Opinion
Case No. 17-CV-61485-MIDDLEBROOKS/HUNT
09-26-2017
Ken GRIER and Carmen Grier, Plaintiffs, v. GRIFFIN MOVING & STORAGE, INC., Allied Van Lines, Inc., and Sirva, Inc., Defendants.
Geoffrey S. Stahl, Jeffrey M. Liggio, Liggio Law, P.A., West Palm Beach, FL, for Plaintiffs. Heidi M. Roth, Coral Gables, FL, for Defendants Allied Van Lines, Inc., SIRVA, Inc. Kirstie Hayduk, Lewis Brisbois Bisgaard & SmithLLP, Fort Lauderdale, FL, for Defendant Griffin Moving and Storage, Inc.
Geoffrey S. Stahl, Jeffrey M. Liggio, Liggio Law, P.A., West Palm Beach, FL, for Plaintiffs.
Heidi M. Roth, Coral Gables, FL, for Defendants Allied Van Lines, Inc., SIRVA, Inc.
Kirstie Hayduk, Lewis Brisbois Bisgaard & SmithLLP, Fort Lauderdale, FL, for Defendant Griffin Moving and Storage, Inc.
ORDER ON MOTION TO REMAND AND MOTIONS TO DISMISS
DONALD M. MIDDLEBROOKS, UNITED STATES DISTRICT JUDGE
THIS CAUSE comes before the Court on Plaintiffs’ Motion to Remand and various Motions to Dismiss. (DE 3, 5, 12). For reasons stated below, Plaintiffs’ Motion to Remand (DE 12) is denied, Allied Van Lines, Inc. and Sirva, Inc.’s Motion to Dismiss (DE 3) is granted in part and denied in part, and Defendant Griffin Moving & Storage, Inc.’s Motion to Dismiss (DE 5) is granted.
BACKGROUND
Plaintiffs Ken and Carmen Grier ("Plaintiffs") allege that they contacted Defendant Griffin Moving & Storage, Inc. ("Griffin"), an agent of Defendant Allied Van Lines, Inc. ("Allied"), for assistance with their move from Florida to North Carolina. (Compl. ¶ 6). Plaintiffs specifically explained to Griffin that they were moving valuable antiques and artwork and were seeking experienced movers. (Id. at ¶¶ 7-8). They also explained that in addition to the items in their home, they needed to move items from a separate storage unit. (Id. at ¶ 10). After Griffin assured Plaintiffs that they had experience moving valuable goods, Plaintiffs contracted with Griffin and Allied for moving services on August 28, 2014. (Id. at ¶ 15). Plaintiffs inquired about insurance options with Griffin and Allied and were informed that "they were limited to only $200,000.00 of insurance coverage, but that they did not even need to purchase that because Griffin ... was entirely trustworthy and reliable." (Id. at ¶ 16). Plaintiffs purchased the $200,000.00 insurance policy with Defendant Sirva, Inc. ("Sirva"). (Id. at ¶ 17).
On September 29, 2014, Griffin began packing Plaintiffs’ belongings at their Florida home. (Id. at ¶ 18). The items from the storage unit were loaded onto an Allied truck but not safely packed at that location. (Id. at ¶ 20). However, Plaintiffs were informed that the items were safely packed at Griffin's facility. (Id. ). After a period of time in storage under Griffin's care (id. at ¶ 56), Plaintiffs’ belongings were delivered to their North Carolina home on August 17, 2015 (id. at ¶ 23). Ten to 15 of the boxes were not delivered and other items were significantly damaged. (Id. ). The floor of Plaintiffs’ North Carolina home was also damaged. (Id. at ¶ 24). Plaintiffs made a claim to Sirva in the amount of $1,500,746 based on the undelivered and damaged items but Sirva ultimately offered Plaintiffs $17,855 as a "full and final offer." (Id. at ¶ 46). Plaintiffs rejected the offer. (Id. at ¶ 47).
Plaintiffs filed a complaint in state court alleging the following claims: (1) Fraud in the Inducement against Griffin and Allied; (2) Breach of Contract against Griffin and Allied; (3) Negligent Supervision against Griffin and Allied; (4) Conversion against Griffin and Allied; (5) Breach of Contract against Sirva; and (6) Breach of Good Faith and Fair Dealing against Griffin, Allied, and Sirva. On July 25, 2017, Defendant Allied removed the complaint to federal court, with the consent of Griffin and Sirva. (DE 1). Defendants contend that Plaintiffs’ claims against Griffin and Allied are preempted by the Carmack Amendment, 49 U.S.C. § 11706, et seq., and thus this case is removable as it is a civil action over which this Court has original jurisdiction. "In accordance with 28 U.S.C. [§] 1445(b), a civil action against a common carrier for loss or damage to shipments arising under Section 14706 or 11707 of Title 49 is deemed ‘nonremovable’ unless the matter in controversy exceeds $10,000." (DE 1 at 2). Because Plaintiffs seek damages in excess of $15,000, "the jurisdictional amount set forth in 28 U.S.C. § 1445(b) has been satisfied." (Id. ).
On August 22, 2017, Plaintiffs filed a Motion to Remand, arguing that the Carmack Amendment does not completely preempt their state law claims. (DE 12). Defendants filed a response (DE 20), to which Plaintiffs replied (DE 24). Defendants Allied and Sirva filed a Motion to Dismiss (DE 3), as did Defendant Griffin (DE 5). Both Motions to Dismiss are fully briefed.
STANDARD
Motion to Remand. "[T]he burden of proving jurisdiction lies with the removing defendant." Williams v. Best Buy Co., Inc. , 269 F.3d 1316, 1319 (11th Cir. 2001). "Federal courts are courts of limited jurisdiction, and there is a presumption against the exercise of federal jurisdiction, such that all uncertainties as to removal jurisdiction are to be resolved in favor of remand." Russell Corp. v. Am. Home Assur. Co. , 264 F.3d 1040, 1050 (11th Cir. 2001). "[R]emoval statutes are construed narrowly." Burns v. Windsor Ins. Co. , 31 F.3d 1092, 1095 (11th Cir. 1994). Motion to Dismiss. A motion to dismiss under Rule 12(b)(6) challenges the legal sufficiency of a complaint. See Fed. R. Civ. P. 12(b)(6). In assessing the legal sufficiency of a complaint's allegations, the Court is bound to apply the pleading standard articulated in Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) and Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). That is, the complaint "must ... contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Am. Dental Ass'n v. Cigna Corp. , 605 F.3d 1283, 1289 (11th Cir. 2010) (quoting Twombly , 550 U.S. at 570, 127 S.Ct. 1955 ). "Dismissal is therefore permitted when on the basis of a dispositive issue of law, no construction of the factual allegations will support the cause of action." Glover v. Liggett Grp., Inc. , 459 F.3d 1304, 1308 (11th Cir. 2006) (internal quotations omitted) (citing Marshall Cnty. Bd. of Educ. v. Marshall Cnty. Gas Dist. , 992 F.2d 1171, 1174 (11th Cir. 1993) ).
When reviewing a motion to dismiss, a court must construe plaintiff's complaint in the light most favorable to plaintiff and take the factual allegations stated therein as true. See Erickson v. Pardus , 551 U.S. 89, 93, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007) ; Christopher v. Harbury , 536 U.S. 403, 406, 122 S.Ct. 2179, 153 L.Ed.2d 413 (2002) ; Brooks v. Blue Cross & Blue Shield of Fla., Inc. , 116 F.3d 1364, 1369 (11th Cir. 1997). However, pleadings that "are no more than conclusions, are not entitled to the assumption of truth. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 ; see also Sinaltrainal v. Coca-Cola Co. , 578 F.3d 1252, 1260 (11th Cir. 2009) (stating that an unwarranted deduction of fact is not considered true for purpose of determining whether a claim is legally sufficient).
DISCUSSION
Motion to Remand. Although Plaintiffs’ complaint only contains state law claims, Defendants removed on the basis that the Carmack Amendment completely preempts the state law claims alleged against Griffin and Allied. A case that could have originally been brought in federal court may be removed from state court. One type of case over which federal courts have original jurisdiction is a case presenting a federal question. "The presence or absence of federal-question jurisdiction is governed by the ‘well-pleaded complaint rule,’ which provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint." Caterpillar, Inc. v. Williams , 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987). However, there is an ‘independent corollary’ to the well-pleaded complaint rule ... known as the ‘complete pre-emption’ doctrine." Id. (internal citation omitted). In some cases, "the pre-emptive force of a statute is so ‘extraordinary’ that it ‘converts an ordinary state common-law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule.’ " Id. (quoting Metropolitan Life Ins. Co. v. Taylor , 481 U.S. 58, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987) ). "Once an area of state law has been completely pre-empted, any claim purportedly based on that pre-empted state law is considered, from its inception, a federal claim, and therefore arises under federal law." Id. at 393, 107 S.Ct. 2425. See also Beneficial National Bank v. Anderson , 539 U.S. 1, 8, 123 S.Ct. 2058, 156 L.Ed.2d 1 (2003) ("When the federal statute completely pre-empts the state-law cause of action, a claim which comes within the scope of that cause of action, even if pleaded in terms of state law, is in reality based on federal law."); Franchise Tax Board of Cal. v. Construction Laborers Vacation Trust for Southern Cal. , 463 U.S. 1, 24, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983) ("[I]f a federal cause of action completely pre-empts a state cause of action any complaint that comes within the scope of the federal cause of action necessarily ‘arises under’ federal law.").
To determine whether the complete preemption doctrine applies, "the proper inquiry focuses on whether Congress intended the federal cause of action to be exclusive rather than on whether Congress intended that the cause of action be removable." Beneficial National Bank , 539 U.S. at 9 n.5, 123 S.Ct. 2058. The Eleventh Circuit has not analyzed the Carmack Amendment and complete preemption after Beneficial National Bank. However, the Fifth and Ninth Circuits have.
In Hoskins v. Bekins Van Lines , 343 F.3d 769 (5th Cir. 2003), the Fifth Circuit analyzed whether the Carmack Amendment completely preempted claims of negligence, breach of contract, and deceptive trade practices "stemming from the loss or damage to [a plaintiff's] personal belongings as a result of a move from Texas to Virginia." Id. at 771. The Fifth Circuit, applying Beneficial National Bank , found that "Congress intended for the Carmack Amendment to provide the exclusive cause of action for loss or damages to goods arising from the interstate transportation of those goods by a common carrier. " Id. at 778 (emphasis in original). The Fifth Circuit, therefore, held that complete preemption applied "[b]ecause the Carmack Amendment provides the exclusive cause of action for such claims," and thus plaintiff's claims arose under federal law. Id. The Ninth Circuit has reached the same conclusion. See Hall v. N. Am. Van Lines. Inc. , 476 F.3d 683, 688-89 (9th Cir. 2007) ("We hold that the Carmack Amendment is the exclusive cause of action for contract claims alleging delay, loss, failure to deliver or damage to property.... Because [plaintiff's] completely preempted contract claim presents a federal question, the district court properly denied [plaintiff's] motion to remand.").
I agree with the Fifth and Ninth Circuits and find that complete preemption applies to the Carmack Amendment. The Carmack Amendment has been described as "creat[ing] a uniform rule for carrier liability when goods are shipped in interstate commerce." Smith v. United Parcel Service , 296 F.3d 1244, 1246 (11th Cir. 2002) (citing New York, New Haven, & Hartford R.R. Co. v. Nothnagle , 346 U.S. 128, 131, 73 S.Ct. 986, 97 L.Ed. 1500 (1953) ; Adams Express Co. v. Croninger , 226 U.S. 491, 506, 33 S.Ct. 148, 57 L.Ed. 314 (1913) ). "To accomplish the goal of uniformity, the Carmack Amendment preempts state law claims arising from failures in the transportation and delivery of goods." Id. See also Adams Express , 226 U.S. at 505-06, 33 S.Ct. 148 ("Almost every detail of the subject is covered so completely that there can be no rational doubt but that Congress intended to take possession of the subject, and supersede all state regulation with reference to it."). In light of Beneficial National Bank , because the Carmack Amendment is the exclusive cause of action for claims arising out of the loss or damage to goods in interstate shipping, I find that complete preemption applies to such claims.
Plaintiffs argue that the Carmack Amendment does not completely preempt their claims against Allied and Griffin because they have alleged Defendants made misrepresentations to fraudulently induce them into entering into a contractual relationship, and negligently supervised their employees by failing to ensure there was no property loss, theft, or damage. Plaintiffs rely heavily on a recent Florida Supreme Court case, Mlinar v. United Parcel Service, Inc. , 186 So. 3d 997 (Fla. 2016), in support of their argument that their claims are not completely preempted. In Mlinar , a professional artist alleged that she took two of her oil paintings to a third-party retailer to pack and ship the paintings via United Parcel Service, Inc. ("UPS"). Id. at 999. When the container arrived at the recipient's address, the duct tape had been cut and the container was empty. Id. The painter later learned that UPS had sold the paintings to its lost goods contractor, Cargo Largo, which later auctioned off both paintings. Id. "According to the operative complaint, UPS selectively located the contents of her container ‘based on their nature, probable worth, and lack of insurance,’ and then sold the paintings to Cargo Largo for ‘some as of yet undiscovered consideration.’ UPS also utilized [the artist]’s contact information on the back of each painting ‘to catalogue, sell and/or distribute’ the paintings to Cargo Largo." Id. The painter alleged four claims against UPS: (1) conversion; (2) profiting by criminal activity; (3) unauthorized publication of name or likeness; and (4) violation of Florida's Deceptive and Unfair Trade Practices Act. Id. at 1003-04. The Florida Supreme Court held "that a state law or common law claim against an interstate carrier of goods is generally preempted by the [Carmack Amendment] unless the claim alleges conduct or harm that is separate and distinct from the loss of or damage to the goods transported." Id. at 1003. In applying that test, the Florida Supreme Court concluded that the artist's claims arose "from conduct or harm that is independent from the loss of goods during the interstate shipment process." Id. at 1004. It explained that "[t]o expand Carmack Amendment preemption to cases in which a plaintiff seeks to hold a carrier liable not for a negligent yet good-faith loss of goods, but instead for larcenous misconduct by the carrier that was intended to and in fact resulted in the separation of goods from their owner is repugnant to the purpose behind the statute's enactment." Id.
Plaintiffs have not alleged facts similar to those alleged in Mlinar. Plaintiffs’ mere inclusion of the word "theft" in the Complaint does not remove this case from the Carmack Amendment. Plaintiffs have not alleged conduct separate and distinct from the loss or damage of goods during shipment. Plaintiffs have claimed that their household goods were damaged or lost when shipped by Griffin and Allied and that they have not been compensated for their losses. The fact that they also allege they relied on misrepresentations in choosing Griffin and Allied as their moving companies is not separate and distinct conduct or harm because the only implication of the alleged misrepresentations is that Griffin and Allied did not deliver the goods in the condition promised. See Smith v. United Parcel Service , 296 F.3d 1244, 1247-48 (rejecting similar argument based on alleged misrepresentations because it "does not alter the fact that the Smiths base their fraud and negligence, wantonness, or willfulness claims on UPS's failure to provide them with particular transportation and delivery services"). The exclusive remedy for the loss of those goods is under the Carmack Amendment.
Plaintiffs’ claims against Allied and Griffin – fraud in the inducement, breach of contract, negligent supervision, and conversion – clearly arise from alleged loss and damage to interstate shipments and are, therefore, governed exclusively by the Carmack Amendment and are within the jurisdiction of this Court. Accordingly, this Court finds that this action was properly removed. Plaintiffs’ Motion to Remand is, thus, denied. Motions to Dismiss. Having found that Plaintiffs’ state law claims against Griffin and Allied are preempted by the Carmack Amendment, those claims must be dismissed. Indeed, Allied filed a Motion to Dismiss based on Carmack Amendment preemption, as did Griffin. Accordingly, Counts I, II, III, and IV are dismissed in their entirety and Count VI is dismissed against Griffin and Allied, all with prejudice.
Griffin also moved to be dismissed on the basis that it cannot be held liable under the Carmack Amendment. However, because I find that Plaintiffs’ exclusion remedy against Griffin is under the Carmack Amendment, and Plaintiff has not alleged a claim under that Amendment, I need not address Griffin's argument as to liability based on any status as an agent. Additionally, I decline to address Allied's other arguments raised in its Motion to Dismiss because all claims are dismissed as against Allied.
The only remaining claims are the breach of contract claim against Sirva (Count V) and the breach of good faith and fair dealing claim against Sirva (Count VI). Sirva represents that it is the holding company of Allied and is not a proper party in this case because it was not in privity with Plaintiffs. (DE 3 at 2). However, Plaintiffs allege that they "purchased a $200,000.00 insurance policy ... with Defendant, Sirva." (Compl. ¶ 17). Plaintiffs have alleged they were in contractual privity, even if Sirva disputes the allegation. And while that allegation may be untrue as Sirva suggests, it is sufficient to survive a motion to dismiss. Accordingly, Counts V and VI against Sirva are not dismissed.
Sirva argues that none of the shipping documents filed as exhibits to the Complaint reference Sirva. However, Plaintiffs do not purport to attach the alleged insurance policy with Sirva to the Complaint and indeed allege that they are not in possession of the policy. Accordingly, viewing the allegations in the light most favorable to Plaintiffs, there may be an insurance policy that is not in the record before the Court.
Plaintiffs may file an amended complaint alleging any claims under the Carmack Amendment by October 5, 2017. If an amended complaint is not filed by that deadline, the Court will decline to exercise supplemental jurisdiction over Counts V and VI against Sirva and remand those claims to state court.
In deciding whether to continue to exercise supplemental jurisdiction over state claims after all federal claims have been dismissed, a court should "take into account concerns of comity, judicial economy, convenience, fairness, and the like." Crosby v. Paulk , 187 F.3d 1339, 1351 (11th Cir. 1999). " ‘When federal law claims have dropped out of the lawsuit in its early stages and only state-law claims remain, the federal court should decline the exercise of jurisdiction.’ " Baggett v. First Nat. Bank of Gainesville , 117 F.3d 1342, 1353 (11th Cir. 1997) (quoting Carnegie-Mellon Univ. v. Cohill , 484 U.S. 343, 350, 108 S.Ct. 614, 98 L.Ed.2d 720 (1988) ).
Accordingly, it is
ORDERED AND ADJUDGED as follows:
(1) Plaintiffs’ Motion to Remand (DE 12) is DENIED .
(2) Defendant Allied and Sirva's Motion to Dismiss (DE 3) is GRANTED IN PART AND DENIED IN PART . The claims against Allied are dismissed but the claims against Sirva are not dismissed.
(3) Defendant Griffin's Motion to Dismiss (DE 5) is GRANTED .
(4) Counts I, II, III, and IV are dismissed in their entity and Count VI is dismissed against Griffin and Allied. These Counts are dismissed with prejudice.
(5) Plaintiffs may file an amended complaint, by October 5, 2017, alleging
any claims under the Carmack Amendment.
DONE AND ORDERED in Chambers in West Palm Beach, Florida, this 26 day of September, 2017.
ORDER ON MOTION TO RECONSIDER
THIS CAUSE comes before the Court on Plaintiffs’ Motion to Reconsider Court's Order Granting Dismissal With Prejudice and for Leave to Amend the Complaint (DE 30, "Motion"). For reasons stated below, Plaintiffs’ Motion is denied.
Plaintiffs move to reconsider under Federal Rules of Civil Procedure 15(a), 54(b), and/or Rule 60(b). The Eleventh Circuit has explained that the Court's authority to revise interlocutory orders comes from Rule 54(b), which "take[s] after Rule 60(b)." Herman v. Hartford Life and Acc. Ins. Co. , 508 F. App'x 923, 927 n.1 (11th Cir. 2013). Under Rule 60(b),
the court may relieve a party or its legal representative from a final judgment, order, or proceeding for the following reasons:
(1) mistake, inadvertence, surprise, or excusable neglect;
(2) newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b);
(3) fraud (whether previously called intrinsic or extrinsic), misrepresentation, or misconduct by an opposing party;
(4) the judgment is void;
(5) the judgment has been satisfied, released, or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer equitable; or
(6) any other reason that justifies relief.
Fed. R. Civ. P. 60(b). Under Rule 59(e), upon which Plaintiffs do not specifically rely, " ‘[t]he only grounds for granting [a Rule 59(e) ] motion are newly-discovered evidence or manifest errors of law or fact.’ " Arthur v. King , 500 F.3d 1335, 1343 (11th Cir. 2007) (quoting In re Kellogg , 197 F.3d 1116, 1119 (11th Cir. 1999) ). A party may not use a Rule 59(e) motion "to relitigate old matters, raise argument or present evidence that could have been raised prior to the entry of judgment." Michael Linet, Inc. v. Village of Wellington, Fla. , 408 F.3d 757, 763 (11th Cir. 2005). Finally, Rule 15(a) provides that "a party may amend its pleading only with the opposing party's written consent or the court's leave," which should [be] "freely give[n] ... when justice so requires." Fed. R. Civ. P. 15(a).
Plaintiff has not satisfied any of the standards above. Plaintiffs simply disagree with my prior determination that their claims against Griffin and Allied are preempted by the Carmack Amendment. They seek reconsideration of my Order denying their Motion to Remand and granting Defendants’ Motion to Dismiss. They also disagree with my decision to dismiss Counts I, II, III, and IV, as well as Count VI as against Griffin and Allied, with prejudice. They argue that they should be permitted, at a minimum, another opportunity to allege claims that fall outside of the Carmack Amendment. Plaintiffs submit two proposed amended complaints: (1) reasserting similar claims against Griffin and Allied (DE 30-1, "Proposed Amended Complaint 1") and (2) only reasserting a breach of contract claim "subject to the Carmack Amendment" and a breach of contract claim against Sirva (DE 30-2, "Proposed Amended Complaint 2"). Proposed Amended Complaint 1 is the one Plaintiffs hope to file, and Proposed Amended Complaint 2 is the one Plaintiffs intend to file if I deny the instant Motion. As to the request to reconsider my conclusion that Plaintiff's previously pled claims against Griffin and Allied are preempted by the Carmack Amendment, that is denied because Plaintiffs have not convinced me that my conclusion was a manifest error of law or fact. As to the request to reconsider my dismissal of Plaintiff's claims against Griffin and Allied with prejudice, that is also denied. Plaintiffs seek to amend and add allegations that, according to Plaintiffs, would take their claims outside of the Carmack Amendment. Having reviewing their proposed amended complaint, they have failed to do so. The claims against Griffin and Allied in Plaintiffs’ Proposed Amended Complaint 1 are also preempted for the same reasons stated in my prior Order (DE 27). As any amendment would be futile, the request to file Proposed Amended Complaint 1 is denied.
A proposed amendment may be denied for futility "when the complaint as amended would still be properly dismissed." Cockrell v. Sparks , 510 F.3d 1307, 1310 (11th Cir. 2007).
Finally, because Plaintiffs filed Proposed Amended Complaint 2 by the deadline required to file an amended complaint, I find that it is timely. However, Plaintiffs must separately file it as the amended complaint by November 13, 2017.
I have not analyzed whether Proposed Amended Complaint 2 states a claim. As I previously allowed Plaintiffs an opportunity to file an amended complaint to allege a claim against Griffin and Allied under the Carmack Amendment, I need not analyze whether amendment would be futile.
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Accordingly, it is
ORDERED AND ADJUDGED as follows:
(1) Plaintiffs’ Motion to Reconsider (DE 30) is DENIED .
(2) Plaintiff shall file Proposed Amended Complaint 2 as its amended complaint by November 13, 2017.
DONE AND ORDERED in Chambers in West Palm Beach, Florida, this 8 day of November, 2017.