Drive Logistics Ltd. v. PBP Logistics LLC

DRIVE LOGISTICS LTD, Plaintiff, v. PBP LOGISTICS LLC, PIECE BY PIECE INVESTMENTS, INC.,and LEAR CORPORATION, Defendants.

Case No. 14-10289

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

July 20, 2016

Hon. Gerald E. Rosen

OPINION AND ORDER REGARDING CROSS-MOTIONS FOR SUMMARY JUDGMENT

At a session of said Court, held in the U.S. Courthouse, Detroit, Michigan on July 20, 2016

PRESENT: Honorable Gerald E. Rosen United States District Judge

I. INTRODUCTION

Plaintiff Drive Logistics Ltd commenced this case in this Court on January 22, 2014, asserting a variety of state-law claims against Defendants PBP Logistics LLC, Piece By Piece Investments, Inc. and Lear Corporation arising from Defendants' alleged failure to pay Plaintiff for freight transportation services it provided over a several month period in 2013. This Court's subject matter jurisdiction over this matter rests upon the diverse citizenship of the parties. See 28 U.S.C. § 1332(a).

Through the present cross-motions, Plaintiff and Defendant Lear each request an award of summary judgment in their favor on the claims asserted against Lear in counts V through VII of Plaintiff's complaint.¹ In support of its motion, Plaintiff argues that Lear is obligated as a matter of law to compensate Plaintiff for its transportation of freight to and from Lear's facility in Hammond, Indiana, notwithstanding any payments Lear might have made to the PBP Defendants for these transportation services, where Lear either signed or issued a bill of lading in connection with each such shipment. In response, and in support of its own cross-motion, Lear contends that any such obligation of payment that might arise from the bills of lading issued for shipments to and from Lear's Hammond facility is superseded by Plaintiff's execution of a "master transportation agreement" prepared by the PBP Defendants, under which Plaintiff purportedly agreed to collect the charges for its freight services solely from the PBP Defendants, and to waive any right to collect these freight charges from a PBP customer such as Lear.

Plaintiff's and Defendant Lear's cross-motions have been fully briefed by the parties. Having reviewed the parties' briefs and accompanying exhibits, as well as the remainder of the record, the Court finds that the relevant allegations, facts, and legal arguments are adequately presented in these written submissions, and that oral argument would not aid the decisional process. Accordingly, the Court will decide the parties' cross-motions "on the briefs." See Local Rule 7.1(f)(2), U.S. District Court, Eastern District of Michigan. This opinion sets forth the Court's rulings on these motions.

II. FACTUAL BACKGROUND

A. The Parties

Defendant Lear Corporation ("Lear) is a manufacturer of automotive seating and electrical components. Defendants PBP Logistics LLC and Piece By Piece Investments, Inc. (collectively the "PBP Defendants") were transportation brokersthat arranged for the shipment of freight on behalf of customers such as Lear.² Plaintiff Drive Logistics Ltd, a Canadian corporation headquartered in Windsor, Ontario, was one such trucking company retained by the PBP Defendants to carry freight for Lear.

B. The PBP Defendants Enter into an Agreement to Provide Freight Transportation Services for Lear.

In 2011, Lear's third-party logistics provider, Ryder Integrated Logistics, Inc. ("Ryder"), entered into an agreement with the PBP Defendants to transport freight along a route between Texas and Lear's manufacturing facility in Hammond, Indiana. (See Defendant Lear's Motion, Ex. A, Motor Carrier General Terms and Conditions (the "Ryder/PBP Agreement"); Ex. B, 9/7/2011 Award Letter.) Under the terms of this agreement, the PBP Defendants promised to provide transportation services "using [their] own employees and drivers," and agreed that they would "not broker and/or subcontract with other motor carriers or entities to provide any transportation or other services under this Agreement" unless they secured Ryder's "prior written approval." (Lear's Motion, Ex. A,Ryder/PBP Agreement at ¶ 12.)³ Similarly, a memo issued by Ryder and signed by a representative of the PBP Defendants reiterated that "brokering to other carriers of loads tendered to [the PBP Defendants] by Ryder . . . on behalf of its shipper clients . . . is strictly prohibited," and the PBP Defendants agreed "to indemnify and defend Ryder and [its shipper clients] from any and all claims by third parties which result directly or indirectly from [their] brokering of a load to another carrier in violation of this memorandum." (Lear's Motion, Ex. C, 5/9/2011 Memo to Carriers.)

C. The PBP Defendants Arrange for Plaintiff to Carry Lear's Freight on the Route Between Texas and Hammond, Indiana.

For the first several months of the agreement between Ryder and the PBP Defendants to provide freight transportation services between Texas and Lear's manufacturing facility in Hammond, Indiana, the PBP Defendants arranged for non-party Sunbelt Transportation to carry Lear's freight on this route. In late 2012, the PBP Defendants invited Plaintiff to submit a bid to service this route, and Plaintiff's proposal was accepted. Pursuant to this arrangement, Plaintiff provided freight transportation services to Lear on the Texas-Hammond route forapproximately nine months in 2013.⁴

In the course of discovery in this litigation, the PBP Defendants produced a "Master Transportation Agreement" ("MTA") that states on its face that it was entered into between Plaintiff and the PBP Defendants on March 31, 2011. (See Defendant Lear's Motion, Ex. E, Master Transportation Agreement.)⁵ The MTA recited that Defendant Piece By Piece Investments was a "licensed transportation broker and logistics company that arranges the transportation of freight under its contractual agreement[s] with various consignors and consignees or their agents," defined in the agreement as "customers," and it called for Plaintiff to transport freight on behalf of these customers of the PBP Defendants, subject to various terms and conditions. (MTA at 1.) Of particular relevance here, Plaintiff agreed to seek payment for the freight charges it incurred under the MTA solely from the PBP Defendants, and not from their customers:

Piece By Piece shall pay Carrier [i.e., Plaintiff] 40 to 45 days after Piece By Piece['s] receipt of Carrier's invoice, shipper's bill of lading,signed clear delivery receipt and other documents required by Piece By Piece 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 Piece By Piece customers, consignors, consignees or any party other than Piece By Piece 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.

(Id. at ¶ 8.)

Regardless of whether the MTA ever went into effect or governed Plaintiff's transport of freight between Texas and Lear's Hammond facility, the record indicates that Plaintiff's billing practices for freight charges incurred in the course of its relationship with the PBP Defendants were generally consistent with the terms of the MTA. According to Plaintiff's president, Steven Breault, Plaintiff submitted its bills to the PBP Defendants along with proof of delivery, and the PBP Defendants would then pay Plaintiff once they had secured payment from their customer. (See Breault Dep. at 12-13.) Breault further testified that this same arrangement governed the specific freight services at issue here — i.e., Plaintiff's transportation of freight to and from Lear's Hammond facility — with Plaintiff submitting proof of delivery and an invoice to the PBP Defendants, the PBP Defendants in turn securing payment from Lear, and Plaintiff then receivingpayment from the PBP Defendants. (See id. at 30-31.)

D. After Initially Making Some Payments, the PBP Defendants Cease to Pay Plaintiff for Its Transportation of Freight to and from Lear's Hammond Facility.

In support of its claims in the present case, Plaintiff alleges that it was not paid for freight transportation services it provided to Lear between mid-February and late August of 2013 pursuant to its arrangement with the PBP Defendants. Although Lear states without contradiction that it paid the PBP Defendants for most or all of these freight services, (see Lear's Motion, Ex. H, Monday Decl. at ¶¶ 3-5), the PBP Defendants evidently failed to forward these payments to Plaintiff. Plaintiff's president, Steven Breault, testified that as the payments from the PBP Defendants became "spotty" in May or June of 2013 and Plaintiff's efforts to communicate with the PBP Defendants proved unavailing, Plaintiff gave notice to the PBP Defendants in late July of 2013 that "as of a specific date" in the near future, it would no longer transport freight on behalf of the PBP Defendants. (Breault Dep. at 34-35, 41.) Breault further testified that Plaintiff made no effort during this period to contact Lear regarding its difficulties in obtaining payment from the PBP Defendants, explaining 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 32-33.)

In all, Plaintiff asserts that it has not been paid for 310 "inbound" loads it carried from Texas to Lear's Hammond facility between February and August of 2013, and for 114 "outbound" loads that it carried from Hammond to Texas during this same time period. (See Plaintiff's Motion, Ex. C, Breault Decl. at ¶¶ 8-9.) According to Plaintiff, each such shipment is evidenced by a bill of lading that was either signed...