Amazon Logistics, Inc. v. Un4Given Transportation, Inc.

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF NORTH CAROLINA

CHARLOTTE DIVISION

3:19-cv-00028-RJC-DSC

AMAZON LOGISTICS, INC., )

)

Plaintiff, )

)

v. )

) ORDER

UN4GIVEN TRANSPORTATION, INC., )

)

Defendant. )

)

THIS MATTER comes before the Court on Plaintiff’s renewed motion for

default judgment. (Doc. No. 12.)

I. BACKGROUND

Plaintiff Amazon Logistics, Inc. (“Plaintiff”) is a transportation logistics

company and is the registered owner of two trailers, identified as V210487 and

V210650, and related dolly converters (the “Trailers”). (Doc. No. 1, ¶ 7.) Defendant

Un4Given Transportation, Inc. (“Defendant”) is a motor carrier registered with the

Federal Motor Carrier Safety Administration as USDOT 2896549 and MC973531.

(Doc. No. 1, ¶ 8.)

Plaintiff and Defendant are parties to a Linehaul Service Provider Agreement

(the “Agreement”) pursuant to which Defendant agreed to provide Plaintiff truckload

transportation services, including receiving, loading, storing, transporting,

delivering, and unloading goods. (Doc. No. 1, ¶ 9.) Defendant further agreed to use

the Trailers exclusively for the services contemplated in the Agreement and to return

the Trailers in substantially the same condition. (Doc. No. 1, ¶ 18.) On or about July

4, 2017, Defendant possessed the Trailers to transport Plaintiff’s goods from

Plaintiff’s fulfillment center in Baltimore, Maryland to Plaintiff’s fulfillment center

in Chattanooga, Tennessee. (Doc. No. 1, ¶ 11.) Defendant’s driver checked the

Trailers into the Chattanooga facility using his cell phone.1 (Doc. No. 1, ¶ 11.) But,

from July 2 through October 29, 2017, the GPS units on the Trailers showed the

Trailers were located at Defendant’s storage yard in Gastonia, North Carolina. (Doc.

No. 1, ¶ 12.) The GPS units stopped showing a location on October 29, 2017, which

Plaintiff presumes is due to the batteries dying. (Doc. No. 1, ¶ 12.)

On August 22, 2018, Plaintiff sent a letter to Defendant demanding the return

of the Trailers. (Doc. No. 12-2, at Ex. A.) Defendant did not respond to the letter and

has not returned the Trailers. (Doc. No. 12-2, ¶ 4.)

On January 18, 2019, Plaintiff filed a Complaint against Defendant asserting

claims for breach of contract, conversion, and a declaratory judgment. (Doc. No. 1, at

3–4.) According to Plaintiff’s Affidavit of Service, Defendant was properly served with

the summons and a copy of the Complaint on January 25, 2019. (Doc. Nos. 4 to 4-2.)

On February 27, 2019, the Clerk of Court entered default against Defendant. (Doc.

No. 7.)

On June 5, 2019, Plaintiff filed a motion for default judgment, (Doc. No. 8),

which the Court denied without prejudice, (Doc. No. 11). Thereafter, Plaintiff filed

the instant renewed motion for default judgment. (Doc. No. 12.) The motion is ripe

1 The Complaint does not allege when this occurred.

for resolution.

II. STANDARD OF REVIEW

Rule 55 of the Federal Rules of Civil Procedure governs Plaintiff’s renewed

motion for default judgment. “Rule 55 sets forth a two-step process for obtaining a

default judgment.” Brown v. Prime Star Grp., Inc., No. 3:12-cv-165, 2012 U.S. Dist.

LEXIS 141495, at *5 (W.D.N.C. Sept. 30, 2012). A plaintiff must first seek an entry

of default under Rule 55(a). L & M Cos. v. Biggers III Produce, Inc., No. 3:08-cv-309,

2010 U.S. Dist. LEXIS 46907, at *14 (W.D.N.C. Apr. 9, 2010). Rule 55(a) states that

“[w]hen a party against whom a judgment for affirmative relief is sought has failed

to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the

clerk must enter the party’s default.” Fed. R. Civ. P. 55(a). “Upon the entry of default,

the defaulted party is deemed to have admitted all well-pleaded allegations of fact

contained in the complaint.” Brown, 2012 U.S. Dist. LEXIS 141495, at *4.

“After the clerk has entered a default, the plaintiff may seek a default

judgment.” Silvers v. Iredell Cty. Dep’t of Soc. Servs., No. 5:15-cv-00083, 2016 U.S.

Dist. LEXIS 13865, at *9 (W.D.N.C. Feb. 3, 2016). “The entry of a default judgment

is left to the sound discretion of the court, and no party is entitled to a favorable entry

of default judgment as a matter of right.” Dish Network L.L.C. v. Hatley, No. 5:16-

cv-00088, 2017 U.S. Dist. LEXIS 81390, at *6 (W.D.N.C. May 25, 2017). “Without

question, because the American civil litigation system is adversarial by nature, it is

the ‘strong policy’ of the Fourth Circuit to decide cases on their merits.” Silvers, 2016

U.S. Dist. LEXIS 13865, at *9 (citing Colleton Prep. Academy, Inc. v. Hoover

Universal, Inc., 616 F.3d 413, 417–21 (4th Cir. 2010)). Default judgment is proper

“only if the well-pleaded factual allegations in a complaint both establish a valid

cause of action and entitle the plaintiff to an award of damages or other relief.” i play.

Inc. v. D. Catton Enter., LLC, No. 1:12-cv-22, 2015 U.S. Dist. LEXIS 29870, at *6

(W.D.N.C. Mar. 10, 2015). In so deciding, courts in this district apply the standard

used to evaluate a Rule 12(b)(6) motion to dismiss, and “a pleading that offers mere

‘labels and conclusions’ or ‘a formulaic recitation of the elements of a cause of action

will not do.’” Silvers, 2016 U.S. Dist. LEXIS 13865, at *18–19 (quoting Ashcroft v.

Iqbal, 556 U.S. 662, 678 (2009)).

“If the Court determines that liability is established, it must then determine

the appropriate amount of damages.” Bogopa Serv. Corp. v. Shulga, No. 3:08-cv-365,

2011 U.S. Dist. LEXIS 17408, at *4 (W.D.N.C. Feb. 8, 2011). “The court must make

an independent determination regarding damages, and cannot accept as true factual

allegations of damages.” EEOC v. Carter Behavior Health Servs., No. 4:09-cv-122,

2011 U.S. Dist. LEXIS 129493, at *9–10 (E.D.N.C. Oct. 7, 2011). “[A] court may enter

a default judgment as to damages with or without a hearing. As long as there is an

adequate evidentiary basis in the record for an award of damages, the Court may

make such a determination without a hearing.” Bogopa Serv. Corp., 2011 U.S. Dist.

LEXIS 17408, at *5 (citation omitted).

III. DISCUSSION

The Court has entered default against Defendant. (Doc. No. 7.) The Court

thus proceeds to analyzing the propriety of default judgment on Plaintiff’s claims for

breach of contract, conversion, and a declaratory judgment.

A. Breach of Contract and Conversion

Plaintiff’s claims for breach of contract and conversion are both based on

Defendant’s failure to return the Trailers. The Court concludes that Plaintiff has

established Defendant’s liability for breach of contract and conversion.

“The elements of a claim for breach of contract are (1) existence of a valid

contract and (2) breach of the terms of that contract.” Poor v. Hill, 530 S.E.2d 838,

845 (N.C. Ct. App. 2000). “Conversion is the unauthorized assumption and exercise

of the right of ownership over the goods or personal chattels belonging to another, to

the alteration of their condition or the exclusion of an owner’s rights.” White v.

Consol. Planning, Inc., 603 S.E.2d 147, 165 (N.C. Ct. App. 2004) (quotation marks

omitted). “There are, in effect, two essential elements of a conversion claim:

ownership in the plaintiff and wrongful possession or conversion by the defendant.”

Variety Wholesalers, Inc. v. Salem Logistics Traffic Servs., LLC, 723 S.E.2d 744, 747

(N.C. 2012). There is an additional element when the claim for conversion is not

based on a wrongful taking of the property: “Where there has been no wrongful taking

or disposal of the goods, and the defendant has merely come rightfully into possession

and then refused to surrender them, demand and refusal are necessary to the

existence of the tort.” White, 603 S.E.2d at 165.

Here, the evidence shows that Plaintiff and Defendant entered into the

Agreement pursuant to which Defendant agreed to provide Plaintiff truckload

transportation services, to use the Trailers exclusively for the services contemplated

in the Agreement, and to return the Trailers in substantially the same condition.

Despite Plaintiff’s demand, Defendant has not returned the Trailers in breach of the

Agreement. Thus, Plaintiff has established Defendant’s liability for breach of

contract. As the evidence also shows that Plaintiff owns the Trailers, Defendant’s

refusal to return the Trailers constitutes conversion. Having concluded that

Defendant’s liability is established, the Court turns to the issue of damages.

Plaintiff seeks to recover the fair market value of the Trailers. “The measure

of damages for conversion is the fair market value of the converted property at the

time of the conversion, plus interest.” Bartlett Milling Co., L.P. v. Walnut Grove

Auction & Realty Co., 665 S.E.2d 478, 485 (N.C. Ct. App. 2008). Plaintiff submitted

an affidavit of its financial analyst stating that the fair market value of the Trailers

at the time of conversion was $72,940. (Doc. No. 12-3, ¶ 3); see United Leasing Corp.

v. Guthrie, 666 S.E.2d 504, 508 (N.C. Ct. App. 2008) (stating that “lay opinions as to

the value of property are admissible if the witness can show that he has knowledge

of the property and some basis for his opinion” (brackets omitted)). Therefore, the

Court concludes that Plaintiff is entitled to judgment in the amount of $72,940.

B. Declaratory Judgment

Plaintiff also seeks a declaratory judgment that Plaintiff is entitled to the sole

possession and control of the Trailers.

The Declaratory Judgment Act provides that “[i]n a case of actual controversy

within its jurisdiction . . . any court of the United States . . . may declare the rights

and other legal relations of any interested party seeking such declaration, whether

or not further relief is or could be sought.” 28 U.S.C. § 2201. “This power has

consistently been considered discretionary.” Centennial Life Ins. Co. v. Poston, 88

F.3d 255, 256 (4th Cir. 1996). For there to be a case or controversy justiciable for the

Court, plaintiff must present a dispute that is “definite and concrete, touching the

legal relations of parties having adverse legal interests.” MedImmune, Inc. v.

Genentech, Inc., 549 U.S. 118, 127 (2007). The dispute must also be “real and

substantial,” admitting “of specific relief through a decree of a conclusive character,

as distinguished from what the law would be upon a hypothetical state of facts.” Id.

The question for the Court is thus “whether the facts alleged, under all the

circumstances, show that there is a substantial controversy, between parties having

adverse legal interests, of sufficient immediacy and reality to warrant the issuance

of a declaratory judgment.” Id.

Because the Court enters judgment in favor of Plaintiff in an amount equal to

the fair market value of the Trailers, a declaratory judgment that Plaintiff is entitled

to the sole possession and control of the Trailers is not appropriate. The remedy for

conversion is either the return of the converted property and any damages caused by

the loss of use or the fair market value of the property at the time of conversion. See

N.C. Gen. Stat. § 1-230 (“In an action to recover the possession of personal property,

judgment for the plaintiff may be for the possession, or for the recovery of possession,

or for the value thereof in case a delivery cannot be had, and damages for the

detention.”). As Plaintiff has sought and obtained judgment for the fair market value

of the property, Plaintiff is not entitled to the alternative remedy of recovering the

property. See In re Will of Shepherd, 761 S.E.2d 221, 225 (N.C. Ct. App. 2014) (“The

purpose of the doctrine of election of remedies is to prevent more than one redress for

a single wrong. The whole doctrine of election is based on the theory that there are

inconsistent rights or remedies of which a party may avail himself, and a choice of

one is held to be an election not to pursue the other.” (citations and quotation marks

omitted)). Therefore, the Court denies Plaintiff's renewed motion for default

judgment as to its claim for a declaratory judgment.

IV. CONCLUSION

IT IS THEREFORE ORDERED that:

1. Plaintiffs renewed motion for default judgment, (Doc. No. 12), is

GRANTED in part and DENIED in part. The motion is granted as to

Plaintiffs claims for breach of contract and conversion, and the motion

is denied as to Plaintiff's claim for a declaratory judgment; and

2. Judgment is ENTERED in favor of Plaintiff and against Defendant in

the amount of $72,940.00.

Signed: August 5, 2020

Otef$ 4 C9

Robert J. Conrad, Jr. Rs,

United States District Judge ee