United States District Court, W.D. Wisconsin
OPINION AND ORDER
WILLIAM M. CONLEY DISTRICT JUDGE.
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.
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
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
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)). 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.
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. 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
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.
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.
Overview of the Parties
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.
Ground Package System, Inc., is a Delaware Corporation, with
its principal place of business in
Pennsylvania. FedEx Ground is a leading provider of
small-package ground delivery services to its customers.
The Operating Agreement
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.
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.
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.)
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.)
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
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
(Id. at § 1.10.) Section 1.15, titled
“Discretion of Contractor to Determine Method and Means
of Meeting ...