Beverly v. Vitran Express, INC.

Filing 29

MEMORANDUM. Signed by Judge Catherine C. Blake on 8/28/12. (apls, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND

CANDACE BEVERLY, et al.

:
:
:
:
:
:
:
:
:

v.

VITRAN EXPRESS, INC.

Civil No. CCB-12-1599

MEMORANDUM
The plaintiffs in this case, Candace Beverly and Frances Mitchell, co-personal
representatives of the estate of Michael Nemes; Adrianna Nemes; and Richard S. Nemes, Jr.
(collectively, “plaintiffs”), brought this action against Defendant Vitran Express, Inc. (“Vitran”).
Plaintiffs assert claims for wrongful death, survival, and punitive damages arising from a motor
vehicle accident in which a tractor-trailer driven by Vitran’s employee struck Michael Nemes’s
car, resulting in his death. Now pending before the court is Vitran’s motion to dismiss or for
partial summary judgment on the issue of punitive damages. (ECF No. 22.) For the reasons
stated below, Vitran’s motion will be granted.
BACKGROUND
On October 22, 2011, in the early morning hours, Bruce John Beattie, a truck driver for
Vitran Express, Inc., was operating Vitran’s 18-wheel commercial tractor-trailer in an easterly
direction along Interstate 70 in Maryland. (ECF No. 20, Am. Comp. ¶ 14.) At approximately
2:17 a.m., as two passenger vehicles were approaching eastbound, Beattie attempted to make an
illegal U-turn across multiple lanes of Interstate 70 while speaking with one or more Vitran

1

representatives on his mobile phone. (Id. at ¶¶ 16-17.) The driver of the first vehicle, the
plaintiffs’ decedent, Michael K. Nemes, attempted to avoid impact with the tractor-trailer. (Id. at
¶¶ 17, 19.) Nemes was unable to avoid the impact, and the left rear corner of the trailer entered
the driver’s side of the passenger compartment of Nemes’s vehicle. (Id.) As a result of the
accident, Nemes suffered severe injuries that led to his death. (Id. at ¶ 29.)
The plaintiffs brought suit on or about March 2, 2012, in the Court of Common Pleas of
Philadelphia County, Pennsylvania. Their complaint alleged wrongful death and survival act
claims. On March 26, 2012, Vitran removed the action to U.S. District Court for the Eastern
District of Pennsylvania, and the next day Vitran filed for a change of venue. The District Court
for the Eastern District of Pennsylvania entered an order transferring the case to this court on
April 30, 2012. On June 13, 2012, the plaintiffs filed an amended complaint, asserting three
counts: (I) wrongful death; (II) survival; and (III) punitive damages. Vitran filed a motion to
dismiss or for partial summary judgment as to the punitive damages claim on June 29, 2012.
ANALYSIS
Motion to Dismiss Standard
The court finds that this issue can be resolved on the pleadings and will therefore regard
Vitran’s motion as a motion to dismiss. “The purpose of a Rule 12(b)(6) motion is to test the
sufficiency of a complaint and not to resolve contests surrounding the facts, the merits of a claim,
or the applicability of defenses.” Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir.
2006) (internal quotation marks and alterations omitted) (quoting Edwards v. City of Goldsboro,
178 F.3d 231, 242 (4th Cir. 1999)). When ruling on such a motion, the court “must accept the
well-pled allegations of the complaint as true,” and “construe the facts and reasonable inferences

2

derived therefrom in the light most favorable to the plaintiff.” Ibarra v. United States, 120 F.3d
472 (4th Cir. 1997). “Even though the requirements for pleading a proper complaint are
substantially aimed at assuring that the defendant be given adequate notice of the nature of a
claim being made against him, they also provide criteria for defining issues for trial and for early
disposition of inappropriate complaints.” Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir.
2009).
To survive a motion to dismiss, the factual allegations of a complaint “must be enough to
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).” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555
(2007) (internal citations and alterations omitted). Thus, the plaintiff’s obligation is to set forth
sufficiently the “grounds of his entitlement to relief,” offering “more than labels and
conclusions.” Id. (internal quotations marks and alterations omitted). It is not sufficient that the
well-pleaded facts create “the mere possibility of misconduct.” Ashcroft v. Iqbal, 556 U.S. 662,
679 (2009). Rather, to withstand a motion to dismiss, “a complaint must contain sufficient
factual matter, accepted as true, to state a claim to relief that is plausible on its face,” meaning
the court could draw the reasonable inference that the defendant is liable for the conduct
alleged.” Id. at 1949 (internal quotations and citation omitted).
Choice of Law Analysis
Vitran has brought this motion to dismiss and/or for partial summary judgment on the
plaintiffs’ claims for punitive damages, arguing that there is no genuine issue of material fact and
that Vitran is entitled to judgment as a matter of law on this issue. Vitran asserts that Maryland
law prohibiting punitive damages unless the defendant acted with “actual malice” applies to this

3

case. The plaintiffs respond that this court should apply Pennsylvania’s lower “reckless
indifference” standard for punitive damage awards.
A federal court sitting in diversity must apply the choice-of-law rules of the forum state.
Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941). When a case is transferred
pursuant to 28 U.S.C. § 1404(a), the transferee court conducting a choice-of-law analysis must
apply the law of the transferor court. Ferens v. John Deere Co., 494 U.S. 516, 523 (1990).
Assuming that an “actual” conflict exists between the different states’ laws, see
Hammersmith v. TIG Ins. Co., 480 F.3d 220, 230 (3d Cir. 2007), the first step in a choice of law
analysis under Pennsylvania law is an “‘interest analysis’ of the policies of all interested states.”
Budget Rent-A-Car Sys., Inc. v. Chappell, 407 F.3d 166, 170 (3d Cir. 2005) (citing LeJeune v.
Bliss-Salem, Inc., 85 F.3d 1069, 1071 (3d Cir. 1996); Lacey v. Cessna Aircraft Co., 932 F.2d
170, 187 & n. 15 (3d Cir. 1991)). Then, based on the result of that analysis, the court must
characterize the case as a true conflict, false conflict, or unprovided-for case. Id. A true conflict
exists if the “‘governmental interests of [both] jurisdictions would be impaired if their law were
not applied.’” Id. (internal citations omitted). If, on the other hand, “‘only one jurisdiction's
governmental interests would be impaired by the application of the other jurisdiction's law,’”
then there is a false conflict. Id. (internal citations omitted). In the event that “no jurisdiction's
interests would be impaired if its laws were not applied,” an unprovided-for case results. Id.
Turning to the claim for punitive damages, the interested states are Pennsylvania and
Maryland. The defendant is a Pennsylvania corporation and its principal place of business is
located in that state. The incident giving rise to the claim took place in Maryland, and the
plaintiffs and the decedent are/were Maryland residents. Pennsylvania law permits punitive

4

damages “for conduct that is outrageous, because of the defendant’s evil motive or his reckless
indifference to the rights of others.” Hutchison ex rel. Hutchison v. Luddy, 582 Pa. 114, 121, 870
A.2d 766, 770 (2005) (internal citations and quotations omitted). In contrast, under Maryland
law, a court may not award punitive damages for a non-intentional tort “unless the plaintiff has
established that the defendant's conduct was characterized by evil motive, intent to injure, ill
will, or fraud, i.e., ‘actual malice.’” Owens-Illinois, Inc. v. Zenobia, 325 Md. 420, 460, 601 A.2d
633, 652 (1992). Actual malice may be characterized as “the performance of an unlawful act,
intentionally or wantonly, without legal justification or excuse but with an evil or rancorous
motive influenced by hate; the purpose being to deliberately and wilfully [sic] injure the
plaintiff.” Drug Fair of Md., Inc. v. Smith, 263 Md. 341, 352, 283 A.2d 392, 398 (1971). In
deciding whether to apply Pennsylvania’s “reckless indifference” standard or Maryland’s “actual
malice” standard, the court must ascertain the general policies that underlie these competing
standards of care. See Lacey, 932 F.2d at 187-88.
According to the Pennsylvania Supreme Court, the purpose of the Pennsylvania’s
punitive damages law is “to punish a tortfeasor for outrageous conduct and to deter him or others
like him from similar conduct.” Hutchison, 582 Pa. at 121-22 (citing Kirkbride v. Lisbon
Contractors, Inc., 521 Pa. 97, 555 A.2d 800, 803 (1989); Restatement (Second) of Torts § 908
(1)). Imposing damages to punish a civil defendant is appropriate “only where the conduct
complained of is especially egregious.” Martin v. Johns-Manville Corp., 508 Pa. 154, 170, 494
A.2d 1088, 1096-97 (1985) (internal citations omitted) (abrogated on other grounds by
Kirkbride v. Lisbon Contractors, Inc., 521 Pa. 97, 555 A.2d 800 (1989)). The Maryland Court of
Appeals has observed that “[a]warding punitive damages based upon the heinous nature of the

5

defendant's tortious conduct furthers the historical purposes of punitive damages-punishment and
deterrence. Owens-Illinois, Inc., 325 Md. at 454 (internal citations omitted). Unlike
Pennsylvania, the Maryland Court of Appeals has highlighted criticism of the concept of punitive
damages in Maryland. Id. at 450. Maryland’s highest court has noted the “proliferation” of such
claims in tort cases and cited scholarly commentary that “‘the increasing number and size of
such awards may fairly raise concern for the future stability of American industry.’” Id. (internal
citations omitted). In light of these concerns, the Maryland Court of Appeals explicitly rejected a
“recklessness” standard for punitive damages claims, Id. at 460 (overruling Smith v. Gray
Concrete Pipe Co., 267 Md. 149, 297 A.2d 721 (1972)), observing that prior application of the
lower standard “provided little guidance for individuals and companies to enable them to predict
behavior that will either trigger or avoid punitive damages liability.” Id. at 459. Thus, although
the general purposes of the two states’ laws are the same, Maryland’s decision to adopt a
heightened standard reflects a policy of restricting punitive damages awards in order to protect
companies that conduct business in the state from excessive financial liability.1
In light of the policies underlying each state’s punitive damages standard, the court
concludes that a true conflict exists. Maryland’s interest in restricting punitive damages awards
to protect and promote industry in the state would be impaired by applying Pennsylvania’s lower
standard of care to the conduct of a corporation that operates within Maryland. Although Vitran
is not a Maryland corporation, the company has a terminal in Elkridge, Maryland and conducts
business in the state regularly. Conversely, applying Maryland’s heightened standard for
1

The purposes underlying various states’ disallowance of punitive damages may also be instructive. See, e.g. In re
Air Crash Disaster Near Chicago, Illinois on May 25, 1979, 644 F.2d 594, 613 (7th Cir. 1981) (“The purpose
underlying the disallowance of punitive damages is protection of defendants from excessive financial liability.”).

6

punitive damages would impair Pennsylvania’s interest in regulating its resident corporate
wrongdoers. As the interests of both Maryland and Pennsylvania would be impaired if the other
jurisdiction’s law were to apply, a true conflict exists. See Budget Rent-A-Car Sys., Inc. v.
Chappell, 407 F.3d at 170.
Because there is a true conflict, this court must determine which state has the “‘greater
interest in the application of its law.’” Hammersmith, 480 F.3d at 231 (citing Cipolla v.
Shaposka, 439 Pa. 563, 267 A.2d 854, 856 (1970)). This analysis combines the approaches of
the Restatement (Second) of Conflict of Laws (contacts establishing significant relationships)
and “interests analysis,” which entails a “qualitative appraisal of the relevant states’ policies with
respect to the controversy.” Id. (internal citations omitted). The court’s inquiry requires more
than a “mere counting of contacts.” Cipolla, 267 A.2d at 856. Instead, the court should “weigh
the contacts on a qualitative scale according to their relation to the policies and interests
underlying the [particular] issue.” Shields v. Consol. Rail Corp., 810 F.2d 397, 400 (3d Cir.
1987).
The court must first assess each state’s contacts under the Second Restatement of
Conflicts of Laws. See Hammersmith, 480 F.3d at 232. Section 145(2) lists the following
contacts that should be considered when determining which state has the most significant
relationship to the events and parties at issue in a tort claim: (a) the place where the injury
occurred; (b) the place where the conduct causing the injury occurred; (c) the domicile,
residence, nationality, place of incorporation, and place of business of the parties; and (d) the
place where the relationship, if any, between the parties is centered. Restatement (Second) of
Conflicts of Law § 145(2), at 414 (1971).

7

In the present case, both the injury and the conduct that gave rise to the injury occurred in
Maryland. In addition, all of the plaintiffs in the case are from Maryland, as was the decedent.
On the other hand, Vitran was incorporated in Pennsylvania and has its principal place of
business in that state. After weighing these contacts on a “qualitative scale” according to their
relation to the policies underlying the punitive damages issue, however, Maryland has the most
significant relationship to the punitive damages claim. Vitran’s employee was operating the
tractor-trailer in Maryland when it struck the decedent, implicating Maryland’s strong interest in
regulating vehicles that use its roadways. It is true that, because Vitran is a Pennsylvania motor
carrier, Pennsylvania has an interest in regulating Vitran’s conduct. Nonetheless, Vitran has a
terminal in Maryland and regularly conducts business in the state, (ECF No. 21, Answer, at 2.)
such that Maryland’s regulatory interest is also significant. In fact, Vitran’s driver had departed
from its Maryland terminal immediately prior to the incident. Id. For these reasons, Maryland
law must be applied to the punitive damages claim.
The current complaint does not appear to allege facts that would support a finding of
actual malice. Further, a request for punitive damages does not constitute a separate count or
claim. Accordingly, Count III will be dismissed without prejudice. Punitive damages may be
sought at a later date if discovery reveals facts sufficient to meet the Maryland standard.
A separate Order follows.

August 28, 2012
Date

__________/s/________
Catherine C. Blake
United States District Judge

8