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JAS Forwarding (USA), Inc. v. Owens Truckmen, Inc.

United States District Court, E.D. New York

November 1, 2017

JAS FORWARDING (USA), INC., Plaintiff,
v.
OWENS TRUCKMEN, INC., OWENS LOGISTICS GROUP, LLC, Defendant.

          Spector Rubin, P.A. Attorneys for the Plaintiff By: Andrew R. Spector, Esq., of Counsel.

          George W. Wright & Associates, LLC Attorneys for the Defendants By: George W. Wright, of Counsel.

          MEMORANDUM OF DECISION AND ORDER

          ARTHUR D. SPATT, UNITED STATES DISTRICT JUDGE

         The Plaintiff JAS Forwarding (USA), Inc. (the “Plaintiff”) brought this action against the Defendants Owens Truckmen, Inc. (“OTI”) and Owens Logistics Group, LLC (“OLG”) (collectively, the “Defendants”) alleging fraudulent misrepresentation, breach of contract, and, in the alternative, breach of statutory duties under the ICC Termination Act of 1995, the Carmack Amendment, 49 U.S.C.§ 14706 et seq. The Plaintiff only seeks damages in the amount of $15, 000.

         Presently before the Court are two motions: a motion by OLG to vacate the Clerk's entry of default pursuant to Federal Rule of Civil Procedure (“Fed. R. Civ. P.” or “Rule”) 55(c), and a motion by OTI to dismiss the fraudulent misrepresentation count pursuant to Rule 12(b)(6). For the following reasons, OLG's motion to vacate the entry of default is granted, and OTI's motion to dismiss is denied.

         I. BACKGROUND

         A. The Relevant Procedural Background

         On May 15, 2017, the Plaintiff filed its complaint in the Supreme Court of the State of New York, Nassau County. The complaint alleged two causes of action-for fraudulent misrepresentation, and breach of contract. In the alternative, the complaint alleged a cause of action for breach of statutory duties under the ICC Termination Act of 1995, the Carmack Amendment, 49 U.S.C. § 14706 et seq.

         On June 14, 2017, OTI removed the action on the ground that the Court has jurisdiction over a federal question; namely, whether the Defendants violated the Carmack Amendment.

         On June 19, 2017, OTI filed a motion pursuant to Rule 12(b)(6) to dismiss the Plaintiff's claim for fraudulent misrepresentation against it.

         On June 28, 2017, the Plaintiff requested a certificate of default against OLG. The Clerk of the Court noted the default of OLG on the same day.

         On September 21, 2017, OLG moved to vacate the Clerk's entry of default.

         B. The Relevant Facts

         The following facts are drawn from the Plaintiff's complaint, and for the purposes of OTI's motion to dismiss pursuant to Rule 12(b)(6), are accepted as true.

         The Plaintiff is a Georgia corporation. It is not clear from the face of the complaint in what type of business the Plaintiff engages. OTI and OLG are New York corporations. Both of the Defendants appear to engage in trucking services, and the complaint alleges that the Defendants are carriers as defined by the Carmack Amendment, or they held themselves out to be carriers.

         Although the complaint does not state when, the Plaintiff retained OTI to unpack, store, and ship cargo containing mascara (the “cargo”). The complaint does not state if this was a onetime agreement, or if it was an ongoing relationship.

         At some point, which is not clear from the face of the complaint, the cargo arrived in the Port of New Jersey. The complaint alleges that OTI received the cargo, and brought it to its warehouse for delivery to Howell, Michigan. Again, the complaint does not state any dates for these events.

         The pickup order, which was sent from the Plaintiff to OTI, stated that the cargo consisted of 21 pallets. When the cargo was delivered to Michigan, “it was discovered” that three pallets were missing. The three pallets amounted to 23, 328 sets of mascara. The complaint does not state when the cargo arrived, or who “discovered” that the three pallets were missing.

         The complaint alleges that OTI did not make any exceptions to the quantity of cargo that it had received, nor did it notify the Plaintiff that it had received fewer pallets than the number indicated on the pickup order.

         The Plaintiff's customer, who presumably ordered the missing mascara, made a claim against the Plaintiff for $21, 788.35. Through a series of emails, OTI allegedly stated that they would, through insurance, reimburse the Plaintiff for the missing pallets. The Plaintiff claims that it relied on these representations from OTI when it paid the customer who made the claim against it. On February 15, 2017, which is the only date detailed in the complaint, OTI allegedly told the Plaintiff that “[w]e will have our insurance take care of it.”

         However, OTI apparently later stated that it never agreed to reimburse the Plaintiff.

         The Plaintiff was informed, on some date, that OTI did not perform the services at issue for the Plaintiff, but that OLG had done so instead, and that OLG did not have insurance for the Plaintiff's claim. The Plaintiff alleges that OTI has stated that OLG is a “motor broker only, and not a carrier, and, therefore, has no responsibility for any cargo loss.” (Compl. ¶ 27). The Plaintiff states that it always communicated with OTI, and that all documents provided to the Plaintiff ...


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