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Magnum LTL, Inc. v. CIT Group/Business Credit

April 15, 2009

RE: MAGNUM LTL, INC.
v.
THE CIT GROUP/BUSINESS CREDIT, INC. ET AL.



The opinion of the court was delivered by: William J. Martini Judge

LETTER OPINION

Dear Counsel:

This matter comes before the court of Defendant The CIT Group/Business Credit, Inc.'s ("CIT") motion to dismiss, or in the alternative to transfer venue to the United States Bankruptcy Court District of Delaware. The Court did not hold oral argument. Fed. R. Civ. P. 78. For the following reasons, CIT's motion to dismiss is GRANTED.

BACKGROUND

Plaintiff Magnum LTL, Inc. ("Magnum") is an interstate motor carrier of goods, which is based in North Dakota. (Compl. ¶¶ 1-2.) In 2003, it entered into an alleged interline partner contract with non-party, New Jersey based, Jervic Transportation, Inc.

The agreement provided for the division of revenues for transportation of cargo. (Id. at ¶ 4.) Under the agreement, Jervic would originate the shipment of goods for hauling a certain distance and then transfer the goods to Magnum delivery. (Id.) After delivery, Jervic would bill the customers, who in turn would make payment to Jervic. (Id.) Based on freight invoices, Jervic would pay Magnum an apportioned amount. (Id.)

From 2003 through December 2007, Magnum received monies from Jervic under this arrangement. (Id. at ¶ 11.) However, Magnum maintains that it is still owed $67,357.59. (Id. at ¶ 12.) In May 2008, Jervic filed for Chapter 11 in the United States Bankruptcy Court for the District of Delaware. (Id. at ¶ 5.)

Prior to the bankruptcy, Jervic entered in a secured credit agreement with CIT, a New Jersey based bank. (Id. at ¶ 13.) Pursuant to the July 2006 agreement, CIT received a security interest in Jervic's accounts receivable and rolling stock. (Id.) Magnum alleges that based on this credit agreement CIT received, collected, or otherwise transferred monies due under Magnum and Jervic's alleged interline partner contract. (Id.)

Magnum sent CIT a letter on September 16, 2008 demanding that CIT turn over the amounts due to Magnum from Jervic. (Id. at ¶ 14.) CIT refused to comply and Magnum filed the present action on October 29, 2008. In Magnum's Complaint, it presents several theories for recovery, including breach of fiduciary duty as trustee, breach of contract, negligence, and conversation. (Id. at ¶¶ 18-20.) Magnum seeks the above stated amount, along with post-judgement interest, costs, and reasonable attorneys' fees. (Id. at ¶ 23.)

In lieu of answering, CIT filed the present motion, which seeks a dismissal of Magnum's complaint for lack of subject matter jurisdiction and failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6), or in the alternative transferring of venue to the United States Bankruptcy Court District of Delaware under 28 U.S.C. § 1404.

STANDARD OF REVIEW

When deciding a motion to dismiss under Fed. R. Civ. P. 12(b), all allegations in the complaint must be taken as true and viewed in the light most favorable to the plaintiff. See Warth v. Seldin, 422 U.S. 490, 501 (1975); Trump Hotels & Casino Resorts, Inc., v. Mirage Resorts Inc., 140 F.3d 478, 483 (3d Cir. 1998). In evaluating a Rule 12(b)(6) motion to dismiss for failure to state a claim, a court may consider only the complaint, exhibits attached to the complaint, matters of public record, and undisputedly authentic documents if the plaintiff's claims are based upon those documents. See Pension Benefit Guar. Corp. v. White Consol. Indus., 998 F.2d 1192, 1196 (3d Cir. 1993). If, after viewing the allegations in the complaint in the light most favorable to the plaintiff, it appears that no relief could be granted "under any set of facts that could be proved consistent with the allegations," a court may dismiss a complaint for failure to state a claim. Hishon v. King & Spalding, 467 U.S. 69, 73 (1984).

Although a complaint need not contain detailed factual allegations, "the 'grounds' of his 'entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1965 (2007). Thus, the factual allegations must be sufficient to raise a plaintiff's right to relief above a speculative level. See id. at 1964-65. Furthermore, although a court must view the allegations as true in a motion to dismiss, it is "not compelled to accept unwarranted ...


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