Blue Package Delivery, LLC v. Express Messenger Systems, Inc.

Background

Blue Package Delivery, LLC contracted with Express Messenger Systems, Inc., doing business as OnTrac, for package-delivery services. The agreement required OnTrac to transport and deliver packages, provide electronic package information, and meet a service target requiring 100% of packages to be delivered to the United States Postal Service within two business days. It also required Blue Package to pay OnTrac’s charges within 15 days after receiving an invoice.

Blue Package alleged that OnTrac failed to meet the service target, improperly scanned packages, and lost or could not account for some packages. Blue Package stopped using OnTrac’s services in October 2016 and refused to pay nine invoices. Blue Package asserted claims for breach of contract, promissory estoppel, and negligence. OnTrac asserted counterclaims for breach of contract, account stated, and unjust enrichment, but sought summary judgment only on its breach-of-contract and account-stated counterclaims.

Summary-judgment standard

The court explained that summary judgment is proper when the evidence shows no genuine dispute about a material fact and the moving party is entitled to judgment as a matter of law. A genuine dispute exists when a reasonable jury could find for the nonmoving party. The court must view the evidence and reasonable inferences in favor of the nonmoving party.

Written-notice and waiver argument

OnTrac argued that Blue Package waived its claims because it did not submit them in writing within 180 days after accepting the shipments. The agreement said that claims involving damage, loss, or delay “may be submitted in writing” within that period.

The court rejected summary judgment on this issue. It concluded that the agreement’s language was ambiguous as to whether submitting written notice within 180 days was mandatory and whether failing to do so waived a legal claim. The court distinguished cases involving arbitration clauses, explaining that those cases did not establish that the word “may” created a waiver of legal claims in this setting. Blue Package also presented evidence that it sent written notices by email within 180 days, and OnTrac did not explain why those emails were insufficient. The motion for summary judgment on this basis was denied.

Blue Package’s breach-of-contract claim

The court denied summary judgment on Blue Package’s breach-of-contract claim. The agreement expressly treated failure to meet the 100% two-day delivery target as a material breach. Blue Package presented evidence that nearly 2,000 packages failed to meet that target, that some packages were lost or stolen, and that other packages were improperly scanned or not scanned. OnTrac conceded that at least 181 packages were lost, that the delivery status of at least four packages could not be determined, and that thousands of packages were not tendered to the Postal Service. The court found factual disputes about the exact number of packages that were not properly delivered.

The court also found factual disputes about damages. The agreement allowed certain damages for packages that were never delivered or were misshipped, including replacement value, postage, reshipping, and related administrative fees up to $100 per package. Blue Package presented package data, shipping charges, an estimated average package value, testimony from its president, testimony from Blue Package personnel, and a Postal Service billing statement. The court held that the law did not require mathematical precision and that disputes about the weight and credibility of this evidence were for a jury rather than the court to resolve. Summary judgment on the breach-of-contract claim was denied.

Promissory-estoppel and negligence claims

The court granted summary judgment to OnTrac on Blue Package’s promissory-estoppel claim. Under Minnesota law, equitable relief such as promissory estoppel is unavailable when a valid contract governs the parties’ rights and relationship. Blue Package did not dispute that a valid contract governed this relationship.

The court also granted summary judgment to OnTrac on the negligence claim. Blue Package alleged that OnTrac failed to perform its services competently and professionally. The court held that Minnesota law does not recognize a claim for negligent performance of a contract.

OnTrac’s breach-of-contract counterclaim

The court denied summary judgment on OnTrac’s breach-of-contract counterclaim concerning nine unpaid invoices totaling $49,914. The agreement required payment within 15 days after receipt of an invoice but also provided that payments would be based on proof-of-delivery scans and could be withheld if the required data was not received.

Blue Package presented evidence that at least two invoices were incorrect because they included packages that had been rerouted and never handled by OnTrac. It also presented evidence that OnTrac did not provide proof-of-delivery scan data for all invoiced packages. The court held that these facts created genuine disputes about whether Blue Package breached the agreement by refusing to pay the invoices.

OnTrac’s account-stated counterclaim

The court denied summary judgment on OnTrac’s account-stated counterclaim. An account-stated claim is an alternative way to establish liability for a debt based on the parties’ assent to the amount owed. The court held that such a claim cannot proceed when a written contract undisputedly governs the account. Here, the written agreement governed the dispute, and OnTrac sought the same recovery for the same alleged harm through both its breach-of-contract and account-stated counterclaims.

Disposition

The court ordered that OnTrac’s motion for summary judgment was granted in part as to Blue Package’s promissory-estoppel and negligence claims and denied in part in all other respects.