United States District Court,

1. Nevada.

TENKASI VISWANATHAN, Plaintiff,

v.

MOVING USA INC. et al., Defendants.

2:15-cv-02015-RCJ-NJK

|

Filed 06/07/2016

 

 

ORDER

ROBERT C. JONES United States District Judge

*1 This case arises out of a botched residential move from North Carolina to Nevada. Pending before the Court is a motion to transfer venue or dismiss. The Court denies the motion.

 

 

1. FACTS AND PROCEDURAL HISTORY

Plaintiff Tenkasi Viswanathan contracted with Defendant Moving USA Inc. (“MUI”) to ship his household goods from North Carolina to Nevada. (See Compl. ¶ 9, ECF No. 1). The parties agreed to a price of $1,496 prior to the pick-up date of August 12, 2013 (after several price increases), but at the time of pickup the driver of the truck further increased the price to $2,200. (Id. ¶ 21). Due to the requirement to vacate the North Carolina residence by August 15, 2013, Plaintiff and his wife had no choice but to pay the overcharge of at least $400 to MUI. (Id.). MUI also failed to pick up all of Plaintiff’s goods, causing Plaintiff’s wife to abandon certain goods valued at $400 or more. (Id. ¶ 28).

 

Prior to the date of pick up, MUI had informed Plaintiff that insuring the goods was unnecessary as they were guaranteed against loss by MUI. (Id. ¶ 39). On September 15, 2013 (after the pickup in North Carolina but before the delivery in Nevada), Plaintiff filed his overcharge claim with MUI, seeking a discount of $200. (Id. ¶ 26). The bill of lading mentioned but did not expressly identify “the Carrier,” nor did it provide the address of Defendant Moving On Up Inc. (“MOUI”), which Plaintiff believes may have performed the move as MUI’s subcontractor. (See id. ¶¶ 6, 38). This lack of identification of “the Carrier” has prevented Plaintiff from timely filing claims, as Plaintiff was required to file his claims with “the Carrier” in order to receive reimbursement for lost and/or damaged items. (Id. ¶ 42).

 

Although the parties agreed for the shipment to be delivered in Las Vegas, Nevada by the end of August 2013, the shipment was not delivered until October 19, 2013. (Id. ¶¶ 11–12). Upon delivery, it was noticed that a suitcase and twelve cardboard boxes of goods valued at more than $1,140 had been lost. (Id. ¶ 12). The shipment also arrived with a damaged refrigerator and a damaged and unrepairable buffet table, with a total estimated replacement value of $1,020. (Id. ¶ 13). The shipment also arrived with some boxes bearing two identification labels (although they had only one label upon pick up), resulting in double-counting of charges for those boxes. (See id. ¶ 22).

 

On November 1, 2013, Plaintiff submitted another claim to MUI for $1,900, including photographs of the damaged buffet table. (Id. ¶ 14). On November 2, 2013, Plaintiff submitted a lower estimate for $1,590. (Id.). MUI did not respond. (Id. ¶ 16). Plaintiff renewed his claims in a July 9, 2014 letter to both MUI and MOUI, seeking $1,640. (Id. ¶ 17). Neither Defendant responded. (Id. ¶ 18). Plaintiff acquired the services of a Florida attorney, who sent a demand letter to both MUI and MOUI, asserting a claim of $2,160, reflecting market prices of the lost and damaged goods. (Id. ¶ 19). Neither Defendant responded. (Id. ¶ 20).

 

*2 Plaintiff sued MUI, MOUI, Haim Shalem, and Tal Lavie in state court for: (1) violations of the Carmack Amendment, 49 U.S.C. § 14706; (2) negligence; (3) “overcharging”; (4) fraud; (5) nuisance; and (6) intentional infliction of emotional distress. Defendants have moved to transfer or dismiss for improper venue.

 

 

1. LEGAL STANDARDS

A party may move for dismissal for improper venue. Fed. R. Civ. P. 12(b)(3). In such a case, the well-pleaded allegations of the complaint are taken as true, and any evidence submitted by the non-movant in opposition to the Rule 12(b)(3) motion is viewed in the light most favorable to the non-movant. Ginter ex rel. Ballard v. Belcher, Prendergast & Laporte, 536 F.3d 439, 448–49 (5th Cir. 2008). Whether venue lies in a particular district is governed in the first instance by 28 U.S.C. § 1391:

 

A civil action may be brought in–

(1) a judicial district in which any defendant resides, if all defendants are residents of the State in which the district is located;

(2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated; or

(3) if there is no district in which an action may otherwise be brought as provided in this section, any judicial district in which any defendant is subject to the court’s personal jurisdiction with respect to such action.

28 U.S.C. § 1391(b). The three subsections of § 1391(b) are disjunctive; venue lies if any of these subsections is satisfied for a given district. A court determining that venue is improper must dismiss the case or transfer it to a district where venue properly lies. 28 U.S.C. § 1406(a). Furthermore, under 28 U.S.C. § 1404(a), a district court may “in the interest of justice” transfer a case to any other district where venue lies “[f]or the convenience of parties and witnesses” even if venue is proper in the original district under § 1391. Id. § 1404(a).

 

“Forum selection clauses are prima facie valid, and are enforceable absent a strong showing by the party opposing the clause ‘that enforcement would be unreasonable or unjust, or that the clause [is] invalid for such reasons as fraud or overreaching.’ ” Manetti–Farrow, Inc. v. Gucci Am., Inc., 858 F.2d 509, 514 (9th Cir. 1988) (quoting M/S Bremen v. Zapata Off–Shore Co., 407 U.S. 1, 15 (1972)). The other limited exceptions to enforcement occur where the forum is so “gravely difficult and inconvenient” that it is essentially no forum at all, or where enforcement of the clause will contravene a strong public policy of the forum. Argueta v. Banco Mexicano, S.A., 87 F.3d 320, 325 (9th Cir. 1996).

 

 

III. ANALYSIS

The dispute here is whether the phrase “agree to submit to” in the applicable forum selection clause constitutes mandatory or permissive language. (See Bill of Lading § 7, fourth unnumbered paragraph, ECF No. 17, at 6). To be mandatory, a clause must contain language that clearly designates a forum as the exclusive one. For example, language such as “this Agreement shall be litigated only in the Superior Court for Los Angeles, California (and in no other)” is deemed exclusive. Pelleport Investors, Inc. v. Budco Quality Theatres, Inc., 741 F.2d 273, 275 (9th Cir. 1984) (emphases added). In addition, in Docksider, Ltd. v. Sea Technology, Ltd., the Court of Appeals held that a clause was rendered mandatory by the inclusion of the additional language, “venue of any action brought hereunder shall be deemed to be in Gloucester County, Virginia.” 875 F.2d 762, 764 (9th Cir. 1989) (emphasis added). By contrast, courts typically find that forum selection clauses containing “submit to” or similar language are permissive, not mandatory. See, e.g., Redondo Constr. Corp. v. Banco Exterior de Espana, S.A., 11 F.3d 3, 5–6 (1st Cir. 1993) (“expressly submits to” found permissive); Keaty v. Freeport Indonesia, Inc., 503 F.2d 955, 957 (5th Cir. 1974) (“submit to” found permissive); Reliance Ins. Co. v. Six Star, Inc., 155 F. Supp. 2d 49, 58 (S.D.N.Y. 2001) (“will submit to” found permissive); Raspino v. JRL Enterprises, Inc., No. CIV.A.01-1720, 2001 WL 845455, at *2 (E.D. La. July 25, 2001) (“agree to submit to” found permissive); Cummings v. Caribe Marketing & Sales Co., 959 F. Supp. 560, 563–65 (D.P.R. 1997) (“agrees to submit to” found permissive); Guy F. Atkinson Constr., A Div. of Guy F. Atkinson Co. v. Ohio Mun. Elec. Generation Agency Joint Venture 5, 943 F. Supp. 626, 628–29 (S.D.W. Va. 1996) (“submit to” found permissive); S.K. & Co., Inc. v. The Legacy Grp. of Am., Inc., No. 95 Civ. 6748(HB), 1996 WL 5072, at *1 (S.D.N.Y. Jan. 5, 1996) (“agree to submit to” found permissive). Where there is additional language indicating exclusivity, “agree to submit to” has been found to be mandatory. See Leong v. Myspace, Inc., No. CV 10-8366 AHM EX, 2011 WL 7808208, at *5 (C.D. Cal. Mar. 11, 2011) (“agree to submit to the exclusive jurisdiction” found mandatory).

 

*3 In this case, the bill of lading states that the parties “agree to submit to the personal jurisdiction and venue of a court of subject matter jurisdiction located in Broward County, State of Florida.” (Bill of Lading § 7, fourth unnumbered paragraph) (emphasis added). The bill of lading includes no additional exclusive language. The absence of any language suggesting exclusivity indicates the clause is permissive, not mandatory. The language “agree to submit to” means that both parties consent to jurisdiction and venue in Broward County, Florida, but that consent does not exclude litigation in other courts.

 

 

CONCLUSION

IT IS HEREBY ORDERED that the Motion to Transfer Venue or Dismiss (ECF No. 17) is DENIED.

 

IT IS SO ORDERED.

 

DATED: This 7th day of June, 2016.

United States District Court,

1. New Jersey.

Indemnity Insurance Company of North America, a corporation, Plaintiff,

v.

UPS Ground Freight, Inc., d/b/a UPS Freight, a corporation, Defendant.

Civ. Nos. 13-3726, 13-3727 (KM)(MAH)

|

Signed 06/02/2016

 

 

SUPPLEMENTAL OPINION

MCNULTY, District Judge

*1 This action under the Carmack Amendment, 49 U.S.C. § 14706 et seq., arises from damage to two interstate shipments of goods. The Plaintiff, Indemnity Insurance Company of North America (“Indemnity”), is the subrogating insurance company for the owner of the freight, G.E. Healthcare. (I will refer to the plaintiff as “GE”.) The Defendant, UPS Ground Freight, Inc. (“UPS”), is a motor carrier.

 

By Memorandum Opinion and Order filed March 31, 2016 (ECF nos. 69, 70) I denied UPS’s motion pursuant to Fed. R. Civ. P. 56, for partial summary judgment to limit and cap damages. I found that although many of the underlying facts were uncontested, certain issues of contractual interpretation potentially posed genuine, material issues of fact.

 

On April 21, 2016, UPS filed a motion for partial summary judgment and relief from my March 31 Order. (ECF no. 73) The same day, counsel jointly filed a letter stating that they were uncertain as to what factual issues, if any, remained. (ECF no. 72) I convened a conference call with counsel, in which both sides stated that they had no further evidence to submit. (ECF no. 74) At the Court’s suggestion, counsel submitted a joint letter in which they consented to withdraw the April 21, 2016 motion; agreed that there were no issues of fact that they regarded as material still in dispute; and agreed to submit the issue of contractual interpretation to the Court for final decision. (ECF no. 75)

 

As a result, I now decide the issue presented by UPS’s motion for partial summary judgment (ECF no. 57) based on the record as it stands. This opinion must be read as a supplement to my earlier-filed Opinion, and all of that Opinion’s abbreviations and terms are adopted here. (ECF no. 69) For the reasons stated herein, the motion for partial summary judgment is again DENIED. Amplifying my reasoning, I hold that the liability of UPS is not limited by the value declared on the bills of lading, but is governed by the GE Contract.

 

 

DISCUSSION

The upshot of my earlier opinion denying summary judgment is as follows. The plaintiff, GE, alleges damages totaling $1,039,484.94 as a result of defendant’s mishandling of two shipments in 2010 and 2012. The defendant, UPS, contends that damages are contractually limited to the value of goods declared on the bills of lading: $2.30 per pound, which comes out to a total of $15,772.80.

 

GE as “Shipper” and UPS as “Carrier” had an overall contract governing their relationship. That GE Contract provides at section 7(A):

1. Carrier is liable to Shipper for full invoice value (see paragraph E) of Shipper’s goods for loss or damage to goods….

GE Contract § 7(A) (the “Full Invoice Value” provision). The cross-referenced paragraph 7(E) provides:

1. Except as otherwise provided, Carrier’s maximum liability will not exceed $250,000 per occurrence.

GE Contract § 7(E) (the “$250,000 Limit” provision).

 

The GE Contract also has an override provision, paragraph 2(E):

1. To the extent that any bills of lading, or other shipment documents used in connection with transportation services provided pursuant to the contract are inconsistent with the terms and conditions of this contract (including the terms and conditions of Appendices or Exhibits incorporated by reference), the terms and conditions of this Contract (and any incorporated Appendices and Exhibits) shall govern.

*2 GE Contract § 7(E) (the “Override Provision”). Finally, the GE Contract contains an “Entire Contract” clause, providing that its terms cannot be modified or waived except by a writing signed by both parties. GE Contract § 15 ¶7.

 

Under the Carmack Amendment, the carrier may limit its liability “to a value established by written or electronic declaration of the shipper or by written agreement between the carrier and shipper if that value would be reasonable under the circumstances surrounding the transportation.” 49 U.S.C. § 14706(c)(1)(A). UPS says each of the bills of lading, stating a value of $2.30/lb., is such a “written agreement” or “declaration” that limits UPS’s liability. GE replies that the GE Contract (ECF no. 57-3 at 6) is the controlling “written agreement between the carrier and the shipper,” and that it renders UPS liable for the Full Invoice Value of the goods, subject only to the $250,000 Limit.

 

The issue, then, comes down a dispute over which shall control: (a) the value declared on the bills of lading, or (b) the more general Full Invoice and $250,000 Limit provisions of the GE Contract.

 

Penske Logistics, Inc. v. KLLM, Inc., 285 F. Supp. 2d 468 (D.N.J. 2003), faced by a similar scenario, enforced the limitation in the bill of lading. Judge Wolin cited general principles of contract law that interrelated contracts should be interpreted as a whole, so that no part is rendered superfluous or meaningless. Thus, he concluded, the override provision in the general contract should not be interpreted to override the bill of lading; rather the bill of lading should be regarded as “incorporated” in the general contract, because the contract required that each individual shipment be “evidenced by a written receipt.”

 

I was less certain:

I cannot so easily read the court’s interpretation of the Penske contract onto this, the GE Contract. These are not the kind of simultaneously-executed, interlocking agreements to which the rules of contract interpretation cited in Penske most clearly apply. When the GE Contract was signed, these bills of lading did not yet exist. One permissible reading of the Contract is that GE protected itself against the unknown terms of those future bills of lading by telling UPS, in effect, to ignore them to the extent they conflicted with the Agreement. Thus default rules of contract interpretation may not help us where the very purpose of an Override Provision may be to render terms of the other contract superfluous. UPS contends that there is no such inconsistency; but where the contract requires $1 million, and the bill of lading requires $15,000, there may well be. Full Invoice Value and the amount on the bill of lading are not the same thing, and at least one permissible interpretation of the Agreement is that it overrides the bill of lading.

(ECF no. 69 at 7) I went no farther than to deny the motion of UPS for summary judgment. I believed that the matter should be tried, because evidence regarding the intent of the parties might shed further light on the meaning of the Agreement.

 

With the parties’ authorization, however, I now rule more broadly, based on the record before me. I adopt the “one permissible interpretation of the Agreement” referred to in the quoted passage. I hold that the GE Contract overrides the declared value that the warehouse placed on the bills of lading.

 

*3 My reasoning is as follows. The terms and conditions of the Contract state that UPS shall be liable for the full invoice value, subject to the limitation of $250,000. The bills of lading impose a limit of $15,000 based on their declared value. The two are therefore “inconsistent.” The GE Contract’s Override Provision addresses the very situation where “bills of lading … are inconsistent with the terms of conditions of this contract,” providing that in such a case, “the terms and conditions of this Contract … shall govern.” GE Contract § 7(E). The Contract, not the bill of lading, controls.

 

I am confirmed in that conclusion by the integration clause, which provides that the terms of the GE Contract cannot be altered except by a writing signed by both parties. GE Contract § 15 ¶7. The bill of lading is not signed by both parties (i.e., by GE and UPS). And it is reasonable to conclude that GE, in giving primacy to the Contract and requiring a mutual writing to alter it, sought to protect itself against the actions of third parties, such as warehousemen.1

 

UPS, in its now-withdrawn Rule 60 motion, argued that I had overlooked the “dispositive impact” of Penske. (ECF no. 73 at 4) In UPS’s view, when I stated that the GE Contract and the bills of lading “are not the kind of simultaneously-executed interlocking agreements to which the rules of contract interpretation cited in Penske most clearly apply,” I overlooked the fact that the contract and bills of lading in Penske itself were not simultaneously executed. I meant no more than I said: that the “rules of contract” cited in Penske—not the Penske case itself—applied most clearly to simultaneously executed contracts. To be clear, I disagree with the holding of Penske, at least as it applies here. As a decision by a judge of coordinate jurisdiction, it does not control as precedent.

 

The default rules of contract interpretation cited in Penske do not assist the analysis. Other things being equal, all parts of contracts (or interrelated contracts) should be given effect. Here, however, the very purpose and intent of the Override Provision is to render a conflicting bill of lading ineffective.

 

 

CONCLUSION

For the reasons stated above, the relief sought in the motion of UPS for partial summary judgment (ECF no. 57) is and remains DENIED. Amplifying my reasoning, and ruling on the issues of contractual interpretation submitted to the Court by mutual consent, I hold that the liability of UPS is not limited by the value declared on the bills of lading, but is subject to the overriding terms of the GE Contract (ECF no. 57-3 at 6).

 

An appropriate Order accompanies this opinion.

 

All Citations

Slip Copy, 2016 WL 3190554

 

 

Footnotes

1

Indeed, GE’s contract with its warehouse forbade the warehouse to declare the value of goods on bills of lading. (Warehouse Contract p. 25 (Attachment D). UPS, however, was not a party to the Warehouse Contract and had no reason to know that.