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R.E.I. Transport, Inc. v. C.H. Robinson Worldwide

March 16, 2007

R.E.I. TRANSPORT, INC., PLAINTIFF,
v.
C.H. ROBINSON WORLDWIDE, INC., AND CIRCUIT CITY STORES, INC., DEFENDANTS, AND C.H. ROBINSON WORLDWIDE, INC., THIRD-PARTY PLAINTIFF,
v.
PATRIOT LOGISTICS, INC., THIRD-PARTY DEFENDANT.



The opinion of the court was delivered by: Murphy, Chief District Judge

MEMORANDUM AND ORDER

This action came before the Court on January 22, 2007, for a hearing on a motion for judgment on the pleadings filed by C.H. Robinson Worldwide, Inc. ("CHR") (Doc. 96), a motion for summary judgment filed by CHR (Doc. 109), a motion for partial summary judgment on breach of contract and conversion claims filed by R.E.I. Transport, Inc. ("REI") (Doc. 110), and a motion for summary judgment on CHR's counterclaim (Doc. 112).

BACKGROUND

REI filed its third amended complaint on October 12, 2005 (see Doc. 35). Three claims against CHR remain: breach of contract (Count I), unjust enrichment (Count II), and conversion (Count III).*fn1 This Court has federal subject matter jurisdiction under 28 U.S.C. § 1332(c). REI is an Illinois corporation with its principal place of business in Illinois, and CHR is a Minnesota corporation with its principal place of business in Minnesota. The amount in controversy easily exceeds $75,000, exclusive of interest and costs, as REI claims that CHR wrongfully withheld more than $88,876.61 in payments due for transportation services.

The dispute in this case involves the handling of a shipment of portable DVD players. CHR, a self-described "travel agent for freight," arranged for the shipment of these players for its client, Circuit City. CHR does not operate vehicles on its own; instead, it acts as an intermediary by booking freight for its customers with carriers who provide transportation. Circuit City wanted the freight shipped from its facility in Walnut, California, to its store in Marion, Illinois.

The shipment was loaded by Circuit City into container #EMHU231036 and sealed with a steel cable security seal #071856. The seal number and the container number were recorded on the bill of lading. Patriot picked up the shipment on October 21, 2003, and transported it to the Union Pacific Railroad ("UP") in Los Angeles, California. When Patriot picked up the load from Circuit City, the driver signed the bill of lading; when Patriot delivered the shipment to UP, the driver obtained a receipt from UP showing container #EMHU231036 with seal #071856 intact. As the shipment was traveling across the country on a UP train, it made a stop in El Paso, Texas. A visual inspection of container #EMHU231036 revealed that the seal was missing. The container was opened by a UP Police Officer and resealed with seal #UPPDEP119409.

The shipment made its way to Dupo, Illinois, where it was picked up by REI's driver on October 30, 2003. REI's driver obtained a receipt showing that the container was sealed with seal #071856 (the original seal number, not the one placed on the container by UP). REI transported the container to Marion, Illinois, where its driver noted the seal number as #119409 (the one placed on it by UP) at the time of delivery. When Circuit City opened the container on November 1, it discovered that 295 portable DVD players were missing. The amount of the loss totaled $85,429.98.

Circuit City presented this claim to CHR, and CHR paid its customer the full amount, receiving an assignment of Circuit City's rights. In turn, CHR withheld payment to REI pursuant to the parties' contract which contains the following provision:

Compensation paid to Carrier under this Contract may be withheld in whole or in part by Robinson or any of its subsidiaries or related companies to satisfy claims or shortages arising out of this or other Contracts, or to satisfy advances made to, or on behalf of, Carrier, or to satisfy any debt owed by Carrier to Robinson or any of its subsidiaries or related companies. This offset may occur, at Robinson's discretion, only if the claim or debt has not been acknowledged in writing by Carrier within thirty (30) days of presentation or the claim has not either been paid or denied for a valid cause or reason within ninety (90) days of presentation. (See Doc. 6, Ex. 1, p. 3.)*fn2

REI then filed this lawsuit, and CHR filed a counterclaim against REI pursuant to the Carmack Amendment, 49 U.S.C. § 14706, for the value of the lost goods.

DISCUSSION

Rule 12 of the Federal Rules of Civil Procedure provides, in pertinent part, "[a]fter the pleadings are closed but within such time as not to delay the trial, any party may move for judgment on the pleadings." FED. R. CIV. P. 12(c). The pleadings for purposes of a Rule 12(c) motion include the complaint, the answer, and any written instruments attached to the pleadings as exhibits. See Northern Ind. Gun & Outdoor Shows, Inc. v. City of South Bend, 163 F.3d 449, 452-53 (7th Cir. 1998). The main difference between a Rule 12(c) motion and a motion to dismiss for failure to state a claim upon which relief can be granted under Rule 12(b)(6) of the Federal Rules of Civil Procedure is that the latter may be filed before an answer to a complaint is filed, whereas a Rule 12(c) motion may be filed "after the pleadings are closed but within such time as not to delay the trial." Id. at 452 n.3, quoting FED. R. CIV. P. 12(c). Otherwise, however, a Rule 12(c) motion is evaluated "under the same standard as a motion to dismiss under [Rule 12(b)(6)]." GATX Leasing Corp. v. National Union Fire Ins. Co., 64 F.3d 1112, 1114 (7th Cir. 1995). Thus, a court, in ruling on a motion for judgment on the pleadings, must "accept all well-pleaded allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff." Forseth v. Village of Sussex, 199 F.3d 363, 368 (7th Cir. 2000). Likewise, the court must "view the facts in the complaint in the light most favorable to the nonmoving party." GATX Leasing Corp., 64 F.3d at 1114. A court may "grant a Rule 12(c) motion only if 'it appears beyond doubt that the plaintiff cannot prove any facts that would support his claim for relief.'" Northern Ind. Gun & Outdoor Shows, 163 F.3d at 452, quoting Craigs, Inc. v. General Elec. Capital Corp., 12 F.3d 686, 688 (7th Cir. 1993). If matters outside the pleadings are presented to the Court and not excluded, the Court must treat the motion as a motion for summary judgment filed pursuant to Federal Rule of Civil Procedure 56.

It is unnecessary to go beyond the pleadings when analyzing the claims for unjust enrichment and conversion in the third amended complaint. A claim of unjust enrichment is unavailable when it rests on the breach of an express contract. See Shaw v. Hyatt Int'l Corp., 461 F.3d 899, 902 (7th Cir. 2006), citing Guinn v. Hoskins Chevrolet, 836 N.E.2d 681, 704 (Ill. App. Ct. 2005) (the doctrine of unjust enrichment has no application where a specific contract governs the relationship of the parties).

Similarly, a claim for conversion fails under these facts. REI claims that CHR has not paid it for services rendered. As a general rule, a claim for conversion is unavailable for a general debt or obligation. See In re: Thebus, 483 N.E.2d 1258, 1260-61 (Ill. 1985) ("[T]he subject of conversion is required to be an identifiable object of property of which the plaintiff was wrongfully deprived. Money may be the subject of conversion, but it must be capable of being described as a specific chattel, although it is not necessary for purposes of identification that money ...


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