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Top Op Digest: State-law claims for damage to stored property not pre-empted

Based on plausibly-alleged alternative theories of when her personal property sustained water damage, a plaintiff’s state-law claims against the company that both stored and shipped her property were not pre-empted by federal law governing interstate carriers.


As alleged in the complaint, Plaintiff Meredith Nachman had her household goods delivered to Defendant Seaford Transfer Inc.’s temperature-controlled facility for long-term storage. Nachman paid Seaford $1,000 to unload the property, place ID tags on each item, performing any wrapping deemed necessary for the conditions, and place Nachman’s belongings into a large wooden box/vault. She then paid storage fees in excess of $200 per month. At the time of delivery, Nachman’s representative signed a detailed inventory document and a “Non-Negotiable Storage Contract and Warehouse Receipt” on which she elected to pay an additional rent premium for enhanced replacement coverage protection.

About two years later, Nachman hired Seaford to ship her property from Virginia to New York. Seaford loaded Nachman’s property onto a truck and transported it. Upon delivery, much of Nachman’s property was wet, had visible mold, and/or a mildew odor. She estimates her damages at over $56,000.

Nachman initiated a claims process with Seaford, in which it offered her about $4,250. Nachman allegeds that Seaford acted in bad faith throughout the claims process by intentionally providing misinformation to its insurance adjuster.

Nachman admittedly cannot pinpoint how or when such damage occurred without the benefit of discovery, so she advances multiple alternative theories of how the damage occurred: (1) during long-term storage; (2) immediately prior to shipment, perhaps due to being left outside in the rain; and/or (3) during transport to New York. In this action, she asserts claims invoking common-law contract and tort, the federal statute governing interstate carrier liability, and state consumer-protection law.

Seaford has moved to dismiss, relying entirely on the Carmack Amendment and its complete pre-emption of state-law claims for damages to goods caused by an interstate carrier.

Breach of contract

At this early stage, it is unknown if, when, or for what purpose Nachman’s vault may have been stored outside in the rain. Interpreted in Nachman’s favor, allegations that Seaford moved her vault out of the warehouse prior to the anticipated move to New York, and that the vault leaked when left out in the rain, are sufficient to include scenarios where her vault was stored outside far in advance of its shipment to New York, for reasons driven solely by Seaford’s activities as a warehouseman, rather than as an interstate carrier.

Even assuming that the vault was left outside “over the weekend” simply to facilitate shipment, it just as plausibly could have been moved outside for Seaford’s benefit (i.e. to make room for a new customer). Thus, while this claim is pre-empted to the extent it seeks to recover for damages occurring while Seaford acted as a carrier “arranging for” the interstate transportation of Nachman’s belongings, that determination is a matter of fact for another day.

Duty of good faith

At this time, it remains unclear whether Nachman’s property was damaged partially or wholly during long-term storage, rather than during Seaford’s handling of the property as an interstate carrier. If breach of the Storage Contract claim is not pre-empted by the Carmack Amendment, it follows that an associated claim alleging breach of a discretionary duty established by that same contract is likewise not pre-empted.

Although the broad sweep of Carmack pre-emption appears to extend to the subsequent processing of claims for damages occurring during any part of the interstate transportation process, Nachman plausibly alleges a claim for a breach of the duty of good faith in the manner in which Seaford handled her damages claim under the discrete Storage Contract that was executed more than two years before any negotiations associated with hiring Seaford as an interstate carrier.

Negligence and fraud

Because the Carmack Amendment pre-empts any claim for damages resulting from loading activities, Nachman’s claims for negligence and fraud will be dismissed to the extent that they rely on such activities.

However, Nachman alleges sufficient facts to plausibly state a claim that Seaford acted negligently as a warehouseman in handling her effects during the years, months, weeks, or days leading up to the acts taken as a carrier in preparation for shipment.

Nachman also plausibly alleges that Seaford obtained knowledge of the wet condition of her property as a warehouseman-bailee and not only intentionally concealed that fact, but thereafter intentionally biased a third-party adjuster who evaluated her damages claim under the Storage Contract.

These allegations support Nachman’s negligence and fraud claims such that they survive dismissal.

Virginia Consumer Protection Act

It would be premature to conclude that Carmack pre-emption applies in light of Nachman’s allegations that Seaford engaged in intentional deception, fraud, and misrepresentations in processing her damages claims under the independent Storage Contract. Because the claim survives at this early stage, so must Nachman’s assertion that she is entitled to statutory treble damages.

Motion to dismiss granted in part, denied in part.

Nachman v. Seaford Transfer Inc., Case No. 4:18cv62, Aug. 31, 2018. EDVA at Newport News (Davis). VLW No. 018-3-366, 16 pp.