Underdog Trucking, L.L.C. et al v. Cellco Partnership et al

Filing 81

OPINION & ORDER: The defendant's January 20 motion for summary judgment is granted. The Clerk of Court is directed to enter judgment for the defendant and close the case. (Signed by Judge Denise L. Cote on 6/26/2012) (djc)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-----------------------------------------X
:
UNDERDOG TRUCKING, L.L.C.,
:
Plaintiff,
:
-v:
:
CELLCO PARTNERSHIP d/b/a VERIZON
:
WIRELESS,
:
Defendant.
:
:
---------------------------------------- X

10 Civ. 9189 (DLC)
OPINION & ORDER

APPEARANCES:
For the plaintiff:
Japeth N. Matemu
Matemu Law Office P.C.
5540 Centerview Drive
Suite 200
Raleigh, North Carolina 27606
For defendant:
Raymond G. McGuire
Kristina C. Hammond
950 Third Avenue
Fourteenth Floor
New York, New York 10022

DENISE COTE, District Judge:
On January 20, 2012, defendant Cellco Partnership d/b/a
Verizon Wireless (“Verizon”) moved for summary judgment with
respect to Underdog Trucking’s (“Underdog”) claims of breach of
contract and race discrimination in violation of 42 U.S.C.
§ 1981.

For the reasons that follow, defendant’s motion is

granted.

1

BACKGROUND
The following facts are undisputed, unless otherwise noted.
Underdog is engaged in the freight and shipping industry in
Arizona.

Reggie Anders (“Anders”) and his wife, both of whom

are African American, own Underdog.

Verizon is a cellular

telecommunications company.
In September 2006, Verizon began hiring Underdog to deliver
telecommunications equipment from a Verizon distribution center
in Tempe, Arizona to various cell tower sites throughout the
Southwest.

Initially, these jobs were performed on an “open

account” basis and were not governed by a formal, written term
sheet.

From April 3, 2007, however, the shipments were governed

by a document titled “General Services Agreement Between Verizon
Services Corp. and Underdog Trucking LLC” (the “2007 Agreement”
or the “Agreement”).

The Agreement, the terms of which are

discussed in greater detail below, was drafted and signed by
Verizon Services Corp., which is a purchasing agent for various
Verizon entities.

The Agreement was for a term of one year, but

contained an automatic renewal provision.

It was renewed

automatically on April 3, 2008, and April 3, 2009. 1
Soon after signing the Agreement with Underdog, Verizon
“tapered off” its use of two other trucking companies that had
1

The Agreement contains a choice-of-law provision selecting New
York law and a forum selection clause that requires any suit
arising out of the Agreement to be brought in a New York court.
2

previously provided similar services.

In November 2007,

however, Verizon began assigning jobs to BC Logistics (“BC”), a
rival shipping company owned by Vicki Boisjolie.

Unlike

Underdog, which owned most of its own equipment, BC was
primarily a forwarder, meaning it subcontracted the majority of
its deliveries to other carriers.

In November 2007, Verizon

entered into a carriage agreement with BC similar to its
Agreement with Underdog (the “BC Agreement”).

By mid-2008, the

trucking work for the Tempe distribution center was equally
divided between Underdog and BC.
Underdog made deliveries for Verizon for nearly two years
without incident.

In mid-2008, however, Michael Carey, who

managed the distribution center and Matthew Chappell, a Verizon
employee who often prepared bills of lading for the shipments
that Underdog carried, questioned the charges on several
invoices.

On September 2, 2008, Carey sent an e-mail to

Underdog inquiring about certain of these charges.

Shortly

thereafter, Carey was replaced by Oscar Aponte, who paid these
invoices after some initial inquiries.
In late 2008, Joe Cassidy, a Verizon employee who was
responsible for invoice processing, received two invoices (the
“November/December invoices”) from Underdog that he described as
“the most expensive freight bill that [he had] seen in that
role.”

The invoices struck Cassidy as excessive for the work
3

performed, so he sent them to Oscar Aponte, the manager of the
facility, for review.

Aponte showed the invoices to Matthew

Chappell, who prepared the bills of lading for shipments carried
by Underdog.

Both Aponte and Chappell agreed with Cassidy that

the bills appeared excessive.
Aponte shared the December invoices with his manager,
Marcus Stevenson.

Stevenson agreed that the charges seemed high

and directed Aponte to begin soliciting bids for all future
trucking jobs.

But because Verizon had no specific basis for

refusing payment of the November/December invoices, Aponte paid
them on January 7, 2009.
In early 2009, Verizon opened three jobs to bidding by
Underdog and BC.

In each case, BC’s bid was significantly lower

than Underdog’s.

On February 19, 2009, for example, Underdog

bid $8,114.40 to transport 39 skids from the Tempe distribution
center to Las Vegas.

BC’s bid for the same work was $1,890. 2

Unsurprisingly, BC was awarded each of the three jobs.
Through the spring of 2009, Verizon occasionally used
Underdog for delivery jobs that needed to be done on a rush
basis and thus could not be bid out.

2

The other work went to BC.

Although plaintiff disputes that the two bids are for the same
shipment, no reasonable jury could find otherwise. Both
estimates are dated February 19, 2009 and provide for the
delivery of 39 pieces weighing a total of 8000 lbs. from the
distribution facility in Tempe, Arizona to Henderson, NV, a
suburb of Las Vegas.
4

In May 2009, when Verizon questioned a bill for one of the few
jobs that Underdog performed for the company in 2009, Anders
brought a copy of the April 2007 Agreement to a meeting with
Aponte.

Anders says that when he showed Aponte the trucking

rates that were specified in the Agreement, the latter replied,
“I don’t care about your contract, token nigger.”

Aponte denies

making the remark or ever using the word “nigger.”
The relationship between Underdog and Verizon continued to
sour and, by late-May 2009, Anders was no longer responding to
bid requests by Verizon.

Soon thereafter Underdog filed a claim

with the Equal Employment Opportunity Commission (“EEOC”).

On

June 8, 2009, the EEOC issued a right to sue letter.

PROCEDURAL HISTORY
On October 21, 2009, Underdog and Anders filed suit against
Verizon Services Corporation (“VSC”), Verizon Communications
Inc. (“VCI”), Aponte, Chappell, and various unidentified
defendants asserting claims of racial discrimination in
violation of 42 U.S.C. § 1981, breach of contract, libel and
slander (the “2009 Action”).

In an Opinion of July 20, 2010,

the Court dismissed the claims against the individual defendants
for lack of personal jurisdiction and dismissed several claims
against the VSC and VCI on various other grounds.

See Underdog

Trucking, LLC & Anders v. Verizon Services Corp., et al., No. 09
5

Civ. 8918 (DLC), 2010 WL 2900048 (S.D.N.Y. July 20, 2010) (the
“July 20 Opinion”).
Following the July 20 Opinion, the remaining claims in the
2009 Action were those of Anders and Underdog that VSC and VCI
had interfered with their contract rights in violation of § 1981
and Underdog’s breach of contract claim against VSC.

On May 4,

2011, the Court dismissed Underdog’s remaining claims against
VSC and VCI pursuant to Pridgen v. Andresen, 113 F.3d 391, 393
(2d Cir. 1997) (holding that only a natural person may proceed
in an action pro se; a corporation must be represented by an
attorney in federal court).

On November 18, a motion by VSC and

VCI for summary judgment on Anders’ remaining § 1981 claim was
granted because, as noted above, “only a party with rights under
a contract may bring a § 1981 claim for improper discriminatory
interference with that contract.” Domino's Pizza v. McDonald,
546 U.S. 470, 476–77 (2006).
Meanwhile, on December 8, 2010, just after the close of
fact discovery in the 2009 Action, Underdog and Anders filed
this lawsuit (the “2010 Action”), bringing many of the same
claims, but naming Cellco/Verizon in the place of the VSC and
VCI.

An amended complaint was filed on February 18, 2011.

Verizon’s motion to dismiss that amended complaint was granted
in part in an Order dated June 14 and denied in part in an Order
dated July 1.

The June 14 Order dismissed all of the claims
6

brought by Anders, noting that, as a non-party to the Agreement,
he lacked standing to assert breach-of-contract or § 1981
claims.

See Domino's Pizza, 546 U.S. at 476–77.

Verizon moved

for summary judgment on Underdog’s claims of breach of contract
and race discrimination on January 20, 2012.

The motion was

fully submitted on February 22.

DISCUSSION
Summary judgment may not be granted unless all of the
submissions taken together “show that there is no genuine issue
as to any material fact and that the movant is entitled to
judgment as a matter of law.”

Fed. R. Civ. P. 56(c).

The

moving party bears the burden of demonstrating the absence of a
material factual question, and in making this determination, the
court must view all facts “in the light most favorable” to the
nonmoving party.

Celotex Corp. v. Catrett, 477 U.S. 317, 323

(1986); see also Holcomb v. Iona Coll., 521 F.3d 130, 132 (2d
Cir. 2008).
Once the moving party has asserted facts showing that the
non-movant's claims cannot be sustained, the opposing party must
“set out specific facts showing a genuine issue for trial,” and
cannot “rely merely on allegations or denials” contained in the
pleadings. Fed. R. Civ. P. 56(e); see also Wright v. Goord, 554
F.3d 255, 266 (2d Cir. 2009).

“A party may not rely on mere
7

speculation or conjecture as to the true nature of the facts to
overcome a motion for summary judgment,” as “[m]ere conclusory
allegations or denials cannot by themselves create a genuine
issue of material fact where none would otherwise exist.”

Hicks

v. Baines, 593 F.3d 159, 166 (2d Cir. 2010) (citation omitted).
Only disputes over material facts -- “facts that might affect
the outcome of the suit under the governing law” -- will
properly preclude the entry of summary judgment.

Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); see also
Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475
U.S. 574, 586 (1986) (stating that the nonmoving party “must do
more than simply show that there is some metaphysical doubt as
to the material facts”).
I.

Breach of Contract Claim
“Under New York law, a breach of contract claim requires

proof of (1) an agreement, (2) adequate performance by the
plaintiff, (3) breach by the defendant, and (4) damages.”
Fischer & Mandell, LLP v. Citibank, N.A., 632 F.3d 793, 799 (2d
Cir. 2011).

For the purposes of this motion, Verizon does not

dispute that the 2007 Agreement constituted a contract between
it and the plaintiff, 3 nor does it contend that Underdog did not

3

The 2007 Agreement purports to bind “Underdog Trucking LLC
. . . and Verizon Services Corp., . . . on behalf of itself and
for the benefit of its Affiliates . . . , each a Party and
together the Parties hereto.” The July 20 Opinion concluded
8

adequately perform its obligations under the Agreement.

Rather,

it argues that Underdog has failed to put forth evidence tending
to show that the Verizon defendants breached a specific
provision of the Agreement or that any damages flowed therefrom.
Underdog, in contrast, identifies seven provisions of the 2007
Agreement that it claims were violated by Verizon.
The parties’ disagreement in this regard stems not from any
factual dispute but from their differing understandings of what
the 2007 Agreement required.

Whether the agreement was in fact

breached is thus an issue of contract interpretation appropriate
for resolution on summary judgment.
Under New York law, “the fundamental objective of contract
interpretation is to give effect to the expressed intentions of
the parties.”

Lockheed Martin Corp. v. Retail Holdings, N.V.,

639 F.3d 63, 69 (2d Cir. 2011) (citation omitted).

“Where the

parties dispute the meaning of particular contract clauses, the
task of the court is to determine whether such clauses are
ambiguous when read in the context of the entire agreement; and
where consideration of the contract as a whole will remove the
ambiguity created by a particular clause, there is no
ambiguity.”

Law Debenture Trust Co. of New York v. Maverick

that the Agreement’s language created “at least an ambiguity” as
to whether Verizon affiliates other than VSC are parties to the
agreement. See July 20 Opinion, 2010 WL 2900048, at *4.
9

Tube Corp., 595 F.3d 458, 467 (2d Cir. 2010).

Contract language

presents no ambiguity where it has “a definite and precise
meaning, unattended by danger of misconception in the purport of
the contract itself, and concerning which there is no reasonable
basis for a difference of opinion.”

JA Apparel Corp. v. Abboud,

568 F.3d 390, 396 (2d Cir. 2009) (citation omitted).

“[W]hether

a written contract is ambiguous is a question of law for the
court.”

Id.

In resisting summary judgment on its breach of contract
claims, Underdog argues first that Verizon’s use of BC for
certain trucking jobs without first opening those jobs up for
competitive bidding violated Paragraph 6.2 of the 2007
Agreement.

Paragraph 6.2 provides, in relevant part:

Payment and Billing -- Verizon agrees to pay Supplier
as follows: . . . Verizon may submit an Order for
Services at the fixed pricing set forth in Exhibit A.
In addition, Verizon may solicit an offer or proposal
to perform Services on a competitive bid or quotation
basis, which if either is deemed acceptable to Verizon
will be performed pursuant to a subsequently issued
Order or Authorization Letter.
Underdog maintains that this provision “can only be understood
to mean that if the defendant elected not to pay the agreed
prices, then defendant had to submit the order to competitive
bidding.”

In other words, “[t]he contract did not permit

Defendant to issue shipping orders to [Underdog] competitors
without submitting the orders to competitive bidding.”

10

Underdog’s interpretation of Paragraph 6.2 cannot be
reconciled with that provision’s express terms, nor is it
supportable in light of the Agreement as a whole.

As noted, the

language upon which Underdog relies appears under the heading
“Payment and Billing.”

Paragraph 6.2 and the other provisions

that fall under that heading concern the means and manner in
which Underdog is entitled to be compensated once Verizon has
hired it to perform a particular service.

These provisions do

not purport to address the process by which Verizon may allocate
orders for services.

That issue is addressed by Paragraph 5 --

“Orders” -- which contains no reference to any limitations on
Verizon’s ability to assign trucking work to third-parties.
Underdog’s proposed reading of Section 6.2 is further negated by
Paragraph 4 of the Agreement, which states that the document’s
terms are intended to govern Verizon’s purchase of services from
Underdog “on a nonexclusive basis,” and emphasizes that “[t]his
is an as-ordered Agreement and does not itself order any
Services.”
This context leaves no ambiguity.

Section 6.2’s use of the

verb “may” (“Verizon may submit an Order” or “may solicit an
offer or proposal”) is plainly intended to be conditional and
not, as Underdog suggests, permissive.

Section 6.2 describes

circumstances that might give rise to various payment
obligations by Verizon.

It does not specify (and therefore
11

limit) the means by which Verizon is authorized to offer
trucking work to Underdog or third parties.

Accordingly,

plaintiff’s claim that Verizon breached Paragraph 6.2 by
offering trucking jobs to BC Logistics without opening them up
to bidding by Underdog fails.
Because the Agreement unambiguously allowed Verizon to
assign work to shippers other than Underdog, it follows a
fortiori that, contrary to plaintiff’s claim, Verizon’s
practice, beginning in 2009, of assigning shipping jobs to
Underdog only “in the very rare circumstances when BC was
incapable of doing the work” was not an improper repudiation of
the contract.

Nor did Verizon’s use of BC Logistics violate the

contract by “forcing [Underdog] to charge prices that were below
those mandated by the contract.”

As both parties acknowledge,

Underdog was free to discount its rates below those provided in
the Agreement; Verizon was likewise free to encourage such
discounting by assigning deliveries to the shipper that offered
the most competitive pricing.

For the same reasons, plaintiff’s

claim that Verizon violated the contract by “forcing Underdog to
bid on work and not providing it complete information when it
did” fails.

Put simply, nothing in the Agreement promised

Underdog preferential or even equal treatment vis-à-vis
competitors.

12

The other contract provisions upon which Underdog relies to
support its breach of contract claim are similarly unavailing.
Plaintiff maintains that the Agreement required Verizon to keep
shipment records for a period of four years after termination of
the Agreement and that Verizon’s inability to produce certain
bidding records during discovery suggests a violation of that
requirement.

But the provision in question, Paragraph 7.1 of

the Agreement, imposes the record-keeping duty on the
“Supplier,” defined in Paragraph 1 of the Agreement as Underdog,
not on Verizon.
Finally, Underdog argues that Verizon failed to comply with
Paragraph 6.5 of the Agreement, which provides that “payments of
undisputed amounts shall be made within sixty (60) days from the
date of receipt of each invoice.”

Yet plaintiff has identified

only one invoice, from May 8, 2009, that was not paid during the
60-day period and does not dispute that Verizon attempted to
make payment with interest upon learning that the invoice was
outstanding.
Thus, even viewed in the light most favorable to Underdog,
the undisputed evidence shows that Verizon complied with the
2007 Agreement.

Verizon is therefore entitled to judgment as a

matter of law on Underdog’s breach of contract claim.

13

II.

Section 1981 Claim
Section 1981 “protects the equal right of ‘[a]ll persons

within the jurisdiction of the United States' to ‘make and
enforce contracts' without respect to race.”

Domino's Pizza,

546 U.S. at 474-75 (citing 42 U.S.C. § 1981(a)).

On a motion

for summary judgment, claims under Section 1981 that rely on
indirect evidence of discriminatory intent are analyzed under
the familiar burden-shifting approach set forth in McDonnellDouglas Corp. v. Green, 411 U.S. 792, 802-03 (1973).

See Ruiz

v. County of Rockland, 609 F.3d 486, 491 (2d Cir. 2010).

Under

this framework, the plaintiff bears the initial burden of
establishing a prima facie case of discrimination.

In a

contract impairment case, the plaintiff must demonstrate (1)
membership in a protected class; (2) that she was impaired by
the defendant in the making or enforcing of a contract, and (3)
circumstances surrounding that impairment giving rise to an
inference of discrimination.

See Brown v. City of Oneonta, 221

F.3d 329, 339 (2d Cir. 2000).
If the plaintiff satisfies this initial burden, “a
presumption of discrimination arises, and the burden shifts to
the defendant, who must proffer some legitimate
nondiscriminatory reason for the adverse action.”
Schulmann, 604 F.3d 72, 80 (2d Cir. 2010).

Spiegel v.

If the defendant can

offer such a reason, the presumption of discrimination
14

dissolves, and “the defendant will be entitled to summary
judgment unless the plaintiff can point to evidence that
reasonably supports a finding of prohibited discrimination.”
Id. (citation omitted).

The plaintiff may do so by showing that

the defendant’s reasons were pretextual or that the defendant’s
reasons “were not the only reasons and that the prohibited
factor was at least one of the ‘motivating factors.’”
521 F.3d at 138 (citation omitted).

Holcomb,

Although the burden of

producing evidence may shift between the parties under this
framework, the “ultimate burden of persuading the trier of fact
that the defendant intentionally discriminated against the
plaintiff remains at all times with the plaintiff.”

Leibowitz

v. Cornell Univ., 584 F.3d 487, 499 (2d Cir. 2009) (citation
omitted).
To the extent Underdog’s Section 1981 claim rests on the
defendant’s purported interference with the 2007 Agreement, the
claim fails at the first stage of the McDonnell-Douglas
analysis.

As discussed above, the Agreement established a

framework that would govern future delivery contracts between
Underdog and Verizon and did not itself commit Verizon to assign
particular jobs to the plaintiff or prohibit Verizon from using
other carriers.

Thus, the conduct that Underdog cites in

support of its claim that Verizon interfered with its right to
enforce the 2007 Agreement -- the same conduct upon which it
15

relies for its breach of contract claim -- either does not bear
on the Agreement or is not supported by the evidentiary record. 4
But, Underdog also asserts that discriminatory motives
prevented Verizon from contracting with it to perform individual
delivery jobs.

It is, of course, true that “Section 1981 offers

relief when racial discrimination blocks the creation of a
contractual relationship, as well as when racial discrimination
impairs an existing contractual relationship.”
546 U.S. at 476.

Domino’s Pizza,

Here too, however, Underdog has failed to

carry its burden of establishing a prima facie case of race
discrimination.
As noted, to establish a prima facie claim for contract
impairment, a Section 1981 plaintiff must demonstrate (1)
membership in a protected class; (2) that she was impaired by
the defendant in the making or enforcing of a contract, and (3)
circumstances surrounding that impairment giving rise to an
inference of discrimination.

Brown, 221 F. 3d at 339.

For the

purposes of this motion, it can be assumed that the race of
Underdog’s African-American owners may be imputed to the
corporation, thereby satisfying the first prong of the test.

4

It

Specifically, Underdog argues that “[Verizon] employees
interfered with [the 2007 Agreement] by failing to pay invoices,
failing to allocate work, manufacturing a false claim that
[Underdog] was overcharging [Verizon], engaging in sham bidding,
failing to provide pertinent information to allow [Underdog] a
fair chance at bidding, [and] withholding bid information.”
16

is also assumed that a party’s refusal to deal constitutes
interference with the would-be counterparty’s contractual rights
in a way that is prohibited by Section 1981.

Even on these

assumptions, Underdog has failed to marshal any evidence that
would suggest that Verizon’s refusal to negotiate or to offer
Underdog jobs on equal terms with other bidders was motivated by
racial animus.
The only relevant piece of evidence that Underdog has
identified in support of its assertion that Verizon’s
contracting decisions were racially motivated is Anders’
testimony that, in May 2009, Aponte referred to the 2007
Agreement saying, “I don’t care about your contract token
nigger.”

In determining whether such isolated remarks give rise

to an inference of discrimination, the Second Circuit has
emphasized that “the more remote and oblique the remarks are in
relation to the [defendant’s] adverse action, the less they
prove that the action was motivated by discrimination.”

Tomassi

v. Insignia Fin. Grp., 478 F.3d 111, 115 (2d Cir. 2007).
Considered in light of this admonition, the remark attributed to
Aponte is of little value in assessing what motivated Verizon to
prefer the delivery services of BC Logistics over those of
Underdog.
First, as defendant notes, Verizon began using BC Logistics
for deliveries in March 2007, more than two-years before the
17

conversation between Anders and Aponte took place.

The remark

was thus fairly remote in time in relation to when the allegedly
discriminatory conduct began.

Second, the remark was made

during a dispute over the rates that Underdog was entitled to
charge for work already performed, not a discussion of
Underdog’s eligibility for future assignments.

This difference

in context reduces the probative value of the remark for
assessing the conduct at issue.

Finally, as the Tomassi Court

recognized, “remarks made by someone other than the person who
made the decision adversely affecting the plaintiff may have
little tendency to show that the decision-maker was motivated by
the discriminatory sentiment expressed in the remark.”

Id.

Here, the decisions in question -- day-to-day determinations
about which shippers to use for particular jobs -- were made by
Matt Chappell or one of two independent contractors who also
worked in the warehouse.

Although plaintiff’s brief suggests

that Aponte “was the one who assigned work,” this assertion is
not supported by the record.

Indeed, in its rule 56.1

Statement, plaintiff acknowledged Chappell’s role in arranging
jobs for Underdog and other shippers.
Even assuming that plaintiff could carry its burden of
establishing a prima facie case of discrimination, its Section
1981 claim would still fail.

Verizon has proffered a

legitimate, nondiscriminatory reason for assigning work to BC
18

over Underdog -- namely that BC offered the same services at
much lower rates.

In its brief, plaintiff questions whether

BC’s rates were in fact lower and whether the services provided
by the two companies were comparable, but it has offered no
evidence to support this speculation.

In contrast, Aponte’s

uncontradicted testimony was that on each of the three occasions
in 2009 that BC and Underdog submitted competing bids for the
same work, BC significantly underbid the plaintiff.

That

testimony is supported by Verizon records reflecting that on at
least one occasion BC submitted a bid that was more than $6,000
lower than the one submitted by Underdog.
Underdog tries weakly to rebut Verizon’s proffered
justification, asserting in passing that “cost was not an issue
to [Verizon] and efficiency was the primary concern.”
has submitted no evidence to support this claim.

But it

Ultimately

Underdog does not seriously contend that Verizon’s claim to
prefer BC for economic reasons was a mere pretext for
discrimination, nor could it.

Given the savings to be had,

Verizon cannot be blamed for assigning work to BC over Underdog.

19

CONCLUSION

The defendant's January 20 motion for summary judgment is
granted.

The

erk of Court is directed to enter judgment for

the defendant and close the case.

SO ORDERED:
Dated:

New York, New York
June 26, 2012

United

20

District Judge