Forum Clause Beats Broker Negligence Claim, Judge Rules
Atlantic Wells, Inc. sued AG Carrier, LLC and United States of Freight, LLC (USF) after a 2002 Freightliner crane truck it bought for $75,000 was damaged in transit on August 10, 2024, when a driver hired by AG Carrier struck an overhead obstruction. Atlantic Wells said repair costs topped $79,984.96, with an added $11,588.01 to ship the truck for inspection. AG Carrier's insurer denied the claim, saying the policy did not cover that type of vehicle.
Atlantic Wells sued AG Carrier for negligence and USF for negligent selection and hiring, arguing USF failed to confirm AG Carrier carried adequate insurance. USF removed the case to federal court and moved to dismiss, pointing to a forum-selection clause in its Carrier-Broker Agreement requiring disputes to be litigated in Broward County, Florida under Florida law.
Judge Eric N. Vitaliano applied the Second Circuit's four-part Phillips test and found the clause reasonably communicated, mandatory, and broad enough to cover the tort claim because it stemmed from USF's contractual duty to vet transporters. The court dismissed the USF claim without prejudice. The negligence claim against AG Carrier, which never responded to the complaint, continues before the court.
What's next
- Atlantic Wells may refile its claim against USF in Broward County, Florida.
- The AG Carrier negligence claim proceeds in EDNY under Magistrate Judge Anne Y. Shields.
All sources
- Opinion: Atlantic Wells, Inc. v. AG Carrier, LLC et al — Federal court opinion (U.S. District Court Eastern District of New York), 2026-10-26
