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CALEX EXPRESS, INC. v. BANK OF AMERICA

November 22, 2005.

CALEX EXPRESS, INC., Plaintiff
v.
BANK OF AMERICA, US BANK NATIONAL ASSOCIATION, and LUMBERMEN'S MUTUAL INSURANCE CO., Defendants v. OWNER'S EXPRESS GROUP, Third Party Defendant.



The opinion of the court was delivered by: JAMES MUNLEY, District Judge

MEMORANDUM

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.

I. Background Facts

  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.

  II. Jurisdiction

  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)).

  III. Standard

  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.

  IV. Discussion

  U.S. Bank and Lumbermen each argue that it is entitled to summary judgment. We will consider each motion seperately.

  A.U.S. Bank Motion

  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 statute ...


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