Nelson Trucking v. K&M Translogic

• Docket Number: WD 86571
• Decision Date: 20 August 2024
• Citation: 696 S.W.3d 407
• Parties: NELSON TRUCKING, LLC, Respondent, v. K&M TRANSLOGIC, LLC and KM Diesel & Tire Services, LLC, Appellants.
• Court: Missouri Court of Appeals

696 S.W.3d 407

NELSON TRUCKING, LLC, Respondent,

v.K&M TRANSLOGIC, LLC and KM Diesel & Tire Services, LLC, Appellants.

WD 86571

Missouri Court of Appeals, Western District.

OPINION FILED: AUGUST 20, 2024

Appeal from the Circuit Court of Andrew County, Missouri, The Honorable David Lynn Bolander, Judge

Joel Snyder Hane, St. Joseph, MO, for respondent.

John Francis Wilcox, Jr, Meghan Ann Litecky, Samuel Alan Pomeroy, Elizabeth Marie Judy, Kansas City, MO, for appellants.

Before Division One: Edward R. Ardini, Jr., Presiding Judge, Mark D. Pfeiffer, Judge and Cynthia L. Martin, Judge

Cynthia L. Martin, Judge

K&M Translogic, LLC("K&M Translogic") and KM Diesel & Tire Sendees, LLC("KM Diesel & Tire Services")(collectively "the Appellants") appeal from the trial court’s order denying a motion to compel arbitration.The Appellants assert that the arbitration clause in an agreement between K&M Translogic and Nelson Trucking, LLC("Nelson Trucking") includes within its scope claims asserted by Nelson Trucking in a lawsuit.Because KM Diesel & Tire Services is not aggrieved by the trial court’s order denying the motion to compel arbitration, it has no standing to appeal.Because the equipment at issue in Nelson Trucking’s lawsuit is not identified in the agreement with K&M Translogic, Nelson Trucking’s claims in the lawsuit are not within the scope of the arbitration clause.

KM Diesel & Tire Services’s appeal is dismissed for lack of standing.Finding no error in the trial court’s order denying K&M Translogic’s motion to compel arbitration, we affirm.

Factual and Procedural Background¹

[1] On February 10, 2018, K&M Translogic and Nelson Trucking entered into an independent contractor agreement and equipment lease ("Contract").The Contract identifies K&M Translogic as a company "in the business of providing pick-up, delivery and general freight transportation, handling and distribution services in interstate and intrastate commerce [that] desires to use the services and/or equipment" of Nelson Trucking.The Contract describes Nelson Trucking as a company that "owns and operates a business that provides pick-up, delivery and transportation services and owns, leases, controls and/or otherwise has access to motor vehicular and other equipment and accessories as are necessary to conduct such business."The Contract generally provides that Nelson Trucking will lease vehicles and equipment to K&M Translogic, and will pay to maintain the leased vehicles and equipment, in exchange for 70 percent of the gross rate received by K&M Translogic from use of the leased vehicles and equipment.

The Contract identifies the vehicles and equipment leased by K&M Translogic from Nelson Tracking as follows:

[Nelson Tracking] shall, at [Nelson Tracking’s] sole and exclusive cost and expense, provide, and does hereby lease to [K&M Translogic] … the vehicles and equipment described in Equipment Receipts, which are attached hereto and by reference incorporated herein (the "Vehicles").A separate Equipment Receipt shall be prepared and attached hereto for each vehicle leased and provided hereunder and same shall be identified as Exhibit A and sub-numberedseriatim as Exhibit A(1), Exhibit A(2), etc. (all and each of which shall hereinafter be collectively referred to simply as "Exhibit A").Vehicles may be substituted, additional vehicles may be provided and/or vehicles may be withdrawn from the provisions of this Lease, as the Parties may agree from time to time, in which event Exhibit A shall be amended or supplemented and the revised Exhibit A containing a separate, consecutively numbered Equipment Receipt for each vehicle then under lease, shall be attached hereto and incorporated by reference herein.

Exhibit A to the Contract is an equipment receipt identifying a 2009 Freightliner, otherwise identified as number 130, as the equipment leased by Nelson Trucking to K&M Translogic.No other equipment receipts appear in Exhibit A to the Contract.

The Contract includes an arbitration clause: "The Parties hereby agree that all claims, disputes and controversies between [K&M Translogic] and [Nelson Trucking] arising from or relating to any matters arising under this Agreement, except as limited as described herein, shall be submitted to binding arbitration."The Contract also includes an integration provision that states the Contract is "the full and complete understanding existing by and between the Parties concerning the subject matter hereof and may not be modified or amended except by a written instrument signed by the Parties."

On March 29, 2023, Nelson Trucking filed a lawsuit in the Circuit Court of Andrew County against K&M Translogic.On April 13, 2023, Nelson Trucking filed an amended petition("Amended Petition") that named both K&M Translogic and KM Diesel & Tire Services as defendants.The Amended Petition asserted claims for: (1) replevin, seeking possession of a 1998 Peterbilt and a 2004 Peterbilt; (2) conversion, seeking damages from the Appellants for their possession of a 1998 Peterbilt and a 2004 Peterbilt after Nelson Tracking demanded the return of the property; and (3) an accounting for all revenue and expenses related to the 1998 Peterbilt and the 2004 Peterbilt.The replevin and conversion claims are asserted against both of the Appellants, but the action for an accounting is asserted only against K&M Translogic.Although the caption of the Amended Petition refers to "breach of contract," none of the allegations in the Amended Petition refer to the Contract, and no claim was pled for breach of contract.Following a case review hearing on May 15, 2023, the trial court made a docket entry noting that "replevin is resolved."

The Appellants filed a motion to compel arbitration on July 5, 2023("Motion to Compel Arbitration").The Motion to Compel Arbitration asserted that KM Diesel & Tire Services "conducts maintenance and repair work on track tractors and trailers upon request for agreed-upon compensation;" that KM Diesel & Tire Services only had possession of the 1998 Peterbilt and 2004 Peterbilt while it was performing maintenance and repairs; and that both vehicles have been returned to Nelson Tracking fully repaired.The Motion to Compel Arbitration asserted that in light of return of the vehicles there are no other allegations in Nelson Trucking’s Amended Petition"which would form the basis for a proper cause of action" against KM Diesel & Tire Services.²

With respect to K&M Translogic, the Motion to Compel Arbitration alleged that because the 1998 Peterbilt and 2004 Peterbilt had been returned to Nelson Trucking, the only remaining disputes "between the parties center[] on the amounts due Nelson [Trucking] for compensation, proper deductions made from compensation, amounts due for maintenance of and repairs to the [1998 Peterbilt and the 2004 Peterbilt] and related issues."The Motion to Compel Arbitration argued that these issues "all … clearly arise from and are governed by the terms of the [Contract]."The Motion to Compel Arbitration specifically identified the Contract, referred to the arbitration clause in the Contract, and attached a copy of the Contract as an exhibit.The Motion to Compel Arbitration argued that under both the Federal Arbitration Act("FAA")³ and the Missouri Uniform Arbitration Act ("MUAA"),⁴the trial court was required to compel arbitration.Notably, in the prayer for relief, K&M Translogic sought an order from the trial court compelling arbitration, but KM Diesel & Tire Services did not seek an order compelling arbitration, consistent with the fact that KM Diesel & Tire Services is not a party to the Contract.

Nelson Trucking filed suggestions in opposition to the Motion to Compel Arbitration("Suggestions in Opposition").⁵Nelson Trucking asserted that the Contract, and the arbitration clause therein, "do[] not govern the relationship between the parties with regard to the [1998 Peterbilt and 2004 Peterbilt] on which the claims in the Amended Petition are based."Nelson Trucking noted that the Contract allows for the "substitution or amendment of vehicles covered by the [Contract]" but that the Contract was never amended pursuant to the terms of the Contract to include the 1998 Peterbilt and the 2004 Peterbilt.

The trial court conducted a hearing on the Motion to Compel Arbitration on August 21, 2023.M.L., a co-owner of both K&M Translogic and KM Diesel & Tire Services, testified about the Contract.M.L. testified that K&M Translogic regularly entered into lease agreements with trucking companies that own truck tractors.K&M Translogic would hire a driver to use the leased equipment to deliver goods.M.L explained that, after a load of goods is delivered, K&M Translogic and the lessor of the equipment would each receive a portion of the payment for the delivery, as provided in the lease agreement.M.L. testified that K&M Translogic entered into such an agreement, specifically the Contract, with Nelson Trucking on February 10, 2018, and that at the time of the Contract, K&M Translogic agreed to lease number 130, a 2009 Freightliner, from Nelson Trucking.

M.L. acknowledged that the Contract provided a procedure for amendment of the equipment receipts to be attached as exhibit A to the Contract, in the event that the parties later agreed to lease additional equipment.M.L. further testified that the parties did not execute such an amendment for the 1998 Peterbilt and 2004 Peterbilt, even though both were leased by Nelson Trucking to K&M Translogic after the Contract was executed.M.L. testified that, even though the parties did not amend the Contract, they acted as if the Contract applied to the 1998 Peterbiltand 2004 Peterbilt. M.L. testified that the relationship between K&M Translogic and Nelson Trucking soured in 2022 or 2023 due to a dispute related to truck repair and maintenance completed by KM Diesel & Tire Services.

[2]After hearing arguments from the parties, the trial court took...