Beruflich Dokumente
Kultur Dokumente
)
iDrive Logistics, LLC ) MEMORANDUM IN SUPPORT OF
) MOTION FOR PARTIAL
Plaintiff,
) SUMMARY JUDGMENT ON
vs. ) INTEGRACORE’S FIRST
) COUNTERCLAIM (BREACH OF
IntegraCore, LLC ) CONTRACT) AND SECOND
) COUNTERCLAIM (BREACH OF
Defendant. ) COVENANT OF GOOD FAITH AND
) FAIR DEALING)
)
) Civil No. 130400386
Judge: Fred D. Howard
Counterclaim (Breach of Contract) and Second Counterclaim (Breach of Covenant of Good Faith
INTRODUCTION ................................................................................................................................. 1
STATEMENT OF UNDISPUTED MATERIAL FACTS .................................................................... 2
I. PRIOR AGREEMENTS BETWEEN iDRIVE AND INTEGRACORE. ................................ 2
II. THE 2011 PRICING OPTIMIZATION AND SERVICE AGREEMENT. ............................ 3
III. IDRIVE PERFORMED SERVICES PURSUANT TO THE 2011 AGREEMENT. ............... 5
A. iDrive assisted IntegraCore in identifying and hiring Thad Haderlie. .......................... 6
B. iDrive collected and analyzed IntegraCore’s carrier agreements and parcel data........ 6
C. iDrive provided IntegraCore input on negotiation parameters with UPS and FedEx. . 8
D. iDrive implemented and executed auditing services of IntegraCore’s carrier invoices. 9
E. iDrive moved all IntegraCore USPS shipments from Commercial Plus Pricing to
iDrive USPS contract, which resulted in savings to IntegraCore. ................................ 10
F. iDrive communicated with FedEx, requesting new rates in 2009, but was rejected in
those attempts because IntegraCore’s Federal Express volumes did not merit a new
agreement with FedEx. .................................................................................................. 12
G. iDrive sent an RFP (request for proposal) to UPS in May of 2001. ............................. 13
H. iDrive coordinated its optimization efforts with IntegraCore employee Thad Haderlie,
including several meetings at Mr. Haderlie’s office at IntegraCore. ........................... 17
IV. INTEGRACORE BREACHED THE 2011 AGREEMENT IN OCTOBER, 2011 BY
NEGOTIATING AND EXECUTING THE 2011 UPS AGREEMENT IN SECRET. .......... 19
A. iDrive attempted to communicate with IntegraCore about the status of UPS
negotiations in early October, 2011............................................................................... 19
B. Ms. Trujillo testified that the October 2011 UPS Agreement came about as a result of
a request from Mr. Haderlie. ........................................................................................ 20
C. Mr. Haderlie testified that, under the direction of IntegraCore President Ted Broman,
he requested a new UPS agreement in late October, 2011. .......................................... 21
D. In contrast, Mr. Broman testified that: 1) he had no knowledge of any negotiations
between IntegraCore and UPS in 2011; 2) he is unaware of any 2011 agreement
between UPS and IntegraCore, and 3) the only person he has ever authorized to
negotiate with UPS was Steve Chase. ............................................................................ 22
ii
E. IntegraCore admits that it never informed iDrive of the 2011 UPS agreement, and has
never paid iDrive 38% of the savings achieved by the 2011 UPS agreement............... 23
V. INTEGRACORE AFFIRMED THE ENFORCEABILITY OF THE AGREEMENT, EVEN
AFTER ENTERING INTO THE 2011 UPS AGREEMENT. ............................................... 24
ARGUMENT ....................................................................................................................................... 25
I. THE PLAIN LANGUAGE OF THE 2011 AGREEMENT FORECLOSES
INTEGRACORE’S FIRST AND SECOND COUNTERCLAIMS. ...................................... 26
II. INTEGRACORE’S CLAIMS ARE BARRED BY ITS OWN PRIOR BREACHES OF THE
2011 AGREEMENT. .............................................................................................................. 27
III. AS OF OCTOBER, 2011, IDRIVE HAD EITHER PERFORMED UNDER THE 2011
AGREEMENT, OR WAS IN THE PROCESS OF PERFORMING AS REQUIRED BY
THE 2011 AGREEMENT. ..................................................................................................... 28
IV. INTEGRACORE IS BARRED FROM ARGUING THAT IDRIVE BREACHED THE 2011
AGREEMENT PRIOR TO OCTOBER, 2011. ...................................................................... 31
CONCLUSION.................................................................................................................................... 34
iii
TABLE OF AUTHORITIES
Cases
Acosta v. Dist. Bd. of Trustees of Miami, Dade Comm. Coll., 905 So. 2d 226, 228-29 (Fla. Dist. Ct. App.
2005) ................................................................................................................................................. 32
Angelos v. First Interstate Bank, 671 P.2d 772, 777 (Utah 1983)............................................................ 33
B.R. Woodward Marketing, Inc. v. Collins Food Service, Inc., 754 P.2d 99, 103-104 (Utah App. 1988) . 33
Blaisdell v. Dentrix Dental Sys., Inc., 284 P.3d 616, 622 (Utah 2012) .................................................... 26
Boswell v. United States, 123 F.2d 213, 215 (5th Cir. 1941) .................................................................... 32
CCD, Inc. v. Millsap, 116 P.3d 366, 373 (Utah 2005) ............................................................................ 27
Cross v. Olsen, 303 P.3d 1030, 1036 (Utah App. 2013).......................................................................... 27
H.B. Zachry Co. v. The Traveler’s Indemnity Co., 391 F.2d 43, 48 (5th Cir. 1968) .................................. 32
Henry v. Masson, 333 S.W.3d 825, 840 (Tex. App. 2010) ...................................................................... 32
Jackson v. Rich, 28 Utah 2d 134, 499 P.2d 279, 280 (1972) ................................................................... 27
Martin v. Maldonado, 572 P.2d 763, 769-70 (Alaska 1977) ................................................................... 32
Mathis v. DCR Mortg. III, 952 F. Supp. 2d 828, (W.D. Tex. 2013) ........................................................ 32
Morris v. Mountain States Tel. & Tel. Co., 658 P.2d 1199, 1201 (Utah 1983) ........................................ 25
Mortenson v. Financial Growth, Inc., 456 P.2d 181, 183 (Utah 1969) .................................................... 28
Orvis v. Johnson, 2008 UT 2 (Utah 2008) .............................................................................................. 25
Redd v. Hill, 2013 UT 35, ¶ 14 .............................................................................................................. 25
Russ v. Woodside Homes, Inc., 905 P.2d 901, 907 (Utah App. 1995)...................................................... 26
Shaw Resources Limited, L.L.C. v. Pruitt, Gushee & Bachtell, P.C., 142 P.3d 560, 571 (Utah App. 2006)
.......................................................................................................................................................... 33
Sohayegh v. Oberlander, 155 A.D. 436, 438 (N.Y. App. Div. 1989) ...................................................... 32
Whitney v. Perry, 208 A.D. 2d 1025, 1026 (N.Y App. Div. 1994) .......................................................... 32
iv
INTRODUCTION
Plaintiff iDrive Logistics, LLC (“iDrive”) is a company that assists clients reduce
transportation expenses with small parcel carriers, i.e. Federal Express (“FedEx”), the United
Parcel Service, Inc. (“UPS”), and the United States Postal Service (“USPS”). Defendant
On January 13, 2011, iDrive and IntegraCore entered into a contract captioned “Pricing
Optimization and Audit Service Agreement” (the “2011 Agreement.”). In this action,
IntegraCore has asserted a counterclaim for breach of the 2011 Agreement and for breach of the
covenant of good faith and fair dealing arising from the 2011 Agreement. IntegraCore’s claims
fail as a matter of law for at least the following reasons: 1) the express terms of the Agreement
foreclose IntegraCore from asserting any damage claim against iDrive; 2) IntegraCore breached
the 2011 Agreement in October 2011, relieving iDrive of further performance under the 2011
Agreement; 3) by October 2011, iDrive had either performed, or was in the process of
performing under the 2011 Agreement; and 4) IntegraCore has waived any breach of the 2011
Agreement by continuing to accept iDrive’s performance under the 2011 Agreement until
August, 2013.
For these reasons, set forth more fully below, the Court should dismiss IntegraCore’s first
Page 1 of 36
STATEMENT OF UNDISPUTED MATERIAL FACTS 1
As set forth below, the contract at issue is unambiguous as to the obligations relevant to
this motion. IntegraCore’s stated counterclaims are all premised upon an alleged lack of
performance by iDrive. As such, the majority of the facts presented below are to substantiate
LLC (“IntegraCore”) entered into an optimization agreement (the “2009 Agreement”). See
Deposition of Ted Broman (“Broman Depo.”), relevant portions attached hereto as Exhibit 1, at
23: 18-25.
2. A dispute arose under the 2009 Agreement, in which IntegraCore took the
position that iDrive was not entitled to payment for optimization services because iDrive “did not
perform at all.” See id. at 23: 18-25, 27: 15-23, 29: 3-6.
3. To resolve that dispute, on February 16, 2010, iDrive and IntegraCore executed
another agreement titled Pricing Optimization and Audit Service Agreement, dated February 10,
1
All exhibits referred to in this Memorandum and in the concurrently filed Memorandum in
Support of Motion for Partial Summary Judgment Regarding Breach of Contract and Breach of
Covenant of Good Faith and Fair Dealing Arising from IntegraCore’s October, 2011 UPS
Agreement are contained in a separately filed pleading entitled “Exhibits Referred to in the
Memorandum in Support of Motion for Partial Summary Judgment Regarding Breach of
Contract and Breach of Covenant of Good Faith and Fair Dealing Arising from IntegraCore’s
October, 2011 UPS Agreement and Memorandum In Support Of Motion for Partial Summary
Judgment on IntegraCore’s First Counterclaim (Breach of Contract) and Second Counterclaim
(Breach of Covenant of Good Faith and Fair Dealing)”, filed concurrently herewith.
Page 2 of 36
2010 (the “2010 Agreement”), attached hereto as Exhibit 2. See Broman Depo. (Exhibit 1) at
29: 3-22.
compensation under the 2010 Agreement, with iDrive again claiming compensation for services
rendered, and IntegraCore asserting that iDrive had again failed to “do anything” under the 2010
Agreement, and was, therefore, not entitled to compensation. See Broman Depo. at 29: 3-22.
5. To settle the dispute over the 2010 Agreement, on January 13, 2011, Plaintiff
iDrive Logistics, LLC (“iDrive”) and Defendant IntegraCore, LLC (“IntegraCore”) entered into
an agreement titled Pricing Optimization and Audit Service Agreement (the “2011 Agreement”).
See 2011 Agreement, attached hereto as Exhibit 3; Broman Depo. (Exhibit 1), at 29:3-22.
6. As relevant to the instant motion, the 2011 Agreement imposes the following
obligations on IntegraCore: 1) the 2011 Agreement gives iDrive authority to “manage the
process, on CUSTOMER’s behalf;” 2) the 2011 Agreement requires that “[a]ll significant
logistics decisions will flow through iDrive for review;” and the 2011 Agreement provides that
“IntegraCore is obligated to notify iDrive of any changes to Carrier(s) contract or terms and
conditions, sixty (60) days prior to implementation.” See 2011 Agreement (Exhibit 3) at ¶ 1(a)
and (c); see also Broman Depo. (Exhibit 1), at 58: 5-12.
Page 3 of 36
7. If IntegraCore renegotiates any carrier contract within the three year term of the
2011 Agreement, for three years from the date such new carrier agreement is executed, then
IntegraCore is required to pay iDrive thirty eight percent (38%) of any savings achieved by such
Page 4 of 36
8. The parties added the following language to the 2011 Agreement making it
absolutely clear that IntegraCore was to pay iDrive thirty-eight percent (38%) of any
improvements to any carrier agreement during the term of the 2011 Agreement:
9. The 2011 Agreement does not have a provision making time of the essence.
10. The 2011 Agreement provides that IntegraCore pay iDrive seven payments of two
thousand one hundred and eighty-five dollars ($2,185) per month for seven months beginning
11. The 2011 Agreement provides the following limitation of liability to iDrive:
Notwithstanding anything else in this Agreement or otherwise, iDRIVE will not be liable
with respect to any subject matter of this Agreement under any contract, negligence, strict
liability or other legal or equitable theory (i) for any amounts . . .
12. IntegraCore has taken the position in this litigation that iDrive is not entitled to
any compensation under the 2011 Agreement because iDrive was “not going to perform under
the agreement and had not performed.” See Broman Depo. (Exhibit 1), at 38: 22-23, 50: 8-13
Page 5 of 36
A. iDrive assisted IntegraCore in identifying and hiring Thad Haderlie.
identifying and hiring Thad Haderlie (“Mr. Haderlie”) to serve as the Director of Logistics. See
also Email to Rothwell and Chase from Broman, dated February 9, 2011, (Exhibit 4) (“I
extended Thad the offer and he accepted. He will begin tomorrow. He will spend the next two
days with Steve and I. Thanks for the help filling this position.”); Broman Depo. (Exhibit 1), at
77: 9 – 17.
14. Shaun Rothwell, the CEO of iDrive, identified Mr. Haderlie as a prospect for the
Director of Logistics position, contacted Mr. Haderlie, and conducted a half hour interview of
Mr. Haderlie. See Deposition of Thad Haderlie (“Haderlie Depo.”), relevant excerpts attached
hereto as Exhibit 5 at 26:15 – 27: 13. Mr. Haderlie was subsequently interviewed and hired by
IntegraCore. See id. at 35: 10-24; See Email to Shaun Rothwell (iDrive) and Steve Chase
(iDrive) from Ted Broman (IntegraCore), dated February 9, 2011, (attached hereto as Exhibit
4).
15. Subsequently, on February 28, 2011, Mr. Broman sent Mr. Chase an email
confirming that Mr. Haderlie “exceeded [his] expectations,” that he was pleased that he “had no
involvement since [Mr. Chase] left,” that Mr. Haderlie was “pushing forward on all fronts we
discussed,” and that “things were good on [his] end.” See Email to Steve Chase from Ted
B. iDrive collected and analyzed IntegraCore’s carrier agreements and parcel data.
Page 6 of 36
16. Pursuant to the terms of the 2011 Agreement, IntegraCore appointed iDrive to
17. On February 10th and 11th, Steve Chase spent two days at the IntegraCore facility
meeting with representatives of IntegraCore and representatives from UPS and FedEx. See
Email to Shaun Rothwell and Steve Chase from Ted Broman (IntegraCore), dated February 9,
2011, (Exhibit 4); Deposition of Steve Chase (“Chase Depo.”), relevant excerpts attached hereto
as Exhibit 6, at 55: 8 – 56:15; Haderlie Depo. (Exhibit 5), at 36:5 – 38:3; Broman Depo.
18. At these meetings, Steve Chase was introduced to representatives of FedEx and
UPS as the Vice President of Logistics for IntegraCore. See Broman Depo. (Exhibit 1), at 56:1-
4, 66: 5 – 67: 2; Chase Depo. (Exhibit 6), at 56:8-12. Mr. Chase was given an IntegraCore email
address, and cards identifying him as the Vice President of Logistics. See Broman Depo.
19. Subsequent to these meetings, Mr. Spiers of FedEx sent Mr. Chase, (at his
IntegraCore email address), the FedEx agreements on file between FedEx and IntegraCore. See
Email to Stephen Chase and Ted Broman from Kurt Spiers, dated February 10, 2011, (attached
Page 7 of 36
20. iDrive employee Carl Hutchinson, on behalf of iDrive, used information iDrive
had collected from the Carriers and from IntegraCore to prepare a Memorandum to Thad
from Carl Hutchinson, dated February 22, 2011, with attached Excel Spreadsheet containing
shipping analysis, and Memorandum to Thad Haderlie from Carl Hutchinson, dated February 21,
2011 re: IntegraCore—Analysis and Recommendations, (February 21, 2011 Email and
Attachments attached hereto as Exhibit 8); Chase Depo. (Exhibit 6), at 154:1-18; Haderlie
21. The February 21, 2011 Memorandum discusses and provides specific strategy to
approach FedEx and UPS with proposed changes to the following elements of the FedEx and
UPS agreements with IntegraCore: service levels; residential surcharge, DAS (delivery area
surcharge) and EDAS (extended delivery area surcharge), ground minimums, deferred tiers, fuel
surcharges, and caps of rate increases. See Memorandum to Thad Haderlie from Carl
22. On February 22, 2011, Thad Haderlie, Steve Chase, and Carl Hutchinson had a
phone conference in which they discussed the negotiating strategies contained in the February
21, 2011 Memorandum. See Chase Depo. (Exhibit 6), at 46:25 – 47:9; Deposition of Carl
Page 8 of 36
Hutchinson (“Hutchinson Depo.”), relevant excerpts attached hereto as Exhibit 9, at 10:21 –
11:8.
23. Beginning on March 25, 2011, iDrive started performing auditing services for
IntegraCore, and IntegraCore started receiving auditing savings. See Invoices for Audit Savings,
dated May 6, 2011 through August 7, 2013, attached hereto as Exhibit 10. iDrive performed
auditing services under the Agreement until July, 2013. See id. IntegraCore continued to receive
the benefits of iDrive’s auditing services until July, 2013. See id.
24. The audits performed by iDrive from March, 2011 through July, 2013 involved
an audit of every line of every carrier invoice to determine overcharges. See Hutchinson Depo.,
(Exhibit 9), at 51:14 – 52:19. iDrive also provided reports of the audit findings for
under the 2011 Agreement are attached hereto as Exhibit 11, these communications include:
Email to Sherrie Ohrn from Robert Glance, cc. to Thad Haderlie, dated February
28, 2011 (ID000645); Email to Sherrie Ohrn from Nate Voorhies, dated March 7,
2011 (ID000917); Email to Nate Voorhies from Sherrie Ohrn, dated March 22,
2011 (ID000883); Email to Laura Beus from Kurt Spiers cc. Sherrie Ohrn, dated
March 24, 2011 (ID000881); Email to Sherrie Ohrn from Chantale Smith, dated
April 4, 2011 (ID001496); Email to Karen Lindmark from Sherrie Ohrn, dated
April 5, 2011 (ID001491); Email to Sherrie Ohrn from Karen Lindmark, dated
April 5, 2011 (ID001491); Email to Steve Chase from Thad Haderlie, dated April
6, 2011 (ID000049-51); Email to Nate Voorhies from Sherrie Ohrn, dated April 6,
2011 (ID001469); Email to Sherrie Ohrn from Nate Voorhies, dated April 6, 2011
Page 9 of 36
(ID001469); Email to Nate Voorhies from Sherrie Ohrn, dated April 6, 2011
(ID001471); Email to Karen Lindmark from Sherrie Ohrn, dated April 6, 2011
(ID001475); Email to Sherrie Ohrn from Karen Lindmark cc. Rob Ravencamp,
dated April 6, 2011 (ID001475); Email to Ann Lockwood and Rob Ravencamp
from Sherrie Ohrn, dated April 12, 2011 (ID000967); Email to Thad Haderlie
from Sherrie Ohrn, dated April 14, 2011 (ID001044); Email to Sherrie Ohrn from
Thad Haderlie, dated April 15, 2011 (ID001049-50); Email to Thad Haderlie from
Sherrie Ohrn, dated April 15, 2011 (ID001048); Email to Ann Lockwood from
Sherrie Ohrn, dated April 15, 2011 (ID001056); Email to Sherrie Ohrn from Thad
Haderlie cc. Steve Chase, dated April 18, 2011 (ID001019); Email to Christina
Strong from Sherrie Ohrn, dated April 18, 2011 (ID001028); Email to Sherrie
Ohrn from Thad Haderlie, dated April 21, 2011 (ID001027); Email to Thad
Haderlie from Sherrie Ohrn, dated April 21, 2011 (ID001027); Email to Karin
Lindmark from Sherrie Ohrn cc. Rob Ravencamp, dated May 3, 2011
(ID001412); Email to Sherrie Ohrn from Karen Lindmark, dated May 9, 2011
(ID001412); Email to Sherrie Ohrn from Christina Strong, dated April 12, 2011
(ID000973); Email to Christina Strong from Sherrie Ohrn, dated May 12, 2011
(ID000990); Email to Ann Lockwood and Rob Ravencamp from Sherrie Ohrn,
dated May 12, 2011 (ID000963); Email to Chantale Smith from Sherrie Ohrn,
dated September 27, 2011 (ID000754); Email to Karin Lindmark from Sherrie
Ohrn, dated October 6, 2011 (ID000713); Email to Sherrie Ohrn from Karin
Lindmark, dated October 7, 2011 (ID000713-714); Email to Chantale Smith from
Christina Strong, dated November 17, 2011 (ID000684); Email to Chantale Smith
from Sherrie Ohrn, dated December 7, 2011 (ID000683); Email to Chantale
Smith from Brandi Suthar, dated February 22, 2012 (ID000437); Email to Thad
Haderlie from Sherrie Ohrn, dated April 12, 2012 (ID000285); Email to Christina
Strong, Chantale Smith from Sherrie Ohrn, dated April 24, 2012 (ID000587);
Email to Chantale Smith from Christina Strong, dated May 7, 2012 (ID000277).
E. iDrive moved all IntegraCore USPS shipments from Commercial Plus Pricing to
iDrive USPS contract, which resulted in savings to IntegraCore.
26. The 2011 Agreement includes the United States Postal Service (“USPS”) as one
of the defined “Carriers” to which the terms of the Agreement applied. See 2011 Agreement
(Exhibit 3), at 1.
27. When the 2011 Agreement was executed, IntegraCore was using Commercial
Plus Pricing with the USPS. See Haderlie Depo. (Exhibit 5), at 63: 8-12.
Page 10 of 36
28. In May, 2011, IntegraCore began to ship its USPS shipments utilizing the iDrive
USPS account. See iDrive USPS Invoices 1 through 120, dated May, 2, 2011 through September
29. iDrive worked with USPS to obtain rates that would benefit IntegraCore.
Hutchinson Depo., (Exhibit 9), at 62:12 – 63:7, 64:9-19 . Over the course of the relationship,
IntegraCore and iDrive engaged in extensive communications related to USPS and USPS
pricing. iDrive has attached hereto a sampling of these communications, in chronological order,
as Exhibit 13.
February 16, 2011 Email to Thad Haderlie from Steve Chase (ID000677); March
23, 2011 Email to Thad Haderlie from Steve Chase (ID000923); March 29, 2011
Email to Ted Broman from Steve Chase (ID000018); March 29, 2011 Email from
Thad Haderlie to Steve Chase (ID000054-55); March 29, 2011 Email to Thad
Haderlie from Steve Chase (DEF00089); April 1, 2011 Email to Ted Broman
from Steve Chase cc Shaun Rothwell (ID001498-1499); April 7, 2011 Email to
Thad Haderlie from Steve Chase cc Sherrie Ohrn (DEF00073); April 7, 2011
Email to Thad Haderlie from Steve Chase (DEF00104); April 8, 2011 Email to
Thad Haderlie from Steve Chase (ID00070-71); April 14, 2011 Email to Thad
Haderlie from Carl Hutchinson cc Steve Chase (DEF00067); April 14, 2011
Email to Thad Haderlie & Ted Broman from Sherrie Ohrn cc Steve Chase
(ID000074); April 14, 2011 Email to Sherrie Ohrn from Thad Haderlie cc. Steve
Chase (ID000045); April 18, 2011 Email to Thad Haderlie from Carl Hutchinson
cc. Steve Chase (DEF00905); April 19, 2011 Email to Carl Hutchinson cc. Steve
Chase from Thad Haderlie (DEF00096-97); April 20, 2011 Email to Thad
Haderlie & Chantelle Smith from Steve Chase cc. Ted Broman & Shaun Rothwell
(DEF00091); April 21, 2011 Email from Steve Chase to Thad Haderlie
(ID000088); April 21, 2011 Email to Steve Chase from Thad Haderlie (ID00090);
April 21, 2011 Email to Sherrie Ohrn from Thad Haderlie (ID001027); April 21,
2011 Email From Sherrie Ohrn to Thad Haderlie (ID001026); April 25, 2011
Email to Steve Chase from Thad Haderlie (ID000019); May 6, 2011 Email to
Thad Haderlie from Sherrie Ohrn (ID001005); May 6, 2011 Email to Sherrie
Ohrn from Thad Haderlie (ID001414-1415); May 6, 2011 Email to Thad Haderlie
from Sherrie Ohrn (ID001418); May 6, 2011 Email from Sherrie Ohrn to Thad
Haderlie (ID001422); June 6, 2011 Email from Steve Chase to Thad Haderlie cc.
Page 11 of 36
Sherrie Ohrn, Carl Hutchinson (DEF00054); July 18, 2011 Email from Shaun
Rothwell to Thad Haderlie (DEF00871-873); July 19, 2011 Email from Shaun
Rothwell to Thad Haderlie (DEF00023); December 28, 2011 Email to Thad
Haderlie from Shaun Rothwell (ID000680); December 28, 2011 Email to Shaun
Rothwell from Thad Haderlie (DEF00102); January 4, 2012 Email to Shaun
Rothwell from Thad Haderlie (DEF00103); January 5, 2012 Email to Thad
Haderlie, Sherrie Ohrn & Chantelle Smith from Shaun Rothwell (DEF00103);
January 5, 2012 Email to Thad Haderlie from Sherrie Ohrn cc. Shaun Rothwell
(ID00247); January 31, 2012 Email to Thad Haderlie, Chantelle Smith from
Shaun Rothwell (DEF00062); February 2, 2012 Email to Thad Haderlie from
Sherrie Ohrn (ID00439).
F. iDrive communicated with FedEx, requesting new rates in 2009, but was
rejected in those attempts because IntegraCore’s Federal Express
volumes did not merit a new agreement with FedEx.
30. Kurtis Spiers (“Mr. Spiers”) is the FedEx representative to IntegraCore. See
Deposition of Kurtis Spiers, relevant portions of which are attached hereto as Exhibit 14, at 14:
16-17. In 2009, as part of the services it rendered pursuant to an earlier agreement with
IntegraCore, Steve Chase approached Mr. Spiers with a request for changes to the FedEx pricing
in place at that time. See Email from Steve Chase to Kurt Spiers, dated October 13, 2009,
31. Later that same night, Mr. Spiers responded to Mr. Chase, informing him that
there would be no changes to the IntegraCore FedEx agreement until IntegraCore shipped
Page 12 of 36
Integracore was to approach us with substantial new volumes I do not foresee any
approvals for further reductions.
Now, with that being said; If Integracore is proposing measurable new volumes
and opportunities that will drive an increase in their revenues, I will certainly
discuss and develop a strategy with you to present to our pricing management.
See Email from Kurt Spiers to Steve Chase, dated October 13, 2009, attached hereto as Exhibit
32. Mr. Spiers testified at his deposition that, from 2009 until the present, the volumes
IntegraCore has shipped using FedEx have not merited any change to the FedEx agreement. See
representative Steve Chase had several communications with Mr. Spiers to discuss FedEx’s
agreements with IntegraCore. See Email from Kurt Spiers to Steve Chase and Ted Broman,
dated February 10, 2011 (attached hereto as Exhibit 7); Email from Steve Chase to Kurt Spiers
and Ted Broman, dated March 18, 2011 (DEF001075) (attached hereto as Exhibit 17); Email
from Kurt Spiers to Steve Chase and Ted Broman, dated March 21, 2011 (attached hereto as
Exhibit 17) ; Email to Kurt Spiers from Steve Chase, dated March 22, 2011 (attached hereto as
Exhibit 18); Email to Steve Chase from Kurt Spiers, dated March 22, 2011 (attached hereto as
Exhibit 18).
34. During the spring of 2011, Steve Chase sent several communications to Jen
Trujillo for the purpose of establishing a dialogue with regard to IntegraCore’s UPS agreements.
Page 13 of 36
See Email from Steve Chase to Jen Trujillo, dated April 22, 2011, attached hereto as Exhibit 19
(“Thad and i [sic] have also discussed at length the current UPS agreements we currently have at
IntegraCore and have identified several areas of focus where improvement needs to occur. . . . I
would like to schedule a call with you next week when we can discuss key elements of those
improvements. I will also provide those in writing.”); Email from Jen Trujillo to Steve Chase,
35. On May 3, 2011, Steve Chase, on behalf of IntegraCore, reached out to Jen
Trujillo at UPS to follow up on a phone conference that occurred earlier that day among Steve
Chase, on behalf of IntegraCore, and Jen Trujillo and Shawn Orton, on behalf of UPS:
Jennifer,
Thanks for your time today, and please thank Shaun as well. I have attached the
document we discussed, I have a regular call with Thad on Wednesday, and I’ll
review our discussion with him then. I know you will do what you can, and I
believe these are within the range of reason.
See Email to Jennifer Trujillo from Stephen Chase, copying Shawn Orton, dated May 3, 2011,
with attached “IntegraCore UPS Request_May 3, 2011” (email and attachment are attached
requests for pricing adjustments by UPS. See IntegraCore UPS Request_May 3, 2011, attached
as part of Exhibit 21. The attachment to Mr. Chase’s May 3, 2011 email to the UPS
representatives follows the strategy suggested by Mr. Hutchinson in his February 21, 2011
Page 14 of 36
Email and Attachments attached as part of Exhibit 8); Chase Depo. (Exhibit 6), at 154:1-18;
37. Specifically, the May 3, 2011 Memorandum from Mr. Chase to UPS provides as
follows:
UPS has experienced some growth with IntegraCore this year in part due to our
working together to find solutions. For IntegraCore clients to see UPS as a more
viable option UPS will need to address the IntegraCore needs below.
38. The May 3, 2011 Memorandum from Mr. Chase to UPS requests that UPS
provide a proposal to change the following components of its agreement with IntegraCore: 1)
the Deferred Tier % depending on other requests granted;” 5) provide “50% discount on [Fuel
Surcharge] for both Ground and Air;” and 6) provide a Fuel Surcharge percentage cap for ground
and air. Id. (Exhibit 21); see also, Deposition of Jenifer Trujillo (“Trujillo Depo.”), relevant
2
Mr. Spiers, the FedEx representative, confirmed at his deposition that an RFP (request for
proposal) can take the form of any communication, including a phone call:
Q. Okay. And the customer’s RFP to you can take the form of something very
simple: A phone call, one question, a response to your suggestion that there be
increased incentives provided?
Page 15 of 36
39. On May 11, 2011, Mr. Chase followed up on his prior requests for proposal with
UPS, asking Ms. Trujillo for a timetable for a response from UPS:
I hope this message finds you doing well. I was looking for an update concerning
our discussion with Shawn last week on our pricing. Can you give me an update
on where we stand and on the timing for any pricing you are currently pursuing
for us?
See Email from Stephen Chase to Jen Trujillo, dated May 11, 2011, attached hereto as
Exhibit 23.
40. Ms. Trujillo responded that she did not yet “have a proposal,” that she
I have received the requests and am reviewing internally how we want to pursue.
I am continuing to work closely with Thad to understand the needs of Integracore
and how we will continue to provide a valuable partnership moving forward. At
this time, I do not have a proposal. At this time I do not have a timeline when you
will receive a proposal back. I am still mapping out the processes and supply
chain of Integracore.
Email from Jen Trujillo to Stephen Chase, cc to Shawn Orton, dated May 11, 2011, attached
41. Ms. Trujillo testified that in mid-June, 2011, she sent an email to Mr. Chase,
informing him that there was not room for changes in the UPS pricing at that time:
Q. And did you respond by email or did you respond by phone call, if you have a
memory one way or the other?
A. I recall responding by email.
Q. And what did you say in that email?
A. Yes, that is correct. A request for new rates can come in the form of any
mode of communication.
See Trujillo Depo. (Exhibit 22), at 35:20 – 36:4. Mr. Chase communicated with Ms. Trujillo
using his IntegraCore email account. See e.g., Email from Stephen Chase to Jen Trujillo, dated
May 11, 2011, attached hereto as Exhibit 23. IntegraCore has not produced an email matching
42. Mr. Chase testified that after the May email, he attempted to contact Ms.
Trujillo, but she would not respond to his calls. See Chase Depo. (Exhibit 6), at 119:9-23; 123:8
– 124:3; 131:22 - 132:6; 169:16 – 171:17; 184: 2 – 11; 186: 3-7; 189:19-24. Ms. Trujillo denies
that Mr. Chase made any attempt to follow up with her after her June, 2011 email. See Trujillo
Depo. (Exhibit 22), at 35:5-14. For the purposes of this Motion, iDrive does not believe this
dispute is material and will assume that Ms. Trujillo’s version of events is accurate.
43. After execution of the 2011 Agreement, iDrive scheduled weekly and
subsequently monthly phone calls with IntegraCore for the purpose of facilitating
communication between the two companies regarding performance under the 2011 Agreement.
See Chase Depo. (Exhibit 6) at 10: 13-18, 62: 5-17, 66: 18-21, 90:20-91:4, 237: 2-7; Haderlie
Depo. (Exhibit 5) at 109: 11-17, 127: 3-8, 139: 19 – 140: 2; Hutchinson Depo. (Exhibit 9), 7:24
– 8: 6.
Page 17 of 36
44. iDrive witnesses testified that in late Spring, early summer of 2011, Mr. Haderlie
made a request that iDrive CEO, Shaun Rothwell, and not Steve Chase, be the point of contact
for discussions with Mr. Haderlie. See Chase Depo. (Exhibit 6), at 83:13 – 85:1, 86:1 – 87:9,
94:3-8, 127:5 – 128:1; Deposition of Shaun Rothwell (“Rothwell Depo.”), relevant portions
attached hereto as Exhibit 24, at 28:4 – 29:9, 29:19 – 30:24, 32:8-20; Hutchinson Depo.
45. Mr. Haderlie confirmed in his deposition that he had two or three conversations
with Mr. Rothwell when he expressed his preference to “work directly with Shaun” with regard
to issues arising on “the operational side.” See Haderlie Depo. (Exhibit 5) at 137:16 – 138:25;
143:8-10. As a result, Mr. Rothwell had several meetings with Mr. Haderlie in various locations,
including “a few times at IntegraCore.” See Haderlie Depo. (Exhibit 5), at 141:4 – 21; Rothwell
46. The iDrive witnesses testified that during the summer of 2011, Mr. Haderlie
informed iDrive that he preferred to take the lead in the negotiations with UPS, and, as a result,
the iDrive team stepped back to allow Mr. Haderlie to run point in those negotiations. See Chase
Depo. (Exhibit 6), at 91:5 – 93:1; Rothwell Depo. (Exhibit 24), at 34:8 – 35:5; Hutchinson
Depo. (Exhibit 9), at 38:19 – 39:19, 88:15 – 89:24. In contrast, Mr. Haderlie denies that he
participated in negotiations with UPS prior to late October, early November, 2011. See Haderlie
Depo. (Exhibit 5), at 50:23 – 51:4. This disputed issue of fact is irrelevant to the motion before
the Court.
Page 18 of 36
47. The evidence confirms that Mr. Haderlie was involved in communications
between iDrive and IntegraCore where the topic of carrier negotiations was discussed. See e.g.,
See Email to Thad Haderlie, from Carl Hutchinson, dated February 22, 2011, with attached Excel
Spreadsheet containing shipping analysis, and Memorandum to Thad Haderlie from Carl
(February 21, 2011 Email and Attachments attached hereto as Exhibit 8); Email to Steve Chase
from Thad Haderlie, dated March 29, 2011, attached hereto as Exhibit 25 (DEF002833 – 34)
(“Following up on the conversation with Ted and myself yesterday below are a few bullet points
which I feel that iDrive (Carl) can put a proposal together to push UPS & FedEx. . . .”); Email to
Thad Haderlie from Steve Chase, dated April 25, 2011 (ID000019), attached hereto as Exhibit
26 (“As for Jen and Kurt, my guess is they may not respond to me until you and/or Ted reminds
them that I have that role to manage and coordinated these negotiations. . . . Thanks, and keep
me posted on the negotiation talk (not all the ops stuff like you said before) and push them to
respond.").
48. On Monday, October 3, 2011, Mr. Chase sent Mr. Haderlie an email inviting Mr.
Haderlie to participate in the monthly call between iDrive and IntegraCore, asking for ways Mr.
Page 19 of 36
Chase could assist IntegraCore, and requesting an update from Mr. Haderlie with regard to UPS
and FedEx:
I hope you are doing well, we have not spoken for a while. We have time blocked
out as we always do for this Wednesday to catch up with you and see where we
can specifically help you. We have not talked outside of your talks with Shaun
[Rothwell]. We’d like to know what progress may have occurred and what you
may have for us to review and analyze.
Are you available for our call Wednesday, and do you have specifics about UPS
and FedEx that we can discuss and see where we can help?
I look forward to catching up.
Email to Thad Haderlie from Steve Chase, dated October 3, 2011, attached hereto as Exhibit 27
B. Ms. Trujillo testified that the October 2011 UPS Agreement came about as a
result of a request from Mr. Haderlie.
49. Ms. Trujillo testified that in the “first . . . five or ten days of October [2011],”
she had a conversation with Mr. Haderlie in which he said “My contract is three years old, c’mon
my business has grown substantially, what can you do about that.” See Trujillo Depo. (Exhibit
50. Ms. Trujillo testified that she responded to Mr. Haderlie’s request by generating
a pricing proposal within UPS that she then sent to the UPS pricing group for approval. See
Trujillo Depo. (Exhibit 22), at 39:6 – 41:11. Ms. Trujillo testified that she presented the UPS
proposal to Mr. Haderlie a couple of weeks after his request in early October. Id. at 39:25 –
41:9. Ms. Trujillo testified that Mr. Haderlie executed the proposal as it was presented to him,
without any attempt to further negotiate the terms of the UPS proposal. Id. at 40:20 – 41:1. See
Page 20 of 36
also, IntegraCore UPS Agreement, dated effective October 29, 2011, attached hereto as Exhibit
28. The 2011 UPS Agreement was executed to become effective the week ending October 29,
C. Mr. Haderlie testified that, under the direction of IntegraCore President Ted
Broman, he requested a new UPS agreement in late October, 2011.
51. Mr. Haderlie testified that he did not have authority to negotiate rates with any
carrier, and that if the topic of rates ever came up, he would always refer the carrier in question to
Mr. Chase. See Haderlie Depo. (Exhibit 5), at 120: 12-23. Mr. Haderlie testified that in late
October, 2011, he was not aware if any changes had occurred to any IntegraCore Carrier
Agreement:
Q. And you, as of October, at the end of October, 2011, you didn’t know whether
or not there had been a change to any carrier contract in Integracore?
A. It was not my role.
See Haderlie Depo. (Exhibit 5), at 44: 11-14. Mr. Haderlie testified that in late October, early
November, 2011, he approached Mr. Broman to ask if there had been changes to the carrier
agreements, and that Mr. Broman gave him permission to call the carriers to ask. Id. at 45: 4-9.
Mr. Haderlie testified that he asked Mr. Broman, and not Mr. Chase, because he understood that,
at this time, “Mr. Chase was no longer involved.” Id. at 43: 16-19.
52. Mr. Haderlie testified that he then asked the Carrier representatives if Mr. Chase
was working on any rate changes at that time, and that the carrier representatives informed him
that there were no current negotiations taking place. Id. at 46: 13-18; 49: 20-24.
Page 21 of 36
53. Mr. Haderlie testified that he reported back these findings to Mr. Broman, and
that he and Mr. Broman agreed that Mr. Haderlie could pursue agreements with the carriers.
Haderlie Depo. (Exhibit 5), at 156:10 – 157:9. Mr. Haderlie testified that it was his belief that
Mr. Broman was the person who executed the 2011 UPS Agreement on behalf of IntegraCore.
Id. at 158:15-22. IntegraCore has not produced an executed copy of the 2011 UPS Agreement.
See IntegraCore UPS Agreement, dated effective October 29, 2011 (Exhibit 28).
54. IntegraCore’s President and owner, Mr. Broman, admitted that the 2011
Agreement gave iDrive exclusive authority to negotiate with the carriers, and that he never gave
anyone other than Steve Chase and iDrive authority to negotiate with the carriers:
Q. Sure. Under the 2011 Agreement, iDrive was given the authority to manage
the carrier contract negotiation and optimization processes?
A. Yes.
Q. Does anyone other than iDrive have the authority to manage the negotiation
and optimization process with the carriers?
A. No. . . . .
A. I don’t know if that is the case or not either. What I know is that my
agreement with iDrive was that Steve Chase – well, no it was Steve Chase.
Steve Chase was the vice president of logistics. He was the only one
authorized to negotiate with the carriers, and that was never changed.
See Broman Depo. (Exhibit 1), at 44:23 – 45:6 (underline added), 92: 4-11.
55. Mr. Broman elaborated that he is not aware of any new carrier agreement
between UPS and IntegraCore, and that since the date the 2011 Agreement was executed,
Page 22 of 36
through the present day, iDrive is the only party authorized to negotiate carrier agreements on
behalf of IntegraCore:
Q. Okay. When did the authority of iDrive through Mr. Chase to manage the
carrier contract negotiation and optimization process end?
MR. WILLIAMS: Objection to the extent it calls for a legal conclusion, and
asked and answered.
A. In my mind, it never ended.
Q. So, to the extent that somebody else is now managing the carrier contracts,
even today, Integra is breaching the 2011 agreement?
MR. WILLIAMS: Object to the form of the question. Among other things, it
calls for a legal conclusion.
Q. I’m just trying to get to the logical end of your testimony.
MR. WILLIAMS: Understood. I’m just making objections for the record.
A. I don’t know that anyone is managing the carrier contracts, you know,
today.
Q. Well has anyone negotiated a carrier contract since February, 2011?
A. I don’t believe they have, no.
Q. Have you entered into any new carrier contracts?
A. I am not aware of that, no.
Q. You’re not aware of any? Any new contracts?
MR. WILLIAMS:
A. By nature of this lawsuit, I have inferred that there was an agreement
entered into with UPS, but that I was not aware of nor seen nor heard of
until the filing of this lawsuit.
E. IntegraCore admits that it never informed iDrive of the 2011 UPS agreement,
and has never paid iDrive 38% of the savings achieved by the 2011 UPS
agreement.
56. Until immediately prior to the filing of this lawsuit, no one at IntegraCore
informed iDrive that the 2011 UPS Agreement had been executed, or provided a copy of the
2011 UPS Agreement to iDrive. See Haderlie Depo. (Exhibit 5), at 162:8-10; Broman Depo.
Page 23 of 36
57. IntegraCore has not paid iDrive thirty eight percent (38%) of the savings achieved
by IntegraCore as a result of the 2011 UPS Agreement. See Email to Ted Broman from Shaun
58. Effective August 31, 2013, IntegraCore entered into a new UPS Agreement. See
Carrier Agreement between UPS and IntegraCore, dated effective August 31, 2013, attached
hereto as Exhibit 30. IntegraCore has not paid iDrive for thirty eight percent (38%) of the
59. IntegraCore never complained to iDrive about its performance under the 2011
Agreement, or claimed that the 2011 Agreement had been terminated for lack of performance.
See Haderlie Depo. (Exhibit 5), at 142:25 – 143:18; Broman Depo. (Exhibit 1), at 97:2 – 98:4.
60. After October, 2011, iDrive continued to perform auditing services under the
2011 Agreement, and IntegraCore continued to accept the benefits of these services through July,
2013. See Invoices for Audit Savings, attached hereto as Exhibit 10.
61. After October, 2011, and until September 9, 2013, IntegraCore continued to
utilize iDrive’s USPS account to ship packages via the USPS. See iDrive USPS Invoices 1
through 120, dated May, 2, 2011 through September 9, 2013, attached hereto as Exhibit 12.
representatives of iDrive and representatives of IntegraCore working on issues arising from the
Page 24 of 36
63. At no time prior to the filing of this lawsuit did anyone at IntegraCore ever assert
that the 2011 Agreement had terminated, or that IntegraCore was not required to abide by the
terms of the 2011 Agreement. See Haderlie Depo. (Exhibit 5), at 142:25 – 143:18; Broman
Depo. (Exhibit 1), at 97:2 – 98:4. To the contrary, Mr. Broman testified at his deposition in this
case that he still believes that the 2011 Agreement, at least as far as iDrive’s obligations under
the 2011 Agreement, is still in full force and effect. See Broman Depo. (Exhibit 1), at 44:23 –
ARGUMENT
iDrive moves this Court to issue an order for partial summary judgment dismissing the
first and second counterclaims. iDrive satisfies its burden on summary judgment:
Summary judgment is particularly appropriate where, as here, the resolution of the claims
at issue depends upon the interpretation of an integrated and unambiguous contract. See Morris
v. Mountain States Tel. & Tel. Co., 658 P.2d 1199, 1201 (Utah 1983) (“When the existence of a
contract and the identity of its parties are not in issue and when the contract provisions are clear
and complete, the meaning of the contract can appropriately be resolved by the court on
Page 25 of 36
summary judgment.”). See also Redd v. Hill, 2013 UT 35, ¶ 14 (“Questions of contract
As set forth above, the 2011 Agreement unequivocally forecloses any cause of action for
damages against iDrive relating to any obligation undertaken by iDrive as a result of the 2011
Agreement:
2011 Agreement at ¶ 4. Utah law is clear that such limitations of liability, entered into between
sophisticated parties, are enforceable. See e.g., Blaisdell v. Dentrix Dental Sys., Inc., 284 P.3d
616, 622 (Utah 2012) (“The limitation of liabilities clause in the contract between Dr. Blaisdell
and Dentrix is enforceable and precludes the remedy Dr. Blaisdell seeks in this case.”); Russ v.
Woodside Homes, Inc., 905 P.2d 901, 907 (Utah App. 1995) (“We hold that the contractual
provision holding Woodside harmless for injuries arising from job site visits is clear and
The plain language of Paragraph 4 of the 2011 Agreement precludes any claim, under
any theory, that seeks to recover damages against iDrive. IntegraCore is a sophisticated party
that had every opportunity to consider the implications of Paragraph 4. Therefore, the Court
Page 26 of 36
should apply this liability limitation set forth in Paragraph 4 and dismiss IntegraCore’s claims for
breach of contract and breach of the covenant of good faith and fair dealing.
Under Utah law, a party is precluded from bringing an action for breach of contract if that
party was the first to commit a material breach of the contract at issue:
We have explained that under the “first breach” rule “a party first guilty of a
substantial or material breach of contract cannot complain if the other party
thereafter refuses to perform. He can neither insist on performance by the other
party nor maintain an action against the other party for a subsequent failure to
perform.” Id.
CCD, Inc. v. Millsap, 116 P.3d 366, 373 (Utah 2005) (quoting Jackson v. Rich, 28 Utah 2d 134,
499 P.2d 279, 280 (1972)). A breach of contract is material if “it goes to the heart of the contract
itself.” See Cross v. Olsen, 303 P.3d 1030, 1036 (Utah App. 2013) (citing and quoting 14
Richard A. Lord, Williston on Contracts § 43:6, at 578–80 (4th ed. 2000)) (“The relevant
question is not whether the breach goes to the heart of the provision breached, but whether it
As set forth above, the 2011 Agreement unambiguously gives iDrive authority to
“manage the contract negotiation/optimization process with Carrier(s), as well as the contract
maintenance process, on CUSTOMER’s behalf.” See 2011 Agreement, (Exhibit 3), at ¶ 1(a)).
Indeed, iDrive’s owner and President, Ted Broman, unequivocally testified that from execution
of the 2011 Agreement until the present, iDrive, and only iDrive, was given authority by
IntegraCore to manage the negotiation/optimization process with the carriers. See Broman Depo.
Page 27 of 36
(Exhibit 1), at 44:23 – 45:6; 47:5 – 48:13. The 2011 Agreement also requires that “[a]ll
significant logistics decisions will flow through iDrive for review.” 2011 Agreement, (Exhibit
3), at 1(a). Moreover, under the 2011 Agreement, “[IntegraCore] is obligated to notify iDrive of
any changes to Carrier(s) contract or terms and conditions, sixty (60) days prior to
implementation.” Id. at 1(c) (emphasis added). Finally, the 2011 Agreement requires
IntegraCore to pay iDrive 38% of the savings achieved by IntegraCore in the renegotiation of
any agreement with any carrier during the term of the 2011 Agreement, regardless of whether
iDrive actually participates in the renegotiation. See 2011 Agreement, (Exhibit 3), at Page 2
and ¶3(a)(1).
Ignoring the foregoing contractual obligations, it is undisputed fact that in October, 2011,
IntegraCore renegotiated its UPS Agreement in secret, and failed to compensate iDrive for thirty-
eight percent (38%) of the improvement realized by that agreement. IntegraCore’s failures are
material as a matter of law and obviated any requirement of iDrive for further performance under
the 2011 Agreement. See e.g., Mortenson v. Financial Growth, Inc., 456 P.2d 181, 183 (Utah
1969) (finding as a matter of law that failure to make $152,730 payment as required by contract
was material breach of contract that terminated further requirement of performance by party
seeking payment).
Page 28 of 36
IntegraCore’s President, Mr. Broman testified in his deposition that iDrive is not entitled
to compensation under the 2011 Agreement because iDrive did not do anything under the
agreement. See Broman Depo. (Exhibit 1) at 38 (“They were not going to perform under the
As set forth above, from execution of the 2011 Agreement on January 11, 2011, through
October 2011, iDrive performed at least the following services under the 2011 Agreement: 1)
facilitated the hiring of Thad Haderlie (see Statement of Facts (“SOF”) ¶¶ 13-15); 2) Steve Chase
spent two days at IntegraCore on February 10th and 11, 2011 (see SOF ¶¶ 17-18); 3) iDrive
collected information and data from IntegraCore and the carriers (see SOF ¶¶ 19 – 20); 4) iDrive
used information iDrive had collected from the Carriers and from IntegraCore to prepare a the
February 21, 2011 Memorandum to Thad Haderlie from Carl Hutchinson (See SOF ¶¶ 20 - 22);
5) iDrive conducted a phone conference with Mr. Haderlie to explain the content of the February
21, 2011 memorandum (see SOF ¶ 22); 6) iDrive conducted weekly, and subsequently monthly
phone calls with Thad Haderlie to discuss issues arising from iDrive’s performance under the
2011 Agreement (see SOF ¶ 43); 7) iDrive performed all the tasks necessary to execute the
auditing function for IntegraCore (see SOF ¶¶ 23-25); 8) starting on March 25, 2011, and
continuing through July, 2013, iDrive performed auditing services for IntegraCore (see id); 9)
starting in May, 2011, and running through September, 2013, iDrive facilitated the transition of
IntegraCore’s USPS shipments to the iDrive USPS account (see SOF ¶¶ 26-29); 10) throughout
2011 and 2012, IntegraCore and iDrive had regular communications on USPS-related issues (see
id.); 11) on May 3, 2011, Steve Chase, on behalf of IntegraCore, had a phone conference with
Page 29 of 36
UPS to discuss changes to the UPS agreement with IntegraCore (see SOF ¶¶ 35-38); 12) the
same day, Mr. Chase sent Ms. Trujillo a memorandum requesting pricing changes to the UPS
Agreement with IntegraCore (see id.); 13) on May 11, 2011, Mr. Chase followed up on his prior
requests for pricing proposal with UPS, asking Ms. Trujillo for a timetable for a response from
UPS (see SOF ¶ 39); and 14) pursuant to Mr. Haderlie’s stated preference to deal with Mr.
Rothwell, Mr. Rothwell had several meetings with Mr. Haderlie, including “a few times at
IntegraCore” where they discussed issues relating to the 2011 Agreement (see SOF ¶ 45).
Indeed, it is undisputed that in early October, 2011, at the same time Mr. Haderlie was
negotiating a new agreement with UPS, Mr. Chase reached out to Mr. Haderlie in the following
email and specifically asked him for an update on information relating to, among other matters,
I hope you are doing well, we have not spoken for a while. We have time blocked
out as we always do for this Wednesday to catch up with you and see where we
can specifically help you. We have not talked outside of your talks with Shaun
[Rothwell]. We’d like to know what progress may have occurred and what you
may have for us to review and analyze.
Are you available for our call Wednesday, and do you have specifics about UPS
and FedEx that we can discuss and see where we can help?
I look forward to catching up.
See Email to Thad Haderlie from Steve Chase, dated October 3, 2011, (Exhibit 27). Mr.
Chase did not respond to this inquiry, as he was required to do under the terms of the
2011 Agreement. See 2011 Agreement, (Exhibit 4), at 1(c). As such, IntegraCore’s
assertion that iDrive “had not performed” is demonstrably absurd and without evidentiary
support.
Page 30 of 36
Finally, perhaps the most compelling evidence of iDrive’s performance under the
2011 Agreement is what is not found in the documents produced in this case, namely, a
single complaint from IntegraCore about iDrive’s performance under the 2011
Agreement. Indeed, both Mr. Broman and Mr. Haderlie admitted in their depositions that
they never complained about iDrive’s performance under the Agreement. See Haderlie
Depo. (Exhibit 5), at 142:25 – 143:18; Broman Depo. (Exhibit 1), at 97:2 – 98:4.
2011, iDrive had either performed as required by the 2011 Agreement, or was in the
process of performing as required by the 2011 Agreement. Based on those facts, the
Court should dismiss IntegraCore’s counterclaims for breach of contract and breach of
are unambiguous, and its payment obligation is fixed. IntegraCore’s counterclaims are
apparently premised upon the allegation that these obligations do not apply because, prior to
October, 2011, iDrive allegedly failed to perform any services under the 2011 Agreement. See
Broman Depo. (Exhibit 1) at 38; Counterclaim at ¶ 29. The assertion that iDrive “failed to
perform” under the 2011 Agreement is demonstrably false. Moreover, IntegraCore’s attempt to
prove that there was some breach by iDrive prior to October, 2011, that would give rise to a
Page 31 of 36
cause of action for breach of contract or breach of the covenant of good faith and fair dealing,
Indeed, such an attempt is undermined first by the undisputed fact that prior to this
litigation, IntegraCore never, either internally or to iDrive, took the position that iDrive breached
the 2011 Agreement, much less breached the 2011 Agreement prior to October, 2011. And the
2011 Agreement, which has a three year term, does not make time of the essence for
performance of any task by iDrive. See 2011 Agreement, at Page 2 (Agreement Term). Hence,
even if IntegraCore believed that time had expired for iDrive to perform some task, it was, at the
very least, obligated to provide notice to iDrive of such belief. See Whitney v. Perry, 208 A.D.
2d 1025, 1026 (N.Y App. Div. 1994) (citing and quoting Sohayegh v. Oberlander, 155 A.D. 436,
438 (N.Y. App. Div. 1989)); Boswell v. United States, 123 F.2d 213, 215 (5th Cir. 1941) (“In
such a case where time is not of the essence, one wishing to rescind for delay must give notice of
his intention so to do and allow a reasonable time.”). IntegraCore never provided iDrive with
any notice claiming time had expired for iDrive to perform any task under the 2011 Agreement.
Furthermore, as a matter of law, IntegraCore has lost its asserted counterclaims for
breach of contract and breach of the covenant of good faith and fair dealing as a result of its
continuing to treat the 2011 Agreement as in force “in spite of a known excuse for
nonperformance:”
When the promisor on a contract not already fully performed on either side
continues his performance in spite of a known excuse for nonperformance, he
loses his defense of nonperformance.
Page 32 of 36
H.B. Zachry Co. v. The Traveler’s Indemnity Co., 391 F.2d 43, 48 (5th Cir. 1968); Martin v.
Maldonado, 572 P.2d 763, 769-70 (Alaska 1977) (quoting 3 A Corbin, Contracts, § 755) (same);
Mathis v. DCR Mortg. III, 952 F. Supp. 2d 828, (W.D. Tex. 2013) (same); Acosta v. Dist. Bd. of
Trustees of Miami, Dade Comm. Coll., 905 So. 2d 226, 228-29 (Fla. Dist. Ct. App. 2005) (same);
Henry v. Masson, 333 S.W.3d 825, 840 (Tex. App. 2010) (same).
waiver, laches, or estoppel, the result is the same: it is simply too late for IntegraCore to assert a
breach of the 2011 Agreement by iDrive prior to October, 2011. See B.R. Woodward Marketing,
Inc. v. Collins Food Service, Inc., 754 P.2d 99, 103-104 (Utah App. 1988) (emphasis added) (“It
was not until after the relationship was terminated that Woodward sought what it knew it was
entitled to receive during the entire course of its employment. Such conduct, notwithstanding
intent to waive its right to claim the incentive commissions.”); Shaw Resources Limited, L.L.C. v.
Pruitt, Gushee & Bachtell, P.C., 142 P.3d 560, 571 (Utah App. 2006) (“A defense based on
equitable estoppel bars recovery if (1) a party acts or fails to act in a manner that is inconsistent
with a subsequent claim, (2) a second party reasonably acts or does not act because of the first
party's original act or failure to act, and (3) the second party would suffer injury if the first party
were allowed to repudiate such act or failure to act.”); Angelos v. First Interstate Bank, 671 P.2d
772, 777 (Utah 1983) (internal citations omitted) (“Laches is not mere delay, but delay that
works a disadvantage to another. To constitute laches, two elements must be established: (1)
Page 33 of 36
The lack of diligence on the part of plaintiff; and (2) An injury to defendant owing to such lack
of diligence.”).
All of these theories affirm the same basic principle: a party to an agreement may not
unilaterally decide that a breach of a contract has occurred, releasing that party from further
obligations under the contract, and simultaneously continue to receive the benefits of the other
party’s performance, without giving notice of such breach. IntegraCore’s legal failure is
highlighted by Mr. Broman’s deposition, in which he testified that the 2011 Agreement is still
enforceable as to iDrive. See Broman Depo. (Exhibit 1), at 44:23 – 45:6. As a matter of law, if
IntegraCore thought there was a breach of contract prior to October 2011 that released
IntegraCore of its obligations under the 2011 Agreement, it had to inform iDrive of that belief.
By continuing to accept performance by iDrive under the 2011 Agreement through at least
August, 2013,3 IntegraCore is now legally barred from asserting a prior breach of the 2011
Agreement by iDrive.
CONCLUSION
For the reasons set forth above, the Court should grant partial summary judgment,
dismissing IntegraCore’s first counterclaim for breach of contract and second counterclaim for
3
See e.g., Invoices for Audit Savings May 6, 2011 through August 7, 2013 (Exhibit 10) and
iDrive USPS Invoices 1 through 120, dated May, 2, 2011 through September 9, 2013, (Exhibit
12).
Page 34 of 36
DATED this 6th day of March, 2015.
Page 35 of 36
CERTIFICATE OF SERVICE
I hereby certify that on this 6th day of March, 2014, a true and correct copy of the foregoing
MEMORANDUM IN SUPPORT OF MOTION FOR PARTIAL SUMMARY JUDGMENT
ON INTEGRACORE’S FIRST COUNTERCLAIM (BREACH OF CONTRACT) AND
SECOND COUNTERCLAIM (BREACH OF COVENANT OF GOOD FAITH AND FAIR
DEALING) was served electronically via the Court’s electronic filing portal to the following:
Jeffery S. Williams
NELSON CHRISTENSEN
HOLLINGWORTH & WILLIAMS
68 S. Main St., #600
Salt Lake City, UT 84101
Email: jeffw@nchwlaw.com
Bryan L. Quick
QUICK LAW, PC
9160 S. 300 W. Ste. 110
Sandy, UT 84097
Email: bryan@quicklawpc.com
Edwin C. Barnes
Aaron D. Lebenta
CLYDE SNOW & SESSIONS
201 South Main Street, 13th Floor
Salt Lake City, UT 84111
Email: ecb@clydesnow.com
adl@clydesnow.com
Page 36 of 36