Belnick, Inc. v. TBB Global Logistics, Inc.

• Decision Date: 19 May 2015
• Docket Number: Civil Action No. 1:13–CV–1298.
• Citation: 106 F.Supp.3d 551
• Parties: BELNICK, INC., Plaintiff & Counterclaim Defendant v. TBB GLOBAL LOGISTICS, INC., Defendant & Counterclaim Plaintiff.
• Court: U.S. District Court — Middle District of Pennsylvania

106 F.Supp.3d 551

BELNICK, INC., Plaintiff & Counterclaim Defendant

v.TBB GLOBAL LOGISTICS, INC., Defendant & Counterclaim Plaintiff.

Civil Action No. 1:13–CV–1298.

United States District Court, M.D. Pennsylvania.

Signed May 19, 2015.

Dean F. Piermattei, Jill N. Weikert, Rhoads & Sinon, Harrisburg, PA, Jill D. Prussack, Hartman Simons & Wood LLP, Atlanta, GA, for Plaintiff and Counterclaim Defendant.

Ronald N. Cobert, Grove, Jaskiewicz & Cobert LLP, Washington, DC, Elizabeth Klaproth, Buchanan Ingersoll & Rooney PC, Philadelphia, PA, Jayson R. Wolfgang, Buchanan Ingersoll & Rooney, PC, Harrisburg, PA, for Defendant and Counterclaim Plaintiff.

ORDER

CHRISTOPHER C. CONNER, Chief Judge.

AND NOW, this 19th day of May, 2015, upon consideration of the thorough and comprehensive report (Doc. 97) of Chief Magistrate Judge Martin C. Carlson, recommending the court grant in part the motion (Doc. 66) for summary judgment filed by defendant and counterclaim plaintiff TBB Global Logistics, Inc. ("TBB"), to the extent that Judge Carlson opines that the tort claims asserted by plaintiff and counterclaim defendant Belnick, Inc. ("Belnick"), are preempted in their entirety by the Interstate Commerce Commission Termination Act ("ICCTA"), 49 U.S.C. § 14501(c)(1), but recommends the court deny the balance of TBB's Rule 56 motion, and further recommends that the court deny Belnick's cross-motion for summary judgment (Doc. 62) in its entirety, wherein Judge Carlson exhaustively recounts the record evidence, identifying myriad and genuine disputes of material fact precluding the entry of summary judgment as to both parties' contractual and TBB's statutory claims, and the court noting that the parties have objected (Docs. 100, 102)¹ to the magistrate judge's report, contending respectively that the record admits of no disputed facts, and that each is entitled to judgment on their various claims in their entireties, and, following an independent review of the record, the court being in agreement with Judge Carlson's recommendations, and concluding that Belnick's tort claims are preempted as a matter of law, that genuine disputes of material fact abound with respect to each of the parties' remaining claims, and that the parties' objections are without merit and squarely addressed by the report, and determining that the evidentiary record before the court is ill suited for summary adjudication, it is hereby ORDERED that:

1. The report (Doc. 97) of Chief Magistrate Judge Martin C. Carlson is ADOPTED in its entirety.

2. The motion (Doc. 62) for summary judgment by plaintiff and counter defendant Belnick, Inc. ("Belnick"), is DENIED in its entirety.

3. The motion (Doc. 66) for summary judgment by defendant and counter plaintiff TBB Global Logistics, Inc. ("TBB"), is GRANTED to the extent the court concludes that Belnick's tort claims in Counts II through IV of its amended complaint (Doc. 45) are preempted by the Interstate Commerce Commission Termination Act ("ICCTA"), 49 U.S.C. § 14501(c)(1), and DENIED in all other respects.

4. Entry of judgment pursuant to Paragraph 3 is DEFERRED pending final resolution of this litigation.

5. The stay of pretrial and trial deadlines imposed by order (Doc. 95) dated November 19, 2014, is hereby lifted. Both parties may file a reply brief in further support of their respective motions in limine (Docs. 85, 87) within fourteen (14) days of the date of this order.

6. A revised pretrial and trial scheduling order shall issue by future order of the court.

REPORT AND RECOMMENDATION

MARTIN C. CARLSON, United States Magistrate Judge.

I. INTRODUCTION AND STATEMENT OF THE CASE

The plaintiff and counterclaim defendant in this action, Belnick, Inc. ("Belnick"), is a North American furniture distributor, based in Canton, Georgia. The defendant and counterclaim plaintiff is TBB Global Logistics, Inc. ("TBB"), a transportation broker and third-party logistics provider ("3PL") based in New Freedom, Pennsylvania, which assists distributors in obtaining shipping rates from a fleet of carriers that are under contract with TBB.

In November 2005, Belnick and TBB entered into a written contract (the "Subscriber Agreement") that obligated TBB to act as Belnick's broker in negotiating rates directly with third-party motor carriers that would, in turn, transport Belnick furniture to destinations throughout the United States. (Doc. 45, Ex. A, Subscriber Agreement.) Belnick's efforts to extricate itself from this contract, and its agreement in November 2012 to begin working with another 3PL, the Transportation Services Group ("TSG"), led to the filing of this lawsuit in 2013.

The Subscriber Agreement committed Belnick to use TBB's brokerage services for at least 90% of its shipments during the term of the contract, which was an annual contract that contained an evergreen clause that caused it to be renewed on a yearly basis if Belnick did not provide notice of termination within 60 days of the end of each annual term. The Subscriber Agreement obligated TBB to provide Belnick with a variety of shipping and brokerage services, including pre-auditing of freight services, tracing and expediting of specific deliveries, freight routing, advising regarding transportation matters, negotiating rates, and providing shipping rates to enable Belnick to make efficient shipment and distribution decisions.

In particular, the Subscriber Agreement provided that TBB would provide "rate quote information from public information sources or from private information material maintained by [TBB] on specified shipment movements." (Id. ) The terms of the contract provided that these rates would be available to Belnick on the day of the quote, but would not be guaranteed beyond that day. (Id. ) Additionally, with respect to freight routing, TBB agreed to use its best efforts to route shipments at competitive prices, but did not guarantee that the lowest rates would always be used. (Id. ) Belnick represents that the Subscriber Agreement is the only written contract that the parties entered into, and that it "remained in full force and effect throughout the business relationship." (Doc. 64, Belnick Statement of Undisputed Facts, ¶ 8.)

Although the parties only entered into one written agreement, and although Belnick has represented that the Subscriber Agreement is the written contract that "remained in full force and effect," Belnick also contends that TBB made a number of additional oral promises and commitments over time that had the effect of persuading Belnick to continue under the parties' agreement, or otherwise had the effect of clarifying or modifying the terms of the Subscriber Agreement, with respect to the provision of certain types of rate information, and with respect to the timeliness of that rate information. Additionally, Belnick maintains that it never used TBB for 90% of its shipment needs, something that Belnick contends TBB knew for years and never complained about. According to Belnick, as a result of this silence TBB should now be estopped from asserting this contractual provision. As discussed in greater detail below, both of these factual assertions regarding oral modifications of the parties' agreement and the waiver of the written contract's 90% shipment requirement are hotly disputed by the parties on a murky factual record.

The parties relationship grew strained in or around 2010. Belnick claims that around this time, it was in regular communication with TBB about its need for something referred to in this case as "real time rates," as well as rate information for a third-party carrier not under contract with TBB, RoadRunner. According to Belnick, TBB understood Belnick's need for this information, and promised to make the information available to Belnick, despite having neither the ability nor the intention to do so. Belnick claims that TBB repeatedly failed to perform its basic obligation under the parties' contract to provide access to "real time rates" and related shipping information, and maintains that TBB's failure to provide rates over a stable computer system were so extreme and so pervasive as to render the contract null and void and entitled Belnick to cancel the contract. Belnick also claims that TBB's conduct during this time was marked by bad faith, a failure to act in Belnick's best interests, and that TBB engaged in tortious interference with Belnick's business interests and relationships with third parties.

In 2012, Belnick began looking to partner with TSG, another 3PL. In November 2012, Belnick entered into an agreement with TSG, and in February 2013, Belnick notified TBB that it was terminating the Subscriber Agreement. Belnick did not, however, give the required 60 days written notice required under the Subscriber Agreement, and, therefore, TBB responded by accepting Belnick's termination effective on October 31, 2013, which would mark the end of the then-current term of the contract. This eight month dispute over the timing of the dissolution of this business relationship led directly to the initiation of this litigation, with Belnick claiming that TBB breached the Subscriber Agreement in ways so fundamental as to entitle Belnick to unilaterally terminate the contract, and claiming that TBB had engaged in a host of tortious activity that highlighted what Belnick now claims was a pattern of bad-faith conduct on TBB's part, which should permit both cancellation of the parties' contractual relationship and the recovery of damages. (Doc. 45; Doc. 69, TBB Statement of Facts, ¶¶ 20–28.) Belnick has not performed under the Subscriber Agreement after May 10, 2013. (Id. ¶ 31.)

Under the Subscriber Agreement, TBB provided shipping rate quotes to Belnick directly through TBB's system, and also directly to Belnick's potential customer's through TBB's system that interfaced with Belnick's customer-facing website. (Id. ¶ 32.) Despite the volume of briefing and explanation regarding Belnick's claims, it appears that Belnick's contract claim...