United States District Court, W.D. Washington, Seattle
JOINT PRETRIAL ORDER
HONORABLE JAMES L. ROBART, JUDGE
Court has jurisdiction in this matter under 28 U.S.C. §
1332(a) because the matter in controversy exceeds the sum of
$75, 000, exclusive of interest and costs, and is between
citizens of different states.
CLAIMS AND DEFENSES REMAINING FOR TRIAL AFTER THE COURT'S
SUMMARY JUDGMENT RULING
31, 2019, this Court entered its Order on the Motions for
Summary judgment (“Order”), which narrowed the
claims and issues that remain for trial. At the September 10,
2019 hearing on Plaintiff's Daubert motions, the
Court advised the parties to sharpen and focus the issues for
trial. The Court's September 17, 2019 Order on
Plaintiff's Motions to Exclude (“Daubert
Ruling”) further narrowed the remaining issues for
trial. The claims and defenses remain for trial as a result
of these rulings are set forth below.
PLAINTIFFS' CLAIMS AND DEFENSES
Counts I and II - Declaratory Judgment and Breach of
Court “GRANT[ED] CFL summary judgment on its
declaratory judgment claims that AFS's $2, 856, 602.00
setoff was improper.” (Order, 51:12-15.). This issue
therefore no longer remains for trial.
Court held that: (1) CFL and AFS reached an oral agreement
beginning on January 16, 2014 pursuant to which CFL would
charge its spot quote rate for shipments that were 9 or more
pallet spaces in size (Id., 27-28); (2) this oral
agreement did not require CFL to obtain AFS' preapproval
of its spot quote rate for shipments that were 9 or more
pallet spaces in size. (Id., 29-30); (3) “even
if the parties orally agreed to the preapproval requirement,
AFS waived this requirement” (Id., p. 30); (4)
the oral agreement “was for CFL to charge its
spot-quoted volume rate, not a ‘reasonable'
rate” (Daubert Ruling, p. 25 n. 8); (5) CFL
“should not have spot quoted shipments that occupied
exactly eight pallet spaces” (Id., 32:20-22);
(6) the Court was unable to “determine whether CFL
properly charged for the shipments that occupied between one
and seven pallet spaces” (Id.,
Based on the aforementioned rulings by the Court, the only
issues that CFL must establish at trial for Counts I and II
on the 8 Pallet issue are:
. that it billed its volume rate using its
spot quote software;
. the amount AFS owes to CF Lon the
shipments that were 9 or more pallet spaces to which the oral
. the amount AFS owes to CF Lon the
shipments that were 8 or fewer pallet spaces because of
AFS' miscalculation of what was owed under the
Court ruled that CFL was not obligated under the
Transportation Agreement (“TA”) to consolidate
multiple BOLs into a single MBOL. (See Oder, p. 38,
“the Court concludes that the Agreement allowed CFL to
use multiple BOLs”). The Court noted that mutual assent
as to whether CFL would use one MBOL instead of multiple BOLs
“may exist.” (Id.) The sole issue for
trial thus is “whether, and at what date after the
Directive, CFL was required to use one MBOL for same day/same
origin/same destination shipments.” (Id. at
$431, 028 that AFS set off on the MBOL was based on its audit
of the months of February, March and April 2016. The sole
issue at trial, therefore, is whether there was an agreement
to combine BOLs, and, if so when it was reached. For example,
if CFL establishes there was no agreement as of the end of
April 2016, CFL is entitled to payment of the $431, 028 that
AFS set off.
trial issues are: (1) “whether the $112, 203.52 payment
[by CF Lon the MBOL Issue] was a reimbursement pursuant to
the Agreement, or whether it was payment in furtherance of a
settlement.” (Order, 55:16-19); (2) if it was payment
in furtherance of a settlement. whether CFL is entitled to
repayment of this money because AFS continued to pursue
additional money from CFL after it was paid.
issues at trial on the Tender ID Issue are: (i) whether and
when there was an agreement that CFL was required to include
a valid Tender ID; and (ii) whether AFS could refuse payment
for a shipment that was made because of no Tender
Id. (Id., 40-41.)
for “bad faith”
addition to its actual damages, CFL may - if the jury finds
that AFS acted with “bad faith” - be entitled to
the attorneys' fees it expended in this litigation.
(Order, 56:8-17.) As stated in the Order, an award of
attorney fees is proper under the bad faith exception when
the fees were incurred as a result of: (1) an
“intentional and calculated action” that (2) left
“the plaintiff with only one course of action: that is,
litigation.” (Id., 56:8-12 (quotation
Central Freight's Claims Dismissed by the Court at
following claims were dismissed by the Court and are no
longer part of the trial: Count III - Fraud, Count IV -
Fraudulent Inducement, Count V - Conversion, Count VI -
Promissory Estoppel (dismissed as moot because of other
rulings), and Count VIII - Violation of Consumer Protection
Central Freight's Defenses at Trial to AFS's
AFS' counterclaims are barred by the doctrines of laches,
estoppel, release, waiver, ratification, acquiescence, bad
faith and/or unclean hands, and other equitable defenses.
AFS' counterclaims are barred in whole or in part because
AFS has suffered no damage caused by the actions alleged in
AFS' counterclaims are barred by Defendants' own
material breach of the Contract.
allegation that Central Freight breached the Contract is
legally excused and justified by AFS' material breach of
claims by AFS against Central Freight's outstanding
invoices are time-barred.
AFS'S COUNTERCLAIMS AND DEFENSES
does not accept or ratify CFL's characterization of the
Court's Orders and documents which speak for themselves.
Because AFS's defenses and counterclaims are intertwined,
AFS addresses them together. AFS will pursue the following
defenses and counterclaims at trial:
breached the terms of the transportation agreement by failing
to charge the contractual rates for shipments occupying 1-8
breached the terms of the oral modification of the
transportation agreement by (a) failing to use its spot quote
rating software to determine rates for shipments occupying
more than 9 pallet positions, and/or (b) inflated the rates
it charged AFS for shipments occupying 9 or more pallet
parties modified the transportation agreement to require CFL
to consolidate shipments and CFL breached that agreement by
failing to consolidate shipments onto a single bill of lading
for shipments moving in February, March, April, June of 2016;
Freight's Response to (3): The only months at
issue for trial on the MBOL Issue are February, March and
April of 2016. In its Counterclaim, AFS asserts that
“Central Freight charged AFS multiple times for the
same single shipments …. Central Freight's billing
procedures resulted in AFS overpaying Central Freight by
$431, 028, of which only a fraction was reimbursed.”
(Dkt. # 48, Counterclaim ¶ 30.) By email dated June 23,
2016, Christian Piller confirmed to CFL that the audit was
“only … February 2016 through April 2016 . .
.” (CFL 003684, Trial Ex. 42.) Both of the
“Multiple ARN Audit” spreadsheets AFS produced in
discovery, AFSCFL00000839 and AFSCFL00001599, end in April of
2016. (See Dkt. # 105, p. 6, confirming production
of the setoff audits.) In addition, AFS is time-barred by
both the limitations period set forth in the TA and federal
law, 49 U.S.C. § 14705, from asserting a claim
more than 18 months after the claim arose. AFS' claim on
shipments from June 2016 is time-barred. AFS should not be
permitted to expand its prayer for affirmative relief on the
eve of trial.
Reply: AFS's counterclaims have always been that
CFL “materially breached the Contract ... by charging
AFS multiple times for single shipments.” Dkt. No. 48,
¶¶ 21-25, 42. This is an affirmative claim and is
not limited to amounts AFS calculated in its audit as
overcharges by CFL. CFL claims that AFS did not disclose this
amount during discovery; however, CFL limited its discovery
to AFS's audit. See Dkt. No. 99-1, at 9, 17
(requesting the invoice numbers for “all freight
services that you claim were overbilled pursuant to the
Audit.”); see also Dkt. No. 139, ¶
49 (placing CFL's May/June 2016 audit in dispute for this
Dkt. No. 144, ¶ 49 (admitting that CFL agreed to
“self-audit its multiple BOL shipments occurring in May
and June 2016, and agreed to repay these amounts, which
amounted to $112, 203.52 and $145, 698.94”); Dkt. No.
156, at 23 (“CFL agreed to repay the overcharges from
May and June 2016.”). Similarly, in its Motion to
Compel, CF Lonly moved to compel the invoices for the
“audit it [AFS] conducted of CFL's
performance in 2016.” See Dkt No. 98 at 2
(seeking the “full, accurate and complete copy of the
July 2016 Audit.”), and AFS responded
appropriately. The audit in dispute was conducted by
CFL in August 2016. See Dkt. No. 158-2, at
11. AFS produced this audit as AFSCFL00001527. Moreover, AFS
included these amounts in its Amended Initial Disclosures,
served on CF Lon May 9, 2019. Finally, the statute of
limitations does not apply to AFS's counterclaims.
Olsen v. Pesarik, 118 Wn.App. 688, 692, 77 P.3d 385
(2003); Seattle First Nat. Bank, N.A. v. Siebol, 64
Wn.App. 401, 407, 824 P.2d 1252 (1992). CFL's objections
is entitled to retain the $112, 203.52 CFL issued AFS for
unconsolidated shipments that moved in May of 2016;
breached the terms of the transportation agreement by failing
to provide the required Tender ID on its invoices;
is not entitled to damages for shipments for which it failed
to identify the Tender ID on certain unpaid invoices; certain
invoices which were untimely submitted; and for invoices not
authorized by AFS;
Freight's Response to (6): AFS's belated
attempt to state a claim on the eve of trial based upon the
“setoff invoices” (as distinct from the
“audit invoices”) is improper because AFS
previously stated in discovery that information concerning
the “invoices Central Freight submitted after the
Audit” (i.e., the “setoff invoices”)
“is irrelevant to any claim or defense in this
litigation.” (AFS' Answers to Plaintiff's First
Set of Interrogatories, No. 2.) Moreover, AFS stated it did
not have a claim against the “setoff invoices”
when it stated that it “set off this amount [$2, 856,
602] from amounts otherwise due.” (AFS'
Answers to Plaintiff's First Set of Interrogatories, No.
6 (emphasis added).) AFS' answers to discovery foreclosed
its attempt to assert claims against the “setoff
invoices” (invoices Central Freight submitted for work
performed after the 2016 audit that AFS refused to pay). It
cannot do so now. In addition, AFS is time-barred by both the
limitations period set forth in the TA and federal law, 49
U.S.C. § 14705, from asserting these claims more
than 18 months after they arose.
Reply: This allegation is an improper attempt to
supplement CFL's motion in limine addressing this issue
by asserting alternative grounds for relief. See
Dkt. No. 216, at 8-9. It also seeks to circumvent this
Court's ruling that these issues are “relevant to
AFS's breach of contract counterclaim.” Dkt. No.
238, at 16. CFL was well aware that AFS asserts these claims
after CFL sought damages in excess of the set off amount.
These claims were clearly raised during discovery and were
explicitly identified in the expert report of William Partin.
See Dkt. No.158-2, at 69 (dated May 2, 2019);
see also Dkt. No. 156, at 43 (dated May 6, 2019).
Because CFL was well aware of these damages prior to the
discovery cutoff, it cannot now raise an issue that this is
an undisclosed claim. Finally, statute of limitations
defenses do not apply to AFS's counterclaims. Olsen
v. Pesarik, 118 Wn.App. 688, 692, 77 P.3d 385 (2003);
Seattle First Nat. Bank, N.A. v. Siebol, 64 Wn.App.
401, 407, 824 P.2d 1252 (1992).
did not act in bad faith because CFL misrepresented the
agreements it had with prior AFS carrier managers, and AFS
understood CFL's ability to spot quote as following
industry procedures regarding spot quoting shipments.
parties are prepared to stipulate to the following facts,
which are relevant and about which they believes there is no
Central Freight is a less-than-truckload (“LTL”)
freight carrier based in the southwestern United States.
Central Freight also performs Truckload (“TL”)
services and operates throughout the Southern United States.
is a shipping option for freight shipments larger than parcel
(small package) but less than a full truckload
Central Freight and AFS entered into a Transportation
Agreement (“TA”) with an effective date of July
TA was renewed on an annual basis and was in full force and
effect until it was terminated in early 2017.
Central Freight made hundreds of thousands of LTL freight
shipments for AFS over the years the TA was in effect.
2011, Central Freight objected to transporting large volume
shipments which had been tendered to Central Freight.
Central Freight informed AFS that it did not want to pick up
and transport large volume shipments.
Court has ruled that, on January 16, 2014, Christian Piller,
of AFS, and Central Freight orally modified the TA to allow
Central Freight to use its spot quote rating software system
to set pricing for shipments that occupied nine or more
Court has ruled that the oral modification of the TA for
shipments that were nine or more pallets in size did not
require Central Freight to get preapproval from AFS of the
pricing for those shipments.
2014, AFS implemented a computerized invoice auditing
program, the Transportation Invoice Processing System, or
“TIPS”, to support the goal of ensuring that AFS
paid its carriers the right amount and on time.
there was a variance between TIPS's estimated manifest
amount and the LTL carrier's invoice, the system would
flag the invoice as “off manifest.” TIPS also
compared other metrics to determine if an invoice would be
flagged as “off manifest.” 12. AFS paid thousands
of invoices for shipments Central Freight transported for
Amazon, including those that Central Freight contends were
rated using Central Freight's spot quote program.
June of 2016, AFS denied that it had ever entered into an
agreement with Central Freight regarding large volume
bill of lading (“BOL”) is a contract between a
shipper and carrier for a shipment by warranting payment to a
carrier for that shipment. It identifies the freight, the
person who receives it, the place of delivery and the terms
of the agreement.
February 13, 2016, Brett Beavers of AFS sent an email to
AFS's LTL carriers directing the carriers to combine
multiple BOL into a Master BOL (“MBOL”) for
shipments going from the same origin to the same destination
on the same day onto a single MBOL. The email instructed
carriers to invoice AFS based upon the MBOL.
Combining multiple shipments, each identified by a single
BOL, into a MBOL can modify the pricing of the shipments.
sent the February 13, 2016 email to a single billing clerk at
February 24, 2016, Barry Rankin, then the Director of Credit
and Collections at Central Freight, forwarded the February
13, 2016 directive to Central Freight's EDI team.
March 2, 2016, Tom Botsios was forwarded the February 13,
April 4, 2016, AFS sent another email to its LTL carriers
notifying them that if they did not include the proper Tender
ID on an invoice, AFS might refuse to pay the invoice.
Tender ID is a unique reference number used by AFS to provide
authorization for a carrier to transport a shipment.
Tender ID may include multiple Amazon Reference Numbers
2016, AFS initiated an audit of its LTL freight carriers to
determine whether the carriers were complying with MBOL
AFS's MBOL audit claimed that Central Freight overcharged
AFS by $431, 028 for the months of February, March and April
also audited Central Freight to determine its compliance with
Tender ID procedures.
June of 2016, an Amazon employee noticed that Central Freight
was not applying the contractual discounts to some shipments.
then audited Central Freight to determine whether it was
applying the discount percentages set forth in its contract
with AFS to ...