Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_05-cv-00505/USCOURTS-azd-2_05-cv-00505-0/pdf.json

Nature of Suit Code: 450
Nature of Suit: Interstate Commerce
Cause of Action: 

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Transport Factoring Associates, Inc., an

Arizona Corporation, 

Plaintiff, 

vs.

Textron Financial Corporation d.b.a.

Systran Financial Services Corporation, a

Delaware Corporation, 

Defendant. 

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No. CV 05-505 PHX NVW

ORDER

The court has considered Defendant's Motion For Summary Judgment (doc. # 33),

Defendant's Memorandum In Support Of Its Motion For Summary Judgment (doc. # 34),

Defendant's Statement Of Facts In Support Of Its Motion For Summary Judgment (doc. # 35)

("DSOF"), Plaintiff's Response To Defendant's Motion For Summary Judgment Pursuant To

49 U.S.C. Section 14705 (doc. # 49) ("Response"), Plaintiff's Motion To Strike All Of

Defendant's Statement Of Facts In Support Of Its Motion For Summary Judgment And

Organic Attachments Except For Appropriate Elements Of The Affidavit Of Cynthia Basolo

(doc. # 50) ("Motion To Strike"), Defendant's Memorandum In Opposition To Plaintiff's

Motion To Strike (doc. # 51), Defendant's Memorandum In Support Of Its Motion For

Summary Judgment (doc. # 52) ("Reply"), and Plaintiff's Surreply To Defendant's

Case 2:05-cv-00505-NVW Document 60 Filed 11/17/05 Page 1 of 8
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1

 Transport Factoring has not filed with its Response a separate statement of facts as

required by LRCiv 56.1.

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Constructive Reply In Support Of Its Motion For Summary Judgment (doc. # 54)

("Surreply"). 

Transport Factoring Associates ("Transport Factoring") brought this action for

declaratory relief and a "corresponding award of entitlement" to uncollected amounts of

earned motor carrier compensation. (Complaint at ¶ 1.) Transport Factoring sued Defendant

Textron Financial Corporation ("Textron"), the parent corporation of Systran Financial

Services Corporation ("Systran"), and the parties at this stage of the litigation are evidently

satisfied to attribute Systran's conduct to the defendant. Textron now moves for summary

judgment on the ground that Transport Factoring's claims are time-barred under the

limitations period in 49 U.S.C. § 14705(a). 

I. Motion To Strike 

As a preliminary matter, Transport Factoring has moved the court to strike a portion

of Textron's Statement of Facts. (Motion To Strike at 1.) In support of its Motion To Strike,

Transport Factoring has failed to provide a memorandum of points and authorities as required

by LRCiv 7.2(b). Although Transport Factoring argues in its Response that Textron's

Statement of Facts and organic attachments are "utterly immaterial" to the motion before the

court, the argument is not supported or explained in the Response or elsewhere. See

Response at 2. In any event, the court has not relied on irrelevant or immaterial facts in

Textron's filings in deciding Textron's Motion for Summary Judgment. Transport Factoring's

Motion To Strike is therefore denied.

II. Background

The underlying transactions that occasion this lawsuit involved three types of parties:

(1) shippers of goods, (2) a "brokerage company" called KC Express, and (3) carriers of

goods. (DSOF at ¶¶ 12-15.)1

 The shippers would enter into contracts with KC Express to

Case 2:05-cv-00505-NVW Document 60 Filed 11/17/05 Page 2 of 8
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ship, the carriers contracted with KC Express to carry the goods, and KC Express would

retain the difference between what the shippers agreed to pay it for carrying and what the

carriers agreed to accept from KC Express. (DSOF at ¶¶ 12-15.) Although referred to by

the parties as a "broker," KC Express contracted with shippers and carriers on its own behalf

and not as an agent of either. (DSOF at ¶¶ 12-19.) The contracts with shippers and carriers,

moreover, were separate; no express payment obligation was ever formed between the

shippers and carriers. (DSOF at ¶ 17.)

KC Express ceased operations in approximately December of 2002, leaving some

carriers unpaid for their services. (DSOF at ¶ 19.) Some of these unpaid carriers assigned

their rights to Transport Factoring, which brought this suit to collect the amounts owed.

(Complaint at ¶ 2.) 

While in business, KC Express entered into a factoring agreement with Systran.

(Response at 3.) Factoring is the process whereby a business sells or borrows against its

accounts receivable in order to obtain immediate cash flow rather than waiting until the

receivable is paid. (Basolo Aff. at ¶ 4.) KC Express factored its receivables to Systran by

an agreement dated September 18, 2002, under which Systran had recourse to KC Express

for any factored receivable not ultimately paid by the shipper. (Response at 3.) No motor

carrier objected to KC Express's factoring its receivables. (DSOF at ¶ 22.) Although not

apparent from the Complaint, it seems that before ending operations KC Express squandered

the money obtained from Systran on some purpose other than paying the carriers, leaving

both the carriers and Systran with substantial losses.

Transport Factoring's theory of liability against Textron, the parent corporation of KC

Express's lender, is unintelligible to this court. Rather than unravel and attack that theory,

Textron moves for summary judgment based on the statute of limitations in 49 U.S.C. §

14705, which states in relevant part:

49 U.S.C. § 14705. Limitations on actions by and against

carriers

Case 2:05-cv-00505-NVW Document 60 Filed 11/17/05 Page 3 of 8
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(a) In General.— A carrier providing transportation or service

subject to jurisdiction under chapter 135 must begin a civil

action to recover charges for transportation or service provided

by the carrier within 18 months after the claim accrues.

. . . 

(g) Accrual date.— A claim related to a shipment of property

accrues under this section on delivery or tender of delivery by

the carrier.

This court in turn addresses that defense.

Transport Factoring does not contest that the carriers whose rights Transport Factoring

represents were "subject to jurisdiction under chapter 135." (Complaint at ¶ 5.) Transport

Factoring furthermore does not contest that as the assignee of rights from various motor

carriers, Transport Factoring can claim no more rights than could the carriers. (Response at

5.) Nor does Transport Factoring contest Textron's calculation of the limitations period or

the conclusion that all of the relevant claims accrued more than eighteen months before the

filing of this action. Instead, Transport Factoring apparently argues (1) that the limitations

period is not applicable to suits against brokers and is therefore not applicable against

assignees of brokers, and (2) that its Complaint also included the claim— not barred by

section 14705— that Systran rendered portions of the relevant amounts uncollectible through

wrongful collection actions. (See Response at 3-5, 6.)

II. Applicability Of Section 14705 To Suits Against Brokers

Transport Factoring first argues that section 14705 is not applicable to suits against

brokers. (See Response at 3-5.) Textron is content to refute this proprosition without

disputing the characterization of KC Express as a broker. 

The plain language of the statute refutes Transport Factoring's argument. The "first

step in interpreting a statute is to determine whether the language at issue has a plain and

unambiguous meaning with regard to the particular dispute in the case." Robinson v. Shell

Oil Co., 519 U.S. 337, 340 (1997). Section 14705 provides that a "carrier providing

transportation or service . . . must begin a civil action to recover charges for transportation

or service provided by the carrier within 18 months after the claim accrues." 49 U.S.C. §

Case 2:05-cv-00505-NVW Document 60 Filed 11/17/05 Page 4 of 8
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14705. The language of 49 U.S.C. § 14705 is complete as it stands, restricting the time

period that a carrier may bring suit to recover its charges irrespective of the party against

whom the suit is brought. The provision makes no mention of who the defendant in such a

case may or must be. At least on its face, the provision applies to any action brought by a

carrier to collect its charges.

In interpreting the statute, the court should not add words to a statutory provision that

is complete as it stands. Burlington Northern R.R. Co. v. Okla. Tax Com'n, 481 U.S. 454,

463 (1987). "Unless exceptional circumstances dictate otherwise, when [a federal court

finds] the terms of a statute unambiguous, judicial inquiry is complete." Id. at 461 (citations

omitted). To exclude suits against brokers from the limitation of the statute would be to write

into the statute an exception not provided by Congress. The court will not add the words

"against a shipper" or "except when the suit is brought against a broker" to the statutory

language enacted by Congress. See id. at 463. Although Congress elsewhere has imposed

a surety bond requirement upon brokers but not upon shippers, that does not give rise to the

inference that the entire statutory framework was intended to favor shippers and disfavor

brokers as a general matter. Cf. Thompson v. Thompson, 484 U.S. 174, 182-83 (1988)

(refusing to imply a right of action in 28 U.S.C. § 1738A, one of the purposes of which was

to disincentivize non-custodial parents from child snatching from custodial parents); Cort v.

Ash, 422 U.S. 66, 80 (1975) (refusing to imply a right of action in 18 U.S.C. § 610 even

though the protection of private stockholders was one of the relevant motives behind the

legislation). Because Transport Factoring has presented no "exceptional circumstance"

dictating otherwise and because the terms of the statute are unambiguous, the court's inquiry

is complete.

The sparce cases interpreting Section 14705 tend to support this result. The court in

C.H. Robinson Co. v. Paris & Sons, Inc., 180 F. Supp. 2d 1002 (N.D. Iowa 2001), applied

section 14705 in a parallel factual context to dismiss claims brought by the carrier against

the consignor of goods. See id. at 1006. In deciding the "accrual date" of the cause of action,

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the court noted that the identical language of 14705(g) had been construed in other statutes

to "impose an absolute deadline on filing of a claim." Id. at 1008. The C.H. Robinson court

also relied on Wisconsin Bridge & Iron Co. v. Illinois Terminal Co., 88 F.2d 459, 462 (7th

Cir. 1937), which had applied a predecessor to section 14705 and stated that "the lapse of

time not only bars the remedy but also destroys the liability." In addition, Axinn & Sons

Lumber Co. v. Long Island R.R. Co., 466 F. Supp. 993, 1000 (E.D.N.Y. 1978), stated that the

predecessor to Section 14705 "must be read literally." Transport Factoring provides no

authority suggesting that section 14705 is not an absolute bar to recovery. 

III. Claim For Wrongful Collection Actions

Transport Factoring next argues that its case is not entirely barred by section 14705

because it has also sued based on Systran's "wrongful collection actions." (Response at 6-7.)

According to Transport Factoring, Systran's wrongful collection actions have rendered

uncollectible — presumably from shippers — certain portions of the relevant amounts to

which the carriers and now Transport Factoring are entitled. (Id.; Complaint at ¶ 10.) The

court understands Transport Factoring's "wrongful collection activities" claim as an

allegation of tortious interference with the rights of Transport Factoring to the earned

compensation. Transport Factoring apparently asserts that the carrier charges are merely a

measure of Transport Factoring's tort damages and the claim is therefore not one "to recover

charges" within the time limitation of section 14705(a). Transport Factoring provides no

support or explanation for this argument. The court need not decide, however, whether a tort

claim brought on such a theory would be covered by section 14705(a). 

Although this argument was first presented by Textron in its reply brief, Transport

Factoring has sought leave to file a Surreply. Plaintiff's Motion For Leave To File A

Surreply (doc. # 54-1) is hereby granted. The filing of the Surreply affords Transport

Factoring an opportunity to respond to the new argument and cures any prejudice from its

lateness. See Cedars-Sinai Med. Ctr. v. Shalala, 177 F.3d 1126, 1128 (9th Cir. 1999).

Case 2:05-cv-00505-NVW Document 60 Filed 11/17/05 Page 6 of 8
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Even if such a claim is not barred by the limitations period of section 14705, Textron

has otherwise shown that Transport Factoring's claim fails as a matter of law. The Brokerage

Agreement entered by the carriers and KC Express provided, "Under no circumstances will

CARRIER invoice the shipper or consignee, unless specific written authorization has been

so given by KC EXPRESS BROKERAGE, INC." (DSOF Ex. 11 at p. 26.) Transport

Factoring does not dispute the applicability or enforceability of this release and offers no

evidence that Transport Factoring retained any right against the shippers with which Textron

could have tortiously interfered. 

The carriers and Transport Factoring thus had no claim for the charges from the

shippers. Without such a right, Transport Factoring cannot meet the requirements for the tort

of conversion or of interference with property. See, e.g., Sterling Boat Co., Inc. v. Arizona

Marine, Inc., 134 Ariz. 55, 58, 653 P.2d 703, 706 (Ariz. App. 1982) (noting that

"[c]onversion results from conduct intended to affect property of another," or in other words,

from conduct performed with "an intent to exercise a dominion or control over the goods

which is in fact inconsistent with the plaintiff's rights"). Nor can Transport Factoring show

damages, a required element of the tort of interference with contractual relations. Wells

Fargo Bank v. Arizona Laborers, Teamsters & Cement Masons Local No. 395 Pension

Trust, 201 Ariz. 474, 493, 38 P.3d 12, 31 (2002). 

Moreover, the claim also appears to be barred by the Arizona statute of limitations.

See A.R.S. § 12-542; Clark v. Airesearch Mfg. Co. of Ariz., Inc., 138 Ariz. 240, 243-44

(1983) (holding that the two-year statute of limitations of A.R.S. § 12-542 applies to injury

to any kind of property, be it real, tangible, personal or intangible, and that it applies to

claims for wrongful interference with contract). Regardless of whether such a tort claim is

subject to section 14705, then, it does not survive Textron's motion for summary judgment.

IT IS THEREFORE ORDERED that:

1. Plaintiff's motion to strike defendant's statement of facts (doc. # 50) is denied.

2. Plaintiff's motion for leave to file a surreply (doc. # 54) is granted. 

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3. Plaintiff's motion to certify class (doc. # 29) is denied as moot.

4. Defendant's motion for summary judgment (doc. # 33) is granted. 

5. The clerk shall enter judgment in favor of Defendant Textron Financial

Corporation and that Plaintiff Transport Factoring Associates take nothing on

its complaint. The clerk is directed to terminate this action. 

6. All previously set hearings and conferences in this case are vacated. 

DATED this 16th day of November, 2005.

Case 2:05-cv-00505-NVW Document 60 Filed 11/17/05 Page 8 of 8