Source: http://cabadvantage.com/articles/category/cases-from-bits/c175-volume-16-edition-8-cases/
Timestamp: 2019-04-19 13:02:17+00:00

Document:
American Guar. and Liability Ins. Co. v. Crosby Trucking Service, Inc.
Echo Global Logistics, Inc., Benteler Automotive Corporation, and Benteler Goshen, Inc., Third–Party Defendants.
Chris J. Webb, Michael G. McLaren, Black, McLaren, Jones, Ryland & Griffee, Memphis, TN, for Plaintiff/Counter–Defendant.
Lauren C. Barron, Tara L. Swafford, The Swafford Law Firm, PLLC, Franklin, TN, for Defendant/Counter–Plaintiff.
Andrew B. Campbell, Wyatt, Tarrant & Combs, Nashville, TN, Kevin K. Ross, K&L Gates LLP, Miami, FL, for Third–Party Defendants.
ALETA A. TRAUGER, District Judge.
*1 Defendant and counter-plaintiff Crosby Trucking Service, Inc. (“Crosby Trucking”), has filed a Motion to Transfer for Forum Non–Conveniens (Docket No. 29), to which the plaintiff and counter-defendant, American Guaranty and Liability Insurance Company (“American”), has filed a Response in opposition (Docket No. 35), and Crosby Trucking filed a Reply (Docket No. 40). Crosby Trucking has also filed a Motion for Leave to File a Third Party Claim Against Martinrea Industries, Inc. (“Martinrea”), to which American filed a Response in opposition (Docket No. 53) and a Motion for Oral Argument (Docket No. 62), to which Crosby Trucking filed a Response in opposition (Docket No. 66). For the reasons stated herein, the court will deny Crosby Trucking’s Motion to File a Third–Party Complaint Against Martinrea, the court grant Crosby Trucking’s Motion to Transfer Venue, the court will deny American’s Motion for Oral Argument, and the court will transfer the case to the United States District Court for the Northern District of Indiana.
The basic facts of this case are relatively simple. Martinrea, a Michigan corporation with a principal place of business in Springfield, Tennessee, is in the business of developing and producing metal parts for use in various industries. Martinrea operates a facility in Springfield, Tennessee. In 2011, Martinrea contacted Echo Global Logistics, Inc. (“Echo”), a Delaware corporation with a principal place of business in Illinois, to arrange for transportation of an A–Pillar Die Machine (the “Die”) from a facility in Goshen, Indiana, to a facility in Lenoir City, Tennessee, operated by Dienamic Tooling Systems (“DTS”). Apparently, the original plan was for DTS to perform some type of modification to the Die, after which the Die would be transported to Martinrea’s facility in Springfield, Tennessee.
Echo, acting as a broker, contracted with Crosby Trucking to transport the Die from Indiana to Tennessee. On or about September 20, 2011, Benteler Automotive, acting as the consignor, loaded the Die, which was then in good condition, onto a Crosby Trucking truck at the Goshen, Indiana facility. On or about September 21, 2011, while transporting the die, the Crosby Trucking vehicle had a traffic accident in or near Marion, Indiana. The Die fell off of the truck and sustained substantial damage. At an unspecified point after the accident, the Die was transported to the DTS facility in Lenoir City, where it underwent significant repairs. After the repairs, the Die was transported to Martinrea’s facility in Springfield, Tennessee, where, according to American, the Die remains. American had insured Martinrea against damage to the Die during its transport from Indiana to Tennessee. American accordingly paid Martinrea for the repairs, which, according to American’s Complaint, cost over $1 million.
American, acting as Martinrea’s subrogee, filed a single-count Complaint against Crosby Trucking, demanding, inter alia, recovery of the value of the repairs under 49 U.S.C. § 14706.FN1 In response to the Complaint, Crosby filed (1) an Answer; (2) a Counterclaim against American; and (3) a Third–Party Complaint agains Benteler Automotive Corporation and Benteler Goshen, Inc. (collectively, “Benteler”), which are both Michigan corporations with principal places of business in Michigan, and Echo. (See Docket No. 31.) Crosby Trucking alleges that it insured the Die for only $250,000—rather than $1,000,000—because Martinrea and/or Echo breached a duty to inform Crosby Trucking of the value of the Die. Essentially, Crosby Trucking contends that, if Martinrea and/or Echo had informed Crosby Trucking that the Die was worth approximately $1 million, Crosby Trucking would have retained sufficient insurance to cover the damages now claimed by American. Crosby Trucking also alleges that Benteler improperly loaded and secured the Die at the point of shipment in Goshen, Indiana, and that Benteler’s negligence caused the Die to fall and sustain damages when the accident occurred. Accordingly, Crosby Trucking asserts counterclaims against American (standing in the shoes of Martinrea) for negligence and equitable estoppel, third-party claims against Echo for negligence, negligent misrepresentation, and breach of fiduciary duty, and a third-party claim against Benteler for negligence. American and Crosby Trucking appear to agree, at least for purposes of the pending motions, that Indiana law will govern Crosby Trucking’s third-party claims.
FN1. American also named Echo as a defendant in the Complaint. Before the responsive pleading deadline, American voluntarily dismissed its claims against Echo.
FN2. Although Crosby Trucking’s motion is styled as a motion to transfer based on the doctrine of “forum non conveniens,” that characterization is a bit of a misnomer because the transfer decision here is governed by § 1404(a), not federal common law. With certain exceptions not relevant here, § 1404(a) largely superseded the federal common law doctrine of forum non conveniens. See Moore, James Wm., Moore’s Fed. Prac., § 111.04 [3d ed.2013]. Therefore, the court will refer to the motion as a “Motion to Transfer Venue” under § 1404(a).
FN4. In its Answer to Crosby Trucking’s Third–Party Complaint, Benteler has conceded that this court has personal jurisdiction over both Benteler entities and that venue is proper. Echo, on the other hand, has represented that it will (a) challenge venue on the grounds that Crosby Trucking is contractually obligated to bring any disputes with Echo in Illinois under a forum selection clause, and (b) assert that the court does not have personal jurisdiction based on a lack of minimum contacts. Echo has not yet filed a challenge on either basis. Although Benteler and Echo have had nearly two months to address Crosby Trucking’s motion (either in support of the motion or in opposition to it), they have not sought leave of court to do so. Crosby Trucking has not explained how Benteler’s and/or Echo’s stated positions with respect to jurisdiction and venue would impact the court’s analysis, nor have Benteler or Echo sought to address the issue. Under the circumstances, the court finds no need to order briefing from Benteler and/or Echo regarding the Motion to Transfer Venue.
Based on American’s representations to the court, which permit Crosby Trucking to pursue a setoff against American’s claim premised on Martinrea’s allegedly negligent conduct, the court finds that adding Martinrea as a party is unnecessary at this stage. Therefore, Crosby Trucking’s Motion for Leave to File a Third–Party Complaint Martinrea will be denied.
Under 28 U.S.C. § 1404(a), “[f]or the convenience of the parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it may have been brought.” District courts have wide discretion in deciding motions to transfer. Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29, 108 S.Ct. 2239, 104 L.Ed.2d 22 (1988) (“Section 1404(a) is intended to place discretion in the district court to adjudicate motions for transfer according to an ‘individualized, case-by-case consideration of convenience and fairness.’ ”) (quoting Van Dusen v. Barrack, 376 U.S. 612, 622, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964)). In deciding whether to grant transfer under § 1404(a), the Sixth Circuit has suggested that the court may consider: (1) the convenience of the parties and witnesses; (2) the accessibility of evidence; (3) the availability of process to make reluctant witnesses testify; (4) the costs of obtaining willing witnesses; (5) the practical problems of trying the case most expeditiously and inexpensively; and (6) the interests of justice. Reese v. CNH Am. LLC, 574 F.3d 315, 320 (6th Cir.2009). The burden is on the defendant to establish that a transfer is warranted. Blane v. Am. Investors Corp., 934 F.Supp. 903, 907 (M.D.Tenn.1996) (citing Factors, Etc. v. Pro Acts, Inc., 579 F.2d 215 (2d Cir.1978)); Smith v. Kyphon, Inc., 578 F.Supp.2d 954, 958 (M.D.Tenn.2008) (citing Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508, 67 S.Ct. 839, 91 L.Ed. 1055 (1947)).
*3 Convenience of non-party witnesses, as opposed to parties or employee witnesses, is one of the most important factors in the transfer analysis. Smith, 578 F.Supp.2d at 963. Transfer of venue is inappropriate where it would serve only to transfer the inconvenience from one party to the other. Diebold, Inc. v. Firstcard Fin. Servs., Inc., 104 F. Sup.2d 758, 764 (N.D.Ohio 2000). Although a plaintiff’s choice of forum is generally entitled to substantial weight, when a given action has a limited connection with the forum and is not the plaintiff’s residence, the plaintiff’s choice is to be afforded less weight than would otherwise be the case. Lisenbee v. FedEx Corp., 579 F.Supp.2d 993, 1007 (M.D.Tenn.2008). The plaintiff’s interest decreases even further where the central facts of the lawsuit occurred outside the chosen forum. Id.
FN5. American’s brief did not indicate whether a Martinrea or DTS witness would be located in Tennessee. In a footnote, American asked that, if the court believed that the location of those witnesses is relevant to the Motion to Transfer Venue, then the court should permit American to conduct discovery. Because the court would exercise its discretion to transfer the case regardless of whether a Martinrea and/or DTS witness will be located in Tennessee, discovery regarding the transfer issue is unnecessary.
Crosby Trucking has essentially two theories under which it believes other parties are responsible for the damages to the Die. First, as against American and Echo, Crosby Trucking alleges that Martinrea and Echo breached a duty to inform Crosby Trucking of the value of the Die, causing Crosby Trucking to retain insufficient insurance. Second, as against Benteler, Crosby Trucking argues that the damage to the Die was caused by Benteler’s negligence in loading the Die at the Goshen, Indiana point of origin. With respect to American’s Carmack Amendment claim, Crosby Trucking’s defense presumably will require Crosby Trucking to show, inter alia, that it was not negligent and that some factor beyond its control caused the Die to fall and sustain damage. See Custom Rubber Corp. v. ATS Specialized, Inc., 633 F.Supp.2d 495, 509–510 (N.D.Ohio 2009) (defendant carrier disclaimed liability on grounds that cargo was improperly loaded by shipper, i.e., that “the shipper himself” solely caused the damage for purposes of defense under Carmack Amendment) (citing Plough, Inc. v. Mason & Dixon Lines, 630 F.2d 468, 470 (6th Cir.1980)). That defense presumably will implicate (a) facts related to the loading of the Die and (b) the circumstances of the accident itself—i.e., whether some party other than Crosby Trucking caused the accident and/or is responsible for the resulting damages, through no fault of Crosby Trucking. Live testimony from witnesses to the loading of the Die and to the accident, both of which occurred in Indiana, will likely be crucial to resolving the apportionment of liability and damages as among the multiple parties to this case.
*4 Thus, although some potential witnesses in this case are located in this district and/or in other states—such as the former Crosby Trucking driver of the truck that overturned, who is believed to reside in Ohio—the locus of events most likely to involve disputed facts, and, therefore, disputed testimony, is in Indiana. The court is not persuaded that the physical location of the Die strongly favors remaining in this district. By American’s own admission, the Die is not going anywhere and, as a consequence, should be available for inspection by the parties at an appropriate time. Thus, with respect to the Die, American has not shown that a transfer would be unduly prejudicial, insofar as inspecting the Die will be relevant. On the other hand, if Crosby Trucking cannot compel witnesses to testify regarding the loading and/or the accident, it would be highly prejudicial to Crosby Trucking’s attempts to apportion responsibility among other allegedly responsible parties.
Furthermore, Crosby Trucking’s third-party claims (and some of the associated defenses) will involve the application of Indiana law, with which the transferor court in Indiana will be familiar. As to American’s underlying Carmack Amendment claim, both this court and a federal court in Indiana are equally able to apply federal law.
FN6. Although it would not affect the court’s disposition of the motion, the court notes that American has not provided any authority establishing that, for purposes of § 1404(a) deference to a plaintiff’s choice of forum, the court should graft the non-party subrogor’s residence onto the subrogee.
The other factors are essentially neutral as between this court and a federal district court in Indiana. The parties and several non-party witnesses are located in states other than Tennessee and Indiana. Relevant documents are likely located in multiple states, at least including Indiana, Tennessee, and Virginia.
Taking the relevant factors into consideration, the court finds that the balance of factors weighs in favor of transfer and that, in the interests of justice, transfer to a federal district court in Indiana is warranted. Therefore, the court will exercise its discretion to transfer this case to a federal district court in Indiana. Because the loading of the Die and the accident both took place within the Northern District of Indiana, the court will transfer the case to that district.
For the reasons stated herein, Crosby Trucking’s Motion to File a Third–Party Complaint Against Martinrea will be denied, Crosby Trucking’s Motion to Transfer Venue will be granted, and American’s Motion for Oral Argument will be denied. In the exercise of its discretion, the court will transfer the case to the United States District Court for the Northern District of Indiana pursuant to 28 U .S.C. § 1404(a).
An appropriate order will enter.
• Defendant/Counter–Plaintiff Crosby Trucking Service, Inc.’s (“Crosby Trucking”) Motion for Leave to File a Third–Party Complaint Against Martinrea Industries, Inc. (Docket No. 44) is DENIED.
*5 • Plaintiff American Guaranty and Liability Insurance Company’s Motion for Oral Argument (Docket No. 62) is DENIED.
• Crosby Trucking’s Motion to Transfer Venue (Docket No. 29) is GRANTED.
• This case is hereby TRANSFERRED to the United States District Court for the Northern District of Indiana.
Aaron SHOWALTER, et al., Defendants.
NEIL V. WAKE, District Judge.
*1 Before the Court is Third–Party Defendant Allied Van Lines, Inc.’s (“Allied”) Motion to Dismiss (Doc. 25), the Response, and the Reply. Allied’s Motion to Dismiss (“Motion”) was joined by Counterdefendant Olympian Worldwide Moving & Storage Incorporated (“Olympian”) (Doc. 29). The Motion will be granted and the Third–Party Plaintiffs and Counterclaimants, Aaron and Audrey Showalter, will have leave to amend.
When considering a motion to dismiss, a court evaluates the legal sufficiency of the plaintiff’s (or claimant’s) pleadings. Dismissal under Rule 12(b)(6) of the Federal Rules of Civil Procedure can be based on “the lack of a cognizable legal theory” or “the absence of sufficient facts alleged under a cognizable legal theory.” Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir.1990). To avoid dismissal, a complaint need include “only enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). The court may not look beyond facts alleged in the pleadings, documents attached to the pleadings, and matters subject to judicial notice to evaluate legal sufficiency. Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th Cir.2007) (per curiam). All allegations of material fact are assumed to be true and construed in the light most favorable to the non-moving party. Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir.2009).
On June 21, 2012, Plaintiff Olympian, in its capacity as Allied’s disclosed household goods agent, transported Defendants Aaron and Audrey Showalters’ (“Showalters”) property from Mesa, Arizona to Florida pursuant to a bill of lading. Olympian later filed a breach-of-contract action alleging that the Showalters had failed to pay Olympian for the cost of transportation. The Showalters, in turn, filed counterclaims and a Third–Party Complaint against Allied and Olympian based on the allegation that Olympian’s employees stole Audrey Showalter’s wedding ring during the moving process. The pleading being tested by the Motion, the Showalters’ Amended Third–Party Complaint (Doc. 23), suggests that the wedding ring was among the property that the Showalters sought to have Olympian move under the bill of lading. The Showalters’ claims, all based on the alleged taking of the wedding ring, include: (1) conversion, (2) negligent hiring and supervision; (3) breach of contract; (4) breach of the covenant of good faith and fair dealing; and (5) negligence.
In their Motion, Defendants seek to dismiss the Showalters’ Amended Third–Party Complaint on the basis that the claims therein are entirely preempted by the Carmack Amendment. Defendants also argue that Olympian, as an agent of Allied, is not a proper party to the third-party action, as the Carmack Amendment imposes liability on a motor carrier for the acts of its agents. The Showalters argue that the Carmack Amendment does not preempt claims arising out of the alleged theft of the wedding ring and that Olympian is a proper counterdefendant.
A carrier providing transportation or service … shall issue a receipt or bill of lading for property it receives for transportation under this part. That carrier … [is] liable to the person entitled to recover under the receipt or bill of lading. The liability imposed under this paragraph is for the actual loss or injury to the property….
49 U.S.C. § 14706(a)(1). The scope of preemption under Carmack is expansive: “[T]here can be no rational doubt but that Congress intended to take possession of the subject [of interstate common carriers], and supersede all state regulations with reference to it….” Adams Express Co. v. Croninger, 226 U.S. 491, 505–06 (1913); see also Georgia, F. & A. Ry. Co. v. Blish Milling Co., 241 U.S. 190, 196 (1916) (finding that “the words of the [ Carmack Amendment] are comprehensive enough to embrace responsibility for all losses resulting from any failure to discharge a carrier’s duty as to any part of the agreed transportation”); Hall v. N. Am. Van Lines, Inc., 476 F.3d 683, 688 (9th Cir.2007) (“It is well settled that the Carmack Amendment is the exclusive cause of action for interstateshipping contract claims alleging loss or damage to property.”). Even state-law claims that supplement the Carmack Amendment, instead of contradicting it, are preempted. Charleston & W. Carolina Ry. Co. v. Varnville Furniture Co., 237 U.S. 597, 604 (1915).
The Showalters’ counterclaims arise from events surrounding the interstate transportation of the Showalters’ personal property and household goods, thereby potentially implicating the Carmack Amendment. Further, neither party contends that Allied is not a common carrier. Accordingly, since the Carmack Amendment may preempt claims against common carriers arising from contracts for interstate shipments, the Showalters’ claims may be displaced.
*3 The Amended Third Party Complaint is fairly read to say that the wedding ring was intended to be part of the interstate shipment and was not delivered. Even construed in the light most favorable to the Showalters, that complaint still suggests that the Showalters planned to ship the ring through Olympian. The Response to the Motion (Doc. 38) paints a different picture: It asserts flatly that “[t]he stolen ring which forms the basis of the Showalters’ claims … was not the subject of interstate shipment,” and that “the stolen jewelry was not covered by the bill of lading.” (Doc. 38 at 3–4.) However, the Response cannot present new allegations for consideration under Rule 12(b)(6). See Schneider v. Cal. Dep’t of Corr., 151 F.3d 1194, 1197 n. 1 (9th Cir.1998) (“In determining the propriety of a Rule 12(b)(6) dismissal, a court may not look beyond the complaint to a plaintiff’s moving papers, such as a memorandum in opposition to a defendant’s motion to dismiss.”). Accordingly, the assumption at present must be that the wedding ring was part of the intended shipment, as suggested by the Showalters’ operative pleading.
Given the interpretation that the wedding ring was part of the property to be delivered under the interstate-shipment contract, Defendants’ Motion succeeds. “It is well settled that the Carmack Amendment constitutes a complete defense to common law claims alleging all manner of harms.” Hall, 476 F.3d at 689 (citation omitted).
The Showalters’ claim in Count Four, breach of the covenant of good faith and fair dealing, likewise derives under Arizona law from an alleged breach of interstateshipment contract. See Savoca Masonry Co., Inc. v. Homes & Son Const. Co., Inc., 112 Ariz. 392, 396, 542 P.2d 817, 821 (1975) (“[T]here is implied in every contract a covenant of good faith dealing, so that neither party may do anything that will injure or destroy the rights or interests of other parties to the agreement.”) Accordingly, that claim, too, is preempted by the Carmack Amendment. See Hall, 476 F.3d at 688.
Similarly, the Showalters’ remaining claims-negligence, conversion, and negligent hiring and supervision-are defensively preempted by the Carmack Amendment. See White v. Mayflower Transit, L.L.C, 543 F.3d 581, 584–85 (9th Cir.2008) (holding that the Carmack Amendment constitutes a complete defense to claims including negligence, conversion, fraud, and overcharging). And even while the claim of negligent hiring and supervision seems at first to allege some wrong beyond the other claims, it is preempted because it only arises because of the same underlying conduct: failure to deliver. Allowing this claim to stand would counter the uniformity of liability for common carrriers. See Hughes Aircraft Co. v. N. Am. Van Lines, Inc., 970 F.2d 609, 613 (9th Cir.1992) (“It is clear that the Carmack Amendment established a uniform national liability policy for interstate carriers.”) The Showalters’ complaint, at its core, is that common carriers Olympian and Allied failed to deliver a wedding ring that was part of the shipment. However that claim is dressed up-whatever common-law disguise it wears-it is preempted by the Carmack Amendment.
Each motor carrier providing transportation of household goods shall be responsible for all acts or omissions of any of its agents which relate to the performance of household goods transportation services (including accessorial or terminal services) and which are within the actual or apparent authority of the agent from the carrier or which are ratified by the carrier.
49 U.S.C. § 13907(a); see also Nichols v. Mayflower Transit, LLC, 368 F.Supp.2d 1104, 1109 (D.Nev.2003) (dismissing from action the agent of a disclosed principal because agent could not be held liable pursuant to duly issued bill of lading). The Showalters do not contend otherwise, nor do they disagree with the assertion that Olympian acted as an agent of Allied, its disclosed principal, when transporting the Showalters’ property. Accordingly, no claim under the Carmack Amendment can lie against Olympian. Should the Showalters amend their Amended Third Party Complaint, Olympian would not be a proper defendant with respect to a claim under the Carmack Amendment. See Nichols, 368 F.Supp.2d at 1109; Werner v. Lawrence Transp. Sys., Inc., 52 F.Supp.2d 567, 568–69 (E.D.N.C.1998) (granting motion to dismiss defendant from action because defendant acted as agent of disclosed principal and could not be liable for damages from transportation services); Fox v. Kachina Moving & Storage, No. 3:98–CV–0842–AH, 1998 WL 760268, at *1 (N.D.Tex. Oct. 21, 1998) (granting motion to dismiss defendant from action because defendant acted as agent of disclosed principal and could not be liable under Carmack Amendment).
Assuming, pursuant to the Amended Third Party Complaint, that the wedding ring was to be shipped by Olympian and Allied, the Carmack Amendment preempts all five of the Showalters’ counterclaims. However, discrepancies between that pleading and the Showalters’ Response suggest that the facts underlying the counterclaims may in fact be different from what is indicated in the Amended Third Party Complaint. Accordingly, the Showalters will be given leave to amend, either to state a claim under the Carmack Amendment against Allied or, if appropriate, to alter the Amended Third Party Complaint to clearly allege that the wedding ring was not intended to be shipped.
IT IS THEREFORE ORDERED granting Defendants’ Motion to Dismiss (Doc. 25).
IT IS FURTHER ORDERED granting Third–Party Plaintiffs Aaron and Audrey Showalter leave to amend their Amended Third Party Complaint (Doc. 23) by August 9, 2013, as contemplated and explained by this Order.

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