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Jackson Harmon Enterprises, LLC v. Insurance Auto Auctions, Inc.

United States District Court, D. Nebraska

May 1, 2015

JACKSON HARMON ENTERPRISES, LLC, d/b/a MIDWEST TOWING, A Nebraska Limited Liability Company, Plaintiff,
INSURANCE AUTO AUCTIONS, INC., An Illinois Corporation, Defendant.


RICHARD G. KOPF, Senior District Judge.

This is a diversity action alleging breach of contract and, alternatively, unjust enrichment[1] arising from the defendant's failure to pay the plaintiff for what the parties and witnesses have variously referred to as "two-stop, " "second-stop, " "added-stop, " or "additional-stop" towing services. After a three-day non-jury trial, the following constitutes the court's Findings of Fact and Conclusions of Law pursuant to Fed.R.Civ.P. 52(a)(1).


1. Defendant Insurance Auto Auctions ("IAA") is an Illinois corporation engaged in the business of storing automobiles in Douglas County, Nebraska. IAA provides a forum for insurance companies and other vehicle providers to dispose of total-loss, theft-recovered, or dealer trade-in vehicles at auction. Upon assignment from a provider, IAA utilizes towers like plaintiff Midwest Towing ("Midwest") to pick up and deliver vehicles that are assigned to IAA by various vehicle providers.

2. Prior to March 8, 2010, and until January 21, 2013, IAA's Omaha branch operated out of offices located at 4506 S. 52nd Street, in Omaha, Nebraska. Prior to March 8, 2010, and until December 4 or 5, 2012, the Omaha branch consisted of three lots. The main lot, where auctions occurred, was the 52nd Street location, and two other lots were located at 4710 S. 36th Street and at or near 60th and L Streets in Omaha (the "52nd Street, " "36th Street, " and "60th Street" lots).

Contract Negotiations

3. In order to solicit bids for towing of light-duty salvage vehicles, IAA invited towers to participate in a Request for Proposal ("RFP") process beginning in January 2010. IAA utilized Ryder Logistics to coordinate the RFP process. On January 24, 2010, Midwest General Manager Jeff Jackson signed an acknowledgment of "Tower Instructions and Bidder Requirements, " as listed in the RFP.

4. On January 24, 2010, Midwest faxed to Ryder Logistics its "Responses to Request for Proposal: IAA Omaha." In Midwest's responses to RFP 4.14, Midwest stated in pertinent part: "Not covered fees will include:... Wait time, dry runs or double pick ups. We realize that most of these are addressed in the contract and so feel that as long as any additional fees are approved by the Omaha branch manager, they will be paid but, if they are not approved prior to performance they can and may be denied." (Trial Ex. 115.)

5. On January 26, 2010, Midwest Towing sent a fax to Rashell Lang of Ryder Logistics with its proposal for towing services. This fax included proposed Towing Rate Sheets signed by Jeff Jackson with handwritten proposed base towing rates for 20 tow zones and "Remote Drop Yard Transfer Tows." The proposed Towing Rate Sheets included a provision titled "Additional Charges, " which provided in pertinent part:

Additional Charges
1) Dry Runs -
>Will be paid at 35% of the applicable zone rate. Dry runs must be pre-approved by Branch Manager.
2) Wait time -
>IAA will not pay for wait time for the first ½ hour. After 30 minutes, wait time will be paid at $25.00 per ½ hour increments, if approved by the Branch Manager.
3) Added Stops -
>IAA will pay $25.00 for additional stops, if approved by the Branch Manager.

(Trial Exs. 109, 110, 112, 113.)

6. The January 26, 2010, fax also included a list of typewritten questions and Jeff Jackson's handwritten responses. Jackson's responses indicated that Midwest read and understood the terms, requirements, and conditions of the proposed contracts and service level agreement and that Midwest was able to handle seasonal spikes, which typically occurred in the winter months and might include the need for additional equipment. (Trial Ex. 111.)

7. In February of 2010, Jeff Jackson visited IAA Branch Manager John Williams at the 52nd Street lot. During this visit, Williams and Jackson toured all of the lots operated by the Omaha branch, including the 36th and 60th Street lots.

8. Ultimately, IAA conducted a final meeting with Midwest and other towers that submitted bids, and IAA selected Midwest for the light-duty towing contract.

9. Before Jackson entered into the contract with IAA, Jackson was aware of IAA's 36th, 52nd, and 60th Street lots, and knew that Midwest might be required to make deliveries to lots other than the IAA branch office at 52nd Street. However, Jackson understood that these deliveries would be for "overflow" only, and such deliveries would not be a daily requirement. Jackson also understood that no matter where the vehicles were towed, the paperwork associated with the tow must be delivered to the 52nd Street branch office immediately after the tow.

10. During the contract negotiation process, no one told Jackson that Midwest would be paid for second-stop fees for deliveries to outlying lots.

Contract Language

11. On March 8, 2010, Midwest and IAA entered into a Towing Services Agreement ("TSA"), pursuant to which Midwest agreed to pick up motor vehicles and trailers throughout the State of Nebraska. The TSA was an IAA form contract that IAA drafted. The parties did not negotiate over the terms of the TSA, other than the price that Midwest would charge for its towing services. Midwest did not have a lawyer review the contract ...

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