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Walker v. Trailer Transit, Inc.

United States District Court, S.D. Indiana, Indianapolis Division

February 14, 2014

HUBERT E. WALKER on behalf of himself and all others similarly situated, Plaintiff,



This matter is before the Court on Defendant Trailer Transit, Inc.'s ("Trailer Transit") Motion for Summary Judgment (Dkt. 12). Plaintiff Hubert Walker ("Mr. Walker") filed this breach of contract and unjust enrichment action on behalf of himself and others similarly situated, alleging that Trailer Transit breached the terms of a lease contract by failing to pay the entire amount due in accordance with the compensation provision of the agreement. For the reasons set forth below, Trailer Transit's motion is GRANTED in part and DENIED in part.


The following material facts are not in dispute and are viewed in the light most favorable to Mr. Walker as the non-moving party. Trailer Transit is an Indiana corporation located in Porter, Indiana, and is engaged in the business of providing tow-away, power-only transportation solutions for its customers. To carry out these services, Trailer Transit uses independent contractor owner-operators ("Drivers") with whom it has entered into written lease contracts to handle the pick-up and delivery of trailers ("Lease Agreements"). Mr. Walker was formerly one of these Drivers. He contracted with Trailer Transit from approximately December 7, 2004 until February 24, 2011, and handled approximately 600 shipments of trailers during his successive one year contract terms. Over 1, 000 other Drivers leased their semi-tractors to Trailer Transit between September 13, 2001 and May 9, 2012 under a form Lease Agreement that was the same or substantially similar to Mr. Walker's form Lease Agreement.

Appendix B to Mr. Walker's Lease Agreement contained the following provision:

The parties mutually agree that [Trailer Transit] shall pay to [Driver], as rental for the equipment leased herein, for trips under [Trailer Transit]'s operating authorities or in [Trailer Transit]'s service, a sum equal to seventy-one percent (71%) of the gross revenues derived from the use of the equipment leased herein (less any insurance related surcharge and all items intended to reimburse [Trailer Transit] for special services, such as permits, escort services and other special administrative costs including, but not limited to, Item 889).

(the "Compensation Provision"). Dkt. 50-4 at 17. Mr. Walker alleges that Trailer Transit routinely invoices its customers in excess of the amounts that Trailer Transit paid for services performed by third parties, such as escorts, permits, and for fees paid to third parties (the "Add-On Fees"). He argues that the amount exceeding Trailer Transit's out-of-pocket costs is not "intended to reimburse" Trailer Transit, and thus should be considered revenue to which the Drivers are entitled a percentage under the terms of the Compensation Provision. Mr. Walker argues that he and the other Drivers should receive 71% of the amount that exceeded Trailer Transit's out-of-pocket costs or, in the case of customer charges for which there is no underlying cost to Trailer Transit, 71% of the entire charge.


Federal Rule of Civil Procedure 56 provides that summary judgment is appropriate if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Hemsworth v. Quotesmith.Com, Inc., 476 F.3d 487, 489-90 (7th Cir. 2007). In ruling on a motion for summary judgment, the court reviews "the record in the light most favorable to the nonmoving party and draw[s] all reasonable inferences in that party's favor." Zerante v. DeLuca, 555 F.3d 582, 584 (7th Cir. 2009) (citation omitted). However, "[a] party who bears the burden of proof on a particular issue may not rest on its pleadings, but must affirmatively demonstrate, by specific factual allegations, that there is a genuine issue of material fact that requires trial." Hemsworth, 476 F.3d at 490 (citation omitted). "In much the same way that a court is not required to scour the record in search of evidence to defeat the motion for summary judgment, nor is it permitted to conduct a paper trial on the merits of a claim." Ritchie v. Glidden Co., 242 F.3d 713, 723 (7th Cir. 2001) (citation and internal quotations omitted). "[N]either the mere existence of some alleged factual dispute between the parties... nor the existence of some metaphysical doubt as to the material facts... is sufficient to defeat a motion for summary judgment." Chiaramonte v. Fashion Bed Grp., Inc., 129 F.3d 391, 395 (7th Cir. 1997) (citations and internal quotations omitted).


A. Breach of Contract Claim

Mr. Walker argues that there is a question of material fact as to whether the Add-On Fees charged by Trailer Transit were "items intended to reimburse" Trailer Transit. "Generally, construction of a written contract is a question of law for which summary judgment is particularly appropriate." Manzon v. Stant Corp., 202 F.Supp.2d 851, 856 (S.D. Ind. 2002) (quoting N. Ind. Pub. Svc. Co. v. Dabagia, 721 N.E.2d 294, 299 (Ind.Ct.App. 1999)). Only when a contract is ambiguous or uncertain in its terms will extrinsic facts be useful in construing the contract and ascertaining the intent of the parties; otherwise, interpretation of the contract "is purely a question of law to be determined by the trial court." Id. (quoting Fresh Cut, Inc. v. Fazli, 650 N.E.2d 1126, 1133 (Ind. 1995). "[I]f reasonable men would find the contract susceptible of more than one construction, ambiguity exists making summary judgment inappropriate. However, if the ambiguity arises not because of extrinsic facts but by reason of the language used, construction of the ambiguous contract is a question of law for the court." McCae Mgmt. Corp. v. Merchants Nat. Bank & Trust Co. of Indianapolis, 553 N.E.2d 884, 887 (Ind.Ct.App. 1990). A contract term is not ambiguous merely because the parties disagree about the term's meaning. Roy A. Miller & Sons, Inc. v. Indust. Hardwoods Corp., 775 N.E.2d 1168, 1173 (Ind.Ct.App. 2002).

Ambiguity in a contract may be one of two types: patent or latent. Patent ambiguity is "apparent on the face of the instrument and arises from an inconsistency or inherent uncertainty of language used so that it either conveys no definite meaning or a confused meaning." Oxford Fin. Grp., Ltd. v. Evans, 795 N.E.2d 1135, 1143 (Ind.Ct.App. 2003). A latent ambiguity, on the other hand, "rises only upon attempting to implement the contract." Id. at 1144. Patent ambiguities present pure questions of law, while latent ambiguities are resolved as questions of fact. Felker v. Sw. Emergency Med. Serv., Inc., 521 F.Supp.2d 857, 867 (S.D. Ind. 2007). Extrinsic evidence is admissible to explain the meaning of a latent ambiguity, but is not admissible to explain a patent ambiguity. Id.

The first issue that the Court must decide is whether there is an ambiguity in the contract with regard to whether Mr. Walker and the Drivers are entitled to any portion of the Add-On Fees, as asserted by Mr. Walker. In determining whether the terms of a contract are ambiguous, the Court gives words their usual and common meaning, unless it is clear from the entire contract and its subject matter that another meaning was intended. Boswell Grain & Elevator, Inc. v. Kentland Elevator & Supply, Inc., 593 N.E.2d 1224, 1227 (Ind.Ct.App. 1992). The Court finds that the parties merely disagree on the interpretation of the Compensation Provision with regard to which revenue sources are part of the Drivers' compensation, and it is not ambiguous based upon the plain meaning of the language used in the contract. As such, resolution of this issue presents a question of law and the Court will enforce the contract according to its terms. Rice v. Meridian Ins. Co., 751 N.E.2d 685, 688 (Ind.Ct.App. 2001). The Court ...

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