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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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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DIVINE ENTERPRISES, INC.,

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v.

Defendant.

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ORDER GRANTING DEFENDANT’S
MOTION TO DISMISS

WALMART dba Sam’s Wholesale,
and DOES 1 through 50,
inclusive,

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2:21-cv-00209-JAM-JDP

Plaintiff,

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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.
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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.

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See Mot. to Dismiss (“Mot.”),

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ECF No. 17.

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For the reasons set forth below, the Court GRANTS Walmart’s
Motion to Dismiss.1

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I.

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BACKGROUND

Divine, the carrier, was hired by Svenhard’s, the shipper,

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to pick up thirty-five loads of baked goods and transport them to

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Walmart, the consignee.

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the use of bills of lading.

FAC ¶ 19.

This was arranged for through

FAC ¶¶ 15, 26.

The bills of lading

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are the only form of written contract between Divine and

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Svenhard’s.

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FAC ¶ 26.

Divine picked up the first load of goods from Svenhard’s for

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delivery to Walmart on July 18, 2019, and the last load of goods

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on October 29, 2019.

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delivered to Walmart, Walmart either placed a stamp or sticker on

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the front or back of the bills of lading and gave a copy of the

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bills of lading to Divine’s drivers.

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the copy of the original bill of lading was received at Divine’s

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headquarters, an invoice was submitted along with a copy of the

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bill of lading to Svenhard’s for payment within 90 to 120 days.

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FAC ¶ 35.

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$218,643.93.

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loads and Divine can no longer obtain payment from the bakery

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because it filed for bankruptcy and no longer exists.

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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

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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.
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recover the costs of delivering Svenhard’s baked goods in Placer

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County Superior Court.

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Walmart removed the matter to federal court on February 3, 2021.

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Id.

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three claims against Walmart: (1) third party liability of

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carrier pursuant to an implied-in-fact contract; (2) unjust

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enrichment; and (3) 49 U.S.C. § 13706 liability.

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61.

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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

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contract, the second claims fails because California does not

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recognize unjust enrichment as a stand-alone cause of action, and

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the third claim fails because 49 U.S.C. § 13706 is inapplicable

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here.

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ECF No. 18.

See generally Mot.

Divine opposes the motion.

Walmart filed a reply.

See Opp’n,

See Reply, ECF No. 19.

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II.

OPINION

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A.

Legal Standard

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Federal Rule of Civil Procedure 8(a)(2) requires “a short

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and plain statement of the claim showing that the pleader is

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entitled to relief.”

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dismiss a suit if the plaintiff fails to “state a claim upon

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which relief can be granted.”

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defeat a Rule 12(b)(6) motion to dismiss, a plaintiff must

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“plead enough facts to state a claim to relief that is plausible

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on its face.”

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(2007).

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that allows the court to draw a reasonable inference that the

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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

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Ashcroft v.

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Iqbal, 556 U.S. 662, 678 (2009).

At this stage, the court “must

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accept as true all of the allegations contained in a complaint.”

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Id.

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as a factual allegation.”

But it need not “accept as true a legal conclusion couched
Id.

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B.

Implied-in-Fact Contract

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Divine’s first claim against Walmart asserts an implied-in-

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fact contract between the two parties.

See FAC ¶¶ 48–54.

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Divine alleges that this contract makes Walmart, as consignee,

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the third party responsible for Svenhard’s outstanding bills.

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See FAC ¶ 49.

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“arranged the shipments from [Svenhard’s] to Walmart” via the

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bills of lading, was “aware that [Svenhard’s] would be using

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[Divine],” and was “aware that should [Svenhard’s] not pay that

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[Walmart] would be responsible [] for the freight charges.”

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¶ 50.

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thirty-five loads, “impliedly agreed to pay for these freight

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charges” should Svenhard’s fail to do so.

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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

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defective.

See Mot. at 5–9.

The argument that takes the cake

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is a simple one that does not require the Court to determine

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whether certain facts alleged in the FAC are demonstrably false.

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See Mot. at 5–7.

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written contracts between Svenhard’s and Divine.

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Pac. Transp. Co. v. Commercial Metals Co., 456 U.S. 336, 342

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(1982) (“The bill of lading is the basic transportation contract

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between the shipper-consignor and the carrier; its terms and

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conditions bind the shipper and all connecting carriers.”).

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it is well established that if a dispute is governed by an

That is: The bills of lading are express,

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See Southern

And

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express contract, the terms of that contract control.

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for Use of Westinghouse Elec. Supply Co. v. Ahearn, 231 F.2d

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353, 356 (9th Cir. 1955) (“The terms of the express contract

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control.

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in fact contrary in terms to a controlling express contract.”).

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Here, the express contract makes clear that: (1) the contract is

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between Svenhard’s, the shipper, and Divine, the carrier, as

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signatories; and (2) the freight charges are to be paid by the

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shipper.

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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

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law by contending that the bills of lading are subject to the

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terms and conditions of the Uniform Domestic Straight Bill of

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Lading Act (“Bill of Lading Act”).

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to Divine, if the shipper does not pay the freight charges, § 7

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of 45 C.F.R. Pt. 1035.1, App. B, “imposes an obligation on the

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consignee” to pay them.

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Divine omits important language from the bills of lading in its

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opposition.

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all the terms and conditions of the Uniform Domestic Straight

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Bill of Lading set forth . . . in the applicable motor carrier

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classification or tariff if this is a motor carrier shipment.”

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See Bills of Lading.

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terms and conditions of an applicable classification or tariff,

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not to all the provisions of the Bill of Lading Act or its

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associated regulations.

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classification or tariff that might allow this Court to find

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that Walmart is responsible for the unpaid freight charges.

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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

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complete contracts and that there are no terms other than those

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in the bills of lading attached as Exhibit 3 to the FAC.

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FAC ¶¶ 17–20.

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See

Divine also argues that Walmart is liable for the freight

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charges because “pre-paid” was not used on the bills of lading.

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See Opp’n at 7.

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there is no specific format or language required when drafting

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bills of lading, and the parties are free to create contractual

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liability among themselves.

This argument is similarly without merit as

See Western Home Transp., Inc. v.

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Hexco, LLC, 28 F.Supp.3d 959, 963-65 (D.N.D. 2014) (“The

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shipper/consignor and the carrier are free to vary the terms of

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their contract as they see fit with respect to liability for

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freight charges and reflect that either in the bill of lading,

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agreements outside of the bill of lading, or both.”).

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The language used in the bills of lading is neither

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contradictory nor ambiguous.

These express contracts state, in

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no uncertain terms, that the contracting parties are Divine and

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Svenhard’s, and the freight charges are to be covered by

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Svenhard’s.

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the goods.

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based on an implied-in-fact contract fails as a matter of law

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and is DISMISSED WITH PREJUDICE.

Walmart, as consignee, was merely the recipient of
Accordingly, Divine’s first claim for liability

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C.

Unjust Enrichment

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Divine’s second claim against Walmart is for unjust

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enrichment.

See FAC ¶¶ 55–57.

Walmart argues that this claim

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fails because California law does not recognize a stand-alone

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claim for unjust enrichment.

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“California does not recognize unjust enrichment as a separate

See Mot. at 9.

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The Court agrees.

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cause of action.”

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1172, at 1210 (2011).

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contest this argument in its opposition brief.

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Inc. v. Shanley, 2010 WL 546485, at *6 (N.D. Cal. 2010)

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(“Plaintiff fails to respond to this argument and therefore

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concedes it through silence.”); see also E.D. Cal. L.R. 230(c).

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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

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for unjust enrichment does not lie where [] express binding

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agreements exist and define the parties’ rights.”

Mosier v.

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Stonefield Josephson, Inc., 815 F.3d 1161, 1172 (9th Cir. 2016)

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(quoting Cal. Med. Ass’n, Inc. v. Aetna U.S. Healthcare of Cal.,

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Inc., 94 Cal.App.4th 151, 172 (2001)).

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Accordingly, Divine’s second claim for unjust enrichment
fails as a matter of law and is DISMISSED WITH PREJUDICE.

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D.

Section 13706

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Divine’s third claim alleges that Walmart must pay for the

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shipping costs under 49 U.S.C. § 13706, which sets forth tariff

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requirements for certain transportation.

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However, “nothing in the [Interstate Commerce Act (“ICA”)]

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suggests that Congress intended to impose absolute liability

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upon a consignee for freight charges.”

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Corp., 6 B.R. 817, 820 (S.D.N.Y. 1980), aff’d 10 B.R. 878

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(S.D.N.Y 1981).

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recovering from a consignee under the ICA where its policy

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against rate discrimination has not been violated.

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where, as here, there is no question as to the amount of freight

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charges, discrimination is not involved, and the question is

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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

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Id.

And

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is not frustrated by preventing a carrier from collecting

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freight charges from the consignee and making it look solely to

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the shipper.

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Id.

The FAC and the bills of lading make it abundantly clear

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that Divine must look solely to Svenhard’s for the shipping

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costs.

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services via the bills of lading.

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by Svenhard’s and Divine and clearly stating freight charges are

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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

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for the freight charges, once the goods were delivered to

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Walmart.

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with a copy of the bill of lading to [Svenhard’s] for payment

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[to be paid] within 90 to 120 days by [Svenhard’s].”).

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are no facts alleged in the FAC that indicate that Divine was

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looking to Walmart for payment.

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See FAC ¶ 35 (“[Divine] would submit the invoice along

There

As in In re Penn-Dixie, “[t]he short and long of the matter

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is that [Divine’s] arrangement with [Svenhard’s] contemplated

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that only [Svenhard’s] would be held liable for freight

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charges.”

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make this arrangement among themselves without contravening any

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provision of the ICA.

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for bankruptcy changes nothing.

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collection in every instance.”

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legally viable claim against Walmart under 49 U.S.C. § 13706.

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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.

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E.

Sanctions

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Walmart exceeded the Court’s five-page limit on reply
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memoranda.

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(“Order”), ECF No. 4-2.

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require the offending counsel (not the client) to pay $50.00 per

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page over the page limit to the Clerk of the Court.

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Moreover, the Court will not consider arguments made past the

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page limit.

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the Court’s page limit by 3 pages.

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therefore send a check payable to the Clerk for the Eastern

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District of California for $150.00 no later than seven days from

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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.

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III.

ORDER

For the reasons set forth above, the Court GRANTS Walmart’s

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Motion to Dismiss.

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PREJUDICE.

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Divine’s claims against it are DISMISSED WITH

IT IS SO ORDERED.
Dated: June 2, 2021

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