Divine Enterprises v. Walmart

Filing 21

ORDER signed by District Judge John A. Mendez on 6/2/2021 GRANTING 17 Walmart's Motion to Dismiss. Divine's claims against it are DISMISSED with Prejudice. Walmart's counsel must send a check payable to the Clerk for the EDCA for $150.00 no later than seven days from the date of this order. (Reader, L)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 DIVINE ENTERPRISES, INC., 12 15 v. Defendant. 17 19 20 21 22 23 24 25 26 27 ORDER GRANTING DEFENDANT’S MOTION TO DISMISS WALMART dba Sam’s Wholesale, and DOES 1 through 50, inclusive, 16 18 2:21-cv-00209-JAM-JDP Plaintiff, 13 14 No. Divine Enterprises, Inc. (“Divine”), a trucking company, was hired by now-defunct Svenhard’s Swedish Bakery (“Svenhard’s”) to deliver several truckloads of baked treats to Walmart stores around the country. 16. See First Am. Compl. (“FAC”) ¶ 15, ECF No. However, because of Svenhard’s bankruptcy, the $218,643.93 owed to Divine for the transport of goods has gone unpaid. Id. With little hope of recovering from Svenhard’s, Divine filed suit against Walmart to obtain the unpaid freight charges. Walmart argues that it has no legal responsibility to pay these charges and moves to dismiss Divine’s FAC for failing to state a claim upon which relief can be granted. 28 1 See Mot. to Dismiss (“Mot.”), 1 ECF No. 17. 2 3 For the reasons set forth below, the Court GRANTS Walmart’s Motion to Dismiss.1 4 5 I. 6 BACKGROUND Divine, the carrier, was hired by Svenhard’s, the shipper, 7 to pick up thirty-five loads of baked goods and transport them to 8 Walmart, the consignee. 9 the use of bills of lading. FAC ¶ 19. This was arranged for through FAC ¶¶ 15, 26. The bills of lading 10 are the only form of written contract between Divine and 11 Svenhard’s. 12 FAC ¶ 26. Divine picked up the first load of goods from Svenhard’s for 13 delivery to Walmart on July 18, 2019, and the last load of goods 14 on October 29, 2019. 15 delivered to Walmart, Walmart either placed a stamp or sticker on 16 the front or back of the bills of lading and gave a copy of the 17 bills of lading to Divine’s drivers. 18 the copy of the original bill of lading was received at Divine’s 19 headquarters, an invoice was submitted along with a copy of the 20 bill of lading to Svenhard’s for payment within 90 to 120 days. 21 FAC ¶ 35. 22 $218,643.93. 23 loads and Divine can no longer obtain payment from the bakery 24 because it filed for bankruptcy and no longer exists. 25 FAC ¶ 20. When a load of goods was FAC ¶¶ 32, 33–34. After The combined cost of the delivery of baked goods is FAC ¶ 16. Svenhard’s has not paid for any of the FAC ¶ 21. On December 24, 2020, Divine filed suit against Walmart to 26 27 28 This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was scheduled for May 18, 2021. 2 1 1 recover the costs of delivering Svenhard’s baked goods in Placer 2 County Superior Court. 3 Walmart removed the matter to federal court on February 3, 2021. 4 Id. 5 three claims against Walmart: (1) third party liability of 6 carrier pursuant to an implied-in-fact contract; (2) unjust 7 enrichment; and (3) 49 U.S.C. § 13706 liability. 8 61. 9 the first claim fails because there is no implied-in-fact See Notice of Removal, ECF No. 1. On March 26, 2021, Divine filed its FAC. The FAC alleges See FAC ¶¶ 48– Walmart moves to dismiss the FAC in its entirety, arguing 10 contract, the second claims fails because California does not 11 recognize unjust enrichment as a stand-alone cause of action, and 12 the third claim fails because 49 U.S.C. § 13706 is inapplicable 13 here. 14 ECF No. 18. See generally Mot. Divine opposes the motion. Walmart filed a reply. See Opp’n, See Reply, ECF No. 19. 15 16 II. OPINION 17 A. Legal Standard 18 Federal Rule of Civil Procedure 8(a)(2) requires “a short 19 and plain statement of the claim showing that the pleader is 20 entitled to relief.” 21 dismiss a suit if the plaintiff fails to “state a claim upon 22 which relief can be granted.” 23 defeat a Rule 12(b)(6) motion to dismiss, a plaintiff must 24 “plead enough facts to state a claim to relief that is plausible 25 on its face.” 26 (2007). 27 that allows the court to draw a reasonable inference that the 28 defendant is liable for the misconduct alleged.” Fed. R. Civ. P. 8(a)(2). Courts must Fed. R. Civ. P. 12(b)(6). To Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 This plausibility standard requires “factual content 3 Ashcroft v. 1 Iqbal, 556 U.S. 662, 678 (2009). At this stage, the court “must 2 accept as true all of the allegations contained in a complaint.” 3 Id. 4 as a factual allegation.” But it need not “accept as true a legal conclusion couched Id. 5 B. Implied-in-Fact Contract 6 Divine’s first claim against Walmart asserts an implied-in- 7 fact contract between the two parties. See FAC ¶¶ 48–54. 8 Divine alleges that this contract makes Walmart, as consignee, 9 the third party responsible for Svenhard’s outstanding bills. 10 See FAC ¶ 49. 11 “arranged the shipments from [Svenhard’s] to Walmart” via the 12 bills of lading, was “aware that [Svenhard’s] would be using 13 [Divine],” and was “aware that should [Svenhard’s] not pay that 14 [Walmart] would be responsible [] for the freight charges.” 15 ¶ 50. 16 thirty-five loads, “impliedly agreed to pay for these freight 17 charges” should Svenhard’s fail to do so. 18 Specifically, Divine alleges that Walmart FAC Divine further alleges that Walmart, as consignee of all FAC ¶ 51. Walmart advances several reasons why this claim is 19 defective. See Mot. at 5–9. The argument that takes the cake 20 is a simple one that does not require the Court to determine 21 whether certain facts alleged in the FAC are demonstrably false. 22 See Mot. at 5–7. 23 written contracts between Svenhard’s and Divine. 24 Pac. Transp. Co. v. Commercial Metals Co., 456 U.S. 336, 342 25 (1982) (“The bill of lading is the basic transportation contract 26 between the shipper-consignor and the carrier; its terms and 27 conditions bind the shipper and all connecting carriers.”). 28 it is well established that if a dispute is governed by an That is: The bills of lading are express, 4 See Southern And 1 express contract, the terms of that contract control. 2 for Use of Westinghouse Elec. Supply Co. v. Ahearn, 231 F.2d 3 353, 356 (9th Cir. 1955) (“The terms of the express contract 4 control. 5 in fact contrary in terms to a controlling express contract.”). 6 Here, the express contract makes clear that: (1) the contract is 7 between Svenhard’s, the shipper, and Divine, the carrier, as 8 signatories; and (2) the freight charges are to be paid by the 9 shipper. 10 See U.S. There cannot be an implied contract either in law or See Bills of Lading, Ex. 3 to FAC, ECF No. 16-3. Divine attempts to rebut this well-established principle of 11 law by contending that the bills of lading are subject to the 12 terms and conditions of the Uniform Domestic Straight Bill of 13 Lading Act (“Bill of Lading Act”). 14 to Divine, if the shipper does not pay the freight charges, § 7 15 of 45 C.F.R. Pt. 1035.1, App. B, “imposes an obligation on the 16 consignee” to pay them. 17 Divine omits important language from the bills of lading in its 18 opposition. 19 all the terms and conditions of the Uniform Domestic Straight 20 Bill of Lading set forth . . . in the applicable motor carrier 21 classification or tariff if this is a motor carrier shipment.” 22 See Bills of Lading. 23 terms and conditions of an applicable classification or tariff, 24 not to all the provisions of the Bill of Lading Act or its 25 associated regulations. 26 classification or tariff that might allow this Court to find 27 that Walmart is responsible for the unpaid freight charges. 28 Instead, Divine acknowledges that the bills of lading are Id. See Opp’n at 1-2. According However, as Walmart points out, The bills of lading state that they are “subject to Thus, the shipments were subject to the Devine fails to plead any applicable 5 1 complete contracts and that there are no terms other than those 2 in the bills of lading attached as Exhibit 3 to the FAC. 3 FAC ¶¶ 17–20. 4 See Divine also argues that Walmart is liable for the freight 5 charges because “pre-paid” was not used on the bills of lading. 6 See Opp’n at 7. 7 there is no specific format or language required when drafting 8 bills of lading, and the parties are free to create contractual 9 liability among themselves. This argument is similarly without merit as See Western Home Transp., Inc. v. 10 Hexco, LLC, 28 F.Supp.3d 959, 963-65 (D.N.D. 2014) (“The 11 shipper/consignor and the carrier are free to vary the terms of 12 their contract as they see fit with respect to liability for 13 freight charges and reflect that either in the bill of lading, 14 agreements outside of the bill of lading, or both.”). 15 The language used in the bills of lading is neither 16 contradictory nor ambiguous. These express contracts state, in 17 no uncertain terms, that the contracting parties are Divine and 18 Svenhard’s, and the freight charges are to be covered by 19 Svenhard’s. 20 the goods. 21 based on an implied-in-fact contract fails as a matter of law 22 and is DISMISSED WITH PREJUDICE. Walmart, as consignee, was merely the recipient of Accordingly, Divine’s first claim for liability 23 C. Unjust Enrichment 24 Divine’s second claim against Walmart is for unjust 25 enrichment. See FAC ¶¶ 55–57. Walmart argues that this claim 26 fails because California law does not recognize a stand-alone 27 claim for unjust enrichment. 28 “California does not recognize unjust enrichment as a separate See Mot. at 9. 6 The Court agrees. 1 cause of action.” 2 1172, at 1210 (2011). 3 contest this argument in its opposition brief. 4 Inc. v. Shanley, 2010 WL 546485, at *6 (N.D. Cal. 2010) 5 (“Plaintiff fails to respond to this argument and therefore 6 concedes it through silence.”); see also E.D. Cal. L.R. 230(c). 7 Castillo v. Toll Bros., Inc., 197 Cal.App.4th Divine concedes as much by failing to See Ardente, Moreover, “[a]s a matter of law, a quasi-contract action 8 for unjust enrichment does not lie where [] express binding 9 agreements exist and define the parties’ rights.” Mosier v. 10 Stonefield Josephson, Inc., 815 F.3d 1161, 1172 (9th Cir. 2016) 11 (quoting Cal. Med. Ass’n, Inc. v. Aetna U.S. Healthcare of Cal., 12 Inc., 94 Cal.App.4th 151, 172 (2001)). 13 14 Accordingly, Divine’s second claim for unjust enrichment fails as a matter of law and is DISMISSED WITH PREJUDICE. 15 D. Section 13706 16 Divine’s third claim alleges that Walmart must pay for the 17 shipping costs under 49 U.S.C. § 13706, which sets forth tariff 18 requirements for certain transportation. 19 However, “nothing in the [Interstate Commerce Act (“ICA”)] 20 suggests that Congress intended to impose absolute liability 21 upon a consignee for freight charges.” 22 Corp., 6 B.R. 817, 820 (S.D.N.Y. 1980), aff’d 10 B.R. 878 23 (S.D.N.Y 1981). 24 recovering from a consignee under the ICA where its policy 25 against rate discrimination has not been violated. 26 where, as here, there is no question as to the amount of freight 27 charges, discrimination is not involved, and the question is 28 only who is responsible for payment, then the purpose of the ICA See FAC ¶¶ 58–61. In re Penn-Dixie Steel In fact, carriers are often barred from 7 Id. And 1 is not frustrated by preventing a carrier from collecting 2 freight charges from the consignee and making it look solely to 3 the shipper. 4 Id. The FAC and the bills of lading make it abundantly clear 5 that Divine must look solely to Svenhard’s for the shipping 6 costs. 7 services via the bills of lading. 8 by Svenhard’s and Divine and clearly stating freight charges are 9 to be paid by shipper). Svenhard’s alone contracted with Divine for its carrier See Bills of Lading (signed And Divine billed Svenhard’s directly 10 for the freight charges, once the goods were delivered to 11 Walmart. 12 with a copy of the bill of lading to [Svenhard’s] for payment 13 [to be paid] within 90 to 120 days by [Svenhard’s].”). 14 are no facts alleged in the FAC that indicate that Divine was 15 looking to Walmart for payment. 16 See FAC ¶ 35 (“[Divine] would submit the invoice along There As in In re Penn-Dixie, “[t]he short and long of the matter 17 is that [Divine’s] arrangement with [Svenhard’s] contemplated 18 that only [Svenhard’s] would be held liable for freight 19 charges.” 20 make this arrangement among themselves without contravening any 21 provision of the ICA. 22 for bankruptcy changes nothing. 23 collection in every instance.” 24 legally viable claim against Walmart under 49 U.S.C. § 13706. 25 26 6 B.R. at 821. Id. Divine and Svenhard’s were free to The fact that Svenhard’s has filed “[T]he ICA does not insure Id. Divine does not assert a Accordingly, Divine’s third claim for § 13706 liability is DISMISSED WITH PREJUDICE. 27 E. Sanctions 28 Walmart exceeded the Court’s five-page limit on reply 8 1 memoranda. 2 (“Order”), ECF No. 4-2. 3 require the offending counsel (not the client) to pay $50.00 per 4 page over the page limit to the Clerk of the Court. 5 Moreover, the Court will not consider arguments made past the 6 page limit. 7 the Court’s page limit by 3 pages. 8 therefore send a check payable to the Clerk for the Eastern 9 District of California for $150.00 no later than seven days from 10 See Reply; see also Order re Filing Requirements Id. Violations of the Court’s standing order Order at 1. In total, Walmart’s reply memorandum exceeded Walmart’s counsel must the date of this order. 11 12 13 III. ORDER For the reasons set forth above, the Court GRANTS Walmart’s 14 Motion to Dismiss. 15 PREJUDICE. 16 17 Divine’s claims against it are DISMISSED WITH IT IS SO ORDERED. Dated: June 2, 2021 18 19 20 21 22 23 24 25 26 27 28 9

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