United States District Court,

N.D. California.

UNITED VAN LINES, LLC, Plaintiff,

v.

SCOTT DEMING, et al., Defendants.

Case No.17-cv-00390-JST

|

07/25/2017

 

JON S. TIGAR, United States District Judge

 

ORDER DENYING MOTION TO DISMISS Re: ECF No. 23

*1 Defendants Scott and Sarah Deming (the “Demings”) move to dismiss Plaintiff United Van Lines, LLC’s (“United”) complaint. ECF No. 23. The Court will deny the motion.

 

 

1. BACKGROUND

This action arises from United’s transport of the Demings’ household goods during their move from St. Paul, Minnesota to San Francisco, California. Compl., ECF No. 1 ¶ 3.

 

Scott Deming’s employer, Capella Education Company, entered into a contractual relationship with Plus Relocation Services. Id. ¶ 9. In turn, Plus Relocation Services contracted with United for motor carrier services through a “Transportation Services Agreement.” Id. ¶ 8. According to that agreement, “Carrier’s liability on an Item-by-Item basis (excluding Extraordinary Value Items) shall be Full Value Protection…” Id. ¶ 11. The agreement further states that “Carrier’s maximum liability for loss or damage to any and all Items in a shipment shall be the lesser of $5.00 per pound times the actual weight of the shipment or $100,000,” and that “[t]here shall be no charge for Carrier to assume this level of liability.” Id. However, the agreement provides that “Shipper may increase the level of Carrier’s maximum liability set forth above by declaring such additional amount on the Bill of Lading and paying charges for such additional amount equal to $.65 per $100.00 declared above Carrier’s maximum liability level.”

 

 

Id.

United and the Demings also executed a Household Goods Bill of Lading contract for the move. Id. ¶14. That contract similarly provides that, “[i]f any article is lost, destroyed, or damaged while in your mover’s custody, your mover’s liability is limited to the actual weight of the lost, destroyed, or damaged article multiplied by $5.00 per pound per article.” Id. ¶ 15. It goes on to provide that, “[u]nder the Released Level of Liability, your shipment will be transported based on a value of $5.00 per pound multiplied by the actual weight of the shipment.” Id. Finally, the Bill of Lading states the following: “Your signature is REQUIRED here: I acknowledge that for my shipment, I will receive the Released Level of Liability of $5.00 per pound per article.” Id. The Demings shipped 1,066 pounds of household goods at $5.00 per pound and did not declare any household goods as “Item-by-Item” or “Extraordinary Value Items.” Id. ¶ 12.

 

During transportation, the Demings’ household goods suffered water and mold damage. Id. at 17. The Demings have demanded that United pay the full replacement value in the amount of $48,002.64. Id. ¶18. In response, United offered the Demings $5,330, which it contends is its maximum contractual liability under both the Transportation Services Agreement and Bill of Lading. Id. ¶¶ 19?20, 12.

 

United’s complaint asserts a single count seeking declaratory judgment that the Demings are not entitled to recover the full replacement value of the damaged goods. Id. at 5?6.

 

The Demings move to dismiss United’s complaint on the ground that United has not pled the existence of any contract properly limiting its liability under the Carmack Amendment. ECF No. 23 at 6.

 

 

1. LEGAL STANDARD

*2 A complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief” which gives “the defendant fair notice of what the…claim is and the grounds upon which it rests.” Fed. R. Civ. P. 8(a)(2); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotation marks omitted). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks omitted). “A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. at 663.

 

 

III. DISCUSSION

The Court must determine whether United has plausibly alleged that it is entitled to declaratory judgment that its liability limitations were effective under the Carmack Amendment.

 

The Carmack Amendment “subjects a motor carrier transporting cargo in interstate commerce to absolute liability for ‘actual loss or injury to property.’ ” Hughes Aircraft Co. v. N. Am. Van Lines, Inc., 970 F.2d 609, 611–12 (9th Cir. 1992) (citing Missouri Pacific R.R. Co. v. Elmore & Stahl, 377 U.S. 134, 137 (1964)); see also, 49 U.S.C. § 14706(a)(1). “[A] carrier’s maximum liability for household goods that are lost, damaged, destroyed, or otherwise not delivered to the final destination is an amount equal to the replacement value of such goods, subject to a maximum amount equal to the declared value of the shipment and to rules issued by the Surface Transportation Board and applicable tariffs.” 49 U.S.C. § 14706(f)(2).

 

However, “[a] carrier…may petition the Board to modify, eliminate, or establish rates for the transportation of household goods under which the liability of the carrier for that property is limited to a value established by written declaration of the shipper or by a written agreement.” Id. § 14706(f)(1). But “[t]he released rates established by the Board…shall not apply to the transportation of household goods by a carrier unless the liability of the carrier for the full value of such household goods…is waived, in writing, by the shipper.” Id. § 14703(f)(3).

 

“Before a carrier’s attempt to limit its liability will be effective, the carrier must (1) maintain a tariff in compliance with the requirements of the Interstate Commerce Commission; (2) give the shipper a reasonable opportunity to choose between two or more levels of liability; (3) obtain the shipper’s agreement as to his choice of carrier liability limit; and (4) issue a bill of lading prior to moving the shipment that reflects any such agreement.” Hughes, 970 F.2d at 611– 12. “The carrier has the burden of proving that it has complied with these requirements.” Id. at 612.

 

The Demings argue that the Bill of Lading and the Transportation Services Agreement do not comply with the second and third requirements because they did not give Mr. Deming a reasonable opportunity to choose between different liability levels or obtain his agreement as to the same. ECF No. 23 at 6?7. They further argue that the Transportation Services Agreement between Plus Relocation and United does not apply because it was not incorporated by reference into the Bill of Lading between Mr. Deming and United and Mr. Deming was not aware of its terms. Id.

 

In response, United fails to explain how either its Bill of Lading or its Transportation Services Agreement satisfied these requirements. Instead, United argues that the motion to dismiss is premature because there are unresolved factual issues relating to whether Mr. Deming had actual notice of the limitation of liability. ECF No. 27 at 9. United further argues that the liability limitation in the Transportation Services Agreement between United and Plus Relocation is binding on Mr. Deming regardless of whether he knew about it. Id. at 9?11. To the extent the Court is inclined to consider the motion to dismiss, United seeks leave to amend. Id. at 11?12.1

 

*3 The Court rejects United’s argument that the motion to dismiss is premature and improper. To support this argument, United relies exclusively on the Northern District of Illinois’ decision in H. Kramer & Co. v. CDN Logistics, Inc., No 13. CV 5790, 2014 WL 3397161 at *4 (N.D. Ill. July 11, 2014). ECF No. 27 at 9. But that case is distinguishable. The Kramer court noted that it “cannot consider the bill of lading and [defendant’s] tariff without converting the motion to dismiss into a motion for summary judgment, as those documents are ‘matters outside the pleadings.’ ” Id. at *4 (quoting Fed. R. Civ. P. 12(d)). However, United attached both the Bill of Lading and the Transportation Services Agreement to its complaint, and therefore this Court may consider those documents without converting the motion to dismiss into a motion for summary judgment. See United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003). Moreover, because United seeks declaratory relief that hinges directly on whether those two agreements (which are properly before the Court) contained a permissible limitation of liability, it is unclear what further discovery is needed to resolve this litigation, and United does not point to any.

 

Turning to the merits of the motion to dismiss, the Court first looks to the Bill of Lading between Mr. Deming and United. With respect to liability, the Bill of Lading provides the following:

If any article is lost, destroyed, or damaged while in your mover’s custody, your mover’s liability is limited to the actual weight of the lost, destroyed, or damaged article multiplied by $5.00 per pound per article. This liability level is provided at no charge.

Under the Released Level of Liability, your shipment will be transported based on a value of $5.00 per pound multiplied by the actual weight of the shipment.

Your signature is REQUIRED here: I acknowledge that for my shipment, I will receive the Released Level of Liability of $5.00 per pound per article.

ECF No. 1 at 17. On its face, this liability provision in the Bill of Lading does not give Mr. Deming “a reasonable opportunity to choose between two or more levels of liability” or “obtain [his] agreement as to his choice of carrier liability limit.” Hughes, 970 F.2d at 611–12. Nor does the Bill of Lading include any written waiver of full value protection, which is required by the plain text of the provision governing the transport of household goods. 49 U.S.C. § 14703(f)(3). Therefore, the Bill of Lading does not establish an effective limitation of liability under the Carmack Amendment.

 

Next, the Court turns to the Transportation Services Agreement between United and Plus Relocation. As a preliminary matter, United has plausibly alleged that Mr. Deming was bound by this agreement even though he was not a direct party to it. The Bill of Lading incorporates the Transportation Services Agreement between United and Plus Relocation. Specifically, the “CONTRACT TERMS and CONDITIONS of HOUSEHOLD GOODS BILL of LADING” section provides the following: “Carrier’s currently effective applicable tariffs, all inventories prepared in conjunction with this Bill of Lading, any applicable National Contract Agreements and the Estimate/Order for Service prepared in advance of shipment are hereby incorporated by reference.” ECF No. 1 at 20 (emphasis added). And, even if Mr. Deming was not actually aware of the terms of the Transportation Services Agreement, he is still be bound by it if Plus Relocation was acting as an intermediary. See Norfolk S. Ry. Co. v. Kirby, 543 U.S. 14, 33 (2004) ( “When an intermediary contracts with a carrier to transport goods, the cargo owner’s recovery against the carrier is limited by the liability limitation to which the intermediary and carrier agreed….[W]hen it comes to liability limitations for negligence resulting in damage, an intermediary can negotiate reliable and enforceable agreements with the carriers it engages.”). United has plausibly alleged that Plus Relocation was acting as an intermediary between United and Mr. Deming, and therefore that Mr. Deming is bound by the liability limitation in the Transportation Services Agreement. See ECF No. 1 ¶¶ 8?9 (alleging that Scott Deming’s employer, Capella Education Company, entered into a contractual relationship with Plus Relocation Services, who in turn contracted with United).

 

*4 United has also plausibly alleged that the Transportation Services Agreement satisfied the requirements for an effective liability limitation under the Carmack Amendment. According to that agreement, “Carrier’s liability on an Item-by-Item basis (excluding Extraordinary Value Items) shall be Full Value Protection…” ECF No. 1 ¶ 11. The agreement further states “Carrier’s maximum liability for loss or damage to any and all Items in a shipment shall be the lesser of $5.00 per pound times the actual weight of the shipment or $100,000,” and that “[t]here shall be no charge for Carrier to assume this level of liability.” Id. Importantly, though, that agreement also states that “Shipper may increase the level of Carrier’s maximum liability set forth above by declaring such additional amount on the Bill of Lading and paying charges for such additional amount equal to $.65 per $100.00 declared above Carrier’s maximum liability level.” Id. This statement, when viewed in conjunction with Mr. Deming’s subsequent failure to declare an additional amount in the blanks on the Bill of Lading, plausibly suggests that United gave Mr. Deming a reasonable opportunity to choose between two or more levels of liability and obtained Mr. Deming’s agreement to a lower level of liability. See Nipponkoa, 687 F.3d at 782?83 (finding that the contracts, “[o]n their face, suggest that [shipper] had a choice between accepting a $0.60 per pound limitation of liability or declaring a different value for the load” because “[shipper] left the line blank where it could have declared a higher value than $0.60 per pound”).

 

Therefore, when construed in the light most favorable to United, the allegations in the complaint and the attached exhibits plausibly suggest that United is entitled to the declaratory relief that it seeks in this action. The Court accordingly denies the motion to dismiss.

 

 

CONCLUSION

The Court denies the motion to dismiss.

 

IT IS SO ORDERED.

 

 

Dated: July 25, 2017

JON S. TIGAR

United States District Judge

All Citations

Slip Copy, 2017 WL 3149301

 

 

Footnotes

1

United dedicates much of its opposition briefing to jurisdictional issues under the Declaratory Judgment Act that are not in dispute and have no relevance to the present motion to dismiss. ECF No. 27 at 5?9.

 

 

United States District Court,

N.D. Ohio, Eastern Division.

LINDA STEESE, et al., PLAINTIFFS,

v.

SML RELOCATION, LLC, DEFENDANT.

CASE NO. 5:15-cv-2681

|

08/15/2017

 

HONORABLE SARA LIOI, UNITED STATES DISTRICT JUDGE

 

MEMORANDUM OPINION AND ORDER

*1 Before the Court is defendant’s motion for partial dismissal of plaintiffs’ first amended complaint. (Doc. No. 18 [“Mot.”].) Plaintiffs filed a brief in opposition (Doc. No. 19 [“Opp’n”] ) and defendant filed a reply (Doc. No. 20 [“Reply”] ). For the reasons set forth below, the motion is granted. Counts two, three, four, and five are dismissed and the case will proceed solely on count one.

 

 

1. BACKGROUND

On March 5, 2014, plaintiffs and defendant entered into an agreement for the relocation of all of plaintiffs’ belongings from Midlothian, Texas to Akron, Ohio. (Doc. No. 17, First Amended Complaint [“Compl.”] ¶ 5 and Ex. A.) The agreement offered plaintiffs two options: either pay a deductible of $2,000 to insure the full value of their items, or agree to a “Released Value Valuation” (i.e., liquidated damages) that valued the items at $.60 per pound per item. Plaintiffs chose the latter, asserting that they were “under pressure to procure moving services and without funds to afford the deductible[.]” (Id. ¶ 6; Ex. A at 154.1 )

 

On or about March 9, 2014, defendant picked up plaintiffs’ belongings with a company-owned moving truck and transported them to Akron, delivering them on March 12, 2014. (Id. ¶¶ 7, 9.) Plaintiffs allege that, during the transport of their items, the items were destroyed. (Id. ¶ 8.) Nonetheless, with no explanation as to the condition of the items, defendant’s employees unloaded them. (Id. ¶ 10.) Plaintiffs allege that defendant sought payment under the agreement, despite the fact that the contract price was equal to or in excess of the amount of contractual liquidated damages. (Id. ¶ 11.)

 

The complaint contains five counts: (1) a Carmack Amendment claim, 49 U.S.C. § 14706;

(2) a request for declaratory judgment; (3) conversion (in the alternative to count one); (4) negligence (in the alternative to count one); and (5) malicious conduct. Defendants seek dismissal of all but count one, arguing preemption under the Carmack Amendment and failure to state a claim.

 

 

1. DISCUSSION
2. Standard on a Motion to Dismiss

A complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief[.]” Fed. R. Civ. P. 8(a)(2). Although this pleading standard does not require great detail, the factual allegations in the complaint “must be enough to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007) (citing authorities). In other words, “Rule 8(a)(2) still requires a ‘showing,’ rather than a blanket assertion, of entitlement to relief.” Id. at 556, n.3 (criticizing the Twombly dissent’s assertion that the pleading standard of Rule 8 “does not require, or even invite, the pleading of facts”).

 

“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009) (quoting Twombly, 550 U.S. at 570). Rule 8 does not “unlock the doors of discovery for a plaintiff armed with nothing more than conclusions.” Id. at 678-79. “While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.” Id. at 679. “The court need not, however, accept unwarranted factual inferences.” Total Benefits Planning Agency, Inc. v. Anthem Blue Cross & Blue Shield, 552 F.3d 430, 434 (6th Cir. 2008) (citing Morgan v. Church’s Fried Chicken, 829 F.2d 10, 12 (6th Cir. 1987)).

 

 

1. Analysis
2. Counts Three, Four and Five — Preemption of State Law Claims

*2 Plaintiffs have pleaded state law claims of conversion (count three) and negligence (count four). They also assert in count five a state law claim for “malicious conduct.” Defendant argues that these three counts (to the extent count five even exists as a viable claim under Ohio law)2 are all preempted by the Carmack Amendment to the Interstate Commerce Act.

 

“The Carmack Amendment…created a national scheme of carrier liability for loss or damages to goods transported in interstate commerce.” Exel, Inc. v. S. Refrigerated Transp., Inc., 807 F.3d 140, 148 (6th Cir. 2015). “The Amendment restricts carriers’ ability to limit their liability for cargo damage. It makes a motor carrier fully liable for damage to its cargo unless the shipper has agreed to some limitation in writing.” Id. (citing 49 U.S.C. § 11706(a), (c), § 14101(b)). “Carriers in turn acquire reasonable certainty in predicting potential liability because shippers’ state and common law claims against a carrier for loss to or damage were preempted.” Id. (citing Certain Underwriters at Interest at Lloyds of London v. UPS, 762 F.3d 332, 335 (3d Cir. 2014)).

 

Plaintiffs argue in opposition that they have pleaded their state law claims of conversion and negligence in the alternative,3 “[t]o the extent that the Court finds that the Agreement is unenforceable[.]” (Compl. ¶¶ 17, 22.) But, if the agreement is unenforceable, that means that defendant cannot limit its liability to the released value, but must pay the full value. There is no need for any alternative claim, even if the doctrine of complete preemption permitted one. But, where state law claims are completely preempted, they simply cannot be brought, not even in the alternative.

 

Defendant is entitled to dismissal of counts three, four and five.

 

 

2. Count Two – Declaratory Judgment

In this count, plaintiffs ask the Court to declare “the parties’ respective rights and obligations pursuant to the Agreement and as to the enforceability of the Agreement.” (Compl. ¶ 15.) In the prayer for relief, plaintiffs ask for a declaration that the agreement is unenforceable.

 

“[D]istrict courts possess discretion in determining whether and when to entertain an action under the Declaratory Judgment Act, even when the suit otherwise satisfies subject matter jurisdictional requirements.” Wilton v. Seven Falls Co., 515 U.S. 277, 282, 115 S. Ct. 2137, 132 L. Ed. 2d 214 (1995) (citing Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491, 62 S. Ct. 1173, 86 L. Ed. 1620 (1942)). In the Sixth Circuit, courts generally consider five factors: “(1) whether the judgment would settle the controversy; (2) whether the declaratory judgment action would serve a useful purpose in clarifying the legal relations at issue; (3) whether the declaratory remedy is being used merely for the purpose of ‘procedural fencing’ or ‘to provide an arena for a race for res judicata’; (4) whether the use of a declaratory action would increase the friction between our federal and state courts and improperly encroach on state jurisdiction; and (5) whether there is an alternative remedy that is better or more effective.” Scottsdale Ins. Co. v. Roumph, 211 F.3d 964, 968 (6th Cir. 2000) (citations omitted).

 

*3 Here count two is no more than a restatement of count one. Plaintiffs are seeking a declaration that defendant, by way of the agreement between the parties, failed to limit its liability under the Carmack Amendment to the Interstate Commerce Act. Defendant is arguing that plaintiffs are not entitled to that declaration. One way or the other, that determination will be made on the strength of count one. Plaintiffs will either be able to establish under count one that defendant did limit its liability or it did not. Although factors three and four are not at issue here, the other three factors weigh in favor of dismissal. See World Shipping, Inc. v. RMTS, LLC, No. 1:12 CV 3036, 2013 WL 774503, at *5 (N.D. Ohio Feb. 22, 2013) (granting defendant’s motion to dismiss the declaratory judgment count in the complaint because it “would not settle the controversy[,]…nor…serve a purpose more useful than that served by the breach of contract claim.”).

 

The Court declines to exercise jurisdiction over count two and it is dismissed.

 

 

III. CONCLUSION

For the reasons set forth herein, defendant’s motion to dismiss counts two, three, four and five (Doc. No. 18) is granted. The case will proceed only as to count one.

 

IT IS SO ORDERED.

 

 

Dated: August 15, 2017

HONORABLE SARA LIOI

UNITED STATES DISTRICT JUDGE

All Citations

Slip Copy, 2017 WL 3494330

 

 

Footnotes

1

All page number references are to the page identification number generated by the Court’s electronic docketing system.

2

See Justice v. Justice, No. 99CA16, 2000 WL 221996, at *13 n. 15 (Ohio Ct. App. Feb. 4, 2000) (“malicious conduct …is not a separate cause of action but rather a prayer for punitive damages”); see also Grant v. Wells Fargo Home Mortg., Case No. 2:15-cv-12972, 2016 WL 8115649, at *4 (E.D. Mich. May 11, 2016) (“damages [for malicious conduct] are a remedy, not a cause of action”).

3

In their opposition brief, plaintiffs argue that “[it] has yet to be determined whether [d]efendant is a ‘motor carrier’ as defined under the Caremack [sic] Amendment.” (Opp’n at 174.) But the Court is satisfied that defendant meets the definition of both “motor carrier” and “carrier.” See 49 U.S.C. § 13102.