The opinion of the court was delivered by: JAMES MUNLEY, District Judge
Presently before the Court for disposition are Defendant U.S.
Bank National Association's ("U.S. Bank") Motion For Summary
Judgment and Defendant Lumbermen's Mutual Insurance Company's
("Lumbermen") Motion for Summary Judgment. The parties have fully
briefed the motions and they are ripe for summary judgment. For
the following reasons, we will grant both motions.
The background facts are undisputed. Plaintiff Calex Express,
Inc., ("Calex") provides transportation and carrier services.
(Pl. Stat. Facts in Opp. U.S. Bank Mot. Summ J. Ex. ("Exhibit") A
8). In November 2000, Calex subcontracted with Third Party
Defendant Owners Express, Inc. ("Owners") to ship cargo freight
for Toys `R Us, Inc. (Id. at 16-19). On November 9, 2000, the cargo freight was lost or stolen while
in Owners' possession. (Id. at 16-17). Owners had a policy
covering the loss with Lumbermen. (Def. Ex. B. In Supp. Summ. J.)
Included in this policy was an endorsement, which provided in
part, "In consideration of the premium stated in the policy to
which this endorsement is attached, the Company hereby agrees to
pay, within the limits of liability hereinafter provided, any
shipper of consignee for all loss of or damage to all property
belonging to such shipper or consignee." (Id.)
Pursuant to the policy, on February 20, 2001, Lumbermen issued
a check for $150,000 jointly payable to Owners and Toys `R Us and
drawn from an account with Defendant Bank of America. (Exhibit B,
"the check") On February 22, Owners presented the check endorsed
by Owners and Toys `R Us to Firstar Bank, a subsidiary of U.S.
Bank, and U.S. Bank presented the check to Bank of America the
same day. (Exhibit A 44-46, Exhibit B). The signature of the Toys
`R Us representative had been fraudulently endorsed. ("Ex. D").
Thereafter, Toys `R Us assigned all of its rights to the check
to Calex. (Exhibit F) Calex instituted the instant action against
Bank of America on May 2, 3003 to recover the proceeds. On July
21, 2004, Calex moved to amend the Complaint to add claims
against Lumbermen and U.S. Bank. On July 27, 2004, this Court
granted the Motion to Amend and Calex filed the Amended Complaint
on August 2, 2004. The Amended Complaint advances three Counts.
Counts I and II are conversion claims against U.S. Bank and Bank
of America, alleging that the acceptance of the check without
indorsement of Toys `R Us constituted conversion, negligence, and a breach of warranties of presentment
and transfer. Count III maintains that Lumbermen negligently
issued the check to two corporate payees.
This Court has jurisdiction pursuant to the diversity
jurisdiction statute, 28 U.S.C. § 1332. Calex is a Pennsylvania
corporation with a principal place of business in Pittston,
Pennsylvania. U.S. Bank is a national banking institution with
its registered address in Minneapolis, Minnesota. Bank of America
is a national banking institution with its registered address in
Concord, California. Lumbermen is an Illinois Corporation with
its principle place of business in Long Grove, Illinois. Because
we are sitting in diversity, the substantive law of Pennsylvania
shall apply to the instant case. Chamberlain v. Giampapa,
210 F.3d 154, 158 (3d Cir. 2000) (citing Erie R.R. v. Tompkins,
304 U.S. 64, 78 (1938)).
Granting summary judgment is proper if the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party
is entitled to judgment as a matter of law. See Knabe v.
Boury, 114 F.3d 407, 410 n. 4 (3d Cir. 1997) (citing FED. R.
CIV. P. 56(c)). "[T]his standard provides that the mere existence
of some alleged factual dispute between the parties will not
defeat an otherwise properly supported motion for summary
judgment; the requirement is that there be no genuine issue of
material fact." Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 247-48 (1986) (emphasis in original). In considering a motion for summary judgment, the court must
examine the facts in the light most favorable to the party
opposing the motion. International Raw Materials, Ltd. v.
Stauffer Chemical Co., 898 F.2d 946, 949 (3d Cir. 1990). The
burden is on the moving party to demonstrate that the evidence is
such that a reasonable jury could not return a verdict for the
non-moving party. Anderson, 477 U.S. at 248 (1986). A fact is
material when it might affect the outcome of the suit under the
governing law. Id. Where the non-moving party will bear the
burden of proof at trial, the party moving for summary judgment
may meet its burden by showing that the evidentiary materials of
record, if reduced to admissible evidence, would be insufficient
to carry the non-movant's burden of proof at trial. Celotex v.
Catrett, 477 U.S. 317, 322 (1986). Once the moving party
satisfies its burden, the burden shifts to the nonmoving party,
who must go beyond its pleadings, and designate specific facts by
the use of affidavits, depositions, admissions, or answers to
interrogatories showing that there is a genuine issue for trial.
Id. at 324.
U.S. Bank and Lumbermen each argue that it is entitled to
summary judgment. We will consider each motion seperately.
U.S. Bank argues that we should enter summary judgment because
Calex's claim is barred by the statute of limitations. It asserts
that Calex's claim accrued on February 22, 2001, when the check
was negotiated, and the three year statute of limitations expired
on February 22, 2004, five months before Calex joined U.S. Bank as a
defendant in this case. Pennsylvania law applies a three year