Reported / Citable
Background
Happy Automotive purchased a 2025 Cadillac Escalade ESV through an automobile auction. Amherst alleged that either JCT Automotive or Curv Logistics arranged to ship the vehicle from North Carolina to Happy Automotive in Louisiana. The shipment was allegedly posted on Super Dispatch, awarded to Dracma, and later re-brokered, reassigned, or otherwise transferred to Curv Logistics and Valdez.
According to Amherst, either Dracma or Valdez took possession of the Escalade in North Carolina but delivered it to an unauthorized address in the Bronx rather than to Happy Automotive in Louisiana. The vehicle was not recovered. As Happy Automotive’s insurer and subrogee, Amherst sought at least $134,500 and asserted Carmack Amendment and conversion claims against Dracma and Valdez, along with negligence claims against JCT Automotive and Curv Logistics. Valdez moved to dismiss only the conversion claim.
The Court’s Holding
The court granted Valdez’s motion for partial dismissal. It held that Amherst’s pleaded conversion claim concerned unauthorized delivery, misdelivery, or loss during interstate transportation and was therefore preempted by the Carmack Amendment, which supplies the uniform federal remedy for cargo lost or damaged in interstate shipment.
The court recognized that a traditional “true conversion” claim may escape Carmack preemption when a carrier intentionally appropriates a shipper’s property for the carrier’s own use or benefit. Amherst’s allegations did not plausibly support that exception. The distance between the intended Louisiana destination and the Bronx delivery, the delivery to an unauthorized third party, and the vehicle’s disappearance did not reasonably imply that Valdez appropriated the Escalade for its own purposes.
The dismissal was with leave to amend. Amherst may file an amended complaint by July 20, 2026, alleging facts showing intentional conversion by Valdez for its own use or benefit. If Amherst can allege only unauthorized delivery, misdelivery, or cargo loss, the Carmack Amendment will provide its sole claim.
Key Takeaways
- The Carmack Amendment preempts state-law conversion claims based on cargo loss or misdelivery during interstate transportation.
- The true-conversion exception requires facts supporting intentional appropriation by the carrier for its own use or benefit.
- Delivery far from the authorized destination, standing alone, did not plausibly establish true conversion.
Why It Matters
The decision underscores the narrowness of the true-conversion exception to Carmack preemption. A shipper or subrogated insurer cannot preserve a state-law conversion claim merely by characterizing an interstate misdelivery as intentional; the complaint must plausibly allege that the carrier appropriated the property for itself.