CAPITAL LOGISTICS, LLC, Plaintiff, -v- GRAY TRANSPORTATION, INC., Defendant.

 

16-cv-8594 (KBF)

 

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK

 

2017 U.S. Dist. LEXIS 174805

 

 

October 23, 2017, Decided

October 23, 2017, Filed

 

 

COUNSEL:  [*1] For Capital Logistics, LLC, as assignee of Blazer Wilkinson LP, Plaintiff: George Carl Pezold, Augello, Pezold & Hirschmann, P.C., Huntington, NY.

 

For Gray Transportation, Inc., Defendant: Barry Neil Gutterman, LEAD ATTORNEY, Barry N Gutterman & Associates, P.C, Bedford Hills, NY.

 

JUDGES: KATHERINE B. FORREST, United States District Judge.

 

OPINION BY: KATHERINE B. FORREST

 

OPINION

 

OPINION & ORDER

KATHERINE B. FORREST, District Judge:

This is a straightforward case alleging a breach of a carriage contract involving the shipment of 27 to 28 pallets of strawberries. When the strawberries arrived at their destination, they were rejected by the buyer because their pulp temperature exceeded specifications. This lawsuit followed.

Before the Court are the parties’ dueling motions for summary judgment. (ECF Nos. 23, 27.) In most cases alleging breach of a carriage contract, the Court can in fact resolve the dispute on summary judgment, avoiding the need for an expensive trial proceeding. This, however, is not one of those cases. Here, as discussed below, there are triable facts with regard to (1) the condition of the strawberries at the time they were delivered by the shipper to the carrier, and (2) whether the shipper engaged [*2]  in negligent acts that relieve the carrier of liability for the loss. While the amount in controversy is less than $100,000 and there are serious questions as to whether it is worth incurring the expense of a trial, this Court is unable to resolve this dispute on the motions before it. Both motions to dismiss are DENIED.

 

1. LEGAL PRINCIPLES

 

1. Summary Judgment Standard

Summary judgment may be granted when a movant shows, based on admissible evidence in the record, “that 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 moving party bears the burden of demonstrating “the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). In reviewing a motion for summary judgment, the Court construes all evidence in the light most favorable to the nonmoving party, and draws all inferences and resolves all ambiguities in its favor. Dickerson v. Napolitano, 604 F.3d 732, 740 (2d Cir. 2010). The Court’s role is to determine whether there are any triable issues of material fact, not to weigh the evidence or resolve any factual disputes. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986).

 

1. Carmack Amendment

The Carmack Amendment governs the terms of bills of lading issued by domestic rail carriers. See 49 U.S.C. § 11706(a)(1). Carmack imposes liability for damage caused during the rail route under the bill of [*3]  lading against “receiving rail carrier[s]” and “delivering rail carrier[s],” irrespective of which caused the damage. 49 U.S.C. § 11706(a). “Carmack’s purpose is to relieve cargo owners of the burden of searching out a particular negligent carrier from among the often numerous carriers handling an interstate shipment of goods.” Kawasaki Kisen Kaisha Ltd. v. Regal-Beloit Corp., 561 U.S. 89, 90, 130 S. Ct. 2433, 177 L. Ed. 2d 424 (2010) (quotation omitted). It is undisputed that Carmack applies to motor carriers in addition to rail carriers. Royal & Sun Alliance Ins., PLC v. Ocean World Lines, Inc., 612 F.3d 138, 145 (2d Cir. 2010).

 

1. Prima Facie Liability

To establish a prima facie case of liability against a carrier under the Carmack Amendment, the shipper must prove both (1) delivery of the goods to the initial carrier in good condition, (2) damage prior to arrival at the destination, and (3) the quantum of damages or loss. See Sec. Ins. Co. v. Old Dominion Freight Line, Inc., 391 F.3d 77, 81, 83 (2d Cir. 2004); see also Atl. Mut. Ins. Co. v. CSX Lines, LLC, 432 F.3d 428, 433 (2d Cir. 2005) (citing Transatl. Marine Claims Agency, Inc. v. M/V OOCL Inspiration, 137 F.3d 94, 98 (2d Cir. 1998)). Although the issuance of a clean bill of lading is typically prima facie evidence of receipt of the goods described, “where the contents of a shipment are not visible or open for inspection, as may be the case when cargo is transferred to the carrier in a sealed container, a clean bill of lading is not sufficient to establish delivery of the goods in good condition.” Sec. Ins. Co., 391 F.3d at 83; see also Bally, Inc. v. M.V. Zim Am., 22 F.3d 65, 69 (2d Cir. 1994) (holding that it does not constitute such prima facie evidence “of the condition of the goods shipped in sealed packages [*4]  where the carrier is prevented from ‘observing the damaged condition had it existed when the goods were loaded.'” (quoting Caemint Foods Inc. v. Brasileiro, 647 F.2d 347, 352 (2d Cir. 1981))). In the case of a sealed container, the shipper must present evidence other than the clean bill of lading to demonstrate that the goods were delivered to the carrier in good condition. Bally, Inc., 22 F.3d at 69; Sec. Ins. Co., 391 F.3d at 84 (“[W]hen a carrier is prevented from independently inspecting cargo, the plaintiff must present additional evidence, either direct or circumstantial, in order to establish the initial contents and condition of the cargo.”).

Only after the plaintiff has established a prima facie case does the burden shift to the carrier to prove one of the exceptions to liability. Atl. Mut. Ins. Co., 432 F.3d at 433. Those defenses include where the alleged loss or damage arose from “act or omission of the shipper or owner of the goods or their agent,” or where the loss or damage arose from “insufficiency of package.” 46 U.S.C. §§ 30706(b)(6)-(7); see also Mo. Pac. R.R. Co. v. Elmore & Stahl, 377 U.S. 134, 137, 84 S. Ct. 1142, 12 L. Ed. 2d 194 (1964); Imperial Veal & Lamb Co. v. Caravan Refrigerated Cargo, Inc., 554 F. Supp. 499, 501 (S.D.N.Y. 1982).

To support shipper liability, the burden is on

 

the carrier to prove that the loss or damage arose solely from one or more of the excepted causes, and it is of no avail to it to show that the shipper was in any way negligent, if the loss or damage would not have occurred, except for the concurring fault of the [*5]  carrier.

 

 

Lehigh Valley R. Co. v. State of Russia, 21 F.2d 396, 405 (2d Cir. 1927).

Plaintiff argues that the legal standard prevents the imposition of shipper liability, even if it set the temperature of the reefer at the wrong level and on the wrong cycle (see discussion below for facts on this point). According to plaintiff, defendant has a non-delegable “duty to ensure that the temperature of the reefer was properly set”–even if the shipper’s personnel initially set the temperature and cycle of the reefer, the defendant carrier was independently responsible to confirm that they had been set appropriately. (Pl.’s Mem. of Law in Opp. to Def.’s Mot. for Summ. J. (“Pl. Mem. in Opp.”) (ECF No. 31) at 15-16 (citing Project Hope v. M/V IBN Sina, 96 F. Supp. 2d 285, 295-96 (S.D.N.Y. 2000), aff’d, 250 F.3d 67 (2nd Cir. 2001)).) In support of this proposition, plaintiff cites the lower court and appellate decision for Project Hope v. M/V IBN Sina: 96 F. Supp. 2d 285 (S.D.N.Y. 2000) and 250 F.3d 67 (2d Cir. 2001). A review of these cases–and the cases cited therein–make it clear that plaintiff has overstated this argument.

As an initial matter, the Second Circuit did not, as plaintiff’s citation indicates, affirm a holding of the lower court relating to the legal proposition on which it relies. Rather, the Second Circuit affirmed on a different basis. With regard to plaintiff’s argument regarding “non-delegable duty to provide a [reefer] suitable for [*6]  the intended transportation,” (see Pl. Mem. in Opp. at 15), the Second Circuit stated that it was “unpersuaded.” Project Hope, 250 F.3d at 78. The cases cited by the district court in Project Hope–Martin Imports v. Courier-Newsom Exp., Inc., 580 F.2d 240 (7th Cir. 1978), and Watson Bros. Transp. Co. v. Feinberg Kosher Sausage Co., 193 F.2d 283 (8th Cir. 1951)–also do not stand for the broad proposition plaintiff asserts. Both of those cases recite the legal standard for negligence, and that the carrier must not fail to exercise ordinary care. Martin Imports also cites the provision of the Carmack Amendment, 49 U.S.C. § 316(b), that requires every carrier to “provide safe and adequate service, equipment, and facilities for the transportation of property . . . .” 580 F.2d at 244. This Court does not read either case as setting forth a legal requirement that if a shipper presets the temperature and cycle for refrigeration of goods (as defendant asserts occurred here), the carrier must change those settings or face sure liability.

 

1. FACTS NECESSARY FOR RESOLUTION OF THE CASE

As this Court finds triable issues of fact, it does not here set forth all facts relevant to the dispute between the parties and necessary to resolution of the case. Instead, it focuses on those facts that illuminate the existence of material, triable issues: whether the strawberries were delivered in good condition, and whether the shipper engaged [*7]  in conduct supporting an “act of shipper” defense.

On January 28, 2016, three trailers, each containing 27 to 28 pallets of picked strawberries, arrived at the premises of the shipper, Amex Distributing Company (“Amex” or the “Shipper”), in Donna, Texas. (Pl.’s Mem. of Law in Supp. of Pl.’s Cross-Mot. for Summ. J. (“Pl. Mem. in Supp.”), app. A2 (ECF No. 24-2) (“Receiving Reports”).) The strawberries had been grown and harvested in Mexico. (Id.; Decl. of Barry Gutterman in Supp. of Def. Gray Transp.’s Mot. for Summ. Judgment, Ex. F (ECF No. 28-5) (“West Decl.”) at 2.) Amex prepared a bill of lading for further carriage of 27 to 28 of these pallets to a Wal-Mart in Auburn, Illinois. (Id., Ex. G (ECF No. 28-5) (“Ellis Decl.”) at 27.)

The driver for Gray Transportation, Ken Ellis, arrived on January 28, 2016. (Id.) Plaintiff provided evidence that Amex’s normal practice is to allow drivers onto the loading dock, (Pl. Mem. in Supp., Ex. 2 (ECF No. 24-8) (“Renteria Decl.”) ¶ 6), but Ellis has stated that he was not allowed on the loading dock to watch the pallets being loaded into the refrigerated trailer (also referred to as a “reefer”), (Ellis Decl. ¶¶ 5-6). As such, even though the bill [*8]  of lading recites that the strawberries were delivered in good condition, (Gutterman Decl., Ex. A (ECF No. 28-1) (“Bill of Lading”) at 2), Ellis stated that he was not able to confirm this (Ellis Decl. ¶¶ 5-6). Thus, there is a triable issue as to the condition of the goods at loading.

There is an additional question of fact: whether other acts of the Shipper caused the loss. Defendant argues it is entitled to the “act of the shipper” defense.1 (Def. Gray Transp., Inc.’s Mem. of Law in Supp. of its Mot. for Summ. J. (“Def. Mem. in Supp.”) at 27.) According to defendant’s expert Patrick Brecht, strawberries naturally give off heat and should therefore reasonably have been expected to do so here. (Gutterman Decl., Ex. E (“Brecht Decl.”) at 7.) Refrigeration during transport was therefore not only prudent but necessary. According to Brecht, such refrigeration should have been continuous in order to ensure proper pulp temperature at the destination. (Id. at 9.) He also states that sources of heat transfer or heat retention should be avoided. (Id. at 7.)

 

1   As there is a triable issue with regard to the condition of the goods at delivery, the Court may only resolve this case on summary judgment if there is no triable issue on this defense. In the absence of a triable issue on the facts proposed by the defendant, the defendant would prevail. As set forth here, there is a triable issue with regard to the defense as well.

There is no evidence that Ellis was instructed to pre-cool the reefer by the bill of lading or by Amex personnel. Nor is there evidence that he received [*9]  direction regarding the temperature at which the strawberries should be maintained during carriage. These facts alone do not, however, establish shipper liability. Based upon Brecht’s statements, the carrier knew or should have known that some refrigeration was required. The next question is thus whether an adequate level of refrigeration was provided and, if not, which party is responsible.

The level of refrigeration during transit thus takes on importance. There is no dispute that the “Carrier Shipment Confirmation” indicates that the reefer had to be set on the “continuous” cycle. (Def. Mem. in Supp. at 10.) The parties dispute who in fact set the reefer’s temperature and cycle for refrigeration. According to Amex, its normal practice was also to have the driver set the temperature control (both in terms of temperature level and cycle) for the reefer. (Renteria Decl. ¶ 7.) Ellis, the driver for the carrier stated that Amex personnel set the temperature and cycle.2 (Ellis Decl. ¶ 6.) Both parties agree that the temperature was set to 34 degrees Fahrenheit but both also agree that the temperature cycle was set to “start-stop” rather than continuous. (Id.; Pl. Mem. in Supp., Ex. 3 (“Bange [*10]  Decl.”) at 2.) There appears to be agreement that the “start-stop” setting was incorrect and, given the nature of the product, the cycle should have been “continuous.” There is no disagreement that the inaccurately set cycle likely contributed to the excessive pulp temperature when the goods arrived in Illinois on February 1, 2016.

 

2   Defendant asserts that plaintiff’s “routine practice” evidence is not sufficient to rebut the firsthand evidence of Ellis. That is legally incorrect. The evidence of a company’s practice may be received into evidence if it is relevant (here, it is), and probative of whether a person acted in conformity with that routine practice (here, it is). Issues as to the relative value of firsthand evidence versus practice evidence goes to weight–not to admissibility.

There is evidence in the record, by way of Ellis’s declaration, that he checked the temperature reading of the reefer on a regular basis throughout the trip and that the gauge never exceeded 34 degrees Fahrenheit. (Ellis Decl. ¶ 9.) Upon tender on February 1, 2016, Wal-Mart noted that the temperature of the reefer was set to 34 degrees Fahrenheit, and that the actual temperature of the reefer was 34 degrees Fahrenheit. (Decl. of Carl Pezold in Supp. of Pl.’s Mem. of Law in Opp. to Def.’s Mot. for Summ. J. (“Pezold Decl.”), Ex. D.)

The reefer contained a “TempTale” temperature recorder. (Bange Decl. at 2.) The data from that recorder indicates that the temperatures in the reefer cycled between 39.6 degrees Fahrenheit and 53.5 degrees Fahrenheit. (Id.) Throughout the trip, the temperature cycled throughout that range, eventually steadying between 48-50 degrees [*11]  Fahrenheit for the latter part of the trip. (Id. at 2.) The evidence supports a consistent temperature in the 40s. (Id.) The parties agree that the temperature should have been maintain near to or below 41 degrees Fahrenheit. (Brecht Decl. at 26; Pezold Decl., Ex. D.) There is also evidence in the record that the reefer was in working order both before and after carriage of the shipment at issue. (Def. Mem in Supp. at 3.)

When the strawberries were tendered to Wal-Mart, which rejected them as having an excessive pulp temperature, there were signs of mold. (Brecht Decl. at 33; Pezold Decl., Ex. 1-B; see also Pezold Decl., Ex. D.) According to Brecht, the presence of mold indicates the temperature issues between the time of harvesting and receipt. (Brecht Decl. at 33.) An inspector also found signs of moisture on the plastic sheet covering the product. (Pezold Decl., Ex. 1-A (ECF 33-1) at 2.))

The uncontroverted evidence reveals the use of pallet covers over the strawberries; defendant’s expert, Brecht, opines that the use of pallet covers would have resulted in a retention of heat, causing an increase in pulp temperature. (Brecht Decl. at 31.) Brecht does not, however, separate the impact of [*12]  this from the other factors that could or would have impacted the pulp temperature. Thus, the fact that this evidence is uncontroverted is insufficient to allow the Court to grant summary judgment on the “act of shipper” defense to defendant.

 

III. CONCLUSION

This is not a big case. Indeed, it is a case where only a modest loss is at issue. Nevertheless, on the facts that have been developed in the record, the Court determines that there are triable issues as to whether the strawberries were in good condition at the time of delivery to the carrier, and whether the carrier has an “act of shipper” defense.

To finally resolve this case the parties have two choices: (1) consent to a trial on the papers that would allow the Court to weigh the evidence, or (2) a bench trial. A bench trial has been set for December 12, 2017, and if the case is to be tried live, it shall be tried then. The parties shall confer on the format of the disposition (on the papers, or a live trial), and, not later than November 3, 2017, notify this Court in writing of their position(s).

SO ORDERED.

Dated: New York, New York

October 23, 2017

/s/ Katherine B. Forrest

KATHERINE B. FORREST

United States District Judge

 

 

Appellate Court of Illinois,

Third District.

QUALITY TRANSPORTATION SERVICES, INC., Plaintiff-Appellant,

v.

MARK THOMPSON TRUCKING, INC., an Illinois corporation, Defendant-Appellee.

Appeal No. 3-16-0761

|

Opinion filed October 24, 2017

Appeal from the Circuit Court of the 13th Judicial Circuit, La Salle County, Illinois. Circuit No. 15-L-114, The Honorable Eugene P. Daugherity, Judge, Presiding.

 

 

OPINION

JUSTICE WRIGHT delivered the judgment of the court, with opinion.

*1 ¶ 1 On appeal, plaintiff, Quality Transportation Services, Inc. (QTS), contends that the trial court erred by granting summary judgment in favor of defendant, Mark Thompson Trucking, Inc. (MTT). QTS argues that a question of material fact exists concerning whether MTT engaged in the solicitation of one of QTS’s clients in breach of the nonsolicitation covenant contained in the transportation brokerage agreement. We reverse and remand.

 

 

¶ 2 FACTS

¶ 3 This case involves a contract dispute arising from the language of a transportation brokerage agreement, dated July 26, 2011, between plaintiff, QTS, an Illinois corporation, and defendant, MTT, an Illinois corporation. The terms of the agreement provided that QTS, a broker licensed by the Federal Motor Carrier Safety Administration, hired MTT, a registered carrier, to provide transportation services to QTS’s customers. The agreement contained a nonsolicitation provision in paragraph 19, which stated as follows, in relevant part:

“CARRIER will not solicit traffic from any [s]hipper, consignor, consignee, or customer of Broker where (1) the availability of such traffic first become [s] known to CARRIER as a result of BROKER’s efforts, or (2) the traffic of the shipper, consignor, consignee or Customer of BROKER was first tendered to CARRIER by BROKER. If CARRIER breaches this Agreement and directly or indirectly solicits traffic from customers of BROKER and obtains traffic from such customer during the term of this Agreement or for twelve (12) months thereafter, CARRIER shall be obligated to pay BROKER, for a period of fifteen (15) months thereafter, commission in the amount of thirty-five percent (35%) of the transportation revenue resulting from traffic transported for the Customer, and CARRIER shall provide BROKER with all documentation requested by BROKER to verify such transportation revenue.”

 

¶ 4 Pursuant to the July 2011 agreement, MTT began providing trucking services for US Silica Company (USS), one of QTS’s customers. MTT provided motor carrier services for USS between the company’s Ottawa and Utica facilities and the Rochelle facility.

 

¶ 5 In 2016, QTS filed an amended complaint against MTT alleging MTT directly or indirectly solicited USS in violation of the nonsolicitation clause of the agreement. The amended complaint alleged that on June 16, 2015, MTT began hauling traffic for USS over the same routes QTS assigned to MTT. QTS claimed that as a result of QTS’s efforts, this traffic was first tendered to MTT by QTS during the term of the 2011 agreement. QTS asserted that “[b]ut for [MTT’s] solicitation of traffic from USS, [MTT] would not be engaged in hauling for USS directly along the[se] lanes of traffic.” According to the amended complaint, QTS received written notice from MTT of MTT’s intent to terminate the agreement on June 29, 2015, two weeks after MTT began hauling directly for USS.

 

¶ 6 On August 23, 2016, MTT filed an answer to QTS’s first amended complaint. MTT denied that the company breached the nonsolicitation provision in the agreement. MTT also denied that USS “was a shipper, consignor, consignee or customer of QTS.”

 

*2 ¶ 7 On September 9, 2016, MTT filed a motion for summary judgment on all of QTS’s claims. In the motion, MTT argued that the undisputed material facts showed that MTT did not solicit business from USS because it was undisputed USS initiated contact with MTT. MTT claimed the agreement allowed MTT to accept unsolicited business from QTS’s client. Alternatively, MTT submitted the nonsolicitation provision of the agreement was unenforceable as a matter of law.

 

¶ 8 In support of the motion for summary judgment, MTT attached the deposition transcripts of several witnesses, including Janice Casey and Mark Thompson. In his deposition, Thompson, the president of MTT, testified that, while the agreement with QTS was in place, MTT provided hauling services for QTS that included shipments for USS with routes from Ottawa to Peru, Ottawa to Rochelle, and Utica to Rochelle. Thompson understood that QTS received a brokerage fee by charging the QTS customers for whom MTT was hauling freight more money than QTS paid MTT.

 

¶ 9 Thompson spoke with Casey in December 2014 at the Lotz Trucking Christmas party. Thompson testified that he does not recall the conversation but they did not discuss business. Thompson testified that he and Casey previously attended the same high school but they had not kept in contact following graduation.

 

¶ 10 Thompson testified that Casey initiated contact with Thompson by telephoning him in the winter of 2015 to discuss the possibility of MTT hauling for USS. Casey stated that USS was short on trucks and asked Thompson if he was interested in working for USS. Thompson testified that he told Casey he was interested and Casey stated she wanted to meet sometime. According to Thompson, when Casey first approached him, Thompson thought, “boy this would be a good outfit to get.”

 

¶ 11 Thompson testified he met with Casey a few days later at the McDonald’s in Peru, Illinois. Thompson chose the location. Casey and another hauler, Brian Ruff, were also present at the meeting. Thompson stated that he called Ruff and asked him to attend the meeting because Thompson learned that USS was looking for more than one carrier. Thompson testified the purpose of the meeting with Casey was to discuss the possibility of Thompson and Ruff providing trucking services for USS. Thompson testified that Casey mentioned that she wanted trucks for the routes from Utica to Rochelle and from Utica to Peru and requested that Thompson submit a rate for the route from Utica to Peru. Thompson responded that he would give it some thought but did not discuss or submit any specific rates during the meeting at the McDonald’s in Peru, Illinois.

 

¶ 12 Thompson testified that on the following day, February 12, 2015, Casey stopped by the MTT office to pick up Thompson’s proposed rate for the Utica to Peru route. This bid was not accepted by USS because MTT’s bid was too high.

 

¶ 13 On February 13, 2015, MTT submitted a rate to Casey for the USS route from Utica to Rochelle. The bid submitted by MTT to USS took the form of a proposed “Load and Rate Confirmation Agreement” between MTT and USS, which provided as follows:

“This agreement is presented in good faith between [MTT] and [USS]. [MTT] will supply one truck and trailer and more as needed to transport silica sand to C.S.S. (U.S. Silica) Rochelle from Q.P.S. (U.S. Silica) Utica for a rate of $8.59/ton (all in).”

USS did not accept this bid. On March 3, 2015, MTT lowered the bid for the USS route from Utica to Rochelle to $7.75 per ton. This bid was not accepted by USS. Thompson also submitted a rate proposal to USS for the route from Ottawa to Rochelle. All the routes for which MTT submitted rate proposals to USS were routes that MTT had previously hauled for USS pursuant to the agreement between MTT and QTS.

 

*3 ¶ 14 Several months later, in June 2015, Thompson had an opportunity to discuss his rate proposal with Casey. Casey told Thompson, “[Y]ou need to lower the rate, you know, that’s way out of the ballpark, you know.” On June 16, 2015, MTT again lowered its bid for the route from Utica to Rochelle to $7.50 per ton and submitted it to USS. USS accepted the $7.50 per ton rate for the Utica to Rochelle route, and MTT began hauling directly for USS on or about June 18, 2015. Thompson testified that he terminated the agreement with QTS by sending a text message to the QTS dispatcher in the middle of June 2015. Thompson testified that he did not submit rate proposals for services to any other shipper during the same time period.

 

¶ 15 Casey’s deposition testimony was consistent with Thompson’s deposition testimony. According to Casey, she is employed by USS as the transportation coordinator for the company. Her assigned duties required her to approach carriers, trucking companies, and drivers and request the submission of rates for USS traffic. According to Casey, USS would advise the prospective carriers about the origin and destination of each route and wait for the carriers to submit bids for USS’s business. Once Casey received a rate, she would submit it to USS’s corporate office for approval. Casey did not have the authority to make an offer to any carrier, including MTT, or to accept any bid from a carrier. If the rate was not accepted by the corporate office, Casey could ask the carrier to submit a new quote at a lower rate. If the carrier did not submit a lower rate, then the process ended.

 

¶ 16 Casey testified that she has known Thompson for over 20 years and they went to high school together. Casey testified that in late 2014 or early 2015 she reached out to Thompson’s nephew, Dalton, and asked for Thompson’s phone number. After Casey obtained Thompson’s number from Dalton, she called Thompson and asked him “if he had any trucks available” because USS was short on trucks. Thompson replied that he did and Casey asked Thompson if he would propose a rate. However, Thompson did not submit a rate at that time.

 

¶ 17 Casey testified that she was not familiar with QTS and that her day-to-day communications were with Lotz Trucking, Inc. (Lotz). Casey testified that from September 2014, when she started with USS, through about June of 2015, she was not aware that MTT was under contract with a transportation broker. Casey testified that it was her understanding that Thompson was previously working for Lotz.

 

¶ 18 Sometime after the initial phone conversation between Casey and Thompson, Thompson began submitting rates for USS routes and then submitted requotes when he was informed his bids were not good enough. Thompson continued to communicate with Casey until the corporate office of USS accepted one of MTT’s proposed rates. Thereafter, Thompson began hauling for USS on a load-to-load basis, but Casey could not recall the date that MTT first started working directly for USS. MTT hauled for USS on routes from Utica to Rochelle, Ottawa to Rochelle, and Utica to Vectora. Casey testified that neither Thompson nor anyone at MTT solicited her or USS for business.

 

¶ 19 In opposition to MTT’s summary judgment motion, QTS submitted the affidavit of Kevin Kuntz, the president of QTS and Lotz. In the affidavit, Kuntz stated that Lotz is not a transportation broker but is a motor carrier that provides transportation services to shippers. QTS shares dispatch services with Lotz such that all carriers brokered by QTS are dispatched by Lotz dispatchers. Kuntz stated that when a shipper such as USS needs transportation services from QTS’s carriers, the shipper contacts Lotz dispatchers to convey this need, and a Lotz dispatcher will dispatch carriers brokered through QTS to fulfill the shipper’s request.

 

*4 ¶ 20 Kuntz also stated in his affidavit that QTS has had a business relationship with USS in La Salle County, Illinois, since 1993 pursuant to which, QTS, acting as broker, has arranged for motor carriers to transport silica sand for USS. Kuntz stated that, prior to the opening of the USS facility in Rochelle, Illinois, in 2012, QTS negotiated and entered into a motor carrier agreement with USS to provide trucking services for traffic from the USS facility in Ottawa, Illinois, to the new facility in Rochelle. Additionally, Kuntz stated that, prior to the opening of the USS facility in Utica, Illinois, in 2014, QTS negotiated and entered into a motor carrier agreement with USS to provide trucking services from Utica to Rochelle.

 

¶ 21 The trial court held a hearing on defendant’s motion for summary judgment on November 15, 2016. Without indicating the basis for the court’s ruling, the trial court summarily granted MTT’s motion for summary judgment in MTT’s favor. On December 9, 2016, QTS filed a notice of appeal.

 

 

¶ 22 ANALYSIS

¶ 23 On appeal, QTS challenges the trial court’s November 15, 2016, order granting summary judgment in favor of MTT by arguing that a genuine issue of material fact exists as to whether MTT’s conduct violated the nonsolicitation provision of the contract QTS seeks to enforce. MTT argues that the trial court correctly granted its motion for summary judgment because the agreement allowed MTT to accept unsolicited work from an existing QTS client. Alternatively, MTT claims that the nonsolicitation provision in the agreement is unenforceable.

 

¶ 24 The standard of review on an appeal from a trial court’s ruling on a motion for summary judgment is de novo. DeSaga v. West Bend Mutual Insurance Co., 391 Ill. App. 3d 1062, 1066 (2009). Summary judgment is a drastic means of disposing of litigation and should only be permitted when the right of the moving party is clear and free from doubt. Woods v. Pence, 303 Ill. App. 3d 573, 575-76 (1999). At the summary judgment stage, the trial court cannot weigh evidence, make credibility determinations, or decide the truth of the matter but, instead, must determine whether the case should go to trial at all. Essig v. Advocate BroMenn Medical Center, 2015 IL App (4th) 140546, ¶ 88; Gulino v. Economy Fire & Casualty Co., 2012 IL App (1st) 102429, ¶ 25. In other words, the role of the trial court is not to try a question of fact but to determine if one exists. DeSaga, 391 Ill. App. 3d at 1066. Summary judgment should be granted only where the pleadings, depositions, and admissions on file, together with any affidavits, when viewed in the light most favorable to the nonmoving party, show there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. 735 ILCS 5/2-1005(c) (West 2016); Pekin Insurance Co. v. Pulte Home Corp., 404 Ill. App. 3d 336, 339 (2010). A triable issue of fact precluding summary judgment exists where the material facts are disputed or, where the material facts are undisputed, reasonable persons might draw divergent inferences from the undisputed facts. Gilbert v. Sycamore Municipal Hospital, 156 Ill. 2d 511, 518 (1993).

 

¶ 25 In this case, we must construe the scope of conduct prohibited by the precise language of the nonsolicitation clause in the written agreement. The court’s primary goal in interpreting a contract is to give effect to the intent of the parties. Storino, Ramello & Durkin v. Rackow, 2015 IL App (1st) 142961, ¶ 18. When the language of the contract is clear and unambiguous, the parties’ intent must be determined solely from the language of the contract itself and be given its plain and ordinary meaning. Id. Contracts should be construed as a whole, with each provision viewed in light of other provisions in the contract. Thompson v. Gordon, 241 Ill. 2d 428, 441 (2011). The construction, interpretation, or legal effect of a contract is a question of law subject to de novo review on appeal. Martis v. Grinnell Mutual Reinsurance Co., 388 Ill. App. 3d 1017, 1020 (2009).

 

*5 ¶ 26 To address QTS’s contention that a genuine issue of material fact exists as to whether MTT’s conduct constitutes solicitation, we look to the language of the nonsolicitation provision contained in paragraph 19 of the agreement:

“CARRIER will not solicit traffic from any [s]hipper, consignor, consignee, or customer of Broker where (1) the availability of such traffic first become [s] known to CARRIER as a result of BROKER’s efforts, or (2) the traffic of the shipper, consignor, consignee or Customer of BROKER was first tendered to CARRIER by BROKER. If CARRIER breaches this Agreement and directly or indirectly solicits traffic from customers of BROKER and obtains traffic from such customer during the term of this Agreement or for twelve (12) months thereafter, CARRIER shall be obligated to pay BROKER, for a period of fifteen (15) months thereafter, commission in the amount of thirty-five percent (35%) of the transportation revenue resulting from traffic transported for the Customer, and CARRIER shall provide BROKER with all documentation requested by BROKER to verify such transportation revenue.”

The term “solicit” is not defined in the agreement. However, both parties agree that it is appropriate to use the definition of “solicitation” contained in Black’s Law Dictionary, which defines the term as “[t]he act or an instance of requesting or seeking to obtain something” and “[a]n attempt or effort to gain business.” Black’s Law Dictionary 1520 (9th ed. 2009). The parties further agree that, based on the language of the contract, the mere passive acceptance of business would not violate the terms of the nonsolicitation provision because the term “solicitation” connotes taking some affirmative measures.

 

¶ 27 Illinois law provides guidance on the type of conduct that constitutes solicitation. In Tomei v. Tomei, the First District Appellate Court stated that “[w]hether a particular client contact constitutes a solicitation, depends upon the method employed and the intent of the solicitor to target a specific client in need of his services.” Tomei v. Tomei, 235 Ill. App. 3d 166, 170 (1992). There, the court held that “the direct solicitation of insurance customers, as opposed to a general advertisement, suggests a private communication directed at a person or persons, known by the solicitor to have an immediate or potential need for insurance.” Id.

 

¶ 28 QTS argues that Tomei is instructive and supports QTS’s argument that a proper analysis of whether a party has “solicited” business involves a fact-intensive inquiry of multiple considerations regarding the conduct of each party. In our view, simply because MTT did not initiate the very first conversation with USS does not support an automatic conclusion that MTT’s subsequent communications with USS can never rise to the level of solicitation.1 See, e.g., YCA, LLC v. Berry, No. 03 C 3116, 2004 WL 1093385, at *10-11 (N.D. Ill. May 7, 2004) (applying Illinois law and rejecting the notion that the identity of the party who makes the initial contact is outcome dispositive in determining whether solicitation occurred).

 

*6 ¶ 29 We recognize it is undisputed that Casey, acting as an agent for USS, initiated the first phone call to Thompson in early 2015. However, following the first telephone call, there were additional communications arguably initiated by MTT after large gaps of time that followed Casey’s initial phone call. Based on our de novo standard of review, when viewing the evidence in the light most favorable to the nonmovant, reasonable minds may differ as to whether MTT’s multiple and arguably separate contacts with USS violated the nonsolicitation provision of the agreement between QTS and MTT. See Williams v. Manchester, 228 Ill. 2d 404, 417 (2008) (a triable issue precluding summary judgment exists where the material facts are undisputed but reasonable persons might draw different inferences from the undisputed facts). While the facts are not contested, these facts could logically support different conclusions regarding MTT’s intent to solicit business away from QTS for the same routes that MTT was covering for QTS as part of the agreement. For these reasons, we reverse the trial court’s grant of summary judgment in favor of MTT and remand the matter for further proceedings for a trier of fact to determine whether MTT’s conduct amounts to solicitation in violation of the agreement.

 

¶ 30 As a final matter, we address whether the nonsolicitation provision is unenforceable, as MTT contends. The trial court did not expressly address this issue. The question of whether a restrictive covenant is enforceable is a question of law, the determination of which is reviewed de novo on appeal. Reliable Fire Equipment Co. v. Arredondo, 2011 IL 111871, ¶ 12. The Illinois Supreme Court has stated that, while a contract in total and general restraint of trade is void as against public policy, a restrictive covenant that imposes a partial restraint on trade will be upheld if the restraint is reasonable and the agreement is supported by consideration. Id. ¶ 16.

 

¶ 31 Here, we conclude that QTS has a legitimate interest in protecting its customer relationship with USS pertaining to a very finite number of routes MTT had driven on behalf of QTS. As QTS argues, invalidating the nonsolicitation provision at issue would completely undermine the business of brokers like QTS. Contrary to MTT’s contentions, there is also sufficient evidence in the record to show that QTS had a significant, longstanding business relationship with USS pertaining to the routes at issue.2 Kevin Kuntz’s affidavit stated that, since 1993, QTS, acting as broker, has arranged for motor carriers to transport silica sand for USS.

 

¶ 32 Here, the nonsolicitation provision is narrowly tailored to protect but not exceed QTS’s legitimate business interest. The restriction is limited to a one-year period after the termination of the agreement and only prohibits MTT from soliciting work directly from QTS’s customers for the particular traffic that MTT had either hauled or became aware of as a result of QTS’s efforts. The agreement allows MTT to accept unsolicited business from USS. Given the very limited and reasonable restrictions of the provision, we conclude the nonsolicitation requirement set forth in the agreement does not impose an undue hardship on MTT and is not injurious to the public. For these reasons, we conclude that the nonsolicitation provision contained in the agreement is reasonable and enforceable.

 

 

¶ 33 CONCLUSION

¶ 34 The judgment of the circuit court of La Salle County is reversed and remanded.

 

¶ 35 Reversed and remanded.

 

Justices Lytton and O’Brien concurred in the judgment and opinion.

All Citations

— N.E.3d —-, 2017 IL App (3d) 160761, 2017 WL 4792422

 

 

Footnotes

1

Both sides rely on authority from various federal circuit courts to support their positions. We find it unnecessary to look to decisions from other jurisdictions because Illinois case law addresses what conduct constitutes solicitation. See Sadler v. Creekmur, 354 Ill. App. 3d 1029, 1037 (2004).

2

MTT also asserts that QTS does not have a “near-permanent relationship” with USS. However, whether QTS has a “near-permanent relationship” with USS is no longer outcome-determinative. See Reliable Fire Equipment Co., 2011 IL 111871, ¶ 43 (stating the previously accepted two-factor test, in which a near-permanent customer relationship and the employee’s acquisition of confidential information through his employment are determinative, is no longer valid). Instead, whether a legitimate business interest exists is based on the totality of the facts and circumstances of each case. Id.