Grothe v. Kushnivich

521 P.3d 228

Mark GROTHE, Appellant,

v.Victor KUSHNIVICH, and J. Kushnivich, and the marital community comprised thereof, Respondents.

No. 39010-1-III

Court of Appeals of Washington, Division 3.

Filed December 6, 2022

Paul Michael Veillon, Galileo Law, PLLC, 900 SW 16th St. Ste. 230, Renton, WA, 98057-2637, for Appellant.

Mick Anthony Jaeger, Keith Marc Hayasaka, Lewis Brisbois Bisgaard & Smith LLP, 1111 3rd Ave., Ste. 2700, Seattle, WA, 98101-3224, for Respondents.

PUBLISHED OPINION

Lawrence-Berrey, A.C.J. ¶ 1 The Carmack Amendment to the Interstate Commerce Act of 1887, 49 U.S.C. § 14706, provides the exclusive remedy for goods damaged in interstate commerce by a common carrier. Carmack provides the cause of action, but applicable common law provides the measure of damages.

¶ 2 The question presented is whether recoverable damages include loss of use while the goods were being repaired and diminished value of the repaired goods. We hold they do.

¶ 3 We affirm the trial court's summary judgment dismissal of Mark Grothe's negligence claim, but we reverse its denial of his motion to amend to assert a claim under Carmack for loss of use while the goods were being repaired and for diminished value of the repaired goods.

FACTS

¶ 4 In 2019, Mark Grothe bought a new Volvo and had it shipped to his home by Victor Kushnivich. Along the way, Kushnivich's truck was involved in an accident, and Grothe's car suffered extensive damage. Grothe's insurance company paid to repair the Volvo, and it recovered the repair costs in a subrogation claim against Kushnivich's insurance company.

Grothe's lawsuit against Kushnivich

¶ 5 In October 2020, Grothe sued Kushnivich. As relevant here, his complaint alleged:

5. On or about April 3, 2019, the Defendant VICTOR KUSHNIVICH was driving a semi-truck pulling a trailer that was being used to transport ... vehicles [including] Plaintiff's recently purchased Volvo.... Defendant KUSHNIVICH had been hired by the Plaintiff to transport his vehicle from California to Washington State. While traveling along the interstate in California, the Defendant lost control of his vehicle, causing the truck and trailer to veer off of the road and overturn. The Plaintiff's brand new vehicle was damaged in this incident.

6. ... Defendant KUSHNIVICH negligently failed to maintain reasonable control of [his] vehicle and caused the Plaintiff's vehicle to fall off of his trailer. The aforesaid collision involving the Plaintiff's vehicle and the Defendant's vehicle was proximately caused by the tortious conduct of the Defendant KUSHNIVICH.

7. The Plaintiff MARK GROTHE has suffered damages for injury to his property, including, without limitation, physical damage to the vehicle involved in the collision, the cost to repair said damage, loss of use, rental expenses, storage costs, reduced fair cash market value of the damaged property, and other out of pocket expenses, in an amount to be proved at the time of trial.

8. The Plaintiff MARK GROTHE hereby notifies the Defendants ... that he will not honor as a setoff defense to his claims any payments they or their insurers or representatives make for the damages set forth above to any party besides the Plaintiff MARK GROTHE particularly but not limited to his own auto insurer FARMERS....

Clerk's Papers (CP) at 1-2.

¶ 6 In his answer, Kushnivich asserted a number of defenses, including that Grothe's claims were "preempted, in whole or in part, by federal statute(s), including 49 U.S.C. § 14706 et seq. " CP at 7 (alteration in original).¹

¶ 7 Through discovery, Grothe provided Kushnivich with his expert's reports on diminished value and loss of use damages. Grothe's expert concluded that the Volvo's value was diminished due to "buyers’ aversion to purchasing a vehicle that has residual physical damage." CP at 72. The report explained that some factory processes cannot be replicated in a body shop and that some repaired parts, such as metal that was bent and reshaped, "are never as strong at the molecular level as they were before they suffered damage." CP at 72. The report stated that the Volvo's preloss value was $44,994 and its postloss value was $27,465, for a diminution in value of $17,529. The same expert provided a separate report that concluded Grothe lost $93 per day for the 105 days the Volvo was in the shop being repaired, for a total of $9,765.

Motion for summary judgment

¶ 8 Kushnivich moved for summary judgment, arguing that Grothe's negligence claim was preempted by Carmack and that even if Grothe pleaded a claim under Carmack, the claim would be barred because Grothe was seeking a double recovery. The motion was supported by documents showing that Kushnivich's insurance company had already reimbursed Grothe's insurance company for repair costs.

¶ 9 In response, Grothe argued his complaint did plead a claim under Carmack. In the alternative, he requested leave to amend his complaint, arguing that Carmack permitted recovery for diminished value and loss of use in addition to costs of repair. His proposed amended complaint differed from the original complaint in just two respects. It stated the court had jurisdiction under 49 U.S.C. § 14706(d)(1) and it added the words italicized below:

6. ... The aforesaid collision involving the Plaintiff's vehicle and the Defendant's vehicle was proximately caused by conduct of the Defendant KUSHNIVICH that subjects him to liability under 49 U.S.C. [ § ] 14706(d)(1) .

CP at 102.² Grothe failed to file any declaration supporting his claim for damages.

¶ 10 In reply, Kushnivich advanced a new argument that Grothe's request to amend his complaint should be denied because he failed to file a notice of claim with Kushnivich before bringing suit. He reiterated that Grothe had been fully compensated for repair costs and that further damages would be a double recovery.

¶ 11 Grothe countered that he had no contractual obligation to file a notice of claim as a prerequisite to a civil suit and that if there was a requirement, Kushnivich had waived it by paying Grothe's insurance company's subrogation claim.

¶ 12 During oral argument of the motion, Grothe asserted he was only seeking damages for diminished value and for loss of use. He conceded that he had been compensated for repair costs.

¶ 13 The court nonetheless expressed concern that Grothe was attempting a double recovery, "[H]asn't your client already recovered? I mean, that's part of what's really troubling me here. I mean, he got his car fixed and he's been compensated." Report of Proceedings (RP) at 9. The court noted that under Carmack, damage was limited to actual loss and opined that if Grothe had already received the cost of repair, he could not receive diminished value as well, "It's one or the other, right?" RP at 10.

¶ 14 Kushnivich argued that if Grothe was seeking diminished value, he should have elected that as his measure of damages after the crash and should not have also repaired his car. Kushnivich asserted that despite the allegations in Grothe's complaint and the statement he would not honor a setoff defense, "in the face of summary judgment" Grothe had "suddenly pivoted" to accept a setoff for the cost of repairs. RP at 14.

¶ 15 The court concluded, "I believe that plaintiff's claims are preempted by Carmack and I will—I'm going to grant the motion." RP at 15. Its order granting summary judgment did not further explain its reasoning. The court without explanation also denied Grothe's request to file his proposed amended complaint.

Motion for reconsideration

¶ 16 Grothe moved for reconsideration of the court's decision, arguing it was contrary to law under CR 59(a)(7). For the first time, Grothe included his expert's reports on diminished value and loss of use damages. Grothe largely repeated his arguments in opposition to the motion for summary judgment, arguing that diminished value and loss of use damages were recoverable even where a plaintiff had received the costs of repair and that there was no notice of claim requirement.

¶ 17 The court, without hearing argument, denied Grothe's motion for reconsideration. Its written order stated:

Plaintiff's state law negligence claim was preempted by the Carmack Amendment, 49 U.S.C. § 14706 et seq. ("Carmack"), warranting summary judgment, and Plaintiff's Motion to Amend Complaint was denied on the grounds the proposed amendment to add a Carmack claim was meritless, duplicative, and/or futile.

CP at 125 (alteration in original).

¶ 18 Grothe timely appealed.

ANALYSIS

A. OBJECTION TO GROTHE'S BRIEF

¶ 19 Kushnivich objects to our consideration of Grothe's opening brief, which was filed four days late. To the extent this objection is meant as a motion to strike the brief, we deny it.

¶ 20 Under RAP 10.2(i), we may impose sanctions under RAP 18.9 "for failure to timely file and serve a brief." RAP 18.9(a) in turn provides for the imposition of monetary sanctions for a party "who uses these rules for the purpose of delay, files a frivolous appeal, or fails to comply with these rules to pay terms or compensatory damages to any other party who has been harmed by the delay or the failure to comply or to pay sanctions to the court." Striking Grothe's late-filed brief is not an appropriate remedy under RAP 10.2 and RAP 18.9, and Kushnivich identifies no harm caused by Grothe's delay that requires monetary compensation. We therefore deny Kushnivich's motion to strike Grothe's brief.

B. GRANT OF SUMMARY JUDGMENT

¶ 21 Grothe argues the trial court erred by construing his original complaint as not asserting a cause of action under Carmack. We disagree.

¶ 22 Washington is a notice pleading state. Champagne v. Thurston Cnty. , 163 Wash.2d 69, 84, 178 P.3d 936 (2008). An action is not dismissed simply because a complaint fails to artfully state each element of a particular cause of action. Id. at 84-87, 178 P.3d 936. Rather, notice pleading must "adequately inform the defendant of the nature of the plaintiff's claims as well as the legal grounds upon which...