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Amquip Crane Rental, LLC v. N.L. Carson Construction, Co., Inc.

United States District Court, E.D. Pennsylvania

March 13, 2017

AMQUIP CRANE RENTAL, LLC Plaintiff,
v.
N.L. CARSON CONSTRUCTION CO., INC., and TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA Defendants.

          MEMORANDUM OPINION

          Rufe, J.

         Plaintiff AmQuip Crane Rental, LLC leased a crane to Defendant N.L. Carson Construction Co., Inc. for use at a construction project in Mississippi. While in Carson’s control, the crane suffered a mishap and was irreparably damaged.[1] AmQuip sued Carson and Carson’s insurer, Travelers Property Casualty Company of America, seeking the replacement value of the crane, continuing rental payments until the crane is repaired or replaced, and interest, costs, and counsel fees.[2] The value of the crane was paid while the case was pending, but AmQuip seeks the other damages, and has moved for summary judgment, which Defendants oppose. For the reasons set forth below, the motion will be granted in part and denied in part.

         I. FACTS AND BACKGROUND

         Many of the relevant facts are not in dispute. The parties agree that AmQuip leased the crane to Carson, that on September 16, 2014, the crane was damaged while in Carson’s control, and that Carson’s insurance policy with Travelers named AmQuip as an additional insured and loss-payee in the amount of $325,000, the agreed value of the crane. The parties now agree that the crane is beyond repair, but that was not always the case.

         AmQuip’s claims adjuster inspected the crane soon after it was damaged and declared it a total loss and AmQuip took the position that even if the crane could be repaired, the cost (estimated to be $372,948.28) would exceed its value. In contrast, the inspector initially hired by Travelers estimated the cost of repair at $65,403.75, based upon a visual inspection, and Travelers made partial payment to AmQuip. AmQuip objected to this estimate, and Travelers requested that the crane be disassembled to allow further investigation of the crane’s internal components, and offered to pay $25,775 for the disassembly costs. AmQuip agreed (although it thought it unnecessary) to disassemble the crane if Travelers advanced $65,000 to cover the anticipated cost, with any funds not spent to be returned to Travelers. Travelers offered to advance $45,000 for this purpose. The parties could not reach agreement on this point, and AmQuip filed suit.

         During a settlement conference before Magistrate Judge Carol Sandra Moore Wells, the parties agreed that Travelers would arrange for an outside crane equipment company to examine the crane. The new inspector, after reviewing documents and photographs, and without the crane being disassembled, concluded that the crane was a total loss. On March 16, 2016, Travelers delivered payment of $279,920.34 to AmQuip, representing the full amount due under the policy for the value of the crane, continuing rental payments, and inspection costs, less payments made earlier.

         II. STANDARDOFREVIEW

         A court will award summary judgment on a claim or part of a claim where there is “no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”[3] A fact is “material” if resolving the dispute over the fact “might affect the outcome of the suit under the governing [substantive] law.”[4] A dispute is “genuine” if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.”[5]

         In evaluating a summary judgment motion, a court “must view the facts in the light most favorable to the non-moving party,” and make every reasonable inference in that party’s favor.[6]Further, a court may not weigh the evidence or make credibility determinations.[7] Nevertheless, the party opposing summary judgment must support each essential element of the opposition with concrete evidence in the record.[8] “If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted.”[9] This requirement upholds the “underlying purpose of summary judgment [which] is to avoid a pointless trial in cases where it is unnecessary and would only cause delay and expense.”[10] Therefore, if, after making all reasonable inferences in favor of the non-moving party, the court determines that there is no genuine dispute as to any material fact, summary judgment is appropriate.[11]

         III. DISCUSSION

         A. Choice of Law

         As an initial matter, the Court must determine which state’s substantive law to apply. Plaintiff is a Pennsylvania company, Carson is a Mississippi company, the crane was shipped to, used, and damaged in Mississippi, and the relevant insurance policy was delivered in Mississippi. A federal court sitting in diversity applies the choice-of-law rules of the forum state, here Pennsylvania. Pennsylvania determines choice of law by first assessing whether there is a true conflict between the relevant laws of the states concerned, which occurs “[w]hen both states’ interests would be harmed by the application of the other state’s law . . . .”[12] If there is a true conflict, then a court must examine the “policies and interests underlying the particular issue before the court” and apply the law of the state with the “most interest in the problem.”[13]

         This case mostly involves a straightforward application of principles of contract interpretation, and it does not appear that there is a dispute between Pennsylvania and Mississippi law in that regard. However, there may be a conflict that bears on AmQuip’s claim for prejudgment interest against Travelers. Under Pennsylvania law, prejudgment interest is mandatory, and awarded from the time performance becomes due.[14] Pennsylvania law is not clear on whether prejudgment interest may be awarded when full payment is tendered before a court renders judgment. However, the Supreme Court of Mississippi recently held that the resolution of an insurance dispute other than by the entry of a judgment or decree precludes an award of prejudgment interest.[15] Therefore, the Court must decide which state has the most interest in the resolution of this dispute. AmQuip and Travelers both relied upon Mississippi law, while Carson applied Pennsylvania law.[16] Because the performance of both the crane rental agreement and the insurance policy was in Mississippi, where the insurance policy was delivered and where the loss occurred, the Court concludes that Mississippi has the greater interest in this case, and will apply Mississippi law.

         B. Contractual Damages against Carson

          AmQuip argues that pursuant to the rental agreement, Carson owes the following damages: $99,617 for rental payments from October 2014 through March 2016;[17] $11,722.23 in costs for inspections of the crane; and $56,843.93 in legal fees and costs.[18] The agreement between AmQuip and Carson provided for a rental period from at least August 26, 2014, through October 17, 2014, at a rate of $408.33 per day, $1,634.00 per week, or $4,900.00 per month.[19]

         The standard terms provided in relevant part:

4. RETURN OF EQUIPMENT -- Lessee shall return the Equipment . . . in the same condition as when received by Lessee, excepting normal wear and tear resulting from normal proper use. . . . Lessee shall pay in addition to any costs of repair, additional rental for each day until the Equipment is rendered not inoperable . . . .
5. RENTAL PAYMENTS -- Lessee shall pay all rental payments, (including rental of Equipment and crew) in advance, without deduction for Equipment down-time, set-off or counterclaim or for any other reason, commencing when this lease begins and continuing on the same day of each period thereafter (weekly, monthly, or yearly). . . . Rental of Equipment for less than a month shall be at Lessor’s standard prevailing weekly rental payment rate. Rental of Equipment for less than a week shall be at Lessor’s standard prevailing daily rental payment rate. . . . Unpaid rentals, and other charges due by Lessee to Lessor shall bear a delinquency charge of two percent per month, but not in excess of the maximum permitted under applicable state law, unless paid within ten (10) days of the due date. Rental payment shall not abate but shall continue to be paid if any of the Equipment is stolen, lost, damaged or destroyed or while any of the Equipment is being serviced, repaired or is otherwise inoperable for any reason, including, without limitation, inclement weather. Rental payments received by Lessor may be applied in such order as Lessor shall deem advisable in its sole discretion.
6. TAXES AND GOVERNMENTAL ASSESSMENTS -- Lessee shall pay, or shall reimburse Lessor [on] demand if Lessor is required to pay, any and all taxes, assessments, penalties, fines, license or registration fees and other charges imposed, levied or assessed by any governmental authority, local, state, or federal, by reason of the ownership, possession, leasing, operation or use of the Equipment or by reason of payment of any rental payments (except where prohibited by law).
11. DAMAGE TO OR DESTRUCTION OF EQUIPMENT-- Lessee shall bear the sole risk of all theft, loss, damage or destruction to the Equipment and shall indemnify Lessor from any theft or loss of or damage or destruction to the Equipment howsoever caused during the lease term. If the Equipment is stolen, lost, damaged or destroyed, Lessee shall notify Lessor in writing within 24 hours of its occurrence, specifying the extent and nature of the occurrence.[20]

         The agreement also provided in paragraph 12 that “Lessee shall maintain All Risk Physical Damage Insurance with Lessor named Loss Payee covering replacement value of the Equipment as set forth above for its theft, loss, damage or destruction from any cause, including, but not limited to, fire, theft, flood, explosion, overturn, accidents and Acts of God occurring during the lease term.”[21] Finally, paragraph 21 states that “Lessee shall pay all costs of collection of any ...


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