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Fleet Truck Sales, Inc. v. Quality Companies, LLC

United States District Court, D. Nebraska

January 3, 2018

FLEET TRUCK SALES, INC., Plaintiff,
v.
CELADON GROUP, INC., QUALITY COMPANIES, LLC, and QUALITY EQUIPMENT LEASING, LLC, Defendants.

          MEMORANDUM AND ORDER

          Laurie Smith Camp, Chief United States District Judge.

         This matter is before the Court on the Motion for Summary Judgment, ECF No. 67, and the Motion to Exclude, ECF No. 89, filed by Defendants Celadon Group, Inc., Quality Companies, LLC, and Quality Equipment Leasing, LLC (collectively, Defendants). Also before the Court are the Motion for Partial Summary Judgment, ECF No. 79, and Motions to Strike, ECF Nos. 82 and 92, submitted by Plaintiff Fleet Truck Sales, Inc. (Fleet). For the reasons stated below, the Defendants' Motion for Summary Judgment will be granted in part; and Fleet's Motion for Summary Judgment, the Motion to Exclude, and Motions to Strike all will be denied.

         BACKGROUND

         Unless otherwise indicated, the following facts are those stated in the Parties' briefs, supported by pinpoint citations to admissible evidence in the record, in compliance with NECivR 56.1[1] and Federal Rule of Civil Procedure 56.

         Fleet entered into two purchase agreements with Quality Equipment Sales for the sale of commercial trucks, one on September 3, 2015, and another on September 9, 2015. Under the first purchase agreement, Fleet agreed to sell Quality Equipment Sales 163 Volvo commercial trucks for $9, 454, 000 with $81, 500 of the purchase price due as a cash deposit. Under the second purchase agreement, Fleet agreed to sell Quality Equipment Sales 169 Peterbilt commercial trucks for $10, 309, 000 with $84, 500 of the purchase price due as a cash deposit. Fleet never received the purchase price on either contract and contends it did not receive either of the respective cash deposits.

         Quality Equipment Sales was not, itself, a business entity but the fictitious or assumed name used by other business entities. Defendant Quality Equipment Leasing, LLC, (QEL) was registered[2] to do business under the assumed name of Quality Equipment Sales from January 30, 2008, to November 15, 2011. ECF No. 86-1, Page ID 641, 648-49. Defendant Quality Companies, LLC, (Quality Companies) was registered[3] to do business under the assumed name of Quality Equipment Sales from November 23, 2011, to September 28, 2015. ECF No. 86-1, Page ID 635-38. On September 21, 2015, QEL reassumed the name Quality Equipment Sales and currently does business under that name. There is no evidence that Defendant Celadon Group, Inc., has ever registered[4] to do business under the Quality Equipment Sales name. Thus, at the time the purchase agreements were entered into, Quality Companies was registered to do business under the Quality Equipment Sales name.

         At relevant times, however, the Celadon website, Celadontrucking.com, included a webpage titled “Equipment Sales” that stated “Quality Equipment Sales was created based on one concept: Quality.” ECF No. 81. The page advertised and offered pre-owned equipment sales services, including the selling and leasing of pre-owned tractors and trailers. Id. Quality Companies' vice president, Danny Williams, negotiated and authorized the purchase agreements, and although he was not an officer of Celadon Group, his email address was dwilliams@celadontrucking.com. The signature block associated with Williams's email address listed his position as vice president of Quality Companies but also listed the contact information for Celadon Group below. Williams's LinkedIn page also stated his position with Quality Companies, but simultaneously referenced Celadon Group.

         Dennis Kosmicki was the Fleet sales representative who solicited Williams to purchase the trucks. Kosmicki had worked with Eric Meek, a Celadon Group representative, around 2006 or 2007 to consummate a purchase agreement for trucks and, for that particular deal, Meek instructed Kosmicki to title the trucks in the name of “Quality Equipment.” Kosmicki Depo., ECF No. 81-4, Page ID 407. In 2015, Kosmicki emailed Meek, who was then the Chief Operating Officer for Celadon Group, to solicit interest in another equipment purchase, but Meek referred him to Williams and explained Williams was the new individual in charge of equipment purchases. Id. at 408; ECF No. 81-11, Page ID 577. Specifically, Meek responded “I will have Danny [Williams] circle back with you if we need any stock.” ECF No. 81-11, Page ID 577 (emphasis added). Meek also told Kosmicki that “[Williams] is handling all of our purchasing for used/new currently.” Id. at 576 (emphasis added). Neither Meek nor Williams explained that Williams was an officer of Quality Companies and not Celadon Group. Kosmicki Depo., ECF No. 81-4, Page ID 408.

         Kosmicki and Williams proceeded to enter into two purchase agreements between Fleet and Quality Equipment Sales, one in March 2015 and one in May 2015. Payment was made on these purchase orders by Celadon Trucking Services, Inc. ECF Nos. 81-20 & 81-6, Page ID 442. Thereafter, both Kosmicki and Williams coordinated the finalization of the two September purchase agreements at issue in this litigation. Although Kosmicki worked with Williams directly to finalize the purchase agreements, Kosmicki did not have the authority to enter into such contracts for Fleet. He had to get approval from his immediate supervisor, Larry Lamer. Kosmicki Depo., ECF No. 81-4, Page ID 407.

         Quality Companies ultimately was unable to secure financing for the September 3 and September 9 purchase agreements, but for the remainder of 2015 Williams continued to assure Fleet that both purchase agreements would be honored. ECF No. 81-13; ECF No. 81-18; ECF No. 81-31; ECF No. 81-33. On January 13, 2016, however, Williams sent Kosmicki an email explaining that Quality Companies had not resolved its financing problems and recommending that Fleet sell the trucks subject to the September purchase orders to other buyers. ECF No. 81-19. As a result, Fleet began making efforts to sell the trucks to other potential buyers and initiated this action for breach of contract. Both parties have moved for summary judgment on multiple issues.

         STANDARD OF REVIEW

         “Summary judgment is appropriate when the evidence, viewed in the light most favorable to the nonmoving party, presents no genuine issue of material fact and the moving party is entitled to judgment as a matter of law.” Garrison v. ConAgra Foods Packaged Foods, LLC, 833 F.3d 881, 884 (8th Cir. 2016) (citing Fed.R.Civ.P. 56(c)). “Summary judgment is not disfavored and is designed for every action.” Briscoe v. Cty. of St. Louis, 690 F.3d 1004, 1011 n.2 (8th Cir. 2012) (quoting Torgerson v. City of Rochester, 643 F.3d 1031, 1043 (8th Cir. 2011) (en banc)). In reviewing a motion for summary judgment, the Court will view “the record in the light most favorable to the nonmoving party . . . drawing all reasonable inferences in that party's favor.” Whitney v. Guys, Inc., 826 F.3d 1074, 1076 (8th Cir. 2016) (citing Hitt v. Harsco Corp., 356 F.3d 920, 923-24 (8th Cir. 2004)). Where the nonmoving party will bear the burden of proof at trial on a dispositive issue, “Rule 56(e) permits a proper summary judgment motion to be opposed by any of the kinds of evidentiary materials listed in Rule 56(c), except the mere pleadings themselves.” Se. Mo. Hosp. v. C.R. Bard, Inc., 642 F.3d 608, 618 (8th Cir. 2011) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986)). The moving party need not produce evidence showing “the absence of a genuine issue of material fact.” Johnson v. Wheeling Mach. Prods., 779 F.3d 514, 517 (8th Cir. 2015) (quoting Celotex, 477 U.S. at 325). Instead, “the burden on the moving party may be discharged by ‘showing' . . . that there is an absence of evidence to support the nonmoving party's case.” St. Jude Med., Inc. v. Lifecare Int'l, Inc., 250 F.3d 587, 596 (8th Cir. 2001) (quoting Celotex, 477 U.S. at 325).

         In response to the moving party's showing, the nonmoving party's burden is to produce “specific facts sufficient to raise a genuine issue for trial.” Haggenmiller v. ABM Parking Servs., Inc., 837 F.3d 879, 884 (8th Cir. 2016) (quoting Gibson v. Am. Greetings Corp., 670 F.3d 844, 853 (8th Cir. 2012)). The nonmoving party “must do more than simply show that there is some metaphysical doubt as to the material facts, and must come forward with specific facts showing that there is a genuine issue for trial.” Wagner v. Gallup, Inc., 788 F.3d 877, 882 (8th Cir. 2015) (quoting Torgerson, 643 F.3d at 1042). “[T]here must be more than the mere existence of some alleged factual dispute” between the parties in order to overcome summary judgment. Dick v. Dickinson State Univ., 826 F.3d 1054, 1061 (8th Cir. 2016) (quoting Vacca v. Viacom Broad. of Mo., Inc., 875 F.2d 1337, 1339 (8th Cir. 1989)).

         In other words, in deciding “a motion for summary judgment, facts must be viewed in the light most favorable to the nonmoving party only if there is a genuine dispute as to those facts.” Wagner, 788 F.3d at 882 (quoting Torgerson, 643 F.3d at 1042). Otherwise, where the Court finds that “the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, ” there is no “genuine issue of material fact” for trial and summary judgment is appropriate. Whitney, 826 F.3d at 1076 (quoting Grage v. N. States Power Co.-Minn., 813 F.3d 1051, 1052 (8th Cir. 2015)).

         DISCUSSION

         I. Liquidated Damages

         The Parties agree that the primary issue is whether Fleet's damages are, as a matter of law, limited by the liquidated damages clause in each of the September purchase agreements. Fleet argues the purchase agreements give it the option to pursue actual damages or to enforce the liquidated damages clause. Defendants argue Fleet's only option with respect to damages is enforcement of the liquidated damages clause. This issue is one of contract interpretation.[5]

         “The interpretation of a contract and whether the contract is ambiguous are questions of law.” Timberlake v. Douglas Cty., 865 N.W.2d 788, 793 (Neb. 2015). Thus, “[i]n interpreting a contract, a court must first determine, as a matter of law, whether the contract is ambiguous.” Facilities Cost Mgmt. Grp., LLC v. Otoe Cty. Sch. Dist. 66-0111, 868 N.W.2d 67, 74 (Neb. 2015). “A contract is ambiguous when a word, phrase, or provision in the contract has, or is susceptible of, at least two reasonable but conflicting interpretations or meanings, ” and “[t]he meaning of an ambiguous contract is generally a question of fact.” Id. at 74-75. “A contract written in clear and unambiguous language is not subject to interpretation or construction and must be enforced according to its terms.” Kluver v. Deaver, 714 N.W.2d 1, 5 (Neb. 2006). A contract must also be read “as a whole, and if possible, effect must be given to every part of the contract.” Id.

         The purchase agreements are, in all relevant respects, identical. Each is a two page document with a “NOTICES TO PURCHASER” section at the bottom of the first page and a “Purchaser's Certification & Terms of Sales” section that is the entirety of the second page. ECF No. 81-10, Page ID 570-73. The liquidated damages provision is found in the second paragraph on the second page of the Terms of Sales section and states:

The parties agree that it would be impractical and extremely difficult to determine the actual damages in the event of a breach by either party. Thus, the parties agree that liquidated damages in an amount equal to the Cash Deposit shall be paid by either party who breaches this contract. The parties agree that this amount is a reasonable estimate of any actual damages. Purchaser understands and agrees that in the event Purchaser breaches this Agreement, Seller shall retain the Cash Deposit as liquidated damages.

Id. The liquidated damages provision is preceded by the following statement in the Notices to Purchaser section on the first page: “PURCHASER'S CASH DEPOSIT MAY BE RETAINED BY SELLER AS LIQUIDATED DAMAGES PURSUANT TO PARAGRAPH 2 ON PAGE 2.Id. Reading the purchase agreement contracts as a whole, the Court finds they are unambiguous with respect to liquidated damages. See Boyles v. Hausmann, 517 N.W.2d 610, 615 (Neb. 1994) (“[T]he fact that the parties have suggested opposing meanings of the disputed instrument does not necessarily compel the conclusion that the instrument is ambiguous.”).

         Fleet suggests that use of the word “may” in the Notices to Purchaser section means that Fleet may, in its discretion, keep the cash deposit as liquidated damages, or may pursue an action for actual damages. See Childers v. Conservative Sav. & LoanAss'n, 429 N.W.2d 325, 327-28 (Neb. 1988) (finding that the use of the word “may” in the contract at issue was “permissive or discretionary” language, not “mandatory”); Siefford v. Hous. Auth. of City of Humboldt, 223 N.W.2d 816, 823 (Neb. 1974) (explaining the word “may” indicates “permissive, and not mandatory, ” language); accord Bahnmaier v. N. Utah Healthcare Corp., 402 P.3d 796, 800 (Utah Ct. App. 2017) (quoting Holmes Dev., LLC v. Cook, 48 P.3d 895, 902-03 (Utah 2002) (“The plain, ordinary, ...


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