Britt Green Trucking Inc., et al v. FEDEX National LTL, INC.
Filing
184
ORDER: Plaintiffs Britt Green Trucking, Inc. and Donna Isham, Administratrix of the Estate of Lanny D. Whitson's Motion for Partial Summary Judgment 153 is DENIED. Defendant FedEx National LTL, Inc.'s Second Motion for Summary Judgment 158 is DENIED. Signed by Judge Virginia M. Hernandez Covington on 7/14/2014. (KNC)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
BRITT GREEN TRUCKING, INC.
and Donna Isham, Administratrix
of the Estate of Lanny D.
Whitson,
Plaintiffs,
v.
Case No. 8:09-cv-445-T-33TBM
FEDEX NATIONAL, LTL, INC.,
Defendant.
_______________________________/
ORDER
Now before the Court is Plaintiffs Britt Green Trucking,
Inc. and Donna Isham, Administratrix of the Estate of Lanny
D. Whitson’s1 Motion for Partial Summary Judgment (Doc. #
153), filed on November 12, 2013, and Defendant FedEx National
LTL, Inc.’s Second Motion for Summary Judgment (Doc. # 158),
filed on November 15, 2013. Both Motions are ripe for this
Court’s review. Upon due consideration and for the reasons
that follow, both Motions are denied and FedEx’s request for
oral argument on its Motion is further denied.
I.
1
Factual Background
On November 18, 2013, Plaintiffs filed a suggestion of
death as to Lanny D. Whitson. (Doc. # 159). Upon the filing
of an unopposed motion for substitution of party (Doc. # 160),
this Court substituted Donna Isham, Administratrix of the
Estate of Lanny D. Whitson for Lanny D. Whitson (Doc. # 161).
In August of 2006, FedEx took control of Watkins Motor
Lines,
an
interstate
motor
carrier
based
in
Lakeland,
Florida, which employed individuals and trucking companies as
independent contractors (“ICs”). (Doc. # 153 at 3-4; Doc. #
158 at 5). Watkins used both employees and ICs to provide
local pickup and delivery service at service centers in
several states across the country and to provide line haul
service to move freight from one service center to another
across the country. (Doc. # 158 at 5).
FedEx’s acquisition of Watkins closed on September 3,
2006. (Id.). “Immediately after the Watkins acquisition,”
FedEx entered into Equipment Lease and Operating Contracts
(“ELOCs”)
with
ICs,
including
Plaintiffs,
in
various
locations throughout the United States. (Doc. # 153 at 4;
Doc. # 153-1; Doc. # 153-2; Doc. # 158 at 5). The ELOCs were
drafted by FedEx. (Doc. # 153 at 5).
The ELOCs described both the manner in which FedEx would
lease transportation equipment from ICs and the manner in
which ICs would provide transportation services. (See Doc. #
153-1; Doc. # 153-2). The ELOCs provided as follows:
[FedEx] desires to lease, on an as-needed basis,
transportation equipment it does not own from [IC]
and desires that [IC] provide transportation
2
services, as needed, for the transportation of
certain commodities provided by [FedEx] or its
customers; and [IC] desires to contract with
[FedEx] to transport such commodities.
(Id. at 1).
The ELOCs further stated:
[FedEx] agrees to make commodities available to
[IC] for shipment, from time to time, although this
shall not be construed as an agreement by [FedEx]
to furnish any specific number or types of loads or
units, pounds, gallons, or any other measurements
of weight or volume, quantity, kind or amount of
freight, for transport by [IC] at any particular
time or place.
(Id. at ¶ 2).
The ELOCs ran until July 31, 2007, and were subject to
automatic annual renewal thereafter unless terminated by
either party. (Doc. # 153 at 5; Doc. # 153-1 at ¶ 15(a); Doc.
#
153-2
at
¶
15(a);
Doc.
#
153-3
at
105-06).
As
to
termination, the ELOCs provided:
Either Party may terminate this Operating Contract
(1) at any time, without cause, by giving written
notice [to] the other Party at least thirty (30)
days prior to the effective termination date or (2)
immediately and at any time, by giving written
notice to the other Party in the event of a material
breach of any provision of this Operating Contract
by such other Party.
(Doc. # 153-1 at ¶ 15(a); Doc. # 153-2 at ¶ 15(a)). Therefore,
“According to the ELOCs, if a written notice was not sent at
3
least thirty days prior to termination, the contract would
continue in full effect.” (Doc. # 153 at 7; Doc. # 153-3 at
11). FedEx concedes that the 2006 ELOCs contained a thirtyday written notice requirement. (Doc. # 158 at 6).
The ELOCs also leased equipment that was described in
one or more Exhibit A’s to the ELOCs, titled “Receipt of
Equipment.”
(Id.
at
7).
The
Receipt
provided
written
acknowledgement of the date when FedEx took receipt of the
equipment, and the bottom half of the Receipt served as the
written
notice
equipment.
terminating
(Id.).
the
Therefore,
lease
“[o]nce
of
an
that
[IC]
piece
signed
of
the
bottom half of the Receipt acknowledging termination and
receipt of Equipment, and the [IC] then had no other Equipment
leased to FedEx, the ELOC was considered cancelled.” (Id. at
7-8).
According to Plaintiffs, in 2007, FedEx “suddenly and
unilaterally” terminated Plaintiffs’ ELOCs by immediately
cutting off all hauling work to ICs. (Doc. # 153 at 6).
Plaintiffs submit that “[t]his occurred without any written
notice to the Plaintiffs, let alone the thirty days’ written
notice required under the ELOCs, and well before the July 31,
2007[,] expiration date.” (Id.).
4
FedEx, on the other hand, contends that after the Watkins
acquisition “freight levels began dropping.” (Doc. # 158 at
8). “As a result, the amount of excess line haul freight
needed
to
Therefore,
be
moved
“in
by
[ICs]
February
began
2007,
Cory
diminishing.”
Thompson,
(Id.).
Line
Haul
Manager for the Orlando service center, informed the Orlando
[ICs] that it appeared FedEx may not have loads to offer the
Orlando [ICs] on a regular basis; however, FedEx was not
terminating the ELOCs.” (Id.). Thereafter, in February of
2007, Whitson cancelled his ELOC with FedEx by signing the
Receipt acknowledging receipt and termination of each piece
of equipment he had previously leased to FedEx. (Doc. # 158
at
8;
Doc.
#
137-4
at
¶¶
19-21).
Furthermore,
after
discussions with Cory Thompson, Green found “alternative
work” and turned in his FedEx termination paperwork. (Doc. #
158 at 10). The parties disagree, however, as to whether FedEx
had already breached the ELOCs by its failure to provide the
requisite
thirty
days’
written
notice
of
termination
to
Plaintiffs prior to Plaintiffs submitting their termination
paperwork.
II.
Procedural Background
This action arises from FedEx’s alleged termination of
Plaintiffs’ ELOCs without the required written notice of
5
termination. On November 19, 2008, Plaintiffs filed their
class action complaint against FedEx (Doc. # 1), and filed an
amended class action complaint on March 15, 2010, setting
forth the following counts: (1) Breach of Contract; (2) Breach
of the Duty of Good Faith and Fair Dealing; and (3) Violation
of the Florida Deceptive and Unfair Trade Practices Act, Fla.
Stat. § 501.201, et seq. (Doc. # 48).
Plaintiffs filed a motion for class certification on
March 12, 2010. (Doc. # 46). On March 29, 2011, this Court
denied Plaintiffs’ motion for class certification finding
that Plaintiffs failed to meet the typicality requirement of
Federal Rule of Civil Procedure 23(a)(3) and the predominance
requirement of 23(b)(3). (Doc. # 60). Thereafter, the Court
granted FedEx’s motion for summary judgment, and judgment was
entered in favor of FedEx. (Doc. ## 98, 99).
On February 28, 2013, the Eleventh Circuit reversed this
Court’s Orders granting summary judgment in favor of FedEx
and denying class certification and remanded the case for
further review. (Doc. # 116).
Thereafter, Plaintiffs filed a second motion for class
certification (Doc. # 134) on July 15, 2013, requesting
certification of the following class:
6
All persons and entities throughout the United
States operating as independent contractors (ICs)
with Equipment Lease and Operating Contracts
(ELOCs) who contracted to carry freight for FedEx
National LTL, Inc. (FedEx) and whose ELOCs were
terminated by FedEx without 30 days' written
notice.
(Id. at 2).
Plaintiffs
filed
their
Motion
for
Partial
Summary
Judgment on November 12, 2013. (Doc. # 153). Thereafter, FedEx
filed its Second Motion for Summary Judgment on November 15,
2013. (Doc. # 158). Also on November 15, 2013, this Court
denied Plaintiffs’ second motion for class certification.
(Doc. # 155). Subsequently, on December 3, 2013, Plaintiffs
filed a motion for a stay pending the outcome of Plaintiffs’
Fed. R. Civ. P. 23(f) appeal to the United States of Appeals
for the Eleventh Circuit (Doc. # 164), which this Court
granted on December 23, 2013 (Doc. # 169).
On April 1, 2014, the Eleventh Circuit issued an Order
denying Plaintiffs’ petition for leave to appeal pursuant to
Fed. R. Civ. P. 23(f). (Doc. # 170). In light of the Eleventh
Circuit’s Order, this Court lifted the stay of this action on
April 2, 2014, and returned the case to active status. (Doc.
# 171).
At this juncture, the Court determines that it has
jurisdiction to rule on the pending Motions (Doc. ## 153,
7
158), which are ripe for this Court’s review. The Court has
reviewed the Motions, the responses thereto, and the timely
filed replies, and is otherwise fully advised in the premises.
III. Legal Standard
Summary judgment is appropriate “if the movant shows
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). A factual dispute alone is not enough to
defeat a properly pled motion for summary judgment; only the
existence of a genuine issue of material fact will preclude
a grant of summary judgment. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 247-48 (1986).
An issue is genuine if the evidence is such that a
reasonable jury could return a verdict for the nonmoving
party. Mize v. Jefferson City Bd. of Educ., 93 F.3d 739, 742
(11th Cir. 1996) (citing Hairston v. Gainesville Sun Publ’g
Co., 9 F.3d 913, 918 (11th Cir. 1993)). A fact is material if
it may affect the outcome of the suit under the governing
law. Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th Cir.
1997). The moving party bears the initial burden of showing
the court, by reference to materials on file, that there are
no genuine issues of material fact that should be decided at
trial. Hickson Corp. v. N. Crossarm Co., Inc., 357 F.3d 1256,
8
1260 (11th Cir. 2004) (citing Celotex Corp. v. Catrett, 477
U.S. 317, 323 (1986)). “When a moving party has discharged
its burden, the non-moving party must then ‘go beyond the
pleadings,’ and by its own affidavits, or by ‘depositions,
answers
to
interrogatories,
and
admissions
on
file,’
designate specific facts showing that there is a genuine issue
for trial.” Jeffery v. Sarasota White Sox, Inc., 64 F.3d 590,
593-94 (11th Cir. 1995) (citing Celotex, 477 U.S. at 324).
If there is a conflict between the parties’ allegations
or evidence, the non-moving party’s evidence is presumed to
be true and all reasonable inferences must be drawn in the
non-moving party’s favor. Shotz v. City of Plantation, Fla.,
344 F.3d 1161, 1164 (11th Cir. 2003). If a reasonable fact
finder evaluating the evidence could draw more than one
inference from the facts, and if that inference introduces a
genuine issue of material fact, the court should not grant
summary judgment. Samples ex rel. Samples v. City of Atlanta,
846 F.2d 1328, 1330 (11th Cir. 1988) (citing Augusta Iron &
Steel Works, Inc. v. Emp’rs Ins. of Wausau, 835 F.2d 855, 856
(11th Cir. 1988)).
consists
of
conclusional
However,
nothing
if
“more
allegations,”
the
than
summary
non-movant’s
a
repetition
judgment
is
response
of
not
his
only
proper, but required. Morris v. Ross, 663 F.2d 1032, 1034
9
(11th Cir. 1981), cert. denied, 456 U.S. 1010 (1982).
IV.
Motions for Summary Judgment
Plaintiffs move for partial summary judgment on the
issue of liability as to Count I of their amended complaint.
Specifically, Plaintiffs posit that the undisputed facts
establish
that
FedEx’s
failure
to
provide
the
requisite
thirty days’ notice prior to terminating the ELOCs equates to
a material breach of the ELOCs. FedEx’s Motion requests this
Court enter summary judgment in its favor on all Plaintiffs’
Counts. This Court will address each Motion in turn.
A. Plaintiffs’ Motion for Partial Summary Judgment
Plaintiffs’ Motion for Partial Summary Judgment moves
this Court to find FedEx liable on Plaintiffs’ breach of
contract claim (Count I). Under Florida law, a cause of action
for breach of contract has three elements: “(1) a valid
contract, (2) a material breach, and (3) damages.” Havens v.
Coast
Fla.,
P.A.,
117
So.
3d
1179,
1181
(Fla.
2d
DCA
2013)(citing Rollins, Inc. v. Butland, 951 So. 2d 860, 876
(Fla. 2d DCA 2006)).
Plaintiffs seek a finding that FedEx's “unilateral and
simultaneous” termination of the ELOCs – by withdrawing all
hauling work to the ICs - without the required written notice
constituted
a
material
breach
10
thereof.
According
to
Plaintiffs, a breach of the ELOCs “undoubtedly occurred”
because FedEx admitted that it failed to send Plaintiffs
thirty days’ written notice of termination of the ELOCs when
it withdrew all hauling work in 2007. (Doc. # 153 at 8-9).
Plaintiffs posit that:
When FedEx failed to send written notice of
termination prior to cutting off work, the
Plaintiffs were immediately and completely deprived
of the benefit of hauling for FedEx and were forced
to find substitute work with no advance notice.
FedEx’s actions were a complete termination and
thus, a material breach.
(Id. at 10).
However, FedEx contends that no breach occurred despite
the lack of written notices because Plaintiffs voluntarily
terminated their own respective ELOCs in March of 2007 – by
executing the Receipt of Equipment attached to their ELOCs –
and sought alternative work. (Doc. # 167 at 3). Thus, FedEx
claims
that
this
action
constitutes
a
termination
by
Plaintiffs, not FedEx, and a written waiver of the thirtyday written notice requirement. (Doc. # 158 at 13). Plaintiffs
contest FedEx’s position and argue that they could not have
terminated the ELOCs themselves in March of 2007, as FedEx
already terminated the ELOCs weeks earlier in February of
11
2007, by withdrawing all hauling work and failing to send the
required written notice. (Doc. # 181 at 3).
Furthermore, FedEx argues that even if Plaintiffs could
establish a breach, they would be unable to show that FedEx’s
failure to give thirty days’ written notice was a material
breach. (Doc. # 167 at 5). This is because FedEx suggests
that the ELOCs did not obligate FedEx to offer any work to
Plaintiffs
during
the
thirty-day
notice
period,
and
therefore, Plaintiffs could not expect such a benefit. (Doc.
# 167 at 6; see Doc. # 153-1; Doc. # 153-2); Covelli Family,
LP v. ABG5, L.L.C., 977 So. 2d 749, 752 (Fla. 4th DCA 2008)(“A
party’s failure to perform some minor part of his contractual
duty cannot be classified as a material or vital breach.”).
Thus, FedEx contends that the alleged failure to provide the
requisite notice “was not material but, at best, a merely
technical breach, and cannot support a claim for breach of
contract.” (Doc. # 167 at 6).
Contract interpretation is generally a question of law
for the court, rather than a question of fact. Langford v.
Paravant, Inc., 912 So. 2d 359, 360 (Fla. 5th DCA 2005).
“Unless ambiguous, contract language must be given its plain
meaning.” Id. (citing Beans v. Chohonis, 740 So. 2d 65, 67
(Fla.
3d
DCA
1999)).
“However,
12
when
the
content
of
an
agreement is ambiguous and the parties present different
interpretations, the issue of proper interpretation becomes
one of fact, precluding summary judgment.” Langford, 912 So.
2d at 361.
The specific contractual provisions at issue state as
follows:
[FedEx] agrees to make commodities available to
[IC] for shipment, from time to time, although this
shall not be construed as an agreement by [FedEx]
to furnish any specific number or types of loads or
units, pounds, gallons, or any other measurements
of weight or volume, quantity, kind or amount of
freight, for transport by [IC] at any particular
time or place.
* * *
Either Party may terminate this Operating Contract
(1) at any time, without cause, by giving written
notice [to] the other Party at least thirty (30)
days prior to the effective termination date or (2)
immediately and at any time, by giving written
notice to the other Party in the event of a material
breach of any provision of this Operating Contract
by such other Party.
(See Doc. # 153-1; Doc. # 153-2). The parties dispute whether
these provisions require FedEx to provide Plaintiffs written
notice prior to terminating the ELOCs. FedEx contends that
the ELCOS allow FedEx to withdraw all hauling work without
terminating
the
ELOCs,
and
therefore,
13
under
the
present
circumstances, FedEx was not required to provide thirty days’
written notice of termination. Conversely, Plaintiffs submit
that FedEx was obligated to give thirty days’ written notice
before withdrawing all hauling work, which was effectively a
termination of the ELOCs.
After considering the parties’ respective positions, the
Court finds that the meaning and interplay of the above
referenced provisions with the remaining provisions of the
ELOCs is uncertain and fairly susceptible to more than one
meaning. Therefore, this Court finds that an ambiguity exists
in the relevant ELOCs, and as a result, this Court declines
to grant summary judgment as to the issue of liability as to
Count I as requested by Plaintiffs.
Furthermore,
the
Court
notes
that
to
constitute
a
material breach, a party's nonperformance must "go to the
essence of the contract." Covelli, 977 So. 2d at 752 (citing
Beefy Trail, Inc. v. Beefy King Int'l, Inc., 267 So. 2d 853,
857 (Fla. 4th DCA 1972)). Failure to perform some minor part
of a contractual duty cannot be classified as a vital or
material breach. Id. A material breach occurs only when an
injured party has sustained a substantial injury due to the
breach. Malladi v. Brown, 987 F. Supp. 893 (M.D. Ala. 1997).
Whether or not an alleged breach is material is a question of
14
fact to be resolved by the trier of fact. Id.; Covelli, 977
So. 2d at 752 (“The issue of whether an alleged breach is
vital or material is reviewed as a question of fact.”); Moore
v. Chodorow, 925 So. 2d 457, 461 (Fla. 4th DCA 2006)(“Whether
a party's failure to commit certain actions constitutes a
material breach of an agreement is reviewed as a question of
fact.”).
Accordingly, the Court finds that a genuine issue of
fact remains as to whether FedEx breached the ELOCs when it
failed
to
provide
the
thirty
days’
written
notice
of
termination, and whether that breach – if at all – was
material.
Thus,
Plaintiffs’
Motion
for
Partial
Summary
Judgment is denied.
B. FedEx’s Second Motion for Summary Judgment
FedEx moves this Court to grant summary judgment in its
favor as to all of Plaintiffs’ claims. The Court will address
the appropriateness of summary judgment as to each Count of
Plaintiffs’ amended complaint in turn.
1. Count I: Breach of Contract
As previously stated, under Florida law, in order for a
plaintiff to satisfy a breach of contract claim, the plaintiff
must establish: (1) a valid contract, (2) a material breach,
15
and (3) damages. Havens, 117 So. 3d at 1181.
FedEx does not
dispute that the ELOCs in question are valid contracts. (See
Doc. # 116)(Eleventh Circuit finding that the ELOCs are
enforceable contracts).
Furthermore, this Court has previously determined that
the issue of whether FedEx’s failure to provide the requisite
thirty
days’
notice
to
Plaintiffs
prior
to
termination
constituted a material breach of the ELOCs is a question of
fact for the jury. To the extent FedEx argues that “even if
the
alleged
breach
was
material,
the
undisputed
facts
demonstrate that Plaintiffs waived the thirty day notice
provision by executing the [R]eceipts” (Doc. # 178 at 5),
this Court finds that Plaintiffs have provided sufficient
conflicting evidence establishing that a genuine issue of
material fact exists to rebut the affirmative defense of
waiver. See Knight Energy Servs., Inc. v. Amoco Oil Co., 660
So.
2d
786,
plaintiff
affirmative
788
“must
(Fla.
either
defenses
or
4th
DCA
1995)(explaining
factually
establish
refute
that
they
the
are
that
a
alleged
legally
insufficient to defeat summary judgment.”).
Specifically, Plaintiffs submit that they could not have
“waived” the thirty-day notice requirement, as submitted by
FedEx, as FedEx’s alleged breach of the ELOCs – failure to
16
provide thirty days’ written notice – already occurred when
the Receipts of Equipment were executed by Plaintiffs. (Doc.
# 181 at 3). Within their Reply, Plaintiffs explain:
Plaintiffs’ obligations under the ELOCs were
discharged as soon as FedEx withdrew work without
notice in February 2007. Once FedEx terminated by
withdrawing work and breached by failing to give
proper notice, Plaintiffs were “entitled to treat
[their] obligations under the existing contracts as
discharged and sue for damages occasioned by the
breach.”
(Id. at 6). The Court accordingly declines to grant summary
judgment in favor of FedEx based on the affirmative defense
of waiver.
However, FedEx posits that Plaintiffs are unable to
establish the element of damages necessary to support their
breach of contract claim. (Doc. # 158 at 16). Namely, FedEx
argues that (1) Plaintiffs cannot establish damages for early
termination because FedEx was not required to offer any
minimum amount of work to Plaintiffs; (2) Plaintiffs cannot
seek damages beyond the thirty-day notice period; and (3)
Plaintiffs cannot seek consequential damages, such as lost
profits, without carrying their burden of proof as to both
the lost revenue and the avoided costs and expenses. (Id. at
16-17).
17
A. Damages for Alleged Early Termination
FedEx
argues
that
Plaintiffs
would
be
unable
to
demonstrate that they suffered the requisite damages arising
from the alleged breach. (Id. at 16). Specifically, FedEx
explains that pursuant to the ELOCs it was not required to
provide any opportunities for work during the alleged early
termination period, and as a result, Plaintiffs did not suffer
any losses from the shorter termination periods they have
alleged. (Id.; see Doc. # 153-1; Doc. # 153-2).
Plaintiffs argue, however, that they were damaged by
FedEx’s failure to provide thirty days’ written notice in
advance of terminating their ELOCs. (Doc. # 166 at 12). In
support of this contention, Plaintiffs provide that they have
expert reports, authored by Dr. Albert Lee and Marcie Bour,
enumerating Plaintiffs’ damages on both a class wide and
individual basis. (Id. at 13; Doc. # 165-5). Therefore,
Plaintiffs
suggest
that
they
have
produced
sufficient
evidence to create a jury question regarding damages and,
accordingly, FedEx’s Motion must be denied.
Furthermore, Plaintiffs suggest that FedEx’s argument is
just an “end run around the Eleventh Circuit’s opinion.” (Doc.
# 166 at 13). Namely, “[FedEx’s] arguments that the ELOCs did
18
not obligate FedEx to do anything and that FedEx could
withdraw hauling work without ‘terminating’ the ELOCs are
merely another way of saying the ELOCs were illusory and
unenforceable,” which was rejected by the Eleventh Circuit.
(Id.).
Florida law establishes relatively liberal standards for
proving damages. Ritchie v. Harrison, No. CIV.A.3:03CV14-1,
2006 WL 826761, at *3 (M.D. Ga. Mar. 28, 2006). When the value
of an item of damages is uncertain or difficult to prove,
that
uncertainty
alone
does
not
preclude
recovery.
Id.
(citing G.M. Brod & Co., Inc. v. U.S. Home Corp., 759 F.2d
1526, 1538 (11th Cir. 1985)(“‘[U]ncertainty cannot end the
efforts of the federal courts to redress . . . [harm].”’)
(quoting Lehrman v. Gulf Oil Corp., 464 F.2d 26, 45 (5th Cir.
1972))). Instead, because “[t]he wrongdoer must bear the risk
of the uncertainty,” it is enough if “the evidence show[s]
the extent of the damages as a matter of just and reasonable
inference.” G.M. Brod & Co., 759 F.2d at 1538-39. The proof
offered may be indirect and may be based on estimates and
assumptions, as long as those assumptions rest on adequate
data. Id. at 1539. Thus, under Florida law, a plaintiff's
proof of damages will be sufficient as long as he provides
some evidence by reference to which the amount of damages may
19
be satisfactorily ascertained. Harrison, 2006 WL 826761, at
*3.
Upon consideration, this Court finds that Plaintiffs
have provided sufficient evidence on the issue of actual
damages through the use of expert reports and testimony to
survive a summary judgment motion. As there are disputed
issues of material fact as to the amount of damages, if any,
to which Plaintiffs are entitled, summary judgment is denied
on this issue.
B. Damages Beyond the Thirty-Day Notice Period
According to FedEx, Plaintiffs seek damages from three
separate time periods: (1) the thirty-day written notice
period; (2) the remainder of the contract term; and (3) the
remainder of the contract term, plus one year. (Doc. # 158 at
16-17). However, FedEx argues that Plaintiffs may not seek
damages beyond the thirty-day notice period. (Id. at 17).
Conversely, Plaintiffs suggest that “For contracts that
contain automatic renewal clauses, like the ELOCs, Florida
law states that the failure to send the required written
notice
of
termination
can
trigger
the
automatic
renewal
clause, meaning that the contract remains in full force and
effect.” (Doc. # 166 at 16)(citing Flagship Resort Dev., Corp.
20
v. Interval Int’l, Inc., 28 So. 3d 915, 923 (Fla. 3d DCA 2010)
(finding the plaintiff failed to provide defendant notice of
its intent not to renew, and therefore, the contract did not
expire by its terms); Kimberly Scheider Hepler v. Atlas Mut.
Ins. Co., 501 So. 2d 681, 688-89 (finding that the contract
did
not
expire
on
its
terms
and
the
automatic
renewal
provision was triggered when party failed to send written
notice of non-renewal)). Therefore, according to Plaintiffs,
as FedEx concedes there was an automatic renewal provision,
“the ELOCs were enforceable against FedEx beyond the thirty
day notice period because FedEx failed to send written notice
of termination.” (Doc. # 166 at 17).
The goal of an award of damages in a breach of contract
action is “to restore the injured party to the condition which
he would have been in had the contract been performed.”
Campbell v. Rawls, 381 So. 2d 744, 746 (Fla. 1st DCA 1980).
A party can neither receive more than it bargained for nor
should it be put in a better position than it would have been
in had the contract been properly performed. Id. Therefore,
according to FedEx, parties who agree that a contract may be
terminated for any reason, or no reason, upon the giving of
the
specified
notice
cannot
reasonably
anticipate
that
damages would exceed that notice period. (Doc. # 158 at
21
17)(citing Mousa v. Lauda Air Luftfahrt, A.G., 258 F. Supp.
2d
1329,
1346
(S.D.
Fla.
2003)(“damages
recoverable
for
breach of an employment contract terminable at will upon the
giving of notice of a specific length of time are limited to
the salary that would have been earned during the notice
period.”).
Here, it is undisputed that the ELOCs contained a thirtyday notice period. However, FedEx admits that the ELOCs
contained an automatic renewal provision, and that absent
written
notice
of
termination,
the
ELOCs
automatically
renewed. Therefore, this Court finds that a question remains
as to whether the automatic renewal provision was triggered
under the present circumstances, and as a result, whether
Plaintiffs could obtain damages outside the notice period.
Thus, this Court declines to grant summary judgment on this
issue.
C. Consequential Damages
According to FedEx, “the law requires Plaintiffs to bear
the
burden
of
establishing
their
damages
figure,
which
includes the burden of proving their avoided costs, not just
their lost revenue.” (Doc. # 158 at 18)(citing Lipscher v.
LRP Publ’ns, Inc., 266 F.3d 1305, 1317 (11th Cir. 2001)(“Under
22
Florida law, in order to recover lost future profits, a party
must
prove
income
and
expenses
of
the
business
for
a
reasonable time prior to the alleged breach. If the party
presents evidence only of gross receipts or fails to prove
expenses with some specificity, an award of damages cannot
stand.”)(internal quotation omitted)). FedEx argues that any
lost profits analysis provided by Plaintiffs is speculative
because FedEx was entitled to terminate the ELOCs. (Doc. #
158 at 18)(citing Paul Gottlieb & Co., Inc. v. Alps S. Corp.,
985 So. 2d 1, 9 (Fla. 2d DCA 2007)(holding that the award of
lost profits was error because amount was based on mere
speculation as it did not account for costs associated with
production)).
Plaintiffs posit, however, that they have sustained
their burden as their damages calculations stem from the costs
reflected in the settlement sheets, and to the extent that
costs for fuel, tolls, insurance, and taxes were shown in the
settlement sheets, they were accounted for by Plaintiffs’
economic expert Dr. Albert Lee. (Doc. # 165-5; Doc. # 166 at
18). Further, Plaintiffs explain that to the extent expenses
were not reflected in the settlement sheets, “[FedEx] fails
to point to any evidence in the record that any [ICs] actually
stopped paying for their insurance, taxes, or driver salaries
23
after they were terminated by FedEx.” (Doc. # 166 at 18). In
fact, Plaintiffs contend that the opposite occurred – Green
testified that he continued to pay driver salaries, payroll
taxes, and insurance until he was able to secure replacement
work. (Id.; Doc. # 153-5 at 34-35). Therefore, Plaintiffs
suggest
that
they
have
sustained
their
burden,
and
the
question as to the amount of damages is a question for the
jury. (Doc. # 166 at 18).
Upon consideration, the Court finds that Plaintiffs have
provided sufficient evidence on the issue of damages through
expert reports and testimony of Marcie Bour and Dr. Albert
Lee to survive a summary judgment motion. To what extent, if
at all, Plaintiffs are to be awarded consequential damages is
a
question
for
the
jury
to
decide,
based
on
their
determination of the weight to give the testimony of each
expert. Thus, FedEx’s Motion as to the issue of damages is
denied.
Consequently, for the reasons stated above, FedEx’s
Motion on Count I is denied.
2. Count II: Breach of Covenant of Good Faith & Fair
Dealing
FedEx suggests that Count II fails as a matter of law
because Plaintiffs admit that they voluntarily terminated
24
their ELOCs and FedEx was not obligated to provide any amount
of work to Plaintiffs during the notice period to which the
covenant could attach. (Doc. # 158 at 22)(citing Johnson
Enters. of Jacksonville, Inc. v. FPL Grp., Inc., 162 F.3d
1290, 1314 (11th Cir. 1998)(reasoning that the covenant of
good faith and fair dealing attaches only to the performance
of a specific contractual obligation; and therefore, where
there is no duty, there is no duty to perform in good faith);
Snow v. Roden, 896 So. 2d 787, 792 (Fla. 2nd DCA 2005)(holding
that the claim for breach of covenant of good faith and fair
dealing was properly dismissed where the claim failed to link
the implied covenant to a breach of an express provision of
the contract, and therefore, failed to state a cause of
action)).
Furthermore, FedEx argues that even if the ELOCs did
create an enforceable obligation to which the covenant could
attach, Plaintiffs’ claim would still fail as Plaintiffs
cannot demonstrate that FedEx breached the covenant. (Doc. #
158 at 23). Specifically, FedEx submits that “[I]f FedEx was
obligated to provide [work to the ICs in FedEx’s] discretion,
then that discretion as to the amount of work would have to
be exercised in good faith to avoid thwarting the intentions
of the parties.” (Id.). According to FedEx, “[e]ven under
25
that scenario, to prevail, Plaintiffs would be required to
prove that no reasonable party in FedEx’s position would have
made
the
same
discretionary
decision.”
(Id.).
However,
“Plaintiffs’ own testimony shows that any such discretionary
decision would have been reasonable, as a result of a slowdown
in business of FedEx.” (Id. at 23-24).
Conversely, Plaintiffs argue that FedEx:
Recruit[ed] the Plaintiffs . . . into [ELOCs] which
were intended to last until at least July 31, 2007,
which were automatically renewable, and which
called for mandatory, written [thirty] days’ notice
of termination, and then unilaterally disregard[ed]
that provision entirely, without providing any
written notice and without providing anywhere near
the 30 days’ notice under the [ELOCs].
[FedEx’s] [f]ailure to abide by the terms of the
[ELOCs] by terminating the business relations
between itself and the Plaintiffs . . . , by
informing them that they could continue to incur
the charges and expenses attendant to the [ELOCs]
but would not be provided with any further work
under the [ELOCs] constitutes a clear breach of the
duty of good faith and fair dealing, and renders
FedEx liable to Plaintiffs. . . .
(Doc. # 48 at ¶¶ 32-33).
Under Florida law, the implied covenant of good faith
and fair dealing is a part of every contract. Cnty. of Brevard
v.
Miorelli
Eng'g,
Inc.,
703
So.
2d
1049,
1050
(Fla.
1997)(“[E]very contract includes an implied covenant that the
26
parties will perform in good faith.”). “[G]ood faith means
honesty, in fact, in the conduct of contractual relations.”
Harrison Land Dev., Inc. v. R & H Holding Co., Inc., 518 So.
2d 353, 355 (Fla. 4th DCA 1988). However, where not related
to the performance of an express term of the contract, such
an action cannot be maintained. Hosp. Corp. of Am. v. Fla.
Med. Ctr., Inc., 710 So. 2d 573 (Fla. 4th DCA 1998)(finding
that “a duty of good faith must relate to the performance of
an express term of the contract.”).
Here, Plaintiffs have presented an express contractual
provision that FedEx allegedly failed to comply with in good
faith:
Either Party may terminate this Operating Contract
(1) at any time, without cause, by giving written
notice [to] the other Party at least thirty (30)
days prior to the effective termination date or (2)
immediately and at any time, by giving written
notice to the other Party in the event of a material
breach of any provision of this Operating Contract
by such other Party.
(Doc. # 153-1 at ¶ 15(a); Doc. # 153-2 at ¶ 15(a)).
FedEx concedes that it failed to provide thirty days’
notice to Plaintiffs; however, FedEx argues that it was not
required to do so as Plaintiffs voluntarily terminated their
own ELOCS, which voided the thirty-day notice requirement.
27
Conversely,
written
Plaintiffs
notice
prior
contend
to
that
the
termination,
ELOCs
and
required
that
FedEx
effectively terminated the ELOCs by withdrawing all hauling
work. Therefore, what remains is a determination of whether
FedEx was required to provide thirty days’ written notice to
Plaintiffs, and if so, whether FedEx acted in good faith in
its performance of the contractual provision. This is a
determination for the jury, and as a result, FedEx’s Motion
as to Count II is denied.
3. Count III: FDUTPA
A claim pursuant to FDUTPA has three elements: (1) a
deceptive act or unfair practice; (2) causation; and (3)
actual damages. Rollins, 951 So. 2d at 869. A deceptive
practice is one that is likely to mislead consumers, and an
unfair
practice
is
one
that
“offends
established
public
policy” or is “immoral, unethical, oppressive, unscrupulous
or
substantially
injurious
to
consumers.”
Id.(internal
citation and quotations omitted).
FedEx argues that Plaintiffs’ FDUTPA claim must fail as
Plaintiffs cannot show actual damages, a required element of
a FDUTPA claim. (Doc. # 158 at 19). Specifically, FedEx states
that “Even if Plaintiffs could establish lost profits . . .
28
then
Plaintiffs’
FDUTPA
Plaintiffs
cannot
establish
‘actual’
use
claim
any
would
such
damages.”
still
fail
consequential
(Id.).
because
damages
Furthermore,
to
FedEx
suggests that Plaintiffs’ FDUTPA claim, as well as their
Breach of Covenant of Good Faith and Fair Dealing claim, is
preempted
by
federal
law
–
the
Federal
Aviation
Administration Authorization Act, 49 U.S.C. §§ 14501(c) and
41713(b). (Id. at 20).
a. Requisite Damages
FedEx argues that the ELOCs do not obligate FedEx to
offer any number of loads to Plaintiffs and they do not
obligate Plaintiffs to accept any offers from FedEx. (Id. at
19). “Thus, even if this Court were to find that a termination
with less than thirty days’ written notice occurred, FedEx
submits that Plaintiffs’ FDUTPA claim would still fail as
Plaintiffs could not show that damages resulted from that
alleged breach as the parties were not obligated to perform
any services during that thirty-day period.” (Id.). Moreover,
FedEx argues that Plaintiffs appear to be seeking lost profits
damages, which are a form of consequential damages that cannot
be recovered as “actual” damages under FDUTPA. (Id. at 20).
29
In order to state a FDUTPA claim for damages “a plaintiff
must show not only that the conduct complained of was unfair,
unconscionable, or deceptive, but also that it has suffered
actual damages proximately caused by the unlawful conduct.”
Hanson Hams, Inc. v. HBH Franchise Co., LLC, No. 03–61198–
CIV, 2004 WL 5470401, at *4 (S.D. Fla. Dec. 21, 2004). “Actual
damages” under FDUTPA must directly flow from the alleged
deceptive act or unfair practice. Hennegan Co. v. Arriola,
855 F. Supp. 2d 1354, 1361 (S.D. Fla. 2012). “FDUTPA does not
provide for the recovery of nominal damages, speculative
losses,
or
compensation
for
subjective
feelings
of
disappointment.” City First Mortg. Corp. v. Barton, 988 So.
2d 82, 86 (Fla. 4th DCA 2008)(internal citation omitted);
see Rollins, Inc., 951 So. 2d at 869-70 (stating that “[f]or
purposes of recovery under FDUTPA, ‘actual damages' do not
include consequential damages”).
Here, Plaintiffs suggest that they have established the
damages element for their FDUTPA claim, through allegations
of lost profits, which Plaintiffs contend are sufficient
under Florida law. (Doc. # 166 at 18-19)(citing Pegasus
Imaging Corp. v. Northrop Grumman Corp., No. 8:07-CV-1937-T27EAJ, 2010 WL 4627721 (M.D. Fla. Nov. 5, 2010)(entering
summary
judgment
for
defendant
30
where
plaintiff
had
not
identified
any
evidence
of
lost
profits,
injury
to
its
goodwill or reputation, expenses associated with preventing
or remediating customer confusion, or any other damages)).
Under Florida law, a plaintiff's proof of damages will
be
sufficient
as
long
as
he
provides
some
evidence
by
reference to which the amount of damages may be satisfactorily
ascertained. Harrison, 2006 WL 826761, at *3. However, “it
remains well settled in Florida that consequential damages in
the form of lost profits are not recoverable under FDUTPA.”
Five for Entm’t v. Rodriguez, 877 F. Supp. 2d 1321, 1331 (S.D.
Fla.
2012);
Eclipse
Med.,
Inc.
v.
Am.
Hydro-Surgical
Instruments, Inc., 262 F. Supp. 2d 1334, 1357 (S.D. Fla. 1999)
aff'd sub nom. Eclipse Med., Inc. v. Am. Hydro-Surgical, 235
F.3d 1344 (11th Cir. 2000)(“While Plaintiffs seek to label
future lost profits as ‘actual damages,’. . . ‘lost profits
may indeed be the quintessential example of consequential
damages.’”).
Plaintiffs allege that as a result of FedEx’s withdrawal
of all hauling work during the requisite notice period,
Plaintiffs suffered damages. Although Plaintiffs characterize
the damages as “lost profits,” the Court is unwilling to
generalize that all damages sought constitute “lost profits,”
as that term is utilized by Plaintiffs. Therefore, at this
31
juncture, the Court denies summary judgment as to this issue.
To the extent Plaintiffs fail to provide sufficient evidence
of actual damages at trial, FedEx may re-assert its arguments
at the appropriate time.
b. Preemption
FedEx – for the first time – contends that Plaintiffs’
FDUTPA and Breach of Covenant of Good Faith and Fair Dealing
claims are preempted by Federal law; specifically the Federal
Aviation Administration Authorization Act. (Doc. # 158 at 20;
Doc. # 178 at 8-9)(citing Northwest, Inc. v. Ginsberg, 134 S.
Ct. 1422, 1433 (2014)(concluding that preemption applied to
a claim for breach of the implied covenant of good faith and
fair dealing)).
Plaintiffs take issue with FedEx’s preemption argument
as FedEx has failed to allege the affirmative defense of
preemption at any time prior to the present Motion, and as a
result, Plaintiffs argue that FedEx has waived its ability to
do so. (Doc. # 166 at 20). Plaintiffs contend that if this
Court were to allow FedEx to amend its answer, Plaintiffs
would be prejudiced by the unnecessary delay. (Id.).
As a general rule, failure to plead an affirmative
defense results in waiver of that defense. Latimer v. Roaring
32
Toyz, Inc., 601 F.3d 1224, 1239 (11th Cir. 2010); see Am.
Mar. Officers Union v. Merriken, 981 So. 2d 544, 547 (Fla.
4th DCA 2008)(“Federal preemption is an affirmative defense.
. . .”). FedEx admits that it failed to raise the issue of
preemption at any stage of the proceeding prior to its present
Motion. Nonetheless, FedEx contends that as preemption is a
“purely
legal
defense,”
this
defense
will
not
require
discovery, and therefore, Plaintiffs would not be prejudiced
if this Court were to determine the preemption issue at this
juncture. (Doc. # 178 at 8).
The Court disagrees. This case has been pending since
2008, and FedEx could have raised this affirmative defense at
any time prior to summary judgment. Instead, FedEx has waited
until the eleventh hour to bring this issue to the attention
of Plaintiffs and this Court. Allowing FedEx to amend its
answer, and the delay that would result, would prejudice
Plaintiffs and their ability to litigate this case in a timely
manner.
Nonetheless, in an effort to have a fully developed
record,
this
Court
has
considered
FedEx’s
preemption
affirmative defense and determines that FedEx has provided
insufficient support to demonstrate its applicability to this
action.
33
The FAAAA preempts state law relating to the services of
interstate carriers and provides in pertinent part that:
(1) Except as provided in paragraphs (2) and (3),
a State, political subdivision of a State, or
political authority of 2 or more States may not
enact or enforce a law, regulation, or other
provision having the force and effect of law
related to a price, route, or service of any motor
carrier (other than a carrier affiliated with a
direct air carrier covered by section 41713(b)(4))
or any motor private carrier, broker, or freight
forwarded with respect to the transportation of
property.
49 U.S.C. §§ 14501(c)(1) and 41713(b)(4)(emphasis added).
FedEx argues that the FAAAA preempts Plaintiffs FDUTPA
and Breach of Covenant of Good Faith and Fair Dealing claims
as the “transportation of property” is the very core of FedEx
and Plaintiffs’ business and because Plaintiffs argue that
their damages are based on the revenue they allegedly lost
from driving particular routes for FedEx, which is the service
that both Plaintiffs and FedEx provide. (Doc. # 178 at 10).
To support its contention, FedEx cites Beyer v. Acme
Truck Line, Inc., 802 So. 2d 798, 799-800 (La. Ct. App. 5th
Cir. 2001). In Beyer, the plaintiffs were independent ownersoperators of trucks, who provided trucking services to oil
and oilfield service companies. Id. at 799. The plaintiffs
brought a class action lawsuit alleging price fixing by the
34
defendants - trucking companies licensed by the United States
Department
of
Transportation
to
provide
motor
carrier
services through the United States. Id. The defendants filed
a peremptory exception of no cause of action based on federal
preemption, and the district court found that the state court
suit was preempted by federal law. Id. at 800. On appeal, the
Fifth Circuit affirmed the district court’s determination as
it found the plaintiffs’ causes of action as stated were
preempted by 49 U.S.C. § 14501(c)(1) – the FAAAA - which
precludes the application of state laws relating to the
“price, route or service” of common carriers, such as the
plaintiffs (independent truckers). Id. at 801.
Here, unlike the defendants in Beyer, FedEx has failed
to
provide
the
necessary
information
to
demonstrate
the
applicability of the preemption affirmative defense to this
action. Namely, FedEx has failed to demonstrate how it falls
into the category of a “State, political subdivision of a
state, or political authority of 2 or more states” or how a
law, regulation, or other provision enacted by one of the
entities governs FedEx’s business practices as it relates to
the ELOCs. Furthermore, FedEx has failed to point to a
specific law, regulation, or other provision having the force
and effect of law related to a price, route, or service of
35
any motor carrier in which it must abide. Specifically, a
law, regulation or provision regarding FedEx’s ability to
withdraw all hauling work without terminating the ELOCs. As
FedEx has failed to provide the necessary information for
this Court to conduct an appropriate inquiry and analysis on
the preemption issue, at this time, this Court declines to do
so.
To the extent FedEx intends to reassert this affirmative
defense at trial, FedEx should be prepared to explain its
applicability to this action and how Plaintiffs would not be
prejudiced by the raising of this affirmative defense so late
in the proceedings. For the reasons stated above, FedEx’s
Motion is denied as to Count III.
Accordingly, it is
ORDERED, ADJUDGED, and DECREED:
(1)
Plaintiffs Britt Green Trucking, Inc. and Donna Isham,
Administratrix
of
the
Estate
of
Lanny
D.
Whitson’s
Motion for Partial Summary Judgment (Doc. # 153) is
DENIED.
(2)
Defendant FedEx National LTL, Inc.’s Second Motion for
Summary Judgment (Doc. # 158) is DENIED.
36
DONE and ORDERED in Chambers in Tampa, Florida, this
14th day of July, 2014.
Copies: All counsel of record
37
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