Quality Transportation Services, Inc. v. Mark Thompson Trucking, Inc.

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,
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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
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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.
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¶ 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.
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¶ 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
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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
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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.
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¶ 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.
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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