Cargo - Central Analysis Bureau

CHUBB SEGUROS ARG S.A V. USP

United States District Court for the Southern District of New York

May 3, 2022, Decided; May 3, 2022, Filed

20 Civ. 3074 (AKH)

Reporter

2022 U.S. Dist. LEXIS 80352 *; 2022 WL 1321401

CHUBB SEGUROS ARGENTINA S.A. a/s/o AMX ARGENTINA S.A., Plaintiff, -against- UPS, SAVINO DEL BENE U.S.A. INC., and GROUND LOGISTICS & TRANSPORTATION, INC., Defendants.

Core Terms

Cargo, summary judgment, effective, carrier, notice

Counsel: [*1] For Chubb Seguros Argentina S.A., a/s/o AMX Argentina S.A, Plaintiff: Lawrence Caruso Glynn, Caruso Glynn, LLC, Fresh Meadow, NY.

For UPS, Defendant: William Edward Lakis, LEAD ATTORNEY, DeOrchis, & Partners, LLP, New York, NY.

For Savino Del Bene U.S.A., Inc., Defendant: Andrew Robert Spector, LEAD ATTORNEY, Spector Rubin, P.A., Miami, FL.

Judges: ALVIN K. HELLERSTEIN, United States District Judge.

Opinion by: ALVIN K. HELLERSTEIN

Opinion

ORDER DENYING MOTIONS FOR SUMMARY JUDGMENT AND PARTIAL SUMMARY JUDGMENT

ALVIN K. HELLERSTEIN, U.S.D.J.:

This suit¹ involves loss and damage to telecommunications equipment (the “Cargo”), sustained in the spring of 2019, while the Cargo was moved by truck from Tempe, Arizona to Miami, Florida. AMX Argentina S.A. (“AMX”) purchased the Cargo from non-party Arizona-based Comtech and contracted with non-party freight forwarder Savino del Bene Argentina (“Savino Argentina”) to handle overall logistics for moving the Cargo from Tempe to Argentina. Savino Argentina then subcontracted with its USA-affiliate Defendant Savino del Bene U.S.A. Inc. (“Savino USA”), who in turn subcontracted with Defendant Ground Logistics & Transportation, Inc. (“GLT”), who in turn subcontracted with Defendant UPS [*2] (“UPS”) to transport the Cargo. AMX authorized Savino Argentina to make the shipping arrangements and had no contact with any of the subcontractors prior to the Cargo’s departure from Tempe. Although AMX was aware that overland carriers sometimes impose limitations on liability, and also has a department and process for considering whether to declare

values and make special arrangements to increase a limitation of liability for a shipment, in this case, AMX did not seek to increase the limits of liability, as it had an existing general cargo loss insurance policy that covered the shipment of the Cargo. Although Savino USA subcontracted with GLT, the agreement between GLT and UPS was private and confidential and included no option for full Carmack liability.

As to the bill of lading (“BOL”) under which the Cargo moved, GLT drafted it and UPS issued it; however, Savino del Bene provided the necessary information but did not include a declared value for the Cargo. (The facts do not specify whether the information was provided by Savino Argentina or Savino USA.) As issued, the BOL listed UPS Freight in the “carrier name” box, Comtech EF Data in the “ship from” box, and Savino USA in the [*3] “ship to” box. Savino del Bene did not issue a BOL but did send AMX a certificate of receipt, as proof of delivery.

While in transit between Tempe and Miami, the Cargo was damaged when a separate bulk package carried by UPS fell on top of it. The damage was noted on UPS’s bill of lading and observed when the Cargo arrived at Savino USA’s Miami warehouse. Repairs were not feasible, and the Cargo was deemed a total loss.

Plaintiff Chubb Seguros Argentina S.A. (“Plaintiff”), as subrogor of AMX, brought this suit against Savino USA, GLT, and UPS to recover damages in the amount of $203,298.00, the total value of the Cargo, asserting claims under the Carmack Amendment, 49 U.S.C. § 14706; and for bailment and breach of contract under state law.² The parties completed fact discovery and took non-expert witness depositions.

UPS now moves for summary judgment, arguing that Plaintiff lacks standing to pursue its claims under the Carmack Amendment because AMX was not listed as the consignee on the BOL. In the alternative, UPS moves for partial summary judgment on the issue of whether Plaintiff’s claims are subject to an enforceable limitation on liability.

The motion for summary judgment is denied. Plaintiff has standing under the Carmack Amendment. Section 14706(a) of the Carmack Amendment allows [*4] suits by anyone entitled to recover in the receipt or bill of lading, including the buyer who was to receive the goods. See Windows, Inc. v. Jordan Panel Sys. Corp., 177 F.3d 114, 118 (2d Cir. 1998). UPS contends that Plaintiff lacks standing because only Savino USA was listed on the BOL. To be sure, Savino USA has standing to sue because it is the named consignee on the BOL. However, AMX also has standing by virtue of the agency relationship between it and Savino USA. When contracting with GLT and UPS, Savino USA acted as an agent for AMX. Whether or not Savino USA disclosed AMX’s identity, UPS knew that Savino USA, a carrier agent, was not the ultimate consignee or real party in interest. And it is well-settled that an undisclosed principal may enforce a contract made for its benefit, whether or not the obligee was aware of the undisclosed principal. See Interbras Cayman Co. v. Orient Victory Shipping Co., S.A., 663 F.2d 4, 6-7 (2d Cir. 1981).

The motion for partial summary judgment also is denied because it remains unclear whether UPS effectively limited its liability as to AMX. Under the Carmack Amendment, to effectively limit its liability, a carrier must give the shipper a fair opportunity to choose between higher and lower liability by paying a correspondingly greater or lesser charge. See Mechanical Tech. Inc. v. Ryder Truck Lines, Inc., 776 F.2d 1085, 1088 (2d Cir. 1985). AMX contends that because neither it, nor non-party Comtech, [*5] was ever given a choice of rates by UPS, that it cannot be bound by the stated limitation in the BOL. UPS contends that the limitation should be deemed effective as to AMX because AMX knew that carriers might limit their liability, but in light of its general insurance policy, opted not to pay for any additional coverage and gave its agent, Savino Argentina, no special instructions. Neither of these arguments resolves the ultimate issue. That AMX was not explicitly given two choices by UPS would not preclude it from being bound by the terms of the agreement entered into on its behalf by its agent, Savino Argentina (and Savino USA), for the same reasons that Plaintiff has standing to sue under the Carmack Amendment. That is, if UPS effectively limited its liability to Savino USA (and Savino Argentina), that limitation also

could be effective as to AMX. However, AMX’s general knowledge that carriers often limit their liability and conscious decision not to pay for any additional coverage also does not establish that the limitation on liability was effective as to AMX. In order for the limitation to be effective as to AMX, the limitation must first have been effective as to Savino USA and Savino Argentina. [*6]

On the record before me, I cannot determine whether such an effective limitation occurred, whether by actual or constructive notice. The record contains no specifics as to the negotiations between GLT and Savino USA and does not indicate whether Savino USA was given an opportunity to choose between two levels of coverage, precluding a finding of actual notice. The record also lacks a sufficient basis for charging Savino USA with constructive notice and acceptance of the limitation. Although “Savino del Bene” provided the information contained in the BOL, GLT drafted it. The record does not establish that whichever Savino entity provided that information did anything more than fill in the blanks, or that at some point during the process was given an opportunity to choose a higher level of protection and price rather than accepting a quoted price and its attendant limitation on liability. Nor does the record indicate whether Savino USA (or Argentina) had awareness of the separate and private agreement between GLT and UPS, pursuant to which full Carmack liability was unavailable. Absent more facts, I cannot charge Savino USA and Savina Argentina with constructive notice of the limitation [*7] on liability, and cannot impute that notice to AMX. Chartis Seguros Mex., S.A. v. HLI Rail & Rigging, LLC, 3 F. Supp. 3d 171, 192 (S.D.N.Y. 2014) (holding summary judgment on a constructive notice theory was inappropriate when shipper did not actually draft, and only provided information for, the bill of lading, and the record did not establish that the shipper was given an opportunity to choose a higher level of protection). Thus, I cannot say, as a matter of law, that UPS effectively limited its liability as to Savino USA and Savino Argentina, and thereby, as to AMX.

In sum, the motions for summary and partial summary judgment are denied. The Clerk of Court shall terminate the motion (ECF No. 32). The parties shall appear for a status conference on May 27, 2022, at 10 a.m.

SO ORDERED.

Dated: May 3, 2022

New York, New York

/s/ Alvin K. Hellerstein

ALVIN K. HELLERSTEIN

United States District Judge

End of Document

¹The following facts are taken from the UPS’ Rule 56.1 Statement of Material Facts (ECF No. 32-8) and Plaintiff Chubb Seguros’s Rule 56.1 Counterstatement of Material Facts (ECF No. 35).

²In its opposition, Plaintiff withdrew its state law claims against UPS, acknowledging that such claims are preempted by the Carmack Amendment but stating that it brought such claims in an abundance of caution. See ECF No. 38.

Law Office of Guy Levy v. Moishe’s Moving Sys.

United States District Court for the Southern District of California

March 22, 2022, Decided; March 22, 2022, Filed

Case No.: 21-cv-1212-L (AGS)

Reporter

2022 U.S. Dist. LEXIS 51542 *

LAW OFFICE OF GUY LEVY, INC., Plaintiff, v. MOISHE’S MOVING SYSTEMS, LLC, et al., Defendants.

Prior History: Law Office of Guy Levy, Inc. v. Moishe’s Moving Sys., LLC, 2021 U.S. Dist. LEXIS 128428 (S.D. Cal., July 9, 2021)

Core Terms

motion to dismiss, state law claim, cause of action, leave to amend, interstate, transport, amended complaint, office furniture, factual allegations, grant a motion, motor carrier, file a reply, state court, allegations, cognizable, destroyed, preempted, shipping, freely, Amend, stole

Counsel: [*1] For Law Office of Guy Levy, Inc., Plaintiff: John Owen Clune, Jr, LEAD ATTORNEY, Law Offices of John O. Clune, San Diego, CA.

For Moishes Moving Systems, LLC, Defendant: Gregg S. Garfinkel, LEAD ATTORNEY, Stone Dean LLP, Woodland Hills, CA.

Judges: Hon. M. James Lorenz, United States District Judge.

Opinion by: M. James Lorenz

Opinion

ORDER GRANTING MOTION TO DISMISS [ECF NO. 6]

Pending before the Court is Defendants’ Moishe’s Moving Systems and Omega Moving and Storage Motion to Dismiss. [ECF No. 6.] On August 24, 2021, Plaintiff (“Law Office”) filed a response in Opposition. [ECF No. 10.] On August 27, 2021, Defendant Moishe’s Moving Systems filed a Reply. [ECF No. 11.] The Court decides the matter on the papers submitted and without oral argument. See Civ. L. R. 7.1(d)(1). For the reasons stated below, the Court grants the Motion without prejudice and with leave to amend.

I. Factual and Procedural Background

Plaintiff Guy Levy Law LLC is a California LLC. Defendant Moishe’s Moving Systems is a motor carrier engaged in the business of interstate transportation of household goods for hire based in the State of New Jersey. Defendant Omega Moving & Storage, Inc., is a shipping company based in the State of California. On December 26, 2017, [*2] Plaintiff entered into a written agreement with Defendants to transport office furniture from New York City to San Diego. Plaintiff alleges Defendants lost, stole, destroyed, or otherwise failed to deliver some of the office furniture per the terms of the agreement. On May 14, 2021, Plaintiff filed a Complaint in California Superior Court, County of San Diego alleging twelve causes of action arising under State law including: breach of contract, unjust enrichment, fraud, breach of fiduciary duty, conversion, negligence, and declaratory relief. (Oppo. [ECF No. 10-1.])

On July 2, 2021, Defendant Moishe’s Moving Systems LLC removed this action from State court pursuant to 28 U.S.C. §§1331 and 1441, and 49 U.S.C. § 14706. (Notice of Removal [ECF No. 1.]) On July 9, 2021, this Court remanded the action to state court finding that the Court lacked jurisdiction over Plaintiff’s Complaint which contained only state law claims. [ECF No. 3.] On July 12, 2012, Defendant filed a Motion to Amend or Correct the Order of Removal, arguing that the Carmack Amendment, 49 U.S.C. §14706 preempts Plaintiff’s state law claims, citing Hall v. North American Van Lines, Inc., 476 F.3d 683 (9th Cir. 2007). By Order dated July 15, 2021, the Court vacated its Order remanding the action, finding the Carmack Amendment preempted the State law claims. (Order [ECF No. [*3] 5.])

On August 16, 2021, Defendant Moishe’s filed the present Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). (MTD [ECF 6.]) On August 24, 2021, Plaintiff filed a response in Opposition. (Oppo [ECF No. 10.]) On August 27, 2021, Defendant Moishe’s filed a Reply. (Reply [ECF No. 11.]) On the same day, Defendant Omega Moving Systems filed a Notice of Joinder to Moishe’s Reply. (Notice [ECF No. 12.])

II. Discussion

The court must dismiss a cause of action for failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). A motion to dismiss under Rule 12(b)(6) tests the complaint’s sufficiency. See N. Star Int’l v. Ariz. Corp. Comm’n., 720 F.2d 578, 581 (9th Cir. 1983). The court must assume the truth of all factual allegations and “construe them in the light most favorable to [the nonmoving party].” Gompper v. VISX, Inc., 298 F.3d 893, 895 (9th Cir. 2002); see also Walleri v. Fed. Home Loan Bank of Seattle, 83 F.3d 1575, 1580 (9th Cir. 1996).

As the Supreme Court explained, “[w]hile a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff’s obligation to provide the ‘grounds’ of his ‘entitlement to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007) (internal citations and quotation marks omitted). Instead, the allegations in the complaint “must be enough to raise a right to relief above the speculative [*4] level.” Id. at 1965. A complaint may be dismissed as a matter of law either for lack of a cognizable legal theory or for insufficient facts under a cognizable theory. Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984).

Here, Plaintiff’s state law claims in the Complaint allege that Moishe’s and Omega “negligently or intentionally lost stole or destroyed office furniture transported from New York to San Diego” during an interstate move. (Oppo. at 2). In Hall, the Ninth Circuit held that “the Carmack Amendment is the exclusive cause of action for interstate-shipping contract claims alleging loss or damage to property.” Hall, 476 F.3d at 688. Plaintiff’s state law claims are therefore governed by the Carmack Amendment because they include interstate shipping contract claims. Smallwood v. Allied Van Lines, 660 F.3d 1115, 1120-21 (9th Cir. 2011); Hughes Aircraft Co. v. North American Van Lines, 970 F.2d 609, 613 (9th Cir. 1992)(“The Carmack Amendment, 49 U.S.C. § 11707(a), (c), subjects a motor carrier transporting cargo in interstate commerce to absolute liability for ‘actual loss or injury to property.’”) Accordingly, the Court grants Defendants’ Motion to Dismiss.

Plaintiff contends that it “can amend their complaint to withstand any future Motions to Dismiss” if the Court dismisses the complaint and grants leave to file an amended complaint. (Oppo. at 2-3.) Specifically, Plaintiff claims that “based on the facts of the case, Plaintiff could reasonably plead, in the alternative, [*5] a) that the Carmack Amendment is not applicable, or b) exceptions such as waiver, or estoppel apply, or if it applies, c) Plaintiff made valid and perfected claims under the Carmack Amendment.” (Oppo. at 5).

Rule 15 advises leave to amend shall be freely given when justice so requires. Fed. R. Civ. P. 15(a)(2). “This policy is to be applied with extreme liberality.” Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003).

In the absence of any apparent or declared reason — such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of the amendment, etc. – the leave sought should, as the rules require, be freely given.

Foman v. Davis, 371 U.S. 178, 182, 83 S. Ct. 227, 9 L. Ed. 2d 222 (1962). Because Plaintiff may be able to assert viable claims, leave to amend is granted.

III. Conclusion and Order

For the foregoing reasons, Defendant’s motion to dismiss is granted with leave to amend. Plaintiff shall file an amended complaint, if any, no later than April 27, 2022. Defendant shall file a response to the amended complaint, if any, no later than the time set forth in Federal Rule of Civil Procedure 15(a)(3).

IT IS SO ORDERED.

Dated: March 22, 2022

/s/ M. James Lorenz

Hon. M. James Lorenz

United States District Judge

End of Document