Court Opinion

ID: 4665400
Source: CourtListenerOpinion
Date Created: 2021-03-05 21:04:03.510521+00
Date Added: 2024-06-11T08:02:42.698884
License: Public Domain

2021 IL App (3d) 190489

                                 Opinion filed March 4, 2021
      ____________________________________________________________________________

                                                    IN THE

                                    APPELLATE COURT OF ILLINOIS

                                              THIRD DISTRICT

                                                      2021

      QUALITY TRANSPORTATION SERVICES, )           Appeal from the Circuit Court
      INC., an Illinois Corporation,         )     of the Thirteenth Judicial Circuit,
                                             )     La Salle County, Illinois.
              Plaintiff-Appellant,           )
                                             )
              v.                             )     Appeal No. 3-19-0489
                                             )     Circuit No. 2015-L-114
      MARK THOMPSON TRUCKING, INC.,          )
      an Illinois Corporation,               )
                                             )     The Honorable
              Defendant-Appellee.            )     Eugene P. Daugherity,
                                             )     Judge, presiding.
      ____________________________________________________________________________

            PRESIDING JUSTICE McDADE delivered the judgment of the court, with opinion.
            Justices O’Brien and Schmidt concurred in the judgment and opinion.
      ____________________________________________________________________________

                                                 OPINION

¶1          In this second appeal from a case involving a contract dispute arising from the language

     of a transportation brokerage agreement, plaintiff, Quality Transportation Services, Inc. (QTS),

     contends that the trial court erred by finding that defendant, Mark Thompson Trucking, Inc.

     (MTT), did not violate the nonsolicitation clause of their agreement. QTS argues that MTT,

     through the agency of Mark Thompson, breached the clause by submitting trucking rates to a

     client of QTS, even though it was the client that requested said rates. We affirm the trial court’s

     judgment.
¶2                                            I. BACKGROUND

¶3           This case returns to us after the trial court ruled for the defendant following a bench trial.

     The terms of the agreement provided that QTS, a broker licensed by the Federal Motor Carrier

     Safety Administration, hired MTT, a registered carrier, to provide transportation services to

     QTS’s customers. The agreement contained a nonsolicitation provision, which stated in relevant

     part:

                     “CARRIER will not solicit traffic from any [s]hipper, consignor,

              consignee, or customer of Broker where (1) the availability of such traffic first

              become[s] known to CARRIER as a result of BROKER’s efforts, or (2) the

              traffic of the shipper, consignor, consignee or Customer of BROKER was first

              tendered to CARRIER by BROKER. If CARRIER breaches this Agreement

              and directly or indirectly solicits traffic from customers of BROKER and

              obtains traffic from such customer during the term of this Agreement or for

              twelve (12) months thereafter, CARRIER shall be obligated to pay BROKER,

              for a period of fifteen (15) months thereafter, commission in the amount of

              thirty-five percent (35%) of the transportation revenue resulting from traffic

              transported for the Customer, and CARRIER shall provide BROKER with all

              documentation requested by BROKER to verify such transportation revenue.”

¶4           Pursuant to the agreement, MTT began providing trucking services for US Silica

     Company (USS), one of QTS’s customers. MTT provided motor carrier services for USS from

     its Ottawa and Utica facilities to its Rochelle facility.

¶5           On February 10, 2015, USS regional logistics manager Janice Casey called Thompson to

     know if MTT was interested in working for USS. Casey attended high school with Thompson,

                                                        2
     but they were not socially acquainted. Her intention in calling Thompson was “to hire trucks”

     and thus initiated the process of negotiating with MTT by approaching Thompson and requesting

     that he provides rates. In the negotiating process of the trucking industry, the shipper (in this case

     USS) would request a bid from the carrier (MTT in this case); if the bid is accepted, a contract is

     formed; but if the bid is refused, the carrier has an opportunity to submit further bids until the

     parties either reach an agreement or end the negotiation.

¶6          On February 11, 2015, Casey met Thompson and discussed rate proposals for

     transportation from USS’s Utica facility to its Peru and Rochelle facilities. On February 12,

     2015, Casey called Thompson seeking rates on the Utica to Peru route. Thompson submitted a

     bid for the Utica to Peru route for $3.73 per ton; USS rejected his bid. On August 5, 2015,

     Thompson submitted another bid for the same route at $3 per ton; USS accepted this bid. On

     August 7, 2015, MTT began hauling on the Utica to Peru route.

¶7          On February 13, 2015, MTT submitted a bid for the Utica to Rochelle route in the

     amount for $8.59 per ton. Casey approached MTT with a counteroffer, and MTT submitted a

     lower bid of $7.75 per ton on March 3, 2015. That bid was rejected, and MTT submitted a third

     bid of $7.50 per ton on June 16, 2015, which was accepted. On June 18, 2015, MTT began

     hauling for USS on the Utica to Rochelle route.

¶8          During the period of bidding and rebidding, Thompson did not tell Casey that he was

     under contract with QTS. He did not ask Casey about routes that he had hauled for QTS under

     the agreement nor did he refuse to submit his bids upon her request.

¶9          On June 16, 2015, Thompson texted QTS dispatcher saying that he “quit.” On June 17,

     2015, Kevin Kuntz—QTS’s president—became aware that MTT was hauling directly for USS

     when another driver saw Thompson at USS Utica hauling to Rochelle. Kuntz and Thompson met

                                                       3
       on June 22, 2015. Kuntz reminded Thompson that MTT was under contract with QTS and that

       QTS had given MTT work from USS. Thompson said he remembered he had signed a contract

       and told Kuntz to “sue him.” The two met again on June 26, 2015, when Thompson told Kuntz

       “it was his time to go out on his own and not work through a broker anymore.” Kuntz told

       Thompson he could do whatever he wanted, just “don’t take our lanes.” Thompson responded he

       had decided to go out on his own, that MTT was going to haul for USS, and that QTS could sue

       him. QTS filed suit for breach of the nonsolicitation clause. On June 29, 2015, QTS received a

       letter from MTT terminating their agreement.

¶ 10          QTS filed a complaint alleging that MTT breached the nonsolicitation clause. After

       discovery, the parties filed cross-motions for summary judgment. The trial court granted MTT’s

       motion for summary judgment. On appeal, this court reversed the trial court’s decision. Quality

       Transportation Services, Inc. v. Mark Thompson Trucking, Inc., 2017 IL App (3d) 160761, ¶ 1.

       We concluded that there was a genuine issue of material fact as to whether MTT breached the

       nonsolicitation clause because “reasonable minds may differ as to whether MTT’s multiple and

       arguably separate contacts with USS violated the nonsolicitation provision of the agreement

       between QTS and MTT.” Id. ¶ 29. We explained that “[w]hile the facts are not contested, these

       facts could logically support different conclusions regarding MTT’s intent to solicit business

       away from QTS for the same routes that MTT was covering for QTS as part of the agreement.”
Id. We also concluded that the nonsolicitation clause was not an improper restrictive covenant

       and could be enforced against MTT. Id. ¶ 32.

¶ 11          On remand, the trial court held a bench trial where Janice Casey testified regarding the

       bidding and rebidding between MTT and USS. The parties also submitted briefs and points of

       argument on the issue of solicitation.

                                                       4
¶ 12          On July 26, 2019, the trial court issued a written order finding that “[t]he overall context

       of [the] fact pattern is that U.S. Silica, in the person of Janice Casey, initiated the opening

       negotiations by her telephone call and meeting with [MTT] soliciting his bids.” The court then

       found that after USS rejected MTT’s initial bids, Thompson “had no further contact with U.S.

       Silica until again being requested by Janice Casey to reduce his prior bid.” Finally, the court

       found that Casey continued to phone Thompson “a couple of times a week during April and May

       2015 encouraging him to refigure and resubmit his bids.” The court explained:

                      “The court determines as a factual matter, this pattern consisted of a

                negotiation process. Each bid submitted by MTT was not a discrete act unto

                itself but rather a necessary step in the overall negotiation leading to the

                ultimate contract. Each submission by MTT was a direct response to a specific

                request from USS, not an unsolicited request for work initiated by MTT.”

       The trial court also concluded that the gap in time between Casey’s initiating call and the final

       bid acceptance did not end the bargaining between the parties. Thus, the court held that “in the

       context of the overall negotiation process [that] as a matter of fact [Thompson and MTT] did not

       solicit U.S. Silica and therefore did not breach the non-solicitation agreement.”

¶ 13          QTS appeals this decision.

¶ 14                                              II. ANALYSIS

¶ 15          In this appeal, QTS argues that the trial court erred in finding that MTT did not breach

       the nonsolicitation clause of the agreement. QTS contends that (1) this court should apply a

       de novo standard of review to the trial court’s judgment, (2) the trial court did not apply our prior

       ruling of law to the facts of this case, and (3) MTT violated the nonsolicitation clause. We reject

       each of QTS’s contentions and affirm the trial court’s judgment.

                                                         5
¶ 16          QTS argues that a de novo standard of review should apply to the trial court’s judgment

       because it involved an issue of contract interpretation. We disagree. To “the extent that we are

       called upon to interpret the contract between the parties, a question of law, we will apply a

       de novo standard of review.” International Supply Co. v. Campbell, 391 Ill. App. 3d 439, 448

       (2009). But, where the trial court’s ruling involves factual findings, we will not reverse those

       findings unless they are against the manifest weight of the evidence. Id. at 447-48.

¶ 17          Here, the trial court’s ruling involves factual findings. The court concluded that the

       sequence of bid and rebid created a factual pattern indicative of a negotiation process between

       the USS and MTT, initiated by USS. The trial court considered this pattern in reaching its

       judgment. In so doing, the trial court specifically made several factual findings from the trial

       testimony. We will not reverse those findings unless they are against the manifest weight of the

       evidence. Id.

¶ 18          Despite the trial court’s findings, QTS argues that a de novo standard of review is

       appropriate because the trial court failed to apply our ruling in the prior appeal in this case. We

       disagree. In the prior appeal, we remanded the case for a fact-intensive inquiry to resolve the

       genuine issue of material fact underlying our reversal of summary judgment in favor of MTT.

       Quality Transportation Services, Inc., 2017 IL App (3d) 160761, ¶ 29. We noted that the facts of

       the case, as presented in the cross-motions for summary judgment, “could logically support

       different conclusions regarding MTT’s intent to solicit business away from QTS for the same

       routes that MTT was covering for QTS as part of the agreement.” Id. Thus, we ruled that “simply

       because MTT did not initiate the very first conversation with USS does not support an automatic

       conclusion that MTT’s subsequent communications with USS can never rise to the level of

       solicitation.” Id. ¶ 28. Our ruling and reasoning relied on the fact that the subsequent

                                                         6
       conversations between Thompson and Janice Casey were “arguably initiated by MTT after large

       gaps of time that followed Casey’s initial phone call.” (Emphasis added.) Id. ¶ 29.

¶ 19          The trial court’s findings resolved those doubts. The trial court found that after USS

       rejected MTT’s initial bids, Thompson “had no further contact with U.S. Silica until again being

       requested by Janice Casey to reduce his prior bid.” There is nothing in the record from which to

       conclude that this finding was against the manifest weight of the evidence. The evidence at trial

       showed that after a bid was rejected, Thompson only submitted a new bid if Casey requested

       one.

¶ 20          In response, QTS argues that the trial court’s judgment incorrectly defined solicitation

       based on which party initiated each bid submission. QTS contends that each bid Thompson

       submitted, regardless of whether he did so in response to Casey’s requests, was an effort to

       solicit business from USS. We do not agree.

¶ 21          “Whether a particular client contact constitutes a solicitation depends upon the method

       employed and the intent of the solicitor to target a specific client in need of his services.” Tomei

       v. Tomei, 235 Ill. App. 3d 166, 170 (1992). Thompson submitted each bid to Casey only after she

       had requested that he did so. Thus, we cannot conclude that Thompson targeted USS with his

       bidding. In fact, the record shows that when USS rejected a bid, Thompson did not rebid or

       reinitiate contact with Casey unless—and until—she requested a new bid. Instead, we conclude

       that USS sought to obtain favorable transportation fees by directly negotiating and developing

       business opportunities with MTT.

¶ 22          Nonetheless, QTS contends that Casey clarified her requests for bids were not offers and

       that she did not have the authority to make offers. QTS also contends that Casey was simply

                                                         7
       inquiring about MTT’s rates—nothing more. QTS thus argues that, in responding to Casey’s

       inquiries, Thompson and MTT made “an attempt or effort to obtain business” from USS.

¶ 23           We reject this argument because it imposes an unreasonable restraint of trade on

       Thompson and MTT that goes beyond the scope of the nonsolicitation clause. An agreement

       restricting competition between parties “is reasonable only if the [agreement]: (1) is no greater

       than is required for the protection of a legitimate business interest ***; (2) does not impose

       undue hardship on the [promisor], and (3) is not injurious to the public.” Reliable Fire

       Equipment Co. v. Arredondo, 2011 IL 111871, ¶ 17. In the prior appeal, we concluded that the

       clause was a valid restrictive covenant between the parties, in part, because it was “narrowly

       tailored to protect but not exceed QTS’s legitimate business interest.” Quality Transportation

       Services, Inc., 2017 IL App (3d) 160761, ¶ 32. In so doing, we found that the “agreement allows

       MTT to accept unsolicited business from USS.” Id. QTS’s argument asks us to remove MTT’s

       ability to do so.

¶ 24           Under QTS’s understanding, Thompson would have to either ignore or reject all inquiry

       from prospective clients even when he did nothing to initiate the inquiries. This obligation would

       place an undue burden on Thompson’s livelihood because of the limited geographical scope and

       the nature of MTT’s services, regardless of the limited duration of the clause. Thompson

       provides trucking services in the western central Illinois area and would inevitably have

       competing interests with QTS, which provides brokerage for those services in the same market.

       While QTS may protect its legitimate business interest by prohibiting MTT from “taking

       affirmative measures” to obtain business away from QTS, it cannot prohibit MTT from

       developing prospective business opportunity that came their way through no fault of theirs. To

       hold otherwise would be contrary to public policy.

                                                        8
¶ 25          We further note that the interpretation of the nonsolicitation clause urged by QTS also

       restrains USS from actively soliciting in its own best business interests. USS appears to be

       attempting to reduce its business expenses by negotiating reduced rates while maintaining its ties

       with a trucking company with which it has an existing and presumably satisfactory working

       relationship.

¶ 26                                          III. CONCLUSION

¶ 27          The judgment of the circuit court of La Salle County is affirmed.

¶ 28          Affirmed.

                                                       9
                                  No. 3-19-0489

Cite as:                 Quality Transportation Services, Inc. v. Mark Thompson Trucking,
                         Inc., 2021 IL App (3d) 190489

Decision Under Review:   Appeal from the Circuit Court of La Salle County, No. 2015-L-
                         114; the Hon. Eugene P. Daugherity, Judge, presiding.

Attorneys                William R. Kohlhase and Katherine L. Swise, of Miller, Hall
for                      & Triggs, LLC, of Peoria, for appellant.
Appellant:

Attorneys                Christopher Keleher, of Keleher Appellate Law Group, LLC, of
for                      Chicago, for appellee.
Appellee:

                                        10