Filed 6/30/20 XPO Logistics Drayage v. Epson America CA2/1

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION ONE

XPO LOGISTICS DRAYAGE, LLC, et al.,

Plaintiffs and Appellants,

v.

EPSON AMERICA INC.,

Defendant and Respondent.

B298647

(Los Angeles County

Super. Ct. No. NC061524)

APPEAL from a judgment of the Superior Court of Los Angeles County, Michael P. Vicencia, Judge. Affirmed.

The Uthoff Law Corporation and Stephen M. Uthoff for Plaintiffs and Appellants.

Keesal, Young & Logan, Terry Ross and Joshua Norton for Defendant and Respondent.

____________________

Plaintiffs XPO Logistics Drayage, LLC and XPO Logistics Port Services, LLC (collectively, XPO) appeal from a judgment entered in favor of defendant Epson America, Inc. (Epson) after the trial court granted Epson’s motion for summary judgment. XPO challenges orders granting Epson’s motion for summary judgment, denying XPO’s motion for summary judgment, and sustaining Epson’s demurrer to certain causes of action. We affirm.

FACTUAL SUMMARY

Transoceanic shipping contracts can be categorized as container yard to container yard (CY/CY) contracts or container yard to door (CY/Door) contracts. Under a CY/CY contract, the ocean carrier is responsible for delivering cargo from a port of loading to a port of discharge and no farther; the consignee of the cargo is responsible for arranging transportation from the port of discharge to another place specified by the consignee. Under a CY/Door contract, by contrast, the ocean carrier is responsible for transporting the cargo from the port of loading to the consignee’s “door”; if necessary, the ocean carrier must use a third party motor carrier to deliver the cargo to the consignee. Under a CY/Door contract the consignee pays the ocean carrier an all-inclusive rate that covers the overland portion of the shipment as well as the transoceanic portion, and the ocean carrier pays the motor carrier for the overland portion.

In 2015 Epson solicited bids from ocean carriers for a CY/Door contract to transport its products from ports in Asia to its distribution centers in California and Indiana. In connection with that solicitation, Epson “vetted” and “nominated” two “preferred” motor carriers for the overland portion of the contract, one of which was XPO. Hanjin Shipping Co., Ltd. (Hanjin), bid for the Epson contract and selected XPO as the motor carrier for the inland deliveries. Epson awarded the contract to Hanjin. In acting as the overland motor carrier, XPO understood that it would make its deliveries for Epson under a CY/Door contract and would bill Hanjin for its services.

Hanjin began shipments under the Epson contract in May 2016. For each shipment, Epson paid Hanjin the all-inclusive amount due under the contract prior to the time the cargo reached the port of discharge in the United States. When the cargo containers arrived in the port, Hanjin issued work orders to XPO identifying the containers, providing delivery instructions, stating the price, and indicating that the work is provided under a CY/Door contract. XPO provided Epson with daily reports on the status and availability of Epson’s shipping containers. Epson issued delivery orders to XPO identifying the containers it wanted delivered, stating the delivery address, and noting: “BILL TO: HANJIN.” XPO then delivered the cargo to Epson’s distribution centers and issued a delivery receipt with the note: “BILL TO HANJIN SHIPPING.” XPO thereafter billed Hanjin for its services based on Hanjin’s work order.

On August 31, 2016, Hanjin commenced a proceeding in South Korea under that country’s Debtor Rehabilitation and Bankruptcy Act and ceased doing business. At that time, some of Epson’s cargo was on Hanjin ships and at ports in the United States.

After the bankruptcy proceeding commenced, Hanjin changed the bills of lading for its Epson shipments to a CY/CY basis. On September 2, 2016, XPO and Epson agreed that Epson would thereafter pay XPO to deliver Epson’s cargo that was in transit at the time Hanjin filed for bankruptcy. The parties refer to these deliveries as post-petition deliveries. Epson had paid XPO for these deliveries and XPO asserts no claim concerning them.

This litigation is concerned with the invoices XPO submitted to Hanjin for deliveries made prior to Hanjin’s bankruptcy—the pre petition deliveries. After Hanjin’s bankruptcy, XPO requested that Epson pay for the pre petition deliveries. Epson, which had previously paid Hanjin the all-inclusive payments for the pre petition deliveries, declined the request.

PROCEDURAL HISTORY

In February 2018, XPO filed its first amended complaint against Epson to recover the sum of the invoices for the pre-petition deliveries. XPO alleged causes of action for breach of written contract, breach of oral contract, breach of implied contract, “goods wares and services,” open book account, unjust enrichment, and quantum meruit.

Epson demurred to the first amended complaint. The court sustained the demurrer as to each cause of action other than those for breach of oral contract and for goods, wares, and services. The court granted XPO leave to amend as to the causes of action to which the demurrers were sustained.

In August 2018, XPO filed its second amended complaint alleging breach of oral contract and common counts for “Goods Wares and Services,” “Open Book Account,” and “Quantum Meruit.” (Boldface omitted.) XPO alleged that during the years 2015 through 2018 Epson had a pattern of conduct of requesting quotes from XPO for transportation services. XPO would provide quotes and Epson “would agree upon rates for specific services.” Epson would subsequently provide XPO with instructions for transporting Epson’s cargo. Epson “directed the movement of the cargo or was entitled to possession of the cargo.” For each shipment, XPO generated a delivery receipt or delivery memo, which constituted a bill of lading for moving Epson’s cargo, and an invoice for the shipment. XPO attached to the second amended complaint a list of the unpaid invoices for pre petition deliveries and samples of a delivery receipt and delivery memo.

Under the goods, wares, and services count, XPO further alleged that Epson “became indebted to [XPO] for goods wares and services performed by [XPO] for the benefit of [Epson] for the services as invoiced in [exhibits attached to the pleading], for which [Epson] is obligated to pay [XPO]. [¶] . . . Despite due demand, the sum of $692,732.00 is now due, owing and unpaid from [Epson] for said goods wares and services.”

Under the “quantum meruit” count, XPO alleged that Epson “has requested from [XPO] by words or conduct, that [XPO] perform services for the benefit of [Epson]. [¶] . . . [XPO] performed services as requested. [¶] . . . [Epson] has not paid [XPO] for the services. [¶] . . . [And] [t]he reasonable value of the services is $692,732.00.”

Epson filed an answer to the second amended complaint.

In October 2018, XPO and Epson filed cross-motions for summary judgment. Each filed objections to particular evidence submitted by the other.

On December 20, 2019, the court ruled on the parties’ objections, granted Epson’s motion for summary judgment, and denied XPO’s motion for summary judgment. XPO timely appealed.

DISCUSSION

A. Summary Judgment Motions

XPO challenges the court’s rulings granting Epson’s motion for summary judgment and denying its motion for summary judgment. We affirm the trial court’s ruling on Epson’s motion and, for that reason, the challenge to the ruling on XPO’s motion is moot. (See Auchmoody v. 911 Emergency Services (1989) 214 Cal.App.3d 1510, 1521.)

We review a trial court’s summary judgment ruling “de novo, liberally construing the evidence in support of the party opposing summary judgment and resolving doubts concerning the evidence in favor of that party.” (State of California v. Allstate Ins. Co. (2009) 45 Cal.4th 1008, 1017–1018.)

Summary judgment is proper when all the papers submitted on the motion show there are no triable issues of material fact and the moving party is entitled to judgment as a matter of law. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843; Code Civ. Proc., § 437c, subd. (c).) Epson, as a defendant moving for summary judgment “bears the burden of persuasion that ‘one or more elements of’ the ‘cause of action’ in question ‘cannot be established,’ or that ‘there is a complete defense’ thereto.” (Aguilar, supra, 25 Cal.4th at p. 850.)

1. Common Count for Services Performed

XPO alleges in its cause of action for “Goods Wares and Services” that Epson “became indebted to [XPO] for goods wares and services performed by [XPO] for the benefit of” Epson as shown by the invoices for its pre petition services; and Epson is obligated to pay, and has refused to pay, those invoices in the sum of $692,732.00. The cause of action is a form of indebitatus assumpsit common count. (See 4 Witkin, Cal. Procedure (5th ed. 2020) Pleading, § 557, pp. 685–686 & §§ 561–564, pp. 688 690; King, The Use of the Common Counts in California (1941) 14 So.Cal. L.Rev. 288, 290, fn. 10.)

Although the cause of action requires plaintiff to establish that the defendant is “indebted” to the plaintiff for the sum the plaintiff seeks, the debt need not be founded upon an express promise and does not depend upon evidence of contractual privity; rather, it arises from “such circumstances that in equity and good conscience,” the defendant ought to pay the plaintiff. (Philpott v. Superior Court (1934) 1 Cal.2d 512, 523.) Such circumstances exist when, for example, a defendant obtains the plaintiff’s money, goods, or services by mistake, pursuant to a contract that fails for lack of consideration, or by wrongful means such as fraud, theft, extortion, or undue influence. (Id. at pp. 518–523.)

But the common count for services performed is not limited to these situations. Our Supreme Court has explained that its jurisprudential relation, the common count of money had and received, may be maintained “ ‘wherever one person has received money which belongs to another, and which “in equity and good conscience,” or in other words, in justice and right, should be returned.’ ” (Mains v. City Title Ins. Co. (1949) 34 Cal.2d 580, 586.) This principle is easily adapted to a common count based, as here, on the performance of services: When one who has received the services of another and for “ ‘which “in equity and good conscience,” or in other words, in justice and right,’ ” the recipient should compensate the provider, the provider may assert a common count for services performed. (Ibid.) In determining whether equity and good conscience supports relief in a particular case, courts may consider “ ‘the equitable principle of preventing unjust enrichment.’ ” (Rubinstein v. Fakheri (2020) 49 Cal.App.5th 797, 810.)

Here, it is undisputed that Epson and Hanjin entered into a CY/Door contract whereby Epson agreed to pay an all-inclusive price for delivery of its goods through to Epson’s “door,” and Epson paid that price for each delivery that is the subject of this litigation. XPO was aware that it was hired to deliver Epson’s cargo pursuant to the Epson-Hanjin CY/Door contract and, accordingly, billed Hanjin, not Epson, for its services. Epson’s receipt of the pre petition deliveries was not due to a mistake by XPO or the result of wrongdoing by Epson. Nor was Epson unjustly enriched under the circumstances; it paid for each delivery and received no more than what it had bargained for. Indeed, if XPO’s argument was accepted and Epson had to pay XPO the sums that Hanjin owed to it, Epson would be paying twice for the same service, which, under the circumstances of this case, would be inequitable.

Two federal cases involving multiparty shipping arrangements provide guidance. In Jackson Rapid Del. Serv. v. Thomson Consumer Elec. (N.D.Ill. 2001) 210 F.Supp.2d 949 (Jackson), the owner of goods (Thomson) contracted with a transportation broker (Myers) who, in turn, contracted with motor carriers to transport Thomson’s goods. Thomson paid Myers what Myers was due under their contract. Myers, however, did not pay the motor carriers. The motor carriers sued Thomson for breach of contract and quantum meruit, a common count. The District Court granted Thomson’s motion for summary judgment. After disposing of the carrier’s contract claims, the court rejected the common counts, stating: “We agree with [the motor carriers] that Thomson was benefitted by the motor carriers’ transportation of Thomson’s goods. We do not agree, however, that Thomson was unjustly enriched. The uncontroverted evidence . . . show that Thomson paid Myers in full for transporting the shipments at issue. Even though Myers never fulfilled its financial responsibility to the motor carriers, equity would not be served by requiring Thomson to pay twice for the same service.” (Id. at pp. 954–955.)

In EF Operating Corp. v. American Bldgs. (3d Cir. 1993) 993 F.2d 1046 (EF Operating), consignees of certain goods paid a supplier (Tex Ark) to ship the goods to them. Tex Ark hired a carrier (EF) to make the deliveries, which EF completed. EF then requested payment from Tex Ark. Tex Ark refused to pay, then filed for bankruptcy protection. EF then sued the consignees to recover the unpaid sums. Based upon the bills of lading covering the deliveries, which indicated that the charges had been “prepaid,” the court determined that the consignees had paid Tex Ark for the deliveries and that EF “knew and understood that the consignees had paid the charges; and it expected payment from Tex Ark, and not the consignees.” (Id. at p. 1050.) The consignees were thus entitled to summary judgment. “The rationale is simple,” the Third Circuit stated: “if the consignee has performed its purchase agreement in good faith by paying the shipper for freight charges, and if the carrier knows this and acknowledges the payment by marking the bill of lading ‘prepaid,’ the carrier is then estopped from forcing an innocent consignee to pay twice for services rendered only once.” (Id. at p. 1051.)

Epson is in the position of Thomson in Jackson and of the innocent consignees in EF Operating. Each had done no wrong—the plaintiff’s claims arose from the third party’s failure to pay—and imposing an obligation on the consignee to pay the plaintiffs would unfairly require them to pay twice for services rendered only once.

XPO asserts that there is a “bedrock rule” in the shipping industry that “the carrier gets paid,” even if it means that the cargo owner has to pay twice for a single delivery. The rule apparently originated in Exel Transp. Services, Inc. v. CSX Lines LLC (S.D.Tex. 2003) 280 F.Supp.2d 617 (Exel). In Exel, Marriott hired a “freight forwarder” (Exel), which contracted with Cab Logistics, which hired CSX Lines to transport Marriott’s cargo to a location in Hawaii. CSX delivered the cargo and billed Marriott directly “because it understood that Marriott was ultimately responsible for payment.” (Id. at p. 618.) Indeed, “CSX’s tariff—which the invoice incorporate[d]—ma[de] the shipper, consignee, holder of the bill of lading, and owner of the goods jointly and severally liable for payment. Marriott was listed as both the owner and consignee on the invoices.” (Ibid.) The District Court ruled that both Marriott and Exel were liable for CSX’s charges. Although the court acknowledged that “[i]t is superficially unfair that Exel and Marriott must pay for the shipments twice,” “[t]he bedrock rule of carriage cases is that, absent malfeasance, the carrier gets paid.” (Id. at p. 619.)

Significantly, although “[s]hippers are usually liable for payments,” the Exel court stated that “the parties can reallocate this responsibility either explicitly by agreement or implicitly through their actions.” (Exel, supra, 280 F.Supp.2d at p. 618) In the case before it, there was no reallocation. Indeed, “[t]he bill of lading and CSX’s tariff made the shipper and consignee liable no matter what their relationship with the carrier.” (Id. at p. 619.) Moreover, Marriott had been informed that Cab Logistics “was not paying its bills,” and Marriott was therefore “negligent in not investigating the problem.” (Ibid.)

Exel is distinguishable on its facts. Even if the shipper is usually liable for payments to a carrier, the CY/Door contract between Epson and Hanjin, XPO’s awareness of that contract, and XPO’s understanding that it was to look to Hanjin for payment effectively allocated to Hanjin sole responsibility for payment. And unlike Exel, there is no tariff, bill of lading, or other evidence that made Epson “liable no matter what”; indeed, the work orders from Hanjin to XPO, the delivery orders from Epson to XPO, XPO’s delivery receipts and invoices indicate that the parties understood that Hanjin, not Epson, was obligated to pay XPO.

Further distinguishing the instant case from Exel is the absence of any negligence on Epson’s part. Indeed, if a party was negligent here, it was XPO. Although XPO’s invoices to Hanjin had been unpaid for weeks or months prior to Hanjin’s bankruptcy, it does not appear that anyone at XPO raised the matter with Epson, which may have been able to use its business relationship with Hanjin to get XPO’s invoices paid. As an Epson representative informed an XPO account executive after the bankruptcy: “If you were having problems with collection on these invoices[,] you should have contacted us directly so we could have taken action to insure Hanjin payment to XPO.”

Oak Harbor Freight Lines, Inc. v. Sears Roebuck (9th Cir. 2008) 513 F.3d 949 (Oak Harbor), upon which XPO also relies, is similarly distinguishable. In that case, Sears employed a broker, which employed the carrier. Sears was the consignee with respect to some shipments and the consignor with respect to other shipments. When the broker did not pay the carrier, the carrier sued the broker and Sears. The court held that both defendants were liable to the carrier. As a consignor, Sears failed to mark their bills of lading, “nonrecourse,” which, under applicable industry standards, meant that Sears would be liable to the carrier for its fees. (Id. at p. 955.) As a consignee, Sears was liable for the carrier’s charges “[b]ecause the bills of lading were marked ‘collect’—not ‘prepaid’ ” (ibid.), “which put Sears on notice that payment was due” (id. at p. 960). In contrast to the facts in Oak Harbor, the facts in this case show that all parties understood that Epson had a CY/Door contract and had made all-inclusive payments to Hanjin and that Hanjin was solely responsible for payment to XPO.

XPO also points to undisputed facts concerning Epson’s vetting of XPO in connection with nominating XPO as a “preferred” trucker, Epson’s solicitation of bids from ocean carriers, Epson’s decision to contract on a CY/Door basis, Epson’s awareness that Hanjin would need to rely on a third party overland carrier, Epson’s use of delivery orders to XPO, Epson’s requirement that XPO provide daily cargo tracking reports, and Epson’s control over the timing of deliveries. According to XPO, if it failed to fulfill Epson’s requirements, it would have lost its designation as a preferred trucker. XPO does not explain, however, how such facts give rise to an obligation for Epson, “in equity and good conscience,” to pay for deliveries that all parties understood were Hanjin’s obligation.

Based on the foregoing and our review of the evidence in support of and in opposition to Epson’s motion for summary judgment, there is no triable issue of material fact as to whether Epson, in equity and good conscience, owes to XPO any payment for XPO’s pre petition deliveries to Epson. Therefore, Epson has established that it is entitled to judgment in its favor on this claim as a matter of law.

2. Quantum Meruit

In its quantum meruit cause of action, XPO alleges that Epson requested that XPO perform services for Epson’s benefit, XPO performed the requested services, Epson has not paid XPO for the services, and the “reasonable value of the services is $692,732.00.” As XPO points out, its cause of action for quantum meruit is not identical to its common count for services; although both have roots in the common law action of assumpsit, the latter seeks the reasonable value of the services the plaintiff provided to the defendant, not the recovery of a debt for a certain sum. (Jogani v. Superior Court (2008) 165 Cal.App.4th 901, 906–907; 1 Corbin on Contracts (2019) § 1.18[2], pp. 73–74; 4 Witkin, Cal. Procedure, supra, Pleading, § 566, p. 692.)

Although XPO did not refer to unjust enrichment as its theory for quantum meruit relief, it relies on that ground in its briefs on appeal. As explained in the preceding section, XPO cannot establish that Epson was unjustly enriched by XPO’s deliveries of its cargo. Epson was therefore entitled to judgment as a matter of law on this count.

3. Evidentiary Objections

XPO challenges the court’s order overruling certain of its objections to Epson’s evidence in connection with the Epson’s motion for summary judgment. XPO, however, merely sets forth the objections in its opening brief and concludes that “[i]t was error for the court to overrule the objections.” We are not “required to consider alleged error where the appellant merely complains of it without pertinent argument.” (Berger v. Godden (1985) 163 Cal.App.3d 1113, 1119; see also Atchley v. City of Fresno (1984) 151 Cal.App.3d 635, 647 [point raised in an appellate brief without argument or legal support “is deemed to be without foundation and requires no discussion by the reviewing court”].) Because XPO asserts no argument for this point, we decline to consider it.

XPO also contends that the court erred in sustaining Epson’s objections to three statements made in a declaration by Gary Patten, an account manager for XPO. The first is: “Ms. Sallee approved those rates.” Ms. Sallee was a logistics and customs manager with Epson with whom Patten negotiated for XPO’s status as a preferred trucker. The rates Patten asserts Sallee approved are XPO’s proposed rates for deliveries to Epson’s distribution centers in California and Indiana.

The second statement is: “On the date of the Hanjin [bankruptcy] filing, XPO was owed for unpaid invoices for services provided to deliver the pre-petition shipments to Epson.” The third is Patten’s statement: “I never waived any demand to have Epson pay XPO for these pre petition shipments, including, but not limited to, at any time I was negotiating with Ms. Sallee to provide services to Epson post-petition.”

As to each statement, XPO sets forth Epson’s objections to the statements and XPO’s responses to the objections filed below. XPO concludes by stating: “Where this court, in its de novo review [of the summary judgment rulings], deems the above contested evidence as necessary and material to its ruling, XPO prays the court reverse the rulings made by the trial court as identified.” (Italics omitted.) This request suffers from the same deficiency as XPO’s challenge to the order overruling its objections—it makes no cogent argument supporting the request. We therefore do not consider these points.

B. Order Sustaining Demurrer to First Amended Complaint

XPO contends that the court erred in sustaining Epson’s demurrer to its causes of action for breach of written contract and breach of implied contract.

We review a ruling sustaining a demurrer de novo to determine whether the complaint “alleges facts sufficient to state a cause of action under any legal theory.” (Aguilera v. Heiman (2009) 174 Cal.App.4th 590, 595.) “ ‘We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.’ ” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)

“To state a cause of action for breach of contract, a party must plead the existence of a contract, his or her performance of the contract or excuse for nonperformance, the defendant’s breach and resulting damage. [Citation.] If the action is based on alleged breach of a written contract, the terms must be set out verbatim in the body of the complaint or a copy of the written agreement must be attached and incorporated by reference.” (Harris v. Rudin, Richman & Appel (1999) 74 Cal.App.4th 299, 307.)

In its first amended complaint, XPO alleged that it provided “transportation and services . . . pursuant to written contract(s) as evidenced and memorialized in, the agreed upon freight quotes, invoices, the bills of lading, delivery receipts, delivery memos as identified [in the pleading], and [XPO’s] applicable tariff.” The references elsewhere in the pleading to quotes, invoices, et cetera, are vague and general, and do not include the terms of an agreement. The documents attached to the complaint—XPO’s list of invoices, a delivery receipt, and delivery memo—do not constitute an agreement.

More specifically, the list of invoices is merely XPO’s internally created spreadsheet summarizing its invoices for the pre petition deliveries and is, at most, evidence that it had performed services pursuant to an agreement with someone; it does not constitute a written agreement with Epson. The attached delivery receipt is issued by XPO and reflects a delivery of cargo to Epson as consignee. It states, however, that the invoice for the delivery is to be “BILL[ED] TO HANJIN SHIPPING.” Thus, to the extent it reflects an agreement at all, it reflects an agreement with Hanjin, not Epson. The delivery memo merely reflects the loading of a particular container at a particular port destined for an Epson distribution center; it does not include any words of promise or other consideration by Epson. Whether viewed individually or collectively, the attachments to the first amended complaint do not constitute a written contract between XPO and Epson. The court did not, therefore, err in sustaining Epson’s demurrer to that cause of action.

The court appears to have sustained the demurrer to the cause of action for implied contract on the ground that it was duplicative of XPO’s cause of action for breach of oral contract and the common count for services performed, both of which survived Epson’s demurrer. Our review, however, is not confined to the court’s reasons; we review the court’s ruling, not its rationale. (Walgreen Co. v. City and County of San Francisco (2010) 185 Cal.App.4th 424, 433; Sackett v. Wyatt (1973) 32 Cal.App.3d 592, 598, fn. 2.)

XPO contends that it stated sufficient facts to support an implied contract by alleging that “XPO had a pattern of conduct whereby the parties would agree upon a rate; cargo would be tendered to XPO by Epson, XPO would perform the service and XPO has not been paid for the service.” Omitted from the allegations, however, are facts implying a promise by Epson to pay XPO. Even if the fact that “XPO has not been paid for the service” implies that someone had the obligation to pay XPO, it does not imply that Epson had the obligation to pay XPO. The allegations do not, therefore, state a cause of action for breach of implied contract and the court did not err in sustaining the demurrer to this cause of action.

DISPOSITION

The judgment is affirmed. Epson is entitled to recover its costs on appeal.

NOT TO BE PUBLISHED.

ROTHSCHILD, P. J.

We concur:

BENDIX, J.

WHITE, J.*