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Drive Logistics Ltd. v. PBP Logistics LLC

United States District Court, E.D. Michigan, Southern Division

September 29, 2017


          R. Steven Whalen, United States Magistrate Judge.


          Paul D. Borman, United States District Judge.

         In this action, Plaintiff Drive Logistics, Inc. (“Drive”) seeks to collect payment from Lear Corporation (“Lear”) for freight shipments that Drive transported on Lear's behalf. Drive maintains that Lear is liable based on the bills of lading that were issued in connection with each shipment; Lear contends that Drive agreed to collect payment only from an intermediary between the companies, and also waived any legal claims against Lear, when it entered into a contract called the Master Transportation Agreement with the intermediary.

         In July of 2016, Judge Gerald E. Rosen, who was presiding over this matter at the time, denied the parties' first round of cross-motions for summary judgment, and permitted limited additional discovery on a potentially dispositive issue: whether the Drive employee who signed the Master Transportation Agreement had actual or apparent authority to do so. The parties have now filed Renewed Motions for Summary Judgment. For the reasons stated below, the Court will deny Drive's Renewed Motion for Summary Judgment and grant Lear's Renewed Motion for Summary Judgment.

         I. BACKGROUND

         A. Factual Background

         On July 20, 2016, Judge Rosen entered an Opinion and Order in this action denying cross-motions for summary judgment similar to those now before this Court. (ECF No. 99 (“July 2016 Opinion”).) As further detailed below, Judge Rosen denied both motions after finding that there was a jury question on an issue central to both parties' arguments: whether the Drive employee who signed the MTA on his company's behalf had actual or apparent authority to do so, and therefore whether Drive Logistics is bound by the Master Transportation Agreement's waiver provision. (See July 2016 Opinion at 33-34.) Judge Rosen also permitted additional discovery limited to that issue, since the record was mostly silent on it, and since the issue is potentially dispositive of all remaining claims in this action. (See Id. at 36; ECF No. 105.) The instant Motions were filed after that discovery was completed.

         The factual background below is divided into two parts. The first part summarizes the relationships between the parties and the events giving rise to this lawsuit, and it is based primarily on the factual findings set forth in Judge Rosen's July 2016 Opinion. The Court fully incorporates those findings here, providing the summary below only by way of general background. The second part discusses the circumstances surrounding the alleged execution of the Master Transportation Agreement; it is based primarily on evidence collected during the limited discovery period and submitted as exhibits to the parties' Motions for Summary Judgment.

         1. General Background

         Drive is a freight company headquartered in Windsor, Ontario. Lear manufactures automotive parts. Co-Defendants Piece by Piece Investments, Inc. and its subsidiary PBP Logistics LLC (collectively “PBP") were transportation brokers. Both PBP entities are now defunct, according to testimony of their president and co-owner Alexander Jones. PBP largely failed to participate in this litigation, prompting Judge Rosen to enter default judgments against them on claims asserted by both Drive and Lear. (See July 2016 Opinion at 3-4 & n.2; ECF Nos. 31, 89.)

         Prior to the events of this lawsuit, Lear retained non-party Ryder Integrated Logistics (“Ryder”) as a logistics provider. In 2010 or 2011, Ryder enlisted PBP to transport Lear's freight on a route between Lear's supplier in Brownsville, Texas and Lear's facility in Hammond, Indiana. The agreement between Ryder and PBP made clear that PBP were not to subcontract those responsibilities to other carriers without Ryder's prior written permission. (See July 2016 Opinion at 4-5; ECF No. 109, Lear Mot. at 8.) A separate memorandum issued by Ryder and signed by PBP reiterated that “brokering to other carriers of loads tendered to [PBP] by Ryder . . . on behalf of its shipper clients . . . is strictly prohibited[.]” (Id. at 5.) PBP further agreed in the memorandum to indemnify Ryder and its clients for any claims resulting directly from PBP's subcontracting to other carriers in violation of the agreement and the memorandum. (See id.)

         All the same, PBP arranged for third-party carriers to shoulder PBP's responsibilities under the agreement without seeking Ryder's approval: non-party Sunbelt Transportation for the first few months of the agreement, and Drive beginning in late 2012. PBP themselves owned neither office space nor trucks at the relevant time. Through PBP, Drive thus carried freight for Lear on the Texas-Indiana route for roughly nine months in 2013. (See Id. at 5-6 & nn.3-4.)

         In the course of discovery for this litigation, PBP produced a “Master Transportation Agreement” (“MTA”) that states on its face that it was executed between Drive and PBP on March 31, 2011. The MTA is not signed by a representative of PBP, but it is initialed and signed by an employee named Jeff Cameron on behalf of Drive. (See July 2016 Opinion at 6, 32 n.16.) Although the MTA was executed approximately a year and a half before Drive agreed to carry freight for Lear, it appears to set forth terms governing the relationship between Drive and PBP generally.[1] Paragraph 8 of the MTA relevantly provides as follows, with “Carrier” referring to Drive and “the Customer” referring generally to PBP's clients (including Lear):

[PBP] shall pay Carrier 40 to 45 days after [PBP's] receipt of Carrier's invoice, shipper's bill of lading, signed clear delivery receipt and other documents required by [PBP] or [its] Customer. Carrier 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 [PBP] customers, consignors, consignees[2] or any party other than [PBP] 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 [C]arrier under this contract.

         (July 2016 Opinion at 6-7; see also Lear Mot. Ex. F, Master Transportation Agreement at 4.) In other words, Drive agreed not to go around PBP by billing or otherwise communicating with PBP's clients.[3] And in the key MTA provision for the purposes of the instant Motions, the signatory to the MTA “waive[d] 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 [C]arrier under this contract.” (Id.)

         The record shows that Drive's billing practices for freight charges incurred through its relationship with PBP were consistent with the MTA-both as to charges incurred for Drive's carrying Lear's freight on the Texas-Indiana Route, and as to charges incurred for Drive's carrying freight for PBP's other clients. Drive would submit proof of delivery and an invoice to PBP, which would in turn collect payment from Lear and then remit it to Drive. (See Id. at 7-8.)

         Drive did not receive payment for freight transport services that it provided to Lear between February and August of 2013. Lear claims that it paid PBP for all of these services; PBP evidently failed to forward the payments to Drive. After payments from PBP to Drive became “spotty” in mid-2013, Drive gave notice to PBP in July of that year that as of a “specific date” in the near future, it would no longer carry freight for them. Drive did not contact Lear about the payments owing, and the company's president testified that “we never contacted the customer directly in risk of being seen as someone who went around the broker, which can be detrimental to our business.” (Id. at 8.)

         Drive claims that it has not been paid for a total of 424 loads that it carried for Lear: 310 “inbound” shipments (i.e., from Texas to Lear's facility in Indiana) and 114 “outbound” shipments (i.e., from Indiana to Texas). Plaintiff asserts that each shipment is evidenced by a bill of lading, each of which was either signed or issued by Lear. For inbound shipments, the driver would present the bill of lading to a Lear employee on delivery, and the employee would sign and return it. For outbound shipments, Lear would generate a return bill of lading. (See Id. at 9.)

         2. The MTA

         Drive contends that under the bills of lading, Lear is responsible to Drive for the amounts that Lear paid to PBP but which PBP failed to remit to Drive. Lear takes the position that Drive waived all claims against Lear in paragraph 8 of the MTA. In the July 2016 Opinion, Judge Rosen stated that “[f]or present purposes, at least, Lear does not dispute Plaintiff's contention that the bills of lading, viewed in isolation, would subject Lear to primary or joint liability for the freight charges sought by Plaintiff here.” (Id. at 14.) Accordingly, the question of whether Drive's purported waiver of all claims against Lear in the MTA is enforceable is a dispositive one, and so the circumstances surrounding the alleged execution of the MTA merit careful consideration.

         i. Drive's account Jeff Cameron was the Drive employee who initialed and signed the MTA, and his testimony in the record is drawn both from a sworn Declaration that he submitted in 2015, and from a deposition taken in March 2017, after Judge Rosen permitted discovery on the “actual or apparent authority” issue. (ECF No. 110, Drive Mot. Ex. E, Cameron Declaration; Ex. H, Deposition of Jeff Cameron.) Both Cameron and Steven Breault, Drive's president at the relevant time, acknowledged that it is in fact Cameron's signature on the MTA. (Cameron Dep. 39:23-40-2; ECF No. 110, Drive Mot. Ex. D, Deposition of Steven Breault at 22:22-23:7.)

         Cameron worked for Drive as a “planning administrator.” (Cameron Dep. 16:3-4.) In that capacity, he “would receive the load sheets, [4] enter the information into our [Truckmate] system, and just make sure the information was correct and spelling was right and the addresses are accurate and everything that was pertinent on the load sheets made their way into the system.” (Cameron Dep. 16:5-12.) Asked in his deposition whether he signed or initialed any other documents in the course of his duties as a planning administrator, Cameron testified that he typically signed or initialed

any sort of appendices that seemed to be just like authorization for doing the business. Anything like a major, I don't know -- no, no, just anything that was load sheet related was my department. Stuff that came through load sheets, that's what I signed. It was usually stuff that was already established between [Business Development Manager] Clark [Brockman] and the customer.

         (Cameron Dep. 26:24-27:10; see also Breault Dep. 10:8-14.) While Cameron did interact with customers, he would typically “talk to the customer, be nice to the customer, get some preliminary details, [and] possibly answer questions if we had availability in the area, ” but when it came to “negotiations, that was [Brockman].” (Cameron Dep. 26:8-23.) Cameron was expressly authorized by Brockman to sign some documents, but it was generally

made clear by the customer who was able to sign a document. If someone was sending me a document, they knew my role. Any time a conversation would get serious about, like, dollar amounts, whatever, they knew that they would have to go up from me because I'm just a planning administrator, the guy at the keyboard, the data entry guy. . . . If they're doing business with us, they know what I did, and they knew what Clark did and they knew the difference.

         (Cameron Dep. 22:4-19.) Immediately after that testimony, Cameron testified as follows regarding what would happen at the beginning of a customer relationship:

Q. And if it's the very beginning of a relationship, they wouldn't know, would they?
A. Well, they wouldn't be sending me something to sign per se.
Q. Well, they might send something for someone to sign, correct?
A. Possibly.
Q. And if they sent it to Mr. Brockman and he handed it to you to sign, you would do that. . . .
[A.]: Like, in the moment I couldn't -- it depends. . . .
Q. If Mr. Brockman received a document and handed it to you and said 'hey, I just got this, sign it and send it back', would you do that or would you not follow his instructions? . . .
[A.]: It would depend on the situation. . . .
Q. Describe a situation in which Mr. Brockman handed you a document and instructed you to sign it and return it to the origin and you wouldn't do that. . . .
[A.]: I can't remember a situation.

(Cameron Dep. 22:20-23:23.)

         Cameron testified that he had no recollection of signing the MTA, that he “did not know how [his] signature got there[, ]” and that he did not knowingly sign the agreement. (Cameron Dep. 39:18-22.) In his Declaration, Cameron characterized his signing of the MTA as probably unintentional, averring that “[t]he only thing I can think of is that I signed for the receipt of some load building documentation and this document was included within that documentation.” (Cameron Decl. ¶ 4.) He elaborated in his deposition:

Q. . . . So you believe this document or this page might have been slipped in with some load building documentation and you just signed it semi-automatically?
A. Like, might have been just to keep things moving. Like, if I signed something I wasn't supposed to sign, someone would tell me.
Q. Okay. So somehow this document was slipped in and you signed it with other documents and moved it along?
A. Mm-hmm.
Q. Do you have any idea how it would have gotten back to PBP after that?
A. It appears to have been faxed.
Q. And that would have been you doing that, correct? . . .
[A.]: Not at that hour. . . .
Q. You're referring to the 8:18 p.m?
A. Yeah.
Q. Is that when you sent it or received it?
A. That's a good question too.
Q. When -- so your theory is that this was in a bunch of documents and you just signed it along with the other documents, correct?
A. Right.
Q. Would it make sense that you would have initialed the bottom of every page in that scenario too, because these are your initials on the bottom of every page, aren't there?
A. Yes.
Q. So you would have viewed every page of this document, initialed every page of this document except the last one where you would have signed, correct?
A. Yes.
Q. And in all that process, you never realized this was not a load sheet?
A. I knew it wasn't a load sheet. I just thought it was something we needed to get going. If it was an important thing, the customer knows, it's not my department.
Q. Who told you to say ...

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