Jim Ball Pontiac-Buick-GMC, Inc. v. DHL Express (USA), Inc. et al
Filing
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DECISION AND ORDER denying Plaintiff's #53 Renewed Motion for Summary Judgment. The parties are directed to contact the court when discovery is complete to establish a further schedule. Signed by Hon. John T. Curtin on 4/7/2011. (JEC)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
JIM BALL PONTIAC-BUICK-GMC, INC.
Plaintiff,
-vs-
08-CV-761C
DHL EXPRESS (USA), INC., et al,
Defendants.
APPEARANCES:
HODGSON RUSS LLP (DANIEL C. OLIVERIO, ESQ.
and JOHN L. SINATRA, JR., ESQ., of Counsel),
Buffalo, New York, Attorneys for Plaintiff.
QUINN EMANUEL URQUHART & SULLIVAN, LLP
(RICHARD I. WERDER, JR., ESQ. and SARAH L.
HARTLEY, ESQ., of Counsel), New York, New York,
Attorneys for Defendants.
BACKGROUND
This action is before the court on plaintiff’s renewed motion for summary
judgment (Item 53). Plaintiff seeks to recover damages from defendants for the alleged
improper application of jet fuel surcharges for retail shipping services delivered by
ground transportation.1 The parties previously filed cross motions for partial summary
judgment regarding the interpretation of the contract at issue (Items 19, 20). In a
Decision and Order filed May 7, 2010, the court denied the cross motions, finding an
ambiguity in the term “Air Express” (Item 33).
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The case was filed as a class action. In a Decision and Order filed March 2, 2011, the court
denied the plaintiff’s m otion for class certification (Item 58).
FACTS
According to the amended complaint (Item 3), defendants, collectively referred to
as “DHL,” are a shipping company that transports packages for a fee by motor vehicle
and airplane. Plaintiff is an automobile dealership that used DHL for shipping services.
At all times relevant to the complaint, DHL offered “Next Day,” “2nd Day,” and “Ground”
delivery service. In its “U.S. Fees” document, DHL stated that “Air Express shipments”
are assessed a jet fuel surcharge, while “Ground Shipments” are assessed a fuel
surcharge indexed to the United States Department of Energy’s diesel fuel index (Item
3, ¶¶ 35-41). Plaintiff alleges that, pursuant to the contract documents, all shipments
transported solely by ground transportation should be assessed the ground fuel
surcharge, not the jet fuel surcharge (Item 3, ¶ 45). Defendant contends that its “Air
Express” services include “Next Day” and “2nd day” shipments and that such shipments
are assessed a jet fuel surcharge even if the shipment is transported by ground
transportation. Plaintiff alleges that it was assessed jet fuel surcharges for packages
that DHL shipped solely by ground transportation, in breach of the contract.
Plaintiff bases this renewed motion on “new evidence” which it received during
discovery. The new evidence includes 2005, 2006, and 2008 memoranda, e-mails, and
PowerPoint presentations in which DHL’s upper management instructed its sales force
to explain to certain DHL customers that fuel surcharges were a “straight cost pass
through,” “only a Cost Pass Through,” “nothing but a cost pass through,” “a pure cost
pass through,” and/or “entirely a cost pass through” (Item 54, Att. 3, p. 2).
Plaintiff also relies on the deposition of Hank Gibson, DHL’s Vice President of
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Strategy, in support of its motion. See Item 54, Att. 13 (hereafter “Gibson Dep.”). Mr.
Gibson was previously DHL’s Vice President of Pricing and was responsible for setting
DHL’s fuel surcharge rates. Mr. Gibson explained that the statements plaintiff relies
upon were made to certain DHL customers who previously paid a discounted fuel
surcharge according to the terms of their individual agreements with DHL. Gibson
Dep., pp. 21-22. At the time, DHL sought to renegotiate those discounts to reflect the
current market conditions. The fuel surcharge is “an attempt to capture an unexpected
variation in underlying fuel cost, not the total cost of fuel.” Id., p. 17. It was explained
as a “cost pass through,” reflecting changes in the cost of fuel and “not something that
was just done on a whim.” Gibson Dep., p. 27.
DISCUSSION
Summary judgment may be granted where it is shown 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); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23
(1986). “When ruling on a summary judgment motion, the district court must construe
the facts in the light most favorable to the non-moving party and must resolve all
ambiguities and draw all reasonable inferences against the movant.” Dallas Aerospace,
Inc. v. CIS Air Corp., 352 F.3d 775, 780 (2d Cir. 2003); see also Tufariello v. Long
Island R.R. Co., 458 F.3d 80, 85 (2d Cir. 2006) (noting that a court must draw all
reasonable inferences in the non-movant's favor). “A dispute about a genuine issue
exists for summary judgment purposes where the evidence is such that a reasonable
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jury could decide in the non-movant's favor.” Beyer v. County of Nassau, 524 F.3d 160,
163 (2d Cir. 2008).
Plaintiff argues that the new evidence “is capable of only one interpretation - that
DHL’s jet fuel surcharge applies only to “Air Express shipments,” which are shipments
that have traveled by air.” (Item 54, Att. 3, p. 6). It also contends that the court may
reach this result by applying the doctrine of contra proferentem, construing any
ambiguity against the drafter of the contract.
The court finds the proffer of additional evidence insufficient to sustain the
plaintiff’s burden on this renewed motion for summary judgment. The references to fuel
surcharges as a “cost pass through” do not establish that “Air Express” was intended to
refer only to those packages which were transported by airplane or that jet fuel
surcharges were to be applied only to packages transported by air. DHL contends that
it used the term “Air Express” to refer to its expedited delivery products, irrespective of
the mode of transport, and assessed a jet fuel surcharge to those shipments. It has
presented evidence of the parties course of dealing and the custom in the industry in
support of its position. Plaintiff’s “new evidence” is merely argument in favor of its
position.
This dispute cannot be decided by the court as a matter of law. As the terms of
the contract are ambiguous and “the intent of the parties depends on the credibility of
extrinsic evidence or on a choice among reasonable inferences to be drawn from
extrinsic evidence, then such determination is to be made by the” trier of fact, and
summary judgment is inappropriate. Hartford Accident & Indem. Co. v. Wesolowski,
305 N.E.2d 907, 909 (N.Y.1973). Additionally, resort to the doctrine of contra
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proferentem is inappropriate. Generally under New York law, “[w]here extrinsic
evidence is conclusory or does not shed light upon the intent of the parties, a court may
resort to the contra proferentem rule of contract construction and construe any
ambiguities in the contract” against the drafter as a matter of law. Morgan Stanley
Group Inc. v. New England Ins. Co., 225 F.3d 270, 279 (2d Cir. 2000). However, “if
extrinsic evidence is available but inconclusive,” id. at 276, or it “raises a question of
credibility or presents a choice among reasonable inferences,” id. at 279 (quotation
omitted), the ambiguity in question should be considered at trial, rather than applying
the contra proferentem rule at the summary judgment stage. See also In re Prudential
Lines Inc., 158 F.3d 65, 77 (2d Cir. 1998); Schering Corp. v. Home Ins. Co., 712 F.2d 4,
10 n. 2 (2d Cir.1983) (holding that contra proferentem “is used only as a matter of last
resort, after all aids to construction have been employed but have failed to resolve the
ambiguities in the written instrument”).
CONCLUSION
Plaintiff’s motion for summary judgment is denied. The parties are directed to
contact the court when discovery is complete to establish a further schedule.
So ordered.
_______\s\ John T. Curtin_____
JOHN T. CURTIN
United States District Judge
Dated:
4/7
, 2011
p:\pending\2008\08-761-2.mar2311
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