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East Coast Transport & Logistics, LLC v. Cesar Transport

March 17, 2008

EAST COAST TRANSPORT & LOGISTICS, LLC, PLAINTIFF,
v.
CESAR TRANSPORT, INC.; INSURANCE CENTER OF DADE, INC.; UNDERWRITERS AT LLOYDS LONDON; PENOBSCOT GROUP, LLC; EASTERN TRUCKING, INC.; AND CESAR J. PEDRERA; DEFENDANTS.



The opinion of the court was delivered by: Irenas, Senior District Judge

HONORABLE JOSEPH E. IRENAS

OPINION

Before the Court are: 1) Defendant Cesar Transport, Inc.'s ("Cesar Transport") Motion to Vacate Default Judgment; and 2) the Motion to Extend Time to file responsive pleading by Eastern Trucking, Inc. ("Eastern Trucking") and Cesar J. Pedrera.*fn1 For the reasons stated herein, both motions will be granted.

I.

This suit arises out of the hijacking of a freight truck and the theft of its cargo. Joy Systems, Inc. ("Joy"), contracted with Plaintiff, East Coast Transport & Logistics, LLC ("ECT"), to arrange for the transportation of electronic equipment*fn2 from Joy's New Jersey facility to Joy's facility in Miami, Florida. ECT does not transport any freight itself. Rather, ECT is licensed by the Federal Motor Carrier Safety Administration ("FMCSA") to act as a broker, making arrangements between "shipper-customers" like Joy, and motor carriers who have "common or contract authority" from the FMCSA to transport freight. (Amend. Compl. at ¶ 1).

In this case, ECT arranged for Cesar Transport, located in Miami, to transport the freight. ECT required proof of Cesar Transport's cargo insurance coverage, which ECT alleges Defendant Insurance Center of Dade, Inc. ("Insurance Center")*fn3 provided to it. Specifically, the Amended Complaint alleges that Insurance Center provided ECT with a "Certificate of Liability Insurance form as required by the FMCSA," and that the certificate showed that Cesar had $100,000.00 of cargo insurance coverage. (Amend. Compl. at ¶ 16). ECT claims that the certificate was fraudulent.

Cesar Transport leased a truck from Euschial Solis. Mr. Solis drove the truck that carried Joy's cargo. On May 24, 2006, the cargo was stolen while in transit from New Jersey to Florida.*fn4 Cesar Transport promptly filed a claim with its insurance company, Defendant Underwriters At Lloyds London ("Lloyds").*fn5 However, under the terms of Cesar Transport's insurance policy, Cesar was only covered up to $20,000.00 for losses due to theft. (Ex. E to Amend. Compl.).

ECT paid Joy $65,818.00, the alleged value of the cargo. ECT then demanded that Cesar Transport pay ECT $65,818.00, but Cesar Transport allegedly refused. Cesar Transport claims ECT owes it $12,315.00 for unrelated freight transportation services rendered between July and October 2006.*fn6

In February or March, 2007, ECT filed a complaint in New Jersey Superior Court against Cesar Transport, Insurance Center, Canal Insurance Company, and Penobscot, seeking a judgment in the amount of $65,818.00. Penobscot removed the case to this Court.*fn7

ECT amended the complaint on June 26, 2007, asserting various counts against Cesar Transport, Insurance Center, Lloyds, Penobscot, Eastern Trucking, and Cesar J. Predrera.*fn8 ECT seeks the alleged value of the stolen cargo ($65,818.00), compensatory and punitive damages.*fn9 In addition to its claim that Cesar Transport refuses to pay for the stolen cargo, ECT asserts that Defendant Pedrera created Eastern Trucking with the intent to defraud ECT and steal $65,818.00.

Lloyds and Penobscot settled with ECT for $20,000.00 on July 16, 2007. Approximately a month later, on August 24, 2007, the Clerk of Court entered Default Judgment against Cesar Transport and Insurance Center for the amount of $45,818.00. Cesar Transport now moves to vacate the default judgment.*fn10

II.

Fed. R. Civ. P. 60(b) states: "On motion and just terms, the court may relieve a party . . . from a final judgment . . . for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect." In exercising its discretion to vacate a default judgment, the trial court must consider: "(1) whether the plaintiff will be prejudiced if the default is lifted; (2) whether the defendant has a meritorious defense; and (3) whether the default was the result of the defendant's culpable conduct." Zawadski De Bueno v. Bueno Castro, 822 F.2d 416, 419-20 (3d Cir. 1987). The Third Circuit ...


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