Certain Interested Underwriters at Lloyd's, London, England v. Total Quality Logistics, L.L.C.Certain Interested Underwriters at Lloyd's, London, England v. Total Quality Logistics, L.L.C.
Giles & Harper, LLC, and Brian T. Giles, for appellee.
BYRNE, J.
{1} Certain Interested Underwriters at Lloyd‘s, London, England (“Lloyd‘s“) and Outlook Acquisition Corporation (“Outlook“) (collectively, “Plaintiffs“) appeal the decision of the Clermont County Court of Common Pleas, which granted Total Quality Logistics, LLC‘s (“TQL“) motion for summary judgment and dismissed Plaintiffs’ sole cause of action for breach of contract against TQL. For the reasons discussed below, we affirm the common
I. Procedural and Factual Background
{2} TQL is a freight broker. TQL arranges for the transportation of its clients’ freight using independent, third-party motor carriers. At the time of the relevant events of this case, Outlook was a TQL client and used TQL‘s freight brokerage services. Lloyd‘s was Outlook‘s insurer for property loss.
{3} Prior to Outlook using TQL‘s brokerage services, TQL and Outlook entered into a written agreement (“Agreement“). The Agreement, which was prepared by TQL, is titled “Account Application” and refers to Outlook as “Company.” It contains twelve paragraphs of “Terms and Conditions,” of which three paragraphs are relevant to this appeal:
8. Company understands that TQL is a transportation broker only who arranges the transportation of freight by an independent third party motor carrier. Company agrees that TQL will not fill out Bills of Lading and cannot be listed on Bills of Lading as the delivering carrier.
9. In the event of cargo loss or damage, Company must file a claim for the loss with TQL within nine (9) months from the date of such loss, shortage or damage, which for purposes of this Agreement shall be the delivery date or, in the event of non-delivery, the scheduled delivery date. Company agrees to assist TQL in the pursuit of a claim, including confirming the validity of the claim and claim amount. If TQL pays a claim, company automatically assigns any and all of its rights and interest in the claim to TQL.
10. Company understands motor carriers under contract with TQL are required to maintain cargo loss and damage liability insurance in the amount of $100,000.00 per shipment. By signing below, Company acknowledges that loads valued in excess of $100,000.00 will not be tendered without first giving written notice to allow TQL and/or the contracted motor carrier the opportunity to arrange for increased insurance limits. Failure to provide written notice will result in your loads not being insured to the extent the value exceeds $100,000.00.
{4} In 2019, Outlook used TQL‘s brokerage services in conjunction with a load of
{5} In 2021, Outlook and Lloyd‘s filed a complaint in the Clermont County Court of Common Pleas against TQL, asserting a single cause of action for breach of contract. In the complaint, Plaintiffs averred that TQL breached the Agreement by (1) failing to arrange for transportation and delivery of the shipment “by a motor carrier authorized to perform the transportation at issue,” (2) failing to contract “with a motor carrier maintaining cargo loss and damage liability insurance,” (3) failing “to adequately arrange for delivery” of the electronics shipment to New Jersey as designated by Outlook, and (4) failing “to pay the Claim amount” to Outlook.
{6} TQL moved for summary judgment. First, TQL argued that Plaintiffs’ claims were preempted by a federal statute, the Carmack Amendment,
{7} The trial court analyzed the paragraphs of the Agreement in light of both TQL‘s and Plaintiffs’ arguments. We will address the specifics of the court‘s reasoning further below. For now, we note that the court ultimately concluded:
Here, the language in the Agreement does not evince an intent of the parties to impose the duties on TQL that the plaintiffs allege TQL breached. The particular provisions at issue do not use language typical for imposing duties in conjunction with TQL (e.g. must, shall, will, etc.). Further, the language does not state that TQL “guarantees” or “affirms” certain information as true (e.g. that motor carriers are authorized or insured, that TQL shall pursue and pay a claim, etc.). To find that TQL breached the contract, the court would have to impose terms in the Agreement that the parties did not. On the whole, the court cannot find that TQL breached the Agreement in the capacities that the plaintiffs allege.
Accordingly, the trial court granted TQL‘s motion for summary judgment and dismissed the complaint.
{8} Plaintiffs appealed, raising one assignment of error.
II. Law and Analysis
{9} The Plaintiffs’ assignment of error states:
{10} THE TRIAL COURT ERRED BY GRANTING APPELLEE‘S MOTION FOR SUMMARY JUDGMENT.
{11} Plaintiffs argue that the trial court erred in granting summary judgment because the court (1) ignored material facts in dispute; (2) improperly relied upon the dictionary definition of “broker,” as opposed to the definition of “broker” found in a federal regulation,
A. Applicable Law: Breach of Contract Claim
{12} “In construing the terms of a written contract, the primary objective is to give effect to the intent of the parties, which we presume rests in the language that they have chosen to employ.” In re All Kelley & Ferraro Asbestos Cases, 104 Ohio St.3d 605, 2004-Ohio-7104, 29. “Where the terms of the contract are clear and unambiguous, a court need not go beyond the plain language of the agreement to determine the rights and obligations of the parties.” State ex rel. Lee v. Plain City, 12th Dist. Madison No. CA2017-01-002, 2017-Ohio-8931, ¶ 21, citing Aultman Hosp. Assn. v. Community Mut. Ins. Co., 46 Ohio St.3d 51, 55 (1989). That is to say, “[a] contract that is, by its terms, clear and unambiguous requires no real interpretation or construction and will be given the effect called for by the plain language of the contract.” Cooper v. Chateau Estate Homes, L.L.C., 12th Dist. Warren No. CA2010-07-061, 2010-Ohio-5186, 12.
{13} This court reviews issues of contract interpretation de novo. Pierce Point Cinema 10, L.L.C. v. Perin-Tyler Family Found., L.L.C., 12th Dist. Clermont No. CA2012-02-014, 2012-Ohio-5008, 10.
B. Applicable Law: Summary Judgment
{14} Summary judgment is appropriate under
{15} The party requesting summary judgment bears the initial burden of informing the court of the basis for the motion and identifying those portions of the record that show the absence of a genuine issue of material fact. Dresher v. Burt, 75 Ohio St.3d 280, 292-293 (1996). Once a party moving for summary judgment has satisfied its initial burden, the nonmoving party “must then rebut the moving party‘s evidence with specific facts showing the existence of a genuine triable issue; it may not rest on the mere allegations or denials in its pleadings.” Deutsche Bank Natl. Trust Co. v. Sexton, 12th Dist. Butler No. CA2009-11-288, 2010-Ohio-4802, ¶ 7;
{16} This court reviews a trial court‘s summary judgment decision under a de novo standard. Sexton at 7.
C. Analysis
1. Arranging for an “Authorized Motor Carrier”
{17} Plaintiffs alleged in their complaint that TQL breached the Agreement by “fail[ing] to arrange for transportation by a motor carrier authorized to perform the transportation at issue * * *.” TQL argued in its motion for summary judgment that the Agreement imposed no such obligation on TQL. In response, Plaintiffs argued that Paragraph 8 of the Agreement used the word “broker” pursuant to the definition of that word in a federal regulation,
{18} On appeal, Plaintiffs argue the trial court erred in its analysis and that TQL breached the Agreement by failing to arrange for an “authorized motor carrier” to transport Outlook‘s cargo.
{19} Our analysis begins with the text of the Agreement. Paragraph 8 of the Agreement states:
Company understands that TQL is a transportation broker only who arranges the transportation of freight by an independent third party motor carrier. Company agrees that TQL will not fill out Bills of Lading and cannot be listed on Bills of Lading as the delivering carrier.
(Emphasis added.) Based on a plain reading of Paragraph 8, we conclude that the Agreement did not obligate TQL to provide Outlook with an “authorized motor carrier.” There is no language in Paragraph 8 referring to an “authorized motor carrier.” Beyond that, Paragraph 8 imposed no obligations, whatsoever, on TQL. Instead, the purpose of Paragraph 8 was to inform Outlook of TQL‘s role in the freight brokerage transaction. That is, the purpose of Paragraph 8 was to inform Outlook that TQL is only the freight broker in the transaction, is not the transportation carrier, and cannot be listed as such on the bill of lading. Thus, the only party potentially accepting any obligations under Paragraph 8 was Outlook, which, by signing the Agreement, acknowledged that it “understands” that TQL is
{20} Despite this unambiguous language, Plaintiffs assert that we should interpret the language of Paragraph 8 as having required TQL to arrange for an “authorized motor carrier” based on the definition of “broker” in
{21} Plaintiffs’ argument fails. The text of the Agreement does not define “broker” with any reference to
{22} Plaintiffs’ argument that we should interpret the Agreement to include the “authorized motor carrier” requirement of
{23} For these reasons, even if we construe the evidence most strongly in Plaintiffs’ favor and assume that Safe Connection was not an “authorized motor carrier,” Plaintiffs could not prove, as a matter of law, that TQL breached the Agreement by failing to arrange for an “authorized motor carrier.”
2. Arranging for Insurance
{24} Plaintiffs alleged in their complaint that TQL breached the Agreement by “fail[ing] to contract with a motor carrier maintaining cargo loss and damage liability insurance * * *.” Again, TQL argued in its motion for summary judgment that the Agreement imposed no such obligation on TQL. In response, Plaintiffs argued that Paragraph 10 of
{25} On appeal, Plaintiffs argue the trial court erred in its analysis because Paragraph 10 states that “motor carriers under contract with TQL are required to maintain cargo loss and damage liability insurance in the amount of $100,000.00 per shipment.” (Emphasis added.) They also argue that because Paragraph 10 says that “‘Company understands’ this obligation on the part of TQL,” there was a meeting of the minds between Outlook and TQL on this matter.
{26} Our analysis again begins with the text of Paragraph 10 of the Agreement:
Company understands motor carriers under contract with TQL are required to maintain cargo loss and damage liability insurance in the amount of $100,000.00 per shipment. By signing below, Company acknowledges that loads valued in excess of $100,000.00 will not be tendered without first giving written notice to allow TQL and/or the contracted motor carrier the opportunity to arrange for increased insurance limits. Failure to provide written notice will result in your loads not being insured to the extent the value exceeds $100,000.00.
We find that the plain language of Paragraph 10 did not impose any contractual duties on TQL and specifically did not impose an obligation on TQL to “contract with a motor carrier maintaining cargo loss and damage liability insurance * * *.” The first portion of the first sentence of Paragraph 10 begins with “Company understands.” This language indicates that the focus of Paragraph 10 is on the Company‘s (Outlook‘s) obligations, not TQL. The remainder of the sentence is explanatory in nature and describes TQL‘s contractual relations with its third-party independent carriers.
{27} The remainder of the first sentence of Paragraph 10 does suggest that TQL
{28} Paragraph 10‘s second and third sentences underscore this interpretation of the first sentence. Specifically, the second and third sentences imposed obligations on Outlook to inform TQL of cargo valued over $100,000 and explained why TQL required this information. The first sentence, explanatory in nature, provides context for Outlook‘s obligations set forth in the final two sentences.
{29} Read holistically, the purpose of Paragraph 10 is to ensure that Outlook informed TQL in writing if the value of its freight exceeded the minimum $100,000 in loss coverage that TQL requires its motor carriers to obtain. This is to ensure that TQL or its motor carriers had “the opportunity” to obtain increased insurance in the case of freight worth more than that minimum insured amount. Moreover, the use of the phrase “the opportunity,” suggests that whether TQL or its motor carriers decide to procure additional insurance is a matter left to their discretion.
{30} While Paragraph 10 informs Outlook that TQL requires its motor carriers to maintain a minimum amount of insurance, this is a reference to a separate contract between TQL and its motor carriers (“motor carriers under contract with TQL“). Plaintiffs have never claimed to be a party to those separate contracts. And, as noted by the trial court in its decision, Plaintiffs have never argued that Outlook was a third-party beneficiary of any contract between TQL and Safe Connection.
{32} For these reasons, even if we construe the evidence most strongly in Plaintiffs’ favor and assume that Safe Connection did not have appropriate insurance, Plaintiffs could not prove, as a matter of law, that TQL breached the Agreement by failing to contract with a motor carrier maintaining cargo loss and damage liability insurance.
3. Failure to Pay the Loss Claim
{33} Plaintiffs alleged in their complaint that TQL breached the Agreement by “fail[ing] to pay the Claim amount to [Outlook].” TQL argued in its motion for summary judgment that there was no language in the Agreement requiring TQL to pay Outlook for its loss claim. TQL also pointed out that by using the phrase “If TQL pays a claim,” Paragraph 9 of the Agreement indicated that it had the option of paying or not paying a particular loss claim. In opposition to summary judgment, Plaintiffs argued that TQL did not pursue the claim against Safe Connection, and in effect abandoned the loss claim, preventing Outlook from being able to recover after Safe Connection ceased being a viable, operating company. The trial court, as it did with Paragraph 8 and 10, agreed with TQL and concluded that Paragraph 9 did not impose any obligations on TQL.
{34} On appeal, Plaintiffs argue that Outlook satisfied its obligations under Paragraph 9 by “assisting” TQL in pursuing the loss claim, but that TQL did not satisfy its obligations under Paragraph 9 because it failed to pursue and pay the claim.
{35} Paragraph 9 of the Agreement provides,
In the event of cargo loss or damage, Company must file a claim
for the loss with TQL within nine (9) months from the date of such loss, shortage or damage, which for purposes of this Agreement shall be the delivery date or, in the event of non-delivery, the scheduled delivery date. Company agrees to assist TQL in the pursuit of a claim, including confirming the validity of the claim and claim amount. If TQL pays a claim, company automatically assigns any and all of its rights and interest in the claim to TQL.
In their brief, Plaintiffs admit that Paragraph 9 “does not expressly state that TQL will take the lead on an investigation and pay claims * * *.” But Plaintiffs argue that the Agreement required Outlook to “assist” TQL in the pursuit of a claim. And by agreeing to assist TQL, Plaintiffs argue that this language “confirms TQL was to take the lead on investigating loss of the Freight and paying the claim if found to be viable.”
{36} We disagree with Plaintiffs’ interpretation of this language. Like the language in Paragraphs 8 and 10, the only party that obligated itself or made any promises in Paragraph 9 was Outlook. Outlook agreed to (1) file any loss claim with TQL within a defined period, (2) assist TQL in the pursuit of the claim, and (3) if TQL paid a claim, then Outlook agreed to assign any rights it may have to TQL. Thus, all obligations were on Outlook, not TQL. Furthermore, by using the word “if,” it is evident that TQL did not contractually agree to pay all claims presented to it under Paragraph 9.
{37} Alternatively, Plaintiffs argue that if Paragraph 9 is found by this court to be ambiguous, then an issue of fact exists which should have precluded summary judgment. However, we do not find Paragraph 9 to be ambiguous.
{38} For these reasons, even if we construe the evidence most strongly in Plaintiffs’ favor, Plaintiffs could not prove, as a matter of law, that TQL breached the Agreement by failing to pay Outlook‘s loss claim.
4. “Ignoring” Genuine Issues of Fact
{39} Finally, Plaintiffs assert that the trial court ignored various genuine issues of
{40} It is true that all of these factual allegations made by Plaintiffs are disputed by TQL. For example, TQL asserts that Safe Connection was an authorized motor carrier and that Safe Connection did maintain appropriate insurance. But the question before us is not whether these factual issues are disputed, but whether these disputes involve “material” facts. Gosser v. Warren Cty. Engineer‘s Office, 12th Dist. Warren No. CA2022-02-007, 2023-Ohio-2439, ¶¶ 25-26; Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505 (1986) (stating that “[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment“).
{41} Regarding whether Safe Connection was an authorized motor carrier, this is not a material fact for the reasons stated above. The Agreement imposed no obligation on TQL to arrange for an “authorized motor carrier.” Whether Safe Connection maintained adequate insurance is also not a material fact for the reasons stated previously. No term of the Agreement imposed a duty or obligation upon TQL to contract with motor carriers having cargo loss and damage liability insurance.
{42} Finally, concerning whether TQL breached its obligations to investigate and pay claims, this is also not a material fact and is simply Plaintiffs’ attempt to reargue that Paragraph 9 imposed an obligation upon TQL to pay its loss claim. As described above, TQL had no obligation under Paragraph 9 of the Agreement to perform any acts related to
{43} Plaintiffs have failed to point to any genuine issues of material fact that should have precluded a grant of summary judgment.
III. Conclusion
{44} Plaintiffs have failed to establish that the common pleas court erred in granting summary judgment in favor of TQL. Plaintiffs have failed to point to any legal or factual basis for their claim that TQL breached the Agreement. We overrule Plaintiffs’ sole assignment of error.
{45} Judgment affirmed.
HENDRICKSON, P.J., and PIPER, J., concur.