Amherst Specialty Insurance Company v. Dracma LLC et al

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
AMHERST SPECIALTY INSURANCE
COMPANY, as subrogee of HAPPY
AUTOMOTIVE LLC d/b/a KIA OF
COVINGTON
Plaintiff,
v.
DRACMA LLC, VALDEZ
TRANSPORTATION LLC, JCT
AUTOMOTIVE LLC, CURV LOGISTICS
GROUP INC.
Defendants.
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CIVIL ACTION NO. H-26-2784
MEMORANDUM AND OPINION
This dispute arises from the alleged loss of a 2025 Cadillac Escalade ESV during interstate
transport. After Happy Automotive bought the Escalade, either JCT Automotive or Curv Logistics
arranged for the vehicle to be shipped from North Carolina to Louisiana. Either Dracma or Valdez
picked up the Escalade in North Carolina and delivered it to an unauthorized address in the Bronx,
New York. The vehicle has not been recovered. Amherst Specialty Insurance Company, as Happy
Automotive’s subrogee, sued to recover at least the $134,500 it paid or will pay for the loss.
Amherst asserts a Carmack Amendment claim against Dracma and Valdez, a conversion claim
against Dracma and Valdez, and negligence claims against JCT Automotive LLC and Curv
Logistics Group Inc. 	Valdez removed the case and has moved to dismiss only the conversion
claim.
Based on the pleadings, the motion, the record, and the applicable law, the court grants the
motion to dismiss the conversion claim. The reasons for this ruling are set out below.
United States District Court
Southern District of Texas
ENTERED
June 22, 2026
Nathan Ochsner, Clerk
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I. 	Background
Amherst alleges that Happy Automotive purchased a 2025 Cadillac Escalade ESV from
Carolina Auto Direct through a Manheim automobile auction. 	(Docket Entry No. 1-2 ¶ 10).
Amherst alleges that either JCT Automotive or Curv Logistics arranged for the Escalade to be
shipped from Carolina Auto Direct in Lincolnton, North Carolina, to Happy Automotive in
Covington, Louisiana. 	(Id. ¶ 11). 	JCT Automotive allegedly posted the shipment on Super
Dispatch; Dracma was awarded the shipment; and the shipment was later re-brokered, reassigned,
or otherwise transferred to Curv Logistics and Valdez. (Id. ¶¶ 12–15).
Amherst alleges that either Dracma or Valdez took possession of the Escalade in North
Carolina in March 2025 and that a bill of lading acknowledged both the pickup of the vehicle and
the instructions to deliver it to Happy Automotive in Louisiana. (Id. ¶¶ 16–20). The Escalade was
not delivered to Happy Automotive. Instead, Amherst alleges that Dracma or Valdez delivered it
to an unauthorized address in Bronx, New York and that Happy Automotive has been unable to
locate or recover it. (Id. ¶¶ 21–24).
Amherst alleges that, under its insurance policy with Happy Automotive, it paid or will
pay at least $134,500 for the loss of the Escalade. (Id. ¶¶ 25–26). Amherst alleges that, by making
that payment and by operation of law, it became subrogated to Happy Automotive’s claims against
the person or entity liable for the loss. (Id. ¶ 27).
Amherst asserts a Carmack Amendment claim against Dracma and Valdez, alleging that
one of them was the carrier in possession of the Escalade, received it in new and undamaged
condition, and lost it during transport. (Id. ¶¶ 28–31). Amherst also asserts a conversion claim
against Dracma and Valdez, alleging that they wrongfully exercised dominion or control over the
Escalade by delivering it to an unauthorized third party in New York. (Id. ¶¶ 32–37). Amherst
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asserts negligence claims against JCT Automotive and Curv Logistics for allegedly entrusting the
Escalade to an incompetent or unfit motor carrier and for negligent hiring, training, and
supervision. (Id. ¶¶ 38–62).
Valdez moved to dismiss only the conversion claim, arguing that the Carmack Amendment
provides the exclusive remedy for loss or damage to goods during interstate transportation and
preempts Amherst’s conversion claim. (Docket Entry No. 4). Valdez filed an answer subject to
its partial motion to dismiss. (Docket Entry No. 5). Valdez admits that Curv Logistics hired it to
transport the shipment, that it took physical possession of the Escalade in North Carolina, that it
issued a bill of lading acknowledging the pickup of the Escalade, and that it was delivered to the
consignee at the Bronx address. (Docket Entry No. 5 ¶¶ 5, 8, 10, 12). Amherst responds that the
conversion claim should survive because the Original Petition alleges intentional diversion and
unauthorized delivery to a third party, rather than ordinary cargo loss. (Docket Entry No. 6).
II. 	The Legal Standard
Rule 12(b)(6) allows dismissal if a plaintiff fails “to state a claim upon which relief can be
granted.” Fed. R. Civ. P. 12(b)(6). Rule 12(b)(6) must be read in conjunction with Rule 8(a),
which requires “a short and plain statement of the claim showing that the pleader is entitled to
relief.” Fed. R. Civ. P. 8(a)(2). “[A] complaint must contain sufficient factual matter, accepted as
true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
Rule 8 “does not require ‘detailed factual allegations,’ but it demands more than an
unadorned, the-defendant-unlawfully-harmed-me accusation.” Id. (quoting Twombly, 550 U.S. at
555). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court
to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. “The
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plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer
possibility that a defendant has acted unlawfully.” 	Id. (quoting Twombly, 550 U.S. at 556).
“Conversely, when the allegations in a complaint, however true, could not raise a claim of
entitlement to relief, this basic deficiency should be exposed at the point of minimum expenditure
of time and money by the parties and the court.” Eli Lilly & Co. v. Revive Rx, LLC, 812 F. Supp.
3d 708, 723 (S.D. Tex. Dec. 15, 2025) (quoting Cuvillier v. Taylor, 503 F.3d 397, 401 (5th Cir.
2007)).
III. 	Analysis
Plaintiffs may bring a claim for lost, damaged, or delayed cargo in interstate shipping under
the Carmack Amendment. See 49 U.S.C. § 14706(a). The Carmack Amendment governs liability
of motor and railway carriers for lost, damaged, or delayed cargo in interstate shipping. See id. A
claim under the Carmack Amendment can be brought “against a delivering carrier in a district
court of the United States or in a State court.” Id. § 14706(d)(1). The Carmack Amendment “was
intended by Congress to create a national uniform policy regarding the liability of carriers under a
bill of lading for goods lost or damaged in shipment.” Shao v. Link Cargo (Taiwan) Ltd., 986 F.2d
700, 706 (4th Cir. 1993).
Under Texas law, “[c]onversion is the wrongful assumption and exercise of dominion and
control over the personal propererty of another to the exclusion of, or inconsistent with, the
owner’s rights.” 	Action Towing, Inc. v. Mint Leasing, Inc., 451 S.W.3d 525, 530 (Tex. App.—
Houston [1st Dist.] 2014) (citing Burns v. Rochon, 190 S.W.3d 263, 267–68 (Tex. App.—Houston
[1st Dist.] 2006, no pet.)). To establish conversion of personal property, “a plaintiff must prove
that: (1) the plaintiff owned or had legal possession of the property or entitlement to possession;
(2) the defendant unlawfully and without authorization assumed and exercised dominion and
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control over the property to the exclusion of, or inconsistent with the plaintiff's rights as an owner;
(3) the plaintiff demanded return of the property; and (4) the defendant refused to return the
property.” Apple Imports, Inc. v. Koole, 945 S.W.2d 895, 899 (Tex. App. 1997, writ denied).
The “Carmack Amendment preempts state law conversion actions.” Certain Underwriters
at Int. at Lloyds of London v. United Parcel Serv. of Am., Inc., 762 F.3d 332, 338 (3d Cir. 2014).
But the Fifth Circuit has held that “[i]n some circumstances, where a carrier has intentionally
converted for its own purposes the property of the shipper, traditional true conversion claims
should be allowed to proceed, as not preempted by the Carmack Amendment, and limitations on
liability should be considered inapplicable.” Tran Enters., LLC v. DHL Exp. (USA), Inc., 627 F.3d
1004, 1009 (5th Cir. 2010).
In Tran Enters., DHL delivered packages for Nutrition Depot but failed to remit collect-
on-delivery payments. Id. at 1007. Nutrition Depot asserted Texas state-law claims for breach of
fiduciary duty, breach of contract, conversion, and theft, along with a Carmack claim. Id. The
court held that the Carmack Amendment preempted the state-law claims because they arose from
the interstate shipments. 	Id. at 1009. 	The court noted that the plaintiff “failed to present any
summary judgment evidence that true conversion has occurred, instead merely offering the fact
that it did not receive the checks.” Id. at 1010.
Even construed liberally, Amherst does not allege facts sufficient to overcome Carmack
preemption. The original petition alleges the elements of conversion in general terms, but it does
not allege that Valdez intentionally converted the Escalade for Valdez’s own use or benefit.
(Docket Entry No. 1-2 ¶¶ 32–37). Amherst tries to fill that gap in its response by emphasizing the
distance between the vehicle’s intended destination in Louisiana and the delivery in New York.
(Docket Entry No. 6 at 7). Amherst argues that the allegations as to the distance, combined with
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delivery to an unauthorized third party and the inability to recover the vehicle, supports an
inference of intentional conversion. (Id. at 7–8). But those allegations describe an unauthorized
delivery or misdelivery during interstate transportation. 	They do not support a reasonable
inference that Valdez appropriated the Escalade for its own purposes.
Amherst’s explanation is insufficient to avoid Carmack preemption. The court must draw
reasonable inferences in the plaintiff’s favor at the Rule 12(b)(6) stage, but it need not “strain to
find inferences favorable to the plaintiffs.” Southland Sec. Corp. v. INSpire Ins. Sols., Inc., 365
F.3d 353, 361 (5th Cir. 2004) (quoting Westfall v. Miller, 77 F.3d 868, 870 (5th Cir. 1996)). The
more reasonable reading of the petition is that it alleges a cargo-loss claim arising from interstate
transportation, which is exactly the type of claim Carmack governs.
IV. 	Conclusion
The court grants the motion for partial dismissal, with leave to amend, to allow Amherst
an opportunity to allege facts showing that Valdez intentionally converted the Escalade for its own
use or benefit. Any amended complaint must be filed by July 20, 2026. If Amherst can allege
only unauthorized delivery, misdelivery, or loss during interstate transportation, the Carmack
Amendment will provide the only claim.
SIGNED on June 22, 2026, at Houston, Texas.
________________________________
Lee H. Rosenthal
Senior United States District Judge
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