodology contained in the invoice, which constitutes the remaining $15,425.00 of the $28,905.00 invoice .” (Doc. 1, ¶ 16.) And although Carolina Casualty has offered to pay Tony’s $13,480.00 of the disputed invoice, Tony’s has not accepted the compromise, but it has released the cargo only, not the tractor-trailer.

 

The complaint—in which plaintiffs set forth seven causes of action: declaratory judgment; declaratory judgment with interpleader; conversion of tractor; conversion of trailer; tortious interference with business or contractual relationship; fraud through misrepresentation and/or suppression; unjust enrichment; and negligent hiring, training, supervision and retention (Doc. 1, ¶¶ 22–57)—states that this Court has diversity jurisdiction pursuant to 28 U.S.C. § 1332(a) (id., ¶ 6). The motion to dismiss both attacks that assertion “on the basis that the amount-in-controversy clearly does not exceed $75,000” (Doc. 6 at 1; 4–7), and contends that the plaintiffs have failed to state a claim upon which relief may be granted because their “state-law tort claims are preempted by federal law,” namely section 14501(c) of the Interstate Commerce Commission Termination Act of 1995 (the “ICCTA”) (id. at 1; 7–11). Shortly after the defendant filed its motion to dismiss, on July 8, 2011, the plaintiffs filed their “First Amendment to Complaint” (Doc. 8),  on July 13, 2011, which adds the following paragraph (no. 8) under “Parties and Jurisdiction”:

 

Because the plaintiffs’ complaint is a pleading “to which a responsive pleading is required,” and as such, they had the right to amend it—“as a matter of course”—“21 days after service of a motion under Rule 12(b),” their amendment is proper under Rule 15(a)(1)(B). Whether this amendment moots the pending motion to dismiss is a different question; one that the parties have not addressed. While it is common for district courts in this circuit to deny a motion to dismiss an original complaint as moot if an amended complaint is timely filed pursuant to Rule 15(a)(1)(B), see, e.g., Sweetwater Investors, LLC v. Sweetwater Apartments Loan, LLC, No. 1:10–CV–223–WKW [WO], 2011 WL 1545076, at(M.D.Ala. Apr. 25, 2011); Spears v. Meeks, No. 2:10–CV–671–WKW, 2011 WL 1563062, atn. 1 (M.D.Ala. Apr. 26, 2011); Brown v. Donahoe, Civil Action No. 10–0629–CG–N, 2011 WL 2746243, at(S.D. Ala. June 29, 2011); cf. Kalpak v. EMC Mortg. Corp., No. 3:11–cv–49 (CAR), 2011 WL 2711182, at(M.D.Ga. July 13, 2011), an amendment to a complaint does not automatically render moot the grounds raised in the motion to dismiss the original complaint, see, e.g., Bimler v. Stop & Shop Supermarket Co., 965 F.Supp. 292, 296 (D.Conn.1997) (citing Bernstein v. N.V. Nederlandsche–Amerikaansche Stoomvaart–Maatschappij, 76 F.Supp. 335 (S.D.N.Y.1948)); New Hampshire Ins. Co. v. Home Sav. & Loan Co. of Youngstown, No. 4:05–cv–02179, 2008 WL 2446066, atn. 1 (N.D. Ohio June 16, 2008), vacated and reversed on other grounds, 581 F.3d 420 (6th Cir.2009). This is especially true where—like here—the amended complaint is “substantially identical to the original complaint.” Smith v. GE Aviation, No. 3:10–cv–13, 2011 WL 2790166, at(S.D.Ohio July 15, 2011) (quoting Mata–Cuellar v. Tenn. Dep’t of Safety, No. 3:10–0619, 2010 WL 3122635, at(W.D.Tenn. Aug. 6, 2010). In Smith, the only differences between the operative complaint and its previous incarnation were additional facts alleged in support of one claim and the addition of another claim. See id. Here, the amendment simply adds an additional basis for federal jurisdiction, which the parties have addressed in their briefing. Therefore, the Court does not think it necessary to moot the motion to dismiss.

 

This Court has subject matter jurisdiction on the basis of “Federal Question” jurisdiction, specifically application of the United States Transportation Code  and Interstate Commerce Commission Termination Act (“ICCTA”).

 

The Court is unclear what the plaintiffs mean by the “United States Transportation Code,” but takes judicial notice that Title 49 of the United States Code, under which the ICCTA is codified, is titled “Transportation.” Cf. Bigelow v. Healthcare of Miss., Inc., 220 F.3d 339, 344 & n. 11 (5th Cir.2000) (taking judicial notice of, and considering claim pursuant to, correct statute where plaintiff pled a right to relief under the wrong one).

 

(Doc. 8, ¶ 8 (footnote added).)

 

The plaintiffs’ opposition to the motion to dismiss, interestingly, both states that this Court “has ‘Federal Question’ jurisdiction as concerns whether or not Federal law allows Plaintiffs to protect themselves from the behaviors of the Defendant as alleged in this case under Plaintiffs[‘] ancillary state law claims” (Doc. 14 at 4), but provides that “[b]ecause the ‘ICCTA’ preemption section does not apply to non consent tows like this case, Plaintiffs’ ancillary state laws [sic] claims should be allowed to proceed” (id.). The defendant’s reply, on the other hand, concludes that “[b]ecause Plaintiffs have pled state-law tort claims preempted by § 14501(c), relief cannot be granted upon those claims” (Doc. 17 at 5).

 

Discussion

The Court must first determine whether it has subject matter jurisdiction over this lawsuit. The plaintiffs have alleged that the Court has “subject matter jurisdiction on the basis of ‘Federal Question’ jurisdiction,” through the “application of [federal law.]” (Doc. 8, ¶ 8 (emphasis added).) But they have neither shown that the claims they set forth “aris[e] under the Constitution, laws, or treatise of the United States,” 28 U.S.C. § 1331, nor have they alleged—nor, as the Court will explain, can they allege—that either the “United States Transportation Code” or the ICCTA are part of a select group of federal laws that “so forcibly and completely displace[ ] state law that [a] plaintiff’s cause of action is either wholly federal or nothing at all,” which thus converts “what otherwise appear [to be] merely [ ] state law claim[s into] claim[s] ‘arising under’ federal law for jurisdictional purposes.” Elam v. Kansas City Southern Ry. Co., 635 F.3d 796, 803–04 (5th Cir.2011) (quoting New Orleans & Gulf Coast Ry. Co. v. Barrois, 533 F.3d 321, 330 (5th Cir.2008)). Moreover, the plaintiffs’ assertion of federal question jurisdiction does not comport with their argument that the preemption section of the ICCTA—49 U.S.C. § 14501(c)—“does not apply to [the facts of] this case,” and thus, their state law claim “should be allowed to proceed.” (Doc. 14 at 4.) Simply put, claiming that, on the one hand, the claims you assert “arise under,” or are completely preempted by, federal law—as they must for this court to have federal question jurisdiction over them—and then, on the other hand, arguing that those same claims are not defensively preempted by federal law is, at best, illogical.

 

Also, for the reasons set forth below, the plaintiffs have failed to allege that this matter exceeds the minimum jurisdictional amount required by 28 U.S.C. § 1332.

 

1. Federal Question Jurisdiction.

The jurisdictional facts of this case are unique. First, the plaintiffs chose to file their complaint in federal court, originally only invoking jurisdiction pursuant to 28 U.S.C. § 1332 (see Doc. 1, ¶ 6), and have asserted only state law claims. In “response” to the defendant’s motion to dismiss, which in part attacked the plaintiffs’ ability to meet the minimum amount in controversy to invoke jurisdiction under section 1332, they amended their complaint to allege “ ‘Federal Question’ jurisdiction.” Since the plaintiffs have not alleged a violation of federal law, to achieve the federal question jurisdiction they seek, they must rely on the so-called doctrine of complete preemption, or super preemption, the name of which “is a misnomer because it is not a preemption doctrine but, rather, a federal jurisdiction doctrine.” City of Rockford v. Raymond, No. 98 C 50353, 1999 WL 218549, atn. 1 (N.D.Ill. Apr. 14, 1999) (citing Jass v. Prudential Health Care Plan, Inc., 88 F.3d 1482, 1486–87 (7th Cir.1996)); see also Fayard v. Northeast Vehicle Servs., LLC, 533 F.3d 42, 44 (1st Cir.2008) (“Complete preemption is a short-hand for the doctrine that in certain matters Congress so strongly intended an exclusive federal cause of action that what a plaintiff calls a state law claim is to be recharacterized as a federal claim. A federal claim, of course, falls within the district court’s federal question jurisdiction, 28 U.S.C. § 1331.”) (citations omitted).

 

The plaintiffs’ claims for declaratory judgment and interpleader (see counts 1 and 2) do not invoke the corresponding federal statutes and rule—28 U.S.C. § 2201 and 28 U.S .C. § 1335 and/or Rule 22, respectively—and even if the plaintiffs had cited to these, doing so would not give this Court jurisdiction under 28 U.S.C. § 1331. First, the Declaratory Judgment Act, when enacted, did not expand the jurisdiction of the federal courts, and thus, does not provide an independent basis for federal jurisdiction. See Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 671 (1950). Because “[t]he Act is procedural[, a plaintiff’s] allegations must otherwise show an independent basis for the Court’s jurisdiction.” Bethel v. Mack, Civil Action No. 10–0099–KD–M, 2010 WL 2232155, at(S.D.Ala. May 14, 2010) (citing Household Bank v. JFS Group, 320 F.3d 1249, 1253 (11th Cir.2003)), report and recommendation adopted by 2010 WL 2232153 (S.D. Ala. June 3, 2010). Second, as to interpleader, if the plaintiffs are proceeding under Rule 22, “[a] rule interpleader is quite similar to a declaratory judgment action. Both … are purely procedural. Neither provision enlarges the subject-matter jurisdiction of the federal courts.” Metropolitan Life Ins. Co. v. Price, 501 F.3d 271, 277 (3d Cir.2007) (citations omitted). Statutory interpleader, however, does “provide[ ] the federal court with an independent basis for asserting subject-matter jurisdiction[.]” Aaron v. Mahl, 550 F.3d 659, 663 (7th Cir.2008) (citation omitted). But that jurisdiction is “condition[ed] in part upon whether ‘the plaintiff has deposited such money or property’ at issue with the district court or has “given bond payable to the clerk of the court in such amount and with such surety as the court or judge may deem proper.’ “ Republic of Philippines v. Pimentel, 553 U.S. 851, 871 (2008) (quoting 28 U.S.C. § 1335(a)). Contrary to the averment in their complaint—“Carolina Casualty hereby interpleads $13,480.00” (Doc. 1, ¶ 27)—this Court’s records do not show that the plaintiffs have done either. Cf. Aaron, 550 F.3d at 663 (“The district court permitted Merrill Lynch to proceed only under Rule 22 interpleader initially, because it, unlike statutory interpleader, does not require the stake to be deposited in the federal court’s registry…. Jurisdiction was proper, though, because the district court had diversity jurisdiction over Aaron’s claim and supplemental jurisdiction over Merrill Lynch’s interpleader claims.”).

 

In Elam, the Fifth Circuit recently provided, in the context of removal, a succinct primer on the doctrine:

 

An exception to the well-pleaded complaint rule arises when Congress “so completely preempt[s] a particular area that any civil complaint raising this select group of claims is necessarily federal in character.”   Gutierrez [v. Flores], 543 F.3d [248,] 252 [ (5th Cir.2008) ] (quoting Johnson v. Baylor Univ., 214 F.3d 630, 632 (5th Cir.2000))…. “The question in complete preemption analysis is whether Congress intended the federal cause of action to be the exclusive cause of action for the particular claims asserted under state law.” [Id.] at 331; see also Beneficial Nat’l Bank v. Anderson, 539 U.S. 1, 8 (2003).

 

Complete preemption must be distinguished from “defensive preemption” (i.e., “conflict preemption” or “ordinary preemption”). Barrois, 533 F.3d at 331. Defensive preemption does not create federal jurisdiction and simply “declares the primacy of federal law, regardless of the forum or the claim.” Id. “As a general matter, complete preemption is less common and more extraordinary than defensive or ordinary preemption.” Id. Indeed, complete preemption is a “narrow” exception to the well-pleaded complaint rule. Beneficial, 539 U.S. at 5.

 

In determining the nature and reach of federal preemption, Congress’s intent is the “ultimate touchstone.” Medtronic, Inc. v. Lohr, 518 U.S. 470, 485 (1996). Congress can indicate its preemptive intent either expressly through a statute’s plain language, or impliedly through a statute’s “structure and purpose.” Altria Group, Inc. v. Good, 555 U.S. 70, 129 S.Ct. 538, 543 (2008). Regardless of how Congress indicates its intent, we begin “with the assumption that the historic police powers of the States are not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.” Id. (internal quotation marks and citation omitted). This assumption applies with “particular force” when Congress legislates in a field traditionally occupied by state law.   Altria, 129 S.Ct. at 543. On the other hand, the assumption applies with less force when Congress legislates in a field with “a history of significant federal presence.” United States v. Locke, 529 U.S. 89, 108 (2000).

 

635 F.3d at 803–04 (some citations omitted and other alterations to original).

 

In Elam, in which the preemptory effect of a portion of the ICCTA was at issue, the plaintiffs’ complaint asserted “only state law claims of negligence and negligence per se,” and the Fifth Circuit observed that “[o]rdinarily, [such] claims would not support original federal question jurisdiction,” and therefore, “[t]he issue [became] whether any of these claims [was] completely preempted by federal law.” Id. at 804. The Fifth Circuit ultimately affirmed the district court’s exercise of jurisdiction over the action pursuant to 28 U.S.C. §§ 1331 and 1337. See id. at 808–09; 811.

 

While both sides have focused on “whether 49 U.S.C. § 14501(c) preempts [the asserted] state law claims, neither addresses the issue in the context of [this Court’s jurisdiction over those claims, through complete preemption].” Id. at *2. The Northern District of Illinois, in City of Rockford, and the First Circuit, in Fayard, however, both dealt specifically with whether the state law claims at issue in those cases were completely preempted under the ICCTA, such that the federal court had jurisdiction over those claims pursuant to section 1331. And both courts drew an analogy to preemption pursuant to ERISA’s section 502(a). In Fayard, the court of appeals first noted that

 

As the Eleventh Circuit has explained, “[c]omplete preemption under ERISA derives from ERISA’s civil enforcement provision, § 502(a), which has such ‘extraordinary’ preemptive power that it ‘converts an ordinary state common law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule.’ “ Connecticut State Dental Ass’n v. Anthem Health Plans, Inc., 591 F.3d 1337, 1344 (11th Cir.2009) (quoting Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 65–66 (1987)).

 

Conversely, ERISA’s section 514(a), which states that its provisions supersede any and all state laws as they “relate to” certain employee benefit plans, provides only for conflict preemption. As such, state law claims falling within the scope of section 514(a) but not section 502(a) do not present a federal question under 28 U.S.C. § 1331[.]

 

City of Rockford, 1999 WL 218549, at(citations omitted).

 

while some state law claims may be completely preempted under the ICCTA, the question before us is whether the ICCTA automatically immunizes railroads from state nuisance claims. It does not, nor does it clearly provide a federal cause of action amounting to nuisance. Certainly nothing in the ICCTA provides for nuisance the clear-cut federal cause of action available to ERISA benefit claimants or those who seek to enforce labor contracts.

533 F.3d at 48. In City of Rockford, the court held that

 

section 14501(c) … does not evidence a Congressional intent to transfer jurisdiction over all preemption claims arising thereunder from state to federal courts. The language of [that section] more closely mirrors ERISA’s section 514(a) and contains no detailed, comprehensive civil enforcement scheme providing exclusive federal remedies such as that found in ERISA’s section 502(a).

 

1999 WL 218549, at *2

 

Moreover, unlike ERISA’s implementation, pursuant to section 514(a), of a comprehensive civil enforcement scheme, the ICCTA “was passed in 1995 to advance deregulation of the rail and motor carrier industries.” Central Transport Int’l v. Sterling Seating, Inc., 356 F.Supp.2d 786, 788 (E.D.Mich.2005) (citing Fitzpatrick v. Morgan Southern, Inc., 261 F.Supp.2d 978, 982 (W.D.Tenn.2003)) (emphasis in original). Central Transport—an action on account, breach of contract, and quantum meruit arising from the defendants alleged failure to pay the full amount claimed for freight transportation services—is instructive. See id. at 787. There, the court, sua sponte, ordered the defendant to show cause why the case, removed to federal court on the basis of federal question jurisdiction pursuant to sections 1331 and 1337(a), should not be remanded to state court for lack of subject matter jurisdiction. See id. And the court concluded that while section 14501(c)(1) of the ICCTA

 

That section provides that “[t]he district 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.”

 

forbids state and local “law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier [,]” [n]o part of the section prevents a state law claim on contract by a motor carrier for unpaid shipping charges. Furthermore, the Court [was] unable to find any support for the idea that Congress intended to create a federal cause of action for such claims in § 14501(c)(1).

Id. at 788 (citations omitted).

 

Regardless whether section 14501(c) of the ICCTA provides a defense to the plaintiffs’ state law causes of action (as the defendant contends it does), based on the foregoing cases, it is abundantly clear that section 14501(c) does not create federal question jurisdiction. See Merrell Dow Pharm., Inc. v. Thompson, 478 U.S. 804, 808 (1986); cf. Ervast v. Flexible Prods. Co., 346 F.3d 1007, 1012 n. 6 (11th Cir.2003) (“Super preemption is distinguished from defensive preemption, which provides only an affirmative defense to state law claims and is not a basis for removal.”); accord Connecticut State Dental Ass’n, 591 F.3d at 1344. This is particularly true where—as here—a party seems to “want to have it both ways,” by invoking the ICCTA as a federal jurisdictional “hook,” but then quickly trying to dissuade the Court from applying it to preempt—in any way—the state law claims they assert.

 

2. Diversity Jurisdiction.

Turning to the plaintiffs’ alternative basis for jurisdiction, 28 U.S.C. § 1332, the sole issue appears to be whether the plaintiffs, as “the [parties] seeking to invoke federal jurisdiction,” have proven “by a preponderance of the evidence that the claim[s] on which [they are] basing jurisdiction meets the jurisdictional minimum.” Federated Mut. Ins. Co. v. McKinnon Motors, LLC, 329 F.3d 805, 807 (11th Cir.2003). To determine whether the invoking party has met this burden,

 

[s]pecific evidence of the amount in controversy is considered along with any “reasonable deductions, reasonable inferences, or other reasonable extrapolations[.” Pretka v. Kolter City Plaza II, Inc., 608 F.3d 744, 754 (11th Cir.2010).] To clear the jurisdictional hurdle, these deductions and inferences must plainly demonstrate that the damages sought are “sufficiently measurable and certain to satisfy the … amount in controversy requirement .” Morrison [v. Allstate Indem. Co.], 228 F.3d [1255,] 1268–69 [ (11th Cir.2000) ] (citing Ericsson GE Mobile Communications, Inc. v. Motorola Communications & Elecs., Inc., 120 F.3d 216, 221 (11th Cir.1997)).

 

Brown v. Spells, Civil Action No. 7:11–cv–91 (HL), 2011 WL 3714775, at(M.D.Ga. Aug. 24, 2011). The amount in controversy as to the declaratory relief the plaintiffs seek, moreover, “is the monetary value of the object of the litigation from [their] perspective.” Weiner v. Tootsie Roll Indus., Inc., 412 Fed. App’x 224, 227 (11th Cir.2011) (per curiam) (citations and internal quotation marks omitted).

 

The only specific evidence the plaintiffs present is the amount they contend they do not owe the defendant: $15,425.00. (See Doc. 1, ¶¶ 15, 28–29.) While they have asserted claims for conversion of the tractor-trailer—which the plaintiffs contend the defendant has “held hostage due to the disputed portion of the subject invoice” ( id., ¶ 17)—they have not alleged a value for this property.0 They have also failed to allegemuch less present any evidence in support of—the value of their other claims, two of which, tortious interference and unjust enrichment, appear to be based on the refusal to release the equipment. Applying the standard articulated above, the Court cannot consider both the evidence presented and the claims made, and deduce, infer, or extrapolate from that that the requisite amount in controversy has been met. Therefore, the plaintiffs have failed to carry their burden to show that this Court has jurisdiction over this lawsuit pursuant to section 1332.

 

0. It is “reasonable”—for purposes of determining the value of this lawsuit—for the Court to assume, moreover, that if the disputed portion of the invoice, $15,425.00, were paid to the defendant, it would release this equipment.

 

3. No Jurisdiction to Decide the Defensive Preemption Issue.

Because the Court does not have subject matter jurisdiction, it may not consider the alternative basis—Rule 12(b)(6), on the basis of defensive preemption—for the motion to dismiss. Simply put, “defensive preemption is a substantive issue that must be decided by a court with competent jurisdiction.” Ervast, 346 F .3d at 1013 n. 7 (discussing the Fifth Circuit’s en banc decision in Arana v. Ochsner Health Plan, 338 F.3d 433 (5th Cir.2003), in which they “refused to reach the issue of defensive preemption because it is a substantive, and not jurisdictional, issue, and if a state law claim is not completely preempted because it seeks relief available under [29 U.S.C.] § 1132(a) [section 502(a) of ERISA], then it is inappropriate to decide the substantive issue of defensive preemption without proper jurisdiction”) (citing id. at 439–40) (emphasis added).

 

Conclusion

For the reasons set forth above, the motion (Doc. 6) is due to be and is hereby GRANTED. Finding that the Court is without subject matter jurisdiction, the plaintiffs’ claims are due to be DISMISSED WITHOUT PREJUDICE. A separate judgment will issue, and the Court further directs the Clerk of Court to close this matter.

 

DONE and ORDERED.

Jurey v. Kemp

Court of Appeal of Louisiana,

First Circuit.

Lewis F. JUREY

v.

Harry T. KEMP, Dallas & Mavis Specialized Carrier Co., L.L.C, Great American Insurance Company, Liberty Mutual Fire Insurance Company and State Farm Mutual Automobile Insurance Company.

Clarence E. Jurey & Dorothy B. Jurey.

v.

Harry T. Kemp, Dallas & Mavis Specialized Carrier Co., L.L.C, Great American Insurance Company, Liberty Mutual Fire Insurance Company and State Farm Mutual Automobile Insurance Company.

 

Nos. 2011 CA 0142, 2011 CA 0143.

Sept. 20, 2011.

 

On Appeal from the Nineteenth Judicial District Court, In and for the Parish of East Baton Rouge, State of Louisiana, Docket No. C563867 Consolidated With 564504, Honorable Timothy E. Kelley, Judge Presiding.James F. Ledford, Baton Rouge, Louisiana, for Plaintiffs/3rd Appellants, Clarence E. Jurey & Dorothy B. Jurey.

 

Robert T. Myers, Metairie, Louisiana, for Defendant/Appellee Harry T. Kemp.

 

Nelson W. Wagar, III, Sarah Ney, Metairie, Louisiana, for Defendant/1st Appellant Great American Insurance Co.

 

Charles A. Schutte, Jr., Keith S. Giardina, Baton Rouge, Louisiana, for Defendants/Appellees Dallas & Mavis Specialized Carrier, L.L.C. & Liberty Mutual Fire Insurance Co.

 

John T. Roethele, Denham Springs, Louisiana, for Defendant/Appellee State Farm Mutual Automobile Insurance Co.

 

Karl E. Krousel, Baton Rouge, Louisiana, for Plaintiff/2nd Appellant Lewis F. Jurey.

 

Before PETTIGREW, McCLENDON, and WELCH, JJ.

 

McCLENDON, J.

This is an appeal from the granting of and denial of motions for summary judgment on the issue of insurance coverage. For the reasons that follow, we affirm.

 

FACTS AND PROCEDURAL HISTORY

On January 17, 2008, an automobile accident occurred between a 2002 Lincoln Town Car being driven by Lewis Jurey, one of the plaintiffs, and a 2001 Peterbilt Tractor, which was pulling a 50′ flatbed trailer, being driven by Harry T. Kemp, a named defendant. At the time of the accident, Kemp was leaving Baker Metal Works where he had just picked up the flatbed trailer.

 

Kemp was an independent contractor with Dallas & Mavis Specialized Carrier Co., LLC (D & M). D & M, through a policy issued by Liberty Mutual Fire Insurance Company (Liberty Mutual), maintained coverage for the operation of the tractor while Kemp was engaged in performing transportation services for D & M. As an independent contractor, Kemp was responsible for maintaining non-trucking liability (“bobtail”)  insurance for operation of the equipment outside the scope of performing transportation services for D & M. The Great American Insurance Company (Great American) provided Kemp “bobtail” coverage.

 

In consolidated actions, Lewis Jurey and his guest passengers, Clarence Jurey and Dorothy Jurey, filed suit, alleging that they sustained bodily injuries in the accident. They named Kemp, D & M, Liberty Mutual, and Great American, among others, as defendants.

 

Thereafter, Liberty Mutual filed a motion for declaratory relief, or in the alternative, a motion for summary judgment, asserting that its policy did not provide coverage because Kemp was not engaged in performing transportation services for D & M and that the bobtail policy issued by Great American should apply. D & M also filed a motion for summary judgment, asserting that Kemp was not in the course and scope of his employment at the time of the accident, and, as such, D & M was not vicariously liable for Kemp’s negligence. In response, Great American filed a cross-motion for summary judgment, alleging that Kemp was involved in transportation services for D & M at the time of the accident such that the policy issued by Liberty Mutual, rather than its “bobtail” policy, provided coverage for the accident.

 

Following a hearing, the trial court granted the motions for summary judgment filed by Liberty Mutual and D & M, and denied the cross-motions filed by Great American. In so ruling, the trial court indicated that Kemp was “not making a haul for [D & M]” nor was he “on duty or under any dispatch” at the time of the accident, but rather was “on his own time.” The trial court further indicated that this accident is “exactly what the bobtail [policy issued by Great American] is required to cover and what it’s intended to cover.”

 

Great American and plaintiffs (hereinafter collectively referred to as “Great American”) have appealed, assigning the following errors:

 

A. The Trial Court erred in granting summary judgment in favor of Liberty Mutual Fire [Insurance] Company on the basis that Kemp was not involved in transportation duties at the time of the Accident.

 

B. The Trial Court erred in denying summary judgment in favor of Great American Insurance Company.

 

C. The Trial Court erred in concluding that Great American Insurance Company, and not Liberty Mutual Fire [Insurance] Company, provides liability insurance with respect to the Accident in light of the numerous genuine issues of material fact.

 

DISCUSSION

Liberty Mutual issued an insurance policy (number AI2–791–001377–107) to Transport Industries, L.P., and pursuant to a Named Insured Endorsement, added D & M to Item 1 of the Declarations as a named insured. The Liberty Mutual policy providing coverage to D & M provides, in pertinent part:

 

1. Who is An Insured

The following are “insureds”:

 

a. You for any covered “auto”.

 

b. Anyone else while using with your express or implied  permission a covered “auto” you own, hire or borrow, except:

 

(1) The owner, or any “employee”, agent or driver of the owner, or anyone else from whom you hire or borrow a covered “auto”.

 

(2) Your “employee” or agent if the covered “auto” is owned by that “employee” or agent or a member of his or her household.

 

* * *

c. The owner or anyone else from whom you hire or borrow a covered “auto” that is a “trailer” while the “trailer” is connected to another covered “auto” that is a power unit, or, if not connected, is being used exclusively in your business.

 

d. The lessor of a covered “auto” that is not a “trailer” or any “employee”, agent, or driver of the lessor while the “auto” is leased to you under a written agreement if the written agreement does not require the lessor to hold you harmless and then only when the leased “auto” is used in your business as a “motor carrier” for hire.

 

e. Anyone liable for the conduct of an “insured” described above but only to the extent of that liability.

 

At the time of the accident, the parties do not dispute that Kemp’s tractor was leased to D & M pursuant to a lease agreement between the parties. The parties, however, disagree as to whether the flatbed trailer was included in the lease. Even assuming that the trailer was part of the lease, in order for the Liberty Mutual policy to provide coverage, subsection (c) referenced above requires that the trailer must be connected to a “covered auto.” Therefore, in determining whether Liberty Mutual afforded coverage for the accident at issue, the initial inquiry is whether the tractor was a “covered auto”—i.e., whether Kemp was using the tractor in D & M’s business as required under subsection (d) referenced above at the time of the accident.

 

The language in the policy requiring that the covered auto be “used in your business” is unambiguous. Although the application of the endorsement to these facts may pose difficult questions, the difficulty of the questions does not create an ambiguity. Mahaffey v. General Sec. Ins. Co., 543 F.3d 738, 741 (5th Cir.2008). Because the language is unambiguous, the issue is properly resolved as a matter of law on a motion for summary judgment. Id.

 

At the time of the accident, Kemp was off-duty and was not in the process of performing any transportation services for D & M when he decided to pick the trailer up from Baker Metal Works in order to free up space in the shop for Baker Metal Works’ owner. Kemp was not under D & M’s control or on standby for any deliveries and was free to go where he pleased. In addition, Kemp was not paid for his trip to or from Baker Metal Works and did not request or seek any reimbursement or payment in connection with this trip.

 

Appellants contend that at the time of the accident, however, Kemp was on a trip for the business of D & M because he was having requisite maintenance performed on the trailer. Appellants note that the lease agreement required Kemp to “maintain the Equipment in proper operating condition and in full compliance with applicable governmental regulations.” A few days prior to the accident, Kemp had taken the trailer to Baker Metal Works to have a door welded on the front, so it would be easier to access the wiring for the trailer’s lights and air lines for the trailer’s brakes. Baker Metal Works also replaced some of the decking boards on the trailer. Kemp testified that it was important for him to maintain his equipment pursuant to the terms of the lease and in order to maintain a good working relationship with D & M. Kemp concludes that Liberty Mutual’s policy provides coverage because he was maintaining the equipment in accord with the terms of the lease agreement as required by D & M.

 

Several pertinent cases have addressed whether an independent truck owner/lessor was “in the business of” the motor carrier/lessee such that the liability insurance secured by a motor carrier/lessee, as opposed to the bobtail insurance secured by a truck owner/lessor, should apply. In LeBlanc v. Bailey, 97–0388 (La.App. 4 Cir. 10/1/97), 700 So.2d 1311, writ denied, 97–2988 (La.2/6/98), 709 So.2d 743, the fourth circuit found that an independent trucker’s drive home after completion of his deliveries for the day on behalf of the motor carrier/lessee was more of a personal nature rather than a work-related function such that bobtail insurance coverage, as opposed to the liability insurance secured by the motor carrier/lessee, was the primary policy that applied. In Mahaffey, 543 F.3d at 743, however, the federal court, applying Louisiana law, found that the bobtail insurance policy did not provide coverage where an independent truck driver had been asked to remain in the area of the motor carrier/lessee’s business to be available to pick up a load when one became available. See also Robinson v. Guillot, 07–1260 (La.App. 3 Cir. 4/30/08), 980 So.2d 906 (unpublished), writ denied, 08–1162 (La.9/19/08) 992 So.2d 943. However, we have found no Louisiana case specifically addressing the question of when having leased equipment serviced falls within the scope of the business of the carrier. Assuming, without deciding, that the trailer was included in the lease, we must determine as a matter of law whether Kemp’s trip to and from Baker Metal Works to have the work performed on the trailer constituted the business of D & M. The facts here are undisputed.

 

In this context, the proper inquiry is whether Kemp was acting within the scope of the lease agreement with D & M. See National Continental Ins. Co. v. Empire Fire & Marine Ins. Co., 157 F.3d 610, 612 (8th Cir.1998). To the extent that Kemp was executing his contractual duties, he would be acting “in the business of” D & M. Id. We must therefore examine the terms of the lease to ascertain whether Kemp was fulfilling a contractual duty in having the work performed by Baker Metal Works.

 

The lease agreement required Kemp to “maintain the Equipment in proper operating condition and in full compliance with applicable governmental regulations.” Kemp acknowledged that adding the welded door to his trailer was not required by Department of Transportation (“DOT”) specifications or by D & M. He further indicated that the door provided no economic benefit to D & M, but rather was something he wanted to have done for his own benefit. Kemp also indicated that he chose to have some of the decking boards replaced, although the work was not required by DOT or by D & M. Nothing in the record explains how any of the work performed on the trailer furthered D & M’s business. Moreover, Kemp acknowledged that prior to the accident, D & M was unaware that he was having any work done to the trailer. In light of the foregoing, there is no showing that the improvements were required under the terms of the lease agreement between Kemp and D & M. Rather, it appears that these improvements were merely done for the convenience of the owner. Cf. Freed v. Travelers, 300 F.2d 395 (7th Cir.1962) (wherein the carrier/lessee’s insurance policy applied when the independent truck driver was involved in an accident while bringing the vehicle to be serviced-when the lease agreement required the independent truck driver to maintain the tractor “in good running order and condition” and “hold (it) ready at all times for the services of the Lessee” and the carrier/lessee did not urge that the major repair to the rear of the tractor was not necessary to its continued operation) and National Continental Ins. Co., 157 F.3d 610 (wherein the carrier/lessee’s insurance policy applied when the service contract required the driver’s tractor pass periodic inspections and comply with federal standards such that driving the vehicle to a shop for a front end alignment between dispatch orders was “in the business of” the carrier/lessee because the federal regulations required “[a]ll axles … be in proper alignment”). Unlike the contrasted cases, under the terms of the lease agreement here, Kemp’s trip to Baker Metal Works was not undertaken in the business of the employer.

 

Appellants also urge that the Federal Motor Carrier Safety Act–90 Endorsement applies herein. See 49 USCA § 13501, et seq. However, the endorsement only applies to interstate travel and does not apply to the intrastate trip at issue herein. See 49 USCA § 13501, 1 and Branson v. MGA Ins. Co., Inc., 673 So.2d 89 (Fla.App. 5 Dist.), review denied, 680 So.2d 421 (Fla.1996).

 

CONCLUSION

In light of the foregoing, we conclude that the trial court did not err in granting summary judgment in favor of Liberty Mutual and denying summary judgment as to Great American. Therefore, we affirm the district court’s September 17, 2010 judgment. Costs of this appeal are assessed to The Great American Insurance Company.

 

AFFIRMED.

 

WELCH, J., dissent and assigns reasons.

 

WELCH, J., dissenting.

I respectfully dissent. I believe that Kemp qualifies as an insured under an endorsement to the Liberty Mutual policy which expands the list of insured persons to include those who use any covered auto “by or for” the named insured. This endorsement is entitled “Hired Autos Specified as Covered Autos You Own,” and modifies the motor carrier coverage form. It modifies the schedule’s description of “auto” to include “any auto you lease, rent, or hire.” It also states that any auto described in the schedule will be considered a covered auto the insured owns and not a covered auto the insured hires. It further provides:

 

B. CHANGES IN LIABILITY COVERAGE:

The following is added to WHO IS AN INSURED:

 

While any covered “auto” described in the Schedule is rented or leased to you and is being used by or for you, its owner or anyone else from whom you rent or lease it is an “insured” but only for that covered “auto.”

 

For Kemp to be insured under this provision, the tractor he was driving at the time of the accident must be a “covered auto” that was leased to D & M. It is undisputed that the tractor was under lease to D & M at the time of the accident. Further, the schedule of covered autos contains two symbols designating the covered autos—72 and 73. Symbol 72 includes “owned autos used in operations other than those trucking operations that are subject to operating authority granted to the Insured by regulatory authority.” Symbol 73 describes “any auto except those described by Symbol 72.” Liability coverage extends to all autos designated by symbols 72 and 73. Reading all of the provisions together, I would find that a covered auto includes all autos owned by the named insured and all autos hired or leased by the named insured, which includes the tractor leased by D & M from Kemp.

 

Next, in order for Kemp to be an insured under the policy, the covered auto must have been used by him “by or for D & M.” Pursuant to the term of the lease agreement which incorporated DOT regulations, D & M had the exclusive possession, control, and use of the leased motor vehicle for the duration of the lease agreement. I would find that the leased vehicle was being used by Kemp “for” D & M whenever that use furthered D & M’s business interests and was not a purely personal use of the covered vehicle by Kemp. As D & M’s business is transportation, I would find that any use of the leased equipment that falls within the scope of D & M’s trucking business to constitute a use by Kemp “for” D & M.

 

In this case, the evidence showed that Kemp used his covered auto to bring his trailer to Baker Metal Works to have boards replaced on the bed of his trailer and for the installation of a metal box that would make it easier for him to access the wires and air lines that went to the trailer’s brakes and running lights. Kemp explained that he had wanted to make the modification for some time and the situation presented itself when he had to replace the decking on the trailer. He further stated that the improvement to the trailer was done to make it easier for him to maintain the trailer because he would only have to flip the lid of the box to get to the air lines and wiring harness, whereas previously, he had to pull all of the lines and wires out of the front of the trailer, leaving him little room to work on these items if he had to. I find that the installation of boards on the deck of the trailer that holds cargo being shipped for D & M, along with the installation of an accessory to the trailer that made it easier to maintain and repair the trailer’s brakes and lights is clearly trucking-related, and as such, furthered the commercial interest of D & M in keeping the leased vehicle and equipment in safe and proper running condition. The mere fact that the work done to the trailer may have made operating, repairing, and maintaining the leased vehicle more convenient to Kemp does not mean that the work did not serve D & M’s business interests. The possibility that a vehicle owner’s interest may coincide with those of the lessee does not diminish the benefits the lessee received from the owner’s actions. See National Continental Insurance Company v. Empire Fire & Marine Insurance Company, 157 F.3d 610, 613 (8th Cir.1998).

 

Moreover, even under the test employed by the majority in determining whether Kemp’s activity constituted a “business use” of the vehicle, I would find Kemp to be an insured under the policy. In replacing the decking on the trailer and the installation of an accessory to house the brake’s wires, Kemp was executing his contractual duty to maintain the leased equipment, and therefore, his trip to and from Baker Metal Works in his covered auto to have the work performed on the trailer constituted the business of D & M.

 

Pursuant to the lease agreement, Kemp was obligated to maintain the equipment in proper operating condition. Kemp was further obligated to furnish all maintenance, repairs, and other items necessary for the safe and efficient operation of the equipment and lease agreement vests the choice of locations and persons to perform any necessary repairs solely in Kemp. The lease further stipulates that in the event the equipment leased includes a trailer, Kemp was responsible for the periodic safety inspection of the trailer and accessorial equipment furnished by him. I do not believe it could fairly be said that the replacement of decking boards, which holds the transported cargo, and the installation of an accessory making it easier to perform maintenance on the leased equipment do not constitute vehicle maintenance. Because I believe that Kemp was executing his contractual duty to maintain the leased equipment, I would find that he was carrying out the business of D & M when he drove the trailer to and from Baker Metal Works for the replacement of decking boards and the installation of a box to house the trailer’s electrical wires and lines.  Accordingly, I conclude that the Liberty Mutual trucking policy provides coverage for the accident sued upon.

 

For the above reasons, I would reverse the judgment of the trial court and deny Liberty Mutual’s motion for summary judgment. I would further find that the exclusion in Great American’s non-trucking bobtail policy, denying coverage when the vehicle is used for the benefit or to further the commercial interest of D & M, is applicable in this case, and I would grant Great American’s motion for summary judgment and dismiss it from this litigation.

 

“Bobtailing” is a term generally used in the trucking industry to describe a tractor being operated without a trailer.

 

Great American has not appealed the summary judgment granted in favor of D & M. Liberty Mutual avers that because the trial court granted D & M’s motion for summary judgment and found that Kemp was not performing services for D & M at the time of the accident, review of that issue is precluded on appeal pursuant to LSA–R.S. 13:4231(3) insofar as that judgment is now final. However, under the circumstances presented herein, we find it unnecessary to address this issue.

 

The “express or implied” language is added by the Louisiana Change endorsement.

 

Similarly, we note that the bobtail policy issued to Kemp by Great American does not provide coverage if the “covered auto” was being used “for the benefit of or to further the commercial interest of [D & M]” or “while being used for the purpose of traveling to or from any location where the covered auto is regularly garaged or any terminal or facility of [D & M].”

 

The contractual language at issue in Mahaffey was “in the business of.”

 

Kemp indicated that he had originally planned to go to a farmer’s meeting, but instead chose to go to Baker Metal Works to retrieve the trailer.

 

The court also noted that the driver was free to go where he pleased, was not subject to the motor carrier/lessee’s control or paid for his time or mileage, and was not under dispatch or standby for further deliveries. Leblanc, 700 So.2d at 1314.

 

In Mahaffey, the trucker was involved in an accident driving to his motel. The court noted that unlike driving home after completing deliveries as was the driver in LeBlanc, the driver in Mahaffey was “driving to a motel far from home in order to sleep to be adequately rested, when asked to remain in the area to see if a load becomes available,” which the court found “is a work-related function for a commercial driver because commercial drivers are required to have a certain number of rest hours between hauls.” Mahaffey, 543 F.3d at 743.

 

Additionally, we note that the maintenance on Kemp’s trailer had been completed and he was returning home at the time of the accident. Cf. Empire Fire and Marine Ins. Co. v. Liberty Mut. Ins. Co., 117 Md.App. 72, 699 A.2d 482 (Md.App.), cert denied, 348 Md. 206, 703 A.2d 148 (1997), wherein the lease agreement between the independent truck driver and the motor carrier/lessee required the truck driver to maintain “all additions, accessories, and equipment … in good safe operating and mechanical condition.” Empire Fire and Marine Ins. Co., 669 A.2d at 488. The court found that even if the trucker’s stop at a dealership to obtain parts for a toolbox attached to the exterior of the leased tractor was in “furthering the business of the … carrier, once he purchased the parts for the toolbox, his business with the … carrier was complete. He was in the area of his ‘home terminal’ and heading home.” 669 A.2d at 496–97.

 

While National Liberty insists that the trailer was not part of the leased equipment, the undisputed facts of this case indicate otherwise. While none of the three trailers owned by Kemp are listed on the equipment schedule, the evidence on the motion for summary judgment demonstrated that Kemp’s trailers, in addition to the tractor that pulled them, were leased to D & M by Kemp. Therefore, I disagree with National Liberty’s attempt to bring the trailer outside the scope of the lease agreement and would find that any provision in the lease relating to the maintenance of the trailer applicable in this case.

 

The mere feet that Kemp did not request reimbursement for the work performed at Baker Metal Works is of no moment as Kemp testified that he was responsible for all maintenance on his vehicle and was never reimbursed by D & M for maintenance work.

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