Reveille Trucking, Inc. v. Lear Corp.

Decision Date16 February 2017
Docket NumberCIVIL ACTION NO. 4:14-CV-511
PartiesREVEILLE TRUCKING, INC., Plaintiff, v. LEAR CORPORATION, et al, Defendants.
CourtU.S. District Court — Southern District of Texas
ORDER AND OPINION

Before the Court are Plaintiff Reveille Trucking, Inc.'s ("Reveille's") Motion for Partial Summary Judgment (Document No. 66), Defendant Lear Corporation's ("Lear's") Motion for Summary Judgment and Brief in Support (Document Nos. 67, 68), and the parties' responses and replies (Document Nos. 73, 74, 76, 77). Having considered these filings, the facts in the record, and the applicable law, the Court concludes that Reveille's Motion for Partial Summary Judgment (Document No. 66) is denied, and Lear's Motion for Summary Judgment (Document Nos. 67, 68) is partially granted and partially denied.

Background

Plaintiff Reveille is a "motor carrier engaged in the performance of interstate carriage for hire" (Document No. 63 at 1), and Defendant Lear is a "tier-one manufacturer of automotive seating and electrical components." (Document No. 68 at 2).1 Lear used a third-party logistics provider, Ryder Integrated Logistics, Inc. ("Ryder"), to manage its transportation and shipping. (Document No. 66 at 2; Document No. 66-7, Lear/Ryder Commercial Freight ManagementServices Agreement).2 Pursuant to the agreement between Lear and Ryder, Ryder was appointed by Lear as its agent, to provide "logistics management services for Lear." (Document No. 66-7 at 1). Ryder then contracted with Piece by Piece Investments, Inc./PBP Logistics, LLC (referred to collectively as "PBP") "to act as motor carrier for the shipment of freight on the D5005 route from Brownsville to Lear's facility in Hammond and back." (Document No. 66 at 4; Document No. 66-9, Ryder/PBP General Terms and Conditions (Motor Carrier)). In addition to the General Terms and Conditions, Ryder also required PBP "to sign an additional agreement in which PBP acknowledged and agreed that it would be prohibited from brokering shipments of freight tendered to it by Ryder/Lear to other motor carriers." (Document No. 66 at 4; Document No. 66-10, Unauthorized Brokering of Freight Agreement). Furthermore, this agreement also required that PBP:

1. Use equipment owned or operated by PBP to transport any and all loads tendered to PBP by Ryder for Lear;
2. Not broker any loads to another carrier without express authorization from Ryder; and
3. To indemnify and defend Ryder and its shippers from any and all claims by third parties which result from any brokering of freight.

Id.

Despite these terms, PBP contracted with another company, Tropical Logistics, LLC3 ("Tropical"), to complete its carrier responsibilities. (Document No. 66 at 5; Document No. 68 at 3). Tropical then contracted with Plaintiff Reveille from October 2013 to January 2014 for transportation of Lear freight for the roundtrip route from Brownsville, Texas to Hammond, Indiana. Id. Reveille states that "[i]n those four months, Lear and/or Johnson Controls tendered106 shipments to Reveille for transport in interstate commerce," citing the bills of lading from each Defendant. (Document No. 66 at 6) (citing Document No. 66-12, Lear Bills of Lading; Document No. 66-13, Johnson Controls Bills of Lading). According to the Johnson Controls Bills of Lading, Reveille transported 68 shipments from Brownsville to Lear's location in Hammond. (Document No. 66-13). Johnson Controls is the consignor and Lear is the consignee. Id. The Lear Bills of Lading contain record of 38 return shipments of empty containers (from Hammond back to Brownsville), and name Lear as consignor, Johnson Controls as consignee, and Reveille as the "originating carrier." (Document No. 66-12).

The fact that transportation services were contracted out to Reveille is undisputed. However the parties disagree as to whether Lear was aware that this was occurring: Reveille insists that Lear, Ryder, and CSG were aware that PBP contracted out transportation services, while Lear maintains that it was not, and that "neither PBP nor Tropical ever sought or received written approval from Lear or Ryder to subcontract their shipping responsibilities to any carrier." (Document No. 66 at 5-6; Document No. 68 at 3).

Reveille states that, "pursuant to instructions from PBP and Tropical Logistics," it "submitted its invoices and paperwork to Tropical [] for payment of 106 shipments, which totaled $279, 511.00." (Document No. 66 at 7). Reveille received $45,500.00 from Tropical's broker bond, but is still owed the remaining $233,961.00, which has not been paid by PBP or Tropical.4 Id. After this nonpayment, Reveille submitted its invoices and paperwork to Lear, which declined to make payment. Id. Lear states that it paid PBP for the services. (Document No. 68 at 6).

Lear insists that it is not liable for these payments, because "Reveille expressly agreed tolook solely to Tropical (a corporate entity foreign to Lear System) for payment of its services." (Document No. 68 at 3-4). Lear bases this argument upon a Master Transportation Agreement ("MTA") between Tropical and Reveille. (Document No. 66-20, MTA). In the MTA Reveille agrees to the following:

Carrier [Reveille] agrees that it shall not bill the Customer, shipper/consignee or any third party directly nor shall it communicate in any manner, directly or indirectly with Tropical Logistics, LLC customers, consignors, consignees or any party other than Tropical Logistics, LLC concerning the collection of any charges relating to transportation services accruing in connection with or as a consequence of this Contract; and waives any right it may otherwise have to proceed or commence any action against any Customer for the collection of any freight bills arising out of transportation services performed by carrier under this contract.

Id. at 3, ¶ 8. The MTA was signed on August 27, 2013 by a "dispatcher" named "Carina Sobrevillla." Id. at 6.

As a result of not being paid for its services, Reveille asserts the following claims against Lear in its Second Amended Complaint: (1) breach of interstate transportation contracts (the bills of lading), under which Lear is liable for the cost of the shipments; (2) negligence and gross negligence, for Lear's failure to ensure that Reveille was paid for its services; (3) unjust enrichment, because Lear received the benefit of Reveille's services without paying Reveille; and (4) fraud by nondisclosure, because Lear and its agents had a duty to inform Reveille that PBP was not making payments. (Document No. 63 at 7-11).

Parties' Motions

Plaintiff Reveille asks that summary judgment be entered against Lear on two of its claims: breach of interstate transportation contracts and unjust enrichment. (Document No. 66 at 1). Reveille first states generally that "transportation cases such as this one begin with the fundamental premise that, 'absent malfeasance, the carrier gets paid.'" Id. at 13 (citing ExelTransportation Services, Inc. v. CSX Lines LLC, 280 F. Supp. 2d 617, 619 (S.D. Tex. 2003)).5 Reveille then argues that Lear materially breached interstate transportation contracts with Reveille, as each bill of lading "constitutes an interstate transportation contract between Lear, Johnson Controls, and Reveille, which Lear and Johnson Controls have breached by failing to pay Reveille." Id. at 14. Next, Reveille argues that the MTA does not alter the default terms of the uniform bills of lading. Id. at 17. Reveille insists that (1) the MTA is not an enforceable contract, and (2) that the MTA does not waive Reveille's right to recover from Lear. Id. at 18-25. Finally, Reveille argues that Lear has been unjustly enriched, because it has breached a contract implied-in-law with Reveille. Id. at 26.

Defendant Lear asks that summary judgment be entered on all of Plaintiff's claims. (Document No. 68 at 1). Lear argues that the MTA is an enforceable contract, and that Reveille cannot prevail on its contract claims, because it waived them in the MTA. Id. at 7. Lear also states that equitable estoppel prevents Reveille's claims because Reveille continued to make deliveries, allowing the unpaid balance to increase, without notifying Lear that it had not been paid. Id. at 20-21. Lear then argues that unjust enrichment does not apply because a valid contract between Reveille and Tropical covered the services. Id. at 19-20. In addition, Lear argues that Reveille's negligence claims must fail because Lear did not have a legal duty to Reveille. Id. at 15-16. Finally, Lear argues that Reveille fails to state a claim of fraud by nondisclosure, and that Reveille fails to demonstrate that Lear had a duty to disclose. Id. at 18.

Standard of Review
Summary Judgment

Summary judgment is proper if "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). The substantive law governing the claims determines the elements essential to the outcome of the case and thus determines which facts are material. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute over such a fact is genuine if the evidence presents an issue "that properly can be resolved only by a finder of fact because [it] may reasonably be resolved in favor of either party." Id. at 250. The moving party bears the burden of identifying evidence that no genuine issue of material fact exists, Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986), and the Court must view this evidence and all inferences drawn therefrom in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). Choice of Laws

The MTA states that "[t]his agreement shall be governed by and construed in accordance with the laws of the State of Michigan." (Document No. 66-20 at 6). It is well established that where a Court has diversity jurisdiction and there is an issue as to which state's law should control the litigation,...

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