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Russell v. Pacific Motor Trucking Co.

United States District Court, C.D. California, Southern Division

December 18, 2014



DAVID O. CARTER, District Judge.

Before the Court is Defendant's Motion for Summary Judgment (Dkt. 49). A hearing on this matter was held on December 15, 2014. Upon consideration of the arguments and the briefing, the Court hereby GRANTS the Motion.


This case involves a dispute over Defendant Pacific Motor Trucking Company's ("Defendant" or "PMT") short-lived implementation of an "owner-operator" truck leasing program. Plaintiff, Ronald R. Russell ("Plaintiff" or "Mr. Russell") was a participant in the program. Mr. Russell claims that Defendant induced him into signing on to the program by allegedly representing that it would be a long-term arrangement, a statement that proved false given the program's cancellation in 2009, and that a breach of contract occurred when PMT terminated the program.

Defendant now moves for summary judgment, arguing that even if it had represented that the program would be long-term, there is no evidence that Defendant and its representatives had knowledge of the falsity of that statement. Further, Defendant claims Plaintiff was not entitled to rely on that statement in signing up for the program. Defendant also argues that Plaintiff has waived his claim of fraudulent inducement by performing under the terms of his first lease agreement and subsequently entering into a second lease agreement in 2009. Defendant also maintains that it acted according to the terms of the agreement when it cancelled the lease agreement in 2009.


Mr. Russell worked as a car hauler for PMT from 1987 through 2010. Uncontroverted Material Fact ("UMF") 1-2. Consistent with its employment agreements, in 2007 PMT elected for the first time to implement an owner-operator program ("Program"). Before that time, all drivers were company employees driving company tractor trailers. Mr. Russell learned of the Program in late 2006 or early 2007 at an informational meeting. UMF 7. Mr. Randy Beggs ("Mr. Beggs"), PMT's Vice-President at the time, presented at that meeting. He informed the company drivers that PMT would be opening the Program to them if they wished to join. UMF 8. At the meeting, Mr. Russell recalls that Mr. Beggs told him and other drivers that participants in the Program would receive 68% of the revenue from the hauls that were made using the leased equipment. UMF 11. Mr. Russell also recalls that Mr. Beggs mentioned that "it would be beneficial to us... if we would like to be a partner on getting... trucks, becoming an owner/operator" and that it was "a long time thing." Depo. of Ronald Russell ("Russell Depo.") at 43, 143. Mr. Russell understood this to mean that the program would last forever. Id. at 95. Mr. Russell also believes Mr. Beggs made an oral representation at this meeting that PMT would perform maintenance at a reduced rate. Id. at 91. Apart from this meeting, Plaintiff had no other discussion with PMT representatives about the Program prior to purchasing a truck in 2007. UMF 13.[1]

Mr. Russell decided to participate in the program. He did not seek out legal or financial advice prior to purchasing a truck, UMF 15-16, nor did PMT advise him to do so. Mr. Russell joined a group of other drivers in purchasing trucks and trailers from West Coast Enterprises to secure group financing. UMF 20. He purchased a Sterling truck ("Sterling Truck"), although PMT did not specify Plaintiff purchase a specific type of truck for use in the Program. UMF 24. Mr. Russell explains that he felt compelled to purchase a Sterling, as the PMT shop would only work on these types of trucks. Russell Depo. at 51-54. At the time he purchased the truck, Mr. Russell had not seen the lease agreement ("2007 Agreement") that would govern his lease under the owner-operator program. UMF 21. Mr. Russell indicates that he was not allowed to see the agreement prior to signing it, as PMT claimed it contained confidential information. Russell Depo. at 61:24-62:1. He signed the agreement around July 3, 2007, directly before retrieving the Sterling Truck he had purchased. UMF 30. The 2007 Agreement had provisions that provided for cancellation in its first 90 days, and allowed either party to terminate the agreement upon 30 days' notice. UMF 32-33. It did not contain any provisions regarding repairs. UMF 53, 55. After signing the agreement, he immediately began driving for PMT as an owner-operator. UMF 35.

During the course of the 2007 Agreement, Mr. Russell learned that PMT had ceased to provide maintenance to Program trucks at the PMT shop. UMF. 36. He never received any maintenance under the Program. UMF 38. Mr. Russell thus came to believe that certain statements made by Mr. Beggs at the informational meeting were false. UMF 40.

Mr. Russell continued to drive his 2007 Sterling Truck for approximately 18-months, until replacing it with a new, more expensive, vehicle (the "Sleeper Truck Combo") in 2009. UMF 41. Mr. Russell considered this to be an upgrade in quality, and because PMT was not performing maintenance, switching brands was preferable because he could get the truck fixed anywhere. UMF 45, Russell Depo. at 68:2-5. Mr. Russell spoke to Mr. Beggs twice prior to making this purchase. Russell Depo. at 78:16-82:1. Mr. Beggs told him that the new truck would need to be PMT colors with straps, and that PMT would "take care of" the license on the truck. UMF 43; Russell Depo. at 78:20-24. Mr. Russell entered into a subsequent lease agreement with PMT in 2009 when he purchased the Sleeper Truck Combo. UMF 50. Mr. Russell acknowledges that he read through the entirety of the 2007 Lease Agreement during the time he was operating under that agreement, and had knowledge of all the terms of the lease agreement prior to purchasing the 2009 Sleeper Truck Combo and when he entered in to the new lease agreement (the "2009 Agreement"). Plaintiff knew at this time that there was a term in the 2009 Lease agreement that allowed either party to terminate the lease on 30-days' notice. UMF 53. He signed the 2009 Agreement on January 20, 2009. UMF 52. No one from PMT at that time told him how long the lease would last. UMF 51.

Plaintiff claims he would not have joined the Program if he had known its actual duration. UMF 49. Mr. Russell believed the leases would last "forever." Russell Depo. at 95.

On February 16, 2009, PMT issued a thirty day notice to Mr. Russell that it had decided to terminate the 2009 Agreement pursuant to Section 8.01 of the 2009 Agreement. UMF 64. PMT maintains that the program was canceled upon the severe downturn in the economy, and subsequent drop in business. Accordingly, Mr. Russell's 2009 Agreement ended on March 18, 2009. Mr. Russell had no information about why the Program was cancelled. Mr. Russell subsequently returned to his former role with PMT as a company driver until May 2010. UMF 70. After retiring from PMT, Plaintiff worked for at least two other companies to afford $5, 000 per month payments on his Sleeper Truck Combo. UMF 74; Russell Depo. at 70. His truck was eventually repossessed when he was unable to make the payments. Mr. Russell did not personally seek PMT's assistance in selling the truck. UMF 76.


In support of his Opposition, Mr. Russell submitted unauthenticated and unmarked excerpts of deposition testimony, sworn statements from Mr. Russell's attorneys and a declaration from Mr. Russell himself. Defendant argues that all of the evidence Plaintiff presented should be disregarded as inadmissible. Reply at 3, Defendant's Objection to and Motion to Strike Plaintiff's Evidence ISO Defendant's Motion for Summary Judgment (Dkt. 62-4).

As to the depositions, the Plaintiff eventually cured the defect, and the Court will consider the record. It is worth noting, however, that in considering the Deposition evidence it will rely exclusively on the text of the deposition, rather than any restatements of the record.[2]

PMT further argues that Mr. Russell's declaration, which apparently directly controverts or significantly supplements Mr. Russell's own deposition testimony, should be disregard as a "sham." Reply at 1-5. Generally, a party should not be able to substitute an affidavit alleging helpful facts for earlier deposition testimony harmful to its case in order to avoid summary judgment. Sch. Dist. No. 1J, Multnomah Cnty., Or. v. ACandS, Inc., 5 F.3d 1255, 1264 (9th Cir. 1993) (citing Foster v. Arcata Assocs., Inc., 772 F.2d 1453, 1462 (9th Cir.1985); Radobenko v. Automated Equipment Corp., 520 F.2d 540, 544 (9th Cir.1975).) However, the Ninth Circuit has held that rule should be ...

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