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Delta Stone Products v. Xpertfreight

United States District Court, D. Utah, Central Division

January 9, 2018

DELTA STONE PRODUCTS, Plaintiff,
v.
XPERTFREIGHT, U.S. EXPRESS, LLC, EMBASSY CARGO S.P.A.; HARBOR FREIGHT TRANSPORT CORP.; RSA-SUN INSURANCE OFFICE, LTD; SERAN SALOMON, an individual; RAFIK NAZAROV, an individual, and DOES 1-10, Defendants.

MEMORANDUM DECISION AND ORDER GRANTING XPERTFREIGHT'S MOTION TO DISMISS; GRANTING XPERTFREIGHT'S MOTION FOR SUMMARY JUDGMENT (CARMACK CLAIM); GRANTING XPERTFREIGHT'S MOTION FOR SUMMARY JUDGMENT AND ATTORNEYS' FEES (CROSS-CLAIM); DENYING HARBOR FREIGHT'S MOTION FOR SUMMARY JUDGMENT; AND GRANTING HARBOR FREIGHT'S MOTION FOR LEAVE TO FILE SUPPLEMENTAL BRIEF

         Before the court are the following motions: 1) Xpertfreight's Motion to Dismiss Plaintiff's negligence and breach of contract claims (ECF No. 79.); 2) Xpertfreight's Motion for Summary Judgment on Plaintiff's breach of contract and Carmack Amendment claim (ECF No. 80.); 3) Xperfreight's Motion for Summary Judgment on U.S. Express' cross-claims for contribution and allocation of fault under the Carmack Amendment, as well as for costs and attorneys' fees (ECF No. 81.); and 4) Harbor Freight Transport Corp.'s Motion for Summary Judgment on the Carmack Amendment claim. (ECF No. 102.) The court heard oral argument on all these motions on August 3, 2017. Following the close of discovery and oral argument, Harbor Freight filed a Motion for Leave to File a Supplemental Brief in Support of Summary Judgment, alleging newly acquired evidence. (ECF No. 134.) The court will address each motion below.

         INTRODUCTION

         Plaintiff, Delta Stone Products (“Delta Stone”), seeks recovery for losses stemming from damage to a stone cutting machine it purchased from Simec SPA, an Italian company, occurring while the machine was in transit from Port of Newark to Heber, Utah. (See generally ECF No. 2.)[1] On or about November 14, 2014, the stone cutting machine was shipped from the Port La Spezia; it arrived at the Port of Newark, New Jersey on or about December 13, 2014. (ECF No. 2 at ¶ 20.) Two days later, Xpertfreight, a “motor carrier, ” arranged for World Distribution Services (“WDS”), to pick up the stone cutting machine. (ECF No. 80-1 at 4.) WDS arranged for Harbor Freight Transport Corp. (“Harbor Freight”) to transport the stone cutting machine from the Port of Newark Container Terminal to its facilities in Newark--the total transport was two miles and took about ten minutes. (ECF No. 102-1 at 3.)

         On or about December 18, 2014, U.S. Express picked up the stone cutting machine from Harbor Freight's facilities to transport it to Heber, Utah. (ECF No. 2 at ¶ 21; see also ECF No. 102-1 at 7.) At the time of pick up, U.S. Express' driver, Rafik Nazarov, signed an Invoice/Pickup Receipt provided by Harbor Freight which contains the following language:

Customer agrees that when HARBOR FREIGHT TRANSPORT CORP releases goods to customer or its authorized representative, including any common carrier or bailee engaged by Customer, that HARBOR FREIGHT TRANSPORT CORP will have no further obligation or responsibility to Customer or the goods. A signed receipt to HARBOR FREIGHT TRANSPORT CORP without exception as to loss or damage shall be conclusive evidence that the goods were not lost or damaged while in the possession of HARBOR FREIGHT TRANSPORT CORP.

(ECF No. 102-1 at 7.)

         According to the Complaint, on December 22, 2014, the stone cutting machine was delivered to Delta Stone in Heber, Utah significantly damaged.[2] (ECF No. 2 at ¶ 22.) Upon delivery, U.S. Express' driver added the following hand-written note to the Invoice/Pick-up Receipt provided by Harbor Freight:

US Express/Seran Salomon recognizes and acknowledges that they have bent and broken this machine and not limited to other unseen or undetected damage upon delivery. U.S. Express accepts all responsibility to fix and replace if Delta Stone is not satisfied with machinery per the original and new agreement with manufacturer.

(ECF No. 102-1 at 8.) Sometime thereafter, Vericlaim conducted a Marine Cargo Survey Report of the transport of the stone cutting machine and concluded: “Damages were caused when U.S. Express[sic] truck driver, Mr. Seran Salamon, utilized ratchet cargo straps over the top of the machine to secure the protective tarp during inland transit.” (ECF No. 102-1 at 17.)

         As a result of the damage to the stone cutting machine, Delta Stone alleges it was delayed in performing its obligations for a government project, incurring approximately $386, 170 in damages, as well as $44, 441 in repairs. (ECF No. 2 at ¶¶ 24-5.) Delta Stone filed suit in May 2016, alleging the following claims: 1) Carmack Amendment Liability against Xpertfreight, U.S. Express, Seran Salamon, Rakiv Nazarov, Embassy Cargo, and Harbor Freight; 2) Breach of Contract against Xpertfreight, U.S. Express, Seran Salamon, Rakiv Nazarov, Embassy Cargo, and Harbor Freight; 3) Negligence against Xpertfreight, U.S. Express, Seran Salamon, Rakiv Nazarov, Embassy Cargo, and Harbor Freight; and 4) Breach of Insurance Contract against RSA-Sun Insurance.[3]

         MOTION TO DISMISS (ECF No. 79)

         Xpertfreight moved to dismiss Delta Stone's second and third causes of action for breach of contract and negligence pursuant to Rule 12(b)(6). “To survive a motion to dismiss under Rule 12(b)(6), a plaintiff must plead sufficient allegations ‘to state a claim to relief that is plausible on its face.'” Brokers' Choice of Am., Inc., v. NBC Universal, Inc., 861 F.3d 1081, 1104 (10th Cir. 2017) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim is facially plausible ‘when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.'” Id. (citing Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).

         Here, in the Complaint filed in May 2016, Delta Stone pled Xpertfreight was a “common carrier, ” “freight forwarder, ” or “interstate motor carrier.” See ECF No. 2 at ¶¶ 3, 11, 30. The deadline for Delta Stone to file a Motion to Amend Pleadings pursuant to the Scheduling Order in this matter was December 16, 2016. (ECF No. 50.) Delta Stone never amended its Complaint to assert claims against Xpertfreight as a broker and the deadline to do so has passed.[4]

         Delta Stone's claims against Xpertfreight for breach of contract and negligence are preempted by the Carmack Amendment, 49 U.S.C. 14706, which provides the exclusive remedy for cargo claims. “The Carmack Amendment so thoroughly regulates carrier liability that ‘every circuit which has considered the matter . . . has either held or indicated that it would hold that the Carmack Amendment preempts state common law [claims].'” Bullocks Express Transp., Inc., v. XL Specialty Ins. Co., 329 F.Supp.2d 1246, 1253 (D. Utah 2004) (quoting Underwriters v. N. Am. Van Lines, 890 F.2d 1112, 1120 (10th Cir. 1989). “This broad preemption covers not only common law negligence claims, but also claims for breach of contract.” Id. at 1253.

         Moreover, as conceded at the hearing by the parties, Xpertfreight's negligence claim is also preempted by 49 U.S.C. § 14501 (c)(1) (“ICCTA”), which expressly preempts negligence claims arising out services of a carrier or broker. Accordingly, the court grants Xpertfreight's motion to dismiss Delta Stone's breach of contract and negligence claims.

         STANDARD OF REVIEW FOR SUMMARY JUDGMENT

         Summary judgment is appropriate “if there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P.56(a). A material fact is one that may affect the outcome of the litigation. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The moving party bears the initial burden of showing an absence of evidence to support the nonmoving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). “Once the moving party meets this burden, the burden shifts to the nonmoving party to demonstrate a genuine issue for trial on a material matter.” Id. The nonmoving party may not rest solely on allegations on the pleadings, but must instead designate “specific facts showing that there is a genuine issue for trial.” Id. at 324.

         A fact in dispute is “material” if it might affect the outcome of the suit under the governing law; the dispute is “genuine” if the evidence is such that it might lead a reasonable jury to return a verdict for the nonmoving party. Allen v. Muskogee, 119 F.3d 837, 839 (10th Cir.1997) (citing Anderson, 477 U.S. at 248). To defeat a properly supported motion for summary judgment, “there must be evidence upon which the jury could reasonably find for the plaintiff.” Panis v. Mission Hills Bank, N.A., 60 F.3d 1486, 1490 (10th Cir. 1995). “Conclusory allegations will not create a genuine issue of material fact necessitating trial.” White v. York Int'l. Corp., 45 F.3d 357, 360 (10th Cir. 1995). Generally, the court construes “the record in the light most favorable to the nonmoving party.” York v. City of Las Cruces, 523 F.3d 1205, 1210 (10th Cir. 2008).[5]

         MOTION FOR SUMMARY JUDGMENT-Carmack Amendment (ECF No. 80)

         Through this motion, Xpertfreight seeks summary dismissal of Delta Stone's first claim, Carmack Amendment Liability, and second claim, breach of contract. (ECF No. 80 at 3.) The court already dismissed the breach of contract claim, see supra. Since that request is now moot, the court will only address the first claim below.

         In its opening brief, Xpertfreight averred that the legal element required to prevail on the Carmack Amendment claim is as follows:

The liability imposed on a carrier under the Carmack Amendment is “for the actual loss or injury to the property caused by (A) the receiving carrier, (B) the delivering carrier, or (C) another carrier over whose line or route the property is transported in the United States….” 49 U.S.C. § 14706. On a Carmack claim, “the shipper establishes a prima facie case against either the initial carrier or the delivering carrier by proving: (1) delivery of the property to the carrier in good condition; (2) arrival of the property at the destination in damaged or diminished condition; and (3) the amount of its damages.” Mercer Transp. Co. v. Greentree Transp. Co., 341 F.3d 1192, 1196 (10th Cir. 2003) (citing 49 U.S.C. 14706(a)).

Delta Stone did not respond at all to the “legal element stated by the moving party” as required by DUCivR 56-1(c)(2)(A). Since Delta Stone did not “disagree” with Xpertfreight's stated element, or provide its own citation to legal authority regarding Carmack Amendment liability, this court accepts Xpertfreight's statement of this legal element. Ultimately, the authority cited by Xpertfreight is the only legal element for the Carmack claim before the court.

         In support of its motion, Xperfreight listed thirty-two “undisputed material facts.” See ECF No. 80. In response Delta Stone only “disputed” eight of these facts. See ECF. No. 97. The court notes, however, that none of Delta Stone's alleged disputes are “genuine.” Allen, 119 F.3d at 839. The court will address each of Delta Stone's alleged “disputes” below.

         In its statement of “Undisputed Material Facts, ” Xpertfreight alleged in part:

         1. Xpertfreight operates as an interstate property broker (“freight broker”) pursuant to authority granted to it to do so by the Federal Motor Carrier Safety Administration (“FMCSA”) under U.S. DOT Number: 2240854, and MC Number 626764. See Declaration of ...


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