Freightmaster U.S., LLC v. FedEx, Inc.
| Decision Date | 31 March 2015 |
| Docket Number | Civil No.: 14-3229 (KSH) (CLW) |
| Parties | FREIGHTMASTER USA, LLC, Plaintiff, v. FEDEX, INC., Defendant. |
| Court | U.S. District Court — District of New Jersey |
NOT FOR PUBLICATION
Freightmaster USA, LLC ("Freightmaster") filed suit in New Jersey Superior Court against defendant Fedex Freight, Inc.1 ("Fedex"), claiming that Fedex owed it fees for cargo and freight delivery services under a cartage agreement ("Agreement"). (D.E. 1-1, "Compl.") Fedex removed this action, relying on this Court's diversity jurisdiction (D.E. 1, "Notice of Removal."), and brought the motion to dismiss that is now before the Court. [D.E. 5.] As set forth below, the motion will be granted in part and denied in part.
The following facts and procedural history are taken from Freightmaster's complaint, documents integral to its allegations that are referenced in the complaint, and the public record. The Court accepts as true all facts in the complaint and draws all reasonable inferences from the facts in a light most favorable to Freightmaster. Phillips v. Cnty. of Allegheny, 515 F.3d 224, 231 (3d Cir. 2006).
Freightmaster performed "cargo and freight delivery services" for Fedex from December 2008 to April 2010 pursuant to the Agreement in about June 2009.2 (Compl., ¶ 4; D.E. 1-2, "Agreement.") According to Freightmaster, it "performed all services and all services were used and accepted by" Fedex, and from approximately October 2009 through April 2010, it repeatedly sought payment for those services. (Id. ¶¶ 5, 6.) Freightmaster claims that Fedex knew about its debt because of repeated correspondence sent in an attempt to collect it. (Id. ¶¶ 6, 7.)
Earlier, in September, 2012, Freightmaster had filed suit against Fedex in state court to collect fees allegedly owed for services performed between November 2003 and September 2007, asserting claims of breach of contract and the duty of good faith and fair dealing, unjust enrichment, negligent infliction of economic loss, and promissory estoppel.3 (D.E. 5-3, "Rygiel-Boyd Aff.," ¶ 4; D.E. 19-1.) On October 30, 2013, that action was dismissed without prejudice, and Freightmaster moved for reconsideration, which the court denied. (Rygiel-Boyd Aff., ¶¶ 5, 6.)
On March 24, 2014, Freightmaster filed a nearly identical complaint against Fedex in state court, containing the same allegations as the dismissed complaint with the addition of a claim of bad faith. This time, it sought payment for services rendered from December 2008 to April 2012. (Compl., ¶ 4.) On May 20, 2014, Fedex removed the action from state court, citing this Court's diversity jurisdiction. (Notice of Removal, ¶ 17.) Fedex indicates that it first became aware of Freightmaster's lawsuit on April 21, 2014, when it received a copy of the complaint, civil case information statement, and tracking assignment notice from Federal Express Corporation bycertified mail. (Id. ¶ 2.) Fedex then filed the within motion to dismiss in lieu of an answer for insufficient service and service of process and failure to state a claim upon which relief can be granted. [D.E. 5.]
Fedex claims that Freightmaster failed to properly serve it and that the complaint must be dismissed pursuant to Fed. R. Civ. P. 12(b)(4) and (5). Fedex alleges that Freightmaster sent the complaint, without attaching a summons, by certified mail to Federal Express Corporation's principal place of business in Memphis, Tennessee,4 and that Fedex, which is the proper defendant and a separate corporate entity, has its principal place of business in Arkansas where it is also organized and incorporated. (Notice of Removal, ¶¶ 2, 11, 13.) Fedex claims to have received notice of Freightmaster's lawsuit only after Federal Express Corporation sent it the complaint by certified mail. (Id. ¶ 2.) Freightmaster concedes to the facts regarding service of the complaint and the summons, but claims that improper service is irrelevant because Fedex did not suffer any prejudice, having received notice of the complaint within the 30-day period to remove the suit to federal court.
The New Jersey Court Rules govern whether Freightmaster effected proper service on Fedex because it was made prior to removal. See Di Loreto v. Costigan, 351 F. App'x 747, 752 (3d Cir. 2009). N.J. Ct. R. 4:4-4(a)(6) states that proper service is made on a corporation:
by serving a copy of the summons and complaint[, personally,] on any officer, director, trustee or managing or general agent, or any person authorized by appointment or by law to receive service of process on behalf of the corporation, or on a person at the registered office of the corporation in charge thereof, or, if service cannot be made on any of those persons, then on a person at the principal place of business of the corporation in this State in charge thereof, or if there is no place of business in this State, then on any employee of the corporation within this State acting in the discharge of his or her duties.
Service by mail is only permitted if, after "diligent effort and inquiry," it cannot be achieved as described above. N.J. Ct. R. 4:4-4(b)(1). Thus, Freightmaster's service was improper because it did not personally serve Fedex with the complaint and summons, and it sent the complaint by certified mail without first attempting personal service.
Nevertheless, "if the plaintiff shows good cause for the failure, the court must extend the time for service for an appropriate period." Fed. R. Civ. P. 4(m); see also Petrucelli v. Bohringer & Ratzinger, 46 F.3d 1298, 1306 (3d. Cir. 1995). A plaintiff seeking to demonstrate good faith must show "some reasonable basis for noncompliance within the time specific rules." Chiang v. U.S. Small Bus. Admin. , 331 F. App'x 113, 115 (3d Cir. 2009). Prejudice to the defendants also factors into the court's good faith assessment, but the "absence of prejudice alone can never constitute good cause to excuse late service." MCI Telecomms. Corp. v. Teleconcepts, Inc., 71 F.3d 1086, 1097 (3d Cir. 1995). Instead, the court's "primary focus is on the plaintiff's reasons for not complying . . . in the first place." Boley v. Kaymark, 123 F.3d 756, 758 (3d Cir. 1997) (citation and internal quotation marks omitted).
In the absence of good cause, "[a] court may in its discretion decide whether to dismiss the case without prejudice or extend the time for service." Petrucelli, 46 F.3d at 1306. An exercise of the court's discretion to extend time for service is proper, for example, if the statute of limitations would prevent the refiling of the action or the defendant has tried to evade service, id., and the court may also consider whether the plaintiff proceeded pro se or later moved to extend the time within which to serve the defendant. Snyder v. Swanson, 371 F. App'x 285, 287 (3d Cir. 2010). Further, the Third Circuit has repeatedly stressed that there is a "prefer[ence] that cases beadjudicated on the merits." Catanzaro v. Fischer, 507 F. App'x 162, 165 (3d Cir. 2014) (quoting Hritz v. Woma Corp., 732 F.2d 1178, 1181 (3d Cir. 1984)).
Freightmaster first became aware that it did not properly serve Fedex on May 20, 2014, when Fedex removed the action, and this motion to dismiss was filed on June 6, 2014. [D.E. 5.] On June 30, 2014, Freightmaster's prior counsel requested to extend the time to file the opposition from July 7 to July 21, 2014, which was granted. [D.E. 7.] By letter date July 15, 2014, prior counsel told the Court for the first time that he did not practice in federal court and requested for a further time extension to allow Freightmaster to obtain substitute counsel and respond to the motion to dismiss. The Court was informed by Freightmaster's current counsel on July 22, 2014, that he had been approached to represent Freightmaster and would make a decision after reviewing the case's file. [D.E. 9-1.] On July 31, 2014, Freightmaster's current counsel filed his substitution of attorney, and he soon thereafter filed the opposition brief to Fedex's motion to dismiss on August 8, 2014. [D.E. 11; 15.]
The Court finds that if it were not to permit Freightmaster to re-serve the complaint the statute of limitations on its claim could run. At the earliest, Freightmaster asserted that it gave Fedex notice about the debt in about October 2009 and, viewing the facts in a light most favorable to Freightmaster, Freightmaster's claims accrued at that time. The statute of limitations in New Jersey for those claims is six years, N.J.S.A. 2A:14-1. Accordingly, in the interest of adjudicating the case on the merits, the Court will allow Freightmaster 15 days to name Fedex in the complaint and properly serve it at its principal place of business in Arkansas.
Having determined that Freightmaster may re-serve Fedex, it is necessary to proceed to Fedex's motion to dismiss under Rule 12(b)(6) because there would be no need for Freightmaster to do so if the motion is granted. Fedex argues that all of Freightmaster's claims are barred by New Jersey's Entire Controversy Doctrine and a nine-month contractual statute of limitations in the Agreement, and it also seeks dismissal of Freightmaster's unjust enrichment and promissory estoppel claims for failure to state a claim.
In order for a complaint to survive dismissal under Fed. R. Civ. P. 12(b)(6), it must put forth sufficient facts to show "that the claim is facially plausible." Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009). A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A complaint containing only "conclusory or 'bare bones' allegations will [not] survive a motion to dismiss." Fowler, 578 F.3d at 210.
In reviewing a motion to dismiss, the court "must accept all of...
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