The opinion of the court was delivered by: Susan Webber Wright United States District Judge
All-Ways Logistics, Inc. ("All-Ways"), a provider of freight hauling services, brings this action against USA Truck, Inc. and USA Logistics, also providers of freight hauling services (collectively "USA" when not referenced separately), for breach of contract, breach of the implied covenant of good faith and fair dealing, promissory estoppel, tortious interference with business relations, and defamation, for alleged actions involving the application and later termination of a Commission Agreement between All-Ways and USA Truck. USA, in turn, has counterclaimed against All-Ways for negligence, breach of fiduciary duty, and breach of agency contract.
Now before the Court are the following motions: (1) All-Ways' motion to dismiss USA's counterclaim [doc.#37]; (2) All-Ways' motion for summary judgment on USA's counterclaim [doc.#39]; (3) All-Way's motion for partial summary judgment in regards to the Rheem account [doc.#42]; and (4) USA's motion for summary judgment [doc.#46]. Responses and replies to these motions have been filed and the matter is ripe for determination.*fn1 For the reasons that follow, the Court denies as moot All-Ways' motion to dismiss USA's counterclaim [doc.#37], denies All-Ways' motion for summary judgment on USA's counterclaim [doc.#39], denies AllWay's motion for partial summary judgment in regards to the Rheem account [doc.#42], and denies USA's motion for summary judgment [doc.#46].
All-Ways is a South Carolina corporation, with Cheryl Anderson the sole incorporator/shareholder, and her husband, Mike Anderson, a consultant to the company, providing assistance in sales and other areas. USA Truck is a Delaware corporation with its principal place of business in Van Buren, Arkansas. USA Logistics is an unincorporated division of USA Truck.
Prior to 1999, All-Ways was a commission agent for CCC Express, Inc., another trucking company located in Fort Smith, Arkansas. USA Truck purchased CCC Express in 1999, and on October 26, 1999, All-Ways executed a Commission Agreement with USA Truck which provided for the payment of a 5% commission to All-Ways for all freight transported by USA Truck which had been "solicited" by All-Ways. The Commission Agreement provides:
To: All-Ways Logistics, Inc.
We are pleased that you have agreed to solicit freight on behalf of USA Truck, Inc. ("USA Truck"), a Delaware corporation. The Commission Agreement ("Agreement") between you and USA Truck will be governed by the following terms and conditions:
1. You do not have the authority to bind USA Truck to a contract with any shipper for the transportation of freight. If freight is accepted by USA Truck, a tariff will be provided to you and you will be paid a commission, as discussed in paragraph 4.
2. You will be an independent contractor with control over the manner, means and method of freight solicitation. All of your employees, if any, will be subject only to your control. You will provide workers' compensation insurance on all of your employees and will be solely responsible for all employment taxes and withholding taxes due to federal, state, local or foreign governments on your own account and on account of any workers or other employees necessary for the performance of your obligations under the terms of this Agreement. You agree to indemnify and hold USA Truck harmless from and against any and all claims, demands, losses or actions brought or asserted against USA Truck by any of your employees or by any federal, state, local or foreign government agency on account of wages or any other actions arising from your relationship with any of your employees. You and your employees will not be employees of USA Truck at any time, under any circumstances, for any purpose. You will pay all expenses incurred in connection with your services to USA Truck, including expenses for telephone, travel, office supplies, personnel, automobile, meals, lodging and insurance.
3. CARRIER shall be liable for all loss, damage or liability occasioned by transportation of property arranged by agent while being transported by CARRIER under rules contained in 49 USC.
4. USA Truck agrees to pay you a Five (5) % commission weekly for all services provided by you to USA Truck under this Agreement. The commission shall be for the linehaul tariff charge due USA Truck on all freight solicited by you and transported by USA Truck, up to the date this Agreement is cancelled, less any revenue for accessorial, detention, redelivery, consolidation handling charges, or other similar charges. USA Truck will exercise good faith in deciding all questions concerning your right to payment of a commission and the amount of any commission payable under this agreement.
5. CARRIER will be responsible for invoicing all accounts. CARRIER has the right to determine that customer meets all credit and payment standards of CARRIER.
6. This agreement shall remain in effect unless cancelled by either party by 30 days' written notice by certified mail. The notice of cancellation will state the effective date of cancellation and will be deemed received on the date appearing on the return receipt. After the effective date of cancellation, it will be conclusively presumed that no freight transported by USA Truck was solicited by you and no commission will be due on freight transported after the effective date of cancellation.
7. The foregoing Agreement is our entire agreement and understanding between the parties with respect to the subject matter hereof, and may be modified, altered, changed or amended only by a written instrument executed by both you and USA Truck. Your authority is limited expressly to the rights and duties set out herein. This agreement shall be governed by the laws of the state of Arkansas.
8. This Agreement may not be assigned or otherwise transferred or delegated by operation of law or otherwise, in whole or in part, without the prior written consent of the parties hereto.
When All-Ways signed on as a commission agent for USA Truck in 1999, All-Ways brought with it certain accounts, including Rheem Manufacturing Company ("Rheem"), a manufacturer of air conditioning products based in Fort Smith, Arkansas, and W.W. Grainger ("Grainger"), a domestic and international business-to-business distributor.*fn2 Over the next few years, the parties operated under the Commission Agreement apparently without issue.
In March 2002, Rheem changed the way it was handling its transportation needs by hiring a logistics provider. Prior to March 2002, Rheem handled shipping in-house using its own personnel and shipping managers. Because Rheem had no trucking fleet, Rheem personnel would select one of about 20 different carriers it regularly used, tender the loads directly to a carrier, schedule pickup and delivery of the freight load with the carriers, monitor delivery, and deal with any customer complaints regarding that shipment. If the carrier used an agent, then Rheem would deal directly with the carrier's agent. In 2001, Rheem decided to abandon this system of dealing directly with carriers or their agents by outsourcing all shipping decisions to a logistics company. Rheem conducted a study of the manner in which it was handling its transportation needs, which determined it was lacking a good logistics planning system and process, and therefore opted to partner with a third-party logistics firm rather than develop that expertise internally. Rheem wanted the new logistics company to be directly responsible for selecting carriers for Rheem loads, scheduling pickups and deliveries with all the various carriers, overnight of delivery, and dealing with customer issues regarding carrier deliveries. Under Rheem's new shipping model, Rheem had no dealings with carriers or agents representing carriers. The logistics company would be the one source of contact between the carriers shipping Rheem's loads and Rheem's customers.
In late 2001, Rheem entertained bids from the following logistics companies: C.H. Robinson, Transplace, Tompkin Associates, National Freight, and Nationwide. USA Logistics was not in the original group of logistics providers from whom Rheem requested bids. USA Logistics states it first learned about Rheem's desire to hire a third party logistics company when Mike Peterson at USA Logistics called upon Roger Taylor at Rheem about another matter. USA Logistics states that Taylor, who had known Peterson since 7th grade, informed him Rheem was looking for a logistics company to handle all of Rheem's shipping needs.*fn3
After Roger Taylor of Rheem first talked to Mike Peterson at USA Logistics, Taylor asked his boss at Rheem, Bob Martin, whether USA Logistics could also be included in the bidding process to become Rheem's third-party logistics provider. Approval was apparently granted and in the fall of 2001, USA Logistics bid to become the Rheem third-party logistics provider along with numerous other logistics companies. Rheem accepted USA Logistics' bid and Rheem issued a news release announcing the new freight management partnership between Rheem and USA Logistics.
Rheem states it did not consider All-Ways for the logistics provider position because All-Ways did not have the personnel, technology, or expertise for the position. All-Ways denies this, stating that Rheem did not consider it for the logistics provider position because All-Ways did not apply for the logistics provider position. All-Ways states it was not in the same business as USA Logistics as All-Ways is a commission agent for motor freight carriers while USA Logistics is a logistic provider for shippers.*fn4
In March 2002, USA Logistics began its duties as Rheem's logistics company and Rheem notified all carriers by letter dated March 12, 2002, that USA Logistics was being hired to handle the logistics transportation needs for Rheem. In that context, USA Logistics was responsible for selecting carriers for Rheem freight, scheduling pickup and deliveries of hundreds of loads weekly, overseeing those shipments, and acting as the sole liaison between Rheem's shipping customers and the various carriers.
After USA Logistics was hired to be the third-party logistics provider for Rheem, USA Truck, effective April 5, 2002, ceased paying any commissions to All-Ways on the Rheem account. Jack Morgan at USA Truck told Mike Anderson at All-Ways on the telephone that USA intended to suspend payments to All-Ways on Rheem freight hauled after March 2002. Anderson protested to no avail and payments ceased, although the Commission Agreement was not cancelled.
USA Truck states that All-Ways has not solicited any "specific loads" from Rheem which were tendered to and accepted by USA Truck as required by the Commission Agreement since March 2002. All-Ways does not dispute that particular statement, but states that it never solicited "specific loads" from Rheem because the Rheem "book of business" was solicited prior to execution of the Commission Agreement. Mike and Cheryl Anderson at All-Ways claim that All-Ways had no duties or responsibilities under the Commission Agreement other than to bring potential customers to USA Truck, and that if USA Truck decided to haul freight for one of those customers, then USA Truck would enter into a written contract directly with that customer setting out the agreement between them. Once USA Truck had made an agreement with the customer, state the Andersons, All-Ways would be paid a commission for having brought that customer to USA Truck. Mike Anderson states All-Ways was to be paid for "[e]verything that was [hauled] by USA Truck for the account of Rheem," and that "[i]f it was hauled, any of those accounts that we brought into the contract in '99, All-Ways Logistics got paid for them. That's how it was set up." In this regard, All-Ways claims that USA Truck paid the specified 5% commission on all freight it hauled for Rheem from October 26, 1999, through April 4, 2002, having initially brought or solicited the Rheem "book of business" to USA Truck. USA Truck, however, claims it only paid All-Ways for all individual Rheem freight specifically solicited by it and hauled by USA Truck during that time period and that All-Ways was required to actively solicit individual freight loads from shippers and tender those loads to USA Truck for transport before USA paid a commission on that load.
USA Logistics did not assign all freight shipments to USA Truck. USA Logistics states it chose carriers for hauling freight to a particular destination based on several factors including the carrier's experience hauling that lane (a route between two points) and the price for hauling that lane.*fn5 USA Truck states it carried about 20% of Rheem's freight after USA Logistics took over Rheem's shipping operations. All-Ways, however, states the testimony is conflicting as to how the decision was made to tender freight to USA Truck rather than other carriers and as to the percentage of Rheem's freight that was carried by USA Truck. All-Ways points to the testimony of Mike Peterson of USA Logistics that USA Logistics first turned to USA Truck to see if USA Truck could or wanted to haul Rheem's freight; that the plan was for USA Logistics to get the load information from Rheem, put it into the software, and then pick a carrier based on rate to pull it; that "[t]hey didn't follow that plan probably 50 percent of the time"; that Rheem's shipping department was "very fond of putting it on a USA Truck"; and that "the plan was for us to determine who was the best priced carrier to pull that load, but that didn't always happen."*fn6
After commission payments were stopped on the Rheem account, USA Truck continued to pay commissions to All-Ways pursuant to the Commission Agreement on the Grainger account and other various accounts for all freight solicited by All-Ways until USA Truck gave notice to All-Ways it was canceling the Commission Agreement. All-Ways never made any complaint in writing to USA Truck regarding the cessation of Rheem freight related commissions until it filed its original complaint in May 2006, but states that it was not required to make complaints in writing in order for them to be valid complaints and that it made multiple ...