C & J DELIVERY, INC. v. Emery Air Freight Corp.

647 F. Supp. 867, 1986 U.S. Dist. LEXIS 17818
CourtDistrict Court, E.D. Missouri
DecidedNovember 12, 1986
Docket86-358C(1)
StatusPublished
Cited by5 cases

This text of 647 F. Supp. 867 (C & J DELIVERY, INC. v. Emery Air Freight Corp.) is published on Counsel Stack Legal Research, covering District Court, E.D. Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
C & J DELIVERY, INC. v. Emery Air Freight Corp., 647 F. Supp. 867, 1986 U.S. Dist. LEXIS 17818 (E.D. Mo. 1986).

Opinion

647 F.Supp. 867 (1986)

C & J DELIVERY, INC., Plaintiff,
v.
EMERY AIR FREIGHT CORP., Defendant.

No. 86-358C(1).

United States District Court, E.D. Missouri, E.D.

November 12, 1986.

*868 L. William Higley, Shifrin & Treiman, Clayton, Mo., for plaintiff.

Catherine D. Perry, Armstrong, Teasdale, Kramer & Vaughan, St. Louis, Mo., for defendant.

MEMORANDUM

NANGLE, Chief Judge.

This matter is now before the Court on defendant's motion for partial summary judgment. Defendant contends that, as a matter of law, the contractual relationship between Emery and C & J (1) was not a "franchise" as defined by Mo.Rev.Stat. § 407.400(1), and (2) was not a fiduciary relationship. The Court finds that defendant has not shown that the Emery and C & J relationship was not a "franchise". However, the Court finds that defendant has shown that, as a matter of law, the Emery and C & J relationship was not a fiduciary relationship. Therefore, defendant's motion for partial summary judgment is granted in part and denied in part. Celotex Corp. v. Catrett, ___ U.S. ___, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986).

Plaintiff C & J Delivery, Inc. filed a seven-count complaint against defendant Emery Air Freight Corp. alleging breach of contract, fraud, violation of the Missouri franchise statute, breach of fiduciary duty, and breach of an implied covenant of good faith and fair dealing. The complaint arises out of two package delivery contracts between Emery and C & J. Under the contracts, C & J delivered and picked-up packages for Emery in the St. Louis and Miami Metropolitan areas. In 1985, Emery terminated both contracts.

Count III of the complaint alleges that the St. Louis contract created a "franchise" as defined by Mo.Rev.Stat. § 407.400(1), and that Emery violated Mo.Rev.Stat. § 407.405 by terminating the "franchise" without giving the statutorily mandated 90 days' notice. Count VII claims that the St. Louis and Miami contracts created a fiduciary relationship between Emery and C & J, and that Emery breached its fiduciary duty to C & J by terminating the two contracts. Emery filed a motion for partial summary judgment, contending that, as a matter of law, (1) the St. Louis contract did not create a "franchise", and (2) the St. Louis and Miami contracts did not create a fiduciary relationship.

Facts

Emery is a nationwide package forwarding company. Emery transports the packages between cities. Emery runs a package facility at and/or near the airport in each city. In each city, Emery contracts with an independent local delivery company to pick-up and deliver the packages between customer locations in the city and Emery's airport facility.

In 1974, Emery and C & J executed the St. Louis contract at issue here. The contract principally provided that C & J would transport packages from Emery's package facility located near Lambert-St. Louis International Airport to the package recipient's location in St. Louis. Likewise, C & J would pick-up packages from consignors in St. Louis and transport the packages to Emery's package facility. C & J also transferred packages between airlines at Lambert-St. Louis Airport and performed terminal handling services. (Jenkins Affidavit, ¶ 3).

C & J purchased uniforms bearing the Emery logo from a manufacturer designated by Emery. C & J delivery personnel wore these uniforms bearing the Emery logo while delivering the Emery packages. These uniforms were the same for all delivery personnel delivering Emery packages nationwide. Business cards identified the C & J delivery personnel as representatives of Emery. C & J owned the delivery trucks used to deliver the Emery packages. Emery required that the delivery trucks be painted with the Emery logo according to Emery's specifications. The uniforms, the *869 business cards, and the trucks bore only the Emery logo. They did not refer to C & J. (Jenkins Affidavit, ¶ 4).

Essentially, pursuant to the contractual relationship between Emery and C & J, C & J delivery personnel, wearing uniforms bearing the Emery logo and driving trucks bearing the Emery logo, picked-up and delivered packages between St. Louis locations and Lambert-St. Louis Airport.

Emery billed package delivery customers directly and usually received payment directly from the customers. If a customer paid the C & J delivery personnel, C & J remitted that money to Emery. Emery paid C & J a fixed fee based on the size and/or weight of the package, the delivery location for the package, and the type of service performed by C & J with respect to the package.

Between 1974 and 1985, C & J and Emery negotiated annually over the terms of the contract. Each year the parties, among other things, adjusted the fee which Emery paid C & J per package to reflect C & J's increased costs. The 1974 St. Louis contract was three and one-half pages long. The May 1983 amendments were contained on six pages. The May 1983 Ninth Amended Schedule A, Part # 3, set forth C & J's specific duties under the contract on two pages.

On April 19, 1985, defendant, by written notice, terminated and cancelled the St. Louis contract without giving plaintiff 90 days' notice thereof.

The Missouri franchise statute, titled "Pyramid Sales Schemes," provides in pertinent part:

407.400. Definitions
As used in sections 407.400 to 407.420:
(1) "Franchise" means a written or oral arrangement for a definite or indefinite period, in which a person grants to another person a license to use a trade name, trademark, service mark, or related characteristic, and in which there is a community of interest in the marketing of goods or services at wholesale, retail, by lease, agreement, or otherwise ...; except that, the term "franchise" shall not apply to [sales from warehouses, etc.], nor shall the term "franchise" apply to a commercial relationship that does not contemplate the establishment or maintenance of a place of business within the state of Missouri. As used herein "place of business" means a fixed, geographical location at which goods, products or services are displayed or demonstrated for sale; ...

Mo.Rev.Stat. § 407.400(1).

407.405. [Pyramid Sales] — cancellation of franchise without notice prohibited, exceptions
... No person who has granted a franchise to another person shall cancel or otherwise terminate any such franchise agreement without notifying such person of the cancellation, termination or failure to renew in writing at least ninety days in advance of the cancellation, termination or failure to renew, except that when criminal misconduct, fraud, abandonment, bankruptcy or insolvency of the franchisee, or the giving of a no account or insufficient funds check is the basis or grounds for cancellation or termination, the ninety days' notice shall not be required.

Mo.Rev.Stat. § 407.405.

Defendant contends (1) that the franchise statute is not applicable to the 1974 St. Louis contract because the contract was entered into before the effective date of the statute; (2) that the St. Louis contract did not create a franchise under Mo.Rev. Stat. § 407.400; and (3) that the St. Louis and Miami contracts did not create a fiduciary relationship between Emery and C & J.

Summary Judgment

Under Rule 56

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Cite This Page — Counsel Stack

Bluebook (online)
647 F. Supp. 867, 1986 U.S. Dist. LEXIS 17818, Counsel Stack Legal Research, https://law.counselstack.com/opinion/c-j-delivery-inc-v-emery-air-freight-corp-moed-1986.