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Wind Logistics Professional, LLC v. Universal Truckload, Inc.

United States District Court, N.D. Georgia, Atlanta Division

September 23, 2019

Wind Logistics Professional, LLC and Anthony Parson, Plaintiffs,
v.
Universal Truckload, Inc., Defendant, Ace Doran, LLC, et al., Counterclaim Defendants,

          OPINION AND ORDER

          Michael L. Brown, United States District Judge.

         Counterclaim Plaintiff Universal Truckload, Inc. (“Counterclaim Plaintiff” or “Universal”) filed a Second Motion for Partial Summary Judgment (Dkt. 115), and Counterclaim Defendants also moved for summary judgment (Dkt. 121). For the reasons below, the Court grants in part and denies in part each motion.

         I. Background

         Anthony Parson began working for Universal as an employee in 2003.[1] (Dkt. 131-1 at ¶ 1.) He helped coordinate the transportation and delivery of industrial wind equipment for one client, GE Wind Energy Outbound (“GE Wind”), a business unit of a General Electric Company. (Id. ¶¶ 2–4.) He created a network of truck owner-operators, working as independent contractors to carry GE Wind freight under Universal’s motor carrier license. (Dkt. 119 at 14:7–10.) These drivers own and operate their own specialized transportation equipment used to transport over-sized loads.[2] (Dkt. 124 at 45:22–46:9.)

         Parson and Universal changed their professional relationship in 2012. (Dkt. 123 at 38:4–6.) Parson became an independent contractor working exclusively for Universal. (Dkt. 131-1 ¶¶ 8–9.) He still coordinated transportation between Universal and GE Wind and managed the relationships between Universal, GE Wind, and the truck owner-operators. (Dkt. 123 at 43:16–44:21.) Parson created Wind Logistics Professional LLC (“Wind Logistics”) to facilitate this work. (Dkt. 124 at 22:3–6.) Universal and Parson signed two contracts, the Agency Agreement and the Commissioned Agency Agreement (“CAA”). (Dkt. 123-1 at 5–11.)

         Universal also loaned Parson $85, 000. (Id. at 12.) In exchange, Parson agreed to represent only Universal for five years. (Id.) Universal also agreed to forgive the loan over a five-year period, forgiving one-fifth of the loan each year. (Id.) Parson agreed to repay the loan if he failed to meet revenue goals or began competing with Universal within five years. (Id.)

         In 2013, Bennett Motor Express (“Bennett”) agreed to lend Parson $500, 000 if he ended his relationship with Universal and became Bennett’s exclusive agent. (Dkt. 123 at 77:2–15.) Parson told Universal about the offer, and Universal agreed to match it. (Id.) Universal agreed to lend Parson the money and to forgive $100, 000 each year so that it would forgive the entire loan after five years provided Parson kept working as Universal’s exclusive agent. (Id.) The repayment terms shifted slightly depending on whether Parson stopped working for Universal to work for a competitor or left Universal for other reasons. (Dkt. 123-1 at 13.)

         Their arrangement worked well. Parson and Wind Logistics generated about $22 million in revenue in 2013, $32 million in 2014, and $40 million in 2015. (Dkt. 124 at 127:23–128:22.) In mid-2015, however, Parson became concerned about two policies that Universal proposed for the owner/operators. (Dkt. 123 at 55:2–56:17.) First, Universal sought to implement a pay-delay to new owner-operators of Parson’s fleet. (Dkts. 123 at 57:20–24; 120 at 104:20–24.) Second, it wanted to charge drivers a surcharge on permits and escorts. (Id.) Parson feared these policies would make recruiting drivers difficult and decided to stop working with Universal. (Dkt. 124 at 40:2–17.) He signed a letter of intent to work with Bennett in November 2015. (Id.) In it, he agreed to work with Bennett’s heavy haul division, Ace Doran, LLC (“Ace Doran”), to move equipment for GE Wind. (Dkt. 124-1 at 33–34.) The letter stated that Parson would begin working with Bennett on January 1, 2016. (Id.; Dkt. 124 at 41:15–21.)

         Despite signing that letter with Bennett, Parson did not tell Universal that he planned to end their exclusive relationship. But, on December 14, 2015, Mark Limback (Universal’s President) heard from others in the industry that Parson already decided stop working with them. (Dkt. 120 at 115:1–12.) A Universal employee then sent text messages to Parson’s GE Wind drivers telling them to contact Universal’s “NEW AGENT” for all GE Wind shipments. (Dkt. 120-1 at 39.) Two days later, Universal representatives confronted Parson about his plan to end their relationship. (Dkt. 123 at 52:16–53:14.) On December 22, Parson finally told Universal that he was ending their agency relationship as of December 28. (Dkt. 123-1 at 14–15.) As planned, he began working with Bennett on January 1, 2016. (Dkt. 131 ¶ 62.)

         Seventy-five of the eighty drivers with whom Parson had worked with at Universal followed him to Ace Doran. (Dkt. 123 at 87:20–88:1.) Universal’s business with GE Wind also dried up, declining from $40 million in 2015 to $4.3 million in 2016. (Dkt. 120 at 45:6–19.) Ace Doran seems to have picked up that business as it had revenue exceeding $44 million in 2016. (Dkt. 124 at 128:20–22.)

         The evidence shows that, before Parson notified Universal of his intent to end their relationship, he had extensive communications with Bennett, GE Wind, and his network of drivers about his intended move. The parties do not dispute that these communications took place between September 2015 and December 28, 2015, though they dispute their legal significance. Parson, for example, provided Bennett and Ace Doran several documents about shipping windmill equipment. These documents consisted of

. the two-week schedule of loads GE Wind awarded to Universal (Dkt. 131-1 ¶¶ 49-52);
. Universal’s 2016 blade allocation[3] (Dkt. 124 at 102:6-12);
. Universal’s projected line of business, which shows Universal’s prospective and retrospective awards from GE Wind (Dkt. 125 at 81:4-82:2);
. information on the trailers Ace Doran would need to perform the outbound heavy haul transportation of GE Wind’s specialized blades and towers (Dkt. 124 at 141:4-142:5);
. pictures of Universal’s blade trailers (Dkt. 125 at 22:1-14); and
. Universal’s proposal to GE Wind for the purchase and repayment of blade trailers to support Universal’s GE Wind business (Id. at 21:9-16).

         Parson also helped facilitate drivers moving from Universal to Bennett. He sent Bennett a list of the drivers leased to Universal who were hauling GE Wind freight, including their addresses, dates of birth, and driver’s license numbers. (Id. at 46:3-13.)[4] He also gave Bennett a copy of Universal’s insurance materials that Ace Doran could use as a model for its own. (Dkt. 124 at 148:9-149:12).[5]

         He also spoke with the drivers to facilitate their transfer to Bennett. He notified three fleet owners with contracts with Universal that he was leaving for Bennett as of January 1, 2016. (Dkt. 123 at 108:10-109:13.) He reassured a fleet owner that Ace Doran would have work for him once the drivers contracted with Ace Dornan. (Dkt. 124 at 96:3-11.) He personally contacted every single owner-operator and driver who hauled GE Wind outbound freight for Universal to notify them that he was no longer comfortable with Universal and that he was leaving for Bennett. (Id. at 83:21–84:9.) He also provided Universal’s owner-operators and drivers links in mid-December 2015 to an Ace Doran application, answered questions from drivers about differences “between the two companies… what is here versus there, ” and worked on plans to get drivers to attend Ace Doran’s orientation so they could prepare to haul loads for Ace Doran. (Id. at 85:1–5; Dkts. 124 at 157:1–5; 125 at 60:4– 25.)

         Between the time he agreed to join Bennett and the time he notified Universal of his plan, he also spoke with GE Wind to facilitate his efforts to move its business to Ace Doran. During this time, he told GE Wind that he would be leaving Universal the same day that he signed the letter of intent with Bennett and that he would have “100% of the current fleet of owner-operators who were under contract with Universal.” (Dkt. 124 at 166:16–20.) He began conducting business from an Ace Doran email account, including corresponding directly with individuals at GE Wind. (Dkt. 123 at 86:9–17.) Finally, he asked Ace Doran to get registered in GE Wind’s computer system, presumably to make the transition easier. (Dkt. 123 at 138:20–139:22.)

         Plaintiffs Parson and Wind Logistics sued Universal in January 2016 for breach of contract. (Dkt. 1.) Defendant Universal counterclaimed in its answer, alleging breach of contract, breach of fiduciary duty, and tortious interference with business relations. (Dkt. 2.) The Court permitted Universal to add Ace Doran, LLC, Bennett Motor Express, and Bennett International Group, LLC as Counterclaim Defendants. (Dkt. 91.) Here are two motions: Defendant and Counterclaim Plaintiff Universal’s Motion for Summary Judgment; and Counterclaim Defendants Anthony Parson’s, Wind Logistics, LLC’s, Ace Doran, LLC’s, Bennett Motor Express’s, and Bennett International Group, LLC’s (collectively “Counterclaim Defendants”) Motion for Summary Judgment. (Dkts. 115, 121.)

         II. Legal Standard

         Rule 56 of the Federal Rules of Civil Procedure provides that a court “shall 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 factual dispute is genuine if the evidence would allow a reasonable jury to find for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is “material” if it is “a legal element of the claim under the applicable substantive law which might affect the outcome of the case.” Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th Cir. 1997).

         The party moving for summary judgment bears the initial burden of showing a court, by reference to materials in the record, that there is no genuine dispute as to any material fact. Hickson Corp. v. N. Crossarm Co., 357 F.3d 1256, 1260 (11th Cir. 2004) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). A moving party does this by showing “an absence of evidence to support the nonmoving party’s case.” Celotex, 477 U.S. at 325. The movant, however, need not negate the other party’s claim. Id. at 323. It simply must show a lack of dispute as to a material fact. In determining whether a movant has done this, the Court views the evidence and all factual inferences in the light most favorable to the party opposing the motion. Johnson v. Clifton, 74 F.3d 1087, 1090 (11th Cir. 1996).

         If the movant meets its burden, the nonmovant must show that summary judgment is improper by identifying specific evidence that raise a genuine dispute as to a material fact. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). Ultimately, there is no “genuine [dispute] for trial” when the record as a whole could not lead a rational trier of fact to find for the nonmoving party. Id. But “the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Anderson, 477 U.S. at 247–48. The court, however, resolves all reasonable doubts in the favor of the non-movant. Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115 (11th Cir. 1993).

         III. Analysis

         A. Parson’s Breach of Fiduciary Duty and Duty of Loyalty

         Universal claims Parson and Wind Logistics breached the fiduciary duty and duty of loyalty they owed it. To sustain a claim for breach of fiduciary duty, a plaintiff must prove (1) the existence of a fiduciary duty; (2) breach of that duty; and (3) damage proximately caused by the breach. See Perry Golf Course Dev., LLC v. Hous. Auth. of Atlanta, 670 S.E.2d 171, 178 (Ga.Ct.App. 2008). Agents also owe a duty of loyalty to their principal. S. Parts & Eng’g Co. v. Air Compressor Servs., LLC, No. 1:13-CV-2231, 2014 WL 667958, at *3 (N.D.Ga. Feb. 20, 2014). But duty of loyalty claims must be based on a fiduciary duty owed by the employee and “must rise and fall with any claim for breach of fiduciary duty.” Hanson Staple Co. v. Eckelberry, 677 S.E.2d 321, 324 (Ga.Ct.App. 2009).

         1. Existence of a Fiduciary Duty

         Under Georgia law, an agent owes its principal a fiduciary duty. See Smith v. Pennington, 15 S.E.2d 727, 728 (Ga. 1941). An agency relationship arises “wherever one person, expressly or by implication, authorizes another to act for him.” Ga. Code Ann. § 10-6-1. Agents can create obligations on behalf of the principal, bringing third parties into contractual relations with the principal. See Physician Specialists in Anesthesia, P.C. v. Wildmon, 521 S.E.2d 358, 360 (Ga.Ct.App. 1999). Agency relationships can be created through “law, contract, or the facts of a particular case.” Wright v. Apartment Invest. & Mgt. Co., 726 S.E.2d 779, 785–86 (Ga.Ct.App. 2012).

         Counterclaim Plaintiff Universal argues that Parson/Wind Logistics had a principal-agent relationship with Universal created by both contract and Parson’s/Wind Logistics’s authority to bind Universal in contract. Universal claims this contractual relationship led to a fiduciary duty. Universal is correct. The contract between Parson and Universal created an agency relationship.[6] The parties entitled it “Commissioned Agent Agreement, ” designated Parson as “The Agent, ” and agreed that “will operate as a Commissioned Agent.” (Dkt. 123-1 at 5–9.) While self-imposed labels are not always controlling, Parson admitted in his deposition that the agreement created a principal-agent relationship. (Dkt. 123 at 38:4–6; Dkt. 124 at 18:13–16); see Salters v. Pugmire Lincoln-Mercury, 184 S.E.2d 56, 57 (Ga.Ct.App. 1971) (“[O]ne who is party to the relationship (principal or agent) may testify as fact to the ...


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