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Parcel Delivery Express, Inc. v. Volpe Express, Inc.

United States District Court, D. Maryland

April 20, 2018



          J. Mark Coulson, United States Magistrate Judge.

         This case concerns a contractual dispute between Plaintiff Parcel Delivery Express, Inc. (“Plaintiff” or “PDX”) and Defendant Volpe Express, Inc. (“Defendant” or “Volpe”) over the collection of allegedly unpaid fees for transportation services that PDX provided to Volpe. The parties consented to proceed before a magistrate judge pursuant to 28 U.S.C. § 636(c) and Local Rule 301.4. (ECF Nos. 15 & 22). Now pending before the Court is Plaintiff's Motion for Partial Summary Judgment. (ECF No. 17). In considering that Motion, the Court has also reviewed Defendant's Response in Opposition and Plaintiff's Reply. (ECF Nos. 20 & 25). A hearing was also held before the Court on March 29, 2018. (ECF No. 32); see Loc. R. 105.6 (D. Md. 2016). For the reasons that follow, Plaintiff's Motion for Partial Summary Judgment will be DENIED.

         I. BACKGROUND

         Plaintiff Parcel Delivery Express, Inc. and Defendant Volpe Express, Inc. are motor carriers engaged in the interstate transportation and delivery business, providing transportation services to various consignees and shippers of freight throughout the Mid-Atlantic region. (ECF No. 2, Compl. at ¶¶ P3, P4, 2). On March 19, 2010, PDX and Volpe entered into the Interline Division Contract Agreement (the “Contract”). Id. at ¶ 1. Under the terms of the contract, PDX would provide certain transportation services to Volpe's direct customers and vice versa, depending on the geographic location of the companies' customers. Essentially, PDX and Volpe acted as “interline carriers for one another so they could extend the reach of their transportation services for their customers.” Id. at ¶ 2. In accordance with the percentage splits assigned in the Contract, PDX and Volpe would then pay one another for their share of the revenue from the transportation services provided to customers. Id. at ¶ 9. The Contract called for payments to be made within 30 days of the presentation of an invoice. (ECF No. 2-1 at ¶ 1). Occasionally, a third party carrier would be used to cover certain portions of the transportation route. On these occasions, PDX and Volpe would split the shipping charges according to a formula provided in the Contract. (ECF No. 17-1 at 4). This business partnership appears to have functioned well for both parties for a number of years. (ECF No. 2, Compl. at ¶ 9).

         However, PDX alleges that, “by January of 2016, Volpe had fallen behind” on payments that were due to PDX under the Contract-i.e., Volpe was in breach of the 30-day payment provision of the contract. (ECF Nos. 17-1 at 7 & 2-1 at ¶ 1). Notwithstanding some payments from Volpe, PDX further alleges that 69 invoices, totaling $148, 769.03, remain unpaid.[1] Id. For its part, Volpe admits to “fall[ing] behind on payment” due to “unforeseen issues with a workers' compensation settlement.” (ECF No. 20 at 2, 5). But Volpe asserts that the companies reformed their original contract in 2016 to provide flexibility to Volpe to better allow for its continued repayment of past due amounts given its cash flow issues. Id. at 5. According to Volpe, under this reformed agreement, it paid down at least $150, 000 of its past due amounts, although outstanding invoices remain unpaid. Id.

         Volpe next asserts that, sometime in July of 2017, PDX became frustrated that it had not yet paid off all of its debt and “sought to unilaterally modify the parties' agreement [by refusing to service certain locations on Volpe's behalf] and threatened to terminate all business if the terms were not accepted.” (ECF No. 20 at 2). Volpe admits that it made only one additional payment to PDX and was subsequently “unable to continue [repayment] without PDX's continued business.” Id. at 2. PDX asserts both that Volpe's last payment was made on April 28, 2017 and that Volpe “stopped paying PDX altogether” in August of 2017. (ECF No. 17-1 at 11, 12).

         On August 23, 2017, PDX filed suit against Volpe. (ECF No. 2, Compl.). PDX's complaint alleges breach of contract, breach of implied contract, quantum meruit/unjust enrichment, intentional interference with contractual relations, breach of trust, and breach of fiduciary duties of loyalty and care. Id. at 6-12. On November 9, 2017, PDX filed the currently pending Motion for Partial Summary Judgment as to Count I for breach of contract, Count II for breach of implied contract, and Count III for quantum meruit/unjust enrichment. (ECF No. 17).


         Federal Rule of Civil Procedure 56(a) requires the Court to “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.” The moving party bears the burden “to demonstrate the absence of any genuine dispute of material fact.” Jones v. Hoffberger Moving Servs. LLC, 92 F.Supp.3d 405, 409 (D. Md. 2015) (internal citations omitted). A dispute as to a material fact “is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” J.E. Dunn Const. Co. v. S.R.P. Dev. Ltd. P'ship, 115 F.Supp.35 593, 600 (D. Md. 2015) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).

         A nonmoving party “opposing a properly supported motion for summary judgment ‘may not rest upon the mere allegations or denials of [his] pleadings, ' but rather must ‘set forth specific facts showing that there is a genuine issue for trial.'” Bouchat v. Baltimore Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir. 2003). The court is “required to view the facts and draw reasonable inferences in the light most favorable to” the nonmoving party, Iko v. Shreve, 535 F.3d 225, 230 (4th Cir. 2008) (citing Scott v. Harris, 550 U.S. 372, 377 (2007)), but must also “abide by the ‘affirmative obligation of the trial judge to prevent factually unsupported claims and defenses from proceeding to trial.'” Heckman v. Ryder Truck Rental, Inc., 962 F.Supp.2d 792, 799-800 (D. Md. 2013) (quoting Drewitt v. Pratt, 999 F.2d 774, 778-79 (4th Cir. 1993)).


         A. Count I: Breach of Contract

         Plaintiff first argues that Defendant breached the Contract by failing to pay carrier charges due to Plaintiff within 30 days under the payment structure in the Contract and, therefore, summary judgment should be granted in its favor. For its part, Defendant asserts that Plaintiff cannot now attempt to enforce the 2010 Contract's 30-day payment provision having essentially waived Defendant's prior breach of that condition and having agreed to a new payment arrangement to deal with its outstanding balance caused by the cash flow issue. Further, Defendant argues that Plaintiff's own unilateral decision to restrict certain types of services (and ultimately terminate all service) once Defendant's ability to pay in a timely fashion was called into question constituted yet a second modification of the 2010 Contract. The Court interprets this as an argument that Plaintiff breached the Contract, frustrating (and perhaps excusing) Defendant's responsibility to pay. Plaintiff answers that no modifications were made to the Contract and that, at all times, Plaintiff was simply demanding the sums Defendant owed to it under the Contract and taking steps to mitigate further losses (when Plaintiff unilaterally modified then terminated its own performance). The Contract itself contains a clause stating that all amendments require mutual consent and must be negotiated in writing with 30 days prior notice absent an express agreement for a different effective date. (ECF No. 2-1 at ¶ 5).

         The Maryland Court of Appeals has opined that “the freedom to contract is not limited to the contract as written, ” and instead “includes the freedom to alter that contract.” Hovnanian Land Inv. Group, LLC v. Annapolis Towne Centre at Parole, LLC, 421 Md. 94, 121 (2011). “The parties to a contract may agree to vary its terms and enter into a new contract embodying the changes agreed upon and a subsequent modification of a written contract may be established by a preponderance of the evidence. Assent to an offer to vary, modify or change a contract may be implied and found from circumstances and the conduct of the parties showing acquiescence or agreement.” Cole v. Wilbanks, 226 Md. 34, 38 (1961). This is true even in the face of a so-called “non-waiver clause” included in the contract. Hovnanian Land, 421 Md. at 121-22. Furthermore, “whether subsequent conduct of the parties amounts to a modification or waiver of their contract is generally a question of fact to be decided by the trier of fact.” Id. at 122 (quoting University Nat'l Bank v. Wolfe, 279 Md. 512, 523 (1977)). In ...

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