Kellog et al v. Wheaton Van Lines, Inc. et al
MEMORANDUM AND OPINION ORDER by Magistrate Judge Steven C. Yarbrough denying 19 Plaintiff's Motion for Summary Judgment and granting 24 Defendant's Motion for Summary Judgment. (cm)
IN THE UNITED SATE DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
STATE FARM FIRE AND CASUALTY
Case No. 16-cv-1187 SCY/LF
WHEATON VAN LINES,
MEMORANDUM OPINION AND ORDER
This matter is before the Court on Plaintiffs’ Motion for Summary Judgment on
Defendant’s Second and Third Defenses (Doc. 19) and Defendant’s Motion for Summary
Judgment (Doc. 24). The issues contained in these Motions substantially overlap. The central
question is whether Plaintiffs’ claims are either time barred or, in the case of Plaintiffs’ state law
claims, preempted under 49 U.S.C. § 14706 (“Carmack Amendment”). For the reasons stated
below, the Court concludes that Defendant’s Motion for Summary Judgment is well-taken and
shall be GRANTED. Because the Court grants Defendant’s Motion, Plaintiffs’ Motion is
The undisputed material facts are as follows. In early September 2013, Plaintiff Wendy
Kellog contracted with Defendant Wheaton Van Lines to move her personal belongings from
Yorktown Heights, New York, to Solana Beach, California. Doc. 19 at 2; Doc. 23. A bill of
lading set forth the contractual terms for the shipment of Kellog’s belongings.1 On October 18,
The parties cite various portions of the bill of lading in their undisputed material facts. To the extent that these
portions become relevant to the determination of the issues herein, the Court will address them in its analysis.
2013, as a result of a problem at the van’s rear trailer axle, the moving van caught fire in New
Mexico and destroyed Kellog’s belongings. Doc. 19 at 2; Doc. 23 at 4. The damage to Kellog’s
property totaled $59,674.48. Doc. 30-4 at 10. Kellog had insurance through State Farm which,
after applying the $5000 deductible, paid her $54,674.48. Doc. 30-4 at 10.
The parties do not dispute that they exchanged the following communications in the
aftermath of the fire. Doc. 19 at 3; Doc. 23 at 2-3. On November 8, 2013, State Farm, on behalf
of Kellog, notified Wheaton of the loss. State Farm’s letter stated, “Please consider this as notice
of our possible subrogation claim[.]” Doc. 23-2 at 4. On January 22, 2014, State Farm sent a
second letter to Wheaton representing that State Farm considered Wheaton responsible for the
loss. Doc. 30-4 at 3. The letter referenced a claim number that Wheaton had established for the
matter. Doc. 30-4 at 3. However, the letter indicated that the amount of the claim was “to be
determined.” Doc. 30-4 at 3. On January 23, 2014, State Farm sent a similar letter to Wheaton’s
insurance carrier, McLarens International. Doc. 23-2 at 6. This letter indicated that State Farm
had paid Kellog for her loss, that State Farm considered Wheaton responsible for the loss, and
that it was State Farm’s position that it was entitled to recovery from Wheaton. Doc. 23-2 at 6.
The letter again reiterated that the amount of the claim was “to be determined” and that “[o]nce
our claim handling has been completed, we will provide you with documentation to support our
subrogation demand.” Doc. 23-2 at 6.
On February 6, 2014, McLarens International confirmed receipt of the letter and notice of
subrogation interest and requested that it be updated regarding the matter. Doc. 30-4 at 6.
McLarens International requested that State Farm provide it “with the loss inventory and
supporting documentation for [State Farm’s] subrogation claim.” Doc. 30-4 at 6. McLarens
International’s letter also included a reference number for the matter. Doc. 30-4 at 6. McLarens
International further notified State Farm on April 1, 2014 that an examination of the moving van
would occur on April 18, 2014. Doc. 30-4 at 8. On February 19, 2015, McLarens International
again requested in writing that State Farm provide it “with the loss inventory and supporting
documentation for your subrogation claim.” Doc. 30-4 at 9. State Farm did not respond to that
letter until over a year later. On May 9, 2016, State Farm replied that its subrogation demand
totaled $59,674.48. Doc. 30-4 at 10. To date, Defendant has not paid Plaintiffs’ claim and on
September 19, 2016, Plaintiffs filed suit against Defendant.
STANDARD OF REVIEW
Under Federal Rule of Civil Procedure 56(a), this Court must “grant summary judgment
if the movant shows that there is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). The movant bears the initial
burden of “show[ing] that there is an absence of evidence to support the nonmoving party’s
case.” Bacchus Indus., Inc. v. Arvin Indus., Inc., 939 F.2d 887, 891 (10th Cir. 1991) (citing
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). Once the movant meets this burden, Rule
56(c) requires the non-moving party to designate specific facts showing that there is a genuine
issue for trial. See Celotex Corp., 477 U.S. at 324; Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 256 (1986).
“An issue is ‘genuine’ if there is sufficient evidence on each side so that a rational trier of
fact could resolve the issue either way. An issue of fact is ‘material’ if under the substantive law
it is essential to the proper disposition of the claim.” Thom v. Bristol Myers Squibb Co., 353
F.3d 848, 851 (10th Cir. 2003) (internal citation omitted). “A party asserting that a fact cannot
be or is genuinely disputed must support the assertion by . . . citing to particular parts of
materials in the record . . . .” Fed. R. Civ. P. 56(c)(1)(A). All material facts set forth in the
motion and response which are not specifically controverted are deemed undisputed. D.N.M.LRCiv. 56.1(b).
When reviewing a motion for summary judgment, the court should keep in mind three
principles. First, the court’s role is not to weigh the evidence, but to determine whether a
genuine issue exists as to material facts requiring a trial. See Liberty Lobby, 477 U.S. at 249.
Second, the court must resolve all reasonable inferences and doubts in favor of the non-moving
party, and construe all evidence in the light most favorable to the non-moving party. See Hunt v.
Cromartie, 526 U.S. 541, 550–55 (1999). Third, the court cannot decide any issues of
credibility. See Liberty Lobby, 477 U.S. at 255. “[T]o survive the . . . motion, [the nonmovant]
need only present evidence from which a jury might return a verdict in his favor.” Id. at 257.
As an initial matter, the Court addresses ambiguity in the bases on which Plaintiffs’
support their Motion for Partial Summary Judgment (Doc. 19). Both the title of the motion and
the opening sentence represent that Plaintiffs are moving for summary judgment on Defendant’s
second and third affirmative defenses. See Doc. 19 at 1 (“Plaintiffs…hereby move this Court for
partial summary judgment on the Second and Third Defenses…”). Defendant’s second defense
is that “The Carmack Amendment completely pre-empts any and all state law-based claims
against a carrier arising out of the loss of or damage to the goods being carried.” Doc. 6 at 3.
Both in their analysis and their proposed undisputed material facts, however, Plaintiffs neither
argue nor cite evidence relevant to whether their state law claims are preempted. Plaintiffs
instead cite to Defendant’s fourth defense in their undisputed material facts which is that
Plaintiffs’ claims are time barred based on the contract between Kellog and Wheaton. Doc. 19 at
1 (citing Doc. 6 at 3). Additionally, Plaintiffs request at the end of their motions that the Court
“grant partial summary judgment to Plaintiffs…as to Defenses Three and Four in the answer…”
Doc. 19 at 5. Because Plaintiffs offer neither evidence nor argument relevant to the issue of
whether their state law claims are preempted by the Carmack Amendment, the Court construes
Plaintiffs’ Motion to be a request that partial summary judgment be entered in their favor in
regard to Defendant’s third and fourth defenses.
That said, in further reviewing Plaintiffs’ briefing, the Court is unable to parse the
difference between Plaintiffs’ arguments regarding the adequacy of their claim under the
Carmack Amendment and the adequacy of the claim pursuant to the contractual arrangement
between the parties. Plaintiffs’ argument section totals four relatively succinct paragraphs
contending that Plaintiffs gave adequate notice of their claim. See Doc. 19 at 4-5. While
Plaintiffs appear to further expound on the contractual provisions in their reply brief, the relevant
portions of the contract cited by Plaintiffs do no more than reiterate the notice provisions of the
Carmack Amendment and the controlling regulation, 49 C.F.R. § 370.3.2 In other words,
because the bill of lading requires that a claim be filed in accordance with the Carmack
Amendment, to the extent the Court will address the parties’ contract, it will do so in relation to
whether Plaintiffs’ notice of claim was sufficient pursuant to the Carmack Amendment.
With this confusion aside, the Court clarifies the issues before it. First, Plaintiffs and
Defendant both seek summary judgment on the issue of whether Plaintiffs’ claim was adequate
and timely pursuant to the Carmack Amendment. Second, Defendant argues it is entitled to
Plaintiffs further discuss a number of Wheaton’s tariff provisions in their reply brief. See Doc. 30 at 5-10.
However, Wheaton limited the reach of the majority of these provisions to the “processing of claims for overcharge,
duplicate payment or overcollection for the transportation of property.” Doc. 30 at 5. Wheaton’s procedures for
filing these types of claims are not at issue in this litigation. Further, while some of the tariff provisions cited by
Plaintiffs discuss claims for loss or damage to transported property, these provisions track the procedures set out in
49 C.F.R. § 370.3.
summary judgment on Plaintiffs’ state law claims because the Carmack Amendment preempts
those claims. The Court will address these issues in turn.
A. Plaintiffs’ Failed to Provide a Timely Claim for a Specific or Determinable
Amount of Money
Both sides claim they are entitled to summary judgment on the issue of whether
Plaintiffs’ claim was adequate and timely pursuant to the Carmack Amendment. To resolve this
issue the Court must address whether Plaintiffs’ communications with Defendant, and its insurer
McLarens International, timely complied with the notice provisions of the Carmack Amendment,
49 U.S.C. § 14706 and 49 C.F.R. 370.3. Defendant contends that Plaintiffs failed to timely
provide a specific or determinable amount of damages in their notice of claim. The Court agrees
that Plaintiffs failed to provide timely and adequate notice under the Carmack Amendment.
“The Carmack Amendment codifies an initial carrier’s liability for goods lost or damaged
in shipment.” A.T. Clayton & Co., Inc. v. Missouri-Kansas-Texas R. Co., 901 F.2d 833, 834
(10th Cir. 1990). The statute provides that a carrier is liable to the shipper for “the actual loss or
injury to the property[.]” 49 U.S.C. § 14706(a)(1). The purpose behind the Carmack Amendment
is to “(1) hold carriers responsible for damage they cause to transported goods; (2) to encourage
payment of claims without litigation; (3) to facilitate prompt investigation of claims; and (4) to
prevent carriers from discriminating against shippers by paying claims of favored shippers while
rejecting claims of others.” Molloy v. Allied Van Lines, Inc., 267 F.Supp.2d 1246, 1251-52 (M.D.
The Carmack Amendment, and regulations promulgated thereunder, contain the
procedures for filing a claim with a carrier. The Carmack Amendment provides that a carrier
may contractually limit the time within which a shipper may file a claim, provided that the time
period not be less than nine months. 49 U.S.C. § 14706(e)(1) (“A carrier may not provide by
rule, contract, or otherwise, a period of less than 9 months for filing a claim against it[.]”).
Consistent with this restriction, the bill of lading in the present case provided that a claim must
be brought within nine months. Doc. 24-1 at 6. The bill of lading further provided that “[w]here
a claim is not filed or suit is not instituted in accordance with the foregoing provisions, Wheaton
shall not be liable and such claim will not be paid.” Doc. 24-1 at 6.
The minimum filing requirements for a claim are contained in 49 C.F.R. § 370.3. This
regulation provides that a claim must be in writing, unless the carrier and shipper agree that an
electronic communication is permissible, and be received within the time limits specified in the
bill of lading or contract of carriage or transportation. § 370.3(b). The regulation states that in
order to sufficiently comply with the minimum filing requirements, the notice of claim must (1)
contain facts sufficient to identify the baggage or shipment; (2) assert liability for the alleged
loss, damage, injury, or delay; and (3) make a claim for the payment of a “specified or
determinable amount of money.” § 370.3(b)(1)-(3). The regulation further prohibits a carrier
from voluntarily paying a claim until it receives “a formal claim in writing for a specified or
determinable amount of money.” § 370.3(d).
In the present case, the bill of lading provided that Plaintiffs’ claim needed to be filed
within nine months of the loss. The parties accordingly agree that the deadline for Plaintiffs to
file their claim was July 18, 2014. Doc. 31 at 1; Doc. 24 at 2. Defendants do not contend that
Plaintiffs failed to properly notify Defendant of the identity of the shipment at issue and assert
liability for the loss pursuant to § 370.3(b)(1)-(2). Defendants do dispute, however, that claimant
timely asserted a claim for a “specified or determinable amount of money” as § 370.3(b)(3)
Federal circuit courts are split on the degree of specificity a claimant must include in his
or her notice of claim under § 370.3(b)(3). The First, Second, and Fifth Circuits are considered
“strict compliance” jurisdictions. See Bowman v. Mayflower Transit, LLC, 914 F.Supp.2d 47 (D.
Mass. 2012) (stating that the phrase “‘payment of a specified or determinable amount of money’
is strictly construed in the First Circuit; the claim must demand an exact dollar value”); Pathway
Bellows, Inc. v. Blanchette, 630 F.2d 900-903 (2d Cir. 1980) (applying strict compliance
standard to the claimant’s notice of claim in concluding that its failure to timely file a claim
asserting liability and setting forth a specific amount of damages precluded recovery); Salzstein
v. Bekins Van Lines, 993 F.2d 1187, 1189-90 (5th Cir. 1993) (adopting strict compliance test).
Generally speaking, “Courts following a strict compliance standard routinely find that claims are
insufficient unless some price is quoted.” Parramore v. Tru-Pak Moving Systems, Inc., 286
F.Supp. 643, 653 (M.D.N.C. 2003).
On the other hand, the Sixth, Ninth, and Third Circuits utilize a substantial compliance
standard. In Trepel v. Roadway Exp., Inc., for instance, the Sixth Circuit stated that a claimant is
not required to state a specific amount but instead must provide “a reasonably accurate indication
of the value of the claim.” 194 F.3d 708, 713 (6th Cir. 1999). Similarly, in Insurance Company
of North America v. GI Trucking Company, the Ninth Circuit held that a written notice was
sufficient where it gave “a reasonable estimate of the claimed amount.” 1 F.3d 903, 907 (9th
Cir. 1993). More recently, in Lewis v. Atlas Van Lines, Inc., the Third Circuit emphasized that
the terms “specific” and “determinable” have unique meanings and therefore the regulation does
not require that a specific amount of money be claimed. 542 F.3d 403, 410 (3d Cir. 2008). The
Third Circuit explained that a claim for an amount of money is determinable if it “is merely
capable of being determined or ascertained.” Id. at 409 (internal quotation marks and alterations
omitted). The Court accordingly concluded that a claim is deficient when it “does not contain
sufficient information to put the carrier on notice of the nature and extent of its liability.” Id. at
410. These cases emphasize that the purpose of the notice requirement “is not to permit the
carrier to escape liability, but to insure that the carrier may make a prompt and thorough
investigation of the claim.” Id.; Trepel, 194 F.3d at 713 (“the purpose of the claim regulation is
not to permit the carrier to escape liability but to insure that the carrier has enough information to
begin processing the claim”); Lewis, 542 F.3d at 411 (same).
The Tenth Circuit has not construed § 370.3(b)’s requirement that a claimant make a
“claim for the payment of a specified or determinable amount of money.” However, in
previously construing the Carmack Amendment, the Tenth Circuit applied a standard more akin
to the substantial compliance test in reviewing whether a claimant’s notice was sufficient. See
Atchison, Topeka and Santa Fe Railway Company v. Littleton Leasing and Investment Company,
Inc., 582 F.2d 1237, 1238, 1240 (10th Cir. 1978) (holding that the claimant’s notice did not
substantially comply with the notice requirement of the Carmack Amendment and stating that
“[i]t must be remembered that the purpose of the notice requirement is not to escape liability but
to facilitate prompt investigation”). Additionally, the Court has reviewed two cases from district
courts within the Tenth Circuit. In Tesmer v. Allied Van Lines, Inc., the district court held that
the notice provided by the claimant was sufficient under either standard because the claimant
specified a definitive sum of money in the notice. 82 F.Supp.2d 1216, 1219 (D. Kan. 2000).
However, in Clair v. Emricks Van and Storage Company, the district court utilized the strict
compliance test and held that the plaintiff’s claims were barred because she failed to specify the
amount of her claim. 33 F.Supp.2d 965, 968-69 (W.D. Okla. 1999). The court further rejected
the plaintiff’s argument that her claims substantially complied with the regulations because it
would have been relatively easy for the defendants to determine the amount of her claim. Id. at
The lack of clear guidance in the Tenth Circuit about the appropriate standard ultimately
does not matter, however, because the Court concludes that Plaintiffs’ claim is barred regardless
of which standard applies. First, it is undisputed that Plaintiff did not timely file a claim for a
specific amount of money. Thus, Plaintiffs’ claim would undoubtedly be deficient under the
strict compliance standard. See Bowman v. Mayflower Transit LLC, 914 F.Supp.2d 47, 50 (D.
Mass 2012) (applying strict compliance standard in holding that the notice was insufficient
where claimant indicated that the amount of the claim was to be determined).
Turning to the substantial compliance standard, the Court concludes that Plaintiffs neither
provided Wheaton a reasonable estimate of their damages nor supplied it with information
sufficient to put it on notice of the nature and extent of its purported liability. Over the course of
State Farm’s communications with Defendant and its insurer during the nine month period, State
Farm consistently represented that the amount of the claim was “to be determined.” See Doc. 304 at 3, 30-4 at 5. Further, in State Farm’s final communication with Defendant’s insurer during
the relevant timeframe, State Farm stated that “[o]nce our claim handling has been completed,
we will provide you with documentation to support our subrogation demand.” Doc. 30-4 at 5.
Noticeably absent from these communications is any type of estimate of Plaintiffs’ damages,
much less any representation regarding the extent of the damages that Plaintiffs were seeking.
Thus, far from providing a determinable amount of the claim, these representations are by their
very nature indeterminate.
Perhaps in recognition of the fact that State Farm’s communications with Defendant fail
to establish a claim for a determinable amount of money, Plaintiffs contend that no dispute
existed about the amount of Plaintiffs’ claim because Kellog and Wheaton had estimated the
value of her belongings in the bill of lading to be $56,400. See Doc. 30-2 at 1. Plaintiff further
contends that an inventory of Kellog’s goods attached to the bill of lading was sufficient to
appraise Wheaton as to the value of Kellog’s belongings. While the Court is sympathetic to
Plaintiffs’ argument, these arguments fail as a legal matter.
First, Plaintiffs’ consistent representations that the amount of their claim was
undetermined indicated Plaintiffs’ damages could not be determined from the bill of lading. In
other words, because the amount listed in the bill of lading was known to both parties in the
aftermath of the fire, Plaintiffs’ representations in their notice of claim that their demand was
undetermined was necessarily a representation that the bill of lading did not constitute an
accurate estimation of their claim.
Second, if accepted, Plaintiff’s argument would nullify the regulatory scheme in place.
Section 370.3(b) requires a claimant to provide a claim for a specific or determinable amount of
money. Under Plaintiffs’ argument, in order to state a sufficient claim, a claimant would need
only identify the shipment and assert liability because the carrier would then be responsible to
determine the nature and extent of its liability from the bill of lading and any documentation
attached thereto. The regulation clearly does not countenance this because it places the burden
on the claimant to affirmatively claim a specific or determinable amount of money. See 49
C.F.R. § 370.3(b). No indication exists that this regulation can be ignored in favor of reliance on
information contained in the bill of lading.
Furthermore, § 370.3 provides the responsibilities of a carrier when it receives a claim for
an uncertain amount. See 49 C.F.R. § 370.3(d). While this provision does require a carrier to
begin investigating such a claim, the regulation specifically precludes a carrier from voluntarily
paying a claim in the absence of a claim for a specific or determinable amount of money
consistent with § 370.3(b). Wheaton complied with the investigation part of this requirement by
initiating an investigation and assigning the matter a claim number when Plaintiffs filed a claim
for an uncertain amount. Further, as part of its investigation, Wheaton attempted on multiple
occasions to obtain from Plaintiffs a more definitive statement of the nature and extent of its
purported liability. During the relevant timeframe, however, Plaintiffs consistently represented
that the amount of the claim was still being determined. Thus, even had Wheaton utilized the
estimated value of Kellog’s belongings from the bill of lading, as Plaintiffs contend Wheaton
should have, Plaintiffs’ argument ignores the fact that § 370.3(d) would still preclude it from
paying the claim until Plaintiffs made a formal demand for a specific or determinable amount of
money. This preclusion applies even in the event Wheaton was able to “ascertain as nearly as
possible the extent…of the loss or damage for which it may be responsible” from the bill of
lading or the inventory of Kellog’s goods attached thereto. See § 370.3(d).
Finally, to the extent that Plaintiffs argue that Wheaton was somehow obligated to notify
Plaintiffs that their claim was deficient, the Court rejects this argument as it finds no support in
either the Carmack Amendment or § 370.3. Similarly, Plaintiffs cite to no case law supporting
such a duty.
Even if such a duty could be said to exist, however, it would not change the Court’s
conclusion. Wheaton requested on multiple occasions that Plaintiffs provide it with the amount
of the claim. Plaintiffs repeatedly failed to do so. An important function of the notice
requirement is to facilitate “voluntary resolution [of claims] by ensuring that both shipper and
carrier have adequate information to evaluate liability and the extent of damages. See Nedlloyd
Lines, B.V. Corp. v. Harris Transport Co., Inc., 922 F.2d 905, 908 (1st Cir. 1991). “Leisurely
approaches and periods of procrastination are inconsistent with both the legislative goal of the
Carmack Amendment and the standards applied by the courts.” Cherkis v. Atlas Van Lines, Inc.,
59 F.Supp.2d 203, 208 (D. Mass. 1999). Accordingly, the Court concludes that Plaintiffs failed
to submit a claim which met the minimum filing requirements within the requisite nine month
period and that summary judgment must therefore be entered in Wheaton’s favor.
B. The Carmack Amendment Preempts Plaintiffs’ State Law Claims
Defendant contends that the Carmack Amendment preempts Plaintiffs’ state law claims
which are for negligence, negligence per se, and breach of contract. Plaintiff does not address
this argument. Nevertheless, in the analyzing Defendant’s argument, the Court agrees with
As noted above, the parties have stipulated that the Carmack Amendment controls the
issues in this case. Doc. 19 at 1; Doc. 24 at 4. “Congress, in enacting the Carmack Amendment,
intended to take possession of the subject [of interstate carriers’ liability], and supersede all state
regulation with reference to it in order to establish uniformity of liability.” Raineri v. North
America Van Lines, Inc., 906 F.Supp.2d 334, 340 (D.N.J. 2012) (internal quotation marks and
alterations omitted). Thus, the Tenth Circuit, consistent with every other federal circuit, has held
that the “Carmack Amendment preempts state common law remedies against common carriers
for negligent loss or damage to goods shipped under a lawful bill of lading.” Underwriters at
Llyods of London v. North American Van Lines, 890 F.2d 1112, 1120-21 (10th Cir. 1989) (noting
that every other circuit to have considered the matter “has either held or indicated it would hold
that the Carmack Amendment preempts state common law remedies against a carrier for
negligent damage to goods shipped under a proper bill of lading.”). The preemptive effect
extends to breach of contract claims. See Margetson v. United Van Lines, Inc., 785 F.Supp. 917,
919 (D.N.M. 1991) (“Courts have consistently recognized the preemptive effect of the Carmack
Amendment over breach of contract claims.”). Accordingly, the Court concludes that Plaintiffs’
state law claims for negligence, negligence per se, and breach of contract are preempted.
For the foregoing reasons, Defendant’s Motion for Summary Judgment (Doc. 24) is
GRANTED. As a consequence, Plaintiffs’ Motion for Summary Judgment on Defendant’s
Second and Third Defenses (Doc. 19) is DENIED.
IT IS SO ORDERED.
UNITED STATES MAGISTRATE JUDGE
Sitting by Consent
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