MVP Logistics, LLC v. FDG Express, LLC

Background

MVP Logistics, LLC, a motor carrier cargo broker incorporated and headquartered in Minnesota, entered into a broker-carrier agreement with FDG Express, LLC, a cargo motor carrier incorporated and headquartered in Georgia. Under the agreement, FDG agreed to transport cargo belonging to Hissho Sushi Company from North Carolina to New York and New Jersey. Hissho assigned its claim to MVP.

FDG picked up the cargo in good condition, made some deliveries, and then abandoned the rest. The undelivered cargo—sushi, fish, and related products—spoiled. Hissho replaced the spoiled products at a cost of $31,925.72. MVP submitted a claim to FDG in January 2022 and later reminded FDG about it, but FDG did not respond.

MVP filed this lawsuit on March 15, 2022. Count I alleged breach of contract, and Count II alleged liability under the Carmack Amendment, 49 U.S.C. § 14706. FDG did not respond to the complaint or appear. The Clerk entered default against FDG on May 2, 2022, and MVP moved for default judgment.

Default Judgment Standard

A party seeking default judgment must first obtain an entry of default from the Clerk and then ask the court to enter judgment. When default is entered, the complaint’s factual allegations generally are treated as admitted, except allegations about the amount of damages. The court must still determine whether the admitted facts establish a valid legal claim.

Carmack Amendment Claim

The Carmack Amendment imposes liability on a motor carrier for the actual loss or injury to goods damaged during interstate transportation. For lost goods, a plaintiff must show that goods were delivered to the carrier, that fewer goods arrived at the destination, and the amount of damages.

Because FDG was in default, the court accepted MVP’s allegations as true. MVP alleged that FDG received the cargo in good condition, delivered only part of it, abandoned the remainder, and caused the undelivered cargo to spoil. The court concluded that MVP established FDG’s liability under the Carmack Amendment and that the court had original jurisdiction over the case.

The court therefore granted MVP’s motion for default judgment as to Count II.

Breach-of-Contract Claim

MVP based its contract claim on the same loss of cargo underlying its Carmack Amendment claim. The court concluded that the Carmack Amendment preempts—meaning it displaces—the state-law breach-of-contract claim because the claim arose from the loss or damage of goods during interstate transportation.

The court denied MVP’s motion for default judgment as to Count I and dismissed Count I without prejudice.

Damages, Interest, Fees, and Costs

The court determined that MVP proved its actual damages to a reasonable degree of certainty. It ordered judgment for $31,925.72 for the lost and damaged cargo.

The court also awarded prejudgment interest under federal law. Because the agreement did not set an interest rate and no statute established one for the Carmack Amendment claim, the court used Minnesota’s six-percent statutory rate. Interest runs from January 20, 2022, the date MVP filed its claim, until the date of judgment.

The agreement required FDG to defend, indemnify, and hold MVP harmless from losses, costs, and reasonable attorney’s fees arising from FDG’s performance or breach of the agreement. The court concluded that this provision applied to the Carmack Amendment liability. It awarded MVP $5,885.50 in attorney’s fees and $549.74 in costs.

Order

The court granted MVP’s motion for default judgment as to Count II and denied the motion as to Count I. It dismissed Count I without prejudice and directed the Clerk to enter judgment for $31,925.72 in actual damages, six-percent interest from January 20, 2022, until judgment, $5,885.50 in attorney’s fees, and $549.74 in costs.