Cornerstone Systems, Inc. v. Prestress Services Industries of Tennessee, LLC
Filing
49
ORDER granting 36 Motion for Summary Judgment. Signed by Judge Jon Phipps McCalla on 9/2/2016. (McCalla, Jon)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION
CORNERSTONE SYSTEMS, INC.,
Plaintiff,
No. 2:15-cv-02255-JPM-cgc
v.
PRESTRESS SERVICES INDUSTRIES
OF TENNESSEE, LLC,
Defendant.
ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT
Before the Court is Defendant Prestress Services Industries of
Tennessee, LLC’s Motion for Summary Judgment, filed on May 19,
2016.
(ECF No. 36.)
For the following reasons, the Court GRANTS
the Motion.
I.
PROCEDURAL BACKGROUND
On March 16, 2015, Plaintiff Cornerstone Systems, Inc.
(“Cornerstone” or “Plaintiff”) filed a Complaint in the Chancery
Court of Shelby County, Tennessee.
(Compl., ECF No. 1-1.)
Defendant Prestress Services Industries of Tennessee, LLC
(“Prestress” or “Defendant”) was served with the Complaint on
March 20, 2015 (see ECF No. 1-2) and filed a notice of removal
to the U.S. District Court for the Western District of Tennessee
on April 17, 2015 (ECF No. 1).
April 24, 2015.
(ECF No. 7.)
Defendant filed its Answer on
On January 5, 2016, Defendant filed a Motion to Transfer
Venue to the Northern District of Mississippi.
(ECF No. 16.)
Plaintiff responded in opposition on January 19, 2016.
17.)
(ECF No.
On June 7, 2016, Judge Samuel H. Mays, Jr. ordered
Defendant to submit evidence of the parties’ citizenship for
jurisdictional purposes.
(ECF No. 37.)
Defendant filed a
response in compliance with the order on June 9, 2016.
38.)
(ECF No.
On June 15, 2016, this Court received the case on
transfer.
(ECF No. 39.)
The Court denied the Motion to
Transfer Venue to the Northern District of Mississippi on July
7, 2016.
(ECF No. 44.)
On May 19, 2016, Defendant filed the instant motion for
summary judgment.
(ECF No. 36.)
Plaintiff responded in
opposition on June 20, 2016.
(ECF No. 41.)
Defendant filed a
reply brief on July 5, 2016.
(ECF No. 42.)
On July 26, 2016,
the Court held a telephonic hearing on the instant motion.
(Min. Entry, ECF No. 46.)
II.
UNDISPUTED MATERIAL FACTS
The following facts are undisputed for purposes of the instant
motion.
A.
The Parties and the Agreement
Prestress is a fabricator of bridge products and structural
precast, prestressed components.
(Abnee Decl. ¶ 1, ECF No. 16-
7; Statement of Undisputed Facts (“SUF”) ¶ 1, ECF No. 36-5;
2
Resp. to SUF ¶ 1, ECF No. 41-8.)
Cornerstone is a broker for
trucking services and served as the broker for the services of
Specialty Logistics.
(Abnee Decl. ¶¶ 4-5; SUF ¶¶ 5, 7; Resp. to
SUF ¶¶ 5, 7.)
The parties entered into an Agreement for Hauling Product
to Ole Miss Parking Garage in Oxford, Mississippi, from Memphis,
Tennessee (the “Agreement”) on or about April 23, 2014.
(See
Ex. A to Compl., ECF No. 1-1 at PageID 10; SUF ¶ 2; Resp. to SUF
¶ 2.)
The Agreement provides in relevant part that:
The
consideration for
the
services
provided
by
[Cornerstone] to Prestress shall be as follows: Prestress
shall pay [Cornerstone] $550.00 per load delivered to the
project site[1] with the above listed equipment operated
for Prestress. Prestress shall also pay $0.00 per hour
for delays that occur for duration longer than 2 hours
past given load/delivery time. Prestress shall also pay
$0.00 for canceled deliveries not canceled prior to
drivers departing to Prestress Services Industries,
L.L.C. Decatur facilities.[2] Such consideration is the
total consideration payable to [Cornerstone] pursuant to
this Agreement, and [Cornerstone] is solely responsible
for the compensation and insurance, (including Workman’s
Compensation), of the properly certified licensed drivers
who will operate the subject vehicle during the term of
this Agreement.
(Ex. A to Compl.; SUF ¶ 3; Resp. to SUF ¶ 3.)
Prestress was to begin delivering precast material to the
project site in April 2014, but because of delays not
attributable to Prestress, it was not permitted to commence
1
The project site refers to the site of the Ole Miss Parking Garage
project in Oxford, Mississippi. (See SUF ¶ 2; Resp. to SUF ¶ 2.)
2
During the telephonic motion hearing, the parties agreed that the
facilities referenced in the Agreement are located in Memphis, Tennessee, and
are not the named facilities in Decatur, Indiana.
3
delivering material at that time.
(Abnee Decl. ¶ 7; SUF ¶¶ 10-
11; Resp. to SUF ¶¶ 10-11.)
B.
The Disputed Charges
Certain invoices 3 contain Truck Order Not Used (“TONU”)
charges for cancellations that occurred on June 2, 2014, after
drivers had departed to Prestress.
(Statement of Additional
Undisputed Facts (“SAF”) ¶ 27, ECF No. 41-8 at PageID 11; Resp.
to SAF ¶ 27, ECF No. 43; see ECF No. 36-3 at PageID 383-90.)
Prestress has not paid Cornerstone for TONU, empty return, and
jobsite shuttle charges, which Cornerstone alleges are owed
under the Agreement. 4
(Rodell Dep. 30:20-31:5, ECF No. 41-6; SAF
¶ 33; Resp. to SAF ¶ 33.)
III. LEGAL STANDARD
“The court shall grant summary judgment if the movant shows
that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Fed. R.
Civ. P. 56(a); accord Haddad v. Alexander, Zelmanski, Danner &
Fioritto, PLLC, 758 F.3d 777, 781 (6th Cir. 2014) (per curiam).
“A genuine dispute of material facts exists if ‘there is
sufficient evidence favoring the nonmoving party for a jury to
return a verdict for that party.’”
Am. Copper & Brass, Inc. v.
Lake City Indus. Prods., Inc., 757 F.3d 540, 543-44 (6th Cir.
3
The invoice numbers are 1276590, 1276591, 1276592, 1276593, 1276594,
1281490, 1281491, and 1281492. (SAF ¶ 27; Resp. to SAF ¶ 27.)
4
Cornerstone alleges that the outstanding balance due is $137,060.00.
(Compl. ¶ 12, ECF No. 1-1.)
4
2014) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
249 (1986)).
“The moving party bears the initial burden of demonstrating
the absence of any genuine issue of material fact.”
Mosholder
v. Barnhardt, 679 F.3d 443, 448 (6th Cir. 2012) (citing Celotex
Corp. v. Catrett, 477 U.S. 317, 323 (1986)).
“In considering a
motion for summary judgment, [the] court construes all
reasonable inferences in favor of the nonmoving party.”
Robertson v. Lucas, 753 F.3d 606, 614 (6th Cir. 2014) (citing
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,
587 (1986)).
“Once the moving party satisfies its initial burden, the
burden shifts to the nonmoving party to set forth specific facts
showing a triable issue of material fact.”
Mosholder, 679 F.3d
at 448-49 (citing Matsushita, 475 U.S. at 587; Fed. R. Civ.
P. 56(e)).
“When the non-moving party fails to make a
sufficient showing of an essential element of his case on which
he bears the burden of proof, the moving parties are entitled to
judgment as a matter of law and summary judgment is proper.”
Martinez v. Cracker Barrel Old Country Store, Inc., 703 F.3d
911, 914 (6th Cir. 2013) (quoting Chapman v. UAW Local 1005, 670
F.3d 677, 680 (6th Cir. 2012) (en banc)).
To show that a fact is, or is not, genuinely disputed,
both parties are required to either “cite[] to particular
parts of materials in the record” or “show[] that the
5
materials cited do not establish the absence or presence
of a genuine dispute, or that an adverse party cannot
produce admissible evidence to support the fact.”
Bruederle v. Louisville Metro Gov’t, 687 F.3d 771, 776 (6th Cir.
2012) (alterations in original) (quoting Fed. R. Civ. P.
56(c)(1)), cert. denied, 133 S. Ct. 866 (2013).
“The court need consider only the cited materials, but it
may consider other materials in the record.”
Fed. R. Civ.
P. 56(c)(3); see also Pharos Capital Partners, L.P. v. Deloitte
& Touche, 535 F. App’x 522, 523 (6th Cir. 2013) (per curiam)
(acknowledging that a district court has no duty to search
entire record to establish grounds for summary judgment).
IV.
ANALYSIS
Defendant asserts that it “is entitled to summary judgment
because there are no genuine issues of material fact for trial.”
(ECF No. 36-1 at 6.)
Defendant asserts that Plaintiff cannot
prove two of the three elements of a breach of contract claim.
(Id.)
Plaintiff argues that there is evidence in the record
that supports its claim that there was a breach of contract and
that such evidence creates a genuine issue of material fact for
trial.
(ECF No. 41 at 5-6.)
The Court finds that summary
judgment is appropriate and GRANTS Defendant’s motion.
A.
Truck Order Not Used
(“TONU”) Charges
The disputed TONU charges refer to charges for orders that
are placed and later canceled.
(ECF No. 36-1 at 7 (citing
6
Rodell Dep. 11:20-25, 12:1-2, ECF No. 36-2); see also SAF ¶ 27;
Resp. to SAF ¶ 27.)
Defendant asserts that such charges for
canceled deliveries are not “recoverable under the express terms
of the Agreement.”
(ECF No. 36-1 at 7.)
Plaintiff asserts that
the TONU charges are not “canceled deliveries” governed by the
terms of the Agreement and that “[a]n issue of fact remains as
to whether the TONU invoices . . . represent charges for
cancellations that occurred after drivers had departed to the
Prestress facility.”
(ECF No. 41 at 8-9.)
The Court finds that
there is no dispute of material fact that the TONU charges are
not owed under the Agreement.
An employee for Plaintiff testified that “there was never
anything canceled prior to [departure]. . . . [A]ll the
cancellations came the same day once drivers were en route, once
drivers, had their loads, all their pick-up numbers, and
everything they needed for that day’s worth of work.”
Dep. 20:6-11, ECF No. 41-3.)
(Whitten
Since the deliveries were all
canceled after the “drivers[’] depart[ure] to Prestress,”
Prestress is not liable for payment on such deliveries. 5
5
Plaintiff’s own Credit and Collections Manager stated in an internal
e-mail that “[t]he TONU charges are not valid charges to Prestress in my
opinion” because a “TONU [charge] is really just a non-contractual penalty
charge.” (Ex. 18 to Rodell Dep. at PageID 374, ECF No. 36-2 (emphasis
added).) In another internal e-mail, the manager clarified that Plaintiff
was billing Defendant “for TONU even if the driver hasn’t departed” although
the contract appeared to state that Defendant will “only pay TONU if the[]
driver has already departed.” (Ex. 13 to Rodell Dep. at PageID 368, ECF No.
36-2.) The manager’s own legal opinions regarding the Agreement are not
sufficient to establish that the TONU charges are or are not warranted. See
7
“If the language of a written instrument is unambiguous,
the Court must interpret it as written rather than according to
the unexpressed intention of one of the parties.”
Thomas &
Betts Corp. v. Hosea Project Movers, LLC, No. 02-2953 Ma/M, 2007
WL 6892328, at *7 (W.D. Tenn. Nov. 2, 2007) (quoting Honeycutt
v. Honeycutt, 152 S.W.3d 556,561-62 (Tenn. Ct. App. 2003)).
“Contractual language is ambiguous only when it is of uncertain
meaning and may fairly be understood in more ways than one.”
Id. (quoting Allstate Ins. Co. v. Watson, 195 S.W.3d 609, 611
(Tenn. 2006)).
“Demonstration of ambiguity in some respect not
material to any existing dispute serves no useful purpose.”
Donoghue v. IBC USA (Publ’ns), Inc., 70 F.3d 206, 215 (1st Cir.
1995) (emphasis added).
Although the term “departing to Prestress” in the Agreement
could refer to any of three scenarios--(1) the drivers’
departure from another location to the Prestress facility; (2)
the drivers’ departure from the Prestress facility to the
jobsite; or (3) the drivers’ departure from the jobsite back to
the Prestress facility--the Court finds that any interpretation
contemplates the same result and thus, any ambiguity is
immaterial to the analysis of the TONU charges.
The contract
Great W. Sugar Co. v. White Stokes Co., 736 F.2d 428, 432 (7th Cir. 1984)
(discounting “legal conclusions or opinions of . . . laymen as to the legal
significance of the language” of a “contract” letter). The manager’s
opinions, however, that the TONU charges are not recoverable support the
Court’s ultimate finding that Defendant is entitled to summary judgment.
8
language relevant to the TONU charges by its plain meaning
offers two times at which a canceled delivery could be canceled:
either “prior to” the drivers’ departure or at another time, not
“prior to” the drivers’ departure. 6
Regardless of which of the
three scenarios above was intended by the parties, Prestress is
not obligated to pay the TONU charges because charges for
deliveries canceled prior to the drivers’ departure are not
covered by the Agreement, and charges for canceled deliveries
not canceled prior to the drivers’ departure--that is, those
canceled after the drivers’ departure--are $0.00 under the
Agreement. 7
(See Ex. A to Compl., ECF No. 1-1 at PageID 10
(“Prestress shall also pay $0.00 for canceled deliveries not
canceled prior to drivers departing to Prestress . . . .”
6
Although a canceled delivery technically could also be canceled at the
exact time of the drivers’ departure, a simultaneous cancellation is not
relevant to the analysis, and the Court need not consider it.
7
If the Agreement’s term “departure to Prestress” refers to the
earliest possible scenario--the drivers’ departure from another location to
the Prestress facility--then any TONU charge at issue originated from a
cancellation after such departure. (See ECF No. 41 at 9 (“Cornerstone billed
TONU charges to Prestress where cancellations occurred after (i) the drivers’
departure to the Prestress facility, (ii) while the driver was en route from
Memphis to Oxford, or (iii) after the driver had already arrived at the
Project site in Oxford.”).)
If the Agreement’s term “departure to Prestress” refers to the drivers’
departure from the Prestress facility to the jobsite, then any TONU charge at
issue originating from a cancellation after such departure is governed by the
Agreement. The Agreement is silent as to any TONU charge at issue
originating from a cancellation before such departure; neither party asserts
that Defendant was charged for cancellations before departure.
If the Agreement’s term “departure to Prestress” refers to the latest
possible scenario--the drivers’ departure from the jobsite back to the
Prestress facility--then any TONU charge at issue originating from a
cancellation after such departure is governed by the Agreement. The
Agreement is silent as to any TONU charge at issue originating from a
cancellation before such departure; neither party asserts that Defendant was
charged for cancellations before departure. The Court notes that this
scenario is illogical because if the driver had already arrived at the
jobsite, it would not be necessary to cancel a delivery at that point.
9
(emphasis added)).)
Moreover, during the telephonic motion
hearing, Plaintiff’s counsel conceded that all TONU charges were
incurred after drivers “departed to” Prestress.
Consequently,
there is no dispute of material fact as to whether Defendant
breached the Agreement by not paying TONU charges; Defendant was
not responsible for TONU charges under the Agreement because the
deliveries were canceled after departure to Prestress.
Thus,
the Court finds that Defendant is entitled to summary judgment
with respect to the TONU charges.
See United States ex rel.
Compton v. Midwest Specialties, Inc., 142 F.3d 296, 301 (6th
Cir. 1998) (indicating that summary judgment is appropriate when
a district court finds a contract unambiguous).
B.
Empty Return Charges
The disputed empty return charges refer to charges “when a
trucker has to bobtail to pick up an empty piece of equipment.”
(Rodell Dep. 11:15-19, ECF No. 36-2; see also SAF ¶ 32; Resp. to
SAF ¶ 32.)
To “bobtail” means to “haul without a trailer.”
(Rodell Dep. 11:18-19, ECF No. 36-2.)
Defendant asserts that
because Plaintiff and Specialty Logistics decided to drop off
loaded trailers due to project-related delays and to return
another time to retrieve empty trailers, Defendant is not
responsible for covering the cost of Plaintiff’s empty returns.
(ECF No. 36-1 at 8.)
Plaintiff asserts that the parties agreed
to both the delivery and return of trailers, although the
10
Agreement does not literally provide for the return of trailers,
and that the empty return charges were authorized by an employee
of Defendant’s.
(ECF No. 41 at 7-8, 10.)
The Court finds that
there is no genuine dispute of material fact that the empty
return charges are not owed under the Agreement.
The Agreement provides that “Prestress shall pay
[Cornerstone] $550.00 per load delivered to the project site.”
(Ex. A to Compl., ECF No. 1-1 at PageID 10.)
The Agreement is
silent as to the return of empty trailers from the jobsite back
to Memphis; this alone is not indicative of ambiguity.
See
United States v. Tennessee, 632 F. Supp. 2d 795, 801 (W.D. Tenn.
2009) (“ambiguity does not arise simply because a contract does
not define a term or because the contract is silent on a
particular issue”).
Because the contract is silent, the Court
must determine the parties’ intent.
Parrott Marine Sys., Inc.
v. Shoremaster, Inc., No. E2007-02789-COA-R3-CV, 2008 WL
3875432, at *3 (Tenn. Ct. App. Aug. 21, 2008) (citing Planters
Gin Co. v. Fed. Compress & Warehouse Co., 78 S.W.3d 885 (Tenn.
2002)).
The parties dispute whether Defendant must pay for all
roundtrips made by Plaintiff, including trips specifically made
to the jobsite to bring back empty trailers, at the $550.00
rate. Plaintiff argues that there is ambiguity as to the
meanings of the term “load” or “above listed equipment” such
11
that the Agreement could mean that any trip to the jobsite by
Plaintiff would be charged at the $550.00 rate.
7.)
(ECF No. 41 at
The Court disagrees with Plaintiff’s interpretation because
the plain meaning of the term “per load delivered” is that
Defendants only incur the cost of trips made with the purpose of
transporting materials from the Memphis facility to be deposited
at the jobsite. 8
The Court finds that there is no ambiguity in
the payment provision and that the intended meaning is for
Defendant to pay Plaintiff $550.00 for each delivery of precast
product to the jobsite.
The Court finds that trips made
exclusively to retrieve empty trailers are not contemplated by
the Agreement. 9
Consequently, there is no genuine dispute of
material fact as to whether Defendant breached the Agreement by
not paying the empty return charges; Defendant was not
responsible for empty return charges under the Agreement because
8
The parties’ filings and their statements during the telephonic motion
hearing indicate that they agree that the Agreement covers both delivery and
return of trailers and that Plaintiff was responsible for bringing the empty
trailers back to Memphis after a delivery to the jobsite. (See, e.g., Resp.
to SUF ¶¶ 6, 8; Ballard Dep. 39:15-19, ECF No. 42-1.) Despite their
agreement on these facts, the “parol evidence rule does not permit
contracting parties to ‘use extraneous evidence to alter, vary, or qualify
the plain meaning of [the] unambiguous written contract.’” Staubach Retail
Servs.-Se., LLC v. H.G. Hill Realty Co., 160 S.W.3d 521, 525 (Tenn. 2005)
(quoting GRW Enters., Inc. v. Davis, 797 S.W.2d 606, 610 (Tenn. Ct. App.
1990)). Thus, the Court does not consider the parties’ extraneous
assertions.
9
The Court agrees with Plaintiff that the empty return charges (and
TONU charges) are not charges governed by the “delays” provision of the
Agreement, which states that “Prestress shall also pay $0.00 per hour for
delays that occur for duration longer than 2 hours past given load/delivery
time.” (Ex. A. to Compl.; see also ECF No. 41 at 10-11.) The charges are
not directly associated with the delays during loading or delivery of the
product to which the Agreement refers. Nonetheless, the Agreement’s other
provisions also do not govern the empty return charges, and the Agreement’s
cancellation provision governs the TONU charges, see supra Part IV.A.
12
the Agreement only requires payment for trips associated with a
delivery.
Accordingly, the Court finds that Defendant is
entitled to summary judgment with respect to the empty return
charges.
C.
Jobsite Shuttle Charges
The jobsite shuttle charges refer to charges for
“daycab/jobsite services” provided by Plaintiff at the jobsite,
including the moving of empty trailers from one area to another.
(ECF No. 36-1 at 8 (citing Resp. to Interrog. ¶ 6, ECF No. 36-9;
Ex. 14 to Rodell Dep. at PageID 371, ECF No. 36-2).)
Defendant
asserts that the jobsite shuttle charges are “solely related to
a decision between Cornerstone and Specialty regarding how they
chose to deal with delays.”
(ECF No. 36-1 at 9.)
Plaintiff
asserts that Defendant requested and agreed to pay for the
jobsite shuttle.
(ECF No. 41 at 11-12.)
The Court finds that
there is no dispute of material fact that the jobsite shuttle
charges are not owed under the Agreement.
Based on testimony from employees of the company Plaintiff
contracted with to provide trucking services, the parties had
agreed that Defendant would pay Plaintiff for the shuttles.
(Willer Dep. 41:4-14, 42:1-17, ECF No. 41-5; Campbell Dep.
33:21-23, ECF No. 41-7.)
The Agreement, however, is silent as
to payment for jobsite shuttle charges.
Plaintiff does not
appear to dispute that such charges are not covered by the
13
Agreement.
(See ECF No. 41 at 11-12 (making no reference to the
Agreement when discussing the charges).)
Further, Plaintiff
conceded during the telephonic motion hearing that the Agreement
does not address jobsite shuttle charges.
The instant suit
alleges only breach of the Agreement (see Compl. ¶¶ 9-13), and
Plaintiff has indicated to the Court that it will not move to
amend its complaint.
Thus, the Court need not determine whether
any other agreement was breached such that Defendant would be
responsible for the jobsite shuttle charges.
In the instant
case, there is no dispute of material fact as to whether
Defendant breached the Agreement by not paying the jobsite
shuttle charges; Defendant was not responsible for the jobsite
shuttle charges under the Agreement because any agreement
between the parties as to the jobsite shuttles is beyond the
scope of the Agreement.
Cf. Klosterman Dev. Corp. v. Outlaw
Aircraft Sales, Inc., 102 S.W.3d 621, 630 (Tenn. Ct. App. 2002)
(finding no “meeting of the minds so as to constitute a
contract” when the parties agreed to certain terms but the
plaintiff did not contract for other services provided by the
defendant).
Accordingly, the Court finds that Defendant is
entitled to summary judgment with respect to the jobsite shuttle
charges.
14
V.
CONCLUSION
For the foregoing reasons, the Court finds that there is no
genuine dispute of material fact as to whether Defendant is
obligated to pay the TONU, empty return, or jobsite shuttle
charges.
The Agreement does not require Defendant to pay any of
the three charges, and Plaintiff’s breach of contract claim
necessarily fails.
Thus, Defendant’s Motion for Summary
Judgment is GRANTED.
IT IS SO ORDERED, this 2nd day of September, 2016.
/s/ Jon P. McCalla
JON P. McCALLA
UNITED STATES DISTRICT JUDGE
15
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