Garza v. Swift Transp. Co.

• Decision Date: 07 October 2021
• Docket Number: 1 CA-CV 20-0389
• Parties: LEONEL GARZA, Plaintiff/Appellant, v. SWIFT TRANSPORTATION COMPANY INC, Defendant/Appellee.
• Court: Arizona Court of Appeals

LEONEL GARZA, Plaintiff/Appellant, v. SWIFT TRANSPORTATION COMPANY INC, Defendant/Appellee.

No. 1 CA-CV 20-0389

Court of Appeals of Arizona, First Division

October 7, 2021

Not for Publication - Rule 111(c), Rules of the Arizona Supreme Court

Appeal from the Superior Court in Maricopa County No. CV 2004-001777 No. CV 2004-005924 (Consolidated) The Honorable Timothy J Thomason, Judge

Hagens Berman Sobol Shapiro LLP, Phoenix, AZ By Robert B. Carey (argued), Leonard W. Aragon, Michella A. Kras Counsel for Plaintiff/Appellant

Fisher & Phillips LLP, Kansas City, MO By James C. Sullivan (argued) Co-Counsel for Defendant/Appellee

Fisher & Phillips LLP, Phoenix, AZ By Shayna H. Balch, Alanna R Brook Co-Counsel for Defendant/Appellee

Dentons U.S. LLP, Phoenix, AZ By Karl M. Tilleman, Erin N Bass, Doug Janicik Co-Counsel for Defendant/Appellee

Judge Paul J. McMurdie delivered the Court's decision, in which Presiding Judge Peter B. Swann and Judge David D. Weinzweig joined.

MEMORANDUM DECISION

McMURDIE, Judge

¶1 In this class action, Leonel Garza appeals from the superior court's rulings (1) granting summary judgment on the class's sole remaining claim for breach of the covenant of good faith and fair dealing; (2) decertifying the class; and (3) finding the limitations period for certain class members was not tolled during a prior appeal in this case. We affirm the summary judgment and therefore do not reach the other two issues.

FACTUAL AND PROCEDURAL BACKGROUND

¶2 In 2004, Scott Piron, a truck driver employed by Swift Transportation Company Inc., filed a class action complaint against Swift, alleging it uniformly paid drivers materially less than the actual miles driven. Piron's complaint was consolidated with another class action complaint filed by Garza, Daniel Yingling, Dennis Jensen, and Dennis Aitken. Garza and Yingling were owner-operators who had contracted with Swift, and Jensen and Aitken were Swift employees.

¶3 In 2006, Garza moved to certify a nationwide class of owner-operators, alleging Swift had consistently underpaid drivers by not paying "dispatch miles" for each trip. Garza alleged the underpayments stemmed from Swift's use of the Rand McNally Household Mover's Guide, sometimes referred to by the parties as the Household Goods Mileage Guide ("HHG"), to calculate miles and reimbursement. The Household Goods Carriers' Bureau Committee developed the HHG rules to "establish a uniform method of computing mileages," representing "the shortest distance between two points suitable for truck travel." Under the HHG, mileages generally "are computed over those authorized highways which result in the shortest distance between any two points and in accordance with any other rules of [the HHG] that may apply," and "[m]ileages between cities or towns are computed from or to a centrally located point within such city or town."

¶4 The superior court denied Garza's class certification motion. Garza appealed that ruling, and we reversed. Garza v. Swift Transp. Co., Inc., 1 CA-CV 07-0472 2008 WL 3009961 (Ariz. App. July 31, 2008) (mem. decision) ("Garza I"). We held that the superior court could determine on a class-wide basis "(1) whether [Swift's] payment method, as applied to this class, was undertaken in good faith, and (2) whether Swift exhibited good faith in failing to explain to the class exactly how the payment method worked." Id. at *5, ¶ 24.

¶5 Our supreme court vacated Garza I on jurisdictional grounds without addressing the merits of Garza's motion. Garza v. Swift Transp. Co., Inc., 222 Ariz. 281 (2009) ("Garza II"). On remand, the superior court certified a class of drivers employed by or contracted with Swift on or after January 30, 1998, and compensated by mileage. It later granted summary judgment on the owner-operators' breach of contract claim. It also separately ruled that the applicable limitation period for the remaining claims was not tolled while Garza I and Garza II were pending.

¶6 Several years later, the court decertified the class, finding that the remaining good faith and fair dealing claim was unsuitable for class action treatment. But the court stayed the proceedings to allow Garza to seek special action relief. In that special action, we reversed the decertification order. Garza v. Gama, 240 Ariz. 373 (App. 2016) ("Garza III"). Citing Garza's allegation that the HHG offers a more precise means of calculating distances than the city and state pairings used by Swift, "including by zip code, nearest intersection, and latitude/longitude," we concluded as follows:

[A]lthough Swift's contracts may not have required it to pay drivers for any more miles than HHG specified, Swift may have breached its duty of good faith and fair dealing if it deliberately manipulated HHG to have it short the mileage the software calculated for purposes of payment.

It is apparent, therefore, that petitioners' claim for breach of the duty of good faith and fair dealing raises an issue common to all the members of the class: Given that the class members agreed to be paid based not on actual miles but on HHG-derived miles, did Swift have a duty implied by law to select a program within HHG that would derive mileages that most closely approximated actual miles? Put differently, assuming petitioners agreed that they would be paid based on whatever HHG calculated, if Swift could choose between two (or three) options within HHG, did Swift have a duty to the drivers to select the option that was most advantageous to them?

Id. at 377, ¶¶ 10-12 & n.1. On this basis, we reversed the superior court's order denying class certification. Id. at 380, ¶ 26.

¶7 On remand, Garza offered two liability theories: (1) an "Endpoint Theory," under which Garza contended Swift "could have selected origin and destination endpoints that more accurately reflected the location where a driver was starting or ending his or her trip"; and (2) a "Route Theory," under which Garza contended Swift could have used other location points to more closely approximate actual miles driven rather than use the "short route" to determine HHG miles for pay.

¶8 Swift objected to the Route Theory on disclosure grounds. As a result, the court set an evidentiary hearing to address that issue and "whether routing is or is not an option available" within the HHG. After hearing expert testimony from both sides, the court ruled "there is an option under the HHG that could support the Route Theory," citing Garza's expert, Dr. Lance Kaufman. Thus, the court allowed Garza to proceed on the Endpoint and Route Theories but expressly left open "whether or not Swift should have utilized the mechanism used by Kaufman," whether Kaufman's methodology "is used in the industry," and whether "it was feasible or practical to utilize that methodology."

¶9 Eventually, Swift moved for summary judgment. It presented evidence that its transportation management system operated through "Innovative Enterprise Software" and MileMaker software, the latter of which could implement the HHG rules. Swift also presented evidence that Innovative was "programmed to use only city/ state pairs as location points, including for the purpose of determining HHG mileage through its interface with MileMaker." Swift thus argued that Kaufman's analysis, in which he calculated mileages under Garza's Endpoint and Route Theories, was not compatible with Innovative and MileMaker. Swift also contended Kaufman did not consider whether his analysis would be compatible with Innovative.

¶10 Swift, then, asserted four grounds for granting summary judgment: (1) the Endpoint and Route Theories "are not options within HHG"; (2) Swift acted reasonably by using third-party software according to the publisher's specifications to determine HHG mileage; (3) Garza had no reasonable expectation that Swift could implement the options proffered by Kaufman; and (4) Garza could not prove damages.

¶11 Swift also separately moved to decertify the class, contending (1) individualized issues predominated over common issues; (2) damages were not capable of class-wide calculation; (3) Garza no longer was a typical plaintiff; and (4) Garza could not show that Swift could have used a different option within the HHG.

¶12 The superior court granted summary judgment to Swift. It rejected Garza's contention that Swift had manipulated the data to generate shorter mileages. Instead, the court found that Garza failed to present evidence showing Swift did anything beyond "simply input information into MileMaker and utilize[] the mileage data generated by the computer program." The court also found nothing in the record supported the "notion that there was . . . an available 'option' that Swift failed to 'select, '" and that Kaufman's methodologies "were not . . . existing options within the HHG that Swift could have and should have used."

¶13 The court decertified the class, ruling "the fundamental inquiry [on the good faith and fair dealing claim] will be whether Swift failed to meet the drivers' reasonable expectations," which "would necessarily entail individualized inquiries into each class member's experience, background and reasonable expectations." It held that Garza could not apply the Route Theory on a class-wide basis because "some drivers fully understood they would not be paid based on the routes driven" and reasonable expectations only could be decided by determining "what each class member was specifically told and how they interpreted what they were told about how they would be paid."

¶14 Moreover, because the court found Kaufman's calculations were not "available option[s]" within the HHG, the court reasoned that

the operative question now is whether Swift had an obligation to create a complicated system for

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