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Underwriters At Lloyds Subscribing to Cover Note MC-1151 v. Fedex Truckload Brokerage, Inc.

United States District Court,

S.D. Florida.

UNDERWRITERS AT LLOYDS SUBSCRIBING TO COVER NOTE MC-1151, Plaintiff,

v.

FEDEX TRUCKLOAD BROKERAGE, INC., et al., Defendants.

No. 09-21892-CIV.

 

July 7, 2010.

 

OMNIBUS ORDER ON VARIOUS MOTIONS FOR SUMMARY JUDGMENT

 

ALAN S. GOLD, District Judge.

 

I. Introduction

 

THIS CAUSE is before the Court upon various motions for summary judgment. See [DE 48]; [DE 50]; [DE 63]; [DE 64]; [DE 65]; [DE 69]; [DE 77]; [DE 78]. Responses and replies were timely filed, and oral argument was held on June 14, 2010. I have jurisdiction pursuant to 28 U.S.C. § 1331 and 28 U.S.C. § 1367(a). Having considered the relevant submissions, the arguments of the parties, the applicable law, and being otherwise duly advised, I grant the motions in part and deny the motions in part for the reasons that follow.

 

II. Undisputed Material Facts

 

In the Southern District of Florida a party moving for summary judgment must submit a statement of undisputed facts. See S.D. Fla. L.R. 7.5. If necessary, the non-moving party may respond with a concise statement of material facts as to which it is contended that there exists a genuine issue to be tried. Id. Each disputed and undisputed fact must be supported by specific evidence in the record, such as depositions, answers to interrogatories, admissions, and affidavits on file with the Court. Id. All facts set forth in the movant’s statement which are supported by evidence in the record are deemed admitted unless controverted by the non-moving party. Id.

 

Plaintiff Lloyd’s initiated this action on behalf a syndicate of underwriters that paid First International Computer of America (“FICA”) $168,592 for cargo shipped by FICA that was stolen while en route to Miami. [DE 1]; see also [DE 8]. Defendants FedEx Truckload Brokerage (“FedEx”), B2B Transportation Services, Inc. (“B2B”), Central Oregon Truck Company (“COTC”), F*M Auto Transport, Inc. (“FM”), and Juan Gaban are alleged to be brokers or carriers that played a role in arranging and carrying the shipment that was ultimately stolen. [DE 1]. On July 7, 2009, Plaintiff filed the operative complaint, asserting claims against all Defendants for violations of the Carmack Amendment, breach of bailment obligations, “tort claims,” and breach of contract. [DE 1]. All Defendants answered with the exception of Juan Gaban and FM, and a clerk’s default was entered as to the non-answering Defendants on September 14, 2009. See [DE 31]. In addition to filing its answer, FedEx asserted cross-claims against B2B and COTC for breach of contract and contractual indemnity on July 28, 2009. [DE 12]. A cross-claim was also filed by B2B against Defendant FM [DE 38], however, FM did not respond and a default was subsequently entered as to B2B’s cross-claim. [DE 45].

 

49 U.S.C. § 14706.

 

Plaintiff has since withdrawn its Carmack Amendment and bailment claims against FedEx. See [DE 105, p. 2 n. 2].

 

Currently before the Court are the following motions: Plaintiff’s Motion for Partial Summary Judgment [DE 69], FedEx’s Cross-Motion for Summary Judgment as to Plaintiff’s Claims [DE 78], B2B’s Cross-Motion for Summary Judgment as to Plaintiff’s Claims [DE 48], COTC’s Cross-Motion for Summary Judgment as to Plaintiff’s Claims [DE 64], B2B’s Motion for Summary Judgment as to FedEx’s Cross-Claims Against B2B [DE 50], FedEx’s Cross-Motion for Summary Judgment as to its Cross-Claims Against B2B [DE 65] COTC’s Motion for Summary Judgment as to FedEx’s Cross-Claims Against COTC [DE 63], and FedEx’s Cross-Motion for Summary Judgment as to its Cross-Claims Against COTC [DE 77].

 

The undisputed facts giving rise to the claims at issue are as follows: On July 15, 2008, a cargo of 840 desktop computers were provided by FICA to driver Juan Gaban at FICA’s Fremont, California Facility to be shipped to Miami, Florida. [DE 68, ¶ 1]. The bill of lading provided to FICA in connection with this shipment listed COTC as the “carrier” and was signed by Juan Gaban in his capacity as “carrier/driver” [DE 67-7]. In the bill of lading, Gaban “acknowledge[d] receipt of [840 units of computer equipment]” in “good order.” Id. While en route to Miami, the cargo was stolen. [DE 68, ¶ 2]. As a result of the theft, Plaintiff paid FICA $168,592.00 as compensation for its loss. [DE 68, ¶ 4].

 

The only Defendant to contest this fact is COTC. However, COTC failed to cite any record evidence in support of its conclusory statement that this fact is contested. See [DE 98]. Because COTC “has offered no evidence, other than [its] own conclusory allegations, to rebut this evidence … these statements are insufficient to create a genuine issue of material fact …” McCarley v. KPMG Int’l, 293 Fed. App’x. 719, 722 (11th Cir.2003) (citation omitted); see also [DE 67-7]; Banana Servs., Inc. v. M/V Tasman Star, 68 F.3d 418, 420 (11th Cir.1995) (noting that a “clean bill of lading creates a rebuttable presumption the goods were delivered to the carrier in good condition”).

 

Although the specific role played by each Defendant with respect to the cargo at issue is far from settled, there are a number of signed agreements purporting to govern each parties’ rights and liabilities. The first is a “Freight Brokerage Contract and Authorization” entered into by FICA and FedEx on July 15, 2008. [DE 78]; [DE 67-7] (“the FICA Brokerage Contract”). The FICA Brokerage Contract, which states that it “is the sole governing document with respect to the brokerage of the [cargo at issue],” provides, inter alia, that “FedEx … is not liable for any loss or damage to cargo” and that “all claims for non-delivery, late delivery, loss and/or damage must be made directly with the actual transporting carrier.” [DE 67-7].

 

The second pertinent agreement for purposes of this Order is a Transportation Brokerage Broker-Carrier Agreement (“Broker-Carrier Agreement”) purportedly entered into by FedEx, as broker, and “B2B/COTC,” as carrier, on January 16, 2007. [DE 67-1]. This agreement-which was purportedly executed by an employee of B2B without authority to do so, [DE 48-5]; note 7, infra-provides that the “carrier shall assume all risk of loss and liability in the transportation of any goods for Broker from the time of Carrier’s receipt of such goods from Broker or Broker’s customer until proper delivery of the same has been made.” [DE 67-1]. The Broker-Carrier Agreement also provides that “all liability standards and burdens of proof will be governed by the common law applicable to common carriers and … the provisions of 49 U.S.C. § 14706 (the Carmack Amendment).” Id.

 

The contract provides that it shall remain in effect until terminated by either party. Neither party contends that it was terminated.

 

The third pertinent agreement is a Freight Brokerage Contract and Authorization (“the B2B Brokerage Contract”) allegedly entered into by B2B  and FedEx on July 15, 2008, that lists both COTC and B2B as a carrier, and identifies Earl Homes as COTC’s contact. [DE 67-5]. The B2B Brokerage Contract provides, in pertinent part, that it is “subject to the terms of the [Broker-Carrier Agreement] previously executed between us and this constitutes an addendum to the [Broker-Carrier] Agreement.” Id. Keeping these facts in mind, I now turn to the legal arguments raised in the motions at issue.

 

COTC’s name is printed on the first page of the contract under “Carrier,” but B2B’s name appears in the signature block on the “Carrier Name” line.

 

Mr. Holmes is a former employee of B2B whose signature appears on the face of the Broker-Carrier Agreement and the B2B Brokerage Contract. [DE 119-1, pp. 8, 13]. While he worked at B2B, he had a working relationship with COTC and was the only person loading their vans at one point during his tenure with B2B. [DE 119-1, pp. 4, 6-7]. B2B’s President has submitted an affidavit declaring that Mr. Holmes had no authority to bind B2B or COTC to the January 2007 Transportation Brokerage Broker-Carrier Brokerage agreement or the July 15, 2008 Freight Brokerage Contract and Authorization. [DE 48-5].

 

III. Standard of Review

 

Rule 56(c) of the Federal Rules of Civil Procedure authorizes summary judgment when the pleadings and supporting materials  show that, drawing all inferences in favor of the nonmovant, there is no genuine issue as to any material fact and summary judgment is proper as a matter of law. Fed.R.Civ.P. 56(c). The court must determine the relevant set of facts and draw all inferences in favor of the opposing party “to the extent supportable by the record.” Scott v. Harris, 550 U.S. 372, 381 n. 8, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007). The requirement to view the facts in the nonmoving party’s favor extends only to “genuine” disputes over material facts. Id. at 380 (quoting Fed.R.Civ.P. 56(c)). A genuine dispute requires more than “some metaphysical doubt as to the material facts.” Id. at 380 (citation and internal quotation marks omitted). In other words, a “mere scintilla” of evidence is insufficient; the non-moving party must produce “substantial evidence” in order to defeat a motion for summary judgment. Kesinger v. Herrington, 381 F.3d 1243, 1249-50 (11th Cir.2004). Furthermore, summary judgment is appropriate even if “some alleged factual dispute” between the parties remains, so long as there is “no genuine issue of material fact.”   Scott, 550 U.S. at 380 (internal quotes and citation omitted).

 

The supporting materials must be properly authenticated, and “[u]nsworn documents generally cannot support a summary judgment motion.”   Withrow v. Miller, 348 Fed. App’x. 946, 947 (5th Cir.2009) (citing Eguia v. Tompkins, 756 F.2d 1130, 1136 (5th Cir.1985)); Burnett v. Stagner Hotel Courts, Inc., 821 F.Supp. 678, 683 (N.D.Ga.1993) (“In order for a document to be considered in support of, or in opposition to, a motion for summary judgment, it must be authenticated by and attached to an affidavit that meets the requirements of Rule 56(e) and the affiant must be a person through whom the exhibits could be admitted into evidence.”).

 

The party that is “seeking summary judgment must demonstrate that ‘there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.’ The moving party bears the initial burden of informing the court of the basis for its motion and of identifying those materials that demonstrate the absence of a genuine issue of material fact.” Rice-Lamar v. City of Ft. Lauderdale, 232 F.3d 836, 840 (11th Cir.2000) (citations omitted). Once the moving party satisfies this burden, the burden shifts to the party opposing the motion to go beyond the pleadings and designate “specific facts showing that there is a genuine issue for trial.”   Celotex v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

 

The court’s focus in reviewing a motion for summary judgment is “whether the evidence presents a sufficient disagreement to require submission to a [fact-finder] or whether it is so one-sided that one party must prevail as a matter of law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Bishop v. Birmingham Police Dep’t, 361 F.3d 607, 609 (11th Cir.2004). In determining whether to grant summary judgment, the court must remember that “[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are [fact-finding] functions, not those of a judge.” Anderson, 477 U.S. at 255. However, where no reasonable [fact-finder] could find in the non-moving party’s favor, summary judgment is appropriate. Stewart v. Happy Herman’s Cheshire Bridge, Inc., 117 F.3d 1278, 1287 (11th Cir.1997).

 

IV. Analysis

 

A. Plaintiff’s Motion for Partial Summary Judgment

 

The first motion I consider is Plaintiff’s Motion for Partial Summary Judgment “against Defendants,” which “submits that one issue-prima facie case-is ripe for summary adjudication.” [DE 69, pp. 1-2]. Curiously, Plaintiff does not contend that it is entitled to partial summary judgment regarding liability. Instead, it requests a declaration stating “that it has proven its prima facie case, leaving for trial the respective liability of the defendants and awarding of prejudgment interest.” Id. at 4.

 

Federal Rule of Civil Procedure 56(a) provides that a party claiming relief, or a party against whom relief is sought, “may move … for summary judgment on all or part of the claim.” Thus, pursuant to Rule 56, a party may move for final summary judgment as to a claim, or partial summary judgment as to a “part of a claim,” such as liability. See Fed.R.Civ.P. 56(d)(2) ( “noting that summary judgment may be rendered on liability alone, even if there is a genuine issue on the amount of damages”). However, Plaintiff has not cited any authority-and this Court is unaware of any-stating that a Court may provide a declaration as to the establishment of a Plaintiff’s prima facie case. Accordingly, to the extent Plaintiff’s Motion for Partial Summary Judgment requests such a declaration, the motion is denied. To the extent that Plaintiff simply seeks to establish certain undisputed material facts, see Fed.R.Civ.P. 56(d)(1), I conclude that the following material facts have been established by competent evidence and are not currently at issue: (1) that the computers at issue were shipped by FICA and were delivered to Juan Gaban in Fremont, CA in good order, see [DE 67-7]; Banana Servs., 68 F.3d at 420 (noting that a “clean bill of lading creates a rebuttable presumption the goods were delivered to the carrier in good condition”); 0 (2) that the computers were stolen en route to Miami, [DE 68 at ¶ 2]; (3) that the computers had a value of $153,720.00, id. at ¶ 3; and (4) that Plaintiff paid FICA $168,592 for its loss. Id. at ¶ 4.

 

Plaintiff’s counsel conceded at oral argument that it could not find a single case where a district court provided a declaration via summary judgment order that a plaintiff had proven a prima facie case. [MSJ Hr’g Tr., 5:13 p.m.-5:15 p.m., June 14, 2010].

 

0. See note 4, supra.

 

B. FedEx’s Cross-Motion for Summary Judgment as to Plaintiff’s Claims

 

Next, I address FedEx’s Cross-Motion for Summary Judgment as to Plaintiff’s Claims [DE 78], which asserts that FedEx is entitled to judgment as a matter of law with respect to all counts of Plaintiff’s complaint. Because Plaintiff has withdrawn its Carmack Amendment and bailment claims as to Defendant FedEx, see [DE 105, p. 2 n. 2], I need only address Plaintiff’s third and fourth causes of action for negligence and breach of contract.

 

1. Negligence Claim

 

FedEx argues that Plaintiff’s negligence claim is barred by Florida’s economic loss rule.1 Under Florida law, the contractual economic loss rule 2 bars parties in contractual privity from asserting tort claims to recover solely economic damages where the tortfeasor has not committed a breach of duty separate from what is covered by a valid contract. See Indemnity Ins. Co., 891 So.2d at 536. This “prohibition against tort actions to recover solely economic damages for those in contractual privity is designed to prevent parties to a contract from circumventing the allocation of losses set forth in the contract by bringing an action for economic loss in tort.” Indem. Ins. Co., 891 So.2d at 536.

 

1. Both Plaintiff and FedEx agree that Florida law applies to Plaintiff’s claims against FedEx. [DE 105, p. 14]; [DE 78, p. 16]; see also [MSJ Hr’g Tr., 5:29 p.m.-5:31 p.m.].

 

2. There is also a products liability economic loss rule that is inapplicable here. See Indemnity Ins. Co. of North America v. American Aviation, Inc., 891 So.2d 532, 537-38 (Fla.2004).

 

Here, it is undisputed that FICA and FedEx were parties to the FICA Brokerage Contract, which provides that it “is the sole governing document with respect to the brokerage of the [cargo at issue].” [DE 67-7]. Thus, FedEx and FICA’s rights and obligations are limited to those contemplated by their agreement, and cannot be “circumvent[ed]” by bringing a claim sounding in tort. Indem. Ins. Co., 891 So.2d at 536; Detwiler v. Bank of Cent. Fla., 736 So.2d 757, 759 (5th DCA 1999) (“[T]he economic loss rule limits the plaintiff to pursuing her rights in contract”).

 

In opposition to FedEx’s economic loss argument, Plaintiff asserts that “it is not appropriate at this stage to determine that plaintiff’s claims lie solely in tort or contract.” [DE 105, p. 14]. This argument is without merit, as Florida courts have uniformly held that whether a particular claim is barred by the economic loss rule is a question of law that may be appropriately determined at the dismissal or summary judgment stage. See, e.g., Taylor v. Maness, 941 So.2d 559 (3d DCA 2006); Detwiler, 736 So.2d at 759 (affirming dismissal of fiduciary duty claim based on economic loss rule).

 

In sum, the rights and obligations of Plaintiff and FedEx with respect to the cargo at issue are set forth in the FICA Brokerage Contract. The economic loss rule does not permit parties to circumvent a binding and valid contract, and Plaintiff’s tort claims against FedEx therefore fail as a matter of law. 3

 

3. Plaintiff’s counsel conceded at oral argument that its negligence claim against FedEx is barred by the economic loss rule. [MSJ Hr’g Tr., 5:16 p.m.-5:17 p.m.].

 

2. Breach of Contract Claim

 

FedEx also argues that it is entitled to judgment as a matter of law on Plaintiff’s breach of contract claim because Plaintiff has failed to allege a breach of any contractual term. [DE 78, p. 17] . At oral argument, counsel for Plaintiff and FedEx agreed that the FICA Brokerage Contract constitutes a valid contract between FedEx and FICA “for the provision of brokerage services by FedEx.” [MSJ Hr’g Tr., 5:21 p.m.-5:22 p.m.]. However, neither party was able to clarify exactly what the contract requires of FedEx, and on its face, the contract does not appear to impose any obligations upon FedEx. Instead, the contract simply states that it is a “Freight Brokerage Contract & Authorization.” 4 FedEx argues that by virtue of its title, the FICA Brokerage Contract “required [it] to … see that the shipment was transferred from the shipper to the destination” and nothing more. [MSJ Hr’g Tr., 5:21 p.m.-5:22 p.m.]. Plaintiff, on the other hand, argues that because the contract fails to specify the FedEx’s duties with respect to the brokered shipment, it is latently ambiguous, and the Court must consider extrinsic evidence in order to “ascertain, insofar as possible, the intent of the parties” and then determine whether FedEx breached the agreement.5 Centennial Mortg., Inc. v. SG/SC, Ltd., 772 So.2d 564, 565 (concluding that, where an “option contract did not address topic of renovation-cost overruns … parol evidence was admissible to assist trial court in determining what the parties would have included in the contract had they anticipated the possibility of cost overruns”). Having reviewed the FICA Brokerage Contract, I agree with Plaintiff that it is latently ambiguous, as it is completely silent regarding FedEx’s brokerage obligations-obligations that FedEx concedes exist. Because the existence of a latent ambiguity prevents me from interpreting the FICA Brokerage Contract as a matter of law, FedEx’s motion for summary judgment on Plaintiff’s breach of contract claim must be denied. Barrington v. Gryphon Inv., Inc., 32 So.3d 668, 671 (Fla. 2d. DCA 2010) (“When an agreement contains a latent ambiguity, … the issue of the correct interpretation of the agreement is an issue of fact which precludes summary judgment.”) (cites and quotes omitted).6

 

4. It also contains a number of other provisions, none of which appear to impose any obligations on FedEx.

 

5. Plaintiff claims that FedEx breached its implied contractual obligation to “get[ ] a carrier that has insurance.” [MSJ Hr’g Tr., 5:20 p.m.].

 

6. Because FedEx’s obligations under the FICA Brokerage Contract are ambiguous, so are the exculpatory clauses contained therein, for when faced with such a contract, an “ordinary and knowledgeable party will [not] know what he is contracting away”; as such, these clauses are unenforceable. Southworth & McGill, P.A. v. Southern Bell Tel. and Tel. Co., 580 So.2d 628, 634 (Fla. 1st DCA 1991) (noting that under Florida law, exculpatory clauses “are not favored … [and] are enforceable only where … an ordinary and knowledgeable party will know what he is contracting away.”)

 

C. B2B’s Motion for Summary Judgment on Plaintiff’s Claims

 

1. Carmack Amendment Claim

 

B2B contends that it is entitled to summary judgment on Plaintiff’s Carmack Amendment claim because the Carmack Amendment applies only to “carriers” and not to “brokers.” B2B asserts that because it acted as a “co-broker” and was not authorized to act as a “carrier,” it cannot be held liable pursuant to the Carmack Amendment. [DE 48, p. 5]. Plaintiff does not dispute that B2B lacked authorization to act as a carrier, but claims that it agreed to-and did-act as a carrier with respect to shipments brokered by FedEx, including the shipment at issue. [DE 70, pp. 1-4 at ¶ ¶ 2, 7, 11].

 

Pursuant to 49 U.S.C. § 13102(3), “[t]he term ‘carrier’ means a motor carrier, a water carrier, and a freight forwarder.” The term “motor carrier,” in turn, is defined as “a person providing motorvehicle transportation 7 for compensation.” 49 U.S.C. § 13102(14). While it is undisputed that B2B was not authorized to act as a motor carrier, there is clearly a genuine issue of material fact as to whether B2B actually acted as a carrier. 8 See, e.g., [DE 49-1, p. 13] (“Q: And despite the fact that another trucker was [to] be used as far as FedEx was concerned, [COTC] and B2B were the carriers for this load? A: Yes.”). Accordingly, B2B’s motion for summary judgment on Plaintiff’s Carmack Amendment claim must be denied. Phoenix Assur. Co. v. K-Mart Corp., 977 F.Supp. 319, 325 (D.N.J.1997) (concluding that whether truck service company was carrier or broker involved questions of fact precluding summary judgment in subrogation action by shipper’s insurer, even though truck service company was registered as a broker and was not authorized to act as a carrier); see also Neb. Turkey Growers Co-Op Ass’n v. ATS Logistics Servs., Inc., 2005 WL 3118008, *1,(D.Neb.2005) (noting that “[t]he difference between a carrier and a broker is often blurry [and][t]he crucial distinction is whether the party legally binds itself to transport, in which case it is considered a carrier”) (citation omitted).

 

7. See 49 U.S.C. § § 13102(16), 13102(23) (defining “motor vehicle” and “transportation”).

 

8. I reject B2B’s suggestion that the Carmack Amendment ceases to apply when a party acts as a “carrier” as defined in 49 U.S.C. § 13102 without appropriate authorization to do so. See Delta Research Corp. v. EMS, Inc., 2005 WL 2090890, *1,(E.D.Mich. Aug.29, 2005) (“[t]he fact that [defendant] is not a regulated interstate motor carrier is not dispositive of the issue of liability under the Carmack Amendment”); Ensco, Inc. v. Weicker Transfer and Storage Co., 689 F.2d 921, 925 (10th Cir.1982) (“A carrier’s status as a common carrier is determined not by reference to its authority ….”).

 

2. Bailment Claim

 

B2B also claims that it is entitled to summary judgment on Plaintiff’s bailment claim because the undisputed evidence establishes that B2B never took possession of the cargo. Under Florida law,9 a bailment is “a contractual relationship among parties in which the subject matter of the relationship is delivered temporarily to and accepted by one other than the owner.” S & W Air Vac Sys., Inc., v. Fla. Dep’t of Revenue, 697 So.2d 1313, 1315 (5th DCA 1997) (citation omitted). “Among the chief features of bailments is the degree to which possession, custody and control of the subject matter is surrendered by the bailor to the bailee.” Id. Thus, it has been stated that:

 

9. B2B and Plaintiff agree that Florida law governs Plaintiff’s bailment claim against B2B. [MSJ Hr’g Tr., 5:40 p.m.].

 

[A] full delivery of the subject matter must be made to the bailee as will entitle him to exclude for the time of the bailment the possession of the owner and all other persons, give the bailee an independent and temporarily exclusive possession of the property, or sole custody and control, result in an actual change of legal as well as physical possession of the property from the bailor to the bailee, make him liable to the owner as the sole custodian of the property in the event of his neglect or fault in discharging his trust with respect to the subject matter, and require a redelivery of it by him to the owner or other person entitled to receive it after the trusts of the bailment have been discharged.

 

Id. (quoting 8 C.J.S. Bailments § 23(b) (1988)).

 

In the instant case, Plaintiff has not presented any evidence to rebut the affidavit submitted by B2B’s President stating that “[a]t no time did B2B … have possession of the cargo in question.” [DE 48-5]. Instead, Plaintiff simply refers to a provision of the January 2007 Broker-Carrier Agreement-an agreement executed more than a year before the shipment at issue was loaded-in which “B2B/COTC” agreed to “have exclusive control and direction of the equipment and vehicles in the performance of Services pursuant to [the Broker-Carrier] Agreement.” [DE 71, p. 14]; [DE 67-1, § 1(b) ]. Because this contractual provision, without more, is insufficient to create a triable issue regarding actual or constructive delivery of the cargo at issue to B2B, B2B’s motion for summary judgment will be granted as to Plaintiff’s bailment claim. 0 See Meeks ex rel. Estate of Meeks v. Fla. Power & Light Co., 816 So.2d 1125, 1129 (noting that “bailment generally requires delivery by the bailor and acceptance by the bailee”) (citations omitted); see also Ice Fern Shipping Co., Ltd. v. Golten Service Co., Inc., 2005 WL 3692840, *1,(S.D.Fla.2005) (concluding that bailment claim failed as a matter of law where plaintiff failed to demonstrate that cargo was placed in defendant’s exclusive possession).

 

0. Curiously, B2B did not seek summary judgment on Plaintiff’s Carmack Amendment claim based on lack of delivery. See [DE 48, p. 5].

 

3. Negligence Claim

 

B2B also contends that it is entitled to summary judgment on Count III of Plaintiff’s Complaint because “Plaintiff has not alleged any duty owed by B2B” and B2B did not agree to carry the shipment. [DE 48]. Plaintiff responds that summary judgment is not appropriate on the negligence claim, because even if B2B is ultimately found not to be a carrier for purposes of the Carmack Amendment-which would pre-empt any state law tort claims, see Hewlett-Packard Co. v. Bros. Trucking Enter., Inc., 373 F.Supp.2d 1349, 1351-52 (S.D.Fla.2005)-B2B could still be liable for wrongful conduct under state law as a broker. I agree. As the Hewlett Packard Court correctly noted, a freight broker defendant can be held liable for its negligent conduct in the event that the Carmack Amendment is found not to apply. Id. (“In the event the fact-finder finds that the Carmack Amendment does not apply to Defendant, Defendant may be held liable for the alleged negligent conduct”). As such, it remains for the fact-finder to determine whether B2B violated its common law duties as a freight broker, assuming it is ultimately absolved of carrier liability under the Carmack Amendment.

 

4. Breach of Contract Claim

 

As for Count IV, I agree with B2B that Plaintiff’s claim fails for want of a contract. To prevail on a breach of contract claim, a plaintiff must establish the existence of the following elements: “(1) a valid contract; (2) a material breach; and (3) damages.” Friedman v. N.Y. Life Ins. Co., 985 So.2d 56, 58 (Fla. 4th DCA 2008) (citations omitted). Here, Plaintiff has failed to identify the existence of a contract between FICA and B2B, while B2B has submitted a sworn affidavit stating that no such contract existed. [DE 48-5 at ¶ 8] (“At no time did B2B Transportation Services, Inc. have any oral or written contracts with [FICA]”). Because Plaintiff has failed to create a genuine issue of material fact regarding the existence of a contract between FICA and B2B, summary judgment will be granted on this claim.

 

D. COTC’s Motion for Summary Judgment on Plaintiff’s Claims

 

Defendant COTC moves for summary judgment on Plaintiff’s first two claims-i.e., Carmack Amendment and bailment-on the grounds that Plaintiff “cannot establish the … delivery of the shipment to COTC in good condition.” [DE 64, p. 4]. While it is true that Plaintiff has not conclusively established delivery to COTC, it is not Plaintiff’s burden to do so at this stage. Instead, it is COTC’s burden to demonstrate that Plaintiff has failed to create a genuine issue of material fact as to delivery. It has not, nor can it, for Plaintiff has submitted ample evidence to create a triable issue regarding delivery, including, but not limited to, a clean bill of leading listing COTC as “carrier.” [DE 67-7]; Banana Servs., 68 F.3d at 420 (noting that a “clean bill of lading creates a rebuttable presumption the goods were delivered to the carrier in good condition”).

 

As for Plaintiff’s third claim (i.e., negligence), COTC’s duty argument fails for the same reasons as B2B’s; that is, COTC could still be found liable for wrongful conduct under state tort law-e.g ., negligently hiring FM to carry the load, see [DE 48, p. 3 at ¶ 3]; [DE 70, p. 6 at ¶ ¶ 31-32, 37]-even if it is absolved of carrier liability under the Carmack Amendment. See Suarez v. Gonzalez, 820 So.2d 342, 347 (Fla. 4th DCA 2002) (holding that a defendant can be held liable for negligently hiring an independent contractor if it “is negligent in selecting, instructing, or supervising the contractor”) (citation and internal quotation marks omitted). Accordingly, COTC’s motion must be denied in its entirety.1

 

1. COTC’s attempt to invoke the “carrier claim” clause contained in the FICA Brokerage Contract entered into between FedEx and FICA is unavailing, as COTC is not a party to that contract and may not enforce its provisions.

 

E. B2B’s Motion for Summary Judgment on FedEx’s Cross-Claims and FedEx’s Cross-Motion for Summary Judgment

 

In addition to moving for summary judgment on Plaintiff’s claims, B2B has also submitted a statement of facts and two-page memorandum of law requesting summary judgment on FedEx’s breach of contract cross-claims. [DE 50]. As noted, FedEx’s first cross-claim alleges a breach of the January 2007 Broker-Carrier Agreement signed by B2B employee Earl Holmes, while its second cross-claim alleges a breach of the July 2008 B2B Brokerage Contract, which was also executed by Mr. Holmes. B2B argues that it is entitled to summary judgment on FedEx’s contract claims because: (1) “there is no entity known as B2B/Central Oregon Truck”; 2 and (2) Mr. Holmes was without the actual authority to enter into the contracts on behalf of B2B. [DE 50, p. 6]. Even taking these facts as true, B2B is not entitled to judgment as a matter of law on FedEx’s cross-claims because triable issues remain regarding whether B2B’s employee, Mr. Holmes, signed the agreements as an apparent agent of B2B. See [DE 65, pp. 6-7 at ¶ ¶ 7, 9] (noting that Holmes was given a B2B email address and access to B2B forms and documents); Roessler v. Novak, 858 So.2d 1158, 1161 (Fla. 2d DCA 2003) 3 (expounding doctrine of apparent agency and noting that “a principal should be estopped to deny the authority of an agent when the principal permitted an appearance of authority in the agent and, in so doing, justified a third party’s reliance upon that appearance of authority as if it were actually conferred upon the agent”); Sears Roebuck & Co. v. Williams, 877 So.2d 5, 6 (Fla. 3d DCA 2004) (reversing grant of summary judgment where record supported “different inferences … as to an agency relationship” and noting that “question of agency and/or apparent agency is generally a question of fact which must be determined by a [fact-finder]”) (citing Robbins v. Hess, 659 So.2d 424, 427 (Fla. 1st DCA 1995)).4

 

2. See Section II, supra (noting that Broker-Carrier Agreement was signed by Mr. Holmes on behalf of “B2B/COTC” and “B2B/Central Oregon Truck”).

 

3. Both B2B and FedEx cited Florida law when briefing these issues. [DE 50, p. 6]; [DE 65, p. 9]. I therefore presume its applicability. Manhattan Bank v. Rood, 698 F.2d 435, 436 n. 1 (11th Cir.1983).

 

4. I summarily reject B2B’s impossibility-of-performance argument. The fact that B2B was licensed only as a broker at the time the agreements were executed does not render its performance impossible under Florida contract law. Am. Aviation, Inc. v. Aero-Flight Serv., Inc., 712 So.2d 809, 810 (Fla. 4th DCA 1998) (expounding impossibility of performance under Florida law).

 

For these same reasons, FedEx’s Cross-Motion for Summary Judgment on its Cross-Claims [DE 65] must also be denied. As FedEx correctly acknowledged in its memorandum of law, its Cross-Motion cannot be granted unless the Court “finds that Holmes had apparent authority to enter into the contract[s].” [DE 65, p. 18]. Because triable issues remain regarding Mr. Holmes’ apparent authority, FedEx’s Cross-Motion cannot be granted.

 

F. COTC’s Motion for Summary Judgment on FedEx’s Cross-Claims and FedEx’s Cross-Motion for Summary Judgment

 

The last motions I must address are the cross-motions filed by COTC and FedEx with respect to FedEx’s cross-claims against COTC. COTC claims it is entitled to summary judgment because B2B’s employee, Mr. Holmes, was not authorized to execute the January 2007 Broker-Carrier Agreement or the B2B Brokerage Contract that lists both COTC and B2B as a carrier. See [DE 63]. Like B2B, COTC’s motion fails to account for the doctrine of apparent authority. That is, even if Mr. Holmes did not have actual authority to execute documents on behalf of COTC, the record evidence demonstrates genuine issues of material fact as to whether Mr. Holmes acted as an apparent agent of COTC when he signed the two documents at issue. For example, around the time the Broker-Carrier Agreement was signed, Holmes presented FedEx with COTC’s Certificate of Liability insurance, after having received permission from COTC to do so. [DE 49-1, p. 38]; [DE 119-1, p. 8]; [DE 66-1]. Moreover, approximately a week before the Broker-Carrier Agreement was executed, COTC’s Interstate Commerce Commission Permit and “Carrier Profile”-which lists ehomes@b2btranserv.com as COTC’s e-mail address-were faxed to FedEx from the same B2B fax machine Mr. Thomas used to send FedEx a copy of the Broker-Carrier Agreement he executed on behalf of “B2B/COTC.” [DE 66-4]; [DE 66-5]; [DE 119-1, p. 8]. Finally, it cannot be overlooked that-in addition to signing the Broker-Carrier agreement on behalf of “B2B/COTC”-Mr. Holmes signed numerous load rate confirmations on behalf of COTC throughout 2008. [DE 66-6]; [DE 119-1, p. 18].5 Viewing this evidence in the light most favorable to Defendant FedEx, I conclude that there is a genuine issue of material fact regarding whether COTC “permitted an appearance of authority in [Mr. Holmes] and, in so doing, justified [FedEx’s] reliance upon that appearance of authority as if it were actually conferred.”   Roessler, 858 So.2d at 1161.6 Because this factual issue must be resolved by the trier of fact, both motions for summary judgment on FedEx’s cross-claims against COTC must be denied.7

 

5. I note that COTC has failed to present any evidence indicating that it took any action to prevent or correct Mr. Holmes’ allegedly unauthorized behavior.

 

6. FedEx treats the apparent agency issue as one of Florida law, while COTC argues for the application of Oregon agency law. Compare [DE 77, pp. 9-18] with [DE 100, p. 11]. Because the pertinent principles of apparent agency in the two states are “substantially similar,” I need not reach the conflicts question. Checkley v. Boyd, 198 Or.App. 110, 107 P.3d 651, 665-66 (Or.App.2005); Cooper v. Meridian Yachts, Ltd., 575 F.3d 1151, 1171 (11th Cir.2009) (noting that “when the laws of the competing states are substantially similar,” district courts should “avoid the conflicts question”).

 

7. I summarily reject COTC’s attempt to invoke the Broker-Carrier Agreement’s forum selection clause, see [DE 99, pp. 3], as this argument has been waived. Lipofsky v. N.Y. Workers Comp. Bd., 861 F.2d 1257, 1258 (11th Cir.1988) (“Lack of personal jurisdiction and improper venue, unlike lack of subject matter jurisdiction which requires dismissal on the court’s own motion if not raised by the parties, are waivable defects.”). I also reject COTC’s attempt to rely on the “carrier claim” clause contained in the FICA Brokerage Contract. See Note 15, supra.

 

V. Conclusion

 

Based on the foregoing, it is hereby

 

ORDERED AND ADJUDGED that:

 

1. Plaintiff’s Motion for Partial Summary Judgment [DE 69] is GRANTED IN PART AND DENIED AND PART.

 

2. FedEx’s Cross-Motion for Summary Judgment as to Plaintiff’s Claims [DE 78] is GRANTED IN PART AND DENIED IN PART.

 

a. Plaintiff’s negligence claim against FedEx is DISMISSED WITH PREJUDICE.

 

3. B2B’s Cross-Motion for Summary Judgment as to Plaintiff’s Claims [DE 48] is GRANTED IN PART AND DENIED IN PART.

 

a. Plaintiff’s bailment claim against B2B is DISMISSED WITH PREJUDICE.

 

b. Plaintiff’s breach of contract claim against B2B is DISMISSED WITH PREJUDICE.

 

4. COTC’s Cross-Motion for Summary Judgment as to Plaintiff’s Claims [DE 64] is DENIED.

 

5. B2B’s Motion for Summary Judgment as to FedEx’s Cross-Claims Against B2B [DE 50] is DENIED.

 

6. FedEx’s Cross-Motion for Summary Judgment as to its Cross-Claims Against B2B [DE 65] is DENIED.

 

7. COTC’s Motion for Summary Judgment as to FedEx’s Cross-Claims Against COTC [DE 63] is DENIED.

 

8. FedEx’s Cross-Motion for Summary Judgment as to its Cross-Claims Against COTC [DE 77] is DENIED.

 

9. An Amended Scheduling Order will issue shortly.

 

DONE and ORDERED.

Selective Way Ins. v. Travelers Property Cas. Co. of America

United States District Court,

E.D. Pennsylvania.

SELECTIVE WAY INSURANCE COMPANY

v.

TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA.

Civil Action No. 09-1670.

 

July 8, 2010.

 

Andrew G. Cassidy, Donnelly & Associates P.C., Conshohocken, PA.

 

MEMORANDUM

 

McLAUGHLIN, District Judge.

 

This declaratory judgment action involves an insurance coverage dispute between the plaintiff, Selective Way Insurance Company (“Selective Way”) and the defendant, Travelers Property and Casualty Company of America (“Travelers”), after an automobile accident in Tunkhannock, Pennsylvania that occurred on October 3, 2005. The accident gave rise to a state civil action,  and Selective Way, the insurer for the named defendants, settled the lawsuit for $14.25 million.

 

Selective Way filed the instant action because it claims that Travelers had an obligation to provide a defense and indemnity to two defendants, Keith Stalker and Stafursky Paving, Inc. (“Stafursky Paving”). Selective Way and Travelers both move for summary judgment. For the reasons stated below, the Court will grant Travelers’ motion.

 

I. Summary Judgment Record

 

Stafursky Paving is a Pennsylvania corporation that primarily provides excavation, construction and paving services. It also provides hauling services to third-party companies. David Stafursky is the President of Stafursky Paving. Dep. of Keith Stalker 10:1-18 (“Stalker Dep.”), Ex. G to Pl.’s M.; Dep. of David Stafursky 5:3-9 (“Stafursky Dep.”), Ex. H. to Pl.’s M.

 

At the time of the accident, Stafursky Paving had approximately ten tri-axle dump trucks, which were kept at its business address in Archibald, Pennsylvania. The trucks were licensed in the company’s name, and they were maintained and owned by Stafursky Paving. Stalker Dep. 13:1-24; Stafursky Dep. 10:13-18.

 

At the time of the accident, States Aggregate (“S.A.”)  was a business that produced crushed stone and asphalt materials for roads. Since approximately some time in the 1980s, S.A. would occasionally contact Stafursky Paving to haul materials. To schedule a truck for hauling, Vernon Tompkins, an employee of S.A., would contact Stafursky Paving by telephone and request a dump truck for a specific day. S.A. would then have the truck and driver for that day for as long as necessary. Dep. of Vernon Tompkins 9:5-9, 10:23-11:24, 8:5-14, 13:19-25, 15:24-17:6 (“Tompkins Dep.”), Exhibit I to Pl.’s M.

 

The Friday before October 3, 2005, Mr. Stafursky spoke with Mr. Tompkins regarding hauling for an ongoing paving project. The exchange was an oral exchange, and there is no written contract memorializing the terms of the agreement. Stafursky Dep. 7:10-24, 12:3-19; Tompkins Dep. 10:23-11:24.

 

Pursuant to the conversation with Mr. Tompkins, Mr. Stafursky assigned Keith Stalker, a Stafursky Paving employee, to report to the S.A. blacktop plant in Clifford, Pennsylvania on October 3, 2005, at 7 a.m. Mr. Stafursky also determined which Stafursky Paving dump truck Mr. Stalker would use. S.A. never chose the truck or the driver for its hauling projects, but, theoretically, S.A. could call Stafursky Paving if it sent a truck that was not a dump truck or sent a driver who did not perform properly. Such problems, however, had never occurred and did not occur on the day of the accident. Stafursky Dep. 7:3-8:4; Stalker Dep. 22:7-9, 19:18-20:6, 23:10-12; Tompkins Dep. 25:18-30:14.

 

Mr. Stalker determined his own route to drive to the S.A. plant on October 3, 2005. When Mr. Stalker arrived at the plant around 7 a.m., an S.A. employee told him when to load and where he was going. After Mr. Stalker’s truck was loaded with asphalt, he received a bill of lading with the delivery address. Mr. Stalker was to deliver the material to a resurfacing project on State Road 29/309. Stalker Dep. 20:17-21:5, 23:16-25:14; Tompkins Dep. 32:21-25, 33:14-23.

 

Mr. Stalker left to deliver the materials around 8:30 a.m. When he arrived at the delivery location, he provided an S.A. employee with the bill of lading for signing. He then waited his turn to dump the materials. Any driver, including S.A.’s own employees who performed hauling, would follow these procedures. Stalker Dep. 25:8-10, 26:3-9, 28:11-20; Tompkins Dep. 33:1-13, 59:20-60:9.

 

After Mr. Stalker unloaded his truck, he returned to S.A. to obtain another load to be hauled to the same location. After delivering the second load, he returned to S.A. to obtain a third load. Mr. Stalker deposited the third load, and he left the job site at 2:55 p.m., having completed the hauling for S.A. A truck driver would know that he was done hauling if he was not told to get another load; he would then be signed out. Stalker Dep. 26:13-29:23, 33:5-24, 34:6-9; Tompkins Dep. 25:14-17.

 

Mr. Stalker intended to drive back to Stafursky Paving in Archibald, Pennsylvania. In all of his driving, to the S.A. plant, to and from the hauling points, and back to Stafursky Paving, Mr. Stalker chose his own route. Mr. Tompkins explained in his deposition that S.A., as a matter of business practice, did not designate a driver’s route for hauling because the drivers know the particular weight limit restrictions of each road and bridge. After repeated questions asking whether, theoretically, Mr. Tompkins could tell a driver to take a particular route, Mr. Tompkins responded, “Theoretically I could tell the driver anything I wanted to.” Stalker Dep. 34:14-19, 25:25-26:2, 27:11-12, 33:1-4, 35:6-11; Tompkins Dep. 18:23-21:25.

 

On his way back from the S.A. worksite to the Stafursky Paving plant, prior to arriving there, Mr. Stalker’s truck was involved in an accident. Stalker Dep. 35:20-22.

 

Mr. Stalker did not perform any hauling for any other company other than S.A. that day. Mr. Stalker did not perform any other duties for Stafursky Paving that day. Because of the agreement with S.A., Stafursky Paving would not have been able to lease the truck that Mr. Stalker drove or Mr. Stalker himself to any other person or company that day. At the same time, Mr. Stalker was is Stafursky Paving’s dispatch, in that he could communicate with the company through radio. If Stafursky Paving had another job for Mr. Stalker after he completed the hauling for S.A., then it could have directed Mr. Stalker to the new job, and Mr. Stalker would have complied. Stalker Dep. 40:7-13, 38:16-39:1; Stafursky Dep. 16:13-18, 13:22-14:13, 10:4-12.

 

S.A. paid Stafursky Paving $6.25 per ton of material hauled. This amount accounted for all of Stafursky Paving’s overhead costs for the project, including the costs of paying Mr. Stalker. Stafursky Paving provided Mr. Stalker with a weekly paycheck, from which it deducted taxes. Mr. Stalker was never paid directly by S.A. for his services. Stalker Dep. 37:11-21, 22:16-23:3, 35:17-19; Stafursky Dep. 8:20-9:1, 13:11-16, 19:7-18.

 

In full force and effect at the time of the accident was a commercial automobile policy issued by Travelers to the Estate of Donald B. Stabler, Q-Tip Trust and/or Stabler Companies (“Travlers policy”). Also in effect was a “Broadened Named Insured Endorsement,” which modified “insured” in the Travelers policy to include “any organization, other than a partnership or joint venture, over which you maintain ownership or majority interest on the effective date of the policy.” Travelers Policy, Ex. C to Pl.’s M.; Traveler’s Endorsement, Ex. D to Pl.’s M.

 

It is undisputed that, as of the effective date of the policy, Stabler Companies maintained an ownership interest in S.A. It is also undisputed that S.A. qualified as an insured under the Travelers policy, and that S.A. was an insured on the date of the automobile accident. Pl.’s Request for Admissions, Ex. E to Pl.’s M.

 

With respect to business auto coverage, the Travelers policy provides:

 

A. Coverage

 

We will pay all sums an “insured” legally must pay as damages because of “bodily injury” or “property damage” to which the insurance applies, caused by an “accident” and resulting from an ownership, maintenance or use of a covered “auto”.

 

Travelers Policy, Business Auto Coverage Form at 2, Ex. F to Pl.’s M. The policy further provides:

1. Who Is An Insured

 

The following are “insureds”:

 

a. You for any covered “auto”.

 

b. Anyone else while using with your permission a covered “auto” you own, hire or borrow …

 

 

C. Anyone liable for the conduct of an “insured” described above but only to the extent of that liability.

Ex. F at 2.

 

II. Analysis

 

Selective Way argues that both Mr. Stalker and Stafursky Paving are insureds under the Travelers policy. First, it asserts that Mr. Stalker is an insured pursuant to the terms of the policy because S.A. “hired” the truck that Mr. Stalker used at the time of the accident, and individuals who operate “hired autos” are insureds. It argues that the term “hire” does not include an element of control, but that even if the Court finds “hire” to contain this element, then S.A. controlled and had the right to control both Mr. Stalker and the Stafursky Paving dump truck.

 

Second, it asserts that Mr. Stalker is an insured under the policy pursuant to Pennsylvania’s “borrowed servant doctrine,” where an employee of one company becomes an employee of a second company if the second company controlled or had a right to control the employee. It argues that because S.A. had the right to control Mr. Stalker and did control him, Mr. Stalker is an insured. It asserts that if Stalker is an insured under either rationale, then Stafursky Paving is also an insured because the policy covers anyone liable for the conduct of an insured.

 

Travelers argues both in its motion for summary judgment and its opposition to the plaintiff’s motion for summary judgment that Mr. Stalker did not operate a “hired auto.” It asserts that courts evaluate whether an auto is “hired” based on the degree of control a company exerts over the driver and vehicle. Because S.A. did not have control over Mr. Stalker or the Stafursky Paving dump truck, Travelers is not liable for any insurance coverage. Travelers also argues that, if the Court finds coverage under the Travelers policy, the policy’s “other insurance” clause bars any collection or indemnification.

 

Under Rule 56 of the Federal Rules of Civil Procedure, a party moving for summary judgment must show that there is no genuine issue as to any material fact and that judgment is appropriate as a matter of law. Fed.R.Civ.P. 56(c). The moving party bears the initial burden of demonstrating the absence of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once a properly supported motion for summary judgment is made, the burden then shifts to the non-moving party, who must set forth specific facts showing that there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

 

The burdens of proof do not change in cases where a court is considering cross-motions for summary judgment. Peters Twp. Sch. Dist. v. Hartford Accident & Indem. Co., 833 F.2d 32, 34 (3d Cir.1987). On cross-motions for summary judgment, the court must construe the motions independently, viewing the evidence presented by each moving party in the light most favorable to the nonmovant. Pichler v. Unite, 542 F.3d 380, 386 (3d Cir.2008).

 

A. Interpretation of the Traveler’s Insurance Policy

 

Pursuant to the Travelers policy, an insured is “anyone … while using with your permission a covered ‘auto’ you own, hire, or borrow.” Because the Travelers policy does not define the term “hire,” the Court must interpret its meaning.

 

Under Pennsylvania law, an insurance policy must be read as a whole and construed according to the plain meaning of its terms. C.H. Heist Caribe Corp. v. Am. Home Assurance Co., 640 F.2d 479, 481 (3d Cir.1981). Words of common usage in an insurance policy are to be construed in their natural, plain, and ordinary sense, and courts may inform their understanding of such words by consulting a dictionary. Madison Constr. Co. v. Harleysville Mut. Ins. Co., 557 Pa. 595, 735 A.2d 100, 108 (Pa.1999). Ambiguous terms in a contract are to be construed in favor of the insured and against the insurer.   Bateman v. Motorists Mut. Ins. Co., 527 Pa. 241, 590 A.2d 281, 283 (Pa.1991). Courts, however, should not read ambiguity into contracts.   Madison Constr. Co., 735 A.2d at 106 (“We will not, however, distort the meaning of the language or resort to a strained contrivance in order to find an ambiguity.”). Contractual language is ambiguous only “if it is reasonably susceptible of different constructions and capable of being understood in more than one sense .” Hutchison v. Sunbeam Coal Co., 513 Pa. 192, 519 A.2d 385, 390 (Pa.1986).

 

The plaintiff asserts that the Court should look to dictionaries to determine the meaning of “hire,” and that none of the definitions contain explicitly the word “control.” It also argues that the term “hire” is ambiguous because it is not defined in the Travelers policy. It should be construed against Travelers, the drafter, and not found to contain an element of control.

 

The plaintiff’s arguments fail. First, although dictionaries may not use the word “control” when defining “hire,” and Pennsylvania courts have provided little guidance in interpreting the term, the Court finds that the term “hire” contains an element of control. According to the Oxford English Dictionary, the term “hire” means: “To procure the temporary use of (any thing) for stipulated payment.” Oxford English Dictionary (2d ed.1989). The Merriam-Webster Dictionary provides: “To engage the temporary use of for a fixed sum.” Webster’s Third New Int’l Dictionary (1997). To use something requires a degree of control. As explained in a treatise on insurance, “[T]he key inquiry regarding whether an automobile will fall within the hired automobiles provision of the policy is whether the insured exercised dominion, control or the right to direct the use of the vehicle.” Lee R. Russ & Thomas F. Segalla, COUCH ON INSURANCE § 118.46, at 118-74 (3d ed.1997) (quoted in Holmes v. Brethren Mut. Ins. Co., 868 A.2d 155, 158 (D.C.Ct.App.2005)).

 

The majority of courts that apply the plain meaning of “hire” when interpreting policies like the one at issue have found the term to contain an element of control. E.g., U.S. Fid. & Guar. Co. v. Heritage Mut. Ins. Co., 230 F.3d 331, 333-35 (7th Cir.2000);  (evaluating “hired auto” under Indiana law based on plain meaning of term and amount of control when one company was hauling materials for another company); Chicago Ins. Co. v. Farm Bureau Mut. Ins. Co., 929 F.2d 372, 374-75 (8th Cir.1991) (evaluating control to determine whether company was an independent contractor or “hired auto”); Wolverine Ins. Co. v. State Auto. Mut. Ins. Co. ., 415 F.2d 1182, 1184 (6th Cir.1969) (“The right to control of equipment is generally regarded as the critical distinction between the ‘hired automobile’ and the ‘nonowned automobile’ for insurance contract purposes.”); Earth Tech, Inc. v. U.S. Fire Ins. Co., 407 F.Supp.2d 763, 771-73 (E.D.Va.2006) (evaluating “hired auto” under Virginia law based on degree of control); Occidental Fire & Cas. Co. v. Westport Ins. Corp., No. 02-8923, 2004 WL 2028616, at *5-9 (E.D.Pa. Sept.10, 2004) (evaluating “hired auto” under Pennsylvania law based on dictionary definition and amount of control when one company subcontracted with another company for hauling).

 

The plaintiff cites to only one case, Pawtucket Mutual Insurance Company v. Hartford Insurance Company, 147 N.H. 369, 787 A.2d 870 (N.H.2001), where a court did not consider control when determining whether a car was a “hired auto” for insurance policy purposes. Pawtucket, however, did not involve a hauling scenario, unlike the above-referenced cases. Further, courts note that Pawtucket is known for its “distinctly minority view” with respect to this issue. Holmes, 868 A.2d at 158 n. 3; see Earth Tech, 407 F.Supp.2d at 771-72 & n. 13.

 

Second, the Court does not find the term “hire” to be ambiguous, such that it should be construed against Travelers. A term is not ambiguous under Pennsylvania law simply because it is undefined; it is ambiguous when it is susceptible to two different meanings. Hutchison, 519 A.2d at 390. Courts should not distort the meaning of a word to find an ambiguity. Madison Constr. Co., 735 A.2d at 106. Further, a finding of ambiguity would not require the Court to ignore the element of control because courts have still considered the degree of control upon holding that the term “hire” is ambiguous. E.g., Kresse v. Home Ins. Co., 765 F.2d 753, 755-56 (8th Cir.1985) (finding “hire” ambiguous, then evaluating term based on degree of control); Toops v. Gulf Coast Marine Inc., 72 F.3d 483, 486-87 (5th Cir.1996) (holding contract should be construed against insurer and evaluating “hired auto” through degree of control).

 

B. Whether S.A. “Hired” the Stafursky Paving Truck

 

Courts evaluating “hired auto” clauses in the hauling context look to a variety of factors to determine whether a company in S.A.’s position had control, such that the auto was “hired.” They consider the degree of control exerted over the vehicle, driver, and route, and note that minimal levels of control do not render an auto “hired.”

 

In United States Fidelity & Guaranty Company v. Heritage Mutual Insurance Company, 230 F.3d 331, the Court of Appeals for the Seventh Circuit evaluated whether Irving Materials, Inc. (“IMI”) hired a truck owned by V & S Transport, Inc. (“V & S”) after an employee of V & S was involved in an accident while hauling materials for IMI. The insurance companies for IMI and V & S filed cross-motions for summary judgment, and the Court of Appeals affirmed the district court’s finding that the truck was not a “hired auto” because: (1) V & S maintained its trucks and provided gas for them, (2) V & S paid the drivers and provided their benefits, and (3) IMI did not dictate the routes the drivers took. Although IMI directed the driver to particular locations, it could tell V & S not to send a particular driver, and the driver worked for as long as IMI had loads, the court found this evidence of control insufficient to make the truck a “hired auto.”

 

The Court of Appeals for the Eighth Circuit evaluated these factors in Kresse v. Home Insurance Company, 765 F.2d 758, to reach the opposite result. Clarence Kresse’s driver was involved in an accident while hauling for Cass County, and Mr. Kresse’s insurance company sought a declaration of insurance coverage. The Court of Appeals determined that there were genuine issues of material fact as to whether Cass County “hired” the auto involved in the accident because: (1) the parties had a written contract that referred to the trucks as “hired trucks”; (2) the county determined the route to be used, and it could dismiss drivers who deviated from it; (3) the county determined specific hours of operation; and (4) there was evidence that the county hired specific trucks.

 

One court in this district evaluated a “hired auto” clause in an insurance policy under Pennsylvania law and found these same factors relevant. In Occidental Fire and Casualty Company v. Westport Insurance Company, 2004 WL 2028616, B.K. Leasing Company, Inc. (“B.K.”) had a verbal contract with F.O. Transport, Inc. (“F .O.T.”) to transport cargo when B.K. did not have enough equipment or personnel to transport the cargo itself. An F.O.T. driver was involved in an accident while hauling for B.K., and the insurance companies sought declarations of their coverage responsibilities. The court held that B.K. did not “hire” F.O.T. because: (1) B.K. did not determine the route that F.O.T. drivers took when hauling, (2) B.K. did not assign the drivers or tell the drivers how to maintain the trucks, and (3) B.K. did not choose a specific truck to be used. Although B.K. exerted limited control, in that it could instruct F.O.T. to not use certain drivers, it determined the number of loads transported, and it told F.O.T. where and when to load, this control was insufficient to demonstrate that B.K. hired the trucks. See also Chicago Ins. Co., 929 F.2d at 374 (evaluating same factors); Earth Tech, 407 F.Supp.2d at 771-73 (same).

 

Upon consideration of the factors used by courts to determine whether an auto is “hired,” the Court finds that the Stafursky Paving vehicle was not a “hired auto” for purposes of the Travelers policy.

 

1. Vehicle

 

It is undisputed that Stafursky Paving maintained all of the vehicles used for hauling. The vehicles were licensed in its name, and the company owned them. It is also undisputed that Stafursky Paving assigned the trucks to be used for hauling, and that Mr. Stafursky chose the truck for the S.A. project.

 

The plaintiff argues that S.A. had control over the truck because if Stafursky Paving did not send a dump truck, S.A. could get a replacement. Such a fact does not demonstrate control over the truck, or demonstrate that S.A. had the right to choose a specific dump truck for its hauling needs. E.g., Kresse, 765 F.2d at 756 (finding that choosing a specific dump truck to be used for the entire hauling season as evidence of control); Earth Tech, 407 F.Supp.2d at 773 (finding that choosing the type of truck, but not a specific truck within that type not an indicia of control).

 

2. Driver

 

Analysis of the control over the driver also demonstrates that S.A. did not “hire” the dump truck. It is undisputed that Mr. Stafursky chose which driver would perform a specific hauling project, and that Mr. Stafursky chose Mr. Stalker to perform for S.A. Also, Mr. Stalker was employed by Stafursky Paving at all times. He received a weekly pay check from Stafursky Paving from which taxes were deducted, and he was never paid by S.A.

 

The plaintiff argues that S.A. could exert control over Mr. Stalker because Mr. Stalker could not abandon the S.A. project while he was hauling, demonstrating that S.A. had exclusive control over him. Also, hypothetically, S.A. could tell Stafursky Paving that it did not like a driver who did not perform properly, and S.A. “paid” Mr. Stalker to the extent that the cost per ton of hauling included the cost of the driver.

 

These points are uncompelling. First, Mr. Stalker was under Stafursky Paving’s dispatch during the entire hauling project, and it could have sent Mr. Stalker to a different hauling job once the S .A. job was complete. Second, courts have found that the ability to dismiss or the actual dismissal of drivers is insufficient to demonstrate control. E.g., U.S. Fid., 230 F.3d at 333, 335; Chicago Ins. Co., 929 F.2d at 374; Occidental, 2204 WL 2028616, at *7. Third, the payment per ton for the hauling included all of Stafursky Paving’s overhead costs, and not just the costs of paying Mr. Stalker.

 

The plaintiff also argues that S.A. exerted control over Mr. Stalker because S.A. employees told Mr. Stalker where and when to load and unload the cargo, and it provided Mr. Stalker with a bill of lading to be handed over upon arrival at the dump site. S.A. employees who provided hauling for S.A. would also follow these procedures, indicating that S.A. exerted the same degree of control over Mr. Stalker as it did over its own employees.

 

Although such facts may be an indication of minimal control, they are insufficient to render the truck a “hired auto.” S.A. did not tell Mr. Stalker how to operate his vehicle, nor did it provide specific instructions for how to load and unload. S.A. was only concerned with the result of the transportation from point A to Point B, and it gave minimal direction to Mr. Stalker for completing this task. See, e.g., Toops, 72 F.3d at 487; Earth Tech, 407 F.Supp.2d at 773; Occidental, 2004 WL 2028616, at *7.

 

Further, although S.A. employees hauling for S.A. would perform the same procedures, in the case of an S.A. employee, other factors reflecting control, which are absent here, would be present. In such a scenario, the employee would use a truck that S.A. owned, maintained, and licensed; he would receive a paycheck from S.A.; and he would remain in S.A.’s dispatch.

 

3. Route

 

Mr. Stalker stated that he chose all of his driving routes on the day of the accident: he chose his route to the S.A. plant, to and from the plant and the depositing location, and back from the depositing location to Stafursky Paving. Mr. Tompkins explained that he would never tell a driver what route to use for hauling because the drivers “know what roads, they know the bridges, they know the weight limit that I don’t keep track of.” Tompkins Dep. 19:13-15.

 

The plaintiff claims that S.A. controlled the route because, during a line of questioning asking whether S.A. could theoretically tell a driver what route to take, where Mr. Tompkins continued to explain that he would not dictate this aspect of hauling, Mr. Tompkins eventually stated, “Theoretically, I could tell the driver anything I wanted to.” The plaintiff cites to this statement for the propositions that “if [S.A.] directed a driver to take a particular route, the driver would be required to take that route,” and that S.A. “retained the right to control virtually every aspect of a hired truck and driver.” Pl.’s Opp. 7; see also Pl.’s Opp. 18-20.

 

The record does not support the plaintiff’s claim, and no reasonable jury could interpret Mr. Tompkins’s statement to mean that S.A. controlled every aspect of hauling. Not only did Mr. Tompkins explain that S.A. never dictated the routes for drivers, and that a specific route was never a condition for hauling, but he stated later in his deposition that he would have no ability to enforce such a hypothetical command. Tompkins Dep. 44:11-15. Contra Kresse, 765 F.2d at 755 (finding ability to fire driver who deviated from specific route an indicia of control).

 

The plaintiff then argues in the alternative that the Court should not consider control over the route to be a factor because S.A. did not dictate the route for any haulers, including its own employees who hauled materials. It is incongruous to find this factor neutral simply because S.A. never controlled a driver’s route. Rather, this fact demonstrates that S.A. never exerted control over a route, including that taken by Mr. Stalker.

 

C. The “Borrowed Servant Doctrine”

 

The plaintiff argues that Mr. Stalker, and therefore Stafursky Paving, are insureds under the Travelers policy not only under the terms of the policy itself, but also under the “borrowed servant doctrine.” This doctrine provides that “one who is in the general employ of one employer may be transferred to the service of another in such a manner that the employee becomes an employee of the second employer.” Virtue v. Square D Co., 887 F.Supp. 98, 100-01 (M.D.Pa.1995). The plaintiff argues that Mr. Stalker was an employee of S.A. under the borrowed servant doctrine, making him and Stafursky Paving insureds.

 

The borrowed servant doctrine applies when an employee passes under the control from one employer to another. Wilkinson v. K-Mart, 412 Pa.Super. 434, 603 A.2d 659, 661 (Pa.Super.Ct.1992). The determination is based on the right to control the employee, and not on the actual control exerted. Id. at 661. Relevant factors in the hauling context include whether the alleged employer had the right to dispatch and direct the driver, select routes, and direct day-to-day operations of the vehicle, and whether it owned the vehicle at issue. See id.

 

The plaintiff’s arguments with respect to the borrowed servant doctrine replicate those from its “hired auto” analysis. Pl.’s Opp. 19 n. 5 & 23-24; Pl.’s M. 29-30. For the reasons stated in the previous section, the Court finds that S.A. did not have sufficient control over Mr. Stalker to make him a “borrowed servant.”

 

D. “Other Insurance”

 

The Court does not reach the defendant’s argument that the “other insurance” clause within the Travelers policy bars collection and indemnification. Because it finds that Mr. Stalker and Stafursky Paving are not insureds under the Travlers policy, the “other insurance” issue is moot.

 

III. Conclusion

 

For the reasons herein stated, the Court grants summary judgment for the defendant. There is no genuine issue of material fact as to whether Mr. Stalker and Stafursky Paving are insureds under the Travlers policy. An appropriate order shall issue separately.

 

ORDER

 

AND NOW, this 8th day of July, 2010, upon consideration of the parties’ cross-motions for summary judgment (Docket Nos. 21 & 23), the parties’ opposition briefs, and their briefs in reply thereto, the plaintiff’s motion for leave to file a surreply (Docket No. 33), oral argument on the parties’ motions, supplemental briefing by the parties, and for the reasons stated in a memorandum of law bearing today’s date, IT IS HEREBY ORDERED that:

 

1. The defendant’s motion for summary judgment (Docket No. 23) is GRANTED.

 

2. The plaintiff’s motion for summary judgment (Docket No. 21) is DENIED.

 

3. The plaintiff’s motion for leave to file a surreply (Docket No. 33) is DENIED AS MOOT.

 

4. Judgement is hereby entered for the defendant and against the plaintiff. This case is CLOSED.

 

The state action was styled Tracy Irish and John Irish v. Dempsey Uniform and Linen Supply, Inc., James Fox, Stafursky Paving Co., and Keith Stalker, Docket No. 314-206, and it was initiated in Lackawanna County Court of Common Pleas in Pennsylvania.

 

 

The Court cites to the parties’ exhibits when referencing the summary judgment record. The defendant also included the depositions of Mr. Stafursky and Mr. Stalker in its motion for summary judgment, as exhibits E and F, respectively. These deposition transcripts are the same as those attached to the plaintiff’s motion referenced above.

 

States Aggregate is currently known as Eastern Industries.

 

Travelers asserts its “other insurance” argument in its reply to its motion for summary judgment. Selective Way moved to file a surreply and argues in the brief attached to its motion that the “other insurance” clause does not alter Travelers’ responsibilities of payment to Selective Way. Because the Court finds that Mr. Stalker and Stafursky Paving are not insureds under the Traveler’s policy, it does not reach this issue.

 

Both parties submit that Pennsylvania law controls this action.

 

The presumption against the insurer applies even when the parties in an action are two insurance companies. Pa. Nat’l Mut. Cas. Ins. Co. v. Traveler’s Ins. Co., 405 Pa.Super. 149, 592 A.2d 51, 53-54 (Pa.Super.Ct.1991).

 

Although Indiana, unlike Pennsylvania, law does not require courts to construe ambiguous terms against an insurer when the parties in a matter are two insurance companies, the court in U.S. Fidelity did not rely on this aspect of Indiana law in reaching its decision because it found the term “hire” unambiguous. U.S. Fid., 230 F.3d at 333.

 

Occidental provided a slightly different fact pattern than the present matter. It involved a company with goods that hired a hauling company that subcontracted with another hauling company whose driver caused an accident, resulting in an insurance dispute between the two hauling companies. The present matter, however, involves S.A., a company with goods, that used a hauling company, Stafursky Paving, whose driver caused an accident. The Court finds this distinction immaterial. It did not have a bearing on the holding of Occidental, and no courts have found the distinction meaningful. E.g., U.S. Fid., 230 F.3d at 334 (citing to subcontractor case even though fact pattern at issue did not involve subcontractors).

 

The Court acknowledges that consideration of which employer actually hired the employee and paid the employee’s wages are not relevant under the borrowed servant doctrine. Wilkinson, 603 A.2d at 661. Putting such considerations aside, the Court still finds that S.A. did not have the requisite control to render Mr. Stalker a borrowed servant.

 

 

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