RAMOS, District Judge.
Dynamic Worldwide Logistics, Inc. ("Dynamic" or "Plaintiff") brings suit against Exclusive Expressions, LLC ("Exclusive"), David Saad, and Joseph Saad (together with Dynamic, "Defendants") for conversion and breach of contract. See Compl., Doc. 2. The parties entered into a contract in which Dynamic promised to arrange for the transportation of leather goods from China to the United States. Id. at ¶ 7. The present dispute centers on Defendants' failure to tender the corresponding bills of lading following delivery of the items to Defendants in New York City. Id. at ¶¶ 18, 23. Defendants moved to dismiss the Complaint pursuant to Rule 12(c) of the Federal Rules of Civil Procedure. See Defs.' Mem. L. Support Mot. Dismiss, Doc. 19. For the reasons set forth below, Defendants' motion is GRANTED.
Dynamic is a New Jersey-based non-vessel-operating common carrier ("NVOCC") that provides transportation services between Asia and the United States. Compl. at ¶ 1. Exclusive, a New York Limited Liability Company, imports goods from China. Id. at ¶ 2. David and Joseph Saad are alleged to be either members or managers of Exclusive who currently reside in New York. Id. at ¶ 3-4.
Dynamic claims that it contracted with Exclusive to arrange for the transportation of handbags, wallets, and evening bags from China to New York City. Id. at ¶¶ 7, 8-9. In 2012-the only date specified in the entire Complaint-Dynamic allegedly issued a total of eight negotiable bills of lading, which designated Exclusive as the consignee.
Without establishing the source of Exclusive's obligation or reciting any contractual provisions, Plaintiff claims that Exclusive was required to provide Dynamic with the original bills of lading in order to receive delivery of the shipments. Id. at ¶ 10. Despite this alleged requirement, however, a Dynamic employee, who was not identified in the Complaint, authorized the delivery of the shipments to Exclusive
Nowhere in the Complaint does Plaintiff allege that it owned, possessed or controlled the goods delivered to Defendants. Although it fails to describe any specific harm it has suffered, Dynamic seeks damages in excess of $374,154 for the conversion of property and breach of contract, along with costs and attorney fees. Id. at ¶ 23.
Rule 12(c) provides that "[a]fter the pleadings are closed — but early enough not to delay trial — a party may move for judgment on the pleadings." Fed.R.Civ.P. 12(c). The Court applies the same standard of review to a Rule 12(c) motion as it does to a motion to dismiss for failure to state a claim upon which relief can be granted under Rule 12(b)(6). Cleveland v. Caplaw Enters., 448 F.3d 518, 521 (2d Cir.2006).
When ruling on a motion to dismiss pursuant to Rule 12(b)(6), the Court must accept all factual allegations in the complaint as true and draw all reasonable inferences in the plaintiff's favor. Koch v. Christie's Int'l PLC, 699 F.3d 141, 145 (2d Cir.2012). However, the Court is not required to credit "mere conclusory statements" or "threadbare recitals of the elements of a cause of action." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)); see also id. at 681, 129 S.Ct. 1937 (citing Twombly, 550 U.S. at 551, 127 S.Ct. 1955). "To survive a motion to dismiss, a complaint must contain sufficient factual matter... to `state a claim to relief that is plausible on its face.'" Id. at 678, 129 S.Ct. 1937 (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). 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." Id. (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955). More specifically, the plaintiff must allege sufficient facts to show "more than a sheer possibility that a defendant has acted unlawfully." Id. Federal Rule of Civil Procedure 8 "marks a notable and generous departure from the hyper-technical, code-pleading regime of a prior era, but it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions." Id. at 678-79, 129 S.Ct. 1937. If the plaintiff has not "nudged [his] claims across the line from conceivable to plausible, [the] complaint must be dismissed." Twombly, 550 U.S. at 570, 127 S.Ct. 1955.
Whether a tort falls within the admiralty jurisdiction of the federal courts traditionally depends on the locality of the wrong. Executive Jet Aviation, Inc. v. City of Cleveland, Ohio, 409 U.S. 249, 253,
Based on the bare-bones allegations in the Complaint, admiralty jurisdiction is anything but clear. Plaintiff claims that Exclusive converted the goods by taking possession of them without surrendering the bills of lading. Compl. at ¶ 13. As the designated consignee, Exclusive presumably could have only accepted delivery of the goods after the shipments arrived in New York. See id. at ¶¶ 2, 8-9. Since a Dynamic employee concededly authorized the delivery to Exclusive, the initial possession was lawful and the alleged conversion must have occurred later. See id. at ¶ 11. Nothing in the Complaint suggests that the alleged tortious conduct occurred on navigable waters. Therefore, the Court may not exercise admiralty jurisdiction over Plaintiff's conversion claim. See Leather's Best, Inc. v. S.S. Mormaclynx, 451 F.2d 800, 808 (2d Cir.1971) (no admiralty jurisdiction for tort claims where purported negligence took place on land).
Given that the Court has jurisdiction pursuant to 28 U.S.C. § 1332(a), it must also assess Plaintiff's conversion claim under the applicable state law.
Both parties have dedicated significant effort to debating whether Plaintiff has standing to bring a suit against Defendants given its status as an NVOCC.
Plaintiff claims that courts within this circuit have determined that, when an NVOCC delivers cargo without obtaining the corresponding bills of lading, it assumes the status of a bailee. Doc. 20 at 4. However, the cases that Plaintiff cites only deal with a vessel-operating common carrier's liability as a bailee for misdelivery. See e.g. Allied Chem. Int'l Corp. v. Companhia de Navegacao Lloyd Brasileiro, 775 F.2d 476, 483 (2d Cir.1985) (ocean carrier liable to shipper for misdelivery of goods); David Crystal, Inc. v. Cunard S.S. Co., 339 F.2d 295, 298 (2d Cir.1964) (same); Tokio Marine Mgmt., Inc. v. M/V Zim Tokyo, No. 91 Civ. 63(PKL), 1993 WL 322869, at *5 (S.D.N.Y. Aug. 17, 1993) (marine cargo underwriter established a prima facie case of negligence against common carrier that assumed bailee status; NVOCC's liability assessed under the express terms of the bills of lading). It does not appear that any court of binding jurisdiction has determined whether an
Ultimately, the Court need not decide Plaintiff's status because the Complaint fails to adequately allege the elements of conversion under New York law. First, regardless of Plaintiff's status as an NVOCC, the Complaint does not establish that it had a superior right of possession over Exclusive, the consignee. Plaintiff proclaims that Exclusive lacked an ownership interest in the goods, but the Complaint fails to specifically allege facts that support its conclusory assertion or rule out the possibility that Exclusive maintained a superior possessory interest. See Compl. at ¶ 17. Second, when possession of the property by a defendant was initially lawful, an action for conversion only arises if plaintiff made demands for return of the property or a defendant wrongfully transferred or dispossessed of it before a demand was made. Regions Bank v. Wieder & Mastroianni, P.C., 526 F.Supp.2d 411, 414 (S.D.N.Y.2007) aff'd, 268 Fed.Appx. 17 (2d Cir.2008) (citing MacDonnell v. Buffalo Loan, Trust & Safe Deposit Co., 193 N.Y. 92, 101, 85 N.E. 801, 803 (1908)). Therefore, although wrongful intent is generally not an element of conversion, "a defendant who came into possession lawfully will be liable for transferring the property only if the transfer was in some way wrongful." Id. In the conversion context, courts have deemed a transfer to be "wrongful" when the "transferor knew [it] would violate the superior property rights of another, yet disposed of the property anyway, usually for personal gain." Id. at 415.
According to the Complaint, a Dynamic employee authorized the transfer of cargo to Exclusive, in exchange for a promise that it would surrender the bills of lading. Compl. at ¶ 11. The Complaint states that Plaintiff made repeated demands for the bills of lading. Id. at ¶ 12. However, the conversion claim pertains to the cargo, not the bills of lading. Although Plaintiff also contends that Exclusive disposed of the goods, it does not allege that Exclusive knew that it was violating Plaintiff's rights when it did so. Therefore, the Complaint fails to adequately plead a claim for conversion.
Plaintiff points to a First Circuit case in which a carrier, as a bailee, "retained reclamation rights ... under a common law claim for conversion."
Although several of the facts in Evergreen parallel the instant case, ultimately it is distinguishable. First, the court was not assessing the sufficiency of the pleadings. Indeed, the district court determined that they were adequate. Second, the carrier in Evergreen received letters of indemnity in lieu of the bills of lading themselves. Id. at 92. These letters not only contained a promise to produce the bills of lading; they also contained agreements to indemnify the carrier against third party claims and included false representations of title.
A more appropriate source of guidance is provided by a court within this district,
Plaintiff's claim is dismissed due to its failure to adequately plead the required elements of conversion.
As a preliminary matter, it is entirely unclear whether Plaintiff's breach of contract claim is premised on a breach of the obligations in the bills of lading, or an alleged oral promise to tender the bills after the goods were delivered. The Court has therefore analyzed the claim under both theories and finds both wanting.
"A bill of lading for ocean carriage is a maritime contract." Thypin Steel Co. v. Asoma Corp., 215 F.3d 273, 277 (2d Cir.2000) (citing Leather's Best, 451 F.2d at 807). "When a contract is a maritime one, and the dispute is not inherently local, federal law controls the contract interpretation." Kirby, 543 U.S. at 22-23, 125 S.Ct. 385 (citing Kossick v. United Fruit Co., 365 U.S. 731, 735, 81 S.Ct. 886, 6 L.Ed.2d 56 (1961)). "Under federal common law, `contracts for carriage of goods by sea must be construed like any other contracts: by their terms and consistent with the intent of the parties.'" Nippon Yusen Kaisha v. FIL Lines USA Inc., 977 F.Supp.2d 343, 349 (S.D.N.Y.2013) (quoting Kirby, 543 U.S. at 31, 125 S.Ct. 385). Although it is unclear whether Plaintiff's claim arises under the bills of lading or a separate oral promise to tender the bills, it plainly relates to entitlement to the bills themselves. Therefore the Court may exercise its admiralty jurisdiction over the dispute. See Thypin Steel, 215 F.3d at 278-279 ("[A] dispute over title to or possession of a bill of lading... clearly implicates the fundamental federal interest in the protection of maritime commerce.").
Defendants contend that the bills of lading at issue are non-negotiable
Nonetheless, in its opposition papers, Plaintiff argues that, as a consignee, Exclusive was automatically bound by the terms of the bills of lading to present the original bills in return for the release of the cargo.
A second potential source of Plaintiff's breach of contract claim is the promise Exclusive allegedly made to surrender the original bills of lading. See Compl. at ¶ 11. In an admiralty case for breach of contract, a plaintiff must plead sufficient facts to establish: (1) the terms of the maritime contract; (2) that the contract was breached; and (3) the reasonable value of purported damages. Overseas Philadelphia, LLC v. World Council of Credit Unions, Inc., 892 F.Supp.2d 182, 188-89 (D.D.C.2012) (citing Sweet Pea Marine, Ltd. v. APJ Marine, Inc., 411 F.3d 1242, 1249 (11th Cir.2005)). Here, the terms of any purported oral contract are nowhere provided. Furthermore, the information that is provided is contradictory. The Complaint simultaneously states that Exclusive breached its contract with Dynamic by failing to present the original negotiable bills of lading in order to obtain the goods, while also conceding that it nonetheless authorized the delivery in reliance on a promise by Exclusive that it would obtain and surrender the bills at some unidentified point in time. Compl. at ¶¶ 11, 22-23. It is unclear whether the transfer of cargo was meant to serve as consideration for the bills of lading, or if Exclusive was previously bound to surrender the bills of lading by some unspecified agreement.
Taken as a whole, the Complaint is marred by a lack of necessary detail and ambiguity. Plaintiff fails to clearly identify the source of Exclusive's obligation or the contractual language that defines it. The papers submitted by Plaintiff are also lacking in contextual information that sheds light on the allegations. "A sufficient pleading for breach of contract must, `at a minimum, allege the terms of the contract, each element of the alleged breach and the resultant damages in a plain and simple fashion.'" Warren v. John Wiley & Sons, Inc., 952 F.Supp.2d 610, 624 (S.D.N.Y.2013) (dismissing breach of contract claim for failure to identify any contracts, express or implied contractual terms, contracting parties, or corresponding dates) (quoting Zaro Licensing, Inc. v. Cinmar, Inc., 779 F.Supp. 276, 286
For the reasons set forth above, Defendants' motion to dismiss is GRANTED. The Clerk of the Court is respectfully directed to terminate the motion, Doc. 17, and to close the case.
It is SO ORDERED.