Vizant Techs., LLC v. YRC Worldwide, Inc.

• Decision Date: 28 February 2020
• Docket Number: No.160A19,160A19
• Citation: 838 S.E.2d 616 (Mem),373 N.C. 549
• Parties: VIZANT TECHNOLOGIES, LLC v. YRC WORLDWIDE, INC.
• Court: North Carolina Supreme Court

373 N.C. 549

838 S.E.2d 616 (Mem)

VIZANT TECHNOLOGIES, LLC

v.YRC WORLDWIDE, INC.

No.160A19

Supreme Court of North Carolina.

Filed February 28, 2020

Lincoln Derr PLLC, Charlotte, by Sara R. Lincoln, for plaintiff-appellant.

Strauch Green & Mistretta, P.C., Winston-Salem, by Jack M. Strauch and Jessie C. Fontenot Jr., for defendant-appellee.

PER CURIAM.

AFFIRMED.

APPENDIX

STATE OF NORTH CAROLINA

MECKLENBURG COUNTY

VIZANT TECHNOLOGIES, LLC, Plaintiff,

v.

YRC WORLDWIDE INC., Defendant.

IN THE GENERAL COURT OF JUSTICE

SUPERIOR COURT DIVISION

15 CVS 20654

FURTHER ORDER AND OPINION ON DEFENDANT YRC WORLDWIDE INC.’S CROSS MOTION FOR SUMMARY JUDGMENT¹

1. THIS MATTER is before the Court upon Defendant YRC Worldwide Inc.’s ("YRC") Cross Motion for Summary Judgment (the "Summary Judgment Motion") in the above-captioned case.

2. Having considered the Summary Judgment Motion, the original briefs in support of and in opposition to the motion, the arguments of counsel at the May 23, 2018 hearing on the motion, the supplemental briefs submitted by the parties in support of and in opposition to the motion, and other appropriate matters of record, the Court hereby concludes that YRC's Summary Judgment Motion should be GRANTED in part and DENIED in part as set forth herein.

Lincoln Derr PLLC, by Sara R. Lincoln and Kevin L. Pratt, for Plaintiff Vizant Technologies, LLC.

Strauch Green & Mistretta, P.C., by Jack M. Strauch and Jessie Charles Fontenot, for Defendant YRC Worldwide Inc.

Bledsoe, Chief Judge.

I.BACKGROUND

3. The Court has previously discussed the factual and procedural history of this action in its June 26, 2018 Order and Opinion, as reported at Vizant Technologies, LLC v. YRC Worldwide Inc., 2018 WL 3207205, 2018 NCBC LEXIS 65 (N.C. Super. Ct. June 26, 2018). Consequently, this Order and Opinion revisits only those facts that are relevant to the Court's decision herein. The details recited are not findings of fact but a summary "of material facts which ... are not at issue[.]" Hyde Ins. Agency, Inc. v. Dixie Leasing Corp. , 26 N.C. App. 138, 142, 215 S.E.2d 162, 165 (1975).

A. Factual Summary

4. This action arises out of an alleged breach of a Professional Services Agreement (the "PSA") between Plaintiff Vizant Technologies, LLC ("Vizant") and YRC. (See Pl.’s Mem. L. Supp. Mot. Summ. J. Ex. 2, at 5 [hereinafter "PSA"], ECF No. 84.3.)

5. YRC—the parent entity of several freight companies that operate throughout North America—has a large number of customers who pay for shipping services by credit card. (Def.’s Br. Supp. Mot. Summ. J. 3, ECF No. 88.) When one of its customers pays using a credit card, YRC pays a credit card processing fee. (Def.’s Br. Supp. Mot. Summ. J. 3.) YRC incurs substantial costs in credit card fees each year due to the number of customers that it serves and the number of orders that it fills. (Def.’s Br. Supp. Mot. Summ. J. 3.) At all times relevant to this lawsuit, YRC has sought to reduce these costs. (Whitsel Dep. 29:8–23, ECF No. 96.)

6. Vizant holds itself out as a consultant that can help clients reduce costs associated with financial payments. (See Br. Supp. Def.’s Mot. Summ. J. Ex. X, ECF No. 133.) Vizant approached YRC in mid-2014 to offer its services, and after a series of negotiations, the two entities executed the PSA. (PSA 5.) By the terms of the PSA, Vizant agreed to "perform an evaluation, assessment and customized analytical review" of the "Financial Payments" YRC received and "identify, indicate and quantify specific and actionable strategies and solutions" that would reduce YRC's costs associated with those payments. (PSA § 2.) In return, YRC agreed to pay Vizant a percentage of YRC's savings resulting from the strategies and solutions identified by Vizant. (PSA § 10.)

7. Under the terms of the PSA, Vizant's fee was calculated by comparing YRC's "Pre-Agreement Financial Payment Costs" with YRC's "Post-Agreement Financial Payment Costs." (PSA § 8.) If the post-agreement costs were less than the pre-agreement costs, YRC would pay Vizant a percentage of the difference. (PSA § 8.) The PSA defined "Post-Agreement Financial Payment Costs" as the Financial Payment Costs YRC incurred "as a result of the strategies and solutions that [were] identified and recommended by Vizant in performance of its professional services[.]" (PSA § 6.)

8. On July 9, 2015, after completing an initial assessment of YRC, Vizant personnel attempted to present an in-person report on Vizant's initial recommendations to YRC management. Vizant Techs., LLC , 2018 WL 3207205, at *1, 2018 NCBC LEXIS 65, at *6. Two of these recommendations included charging an account management fee for credit card transactions and convincing customers to switch from paying by credit card to paying by Automated Clearing House ("ACH") batch payments. Id. at *1, *4, 2018 NCBC LEXIS 65, at *6, *23.

9. Minutes into the presentation, YRC's management stopped Vizant's employees and reminded them that YRC was already considering some of the proposed measures for lowering credit card costs. (Lopez Aff. ¶ 7, ECF No. 101.) When YRC asked if Vizant believed it was entitled to a fee for savings resulting from these measures, one of Vizant's representatives responded, "Yes." (Wilson Dep. 83:5–16, ECF No. 95; Lopez Aff. ¶ 7.) YRC then ended the meeting. (Wilson Dep. 271:11–16.) Soon thereafter, Vizant sent hard-copy and electronic versions of its Report to YRC. (Christiansen Dep. 30:1–31:25, ECF No. 122.) YRC sent Vizant a written notice of termination two months later. (Pl.’s Mem. L. Supp. Mot. Summ. J. Ex. 28, at 1, ECF No. 84.29.)

B. Procedural History

10. Vizant seeks declaratory and injunctive relief against YRC as well as damages for breach of the PSA. As part of its claimed damages, Vizant contends that it is owed outstanding fees for savings that YRC allegedly realized through successful efforts to convince customers to pay using ACH rather than credit cards (Vizant's "ACH Damages").

Vizant Techs., LLC , 2018 WL 3207205, at *4, 2018 NCBC LEXIS 65, at *23.

11. On January 18, 2018, Vizant filed a motion for summary judgment. On January 19, 2018, YRC filed its cross motion for summary judgment, requesting that the Court grant summary judgment "as to [P]laintiff's claims for breach of contract." (Def.’s Mot. Summ. J. 1, ECF No. 87.) In briefing and at oral argument, each side presented the Court with its proposed interpretation of the PSA's provisions, each contending that its respective interpretation required summary judgment in its favor.

12. Vizant contended that the PSA requires YRC to pay a fee to Vizant because YRC has realized savings as a result of the strategies and solutions identified in Vizant's report. Vizant Techs., LLC , 2018 WL 3207205, at *2, 2018 NCBC LEXIS 65, at *9. Under Vizant's reading of the PSA, it does not matter whether Vizant's services actually caused YRC to implement cost-saving measures or whether YRC implemented those measures of its own accord—if Vizant identified one of the solutions that proved beneficial to YRC, Vizant argues it is owed a fee. Id.

13. YRC, on the other hand, asserted that the PSA only requires YRC to pay Vizant if Vizant's suggestions actually caused YRC to change business practices and realize savings. Id. at *2, 2018 NCBC LEXIS 65, at *10. YRC denied that it implemented any strategies based on the information in Vizant's report or presentation and thus argued that it does not owe Vizant any fee. Id.

14. YRC also argued that Vizant was unable to provide sufficient evidence to support its claim for ACH damages. (Def.’s Br. Supp. Mot. Summ. J. 32–33.) In particular, YRC attacked the opinions offered by one of Vizant's experts, Scott Emmanuel ("Emmanuel"), who calculated Vizant's claimed damages. Vizant Techs., LLC , 2018 WL 3207205, at *4, 2018 NCBC LEXIS 65, at *23. By way of a post-discovery motion to strike, YRC asked the Court to strike Emmanuel's opinions on Vizant's claimed ACH Damages, contending that those opinions were speculative and unreliable. Id. In connection with its Summary Judgment Motion, YRC argued that Vizant's failure to put forward reliable evidence of ACH Damages required an entry of "judgment, as a matter of law, in YRC's favor." (Def.’s Br. Supp. Mot. Summ. J. 33.)

15. In an Opinion dated June 26, 2018, the Court made several conclusions as to the parties’ summary judgment motions. First, the Court concluded that a genuine issue of material fact remained as to the interpretation of the PSA's fees provision that precluded the Court from entering summary judgment on that issue. Vizant Techs., LLC , 2018 WL 3207205, at *3, 2018 NCBC LEXIS 65, at *18. Second, the Court concluded that even if YRC's interpretation of the PSA was required as a matter of law, Vizant had presented circumstantial evidence sufficient to create a question of fact as to whether YRC implemented the strategies found in Vizant's report, i.e., evidence of a sharper decline in credit card payments in the year following Vizant's report which might support Vizant's contention that YRC used the suggestions in the report. Id. at *3, 2018 NCBC LEXIS 65, at *19. Third, the Court concluded that questions of fact remained as to YRC's obligations to provide Vizant with certain financial data under the PSA. Id. at *4, 2018 NCBC LEXIS 65, at *21–22. In connection with YRC's motion to strike, the Court also concluded that Emmanuel's opinions were speculative and unreliable. Id. at *5, 2018 NCBC LEXIS 65, at *30. The Court then denied both sides’ summary judgment motions and struck Emmanuel's opinions as to Vizant's ACH Damages.

Id. at *5, 2018 NCBC LEXIS 65, at *30–31. The Court did not address YRC's argument that summary judgment should be granted in its favor due to Vizant's inability to present reliable evidence of ACH Damages and made no conclusions as to the sufficiency of Vizant's evidence concerning those damages.

16. On August 6, 2018, YRC filed a motion under Rule 54(b) of the North Carolina Rules of Civil Procedure asking the...