FILED U.S. COURT OF AP P EALS E LEV EN T HC IRC U IT JUNE 6, 2008 THOMAS K. KAH

N CLERK [ DO NO T P UB L I S H]

I N THE UN I TE D STATE S C OU RT OF APPE ALS F O R T H E E L E V E N T H C IR C U IT

________________________ N o. 07- 15496 N on -A rgum entC al endar

________________________ D . C . D ocketN o. 06 -003 51 -C V -F -E G .F . K E L L Y T R U C K I N G , I N C ., G U Y K E L L Y , in d iv id u a lly , P la in tif f s - A p p e lla n ts , v ersu s U .S . X P R E S S E N T E R P R I S E S , I N C ., D e f e n d a n t- A p p e lle e .

________________________ A pp ea l fr om the U ni t ed S t at es D i stri ctC ou rt f o rth e M i d d l e D i s tr i c to f A l ab a ma

_________________________ ( Ju n e 6, 2008) B efo re H U L L , M A R C U S an d W IL S O N , C i rcu i tJu d g es. P E R C U R I A M: P l a i nt i f f s - A ppe l l a nt s G . F . K e l l y T ruc ki ng, I nc . ( “ K e l l y T ruc ki ng” ) a nd G uy K e l l y appe a l the di s tr i c tc our t ’ s or de rgr a nt i ng s um m a ry j udgm e ntt o the2

D e f e nda nt - A ppe l l e e U . S . X pr e s s E nt e rpr i s e s , I nc . ( “ U S X ” ) on the i rc l a i m s of b r e a c h o f

c o n tr a c t , f

r a u d a n d s u p p r e s s i o n . A f t e rr e v i e w , w e a f

f i rm. I . B AC KG RO UN D D e f e nda ntU S X , atr a ns por t a t i on c orpor a t i on i n T e nne s s e e ne got i a t e d the p u r c h a s e o f

Ke l l y T ru c k i n g , as h o r t - h a u l tru c k i n g c o m p a n y i n Al ab a m a . On A u g u st8 , 2 0 0 5 , G u y K el l y, p resi d en to f K el l y T ru ck i n g , si g n ed an A ssetP u rch ase A g r e e m e n t ( “A P A ” ) in w h ic h , a m o n g o th e rth in g s , U S X a g r e e d to p u r c h a s e K e lly T ru c k in g ’s b o o k o f

b u s in e s s a n d c e r ta in e q u ip m e n t, in c lu d in g tr a c to r s a n d tr a ile r s . I n e x c h a n g e , K e lly T ru c k in g g a v e U S X a n e x c lu s iv e o p p o r tu n ity to h ir e its
e m pl oy e e dr i ve r s a nd c ontr a c tw i th i t s ow ne r/ ope r a t ordr i ve r s . K e l l y T ruc ki ng a gr e e d t o pr ovi de al i s tof i t s dr i ve r s , t o gi ve U S X a c c e s s t o i t s dr i ve r s ’ r e c or ds a nd t o “ prov i de al l re as on abl e c oo pera t i on and ass i st ance ” i n U S X ’ s a tt em pt s t o h i re K el l y T rucki ng ’ s dri vers . U S X , i n i t s s ol e di sc re t i on , deci ded w hether t o h i re ea ch K el l y T rucki ng dri ver. A s ac o n d itio n to c lo s in g , th e A P A p r o v id e d th a t U S X : ( 1 ) w o u ld c o n d u c t a due di l i ge nc e i nve s t i ga t i on c onf i rm i ng K e l l y T ruc ki ng’ s bus i ne s s , a s s e t s a nd fi nanci al and l egal cond i t i on and (2) w as t o b e s at i sf i ed, i n i t s s ol e di sc re t i on , that K el l y T rucki ng had atl ea st13 0 d ri vers thatm etU S X qu al i fi ca t i on s f or hi ri ng , as fo l l o w s:The phra se “ClosingDate D rivers”is defined under the APA a s “employee drivers and 1 o wn er -o p er at o rs ” a s o f th e d at e o f c l o s i n g. 3 S e c tio n 3 .6 . C lo s in g D a te D r iv e r s . B u y e rs h a ll b e s a tis f ie d , in its s o le di s c r e t i on, tha tthe r e w i l l be a tl e a s tone hundr e d thi r ty ( 130) C l os i ng D a t e D r i ve r s tha tw i l l m e e tB uy e r ’ s qua l i f i c a t i ons f orhi r i ng. 1 T h e A P A al so req u i red th e p art i es t o “ co o p erat e an d u se th ei r reaso n ab l e b est ef fort s t o eval uat e a s prom pt l y a s pra ct i cabl e a l l of [K el l y T rucki ng ’ s] em pl oyee d r iv e r s a n d o w n e r - o p e r a to r s f o rp u rp o s e s o f

th e c o n d itio n s p e c if

ie d in S e c tio n 3 .6
ab o v e .” A s a d d itio n a l c lo s in g c o n d itio n s , U S X n e e d e d to b e s a tis f ie d , in its s o le di s c r e t i on, w i th the r e s ul t s of a n i ns pe c t i on of

the e qui pm e ntt o be tr a ns f e rr e d a nd
r e qui r e d K e l l y T ruc ki ng t o pr ovi de l i e n pa y of f l e tt e r s f r om l e nde r s f

i na nc i ng a ny of the tra nsfe rr ed equi pm entand a fac t ori ng payoff l ett er . D u r in g n e g o tia tio n s a n d th e d u e d ilig e n c e in v e s tig a tio n , D e n n is F a rn s w o r th of U S X tw i c e gua r a nt e e d t o G uy K e l l y tha tU S X w oul d pur c ha s e K e l l y T ruc ki ng a nd a s s ur e d K e l l y tha tthe s a l e w oul d c l os e on A ugus t29, 2005. O n A ugus t12, 2005, K e l l y T ruc ki ng s e ntU S X al i s tof 167 K e l l y T ruc ki ng dr i ve r s , f r om w hi c h the 130 C l os i ng D a t e D r i ve r s c oul d be f ound t o s a t i s f

y S e c t i on 3 . 6 o f th e A P A . K el l y T ru ck i n g al so g av e U S X access t o i t s d ri v ers’ reco rd s, a l though s om e f

i l e s w e r e i nc om pl e t e orm i s s i ng. A s pa r tof

i t s due di l i ge nc e , U S X c onduc t e d apr e l i m i na ry r e vi e w of the dr i ve r s ’ r e c or ds t o de t e rm i ne w he the ra tl e a s t130 dr i ve r s w oul d qua l i f y a s C l os i ng4

D a t e D r i ve r s . U S X de t e rm i ne d tha t27 dr i ve r s w e r e notqua l i f i e d, l e a vi ng 140 d r iv e r s w h o w e r e p o te n tia lly e lig ib le f o rh ir e b y U S X . O n A u g u s t 1 7 , 2 0 0 5 , a col or-c od ed l i stof the dri vers thati nd i ca t ed w hi ch dri vers w er e di squal i fi ed w as f orw a r de d t o K e l l y T ruc ki ng. O n A u g u s t 2 2 , 2 0 0 5 , U S X s e n t e m p lo y e e s f r o m its s a f

e ty d e p a r tm e n t to K el l y T ru ck i n g ’ s h o m e o ffi ce i n W ad l ey, A l ab am a t o co n d u ct , am o n g o th er th i n g s, a dri ver qual i fi ca t i on proces s. U S X ’ s dri ver qual i fi ca t i on proces s i ncl ud ed a r oad t e s t , drug t e s t i ng, c om pl e t i ng e m pl oy m e ntappl i c a t i ons a nd a tt e ndi ng a n or i e nt a t i on b y U S X ’s s a f

e ty d e p a r tm e n t to in tr o d u c e K e lly T ru c k in g d r iv e r s to U S X ’s s a f e ty p o lic ie s a n d p r o c e d u r e s . T o com pl et e the dri ver qual i fi ca t i on proces s, K el l y T rucki ng ’ s dri vers n eed ed t o b e p h ysi cal l y p resen t . C o n seq u en t l y, th e d ri v er q u al i fi cat i o n p ro cess w a s di s rupt i ve t o K e l l y T ruc ki ng’ s bus i ne s s . K e l l y T ruc ki ng de t e rm i ne d w hi c h of i t s dr i ve r s w e r e r out e d thr ough W a dl e y t o pa r t i c i pa t e i n the dr i ve rqua l i f i c a t i on proces s. T o m i ni m i ze the di srup t i on , K el l y T rucki ng di d n otrout e a l l of i t s dri vers throu gh W adl eyaton ce . Inst ea d, on A ug ust22 , K el l y T rucki ng rout ed
appr oxi m a t e l y 40% of

i t s dr i ve r s t o W a dl e y . A l though the dr i ve rqua l i f i c a t i on p r o c e s s w a s s u p p o s e d to ta k e o n ly o n e d a y , it d id n o t a n d s o m e o f K e lly T ruc ki ng’ s dr i ve r s w e r e s t i l l i n W a dl e y on A ugus t25.5

B e tw e e n A ugus t22 a nd A ugus t24, U S X pr oc e s s e d 95 K e l l y T ruc ki ng dri vers and d i squal i fi ed 29 of them
. Iti s und i sput ed that17 of the 29 dri vers di squal i fi ed du ri ng the dri ver qual i fi ca t i on proces s had al re ady bee n d i squal i fi ed du ri ng the dri vers ’ re cord revi ew . T hu s, i n add i t i on t o the 27 dri vers di squal i fi ed du ri ng the re cord revi ew , 12 other dri vers w er e di squal i fi ed du ri ng the dri ver qua l i f i c a t i on pr oc e s s , f

orat ot a l of

39 di s qua l i f

i e d dr i ve r s . T hi s l e f

t128 dr i ve r s f

or U S X t o eval uat e a nd tryt o h i re . Fe w e rd r i v e r s s h o w e d u p f o rth e d r i v e rq u a l i f

i c a t i o n p r o c e s s th a n U SX
e xpe c t e d. T he r e w a s s om e di s c us s i on be tw e e n U S X a nd K e l l y T ruc ki ng about cond uct i ng the dri ver qual i fi ca t i on proces s a tother K el l y T rucki ng l ocat i on s t o see d r i v e r s w h o w e r e u n ab l e t o b e r o u t e d th r o u g h W a d l e y ; h o w e v e r , U SX di s c ont i nue d the dr i ve rqua l i f i c a t i on pr oc e s s be f

or e tha tc oul d happe n. D u ri n g th e w eek o f A u g u st2 2 , 2 0 0 5 , K el l y T ru ck i n g l o st5 0 d ri v ers. T h ese dr i ve r s l e f

tK e l l y T ruc ki ng be c a us e the y l e a rne d dur i ng U S X ’ s dr i ve rqua l i f i c a t i on pr oc e s s tha tm a ny of

U S X ’ s s a f

e ty pol i c i e s a nd pr oc e dur e s w e r e m or e one r ous tha n thos e of

K e l l y T ruc ki ng. F ore xa m pl e , K e l l y T ruc ki ng r out e d dr i ve r s thr ough th e irh o m e c ity f

o rw e e k e n d s , b u t U S X d id n o t. U S X a ls o r e q u ir e d a ll tru c k s to have a gov erno r s o thattrucks c ou l d n otexce ed 67 m i l es per hou r a nd re qu i re d d r iv e r s to s to p a t s c a le s a n d lo g a ll s c a le a n df u e l s to p s . I t b e c a m e ap p a r e n t to6

U S X e m p lo y e e s c o n d u c tin g th e d r iv e rq u a lif ic a tio n p r o c e s s th a t m a n y o f K e lly T rucki ng ’ s dri vers w er e host i l e t o and un w i l l i ng t o com pl y w i th U S X ’ s pol i ci es a n d p r o c e d u r e s a n d th a t m a n y m ig h t n o t w o rk f o rU S X e v e n if

th e y q u a lif

ie d
. D uri ng a t el epho ne confere nce on A ug ust25 , these U S X em pl oyee s a dv i se d U S X ’ s s e ni orm a na ge m e nttha tthe y be l i e ve d U S X w oul d be unabl e t o qua l i f y the
r e q u ir e d 1 3 0 C lo s in g D a te D r iv e r s . I n a d d itio n , U S X le a rn e d th r o u g h ath ir d
- p a r ty e va l ua t i on tha tthe book va l ue on K e l l y T ruc ki ng’ s tr a c t or s a nd tr a i l e r s e qua l e d the de btout s t a ndi ng on the e qui pm e nt . F ur the rm or e , dur i ng aphy s i c a l i ns pe c t i on of
s om e of the tr a i l e r s c onduc t e d the w e e k of A ugus t22, U S X l e a rne d tha tthe tr a i l e r s ’ book va l ue e xc e e de d the i ra c tua l va l ue . T he i ns pe c t i on r e ve a l e d tha tm a ny of the tra i l er s had subst ant i al dam age a nd w er e notup t o U S X ’ s r oad spec i fi ca t i on s. F i nal l y, as of A ug ust25 , K el l y T rucki ng had n otprov i ded ei ther the l i en payoff l ett er s or the fa ct ori ng payoff l ett er . A lth o u g h se v er al co n d it io n s to clo sin g h ad n o t b ee n m et, U S X ’s det erm i nat i on thati tw ou l d b e unabl e t o fi nd 13 0 q ual i fi ed dri vers w as de t e rm i na t i ve . O n A ugus t25, U S X di s c ont i nue d i t s due di l i ge nc e e f f or t s a nd
s to p p e d th e d r iv e rq u a lif ic a tio n p r o c e s s , w h ic h w a s o n g o in g . U S X s e n t ale tte rto K e l l y s t a t i ng tha t“ pur s ua ntt o the t e rm s of the A s s e tP ur c ha s e A gr e e m e nt , w e ha ve de t e rm i ne d tha ti ti s noti n the pa r t i e s ’ be s ti nt e r e s tt o m ove f orw a r d w i th the7

p r o p o s e d b u s in e s s a rr a n g e m e n t.” A c c o r d in g to K e lly , A l H in g s t, aU S X r e p r e s e n ta tiv e , a ls o in f o rm e d K e lly in p e r s o n o n A u g u s t 2 5 th a t U S X w a s n o t g o in g to p u r c h a s e K e lly T ru c k in g ’s a s s e ts . H i ngs tt ol d K e l l y tha tU S X ha d “ bot c he d thi s w hol e de a l thr ough
m i sm anagem ent . ” H i ng stapol og i ze d t o K el l y a nd sa i d thati f he, H i ng st , had b ee n brou gh ti nt o the du e di l i gence i nv es t i gat i on ea rl i er(H i ng stbeca m e i nv ol ved w hen h e arri v ed i n W ad l ey o n A u g u st2 4 ), th e d eal w o u l d h av e cl o sed
. A ft er H i n g st in f o rm e d K e lly th a t th e d e a l w a s o f f , W illis C h ild e r s , th e s a f e ty d ir e c to ra t K e lly T rucki ng , ca l l ed the dri vers t og ether a nd anno un ce d thatthe deal had fal l en th ro u g h
. In resp o n se, th e d ri v ers ch eered an d w an t ed t o h u g C h i l d ers. D uri ng and aft erthe nego t i at i on s, K el l y T rucki ng l ostse vera l cl i ent s e i ther be c a us e the y di d notw a ntt o c ontr a c tw i th U S X orbe c a us e K e l l y T ruc ki ng no l onge rha d a de qua t e f

l e e tc apa c i ty a f

t e ri tha d l os ts o m a ny dr i ve r s . I n a ddi t i on, U S X em pl oyee s c on t ac t ed se vera l K el l y T rucki ng cl i ent s duri ng the du e di l i gence in v e s tig a tio n a n d to ld th e m th a t U S X w a s a c q u ir in g K e lly T ru c k in g . W h e n K e lly l e a rne d of

the c l i e ntc ont a c t , he a s ke d U S X nott o c ont a c thi s c l i e nt s unt i l a f t e rthe d e a l h a d c l o s e d
. Fi n a l l y , ab o u ttw o mo n th s a f t e rth e p u r c h a s e f

e l l th r o u g h , U SX offe re d t o h i re tw o K el l y T rucki ng dri vers w ho had b ee n rej ec t ed du ri ng the dri ver q u a lif ic a tio n p r o c e s s .We re view a dis tric t c ourt ’sgra

nt o f summ ary

judgment deno vo , a

pp lyingthesame 2 leg al standards used by

the district court. Sierra Club v. L eavitt, 488 F.3d 904, 911 ( 11th Cir. 20 07 ). Summary

judgment i s p roper when th ee videnc e , v iewe d in thelight m os t f

avo ra bleto the non-movingparty, presents no genuine issue of material fact and the movingparty is entitled to judgment a s a matter of law. Id. As a fe deral court sitting in diversity, we a pply the choiceof law r

ules of the f

orum 3 state, in this case, A labama. SeeGrupo Te levisa, S.A. v. Telemundo Comms. Group, Inc., 485 F.3d 1233, 1240 ( 11th Cir. 2007). Alabama law first looks to the contract to deter mine which 8 K el l y T rucki ng and G uy K el l y f i l ed thi s a ct i on i n A l abam a s t at e c ou rt
a l l e gi ng tha tU S X : ( 1) ha d br e a c he d the A P A by notc om pl e t i ng the pur c ha s e , ( 2) had fraudul ent l y r epre se nt ed thati tw ou l d cl ose on the pu rc hase , and (3) had
s u p p r e s s e d th e f

a c t th a t it w a s u s in g th e d u e d ilig e n c e p r o c e s s to s te a l K e lly T ru c k in g ’s c u s to m e r s a n d d r iv e r s a n d to d r iv e K e lly T ru c k in g o u t o f b u s in e s s . U S X r e m ove d the a c t i on t o f e de r a l c our tba s e d on di ve r s i ty j ur i s di c t i on a nd,
a f t e rd i s c o v e ry , mo v e d f

o rs u mma ry j u d g me n t . Th e d i s tr i c tc o u r tg r a n t e d U SX
s um m a ry j udgm e nton a l l c l a i m s . T hi s appe a l f ol l ow e d. I I . DI S CUS S I ON 2 A . B re ach of C on tr act T o est abl i sh a c l ai m of brea ch of contra ctun der T enness ee l aw , the pl ai nt i ff
m ustshow : (1) the exi st ence of an enforce abl e c on tra ct ; (2) non perf orm ance a m ount i ng t o abr e a c h of the c ontr a c t ; a nd ( 3) da m a ge s c a us e d by the br e a c h of the
c ontr a c t . A R C L i f

e M e d, I nc . v. A M C
- T e nne s s e e , I nc . , 183 S . W . 3d 1, 26 ( T e nn. C t . A pp. 2005)
. H ow e ve r , i f the c ontr a c tc ont a i ns ac ondi t i on pr e c e de nt , no 3law applies. Stovall v. Universal Constr. Co., Inc., 893 So.2d 1090, 1102 (Ala. 2004) . Here, the

APAprov ide s th at T enn e sse elaw g ov ern s it s c on str uc tio n a nd enf orc ement. Thus , w ea

pp ly Tenne ssee c ontrac t law. A “c ondition prece dent” under Tenne ssee law is “a c ondition which must be perfor med 4 be fo retheagre e ment o f t hepa rtie s sh all b e c omea

bindingc ontra c t”or

“ a c on dition

whic h mu st be fulfilled be forethe duty to perfor m an exist ing c ontrac t arises.”Strickland, 611 S.W .2d at 686. 9 liab ility a r is e s u n d e rth e c o n tr a c t u n til th e c o n d itio n p r e c e d e n t is f u lf ille d
. S tri ckl and v
. C i ty of L aw re nceburg, 61 1 S . W . 2d 83 2, 83 7 (T enn. C t . A pp . 19 80 ). 4 T enness ee l aw i m pl i es a duty of goo d fai th and fa i r dea l i ng i n every c o n tr a c t. W a lla c e v . N a t’l B a n k o f C o m m e r c e , 9 3 8 S .W .2 d 6 8 4 , 6 8 6 ( T e n n . 1 9 9 6 )
. W h e th e rap a r ty h a s a c te d in g o o d f a ith in p e r f

o rm in g th e te rm s o f

th e c o n tr a c t is ju d g e d “a g a in s t th e in te n t o f th e p a r tie s a s d e te rm in e d b y ar e a s o n ab le a n d f a ir construct i on of the l angu age of the i nstrum ent . ” I d. H ow ever , w here the contra ct pr ovi de s one pa r ty w i th the uni l a t e r a l e xe r c i s e of di s c r e t i on, the othe rpa r ty c a nnot re as on abl y e xp ec tthatdi sc re t i on no tt o b e e xerc i se d and “ [p] er form ance of a
c ontr a c ta c c or di ng t o i t s t e rm s c a nnotbe c ha r a c t e r i z e d a s ba d f a i th. ” I d. a t687 (co n cl u d i n g th atb an k ’ s rai si n g o f fees d i d n o tb reach th e d u ty o f b ad fai th b ecau se the contra ctgave the bank the un i l at er al di sc re t i on t o d o so). U n d e rth e A P A , U S X ’s o b lig a tio n to p u r c h a s e K e lly T ru c k in g ’s a s s e ts d id
n o t a r is e u n le s s S e c tio n 3 .6 , th e C lo s in g D a te D r iv e r s p r o v is io n , w a s f u lf ille d
. U nd erS ec t i on 3. 6, U S X needed t o b e s at i sf i ed, i n i t s s ol e di sc re t i on , thatthere10

w e r e a t le a s t 1 3 0 C lo s in g D a te D r iv e r s th a t m e t U S X ’s q u a lif ic a tio n s f o rh ir in g . T hus , U S X ’ s s a t i s f

a c t i on w i th r e ga r d t o the C l os i ng D a t e D r i ve r s w a s ac ondi t i on prec edentt o i t s duty t o p er form un der the A P A and, i f the cond i t i on prec edentw as n o tf u l f i l l e d , US X’ s f

a i l u r e t o p e r f

o rm wo u l d n o tc o n s t i tu t e ab r e a c h o f th e AP A. P l a i nt i f f s a r gue tha tthe y pr e s e nt e d e vi de nc e c r e a t i ng age nui ne i s s ue of
m at er i al fa ctas t o w hether U S X brea ched S ec t i on 7. 12 of the A P A , w hi ch re qu i re d th e p a r tie s to “c o o p e r a te a n d u s e r e a s o n ab le b e s t e f f o r ts ” to e v a lu a te K e lly T ru c k in g ’s d r iv e r s a s p r o m p tly a s p r a c tic ab le f o rth e p u rp o s e o f

th e c o n d itio n in S ec t i on 3. 6 and al so thatU S X brea ched the du ty of goo d fai th i n d et erm i ni ng that th e C lo s in g D a te D r iv e r s c o n d itio n c o u ld n o t b e m e t. P l a i nt i f f s poi ntt o e vi de nc e tha t , dur i ng the A ugus t22 dr i ve rqua l i f i c a t i on pr oc e s s , U S X e va l ua t e d 17 dr i ve r s i tha d a l r e a dy di s qua l i f i e d dur i ng the p r e lim in a ry r e v ie w o f

th e d r iv e r s ’ f

ile s . P la in tif

f s c o m p la in th a t U S X ’s s a f e ty d e p a r tme n te mp l o y e e s s e n tt o W a d l e y “ [ u ] n e x p l a i n ab l y . . . s p e n tv a l u ab l e t i me t a ki ng appl i c a t i ons , c onduc t i ng dr i vi ng t e s t s a nd drug t e s t s ” on the s e 17 a l r e a dy di s qua l i f i e d dr i ve r s . H ow e ve r , i ti s undi s put e d tha ti tw a s K e l l y T ruc ki ng, a nd not U S X , thatrout ed the dri vers throu gh W adl eyt o p art i ci pat e i n the dri ver qua l i f i c a t i on pr oc e s s a nd tha tK e l l y T ruc ki ng kne w the i de nt i ty of the a l r e a dy di squal i fi ed dri vers atthatt i m e. T here fore , thi s e vi dence does notsugg es tthatBa sed on these undisputed f acts, there also is no jury

issue as to whether the c ondition 5 pre c e dent ( Se c tio n 3 .6 Clo singDateDriver c on dition) to U SX’ s d uty to p erf or m under t heAPA was not met. See Strickland, 611 S.W.2d at 837. 11 U S X fa i l ed t o coo pera t e a nd use r ea sonabl e bes tef fort s t o eval uat e the dri vers p ro m p t l y. P l ai nt i ff s a l so em ph as i ze thatU S X had n otcom pl et ed the dri ver q u a lif ic a tio n p r o c e s s w h e n it d e c id e d n o t to g o th r o u g h w ith th e p u r c h a s e . P l a i nt i f f s not e tha tU S X ’ s H i ngs tt e s t i f i e d tha ta tthe t i m e he e xpe c t e d be tw e e n 60
a nd 100 a ddi t i ona l dr i ve r s t o s how by the e nd of the w e e k f

ore va l ua t i on. H ow e ve r , the undi s put e d f a c t s s how tha t , a s of

A ugus t25, K e l l y T ruc ki ng d id n o t h a v e e n o u g h d r iv e r s f r o m w h ic h U S X c o u ld f in d 1 3 0 C lo s in g D a te D r iv e r s . O f the ori gi nal po ol of 16 7 K el l y T rucki ng dri vers , 39 had al re ady bee n di squal i fi ed, l ea vi ng on l y 128 po t ent i al l y e l i gi bl e dri vers . E ven i f a l l 12 8 d ri vers w er e dee m ed qu al i fi ed t o U S X ’ s s at i sf ac t i on , K el l y T rucki ng st i l l w ou l d h ave been 2 d r iv e r s s h o r t o f

th e 1 3 0 n e e d e d to m e e t th e C lo s in g D a te D r iv e r s c o n d itio n . T h u s, i tw as n o tu n reaso n ab l e fo r U S X t o h al tth e d ri v er q u al i fi cat i o n p ro cess be f or e i tw a s c om pl e t e d. 5 F u r th e rm o r e , a lth o u g h H in g s t e s tim a te d th a t b e tw e e n 6 0 a n d 1 0 0 d r iv e r s s till
ne e de d t o be e va l ua t e d a s of A ugus t25, he di d nott e s t i f y tha tthe r e w e r e e nough d r iv e r s le f

t in th e p o o l to p e rm it U S X to f in d a t le a s t 1 3 0 q u a lif

ie d d r iv e r s .12

F ur the r , H i ngs tt e s t i f

i e d tha te ve n i f

130 dr i ve r s pa s s e d the dr i ve rqua l i f i c a t i on pr oc e s s , he be l i e ve d tha tm a ny of the m w oul d be unw i l l i ng t o w ork f orU S X a nd th ath e p assed th i s i n fo rm at i o n o n t o h i s su p eri o rs. F i na l l y , P l a i nt i f

f s poi ntt o K e l l y ’ s t e s t i m ony tha tH i ngs ta dm i tt e d t o hi m on A ug ust25 thatU S X had “ bo t ched the w ho l e dea l throu gh m i sm anagem ent . ” Al th o u g h Hi n g s td e n i e s m a k i n g th i s s t a t e m e n t , f o rs u m m a ry j u d g m e n tp u rp o s e s we m us tc ons true a l l f

a c t s i n f a vorof the pl a i nt i f

f s . H ow e ve r , thi s one c onc l us ory a nd
v a g u e s ta te m e n t is in s u f f ic ie n t to s u p p o r t aju ry f in d in g th a t U S X a c te d in b a d f a ith
orf a i l e d t o us e r e a s onabl e be s te f f or t s . S e e A l l e n v. T y s on F oods , 121 F . 3d 642, 646 ( 11th C i r . 1997) ( “ A m e r e ‘ s c i nt i l l a ’ of e vi de nc e s uppor t i ng the [ nonm ovi ng] party’ s posi t i on w i l l no tsuff i ce ; there m ustbe enou gh of a s ho w i ng thatthe j ury coul d rea sonabl y f

i nd for thatparty. ” ( qu ot at i on m arks om i tt ed))
. E ven i f H i ng stm ade the st at em ent , i ti s notsupp ort ed by any other e vi dence th at U S X d idn o t u se re as o n ab le b es t eff o rts to p ro m p tl y e v alu ate K elly T ru ck in g ’s dr i ve r s . K e l l y T ruc ki ng pr ovi de d f i l e s f ori t s 167 dr i ve r s on A ugus t9 a nd by A ug ust17 U S X had revi ew ed them al l and p rovi ded K el l y T rucki ng w i th a col orc o d e d c h a r ti n d i c a t i n g , a mo n g o th e rth i n g s , w h i c h d r i v e r s w e r e d i s q u a l i f i e d
. By A ug ust22 , U S X w as atK el l y T rucki ng ’ s W adl eyl ocat i on perf orm i ng i t s dri ver qua l i f i c a t i on pr oc e s s . W i thi n thr e e da y s i tbe c a m e appa r e nttha tU S X w oul d beAlabama choiceof law r

ules apply

the doctrineof lex loci delicti to t ort claims, which 6 means that the la

w of the statein which the injury occur red g overns the substantive rights of the injured par

ty . Colonial L ife &Acc ident Ins. Co. v. Hartford FireIns. Co., 358 F.3d 1306, 1308 (11th Cir. 2004). Here, bec ause thealleg ed fraudulent misrepresentations occurred in Alabama, we a pply Alabama law. 13 unabl e t o f

i nd the r e qui r e d 130 qua l i f i e d dr i ve r s f

r om the r e m a i ni ng pool of el i gi bl e dri vers . A tthatpo i nt , U S X i m m edi at el y i nform ed K el l y T rucki ng . G i ven the s e undi s put e d f

a c t s , H i ngs t ’ s s t a t e m e ntt o K e l l y doe s notc r e a t e age nui ne i s s ue o f m a te r ia l f

a c t a s to w h e th e rU S X f a ile d to u s e r e a s o n ab le b e s t e f f o r ts to e v a lu a te K el l y T rucki ng ’ s dri vers as prom pt l y a s pra ct i cabl e or w hether U S X ac t ed i n b ad fai th i n ev al u at i n g th e d ri v ers. B. Pr o m i s s o r y Fr a ud T o p ro v e a cl ai m o f p ro m i sso ry frau d u n d er A l ab am a l aw , th e p l ai n t i ff m u st show : “ (1) afa l se re pres ent at i on (2) of am at er i al exi st i ng fa ct(3) r ea sonabl y r el i ed upon by the pl a i nt i f

f ( 4) w ho s uf

f e r e d da m a ge a s apr oxi m a t e c ons e que nc e of the
m i s r e pr e s e nt a t i on . . . . ( 5) pr oof tha ta tthe t i m e of

the m i s r e pr e s e nt a t i on, the de f e nda ntha d the i nt e nt i on nott o pe r f orm the a c tpr om i s e d, a nd ( 6) pr oof tha tthe defe nd anthad an i nt entt o d ec ei ve. ” W addel l & R ee d, Inc. v. U ni t ed Invest ors L i fe Ins. C o. , 87 5 S o. 2d 11 43 , 11 60 (A l a. 20 03 ). 6 P l a i n t i f f s ’ p r o m i s s o ry f

r a u d c l a i m a r i s e s o u to f De n n i s F a rn s wo r th ’ s two a lle g e d v e rb a l g u a r a n te e s to G u y K e lly th a t U S X w o u ld p u r c h a s e K e lly T ru c k in g .14

Th e f i r s tt i me w a s o n J u l y 2 2 , 2 0 0 5 a tK e l l yTru c k i n g i n W a d l e y , b e f o r e th e A PA
w as si gn ed. H ow ever , thatst at em enton Jul y 22 w as m ade before the part i es e n t e r e d i n t o th e A PA . A n y p r e - c o n tr a c tg u a r a n t e e s Fa rn s w o r th ma d e th a tU SX
c oul d c l os e on the de a l w e r e vi t i a t e d by the A P A , w hi c h i m pos e d c ondi t i ons pr e c e de ntt o c l os i ng. S e e T y l e rv. E qui t abl e L i f e A s s ur a nc e S oc ’ y , 512 S o. 2d 55, 57 (A l a. 19 87 ) ( “ [F ] raud or m i sr epre se nt at i on ca nn otbe predi ca t ed up on a verbal st at em entm ade before exec ut i on of a w ri tt en contra ctw hen a prov i si on i n that contra ctcontra di ct s the verbal st at em ent . ”)
. T he se cond t i m e w as on A ug ust20 , 20 05 . K el l y had se ntF arnsw orth an
em ai l t el l i ng U S X t o ei ther “ pi ss or getoff the po t ” bec ause U S X had p ushed b ac k the or i gi na l c l os i ng da t e t a r ge tof J ul y 15 a nd K e l l y T ruc ki ng’ s c us t om e r s a nd dri vers w er e gett i ng nervou s. In re spon se , F arnsw orth cal l ed K el l y a nd apol og i ze d for the del ay s. F arnsw orth sai d, “ G uy, I guara nt ee you and prom i se you w e a re goi ng t o buy y ourc om pa ny ” a nd f ur the rpr om i s e d, “ w e a r e goi ng t o c l os e on A u g u s t th e 2 9 th .” F a rn s w o r th to ld K e lly th a t aU S X te a m w o u ld b e c o m in g to W a d le y o n A u g u s t 2 2 to “s ta r t th e p r o c e s s .” F a rn s w o r th a ls o to ld K e lly n o t to
w o rry ab o u t S e c tio n 3 .6 ’s C lo s in g D a te D r iv e r s c o n d itio n b e c a u s e “th e y w o u ld
w o rk o u t th e d e a l w ith th e d r iv e r s th r o u g h s a f e ty .” P l a i nt i f f s a r gue tha ti tw a s r e a s onabl e f orK e l l y t o be l i e ve , ba s e d on15

F a rns w or th’ s ve rba l a s s ur a nc e s , tha tthe C l os i ng D a t e D r i ve r s c ondi t i on i n S e c t i on 3. 6 o f the A P A had b ee n m etor w ou l d b e m etatcl osi ng . H ow ever , un der A l aba m al a w , ac ontr a c t i ng pa r ty c a nnota s am a tt e rof l a w r e a s onabl y r e l y on v e rb a l s ta te m e n ts th a t a r e in c o n s is te n t w ith th e w r itte n te rm s o f ac o n tr a c t. F orem ostIns. C o. v. P arham , 69 3 S o. 2d 40 9, 42 1 (A l a. 19 97 ). H er e, the w ri tt en t erm s i n S ec t i on 3. 6 o f the A P A expl i ci t l y s t at ed thatU S X had t o b e s at i sf i ed that the r e w e r e 130 C l os i ng D a t e D r i ve r s tha tw oul d m e e ti t s hi r i ng qua l i f i c a t i ons b e f o r e U SX w o u l d c l o s e o n th e p u r c h a s e o f K e l l y Tru c k i n g ’ s a s s e t s . Th e A PA al so i n cl u d ed a cl au se p ro h i b i t i n g an y o f i t s co n d i t i o n s fro m b ei n g w ai v ed v erb al l y, as fo l l o w s: S e c t i on 11. 6. A m e ndm e nt s . T hi s A gr e e m e nts ha l l notbe c ha nge d or t e rm i na t e d or a l l y a nd no w a i ve rof c om pl i a nc e w i th a ny pr ovi s i on or c ondi t i on he r e of

a nd no c ons e ntpr ovi de d f orhe r e i n s ha l l be e f

f e c t i ve u n le s s e v id e n c e d b y aw r itte n in s tru m e n t d u ly e x e c u te d b y th e p a r ty to be c ha r ge d the r e w i th. K el l y s i gn ed the A P A and i s pre sum ed t o h ave kno w n i t s c on t ent s. S ee M as se y A ut om ot i ve, Inc. v. N orri s, 89 5 S o. 2d 21 5, 21 8-20 (A l a. 20 04 ) ( expl ai ni ng that
w he n ac ontr a c t i ng pa r ty w ho i s abl e t o r e a d s i gns aw r i tt e n c ontr a c t , the contra ct i ng party i s bou nd by the contra ctand canno tre as on abl y r el y upo n v erbal st at em ent s thatar e i ncon si st entw i th the contra ct ’ s t erm s)
. M or e ove r , i ti s undi s put e d tha tU S X ha d notc om pl e t e d i t s e va l ua t i on ofOn appe al, Plaintiffs do not appea r to challeng e the district cour t’s summary

judgment 7 on the ir c laim o f f

ra ud ulent suppre ssi on . In a

ny e vent, weno tethat th at c laim f ailsfo r t hesame rea son that the promissory fra ud claim fails. S ee Crow der v. Memory Hill Gardens, Inc., 516 So.2d 602, 605 (Ala. 1987) ( stating that claims for both misrepre sentation and suppre ssion requirea showingof re asonablerelianc e). 16 K el l y T ru ck i n g ’ s d ri v ers w h en F arn sw o rth m ad e th e seco n d st at em en to n A u g u st 20. A ttha tt i m e , K e l l y kne w tha t27 dr i ve r s ha d be e n di s qua l i f i e d i n the p rel i m i n ary rev i ew o f th e d ri v ers’ fi l es an d th atth e d ri v er q u al i fi cat i o n p ro cess w o u ld b e g in a t th e W a d le y lo c a tio n tw o d a y s la te ro n A u g u s t 2 2 . A n d e v e n K e lly
s t a t e d tha tF a rns w or th t ol d hi m tha taU S X t e a m w a s c om i ng t o W a dl e y t o s t a r tthe dri ver qual i fi ca t i on proces s. T hu s, i tw as un re as on abl e f or K el l y t o b el i eve, base d on F a rns w or th’ s s t a t e m e nt s , tha tthe c ondi t i on ha d a l r e a dy be e n m e tortha tthe
c o n d itio n w o u ld n e c e s s a r ily b e m e t o rth a t th e c lo s in g w a s g u a r a n te e d
. F ur the rm or e , be c a us e the A P A e xpr e s s l y pr ovi de d tha tc ondi t i ons c oul d onl y be
w a i ve d i n w r i t i ng, K e l l y c oul d notha ve r e a s onabl y be l i e ve d ba s e d on F a rns w or th’ s s t a t e m e nt s tha tU S X w oul d buy K e l l y T ruc ki ng’ s a s s e t s e ve n i f the
c o n d itio n w a s n o t m e t. 7 F or these re as on s, the di stri ctcourtdi d n oterr i n g ra nt i ng sum m ary j u d g m en tt o U S X o n p l ai n t i ffs’ b reach o f co n tractan d frau d cl ai m s. AF F I RME D.