United States District Court, E.D. Washington
ORDER RULING ON SUMMARY JUDGMENT MOTIONS
SALVADOR MENDOZA, JR., UNITED STATES DISTRICT JUDGE
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
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Contract assignment and delegation
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).
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
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.
Contract-related causes of action
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.
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.
Breach of fiduciary duty
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).
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
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)).
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. 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.
Fraud or misrepresentation
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. Likewise, the
Court analyzes Seaside's misrepresentation claim under
Washington law governing its fraud claim.
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)
Elcon Constr., Inc. v. E. Wash. Univ., 273 P.3d 965,
970 (Wash. 2012).
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.
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.
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.
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
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.
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 ...