GlobalTranz Enterprises LLC v. State to State Freight, LLC

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF OHIO

EASTERN DIVISION

GLOBALTRANZ ENTERPRISES, LLC, ) CASE NO. 5:21-cv-330

)

)

PLAINTIFF, ) JUDGE SARA LIOI

)

vs. )

) MEMORANDUM OPINION &

) ORDER

STATE TO STATE FREIGHT, LLC, )

)

)

DEFENDANT. )

Plaintiff Globaltranz Enterprises, LLC (“plaintiff”) is a “logistics company and freight

broker that provides third-party logistics services to its customers[.]” (Doc. No. 1 (Complaint) ¶

2.) Defendant State to State Freight, LLC (“defendant”) “was licensed as a for-hire motor carrier

of property, operating in interstate commerce[.]” (Id. ¶ 5.) On February 10, 2021, plaintiff

brought this action to recover damages under a broker-carrier agreement. After defendant failed

to timely respond to plaintiff’s complaint, the Clerk of Courts entered an entry of default against

defendant pursuant to Fed. R. Civ. P. 55(a). (Doc. No. 9 (Default Entry); see Doc. No. 8

(Application for Default Entry).) Plaintiff thereafter moved for a default judgment pursuant to

Fed. R. Civ. P. 55(b). (Doc. No. 10 (Motion for Default).) Defendant did not file a response and

the time for doing so has expired. In now moving for a default judgment, plaintiff seeks a

judgment for $68,003.28 in damages and post-judgment interest against defendant. (Doc. No. 10

at 2.)1

1 All page number references herein are to the consecutive page numbers applied to each individual document by the

Court’s electronic docketing system.

I. BACKGROUND

On December 21, 2018, plaintiff and defendant entered into a broker-carrier agreement

(“Agreement”), whereby defendant agreed to transport frozen food products from Jonesboro,

Arkansas, to Streetsboro, Ohio on behalf of plaintiff’s customer. (Doc. No. 1 ¶¶ 11–12.) The bill

of lading provided that the products were to be maintained at -10º Fahrenheit at all times during

shipment. (Id. ¶¶ 16–17.) According to the complaint, defendant failed to maintain the required -

10º F temperature during shipment and the products were ruined. (Id. ¶¶ 18–19.) Due to the loss

of the food products, plaintiff’s customer incurred costs in the amount of $68,003.28, including

the cost of transporting the damaged products to a facility for disposal. (Id. ¶¶ 24–26.)

Subsequently, on January 17, 2020, plaintiff issued payment to its customer in the amount of

$68,003.28 for the damaged products. (Id. ¶ 35.)

Under the terms of the Agreement, defendant agreed to assume liability for any loss or

damage to plaintiff’s customers’ freight, and further agreed to indemnify plaintiff for any claims,

damages, attorney’s fees, and costs resulting from defendant’s breach of the Agreement. (Id. ¶¶

27–28.) Accordingly, plaintiff now seeks to recover from defendant its losses under the

Agreement and raises claims under the Carmack Amendment, 49 U.S.C. § 14706 (Count One),

and breach of contract (Count Two). (See generally Doc. No. 1.)

II. STANDARD OF REVIEW

Federal Rules of Civil Procedure 55 provides 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.

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55(a). Subsequently, unless a claim is for a sum certain or a sum that can be made certain by

computation, plaintiff “must apply to the court for a default judgment.” Fed. R. Civ. P. 55(b).

“Even if a default has been entered against a party, it remains for the court to consider whether

the unchallenged facts constitute a legitimate cause of action, since a party in default does not

admit mere conclusions of law.” Anderson v. Johnson, No. 98-1931, 1999 WL 1023753, at *2

(6th Cir. No. 4, 1999) (citing Quirindongo Pacheco v. Rolon Morales, 953 F.2d 15, 16 (1st Cir.

1992)). In considering a motion for default judgment, all “factual allegations of the complaint,

except those related to the amount of damages, will be taken as true.” Harris v. Cooley, No.

1:17-cv-540, 2019 WL 1573260, at *1 (S.D. Ohio Apr. 11, 2019). If the defaulting party is found

liable for the cause of action, that “does not resolve issues relating to damages.” Antonie v. Atlas

Turner, Inc., 66 F.3d 105, 110 (6th Cir. 1995). Under Rule 55(b), if the amount of damages is

unclear “the court may conduct hearings or make referrals” in order to “determine the amount of

damages[.]” Fed. R. Civ. 55(b)(2).

III. DISCUSSION

To make a cognizable claim pursuant to the Carmack Amendment, a shipper must

establish the following: (1) the delivery of goods to the carrier in good condition, (2) the arrival

of goods in damaged condition, and (3) the amount of damages measured by actual loss. Great

West Cas. Co. v. Flandrich, 605 F. Supp. 2d 955, 966 (S.D. Ohio 2009) (citing Missouri Pacific

R.R. v. Elmore & Stahl, 377 U.S. 134, 138, 84 S. Ct. 1142, 12 L. Ed. 2d 194 (1964)). The

Carmack Amendment also has a jurisdictional threshold of $10,000 that must be satisfied. See 28

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U.S.C. § 1337(a) (“the district court shall have original jurisdiction of an action brought under

section 11706 or 14706 of title 49, only if the matter in controversy for each receipt or bill of

lading exceeds $10,000, exclusive of interest and costs”). If the shipper establishes a prima facie

case, the burden of proof shifts to the carrier “to show both that it was free from negligence and

that the damage to the cargo was due to one of the expected causes relieving the carrier of

liability. Missouri Pacific R.R., 377 U.S. at 138 (citations omitted).

Here, plaintiff sufficiently alleges that the goods in question were delivered to defendant

in good condition, that the goods arrived at their final destination in damaged condition, and that

the amount of damages was $68,003.28. (Doc. No. 1 ¶¶ 39–47.) As to evidentiary proof of

damages, plaintiff has appended to its motion the affidavit of Jeffrey Simmons and the Loss and

Damages Claim establishing damages in the amount of $68,003.28 (Doc. No. 10-1 ¶ 2

(referencing Exhibit A-1 [Loss and Damage Claim]); see Doc. No. 10-1 ¶ 3 (referencing

[Agreement] at 8–15); id. ¶ 7 (referencing Exhibit A-3 [General Release, Settlement and

Assignment of Claim]).)

Accepting plaintiff’s allegations of liability as true, plaintiff has established a prima facie

case under the Carmack Amendment, and has offered sufficient evidentiary proof as to the

amount of damages it has sustained. Further, defendant has failed to satisfy plaintiff’s losses

(Doc. No. 1 ¶¶ 31–32; see Doc. No. 10-1 ¶¶ 5–6 (referencing Exhibit A-2 [Letter Demand]), and

has otherwise failed to offer any evidence in support of its burden to show that it was free of

negligence and/or that the damage to the cargo in question was one of the expected causes

recognized under the Carmack Amendment. Accordingly, default judgment is GRANTED in

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favor of plaintiff on its first claim of relief and against defendant in the amount of $68,003.28.2

Additionally, plaintiff seeks post-judgment interest pursuant to 28 U.S.C. § 1961(a). The

purpose of post-judgment interest is to compensate the prevailing party for the time-value of

money lost between the occurrence of damages and the defendant’s payment at a later date.

Kaiser Aluminum & Chem. Corp. v. Bonjorno, 494 U.S. 827, 835–36, 110 S. Ct. 1570, 108 L.

Ed. 2d 842 (1990) (quotation marks and citation omitted). 28 U.S.C. § 1961(a) requires post-

judgment interest to be paid on money awarded by district courts in civil actions. Broad Street

Energy Co. v. Endeavor Ohio, LLC, No. 2:12-cv-711, 2014 WL 12657033, at *4 (S.D. Ohio

Nov. 14, 2014) (citing O’Sullivan Corp. v. Duro-Last, Inc., 7 F. App’x 509, 519 (6th Cir. 2001)).

The district court has no discretion to deny post-judgment interest, as it is mandatory. Caffey v.

Unum Life Ins. Co., 302 F.3d 576, 586 (6th Cir. 2002). 28 U.S.C. § 1961(a) further dictates that,

“[s]uch interest shall be calculated from the date of the entry of the judgment at a rate equal to

the weekly average 1-year constant maturity Treasury yield, as published by the Board of

Governors of the Federal Reserve System, for the calendar week preceding the date of the

judgment.” Accordingly, defendant is ORDERED to pay post-judgment interest at the applicable

statutory rate from the date of this Order until the judgment is satisfied.

2 The Carmack Amendment is the sole remedy available to a shipper seeking damages from a carrier resulting from

the interstate shipment of goods, and it preempts all state law claims arising from the same shipping incident. See

Adams Express Co. v. Croninger, 226 U.S. 491, 505–06, 33 S. Ct. 148, 57 L. Ed. 314 (1913); see also Auto. Window

Mach., Inc. v. McKay Ins. Agency, Inc., 320 F. Supp. 2d. 619, 620 (N.D. Ohio 2004) (The doctrine of complete

preemption eliminates state law claims against carriers and preserves uniform treatment of the carrier-shipper

relationship). Because plaintiff’s breach of contract claim arises from the same set of facts as its claim under the

Carmack Amendment, its state law claim is preempted.

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IV. CONCLUSION

For the foregoing reasons, plaintiff’s motion for default judgment is GRANTED in favor

of the plaintiff and against defendant in the amount of $68,003.28, along with post-judgment

interest at the applicable statutory rate as set forth above. The Clerk shall enter judgment in favor

of plaintiff and against defendant accordingly.

IT IS SO ORDERED.

Dated: October 27, 2021 Bi me

HONORABLE S LIOI

UNITED STATES DISTRICT JUDGE