United States District Court,

1. Nebraska.

CERTAIN UNDERWRITERS AT LLOYD’S and Those Companies Severally Subscribing to Boeing Policy Number MARCW150053 and Related Policies Governing the Cargo, Plaintiffs,

v.

SOUTHERN PRIDE TRUCKING, INC., et al., Defendants.

8:16-CV-116

|

Signed 09/27/2017

Attorneys and Law Firms

Brandon J. Crainer, Mark C. Laughlin, Fraser, Stryker Law Firm, Omaha, NE, Carlotta Cassidy, David T. Maloof, Thomas M. Eagan, Maloof, Browne Law Firm, Rye, NY, for Plaintiffs.

Darin W. Flagg, Murchison, Cumming Law Firm, Irvine, CA, Jennifer D. Tricker, Baird, Holm Law Firm, Robert D. Mullin, Jr., McGrath, North Law Firm, Omaha, NE, Richard C. Moreno, Steven J. McEvoy, Murchison, Cumming Law Firm, Los Angeles, CA, Collin D. Woodward, John A. Masters, Langhenry, Gillen Law Firm, Chicago, IL, Troy A. Lundquist, Langhenry, Gillen Law Firm, Joliet, IL, Beata Shapiro, Wilson, Elser Law Firm, Boston, MA, Brian Del Gatto, Wilson, Elser Law Firm, Stamford, CT, for Defendants.

 

 

MEMORANDUM AND ORDER

John M. Gerrard, United States District Judge

*1 This dispute involves an accident between two tractor trailers on Interstate 80 near Wood River, Nebraska. The accident resulted in significant damage to a Boeing airplane engine, which has led to this multi-party dispute. Specifically, Boeing’s insurers, “Certain Underwriters at Lloyd’s and Those Companies Severally Subscribing to Boeing Policy Number MARCW150053 and Related Policies Governing The Cargo” (collectively, “Certain Underwriters”), are suing four entities which, they claim, caused or contributed to the accident: Southern Pride Trucking, Thunder Rolls Express, Bauer Built, and Road Star Carrier.

 

Several motions for summary judgment are currently before the Court—each raising complex issues of law and fact. The Court has spent significant time reviewing those motions, and is fully aware of the parties’ arguments with respect to each pending request. But as discussed in more detail below, the Court cannot, at least at this stage of the proceedings, resolve those disputes on the merits. Indeed, none of the defendants have answered the plaintiffs’ amended complaint, and each of the pending motions responds to, or otherwise relies on, pleadings that are no longer operative in this case. So, the Court will deny the pending motions for summary judgment without prejudice to reassertion. The Magistrate Judge shall promptly confer with the parties and set an amended progression order consistent with this Memorandum and Order.

 

 

BACKGROUND

The facts of this case, generally summarized, are as follows. Southern Pride, a trucking company, agreed to transport a Boeing airline engine from Ohio to Washington. Filing 115 at 3-4. Rather than using its own fleet of tractor trailers, Southern Pride subcontracted the job to defendant Thunder Rolls, a trucking company based in Indiana. Filing 115 at 3. Joseph Womack, Thunder Rolls’ owner and sole proprietor, picked up the engine from a General Electric plant in Ohio. After loading the engine onto his trailer, Womack set out for Everett, Washington. See filing 124-1 at 6. Womack’s route took him through Wood River, Nebraska, as he headed west on Interstate 80. Filing 117 at 8.

 

Approximately an hour and a half before Womack reached Wood River, a different westbound tractor trailer had pulled over to the side of Interstate 80 with a flat tire. Filing 117 at 10; filing 118-4 at 5. That tractor trailer was owned by defendant Road Star. Filing 118-4 at 5. Road Star contacted defendant Bauer Built, which provides roadside assistance to the interstate trucking industry. Soon after, a Bauer employee arrived to replace the tire. Filing 117 at 12. Both were still there as Womack approached.

 

Womack, driving in the right lane, was approximately 100 feet away from Road Star’s disabled truck when he first saw it on the side of the road directly ahead of him. Filing 118-2 at 17. Womack attempted to move into the left lane to avoid any potential contact with the vehicles. Filing 118-2 at 9. But as he began to move over, Womack noticed a pickup truck in his side-view mirror. Filing 124-1 at 40. So, Womack “came back to the right to get [to the] center of [his] lane.” Filing 124-1 at 40. Womack collided with Road Star’s truck. The airplane engine dislodged from Womack’s trailer, landing on the road. See filing 124-1 at 11. According to Certain Underwriters, the engine is no longer functional, resulting in approximately $18,000,000 in damages. Filing 115 at 6. Certain Underwriters allege various theories of liability against the defendants under both state and federal law. Each defendant has moved for summary judgment.

 

 

DISCUSSION

*2 The procedural history of this case is straightforward: the plaintiffs filed a complaint, the defendants answered with counterclaims, and parties began moving for summary judgment. But on January 26, 2016, while three motions for summary judgment were pending, Certain Underwriters—with leave from the Magistrate Judge—filed an amended complaint. See filing 115. And that complaint includes substantive changes to Certain Underwriters’ theories of recovery. In particular, Certain Underwriters added a claim against Bauer and Road Star, and removed Thunder Rolls from their first claim for relief, which alleges a violation of the Carmack Amendment of the Interstate Commerce Act, 49 U.S.C. § 13101 et seq. Compare filing 1 with filing 115.

 

The amended complaint also had procedural implications. As the Eighth Circuit has recognized, an amended complaint supersedes an original complaint and renders the original complaint without legal effect. In re Wireless Tel. Fed. Cost Recovery Fees Litig., 396 F.3d 922, 928 (8th Cir. 2005). So, when an amended complaint has been filed, a defendant generally has 14 days to file an amended answer. See Fed. R. Civ. P. 15(a)(3). As noted, once an amended pleading is interposed, “the original pleading no longer performs any function in the case[.]” Charles A. Wright & Arthur Miller, 6 Federal Practice & Procedure § 1476 (3d ed. 2017).

 

None of the four defendants in this case have filed answers to Certain Underwriters’ amended complaint. And that oversight is not insignificant. Indeed, each of the pending motions for summary judgment are premised, in whole or in part, on an affirmative defense or counterclaim. For example, defendants Southern Pride and Thunder Rolls have moved for partial summary judgment, seeking the enforcement of a $250,000 limitation on liability “pursuant to [their] eleventh affirmative defense[.]” Filing 90 at 1. Those defendants also seek judgment on Bauer and Road Star’s cross-claims, arguing that they are preempted under the Carmack Amendment. Filing 90 at 2. Similarly, Bauer moves for summary judgment on its third affirmative defense, filing 57 at 6, arguing that Thunder Rolls’ driver was the sole proximate cause of the accident. Filing 123 at 18. And defendant Road Star, relying on its seventh affirmative defense, makes the same argument—claiming that “intervening” and “superseding” forces proximately caused the plaintiffs’ losses. Filing 47 at 8.

 

But as noted above, those arguments derive from previously filed—and now legally inoperative—pleadings. Thus, to renew those arguments, the defendants must, pursuant to Fed. R. Civ. P. 15, file an amended answer. “No option is given to merely stand on preexisting pleadings made in response to an earlier complaint.” Bremer Bank, Nat. Ass’n v. John Hancock Life Ins. Co., 2009 WL 702009, at *12 (D. Minn. 2009); see General Mills, Inc. v. Kraft Foods Global, Inc., 495 F.3d 1378, 1381 (8th Cir. 2007) (previously asserted counterclaims are “no longer … pending” upon the filing of an amended complaint). Until such answers are filed, the Court cannot, and will not, address the merits of the parties’ dispositive motions.

 

And there’s another problem: as alluded to above, three of the five parties moved for summary judgment before Certain Underwriters had filed their amended complaint. See filing 90; filing 111. As a result, those motions and accompanying briefs are not fully responsive to the claims currently before the Court. For instance, defendant Thunder Rolls argues that, as a Carmack defendant, it is protected by a $250,000 limitation on liability pursuant to the Carmack Amendment. See filing 90 at 1. But pursuant to the amended complaint, Certain Underwriters are no longer pursuing their Carmack claim against Thunder Rolls, suing Thunder Rolls instead for breach of contract, breach of bailment obligations, and negligence. Filing 115 at 7-9. And it is not entirely clear how, if at all, that change affects Thunder Rolls’ position. Similarly, Bauer and Road Star refer to defendant Thunder Rolls in their briefing as being sued “under the Carmack Amendment.” See filing 123 at 37. But again, under the amended complaint, it is not. See filing 115 at 7.

 

*3 To be clear: the Court is in no way suggesting that the parties should alter their position or arguments based on the amended complaint. Rather, the Court is advising the parties to directly address how, if at all, Certain Underwriters’ amended allegations affect their respective positions on summary judgment.

 

As a final matter, the Court acknowledges Bauer’s ongoing disagreement with the Magistrate Judge’s order permitting Certain Underwriters to amend their complaint. See filing 99; filing 123 at 6 n.1. But that is a moot point. Under the local rules, a party may object to a Magistrate Judge’s order in a nondispositive matter within 14 days of service. NECivR 72.2(a). Bauer did not object here, nor did it ask the Magistrate Judge to reconsider her decision. That decision is water under the bridge, and will not be revisited, in any form, by this Court.

 

 

CONCLUSION

To reiterate, the Court has expended significant time reviewing the parties’ evidence and argument, and will promptly resolve the parties’ motions, should they be refiled, upon proper compliance with the Federal Rules. To that end, the Magistrate Judge shall confer with the parties and set an amended progression order consistent with this Memorandum and Order. In the meantime, the parties’ pending motions for summary judgment will be denied without prejudice to reassertion.

 

IT IS ORDERED:

1. Southern Pride Trucking and Thunder Roll Express’s joint motion for partial summary judgment (filing 90) is denied without prejudice to reassertion.
2. Certain Underwriters’ partial motion for summary judgment as to Bauer Built and Road Star Carrier (filing 111) is denied without prejudice to reassertion.
3. Road Star Carrier’s motion for summary judgment (filing 116) is denied without prejudice to reassertion.
4. Bauer Built’s motion for summary judgment (filing 122) is denied without prejudice to reassertion.
5. Bauer Built’s motion for oral argument (filing 125) is denied without prejudice to reassertion.
6. Certain Underwriters’ motion to amend their motion for summary judgment (filing 146) is denied as moot.
7. Certain Underwriters’ motion for leave to file supplemental legal authority (filing 154) is denied as moot.
8. This case is referred to the Magistrate Judge for case progression. The Magistrate Judge shall promptly confer with the parties to set an amended progression order consistent with this Memorandum and Order.

 

United States District Court,

1. Colorado.

Jimmy B. PACHECO, Plaintiff,

v.

SPARTA INSURANCE COMPANY, a Connecticut corporation, Garnishee/Defendant.

Sparta Insurance Company, Plaintiff,

v.

Jimmy Pacheco, US Transport, Inc., and Begay Bemeu, Defendants.

Civil Action No 17–cv–01309–RBJ

|

Consolidated Civil Action No. 17–cv–01511–RBJ

|

Signed 09/28/2017

Attorneys and Law Firms

Patric J. LeHouillier,Franklin D. Azar & Associates, PC, Aurora, CO, for Plaintiff/Defendants.

Monica Lynn Lester, Jane E. Young, McElroy Deutsch Mulvaney & Carpenter, LLP, Greenwood Village, CO, for Plaintiff/Garnishee/Defendant..

 

 

ORDER on MOTION TO JOIN AND REMAND

1. Brooke Jackson, United States District Judge

The case is before the Court on plaintiff’s “Motion to Join Defendants Begay Bemeu and U.S. Transport & Logistics LLC; and for Remand to State Court.” ECF No. 15. The motion is directed only to case 17–cv–1309–RBJ. The motion is denied for the reasons discussed in this order.

 

 

BACKGROUND

*1 This is an insurance coverage dispute arising out of two motor vehicle accidents and a personal injury lawsuit that was litigated in state court.

 

 

The Underlying Case.

On June 21, 2017 Sparta filed a separate federal lawsuit against Mr. Pacheco, Mr. Bemeu and US Transport seeking a declaratory judgment that it has no liability for Mr. Pacheco’s judgment against Mr. Bemeu in the underlying case. Jurisdiction was asserted based on diversity of citizenship and federal question grounds. ECF No. 1 in no. 17–cv–1511–RBJ at 2. Sparta then filed a motion in case no. 17–cv–1309 to consolidate the declaratory judgment action with the garnishment action. ECF No. 25 in 17–cv–1309–RBJ. Sparta reported that plaintiff did not oppose consolidation but did oppose consolidation into no. 17–cv–1309. Id. at 25. This meant that plaintiff did not oppose consolidation so long as the case was consolidated into no. 17–cv–1511. However, the practice in this district is to consolidate into the first filed case. Accordingly, that was done without further briefing by the parties. See 7(d) (“Nothing in this rule precludes a judicial officer from ruling on a motion at any time after it is filed.”).

 

 

Case No. 17–cv–1309–RBJ.

Shortly after the judgment was entered against Mr. Bemeu, Mr. Pacheco served a writ of garnishment on Sparta Insurance Company. Sparta had issued a liability insurance policy to US Transport. On May 30, 2017 Sparta filed a notice of removal of the garnishment action to federal court, asserting both diversity of citizenship and federal question jurisdiction. ECF No. 1. On June 30, 2017 Mr. Pacheco filed the pending motion to remand the case to state court. ECF No. 15.

 

 

Case No. 17–cv–1511–RBJ.

On February 13, 2017 Jimmy Pacheco was sitting in his car which was temporarily stopped on Interstate Highway 70 in Eagle County, Colorado (or its shoulder) due to an accident on the road ahead when a truck driven by Walter J. Little, Jr. crashed into the rear of Mr. Pacheco’s car and injured him. Mr. Pacheco sued Mr. Little and the owner of Little’s vehicle, Colorado Petroleum Corporation, in the Denver District Court. Shortly after filing suit, however, Mr. Pacheco amended his complaint to name three other individuals, including one Begay Bemeu, as additional defendants.1 They apparently were the people involved in the accident that resulted in Mr. Pacheco’s stop.

 

At the time of the accidents Mr. Bemeu was an employee of a company variously referred to in the pleadings as US Transport, Inc. or US Transport and Logistics LLC and in this order simply as US Transport. It is not disputed that Mr. Bemeu was acting within the scope and course of his employment when the accidents took place. However, US Transport was not joined as a defendant. Mr. Bemeu was served with the amended complaint but did not respond. A default was entered against him, and he did not appear for the February 2017 trial. Ultimately, the jury assigned 20% of the fault to him. On April 4, 2017 the court entered judgment, including prejudgment interest, against Mr. Bemeu in the amount of $304,976.13.

 

 

MOTION TO REMAND

*2 In the pending motion Mr. Pacheco asserts that Mr. Bemeu and U.S. Transport are indispensable to the resolution of the garnishment issues in case 17–cv–1309–RBJ. ECF No. 15 at 2. He asserts that joining them would destroy diversity of citizenship jurisdiction (because he and, he claims, Mr. Bemeu and US Transport are citizens of Colorado), and that this would rule out joinder under Fed. R. Civ. P. 19(a). But he argues that the court should find that case cannot in equity and good conscience proceed without Mr. Bemeu and US Transport as provided in Fed. R. Civ. P. 19(b). Id. at 2–5. Accordingly, he asks that the case be remanded to the state court under 28 U.S.C. § 1447(e). Id. at 2–5. Id. at 8.

 

In response Sparta begins by asserting that the motion to remand was untimely. “A motion to remand the case on the basis of any defect other than lack of subject matter jurisdiction must be made within 30 days after the filing of the notice of removal….” 28 U.S.C. § 1447(c). The motion to remand here was filed on the 31st day after the notice of removal was filed. But generously construed, one could interpret the motion to remand as, in effect, a challenge to this Court’s subject matter jurisdiction. Also, neither party addresses whether the 30–day period is expanded by three days under Rule 6(d). The Court gives plaintiff and his lawyers the benefit of the doubt and determines that the motion to remand was timely.

 

I do not, however, agree that this Court lacks jurisdiction. Setting aside possible diversity of citizenship jurisdiction for the moment, I find that this Court has federal question jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1337. I begin with the observation that it is highly unlikely that there is coverage under the terms of the Sparta policy other than under a special endorsement called the MCS–90 endorsement. If it is true, as Sparta asserts (and no one has denied), that neither Mr. Bemeu nor his employer, US Transport, notified Sparta of Mr. Pacheco’s claim in the underlying case until after judgment had been entered against Mr. Bemeu, I do not envision a path by which plaintiff could successfully argue that coverage exists apart from the MCS–90. Plaintiff’s counsel essentially acknowledged during the initial Scheduling Conference on September 27, 2017 that insurance coverage here turns on the MCS–90 endorsement.

 

Motor carriers such as US Transport are required by Congress and regulations promulgated by the Federal Motor Carrier Safety Administration to obtain insurance covering judgments against them for damages caused by the carrier’s negligence. See Carolina Cas. Ins. Co. v. Yeats, 504 F3d 868, 873–74 (10th Cir. 209) (“The MCA and the subsequent regulations promulgated by the Federal Motor Carrier Safety Administration (FMCSA) require interstate motor carriers to obtain ‘a special endorsement…providing that the insurer will pay within policy limits any judgment recovered against the insured motor carrier for liability resulting from the carrier’s negligence, whether or not the vehicle involved in the accident is specifically described in the policy.”); Empire Fire and Marine Ins. v. Guaranty National Ins. Co., 868 F.2d 357, 362 (10th Cir. 1989) (the ICC developed the form endorsement to assure compliance with its regulations and Congress’s mandate)).2 Because the endorsement is the result of a federal mandate, most if not all federal courts that have addressed the issue have held that federal law governs the operation and effect of this endorsement. See, e.g., John Deere Ins. Co. v. Nueva, 229 F.3d 853, 856 (9th Cir. 2000); Carter v. Vangilder, 803 F.2d 189, 191 (5th Cir. 1989); Ford Motor Co. v. Transport Indemnity Co., 795 F.2d 538, 544 (6th Cir. 1986); Carolina Casualty Co. v. Ins. Co. of North America, 595 F.2d 128, 135–39 (3d Cir. 1979; Armstrong v. U.S. Fire Ins. Co., 606 F.Supp. 2d 794, 820 (E.D. Tenn. 2009) (“[V]irtually all jurisdictions to consider the question have concluded that the interpretation of the MCS–90 is a matter of federal law.”).

 

*3 Plaintiff cites McCloy v. Larew, No. 1:12CV166, 2013 WL 1962314 (N.D. W. Va. May 10, 2013) and Atlantic Cas. Ins. Co. v. United Tours, Inc., No. 3:12CV680, 2013 WL 2389887 (E.D. Va. May 30, 2013). Those cases did not hold that the effect and application of the MCS–90 endorsement is not a matter of federal law. Rather, they noted that the MCS–90 endorsement is triggered only if the court determines that coverage is not otherwise available under the policy, and thus the argument based on the MCS–90 endorsement was essentially premature. See McCloy, 2013 WL 1962314 at **4–5; Atlantic Cas. Ins. Co., 2013 WL 2389887 at *4 (“Federal law governs the interpretation of the federally mandated terms in the MCS–90B Endorsement, but the mere presence of a federal element is not enough to establish federal jurisdiction. Here, the endorsement is not triggered unless coverage is lacking under the liability provision of the policy.”) (internal citation omitted).

 

In the present case it is all but certain that there is no coverage other than what might be provided by the MCS–90 endorsement. The legal issue in this case, as I see it, is whether the judgment against Mr. Bemeu triggers the MCS–90 endorsement even though US Transport was not named a defendant and is not expressly the subject of the judgment. That is a question for another day. But I hold in the circumstances of this case that the need to interpret and apply the MCS–90 endorsement is sufficient to establish federal jurisdiction.

 

Even were there not federal question jurisdiction, however, I would find that there is diversity of citizenship jurisdiction. A garnishment is not simply ancillary or supplemental to the underlying action; rather, it is a civil action of its own, capable of being removed to federal court. See Garcia v. Century Surety Co., 71 F.Supp.3d 1184, 1186–88 (D. Colo. 2014). As I noted above, the legal issue here is whether the judgment against Mr. Bemeu triggers the MCS–90 endorsement even though the judgment was not entered against US Transport. I do not understand why that legal issue cannot be resolved without making Mr. Bemeu and US Transport parties to case no. 17–cv–1309–RBJ.

 

Regardless, even if plaintiff were right that Mr. Bemeu and US Transport should be joined as parties to the garnishment action, but that joinder would be infeasible due to the alleged destruction of diversity jurisdiction, the Court still has to decide under Rule 19(b) whether “in equity and good conscience” the case should proceed without out them or should be remanded. Because Mr. Bemeu and US Transport have been named as parties’ in Sparta’s related declaratory judgment lawsuit, which has been consolidated with this case, they will have the opportunity to be heard. The equities of the situation suggest that case no. 17–cv–1309 can proceed without them without compromising anyone’s rights, and that resolving the coverage issue in one forum is more sensible and fair to all concerned than having two different courts addressing the same issue and, potentially, reaching inconsistent results.

 

 

ORDER

For the reasons stated, the motion to join and remand, ECF No. 15, is denied.

All Citations

Slip Copy, 2017 WL 4296661

 

 

Footnotes

1

During the initial scheduling conference in the present consolidated cases on September 27, 2017 counsel for US Transport informed the Court that the man’s name was actually Bergell Begay, and that an erroneous police report was the origin of the name Begay Bemeu. For present purposes, however, I will use the name that has been used so far in both the state and federal litigation to avoid confusion.

2

Yeats, an en banc decision, vacated the holding of Empire and established as Tenth Circuit law that “the MCS–90 endorsement only applies where (1) the underlying insurance policy to which the endorsement is attached does not provide coverage for the motor carrier’s accident, and (2) the motor carrier’s insurance coverage is either not sufficient to satisfy the federally—prescribed minimum levels of financial responsibility or is non-existent. 584 F.3d at 871. For present purposes I am assuming that requirements are met in the present case. I cite these cases here only because they implicitly support the proposition that federal law governs the interpretation and application of the endorsement.