United States District Court, W.D. Washington
ORDER DENYING MOTION FOR JUDGMENT ON THE
L. ROBART UNITED STATES DISTRICT JUDGE
the court is Plaintiff Central Freight Lines, Inc.'s
(“Central Freight”) motion for partial judgment
on the pleadings. (MJOP (Dkt. # 51).) Defendant Amazon
Fulfillment Services, Inc., opposes the motion. (MJOP Resp.
(Dkt. # 54).) The court has considered the motion, the
parties' submissions in support of and in opposition to
the // motion, the relevant portions of the record, and the
applicable law. Being fully advised, the court DENIES the motion
for the reasons set forth below.
case arises from a contract dispute between Central Freight,
a freight carrier, and Amazon Fulfillment Services, Inc.
(“Amazon”), a subsidiary of the online retailer
Amazon.com. (See generally Compl. (Dkt. # 1).)
Central Freight is a “less-than-truckload
(‘LTL') freight carrier” that provided
shipping services to Amazon pursuant to a Transportation
Agreement (“the Agreement”) executed on July 7,
2011. (Id. ¶¶ 2, 10-11, Ex. A
(“Agreement”).) The Agreement details the
services Central Freight provided to Amazon, including
“receiving, loading, storing, transporting, [and]
unloading” freight. (Id. ¶¶ 13-14.)
Amazon agreed to pay Central Freight for those services
pursuant to a rate chart incorporated into the Agreement
“or as mutually agreed to by the parties (which may
include email).” (Agreement § 2.1; see also
Id. Ex. B-1, Ex. B-2.) The parties further agreed that
the “rate structure will not be modified during the
term of th[e] Agreement, except upon mutual agreement of the
parties (which may include email).” (Agreement §
2.1.) The Agreement also contains an integration
clause and a provision precluding modification “unless
it is in writing and signed by Amazon and [Central
Freight].” (Id. § 11.8.)
Agreement further provides that Amazon may “conduct a
performance audit” to determine whether Central Freight
is meeting its obligations under the Agreement. (Id.
§ 1.2.) The provision also allows Amazon to seek
reimbursement “for the full amount of any overcharge
identified in the audit.” (Id.) The Agreement
also includes an “Invoices” section that states
that “[a]ll claims filed by Amazon for overcharge . . .
must be filed within 18 month[s] of the original
invoice” (id. ¶ 2.2), which Central
Freight characterizes as a “look-back” period
(MJOP at 7).
mid-2016, Amazon audited Central Freight's services and
concluded that it had overpaid Central Freight under the
Agreement. (Compl. ¶ 35; see id., Ex. D
(“Demand Letter”).) Amazon concluded that Central
Freight had overcharged in three ways: (1) by failing to
apply a 30 percent discount to shipments of eight or more
pallets (“8-pallet shipments”) (Demand Letter at
3); (2) by improperly double-counting shipments from the same
origin to the same destination on the same day (id.
at 2-3); and (3) by supplying Amazon the incorrect Tender ID,
which Amazon uses to identify the shipment for notification
and transportation purposes (id. at 3). Based on
those asserted errors, Amazon demanded that Central Freight
reimburse Amazon $2, 856, 602.00 no later than September 15,
2016. (Id. at 2.)
Freight disputes Amazon's contentions. It alleges that in
early 2012, the parties orally modified the Agreement's
pricing for 8-pallet shipments, and that its subsequent
billing had been consistent with that oral modification and
subsequent dealings with Amazon. (See Compl.
¶¶ 26-27.) In 2014, Central Freight prepared a
written addendum memorializing those oral modifications, but
Amazon never signed the addendum. (Id. ¶¶
31-32.) Central Freight disputes Amazon's double-counting
and Tender ID allegations, which according to Central Freight
are based on Amazon's unenforceable attempt to
unilaterally amend the Agreement. (Id. ¶¶
37-63.) Based on these disputes, Central Freight declined to
reimburse any of the money that Amazon demanded.
(Id. ¶¶ 37, 49, 63, 68.)
response, an Amazon “affiliate”-Amazon Truckload
Services-withheld payment from Central Freight for other
services performed. (Id. ¶ 76.) The Amazon
affiliate indicated that it was “setting off funds owed
by Central Freight” and would “start to pay any
outstanding funds once the funds owed to Amazon have been
recouped as part of this process.” (Id. ¶
87, Ex. F.)
Freight contends that Amazon wrongfully withheld the alleged
overcharges. (Id. ¶ 16.) Central Freight
asserts the following claims: declaratory judgment (1) that
Amazon breached the Agreement by (a) “back-charging
Central Freight a 30 percent discount for shipments of 8
pallets or more, ” (b) “back-charging Central
Freight for separately invoicing Amazon for shipments from
the same origin to the same destination on the same day,
” and (c) “back-charging Central Freight for the
Tender ID [i]ssue, ” and (2) that Amazon
“wrongfully withheld payments as purported set-off to
the amounts it wrongfully claimed it overpaid”
(id. ¶¶ 90-92); breach of contract
(id. ¶¶ 93-98); violation of the
Washington Consumer Protection Act (“CPA”), RCW
19.86, et seq.; and the California Unfair
Competition Law, Cal. Bus. & Prof. Code § 17200,
et seq. (id. ¶¶ 99-110); and
fraud (id. ¶¶ 111-19).
brings a number of counterclaims against Central Freight: (1)
declaratory judgment that (a) Amazon did not breach the
Agreement, (b) the parties did not orally modify the
Agreement, (c) Central Freight materially breached the
Agreement by failing to charge the contractual rate, failing
to include the Tender IDs, and invoicing Amazon multiple
times for the same shipment, and (d) Amazon had a right to
set off the alleged overcharges (Countercl. (Dkt. # 48)
¶¶ 37-39); (2) breach of contract (id.
¶¶ 40-45); (3) recoupment and setoff (id.
¶¶ 46-49); (4) violation of the CPA (id.
¶¶ 50-55); and (5) unjust enrichment (id.
¶¶ 56-59). Amazon alleges that the parties never
modified the rate structure for the 8-pallet shipments.
(Id. ¶ 10.) Instead, Amazon contends that
beginning in or about January 2012, Central Freight stopped
charging Amazon pursuant to the rate structure in the
Agreement and instead started issuing “spot
quotes” based on the size and locations of shipments.
(Id. ¶ 11.) Amazon further alleges that
“[p]ursuant to ordinary and expected commercial
practice between sophisticated contracting parties, and as
allowed by Washington law, [Amazon] set off the amount it
overpaid Central Freight from sums it otherwise owed Central
Freight.” (Id. ¶ 35.) Once it had
“recouped” the overcharges, Amazon asserts that
it “ceased setting off funds.” (Id.
20, 2017, Central Freight moved for partial judgment on the
pleadings for its declaratory judgment and breach of contract
claims. (See MJOP at 1.) Amazon opposes
the motion. (See MJOP Resp.) The court now addresses