Nachman v. Seaford Transfer, Inc., No. 4:2018cv00062 - Document 11 (E.D. Va. 2018)
Court Description: OPINION & ORDER GRANTING in part and DENYING in part 7 Motion to Dismiss; Motion to Dismiss for Failure to State a Claim. While none of the individual counts are dismissed at this time, Defendant's motion is granted to the extent that Plainti ff's state law claims are predicated on damage caused by Defendant's activities as an interstate carrier; all claims against Defendant as a "warehouseman" survive at this time. The Court RECOMMENDS that counsel confer in advance of the Rule 16(b) conference to determine an agreeable date for a settlement conference as early as possible in the litigation process. See Order for Details. Signed by District Judge Mark S. Davis on 8/31/18. (bpet, )
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Nachman v. Seaford Transfer, Inc. Doc. 11 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF VIRGINIA Newport News Division MEREDITH NACHMAN, Plaintiff, V. Civil No. SEAFORD TRANSFER, 4:18cv62 INC., Defendant. OPINION & This dismiss, matter is before the ORDER Court on a filed by defendant Seaford Transfer, partial Inc. motion to ("Seaford" or Defendant"), pursuant to Federal Rule of Civil Procedure 12(b)(6). ECF No. 7. For the reasons set forth below, Defendant's motion is GRANTED in part, and DENIED in part. I. Factual and Procedural Background Summarizing the detailed Meredith Nachman's factual {''Plaintiff") allegations complaint, in plaintiff in late September of 2015, Plaintiff's mother, acting on Plaintiff's behalf, personally delivered Plaintiff's household goods to Defendant's Yorktown Virginia "temperature controlled" storage facility for long-term storage. Compl. 6-9, ECF No. 1-1. Defendant was paid to: (1) unload Plaintiff's property from a U-Haul Truck; tags on each item; (2) place ID (3) perform any "wrapping" deemed necessary by Defendant; and (4) place Plaintiff's belongings into a large wooden Dockets.Justia.com box/vault for long-teinn storage. Id. flU 10-12. Plaintiff was charged over $1,000 for the initial unloading and repacking of her goods, and she paid storage fees in excess of $200 per month. H 13. Id. Plaintiff's mother signed a detailed inventory document as well as a "Non-Negotiable Storage Contract and Warehouse Receipt," ("Storage Contract") rent premium for on which she elected to pay an additional enhanced Plaintiff's property. replacement coverage protection on Id. tH 14-17. Approximately two years later. Plaintiff contacted Defendant to obtain a quote for transportation of her property from Virginia to New York because she wanted to compare the price of various options, one of which was transporting the property herself using a rental truck. Defendant Id. H 19. provided Sometime near the end of October 2017, Plaintiff a quote for the cost of shipping Plaintiff's goods, and Plaintiff agreed to hire Defendant to ship her property to New York. Id. HH 20-22. A short time thereafter. Defendant loaded Plaintiff's property onto a truck and shipped it to New York, November 2, with 2017. the delivery Id. ft Plaintiff's property was wet, odor. Id. HI 26-29, 35. 22, truck arriving 24. Upon delivery, had visible mold, Plaintiff's in New York much on of and/or a mildew complaint acknowledges Plaintiff's inability to pinpoint how or when such damage occurred without the benefit of discovery, id. ff 77-78, and she therefore advances multiple alternative factual theories, including: (1) damage occurred during the multi-year storage in Virginia; (2) damage occurred in the days immediately prior to shipment to New York when the large wooden box/vault containing Plaintiff's belongings occurred, was left outside in the and/or was exacerbated, rain; and/or (3) damage while Plaintiff's wet property was being transported to New York. After inventorying and photographing her property in New York, and documenting the damage on various claim forms. Plaintiff calculated her damages at over $56,000. claims process that spanned several Plaintiff approximately $4,250. Id. KK 38-41. months. Id. After a Defendant 42-50, 61-64. offered Plaintiff alleges that Defendant acted in bad faith throughout the claims process, to Defendant's include intentionally providing insurance adjuster in an individual's review of Plaintiff's claim.^ misinformation effort to bias to such Id. H 69. Plaintiff initially filed suit in the York-Poquoson Circuit Court, alleging claims under Virginia statutory and common law, as well as a carrier claim under the liability {the federal ''Carmack statute governing interstate Amendment"). ECF No. 1-1. Defendant properly removed the action to this Court and filed the motion to dismiss now pending before the Court. ECF Nos. 1, 7. ^ Plaintiff further alleges that Defendant improperly denied broader mold/mildew coverage based on the terms of Defendant's own insurance policy, a policy that Plaintiff asserts has no bearing on whether she is entitled to compensation for her damaged property. Compl. 66-67, 69. II. standard of Review Rule 8(a) (2) of the Federal Rules of Civil Procedure requires "a short and plain statement of the claim showing that the pleader is entitled to relief," Fed. R. Civ. P. 8(a)(2), the defendant fair notice of what the . . . so as to "'give claim is and the grounds upon which it rests,'" Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (omission in original) Gibson, 355 U.S. 41, 47 (1957)) . (quoting Conley v. The Supreme Court has interpreted the pleading standard set forth in Rule 8(a) as requiring that a complaint include enough facts to render a claim "plausible on its face" and thereby "raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." omitted). This 'probability plausibility requirement, ' Id. at 555, requirement but it asks for possibility" that a defendant is liable. U.S. 662, 678 (2009) (cfuotinq Twombly, The well-established authorizes dismissal of a Rule "is A Rule not more 12(b)(6) motion akin a to a sheer Iqbal, 556 550 U.S. at 556). standard claim when the complaint 12(b) (6) (citations than Ashcroft v. state a claim upon which relief can be granted." 12(b) (6) . 570 tests the of review "fail[s] to Fed. R. Civ. P. sufficiency of a complaint without resolving factual disputes, and a district court must therefore "accept as true all of the factual allegations contained in the complaint and draw all reasonable inferences in favor of the plaintiff." Kensington Volunteer Fire Montgomery Cty. , 684 F.3d 462, 467 (4th Cir. 2012) and citation omitted). Dep't v. (quotation marks Although the truth of the alleged facts is presumed, district courts are not bound by "legal conclusions" and "need not accept as true unwarranted conclusions, or arguments." inferences, E. Shore Mkts., unreasonable Inc. v. J.D. Assocs. Ltd. P^ship, 213 F.3d 175, 180 (4th Cir. 2000) . Moreover, a court does not resolve the applicability of defenses at the 12(b)(6) stage except in "the relatively rare circumstances where facts sufficient to rule" on such defenses "clearly appear on the face of the complaint." (4th Cir. 2007) Goodman v. (en banc) Praxair, Inc., 494 F.3d 458, 464 (quotation marks and citation omitted). III. Discussion It is well-established that the Carmack Amendment completely preempts state law interstate carrier. F.3d 331, 335 amendment to claims damages 5K Logistics, (4th Cir. the for 2011). Interstate Inc. to v. goods caused Daily Exp., by Inc., an 659 "Initially enacted in 1906 as an Commerce Act of 1887, the Carmack Amendment creates ^a national scheme of carrier liability for goods damaged or lost during interstate shipment under a valid bill of lading.'" Id. 700, (4th 704 (quoting Shao v. Link Cargo (Taiwan) Ltd., 986 F.2d Cir. 1993)). As a "comprehensive Congress's power to regulate interstate commerce," exercise of such federal remedy "has long been interpreted to preempt state liability rules pertaining to cargo carriage, either under statute or common law." Id. "In creating this uniform nationwide scheme of statutory remedies, Congress legislated with [federal] remarkable care, striking a precise balance between the rights of shippers and carriers." Id. As explained in greater detail by the Fourth Circuit in 5K Logistics, the Carmack Amendment benefits interstate carriers by relieving them of the burden of complying with varying regulations across different states, and benefits shippers both by providing favorable burden-shifting rules and by authorizing a lawsuit against either the original carrier or the delivering carrier. Id. "liable 'for transports." Pursuant the to actual the loss Carmack Amendment, or injury Ward v. Allied Van Lines, (4th Cir. 2000) (emphasis added) to a the Inc., carrier is property' it 231 F.3d 135, 138 (quoting 49 U.S.C. § 14706(a)(1) (1997) ) .2 Defendant's relies (1) entirely motion on to dismiss Carmack pending preemption, before seeking this Court dismissal of: Count One-Breach of the Storage Contract to the extent such count alleges rain damage; Faith; (3) Count Common Law Fraud; (2) Three—Common and (5) Count Two—Breach of Duty of Good Law Negligence; Count Six—Consumer (4) Fraud. Count Four- Defendant 2 As the parties' briefing illustrates, another benefit for interstate carriers is that the Carmack Amendment is generally interpreted as limiting a shipper's remedy, in most circumstances, to the actual damage to the shipped goods. In contrast, state tort law and/or state statutory consumer protection laws often allow for the recovery of punitive damages or similar forms of relief designed to deter misconduct. does not assert that the Cairmack Amendment otherwise preempts the breach of the Storage Contract claim advanced in Count One, nor does it challenge the Carmack Amendment claim advanced in Count Five. that Plaintiff largely agrees with Defendant's legal contention the Carmack Amendment pre-empts any state law claims predicated on damage occurring after her property was loaded on the truck questions for of interstate fact exist shipment, as to but both argues when the that unresolved relevant damage occurred as well as when Defendant's activities shifted from those of a long-term "warehouseman" to those of an interstate carrier. A. Count One of the complaint includes a paragraph asserting that "one possibility" as to how Plaintiff's property was damaged is that Defendant "moved the container vault housing [Plaintiff's] goods out of the warehouse in advance of" the anticipated move to New York leaked. and that Compl. f such wooden 89. Such vault was paragraph left in further the rain alleges and that Defendant engages in the practice of storing some customers' items outside i t s warehouse for a reduced fee. Id. First, as argued by Plaintiff in opposition to dismissal, cannot be known at this early stage in the proceedings if, it when, or for what purpose. Plaintiff's vault may have been stored outside in the rain rather than inside Defendant's temperature-controlled facility. Interpreted in Plaintiff's favor. Plaintiff's pre- discovery allegations are sufficient to include scenarios where her vault was stored outside far "in advance" of the shipment of her items to New York for reasons driven solely by Defendant's activities as a warehouseman, rather than as an interstate carrier. Second, even assuming that Plaintiff's vault was left outside "over the weekend" immediately prior to Plaintiff's move to New York, it appears just as plausible that it was moved outside for Defendant's benefit Defendant had a as a long-term storage new customer waiting to facility lease the (i.e.. temperature- controlled space occupied by Plaintiff's vault), as it is that it was moved outside by Defendant to facilitate interstate shipment, because when inferences are made in Plaintiff's favor, letting a vault sit in the rain for several days until employees and/or a moving truck become available appears "facilitating" shipment.^ a matter of law, to achieve little toward While Defendant is clearly correct, as that Count One is pre-empted to the extent that i t seeks to recover for damages occurring while Defendant acted as 2 Additional plausible explanations likewise exist that cannot be known by a plaintiff without access to Defendant's internal policies and procedures. For example, consistent with Defendant collecting over $1,000 in fees for unpacking, labeling, repacking, and inventorying each of Plaintiff's belongings as a warehouseman when i t received Plaintiff's items for longterm storage, i t is surely plausible that, to avoid fraudulent customer claims under the enhanced property damage provision of the Storage Contract, Defendant had a policy to open and inspect all vaults and inventory each item before "releasing" them to the owner, regardless of whether they were personally collected by the owner or shipped directly by Defendant. It is therefore inappropriate at this early stage to assume, in Defendant's favor, that it was necessarily acting as an interstate carrier when it first moved, and/or first inspected the contents of Plaintiff's vault. a carrier ''arranging for" the interstate transportation of Plaintiff's belongings, 49 U.S.C. § 13102(23), such determination of fact is a matter for another day. Lines, Inc. , No. 30, 2005) the 3:05cv62, See Bowman v. Paul Arpin Van 2005 WL 3590948, at *2 (W.D. Va. Dec. (explaining that the meaning of ''transportation" under Carmack Amendment "includes the arrangements made movement of goods, as well as the movement itself")."* for the Defendant's motion to dismiss H 89 of the complaint is therefore denied at this time. B. Count Two of the complaint alleges a breach of the duty of good faith in evaluating Plaintiff's damages claim. As suggested above, it remains unclear at this time whether Plaintiff's property was damaged partially, or wholly, during long-term storage rather than when Defendant was handling such property as an interstate carrier. to As argued by Plaintiff, to the extent Defendant appears acknowledge that the breach of the Storage Contract claim alleged in Count One is not pre-empted by the Carmack Amendment, it appears to logically follow that an associated claim alleging the breach of a discretionary duty contract is likewise not pre-empted. established by that same Although Defendant appears ^ Defendant accurately asserts that transportation under the Carmack Amendment is a broad concept, and includes acts taken by a carrier in preparation for transit and following transit, including, at a minimum, negotiations for carriage, loading activities, shipment activities, unloading activities, and temporary storage. correct that the broad sweep of Carmack preemption extends to the subsequent processing of claims for damages occurring during any part of the interstate transportation process, Rehm v. Baltimore Storage Co., 300 F. Supp. 2d 408, 413 (W.D. Va. 2004) V. United Van Lines, Gordon v. 1997)), Inc., United Van Lines, 104 F.3d 502, Inc., 505-06 130 F.3d 282, Plaintiff plausibly alleges a (citing Rini (1st Cir. 289-90 claim for a 1997); (7th Cir. breach of the duty of good faith in the manner in which Defendant handled her damages claim under the discrete Storage Contract executed more than two years prior to any negotiations associated with hiring Defendant as an interstate carrier.^ Count Two i s Defendant's motion to dismiss therefore denied a t this time. 5 Accepting Plaintiff's well-pled facts as true, Defendant clearly wore two discrete "hats" over the course of the several years relevant to Plaintiff's claims, first acting as "warehouseman" under the Storage Contract executed in 2015 and later acting as an interstate carrier under a separate agreement negotiated in 2017. The existence of a separate long-term Storage Contract plainly distinguishes this case from the wealth of case law holding that short-term storage prior to, during, or after, an interstate trip is part of the transportation process, rendering state law claims for damages incurred during storage preempted by Carmack. See e.g., Bowman, 2005 WL 3590948, at *3; Schultz v. Auld, 848 F. Supp. 1497, 1503-04 (D. Idaho 1993); Tayloe v. Kachina Moving & Storage, Inc., 16 P. Supp. 2d 1123, 1128 (D. Ariz. 1998) ; see also Kalman v. Morris-North American, Inc., 531 So. 2d 394, 3 96 (Fla. Dist. Ct. App. 3d Dist. 1988) (finding that the "claims against the warehousemen are not preempted" by the Carmack Amendment because i t was "clear that the parties entered into a new contract for storage" six months after the interstate move and that such contract was "separate and distinct from the terms of the bill of lading") ; Stabler v. Fla. Van Lines, Inc., No. CIV.A. 11-0103-WS-N, 2012 WL 32660, at *9 (S.D. Ala. Jan. 6, 2012) (discussing the distinction between: (1) Carmack preemption applicable to household goods packed and shipped to another state; and (2) the absence of Carmack preemption applicable to separate goods packed from the same house on the same day but shipped to an in-state storage facility as there was no evidence suggesting that the stored goods were ever intended to be transported out of state). Furthermore, Defendant fails to cite any case law suggesting that a later-in-time contract to act as an interstate carrier 10 c. The thrust of Count Three of the complaint, count is construed in Plaintiff's favor, even when such alleges that Defendant was negligent in "[1]oading wet goods for shipment" knowing that they would "sit in an enclosed and unventilated area for manyhours." Compl. H 114 (emphasis added). Such loading activities, as a matter of fact and law, were unquestionably taken by Defendant as a carrier in preparation for the interstate shipment of Plaintiff's property, and Plaintiff's state law negligence claim must be dismissed as preempted to the extent it relies on such factual assertions. See PNH 586, 590 (1st Cir. 1988) transportation" "all of a delivery"). That preceding sections, to carrier's said, v. Hullquist Corp., 843 F.2d (indicating that the "broad definition of applicable motor Corp. the Carmack Amendment services for the incident same reasons to extends carriage to and discussed in the Count Three is not dismissed in its entirety as Plaintiff alleges sufficient facts to plausibly state a claim asserting that Defendant acted negligently as a handling Plaintiff's effects during the years, warehouseman in months, weeks or days leading up to the acts taken as a carrier in preparation for shipment. Cf. id. at 591 (noting, differs from the instant case, in a factual scenario that that if the defendant "acted in the eviscerates a long-term warehouseman's common law and state statutory duties, thus operating to give a warehouseman-turned-carrier free reign to act in bad faith and/or commit fraud with respect to the processing of claims under the independent storage contract. 11 capacity of a warehouseman, rather than a carrier . Carmack Amendment, Interstate and would be inapplicable" the . Commerce Act to such entity). . [t]he generally, Defendant's motion to dismiss Count Three is therefore granted in part to the extent it relies on activities taken in preparation for interstate shipment, and denied in part as to activities taken as a warehouseman. D. Count Four of Plaintiff's complaint suffers from an infirmity similar to Defendant Count Three, committed as fraud the thrust of through knowingly Count Four is concealing the that wet condition of Plaintiff's property and then loading such goods "onto the moving truck while wet and then transporting them." H 122. Compl. Count Four is therefore dismissed to the extent it relies on loading activities because a claim for damages resulting from such activities is preempted as a when facts and reasonable matter of law. In contrast, inferences are construed in P l a i n t i f f ' s favor, as they must be at the 12(b)(6) stage. Plaintiff plausibly alleges that Defendant obtained knowledge of the wet condition of Plaintiff's property as a warehouseman-bailee, and not only intentionally concealed such fact from Plaintiff, but thereafter intentionally who biased a third-party adjuster Plaintiff's damages claim under the Storage Contract. evaluated Such latter allegations survive dismissal, and Defendant's motion is therefore granted in part, and denied in part. 12 E. Count Six of Plaintiff's complaint seeks relief pursuant to the Virginia Consumer Protection Act predicated on multiple theories, ("VCPA") with such claim to include false processing of claims under the Storage Contract and the inclusion of improper burden-shifting language in the Storage Contract. motion to dismiss asserts that such claim is Defendant's preempted by the Carmack Amendment, and to the extent i t is not pre-empted, argues that Count Six improperly seeks "treble damages" under the VCPA when the proper remedy is, burden-shifting Contract. provision at most, contained ECF No. 7, at 6-7. disregarding the disputed in the written Storage For the reasons discussed in detail above, the Court finds that i t would be premature to conclude that Carmack preemption applies that Defendant engaged in light of in intentional Plaintiff's allegations deception, fraud, and misrepresentations in processing Plaintiff's damages claims under the independent Storage Contract.® this early stage, Because such claim survives at so must Plaintiff's assertion to the right to treble damages under the VCPA. ® As noted in the preceding footnote, while the Carmack Amendment may not have a mechanism to dissuade interstate shippers from committing fraud while processing damages claims, Defendant fails at this time to demonstrate that Carmack's reach i s so broad that a warehouseman can use Carmack to insulate itself from an otherwise valid state law claim arising out of a long-term storage contract based solely on the fact that the same business entity that acted as warehouseman acted as an interstate carrier several years later through a separate and independent carriage contract. 13 The Court separately finds that Plaintiff has sufficiently alleged that there is an improper burden shifting provision in the long-term Storage Contract that, at a minimum, provides additional context for Plaintiff's VCPA claim.^ Stated differently, even assuming that the improper burden shifting language cannot, isolation, damages support may recovery of be treble recoverable in damages, in because treble with other conjunction facts/theories alleged in Count Six, the Court denies the motion to dismiss any portion of Count Six associated with such language at this early stage in the proceedings. The Court does, Six to 200(37), the as extent however, that such Plaintiff grant the motion to dismiss Count count improperly relies on interprets Va. Code such § 59.1- statutory provision as incorporating by reference a broad range of Virginia Code sections rather than a single code section that has no facial relevance to the facts of this case.^ on this subsection, Although Defendant's attack and several other subsections, of § 59.1-200 was not fully articulated until Defendant filed its reply brief. Defendant's assertion that Plaintiff cannot demonstrate that Defendant applied the improper burden shifting language during the claims process relies on facts outside the complaint, to include Defendant's contention that its insurer did not require Plaintiff to prove that Defendant caused any of the damage to her property. The fact that Defendant's arguments rely on facts not presently before the Court further supports denial of the motion to dismiss Count Six. See Leichling v. Honeywell Int'l, Inc., 842 F.3d 848, 850-51 (4th Cir. 2016) ("An affirmative defense permits 12(b)(6) dismissal if the face of the complaint includes all necessary facts for the defense to prevail" (citing Goodman, 494 F.3d at 464)) . ® Va. Code § 59.1-200(37) incorporates violations of § 8.01-40.2, which covers "Unsolicited transmission of advertising materials by facsimile." 14 Defendant's argument in its reply brief as to subsection (37) is a direct response to Plaintiff's improper interpretation of § 59.1- 200(37) in its brief in opposition. Because Plaintiff will not be prejudiced in any way by the lack of a respond to Defendant's exercises its argument discretion portion of Count Six. (E.D. Va. 2015). to further opportunity to on subsection grant the motion (37), to the Court dismiss such Zinner v. Olenych, 108 F. Supp. 3d 369, 398 On this undeveloped record, the Court finds that it is inappropriate to exercise its discretion to reach the dispute as to any other subsections of § 59.1-200 set forth in Count Six of the complaint. The motion to dismiss Count Six is therefore granted as to Defendant's challenge to Count Six's reliance on Va. Code § 59.1-200(37), and is denied in all other respects. IV. Conclusion For the reasons stated above. dismiss is GRANTED in part, sum, while none of the Defendant's partial motion to and DENIED in part. individual counts are ECF No. 7. dismissed at In this time. Defendant's motion is granted to the extent that Plaintiff's state law claims are predicated on damage caused by Defendant's activities as an interstate Plaintiff's property onto a shipment. carrier, to include loading truck in preparation for interstate All claims against Defendant as a "warehouseman," with the exception of the claim predicated on a misinterpretation of Va. Code § 59.1-200(37), survive at this time, with discovery being 15 the appropriate mechanism for investigating: relevant damages activities were occurred Storage Contract), carrier (and caused; as and/or (2) warehouseman (1) when and how the which of (and were governed and which activities occurred as were governed by the Defendant's by the interstate rules/procedures/remedies provided in the Carmack Amendment). In light of the amount of damages at issue vis-i-vis the scope of discovery and other litigation procedures that will likely be necessary in this case, the Court RECOMMENDS that counsel for both parties confer in advance of the Rule 16(b) scheduling conference to determine an agreeable date for a settlement conference with a Magistrate Judge of this Court as early as possible in the litigation process. The Clerk is REQUESTED to send a Order to a l l IT IS SO counsel of copy of this Opinion and record. ORDERED. /s/ Mark S. Davis United States District Judge UNITED Norfolk, Virginia August 31 , 2018 16 STATES DISTRICT JUDGE
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