STARR INDEMNITY & LIABILITY COMPANY v. ATLANTIC DRAYAGE & TRANSPORT, INC. et al

Filing 34

OPINION. Signed by Judge William J. Martini on 11/24/14. (gh, )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

STARR INDEMNITY & LIABILITY
COMPANY a/s/o CAMPER’S WORLD
APPAREL, LLC,
Plaintiff,

Civ. No. 2:14-cv00807(WJM)(MF)

OPINION

v.
ATLANTIC DRAYAGE & TRANSPORT,
INC. and PORT KEARNY SECURITY,
INC.,
Defendants.

WILLIAM J. MARTINI, U.S.D.J.:
This is a property loss case involving cartons of women’s apparel that went
missing while in transport. The owner of these cartons, Camper’s World Apparel,
LLC, filed an insurance claim with Insurer/Subrogee Starr Indemnity & Liability
Company. In this action, Starr Indemnity seeks to hold the allegedly responsible
parties, co-Defendants Atlantic Drayage & Transport, Inc. and Port Kearny Security,
Inc. (“PKS”) liable for the loss.
Currently before the Court is a motion involving a Crossclaim between the
co-Defendants. Atlantic Drayage has filed a motion, pursuant to Federal Rule of
Civil Procedure 12(b)(6), to dismiss Counts II, III, and IV of PKS’s Crossclaim. For
the reasons set forth below, Atlantic Drayage’s motion to dismiss is DENIED.
I.

BACKGROUND

Insured Camper’s World is a seller, manufacturer, and distributor of women’s
apparel. Compl. at ¶ 6. Co-Defendant Atlantic Drayage is a Florida corporation

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engaged in the interstate transportation of goods by motor truck. Co-Defendant PKS
owns a cargo storage facility.
On January 8, 2013, Atlantic Drayage agreed to deliver a container, holding
2,440 cartons of women’s clothing apparel, (“the Cargo”) from Newark, New Jersey
to Camper’s World in Hicksville, New York. Compl. ¶ 11. During interstate
transport, Atlantic Drayage contracted with PKS to leave the Cargo at a PKS storage
lot overnight. Id. at ¶ 16. Upon delivery of the Cargo to Camper’s World on January
9, 2013, it was noted that 914 cartons of the Cargo were missing. Id. at ¶ 23.
Camper’s World filed a claim with its insurer, Starr Indemnity, for the loss of
the Cargo. Id. at ¶29. Insurer Starr paid Camper’s World the sum of $393,668.12
and became subrogated to the rights of Camper’s World for its loss under the terms
of the policy of insurance. Id. Plaintiff filed a Complaint on February 7, 2014 to
recover damages from Atlantic Drayage and PKS.
On April 25, 2014, Defendant PKS filed an Answer with Crossclaims,
alleging that Atlantic Drayage breached the terms and conditions of its agreement
and release by failing to defend, indemnify, release and hold PKS harmless against
the subrogation claims. PKS’s Crossclaims include breach of contract, breach of
fiduciary duty, breach of the implied covenant of good faith and fair dealing, and
indemnification and contribution. Atlantic Drayage now moves to dismiss the
Crossclaim.
II.

LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a
complaint, in whole or in part, if the plaintiff fails to state a claim upon which relief
can be granted. The moving party bears the burden of showing that no claim has
been stated. Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005). In deciding
a motion to dismiss under Rule 12(b)(6), a court must take all allegations in the
complaint as true and view them in the light most favorable to the plaintiff. See
Trump Hotels & Casino Resorts, Inc. v. Mirage Resorts Inc., 140 F.3d 478, 483 (3d
Cir. 1998) (citing Warth v. Seldin, 422 U.S. 490, 501 (1975)).
Although a complaint need not contain detailed factual allegations, “a
plaintiff’s obligation to provide the ‘grounds’ of his ‘entitlement to relief’ requires
more than labels and conclusions, and a formulaic recitation of the elements of a
cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).
Thus, the factual allegations must be sufficient to raise a plaintiff’s right to relief
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above a speculative level, such that it is “plausible on its face.” See id. at 570; see
also Umland v. PLANCO Fin. Serv., Inc., 542 F.3d 59, 64 (3d Cir. 2008). A claim
has “facial plausibility when the plaintiff pleads factual content that allows the court
to draw the reasonable inference that the defendant is liable for the misconduct
alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at
556). While “[t]he plausibility standard is not akin to a ‘probability requirement’ . .
. it asks for more than a sheer possibility.” Id. at 678.
III.

DISCUSSION

Atlantic Drayage argues that the Carmack Amendment to the Interstate
Commerce Act, 49 U.S.C. § 14706, preempts Counts II (breach of fiduciary duty),
III (breach of the covenant of good faith and fair dealing), and IV (indemnity and
contribution) of PKS’s Crossclaims and as such, should be dismissed. The argument
is not convincing. The Carmack Amendment simply does not apply to the
relationship between Atlantic Drayage and PKS.
In 1906, Congress enacted the Carmack Amendment to establish a nationwide
scheme of liability for “interstate carriers,” such as Atlantic Drayage. See Certain
Underwriters at Interest at Lloyds of London v. United Parcel Serv. of Am., Inc., 762
F.3d 332, 335 (3d Cir. 2014). Under the Carmack Amendment, an “interstate
carrier” is held strictly liable to the “person entitled to recover under the . . . bill of
lading” for damages up to “the actual loss or injury to the property.” 49 U.S.C. §
14706(a)(1). PKS, however, has no rights under a bill of lading. Its rights are based
on a contract for overnight storage. Since PKS has no rights under a bill of lading,
the Carmack Amendment does not apply to its Crossclaims against Atlantic
Drayage.
IV.

CONCLUSION

For the reasons stated above, Atlantic Drayage’s motion to dismiss is
DENIED. An appropriate order follows.

/s/ William J. Martini
______________________________
WILLIAM J. MARTINI, U.S.D.J.
Date: November 24, 2014

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