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Brooks Jay Transportation, Inc. v. Fedex Ground Package System, Inc.

United States District Court, W.D. Wisconsin

November 3, 2017

BROOKS JAY TRANSPORTATION, INC., Plaintiff,
v.
FEDEX GROUND PACKAGE SYSTEM, INC., Defendant.

          OPINION AND ORDER

          WILLIAM M. CONLEY, District Judge

         In this lawsuit sounding under the court's diversity jurisdiction, plaintiff Brooks Jay Transportation, Inc., (“Brooks”) alleges that defendant FedEx Ground Package System, Inc., breached their written operating agreement by transferring a client account within Brooks' service area to another ground transportation provider. In addition to asserting this seemingly straight-forward breach of contract claim, plaintiff pleads a related claim for breach of FedEx's duty of good faith and fair dealing implied in that contract, as well as various other claims based on an alleged oral contract and civil theft claim. Before the court is defendant's motion to dismiss these other claims under Federal Rule of Civil Procedure 12(b)(6). (Dkt. #14.) Because the court agrees with defendant FedEx that plaintiff Brooks has failed to state claims other than its straightforward breach of contract claim, the court will grant the motion to dismiss.

         ALLEGATIONS OF FACT[1]

         Brooks is in the business of providing ground transportation for the pick-up and delivery of packages and cargo in Wisconsin. In 2015, Brooks and defendant FedEx executed a Pick-Up and Delivery Contractor Operating Agreement (the “Operating Agreement”) in which Brooks agreed to retrieve and deliver packages to customers designated by FedEx. Brooks' deployments are coordinated out of its FedEx's station in Madison, Wisconsin, FedEx. In turn, addendum 4 to the Operating Agreement identifies Brooks' primary delivery service areas.[2]

         EcoLab is a FedEx customer. Generally, servicing EcoLab requires four daily tractor-trailer pickups by FedEx Monday through Friday, in addition to occasional pickups on Saturdays. EcoLab was previously located in South Beloit, Illinois, during which time, its needs were serviced out of FedEx's Rockford, Illinois, station. As a result, Brooks did not provide any pick-up or delivery services to EcoLab.

         In or around September and October 2015, however, Brooks' owner James McMahon had conversations with FedEx employees James Wambach, senior manager of the Madison station, and John Torok, linehaul supervisor, about EcoLab's possible move to Wisconsin and Brooks then taking over service of that account. Consistent with those conversations, EcoLab did in fact move its lab in October 2015, across the state line to Beloit, Wisconsin, which is within Brooks' service area. Moreover, from the time of the move until the end of November or early December 2015, Brooks provided all of FedEx pickup service needs at EcoLab's new location.

         In late November or early December, however, Wambach informed McMahon that it would be more profitable for FedEx Ground to take EcoLab pickups to FedEx's Rockford station. Plaintiff further alleges Wambach then gave McMahon just two days to try to sell the EcoLab service route to another FedEx contractor that takes pickups to the Rockford station. Shortly thereafter, FedEx gave the EcoLab pick-up service to another contractor, without compensating Brooks.

         OPINION

         Plaintiff asserts the following causes of action: (1) breach of the operating agreement, specifically, Section 5.1, which plaintiff represents provides that “Brooks Jay will be responsible for daily pick-up and delivery of packages in Brooks Jay's service area” (Am. Compl. (dkt. #13) ¶ 43); (2) breach of duty of good faith and fair dealing, which also concerns removal of a customer account in breach of the operating agreement; (3) breach of oral contract, based on Wambach and Torok's alleged representations that Brooks would service the EcoLab account from its new Wisconsin location; (4) breach of duty of good faith and fair dealing implied in that oral contract; (5) specific performance; and (6) civil theft under Wis.Stat. §§ 943.20 and 895.446, based on FedEx's alleged taking of a customer account in which plaintiff contends it has a proprietary interest.

         Other than count I -- the breach of the written contract claim -- defendant seeks dismissal of all claims on the basis that plaintiff has failed to state a claim under Federal Rule of Civil Procedure 12(b)(6). A motion to dismiss under Rule 12(b)(6) is designed to test the complaint's legal sufficiency. See Fed. R. Civ. P. 12(b)(6). Dismissal is only warranted if no recourse could be granted under any set of facts consistent with the allegations. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

         In response to defendant's motion to dismiss, plaintiff curiously cites cases discussing the notice pleading requirement that date back to the 1950s. (Pl.'s Opp'n (dkt. #15) 2-3 (citing, as an example, Temperato v. Rainbolt, 163 F.Supp. 744, 746 (E.D. Ill. 1957 (for the proposition that “no pleading is bad in substance which contains such information as reasonably informs the opposite party of the nature of the claim upon which it is called to defend”).) Even putting aside more recent cases requiring pleadings to be plausible like Iqbal and Twombly, plaintiff's discussion of the appropriate standard of review appears to concern itself with the pleading requirements under Rule 8(a), while defendant's motion challenges the legal basis for plaintiff's various claims under Rule 12(b)(6). The court will address each claim under that standard.

         I. Motion to Dismiss Breach of Good Faith and Fair Dealing Claims

         First, defendant seeks dismissal of plaintiff's two, breach of duty of good faith and fair dealing claims -- one sounding in the parties' Operating Agreement; the other in their alleged oral contract. Because of a forum selection provision in the Operating Agreement, the parties agree that Pennsylvania law governs. (Def.'s Mot. (dkt. #14) 3; Pl.'s Opp'n (dkt. #15) 2.) Citing cases in support, therefore, defendant seeks dismissal of these claims because “Pennsylvania law does not recognize a claim for breach of the implied covenant of good faith and fair dealing that is distinct from a claim for breach of contract.” (Def.'s Mot. (dkt. #14) 3.) On all of this, there appears no dispute between the parties. Indeed, plaintiff not only agrees that Pennsylvania law governs but concedes that it is “undisputed that Pennsylvania law . . . does not recognize a separate claim for the breach of the duty of good faith and fair dealing from a breach of contract.” (Pl.'s Opp'n (dkt. #14) 2-3.)

         Still, for reasons that are entirely unclear, plaintiff contends that “Brooks Jay could recover damages under a breach of contract theory based upon FedEx's breach of duty of good faith and fair dealing, ” and therefore concludes that the claim “should stand.” (Pl.'s Opp'n (dkt. #14) 3.) The latter clause is a non-sequitur. Since the parties agree with clear caselaw cited by defendant that no breach of duty of good faith and fair dealing claim stands independent of ...


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