Sivak v. United Parcel Service Co.
28 F. Supp. 3d 701
E.D. Mich.2014Background
- Plaintiffs Steven Sivak and International Samaritan sued UPS alleging UPS overcharged customers for "Declared Value" (additional liability) by charging for the first $100 of coverage when customers purchased higher declared values, producing small per-shipment overcharges that allegedly aggregate to large sums.
- Plaintiffs bought declared-value coverage for shipments (including via UPS Store third‑party retailers) and relied on UPS Tariff/Terms, the Service Guide pricing table, and shipping receipts (Source Documents).
- Plaintiffs contend the Shipping Contract promises the first $100 of coverage at no charge, but UPS’s pricing (including a $2.55 minimum and $0.85 per $100 or portion thereof of "total value declared") results in an $0.85 overcharge for declared values above $300.
- Plaintiffs asserted six claims: breach of contract, declaratory relief, violation of 49 U.S.C. § 13708 (truth‑in‑billing), unjust enrichment (in the alternative), and RICO (18 U.S.C. §§ 1962(c), (d)).
- UPS moved to dismiss under Fed. R. Civ. P. 12(b)(6)/12(c). The court treated contract interpretation as central and concluded Plaintiffs’ reading was implausible and contradicted the unambiguous contract language; it dismissed all claims with prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Contract interpretation — whether Shipping Contract promises the first $100 free when additional declared value purchased | Plaintiffs: contract and Terms promise first $100 free; charging for that first $100 when total declared value > $300 is a breach | UPS: pricing table charges $0.85 per $100 (or portion) of the total declared value; $2.55 minimum and unambiguous "total value declared" wording defeat Plaintiffs' reading | Court: contract unambiguous; Plaintiffs’ construction rewrites terms and is rejected; breach and declaratory claims dismissed |
| Unjust enrichment (alternative to contract claim) | Plaintiffs: alternatively allege UPS was unjustly enriched by overcharges | UPS: express written contract governs; unjust enrichment unavailable where express contract covers subject matter | Court: unjust enrichment barred by existence of express contract; claim dismissed |
| 49 U.S.C. §13708 (truth‑in‑billing) | Plaintiffs: UPS failed to disclose actual rates/charges and presented misleading billing by charging for the first $100 contrary to contract | UPS: invoices reflect charges consistent with tariff/service guide; §13708 targets off‑bill discounts/hidden allowances, not contractual overbilling | Court: §13708 does not cover Plaintiffs’ theory; plaintiffs failed to plead false/misleading disclosure distinct from contract dispute; claim dismissed |
| RICO (mail/wire fraud predicates) | Plaintiffs: scheme to defraud via billing; use of mail/wires to bill supports RICO predicates | UPS: disputes amount are contract issues not actionable as mail/wire fraud; no particularized allegations of misrepresentations or mail/wire predicate acts | Court: RICO claims sound in contract and lack particularized fraudulent misrepresentations and proximate causal allegations; dismissed |
Key Cases Cited
- Reider v. Thompson, 339 U.S. 113 (U.S. 1950) (purpose of Carmack Amendment explained)
- Mo. Pac. R.R. v. Elmore & Stahl, 377 U.S. 134 (U.S. 1964) (carrier liability principles under common law/Carmack)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (plausibility standard for pleadings)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (application of pleading standard and plausibility requirement)
- Wilkie v. Auto-Owners Ins. Co., 469 Mich. 41 (Mich. 2003) (contract interpretation principles under Michigan law)
- Port Huron Educ. Ass’n v. Port Huron Area Sch. Dist., 452 Mich. 309 (Mich. 1996) (ambiguity as question of law; plain language control)
- Klapp v. United Ins. Grp. Agency, Inc., 468 Mich. 459 (Mich. 2003) (give effect to all contract terms; avoid surplusage)
- Barber v. SMH (US), Inc., 202 Mich. App. 366 (Mich. Ct. App. 1993) (elements and limitation of unjust enrichment where express contract exists)
- Blount Fin. Servs., Inc. v. Walter E. Heller & Co., 819 F.2d 151 (6th Cir. 1987) (RICO claims rooted in contract disputes require particularized misrepresentations)
- Dana Corp. v. Blue Cross & Blue Shield Mut. of N. Ohio, 900 F.2d 882 (6th Cir. 1990) (RICO allegations based on specific misrepresentations can survive dismissal)