R.R. Donnelley & Sons v. Vanguard Transp. Systems, 06 C 5837.

Decision Date10 August 2009
Docket NumberNo. 06 C 5837.,06 C 5837.
Citation641 F.Supp.2d 707
CourtU.S. District Court — Northern District of Illinois
PartiesR.R. DONNELLEY & SONS COMPANY, doing business as R.R. Donnelley Logistics Services, a Delaware Corporation, Plaintiff, v. VANGUARD TRANSPORTATION SYSTEMS, INC., an Ohio Corporation, Defendant.

Daniel Cornelius Sullivan, Matthew Paul Barrette, Ryan Arthur Mahoney, Sullivan Hincks & Conway, Oak Brook, IL, for Plaintiff.

Donald Joseph Vogel, Adam Carl Smedstad, Sara L. Pettinger, Scopelitis Garvin Light, Hanson & Feary, P.C., Chicago, IL, Renea Elaine Hooper, Scopelitis, Garvin, Light, Hanson & Feary, P.C., Indianapolis, IN, for Defendant.

JEFFREY COLE, United States Magistrate Judge.

INTRODUCTION

This breach of contract dispute proves the wisdom of Shakespeare's injunction, "Defer no time, delays have dangerous ends." Henry VI, Part 1, Act III, sc. ii 1.331 (1592). The case arose from an admittedly delayed delivery by Vanguard Transportation Systems of advertising brochures announcing a post-Christmas Macy's sale in Florida. The brochures were delivered to Donnelley's distribution center in Atlanta on December 27, 2005— eleven days after the promised date of delivery. By then it was too late to mail the brochures to Macy's customers. Donnelley had to credit the $81,650 cost of the brochures to its customer, Continental Web Press, the printer of the Macy's brochures. At the bench trial, Donnelley sought this amount in damages, plus its attorney's fees, which it contends are due under the indemnification clause in the parties' contract.

Vanguard admits the delivery did not occur until December 27, but claims Donnelley caused the problem by refusing to let Vanguard's driver unload the truck, even though he arrived at the distribution center on Friday, December, 2006 before 2:00 p.m., as he was required to do. It is Vanguard's further contention that Donnelley never told it, either before or after the failed delivery attempt on December 16, that the load had to be delivered to Donnelley not later than December 21st (or the 23rd, the evidence on this point was not entirely clear) or it would be valueless. Vanguard contends that even if it breached the contract, Donnelley cannot recover because it failed to mitigate its damages. Failure to mitigate is an affirmative defense on which Vanguard has the burden of proof. Cates v. Morgan Portable Bldg. Corp., 780 F.2d 683, 687 (7th Cir.1985).

Donnelley's position is that Vanguard breached the contract by arriving in Atlanta at least two hours late, while outbound trucks were being loaded. While acknowledging that the victim of a breach of contract must mitigate damages, Donnelley argues that it did not do so—although it concedes that it would have been easy and cheap for it to have done so—because it justifiably relied on Vanguard's repeated assurances that it would make delivery.

Stating the parties' respective positions is simple; nothing else in the case is, for the parties disagree over virtually every factual and legal issue in the case. The question that preoccupied the parties at trial was whether Vanguard's driver arrived at 1:45 p.m. on December 16th, as he claimed—and thus arrived on time—or at around 4:00 p.m., as Donnelley's agent claimed, and thus too late for the Vanguard truck to be unloaded. Determining whom to believe was rendered more difficult because the relevant testimony was through depositions, thereby making it impossible to assess the witnesses' demeanor, which often plays a significant role in making credibility determinations. Indeed, the Supreme Court has said that the demeanor of a witness may satisfy the tribunal not only that the witness' testimony is not true but that the truth is the opposite of his story, "for the denial of one, who has a motive to deny, may be uttered with such hesitation, discomfort, arrogance or defiance, as to give assurance that he is fabricating, and that, if he is, there is no alternative but to assume the truth of what he denies." N.L.R.B. v. Walton Mfg. Co., 369 U.S. 404, 408, 82 S.Ct. 853, 7 L.Ed.2d 829 (1962). See also Anderson v. City of Bessemer City, N.C., 470 U.S. 564, 575, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985); Thornton v. Snyder, 428 F.3d 690, 697 (7th Cir. 2005), cert. denied, 547 U.S. 1192, 126 S.Ct. 2862, 165 L.Ed.2d 896 (2006); United States v. Wendt, 465 F.3d 814 (7th Cir. 2006).

But credibility involves more than demeanor, and while the opportunity to assess demeanor may be a sufficient basis to accept or reject a witness' testimony, it is not a necessary basis. The implausibility of testimony, the shifting and vacillating explanations for conduct, the inconsistencies between testimony and objective evidence, and the internal inconsistencies within testimony are perhaps more important than attempting to separate truth from a tale spun for the occasion by watching a witness's mannerisms while testifying. See Mitondo v. Mukasey, 523 F.3d 784, 788 (7th Cir.2008)(Easterbrook, C.J.); United States v. Bradford, 499 F.3d 910, 920-21 (8th Cir.2007); Pinpoint, Inc. v. Amazon.Com, Inc., 347 F.Supp.2d 579, 583 (N.D.Ill.2004) (Posner, J.)(sitting by designation).

THE EVIDENCE AT TRIAL1

Donnelley is one of the Nation's largest commercial printers (Pl.'s Ex. 6); Vanguard is a for-hire interstate motor carrier. (Pretrial Order, Stipulation of Uncontested Facts, ¶ 5)("Stipulation"). Anxious to do business with Donnelley, Vanguard, in 2004, represented itself as a successful, service-sensitive, carrier with a "99% + on time performance record" and daily capacity in numerous states, including Georgia. (Pl.'s Ex. 1 at 0107; Pl.'s Ex. 6; Stipulation, ¶ 9). Vanguard's efforts were successful, and the parties entered into a written agreement, the Truckload Line Haul Services Contract, in November of 2004. (Pl.'s Ex. 8; Stipulation, ¶ 7). Vanguard signed the Truckload Contract and returned it to Donnelley. (Menne Dep., at 12; Pl.'s Ex. 8 at 9).2 Between October 2004 and December 2005 Vanguard delivered a number of shipments of printed material to Donnelley's distribution centers, including the one in Atlanta. (Stipulation, ¶ 12).

On about December 15, 2005, Vanguard was engaged to transport a shipment of printed material from Continental Web Press in Walton, Kentucky, to Donnelley's distribution center in Atlanta. Vanguard knew Continental Web Press printed and shipped finished paper products. (Stipulation, ¶¶ 13-14). The parties agree that the engagement was initiated by a phone call from Marcellino Reyes of Donnelley and Kevin Vest, the Distribution Manager at Continental Web Press. (Reyes Trial Testimony). Reyes testified that on about December 8th he spoke with Jim Fates, a salesman for Macy's regarding shipping the Macy's brochures. They then met with Becky Tibbs of Donnelley and were told by Mr. Fates that the brochures were "a very hot shipment." Id. Reyes then contacted Greg Maschinot of Vanguard and asked if Vanguard could deliver a truckload of brochures to Donnelley's distribution center in Atlanta. It is at this point that the parties' respective versions of what happened drastically diverged.

Reyes claimed that he told Maschinot that the load was "very hot," since it contained advertising brochures for a Macy's post-Christmas sale in Florida. Indeed, so urgent was the situation that Reyes claimed he agreed to pay triple the spot rate of $1.55 per mile in the parties' contract for Vanguard to deliver the load to Atlanta. Neither the Donnelley manifest nor any other document in the case supported this claim. Quite the contrary, every document showed that Vanguard was to be paid the normal rate of $1.55 per mile. Neither Ms. Tibbs, Mr. Fates, nor Mr. Vest testified, and thus Reyes' claim that he told Vanguard how urgent the shipment was is uncorroborated. Not a single document in the case would have alerted Vanguard to the exceedingly time-sensitive nature of the load. (Pl.'s Ex. 9, 10, 11, 18, at 0329-30). In short, I find Mr. Reyes' testimony unconvincing.

Maschinot, who testified by deposition, agreed that Vanguard would deliver the load by December 16. The delivery time shown on the manifest was 12:00 p.m., but it was undisputed that the parties had agreed that there was a two-hour window within which delivery could be made and still be timely. Mr. Maschinot contacted Simon Blevins, a Vanguard driver, and had him reschedule a prior delivery so that he could make the trip to Atlanta. Neither Blevins nor Maschinot supported Reyes' claim that he told Maschinot how time-sensitive the load was, and Donnelley's own witnesses, including Reyes, admitted that Mr. Reyes never even informed the Atlanta distribution center that the load was time-sensitive, let alone how time-sensitive it was. No specific appointment was set with the Atlanta distribution center,3 and Reyes never told Vanguard that if the load was not delivered by a certain date it would be valueless since there would not be enough time to mail the brochures announcing Macy's sale.

Reyes conceded that nothing on the face of the Donnelley manifest reflected that the load was time-sensitive (Pl.'s Exs. 9, 10), and that he made no notation in the Donnelley Freight Management System to reflect that time-sensitivity. He claimed that he had such notations on his own note pad, but it was never produced either in discovery or at trial.4 While it was Donnelley policy to make room for "hot" loads whenever they arrived (Favors Dep., at 65), Mr. Reyes failed to alert the Atlanta distribution center by email or otherwise that a "hot load" was being delivered by Vanguard on December 16th. (Favors Dep., at 36-37). Matthew Janiak, Donnelley's Operations/ Transportation Manager in December 2005, testified that Reyes should have done so. Reyes conceded that he did not make any notes of his conversation with Maschinot that would support his claim that he told Mr. Maschinot that the load was "hot" or that he agreed...

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