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Scotlynn USA Div., Inc. v. Titan Trans Corp.

United States District Court for the Middle District of Florida, Fort Myers Division

September 26, 2022, Decided; September 26, 2022, Filed

Case No. 2:18-cv-521-JLB-NPM

Reporter

2022 U.S. Dist. LEXIS 173700 *; 2022 WL 4463646

SCOTLYNN USA DIVISION, INC., Plaintiff, v. TITAN TRANS CORPORATION, Defendant.

Prior History: Scotlynn USA Div., Inc. v. Titan Trans Corp., 2022 U.S. Dist. LEXIS 174352 (M.D. Fla., Aug. 25, 2022)

Core Terms

attorney’s fees, costs, preempted, report and recommendation, entitlement, contract claim, cargo, prevailed, indemnification, federal law, fee-shifting, provisions, quotation

Case Summary

Overview

HOLDINGS: [1]-Defendant’s contention that it was entitled to attorney’s fees and costs as to the Carmack Amendment had no merit because plaintiff did not bring the Carmack amendment claim to enforce, or pursuant to the Broker-Carrier Agreement at all but rather it was because it was an assignment of a claim from a third person; [2]-Defendant’s request for attorney’s fees as a prevailing party feel within the preemptive scope of the Federal Aviation Administration Authorization Act of 1994 because plaintiff failed to show evidence regarding his claim and Fla. Stat. § 57.105(7) and defendant’s claim for attorney’s fees was not preempted by the  Federal Aviation Administration Authorization Act of 1994.

Outcome

Report and recommendation adopted.

LexisNexis® Headnotes

Civil Procedure > Judicial Officers > Magistrates > Objections

Civil Procedure > Judicial Officers > Magistrates > Standards of Review

Civil Procedure > Judicial Officers > Magistrates > Pretrial Referrals

HN1  Magistrates, Objections

A district judge may accept, reject, or modify a magistrate judge’s report and recommendation. 28 U.S.C.S. § 636(b)(1). When a party makes a timely and specific objection to a report and recommendation, the district judge shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made.

Civil Procedure > … > Attorney Fees & Expenses > Basis of Recovery > American Rule

Civil Procedure > … > Attorney Fees & Expenses > Basis of Recovery > Statutory Awards

HN2  Basis of Recovery, American Rule

Under Florida law, a party must bear its own attorneys’ fees unless a contract or statute provides otherwise.

Civil Procedure > … > Attorney Fees & Expenses > Basis of Recovery > Statutory Awards

HN3  Basis of Recovery, Statutory Awards

Florida law is clear that no person can claim fees under Fla. Stat. § 57.105(7) unless that person is a party to the contract that includes the fee provision.

Constitutional Law > Supremacy Clause > Federal Preemption

HN4  Supremacy Clause, Federal Preemption

State laws are preempted when they conflict with federal law. As the Eleventh Circuit has instructed, this includes cases where compliance with both federal and state regulations is not possible and where a state law is an obstacle to the purpose and objective of a federal law. Where Congress has superseded state legislation by statute, a court must identify the domain expressly pre-empted by focusing on the statutory language, which necessarily contains the best evidence of Congress’ preemptive intent. As the Magistrate Judge noted, the Supreme Court has previously held that fee-shifting statutes of general application do not conflict with federal provisions regulating the interstate transportation of goods that remain silent about litigation costs.

Business & Corporate Compliance > … > Transportation Law > Carrier Duties & Liabilities > Rates & Tariffs

Constitutional Law > Supremacy Clause > Federal Preemption

HN5  Common Carrier Duties & Liabilities, Rates & Tariffs

Although that statute’s preemptive scope may be broad, federal law does not pre-empt state laws that affect rates, routes, or services in too tenuous, remote, or peripheral a manner. Further, the state laws whose effect is forbidden under federal law are those with a significant impact on carrier rates, routes, or services.

Civil Procedure > … > Attorney Fees & Expenses > Basis of Recovery > Statutory Awards

HN6  Basis of Recovery, Statutory Awards

Fla. Stat. § 57.105(7) mandates that contractual attorney’s fees provisions be reciprocal obligations. The award of attorneys’ fees under Fla. Stat. § 57.105(7) is mandatory for the prevailing party.

Counsel:  [*1] For Scotlynn USA Division, Inc., Plaintiff: Katy Koestner Esquivel, LEAD ATTORNEY, Esquivel Law, Chartered, Naples, FL USA; Michael J. Connick, LEAD ATTORNEY, PRO HAC VICE, Michael J. Connick Co., LPA, Zanesville, OH USA.

For Titan Trans Corporation, Defendant: Kristen Marie Jarvis Johnson, LEAD ATTORNEY, Taylor Johnson PL, Winter Haven, FL USA; Elena Pauline Adang, Quality Carriers, Inc., Tampa, FL USA.

Judges: JOHN L. BADALAMENTI, UNITED STATES DISTRICT JUDGE.

Opinion by: JOHN L. BADALAMENTI

Opinion


ORDER

Following a three-day bench trial, this Court entered Findings of Fact and Conclusions of Law in which it found that Defendant Titan Trans Corporation (“Titan”) was not liable to Plaintiff Scotlynn USA Division, Inc. (“Scotlynn”) for the loss of transported cargo or for indemnification of attorney’s fees and costs. (Doc. 155.) The Magistrate Judge has issued a Report and Recommendation (Doc. 171), recommending that Titan’s subsequent Motion on Entitlement to an Award of Attorney’s Fees and Costs (Doc. 157) be granted. Upon independent review of the record, the Report and Recommendation, and both parties’ timely objections (Doc. 174; Doc. 176), the Court adopts the Report and Recommendation and grants the motion [*2]  on entitlement to attorney’s fees and costs as outlined and clarified below.


BACKGROUND

This case’s factual and procedural history was extensively outlined in the Findings of Fact and Conclusions of Law. (See Doc. 155.) In short, pursuant to a Broker-Carrier Agreement between the parties, Titan transported a cargo of meat for Scotlynn’s customer, Cargill Meat Logistics Solutions, Inc. (“Cargill”). (Doc. 147-1 at 7-8, ¶¶ 7, 11; Doc. 147-68.) For various reasons, Cargill rejected that cargo, which was later deemed a loss, and this action ensued. (Doc. 155 at 14-16, 27-28.)

Scotlynn initially sued Titan under the Broker-Carrier Agreement, but the judge previously assigned to this matter held that Scotlynn’s contract claim was preempted by the Carmack Amendment to the Interstate Commerce Act, and Scotlynn elected not to revisit the issue before trial. (Doc. 61 at 11-13; Doc. 1 at ¶¶ 15-16.) Instead, Scotlynn asserted a claim in Count II under the Carmack Amendment as Cargill’s assignee. (Doc. 144 at ¶ 14.) Additionally, in Count I, Scotlynn sought “entry of a judgment against Titan . . . for costs, expenses and attorney fees” based on an indemnification provision in the Broker-Carrier Agreement. (Doc. 62 [*3]  at ¶¶ 15-17; Doc. 147-1 at p. 9, ¶ 12(c), p. 10, ¶ 22.)

After a three-day bench trial conducted by the undersigned, the Court found that Scotlynn did not establish a prima facie case under the Carmack Amendment and that, even if it did, Titan had shown that it was free of negligence and the damage to the cargo was caused by shipper error. (Doc. 155 at 43-52.) As to Scotlynn’s claim for attorney’s fees and costs in Count I, building off the prior preemption ruling, the Court concluded that the claim was also preempted. (Id. at 55-57.) The Court alternatively determined that even if the claim was not preempted, indemnification was unwarranted because, among other reasons, Cargill and Scotlynn were not shown to be without fault in the loss of the cargo and the Broker-Carrier Agreement did not express an intent in clear and unequivocal terms for indemnification to apply in these circumstances. (Id. at 57-58.)

In that order, the Court noted that “[t]he issue of whether Titan is entitled to attorney’s fees and costs is not before this Court” and that “[a]ny such request must comply with [this Court’s] Local Rules.” (Id. at 58 n.44.) Pursuant to Local Rule 7.01(b) and Fla. Stat. § 57.105(7), Titan now moves for entitlement to attorney’s fees and [*4]  costs. (Doc. 157.) The Magistrate Judge has entered a Report and Recommendation, finding that Titan is “entitled to its fees for defeating the contract claims on preemption grounds,” but not the claim under the Carmack Amendment. (Doc. 171 at 5.)

In so finding, the Magistrate Judge first determined that section 57.105(7) was “enforceable” and not “displaced” by the Carmack Amendment or Federal Aviation Administration Authorization Act of 1994 (“FAAAA”). (Id. at 3-4.) The Magistrate Judge next found there was no dispute that a contract was formed, that the Broker-Carrier Agreement contained a fee-shifting provision, or that Titan prevailed “with respect to the contract.” (Id. at 4.) The Magistrate Judge concluded that “[h]ad Scotlynn prevailed on its contract claim, Scotlynn would have been entitled to its related fees and costs,” and that therefore Titan was entitled to the same under the reciprocal fee-shifting rights. (Id. at 5.) The Magistrate Judge reasoned, however, that “it appears from the court’s trial ruling that Scotlynn would not have been entitled to attorney’s fees even if it had prevailed on its Carmack claim,” and thus Titan “is not entitled to any prevailing-party fee award for litigating the Carmack Amendment claim.” (Id. at 5-6 (emphasis added).) Both parties have filed objections, and this [*5]  matter is extensively briefed. (Doc. 174; Doc. 176; see also Doc. 157; Doc. 165; Doc. 169; Doc. 170.)1


STANDARD OF REVIEW

HN1 A district judge may accept, reject, or modify a magistrate judge’s report and recommendation. 28 U.S.C. § 636(b)(1). When a party makes a timely and specific objection to a report and recommendation, the district judge “shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made.” Id.


DISCUSSION

As noted, Scotlynn and Titan each raise various objections to the Magistrate Judge’s Report and Recommendation. Upon review, neither party’s objections are persuasive. The Court will begin with Titan’s objections.


Titan’s First Objection: Titan’s entitlement to attorneys’ fees and costs on Count I should not be limited to “preemption grounds.”

Titan raises two related objections. It first argues that its entitlement to fees and costs should not be limited to “defeating the contract claims on preemption grounds” because, as pleaded and set forth at trial, the “indemnity claim [was] wholly dependent upon a finding that Titan was responsible for damage to the cargo and that Titan failed to indemnify Scotlynn [*6]  for the damage as required under [the Broker-Carrier Agreement].” (Doc. 174 at 4-7.) To the extent Titan argues it is entitled to attorney’s fees and costs as to the Carmack Amendment claim, its contention is unpersuasive.

HN2 Under Florida law, a party must bear “its own attorneys’ fees unless a contract or statute provides otherwise.” Price v. Tyler, 890 So. 2d 246, 250 (Fla. 2004) (quotation omitted). Section 57.105(7), Florida Statutes provides as follows:

If a contract contains a provision allowing attorney’s fees to a party when he or she is required to take any action to enforce the contract, the court may also allow reasonable attorney’s fees to the other party when that party prevails in any action, whether as plaintiff or defendant, with respect to the contract.

Fla. Stat. § 57.105(7). The fee-shifting provision in the Broker-Carrier Agreement provides that Titan:

shall pay all costs, expenses and attorney fees which may be expended or incurred by [Scotlynn] in enforcing this Agreement or any provision thereof . . . or in exercising any right or remedy of [Scotlynn] against [Titan], or in any litigation incurred by [Scotlynn] because of any act or omission of [Titan] under this Agreement.

(Doc. 147-1 at 10, ¶ 22.)

As noted, the judge previously assigned to this matter granted Titan’s motion for summary [*7]  judgment, finding that Count I for indemnification based on the damage to the cargo was preempted by the Carmack Amendment. (Doc. 61 at 11-13.) That order, however, granted Scotlynn leave to amend its pleading to “limit the recovery sought to attorney’s fees and costs in accordance with Paragraphs 12 and 22 of the Agreement” and UPS Supply Chain Solutions, Inc. v. Megatrux Transportation, Inc., 750 F.3d 1282 (11th Cir. 2014). (Doc. 61 at 12.) Consistent with that order, in Count I of its second amended complaint Scotlynn sought “entry of a judgment against Titan . . . for costs, expenses and attorney fees,” relying again on the Broker-Carrier Agreement. (Doc. 62 at ¶¶ 15-17.)

In rejecting the claim following trial, the Court first found that the claim was also preempted because Scotlynn failed to establish separate and distinct conduct to support its claim for attorney’s fees and costs. (Doc. 155 at 56); see UPS Supply Chain Sols., Inc., 750 F.3d at 1284-85. The Court alternatively found that Scotlynn had failed to establish that Scotlynn (or Cargill) was without fault in the loss of the cargo, that neither faced liability founded on Titan’s liability, and that the text of the Broker-Carrier Agreement did not express an intent in clear and unequivocal terms for indemnificiation to apply in these circumstances. (Doc. 155 at 57-58.)

The Magistrate [*8]  Judge concluded that, unlike with the preempted contract claims,2 even if Scotlynn had prevailed on its claim under the Carmack Amendment it would not have been entitled to attorney’s fees under the Broker-Carrier Agreement. (Doc. 171 at 5.) Indeed, attorney’s fees and costs were unavailable to Scotlynn on the Carmack Amendment claim for several reasons. And as the Magistrate Judge observed, Titan did not previously view the “act of litigating the loss as conduct separate and distinct from the loss itself, but now it does.” (Doc. 171 at 5 n.5; see Doc. 138.)

It is also worth noting that, despite some overlap between the two counts, Scotlynn did not bring the Carmack Amendment claim to enforce, or pursuant to, the Broker-Carrier Agreement at all, but rather via an assignment of the claim from Cargill. (Doc. 155 at 41-42, 58; Doc. 144 ¶ 14; Doc. 147-87.) Cargill, of course, was not a party to the agreement between Scotlynn and Titan and would not have been entitled to attorney’s fees. See Azalea Trace, Inc. v. Matos, 249 So. 3d 699, 702 (Fla. 4th DCA 2018) (“HN3[] Florida law is clear that no person can claim fees under section 57.105(7) unless that person is a ‘party’ to the contract that includes the fee provision.”). It is thus not clear how the fee-shifting provision in the agreement between Scotlynn and Titan, made reciprocal [*9]  by Fla. Stat. § 57.105(7), would entitle Scotlynn to attorney’s fees and costs on the Carmack Amendment claim. Cf. Inland Dredging Co. v. Panama City Port Auth., 406 F. Supp. 2d 1277, 1283 (N.D. Fla. 2005) (“Under § 57.105(7), plaintiff gets what it gave: the ability to recover fees in litigation arising under these contractual provisions. But the case at bar did not arise under or relate in any way to these contractual provisions.”); Int’l Fid. Ins. Co. v. Americaribe-Moriarty JV, 906 F.3d 1329, 1338 (11th Cir. 2018) (“Because the general indemnity provision of the subcontract would not allow Americaribe to recover attorney’s fees in an action against CPM to enforce the subcontract, that provision is not a unilateral contract provision for attorney’s fees and thus does not come within the scope of Fla. Stat. § 57.105(7).”).3

In all events, Titan has not shown that the Magistrate Judge erred in limiting Titan’s entitlement of attorney’s fees and costs to the defense of Scotlynn’s contract claims and not the Carmack Amendment claim.4


Titan’s Second Objection: Titan is entitled to attorneys’ fees and costs on the Carmack Amendment count because the Court explicitly found that the basis of the Carmack Amendment count was “the same” as the indemnity count.

Similar to its first objection, Titan next argues it is entitled to attorney’s fees and costs on the Carmack Amendment count because its underlying basis was the “same” as the indemnification count. (Doc. 174 at 7-10.) This contention is likewise [*10]  unpersuasive.

First, as explained, the Magistrate Judge noted that even if Scotlynn had prevailed on its claim under the Carmack Amendment, Scotlynn would not have been entitled to attorney’s fees and costs. For the same reasons, Titan is not entitled to attorney’s fees and costs on the Carmack Amendment claim, despite any overlap in Scotlynn’s various claims.

Next, Titan relies on several cases for the proposition that, where “‘a party is entitled to an award of fees for only some of the claims involved in the litigation, . . . the trial court must evaluate the relationship between the claims’ to determine the scope of the fee award.” (Doc. 174 at 8 (quoting Durden v. Citicorp Tr. Bank, FSB, 763 F. Supp. 2d 1299, 1306-07 (M.D. Fla. 2011)). These cases, however, relate to the question of the scope of a fee award, not whether a party is entitled to attorney’s fees and costs on a certain claim. See e.g., Palm Beach Polo, Inc. v. Vill. of Wellington, No. 19-cv-80435, 2021 WL 5024550, at *6 (S.D. Fla. Oct. 13, 2021), adopted, 2021 WL 5013748 (S.D. Fla. Oct. 28, 2021); see also Yellow Pages Photos, Inc. v. Ziplocal, LP, 846 F.3d 1159, 1164 n.3 (11th Cir. 2017). In fact, Titan appears to concede as much. (See Doc. 174 at 4 n.1 (acknowledging that “[t]his argument is, perhaps, better raised as part of the Local Rule 7.01(c) supplemental motion on the amount of attorneys’ fees and costs to be awarded”).) Accordingly, although this objection is not a basis to reject or modify the Report and Recommendation, Titan may reraise the issue in its supplemental [*11]  motion on amount, consistent with M.D. Fla. Local Rule 7.01(c).


Scotlynn’s First Objection: Federal law preempts Titan’s claim for attorneys’ fees.

The Court now turns to Scotlynn’s objections. Scotlynn first objects to the Magistrate Judge’s finding that “Titan’s attorneys’ fee claim was not preempted” by the FAAAA and the Carmack Amendment. (Doc. 176 at 3-7.) This objection is unpersuasive.5

HN4 “State laws are preempted when they conflict with federal law.” UPS Supply Chain Solutions, Inc., 750 F.3d at 1289. As the Eleventh Circuit has instructed, this includes cases where compliance with both federal and state regulations is not possible and where a state law is an obstacle to the purpose and objective of a federal law. Id. Where Congress has “superseded state legislation by statute,” a court must “identify the domain expressly pre-empted” by focusing “on the statutory language, which necessarily contains the best evidence of Congress’ preemptive intent.” Dan’s City Used Cars, Inc. v. Pelkey, 569 U.S. 251, 260, 133 S. Ct. 1769, 185 L. Ed. 2d 909 (2013) (quotations omitted). As the Magistrate Judge noted, the Supreme Court has previously held that fee-shifting statutes of general application do not conflict with federal provisions regulating the interstate transportation of goods that remain silent about litigation costs. See Missouri, K. & T. Ry. Co. of Tex. v. Harris, 234 U.S. 412, 422, 34 S. Ct. 790, 58 L. Ed. 1377 (1914); [*12]  see also UPS Supply Chain Solutions, Inc., 750 F.3d at 1291 n.9.

As to the FAAAA, Scotlynn has failed to show how Titan’s request for attorney’s fees as a prevailing party on Scotlynn’s contract claims falls within the preemptive scope of the FAAAA. HN5 Although that statute’s preemptive scope may be broad, “federal law does not pre-empt state laws that affect rates, routes, or services in too tenuous, remote, or peripheral a manner.” Rowe v. New Hampshire Motor Transp. Ass’n, 552 U.S. 364, 375, 128 S. Ct. 989, 169 L. Ed. 2d 933 (2008) (quotation omitted). Further, “the state laws whose effect is forbidden under federal law are those with a significant impact on carrier rates, routes, or services.” Id. (quotation omitted). Here, the state statute allowing for Titan’s fee entitlement is not “related to a price, route, or service” of a motor carrier or broker “with respect to the transportation of property.” 49 U.S.C. § 14501(c)(1). In short, section 57.105(7) and Titan’s claim for attorney’s fees are not preempted by the FAAAA.

Second, as to the Carmack Amendment, again, there is no conflict between the relevant provisions and section 57.105(7).6 See e.g., UPS Supply Chain Sols., Inc., 750 F.3d at 1291. Indeed, as noted above, Titan is entitled to remuneration for an unsuccessful lawsuit brought by Scotlynn pursuant to the Broker-Carrier Agreement, not for a loss of cargo. In summary, the Magistrate Judge did not err in finding that the FAAAA and Carmack Amendment [*13]  do not preempt section 57.105(7) or Titan’s claim for entitlement to attorney’s fees and costs on the contract claims.


Scotlynn’s Second Objection: An award of fees under section 57.105(7) is discretionary.

Lastly, Scotlynn objects to the Magistrate Judge’s finding that an award of attorney’s fees and costs under section 57.105(7) is mandatory, not discretionary. (Doc. 174 at 15-18.) This final contention is not persuasive.

HN6 As the Magistrate Judge noted, despite the statute’s use of the word “may” rather than “must,” both Florida courts and the Eleventh Circuit have consistently held that section 57.105(7) “mandates that contractual attorney’s fees provisions be reciprocal obligations.” Landry v. Countrywide Home Loans, Inc., 731 So. 2d 137, 140 (Fla. 1st DCA 1999) (quotation omitted); see also Sequoia Fin. Sols., Inc. v. Warren, 660 F. App’x 725, 728 (11th Cir. 2016) (“The award of attorneys’ fees under § 57.105(7) is mandatory for the prevailing party.”). And as the Magistrate Judge observed, the Broker-Carrier Agreement provides that litigation fees “shall” be shifted, and section 57.105(7) renders that provision reciprocal. (Doc. 147-1 at 10, ¶ 22.) Accordingly, Scotlynn has not shown that the Magistrate Judge erred on this point.7


CONCLUSION

After an independent review of the record, it is ORDERED:

1. The parties’ objections to the Magistrate Judge’s Report and Recommendation (Doc. 174; Doc. 176) are OVERRULED.

2. The Report [*14]  and Recommendation (Doc. 171) is ADOPTED and made part of this Order as outlined above.

3. Defendant’s Motion on Entitlement to an Award of Attorney’s Fees and Costs (Doc. 157) is GRANTED to the extent that Defendant is entitled to an award of attorney’s fees and nontaxable expenses for defending against Plaintiff’s contract claims, obtaining its fee-and-expense award, and taxing its costs.

4. Within forty-five days of this Order, consistent with the above and M.D. Fla. Local Rule 7.01, Defendant is DIRECTED to file a supplemental motion on the amount of attorney’s fees and costs it seeks.

ORDERED in Fort Myers, Florida, on September 26, 2022.

/s/ John L. Badalamenti

JOHN L. BADALAMENTI

United States District Judge


End of Document


In light of this, and the nature of the instant motion, it is unnecessary to await Titan’s potential response to Scotlynn’s objections to rule on this matter. (See Doc. 176.) Should a response be filed and any part of this order merit modification because of such, the Court would sua sponte address anything of note in a subsequent order. Meanwhile, the deadline for Scotlynn to file a response to Titan’s objections has expired. (See Doc. 174.)

It is undisputable that Scotlynn pursued the contract claims to “enforce” the Broker-Carrier Agreement or to “exercis[e] any right or remedy” thereunder, and the claims thus fall squarely within the ambit of the fee-shifting provision. (Doc. 147-1 at 10, ¶ 22.) It is also clear that Titan “successfully defended against an action to enforce the contract.” Ghent v. HSBC Mortg. Servs., Inc., 323 So. 3d 758, 760 (Fla. 4th DCA 2021) (quotation omitted); Page v. Deutsche Bank Tr. Co. Americas, 308 So. 3d 953, 959 (Fla. 2020). Further, neither party challenges the Magistrate Judge’s application of David v. Richman, 568 So. 2d 922, 924 (Fla. 1990), in which the Supreme Court of Florida noted that “when litigation ensues in connection with a validly formed contract, attorney’s fees may be recovered under a prevailing-party provision of the contract even though the contract has been rescinded or held to be unenforceable.” (Doc. 171 at 5.)

The Broker-Carrier Agreement’s fee-shifting provision did ostensibly provide for expenses “expended or incurred by . . . [Scotlynn’s] Customers in enforcing this Agreement,” or in “exercising any right or remedy of . . . [Scotlynn’s] Customers against [Titan].” (Doc. 147-1 at 10, ¶ 22.) However, no party explains how this language—or even the assignment—affects Titan’s entitlement to attorney’s fees and costs.

The parties read too much into the Report and Recommendation’s apparent limitation of Titan’s recovery to defeating the contract claims on specifically “preemption grounds.” (See Doc. 173 at 3; Doc. 176 at 19; Doc. 171 at 5, 8.) Titan’s entitlement extends to fees and costs related to defending the contract claims, which includes the successful grounds of preemption. Any related issues may be raised in Titan’s supplemental motion.

Scotlynn notes that “to the extent this Court disagrees with Scotlynn’s objection set forth above, Scotlynn has no objection to the remainder of the Report.” (Doc. 176 at 18.) In this vein, Scotlynn alternatively agrees that the Magistrate Judge “was correct in finding that ‘Titan [is] entitled to a limited fee-and-expense award,’ ‘[t]he court should find Titan entitled to its fees for defeating the contract claims on preemption grounds,’ and ‘that Titan — like Scotlynn — is not entitled to any prevailing-party fee award for litigating the Carmack Amendment claim.'” (Id. at 19 (citations omitted).)

As the Magistrate Judge noted, an inapplicable provision of the Carmack Amendment provides for attorney’s fees in the context of the shipment of household goods. See 49 U.S.C. §§ 14708(d), (e).

In all events, even assuming the award is discretionary, the Court deems it warranted as to the contract claims here.

Kelts v. King Ocean Servs.

United States District Court for the Southern District of Florida

September 8, 2022, Decided; September 8, 2022, Entered on Docket

Civil Action No. 22-22299-Civ-Scola

Reporter

2022 U.S. Dist. LEXIS 162359 *; 2022 WL 4111079

Cameron Kelts and Jeffery Sullivan, Plaintiffs, v. King Ocean Services, Ltd. and Oscar Calderon, Defendants.

Core Terms

bill of lading, carrier, custody, terms, truck, ship, motion to dismiss, Paramount

Counsel:  [*1] Mr. Cameron Kelts, Plaintiff, Pro se, Seffner, FL.

Jeffery Sullivan, Plaintiff, Pro se, Seffner, FL.

For King Ocean Services, Ltd., Oscar Calderon, Defendants: Charles Gullette De Leo, Ryon Lyndon Little, LEAD ATTORNEYS, Jan Michael Kuylenstierna, De Leo & Kuylenstierna P.A., Miami, FL.

Judges: Robert N. Scola, Jr., United States District Judge.

Opinion by: Robert N. Scola, Jr.

Opinion


Order

This matter is before the Court on Defendant King Ocean Services, Ltd.’s, motion to dismiss. (ECF No. 8.) The Plaintiffs filed a response to the motion (ECF No. 10), and the Defendant filed a reply memorandum in support of its motion (ECF No. 13). After careful consideration of the briefing, the record, and the relevant legal authorities, the Court grants the Defendant’s motion. (ECF No. 8.)


1. Background

Plaintiffs Cameron Kelts and Jeffrey Sullivan, proceeding pro se, assert counts for civil theft under Florida Statutes Section 812.014 and conversion under Florida common law against Defendant King Ocean. (Compl., ECF No. 1-2, ¶¶ 43-49, 50-57.) The Plaintiffs additionally plead one count for fraudulent transfer against Defendant Oscar Calderon, who has not yet been served with the complaint and is allegedly a “citizen of Costa Rica.” (Id. ¶¶ 4, 51-65.) The Plaintiffs [*2]  filed their complaint in Florida state court, and Defendant King Ocean timely removed after receiving service of process. (Not. of Removal, ECF No. 1.)

The Plaintiffs’ allegations, at heart, are simple. The Plaintiffs contracted with King Ocean to ship a truck from Florida to Costa Rica. (Compl. ¶¶ 10-12.) King Ocean did, in fact, ship the truck to Costa Rica. (Id. ¶ 12.) After the truck was delivered to Costa Rica and discharged from the ship but while it remained in King Ocean’s custody, the truck was wrongfully released to Defendant Calderon without the Plaintiffs’ approval. (Id. ¶ 27.) The Plaintiffs filed a criminal complaint against the Defendants in Costa Rica and this civil complaint against the Defendants in Florida for the wrongful release of the truck. (Id. ¶¶ 40-41.)

In support of their claims, the Plaintiffs attach as Exhibit 1 to the complaint the front side of the bill of lading for King Ocean’s shipping of the truck to Costa Rica. (Id. ¶ 12, Ex. 1.) King Ocean attaches to its motion to dismiss the remainder of the referenced bill of lading. (Mot., ECF No. 8, at 2 n.4, Ex. 1; Not., ECF No. 18, Ex. A.) The rear side of the bill of lading contains the following “Clause Paramount” [*3]  regarding the King Ocean’s liability:

This bill of lading shall have effect subject to the provisions of the Carriage of Goods by Sea Act of 1936 of the United States of America, as amended (“COGSA“) which shall apply to the Goods whether the Goods carried on or under deck to carriage of the Goods to, from, or between U.S. ports or between non-U.S. ports before the Goods are loaded on and after they are discharged from the vessel and throughout the entire time that they are in custody of the Carrier, whether acting as carrier, bailee, terminal operator, inland carrier, stevedore. Carrier shall be entitled to any and all defenses and limitations of liability provided under COGSA or any other compulsorily applicable law or for any and all claims arising out of Carrier’s custody or control of the Goods . . . .

(Not., Ex. A.) The front of the bill of lading establishes that “[t]he goods [are] to be delivered at the aforementioned port of discharge or place of delivery, whichever is applicable, subject always to the exceptions, limitations, conditions and liberties set out on the reverse side hereof to which the Shipper and Consignee agree to accepting this Bill of Lading.” (Id.) (emphasis added). The reverse side of the bill [*4]  of lading also establishes that the “Merchant,” by “accepting this bill of lading, whether or not signed by Merchant, Merchant expressly accepts and agrees that the receipt, custody, carriage, delivery and any transshipping of the Goods are subject to the terms appearing on the face and back hereof.” (Id.) A “Merchant” is further defined as “includ[ing] the shipper, holder, consignee, receiver of Goods, [or] any Person owning or entitled to the possession of the Goods or of this Bill of Lading.” (Id.)

King Ocean now moves to dismiss the two counts against it for failure to state a claim upon which relief can be granted, asserting that the Plaintiffs’ claims for civil theft and conversion are preempted by the federal Carriage of Goods at Sea Act (“COGSA,” codified at 46 U.S.C. § 30701 Note), based on the express terms of the bill of lading. (Mot. at 1.)


2. Legal Standard

A court considering a motion to dismiss, filed under Federal Rule of Civil Procedure 12(b)(6), must accept all of the complaint’s allegations as true, construing them in the light most favorable to the plaintiff. See Pielage v. McConnell, 516 F.3d 1282, 1284 (11th Cir. 2008). Although a pleading need only contain a short and plain statement of the claim showing that the pleader is entitled to relief, a plaintiff must nevertheless articulate [*5]  “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007). “But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not shown—that the pleader is entitled to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 679, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009) (internal punctuation omitted) (quoting Fed. R. Civ. P. 8(a)(2)). A court must dismiss a plaintiff’s claims if she fails to nudge her “claims across the line from conceivable to plausible.” Twombly, 550 U.S. at 570. Regardless of a plaintiff’s allegations, “the court may dismiss a complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) when, on the basis of a dispositive issue of law, no construction of the factual allegations will support the cause of action.” Marshall Cnty. Bd. of Educ. v. Marshall Cnty. Gas Dist., 992 F.2d 1171, 1174 (11th Cir. 1993).


3. Analysis

King Ocean argues that the Plaintiffs’ claims are preempted by COGSA based on the plain terms of the Clause Paramount in the bill of lading. (Mot. at 15-19.) The Plaintiffs, in response, attempt to disavow the bill of lading, stating that they never signed it. (Resp. at 3.) King Ocean, in reply, argues that the terms of the bill of lading confirm that the Clause Paramount applies because, by shipping goods under the bill of lading, the party contracting with King Ocean is put on notice of and accepts the terms of the bill [*6]  of lading regardless of whether that party signs the bill of lading. (Reply at 3.)

The Court finds that the bill of lading’s terms govern the parties’ relationship, those terms expressly call for COGSA to apply to the circumstances detailed in the Plaintiffs’ complaint, and the Plaintiffs’ claims for civil theft and conversion are therefore preempted by COGSA.

The Eleventh Circuit holds that, where COGSA applies, it provides the plaintiff with an exclusive remedy. Polo Ralph Lauren, L.P. v. Tropical Shipping & Const. Co., 215 F.3d 1217, 1220 (11th Cir. 2000) (“We conclude that because COGSA applies in this case, it provides [the plaintiff’s] exclusive remedy.”). A plaintiff therefore may not plead tort claims under state law where a COGSA claim would be appropriate. Id. (“We have found no cases in which a court has allowed a tort claim to proceed when COGSA applies.”).

COGSA allows parties to extend its application by contract. Carriage of Goods by Sea Act, § 7, 46 U.S.C. § 30701 Note (“Nothing contained in this Act shall prevent a carrier or a shipper from entering into any agreement, stipulation, condition, reservation, or exemption as to the responsibility and liability of the carrier or the ship for the loss or damage to or in connection with the custody and care and handling of goods prior to the loading on and subsequent [*7]  to the discharge from the ship on which the goods are carried by sea.”). The Eleventh Circuit has confirmed that, by its own terms, COGSA allows the parties to extend its application to times when shipments of goods are in the custody of the carrier. Groupe Chegaray/V. De Chalus v. P&O Containers, 251 F.3d 1359, 1364 (11th Cir. 2001) (holding that COGSA applied to goods in the custody of the carrier, even though the goods were lost after being discharged from the ship, because the “bill of lading explicitly incorporates COGSA as ‘paramount throughout’ the time the goods are in the custody of [the carrier].”). The Supreme Court has confirmed this, as well. Norfolk S. Ry. Co. v. Kirby, 543 U.S. 14, 29, 125 S. Ct. 385, 160 L. Ed. 2d 283 (2004) (“As COGSA permits, [the defendant carrier] in its bill of lading chose to extend the default rule to the entire period in which the machinery would be under its responsibility, including the period of the inland transport.”).

The Plaintiffs incorporated the bill of lading in their complaint. (Compl. ¶ 12, Ex. 1.) They therefore may not disclaim the terms and conditions contained in the bill of lading, and King Ocean may properly rely on the bill of lading’s terms on a motion to dismiss. Wilchombe v. TeeVee Toons, Inc., 555 F.3d 949, 959 (11th Cir. 2009) (“A court may consider only the complaint itself and any documents referred to in the complaint which are central to the claims.”). [*8] 

Under the express terms of the bill of lading, COGSA applies as long as the truck was in King Ocean’s custody. (Not., Ex. A); Groupe Chegaray, 251 F.3d at 1364. And the bill of lading makes clear that, by shipping goods with King Ocean, the Plaintiffs accepted the bill of lading’s terms and conditions contained on the reverse side. (Not., Ex. A); Big Blue Inc. v. Hapag-Lloyd Aktiengesellschaft, No. 08-22753-CIV, 2009 U.S. Dist. LEXIS 143197, 2009 WL 10712209, at *3 (S.D. Fla. July 23, 2009) (Bandstra, Mag. J.) (finding that “the Bill of Lading . . . attached to the second amended complaint contractually bind[s] plaintiff to the terms and conditions on the reverse side of the Bill of Lading.”). Therefore, the bill of lading’s Clause Paramount is enforceable against the Plaintiffs here, and COGSA applies while the truck was in King Ocean’s custody after discharge. Big Blue, 2009 U.S. Dist. LEXIS 143197, 2009 WL 10712209, at *3.

The Plaintiffs’ claims against King Ocean are based on circumstances that occurred while the truck was in King Ocean’s custody. (Compl. ¶¶ 12, 43-49, 50-57.) Because COGSA contractually applies to that period and provides an exclusive remedy where it applies, Plaintiffs’ claims for civil theft and conversion fail to state a claim upon which relief may be granted as a matter of law. Polo Ralph Lauren, 215F.3d  at 1220; Big Blue, 2009 U.S. Dist. LEXIS 143197, 2009 WL 10712209, at *2-3. Plaintiffs may plead a claim against King Ocean only under COGSA on these facts.


4. Conclusion

For the reasons [*9]  stated above, the Court grants King Ocean’s motion to dismiss (ECF No. 8) and dismisses counts one and two of the Plaintiffs’ complaint against Defendant King Ocean without prejudice.

Done and ordered in Miami, Florida, on September 8, 2022.

/s/ Robert N. Scola, Jr.

Robert N. Scola, Jr.

United States District Judge


End of Document

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