Drive Logistics Ltd. v. PBP Logistics LLC et al
OPINION AND ORDER granting 109 Defendant's Motion for Summary Judgment; denying 110 Plaintiff's Motion for Summary Judgment. Signed by District Judge Paul D. Borman. (DTof)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
DRIVE LOGISTICS LTD,
Case No. 14-10289
Paul D. Borman
United States District Judge
PBP LOGISTICS LLC; PIECE BY
PIECE INVESTMENTS, INC.; and
R. Steven Whalen
United States Magistrate Judge
OPINION AND ORDER:
1) GRANTING DEFENDANT LEAR CORPORATION’S RENEWED
MOTION FOR SUMMARY JUDGMENT; AND
2) DENYING PLAINTIFF DRIVE LOGISTICS LTD’S RENEWED
MOTION FOR SUMMARY JUDGMENT
In this action, Plaintiff Drive Logistics, Inc. (“Drive”) seeks to collect
payment from Lear Corporation (“Lear”) for freight shipments that Drive
transported on Lear’s behalf. Drive maintains that Lear is liable based on the bills of
lading that were issued in connection with each shipment; Lear contends that Drive
agreed to collect payment only from an intermediary between the companies, and
also waived any legal claims against Lear, when it entered into a contract called the
Master Transportation Agreement with the intermediary.
In July of 2016, Judge Gerald E. Rosen, who was presiding over this matter
at the time, denied the parties’ first round of cross-motions for summary judgment,
and permitted limited additional discovery on a potentially dispositive issue: whether
the Drive employee who signed the Master Transportation Agreement had actual or
apparent authority to do so. The parties have now filed Renewed Motions for
Summary Judgment. For the reasons stated below, the Court will deny Drive’s
Renewed Motion for Summary Judgment and grant Lear’s Renewed Motion for
On July 20, 2016, Judge Rosen entered an Opinion and Order in this action
denying cross-motions for summary judgment similar to those now before this
Court. (ECF No. 99 (“July 2016 Opinion”).) As further detailed below, Judge Rosen
denied both motions after finding that there was a jury question on an issue central
to both parties’ arguments: whether the Drive employee who signed the MTA on his
company’s behalf had actual or apparent authority to do so, and therefore whether
Drive Logistics is bound by the Master Transportation Agreement’s waiver
provision. (See July 2016 Opinion at 33-34.) Judge Rosen also permitted additional
discovery limited to that issue, since the record was mostly silent on it, and since the
issue is potentially dispositive of all remaining claims in this action. (See id. at 36;
ECF No. 105.) The instant Motions were filed after that discovery was completed.
The factual background below is divided into two parts. The first part
summarizes the relationships between the parties and the events giving rise to this
lawsuit, and it is based primarily on the factual findings set forth in Judge Rosen’s
July 2016 Opinion. The Court fully incorporates those findings here, providing the
summary below only by way of general background. The second part discusses the
circumstances surrounding the alleged execution of the Master Transportation
Agreement; it is based primarily on evidence collected during the limited discovery
period and submitted as exhibits to the parties’ Motions for Summary Judgment.
Drive is a freight company headquartered in Windsor, Ontario. Lear
manufactures automotive parts. Co-Defendants Piece by Piece Investments, Inc. and
its subsidiary PBP Logistics LLC (collectively “PBP") were transportation brokers.
Both PBP entities are now defunct, according to testimony of their president and coowner Alexander Jones. PBP largely failed to participate in this litigation, prompting
Judge Rosen to enter default judgments against them on claims asserted by both
Drive and Lear. (See July 2016 Opinion at 3-4 & n.2; ECF Nos. 31, 89.)
Prior to the events of this lawsuit, Lear retained non-party Ryder Integrated
Logistics (“Ryder”) as a logistics provider. In 2010 or 2011, Ryder enlisted PBP to
transport Lear’s freight on a route between Lear’s supplier in Brownsville, Texas
and Lear’s facility in Hammond, Indiana. The agreement between Ryder and PBP
made clear that PBP were not to subcontract those responsibilities to other carriers
without Ryder’s prior written permission. (See July 2016 Opinion at 4-5; ECF No.
109, Lear Mot. at 8.) A separate memorandum issued by Ryder and signed by PBP
reiterated that “brokering to other carriers of loads tendered to [PBP] by Ryder . . .
on behalf of its shipper clients . . . is strictly prohibited[.]” (Id. at 5.) PBP further
agreed in the memorandum to indemnify Ryder and its clients for any claims
resulting directly from PBP’s subcontracting to other carriers in violation of the
agreement and the memorandum. (See id.)
All the same, PBP arranged for third-party carriers to shoulder PBP’s
responsibilities under the agreement without seeking Ryder’s approval: non-party
Sunbelt Transportation for the first few months of the agreement, and Drive
beginning in late 2012. PBP themselves owned neither office space nor trucks at the
relevant time. Through PBP, Drive thus carried freight for Lear on the Texas-Indiana
route for roughly nine months in 2013. (See id. at 5-6 & nn.3-4.)
In the course of discovery for this litigation, PBP produced a “Master
Transportation Agreement” (“MTA”) that states on its face that it was executed
between Drive and PBP on March 31, 2011. The MTA is not signed by a
representative of PBP, but it is initialed and signed by an employee named Jeff
Cameron on behalf of Drive. (See July 2016 Opinion at 6, 32 n.16.) Although the
MTA was executed approximately a year and a half before Drive agreed to carry
freight for Lear, it appears to set forth terms governing the relationship between
Drive and PBP generally.1 Paragraph 8 of the MTA relevantly provides as follows,
with “Carrier” referring to Drive and “the Customer” referring generally to PBP’s
clients (including Lear):
[PBP] shall pay Carrier 40 to 45 days after [PBP’s] receipt of Carrier’s
invoice, shipper’s bill of lading, signed clear delivery receipt and other
documents required by [PBP] or [its] Customer. Carrier agrees that it
shall not bill the Customer, shipper/consignee or any third party directly
nor shall it communicate in any manner, directly or indirectly[,] with
[PBP] customers, consignors, consignees2 or any party other than [PBP]
concerning the collection of any charges relating to transportation
services accruing in connection with or as a consequence of this
Contract; and waives any right it may otherwise have to proceed or
commence any action against any Customer for the collection of any
freight bills arising out of transportation services performed by
[C]arrier under this contract.
(July 2016 Opinion at 6-7; see also Lear Mot. Ex. F, Master Transportation
Lear was not the only PBP client for whom Drive carried freight, but there is
apparently conflicting evidence in the record as to when exactly Drive first began
carrying freight for PBP. Alexander Jones testified that Drive transported its first
load for PBP in April 2011. (ECF No. 110, Drive Mot. Ex. A, Deposition of
Alexander Jones 141:20-25.) Further, the MTA is dated March 31, 2011, and Jones
testified that executing the MTA was a prerequisite for any carrier to move freight
for PBP. (Alexander Jones Dep. 94:18-95:9.) At the same time, Drive president
Steven Breault testified that Drive began carrying loads for PBP in early 2010. (ECF
No. 110, Drive Mot. Ex. D, Deposition of Steven Breault at 9:24-11:19, 14:23-15:3.)
“Consignor” and “consignee” have distinctive legal meanings in the freight
context. The Federal Bill of Lading Act defines “consignor” as “the person named
in a bill of lading as the person from whom the goods have been received for
shipment,” and “consignee” as “the person named in a bill of lading as the person to
whom the goods are to be delivered.” 49 U.S.C. § 80101(1)-(2).
Agreement at 4.) In other words, Drive agreed not to go around PBP by billing or
otherwise communicating with PBP’s clients.3 And in the key MTA provision for
the purposes of the instant Motions, the signatory to the MTA “waive[d] any right it
may otherwise have to proceed or commence any action against any Customer for
the collection of any freight bills arising out of transportation services performed by
[C]arrier under this contract.” (Id.)
The record shows that Drive’s billing practices for freight charges incurred
through its relationship with PBP were consistent with the MTA—both as to charges
incurred for Drive’s carrying Lear’s freight on the Texas-Indiana Route, and as to
charges incurred for Drive’s carrying freight for PBP’s other clients. Drive would
submit proof of delivery and an invoice to PBP, which would in turn collect payment
from Lear and then remit it to Drive. (See id. at 7-8.)
Drive did not receive payment for freight transport services that it provided to
Lear between February and August of 2013. Lear claims that it paid PBP for all of
these services; PBP evidently failed to forward the payments to Drive. After
payments from PBP to Drive became “spotty” in mid-2013, Drive gave notice to
The parties dispute whether Lear knew that Drive had been subcontracted by PBP
to service the Texas-Indiana route in violation of PBP’s agreements with Drive.
Drive charges Lear with complete knowledge of the fact; Lear acknowledges that
while its plant employees in Indiana were aware, their superiors within the company
were not. (See ECF No. 114, Drive Resp. at 12-13; ECF No. 91 at 3-4.) This issue
does not ultimately affect the outcome here, so the Court does not reach it.
PBP in July of that year that as of a “specific date” in the near future, it would no
longer carry freight for them. Drive did not contact Lear about the payments owing,
and the company’s president testified that “we never contacted the customer directly
in risk of being seen as someone who went around the broker, which can be
detrimental to our business.” (Id. at 8.)
Drive claims that it has not been paid for a total of 424 loads that it carried for
Lear: 310 “inbound” shipments (i.e., from Texas to Lear’s facility in Indiana) and
114 “outbound” shipments (i.e., from Indiana to Texas). Plaintiff asserts that each
shipment is evidenced by a bill of lading, each of which was either signed or issued
by Lear. For inbound shipments, the driver would present the bill of lading to a Lear
employee on delivery, and the employee would sign and return it. For outbound
shipments, Lear would generate a return bill of lading. (See id. at 9.)
Drive contends that under the bills of lading, Lear is responsible to Drive for
the amounts that Lear paid to PBP but which PBP failed to remit to Drive. Lear takes
the position that Drive waived all claims against Lear in paragraph 8 of the MTA. In
the July 2016 Opinion, Judge Rosen stated that “[f]or present purposes, at least, Lear
does not dispute Plaintiff’s contention that the bills of lading, viewed in isolation,
would subject Lear to primary or joint liability for the freight charges sought by
Plaintiff here.” (Id. at 14.) Accordingly, the question of whether Drive’s purported
waiver of all claims against Lear in the MTA is enforceable is a dispositive one, and
so the circumstances surrounding the alleged execution of the MTA merit careful
i. Drive’s account
Jeff Cameron was the Drive employee who initialed and signed the MTA, and
his testimony in the record is drawn both from a sworn Declaration that he submitted
in 2015, and from a deposition taken in March 2017, after Judge Rosen permitted
discovery on the “actual or apparent authority” issue. (ECF No. 110, Drive Mot. Ex.
E, Cameron Declaration; Ex. H, Deposition of Jeff Cameron.) Both Cameron and
Steven Breault, Drive’s president at the relevant time, acknowledged that it is in fact
Cameron’s signature on the MTA. (Cameron Dep. 39:23-40-2; ECF No. 110, Drive
Mot. Ex. D, Deposition of Steven Breault at 22:22-23:7.)
Cameron worked for Drive as a “planning administrator.” (Cameron Dep.
16:3-4.) In that capacity, he “would receive the load sheets,4 enter the information
into our [Truckmate] system, and just make sure the information was correct and
“Load sheets” are informational documents that Drive receives from customers
when they book Drive’s services. Drive employees like Cameron who work in the
dispatch group enter information from load sheets into a database called Truckmate.
(Cameron Decl. ¶ 2.) Cameron testified that load sheets “would usually have a
company logo at the top, pick up address, delivery address, normal full addresses,
and any pertinent information, special instructions, dock numbers, the customer's
broker, usually the agreed upon rate” and a place for the Drive employee to sign and
date the form. (Cameron Dep. 24:20-25:10.)
spelling was right and the addresses are accurate and everything that was pertinent
on the load sheets made their way into the system.” (Cameron Dep. 16:5-12.) Asked
in his deposition whether he signed or initialed any other documents in the course of
his duties as a planning administrator, Cameron testified that he typically signed or
any sort of appendices that seemed to be just like authorization for
doing the business. Anything like a major, I don't know -- no, no, just
anything that was load sheet related was my department. Stuff that
came through load sheets, that's what I signed. It was usually stuff that
was already established between [Business Development Manager]
Clark [Brockman] and the customer.
(Cameron Dep. 26:24-27:10; see also Breault Dep. 10:8-14.) While Cameron did
interact with customers, he would typically “talk to the customer, be nice to the
customer, get some preliminary details, [and] possibly answer questions if we had
availability in the area,” but when it came to “negotiations, that was [Brockman].”
(Cameron Dep. 26:8-23.) Cameron was expressly authorized by Brockman to sign
some documents, but it was generally
made clear by the customer who was able to sign a document. If
someone was sending me a document, they knew my role. Any time a
conversation would get serious about, like, dollar amounts, whatever,
they knew that they would have to go up from me because I'm just a
planning administrator, the guy at the keyboard, the data entry guy.
. . . If they're doing business with us, they know what I did, and they
knew what Clark did and they knew the difference.
(Cameron Dep. 22:4-19.) Immediately after that testimony, Cameron testified as
follows regarding what would happen at the beginning of a customer relationship:
Q. And if it's the very beginning of a relationship, they wouldn't know,
A. Well, they wouldn't be sending me something to sign per se.
Q. Well, they might send something for someone to sign, correct?
Q. And if they sent it to Mr. Brockman and he handed it to you to sign,
you would do that. . . .
[A.]: Like, in the moment I couldn't -- it depends. . . .
Q. If Mr. Brockman received a document and handed it to you and said
'hey, I just got this, sign it and send it back', would you do that or would
you not follow his instructions? . . .
[A.]: It would depend on the situation. . . .
Q. Describe a situation in which Mr. Brockman handed you a document
and instructed you to sign it and return it to the origin and you wouldn't
do that. . . .
[A.]: I can't remember a situation.
(Cameron Dep. 22:20-23:23.)
Cameron testified that he had no recollection of signing the MTA, that he “did
not know how [his] signature got there[,]” and that he did not knowingly sign the
agreement. (Cameron Dep. 39:18-22.) In his Declaration, Cameron characterized his
signing of the MTA as probably unintentional, averring that “[t]he only thing I can
think of is that I signed for the receipt of some load building documentation and this
document was included within that documentation.” (Cameron Decl. ¶ 4.) He
elaborated in his deposition:
Q. . . . So you believe this document or this page might have been
slipped in with some load building documentation and you just signed
A. Like, might have been just to keep things moving. Like, if I signed
something I wasn't supposed to sign, someone would tell me.
Q. Okay. So somehow this document was slipped in and you signed it
with other documents and moved it along?
Q. Do you have any idea how it would have gotten back to PBP after
A. It appears to have been faxed.
Q. And that would have been you doing that, correct? . . .
[A.]: Not at that hour. . . .
Q. You're referring to the 8:18 p.m?
Q. Is that when you sent it or received it?
A. That's a good question too.
Q. When -- so your theory is that this was in a bunch of documents and
you just signed it along with the other documents, correct?
Q. Would it make sense that you would have initialed the bottom of
every page in that scenario too, because these are your initials on the
bottom of every page, aren't there?
Q. So you would have viewed every page of this document, initialed
every page of this document except the last one where you would have
Q. And in all that process, you never realized this was not a load sheet?
A. I knew it wasn't a load sheet. I just thought it was something we
needed to get going. If it was an important thing, the customer knows,
it's not my department.
Q. Who told you to say that?
A. I just know that.
(Cameron Dep. 41:4-42:22.)
Cameron averred in his Declaration that he never discussed the MTA or any
of its terms with anyone who worked for PBP, and more broadly that he “[is] not
authorized to bind Drive to contracts and . . . never [has] been.” (Cameron Decl. ¶¶
3, 5.) On the other hand, he also testified that he never told any PBP employees or
representatives that he was not authorized to sign any particular document. Asked if
a situation ever arose in which he had to tell PBP that he lacked the authorization to
sign a particular document, Cameron responded that PBP personnel he dealt with
were “familiar with my role, that's all I know.” (Cameron Dep. 44:8-19.)
Cameron testified that he had received no formal guidance, documentation, or
training concerning the scope of his authority. (Cameron Dep. 18:12-15.) Karen Hutt
testified on behalf of Drive itself,5 and confirmed that “[t]here was no written policy
that detailed the authority to bind Drive Logistics[,]” and that this information would
have been communicated to the employee at the time of hire.” (ECF No. 110, Drive
Mot. Ex. G, Deposition of Karen Hutt at 31:14-20; 32:21-22.) Hutt testified that
Drive was not aware of any documents or communications that were shared with
Fed. R. Civ. P. 30(b)(6) provides that an entity party, if named as a deponent, must
“designate one or more officers, directors, or managing agents, or designate other
persons who consent to testify on its behalf; and it may set out the matters on which
each person designated will testify. . . . The persons designated must testify about
information known or reasonably available to the organization. . . .”
PBP or any other outside parties concerning who within the company was authorized
to sign contracts for it. (Hutt Dep. 35:1-21.) Hutt also testified that Cameron was not
authorized to sign or initial documents besides load sheets, but that Brockman had
signing authority and knew who else in the company would be authorized to sign an
agreement like the MTA. (Hutt Dep. 37:13-23, 39:25-40:24, 41:19-42:20, 43:1922.)
Breault averred in a sworn Declaration that “[n]either I or nor any of Drive's
senior managers had even seen the [MTA] before it was produced by PBP's counsel
in December 2014. Neither I nor any of Drive's senior managers had ever discussed
any ‘master agreement’ with PBP. This document was not anywhere in our records.”
(Drive Mot. Ex. C, Declaration of Steven Breault at ¶ 8.) Both Breault and Cameron
testified that they had no recollection of seeing the MTA prior to this litigation.
(Breault Dep. 21:25-22:7; Cameron Dep. 39:12-22.) Hutt testified that she reviewed
“the emails that were communication between Drive and primarily Aaron Jones or
members of PBP” and found no evidence that Aaron Jones emailed the MTA to
Brockman, but also acknowledged that she did not have access to the email server
that would have been in use at that time. (Hutt Dep. 27:9-28:22.)
ii. PBP’s account
As for PBP, testimony from PBP co-owner and president Alexander Jones and
his brother Aaron (vice president and also a co-owner of PBP) suggests that
requiring subcontractors like Drive to sign agreements like the MTA was not only
PBP’s standard practice, but was in fact a prerequisite condition that PBP would
impose before allowing any subcontractor to carry freight for PBP and their clients.
(Alexander Jones Dep. 95:1-9, 100:21-24, 101:4-6; ECF No. 110, Drive Mot. Ex. F,
Deposition of Aaron Jones 30:10-19, 40:7-10.) Aaron Jones further testified that the
MTA provision restricting the subcontractor from contacting PBP’s customers was
typically scratched off by subcontractors, though he could not recall whether that
was true in Drive’s case. (Aaron Jones Dep. 43:17-44:3.) As noted above, there is
conflicting evidence as to whether Drive first started carrying freight for PBP in
2010 or 2011, but the MTA is undisputedly dated 2011. Thus, to any extent Drive
worked with PBP prior to March 31, 2011, there is no documentary evidence in the
record that the relationship was governed by an MTA at that time.
As a vice president at PBP, Aaron Jones’s responsibilities included
“[m]aintaining the daily operations, managing all the operational staff, the account
managers, [and] managing the carrier department.” (Aaron Jones Dep. 16:13-24.)
Jones was also responsible for sending master agreements like the MTA to
subcarriers with whom PBP was going to do business. (Aaron Jones Dep. 29:1730:12.) He testified that to the best of his recollection, he sent the MTA to
Brockman—who undisputedly had the authority to sign the MTA—to be signed:
Q. Do you remember any contact with either [Drive account manager
Clark Brockman or Drive president Steven Breault] concerning this
Q. Okay. Do you think it's possible you alerted one of them that it would
A. I talked to Clark every day, all day. I'm sure I communicated with
Clark rather than Jeff that it was coming over.
Q. So you think you told Clark it was coming over and when you got it
back, Jeff had signed it?
A. Yes, I talked to Clark every day, all day, probably more than Steve
talked to Clark.
Q. Do you believe you sent it to Clark?
A. Probably so. I'm trying to think back then, I probably sent it in the
e-mail. I'm sure it probably went to Clark rather than Jeff.
Q. Okay. When you got it back you were ready to proceed to the next
Q. At any point in time did either Piece by Piece Investments or Drive
Logistics want to revisit this agreement?
Q. Enter into a new one?
Q. This agreement was in effect for the entire time that Piece by Piece
Investments and Drive Logistics were doing business, as far as you
Q. Would Drive Logistics have been awarded any freight to carry for
Piece by Piece Investments without having signed this agreement?
Q. Do you recall Mr. Brockman acknowledging the existence of the
agreement at any time?
Q. Describe that.
A. He knew in -- I mean, we both knew it could not be done without us
moving freight. So somewhere within our communication we both
approved, hey, this contract has been done. I don't recall a specific date
or time but we both knew this contract was done in order to move
Q. They would not have been able to carry freight?
Q. I believe you said this was common in the industry, correct?
(Aaron Jones Dep. 39:3-40:25.) Jones further testified that in general, conversations
about whether a carrier would carry freight for a particular PBP customer would
have been held with an employee of the carrier who, like Brockman, had
“operational control.” (Aaron Jones Dep. 50:5-12.)
Regarding PBP’s knowledge as to who at Drive had the authority to bind the
company by contract, Aaron Jones testified that he knew managerial staff members
such as Breault and Brockman would have had the authority to sign agreements like
the MTA (Aaron Jones Dep. 48:8-12), and that he understood Cameron’s role at
Drive to be more secretarial than managerial. (Aaron Jones Dep. 36:12-19, 41:2442:7, 48:19-21.) At the same time, however, he testified that while he could not
remember whether he noticed that the MTA bore Cameron’s signature when Drive
returned it to him, he did not find it surprising that Cameron signed the document:
Q. Do you remember how quickly they signed and sent it back?
A. Maybe 10 minutes. It's a common thing in transportation. It's not
really a send it to your boss or send it to your supervisor kind of deal.
Q. So they would have signed this on about the first day of operation of
Piece by Piece Investments?
Q. Did you notice when you received it back that Jeff Cameron was the
one who signed it?
A. At the time, I don't recall.
Q. Does it surprise you that Jeff Cameron is the person who signed this
on behalf of Drive Logistics?
Q. Was it your understanding that Jeff Cameron was somebody who
would be authorized to sign a document like this on behalf of Drive
A. Yes, sure.
Q. Did he have a position at Drive Logistics that would be common for
him to sign this on behalf of the trucking company?
A. The way they operate, I think he was the one who signed it on a daily
Q. So you understood he signed documents like this daily?
Q. Not just for you but for others?
A. Correct. . . .
Q. Did anyone at Drive Logistics ever communicate to you that this -that signing a document like this was beyond Mr. Cameron's authority?
Q. And you said you had frequent contact with Clark Brockman and
Q. Daily contact with them?
A. Maybe even hourly.
(Aaron Jones Dep. 37:11-39:2.) When asked what he would have done if anyone had
suggested to him that Cameron was not authorized to sign the agreement, Jones
testified that he would have re-sent it to Brockman or Breault and asked them to sign
it. (Aaron Jones Dep. 44:12-18.)
It is undisputed that Drive never expressly represented to PBP that Cameron
had the authority to bind the company. (Breault Decl ¶¶ 9, 11; Hutt Dep. 35:1-21,
41:19-42:26, 43:19-22.) Nevertheless, Drive performed consistently with the terms
of the MTA until PBP began failing in their payments to Drive. Judge Rosen
described Drive’s performance in the following way:
Consistent with the terms of the MTA — and inconsistent with
[Drive’s] contention that the bills of lading should control the
determination of liability for Plaintiff’s freight charges — Plaintiff
submitted invoices for its freight charges to the PBP Defendants, along
with proof of delivery, and the PBP Defendants would then pay
Plaintiff for its services. Also consistent with the terms of the MTA —
and, more specifically, paragraph 8 of this agreement, which contains
the waiver provision that Lear seeks to invoke here — Plaintiff made
no attempt to communicate with Lear regarding its unpaid freight
charges until October of 2013, well after Plaintiff terminated its
relationship with the PBP Defendants in late July or August of 2013.
(July 2016 Opinion at 29-30 (citing Breault Dep. at 12-13, 30-31, 33-36).)
Relevant Procedural History
On January 22, 2014, Drive filed this action against Lear and PBP. (ECF No.
1, Compl.) In the Complaint, Drive asserted three claims against Lear: breach of
contract (Count V), unjust enrichment (Count VI), and breach of implied contract
(Count VII). The Complaint also included three claims against PBP: breach of
contract (Count I), promissory estoppel (Count II), and account stated (Count III).
(The Complaint did not contain a Count IV.) Along with its Answer and Affirmative
Defenses, Lear asserted three cross-claims against PBP: breach of contract,
indemnification, and conversion/breach of fiduciary duty. (ECF No. 13.)
Judge Rosen granted Drive’s motion for default judgment against PBP on
April 21, 2014. (ECF No. 31.) The parties (including PBP) then engaged in
discovery for approximately a year, and on June 30, 2015, Judge Rosen granted
Lear’s motion for default judgment against PBP and dismissed claims that PBP had
previously asserted against Lear. (ECF No. 89.) This left only Drive’s three claims
against Lear for breach of contract, unjust enrichment, and breach of implied
contract, over which Drive and Lear had filed their first set of cross-motions for
summary judgment a few days before the default judgment against PBP was entered
in Lear’s favor. (ECF Nos. 80, 82.)
Judge Rosen ruled on those cross-motions in the July 2016 Opinion. In it,
Judge Rosen analyzed the pair of Ninth Circuit cases cited by the parties as well as
applicable Michigan law, and held that the fact that Lear was not a party to the MTA
did not bar Lear from enforcing the waiver provision in the MTA against Drive,
since that provision was broad enough on its face to encompass Drive’s breach of
contract claim against Lear. (See July 2016 Opinion at 15-25.) And although the
parties had “extensively address[ed] the question whether Lear qualifies as a thirdparty beneficiary of the MTA” under Michigan law, Judge Rosen determined that
this issue was immaterial: having just held that a non-party can invoke a waiver that
is broad enough to encompass the non-party under Michigan law, it was unnecessary
to “conduct an inquiry into third-party beneficiary status.” (Id. at 25 n.13.) Judge
Rosen also rejected Drive’s contention that the absence of PBP’s signature on the
MTA rendered it unenforceable. (See id. at 28.)
Judge Rosen went on to explain that while the record “demonstrates the
existence of an agreement between Plaintiff and the PBP Defendants that
encompasses at least some of the terms set forth in the MTA, it is another matter
whether the record establishes Plaintiff’s assent to the specific provision that Lear
seeks to enforce here — namely, the waiver provision . . .” (Id. at 30.) Breault’s
testimony that there was no written agreement memorializing the business
relationship between Drive and PBP weighed against this. Judge Rosen held that
[i]f Lear is to overcome this testimony and establish as a matter of law
that Plaintiff is bound by the MTA’s waiver provision, it must
demonstrate Plaintiff’s assent to this specific provision, and Lear’s
showing on this point rests solely on the signature of one of Plaintiff’s
employees, Jeff Cameron, that appears on the last page of the MTA.
(Id. at 30-31.) Absent any evidence that Cameron had been granted actual authority,
this question would turn on whether Cameron had apparent authority. And since the
evidence in the record did not establish as a matter of law either that he did or that
he didn’t, Judge Rosen denied summary judgment to both parties, while at the same
time stating that it would “entertain a request from the parties to reopen discovery
for the limited purpose of exploring this specific issue.” (Id. at 31-34.)
Finally, Judge Rosen denied summary judgment to both parties on the unjust
enrichment and implied-contract claims because those claims also turned on the
question of apparent authority. This was for two reasons. First, the MTA’s waiver
provision broadly waived “any right” on Drive’s part to bring “any action . . . for the
collection of any freight bills,” and Drive did “not contend that this provision, if
enforceable, would extend to less than all of the theories of recovery it has asserted
against Lear, nor [did] the Court see any basis for drawing such a distinction.” (Id.
at 34.) Second, Judge Rosen stated that under Michigan law, implied contracts
cannot exist where an express contract covers the same subject matter, and
concluded that any implied-contract theories of recovery would have to await
resolution of the express-contract claim. (See id. at 35.)
On July 28, 2016, Lear filed a Motion to Reopen Discovery, which was
opposed by Drive but ultimately granted. (ECF Nos. 102-105.) As the parties
conducted discovery on the apparent-authority issue, the case was reassigned to this
Court on December 27, 2016. The parties then filed Renewed Motions for Summary
Judgment on April 28, 2017. (ECF No. 109, Lear Mot.; ECF No. 110, Drive Mot.)
Timely Responses followed on May 19, 2017 (ECF No. 113, Lear Resp.; ECF No.
114, Drive Resp.), and timely Replies on June 2, 2017 (ECF No. 115, Lear Repl.;
ECF No. 116, Drive Repl.).
This Court conducted a hearing on the parties’ cross-motions on July 6, 2017,
and now issues the following ruling.
Summary judgment is appropriate where the moving party demonstrates that
there is no genuine dispute as to any material fact. Celotex Corp. v. Catrett, 477 U.S.
317, 322 (1986); Fed. R. Civ. P. 56(a). “A fact is ‘material’ for purposes of a motion
for summary judgment where proof of that fact ‘would have [the] effect of
establishing or refuting one of the essential elements of a cause of action or defense
asserted by the parties.’” Dekarske v. Fed. Exp. Corp., 294 F.R.D. 68, 77 (E.D. Mich.
2013) (Borman, J.) (quoting Kendall v. Hoover Co., 751 F.2d 171, 174 (6th Cir.
1984)). A dispute is genuine “if the evidence is such that a reasonable jury could
return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 247-48 (1986).
“In deciding a motion for summary judgment, the court must draw all
reasonable inferences in favor of the nonmoving party.” Perry v. Jaguar of Troy,
353 F.3d 510, 513 (6th Cir. 2003) (quoting Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 587 (1986)). At the same time, the non-movant must
produce enough evidence to allow a reasonable jury to find in his or her favor by a
preponderance of the evidence, Anderson, 477 U.S. at 252, and “[t]he ‘mere
possibility’ of a factual dispute does not suffice to create a triable case.” Combs v.
Int'l Ins. Co., 354 F.3d 568, 576 (6th Cir. 2004) (quoting Gregg v. Allen–Bradley
Co., 801 F.2d 859, 863 (6th Cir. 1986)). Instead, “the non-moving party must be able
to show sufficient probative evidence [that] would permit a finding in [his] favor on
more than mere speculation, conjecture, or fantasy.” Arendale v. City of Memphis,
519 F.3d 587, 601 (6th Cir. 2008) (quoting Lewis v. Philip Morris Inc., 355 F.3d
515, 533 (6th Cir. 2004)).
When the Court is faced with cross-motions for summary judgment, the Court
“must evaluate each motion on its own merits and view all facts and inferences in
the light most favorable to the nonmoving party.” Westfield Ins. Co. v. Tech Dry,
Inc., 336 F.3d 503, 506 (6th Cir. 2003). “The fact that the parties have filed cross
motions for summary judgment does not automatically justify the conclusion that
there are no facts in dispute.” Ely v. Dearborn Heights School Dist. No. 7, 150 F.
Supp. 3d 842, 849-50 (E.D. Mich. 2015) (citing Parks v. LaFace Records, 329 F.3d
437, 444 (6th Cir. 2003). In this context, a plaintiff and a defendant have different
In a defensive motion for summary judgment, the party who bears the
burden of proof must present a jury question as to each element of the
claim. Davis v. McCourt, 226 F.3d 506, 511 (6th Cir. 2000). Failure to
prove an essential element of a claim renders all other facts immaterial
for summary judgment purposes. Elvis Presley Enters., Inc. v. Elvisly
Yours, Inc., 936 F.2d 889, 895 (6th Cir. 1991).
When the moving party also bears the ultimate burden of persuasion,
the movant's affidavits and other evidence not only must show the
absence of a material fact issue, they also must carry that burden. Vance
v. Latimer, 648 F.Supp.2d 914, 919 (E.D. Mich. 2009); see
also Resolution Trust Corp. v. Gill, 960 F.2d 336, 340 (3d Cir.
1992); Stat–Tech Liquidating Trust v. Fenster, 981 F.Supp. 1325, 1335
(D. Colo. 1997) (stating that where “the crucial issue is one on which
the movant will bear the ultimate burden of proof at
trial, summary judgment can be entered only if the movant submits
evidentiary materials to establish all of the elements of the claim or
The plaintiff therefore “must sustain that burden as well as demonstrate
the absence of a genuine dispute. Thus, it must satisfy both the initial
burden of production on the summary judgment motion—by showing
that no genuine dispute exists as to any material fact—and the ultimate
burden of persuasion on the claim—by showing that it would entitled
to a directed verdict at trial.” William W. Schwarzer, et al., The
Analysis and Decision of Summary Judgment Motions, 139 F.R.D.
441, 477-78 (1992) (footnotes omitted).
Ely, 150 F. Supp. 3d at 849-50.
Finally, all evidence submitted in opposition to a motion for summary
judgment must ultimately be capable of being presented in a form that would be
admissible at trial. See Alexander v. CareSource, 576 F.3d 551, 558–59 (6th Cir.
2009) (“[T]he party opposing summary judgment must show that she can make good
on the promise of the pleadings by laying out enough evidence that will be
admissible at trial to demonstrate that a genuine issue on a material fact exists, and
that a trial is necessary.”).
Law of the Case
“Under the doctrine of law of the case, findings made at one point in the
litigation become the law of the case for subsequent stages of that same litigation.”
Moore v. Mitchell, 848 F.3d 774, 776 (6th Cir. 2017) (quoting United States v.
Moored, 38 F.3d 1419, 1421 (6th Cir. 1994)). The doctrine
bars relitigation of issues that were decided at an earlier stage of the
litigation, either explicitly or by necessary inference from the
disposition of the case, unless one of three “exceptional circumstances”
exists: (1) where substantially different evidence is raised on
subsequent trial; (2) where a subsequent contrary view of the law is
decided by the controlling authority; or (3) where a decision is clearly
erroneous and would work a manifest injustice.
United States v. Barnwell, 617 F. Supp. 2d 538, 543 (E.D. Mich. 2008) (citations
and quotation marks omitted), aff'd, 364 F. App'x 240 (6th Cir. 2010).
The following issues were explicitly decided by Judge Rosen in the July 2016
Opinion, and therefore constitute law of the case for the purposes of the parties’
Renewed Motions for Summary Judgment.
First, Michigan law applies “in determining the scope and effect of the MTA’s
waiver provision.” Judge Rosen reached this determination based on an express term
in the MTA providing for the applicability of Michigan law, and on both parties’
citations to Michigan law in their arguments on Lear’s third-party beneficiary status
and on the question of who had the authority to bind Drive to the MTA. (July 2016
Opinion at 22-23 n.11.) This Court will also apply Michigan law to the dispositive
question of apparent authority, which is more germane to the enforceability of the
MTA than its scope or effect, because the parties have again cited Michigan law (as
well as federal cases applying it) in their arguments on that topic.
Second, if the MTA was validly executed, it binds Drive notwithstanding that
Lear itself was not a party to the MTA, and notwithstanding that the MTA was not
signed by a representative of PBP. Judge Rosen held that Michigan law supports the
proposition that “a non-party to a contract [may] invoke a contractual waiver or
release that, by its terms, is broad enough to encompass the non-party.” (July 2016
Opinion at 22-25 & n.3 (citing Romska v. Opper, 234 Mich. App. 512 (1999) and
Collucci v. Eklund, 240 Mich. App. 654 (2000)).) Judge Rosen then concluded that
“[a]pplying this principle of Michigan law here, the waiver provision in the MTA
allegedly executed by Plaintiff unquestionably is broad enough to encompass the
breach of contract claim asserted by Plaintiff against Defendant Lear.” (July 2016
Opinion at 24.) Judge Rosen also rejected Drive’s argument that PBP’s failure to
sign the MTA made it unenforceable, holding that the argument lacked support in
Michigan law, and that record evidence independently confirmed PBP’s consent to
be bound by the MTA. (Id. at 28-29.)
Third, Michigan law’s recognition “that a contractual waiver or release is not
limited in its reach to the contracting parties, but may also confer benefits on third
parties” (id. at 22) renders several other issues raised by the parties immaterial to the
adjudication of the instant Motions. These include: (1) Lear’s third-party beneficiary
status under Mich. Comp. Laws § 600.1405; (2) the related issue of whether Lear
must “stand in the shoes” of PBP and thus inherit any limitations on the ability to
enforce the agreement that PBP would have; and (3) the effect of the Ninth Circuit
cases that the parties have invoked in their arguments over whether the bills of lading
may be displaced by the MTA: C.A.R. Transp. Brokerage Co. v. Darden
Restaurants, Inc., 213 F.3d 474 (9th Cir. 2000), and Oak Harbor Freight Lines, Inc.
v. Sears Roebuck, & Co., 513 F.3d 949 (9th Cir. 2008).6
Finally, Judge Rosen explained in the July 2016 Opinion that
the waiver provision in the MTA is not limited to any particular theory
of recovery. Rather, it broadly waives “any right [Plaintiff] may
otherwise have to proceed or commence any action against any
Customer [of the PBP Defendants] for the collection of any freight bills
arising out of the transportation services performed by [Plaintiff]
under” the MTA. (MTA at ¶ 8.) Plaintiff does not contend that this
provision, if enforceable, would extend to less than all of the theories
of recovery it has asserted against Lear, nor does the Court see any basis
for drawing such a distinction.
(July 2016 Opinion at 34.) Drive has not addressed this point in any of its briefs on
the instant Motions, and therefore has not provided any reason for this Court to
Judge Rosen comprehensively addressed these three issues in the alternative,
concluding that Lear in fact qualifies as a third-party beneficiary under Mich. Comp.
Laws § 600.1405 (see July 2016 Opinion at 25 n.12), that the “stand in the shoes”
limitation does not apply here given the parties’ clear intent as expressed in the MTA
(see id. at 27-28), and that even if C.A.R. and Oak Harbor governed this case, they
do not require a finding that the allocation of liability in the bills of lading trumps
the MTA (see id. at 20-22). This Court adopts Judge Rosen’s reasoning as to these
issues as well.
determine that the waiver provision, if enforceable, does not apply to its implied
contract and unjust enrichment claims as well as its breach of express contract claim.
For that reason, the issue of apparent authority is dispositive on all three of the claims
that remain in the action.
Cross-Motions for Summary Judgment
Drive maintains that Cameron lacked actual authority to bind Drive to the
MTA. Lear does not expressly concede this point, but it also does not argue it.
Accordingly, this Court adopts Judge Rosen’s conclusion that the issue of apparent
authority, rather than actual authority, is dispositive here because “resolution of this
issue, in turn, will determine the outcome of Lear’s appeal to the waiver provision
in the MTA as a defense to Plaintiff’s breach of contract claim . . .” (July 2016
Opinion at 34.)
Judge Rosen held that neither party was entitled to summary judgment on the
apparent-authority issue because as of July 2016, the record was “wholly silent as to
the PBP Defendants’ belief or understanding regarding Mr. Cameron’s authority to
sign the MTA on Plaintiff’s behalf,” and almost as silent as to Cameron’s own
perceptions of the MTA and his authority generally. (Id. at 33-34.) Those evidentiary
gaps in the record have now been filled, and this Court concludes in light of the new
evidence that Lear is entitled to summary judgment on all three remaining claims.
Under Michigan law, “[p]ersons dealing with an agent may rely on apparent
authority and such authority is to be gathered from all of the facts and circumstances
properly admitted into evidence.” Innotext, Inc. v. Petra'Lex USA Inc., 694 F.3d 581,
589 (6th Cir. 2012) (citing Grinnell v. Carbide & Carbon Chems. Corp., 282 Mich.
509 (1937)). “Apparent authority arises where the acts and appearances lead a third
person reasonably to believe that an agency relationship exists ... [h]owever,
apparent authority must be traceable to the principal and cannot be established only
by the acts and conduct of the agent.” Chires v. Cumulus Broad., LLC, 543 F. Supp.
2d 712, 717 (E.D. Mich. 2008) (citing Hertz Corporation v. Volvo Truck
Corporation, 210 Mich. App. 243, 246 (Mich. App. 1995))
The doctrine of apparent authority has three distinct elements:
(1) the person dealing with the agent must do so with belief in the
agent's authority and this belief must be a reasonable one, (2) the belief
must be generated by some act or neglect on the part of the principal
sought to be charged, and (3) the person relying on the agent's authority
must not be guilty of negligence.
VanStelle v. Macaskill, 255 Mich. App. 1, 10 (2003) (quoting Grewe v. Mt. Clemens
Gen. Hosp., 404 Mich. 240, 252-53 (1978)).
The third party’s reasonable belief in the existence of an agency relationship
can be traceable to an omission or omissions by the principal, in addition to
affirmative acts. See Little v. Howard Johnson Co., 183 Mich. App. 675, 683 (1990)
(citing Sasseen v. Community Hosp Foundation, 159 Mich. App. 231, 238 (1986)).
The instant Motions present two parallel questions to this Court. First,
drawing all inferences in Lear’s favor, has Drive has shown in its Renewed Motion
for Summary Judgment that no reasonable jury could find that Cameron had
apparent agency to bind Drive to the MTA? Second, drawing all inferences in
Drive’s favor, has Lear has shown in its own Motion that a reasonable jury could
only find that Cameron had apparent authority in that regard? For the reasons below,
the Court answers the first question in the negative but the second question in the
affirmative. Accordingly, the Court will deny Drive’s Renewed Motion for
Summary Judgment, and grant Lear’s Renewed Motion for Summary Judgment.7
Drive’s Renewed Motion for Summary Judgment
Drive makes a three-pronged argument for summary judgment in its favor.
First, Drive argues that it never agreed to waive all rights to collect from Lear, and
that Lear has failed to establish that any authorized representative of Drive signed
the MTA. Second, Drive argues that even if it is enforceable, the MTA cannot
modify the terms of the express contract between Drive and Lear in the bills of lading
under the Ninth Circuit decisions C.A.R. and Oak Harbor. Third, Drive argues that
as a third-party beneficiary, Lear can only enforce the MTA to the same extent that
PBP could, and PBP would have no rights in this regard because they substantially
The parties dispute whether the evidentiary standard applicable here is
“preponderance of the evidence” or “clear and convincing evidence.” Because the
Court concludes that the outcome would be the same under either standard, the Court
need not reach this issue.
breached their obligations under the MTA.
The second and third aspects of Drive’s argument were already addressed by
Judge Rosen in the July 2016 Opinion. Drive’s argument based on C.A.R. and Oak
Harbor essentially reiterates its earlier argument that the MTA (to which Lear was
not a party) cannot modify the terms set forth in the bill of lading, but this Court
finds for the reasons stated earlier that whatever C.A.R. and Oak Harbor have to say
about this case, Michigan law is clear that the MTA’s waiver provision can
supersede the MTA’s allocation of liability. Likewise, Judge Rosen rejected Drive’s
argument based on the “stand in the shoes” principle in the July 2016 Opinion, both
because Lear need not qualify as a third-party beneficiary to enforce the MTA under
Michigan law, and because the terms of the MTA contain countervailing evidence
as to the parties’ intentions that outweighs that rule of construction here. As Drive
has not materially changed these arguments from the form they took in its last
summary judgment motion, the Court sees no reason to upset these determinations.
Any case Drive may make for summary judgment in its favor must be based
on an argument that Cameron lacked both actual authority and apparent authority to
bind Drive to the MTA. Drive first claims that Cameron did not have actual
authority, but there is no substantial dispute over this; the crucial issue is whether
Cameron had apparent authority. On that point, Drive asserts that Lear has failed to
show that Drive took any affirmative steps to hold out Cameron as having the
requisite authority, and that Lear has failed to show that any belief in Cameron’s
authority on PBP’s part was reasonable.
Drive mischaracterizes Lear’s burden when it states that “Lear must prove
that, by something Drive’s principals said or did to PBP, Drive conveyed to PBP
that Jeff Cameron was its agent for executing important master agreements that
limited Drive’s ability to seek payment for its services.” (Drive Mot. at 31.)
Michigan agency law is clear that to support a finding of apparent authority, the third
party’s reasonable belief in the agent’s authority “must be generated by some act or
neglect of the principal.” Little, 183 Mich. App. at 683 (emphasis added); VanStelle,
255 Mich. App. at 10. Not all instances of neglect by principals will create apparent
authority, of course: the doctrine requires that the neglect “generate” a “reasonable
belief” in the third party that the agent is acting within his or her authority. See id.
Several factors in this case, taken together, strongly favor a finding that PBP’s
belief in Cameron’s authority was traceable to Drive. First, it is undisputed that
Drive never communicated any limitations on Cameron’s authority to PBP or to any
other outside parties. Second, Aaron Jones testified that before he sent the MTA to
Drive to be signed, he was “sure [he] communicated with Clark [Brockman] rather
than Jeff [Cameron] that it was coming over.” (Aaron Jones Dep. 39:8-10.) Jones
then confirmed that to the best of his recollection, he “told [Brockman] it was coming
over and when [he] got it back, Jeff had signed it[.]” (Aaron Jones Dep. 39:11-14.)
Although there are some ambiguities in Jones’s testimony,8 they must be drawn in
Lear’s favor at this point, and the narrative that thus emerges is that Jones informed
Brockman (who everyone agrees had the requisite authority) that he would be
sending the MTA, sent it, and then received back a copy of the MTA that was either
initialed or signed on every page by a person Jones knew to be Brockman’s
employee. Third, Drive performed in accordance with the MTA after it was sent
back to PBP, by submitting invoices to and collecting payment from PBP, and by
refraining from contacting Lear directly when PBP began to miss payments that it
Drive makes much of these ambiguities, but all they prove is that Aaron Jones did
not have a specific recollection of a conversation with Brockman regarding the terms
of the MTA or the MTA in general. This does not contradict his testimony that he
was “sure [he] communicated with Clark rather than Jeff,” since that perception was
independently supported by his recollection that at a different time he “moved a
piece of business from [his previous company] to [PBP], and Clark was the only one
[he] talked to.” (Aaron Jones Dep. 39:8-10, 47:20-25.)
Drive also asserts in its Renewed Motion that “Mr. Jones never sent the alleged
agreement to either” Breault or Brockman. (Drive Mot. at 14, 20.) Drive supports
this factual proposition by citing a portion of Breault’s Declaration, in which Breault
averred that “[n]either I or nor any of Drive's senior managers had even seen the
document before it was produced by PBP's counsel in December 2014.” (Breault
Decl. ¶ 8.) This may be evidence that Breault himself never saw the MTA before
this litigation. But as to whether Brockman ever saw it, Breault’s averment is
minimally probative if it is based solely on firsthand personal knowledge, and likely
inadmissible hearsay if it is based on anything Brockman said to Breault. Breault’s
Declaration thus fails to fully counteract Aaron Jones’s testimony that he was
confident he sent the MTA to Brockman.
There is in fact no testimony from Brockman in the record at all, which is a
significant omission given that if anyone at Drive besides Cameron saw the MTA in
2011, all indications are that it would have been Brockman. The omission is even
more significant given Aaron Jones’s testimony that he did in fact recall Brockman
acknowledging after the fact that the MTA had been executed.
owed to Drive. These facts in tandem are more than enough to justify a conclusion
that an act or omission by Drive generated a belief on PBP’s part that Cameron had
authority to sign the MTA.
There is no real dispute that PBP subjectively believed in Cameron’s
authority, but as Drive points out, that belief must be reasonable. Again drawing all
reasonable inferences in Lear’s favor, this Court cannot conclude that no reasonable
jury could find PBP’s belief to be reasonable. The facts set forth in the paragraph
above strongly suggest that PBP’s belief was reasonable even by themselves: Aaron
Jones sent the MTA to (or at least communicated about it with) a person who clearly
had the authority to sign the document, and then had it promptly returned to him
with every page initialed or signed. Other evidence that supports this conclusion
includes Jones’s testimony that he understood Cameron to be an employee who
signed documents like the MTA daily (Aaron Jones Dep. 37:19-38:12), Hutt’s
testimony that Drive never communicated any limitations on Cameron’s authority
to PBP (Hutt Dep. 35:1-21.), and Aaron Jones’s testimony that an agreement like the
MTA is “a common thing in transportation. It's not really a send it to your boss or
send it to your supervisor kind of deal.” (Aaron Jones Dep. 37:13-15.)
Drive takes specific issue with the last of those points, arguing that
notwithstanding Jones’ testimony, any belief that Cameron, who was not a member
of senior management, “would have the authority to waive Drive’s recourse to seek
payment for a million dollars’ worth of services” is per se unreasonable, as is Jones’s
statement that the MTA is “not really a send it to your boss or send it to your
supervisor kind of deal.” (Drive Mot. at 33.) But Drive’s assertion is conclusory and
unsupported by any evidence that within the freight industry norms and practices
prevailing at the time, these beliefs would have been unreasonable. The testimony
of Aaron Jones, who had worked in the industry for nearly a decade before the MTA
was signed (Aaron Jones Dep. 7:2-17:9), amounts to competent evidence that PBP’s
belief was reasonable, which Drive has thus failed to rebut.
The fact that Drive performed consistently with the MTA has another, larger
significance here. Michigan recognizes the doctrine of ratification, in which a
principal’s after-the-fact conduct can give the unauthorized actions of the agent the
same legal effect as they would have had they been authorized. The Michigan
Supreme Court defines the doctrine in this way:
“Ratification is the affirmance by a person of a prior act which did not
bind him but which was done or professedly done on his account,
whereby the act, as to some or all persons, is given effect as if originally
authorized by him.” . . .
“Affirmance is either . . . (a) a manifestation of an election by one on
whose account an unauthorized act has been done to treat the act as
authorized, or . . . (b) conduct by him justifiable only if there were such
David v. Serges, 373 Mich. 442, 444 (1964) (quoting Restatement (First) of Agency
§§ 82, 83 (1933)); see also Gorman Golf Prod., Inc. v. FPC, L.L.C., No. 295201,
2011 WL 4424349, at *5 (Mich. Ct. App. Sept. 22, 2011) (“As an example,
ratification by a principal would include the acceptance of the benefits of an
agreement ‘with knowledge of the material facts.’”) (quoting Echelon Homes, L.L.C.
v. Carter Lumber Co., 261 Mich. App. 424, 432 (2004)). “Although Michigan cases
in which ratification has been discussed usually have involved receipt of direct
benefits by the ratifying principal, evidence of receipt of benefits, while it lends
plausibility to an allegation of ratification and, indeed, may in itself constitute
ratification, . . . is not a sine qua non of ratification.” David, 373 Mich. at 444 (citing
Bacon v. Johnson, 56 Mich. 182, 185 (1885) and Langel v. Boscaglia, 330 Mich.
655, 659 (1951)).
There is evidence in the record that even if Cameron lacked apparent authority
to bind Drive to the MTA, Drive ratified the MTA by affirmance under David. Drive
submitted invoices and proof of delivery to PBP, and thereafter collected payment
from PBP for the individual shipments. (Breault Dep. 12:2-13:21, 30:24-31:6.) As
Judge Rosen noted, this is “inconsistent with [Drive]’s contention that the bills of
lading should control the determination of liability for [Drive]’s freight charges.”
(July 2016 Opinion at 29.) Additionally, as required by paragraph 8 of the MTA,
which also contains the waiver provision at issue in this case, Drive made no attempt
to contact Lear regarding the payment deficiencies from PBP’s first missed payment
in February 2013 until October 2013—well after the relationship between Drive and
PBP had been terminated. (Breault Dep. 31:12-16, 33:4-36:24.)
Other testimony by Breault tells a different story about whether Drive’s
actions with respect to PBP represent affirmance of the MTA. Breault testified that
there was never a written document memorializing the contractual or business
relationship between Drive and PBP. (Breault Dep. 11:6-8, 27:10-13.) Further,
Breault acknowledged that Drive never contacted Lear about the missing payments,
but chalked that up to business judgment, testifying that in general Drive “never
contacted the customer directly in risk of being seen as someone who went around
the broker, which can be detrimental to our business.” (Breault Dep. 32:22-33:3.)
This testimony reasonably permits the alternative inference that Drive invoiced and
was paid by PBP pursuant to an informal arrangement between the companies, rather
than doing so because the MTA required it to; it also permits the alternative inference
that Drive waited until after its working relationship with PBP was over to contact
Lear due to professional courtesy, rather than contractual obligation. Thus, while
there is solid evidence of ratification in the record, it is not without limitations.
To overcome Lear’s waiver defense, as it must do to justify summary
judgment in its favor, Drive must show that there are no genuine issues of material
fact regarding any of the elements of the apparent authority doctrine or the
ratification doctrine, such that no reasonable jury could conclude that Cameron had
apparent authority and no reasonable jury could conclude that Drive ratified
Cameron’s signing of the MTA. Drive has not met this burden. There is compelling
evidence that Cameron had apparent authority to take the action that he did, and
there is at least a genuine issue of material fact as to whether Drive ratified that
action through subsequent conduct. The Court will therefore deny Drive’s Renewed
Motion for Summary Judgment as to its breach of express contract claim. Further,
because the Court finds for the reasons set forth below that Lear can enforce the
MTA’s waiver provision against Drive under the doctrine of apparent authority, the
Court will also deny Drive’s Motion for Summary Judgment as to its implied
contract and unjust enrichment claims, since Judge Rosen held (and this Court agrees
that) the MTA’s waiver provision encompasses those claims.
Lear’s Renewed Motion for Summary Judgment
To obtain summary judgment in its favor on its waiver defense, and thus on
Drive’s claims overall, Lear must show that there is no genuine issue of material fact
as to the elements of apparent authority, or alternatively that there is no genuine issue
of material fact as to the elements of ratification. In other words, Lear has two
options. It can prevail on a theory of apparent authority if it can demonstrate the
absence of any genuine fact questions over (1) whether PBP reasonably believed in
Cameron’s authority to sign the MTA, (2) whether that belief was generated by some
act or neglect on Drive’s part, and (3) whether PBP was non-negligent in forming
that belief. See VanStelle, 255 Mich. App. at 10. Alternatively, Lear’s waiver defense
may prevail on a ratification theory if the record shows that no genuine fact questions
would preclude any reasonable jury from finding either that (1) Drive in some way
manifested its assent to the MTA after it was signed and returned to Drive, or (2)
Drive engaged in conduct that was justifiable only if it had agreed to the be bound
by the MTA. See David, 373 Mich. at 444.
As explained above in the discussion of Drive’s Renewed Motion for
Summary Judgment, there are genuine fact issues germane to the question of
ratification here. Consequently, this Court is not prepared to hold that no reasonable
jury could find that Drive’s interactions with PBP and its lack of contact with Lear
were for any reason other than Drive’s after-the-fact assent to the MTA. This Court
does conclude, however, that the record reflects no genuine issues of material fact
as to whether Cameron had apparent authority to sign the MTA on Drive’s behalf.
There is no dispute that PBP subjectively believed that Cameron possessed
the authority to bind Drive to the MTA. The contested issues are therefore whether
PBP’s belief was reasonable, whether it can be traced to one or more acts or
omissions by Drive, and whether PBP was in some way negligent in forming it.
For the reasons stated in the discussion of Drive’s Renewed Motion for
Summary Judgment, supra, this Court concludes that no reasonable trier of fact
could find that PBP’s belief in Cameron’s authority to sign the MTA was
unreasonable. This conclusion is most strongly supported by the testimony of Aaron
Jones that he was in frequent communication with Brockman prior to the signing of
the MTA;9 that he very likely informed Brockman before sending the MTA that it
was coming; and that very shortly after he sent it, he received back a copy that was
initialed or signed on every page by Cameron, whom Jones knew worked under
Brockman. Equally important here is Aaron Jones’s testimony that he was not (or
would not have been) surprised to learn that Cameron signed the document on behalf
of Drive, given his perception based on “[t]he way they operate[ that] he was the one
who signed” documents like the MTA both for PBP and for other clients “on a daily
basis.” (Aaron Jones Dep. 37:22-38:18.) In light of all of this, as well as Aaron
Jones’s testimony that at the relevant time he “talked to [Brockman] every day, all
day, probably more than [Breault] talked to [Brockman],” and further taking into
account the fact that neither Cameron nor any other employee of Drive ever
communicated any limitations on Cameron’s authority to PBP, no reasonable jury
could conclude that PBP’s belief that the MTA was signed by a person with authority
The Court notes that while Aaron Jones testified less than definitively that he was
“sure [the MTA] probably went to Clark rather than Jeff” (Aaron Jones Dep. 39:1718), Jones’s testimony still generates a strong—if not wholly unrebuttable—
inference that Jones in fact did so. Breault’s vouching for Brockman’s having never
seen the MTA in his Declaration is considerably less probative on that point (not to
mention potential hearsay), especially given the absence of any testimony from
Brockman himself. The Court is thus not required to assume that Brockman never
saw the MTA in the spirit of drawing reasonable factual inferences in Drive’s favor.
to sign it was unreasonable.10
In a similar vein, the Court concludes that a reasonable trier of fact could only
determine that PBP’s belief in Cameron’s authority was traceable in substantial part
to acts or omissions by Drive. As with the “reasonable belief” question examined
above, the evidence in the record does not merely require denial of summary
judgment to Drive, but is in fact also compelling enough to justify the conclusion
that Lear is entitled to judgment as a matter of law on the issue. To begin with, it is
undisputed that Drive made no representations to PBP that Cameron’s authority was
limited in any way. Not every failure by a principal to expressly limit its agent’s
authority will generate a reasonable belief in third parties as to that authority; what
makes the omission significant here is the third party’s awareness that the agent was
The parties argue vigorously over whether the MTA was a boilerplate or otherwise
commonplace agreement, and (relatedly) the extent to which the Jones brothers
entered into agreements like the MTA with any other business partners—or with
Drive at any other times. As noted above, the record contains conflicting testimony
on whether Drive began carrying freight for PBP in 2010 or 2011. The record is also
obscure as to whether an agreement like the MTA was executed between Drive and
Camryn Logistics, the company that the Jones brothers worked for before they
bought PBP in late 2010 or early 2011. (Alexander Jones Dep. 52:24-53:6; Aaron
Jones Dep. 38:13-16; Hutt Dep. 23:8-24:7, 49:20-24.) .
At this stage, the Court must resolve in Drive’s favor any factual ambiguities as to
the frequency with which PBP entered into agreements like the MTA, but doing so
does not materially alter the Court’s analysis of how reasonable PBP’s belief in
Cameron’s authority was. That analysis depends primarily on the evidence regarding
Aaron Jones’s interactions with and perceptions of Drive and its employees, and so
the analysis would be materially unchanged even if the MTA were the first
agreement of its kind that PBP had ever entered into.
given similar if more limited authority in other respects. Cameron testified that he
did have authority to bind Drive by signing some types of documents, such as load
sheets or trailer use authorizations. That Drive made no indication as to any limits
on that authority made it more reasonable for a third party to conclude, as Aaron
Jones in fact did, that Cameron signed documents like this “on a daily basis.” (Aaron
Jones Dep. 38:4-12.) Also relevant here is Jones’s testimony that if he had been
given any indication that Cameron lacked the authority to sign the MTA, he would
have sent the document to Brockman or Breault for their signature. Moreover, PBP’s
belief that Cameron had the authority to sign the MTA was rendered even more
reasonable by Drive’s failure to notify him at any point after it sent the MTA back
to PBP, and by Drive’s subsequent performance consistent with the terms of the
MTA, as discussed above.11
This leaves the question of whether PBP, “the third person relying on the
The act of sending the initialed and signed MTA back to Aaron Jones could also
be an act to which PBP’s reasonable belief could be traceable, were it not for a gap
in the record regarding who actually sent it. “Apparent authority . . . cannot be
established only by the acts and conduct of the agent,” Chires, 543 F. Supp. 2d at
717 (quoting Hertz Corporation, 210 Mich. App. at 246), and so if the MTA was
sent to PBP by a Drive employee other than Cameron, that act could qualify as
additional evidence of apparent authority. Cameron had no recollection of sending
it, and also testified that it was unlikely that it was him in any case, given the hour
the fax was sent. At the same time, there is no evidence that anyone else sent it, or
any indication as to who besides Cameron might have. This ambiguity must be
resolved in Drive’s favor in adjudicating Lear’s Motion, so the Court cannot regard
the faxing of the executed MTA to be an “act of the principal” for present purposes.
agent's apparent authority[, was] guilty of negligence.” VanStelle, 255 Mich. App.
at 10 (quoting Grewe, 404 Mich. at 252-53). Drive argues that PBP negligently
breached its duty to inquire into the scope of Cameron’s agency, and cites Cutler v.
Grinnell Bros., 325 Mich. 370 (1949), for the proposition that “[o]ne dealing with
an agent is bound to inquire into the extent of his authority, not from the agent, in
the absence of written evidence thereof, but from the principal, if accessible . . . .”
Id. at 376.
Cutler does represent a limitation imposed by Michigan law on the doctrine
of apparent authority, but it is one that is distinguishable from the present case.
Cutler involved a contractor who installed basement electrical wiring at a retail
branch manager’s behest, and later sued the manager’s company after the company
refused to pay him because it had not given the manager approval to authorize the
job. Id. at 371-73. The Michigan Supreme Court reversed the trial court’s judgment
for the contractor, noting that there was “nothing in the record to indicate that
plaintiff made any attempt to find out from the defendant whether the branch
manager had authority to have the basement rewired.” Id. at 377. But critical to the
Cutler court’s holding was the fact that the contractor “had already been put on
notice” that in that specific context, the manager “had only limited authority . . . .”
Id. Not long before, the contractor had performed an initial electrical wiring job for
the same parties in the same location; when the contractor gave his estimate to the
manager for the first job, the manager said that he would need approval from his
company, which the company denied, prompting the contractor to submit a lower
quote that was then accepted. Id. at 371-72. The court in Cutler relied on this fact in
holding that the contractor had a duty to inquire into the manager’s authority. The
court also found that “[a] further indication that plaintiff had notice or knowledge of
the local manager's lack of authority to have the basement rewired [was] shown by
the amount involved[,]” since the amount that the contractor quoted for the second
job (and which the manager approved without due authorization) was considerably
more than the amount the company had agreed to for the first job. See id. In short,
Cutler’s duty of inquiry appears to be limited to situations in which the third party
has a specific reason to believe that the agent’s authority is limited in the particular
context at issue. Cutler does not compel a finding that PBP was negligent in relying
on Cameron’s apparent authority to bind Drive to the MTA, and for the same reasons
that the Court holds as a matter of law that it was reasonable for PBP to believe
Cameron had the requisite authority, the Court concludes that no reasonable jury
could find that PBP was negligent in relying on Cameron’s apparent authority.
Because a reasonable jury could only conclude that PBP reasonably believed
in Cameron’s authority to bind Drive to the MTA, that PBP’s belief was traceable
to acts or omissions by Drive, and that PBP was not negligent in forming that belief,
this Court holds that the MTA’s waiver provision is enforceable by Lear against
Drive. Drive therefore “waive[d] any right it may otherwise have to proceed or
commence any action against any [Lear] for the collection of any freight bills arising
out of transportation services performed” pursuant to the MTA. (Lear Mot. Ex. F,
Master Transportation Agreement at 4.) Accordingly, the Court will grant summary
judgment to Lear on Drive’s breach of express contract, unjust enrichment, and
implied contract claims.
For all of the reasons stated above, the Court hereby DENIES Drive’s
Renewed Motion for Summary Judgment (ECF No. 110), and GRANTS Lear’s
Renewed Motion for Summary Judgment (ECF No. 109).
IT IS SO ORDERED.
s/Paul D. Borman
Paul D. Borman
United States District Judge
Dated: September 29, 2017
CERTIFICATE OF SERVICE
The undersigned certifies that a copy of the foregoing order was served upon
each attorney or party of record herein by electronic means or first class U.S. mail
on September 29, 2017.
Deborah Tofil, Case Manager
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