COURTNEY et al v. IVANOV et al
Filing
97
MEMORANDUM OPINION AND ORDER denying 61 Motion to Dismiss for Failure to State a Claim, and as more fully stated in said Memorandum Opinion and Order. Signed by Judge Kim R. Gibson on 6/23/2015. (dlg)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
EDDIE L. COURTNEY, JR. and
KREILKAMP TRUCKING, INC.,
Plaintiffs,
v.
YURIY IVANOV a/k/a YURLY IVANOV;
VICTOR MOTRYUK a/k/a VIKTOR
MOTRYUK a/k/a VICKTOR MOTRYUK;
FREIGHTLION LOGISTICS, LLC;
PROMPT LOGISTICS (USA); PROMPT
LOGISTICS (CANADA); and
INTERNATIONAL PURCHASE
SYSTEMS, INC.,
Defendants.
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CIVIL ACTION NO. 3:13-227
JUDGE KIM R. GIBSON
MEMORANDUM OPINION
I.
Introduction
This personal injury action arises from a traffic accident involving two tractor-
trailers on Interstate 80. Pending before the Court is a motion for partial dismissal (ECF
No. 61) of Plaintiffs’ amended complaint (ECF No. 58) pursuant to Federal Rule of Civil
Procedure 12(b)(6) filed by Defendants Prompt Logistics (USA) and Prompt Logistics
(Canada) (collectively “Prompt Logistics”).
Specifically, Prompt Logistics moves to
dismiss two claims in the amended complaint: (1) paragraphs 89-94 and 98 of Count VI
and (2) Count VII in its entirety. Prompt Logistics’ motion involves a question previously
decided by this Court in Defendant Freightlion Logistics’ motion to dismiss—whether 49
U.S.C. § 14704(a)(2) creates a private right of action for a personal injury claim. See
Courtney v. Ivanov, 41 F. Supp. 3d 453, 455 (W.D. Pa. 2014). In a prior memorandum
opinion, this Court concluded that the statute does not create a private cause of action and
dismissed Count X of Plaintiffs’ original complaint, but permitted Plaintiffs to file an
amended complaint asserting violations of the Federal Motor Carrier Safety Regulations
(“FMCSR”) as a factual basis for Plaintiffs’ common law negligence claims. (See ECF No.
57).
Plaintiffs filed an amended complaint on September 8, 2014, to which Prompt
Logistics filed the pending motion for partial dismissal. Having reviewed the motion and
briefs, and in light of this Court’s previous decision and the applicable case law, the Court
will DENY Prompt Logistics’ motion to dismiss paragraphs 89-94 and 98 of Count VI1,
and will DENY Prompt Logistics’ motion to dismiss Count VII of the amended complaint.
II.
Jurisdiction
The Court has diversity jurisdiction over this matter pursuant to 28 U.S.C.
§ 1332(a). Venue is proper under 28 U.S.C. § 1391(b)(2) because a substantial portion of
the events giving rise to the claims occurred in the Western District of Pennsylvania.
III.
Background
This case involves personal injuries and property damage sustained when a
tractor-trailer, owned by Plaintiff Kreilkamp Trucking, Inc. and driven by Plaintiff Eddie
L. Courtney, Jr., collided with a tractor-trailer owned by Defendant Victor Motryuk and
driven by Defendant Yuriy Ivanov. The Court previously set forth the following facts,
As will be explained in more detail below, Plaintiff has agreed to strike paragraph 89.
Accordingly, paragraph 89 will be stricken from the amendment complaint.
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which Plaintiffs have again alleged in their amended complaint, and which the Court will
accept as true for the sole purpose of deciding the pending motion to dismiss.
The Defendants in this case operated under certain contracts and agreements with
one another to transport and deliver cargo. (ECF No. 58, Am. Compl. ¶¶ 17-19). On
August 2, 2012, Defendant Ivanov was driving a tractor-trailer on Interstate 80. (Id. ¶ 22).
Defendant Ivanov stopped his tractor-trailer in the West-bound, right-hand lane of
Interstate 80, without warning and without activating any kind of signal device or light.
(Id. ¶¶ 24-25). Plaintiff Courtney, who was also driving his tractor-trailer in the Westbound, right-hand lane of Interstate 80, collided with the rear of Defendant Ivanov’s
tractor-trailer. (Id. ¶¶ 21, 26). As a result of the collision, Plaintiff Courtney suffered
personal injuries, and the tractor-trailer that he was driving sustained property damage.
(Id. ¶¶ 31-39).
The amended complaint alleges that, at the time of the collision,
Defendants Ivanov and Motryuk were agents, servants, or employees of Prompt Logistics.
(Id. ¶ 29).
On September 27, 2013, Plaintiffs filed an eleven-count complaint. (ECF No. 1).
Among other things, Plaintiffs asserted a claim in Count X for damages under the Motor
Carrier Act, 49 U.S.C. §§ 10101 et seq. (“MCA”), and the Federal Motor Carrier Safety
Regulations (“FMCSR”). (Id. ¶¶ 103-112). Defendant Freightlion filed a motion for partial
dismissal (ECF No. 7), which the Court granted, dismissing Count X of the complaint (see
ECF No. 57). Plaintiffs then filed an amended complaint (ECF No. 58) incorporating
allegations of FMCSR violations into their negligence claims, which Prompt Logistics now
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moves to dismiss (ECF No. 61). The parties have fully briefed the Court (see ECF Nos. 63,
71, 82), and this matter is ripe for adjudication.
IV.
Standard of Review
The Prompt Logistic Defendants have moved to dismiss certain claims in
Plaintiffs’ amended complaint pursuant to Rule 12(b)(6).
The Federal Rules of Civil
Procedure require that a complaint contain “a short and plain statement of the claim
showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). Rule 12(b)(6) allows
a party to seek dismissal of a complaint or any portion of a complaint for failure to state a
claim upon which relief can be granted. Although the federal pleading standard has been
“in the forefront of jurisprudence in recent years,” the standard of review for a Rule
12(b)(6) challenge is now well established. Fowler v. UPMC Shadyside, 578 F. 3d 203, 209
(3d Cir. 2009).
In determining the sufficiency of a complaint, a district court must conduct a twopart analysis. First, the court must separate the factual matters averred from the legal
conclusions asserted. See Fowler, 578 F. 3d at 210. Second, the court must determine
whether the factual matters averred are sufficient to show that plaintiff has a “plausible
claim for relief.” Id. at 211 (quoting Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009)). The
complaint need not include “detailed factual allegations.” Phillips v. County of Allegheny,
515 F. 3d 224, 231 (3d Cir. 2008) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555
(2007)).
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Moreover, the court must construe the alleged facts, and draw all inferences
gleaned therefrom, in the light most favorable to the non-moving party. See id. at 228
(citing Worldcom, Inc. v. Graphnet, Inc., 343 F. 3d 651, 653 (3d Cir. 2003)). However, “legal
conclusions” and “[t]hreadbare recitals of the elements of a cause of action . . . do not
suffice.” Iqbal, 556 U.S. at 678. Rather, the complaint must present sufficient “factual
content that allows the court to draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Sheridan v. NGK Metals Corp., 609 F. 3d 239, 263 n.27 (3d Cir.
2010) (quoting Iqbal, 556 U.S. at 678).
Ultimately, whether a plaintiff has shown a “plausible claim for relief” is a
“context specific” inquiry that requires the district court to “draw on its judicial
experience and common sense.”
Iqbal, 556 U.S. at 679.
The relevant record under
consideration includes the complaint and any “document integral or explicitly relied on in
the complaint.” U.S. Express Lines, Ltd. v. Higgins, 281 F. 3d 383, 388 (3d Cir. 2002) (citing
In re Burlington Coat Factory Sec. Litig., 114 F. 3d 1410, 1426 (3d Cir. 1997)). If a complaint
is vulnerable to dismissal pursuant to Rule 12(b)(6), the district court must permit a
curative amendment, irrespective of whether a plaintiff seeks leave to amend, unless such
amendment would be inequitable or futile. Phillips, 515 F. 3d at 236; see also Shane v.
Fauver, 213 F. 3d 113, 115 (3d Cir. 2000).
V.
Discussion
Plaintiffs’ amended complaint (ECF No. 58) alleges that the Prompt Logistics
Defendants are liable for personal injury and property damages to Plaintiffs.
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The
amended complaint asserts a number of different claims against Prompt Logistics: Count
V asserts a claim for negligent hiring (id. ¶¶ 74-85); Count VI asserts a claim for negligent
entrustment/negligence (id. ¶¶ 86-101); Count VII asserts a claim for negligence under the
Second Restatement of Torts § 428 (id. ¶¶ 102-104); Count VIII asserts a claim for joint
venture liability (id. ¶¶ 105-109); and Count IX asserts a claim for relief under a theory of
vicarious liability and respondeat superior (id. ¶¶ 110-119). As noted above, Prompt
Logistics seeks dismissal of portions of Count VI and Count VII in its entirety. The Court
will separately address each argument below.
A. Dismissal of Count VI of the Amended Complaint
Count VI of the amended complaint (ECF No. 58 ¶¶ 86-101) asserts a claim for
negligent entrustment and negligence against Prompt Logistics. Specifically, Plaintiffs
allege that
[Prompt Logistics] negligently, carelessly, and recklessly entrusted the
transportation of goods to Defendant(s), Freightlion, as a common carrier
of property and directed it to transport flashlights from New York to
Ohio when it knew, or should have known, that Defendant(s),
Freightlion, had a poor assigned safety rating, a poor maintenance and
safety record by the FMCSA, had a history of violations of the FMCSR,
and was otherwise unsuited and unfit to operate safely as required by the
FMCSR.
[Prompt Logistics] was negligent, careless, and reckless in exercising its
discretion as a licensed property broker in arranging for transportation by
an unfit and unsafe motor carrier.
(Id. ¶ 87-88).
Defendants contend that the subsequent paragraphs in Count VI of Plaintiffs’
amended complaint allege liability and damages for violations of the Federal Motor
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Carrier Safety Act in violation of this Court’s previous order.
(ECF No. 63 at 5).
Defendants note that this Court previously concluded that 49 U.S.C. § 14704(a)(2) does not
create a private cause of action for personal injury claims, such as those alleged in the
instant case. See Courtney v. Ivanov, 41 F. Supp. 3d 453, 460 (W.D. Pa. 2014). According to
Defendants, Plaintiffs’ amended complaint “re-alleges the claims made in Count X of the
original complaint for violations of the Federal Motor Carrier Safety Act” in contravention
of this Court’s ruling and should thus be dismissed. (ECF No. 63 at 6). In response,
Plaintiffs argue that the amended complaint “does not state a private cause of action for
personal injuries and damages pursuant to the FMCSR,” but instead “simply references
the statutory and regulatory violations that should have alerted Prompt to the dangers of
entrusting Freightlion with the transportation of the freight.” (ECF No. 71 at 5).
Having reviewed the amended complaint and the arguments presented in the
briefs, the Court finds that the paragraphs of Count VI at issue here do not violate this
Court’s previous order and thus will not be dismissed. As an initial matter, the Court
notes that Plaintiffs agree to strike paragraph 89, “[s]o as to avoid any confusion as to the
nature of the claim.” (ECF No. 71 at 6). Accordingly, paragraph 89 will be stricken from
the amended complaint. Nevertheless, the remaining paragraphs in dispute (Am. Compl.
ECF No. 58 ¶¶ 90-94, 98) are not an attempt by Plaintiff to assert a private cause of action
under 49 U.S.C. § 14704(a)(2), as Count X did in the original complaint. Instead, those
paragraphs allege violations of the FMCSR to serve as a factual basis for asserting a claim
of common law negligence and negligent entrustment.
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For example, paragraph 92 alleges that Prompt Logistics “knew or should have
known, that Defendant(s), Freightlion, had been assigned poor safety ratings by the
FMCSA, had a history of violations of the FMCSR related to personnel and
equipment . . .” (Id. ¶ 92). Plaintiffs assert a claim for negligence against Prompt Logistics
for hiring Freightlion and entrusting Freightlion and its employees with the shipment of
goods despite knowing about Freightlion’s deficiencies and violations of federal
regulations. Accordingly, the disputed paragraphs in Count VI do not contravene this
Court’s previous order because Plaintiffs’ allegations asserting violations of the FMCSR
are made in support of their common law negligence claims and not to assert a private
cause of action under the statute. Thus, the allegations contained in those paragraphs will
not be dismissed from the amended complaint, and Defendants’ motion to dismiss
paragraphs 89-94 and 98 is therefore denied.
B. Dismissal of Count VII of the Amended Complaint
In Count VII of the amended complaint, Plaintiffs assert a claim for negligence
pursuant to the Restatement (Second) of Torts § 428:
[Prompt Logistics], acting as a licensed broker for its own financial gain,
owed a non-delegable duty to the public at large pursuant to Restatement
(Second) of Torts, § 428, to ensure that Defendant(s), Freightlion, operated
in a non-negligent manner pursuant to a public franchise or authority
granted by the United States Department of Transportation.
[Prompt Logistics], breached its non-delegable duty to Plaintiffs, Eddie
Courtney and Kreilkamp Trucking, as members of the general public by
virtue of hiring and/or retaining Defendant(s), Freightlion, who acted
negligently, carelessly, and recklessly as set forth previously herein.
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(ECF No. 58 ¶¶ 103-104). Plaintiffs allege that Prompt Logistics, as a “licensed broker,”
should be liable under § 428 of the Second Restatement of Torts (“§ 428”) for the allegedly
negligent actions of Defendant Freightlion and its agents and employees.
Prompt
Logistics argues that Plaintiffs’ claim must be dismissed because § 428 only applies to
motor carriers operating under franchises to transport freight on public roadways and
does not apply to brokers. Whether a broker is liable under § 428 for the conduct of its
independent contractors is an issue of first impression for this Court.
As a general rule, under Pennsylvania law, “when an independent contractor
causes injury, the party employing the independent contractor is not liable to the injured
third person.” Williams v. Braden Drilling, LLC, No. 3:11-cv-2342, 2014 WL 4792429, at *4
(M.D. Pa. Sept. 24, 2014) (citing Wilson v. IESI N.Y. Corp., 444 F. Supp. 2d 298, 313 (M.D.
Pa. 2006) (“a party is generally not liable for the negligence of an independent
contractor”)).
Nevertheless, the Restatement (Second) of Torts § 428 provides an
exception:
An individual or a corporation carrying on an activity which can be
lawfully carried on only under a franchise granted by public authority
and which involves an unreasonable risk of harm to others, is subject to
liability for physical harm caused to such others by the negligence of a
contractor employed to do work in carrying on the activity.
The Third Circuit has explained that this rule applies to motor carriers transporting
freight on interstate highways: “The carriage of freight in high powered motor vehicles
on public highways is certainly business attended with very considerable risk.” Venuto v.
Robinson, 118 F. 2d 679, 682 (3d Cir. 1941). While the Pennsylvania Supreme Court has not
explicitly adopted § 428 of the Restatement, federal courts in this Circuit have predicted
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that the Supreme Court would do so. See, e.g., Longo v. Pennsylvania Electric Co., 618 F.
Supp. 87, 90-91(W.D. Pa. 1985); Wilson v. IESI N.Y. Corp., 444 F. Supp. 2d 298, 310 (M.D.
Pa. 2006). Thus, in this Circuit, the law is well-settled that “a common or contract carrier
engaged in interstate commerce and regulated under the DOT (or former ICC) are
responsible for the negligence of its subcontractors.” Wilson, 444 F. Supp. 2d at 310 (citing
Venuto, 118 F. 2d at 679).
Defendants contend that, while § 428 mandates that a common carrier is
responsible for the negligence of its subcontractors, the rule does not apply to brokers,
who do not operate under the same franchise licenses as common carriers to transport
freight and who engage in decidedly different activities. (ECF No. 63 at 8). Plaintiffs, on
the other hand, argue that a broker is more comparable to a for-hire motor carrier than a
private carrier and that the same public policy arguments that raises the duty of care for a
for-hire motor carrier under § 428 applies with equal force to a broker. (ECF No. 71 at 9).
Indeed, Plaintiffs contend, “[t]he distinction between a broker and motor carrier is
insignificant when the public’s safety is of concern.” (Id.). Plaintiffs also argue that
whether Prompt Logistics was acting as a broker or as a motor carrier is a question of fact
that should not be resolved on a motion to dismiss. (Id. at 10).
The Court finds that a broker is not the type of individual or corporation
envisioned by § 428. The Federal Motor Carrier Safety Regulations (“FMCSR”) define a
“broker” as “a person who, for compensation, arranges, or offers to arrange, the
transportation of property by an authorized motor carrier.” 49 C.F.R. § 371.2(a); see also
Transplace Stuttgart, Inc. v. Carter, 255 S.W. 3d 878, 879 (Ark. App. Ct. 2007) (“[A]
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transportation broker . . . locates carriers to transport loads for shippers. [I]t contacts a
carrier and arranges to have the load transported. It informs the carrier where the load is
located, when the load needs to be picked up, and when the load needs to be delivered.”).
The FMCSR differentiates “motor carriers” as persons who are “not brokers within the
meaning of this section when they arrange or offer to arrange the transportation of
shipments which they are authorized to transport and which they have accepted and
legally bound themselves to transport.” 49 C.F.R. § 371.2(a). Instead, a “for-hire motor
carrier” is defined as “a person engaged in the transportation of goods or passengers for
compensation.” 49 C.F.R. § 390.5.2 Thus, the FMCSR clearly distinguishes brokers and
motor carriers and identifies very different roles between the two—brokers arrange
transportation while motor carriers engage in the actual transportation. See, e.g., Mach
Mold Inc. v. Clover Associates, Inc., 383 F. Supp. 2d 1015, 1030 (N.D. Ill. 2005); see also Wilson
v. IESI N.Y. Corp., 444 F. Supp. 2d 298, 313 (M.D. Pa. 2006) (discussing difference between
private motor carrier and for profit motor carrier). The public policy rationale underlying
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Similarly, one District Court has noted,
The Interstate Commerce Act defines a “motor carrier” as “a person providing
motor vehicle transportation for compensation,” 49 U.S.C. § 13102(12) (1997), and
a “freight forwarder” as “a person holding itself out to the general public (other
than as a pipeline, rail, motor, or water carrier) to provide transportation of
property for compensation and in the ordinary course of its business . . . assumes
responsibility for the transportation from the place of receipt to the place of
destination; and uses for any part of the transportation a carrier subject to
jurisdiction under this subtitle.” 49 U.S.C. § 13102(8) (1997). By contrast, the ICA
defines a “broker” as “a person, other than a motor carrier or an employee or
agent of a motor carrier, that as a principal or agent sells, offers for sale,
negotiates for, or holds itself out by solicitation, advertisement, or otherwise as
selling, providing, or arranging for, transportation by motor carrier for
compensation.” 49 U.S.C. § 13102(2) (1997).
Mach Mold Inc. v. Clover Associates, Inc., 383 F. Supp. 2d 1015, 1029 (N.D. Ill. 2005).
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§ 428 is concerned with the dangers inherent in the transportation of freight in
commercial motor vehicles on public highways. Indeed, “Comment a” to § 428 explains:
The rule . . . is principally applicable to public service corporations which,
as such, are permitted by their franchise to use instrumentalities which
are peculiarly dangerous unless carefully operated.
The rule . . . does not apply to . . . the carrying on of activities which
involve no special danger, and which could be lawfully carried on . . . by
private persons without liability for the misconduct of the contractors to
whom they are entrusted.
Restatement (Second) of Torts § 428, Comment a. Brokers operate under franchises to
arrange shipment and transportation and are subject to different regulations under the
FMCSR than motor carriers. See 49 C.F.R. § 371, et seq. The duties and responsibilities of a
broker do not involve the same “peculiarly dangerous” instrumentalities inherent with
the activities of motor carriers. Accordingly, the Court finds that a broker operating
solely under a broker franchise, and not a common or for-hire motor carrier franchise, is
not subject to § 428 of the Restatement (Second) of Torts.
Nevertheless, it is not clear at this stage of the litigation whether Prompt Logistics
was acting simply as a broker, or whether it was also engaged in activity as a motor
carrier as contemplated by the relevant statutes and regulations. While Prompt Logistics
labels itself as a broker, and Plaintiffs allege that Prompt Logistics was engaged as a
broker, Prompt Logistics’ status should be determined by the nature of the relationship
between the parties. See, e.g., Phoenix Assur. Co. v. K-Mart Corp., 977 F. Supp. 319, 326
(D.N.J. 1997); see also Christenberry Trucking & Farm, Inc. v. F & M Mktg. Servs., Inc., 329
S.W. 3d 452, 456 (Tenn. Ct. App. 2010).
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In the amended complaint, Plaintiffs repeatedly allege that Prompt Logistics was
engaged as a broker, while alleging that Defendant Freightlion was engaged as a motor
carrier. In paragraphs 87 and 103 of the amended complaint, Plaintiffs allege that Prompt
Logistics was “acting as a licensed broker for its own financial gain” and “entrusted the
transportation of goods to Defendant(s), Freightlion, as a common carrier of property.”
(ECF No. 58 ¶ 87, 103). In paragraph 92 of the amended complaint, Plaintiffs allege that
Prompt Logistics is “a knowledgeable and sophisticated motor carrier broker and/or
freight forwarding company.” (Id. ¶ 92). In paragraph 88, Plaintiffs allege that Prompt
Logistics “was negligent, careless, and reckless in exercising its discretion as a licensed
property broker in arranging for transportation by an unfit and unsafe motor carrier.” (Id.
¶ 88). Thus, the allegations clearly identify Prompt Logistics as a broker.
However, the amended complaint also refers to Prompt Logistics as a motor
carrier. For example, paragraph 100 unequivocally alleges that Prompt Logistics “acted as
a motor carrier with respect to the August 2, 2012, shipment of goods through interstate
commerce, and, therefore, assumed the legal duty to transport the load in a safe and
responsible manner.” (Id. ¶ 100). Whether or not Prompt Logistics engaged in activities
as a motor carrier, as defined by the FMCSR, and is therefore subject to § 428 of the
Second Restatement of Torts is an issue of fact that should be tested and developed
during the course of discovery. At this time, Plaintiffs have alleged sufficient facts in the
amended complaint to plausibly establish a claim for relief to survive the instant motion
to dismiss. Accordingly, the Court will deny Prompt Logistics’ motion to dismiss Count
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VII of the amended complaint at this time, without prejudice to Prompt Logistics’
reasserting such an argument at a later stage in this litigation.
VI.
Conclusion
For the reasons stated above, the Court will deny Prompt Logistics’ motion to
dismiss paragraphs 89-94 and 98 of Count VI and will deny Prompt Logistics’ motion to
dismiss Count VII of Plaintiffs’ amended complaint at this time.
An appropriate order follows.
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IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
EDDIE L. COURTNEY, JR. and
KREILKAMP TRUCKING, INC.,
CIVIL ACTION NO. 3:13-227
JUDGE KIM R. GIBSON
Plaintiffs,
v.
YURIY IVANOV; et al.,
Defendants.
AND NOW, this
~y
ORDER
of june 2015, upon consideration of the motion for
partial dismissal (ECF No. 61) filed by Defendants Prompt Logistics (USA) and Prompt
Logistics (Canada), and for the reasons set forth in the accompanying memorandum,
IT IS HEREBY ORDERED that Prompt Logistics' motion is DENIED as follows:
(1) Prompt Logistics' motion to dismiss paragraphs 89-94 and 98 of Count VI is
DENIED. However, upon agreement of the parties, paragraph 89 is stricken
from the amended complaint.
(2) Prompt Logistics' motion to dismiss Count VII is DENIED at this time.
BY THE COURT:
KIM R. GIBSON
UNITED STATES DISTRICT JUDGE
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