United States Court of Appeals,

Eighth Circuit.

William H. PIPPIN; Lola Jean Pippin, Appellants,

v.

HILL-ROM COMPANY, INC., Appellee.

No. 09-1965.

 

Submitted: Jan. 12, 2010.

Filed: Aug. 2, 2010.

 

Before SMITH and COLLOTON, Circuit Judges, and KORNMANN,District Judge.

 

COLLOTON, Circuit Judge.

 

William and Lola Jean Pippin brought suit against Hill-Rom Company, Inc. (“Hill-Rom”), seeking recovery for an injury incurred by William Pippin at Hill-Rom’s facility in St. Joseph, Missouri. The district court  granted summary judgment for Hill-Rom, and the Pippins appeal. We affirm.

 

I.

 

William Pippin (“Pippin”) and his wife Lola Jean Pippin (“Lola”) are independent truckers who since 1993 have contracted with Landstar Express America, Inc. (“Landstar”). Landstar is a non-forced dispatch trucking company, meaning that when it receives a request from a shipper and assigns that request to a trucker, the trucker is always free to decline the load. The Pippins initially drove a cargo van. They purchased a straight truck (also known as a six-wheeler) in 1997, because there was a higher demand for loads requiring that type of vehicle than for the cargo van. About a year after purchasing the truck, Pippin installed a liftgate, which allowed him to accept loads of heavy freight originating at locations that did not have loading docks. Because “liftgate jobs” were more profitable than regular loads, and only a few Landstar contractors drove trucks with liftgates, the installation of the liftgate enabled Pippin to increase his earnings. The principal items that he transported with the help of the liftgate were hospital beds and gaming machines.

 

On September 8, 2002, the Pippins accepted an assignment of transporting three hospital beds for Hill-Rom from its facility in St. Joseph, Missouri, to Tempe, Arizona. At the time he accepted the load, Pippin knew that the use of his liftgate would be required, but he did not realize that he would be responsible for loading the beds onto his truck.

 

After arriving at the Hill-Rom facility the next morning, the Pippins were greeted by a Hill-Rom employee named Alan Karguth. Karguth asked Pippin to back his truck up to the side of the loading area. While doing so Pippin noticed that the parking lot gradually sloped off away from the building, so that his front axle was lower than the rear axle as he backed in. He manually set the air brakes on his truck to prevent rolling, but he did not think that this slope would prove problematic in loading the beds onto the truck.

 

Pippin and Karguth then rolled the first bed out of the storage facility and to the truck. Pippin testified that he thought Karguth would help him load the beds, but after the two men together rolled the first bed onto the liftgate, Karguth backed away. Pippin loaded the first bed without incident and resolved to finish the loading by himself. Karguth helped him roll the second bed out of the building and onto the liftgate, and again stepped away. As Pippin began to push the bed off the liftgate and onto the truck, it started to roll away from him toward the front of the truck. To prevent this bed from hitting the bed already in the truck, Pippin attempted to use his right foot to activate the bed’s pedal brake. Just as he activated the brake, causing the bed to stop its slide, he was jerked off-balance and wrenched his back. At the time, he thought that he had just pulled a muscle, and he proceeded to load the third bed.

 

The Pippins then began their drive to Tempe, but Pippin’s back pain soon became severe. They completed the Hill-Rom assignment by having Lola do most of the driving, and the couple then accepted several more assignments until they found one that brought them back home to Missouri. Pippin ceased driving for Landstar and subsequently underwent a variety of medical tests and treatments for his back. He incurred extensive medical bills and lost income due to an inability to work.

 

In August 2007, the Pippins filed suit against Hill-Rom in the Circuit Court of Buchanan County, Missouri. The complaint alleged that Hill-Rom acted negligently by failing to provide a reasonably safe loading area and by failing to load the beds. The complaint further asserted that Hill-Rom negligently instructed Pippin to position his truck on an inclined surface and then to load the beds onto that truck, when it knew or reasonably should have known that it was not safe to do so. The second count of the complaint was a loss of consortium claim brought by Lola Pippin. After the suit was removed to federal court, Hill-Rom moved for summary judgment, and the district court granted the motion.

 

II.

 

To prevail in a negligence action under Missouri law, a plaintiff must establish that (1) the defendant owed him a duty of care, (2) the defendant breached that duty, and (3) he suffered an injury proximately caused by the defendant’s breach. Lopez v. Three Rivers Elec. Coop., 26 S.W.3d 151, 155 (Mo.2000) (en banc). “Whether a duty exists is purely a question of law,” suitable for determination on summary judgment. Id. The district court concluded that Hill-Rom did not owe a duty to Pippin, and granted summary judgment on that basis. We review the district court’s grant of summary judgment de novo, viewing the facts in the light most favorable to Pippin.   Gentry v. Georgia-Pacific Corp., 250 F.3d 646, 649 (8th Cir.2001).

 

A.

 

Pippin argues first that Hill-Rom owed him a duty of care under the Transportation Agreement between Hill-Rom and Landstar, because under Missouri law, that contract gave rise to a tort duty. The relevant provision of the Agreement reads in part:

 

Loading Responsibility. Except as otherwise provided in writing prior to the time of dispatch, shipments transported by Carrier must be loaded by Shipper and unloaded by consignee from or on Carrier’s vehicle(s).

 

Pippin contends that Hill-Rom breached its contract with Landstar by failing to load its beds onto the truck, and that the breach of that contract also constituted a breach of Hill-Rom’s duty to Pippin.

 

Under Missouri law, a breach of contract alone does not gives rise to a tort. The Missouri courts have recognized a distinction between negligence and nonperformance of a contract obligation. A mere failure to complete the undertaking required by contract does not give raise to a cause of action in tort; the remedy for such a failure lies in contract. Preferred Physicians Mut. Mgmt. Group v. Preferred Physicians Mut. Risk Retention, 918 S.W.2d 805, 814 (Mo.Ct.App.1996); Harzfeld’s, Inc. v. Otis Elevator Co., 114 F.Supp. 480, 483 (W.D.Mo.1953). To establish a negligence claim, a plaintiff must show negligent misfeasance, such as “the failure to exercise due care in the performance of contract undertakings, as distinguished from mere failure to complete such undertakings.” Preferred Physicians, 918 S.W.2d at 814 (quoting Harzfeld’s, 114 F.Supp. at 483). “If absent a contract the act would not be a tort, the mere breach of an agreement will not create one.”   Khulusi v. Sw. Bell Yellow Pages, Inc., 916 S.W.2d 227, 230 (Mo.Ct.App.1995). Pippin’s contention is that Hill-Rom failed to load the beds as required by its Transportation Agreement with Landstar. This mere failure to perform under the contract cannot support Pippin’s negligence action.

 

B.

 

In addition to his contract-based argument, Pippin argues that Hill-Rom owed him a duty of care under general negligence law. Pippin contends that because Alan Karguth had experience with loading beds for Hill-Rom, and understood that beds tended to roll toward the front of a truck after they were loaded, the danger that Pippin faced was foreseeable to Karguth and Pippin. This foreseeability, Pippin contends, gave rise to a duty of Hill-Rom to help Pippin load the beds, or at least to warn him of the danger.

 

Assuming that Karguth could foresee a danger to Pippin, “foreseeability alone is not enough to establish a duty.” Stitt ex rel. Stitt v. Raytown Sports Ass’n, 961 S.W.2d 927, 930 (Mo.Ct.App.1998). There must also be “some right or obligation to control the activity which presents the danger of injury.” Id. Pippin has not established that Hill-Rom had such an obligation. Pippin was an independent contractor, and Hill-Rom did not control his activities. Pippin chose to load the beds, moreover, despite the obvious weight of the beds and his knowledge that the truck was parked on an incline. There was no “hidden or secret peril here involved,” Ecker v. Big Bend Bank, 407 S.W.2d 45, 47 (Mo.Ct.App.1966), and Hill-Rom did not have a legal duty to warn Pippin of that which he should have known.

 

[10][11] Pippin argues alternatively that the slope of the parking lot was a dangerous condition that triggered a duty of Hill-Rom. This contention sounds in premises liability rather than general negligence law. See Haney v. Fire Ins. Exch., 277 S.W.3d 789, 791 (Mo.Ct.App.2009) (per curiam). Premises liability is triggered when the claimed cause of injury is a dangerous condition of the property on which the injury occurred, but “[s]uch liability generally is limited to those who own or control the property.” Id. Hill-Rom did not own or control the parking lot. Its facility is located in an industrial park owned by Mitchell Woods, LLC. Hill-Rom rented its unit under a lease stating that Mitchell Woods reserved to itself all rights and interests in the common areas on the property, including the parking lot. Mitchell Woods also expressly retained the responsibility for paving, lighting, and landscaping the parking area. Hill-Rom is thus not liable for injuries resulting from the condition of the lot.

 

[12][13] Premises liability, moreover, does not attach when the relevant dangerous condition is “so open and obvious that the invitee should reasonably be expected to discover it and realize the danger.” Harris v. Niehaus, 857 S.W.2d 222, 226 (Mo.1993) (en banc). Pippin realized before he began loading beds that the parking lot sloped, and he manually set the air brakes on his truck in response. His experience of loading the first bed on the truck confirmed his earlier observation. The parking lot’s slope was thus open and obvious as a matter of law, and Pippin cannot recover from Hill-Rom on a premises liability theory.

 

Hill-Rom did not owe a duty of care to Pippin under its Transportation Agreement with Landstar or under Missouri tort law, and the district court properly dismissed Pippin’s negligence claim. Because Lola Pippin’s claim for loss of consortium is derivative of Pippin’s negligence claim, Wright v. Barr, 62 S.W.3d 509, 537 (Mo.Ct.App.2001), the failure of the negligence claim disposes of Lola’s claim as well. Accordingly, we affirm the judgment of the district court.

 

The Honorable Charles B. Kornmann, United States District Judge for the District of South Dakota, sitting by designation.

 

The Honorable Terry I. Adelman, United States Magistrate Judge for the Eastern District of Missouri, sitting by consent of the parties pursuant to 28 U.S.C. § 636(c).

 

Pippin attempts to buttress his argument that the Transportation Agreement gives rise to his tort claim by asserting that he can recover in tort as a third-party creditor beneficiary of the Agreement between Hill-Rom and Landstar. He did not raise this argument in the district court, however, and “[w]e will not entertain a new argument on appeal from the grant of summary judgment.” Berg v. Norand Corp., 169 F.3d 1140, 1145 (8th Cir.1999). In any event, a party may recover as a third-party beneficiary only if “the terms of the contract … express directly and clearly an intent to benefit” that party, L.A. C. ex rel. D.C. v. Ward Parkway Shopping Ctr. Co., 75 S.W.3d 247, 260 (Mo.2002) (en banc) (internal quotation omitted), and the agreement between Hill-Rom and Landstar does not express such an intent.

United States Court of Appeals,

Seventh Circuit.

ALLIANCE 3PL CORPORATION, formerly known as Alliance Logistics, Inc., Plaintiff-Appellee,

v.

NEW PRIME, INC., doing business as Prime, Inc., Defendant-Appellant.

No. 09-3489.

 

Argued Feb. 18, 2010.

Decided Aug. 2, 2010.

 

Before EASTERBROOK, Chief Judge, and KANNE and ROVNER, Circuit Judges.

 

EASTERBROOK, Chief Judge.

 

Alliance 3PL Corporation handles the transportation needs of its customers. It purchases transportation services from air, water, and land carriers, and it allocates this capacity to customers that need to move their own goods or supplies. Alliance may be able to consolidate multiple customers’ shipments into full loads, reducing the cost per ton-mile; even if it cannot do this, a transport-management service enables customers to concentrate on their core businesses and stop fretting about shipping. The 3PL business (for third-party logistics management) is an aspect of the division of labor. The Wikipedia entry “3PL” describes other functions that firms such as Alliance perform; today’s dispute arises from its role in arranging for transportation, and we need not discuss warehousing, inventory control, and additional services in the 3PL business.

 

Until spring 2003 Loders Croklaan USA, a producer of fats and oils used by the food industry, dealt directly with motor carriers. Prime, Inc., was among the carriers that Loders used to move its products to customers from 1998 through 2003. (Some of this transportation was on bills of lading from Loders and some was arranged and paid for by its customers, such as Pillsbury.) In March 2003 Loders hired Alliance to manage its shipping. Alliance employed Prime to haul some of Loders’s output. The contract between Alliance and Prime, signed in 2000 when Alliance first used some of Prime’s services (obviously for customers other than Loders, which was not yet one of Alliance’s clients), contains what the parties call a back-solicitation clause:

 

[Prime] shall not solicit traffic from any shipper, consignee, or customer of [Alliance] where [Prime] first knew the availability of such traffic as a result of [Alliance’s] efforts or the traffic of [Alliance], consignee, or customer of [Alliance] was first tendered to [Prime] by [Alliance].

 

A jury concluded that Prime violated this clause by carrying bulk goods for Loders after the Loders-Alliance contract ended in 2007, and it awarded Alliance about $2.2 million in damages. The district court denied Prime’s motions under Fed.R.Civ.P. 50 and 59.

 

Prime carried freight for Loders while the Alliance contract was in effect and submitted a bid to Loders to do the same work after the Alliance contract ended. The parties debate whether Prime “solicited” this business: Prime says that Loders took the initiative (the contract between Alliance and Loders did not prohibit Loders from placing business with carriers that Alliance had used), while Alliance says that Prime inveigled Loders to request a bid and thus effectively solicited Loders’s business. Like the district court, we think that the evidence allowed a reasonable jury to resolve that question in Alliance’s favor.

 

It is undisputed that Prime had carried some of Loders’s goods (including bulk cargo in tankers) for years before Loders hired Alliance to manage its shipping. This leads Prime to contend that it did not “first know the availability of such traffic as a result of” Alliance’s efforts. A back-solicitation clause ensures that a carrier (such as Prime) introduced to a shipper (such as Loders) through a 3PL won’t poach the business; it effectively allocates to the 3PL the property right in information about which shippers need what transportation service. But Prime did not learn about Loders, or its business, through Alliance; Prime already had that information because it had been picking up freight from Loders since 1998. Whether Loders, Pillsbury, or someone else arranged for any given shipment during 1998 to 2003, and whether those shipments were arranged by long-term contract or spot transactions, the fact remains that Prime’s knowledge of Loders’s business was acquired independent of Alliance.

 

Prime contended that it was entitled to summary judgment because it did not learn about Loders’s traffic through Alliance. The 3PL replied that Loders substantially increased the volume of its bulk shipping in tankers during 2005 and 2006, while the Loders-Alliance contract was in place, and that Prime had increased the size of its own tanker fleet as a result. Alliance contended that Prime learned of this incremental “traffic” through Alliance, and that the back-solicitation clause therefore blocked Prime from carrying any freight for Loders (or at least any more of Loders’s freight than it had been carrying before March 2003). Prime contended, to the contrary, that the word “traffic” in a back-solicitation clause refers to the existence of a shipper, and the general nature of its transportation needs, rather than the gross weight of goods that the shipper tenders to carriers. On this understanding Prime did not learn of Loders’s “traffic” through Alliance.

 

When denying Prime’s motion for summary judgment, the district judge stated that the word “traffic” is ambiguous. Come the trial, the judge did not define the word for the jury. Nor did the judge tell the jurors that they needed to decide whether the word “traffic” means the existence of a shipper and the general nature of its needs, or instead means the volume of transportation services a (known) shipper requires. The judge gave the jurors no guidance on that topic and did not frame any concrete question that required resolution. Instead the judge allowed both sides to argue their positions.

 

Because the judge was non-directive (something that the parties knew long before the jury instructions were delivered), each side attempted to bolster its position with testimony from experts. The meaning of “traffic” might depend, for example, on the customs and general understandings of the industry, and then the jurors would need evidence about usage of trade to reach a verdict. But neither side introduced any evidence about how people in the transport (or 3PL) businesses understand the word “traffic.” Instead Alliance produced an expert who testified that shippers usually notify 3PL companies of their existing clientele, which may be provided for expressly in a back-solicitation clause.

 

When Prime argued on appeal that experts should not be allowed to define words in legal documents-that this is a function for the judge, see Bammerlin v. Navistar International Transportation Corp. ., 30 F.3d 898 (7th Cir.1994)-Alliance replied that its expert had not so much as hinted at the meaning of the word “traffic” but had simply furnished the jurors with background about the industry. For its part, Prime tendered an expert who proposed to testify that the background narrated by Alliance’s expert was not factual. The district judge prevented Prime’s expert from testifying about that subject, and Prime protests the asymmetric treatment. Whether the judge abused her discretion in the handling of the expert testimony is another topic we need not explore, because Alliance’s disclaimer of any trade-specific meaning of the word “traffic” undermines the verdict. Alliance’s evidence concerned how many loads Prime had carried for Loders before March 2003, rather than the meaning of the word “traffic”. The jury evidently concluded that Prime should be held to its old level of business after the Loders-Alliance contract ended. But that’s possible only if “traffic” has the meaning that Alliance favors.

 

Prime relies on the ordinary meaning of the word “traffic” plus the ordinary function of a clause such as this one: to prevent the carrier from poaching business that it learned about only through the 3PL’s (costly) efforts to match a shipper with the optimal carrier. Had it never done any business through Alliance, Prime was bound to get in contact with Loders again as soon as Alliance ceased to be Loders’s sole agent for procuring transport. Prime’s straightforward position has the support of Illinois law, which supplies the rule of decision: Illinois understands non-compete clauses to cover no more than the reasonable import of their language and does not allow expansive readings of restrictive covenants, because more competition often serves the public interest in low prices. See Cambridge Engineering, Inc. v. Mercury Partners 90 BI, Inc., 378 Ill.App.3d 437, 447, 316 Ill.Dec. 445, 879 N.E.2d 512, 522 (2007).

 

A party that wants to depart from a straightforward understanding of contractual language has two principal routes; parol evidence and usage of trade. Yet Alliance did not offer any parol evidence showing that, when Prime and Alliance negotiated their contract, they discussed what the word “traffic” means, or that the negotiation history favors one meaning of “traffic” over another. This leaves the possibility that “traffic” is a term of art in the transportation business. As we have recounted, however, Alliance denies that its expert testified about usage of trade. Reading “traffic” to mean “increase in traffic” or “oodles of traffic” therefore lacks any support on this record. At oral argument, Alliance’s lawyer suggested that the expert’s testimony supports reading “traffic” to mean “the sort of freight carried under this contract”-but if that’s the word’s meaning, then Alliance loses, because Prime did not learn through Alliance that Loders ships fats and oils in bulk tankers, and the back-solicitation clause covers only traffic that Prime “first knew” about as a result of doing business with Alliance.

 

The people who were managing Loders and Prime in 2009, when the case was tried, testified that in 2005 and 2006 they did not know what freight Prime had carried for Loders from 1998 through 2003. The knowledge of Loders’s managers is irrelevant under the back-solicitation clause, which asks what Prime knew rather than what Loders remembered. And the fact that Prime’s managers, hired after 2003, had not been briefed about Prime’s work for Loders while their predecessors were in charge does not affect the fact that Prime as an entity knew about the subject (which the new managers eventually brushed up on). A corporation knows what its managers know, and it does not acquire amnesia when the management team changes. See Prime Eagle Group Ltd. v. Steel Dynamics, Inc., No. 09-1663 (7th Cir. July 27, 2010). By 2007, when Prime bid on the Loders business, its managers were cognizant of the work Prime had done for Loders in 1998 to 2003.

 

Although Prime first knew in 1998 (if not earlier) about Loders’s traffic, it might have been possible for Alliance to argue that it did not know about “such” traffic. The word “such” might carry the weight that Alliance tried to place on “traffic”. But Alliance did not contend in the district court, or in its appellate brief, that the word “such” designates an increase or change in traffic during the contract’s term. Prime reads “such” as a reference to earlier mentions of “traffic”-legalese for the proposition that “this use of the word ‘traffic’ refers to the same ‘traffic’ that this clause already mentioned.” That seems to us the most likely meaning of “such” in this clause. See Bryan A. Garner, A Dictionary of Modern Legal Usage 849 (2d ed.1995). The district court therefore should have granted Prime’s motion under Rule 50 for judgment as a matter of law.

 

REVERSED