Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Seaside Inland Transport v. Coastal Carriers LLC

United States District Court, E.D. Washington

October 4, 2019

SEASIDE INLAND TRANSPORT, Plaintiff,
v.
COASTAL CARRIERS LLC; and JOHN DUNARD AND NICOLE DUNARD, husband and wife, Defendants. COASTAL CARRIERS LLC, Third-Party Plaintiff,
v.
PAUL MASSINGILL, a Washington individual; and SERVICE DRIVEN TRANSPORT INC., a Washington corporation, Third-Party Defendants. PAUL MASSINGILL, Third-Party Plaintiff,
v.
COASTAL CARRIERS LLC, and JOHN DUNARD AND NICOLE DUNARD, Third-Party Defendants.

          ORDER RULING ON SUMMARY JUDGMENT MOTIONS

          SALVADOR MENDOZA, JR., UNITED STATES DISTRICT JUDGE

         Before the Court, without oral argument, is Coastal Carriers LLC and John and Nicole Dunard's Motion for Summary Judgment Partially Dismissing First-Party Action, ECF No. 226, and Motion for Summary Judgment Dismissing Second Third-Party Action, ECF No. 227. Coastal and the Dunards seek summary judgment in their favor on nearly all of Seaside Inland Transport Inc. and Paul Massingill's claims against them. Seaside and Massingill oppose the motions. ECF Nos. 228, 230. Having reviewed the briefing and the file in this matter, the Court is fully informed and grants in part and denies in part both motions.

         BACKGROUND [1]

         John Dunard is the owner, chief executive officer, and president of Coastal Carriers LLC, the successor in interest to Coastal Carriers Inc. ECF No. 232 at 2. His spouse, Nicole Dunard, owns Valkyrie Express LLC and Valkyrie Logistics LLC. Id. Massingill did business as Seaside Inland Transport, which he later incorporated. Id. at 3-4.

         Coastal was a freight broker that solicited customers' freight shipments and located carriers to haul that freight. ECF No. 252 at 2. Coastal made its money on the net profit or margin-the difference between what customers paid to ship and what Coastal paid carriers to haul. Id.

         In 2003, Coastal entered into an Agency Agreement with Massingill, doing business as Seaside, to serve as its freight agent by brokering freight on its behalf in exchange for commissions. Id. at 2-3; ECF Nos. 226-5, 227-5, 232-1, 316. In 2004, Seaside, now incorporated, assumed Massingill's responsibilities under the Agency Agreement. ECF No. 252 at 3. Coastal and the Dunards considered Massingill and Seaside to be their exclusive brokers. Id. at 4.

         However, on March 13, 2017, Coastal and the Dunards fired Massingill and Seaside when the former discovered the latter's establishment of a potentially competing freight brokerage, Service Driven Transport Inc. Id. Seaside sued Coastal that same day. ECF No. 1-2.

         In its fourth amended complaint, Seaside asserts the following twelve causes of action: (1) breach of contract, (2) breach of the covenant of good faith and fair dealing, (3) breach of fiduciary duty, (4) unjust enrichment, (5) conversion, (6) promissory estoppel, (7) misrepresentation, (8) interference with business expectancy, (9) fraud, (10) antitrust and consumer protection violations, (11) trade secret violations, and (12) civil conspiracy. ECF No. 215 at 23-29.

         In his amended countercomplaint and third-party complaint, Massingill asserts the following four causes of action: (1) unpaid wages and commissions, (2) breach of contract, (3) breach of fiduciary duty, and (4) unjust enrichment. ECF No. 214 at 6-7.

         Coastal and the Dunards seek summary judgment in their favor on all of these causes of action, except Seaside's claim for $29, 332 in commissions. ECF No. 226 at 2; ECF No. 227 at 2.

         LEGAL STANDARD

         The Court must 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). A fact is “material” if it “might affect the outcome of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute about a material fact is “genuine” if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id.

         The moving party bears the initial burden of showing no genuine dispute of material fact exists because a reasonable jury could not find in favor of the nonmoving party. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 325 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 588 n.10, 587 (1986). If the moving party makes this showing, the nonmoving party then bears the burden of showing a genuine dispute of material fact exists because reasonable minds could differ on the result. See Anderson, 477 U.S. at 248-51; Matsushita Elec. Indus., 475 U.S. at 586-87.

         The nonmoving party may not rest upon the mere allegations or denials of its pleading and must instead set forth specific facts, and point to substantial probative evidence, tending to support its case and showing a genuine issue requires trial resolution. See Anderson, 477 U.S. at 248-49. The Court must enter summary judgment against the nonmoving party if it fails to make a showing sufficient to establish an element essential to its case and on which it would bear the burden of proof at trial. See Celotex Corp., 477 U.S. at 322.

         In ruling on a summary judgment motion, the Court must view the evidence in the light most favorable to the nonmoving party. See Tolan v. Cotton, 572 U.S. 650, 657 (2014) (quoting Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970)). Thus, the Court must accept the nonmoving party's evidence as true and draw all reasonable inferences in its favor. See Anderson, 477 U.S. at 255. The Court may not assess credibility or weigh evidence. See id.

         DISCUSSION

         A. Contract assignment and delegation

         The parties agree that, in 2004, “Seaside assumed Massingill's responsibilities under the Agency Agreement.” ECF No. 252 at 3 (citing ECF No. 226-4 at 14); ECF No. 253 at 3 (citing ECF No. 226-4 at 14). Indeed, Massingill admits that Seaside “assumed the freight broker-agent duties under the Agency Agreement.” ECF No. 231 at 3 (responding to ECF No. 227-1 at 2). And Seaside admits that it “operated consistent with the Agency Agreement” after assuming Massingill's responsibilities thereunder. ECF No. 229 at 4 (responding to ECF No. 226-1 at 3).

         There is thus no dispute that (1) Seaside's assumption of Massingill's responsibilities arising under the Agency Agreement effected a delegation of his future contractual duties, and (2) Seaside's subsequent receipt of Massingill's commissions due under the Agency Agreement effected an assignment of his future contractual rights as well.

         But a genuine dispute of material fact exists on whether Massingill retained the right to receive commissions held in an escrow account through the March 13, 2017 termination of the Agency Agreement as to Seaside. The record contains substantial probative evidence that he did. See ECF No. 232 at 7-8; ECF No. 240-2 at 3-4. Thus, the Court denies Coastal and the Dunards' motions to the extent they rest on the assertion that Massingill lost, and Seaside gained, all rights under the Agency Agreement in 2004.

         B. Contract-related causes of action

         Seaside's claims for unjust enrichment and promissory estoppel, ECF No. 215 at 24-25, fail as a matter of law because these legal doctrines do not apply where, as here, a valid, binding contract indisputably governs the same aspects of the parties' relationship at issue, see Klinke v. Famous Recipe Fried Chicken, Inc., 616 P.2d 644, 648 n.4 (Wash. 1980); Chandler v. Wash. Toll Bridge Auth., 137 P.2d 97, 103 (Wash. 1943); Boyd v. Sunflower Props., LLC, 389 P.3d 626, 633-34 (Wash.Ct.App. 2016); Spectrum Glass Co. v. Pub. Util. Dist. No. 1 of Snohomish Cty., 119 P.3d 854, 861 (Wash.Ct.App. 2005). Accordingly, Coastal and the Dunards are entitled to judgment as a matter of law on these causes of action.[2]

         Massingill's counterclaim and third-party claim for unjust enrichment, ECF No. 214 at 7, does not suffer the same fate. As discussed above, a genuine dispute of material fact exists regarding what rights, if any, Massingill retained under the Agency Agreement. With this matter yet unresolved, Massingill may plead unjust enrichment in the alternative. If this matter is later determined adversely to Massingill, he may still pursue this cause of action to the extent it concerns matters outside the scope of the Agency Agreement.

         C. Breach of fiduciary duty

         “Generally, participants in a business transaction deal at arm's length . . . .” Annechino v. Worthy, 290 P.3d 126, 129 (Wash. 2012) (quoting Liebergesell v. Evans, 613 P.2d 1170, 1175 (Wash. 1980)). However, a fiduciary relationship may arise between contracting parties if “one party occupies such a relation to the other party as to justify the latter in expecting that his interests will be cared for.” Liebergesell, 613 P.2d at 1175 (internal quotation marks omitted).

         A fiduciary relationship usually “imparts a position of peculiar confidence placed by one individual in another”; thus, a fiduciary is “a person with a duty to act primarily for the benefit of another.” Goodyear Tire & Rubber Co. v. Whiteman Tire, Inc., 935 P.2d 628, 634 (Wash.Ct.App. 1997) (internal quotation marks omitted); accord Guarino v. Interactive Objects, Inc., 86 P.3d 1175, 1192 (Wash.Ct.App. 2004). “The facts and circumstances must indicate that the one reposing the trust has foundation for his belief that the one giving advice or presenting arguments is acting not on his own behalf, but in the interests of the other party.” Guarino, 86 P.3d at 1192 (quoting Goodyear Tire & Rubber, 935 P.2d at 634). “In other words, the plaintiff must show some dependency on his or her part and some undertaking by the defendant to advise, counsel and protect the weaker party. Goodyear Tire & Rubber, 935 P.2d at 634. “For example, a plaintiff's lack of business expertise, and a defendant's undertaking the responsibility of providing financial advice to a close friend or family member, may indicate a fiduciary relationship.” Id.

         Seaside argues Coastal and the Dunards acted as its fiduciaries by “controll[ing] the money collected from Seaside's shippers and paid to Seaside as commissions, all on the promise that they would pay Seaside 70% or 50% commissions.” ECF No. 228 at 10. Further, Massingill argues Coastal and the Dunards acted as his fiduciaries by “escrowing Massingill's commissions ‘for the benefit of [Massingill] . . . for the life of the contract.'” ECF No. 230 at 14 (alteration and omission in original) (quoting ECF No. 232-1 at 3). But “[u]nder modern law, holding funds for a purpose does not, by itself, establish a trust or fiduciary relationship.” Cedar River Water & Sewer Dist. v. King County, 315 P.3d 1065, 1073 (Wash. 2013). “Generally, ‘the key element is whether the parties intended a trust relationship rather than a contractual relationship.'” Id. (quoting Thompson v. Atl. Richfield Co., 673 F.Supp. 1026, 1028 (W.D. Wash. 1987)).

         Viewing the evidence in the light most favorable to Seaside and Massingill, no genuine dispute of material fact exists on whether Coastal and the Dunards were their fiduciaries. A reasonable trier of fact could only find that the parties intended to maintain a contractual or other business relationship.[3] Seaside and Massingill fail to show they were justified in expecting, with peculiar confidence, that Coastal and the Dunards would act primarily for their benefit. Therefore, as a matter of law, Coastal and the Dunards were not fiduciaries of either Seaside or Massingill.

         D. Fraud or misrepresentation

         The parties do not differentiate between the legal doctrines underpinning Seaside's fraud and misrepresentation claims. Compare 6A Wash. State Supreme Court Comm. on Jury Instructions, Washington Practice Series: Washington Pattern Jury Instructions-Civil ch. 160 (7th ed. 2019 update) (entitled “Fraud”), with Id. ch. 165 (entitled “Negligent Misrepresentation”). Indeed, the parties treat Seaside's misrepresentation claim as being subsumed by Washington law governing its fraud claim.[4] Likewise, the Court analyzes Seaside's misrepresentation claim under Washington law governing its fraud claim.

         A party claiming fraud must prove the following nine elements by clear, cogent, and convincing evidence:

(1) a representation of existing fact, (2) its materiality, (3) its falsity, (4) the speaker's knowledge of its falsity, (5) the speaker's intent that it be acted upon by the person to whom it is made, (6) ignorance of its falsity on the part of the person to whom the representation is addressed, (7) the latter's reliance on the truth of the representation, (8) the right to rely upon it, and (9) consequent damage.

Elcon Constr., Inc. v. E. Wash. Univ., 273 P.3d 965, 970 (Wash. 2012).

         Coastal and the Dunards argue Seaside cannot establish the first three elements of fraud-a material misrepresentation of existing fact-by clear, cogent, and convincing evidence. ECF No. 226 at 24-26. Seaside argues Coastal and the Dunards committed fraud by “moving freight for Seaside-generated customers, hiding this fact, and paying no commissions”; “claim[ing] Coastal could not do business with a prospective customer and . . . then broker[ing] freight for that same shipper, without informing Seaside or paying commissions”; “offset[ting] commissions due, without disclosure to Seaside”; and “inducing Seaside to expand its offices, despite [Coastal and the Dunards] simultaneously expanding Coastal's ability to compete against Seaside in its Missouri offices, without informing Seaside, all on the false promise of a long-term relationship with Coastal.” ECF No. 228 at 12-13.

         Seaside's brief provides nothing more than these bald contentions. Seaside does not reason through the elements of fraud or cite to the record or relevant legal authorities. Instead, Seaside merely supplies its subjective interpretation of the record, leaving the Court to piece together possible arguments for why Coastal and the Dunards might be liable for fraud. Cf. Indep. Towers of Wash. v. Washington, 350 F.3d 925, 929 (9th Cir. 2003). The Court declines to fill the void in this analysis by crafting such arguments, especially because Seaside bears the burden of proving fraud's elements by clear, cogent, and convincing evidence.

         Seaside has failed to carry its burden of setting forth specific facts, and pointing to substantial probative evidence, showing reasonable minds could differ and trial is necessary to resolve the issues. Thus, Seaside has failed to make a showing sufficient to establish elements essential to its case and on which it would bear the burden of proof at trial. No. genuine dispute of material fact exists and, as a matter of law, Coastal and the Dunards are liable neither for fraud nor, by extension, misrepresentation.[5]

         E. Account stated

         “A breach of contract is actionable only if the contract imposes a duty, the duty is breached, and the breach proximately causes damage to the claimant.” Nw. Indep. Forest Mfrs. v. Dep't of Labor & Indus., 899 P.2d 6, 9 (Wash.Ct.App. 1995).

         An account stated is “a manifestation of assent by debtor and creditor to a stated sum as an accurate computation of an amount due the creditor.” Sunnyside Valley Irr. Dist. v. Roza Irr. Dist., 877 P.2d 1283, 1284 (Wash. 1994) (quoting Restatement (Second) of Contracts § 282(1) (Am. L. Inst. 1981)). “[O]nce an account stated is established, it becomes a new contract.” Parrott Mech., Inc. v. Rude, 78 P.3d 1026, 1029 (Wash.Ct.App. 2003).

         “To establish an account stated, an invoice must set forth the state of the account between the parties and the balance owed.” Id. Whether an invoice is a true statement of work performed is immaterial to establishing an account stated. See Id. at 1030. Instead, an account stated requires “mutual[] agree[ment] between the parties that the balance struck thereon is the correct amount due from the one party to the other on the final adjustment of their mutual ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.