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

United States District Court, W.D. Wisconsin

March 30, 2018




         Plaintiff Brooks Jay Transportation, Inc., alleges that defendant FedEx Ground Package System, Inc., transferred a client account within Brooks Jay's service area to another FedEx Ground transportation provider in breach of the parties' operating agreement. Before the court is defendant's motion for summary judgment. (Dkt. #36.) For the reasons that follow, the court will deny that motion, finding genuine issues of material fact as to whether: (1) the operating agreement was limited to Brooks Jay's Madison, Wisconsin, station; (2) FedEx Ground breached the agreement by transferring the servicing of a customer account to a different station; and (3) Brooks Jay suffered damages as a result of any breach.


         Before turning to the parties' proposed findings, the court must take up a number of preliminary objections. First, in proposing findings of facts and in response to defendant's proposed findings, plaintiff principally relies on an affidavit by its President and sole owner Bernard (“BJ”) McMahon. With respect to a number of proposed findings and responses, defendant invokes the “sham declaration rule, ” which provides that “parties cannot thwart the purposes of Rule 56 by creating ‘sham' issues of fact with affidavits that contradict their prior depositions.” Bank of Ill. v. Allied Signal Safety Restraint Sys., 75 F.3d 1162, 1168 (7th Cir. 1996). The Seventh Circuit has cautioned restraint in applying this rule, however, particularly when the witness testifies at an earlier deposition that he or she cannot remember a particular fact. See Id. at 1169; EEOC v. Aurora Health Care, Inc., 12-cv-984-JPS, 2015 WL 2344727, at *5 n.28 (E.D. Wis. May 14, 2015) (“[The witness's] general lack of memory at a specific time is not specifically contradicted by her later memory. Indeed, that is often the nature of memory.”). Having reviewed McMahon's deposition testimony, the court does not find contradictions that would warrant the court disregarding portions of his declaration. While defendant is free to cross-examine McMahon on the stand at trial regarding his inability to recall the specifics of certain discussions or provide a more complete description of the nature of plaintiff's claim, the court will not strike or otherwise disregard the challenged portions of McMahon's declaration.

         Second, defendant challenges other portions of McMahon's declaration, and a declaration by another contractor, Mark Verstraete, as impermissible parol evidence. As an initial matter, defendant's objection misconstrues what constitutes “parol evidence.” Under Pennsylvania law, parol evidence is defined as

Where the parties, without any fraud or mistake, have deliberately put their engagements in writing, the law declares the writing to be not only the best, but the only, evidence of their agreement. All preliminary negotiations, conversations and verbal agreements are merged in and superseded by the subsequent written contract ... and unless fraud, accident or mistake be averred, the writing constitutes the agreement between the parties, and its terms and agreements cannot be added to nor subtracted from by parol evidence.

DeArmitt v. N.Y. Life Ins. Co., 73 A.3d 578, 589 (Pa. 2013) (citing Yocca v. Pittsburgh Steelers Sports, Inc., 854 A.2d 425, 436 (Pa. 2004) (quoting Gianni v. R. Russel & Co., 126 A. 791, 792 (Pa. 1924)).[1] Here, plaintiff is not attempting to usher in evidence of the parties' “preliminary negotiations, conversations and verbal agreements”; rather, plaintiff is relying on evidence of the parties' course of conduct evidence or of the scope of the contract after its execution.

         Third, defendant is, of course, correct to point out that the court should not look at evidence extrinsic to the agreement if the agreement is unambiguous. See Duquesne Light Co. v. Westinghouse Elec. Corp., 66 F.3d 604, 613 (3d Cir. 1995) (“Only where the writing is ambiguous may the factfinder examine all the relevant extrinsic evidence to determine the parties' mutual intent.”) (examining Pennsylvania law). For the reasons explained below, however, the court finds a latent ambiguity in the parties' agreement. Therefore, McMahon and Verstraete's statements concerning the parties' implementation of the agreement may well be material to the parties' dispute.[2] See, e.g., Beta Spawn, Inc. v. FFE Transp. Servs., Inc., 250 F.3d 218, 227 (3d Cir. 2001) (“Where a contract provision is ambiguous, however, extrinsic evidence may be properly admitted in an attempt to resolve the ambiguity.” (quoting In re Herr's Estate, 161 A.2d 32, 34 (Pa. 1982)).

         Fourth, plaintiff asserts a number of hearsay objections to apparent FedEx Ground call logs because they have not been properly authenticated. On the docket, these exhibits are attached to defendant's proposed findings of facts. (Def.'s PFOFs, Exs. C, D, E (dkt. #38-2, 38-3, 38-4).) More importantly for purposes of summary judgment, a FedEx Ground paralegal identifies the exhibits in his declaration. (Kunkler Decl. (dkt. #39) ¶¶ 4-6.) Whatever plaintiff's further evidentiary objection may be at trial, this is certainly sufficient for the court's consideration of these documents as business records under Federal Rule of Evidence 803(6). See Norman v. AllianceOne Receivables Mgmt., Inc., 637 F. App'x 214, 216 (7th Cir. 2015) (“Business records, such as AllianceOne's call logs, are admissible when authenticated by a custodian.” (citing Rule 803(6))). Regardless, as described below, plaintiff disputes much of the content of these call logs, calling much of these records into question. Finally, again for reasons discussion below, these records do not materially aid defendant's motion.


         Consistent with the above, the court finds the following facts undisputed and material for the purposes of deciding the present motion when viewed in a light most favorable to plaintiff as the non-moving party, unless otherwise noted.

         A. Overview of the Parties

         Plaintiff Brooks Jay Transportation, Inc., is a Wisconsin Corporation with its principal place of business in Wisconsin. Brooks Jay provides ground transportation for the pick-up and delivery of packages in Wisconsin. BJ McMahon is the sole shareholder and President of Brooks Jay.

         FedEx Ground Package System, Inc., is a Delaware Corporation, with its principal place of business in Pennsylvania.[3] FedEx Ground is a leading provider of small-package ground delivery services to its customers.

         B. The Operating Agreement

         In 1999, Brooks Jay entered into a Pick-Up and Delivery Contractor Operating Agreement with FedEx Ground's predecessor, RPS, Inc. (PFOFs, Ex. B (dkt. #38-2).) At that time, Brook Jay's “station of domicile” was established as Madison, Wisconsin. The Agreement had a one-year term, subject to renewal. (Id. at § 11.1 (defining “initial term”).) Upon the expiration of this initial term, the Agreement has been renewed annually, for 18 straight years.

         The parties point out various portions of their Agreement in support of their respective positions on plaintiff's breach of contract claim. Section 5.1 of the Agreement defines the “Contractor Primary Service Area, ” and it provides, “Contractor shall be responsible for the daily pick-up and delivery of packages in the Contractor's Primary Service Area, as assigned to Contractor from time to time by RPS, and as shown in Addendum 4 to the Agreement.” (Id. at § 5.1.) Addendum 4, a 61-page document, describes Brooks Jay's Primary Service Area as at “Station 00537, ” and then lists the “delivery area, ” “delivery area exceptions, ” “pick up area” and “pick up area exceptions” by zip code, “core zone, ” city, street address and block ranges. (The pick up areas also designate begin and end times.) (Id. at pp. 106-68.) The bottom of each page of the Addendum identifies the Station Number as 00537. Madison's Station Number is 00537. This Addendum was executed in August 2015.

         In addition, Section 5.3, titled “Recognition of Contractor's Proprietary Interests Served, ” as amended by Addendum 5 in 2015, provides that

this Agreement contemplates the recognition both by the parties hereto and by other contractors in the RPS system of a proprietary interest by Contractor in the customer accounts in his/her Primary Service Area as that area is configured from time to time, and a consequent right of Contractor to receive payment in the event his/her Primary Service Area is reconfigured with the result that customers previously serviced by the Contractor are reassigned.

(Id. at § 5.3.)

         Other sections of the contract concern the use of subcontractors and assignments. Section 3.1 of Addendum 16 was executed August 28, 2015, and concerns subcontracting. That section states, “Contractor may subcontract its obligations to provide Services under the Agreement to any independent contractor under any Operating Agreement with FedEx Ground or to any ISP (Independent Service Provider operating under an ISP Agreement with FedEx Ground (‘Subcontractor').” (Id. at p.203.) Addendum 16 further provides that the “Contractor agrees that FedEx Ground will pay the Subcontractor for the work performed in accordance with any agreement FedEx Ground has with the Subcontractor.” (Id. at Addendum 16, § 13.2, p.204.) Section 18 concerns “Assignment” and states, in pertinent part, “Provided Contractor is in good standing hereunder, Contractor shall, with 30 days' prior written notice to RPS, have the right to assign his/her rights and obligations hereunder to a replacement contractor acceptable to RPS as being qualified to provide the services of Contractor under this Agreement . . . .” (Id. at § 18.)

         Finally, defendant directs the court to general provisions concerning the expected conduct of contractors and the method of meeting business objectives. Section 1.10 of the Agreement, titled “Agreed Standard of Service, ” provides in pertinent part:

RPS has represented to shippers and cosignees that, in arranging transportation of packages within the RPS system, it will provide a standard of service that is fully competitive with that offered by other national participants in the industry. Contractor acknowledges the benefits to his/her business of participation in the RPS national system, and agrees to conduct activities under the terms of the Agreement to achieve the results represented to shippers and consignees.

(Id. at § 1.10.) Section 1.15, titled “Discretion of Contractor to Determine Method and Means of Meeting ...

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