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Transport Drivers, Inc. v. Coca-Cola Refreshments USA, Inc.

United States District Court, D. Minnesota

May 10, 2017

Transport Drivers, Inc., Plaintiff,
Coca-Cola Refreshments USA, Inc., Defendant.

          Andrew J. Holly, Esq., Dorsey & Whitney LLP; and Lee Thomas Polk, Esq., Epstein Becker Green, P.C., counsel for Plaintiff.

          Deborah A. Ellingboe, Esq., Faegre Baker Daniels LLP; and Charles Herrick Morgan, Esq., and Jonathan Gary Rose, Esq., Alston & Bird LLP, counsel for Defendant.


          DONOVAN W. FRANK United States District Judge


         Plaintiff Transport Drivers, Inc. (“TDI”) filed this lawsuit against Defendant Coca-Cola Refreshments USA, Inc. (“CCR”) after CCR terminated the parties' business relationship and TDI became obligated to pay ERISA withdrawal liability. TDI alleges that CCR is obligated to reimburse TDI for this liability based on the terms of the parties' underlying services agreement. According to TDI, the relevant agreement is a 1985 contract entered into by the parties' predecessors and assumed by TDI in 2001. CCR, however, has introduced a 2010 agreement which it claims eliminates any obligation CCR may have had and requires TDI to indemnify CCR for the liability asserted in this action. CCR moves for judgment on the pleadings. For the reasons set forth below, the Court denies CCR's motion.


         I. Plaintiff's Complaint

         On or about November 19, 1985, predecessors of both TDI and CCR entered into a contractual agreement (“the 1985 Agreement”) in which TDI's predecessor, Leaseway Personnel Corp. (“Leaseway”), agreed to provide personnel to CCR's predecessor, Coca-Cola Bottling Midwest, Inc. (“CCBM”). (Doc. No. 1 (“Compl.”) ¶¶ 6-10.) Specifically, Leaseway's personnel included truck mechanics that would perform services relating to the transportation or storage of bottled beverages. (Id. ¶ 6.) A copy of the 1985 Agreement, upon information and belief, is attached to Plaintiff's Complaint and is explicitly incorporated therein. (Id. ¶ 6 & Ex. A.)

         In or about 1997, Logistics Personnel Corp. (“Logistics”) assumed the 1985 Agreement. (Id. ¶ 7 & Ex. B.) On or about January 1, 2001, TDI succeeded Logistics and assumed the 1985 Agreement to provide services to Coca-Cola then operating under the trade name Midwest Coca-Cola Bottling Company. (Id. ¶ 8.) A copy of the letter memorializing the parties' agreement (“2001 Letter Agreement”) is attached to and incorporated into the Complaint. (Id. ¶ 8 & Ex. C.)[1] TDI alleges that it provided services consistent with the 1985 Agreement from 2001 to 2013 without interruption. (Id. ¶¶ 9, 16.) TDI also alleges that CCR explicitly or by its conduct assumed the obligations of the 1985 Agreement, accepted TDI's services, and paid the invoices TDI submitted. (Id. ¶¶ 10-11.) TDI alleges, upon information and belief, that CCR assumed the obligations of the 1985 Agreement “as a result of a series of corporate transactions.” (Id. ¶ 10.)

         Under the terms of the 1985 Agreement, CCR agreed to lease from TDI personnel referred to in the agreement as “Workers.” (Id. ¶ 12.) TDI was required to “pay all wages, provide all benefits, . . . and . . . negotiate and administer any collective bargaining agreements applicable to the Workers.” (Id. ¶ 14; see also 1985 Agreement § 2.) TDI alleges CCR “in turn, agreed to reimburse Plaintiff for all sums it was obligated to pay for the Workers' wages and fringe benefits.” (Compl. ¶¶ 15, 17; see also 1985 Agreement § 3 (providing obligations for invoicing and payment for charges under the agreement).) Plaintiff alleges these amounts included “amounts paid pursuant to any applicable collective bargaining agreement.” (Compl. ¶ 15.) Section 4 of the 1985 Agreement provided, in relevant part:

4. Employment Relationship. . . . If any of the Workers are covered by a collective bargaining agreement, [CCR] will not violate or cause [TDI] to violate that collective bargaining agreement, and will defend, indemnify and hold [TDI] harmless against any claim, loss, expense or liability resulting from any such violation.

(Id. ¶ 18; 1985 Agreement § 4.) In the Complaint, TDI also points to the following clauses regarding default and modification:

8. Default. Time is of the essence and [CCR] will be in “Default” if [CCR] fails to make any required payment when due or to perform its obligation under any other provision of this Agreement, and if the failure continues for 7 or more days after written notice to [CCR]. Upon a Default, [TDI] will have the immediate right at its discretion and without further notice, demand or hearing, all of which are expressly waived, and without prejudice to any other remedy or right provided by law, to terminate this Agreement and advise [CCR] accordingly. [TDI] may also recover all costs and expenses which it incurs in protecting its interests and enforcing its remedies under this Agreement, including reasonable legal fees.

(Compl. ¶ 21; 1985 Agreement § 8.)

13. Modifications. This document, together with its Schedule A, constitutes the complete agreement between [TDI] and [CCR], superseding any prior oral or written representations, agreements or understandings relating to this Agreement or its subject matter. For any contemporaneous or future representation, agreement, understanding or waiver to be binding upon the parties, it must be in writing signed by both parties. [TDI's] failure to strictly enforce any provision of this Agreement will not be construed as a waiver of that provision or as excusing [CCR] from future performance.

(Compl. ¶ 22; 1985 Agreement § 13.) The 1985 Agreement is governed by Minnesota law. (See 1985 Agreement at 1 & § 15.)

         TDI entered into collective bargaining agreements (“CBAs”) with the union representing the Workers, agreeing to make contributions to a multiemployer pension plan-the Minneapolis Food Distributing Industry Pension Plan (the “Pension Plan”)- on the Workers' behalf. (Compl. ¶¶ 23-25; see also Id. ¶ 23, Ex. D; id. ¶ 25, Ex. E.) According to the Complaint, the Pension Plan is a multiemployer pension plan as defined under the Employee Retirement Income Security Act of 1974, as amended. (Id. ¶ 34 (citing 29 U.S.C. §§ 1002(37) and 1301(a)(3)).) TDI alleges it routinely made monthly contributions under the CBA and invoiced these contributions to CCR who paid the invoices with knowledge of TDI's contributions to the Pension Plan. (Id. ¶¶ 26-27, 38.) TDI further alleges that the parties' course of dealing at all relevant times involved such a payment and reimbursement arrangement. (Id. ¶ 28.) In addition, TDI asserts CCR advised TDI in connection with the labor negotiations regarding cost restrictions relevant to the plan contributions. (Id. ¶ 29.)

         On or about February 18, 2013, CCR notified TDI that it was terminating the parties' agreement effective April 1, 2013. (Id. ¶ 40 & Ex. F (“Termination Letter”).) As a result of this termination, TDI effectuated a complete withdrawal from the Pension Plan and became legally obligated to pay a withdrawal liability pursuant to ERISA. (See Id. ¶¶ 40-43 (citing 29 U.S.C. §§ 1383(a), 1381).) According to Plaintiff, the withdrawal liability owed “was based on, and bore a direct relationship to, the amount of periodic pension contributions made by TDI to the Pension Plan on behalf of the Workers assigned to service [CCR's] operations prior to the complete withdrawal.” (Id. ¶ 48 (citing 29 U.S.C. § 1381(b)); see also Id. ¶¶ 49-50 & Ex. G.) On or about October 3, 2014, TDI and the Pension Plan reached a settlement agreement (“Settlement Agreement”) under which TDI agreed to pay $520, 607 in twenty quarterly payments beginning in November 2014. (Id. ¶ 51 & Ex. H.)

         TDI alleges it made the required withdrawal liability payments through the date of the Complaint. (Id. ¶ 52.) In a letter dated November 13, 2015, TDI made a formal demand to CCR's representative at Coca-Cola Bottling Midwest, Inc. requesting reimbursement for the withdrawal liability, and, in January 2016, TDI began sending invoices to CCR for its withdrawal liability payments. (Id. ¶ 53 & Ex. I; id. ¶ 54 & Ex. J.) TDI alleges CCR has not paid any invoices, reimbursed any portion of the withdrawal liability TDI has paid, responded to the demand for reimbursement, or contacted TDI concerning this obligation. (Id. ¶¶ 55, 58.)

         On April 25, 2016, TDI filed a Complaint, asserting the following claims: (1) Breach of Contract (Count I); (2) Promissory Estoppel (Count II). (Id. ¶¶ 59-78.) Specifically, under its breach of contract claim, TDI asserts that the 1985 Agreement obligates CCR to reimburse TDI for the ERISA withdrawal liability. (Id. ¶ 62.) TDI frames its promissory estoppel claim as an alternative cause of action, asserting that “[i]f the Court or jury determines that there was no enforceable contract between TDI and [CCR] which [CCR] breached, TDI asserts a claim of promissory estoppel.” (Id. ¶ 70.) Under this claim, TDI asserts that by signing the 2001 Letter Agreement, assuming the obligations of the 1985 Agreement, and thereafter reimbursing TDI for the costs relating to the Workers, CCR made a clear and definite promise to pay on which TDI reasonably relied. (Id. ¶¶ 71-78.)

         II. Defendant's Answer

         On July 22, 2016, CCR filed an Answer and Counterclaim. (Doc. No. 10 (“Answer”).) As relevant to the present motion, CCR raises the following defenses: (1) TDI has failed to state a claim on which relief may be granted; (2) TDI's claims are barred by merger; and (3) TDI is obligated to indemnify CCR for the liability alleged in the Complaint. (Id. at 1-2.)

         With respect to the 1985 Agreement, CCR “admits only that [it] was for the purpose of providing the services of mechanics employed by a predecessor of TDI at the Coca-Cola Bottling Midwest, Inc. location at 2750 Eagandale Boulevard, Eagan, Minnesota, ” but denies TDI's allegations suggesting CCR assumed the 1985 Agreement. (Id. ¶¶ 6, 10-11; Compl. ¶¶ 10-11.) CCR expressly “denies that it is obligated under the 1985 Agreement.” (Answer ¶ 14; see also Id. ¶¶ 17-22.) CCR also denies TDI's allegations relating to the 2001 Letter Agreement. (Answer ¶ 8; Compl. ¶ 8.)

         CCR denies that it was obligated to reimburse TDI for sums to pay for the Workers' wages and benefits, including amounts paid pursuant to a CBA. (Answer ¶ 15; Compl. ¶ 15.) Specifically, CCR denies TDI's allegations relating to the Pension Plan contributions and CCR's reimbursements. (Answer ¶¶ 26-29, 38-39; Compl. ¶¶ 26-29, 38-39.) CCR admits that it notified TDI that it was cancelling its services via the February 18, 2013 Termination Letter, but denies the effect of this termination on TDI's obligation to pay a withdrawal liability. (Answer ¶ 40; Compl. ¶ 40.)

         CCR admits it received a November 13, 2015 letter from TDI demanding reimbursement and that it began receiving invoices from TDI in January 2016. (Answer ¶¶ 53-54.) Further, CCR admits it has not paid any of these invoices, but specifically denies that it is obligated to do so. (Id. ¶ 55.) In short, “CCR denies that it has any obligation to reimburse TDI for any amount of the alleged [withdrawal liability], and further asserts that TDI is contractually obligated to indemnify CCR for any such alleged liability.” (Id. ¶ 58.)

         With respect to TDI's breach-of-contract claim, CCR denies that the 1985 Agreement is a valid and enforceable contract between the parties, denies any liability under its terms, and denies that its actions constitute a breach of contract. (Answer ¶¶ 60, 62, 65, Compl. ¶¶ 60, 62, 65.) CCR similarly denies Plaintiff's allegations under the promissory estoppel claim. (Answer ¶¶ 71-78; Compl. ¶¶ 71-78.)

         III. Defendant's Counterclaim

         CCR asserts a counterclaim for declaratory judgment, breach of contract, and promissory estoppel. (Answer ¶ 80.) CCR acknowledges that TDI's predecessor entered into the 1985 Agreement to provide mechanics services at the Coca-Cola Bottling Midwest, Inc. facility in Eagan, Minnesota. (Id. ¶ 84.) However, CCR alleges that on February 10, 2010, TDI's President, Ronald P. Formento, Sr. (“Formento”), entered into a new agreement on TDI's behalf entitled “Coca-Cola Enterprises Bottling Companies Services Agreement” (the “2010 Agreement”). (Id. ¶¶ 86, 88 & Ex. A (“2010 Agreement”).) According to CCR, the 2010 Agreement's subject matter “related to the provision of services of vehicle maintenance and repairs by TDI at the CCR affiliate location” in Eagan, Minnesota. (Id. ¶ 89.)

         The parties to the 2010 Agreement are identified as “Coca-Cola Enterprises Inc., [2]its divisions, subsidiaries and affiliates (‘Bottler') and Transport Drivers (‘Supplier or Contractor').” (Id. ¶ 86; 2010 Agreement at 1.) In its Counterclaim, CCR explains the corporate relationship between the relevant Coca-Cola entities as follows: “In 2010, The Coca-Cola Company acquired certain U.S. assets, agreements and liabilities of Coca-Cola Enterprises, Inc., including the facility located at 2750 Eagandale Boulevard, Eagan, Minnesota, and those assets are owned by CCR, which is a wholly-owned subsidiary of The Coca-Cola Company.” (Answer ¶ 87.)

         To support its Counterclaim, CCR identifies multiple relevant clauses in the 2010 Agreement. First, CCR points out the ...

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