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Estes Express Lines v. Hardwoods

United States District Court, E.D. Virginia, Richmond Division

May 28, 2019



          David J. Novak, United States Magistrate Judge.

         Plaintiff Estes Express Lines ("Estes") brings this action against Defendant Whatman Hardwoods ("Whatman") to collect $104, 384.29 in unpaid freight charges, plus fees and costs, for shipping services that Estes rendered to Whatman. This matter comes before the Court by consent of the parties pursuant to 28 U.S.C. § 636(c)(1) on Whatman's Partial Motion to Dismiss for Lack of Personal Jurisdiction and Partial Motion to Dismiss for Lack of Subject Matter Jurisdiction ("Motion to Dismiss") (ECF No. 8), moving to dismiss those portions of Estes's claims stemming from shipments outside of Virginia for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2) and those portions of Estes's claims stemming from shipments into Virginia for lack of subject matter jurisdiction pursuant to Rule 12(b)(1). For the reasons set forth below, the Court DENIES Whatman's Motion to Dismiss (ECF No. 8).

         I. BACKGROUND

         When a court addresses the question of personal jurisdiction "on the basis only of motion papers ... the court must construe all relevant pleading allegations in the light most favorable to the plaintiff, assume credibility, and draw the most favorable inferences for the existence of jurisdiction." Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989). That said, the Court need not consider only Estes's proof of personal jurisdiction to decide which inferences it will make. Mylan Labs., Inc. v. Akzo, N.V., 2 F.3d 56, 62 (4th Cir. 1993). Moreover, to the extent that Whatman's Motion to Dismiss challenges the Court's subject matter jurisdiction over the claims stemming from shipments into Virginia, because Whatman challenges the sufficiency of the facts alleged in Estes's Complaint to establish such jurisdiction, the Court will accept such facts as true. See Kerns v. United States, 585 F.3d 187, 192 (4th Cir. 2009) (describing the two types of challenges to subject matter jurisdiction and the presumptions of truthfulness afforded in each). With these principles in mind, the Court accepts the following facts.

         A. Underlying Business and Contractual Relationship

         Estes, a Virginia corporation, transports goods via motor carrier and has a principal place of business in Richmond, Virginia. (Compl. (ECF No. 1-1) ¶¶ 1-2.) Whatman, an Ohio corporation, manufactures antique lumber products such as floors, doors and cupboards, and has a principal place of business in Bellville, Ohio. (Compl. ¶ 3; Aff. of Timothy Whatman ("Whatman Aff.") (ECF No. 9-1) ¶¶ 2-3.) During the relevant period, Whatman utilized an on-demand shipment model whereby it would call its contact, Russell Sweetman ("Sweetman") - an employee of the logistical support company, Meridian One Enterprises, Inc. ("Meridian One")[1] - each time it had a product ready for shipment, and Sweetman would arrange for shipping services. (Whatman Aff. ¶¶ 4-6.) For a typical shipment, Sweetman obtained quotes from multiple carriers before selecting the carrier with the lowest quoted price, relaying that carrier's information back to Whatman. (Whatman Aff. ¶ 8.) After first engaging Estes in 2016, in August 2017, Whatman began utilizing Estes as a carrier on some shipments. (Compl. ¶¶ 8-9, 15; Whatman Aff. ¶ 7.)

         As part of this engagement, in August 2016, Estes issued a Pricing Agreement (the "Agreement") to Whatman. (Compl. ¶ 9; App. A to Compl. ("Agreement") (ECF No. 1-1).) The Agreement provided Whatman with shipping discounts and preferred pricing in return for its patronage. (Compl. ¶ 10.) Relevant here, the Agreement also incorporated by reference and applied to each shipment "the rules set forth in ... the EXLA 105 Rules Tariff [(the "Rules Tariff')] in effect at time of shipment," but Estes did not attach the Rules Tariff to the Agreement or instruct Whatman on how to find it. (Agreement at 3.) Moreover, Whatman never received a copy of the Agreement or the Rules Tariff. (Whatman Aff. ¶ 11.) That said, Estes posted the Rules Tariff on its website. (Aff. of Albert D. Wilder, Jr. ("Wilder Aff.") (ECF No.19-1) ¶ 9.) The Rules Tariff provided, in relevant part, that:

[a]ll bills of lading, pricing agreements, rate agreements, and spot quotes shall be governed by and construed in accordance with the substantive law of the Commonwealth of Virginia without regard to its choice of law principles, or where applicable, federal law. Any court of competent jurisdiction within the Commonwealth of Virginia shall have personal jurisdiction over the shipper, consignor, consignee, bill to party, and beneficial owner in any dispute which might arise under this rules tariff, in addition to any other venue as provided by law.

(Ex. IV to Pl's Mem. in Opp. to Def.'s Mot. to Dismiss ("Rules Tariff) (ECF No. 19-5) at 5, Item 105.)

         For each Estes shipment, Whatman received a draft bill of lading, [2] prepared by Sweetman, which stated that Estes received each shipment for delivery "subject to individually determined rates or contracts that have been agreed upon in writing between the carrier and shipper, if applicable, otherwise the rates, classifications and rules (Estes Express Lines 105 series) that have been established by the carrier and are available to the shipper, on request." (See, e.g., App. B to Compl. ("Sample BOL") (ECF No. 1-1); see also Whatman Aff. ¶ 9.)[3]Each bill of lading also included the address of Estes's Virginia headquarters and stated in the title that the bill was not negotiable and constituted a "short-form" bill of lading, meaning the bill did not expressly contain all of the terms governing the transportation contract but incorporated additional terms by reference to another document. (Sample BOL); Bill of Lading, Black's Law Dictionary (14th ed. 2014). Whatman's co-owner, Timothy Whatman, approved each draft bill of lading and presented it to an Estes driver after Estes loaded the items listed on the bill. (Whatman Aff. ¶¶ 2, 9-10.) The Estes driver signed each bill, and each company kept a copy. (Whatman Aff. ¶ 10.) Although the bills of lading stated that Estes would provide the Rules Tariff to Whatman upon request, Estes did not attach the Rules Tariff to each bill. (Sample BOL.) Neither did each bill of lading refer to the Agreement. (Sample BOL.)

         In total, Estes transported and delivered 269 shipments for Whatman to forty-two different states, including ten shipments to Virginia and several shipments that would have passed through Estes's Virginia terminal. (Wilder Aff. ¶¶ 6-7.) Throughout the parties' relationship, Whatman also filed eleven freight loss and damage claims totaling $30, 337.69, which Estes handled from its Richmond, Virginia headquarters. (Wilder Aff. ¶ 10.)

         B. Disputed Shipments

         At issue in this suit, between August 2017 and March 2018, Estes delivered seventy-four shipments on Whatman's behalf (the "disputed shipments"). (Compl. ¶ 17.) For each of the disputed shipments, Whatman and Estes executed a bill of lading as described above, listing Estes as the carrier and Whatman as the shipper. (Compl. ¶¶ 18-19.) Estes also invoiced Whatman for the cost of each disputed shipment, and Whatman accepted each invoice without objection. (Compl. ¶ 22; App. B to Compl. ("Sample Invoice") (ECF No. 1-1).) Each invoice included Estes's post office box address in Richmond, Virginia, and specified any discounts given pursuant to the Agreement, though the invoices did not name the Agreement as the source of the discounts. (Sample Invoice.)

         To date, Whatman has not paid the invoiced amounts, which totaled $23, 150.65 after including the discounts provided for in the Agreement. (Compl. ¶ 23.) Because Whatman failed to pay the discounted invoices within thirty calendar days, citing to Item 720 of the Rules Tariff, Estes removed all discounts, leaving an undiscounted total of $104, 384.29 in unpaid charges. (Compl. ¶¶ 26-27; App. D to Compl. ("Past Due Warning") (ECF No. 1-1) at 1.) Further citing to Item 720 of the Rules Tariff, Estes ...

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