B&S Transp., Inc. v. Bridgestone Americas Tire Operations, LLC
| Decision Date | 21 March 2016 |
| Docket Number | CASE NO. 5:13-cv-2793 |
| Citation | 171 F.Supp.3d 669 |
| Court | U.S. District Court — Northern District of Ohio |
| Parties | B&S Transport, Inc., et al., Plaintiffs, v. Bridgestone Americas Tire Operations, LLC, et al., Defendants. |
Glenn A. Crickenberger, Willie E. Gary, Gary, Williams, Parenti, Watson & Gary, Stuart, FL, James L. Brown, Los Angeles, CA, for Plaintiffs.
David T. Moss, John R. Chlysta, Hanna, Campbell & Powell, Akron, OH, for Defendants.
HONORABLE SARA LIOI
This matter is before the Court on the parties' cross motions for summary judgment. Plaintiffs B&S Transport, Inc. (“B&S”) and Ronnie Harris (“Harris”) (collectively, “plaintiffs”) seek partial summary judgment in their favor and against defendants Bridgestone Americas Tire Operations, LLC (“BATO”) and Bridgestone Americas, Inc. (“BA”) (collectively, “defendants” or “Bridgestone”) with respect to three claims in the first amended complaint. (Doc. Nos. 86 and 87 [“Pl. Mot.”].) Defendants opposed plaintiffs' motion (Doc. No. 105 [“Def. Opp'n”] ), to which plaintiffs replied (Doc. No. 109 [“Pl. Reply”] ).
Defendants seek summary judgment on all claims asserted in plaintiffs' first amended complaint, and on defendants' counterclaims. (Doc. No. 84 and 90 [“Def. Mot.”].) Plaintiffs opposed defendants' motion (Doc. No. 106 [“Pl. Opp'n”] ), to which defendants replied (Doc. No. 112 [“Def. Reply”] ).
For the reasons that follow, defendants' motion for summary judgment is granted with respect to plaintiffs' first claim for relief pursuant to 42 U.S.C. § 1981
, and plaintiffs' motion for summary judgment with respect to the same claim is denied. Plaintiffs' state law claims, and defendants' counterclaims, are dismissed without prejudice, pursuant to 28 U.S.C. § 1367(c)(3).
The basic factual background of this case is not in dispute. Plaintiff Harris is the founder of plaintiff B&S and its majority stockholder; Harris's wife owns the remaining shares. (Doc. No. 47 (First Amended Complaint [“FAC”] ) ¶ 14.) B&S is a minority owned self-described African American company, which became an authorized dealer of Firestone tires between 1977 and 1979, and of Bridgestone tires after Bridgestone acquired Firestone. (FAC ¶¶ 15, 17, 21-22.)
B&S and Bridgestone entered into the dealership agreement in 1991. It consists of a standard dealership agreement, amended by a letter agreement dated April 1, 1991 (FAC ¶ 23; Doc. No. 84-3, Ex. 1 [“Agreement”] ), and is governed by the laws of the State of California (Agreement at 8161 , ¶ 13).
The agreement was tailored to allow B&S to pursue “ ‘minority set-aside’ business in order to obtain incremental sales and profits for both of us.” (Id. at 819.) Because of the nature of this business, the agreement did not limit B&S geographically, and B&S was not required to provide service and warranty work performed by a typical tire dealer. (Id. ) The agreement acknowledged that these differences provided B&S with “certain advantages” not provided to other dealers, and that “[i]t must be understood that these advantages are to be used only to obtain incremental business for us and to genuinely assist your minority enterprise, and not to disrupt our existing distribution system by merely displacing sales which would otherwise be made by our current dealers or by Bridgestone itself.” (Id. at 819-20.) Among the advantages to B&S was that Bridgestone would drop-ship tires directly to B&S's customers.2 (Doc. No. 85-3 (Deposition of Ronnie Harris [“Harris Dep.”] ) at 1124 (59-60).3 )
Thus, defendants proposed to proceed on a “deal-specific” basis. B&S was not limited to “minority set-aside” business, but could pursue “any sales which are determined by Bridgestone to be incremental to Bridgestone.” Moreover, B&S was free to deal in competitors' products, and defendants were free to utilize other minority enterprises. (Agreement at 820.)
With respect to termination, the agreement provided that:
At any time, and for any reason, either party may terminate this relationship with 30 days' written notice, provided that each party shall honor all commitments incurred prior to the effective date of any such termination. Upon such termination, all amounts due and owed Bridgestone are immediately payable. The intent of this approach is that our business should—and can best—grow over the long-term if it is based primarily on our developing relationship, upon whatever success we have, and upon mutual good faith.
(Id. at 820; see also id. at 815, ¶ 8(a).)
Over the years of the agreement, B&S purchased tires from Bridgestone on credit, sold the tires and was paid by its customers, then paid Bridgestone for the tires. (Harris Dep. at 1147-48 (152-53).) Harris personally guaranteed any indebtedness of B&S to Bridgestone. (Doc. No. 65 at 655-660 [“Guaranty”].) The guaranty is governed by the laws of Tennessee. (Id. at 658, ¶ L.)
On February 28, 2013, Harris received a hand-delivered letter from Kurt Danielson (“Danielson”), President of Bridgestone Commercial Solutions, informing Harris that Bridgestone was terminating B&S's dealership agreement. (FAC ¶¶ 32-33; Doc. No. 47-2 [“Termination Letter”].) According to the letter, “Bridgestone's reasons for termination includes [sic] Bridgestone's change in distribution and [go-to-market] solutions strategies.” (Termination Letter at 511.) The letter states that, in order to give B&S time to wind down its business with Bridgestone, B&S would remain an authorized dealer until December 31, 2013, and Bridgestone would continue to provide B&S with tires through that date. (Id. )
The instant action arises from Bridgestone's termination of B&S's dealership, and the first amended complaint asserts one federal claim and five state claims. With respect to the federal claim, plaintiffs allege, pursuant to 42 U.S.C. § 1981
, that Bridgestone's termination of the agreement was an intentional act of race discrimination and, after the termination letter was issued, B&S received less favorable treatment than did a non-minority Bridgestone dealer—Pomp's Tire Service, Inc. (“Pomp's”). (FAC ¶¶ 40-68.)
With respect to their state law claims, plaintiffs allege breach of contract (second claim—FAC ¶¶ 69-76), breach of implied covenant of good faith and fair dealing (third claim—FAC ¶¶ 77-86), promissory estoppel (fourth claim—FAC ¶¶ 87-97), intentional interference with contract (fifth claim—FAC ¶¶ 98-103), and fraud (sixth claim—FAC ¶¶ 104-113).
Defendants deny liability with respect to all of plaintiffs' claims, and assert counterclaims for breach of contract, account, and unjust enrichment, alleging that plaintiffs have not paid Bridgestone for tires purchased from Bridgestone on credit in the sum of $955,144.16. (Doc. Nos. 49 and 64 [“Counterclaims”].) In answering defendants' counterclaims, plaintiffs deny that defendants have been damaged at all, or in the sums alleged. (Doc. No. 70 [“Answer to Counterclaims”].)
Defendants move for summary judgment on all claims asserted in plaintiffs' first amended complaint, and on defendants' counterclaims. Plaintiffs seek partial summary judgment with respect to their first (§ 1981
race discrimination), second, (breach of contract), and third (breach of implied covenant of good faith) claims. The parties' cross motions with respect to plaintiffs' first, second, and third claims for relief essentially mirror their oppositions to the other's motion.
The foregoing is a summary of the background facts of this case. Additional facts will be discussed in greater detail as necessary and appropriate in the context of the Court's analysis of the parties' motions.
Summary judgment is appropriate where “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a)
. A fact is material if its resolution affects the outcome of the lawsuit under the governing law. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A dispute is genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id. If a reasonable jury could return a verdict for the nonmoving party, then summary judgment is not appropriate. Id.
The moving party must provide evidence to the court that demonstrates the absence of a genuine dispute as to any material fact. Once the moving party meets this initial burden, the opposing party must come forward with specific evidence showing that there is a genuine issue for trial.
Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)
; Anderson , 477 U.S. at 250, 106 S.Ct. 2505. The nonmoving party may oppose a summary judgment motion “by any of the kinds of evidentiary material listed in Rule 56(c), except the mere pleadings themselves [.]” Celotex , 477 U.S. at 324, 106 S.Ct. 2548. The Court must view all facts and evidence, and inferences that may be reasonably drawn therefrom, in favor of the nonmoving party. United States v. Diebold, Inc. , 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962).
General averments or conclusory allegations of an affidavit do not create specific fact disputes for summary judgment purposes. See Lujan v. Nat'l Wildlife Fed'n , 497 U.S. 871, 888–89, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990)
. “Summary judgment requires that a plaintiff present more than a scintilla of evidence to demonstrate each element of a prima facie case.” Garza v. Norfolk S. Ry. Co . 536 Fed.Appx. 517, 519 (6th Cir.2013) (citing Van Gorder v. Grand Trunk W. R.R ., 509 F.3d 265, 268 (6th Cir.2007) ). “ ‘The mere existence of a scintilla of evidence in support of the [nonmoving party's] position will be insufficient; there must be evidence on which the jury could reasonably find for the [nonmoving party].’ ” Street v. J.C. Bradford & Co. , 886 F.2d 1472, 1477 (6th Cir.1989) (quoting
Anderson , 477 U.S. at 252, 106 S.Ct. 2505 ).
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Bridgestone Americas Tire Operations, LLC v. Harris
...the dealer agreement without cause and by allegedly favoring a nonminority dealer. See B & S Transport v. Bridgestone Americas Tire Opers. , 171 F.Supp.3d 669, 676 (N.D. Ohio 2016). They also asserted state-law claims, including breach of contract, breach of implied covenant of good faith, ......
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Bridgestone Americas Tire Operations, LLC v. Harris
...the dealer agreement without cause and by allegedly favoring a nonminority dealer. See B & S Transport v. Bridgestone Americas Tire Opers. , 171 F.Supp.3d 669, 676 (N.D. Ohio 2016). They also asserted state-law claims, including breach of contract, breach of implied covenant of good faith, ......