Bits & Pieces


United States District Court,

E.D. Michigan, Southern Division.



JM TRANSFER, LLC, Defendant.

Case No. 16-11975


Signed 03/22/2017

Attorneys and Law Firms

Marc D. Saurbier, Saurbier & Siegan, St. Clair Shores, MI, Jonathan C. Myers, Jonathan E. Sriro, Steven R. Lefkofsky, Jaffe, Raitt, Heuer & Weiss, P.C., Southfield, MI, for Plaintiff.

Wesley S. Chused, Preti Flaherty Beliveau & Pachios LLP, Boston, MA, Dirk H. Beckwith, Foster, Swift, Southfield, MI, for Defendant.




Denise Page Hood, Chief Judge

*1 This matter is before the Court on a Motion to Consolidate Cases currently pending in this District pursuant to Rule 42(a) of the Federal Rules of Civil Procedure and E.D. Mich. Local Rule 42.1 filed by Defendant JM Transfer, LLC, the defendant in the instant action. Plaintiff United Road Logistics, LLC opposes the motion. Briefs have been filed, and, for the reasons set forth below, the motion is denied.


Rule 42(a)(2) provides that a court may consolidate actions involving “a common question of law or fact.” Fed. R. Civ. P. 42(a)(1); Cantrell v. GAF Corp., 999 F.2d 1007, 1011 (6th Cir. 1993). The objective of consolidation is to administer the court’s business with expedition and economy while providing justice to the parties. Advey v. Celotex Corp., 962 F.2d 1177, 1181 (6th Cir. 1992). Consolidation of separate actions does not merge the independent actions into one suit. Id. at 1180. The party seeking consolidation bears the burden of demonstrating the commonality of law, facts or both in cases sought to be combined. Young v. Hamrick, 2008 WL 2338606 at *4 (E.D. Mich. 2008). Once the threshold requirement of establishing a common question of law or fact is met, the decision to consolidate rests in the sound discretion of the district court. Stemler v. Burke, 344 F.2d 393, 396 (6th Cir. 1965). The court weighs the interests of judicial economy against the potential for new delays, expense, confusion, or prejudice. Banacki v. OneWest Bank, FSB, 276 F.R.D. 567, 571 (E.D. Mich. 2011). Considerations of convenience and economy must yield to a paramount concern for a fair and impartial trial. Id. at 572. Consolidation is not justified or required simply because the actions include a common question of fact or law. Id. When cases involve some common issues but individual issues predominate, consolidation should be denied. Id.


The trial court must consider whether the specific risks of prejudice and possible confusion are overborne by the risk of inconsistent adjudications of common factual and legal issues, the burden on the parties, witnesses and available judicial resources posed by multiple lawsuits, the length of time required to conclude multiple suits as against a single one, and the relative expense to all concerned of the single-trial, multiple-trial alternatives. Cantrell, 999 F.2d at 1011 (citations omitted). “Care must be taken that consolidation does not result in unavoidable prejudice or unfair advantage.” Id. Even though conservation of judicial resources is a laudable goal, if the savings to the judicial system are slight, the risk of prejudice to a party must be viewed with even greater scrutiny. Id.


JM Transfer argues that the factual issues in the five cases1 it seeks to consolidate allege a common fact pattern in which URL acted as a transportation broker and entered into a common Broker/Contractor Agreement with each of the defendants. JM Transfer asserts that in each case, two important, and potentially dispositive legal issues are common. JM Transfer claims that the first legal issue is that URL’s breach of contract claims in each of the cases are void and of no effect because the claims are preempted by the exclusive remedy of the Carmack Amendment to the ICC Termination Act, 49 U.S.C. § 14705. The second legal issue is whether URL, as a broker of freight shipments, has constitutional or prudential standing to bring a Carmack Amendment claim against a motor carrier even though another party, the shipper of the goods, is the only party who was actually injured when the cargo was damaged and is the only party with standing to sue under the Carmack Amendment. JM Transfer asserts that because five separate motions for summary judgment or trials would be reduced to one, the savings of the party and judicial resources would be more than “slight.”


*2 URL responds that each of the five cases JM Transfer seeks to consolidate involve separate and independent broker-carrier agreements and different parties, including different sets of plaintiffs and defendants. URL asserts that the five actions involve five different shippers, six different vehicles, five different truck drivers, five different time periods, at least five different sets of witnesses, including witnesses at the origin and witnesses at the destination of the haul, and three different sets of plaintiffs. URL argues that consolidation is not proper under Rule 42(a) since the cases involve different parties, specifically unrelated Defendants, with different witnesses, different factual issues and legal issues. Other than that some of the “causes of action” are the same and some of the terms of the agreements are the same, URL claims that there is no basis to consolidate the cases. URL further claims that it is the various plaintiffs’ contention that the Carmack Amendment does not apply to their claims for indemnity under the broker-carrier agreements, and that they only pleaded claims under the Carmack Amendment as an alternative theory for relief.


Based on a review of the complaints filed in each of the five cases at issue, the Court finds that there are no common questions of fact involved in the five cases, other than similar terms in the agreements. The plaintiffs are not all the same, although they may be related. The defendants are not related to each of the other defendants. The underlying facts involving the circumstances of how the parties entered into the agreements are not the same. The dates, times, destinations, and incidents are not the same. JM Transfer argues that there is a “common fact pattern” involved in all the cases because URL acted as a transportation broker and entered into a common Broker/Contractor Agreement with each of the defendants. This argument does not support the “common fact” required under Rule 42(a)(2) since each of the case involves different sets of parties, locations, destinations, the circumstances of how the agreements were entered into and the incidents arising out of each case. Under JM Transfer’s “common fact pattern” argument, this would mean that any agreement URL entered into with any other party where URL is acting as a transportation broker is subject to consolidation. JM Transfer has not carried its burden that there are common facts involved in all the cases.


As to the two legal issues JM Transfer argues are common in all the cases, preemption and standing, those appear to be common defenses by any defendant in cases involving the Carmack Amendment (and also in many cases involving a federal statute). JM Transfer argues that consolidation of the actions would minimize motion practice since only one motion instead of five motions need to be filed. However, dispositive motions have already been filed in three of the five cases sought to be consolidated. These motions to dismiss (see footnote 1, infra) in the other cases were filed in June and November 2016, prior to the instant Motion to Consolidate filed by JM Transfer on December 20, 2016. JM Transfer’s argument that consolidating the cases to one case would reduce the number of motions filed by all the defendants involved is without merit since JM Transfer waited until three dispositive motions had been filed in the other remaining cases before filing this motion.


JM Transfer’s argument that consolidation would be in the interest of judicial economy for all parties is belied by its action of waiting more than six months to file this motion. JM Transfer removed this action from State court on June 1, 2016. Of the four other cases JM Transfer seeks to consolidate, four were removed to this district in June and one in November 2016. Scheduling Orders and/or Motions to Dismiss have been filed in those cases.


There were three2 previously dismissed cases in which JM Transfer did not seek to consolidate. These cases involved URL and were filed in February and May 2016. In the case before U.S. District Judge Nancy G. Edmunds, a Motion to Dismiss was filed by the defendant, which was granted on July 27, 2016.3 On the other hand, U.S. District Judge Bernard A. Friedman denied the defendant’s Motion to Dismiss and granted Plaintiff’s Motion to Amend in a September 9, 2016 Order.4 JM Transfer’s argument that consolidation of the cases would avoid inconsistent rulings is without merit since two of the earlier cases filed involving URL resulted in opposite rulings on motions to dismiss. Consolidating the remaining cases at this juncture would not prevent inconsistent rulings since previous inconsistent rulings have already been entered in the other cases in this District.


*3 Although JM Transfer argues that the legal issues were dispositive, if this Court were to rule denying any motions to dismiss, the cases would then move forward to discovery. As noted above, the defendants in the remaining five cases are unrelated. The facts surrounding each agreement is different. The defendants are not all in one location. The individuals involved in each of the agreements, other than perhaps the plaintiffs involved, are unrelated and would require fact discovery unrelated to the other cases if the cases were consolidated. Judicial economy would not be served even if the cases were consolidated since fact discovery would involve different and unrelated parties, witnesses and locations.


Based on the above, the Court finds that the risks of prejudice and possible confusion are overborne by the risk of inconsistent adjudications of common factual and legal issues. The Court further finds that consolidation of the cases would not ease the burden on the unrelated parties and witnesses. Judicial resources would not be saved by consolidating the cases at this juncture since earlier cases have been dismissed where dispositive motions were filed. Dispositive motions in the remaining cases have also been filed by other unrelated defendants. The length of time required to conclude multiple suits against a single one is also not shortened since dispositive motions have been filed and some have already been heard. Because the defendants in all the cases are unrelated, there would be no savings of expenses if the cases were to go to trial since each case against a particular defendant would require a separate trial. JM Transfer has not carried its burden of demonstrating the commonality of law, facts or both in the cases sought to be combined and that consolidation would result in any judicial economy.




IT IS ORDERED that Defendant JM Transfer, LLC’s Motion to Consolidate Cases (Doc. No. 14) is DENIED.


All Citations

Slip Copy, 2017 WL 1077951





The five cases are:

1) 16-11975, United Road Logistics LLC v. JM Transfer, LLC (Hood) (removed June 1, 2016; scheduling order issued October 11, 2016; recent Motion to Amend Complaint filed February 16, 2017).

2) 16-11998, United Road Logistics LLC v. VIG Transport LLC (Murphy) (removed June 2, 2016; Scheduling Order issued November 9, 2016).

3) 16-12128, United Road Logistics LLC v. Alpha Transportation Group LLC (Hood) (removed June 10, 2016; Motion to Dismiss filed June 17, 2016 and heard August 17, 2016).

4) 16-12141, United Road Logistics LLC v. Bull Transport LLC (Cox) (removed June 13, 2016; Motion to Dismiss filed June 20, 2016 and set for hearing April 6, 2017).

5) 16-14018, URS Midwest, Inc. v. Mega Buck Resources (Cox) (removed November 11, 2016; Motion to Dismiss filed November 17, 2016 and set for hearing April 6, 2017).


The three cases which have been dismissed: 1) Case No. 16-10520, United Road Logistics v. Napoleon Trucking, LLC (Leitman) (filed February 12, 2016; Clerk’s entry of judgment by default entered June 7, 2016); 2) Case No. 16-10641, United Road Logistics LLC v. DVM Car Trans, LLC (Edmunds) (removed February 22, 2016; Order of Judgment Dismissing Case without prejudice filed August 31, 2016); 3) Case No. 16-11769, United Road Logistics LLC v. Compass Auto Transport, Inc. (Friedman) (removed May 18, 2016; Order dismissing case without prejudice filed November 10, 2016).


Case No. 16-10641, United Road Logistics LLC v. DVM Car Trans, LLC, et al., Opinion and Order granting defendant’s Motion to Dismiss and denying Plaintiff’s Motion to Amend First Amended Complaint, Doc. No. 20.


Case No. 16-11769, United Road Logistics LLC v. Compass Auto Transport, Inc., Order denying without prejudice Motion to Dismiss and granting Motion to Amend/Correct, Doc. No. 27.




United States District Court,

M.D. North Carolina.



WESTERN EXPRESS, INC., Defendant/Third-Party Plaintiff


COTY US, LLC Third-Party Defendant.



Filed 03/30/2017




Loretta C. Biggs United States District Judge

*1 LORETTA C. BIGGS, District Judge.


Macy’s Corporate Services, Inc. (“Macy’s”) brought this action against Western Express, Inc., (“Western”) under the Carmack Amendment, 49 U.S.C. § 14706, seeking damages for cargo that was stolen during interstate shipment. (ECF No. 1.) Western filed a third-party complaint against Coty US, LLC (“Coty”), alleging claims of indemnity, contribution, breach of contract, negligent misrepresentation, and unfair and deceptive trade practices. (ECF No. 20.) Before the Court is Coty’s motion to dismiss Western’s Amended Third-Party Complaint. (ECF No. 25.) For the reasons that follow Coty’s motion is granted in part and denied in part.



  2. Carmack Amendment

Congress enacted the Carmack Amendment in 1906 to establish a national system of carrier liability for goods lost or damaged during interstate shipment under a valid bill of lading. 5K Logistics, Inc. v. Daily Express, Inc., 659 F.3d 331, 335 (4th Cir. 2011). “The purpose of the Carmack Amendment was to relieve shippers of the burden of searching out a particular negligent carrier from among the often numerous carriers handling an interstate shipment of goods.” Reider v. Thompson, 339 U.S. 113, 119 (1950). To this end, the Carmack Amendment preempts state law claims brought against a carrier for loss or damage to goods that they transport, providing federal courts with exclusive jurisdiction over such claims. See Shao v. Link Cargo (Taiwan) Ltd., 986 F.2d 700, 704–05 (4th Cir. 1993).


The statute requires that a carrier issue a bill of lading for the property it transports, 49 U.S.C. § 14706(a)(1), which “records that a carrier has received goods from the party that wishes to ship them, states the terms of the carriage, and serves as evidence of the contract for carriage.” ABB Inc. v. CSX Transp., Inc., 721 F.3d 135, 138 n.3 (4th Cir. 2013) (quoting Norfolk S. Ry. v. James N. Kirby, Pty Ltd., 543 U.S. 14, 18–19 (2004)); see OneBeacon Ins. Co. v. Haas Indus., Inc., 634 F.3d 1092, 1098 (9th Cir. 2011) (“A bill of lading is a contract between the carrier and the shipper.”). While a carrier is “liable to the person entitled to recover under … [the] bill of lading” “for the actual loss or injury to the property,” 49 U.S.C. § 14706(a)(1), the liability of the carrier for such property may be limited to a value declared by the shipper or by written agreement between the carrier and shipper, § 14706(c)(1)(A).


Ultimately, motor carriers are “virtual insurers” of the cargo they transport and will be held fully liable for loss or damage to the cargo unless they can show the damage or loss was caused by “(a) the act of God; (b) the public enemy; (c) the act of the shipper himself; (d) public authority; (e) or the inherent vice or nature of the goods.” Ward v. Allied Van Lines, Inc., 231 F.3d 135, 139–40 (4th Cir. 2000) (quoting Chandler v. Aero Mayflower Transit Co., 374 F.2d 129, 132 n.2 (4th Cir. 1967)).



  1. Complaint and Amended Third-Party Complaint

Western is a licensed motor carrier under the Carmack Amendment. (ECF No. 1 ¶ 26.) Macy’s is in the business of providing, through independent contractors, “merchandise-handling and transportation-related functions” to its “affiliated retailers.” (ECF No. 1-1 at 1; see ECF No. 1 ¶ 9.) On October 1, 2011, Macy’s and Western entered into an agreement in which Western agreed to provide Macy’s with transportation and handling services for merchandise and property. (ECF No. 1 ¶¶ 9, 11.) In 2014, Western agreed to transport and deliver cargo owned by Macy’s from Coty in North Carolina to Macy’s facility in Connecticut. (Id. ¶¶ 12, 15.) Coty issued Western two bills of lading for the transport of the cargo. (Id. ¶ 14.) While Western was transporting the Cargo from North Carolina to Connecticut, it was stolen in Virginia and has not been found. (Id. ¶¶ 17–19.) According to Macy’s, the value of the cargo exceeded $585,000. (Id. ¶ 20.)


*2 On January 11, 2016, Macy’s filed this action against Western, alleging one claim under the Carmack Amendment seeking to recover the value of the cargo. (Id. at 3.) Western answered the Complaint and filed a third-party action against Coty. (ECF No. 11; ECF No. 20.) Coty moves to dismiss the third-party claims for failure to state a claim upon which relief can be granted under Rule 12(b)(6) of the Federal Rules of Civil Procedure.1 (ECF No. 25.)




The purpose of a motion made pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure “is to test the sufficiency of a complaint.” Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Although a plaintiff need only plead a short and plain statement of the claim establishing that he or she is entitled to relief, Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992), “labels and conclusions” or “a formulaic recitation of the elements of a cause of action will not do,” Twombly, 550 U.S. at 555. A claim is plausible when the complaint alleges sufficient facts that allow “the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. Generally, on a motion to dismiss, a district court may not go beyond the complaint without converting it to a motion for summary judgment. See E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 448 (4th Cir. 2011). However, a court may consider documents that are attached to the complaint or incorporated into it. See id.




Coty asserts that North Carolina law governs Western’s third-party claims and seeks first to dismiss Western’s claims of indemnification and contribution. (See ECF No. 26 at 1–2, 5.) Dismissal of the indemnification and contribution claims, according to Coty, would then require the Court to dismiss the remaining third-party claims as improperly impleaded under Rule 14 of the Federal Rules of Civil Procedure. (Id. at 2.) Finally, Coty contends that even if the remaining claims are properly impleaded, Western’s negligent misrepresentation and unfair and deceptive trade practices claims must be dismissed for failure to state a claim. (See id.) The Court will start with the claims of indemnification and contribution.



  1. Indemnity and Contribution

According to Coty, Western’s potential liability to Macy’s under the Carmack Amendment is contractual in nature. (Id. at 5–6.) Thus, Coty reasons that it cannot be held responsible to Western for indemnification or contribution in the absence of an express or implied contract of indemnification or contribution. (Id. at 5.)


Coty seeks to apply North Carolina law to Western’s claims of indemnification and contribution, (id.); however, courts have held that claims of indemnification and contribution brought by a carrier for its potential liability under the Carmack Amendment are governed by federal common law principles, not state law, see Byrton Dairy Prods., Inc. v. Harborside Refrigerated Servs., Inc., 991 F. Supp. 977, 985 (N.D. Ill. 1997) (citing Gordon H. Mooney, Ltd. v. Farrell Lines, Inc., 616 F.2d 619, 625–26 (2d Cir. 1980) (observing that the Carmack Amendment was silent on the issue of contribution between carrier and shipper but concluding that contribution was available between them because the Amendment “was merely an enactment of already existing common law rights” and that “there is a clear trend in the law toward a rule allowing contribution among joint tortfeasors”)). Further support for the application of federal law is the fact that claims of indemnification and contribution by a carrier for its liability under the Carmack Amendment are not independent causes of action; rather, they are derivative and arise only because of a defendant/third-party carrier’s alleged liability under the statute, see Horton v. United States, 622 F.2d 80, 83 (4th Cir. 1980) (per curiam) (concluding that actions for indemnity and contribution are derivative actions); cf. Equal Rights Ctr. v. Archstone Smith Tr., 603 F. Supp. 2d 814, 821–22 (D. Md. 2009) (analyzing whether federal statute or federal common law gave the defendant the right to indemnification/contribution, despite defendant’s pleading its indemnification claims under state law, because such claims are derivative and arise only because of the defendant’s liability under federal law), aff’d sub nom. Equal Rights Ctr. V. Niles Bolton Assocs., 602 F.3d 597 (4th Cir. 2010).


*3 The Fourth Circuit has not directly addressed whether federal or state law governs claims of indemnification or contribution brought by a carrier, but the court has relied on common law rights “rooted in equity” in deciding whether a carrier was entitled to a setoff based on a settlement made by a co-defendant. Ward, 231 F.3d at 139–41 (concluding “that carriers should have the benefit of the rights of subrogation and reimbursement that apply to insurers at common law” to “allow for an adjustment among the parties so that a loss is paid by the party who should bear the responsibility”); see Franklin Stainless Corp. v. Marlo Transp. Corp., 748 F.2d 865, 870–71 & n.8 (4th Cir. 1984) (relying on the Second Circuit’s decision in Gordon and applying equitable principles of contribution in holding that shipper and carrier should share liability for an accident).


North Carolina case law, like the federal decisions, relies on common law principles of equity in apportioning fault among wrongdoers, see Hunsucker v. High Point Bending & Chair Co., 75 S.E.2d 768, 771, 776 (N.C. 1953) (explaining that contribution and indemnity “rest on principles of equity and natural justice”), and has adopted federal common law principles in deciding issues of carrier liability, see Am. Cigarette & Cigar Co. v. Garner, 47 S.E.2d 854, 855 (N.C. 1948); Butler Int’l, Inc. v. Cent. Air Freight, Inc., 402 S.E.2d 441, 445 (N.C. Ct. App. 1991). Thus, as will be further explained below, the Court concludes that Western has sufficiently stated claims of indemnification and contribution to survive dismissal at this stage in the litigation, irrespective of whether North Carolina or federal law principles ultimately govern these claims.



  1. Indemnification

Under federal and North Carolina law, there are three bases under which a party may seek indemnity: (1) an express contract; (2) a contract implied-in-fact; or (3) a contract implied-in-law. Int’l Surplus Lines Ins. Co. v. Marsh & McLennan, Inc., 838 F.2d 124, 126–27 (4th Cir. 1988); Peoples’ Democratic Republic of Yemen v. Goodpasture, Inc., 782 F.2d 346, 351 (2d Cir. 1986); Kaleel Builders, Inc. v. Ashby, 587 S.E.2d 470, 474 (N.C. Ct. App. 2003). In this case, Western is not seeking indemnity based on an express contractual right to indemnity. Rather, Western contends that it has an implied-in-fact right and an implied-in-law right to indemnity. (See ECF No. 28 at 4, 8.)


“A right of indemnity implied-in-fact stems from the existence of a binding contract between two parties that necessarily implies the right. The implication is derived from the relationship between the parties, circumstances of the parties’ conduct, and that the creation of the indemnitor/indemnitee relationship is derivative of the contracting parties’ intended agreement.” Ashby, 587 S.E.2d at 474 (emphasis added). In order for there to be an implied-in-fact right to indemnity, a plaintiff must allege “special circumstances from which such an agreement might be implied.” Carl v. State, 665 S.E.2d 787, 798 (N.C. Ct. App. 2008). Where “both parties are well equipped to negotiate and bargain for such provisions,” it would be inappropriate for a court to find an implied-in-fact right of indemnity. Schenkel & Schultz, Inc. v. Hermon F. Fox & Assocs., P.C., 636 S.E.2d 835, 842 (N.C. Ct. App. 2006), aff’d, 658 S.E.2d 918 (N.C. 2008).


Unlike implied-in-fact indemnity, the common law right to indemnification implied-in-law has been described as an equitable doctrine of indemnification. See Ashby, 587 S.E.2d at 475. This Court explained that implied-in-law indemnity is a quasi-contractual obligation “created by the law for reasons of justice, without any expression of assent and sometimes even against a clear expression of dissent.” Ne. Solite Corp. v. Unicon Concrete, LLC, 102 F. Supp. 2d 637, 641 (M.D.N.C. 1999) (quoting Cox v. Shaw, 139 S.E.2d 676, 681 (N.C. 1965)). Implied-in-law indemnity is most frequently applied in the tort context to resolve liability among joint tortfeasors. Ne. Solite Corp., 102 F. Supp. 2d at 641. The North Carolina Supreme Court stated that “a party secondarily liable in a tort action is entitled to indemnity from the party primarily liable … when the active negligence of one tort-feasor and the passive negligence of another tort-feasor combine and proximately cause an injury to a third-person.” Hunsucker, 75 S.E.2d at 771; Teachy v. Coble Dairies, Inc., 293 S.E.2d 182, 186–87 (N.C. 1982). To be entitled to indemnity implied-in-law, “North Carolina law requires [that] there be an underlying injury sounding in tort” and that “[t]he party seeking indemnity must have imputed or derivative liability for the tortious conduct from which indemnity is sought.” Ashby, 587 S.E.2d at 475. Ultimately, implied-in-law indemnity is rooted in equity and is used to avoid unfairness. See Ne. Solite Corp., 102 F. Supp. 2d at 641.


*4 Western’s Amended Third-Party Complaint alleges that Coty completed two bills of lading for the shipment, declaring the value of Macy’s cargo and included a provision limiting Western’s liability to the agreed or declared value of the cargo. (ECF No. 20 ¶¶ 6, 44.) By declaring the value of the property and including liability limitation provisions, Western alleges that “Coty acknowledged that [Western’s] liability would be limited to such agreed or declared value, and that Coty would indemnify [Western] consistent with the terms of the contract and intent and conduct of [the parties].” (Id. ¶ 44.) Western alleges that it justifiably relied on Coty’s representations in preparing the transportation of the cargo, believing the cargo to be valued at $93,145.58, not in excess of $585,000. (See id. ¶¶ 10–12, 43.)



  1. Western fails to state a claim of indemnity implied-in-fact

Coty contends that the bills of lading issued to Western, standing alone, are insufficient to establish an implied-in-fact right to indemnity. (ECF No. 26 at 8.) According to Coty, Western’s allegations fail to demonstrate a binding contract between the parties that necessarily implies the right of indemnity. (See id.) The Court agrees.


While there appears to be no dispute that the allegations are sufficient to demonstrate an agreement between Western and Coty based on the bills of lading, Western “must plead more than just an underlying agreement between the parties,” Gregory Poole Equip. Co. v. ATS Logistics Servs., Inc., No. 5:13-CV-549-BO, 2014 WL 1760999, at *3 (E.D.N.C. Apr. 30, 2014). Western must plead facts from which it may be plausibly inferred that there are special circumstances, such as words or conduct, that demonstrate an indemnitor/indemnitee relationship was intended between the parties such that Coty agreed to bear responsibility for the loss of the cargo. See id.; McDonald Bros., Inc. v. Tinder Wholesale, LLC, 395 F. Supp. 2d 255, 267 (M.D.N.C. 2005). Western has failed to point to any authority that would support a claim of implied-in-fact indemnity based on allegations that Coty included, and it relied on, a limitation of liability provision in a bill of lading. That Coty purportedly limited Western’s liability to the declared value of the goods does not plausibly demonstrate a special relationship between the parties out of which Coty agreed to indemnify Western in an action brought by Macy’s. While the Carmack Amendment addresses a shipper’s ability to limit a carrier’s liability if it so chooses, 49 U.S.C. § 14706(c)(1)(A), it does not address issues of indemnification between those parties.


Western’s allegations are readily distinguishable from the circumstances in which courts have found an implied-in-fact right of indemnification. Western does not allege a master-servant or agency-type relationship, Ashby, 587 S.E.2d at 475, a promise made by Coty implying an intent to indemnify Western, see McDonald v. Scarboro, 370 S.E.2d 680, 686 (N.C. Ct. App. 1988); Ashby, 587 S.E.2d at 475, or any prior business dealings with Coty that would lead Western to believe that Coty agreed to indemnify it, see McDonald Bros., Inc., 395 F. Supp. 2d at 267. Nor is this case similar to the Fourth Circuit’s decision in General Electric Co. v. Moretz, 270 F.2d 780, 786–89 (4th Cir. 1959), where the court found that a shipper was entitled to indemnity from a carrier for injuries sustained to a truck driver because of the “special contractual relationship” between the two. See Int’l Surplus Lines Ins. Co., 838 F.2d at 127. The court relied on the fact that a federal statute and other laws imposed upon the carrier, not the shipper, a duty to transport the cargo safely, even though the shipper had failed to load the cargo safely. Moretz, 270 F.2d at 786–89.


Considering the allegations in the Amended Third-Party Complaint in the light most favorable to Western, as the non-moving party, Western has failed to allege facts that would allow this Court to draw the reasonable inference that it has a plausible claim of indemnification implied-in-fact against Coty. Thus, to the extent that Western’s claim of indemnification is based on implied-in-fact indemnity, it is subject to dismissal for failure to state a claim.



  1. Western has stated a plausible right to indemnity implied-in-law

*5 Coty next argues that Western cannot state a claim of implied-in-law indemnity because Macy’s underlying injury under the Carmack Amendment sounds in contract rather than tort. (See ECF No. 26 at 11.) According to Coty, the right to indemnity implied-in-law exists between joint tortfeasors and any liability that Western has to Macy’s stems from their contractual obligations under the bills of lading. (Id.) Coty further contends that even if the Carmack Amendment does sound in tort, Macy’s has not filed a tort claim against both Coty and Western and thus it cannot be a joint tortfeasor with Western. (Id. at 12–13.) The Court disagrees with both arguments.


The Carmack Amendment was intended to preempt all causes of action against motor carriers for loss or damaged shipments, irrespective of whether the cause of action is for tort or breach of contract. See Shao, 986 F.2d at 705 (“Every circuit court that has considered the issue has … conclude[d] … that the Carmack Amendment preempts a shipper’s state and common law claims of breach of contract and negligence for goods lost or damaged by a carrier during interstate shipment under a valid bill of lading.”). The mere fact that the underlying cause of action is governed by the Carmack Amendment “does not necessarily make it one sounding in breach of contract.” Custom Rubber Corp. v. ATS Specialized, Inc., 633 F. Supp. 2d 495, 515 (N.D. Ohio 2009) (emphasis added). Courts have stated that “the nature of the carrier’s duty under the Carmack Amendment sounds in negligence.” Fulton v. Chicago, Rock Island & Pac. R.R. Co., 481 F.2d 326, 333 (8th Cir. 1973); accord United States v. Reading Co., 289 F.2d 7, 9 (3d Cir. 1961) (affirming dismissal of case against a carrier because the carrier cannot be held liable for damage to goods caused by “the inherent vice or nature of the goods” in the absence of negligence on the part of the carrier); M.I.S. Eng’g v. U.S. Express Enters., Inc., 438 F. Supp. 2d 1056, 1062 (D. Neb. 2006) (“[D]espite the divergent language in the various cases, it is clear that the duty therein sought to be imposed on the common carrier with respect to transportation and delivery of goods is based on the law of negligence.” (quoting Fulton, 481 F.2d at 333)); Seaboard Air Line R.R. Co. v. Lake Region Packing Ass’n, 211 So. 2d 25, 27–28 (Fla. Dist. Ct. App. 1968); see also Mo. Pac. R.R. Co. v. Elmore & Stahl, 377 U.S. 134, 138 (1964) (explaining that to avoid liability under the Carmack Amendment, a carrier must prove, among other things, “that it was free from negligence” (emphasis added)).2


*6 Nor is the Court persuaded that dismissal of Western’s indemnification claim is warranted based on Coty’s argument that it and Western cannot be joint tortfeasors because Macy’s has not filed any claim against Coty. None of the cases cited by Coty can be read to stand for the proposition that Macy’s had to file a tort claim against Coty for Western and Coty to be joint tortfeasors. Coty’s argument reflects a misunderstanding of the law of indemnification and is contrary to the well settled rule that “[a]ctions for indemnification are generally brought by means of a third-party complaint,” Ne. Solite Corp. 102 F. Supp. 2d at 640 (citing Teachy, 293 S.E.2d at 187). To hold as Coty urges would effectively preclude defendants from joining responsible third-parties, limiting them to cross-claims if or when the plaintiff elected to sue such parties. Cf. Fed. R. Civ. P. (14)(a), advisory committee’s note to 1946 amendment (“The provisions in Rule 14(a) which relate to the impleading of a third party who is or may be liable to the plaintiff have been deleted by the proposed amendment. … [T]he plaintiff need not amend his complaint to state a claim against such third party if he does not wish to do so.”).3


Upon careful review of the Amended Third-Party Complaint and relevant case law, the Court concludes that Western has stated a plausible claim of indemnity implied-in-law. Like the federal common law of indemnification, implied-in-law indemnity under North Carolina law is rooted in principles of equity and fairness. Western alleges that Coty provided inaccurate representations regarding the actual value of the cargo, it justifiably relied on Coty’s representations in determining whether to implement additional safety measures, and had no opportunity to inspect the load to determine its actual value. (See ECF No. 20 ¶¶ 12, 43, 45.) Western alleges that if it is found to be liable to Macy’s, then Coty’s actions in failing to disclose the “high-value nature” of the cargo entitles it to indemnity. (Id. ¶ 45.) Viewing these allegations in the light most favorable to Western, as the non-moving party, Western has sufficiently stated a claim of indemnification against Coty. Cf. See Franklin Stainless Corp., 748 F.2d at 870 (explaining that carrier should not bear all liability for the accident and holding that contribution was proper because shipper and carrier should share the burden of liability because it was the shipper that loaded the truck and made assurances that misled the carrier into believing the load was safe).



  1. Western has stated a claim of contribution

Coty next argues that Western may not pursue contribution from Coty for the same reasons Western is unable to pursue indemnity implied-in-law. (ECF No. 26 at 13.) Specifically, Coty asserts that “[t]he right to contribution in North Carolina is governed by the Uniform Contribution Among Tortfeasors Act.” (Id.) This statute provides:

[W]here two or more persons become jointly or severally liable in tort for the same injury to person or property or for the same wrongful death, there is a right of contribution among them even though judgment has not been recovered against all or any of them.

N.C. Gen. Stat. § 1B-1. For the same reasons the Court denied Coty’s motion to dismiss Western’s claim of indemnification, the Court concludes that Coty’s motion to dismiss the contribution claim fails at this stage in the litigation.



  1. Remaining Claims

Having concluded that Western’s indemnification and contribution claims are plausible and thus not subject to dismissal at this stage in the proceedings, the Court need not address Coty’s argument that Western’s breach of contract, negligent misrepresentation, and unfair and deceptive trade practices claims must be dismissed on the basis that these claims are not properly impleaded under Rule 14.4 See Fed. R. Civ. P. 18 (“A party asserting a … third-party claim may join, as independent or alternative claims, as many claims as it has against an opposing party.”). The Court will, however, examine Coty’s arguments that Western’s negligent misrepresentation and unfair and deceptive trade practices claims must be dismissed for failure to state a claim.5 Because these claims are not dependent on Western’s liability to Macy’s, it is clear they are governed by North Carolina law.



  1. Negligent Misrepresentation

*7 Coty moves to dismiss Western’s negligent misrepresentation claim on the ground that Western has failed to plead facts sufficient to allege Coty owed Western a duty of care that is separate and distinct from the duty Coty owed under the parties’ bill of lading contract. (ECF No. 26 at 16.) In particular, Coty argues that Western’s alleged injury is the loss of Macy’s cargo, which is also the subject matter of the bill of lading contract. (Id. at 17.) According to Coty, it is the law of contract, not the law of negligence, which defines the parties’ obligations and remedies. (Id. at 17.) The Court agrees.


It is well settled that “a breach of contract does not give rise to a tort action.” Kelly, 671 F. Supp. 2d at 791 (quoting N.C. State Ports Auth. v. Lloyd A. Fry Roofing Co., 240 S.E.2d 345, 350 (N.C. 1978), rejected in part on other grounds by Trs. of Rowan Tech. Coll v. J. Hyatt Hammond Assocs., Inc., 328 S.E.2d 274 (N.C. 1985)); see also LRP Hotels of Carolina, LLC v. Westfield Ins. Co., No. 4:13-cv-94-D, 2014 WL 5581049, at *6 (E.D.N.C. Oct. 31, 2014) (dismissing negligence and negligent misrepresentation claims because they are based on the alleged negligence in the performance of duties under the contract). “When injury occurs to the subject matter of a contract, ‘[i]t is the law of contract and not the law of negligence which defines the obligations and remedies of the parties ….’ ” LRP Hotels, 2014 WL 5581049, at *6 (alteration in original) (quoting Spillman v. Am. Homes of Mocksville, Inc., 422 S.E.2d 740, 742 (N.C. Ct. App. 1992)). Thus, to pursue a tort claim and a breach of contract claim involving the same conduct, “a plaintiff must allege a duty owed him by [a] defendant separate and distinct from any duty owed under a contract.” Id. (alteration in original) (quoting Vanwyk Textile Sys., B.V. v. Zimmer Mach. Am., Inc., 994 F. Supp. 350, 362 (W.D.N.C. 1997)).


Western has failed to adequately plead the existence of a duty independent of the alleged duty owed by Coty under the parties’ bills of lading. Western alleges in its Amended Third-Party Complaint that “Coty supplied information to Western Express, in the ordinary course of Coty’s business, regarding the value of the subject cargo, and for purposes of a transaction in which both Coty and Western Express had a financial and pecuniary interest.” (ECF No. 20 ¶ 21.) Western further alleges that “Coty owed a duty to Western Express to provide accurate information regarding the actual value of the cargo owned by Macy’s and being shipped by Coty” and that Western relied on such information in preparing the transportation of the cargo. (Id. ¶¶ 23–25.) Virtually the same allegations form the basis of Western’s breach of contract claim. (See id. ¶ 16 (“Coty was obligated under the terms of its contract with Western Express to provide accurate information to Western Express regarding the actual value of the cargo owned by Macy’s and being shipped by Coty.”); id. ¶ 17 (“Coty breached its contract with Western Express by providing false and inaccurate information to Western Express regarding the value of the subject cargo, by failing to properly declare or disclose the actual value of the cargo to Western Express ….”).) While Western alleges that it relied on Coty’s representation in preparing transportation of the cargo, (id. ¶ 22), Western has not alleged an identifiable duty owed by Coty separate and distinct from any duty allegedly owed under the parties’ bills of lading. Thus, Western’s negligent misrepresentation claim must be dismissed for failure to state a claim.



  1. North Carolina’s Unfair and Deceptive Trade Practices Act (“UDTPA”)

*8 This claim requires “(1) an unfair or deceptive act or practice, or an unfair method of competition, (2) in or affecting commerce, (3) which proximately caused actual injury to the plaintiff or to his business.” Faucette v. 6303 Carmel Rd., LLC, 775 S.E.2d 316, 323 (N.C. Ct. App. 2015) (quoting Spartan Leasing Inc. v. Pollard, 400 S.E.2d 476, 482 (N.C. Ct. App. 1991)). “A practice is unfair if it is unethical or unscrupulous, and it is deceptive if it has a tendency to deceive.” Id. at 324 (quoting Dalton v. Camp, 548 S.E.2d 704, 711 (N.C. 2001)). Importantly, a mere breach of contract is insufficient to support a UDTPA claim unless there are “substantial aggravating circumstances.” Stack v. Abbott Labs., Inc., 979 F. Supp. 2d 658, 668 (M.D.N.C. 2013) (quoting Griffth v. Glenn Wood Co., 646 S.E.2d 550, 558 (N.C. Ct. App. 2007)).


Here, the Amended Third-Party Complaint alleges, among other things, that “[t]he formation of the contract between Coty and Western Express and the decisions regarding the shipment of the cargo … were dictated by Coty’s deception and misrepresentation in undervaluing the cargo.” (ECF No. 20 ¶ 36.) Western alleges that these misrepresentations were in and affecting commerce and proximately caused it to suffer damages. (Id. ¶¶ 37–38.) Taken as true, these allegations are sufficient to state a UDTPA claim against Coty.


The Court rejects Coty’s argument that Western has alleged “no new substantially aggravating circumstances—surrounding this alleged wrongdoing that it has not already alleged in support of its previous contract claim [ ].” (ECF No. 26 at 19–20.) Western has alleged that formation of its contract was “dictated” by Coty’s deception. See Stack, 979 F. Supp. 2d at 668 (“The type of conduct that has been found sufficient to constitute a substantial aggravating factor has generally involved forged documents, lies, and fraudulent inducements.”). Thus, the Court denies Coty’s motion to dismiss Western’s UDTPA claim.



  1. Conclusion

Western has stated claims of indemnification and contribution, permitting Western to bring its breach of contract, negligent misrepresentation, and UDTPA claims. While Western has stated a claim to relief on its UDTPA claim, Western’s negligent misrepresentation claim must be dismissed for failure to state a claim. Coty has not moved to dismiss Western’s breach of contract claim. Thus, Coty’s Motion to Dismiss the Amended Third-Party Complaint should be granted only as to the negligent misrepresentation claim, and should be denied as to the indemnification, contribution, breach of contract, and UDTPA claims.


For the reasons outlined herein, the Court enters the following:




IT IS THEREFORE ORDERED that Coty’s Motion to Dismiss Western’s Amended Third-Party Complaint (ECF No. 25) is GRANTED IN PART AND DENIED IN PART. Coty’s motion is granted to the extent it seeks dismissal of Western’s negligent misrepresentation claim; and the motion is denied to the extent it seeks dismissal of Western’s remaining claims.


All Citations

Slip Copy, 2017 WL 1194358





Coty also moves to dismiss Western’s Amended Third-Party Complaint under Rule 14(a). (ECF No. 25.) However, as more fully explained herein, the Court will not address this argument.


Coty relies on North American Van Lines, Inc. v. Pinkerton Security Systems, Inc., 89 F.3d 452 (7th Cir. 1996), American Synthetic Rubber Corp. v. Louisville, & Nashville Railroad Co., 422 F.2d 462 (6th Cir. 1970), and Fireman’s Fund Insurance Co. v. Werner Enterprises Inc., No. 03 C 3228, 2004 WL 406981, at *6–7 (N.D. Ill. Feb. 6, 2004), for its argument that potential liability under the Carmack Amendment sounds in contract rather than tort and thus there can be no right of indemnification or contribution here. (See ECF No. 26 at 11–12.) These cases, however, do not carry the weight Coty claims. North American Van Lines and Fireman’s Fund Insurance were both decided before Sompo Japan Insurance, Inc. v. Nippon Cargo Airlines Co., Ltd., where the Seventh Circuit recognized a common law right to a setoff, notwithstanding its earlier decision in North American Van Lines, see 522 F.3d 776, 786–87 (7th Cir. 2008). The Sixth Circuit in American Synthetic did not address issues involving indemnification or contribution, but rather addressed the preemptive scope of the Carmack Amendment. See 422 F.2d at 465–66.


Moreover, federal and North Carolina state courts have permitted a defendant to assert a third-party complaint, as Western has done, against another party not named as a defendant by the plaintiff. See, e.g., Kelly v. Ga.-Pac. LLC, 671 F. Supp. 2d 785, 790, 801 (E.D.N.C. 2009); Duke Energy Carolinas, LLC v. Bruton Cable Serv., Inc., 756 S.E.2d 863, 868 (N.C. Ct. App. 2014).


Specifically, Coty asserted that, if the Court dismissed the contribution and indemnity claims, then the remaining claims are completely independent of any liability Western has to Macy’s, requiring their dismissal. (See ECF No. 26 at 15 (“While Western’s claims for indemnity and contribution are arguably derivative of, and dependent upon, its potential liability to Macy’s, if the Court dismisses Western’s indemnity and contribution claims for the reasons outlined herein, each of Western’s remaining state law claims are completely independent of possible liability to Macy’s.”).)


Coty does not seek dismissal of Western’s breach of contract claim for failure to state a claim.






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