Freight Tec Mgmt. Grp. Inc. v. Chemex Inc.

Decision Date26 August 2021
Docket NumberNo. 20200096-CA,20200096-CA
Citation499 P.3d 894
Parties FREIGHT TEC MANAGEMENT GROUP INC., Appellee, v. CHEMEX INC., Appellant.
CourtUtah Court of Appeals

Brennan H. Moss, Salt Lake City, Attorney for Appellant

Stevan R. Baxter and Chase B. Ames, Salt Lake City, Attorneys for Appellee

Judge Gregory K. Orme authored this Opinion, in which Judge Ryan M. Harris and Senior Judge Kate Appleby concurred.1

Opinion

ORME, Judge:

¶1 Freight Tec Management Group, Inc. (Freight Tec) sued Chemex, Inc. for breach of contract after Chemex refused to pay for Freight Tec's services in arranging interstate transportation of two freight loads on Chemex's behalf. Chemex counterclaimed, asserting that a prior load Freight Tec had arranged to transport never arrived at its intended destination. Days before the close of fact discovery, Freight Tec moved for summary judgment on its claim and on Chemex's counterclaim. Chemex filed two motions for an extension of time to respond. The district court denied both motions for extension and later granted summary judgment in Freight Tec's favor on all claims. The court further held that Freight Tec was contractually entitled to recover the attorney fees and costs it incurred in pursuing its breach of contract claim against Chemex and in defending against Chemex's counterclaim.

¶2 Chemex appeals, arguing that the court exceeded its discretion in denying its motions for extensions of time. It further contends that the court erred in concluding, on summary judgment, that federal law preempted four of its five claims and in later awarding Freight Tec the attorney fees it incurred in defending against Chemex's counterclaim. We hold that the court acted within its discretion when it denied Chemex's motions for extension. And because Chemex failed to respond to the summary judgment motion below, we hold that it failed to preserve its challenges to the court's grant of summary judgment on appeal. Lastly, we affirm the court's award of attorney fees and award Freight Tec attorney fees incurred on appeal.

BACKGROUND2

¶3 Freight Tec is an interstate property broker operating under the authority of the Federal Motor Carrier Safety Administration. "[I]t arranges for one or more qualified motor carriers to physically pick up, transport, and deliver" freight for its shipping customers. In 2013, Chemex, which is in the business of "wholesale plastics," signed and submitted a credit application so that Freight Tec could perform brokerage services for Chemex on credit. Freight Tec approved the credit application and began brokering freight for Chemex.

¶4 In the credit application, Chemex agreed

that any and all claims for loss or damage to cargo or theft of cargo and any claims for delay in delivery of freight will be directed to and asserted directly against the carriers arranged by Freight Tec. No such claims will be asserted against Freight Tec, and Freight Tec, who is acting in all respects pertaining hereto as an interstate property broker, will not be liable for any such claims.

The credit application also stated that in addition to agreeing to the provisions contained within its four corners, "Applicant agrees and accepts each of the Terms and Conditions found on the Freight Tec website," followed by the website's internet address. Those Terms and Conditions similarly stated that Freight Tec, "being a broker, has no liability to any person or entity for any loss of or damage to any such freight and that [Freight Tec] has no liability to any person or entity for any delay in delivery of such freight," and that the applicant agrees "to look solely to any carrier arranged by [Freight Tec] to transport any subject freight for recovery of any loss of or damage to such freight or delay in delivery of such freight." Nevertheless, the Terms and Conditions stated that Freight Tec "may, at [its] sole option, assist [Applicant] or others in pursuing claims for loss of or damage to freight or delay in delivery of freight with the carrier."

¶5 Concerning payment and any attorney fees and court costs incurred in collecting on amounts owed, the credit application provided,

Any such charges not paid to Freight Tec within thirty (30) days from the date of an invoice shall accrue interest at the rate of 1.5% per month. It is further agreed that the Applicant shall pay any collection expenses, including, but not limited to, attorneys fees and court costs, that may become necessary to effect collection from Applicant ....

The Terms and Conditions likewise provided for an interest rate of 1.5% per month on unpaid invoices and stated that the applicant will be responsible "for any and all costs incurred by [Freight Tec] in collecting the amounts owing, including, but not limited to, reasonable attorney fees."

¶6 On July 6, 2016, Chemex requested that Freight Tec arrange transportation of a load from Houston, Texas, to Winter Haven, Florida (the Winter Haven load). That same day, Freight Tec entered a broker-carrier agreement with USA Logistics, Inc., in which USA Logistics agreed to transport one or more loads, arranged by Freight Tec. Freight Tec then engaged USA Logistics to transport the Winter Haven load to its intended destination. USA Logistics’ records indicated that the Winter Haven load arrived in Winter Haven, Florida, on July 8, 2016, around 8:30 a.m., but it did not have a customer-signed proof of delivery form. On July 20, Freight Tec invoiced Chemex in the amount of $1,900 for its brokerage services on the Winter Haven load. In August, Chemex paid that invoice and also separately paid USA Logistics for freight charges.

¶7 A few months later, Freight Tec arranged transportation of two additional loads on Chemex's behalf: the first from Troy, North Carolina, to Jacksonville, Florida (the Jacksonville load), and the second from Oyster Creek, Texas, to Birmingham, Alabama (the Birmingham load). Both shipments arrived on time and in good condition. In November, Freight Tec submitted a $1,000 invoice to Chemex for its brokerage services on the Jacksonville load and a $1,150 invoice for its services on the Birmingham load. Chemex refused to pay either invoice. Instead, in December, Chemex demanded $19,180.02 from Freight Tec, claiming that the Winter Haven load had never been delivered.

¶8 Based on Chemex's representations and the lack of a customer-signed proof of delivery form, Freight Tec exercised its option under the Terms and Conditions to sue USA Logistics for the allegedly undelivered Winter Haven load. In March 2018, after USA Logistics provided proof to Freight Tec's satisfaction that the Winter Haven load had indeed been delivered, Freight Tec dismissed USA Logistics from the suit and amended its complaint to name Chemex as a defendant, alleging breach of contract relating to Chemex's refusal to pay for the Jacksonville load and the Birmingham load.3 Chemex counterclaimed, alleging breach of contract, negligence, negligent misrepresentation, conversion, and breach of fiduciary duty against Freight Tec.

¶9 On August 3, 2018, Chemex served Freight Tec with discovery requests, to which Freight Tec responded on September 7. On November 28, Freight Tec moved for summary judgment on its breach of contract claim against Chemex and on Chemex's counterclaim. Fact discovery closed approximately one week later, on December 3.

¶10 On December 12, the day its opposition to Freight Tec's motion for summary judgment was due, Chemex's counsel emailed Freight Tec's counsel requesting an extension until December 21. Chemex did not mention Freight Tec's discovery responses in its request. Freight Tec agreed to the extension. On December 19, two days before its summary judgment response was now due, Chemex sent a letter to Freight Tec stating that while preparing its opposition to the summary judgment motion, "it became apparent that [it was] unable to provide a complete response due to [alleged] deficiencies in" Freight Tec's discovery responses. Freight Tec responded the next day, offering to meet and confer via telephone but stating that "all admissions and denials stand as stated and all documents responsive to [Chemex's] requests have been produced."

¶11 On the day Chemex's summary judgment response was due, it asked the district court for an extension of time pursuant to rule 6(b)(1)(A) of the Utah Rules of Civil Procedure (the First Motion), alleging that Freight Tec "refused to provide important information and documents to Chemex that directly relate to its claims in this case." On April 1, 2019, following argument, the court denied the First Motion on the grounds that Chemex had not demonstrated good cause and that Chemex had failed to avail itself of the proper procedural avenue for such situations under rule 56(d) of the Utah Rules of Civil Procedure.

¶12 Almost two weeks later, Chemex filed another motion for an extension (the Second Motion), this time under rule 6(b)(1)(B) of the Utah Rules of Civil Procedure. The court denied the Second Motion, noting that because Chemex had failed to demonstrate good cause in the First Motion, it also "failed to show entitlement to relief under Rule 6(b)(1)(B)." Furthermore, the court determined that Chemex was not entitled to an extension under rule 6(b)(1)(B) because it had also failed to show excusable neglect.

¶13 Given its denial of both motions for extension, the court stated that "any opposition to [Freight Tec's] Motion for Summary Judgment will not be considered."4 But, the court continued, "This ruling does not result in the automatic grant of summary judgment, ... and the Court will consider the arguments raised in the Motion for Summary Judgment." See Pepperwood Homeowners Ass'n v. Mitchell , 2015 UT App 137, ¶ 6, 351 P.3d 844 ("[S]ummary judgment may not be entered against the nonmoving party merely by virtue of a failure to oppose; the rules of civil procedure allow entry of summary judgment against a defaulted party only ‘if appropriate.’ ") (quoting Utah R. Civ. P. 56(e) ).

¶14 The...

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