NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA, et al., Plaintiffs, v. ALL AMERICAN FREIGHT, INC., HARTLEY FREIGHT LINES, LLC, and HARTLEY TRANSPORTATION, LLC, Defendants.
Case No. 14-CIV-62262-BLOOM/VALLE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA
2016 U.S. Dist. LEXIS 120828
September 6, 2016, Decided
September 6, 2016, Filed
PRIOR HISTORY: Nat’l Union Fire Ins. Co. v. All Am. Freight, Inc., 2016 U.S. Dist. LEXIS 19014 (S.D. Fla., Feb. 16, 2016)
COUNSEL: [*1] For National Union Fire Insurance Company of Pittsburgh, PA, other Coex Coffee International, Coex Coffee International, Plaintiffs: John Marcus Siracusa, LEAD ATTORNEY, Joseph William Janssen, III, Janssen & Siracusa, P.A., West Palm Beach, FL; Nathan T. Williams, LEAD ATTORNEY, PRO HAC VICE, Kennedy Lillis Schmidt & English, New York, NY.
All American Freight, Inc., Defendant, Pro se, Hollywood, Fl.
JUDGES: ALICIA O. VALLE, UNITED STATES MAGISTRATE JUDGE.
OPINION BY: ALICIA O. VALLE
OPINION
REPORT AND RECOMMENDATION TO DISTRICT JUDGE
THIS MATTER is before the Court upon Defendant Hartley Freight Lines, LLC’s Motion for Entitlement and Award of Reasonable Attorney’s Fees and Costs (ECF No. 89) (the “Motion”). United States District Judge Beth Bloom referred the Motion to the undersigned for disposition. See (ECF No. 91). The undersigned has reviewed the Motion, Plaintiffs’ Response (ECF No. 116), and Defendants’ Reply (ECF No. 133). Accordingly, being fully advised in the matter, the undersigned recommends that the Motion be DENIED for the reasons set forth below.
- PROCEDURAL BACKGROUND
This case has been discussed extensively in prior Court rulings, which are incorporated by reference. See, e.g., (ECF No. 42) (Order [*2] on Defendants’ Motion to Dismiss); (ECF No. 82) (Omnibus Order on Motions for Summary Judgment); and (ECF No. 130) (Order on Motion for Sanctions and Motion for Relief from Order on Summary Judgment). Facts relevant to the instant Motion are set forth below.
The case stems from the 2011 theft of 320 bags of green coffee (the “Cargo”) from a warehouse in Miami, Florida. Plaintiff National Union Fire Insurance Company of Pittsburgh, PA (“National Union”), who insured the Cargo against transit-related loss and damage, commenced this action as subrogee for Coex Coffee International (“Coex”). (ECF No. 1).
On March 25, 2015, Plaintiffs filed an Amended Complaint (ECF No. 34), alleging separate claims for breach of carriage contract under the Carmack Amendment, 49 U.S.C. § 14706, against Defendants All American Freight, Inc. (“AAF”), Hartley Transportation, LLC (“Hartley Transportation”), and Hartley Freight Lines, LLC (“Hartley Freight”). Id. Plaintiffs alleged an alternative state law negligence cause of action against Hartley Transportation. Id. at ¶¶ 58-72. Jurisdiction was alleged under 28 U.S.C. § 1331 (federal question) and, alternatively, under 28 U.S.C. § 1332 (diversity of citizenship). Id. at ¶¶ 17, 19.
On May 12, 2015, pursuant to Florida statue [*3] § 768.79, Hartley Freight served an Offer of Judgment on Plaintiffs in the amount of $500 for “settlement of all claims made by the Plaintiffs against the Defendant Hartley Freight . . . including claims for attorney’s fees, interest, and punitive damages.” (ECF No. 89-1 at 1) (the “Offer of Judgment”). Plaintiffs did not accept the Offer of Judgment. (ECF No. 89 at 2).
On December 16, 2015, Defendants Hartley Freight and Hartley Transportation filed Motions for Summary Judgment. See (ECF Nos. 55, 57). On February 17, 2016, the Court granted Hartley Freight’s Motion for Summary Judgment. See (ECF No. 82). In granting summary judgment, the Court stated that Hartley Freight and Hartley Transportation–although sharing a root name–were distinct legal entities, and Plaintiffs had not provided a legal basis to support their argument that the corporate forms should be disregarded and/or comingled. Id. at 21-22. The Court further concluded that “there is absolutely no evidence that Hartley Freight was a party to the transaction resulting in the theft.” Id. at 23.
The instant Motion followed. In the Motion, Defendant Hartley Freight seeks to recover reasonable attorney’s fees and costs pursuant to Florida statute § 768.79 on the [*4] grounds that Plaintiffs rejected the Offer of Judgment and the Court ultimately entered summary judgment in its favor. See (ECF No. 89 at 2).
Plaintiffs respond that § 768.79 is inapplicable because the basis for jurisdiction in this case is a federal question under 28 U.S.C. § 1331 based on the Carmack Amendment. (ECF No. 116 at 3).1 In reply, Defendants argue that the Court has diversity or supplemental jurisdiction under 28 U.S.C. §§ 1332 or 1367 over the state law negligence and alter-ego claims such that § 768.79 applies. (ECF No. 133 at 4-5).
1 Plaintiffs also argue that the Offer of Judgment was facially deficient. See (ECF No. 116 at 3-5). Because the Motion can be decided on the applicability of § 768.79 to the instant facts, the Court need not address whether the Offer of Judgment was deficient.
- LEGAL STANDARDS
Under the “American Rule,” litigants are generally not entitled to an award of attorneys’ fees for prevailing in litigation unless provided by statute or contract. See, e.g., In re Martinez, 416 F.3d 1286, 1288 (11th Cir. 2005); Buckhannon Bd. & Care Home, Inc. v. W Virginia Dep’t of Health & Human Res., 532 U.S. 598, 602, 121 S. Ct. 1835, 149 L. Ed. 2d 855 (2001). Relevant to the issue of fees is the interplay between the federal Carmack Amendment (49 U.S.C. § 14706) and Florida’s Offer of Judgment statute (§ 768.79).
The Carmack Amendment generally governs interstate cargo claims, controls and limits the liability of common carriers for in-transit cargo, and preempts common or state law remedies [*5] that increase a common carrier’s liability beyond the actual loss or injury to the property. See, e.g., A.I.G. Uruguay Compania de Seguros, S.A. v. AAA Cooper Transp., 334 F.3d 997, 1003 (11th Cir. 2003) (citing 49 U.S.C. § 14706(a)(1)) (“The Carmack Amendment to the Interstate Commerce Act makes common carriers liable for actual loss of or damage to shipments in interstate commerce.”); Smith v. United Parcel Serv., 296 F.3d 1244, 1246 (11th Cir. 2002) (“The Carmack Amendment creates a uniform rule for carrier liability when goods are shipped in interstate commerce.”); see also Casamassa v. Walton P. Davis Co. Inc., No. 2:07-CV-317-FTM-34DNF, 2008 U.S. Dist. LEXIS 24941, 2008 WL 879412, at *3 (M.D. Fla. Mar. 28, 2008) (“The Carmack Amendment provides that a shipper may recover the ‘actual loss or injury to the property’ caused by a carrier.”) (quoting 49 U.S.C. § 14706(a)(1)). The Amendment “provides the exclusive cause of action for interstate shipping contract claims.” White v. Mayflower Transit, LLC, 543 F.3d 581, 584 (9th Cir. 2008). As a result, state law claims arising from failures in the transportation and delivery of commercial goods are preempted. Smith, 296 F.3d at 1246 (internal citations omitted); see also Hansen v Wheaton Van Lines, Inc., 486 F. Supp. 2d 1339, 1343-44 (S.D. Fla. 2006) (“The law is well established that the remedies available under the Carmack Amendment preempt all state, common and statutory law regarding the liability of an interstate common carrier for claims arising out of shipments within the purview of said statute.”).
Under Florida statute § 768.79(1), in “a civil action for damages,” a defendant who files an offer of judgment that is not accepted by a plaintiff within 30 days “shall be entitled to recover reasonable costs and [*6] attorney’s fees incurred by her or him . . . if the judgment is one of no liability.” Courts generally agree that § 768.79 must be strictly construed because it is “in derogation of the common law rule that parties are responsible for their own attorney’s fees.” Campbell v. Goldman, 959 So. 2d 223, 226 (Fla. 2007); Winter Park Imports, Inc. v. JM Family Enters., 66 So. 3d 336, 340 (Fla. Dist. Ct. App. 2011); Palm Beach Polo Holdings, Inc. v. Equestrian Club Estates Prop. Owners Ass’n, Inc., 22 So. 3d 140, 144 (Fla. Dist. Ct. App. 2009).
III. DISCUSSION
Although Plaintiffs alleged diversity of citizenship as an alternative basis for jurisdiction in the Amended Complaint, the primary basis for jurisdiction in this case is the Carmack Amendment and federal question jurisdiction. Federal question jurisdiction is governed by 28 U.S.C. § 1331, which provides that “district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treatises of the United States.” (ECF No. 34 at ¶¶ 17, 19). The parties agree that the relevant federal statute, the Carmack Amendment, does not allow for the recovery of attorney’s fees for shipments involving commercial goods. See (ECF Nos. 116 at 2; 133 at 4); Fine Foliage of Florida, Inc. v. Bowman Transp., Inc., 698 F. Supp. 1566, 1576 (M.D. Fla. 1988), aff’d, 901 F.2d 1034 (11th Cir. 1990) (noting that the Carmack Amendment has no provision for the recovery of attorney’s fees in litigation regarding the shipment of commercial goods). The parties, however, dispute whether the claims against Defendant Hartley Freight were brought solely under the Carmack Amendment (which would preclude recovery of attorney’s [*7] fees), or as an alternative state law negligence claim (which may provide recovery of attorney’s fees under the Offer of Judgment statute).
Specifically, Defendant Hartley Freight argues that where a court has both federal question and supplemental jurisdiction, § 768.79 applies to the state law claims. (ECF No. 133 at 5); see, e.g., Design Pallets v. Gray Robinson, P.A., 583 F. Supp. 2d 1282, 1287 (M.D. Fla. 2008). According to Defendant Hartley Freight, the Amended Complaint included allegations of “negligence and alter-ego liability” that were “incorporated” into the claims against it. (ECF No. 133 at 5-6). Defendant Hartley Freight therefore concludes that the claims against it included state law claims that were not barred by the Carmack Amendment’s prohibition on fees for shipments involving commercial goods. Id. at 6. An analysis of the Amended Complaint, however, does not support Defendant’s argument.
First, the claims against Defendant Hartley Freight set forth in paragraphs 49 to 52 of the Amended Complaint were expressly premised on the Carmack Amendment. (ECF No. 34 at 6-7). Although it is true that paragraph 49 incorporated by reference prior allegations in the Amended Complaint, such form pleading did not create a separate state negligence claim against Defendant Hartley Freight that would allow recovery [*8] of attorney’s fees under § 768.79. Moreover, even paragraph 16 of the Amended Complaint, which identifies the Defendants Hartley Freight and Harley Transportation as “[acting] in concert and in a similar capacity . . . as an interstate motor carrier of goods” is expressly “subject to the Carmack Amendment.” (ECF No. 34 at ¶ 16) (emphasis added). None of these paragraphs reference state law claims.
Second, paragraphs 58 to 72 of the Amendment Complaint, which allege the alternative state law negligence claim, do not mention Defendant Hartley Freight. (ECF No. 34 at 8-10). Although paragraph 58 once again incorporates prior paragraphs, the only corporate entity named in the alternative negligence claim is Defendant Hartley Transportation. See, e.g., ¶ 59 (“Hartley Transport owed [Plaintiff] a duty . . . .”); ¶ 60 (“Hartley Transport solicited, selected . . . .”); ¶ 62 (“As between [Plaintiff] and Hartley Transport . . . .”); ¶ 63 (“[Plaintiff] relied on Hartley Transport to inquire . . . .”); ¶¶ 64-65, 68 (“Hartley Transport hired AAF . . . .”); ¶ 67 (“the facts specified in Paragraphs 64 and 65 required Hartley Transport to expressly instruct AAF . . . .”); ¶ 69 (“Hartley Transport breached its duties . . . [*9] .”); ¶¶ 70-71 (“By reason of Hartley Transport’s negligent acts . . . .”); ¶ 72 (“Hartley Transport caused [Plaintiffs] to sustain damages . . . .”). Thus, Defendant Hartley Freight’s argument that it too was the subject of the alternative state negligence claim is contrary to the plain language of the Amended Complaint.
Accordingly, the undersigned finds that the claims against Defendant Hartley Freight were based on the federal Carmack Amendment and it prevailed solely under the federal statute.2 Consequently, § 768.79 is inapplicable to the facts of this case. Vanderwall v. United Airlines, Inc., No. 14-60256-CIV, 2014 U.S. Dist. LEXIS 137709, 2014 WL 4755219, at *1 (S.D. Fla. Sept. 23, 2014) (“[A] federal judge whose
2 Indeed, Hartley Freight’s successful motion on summary judgment challenged the Carmack Amendment, without discussion of an alternative state law negligence claim. See (ECF No. 57). Likewise, the Court’s ruling on summary judgment was based on there being “absolutely no evidence that Hartley Freight was a party to the transaction resulting in the theft,” without reference to any state law claim. (ECF No. 82 at 23).
jurisdiction is founded solely on a federal question would not apply § 768.79 to the resolution of federal claims inasmuch as § 768.79 is preempted by federal law.”); Design Pallets, 583 F. Supp. 2d at 1285 (noting that where a federal court [*10] has subject matter jurisdiction over a federal question only, § 768.79 does not apply); Cf. Morris v. Arizona Beverage Co., No. 03-60907-CIV, 2005 U.S. Dist. LEXIS 45292, 2005 WL 5544961, at *2 (S.D. Fla. Feb. 9, 2005) (concluding that § 768.79 applies where a court has supplemental jurisdiction over state law claims).
- RECOMMENDATION
For the foregoing reasons, the undersigned respectfully recommends that the Motion (ECF No. 89) be DENIED. The undersigned also recommends that judgment be entered in favor of Defendant Hartley Freight consistent with the District Court’s prior ruling on summary judgment. See (ECF Nos. 82 at 25; 89 at 2 n.1).
Within fourteen days after being served with a copy of this Report and Recommendation, any party may serve and file written objections to any of the above findings and recommendations as provided by the Local Rules for this district. 28 U.S.C. § 636(b)(1); S.D. Fla. Mag. R. 4(b). The parties are hereby notified that a failure to timely object waives the right to challenge on appeal the district court’s order based on unobjected-to factual and legal conclusions contained in this Report and Recommendation. 11th Cir. R. 3-1 (2016); see Thomas v. Arn, 474 U.S. 140, 106 S. Ct. 466, 88 L. Ed. 2d 435 (1985).
DONE AND ORDERED in Chambers in Fort Lauderdale, Florida, on September 6, 2016.
/s/ Alicia O. Valle
ALICIA O. VALLE
UNITED STATES MAGISTRATE JUDGE
