C & K Trucking LLC et al v. Ardent Mills LLC
Filing
75
MEMORANDUM OPINION AND ORDER - Before the Court are Defendant and Counterclaim Plaintiff Ardent Mills, LLC's Motion for Summary Judgment ("Defendant's Motion") (Doc. No. 52), Plaintiff's Response to Defendant's Mot ion for Summary Judgment ("Plaintiff's Response") (Doc. No. 56), and Reply Brief in Support of Defendant and Counterclaim Plaintiff Ardent Mills, LLC's Motion for Summary Judgment ("Defendant's Reply") (Doc. No. 6 2). After carefully considering Defendant's Motion, Plaintiff's Response, Defendants Reply, the associated briefs and appendices, and the relevant law, the Court GRANTS in part and DENIES in part Defendant's Motion. Also before the Co urt are Plaintiffs Motion for Summary Judgment on Defendant's Counterclaim ("Plaintiff's Motion") (Doc. No. 49), Defendant and Counterclaim Plaintiff Ardent Mills, LLC's Response in Opposition to Plaintiff and Counterclaim Defendant's Motion for Summary Judgment ("Defendant's Response") Doc. No. 54), and Plaintiff's Reply to Defendants Response to Plaintiff's Motion for Summary Judgment on Defendant's Counterclaim ("Plaintiff's Reply") (Doc. No. 61). Because the Court grants summary judgment as to Plaintiff's liability on Defendant's breach of contract counterclaim, Plaintiff's Motion is DENIED. (chmb)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
C & K TRUCKING, LLC,
Plaintiff and Counterclaim
Defendant,
v.
Civil Action No. 3:20-CV-01104-K
ARDENT MILLS, LLC,
Defendant and Counterclaim
Plaintiff.
MEMORANDUM OPINION AND ORDER
Before the Court are Defendant and Counterclaim Plaintiff Ardent Mills, LLC’s
Motion for Summary Judgment (“Defendant’s Motion”) (Doc. No. 52), Plaintiff’s
Response to Defendant’s Motion for Summary Judgment (“Plaintiff’s Response”)
(Doc. No. 56), and Reply Brief in Support of Defendant and Counterclaim Plaintiff
Ardent Mills, LLC’s Motion for Summary Judgment (“Defendant’s Reply”) (Doc. No.
62). After carefully considering Defendant’s Motion, Plaintiff’s Response, Defendant’s
Reply, the associated briefs and appendices, and the relevant law, the Court GRANTS
in part and DENIES in part Defendant’s Motion.
Also before the Court are Plaintiff’s Motion for Summary Judgment on
Defendant’s Counterclaim (“Plaintiff’s Motion”) (Doc. No. 49), Defendant and
Counterclaim Plaintiff Ardent Mills, LLC’s Response in Opposition to Plaintiff and
Counterclaim Defendant’s Motion for Summary Judgment (“Defendant’s Response”)
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(Doc. No. 54), and Plaintiff’s Reply to Defendant’s Response to Plaintiff’s Motion for
Summary Judgment on Defendant’s Counterclaim (“Plaintiff’s Reply”) (Doc. No. 61).
Because the Court grants summary judgment as to Plaintiff’s liability on Defendant’s
breach of contract counterclaim, Plaintiff’s Motion is DENIED.
I.
Brief Factual and Procedural Background
A. The Parties
C & K Trucking, LLC (“Plaintiff” or “CKT”) is a trucking business owned and
operated by Kenyon Collins (“Collins”). See Doc. No. 31 ¶ 7. Relevantly, Collins is
African American, and the majority of CKT’s drivers are minorities. Id. ¶¶ 7, 9. Ardent
Mills, LLC (“Defendant” or “Ardent Mills”) is a flour-milling and ingredient business.
See Doc. No. 53 at 6. After milling wheat into flour, Ardent Mills sells that flour along
with certain byproducts of the milling process. See id. Ardent Mills’ Saginaw, Texas and
Sherman, Texas facilities sometimes contract with third-party motor carriers to
transport raw materials, finished products, and certain byproducts to and from those
plants. See id. CKT was one of those motor carriers. See Doc. No. 31 ¶ 10.
B. The Motor Transportation Agreement
CKT’s relationship with Ardent Mills goes back to at least the summer of 2010,
when CKT began hauling out of Ardent Mills’ Saginaw plant. Id. On or about February
18, 2015, CKT entered into a Motor Transportation Agreement (the “MTA”) with
Ardent Mills whereby CKT agreed to provide motor transportation services to Ardent
Mills pursuant to the terms of the Agreement (it is unclear why the parties had not
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signed such an agreement prior to this date). See Doc. No. 53-1 at 203. The MTA
purports to govern the relationship between the parties; it defines CKT as an
independent contractor and covers—among other things—compensation rates and
carrier insurance and maintenance requirements. See id. at 196-200. The MTA is nonexclusive—under its terms, CKT is free to accept fright from companies other than
Ardent Mills, and Ardent Mills is free to tender freight to companies other than CKT.
See id. at 201. The MTA may be terminated immediately upon the occurrence of a
specified event or by either party upon sixty days’ prior written notice (“Sixty Days’
Notice Clause”). See id. at 200.
C. Disparate Treatment Allegations
CKT continued to haul for Ardent Mills’ Saginaw plant for the next several
years. Doc. No. 31 ¶ 13. It was during this time that CKT alleges it “began noticing
that its drivers were being treated differently than other non-minority truckers driving
for Ardent Mills.” Id. For example, CKT alleges its drivers were required “to wait and
unload shipments in the back of the Ardent Mills [Saginaw] facility, while nonminority truckers unloaded in the front.” Id. ¶ 14. CKT also alleges, inter alia, that it
was reprimanded disproportionately for violating Ardent Mills’ tarping requirements.
Id.
D. Physical Confrontation at the Saginaw Facility
On November 22, 2016, Collins got into a physical confrontation with Dave
Bullard (“Bullard”), a white driver from Dick Lavy Trucking. See id. ¶ 15. Collins
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maintains that Bullard became irate after Collins attempted to assist him with Ardent
Mills’ protocol for entering and exiting the Saginaw facility. See id. Bullard purportedly
screamed racial slurs and attempted to spit on Collins. See id. Collins admits to striking
Bullard in response. See id.
Collins emailed Peter Elsham (“Elsham”) about the incident later that day. See
Doc. No. 53-1 at 229. Elsham worked as a grain merchandiser for Ardent Mill before
his retirement in 2020. See Doc. No. 57 at 9. His responsibilities included arranging
crosstown deliveries of wheat from various suppliers to Ardent Mills’ Saginaw plant.
See id. Elsham forwarded Collins’ email to a number of Ardent Mills employees,
including Jon Cozad (“Cozad”)—the regional plant manager for a number of Ardent
Mills’ facilities, including Saginaw and Sherman. Ultimately, Cozad ordered both
Collins and Bullard personally banned from all Ardent Mills facilities. See Doc. No. 531 at 228. CKT, however, was still permitted to perform deliveries for the Saginaw plant.
Id. Cozad formally notified Collins and Bullard of their indefinite premises bans in
letters dated December 10, 2016. Id. at 190-91. CKT did continue to haul for the
Saginaw plant, and even eventually began hauling for Ardent Mill’s Sherman facility.
See Doc. No. 31 ¶ 18.
E. Collins’ Return to the Saginaw Facility
On or about August 10, 2018, Collins was contacted by Kaitlin Larson
(“Larson”)—a logistics coordinator for Ardent Mills. See Doc. No. 53-1 at 301; Doc.
No. 57 at 10. According to CKT, Larson “begged C & K Trucking to pick up an
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emergency load at Ardent Mill’s Saginaw plant.” Doc. No. 31 at 20 (emphasis added).
Parties dispute whether Larson asked Collins to personally pick up the load, or whether
she asked him to send one of CKT’s drivers to pick it up. See Doc. No. 58-3 at 27-29;
Doc. No. 62 at 13. Regardless, Collins admits to entering the Saginaw premises to pick
up the load, “knowing that he was still technically not allowed on site[.]” Doc. No. 31
¶ 20.
At some point later that day, Theresa Knestrick (“Knestrick”)—a lead grain
elevator operator at Ardent Mills’ Saginaw plant—observed Collins picking up the load
at the Saginaw facility. See Doc. No. 58-2 at 5, 14. She reported Collins to Cozad. See
id. In response, Cozad sent an email to a number of Ardent Mills employees informing
them that Collins “most likely” violated Ardent Mills’ ban. See id. at 29. Minutes later,
Cozad sent another email on the same chain: “I just received confirmation that it was
Kenyon and we have video and pictures. My opinion is that C and K should not haul
in and out of Saginaw. Again, we would not make an exception with a terminated
employee, so we should not do it for a carrier or contractor. Please advise[.]” Id. Eric
Miller (“Miller”)—an Ardent Mills feed merchant (See Doc. No. 53 ¶ 77)—replied,
“This is extremely concerning. Would you mind sending me the video and pictures so
I have all of the evidence available before I have the conversation with Kenyon? . . .
We need to get to the bottom of this and make a group based decision as to what is
best for the company. We’re currently working on adding more carriers to our Saginaw
base so Kenyon’s company won’t need to haul there. Trucks are extremely tight as you
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know so it has been difficult.” Doc. No. 58-2 at 29. Cozad then responded, “We need
to hold our safety value above our business priorities and not contract C and K to haul
products in or out of our facility or any other Ardent Mills facility. We are pretty sure
this is not the first time Kenyon has hauled out of the location, just the first time we
have it confirmed.” Id. at 28. Travis Kapusta (“Kapusta”)—an Ardent Mills employee
included on the email chain—replied to Cozad, “I agree and we need to support Sag in
their request. They no longer haul for Ardent Mills[.]” Id.
Notwithstanding Cozad’s email—and apparently realizing the extent of the
carrier shortages—Miller emailed Kapusta later that day: “Banning Kenyon in Sherman
right now maybe problematic because we don’t have a viable replacement this very
second. We can certainly work towards a replacement, but cutting him off cold turkey
in sherman would be tough.” Id. at 31. Copying Cozad and Patrick Smith (“Smith”)—
Ardent Mills’ Sherman plant manager (see Doc. No. 57 at 10)—Kapusta responded,
“Well I started some crap on this. We will ban them out of Sag right away and we will
phase out in sherman over time if possible.” Doc. No. 58-2 at 32. Collins was never
informed of the “phase out” plan, though Larson was. See Doc. No. 57 at 15-16; Doc.
No. 58-3 at 60. It is not immediately apparent to the Court how or when CKT was
notified of its ban at Ardent Mills’ Saginaw facility. Compare Doc. No. 31 ¶ 20, with
Doc. No. 53-1 at 129, 140, 146-47, and Doc. No. 58-2 at 18.
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F. CKT Replaces RJ Trucking in Sherman
As mentioned above, CKT continued to haul for Ardent Mills’ Sherman facility
after its ban at the Saginaw facility. See Doc. No. 31 at 20. Over time, CKT began
delivering wheat middlings from the Sherman facility to Ardent Mills’ customers in
addition to its regular wheat deliveries to the facility. See Doc. No. 53 at 17. Wheat
middlings (“midds” for short) are byproducts of the wheat milling process used for
animal feed. See id. Things were seemingly going well.
In or around April 2019, Larson received word that the owner of RJ Trucking—
Ardent Mills’ “primary hauler” of midds out of the Sherman facility—was retiring. See
Doc. No. 31 ¶ 22; Doc. No. 53 at 17-18. It is unclear what happened to Ardent Mills’
plan to “phase out” CKT in Sherman; Ardent Mills argues Larson simply gave up on
finding a replacement. See Doc. No. 62 at 20. On April 12, 2019, Larson emailed
Collins to inquire about CKT’s interest in taking over for RJ Trucking: “We got some
bad news this week about RJ Trucking, you might have already heard but sounds like
he is shutting down his business for good by the end of the month. . . . That being said
will you be able to cover the loads RJ was doing every week in addition to your own?
It would be about 30 loads per week, give or take a few, probably starting the week of
4/22.” Doc. No. 58-3 at 66. Collins responded, “Yes we heard about RJ and we’re sad
to hear that as well. I can attest how hard it is to keep and find good drivers. I can cover
the loads RJ was doing in addition to mine, but will definitely need to get some things
in place. Do you foresee this arrangement being long-term or just temporary until you
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find another company to backfill RJ?” Id. Larson replied, “Is 10 days enough time? I
can plan on bringing in outside trucks for week of 4/22 if that is too soon to take over.
Yes I see this being long term, we don’t have any plans to find a carrier to take RJ’s
spot. I do see us having outside trucks coming in from time to time though. . . . I would
say you can plan on doing 90% of the loads, if not more, every week though.” Id. CKT
ultimately replaced RJ Trucking as the primary hauler of midds out of the Sherman
facility. See Doc. No. 31 ¶¶ 24, 26; Doc. No. 53 at 18; Doc. No. 58-3 at 68.
CKT maintains that it made additional infrastructure and staffing investments
based on Larson’s emails and its new role at the Sherman plant, including the purchase
of a commercial property adjacent to the plant. Doc. No. 31 ¶ 25. CKT alleges that
this was part of Ardent Mills’ plan to “lead [it] on” and then terminate the relationship
at the first available opportunity. Id. ¶¶ 26-27.
From April 2019 through December 2019, CKT reliably hauled for the Sherman
facility, seemingly without incident. See Doc. No. 31 at 7. The record suggests that
Collins, Larson, and Melissa Calfy (“Calfy”)—a grain handler at Ardent Mills’ Sherman
plant—enjoyed a good working relationship. See Doc. No. 58-3 at 35-36, 69, 87-88,
107.
G. Incident with Attebury Grain
Attebury Grain is one of two primary suppliers of wheat for Ardent Mills’ Texas
facilities. See Doc. No. 53 at 18. In or around January 2020, Collins asked Calfy to
reach out to Stephanie Davis (“Davis”)—an employee at Attebury Grain—about
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rethinking her decision to discontinue the use of CKT’s services at Attebury Grain. See
id. at 23-24; Doc. No. 57 at 18. When Calfy contacted Davis about the matter, Davis
explained that she would not use CKT because Collins and CKT’s drivers had been
disrespectful to her, and because Collins had cursed at her. See Doc. No. 53 at 28. Calfy
reported this back to Collins. See id.
Copying Calfy and Elsham, Collins sent an email to Davis regarding her
allegations on January 14, 2020. See Doc. No. 53-1 at 291. Collins stated, “I asked
Melissa at Ardent Mills to reach out to you about us resuming hauls for Attebury. She
informed me that you told her C&K will never haul for Attebury again because I cursed
at you. Stephanie - I nor any of my drivers have ever cursed or been disrespectful to
you. . . . I am at a loss as to why you would say that about me and defame my character.
I enjoyed working with you all and hope to resume hauling for Attebury again one day.
But I want to make sure this issue is addressed directly. That is not who I am and not
what my company represents.” Id. Copying Calfy and Elsham, Davis responded,
“Kenyon, you know why you no longer haul for Attebury. Melissa did reach out to me
and I told her that you had been ugly to me and lost your temper and cursed at me
which is the truth. This is the end of the matter as far as I’m concerned. I hire my own
drivers and I do not wish to utilize your services.” Id. at 290.
Elsham reached out to Calfy, Cozad, and Smith about the exchange. See Doc.
No. 58-3 at 110. Cozad responded, “Just to remind everyone. We had multiple issues
with Kenyon in the past in Saginaw and he nor C and K are to haul inbound or
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outbound with regards to our plant here in Saginaw[.]” Id. Smith replied, “Think I
need to understand the email chain better. I will talk to Mellisa [sic] tomorrow. Sounds
like there is some misunderstanding. I understand issues in Saginaw. C&k have been
okay in Sherman for feed transportation only. I will investigate and trust that they are
on a thin line for work in Sherman. This is highly disappointing[.]” Id. Smith also
responded to Elsham in a separate email chain early the next morning: “Thanks Pete,
because of issues he had in Saginaw he was on probation here. I reluctantly allowed
him to haul feed out of Sherman because of the feed merchants wishes. That will no
longer be the case. It also appears that he has used Mellisa [sic] so I will spend some
time coaching her on this situation[.]” Doc. No. 53-1 at 290. About two hours later,
Smith emailed Miller and Larson: “We have had another issue with C&K trucking. My
initial reaction is to kick the [sic] off the property but I will be respective of this group’s
challenges. Please have them replaced by the end of the month.” Id. at 292. Minutes
later, Smith emailed Cozad and Elsham: “I have reached out to the Feed Group and
explained that I want C&K out of here by the end of the month[.]” Id. at 17.
Larson began searching for CKT’s replacement that same morning. See id. at 7273. The search did not take long; Nick Vincent Trucking was interviewed, selected, and
onboarded before the end of the next business day. See id. at 72. CKT alleges that Nick
Vincent Trucking is a non-minority owned business. Doc. No. 31 ¶ 30.
Miller and Larsen called Collins on January 23, 2020 to inform him of Ardent
Mills’ decision. Miller then emailed Cozad, Smith, and Elsham about the call: “Just a
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heads up, but about 10 minutes ago I informed C & K Trucking that as of Feb 1st he
will no longer be allowed to haul into or out of Ardent Mills Sherman. Mr. Smith is
going to keep up in the loop as to how Kenyon responds in the meantime, but the
current plan is to allow CK Trucking to haul for us up until Feb. 1.” Doc. No. 53-1 at
208. Larson also offered her thoughts about the call in a separate email to Calfy and
Miller: “Just notified Kenyon that we will no longer be utilizing his services and there’s
a hard end date of Feb. 1. We didn’t name anyone or go into specifics, seemed to be a
quick convo.. he was obviously upset but didn’t get hostile or anything, he mostly
seemed confused about it.” Doc. No. 58-3 at 75.
Some point not long after speaking with Miller, Collins met with Smith at the
Sherman facility. See Doc. No. 53-1 at 140, 334. Apparently, this was the first time the
two had met. See id. at 334. Smith claims that he told Collins the reason behind his
decision to stop tendering loads to CKT was that he considered it unprofessional for
Collins to ask Calfy to handle his dispute with Attebury Grain. See id. at 347. Smith
also mentioned to Collins that he would consider allowing CKT to haul out of the
Sherman plant again in about a year. See id. at 140, 348.
Ardent Mills’ Sherman facility stopped tendering loads to CKT on or shortly
before February 1, 2020. See Doc. No. 53 at 22; Doc. No. 57 at 18.
H. This Lawsuit
CKT filed this lawsuit on May 5, 2020. Doc. No. 1. CKT was granted leave of
court to amend its complaint after portions of Ardent Mills’ Motion to Dismiss
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Plaintiffs’ Original Complaint (Doc. No. 10) were granted. Doc. No. 30. On January
14, 2021, the parties filed a stipulated dismissal of Plaintiffs’ defamation claim. Doc.
No. 29. Plaintiff’s First Amended Complaint was filed on February 1, 2021. Doc. No.
31. Ultimately, the Court granted Defendant Ardent Mills, LLC’s Motion to Dismiss
Promissory Estoppel Claim in Plaintiff’s First Amended Complaint (Doc. No. 32). Doc.
No. 48.
CKT alleges Ardent Mills violated 42 U.S.C. § 1981 “by, among other things,
paying C & K Trucking less than non-minority trucking companies and terminating C
& K Trucking’s services in favor of a non-minority trucking company[.]” Doc. No. 31
¶ 37. Next, CKT alleges Ardent Mills breached the MTA when it “terminate[d] its
relationship with [CKT] entirely” without giving the requisite sixty days’ notice. Id. at
¶¶ 29, 40; see Doc. No. 57 at 30. Finally, CKT claims Ardent Mills tortiously interfered
with its existing contracts with Cargill, Gavilon Grain, and Nathan Segal & Co. Doc.
No. 31 ¶¶ 48-51.
In its counterclaim, Ardent Mills alleges CKT breached the MTA when Collins
impermissibly brokered freight in violation of the MTA’s terms. Doc. No. 44 at 13-16.
II.
Legal Standards
A. Summary Judgment
Summary judgment is appropriate when the pleadings, affidavits, and other
summary-judgment evidence show that no genuine issue of material fact exists and the
moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); Celotex
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Corp. v. Catrett, 477 U.S. 317, 322 (1986). A “material fact” is a fact that under the
applicable substantive law “might affect the outcome of the suit.” Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute of “a material fact is ‘genuine’ . . . if
the evidence is such that a reasonable jury could return a verdict for the nonmoving
party.” Id. All evidence and reasonable inferences must be viewed in the light most
favorable to the nonmovant, and all disputed facts resolved in favor of the nonmovant.
See United States v. Diebold, Inc., 369 U.S. 654, 655 (1962); Boudreaux v. Swift Transp.
Co., 402 F.3d 536, 540 (5th Cir. 2005).
The moving party bears the burden of identifying those portions of the record it
believes demonstrates the absence of a genuine issue of material fact. Celotex, 477 U.S.
at 322-25. Once a movant makes a properly supported motion, the burden shifts to
the nonmovant to show the existence of a genuine fact issue for trial; however, the
nonmovant may not rest upon allegations in the pleadings to make such a showing.
Anderson, 477 U.S. at 256-57. Conclusory allegations, unsubstantiated assertions, or a
mere scintilla of evidence cannot defeat a motion for summary judgment. See id. at 24952; Boudreaux, 402 F.3d at 540. “Where critical evidence is so weak or tenuous on an
essential fact that it could not support a judgment in favor of the nonmovant, or where
it is so overwhelming that it mandates judgment in favor of the movant, summary
judgment is appropriate.” Alton v. Tex. A&M Univ., 168 F.3d 196, 199 (5th Cir. 1999).
If the nonmovant fails to make a sufficient showing to prove the existence of an
essential element to the case and on which the nonmovant will bear the burden of
13
proving at trial, summary judgment must be granted. Celotex, 477 U.S. at 322. The
nonmovant must cite specific facts in the record to survive a motion for summary
judgment, as “Rule 56 does not impose upon the district court a duty to sift through
the record in search of evidence to support a party’s opposition to summary judgment.”
Adams v. Travelers Indem. Co. of Conn., 465 F.3d 156, 164 (5th Cir. 2006) (quoting Ragas
v. Tenn. Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998)); see Fed. R. Civ. P.
56(c)(3).
B. 42 U.S.C. § 1981
42 U.S.C. § 1981 does not provide “a general cause of action for race
discrimination.” Arguello v. Conoco, Inc., 330 F.3d 355, 358 (5th Cir. 2003). Instead, §
1981 prohibits discrimination in contracting by guaranteeing all persons within the
jurisdiction of the United States the “same right . . . to make and enforce contracts . .
. as is enjoyed by white citizens.” See 42 U.S.C. § 1981(a). The phrase “make and
enforce contracts” is defined to include “the making, performance, modification, and
termination of contracts, and the enjoyment of all benefits, privileges, terms, and
conditions of the contractual relationship.” Id. § 1981(b). “Any claim brought under §
1981 . . . must initially identify an impaired contractual relationship under which the
plaintiff has rights.” Domino’s Pizza, Inc. v. McDonald, 546 U.S. 470, 476 (2006).
“To prevail under section 1981, the plaintiff must prove a prima facie case of
intentional discrimination.” Bellows v. Amoco Oil Co., 118 F.3d 268, 274 (5th Cir.
1997). A prima facie case of discrimination requires a plaintiff to establish “(1) they are
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members of a racial minority; (2) Defendants intended to discriminate on the basis of
race; and (3) the discrimination concerned one or more of the activities enumerated in
the statute.” Id. (citing Body by Cook, Inc. v. State Farm Mut. Auto. Ins., 869 F.3d 381,
386 (5th Cir. 2017)). “The plaintiff may establish a prima facie case by direct evidence
or, more commonly, by circumstantial evidence of discriminatory motive.” Id. Plaintiff
must make its prima facie case by a preponderance of the evidence. Powell v. Zurich Am.
Ins. Co., 653 F. App’x 292, 297 (5th Cir. 2016).
Where Plaintiff offers sufficient evidence to establish its prima facie case, a
presumption of discrimination arises as courts apply the McDonnell Douglas burden
shifting framework. Thomas v. Johnson, 788 F.3d 177, 179 (5th Cir. 2015) (citing
McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973)). The burden then shifts to
defendant to rebut the presumption of discrimination by producing evidence “that its
actions were justified by a legitimate, nondiscriminatory reason.” Id. “The burden then
shifts back to the plaintiff, who must show the articulated reason is pretextual.” Id.; see
Laxton v. Gap Inc., 333 F.3d 572, 578 (5th Cir. 2003). “[A] plaintiff can establish
pretext either through evidence of disparate treatment or by showing that the
defendant’s proffered explanation is false or unworthy of credence.” Powell, 653 F.
App’x at 298 (internal citation omitted). Under the McDonnell Douglas framework (and
for all § 1981 claims), plaintiff must be able to “ultimately prove that, but for race, it
would not have suffered the loss of a legally protected right.” Comcast Corp. v. Nat'l Ass'n
of Afr. Am.-Owned Media, —U.S.—, 140 S. Ct. 1009, 1019, 206 L. Ed. 2d 356 (2020).
15
C. Breach of Contract
The MTA test is governed by the laws of the State of Minnesota. See Doc. No.
53-1 at 201 (“The terms of this Agreement shall be governed by the laws of the State
of Minnesota, without regard to its conflicts of law rules.”). It does not appear to the
Court that the parties dispute this. A breach of contract claim in Minnesota requires
proof of three elements: “(1) formation of a contract, (2) performance by plaintiff of
any conditions precedent to his right to demand performance by the defendant, and
(3) breach of the contract by defendant.” Park Nicollet Clinic v. Hamann, 808 N.W.2d
828, 833 (Minn. 2011) (citing Briggs Transp. Co. v. Ranzenberger, 299 Minn. 127, 129,
217 N.W.2d 198, 200 (1974)).
D. Tortious Interference with Existing Business Relations
Under Texas law, a party claiming tortious interference with existing business
relations must show: “(1) an existing contract subject to interference; (2) a willful and
intentional act of interference with the contract; (3) that proximately caused the
plaintiff’s injury; and (4) caused actual damages or loss.” Unicorn Glob., Inc. v. GoLabs,
Inc., 447 F. Supp. 3d 535, 547 (N.D. Tex. 2020) (Godbey, J.) (citing Prudential Ins. Co.
of Am. v. Fin. Review Servs., Inc., 29 S.W.3d 74, 77 (Tex. 2000)).
III.
Analysis
Because a § 1981 claim fails as a matter of law if plaintiff lacks “rights under the
existing (or proposed) contract that he wishes ‘to make and enforce[,]’” the Court will
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first analyze Plaintiff’s breach of contact claims. Domino’s Pizza, Inc., 546 U.S. at 47980 (quoting 42 U.S.C. § 1981).
A. Contract Claims
1.
Breach of the Sixty Days’ Notice Clause
In its Term and Termination section, the MTA states that it “shall continue
until a party terminates this Agreement upon sixty (60) days prior written notice to
the other party or is otherwise terminated [upon the occurrence of a specified event].”
Doc. No. 58-1 at 55. CKT argues that Ardent Mills breached the MTA when it
prematurely “terminate[d] its relationship with [CKT] entirely on February 1, 2020,
despite the fact that the Agreement expressly required Ardent Mills to give [CKT] 60
days’ prior written notice to terminate it.” Doc. No. 31 ¶ 29.
Ardent Mills reasons that it did not breach the Sixty Days’ Notice Clause
because it merely “suspended”—not terminated—the MTA. See Doc. No. 53 at 50. In
support of this reasoning, Ardent Mills notes that the MTA is non-exclusive and does
not require Ardent Mills to tender any freight to CKT. See id. Further, Ardent Mills
notes that CKT has been unable to identify any communication from Ardent Mills
explicitly stating the MTA was terminated. See id. Ardent Mills argues Smith’s
statement to Collins that he would consider allowing CKT to haul out of the Sherman
plant again in about a year is more consistent with a suspension than a termination.
See id. Finally, Ardent Mills argues that even if it breached the Sixty Days’ Notice
17
Clause, CKT is unable to prove damages because the MTA does not obligate Ardent
Mills to tender loads to CKT. Id.
The Court finds CKT has sufficiently established, for purposes of summary
judgment, that there are genuine disputes of material facts as to whether Ardent Mills
prematurely terminated the MTA, or merely suspended its use of CKT’s services.
Considering the lack of any explicit language of termination and Collins’ meeting with
Smith, a reasonable jury could conclude that Ardent Mills merely suspended CKT and
therefore did not violate the Sixty Days’ Notice Clause. Also, although Ardent Mills
states that it has “facilities in the United States, Canada, and Puerto Rico” (Doc. No.
53 at 6), it is unclear whether the MTA would cover all jobs CKT could theoretically
perform for Ardent Mills’ other facilities. On the other hand, a reasonable jury could
conclude from, inter alia, Smith’s emails and other communications with Collins, that
Ardent Mills improperly terminated the MTA in violation of the Sixty Days’ Notice
Clause.
Damages are a separate question. The Court has already stated that Texas courts
recognize nominal damages and “must . . . attempt to give effect to all contract
provisions so that none will be rendered meaningless.” Kelley-Coppedge, Inc. v. Highlands
Ins. Co., 980 S.W.2d 462, 464 (Tex. 1998); Doc. No. 30 at 8-9. Minnesota courts do
the same. See Youngers v. Schafer, 264 N.W. 794, 796 (1936) (“When reasonably
possible a contract should be so construed as to give it effect rather than to nullify it.”);
Park Nicollet Clinic, 808 N.W.2d at 833 n.5 (“We have recognized that the plaintiff
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may not have to allege that the breach caused damages in order to state a claim for
breach of contract.”).
Here, CKT argues in its Response that the “whole purpose for [the Sixty Days’
Notice Clause] is that Ardent Mills be required to continue doing business with C &
K Trucking during that 60-day period . . . [t]hus, at the very least, C&K Trucking is
entitled to damages relating to the loads it would have received during the last 60 days
of the Agreement had Ardent Mills provided notice.” The Court disagrees. It is entirely
possible under the terms of the MTA that Ardent Mills could—in the same way as
could CKT—elect to terminate the MTA upon sixty days’ prior written notice, tender
no loads to any party during that time, and remain in compliance with the terms of the
MTA. CKT fails to point the Court to any provision in the MTA that obligates Ardent
Mills to tender freight to CKT for any period of time. Thus, even if Ardent Mills is
found to have prematurely terminated the MTA by violating the Sixty Days’ Notice
Clause, CKT has failed to establish it is entitled to any damages from such a breach.
For these reasons, Plaintiff has demonstrated the parties genuinely dispute
material facts related to whether Ardent Mills prematurely terminated the MTA or
merely suspended its use of CKT’s services. Thus, Ardent Mills’ Motion is DENIED
as to its liability for breaching the MTA but GRANTED as to this damages theory.
2.
Contract Modification
In its Response, CKT maintains that it previously pled that Larson’s emails with
Collins modified the MTA, which Ardent Mills later breached when it stopped
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tendering loads to CKT. Doc. No. 57 at 28-30. However, CKT fails to cite to where it
previously advanced this argument, and the Court cannot locate it. Ardent Mills makes
a similar point in its Reply. Doc. No. 62 at 20 (“Only now has CKT averred that
Larson’s email supports a contract claim.”). CKT did not motion this Court to amend
its Complaint after Ardent Mills made this argument, nor did it move to file a surreply.
“A claim which is not raised in the complaint but, rather, is raised only in
response to a motion for summary judgment is not properly before the court.” Cutrera
v. Bd. Of Sup’rs of Louisiana State Univ., 429 F.3d 108, 113 (5th Cir. 2005) (citing Fisher
v. Metropolitan Life Ins. Co., 895 F.2d 1073, 1078 (5th Cir. 1990)). Because CKT’s
contract modification claim was raised for the first time in its Response, it is not
properly before the Court, and the Court will not consider it.
3.
Disparate Pay Breach
In its Response, CKT argues that Ardent Mills breached the MTA by paying
CKT less than it paid others for the same work. Compare Doc. No. 57 at 32, with Doc.
No. 31 at 9. However, it does not appear to the Court that CKT previously pled this
separate breach of contract claim, and instead pled only a disparate pay / treatment
allegation under § 1981. See Doc. No. 31 ¶¶ 34-40. A claim that Ardent Mills breached
the MTA by paying CKT less than it paid others for the same work is not necessarily
the same as a claim that Ardent Mills ran afoul of § 1981 by engaging in contractual
discrimination by paying CKT less for contracts than other non-minority owned
trucking companies on the basis of race. CKT fails to articulate any rights under the
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MTA that would obligate Ardent Mills to pay it the same as other trucking companies.
Thus, it appears that this claim is also not properly before the court. See Cutrera, 429
F.3d at 113.
Regardless, the substance of CKT’s disparate pay allegation is discussed in
Section III(B)(2) below. Even if the Court were to construe the Complaint to allege
CKT’s breach of contract claim as it describes it in its Response (see Doc. No. 57 at 3236), it would not survive summary judgment because CKT fails to establish that Ardent
Mills breached the MTA by paying it less than it paid others for the same work. Thus,
the Court GRANTS Ardent Mill’s Motion on CKT’s claim that Ardent Mills breached
the MTA by paying it less than it paid others for the same work.
B. Section 1981 Claim
CKT alleges Ardent Mills violated § 1981 by engaging in contractual
discrimination by paying CKT less on its contracts than other non-minority owned
trucking companies and by terminating the MTA without due notice in favor of a nonminority owned trucking company, both on the basis of race. See Doc. No. 31 ¶ 37.
Ardent Mills moves for summary judgment on CKT’s § 1981 claim, arguing that: (1)
CKT cannot establish prima facie § 1981 claim; (2) that it had legitimate,
nondiscriminatory reasons for the actions CKT perceives as discriminatory treatment;
and (3) CKT cannot show that such reasons were mere pretext. The Court agrees with
Ardent Mills for the reasons stated below and GRANTS Ardent Mills’ Motion on
CKT’s § 1981 claim.
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1.
Termination of the MTA Allegation
CKT claims that Ardent Mills improperly terminated the MTA in favor of a nonminority owned trucking company on the basis of race. Although the Court has denied
summary judgment on the question of whether Ardent Mills terminated the MTA at
all (and thus it has not determined whether Ardent Mills breached the Sixty Days’
Notice Clause), it is possible that if Ardent Mills so breached, it could have been for
nondiscriminatory reasons. Accordingly, the Court examines this claim separately.
As noted above, the MTA was allegedly terminated when Smith—the employee
with the authority behind the alleged decision to terminate—decided to stop tendering
loads to CKT out of the Sherman facility. However, even if the jury were to find that
Smith terminated the MTA, CKT has offered no evidence that Smith’s decision was
made with discriminatory intent.
CKT alleges that Ardent Mills encouraged CKT to make significant additional
investments on the belief that it would be Ardent Mills’ long-term partner in Sherman,
all the while plotting to drop CTK at the first available opportunity. See Doc. No. 31
¶¶ 23-27. CKT apparently alleges that this plan was made on the basis of race. See id.
¶ 37. The evidence tells a different story. Despite CKT’s allegations of a malicious
conspiracy, the record generally reveals a positive relationship between CKT and
Ardent Mills’ Sherman plant employees up until the incident with Davis at Attebury
Grain. Only after Davis’ email did Smith ask Miller and Larson to begin searching for
CKT’s replacement. This email was sent before Larson or Calfy made any indication to
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Smith that Collins made them uncomfortable. See Doc. No. 57 at 22. And the record
reveals that Larson only contacted Nick Vincent Trucking after Smith’s directive. See
id. at 20. No evidence has been introduced to rebut Larson’s claim that in 2018 she
simply gave up on finding a replacement for CKT in Sherman after the incident at the
Saginaw plant.
CKT does allege that “higher-up Ardent Mills employees made crude and racially
insensitive comments about Collins amongst themselves behind [Collins’] back.” Doc.
No. 31 ¶ 19. But CKT cites only one example of this, and it does not involve Smith.
On August 27, 2015, Collins wrote an email to Elsham concerning future workloads.
See Doc. No. 57 at 7. In the email, Collins addresses Elsham as “Mr. Pete.” See id.
Elsham forwarded the email to a number of coworkers, writing: “Nice overture from
CK. He has dedicated 1 trk sometimes 2. Need your feedback[.]”. See id. Mike Dean—
Elsham’s boss—responded, “Mr Pete!” See id. Elsham replied, “That’s what they says
in the south[.]” See id.
Ardent Mills argues that “Elsham was not referring to African-Americans when
he wrote ‘[t]hat’s what they says in the south[.]’” Doc. No. 62 at 15. Notwithstanding
the dubious veracity of this defense, the fact remains that CKT fails to connect this
instance to Smith’s alleged decision to terminate the MTA. Smith was not even
included on the email chain, and the emails were sent years before the MTA was
allegedly terminated.
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To the extent that CKT attempts to use the instances cited in Section III(B)(3)
below as additional evidence of Ardent Mills’ alleged termination of the MTA based
on race, the claim still fails to survive summary judgment as CKT establishes neither
that Ardent Mills had the intent to discriminate on the basis of race nor that Ardent
Mills’ nondiscriminatory explanations are pretextual.
2.
Treatment and Pay Discrepancy Allegations
CKT alleges that Ardent Mills afforded a non-minority owned trucking company
preferential treatment and that Ardent Mills paid it less than a non-minority owned
trucking company, both on the basis of race. See Doc. No. 31 ¶ 37. For the former
allegation, CKT argues “C & K Trucking provided superior service to RJ Trucking, but
RJ Trucking still received priority on routes until its owner retired.” Doc. No. 57 at 29.
CKT attempts to buttress this claim with citations that indicate CKT’s reliability and
work ethic. See Doc. No. 58-3 at 54-60. Ardent Mills rebuts this claim by arguing that
any preferential treatment RJ Trucking received was due to its long-term relationship
with Ardent Mills and because it was the “primary hauler” of midds at the Sherman
facility. Doc. No. 62 at 13-14. “Plaintiffs’ personal, subjective views of their own
performance are not probative evidence of falsity or pretext.” Coleman v. Exxon Chem.
Corp., 162 F. Supp. 2d 593, 615 (S.D. Tex. 2001). And CKT eventually did replace RJ
Trucking as the “primary hauler” for midds out of the Sherman plant. CKT fails to
establish that any preferential treatment for RJ Trucking was on the basis of race.
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That leads to CKT’s latter claim that Ardent Mills paid it less than a nonminority owned trucking company on the basis of race. See Doc. No. 31 ¶ 37; Doc. No.
57 at 16-17, 29-30. Here, CKT alleges that it was sometimes paid less than RJ Trucking
for similar routes, apparently both before and after it became the primary hauler for
midds out of the Sherman facility. See Doc. No. 57 at 30. CKT makes a similar claim
about Nick Vincent Trucking. See id. However, CKT admits that it was sometimes paid
more than RJ Trucking and Nick Vincent Trucking for the same routes. Id. CKT fails
to offer evidence that race played any part for the instances in which it was paid less.
3.
Other Allegations
In its Response, CKT also alleges that it has “demonstrated a prima facie case
regarding Ardent Mills’ intent to discriminate against C & K Trucking on the basis of
race in the making, performance, modification and/or termination of a contract” in that
(1) its drivers were required to unload trucks in the back of Ardent Mills’ Saginaw
facility while drivers of non-minority owned trucking companies were permitted to
unload in the front (see Doc. No. 57 at 10, 25; Doc. No. 58-1 at 12-17, 67-68, 80); (2)
its drivers were made to wait longer to make deliveries at the Saginaw plant than other
trucking companies’ white drivers (see Doc. No. 57 at 11, 26; Doc. No. 58-1 at 67-68,
75-76); (3) a specific employee at Ardent Mills’ Saginaw plant spoke to CKT’s minority
drivers harshly and disrespectfully but did not speak the same way to the drivers of a
different, non-minority owned trucking company (see Doc. No. 57 at 11, 26; Doc. No.
58-1 at 16-18, 22, 77-78); and (4) CKT was cited for certain violations of Ardent Mills’
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policies while other non-minority owned trucking company violators were not (see Doc.
No. 57 at 11, 26; Doc. No. 58-1 at 18-22, 70-71).
Here, CKT merely cites certain language from the statute; it is not clear to the
Court how CKT connects these specific allegations to a § 1981 claim. In other words,
CKT has failed to establish prong three of making its prima facie case—how these
allegations concerned one or more of the activities enumerated in the statute. And even
if CKT had established the third prong of its prima facie case, it nevertheless fails to
establish by a preponderance of the evidence that Ardent Mills had the intent to
discriminate on the basis of race in any of these four instances. Nor does it establish by
a preponderance of the evidence that Ardent Mills’ nondiscriminatory explanations are
pretextual.
C. Tortious Interference with Existing Business Relations Claim
CKT alleges that Ardent Mills tortiously interfered with its existing contractual
relationships with Cargill, Attebury Grain, Gavilon Grain, and Nathan Segal & Co. See
Doc. No. 31 ¶ 48-51; Doc. No. 57 at 36-39. However, CKT admits that it never had a
contract with Nathan Segal & Co. Doc. No. 58-1 at 34. And CKT seemingly abandons
its claim as to the Cargill contract as it only specifically addresses its contracts with
Attebury Grain and Gavilon Grain in its Response. Doc. No. 57 at 37.
CKT admits that its contract with Gavilon Grain was never terminated (see Doc.
No. 58-1 at 33), and instead argues that it need only show some interference from
Ardent Mills that made performance on the contract more burdensome or of less value
26
to maintain a tortious interference with existing business relations claim. Doc. No. 57
at 37 (citing Khan v. GBAK Properties, Inc., 371 S.W.3d 347, 359-60 (Tex. App.—
Houston [1st Dist.] 2012, no pet.)). CKT argues Ardent Mills made such an
interference when it contacted “Gavilon Grain to inform [it] of C & K Trucking’s ban
from Ardent Mills properties.” Id. at 35. However, Collins describes his contract with
Gavilon Grain as a “regular carrier agreement.” Doc. No. 58-1 at 33. CKT has not
produced for the Court this carrier agreement, nor does it point to any rights under the
agreement that Ardent Mills interfered with.
Regarding CKT’s contract with Attebury Grain, Davis’ email explained that
Attebury Grain stopped tendering loads to CKT after Collins behaved disrespectfully
to her, not because Ardent Mills informed Attebury Grain of CKT’s Saginaw ban. See
Doc. No. 53-1 at 290. Thus, CKT has failed to establish that Ardent Mills proximately
caused any actual damages or loss related to the contract with Attebury Grain.
For these reasons, the Court GRANTS Ardent Mills’ Motion on CKT’s tortious
interference with existing business relations claim.
D. Ardent Mill’s Breach of Contract Counterclaim
Moving for summary judgment on its breach of contract counterclaim, Ardent
Mills alleges CKT breached the MTA by brokering loads tendered to CKT to other
carriers without notice to Ardent Mills. See Doc. No. 53 at 53. Ardent Mills points to
the second paragraph of the MTA which states “Carrier is not authorized to broker
fright under this contract[.]” See Doc. No. 58-1 at 51. Collins admits to using
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contractors to help deliver loads for Ardent Mills. See Doc. No. 55-1 at 10-13. CKT
argues that Ardent Mills’ breach of contract counterclaim nevertheless fails because it
cannot establish damages. See Doc. No. 61 at 2. However, Ardent Mills only seeks
partial summary judgment on this counterclaim for liability and does not contend that
the amount of damages may be determined by summary judgment. See Doc. No. 53 at
54. Because CKT admits to violating the terms of the MTA by brokering freight, the
Court GRANTS Ardent Mills’ Motion as to CKT’s liability for breaching the MTA,
but not as to damages.
IV.
Conclusion
For the reasons cited above, Court GRANTS in part and DENIES in part
Defendant’s Motion and DENIES Plaintiff’s Motion. CKT has one contract claim
remaining for nominal damages; damages on Defendant’s counterclaim also remain to
be adjudicated.
SO ORDERED.
Signed February 19th, 2022
____________________________________
ED KINKEADE
UNITED STATES DISTRICT JUDGE
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