Zurich Am. Ins. Co. v. LCG Logistics, LLC

• Decision Date: 23 July 2013
• Docket Number: Case No. 12-cv-0635-MJR-PMF
• Parties: ZURICH AMERICAN INS. CO., Plaintiff, v. LCG LOGISTICS, LLC, UNIVERSAL CARRIERS, INC., SILVIA CEJA (d/b/a Nieto's Transport), and TRUCK CENTERS, INC., Defendants. LCG LOGISTICS, LLC, Crossclaim Plaintiff, v. UNIVERSAL CARRIERS, INC., and SILVIA CEJA (d/b/a Nieto's Transport), Crossclaim Defendants. LCG LOGISTICS, LLC, Third-Party Plaintiff, v. TRUCK CENTERS, INC., Third-Party Defendant.
• Court: U.S. District Court — Southern District of Illinois

ZURICH AMERICAN INS. CO., Plaintiff,

v.LCG LOGISTICS, LLC, UNIVERSAL CARRIERS, INC., SILVIA

CEJA (d/b/a Nieto's Transport), and TRUCK CENTERS, INC., Defendants.

LCG LOGISTICS, LLC, CrossclaimPlaintiff,

v.UNIVERSAL CARRIERS, INC., and SILVIA CEJA (d/b/a Nieto's Transport), CrossclaimDefendants.

LCG LOGISTICS, LLC, Third-Party Plaintiff,

v.TRUCK CENTERS, INC., Third-Party Defendant.

Case No. 12-cv-0635-MJR-PMF

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ILLINOIS

DATED: July 23, 2013

MEMORANDUM AND ORDER

REAGAN, District Judge:

A.INTRODUCTION AND PROCEDURAL HISTORY

This case involves a shipment of Eddie Bauer blue jeans which went missing in Southern Illinois, en route from Texas to Ohio.Zurich American Insurance Company sues as the subrogated insurer of Eddie Bauer's successor, Everest Holdings, LLC.Zurich's December 2012 amended complaint names four Defendants: (1)LCG Logistics, LLC(LCG), (2)Universal Carriers, Inc.(Universal), (3)Silvia Ceja, d/b/a Nieto's Transport (Nieto), and (4)Truck Centers, Incorporated(TCI).Zurich alleges that LCG, Universal, and Nieto were interstate motor carriers or freight forwarders, within the scope of the Carmack Amendment.¹This Court enjoys subject matter jurisdiction under 28 U.S.C. 1337(based on the Carmack Amendment claims) and 28 U.S.C. 1367(as to the related common law claims).See, e.g., Indemnity Ins. Co. of North America v. Hanjin Shipping Co., 348 F.3d 628, 632(7th Cir.2003).

The amended complaint alleges as follows.LCG, a freight broker, contracted with Eddie Bauer to transport 1652 cartons of blue jeans from Laredo, Texas to Groveport, Ohio.The contract required LCG to maintain cargo liability insurance and provided that LCG would be liable for the full actual loss resulting from any damage,injury, or delay in the shipment.Without Eddie Bauer's knowledge, LCG hired Universal to take the shipment from Texas to Eddie Bauer's Ohio facility.Universal received the shipment in good condition in Texas (seebill of lading, Exhibit C to amended complaint at Doc. 40).LCG and/or Universal failed to deliver the shipment to Eddie Bauer in Ohio.

The complaint further alleges that while hauling the shipment, the tractor (being driven by Universal) broke down in Southern Illinois.The "tractor unit was transported to TCI ... in Mt. Vernon" for repair (Doc. 40, p. 5)."On information and belief," Nieto took control of the container of jeans and transported it to the TCI facility, without Eddie Bauer's knowledge or consent (Id., p. 6).While the container was at a TCI lot (sometime between July 14 - 19, 2011), it was removed or stolen.Eddie Bauer incurred roughly $260,000 in damages from LCG, Universal and Nieto's failure to deliver the shipment.LCG, Universal and Nieto refused demands to pay this amount to Eddie Bauer.Ultimately, Zurich paid this amount to Eddie Bauer's successor (Everest) under an insurance policy.Zurich seeks to recover that amount in this action.

Zurich's amended complaintcontains claims for breach of contract against LCG (Counts I and II), breach of obligations under the Carmack Amendment by LCG, Universal and Nieto (Counts III, IV and V), and breach of bailment by Nieto and TCI (Counts VI and VII).LCG filed a crossclaimagainst Universal and Nieto.The amended crossclaim (Doc. 41) alleges that Universal and Nieto failed to deliver the shipment as required by a separate agreement, entitling LCG to roughly $260,000 or indemnification if LCG is found liable to Eddie Bauer for the value of the lost shipment.LCG also filed a third-party complaint against TCI which, as amended March 11, 2013(Doc. 54), asserts bailment and negligence/ contribution claims (i.e., to the extent LCG is found liable to Zurich, TCI is liable to LCG for contribution).

Jury trial is set before the undersigned District Judge on September 30, 2013, with a final pretrial conference September 20, 2013.To date, no one has appeared, answered, or otherwise responded on behalf of Universal or Nieto.Five months ago, LCG secured a clerk's entry of default, pursuant to Federal Rule of Civil Procedure 55(a), against Universal and Nieto on its crossclaims against those two parties(seeDocs. 51-53).²

The discovery and dispositive motion deadlines have elapsed (seeDoc. 20).One motion is pending - TCI moves for summary judgment on both counts of the third-party complaint LCG filed plus Count VI of Zurich's amended complaint (Doc. 59, with supporting briefs at Docs. 60 and 65).LCG and Zurich filed memoranda opposing TCI's motion (Docs. 63 and 64).For the reasons stated below, the Court will grant TCI's motion.Analysis begins with the applicable legal standards.

B.STANDARD GOVERNING SUMMARY JUDGMENT

Federal Rule of Civil Procedure 56 governs motions for summary judgment.Summary judgment should be granted if "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law."Anderson v. Donahoe, 699 F.3d 989, 994(7th Cir.2012), citingFED.R. CIV. P. 56(a).A genuine issue of material fact remains "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party."Serednyj v. Beverly Healthcare, LLC, 656 F.3d 540, 547(7th Cir.2011), citingAnderson v. Liberty Lobby, Inc., 477 U.S. 242, 248(1986).

Summary judgment has been described as the "put up or shut up moment" in the case, at which "the non-moving party is required to marshal and present the court with the evidence she contends will prove her case," evidence on which a reasonable jury could rely.Porter v. City of Chicago, 700 F.3d 944, 956(7th Cir.2012), citingGoodman v National Sec. Agency, Inc., 621 F.3d 651, 654(7th Cir.2010).

In assessing a summary judgment motion, the district court views the facts in the light most favorable to, and draws all reasonable inferences in favor of, the non-moving party.Anderson, 699 F.3d at 994;Righi v. SMC Corp., 632 F.3d 404, 408(7th Cir.2011);Delapaz v. Richardson, 634 F.3d 895, 899(7th Cir.2011).Before the nonmovant can benefit from this favorable view of the evidence, though, he must first actually place some evidence before the court.Montgomery v. American Airlines, Inc., 626 F.3d 382, 389(7th Cir.2010).

C.ANALYSIS OF TCI'S MOTION FOR SUMMARY JUDGMENT

TCI seeks summary judgment on LCG's and Zurich's bailment claims, plus LCG's contribution claim (labeled as a "negligence" claim in the amended third-party complaint, Doc. 54, p. 3).Illinois common law defines a bailment as "the delivery of goods for some purpose, upon a contract, express or implied, that after the purpose has been fulfilled they shall be redelivered to the bailor, or otherwise dealt with accordingto his directions or kept [until]he reclaims them."In re Midway Airlines, Inc., 383 F.3d 663, 671(7th Cir.2004), quotingSpirit of Excellence, Ltd. v. Intercargo Ins. Co., 777 N.E.2d 660, 670 n.1(Ill. App.2002).To prevail on a bailment claim, the plaintiff must demonstrate each of the following: (1) an agreement to create a bailment, (2) the actual delivery or transfer of exclusive possession of the property of the bailor to the bailee; and (3) and acceptance of exclusive possession by the bailee.Midway, 383 F.3d at 671;AccordSpirit, 777 N.E.2d at 670, n.1, citingKirby v. Chicago City Bank& Trust Co., 403 N.E.2d 720, 723(Ill. App.1980).

In Indemnity Ins. Co. of North America v. Hanjin Shipping Co., 348 F.3d 628, 637(7th Cir.2003), the Seventh Circuit (applying Illinois law) articulated the necessary elements of a prima facie case for bailment as: (1) an express or implied agreement to create a bailment, (2) delivery of the property in good condition, (3) acceptance of the property by the bailee, and (4) the bailee's failure to return the property (or the return of the property in damaged condition).Once the plaintiff has made this showing, "there is a presumption of bailee negligence that may be rebutted if the defendant-bailee presents 'sufficient evidence to support a finding that the presumed fact did not exist and that the defendant was free from fault.'"Indemnity, 348 F.3d at 637-38.

Turning to the case at bar, TCI contends that neither LCG nor Zurich has shown that a bailment existed, and LCG has no proof that TCI was negligent (Doc. 59, p. 2).TCI says neither LCG nor Zurich can establish the first, second, or third requirements of a bailment.TCI tenders an affidavit from Julie Klebba, the general manager of TCI'sMt.Vernon facility (Doc. 60-1).Ms. Klebba attests to the following facts, inter alia (id., emphasis added):

?On July 14, 2011, a 2005 Freightliner Conventional was towed to TCI's Mt. Vernon facility due to a breakdown."The tractor was not connected to a trailer."The tractor was owned by Universal Carrier.

?TCI mechanics determined that the tractor needed a new or rebuilt differential.Melissa Gomez of Universal was notified of the need for the repairs, and she authorized the repairs.

?TCI employees were not informed that a trailer being pulled by Universal was going to be brought to the Mt. Vernon TCI facility.TCI employees are trained to inform truck drivers that TCI takes no responsibility for any trailers parked on the lot while tractors are serviced.Additionally, at the relevant time, TCI's service desk had a large sign that cautioned drivers coming for repair work that TCI was not responsible for items stolen from customer's vehicles.

?On July 19, 2011, the driver of the Universal tractor reported that a trailer had been stolen from the TCI lot, and the police were called in to investigate.This was the first notice that TCI had that the Universal driver had brought a trailer on to TCI's property.

LCG urges the Court to completely disregard the Klebba Affidavit, because it does not contain evidence which would be admissible at trial.More specifically, LCG asserts that Ms. Klebba failed to aver that she had personal knowledge of the facts and...