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Personal Communications Devices v. Platinum Cargo Logistics

September 3, 2010


The opinion of the court was delivered by: Dean D. Pregerson United States District Judge


[Motion filed on 7/09/2010 and 8/2/2010]

Presently before the court is Defendant Platinum Cargo Logistics' ("Platinum") Partial Motion for Summary Judgment and Plaintiff Personal Communications Devices("PCD)'s Motion to Dismiss. After reviewing the materials submitted by the parties and hearing oral argument, the court grants the partial motion for summary judgment, denies the motion to dismiss, and adopts the following order.

I. Background

On or around October 2, 2008, PCD tendered seven separate consigned shipments containing mobile phones to Platinum. (Compl. ¶ 9.) PCD alleges that, together, the seven shipments were worth $7,692,149.60. (Id.) Prior to tendering the goods, PCD prepared an online bill of lading through Platinum's website, and signed an agreement setting forth Platinum's standard terms and conditions. (Compl. ¶¶ 27-28.) PCD elected a declared value of $35,000 for each shipment (totaling $245,000 for all seven shipments) on the bill of lading. (Compl. ¶ 28.) Platinum accepted the declared value of $35,000 in lieu of its standard limitation of liability of 50 cents per pound. (Id.) Rather than declare the actual value of each shipment and pay a higher freight rate, PCD obtained insurance of $5 million per truckload.

According to PCD, the parties agreed that each consigned shipment would be shipped "less than trailer load," i.e., that the shipments would not be consolidated without notification. (Compl. ¶ 10.) In contravention of the parties agreement, PCD contends, Platinum consolidated the seven shipments without providing notification. (Id.) Because PCD's shipping insurance policy contained a $5 million dollar per truckload limit, Platinum's consolidation of the shipment exposed PCD to considerable risk (approximately $2.6 million of uninsured exposure).

Platinum, the Complaint alleges, subcontracted carriage of the shipment to Defendant Celestial Freight Solutions, LLC ("Celestial"). (Compl. ¶ 14.) On October 2, 2008, two drivers from Celestial picked up the shipment to transport it from Carson, CA to Louisville, Kentucky. (Id.) On October 3, 2008, the two Celestial drivers reported the truck, trailer, and shipments stolen. (Compl. ¶ 16.) According to the Complaint, the truck and trailer were stolen from an unlocked truck yard in Santa Ana, CA, where the drivers had, for reasons unknown, temporarily stored them. (Id.)

On October 4, 2008, the Pasadena Police Department recovered the truck, but not the trailer containing the shipment. (Compl. ¶ 17.) On November 4, 2008, the North Port (Florida) Police Department recovered the trailer. (Compl. ¶ 18.) The shipment was never recovered. (Id.)

PCD contends that the Celestial drivers were not properly trained, and that they failed to undertake the security precautions that Platinum guaranteed in the parties' agreement. PCD also contends that Platinum: (1) refused to provide PCD with a copy of its tariff; (2) failed to use care in selecting a motor carrier; (3) wrongfully held out personnel as experienced; and (4) failed to "abide by reasonable standards of conduct in all pre-shipment processes. (Opp'n 8:1-7.)

PCD submitted timely claims to its insurer, Fireman's Fund, but the claims were denied on the grounds that Platinum, and its agents, were responsible for the loss of the shipment. (Compl. ¶ 21.) Fireman's Fund subsequently sued PCD in federal district court seeking a declaration that PCD's insurance policy does not cover the loss of the shipment.*fn1 (Compl. ¶ 20.)

PCD brought the present action, naming Platinum, Celestial, and the two drivers (Lai Dang and Thuong Trong) as defendants, on May 1, 2009. The Complaint seeks $7,692,149 in damages and sets forth the following causes of action: (1) breach of contract (against Platinum only); (2) breach of bailment obligations; (3) negligence, gross negligence, recklessness and/or willfulness; and (4) conversion. On October 6, 2009, this court concluded that the Carmack Amendment preempts PCD's state law claims against Platinum and Celestial, and dismissed all state law claims. (Dkt. No. 37.) Platinum now moves for partial summary judgment, arguing that the Carmack Amendment limits Platinum's liability to $245,000, the declared value of the seven stolen shipments. (Dkt. No. 56.) PCD seeks to dismiss this case and resolve its dispute with Platinum as part of the related Fireman's Fund case. (Dkt. No. 61.)

II. Legal Standard

A motion for summary judgment must be granted when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show 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." Fed. R. Civ. P. 56(c). A party seeking summary judgment bears the initial burden of informing the court of the basis for its motion and of identifying those portions of the pleadings and discovery responses that demonstrate the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

Where the moving party will have the burden of proof on an issue at trial, the movant must affirmatively demonstrate that no reasonable trier of fact could find other than for the moving party. On an issue as to which the nonmoving party will have the burden of proof, however, the movant can prevail merely by pointing out that there is an absence of evidence to support the nonmoving party's case. See id. If the moving party meets its initial burden, the non-moving party must set forth, by affidavit or as otherwise provided ...

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