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Transport Financial Services, LLC v. ETL, Inc.

United States District Court, D. Oregon

September 18, 2017

TRANSPORT FINANCIAL SERVICES, LLC, a Florida corporation, Plaintiff,
v.
ETL, INC., a Washington corporation, Defendant.

          JOHN P. MANNING Attorney for Plaintiff.

          KEVIN M. ANDERSON ANDREW I. SCHLEGEL Anderson and Yamada, PC Attorneys for Defendant.

          OPINION AND ORDER

          ANNA J. BROWN UNITED STATES SENIOR DISTRICT JUDGE.

         This matter comes before the Court on Plaintiff's Motion (#15) for Summary Judgment and Defendant's Cross-Motion (#21) for Summary Judgment. For the reasons that follow, the Court DENIES Plaintiff's Motion and GRANTS Defendant's Motion.

         BACKGROUND

         The following facts are taken from the Statement of Agreed Facts and the parties' filings related to their Motions for Summary Judgment.

         Plaintiff Transport Financial Services (TFS) is a limited liability company that is authorized by the Federal Motor Carrier Safety Administration (FMCSA) to issue and to file Form BMC-85, which is a transportation broker's or freight forwarder's trust fund agreement, pursuant to 49 U.S.C. § 13906(a).[1]

         During the relevant period Rail Logistics, LLC, [2] was a transportation broker licensed and registered by the FMCSA pursuant to 49 U.S.C. § 13904. A transportation broker is “a person who, for compensation, arranges, or offers to arrange, the transportation of property by an authorized motor carrier.” 49 C.F.R. § 371.2.

         Defendant ETL, Inc., is an interstate motor carrier defined as being in “the business of transporting, for compensation, the goods or property of another.” 49 C.F.R. § 387.5. Defendant is registered with the FMCSA pursuant to 49 U.S.C. § 13902(a), which provides the Secretary of Transportation “shall register a person to provide transportation . . . as a motor carrier using self-propelled vehicles the motor carrier owns, rents, or leases” when certain conditions are satisfied.

         On October 1, 2013, Plaintiff issued a Form BMC-85 to Rail Logistics in the amount of $75, 000.

         On October 28, 2013, Rail Logistics and Defendant entered into a Broker-Carrier Agreement under which Defendant “was to be paid for its carrier services by Rail Logistics.” Statement of Agreed Facts at ¶ 5. Defendant “performed motor carrier transportation services under the Broker-Carrier Agreement.” Statement of Agreed Facts at ¶ 6. Plaintiff alleges Rail Logistics was paid by “the responsible account debtor for each of the shipments involved.” Compl. at ¶ 11.

         At some point in 2014 Rail Logistics “ceased doing it [sic] brokerage business.” Statement of Agreed Facts at ¶ 7. Defendant demanded Rail Logistics “pay its claims for it [sic] services provided to Rail Logistics. Rail Logistics refused to do so.” Statement of Agreed Facts at ¶ 7.

         At some point after Rail Logistics's refusal to pay Defendant, Defendant submitted its claims to Plaintiff pursuant to the Form BMC-85 Trust Agreement for payments that Rail Logistics owed Defendant.

         Plaintiff paid a portion of Defendant's claim in the amount of $22, 295.

         On July 26, 2016, Plaintiff filed a Complaint for Declaratory Judgment in this Court in which it alleges it “mistakenly paid [Defendant's] claims under the Form BMC-85 . . . in the amount of $22, 295, [because] the . . . shipments made by [Defendant] were exempt from coverage under the BMC-85 trust fund agreement [by the terms of] 49 CRF [sic] 1090.2 captioned ‘Exemption of rail and highway TOFC/COFC service.'”[3] Compl. at ¶ 16. Plaintiff seeks a declaration from that Court that it “was not required to pay [Defendant's] claims inasmuch as the underlying movements were exempt from coverage under [the Form BMC-85] and, further, requiring [Defendant] to refund all amounts paid on such claims to [Plaintiff].” Compl. at ¶ 17.

         On April 28, 2017, Plaintiff filed a Motion for Summary Judgment seeking a judgment in its favor. On May 19, 2017, Defendant filed a Cross-Motion for ...


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