Johanson Transportation Service v. Shelby Transportation, Inc.

Background

Johanson Transportation Service (JTS) sued Shelby Transportation, Inc. for liability under the Carmack Amendment, a federal law governing carrier responsibility for lost or damaged cargo, and for breach of contract. JTS alleged that the parties entered an Agreement for Motor Carrier Services in October 2022. In July 2023, Shelby picked up seventeen pallets of wine and spirits in good condition in Pennsylvania for transport to California. Seven pallets were missing when the shipment was delivered.

JTS alleged that its customer submitted a $60,302.48 claim, that JTS paid the customer that amount, and that the customer assigned its claim against Shelby to JTS. JTS submitted the claim to Shelby on October 17, 2023, and later sent a demand letter. Shelby did not respond to the complaint. The Clerk entered Shelby’s default, and JTS moved for default judgment.

Service and Default Judgment

The court examined whether Shelby had been properly served. JTS had unsuccessfully attempted service at addresses associated with Shelby and then served On Call Legal Inc., the California agent for #1 A+ Agents of Process Inc. JTS presented evidence that #1 A+ was Shelby’s designated agent for service of process and that On Call Legal was #1 A+’s California agent. The court concluded that service of the summons and complaint was proper under Federal Rule of Civil Procedure 4(h).

The court applied the factors used to decide whether default judgment is appropriate. Because Shelby did not answer or otherwise defend the case, the court treated the complaint’s factual allegations—other than the amount of damages—as true. The court found that JTS would likely be left without a remedy if default judgment were denied, that the requested amount was tied to the alleged cargo loss, and that Shelby’s failure to participate made a decision after a contested trial impractical.

The court also found that JTS sufficiently pleaded both claims. For the Carmack Amendment claim, JTS alleged that Shelby received the cargo in good condition, that cargo was lost, and that JTS suffered a specific loss. For the contract claim, JTS alleged a contract, its performance, Shelby’s obligation to deliver the cargo, and Shelby’s breach when part of the cargo was lost. The court concluded that default judgment was appropriate.

Relief and Disposition

The court awarded JTS $60,302.48 in compensatory damages and $6,344.15 in interest for the period from October 17, 2023, through November 4, 2024. It granted the motion for default judgment and ordered JTS to file its motion for attorneys’ fees by February 6, 2025. The order did not set a specific attorneys’ fee award. The order disposed of Docket No. 18.