United States District Court, M.D. Tennessee, Nashville Division
WESTERN EXPRESS, INC. d/b/a WESTERN LOGISTICS, Plaintiff,
OSCAR VILLANUEVA d/b/a LAS MARIAS PALLETS, PROGRESSIVE INSURANCE COMPANY d/b/a DRIVE INSURANCE FROM PROGRESSIVE, KASSNICK TRUCK, INC., NATIONAL INDEMNITY COMPANY d/b/a NATIONAL LIABILITY & FIRE INSURANCE, and ALLIANZ GLOBAL CORPORATE AND SPECIALTY d/b/a AGCS MARINE INSURANCE COMPANY, Defendants.
A. TRAUGER UNITED STATES DISTRICT JUDGE.
Western Express, Inc. (“Western”) initiated this
action seeking resolution of the question of what entity
should bear financial responsibility for a misdelivered
shipment. Now before the court are five separate Motions to
Dismiss, filed by each of the five defendants: National
Indemnity Company d/b/a National Liability & Fire
Insurance (“National”) (Doc. No.
1-4); Progressive Insurance Company d/b/a Drive
Insurance from Progressive (“Progressive”) (Doc.
No. 14); Oscar Villanueva d/b/a Las Marias Pallets
(“LMP”) (Doc. No. 21); Kassnick Trucking, Inc.
(“Kassnick”) (Doc. No. 32); and Allianz Global
Corporate and Specialty (“Allianz”) (Doc. No.
motions have been fully briefed and are ripe for
review. For the reasons set forth herein,
LMP's motion will be denied, and the other
defendants' motions will be granted.
Factual and Procedural Background
initiated this action by filing a Complaint in the Circuit
Court for Davidson County, Tennessee on May 24, 2017,
alleging that it entered into a Carrier-Broker Contract with
LMP, pursuant to which LMP agreed to deliver a shipment for
Western's customer, Colgate-Palmolive Company
(“Colgate”), a non-party. (See Compl.
¶¶ 1, 2, 7 & Ex. 1, Doc. No. 1-5, at 11-15.)
accepted load #5843456 for pick up in Redlands, California,
on May 26, 2016, to be delivered to a Wal-Mart Distribution
Center in Red Bluff, California, on May 27, 2017.
(See Compl. ¶ 12 & Ex. 2, Doc. No. 1-5, at
16.) LMP enlisted the aid of subcontractor Kassnick to
fulfill its contractual obligation to deliver the shipment.
(Compl. ¶ 15.) Instead of delivering the load to the
Wal-Mart Distribution Center in Red Bluff, California,
Kassnick misdelivered the load to an address other than the
address indicated on the Bill of Lading. (Compl. ¶ 16.)
The shipment never reached its intended destination, and
Western's customer filed a claim with Western for the
misdelivered shipment in the amount of $88, 787.80. (Compl.
¶ 19 & Ex. 6, Doc. No. 1-5, at 23.)
to Western, LMP is obligated by the Carrier-Broker Contract
(“Contract”) to carry not less than $100, 000 in
cargo insurance to compensate a party entitled to recover
under a bill of lading covering the goods being transported.
(Compl. ¶ 8; Contract ¶ 1(b).) The Contract
provides that LMP's liability as “carrier”
“shall begin at the time cargo is loaded upon
CARRIER'S equipment at point of origin and shall continue
until said cargo is delivered to the designated consignee at
destination.” (Compl. ¶ 9; Contract ¶ 1(c).)
In addition, LMP agreed to “defend and hold
harmless” Western and Western's customers
“against any and all loss and damage claims on each
shipment transported by CARRIER pursuant to this agreement .
. . related to shipments transported by CARRIER.”
(Compl. ¶ 10; Contract ¶ 1(d).) The untitled
document to which Express refers as the “Rate
Confirmation and Load Tender” (Compl. ¶ 12 &
Ex. 2) also provides that LMP as carrier agreed to
“defend, indemnify, and hold broker its customers [sic]
harmless from and against expenses and damages arising out of
or related to services provided by Carrier, ” and it
specifies that “any dispute arising from or related
hereto shall be brought exclusively in the courts of Davidson
County, Tennessee.” (Compl. Ex. 2.)
Progressive agreed to insure LMP for cargo losses and issued
a certificate of insurance covering such losses that was
effective at all times relevant to this suit. (Compl. ¶
14 & Ex. 3, Doc. No. 1-5, at 17.) Defendant National
agreed to insure Kassnick for liability, and Allianz agreed
to insure Kassnick for loss and damage to cargo transported
by Kassnick. (Compl. ¶¶ 17-18 & Ex. 5, Doc. No.
1-5, at 22.)
on these allegations, Western asserts that LMP violated the
Contract with Western by failing to deliver the shipment as
directed on the Bill of Lading and is therefore liable for
losses caused by that breach. Western has called upon
Progressive to cover the loss on behalf of its insured, LMP,
but Progressive has failed to cover the loss. (Compl. ¶
asserts that Kassnick was negligent in failing to transport
the shipment to the address indicated on the Bill of Lading,
thereby causing loss to Western and Western's customer.
Western has called upon National to cover the loss caused by
its insured, Kassnick, but National has failed to cover the
loss. (Compl. ¶ 24-26.) Western also asserts that
Kassnick breached its agreement with LMP by failing to
deliver the shipment to the address directed by the Bill of
Lading, causing loss to Western and Western's customer,
and that Allianz has failed to cover that loss. (Compl.
removed this action to federal court on July 5, 2017. Prior
to removal, both Progressive and National had filed Motions
to Dismiss in state court and counsel for LMP had entered an
appearance. It appears that neither Kassnick nor Allianz had
been served prior to removal.
removal, both National and Villanueva filed Notices of
Consent to Removal. Progressive filed a new Motion to Dismiss
in this court (Doc. No. 14), which supersedes the first (Doc.
No. 1-3); National's pre-removal Motion to Dismiss
remains pending as well (Doc. No. 1-4). Following removal,
LMP, Kassnick, and Allianz each filed a Motion to Dismiss
(Doc. Nos. 21, 32, 40). Western has now filed a Response in
opposition to each of the motions (Doc. Nos. 18, 42, 30, 44)
except that of Allianz (see Note 3, supra).
Progressive, National, and Kassnick filed Replies. (Doc. Nos.
23-1, 49, 52).
Standards of Review
deciding a motion to dismiss for failure to state a claim
under Rule 12(b)(6), the court must “construe the
complaint in the light most favorable to the plaintiff,
accept its allegations as true, and draw all reasonable
inferences in favor of the plaintiff.” Directv,
Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007);
Inge v. Rock Fin. Corp., 281 F.3d 613, 619 (6th Cir.
2002). The Federal Rules of Civil Procedure require that a
plaintiff provide “‘a short and plain statement
of the claim' that will give the defendant fair notice of
what the plaintiff's claim is and the grounds upon which
it rests.” Conley v. Gibson, 355 U.S. 41, 47
(1957) (quoting Fed.R.Civ.P. 8(a)(2)). The court must
determine whether “the claimant is entitled to offer
evidence to support the claims, ” not whether the
plaintiff can ultimately prove the facts alleged.
Swierkiewicz v. Sorema N.A., 534 U.S. 506, 511
(2002) (quoting Scheuer v. Rhodes, 416 U.S. 232, 236
complaint's allegations, however, “must be enough
to raise a right to relief above the speculative
level.” Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 555 (2007). To establish the “facial
plausibility” required to “unlock the doors of
discovery, ” the plaintiff cannot rely on “legal
conclusions” or “[t]hreadbare recitals of the
elements of a cause of action”; instead, the plaintiff
must plead “factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009).
Rules 12(b)(1) and 12(b)(2)
12(b)(1) provides that the defendant may file a motion to
dismiss based on a court's “lack of subject-matter
jurisdiction.” Fed.R.Civ.P. 12(b)(1). The plaintiff has
the burden of proving jurisdiction when the defendant
challenges subject-matter jurisdiction under Rule 12(b)(1).
Rogers v. Stratton Indus., 798 F.2d 913, 915 (6th
a plaintiff confronted with a Rule 12(b)(2) motion
“bears the burden of establishing the existence of
jurisdiction” over the defendant's person.
Estate of Thompson v. Toyota Motor Corp. Worldwide,
545 F.3d 357, 360 (6th Cir. 2008) (citation omitted).
LMP's Motion to Dismiss
motion is premised on Rules 12(b)(1) and 12(b)(6). It seeks
dismissal based on two theories. First, it asserts that
Western does not have Article III standing to assert a breach
of contract claim against LMP, because it has not paid its
customer-shipper, Colgate, for the alleged loss occasioned by
the misdelivered shipment and does not hold an assignment of
Colgate's rights. Thus, it argues, Western is not the
real party in interest and its breach of contract claim
against LMP must be dismissed.
it argues that the Contract between Western and LMP, by its
terms, is governed by the Carmack Amendment, 49 U.S.C. §
14706 et seq., which preempts the Contract and
renders it void as a matter of law, because Western does not
have an assignment from its customer-shipper and therefore
cannot step into the customer's shoes for purposes of a
claim under the Carmack Amendment.
conjunction with its Response in opposition to LMP's
motion, Western submitted a copy of the Assignment of Claim
executed on August 7, 2017 by and between Western and
Colgate, the customer-shipper whose lost cargo is the subject
of this lawsuit. The Assignment makes it clear that Western
paid Colgate the value of its claim, and Colgate assigned to
Western all “right, title and interest of Colgate
related to its aforementioned claim and its interest under
the Bill of Lading, with right to collect and exercise all
rights in relation thereto.” (Doc. No. 30-1.) Based on
the Assignment, Western asserts that it has standing and that
both of the theories upon which LMP relies in support of its
motion to dismiss have been rendered moot.
court notes, first, that there is a fundamental difference
between statutory standing and Article III standing. The
Supreme Court has enumerated the elements necessary to
establishing the latter:
First, Plaintiff must have suffered an injury in fact-an
invasion of a legally-protected interest which is (a)
concrete and particularized; and (b) actual or imminent, not
conjectural or hypothetical. Second, there must be a causal
connection between the injury and the conduct complained
of-the injury has to be fairly traceable to the challenged
action of the defendant, and not the result of the
independent action of some third party not before the court.