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TDY Industries, Inc. v. National Freight Transportation

March 12, 2009

TDY INDUSTRIES, INCORPORATED, ALLEGHENY LUDLUM CORPORATION, PLAINTIFFS,
v.
NATIONAL FREIGHT TRANSPORTATION, INC., DEFENDANT.



The opinion of the court was delivered by: Judge Nora Barry Fischer

MEMORANDUM OPINION

I. INTRODUCTION

This is a diversity action in which Plaintiffs TDY Industries, Inc. ("TDY") and Allegheny Ludlum Corporation ("Allegheny Ludlum") (or collectively, "Plaintiffs") seek a declaratory judgment that they are entitled to contractual indemnification from and against Defendant National Freight Transportation, Inc. ("National Freight" or "Defendant") for all liabilities, obligations, losses, and reasonable attorneys' fees arising from an unresolved personal injury action being litigated in the state courts of North Carolina as well as damages for breach of contract. In addition, TDY seeks a declaratory judgment that it is entitled to common law indemnification and contribution against National Freight arising from the same claim and litigation. Currently pending before the Court are cross motions for summary judgment filed by the parties. Based on the following, TDY's common law indemnification and contribution claims are dismissed, without prejudice, as neither claim is ripe for adjudication. With respect to Plaintiffs' contractual indemnity and breach of contract claims, Plaintiffs' Motion for Summary Judgment [32] is DENIED and Defendant's Motion [28] is GRANTED.

II. BACKGROUND*fn1

A. Relationships Between the Parties

Plaintiff, TDY, d/b/a Allvac,*fn2 is a California corporation with its principal place of business in Pittsburgh, Pennsylvania. It produces and sells a range of specialty metals. (Docket No. 6 at ¶ 5; Docket No. 33 at ¶ 1; Docket No. 40 at ¶ 1). Plaintiff, Allegheny Ludlum Corporation, is a Pennsylvania corporation with its principal place of business in Pennsylvania. It also produces and sells a variety of specialty metals. (Docket No. 33 at ¶ 2). TDY owns 10% of Allegheny Ludlum, although the two are separate legal entities. (Docket No. 33 at ¶ 1). Defendant National Freight is a Massachusetts corporation with its principal place of business in Charlotte, North Carolina. It operates as a common carrier in the business of transporting cargo by truck. (Docket No. 29 at ¶ 5; Docket No. 33 at ¶ 4).

From 2000-2002, National Freight and TDY had a business relationship in which National Freight hauled loads for TDY without a formal, written, transportation contract. (Docket No. 38 at 7-8 ¶¶ 2-3; Docket No. 46 at ¶¶ 2-3). National Freight hauled the following loads over that period:

137 loads in 2000; 87 loads in 2001; and 35 loads from January 2002 through June 13, 2002. (Docket No. 38 at 7 ¶ 2; Docket No. 46 at ¶ 2). Each haul was governed by a bill of lading issued by TDY to National Freight. (Docket No. 38 at 8 ¶ 3; Docket No. 46 at ¶ 3).

From 2002 on, Allegheny Ludlum operated an online system to manage shipping routes and rates. (Docket No. 33 at ¶¶ 5, 13). Allegheny Ludlum also managed shipping rates and routes for TDY under this system. Carriers, like NFT, could use this website to input their rates for various shipping routes. (Docket No. 33 at ¶ 9). In order to use the website, carriers were required to sign a contract with Allegheny Ludlum. (Docket No. 33 ¶ 13).

B. The Allegheny Ludlum-National Freight Transportation Contract

At some point prior to June 13, 2002, Allegheny Ludlum requested that TDY provide it with a recommendation of a trucking company that it could "on board" or sign up as a contract carrier to haul loads for Allegheny Ludlum. (Docket No. 38 at 8 ¶ 5; Docket No. 46 at ¶ 5). TDY employee, Duane Strong recommended National Freight to Allegheny Ludlum. (Id.). "Allegheny Ludlum did not allow 'common carriers' to transport their cargo. In order to haul for Allegheny Ludlum, a carrier was required to sign a contract." (Docket No. 38 at 8 ¶ 6; Docket No. 46 at ¶ 6). After receiving TDY's recommendation, Allegheny Ludlum employee John Sample traveled to Charlotte and visited with representatives from National Freight. (Docket No. 38 at 8 ¶ 7; Docket No. 46 at ¶ 7). Subsequently, a transportation agreement was sent to National Freight by Allegheny Ludlum. (Id.). The agreement was titled "Contract for Transportation Services Contract AL*NFTI" and dated June 13, 2002 (hereinafter "Agreement"). (Docket No. 35-15 at 2). The parties to the Agreement are identified as National Freight Transportation Inc. and Allegheny Ludlum Corporation. (Id.). At the time it was executed, TDY was not a party to the Agreement. (Docket No. 29 at ¶ 19; Docket No. 40 at ¶ 19).

Pursuant to the Agreement, the carrier, National Freight, agreed to provide the shipper, Allegheny Ludlum, with certain trucking services subject to the terms and conditions of the agreement. (Docket No. 35-15). The Agreement was executed by Mark D. Shemak, Supervisor, Transportation Rate Administration, on behalf of Allegheny Ludlum and Oliver B. Faulk, President, on behalf of National Freight. (Id. at 8).

The Agreement contained the following provisions which are applicable to the instant matter.

THIS AGREEMENT, MADE THIS 13TH DAY OF JUNE 2002, BY AND BETWEEN NATIONAL FREIGHT TRANSPORTATION INC., A NO R T H C AR OLI NA CORPOR ATION HEADQUARTERED AT CHARLOTTE BC ("CARRIER") AND ALLEGHENY LUDLUM CORPORATION, A PENNSYLVANIA CORPORATION WITH OFFICES AT LEECHBURG, PENNSYLVANIA, ("SHIPPER").

...

1. TRANSPORTATION SERVICES. CARRIER AGREES TO PROVIDE SHIPPER A MOTOR CARRIER TRANSPORTATION SERVICE THAT MEETS THE DISTINCT NEEDS OF THE SHIPPER FOR THE TRANSPORTATION OF VARIOUS COMMODITIES AND SUPPLIES WITHIN THE TERRITORIAL SCOPE OF ITS OPERATING AUTHORITY, AS AMENDED FROM TIME TO TIME. SHIPPER SHALL TENDER FOR TRANSPORTATION AND CARRIER SHALL TRANSPORT FOR SHIPPER A SERIES OF SHIPMENTS CONSISTING OF NO LESS THAN A MINIMUM OF 100,000 POUNDS PER YEAR. CARRIER SHALL ALSO TRANSPORT, SUBJECT TO THE CAPACITY AND AVAILABILITY OF ITS MOTOR VEHICLE EQUIPMENT, SUCH ADDITIONAL QUANTITY OF PROPERTY AS MAY BE TENDERED FOR TRANSPORTATION BY SHIPPER.

2. CONTROL OF TRANSPORTATION SERVICE. CARRIER SHALL HAVE SOLE AND EXCLUSIVE CONTROL OVER THE MANNER IN WHICH CARRIER AND ITS AGENTS PERFORM THE TRANSPORTATION SERVICE PROVIDED HEREUNDER, AND CARRIER SHALL UTILIZE SUCH INDIVIDUALS AS IT MAY DEEM NECESSARY IN CONNECTION THEREWITH, IT BEING UNDERSTOOD AND AGREED THAT SUCH INDIVIDUALS SHALL BE SUBJECT TO CONTROL, DISCHARGE, AND DISCIPLINE SOLELY AND EXCLUSIVELY BY CARRIER.

3. EQUIPMENT AND DRIVERS. AS A PART OF THE TRANSPORTATION SERVICE CONTEMPLATED BY THIS CONTRACT, CARRIER SHALL PROVIDE ALL FACILITIES, PROPERLY LICENSED DRIVERS, AND OTHER PERSONNEL AND EQUIPMENT NECESSARY TO PERFORM THE REQUIRED TRANSPORTATION SERVICE IN A SAFE MANNER. CARRIER SHALL ALSO PROVIDE, OPERATE, AND MAINTAIN IN GOOD WORKING CONDITION, THE MOTOR VEHICLES AND ALLIED EQUIPMENT NECESSARY FOR THE PERFORMANCE OF THIS SERVICE.

4. COMPLIANCE. CARRIER SHALL COMPLY WITH ALL STATUTES, RULES AND REGULATIONS APPLICABLE TO INTERSTATE AND INTRASTATE TRANSPORTATION BY MOTOR VEHICLE WITHIN THE SCOPE OF ITS OPERATING AUTHORITY AND WILL OBTAIN AND PAY FOR ALL PERMITS AND LICENSES NECESSARY TO TRANSPORT SHIPPER'S COMMODITIES WITHIN THE VARIOUS STATES.

5. SERVICE REQUIREMENTS. CARRIER SHALL TRANSPORT ALL PROPERTY, WHETHER TENDERED BY SHIPPER DIRECTLY OR RECEIVED FROM A THIRD PARTY DESIGNATED BY SHIPPER, UNDER THE TERMS AND CONDITIONS OF THIS CONTRACT. THE ACCEPTANCE BY THE CARRIER OF SUCH PROPERTY AND THE ISSUANCE OF A RECEIPT THEREFOR, EITHER TO SHIPPER OR TO A THIRD PARTY DESIGNATED BY SHIPPER, SHALL EFFECTUATE THE TERMS OF THIS CONTRACT INTO EACH SUCH INSTANCE OF TRANSPORTATION. THE SERVICE TO BE PROVIDED UNDER THIS CONTRACT IS FOR SPECIFIED SERVICES UNDER SPECIFIC RATES AND CONDITIONS PURSUANT TO 49 U.S.C. 14101(b). CARRIER AND SHIPPER AGREE TO BE BOUND BY PROVISIONS OF THIS CONTRACT AND HEREBY EXPRESSLY WAIVE ALL RIGHTS AND REMEDIES CONTAINED IN THE ICC TERMINATION ACT, EXCEPT THE PROVISIONS OF 49 U.S.C. 14706, AND THOSE PROVISIONS RELATING TO REGISTRATION, INSURANCE AND SAFETY FITNESS.

6. RATES AND CHARGES. THE RATES AND CHARGES TO BE APPLIED FOR TRANSPORTATION SERVICE PERFORMED UNDER THIS CONTRACT ARE SPECIFIED IN EXHIBIT I WHICH, BY REFERENCE, IS ATTACHED AND MADE PART HEREOF. IN SUCH CASES WHERE SHIPMENTS ARE TENDERED ON A FREIGHT COLLECT BASIS, SUCH RATES AND CHARGES AS SPECIFIED IN EXHIBIT I WILL ONLY BE APPLIED WHEN PAYABLE BY SHIPPER; WHEN PAYABLE BY A PARTY OTHER THAN SHIPPER, RATES AND CHARGES IN CARRIERS LEGALLY FILED COMMON MOTOR CARRIER FREIGHT TARIFF(S) APPLY. CARRIER AGREES THAT ITS RATES AND CHARGES, AS SPECIFIED IN EXHIBIT I, SHALL REMAIN FIXED ON A YEAR-TO-YEAR BASIS EXCEPT, HOWEVER, SUCH RATES AND CHARGES MAY BE ADJUSTED FROM TIME-TO-TIME FOR PURPOSES OF OFFSETTING ANY CHANGES IN DIRECT OPERATING COSTS, AS MAY BE MUTUALLY AGREED UPON BY CARRIER AND SHIPPER.

7. PAYMENT. THE CHARGES TO BE PAID BY SHIPPER FOR SERVICES RENDERED BY CARRIER SHALL BE AS PROVIDED IN EXHIBIT I. CARRIER SHALL PERIODICALLY INVOICE SHIPPER IN ACCORDANCE WITH SUCH CHARGES AND SHIPPER SHALL MAKE FULL PAYMENT THEREOF WITHIN 40 DAYS OF RECEIPT THEREFORE.

...

9. INDEMNIFICATION

(a). CARRIER SHALL INDEMNIFY AND SAVE HARMLESS SHIPPER FROM AND AGAINST ALL LIABILITIES, OBLIGATIONS, LOSSES, EXPENSES INCLUDING REASONABLE ATTORNEYS FEES WHICH MAY BE IMPOSED OR INCURRED BY OR ASSERTED AGAINST SHIPPER BY REASON OF ACTUAL OR ALLEGED (I) INJURY OR DEATH TO PERSONS (INCLUDING, WITHOUT LIMITATION, THE PROPERTY OF SHIPPER AND THE PROPERTY OF ITS CONTRACTORS, SUBCONTRACTORS, VENDORS, AGENTS, OR EMPLOYEES), (II) DAMAGE TO THE PROPERTY ANY PERSON OR LEGAL ENTITY (INCLUDING WITHOUT LIMITATION, THE PROPERTY OF SHIPPER AND THE PROPERTY OF ITS CONTRACTORS, SUBCONTRACTORS, VENDORS, AGENTS, OR EMPLOYEES) OR (III) VIOLATION OF ANY LAW, ORDINANCE, OR REGULATIONS OF ANY FEDERAL, STATE, OR LOCAL GOVENMENTAL [SIC] AUTHORITY BY CARRIER OR ITS CONTRACTORS, SUBCONTRACTORS, VENDORS, AGENTS OR EMPLOYEES, AS A RESULT OF OR ARISING OUT OF ANY OR ALL OF THE WORK OR SERVICES PERFORMED UNDER THIS CONTRACT BY CARRIER, OR ITS CONTRACTORS, SUBCONTRACTORS, VENDORS, AGENTS OR EMPLOYEES. IT IS UNDERSTOOD, HOWEVER, THAT THE FOREGOING AGREEMENT TO INDEMNIFY AND HOLD THE SHIPPER HARMLESS SHALL NOT BE APPLICABLE TO THE EXTENT THAT SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, CLAIMS, ACTIONS, SUITS, COSTS, CHARGES, AND EXPENSES ARE ATTRIBUTABLE TO THE SOLE NEGLIGENCE OF THE SHIPPER OR ITS CONTRACTORS, SUBCONTRACTORS, VENDORS, AGENTS OR EMPLOYEES.

10. INSURANCE. CARRIER WILL PROCURE AND MAINTAIN IN FORCE CONTINUOUSLY THROUGH THE TERM OF THE CONTRACT, THE FOLLOWING TYPES OF INSURANCE: (a) INSURANCE REQUIRED UNDER THE WORKMAN'S COMPENSATION LAWS OF THE STATES IN WHICH THE TRANSPORTATION SERVICES SHALL BE PERFORMED, PROTECTING AND COVERING CARRIER AND ITS EMPLOYEES, IF ANY, IN SUCH AMOUNTS AS ARE REQUIRED BY SUCH LAW. WHEN APPLICABLE, CARRIER SHALL ALSO PROVIDE EMPLOYER'S LIABILITY INSURANCE IN THE AMOUNT OF LESS THAN $1,000,000 COMBINED SINGLE LIMIT PER OCCURRENCE; (b) COMPREHENSIVE GENERAL LIABILITY INSURANCE, INCLUDING BLANKET CONTRACTUAL COVERAGE, FOR BODILY INJURY AND TANGIBLE PROPERTY DAMAGE IN THE AMOUNT OF NOT LESS THAN $1,000,000 COMBINED SINGLE LIMIT PER OCCURRENCE; AND (c) AUTOMOBILE BODILY INJURY AND PROPERTY DAMAGE INSURANCE PROTECTING AGAINST CLAIMS FOR BODILY INJURY, INCLUDING ACCIDENTAL DEATH, AS WELL AS LOSS OR DAMAGE TO TANGIBLE PROPERTY IN THE AMOUNT OF NOT LESS THAN $1,000,000 COMBINED SINGLE LIMIT PER OCCURRENCE.

PERSONAL INJURY AND PROPERTY DAMAGE: LIABILITY FOR PERSONAL INJURY AND PROPERTY DAMAGE NOT COVERED BY THE EXPLICIT TERMS OF THIS AGREEMENT SHALL BE THE SAME AS WOULD EXIST IF THESE TRANSPORTATION SERVICES WERE PERFORMED BY CARRIERS AS COMMON CARRIERS SUBJECT TO THE INTERSTATE COMMERCE ACT.

CARRIER SHALL FURNISH SHIPPER WITH EVIDENCE OF SUCH COVERAGE.

...

14. BREACH. NOTWITHSTANDING ANY OTHER PROVISION IN THIS CONTRACT TO THE CONTRARY, IF EITHER CARRIER OR SHIPPER BREACHES ANY TERM OR OBLIGATION CONTAINED HEREIN, THE AGGRIEVED PARTY MAY GIVE WRITTEN NOTICE TO THE BREACHING PARTY OF THE BREACH AND THE REASON(S) THEREFOR AND, IF THE BREACH IS NOT CORRECTED WITHIN 30 CALENDAR DAYS AFTER THE RECEIPT OF SUCH NOTICE, THE AGGRIEVED PARTY MAY ELECT TO IMMEDIATELY TERMINATE THIS CONTRACT WITHOUT FURTHER LIABILITY WHILE PRESERVING ANY RIGHTS THAT IT MAY HAVE IN LAW OR EQUITY AGAINST THE BREACHING PARTY. IF EITHER PARTY DECLARES BANKRUPTCY, SEEKS APPOINTMENT OF A RECEIVER, OR MAKES AN ASSIGNMENT FOR THE BENEFIT OF CREDITORS, THEN THE AGGRIEVED PARTY SHALL HAVE THE RIGHT TO IMMEDIATELY TERMINATE THIS CONTRACT UPON NOTICE TO THE BREACHING PARTY.

15. NOTICES. ANY NOTICES GIVEN UNDER THIS AGREEMENT SHALL BE EFFECTIVE WHEN RECEIVED. NOTICES, EXCEPT AS OTHERWISE PROVIDED HEREIN, SHALL BE IN WRITING AND SHALL BE DELIVERED TO THE PARTY(S) ENTITLED TO RECEIVE THE SAME BY HAND OR BY UNITED STATES FIRST CLASS MAIL OR WESTERN UNION TELEGRAPH, WITH ALL NECESSARY POSTAGE AND CHARGES FULLY PREPAID, AND ADDRESSED TO THE PARTY TO WHOM DIRECTED AT ITS BELOW SPECIFIED ADDRESS:

NOTICES TO ALLEGHENY LUDLUM CORPORATION: MARK D. SHEMAK SUPERVISOR TRANSPORTATION RATE ADMINISTRATION ALLEGHENY LUDLUM CORPORATION P.O. BOX 565 LEECHBURG, PA 15656 NOTICES TO NATIONAL FREIGHT TRANSPORTATION INC.: WILLIAM E. BYERS OPERATIONS MANAGER NATIONAL FREIGHT TRANSPORTATION INC.

PO BOX 34303 CHARLOTTE, NC 28234 THESE DESTINATIONS AND/OR ADDRESSES MAY BE CHANGED UPON GIVING WRITTEN NOTICE IN THE MANNER PROVIDED ABOVE.

16. MISCELLANEOUS PROVISIONS. ...

(e) ASSIGNMENT: NEITHER THIS CONTRACT NOR ANY INTEREST HEREIN SHALL BE ASSIGNED BY CARRIER OR SHIPPER WITHOUT THE WRITTEN CONSENT OF THE OTHER.

...

(i) MODIFICATION OR CANCELLATION: ANY MODIFICATION OR CANCELLATION OF ANY OF THE PROVISIONS OF THIS CONTRACT SHALL NOT BE VALID UNLESS IN WRITING AND SIGNED BY BOTH CARRIER AND SHIPPER.

...

(k) APPLICABLE LAW: THE LAWS OF PENNSYLVANIA SHALL GOVERN THIS CONTRACT IN ALL ASPECTS, I NCL UDI NG EXECUTION, I NTE RPRETATION, PERFORMANCE AND ENFORCEMENT.

(l) ENTIRE AGREEMENT: THIS CONTRACT, AND THE EXHIBITS HERETO, CONSTITUTE THE ENTIRE UNDERSTANDING AND AGREEMENT BETWEEN THE CARRIER AND THE SHIPPER WITH REGARD TO ALL MATTERS AND, EXCEPT AS SPECIFICALLY SET FORTH HEREIN, THERE ARE NO OTHER AGREEMENTS, CONDITIONS, OR REPRESENTATIONS, ORAL OR WRITTEN, EXPRESSED OR IMPLIED, WITH REGARD THERETO.

17. DURATION AND TERMINATION: THE DURATION OF THIS CONTRACT SHALL BE FOR A PERIOD OF 1 YEAR FROM THE DATE OF EXECUTION HEREOF, OR UPON THE EFFECTIVE DATE OF THE CARRIER'S NECESSARY GOVERNMENTAL AUTHORITY TO PERFORM THE SERVICES CONTEMPLATED HEREUNDER, WHICHEVER DATE IS THE LATTER. FOLLOWING THE FIRST YEAR, THIS CONTRACT SHALL CONTINUE IN FULL FORCE FOR THE DURATION ...


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