C.H. Robinson Co. v. Paris & Sons, Inc., C01-2030-MWB.

Decision Date10 December 2001
Docket NumberNo. C01-2030-MWB.,C01-2030-MWB.
PartiesC.H. ROBINSON COMPANY, Plaintiff, v. PARIS & SONS, INC., et al., Defendants.
CourtU.S. District Court — Northern District of Iowa

Joseph G. Bertroche, Sr., Bertroche Law Offices, Des Moines, IA, for C.H. Robinson Company.

John M. Titler, Titler & Monroe, Cedar Rapids, IA, for Paris & Sons, Inc.

Michael A. Giudicessi, Faegre & Benson, Des Moines, IA, for Midwest Agricultural Warehouse Company.

ORDER REGARDING MIDWEST AGRICULTURE WAREHOUSE CO.'S, d/b/a UNITED AGRI PRODUCTS MN-IA, MOTION TO DISMISS AND JOINT MOTION TO CONTINUE OR SUSPEND DEADLINES

BENNETT, Chief Judge.

                                             TABLE OF CONTENTS
                 I. INTRODUCTION ............................................................. 1005
                   A. Procedural Background .................................................. 1005
                   B. Factual Background ..................................................... 1006
                II. LEGAL ANALYSIS ........................................................... 1006
                    A. Standard Of Review .................................................... 1006
                    B. Midwest's Motion To Dismiss ........................................... 1007
                       1. The applicable statute of limitations .............................. 1007
                       2. When did C.H. Robinson's claim accrue? ............................. 1008
                       C. Effect Of Automatic Stay On Action Against Midwest ................. 1009
                       1. General rule: Stay does not extend to non-debtors .................. 1009
                       2. The exception to the general rule: A.H. Robins Co. v. Piccinin ..... 1010
                       3. Is extension of automatic stay truly automatic? .................... 1011
                          a. Eighth Circuit Court of Appeals's treatment of extensions ....... 1012
                          b. Application of Eighth Circuit caselaw ........................... 1015
                          c. Legislative history ............................................. 1016
                       4. Significance of any right of indemnity by Midwest against Paris &amp
                                Sons ......................................................... 1016
                       5. Summary ............................................................ 1018
                
                D. Calculation Of The Limitations Period ................................. 1019
                    E. Indispensable Party ................................................... 1020
                III. JOINT MOTION TO CONTINUE OR SUSPEND DEADLINES, OR, IN
                           THE ALTERNATIVE, FOR A SCHEDULING CONFERENCE ...................... 1020
                IV. CONCLUSION ............................................................... 1020
                
I. INTRODUCTION

In this motion to dismiss for failure to state a claim upon which relief could be granted under Federal Rule of Civil Procedure 12(b)(6), one of the co-defendants, Midwest Agriculture Warehouse ("Midwest"), seeks dismissal of the plaintiff's action, as against Midwest, on the ground the action is time-barred under 49 U.S.C. § 14705(a), which imposes an eighteen month limitations period on claims based on unpaid freight charges of goods moved in interstate commerce. In the underlying action, the plaintiff seeks to recover unpaid freight charges from the codefendants, Midwest and Paris & Sons. Paris & Sons has not joined Midwest in seeking dismissal.1

A. Procedural Background

The initial complaint in this action was filed in state court on July 13, 1998, against Paris & Sons. On July 20, 1998, the plaintiff amended its complaint and joined Midwest as a defendant. Shortly thereafter, on August 14, 1998, Paris & Sons filed for Chapter 11 bankruptcy. On November 12, 1998, Midwest removed the action to the United States District Court for the Northern District of Iowa.2 The defendant filed an affidavit of notice of removal with Delaware County District Court on November 16, 1998.

However, on April 22, 1999, District Court Judge Edward J. McManus dismissed the case for want of prosecution. On May 16, 2000, the bankruptcy court also dismissed Paris & Sons's bankruptcy petition. Nearly one year later on April 13, 2001, the plaintiff again filed its complaint seeking unpaid freight charges in state court, naming both Paris & Sons and Midwest as defendants. On May 24, 2001, Midwest removed this action to federal court. Federal jurisdiction is proper pursuant to 28 U.S.C. § 1337 (commerce) and 28 U.S.C. § 1331 (federal question), and Midwest now seeks dismissal of the action as against Midwest, raising the sole contention in support of its motion to dismiss that the claims in the complaint are barred by the applicable statute of limitations.3

B. Factual Background

The underlying action in this case concerns C.H. Robinson's claim for freight charges incurred in 1997 and 1998 in connection with the shipment of goods by C.H. Robinson for Paris & Sons. C.H. Robinson contends that both Paris & Sons and Midwest (the co-defendants) are liable for the unpaid freight charges. According to the complaint, Paris & Sons entered into several agreements with C.H. Robinson between September of 1997 and February of 1998 in which C.H. Robinson shipped goods at Paris & Sons's direction from Paris & Sons's offices in Masonville, Iowa and Manchester, Iowa to various locations around the country. C.H. Robinson contends that Midwest is also liable for these charges based on a consignment agreement between the codefendants and a federal regulation that renders consignors of goods liable for freight charges, unless otherwise stipulated in the bill of lading.4 More specifically, pursuant to an agreement between Paris & Sons and Midwest, Midwest provided to Paris & Sons on a consignment basis certain agricultural products for sale by Paris & Sons to its customers. Midwest retained ownership of all goods in the possession of Paris & Sons. Thus, according to the complaint, the goods shipped by C.H. Robinson for Paris & Sons were owned by Midwest and, consequently, C.H. Robinson contends that, as the consignor of the goods shipped, Midwest is liable for unpaid freight charges.

The crux of this motion to dismiss is the scope of the Bankruptcy Code's automatic stay provision, 11 U.S.C. § 362. The parties agree that when Paris & Sons filed for bankruptcy, C.H. Robinson's complaint against Paris & Sons was stayed and, consequently, the running of the limitations period was suspended as to the action against Paris & Sons. However, C.H. Robinson maintains that, based on Midwest's status as the consignor of the goods shipped, Midwest is an indispensable party to C.H. Robinson's action; therefore, C.H. Robinson argues that the automatic stay's tolling effect redounded to stay the action against Midwest as well. Thus, C.H. Robinson asserts that its complaint against Midwest is timely.

II. LEGAL ANALYSIS
A. Standard Of Review

In ruling on a motion to dismiss for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, the court must "accept the complaint's factual allegations as true and construe them in the light most favorable to [the plaintiff]." Whitmore v. Harrington, 204 F.3d 784, 784 (8th Cir.2000); accord Cruz v. Beto, 405 U.S. 319, 322, 92 S.Ct. 1079, 31 L.Ed.2d 263 (1972); Anderson v. Franklin County, Mo., 192 F.3d 1125, 1131 (8th Cir.1999); Gross v. Weber, 186 F.3d 1089, 1090 (8th Cir.1999); Midwestern Mach. v. Northwest Airlines, Inc., 167 F.3d 439, 441 (8th Cir.1999); Valiant-Bey v. Morris, 829 F.2d 1441, 1443 (8th Cir.1987). A complaint should be dismissed under Rule 12(b)(6) only if, taking the allegations as true, "it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984); Knapp v. Hanson, 183 F.3d 786, 788 (8th Cir.1999) ("A motion to dismiss should be granted only if `it appears beyond doubt that the plaintiff can prove no set of facts which would entitle him to relief.'") (quoting Morton v. Becker, 793 F.2d 185, 187 (8th Cir.1986), and citing Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). This court also observes that a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) does not test whether the plaintiff will prevail on the merits, but rather tests whether the plaintiff has properly stated a claim upon which relief can be granted. See Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974). On a 12(b)(6) motion to dismiss on the ground the action is time-barred, the court determines merely whether "it is apparent from the face of the complaint that the time limit for bringing the claim has passed." 5 CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE & PROCEDURE § 1308, at 695 (2d ed.1990).

B. Midwest's Motion To Dismiss
1. The applicable statute of limitations

In its complaint, C.H. Robinson relies on 49 C.F.R. Part 1035, Appendix B, Section 7 as the basis of Midwest's liability for unpaid shipping charges. Plaintiff's Complt. ¶ 9. This regulation provides:

The consignor shall be liable for the freight and all other lawful charges, except that if the consignor stipulates, by signature, in the space provided for that purpose on the face of this bill of lading that the carrier shall not make delivery without requiring payment of such charges and the carrier, contrary to such stipulation, shall make delivery without requiring such payment, the consignor ... shall not be liable for such charges.

49 C.F.R. Pt. 1035, App. B, Sec. 7 (2000).

Midwest asserts, and C.H. Robinson does not dispute, that the applicable statute of limitations on Paris & Sons's claim against Midwest is 49 U.S.C. § 14705(a), which prescribes a statute of limitations of eighteen months for all actions relating to transportation services: "A carrier providing transportation or service subject to jurisdiction under chapter 135 must begin a civil action to recover charges for transportation or service...

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