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Wallace v. C.R. England Inc

United States District Court, D. Utah, Central Division

March 2, 2018

ADAM BRENT WALLACE, Plaintiff,
v.
C.R. ENGLAND, INC. and HORIZON TRUCK SALES AND LEASING, Defendants.

          Clark Waddoups District Judge.

          REPORT AND RECOMMENDATION

          PAUL M. WARNER Chief United States Magistrate Judge.

         District Judge Clark Waddoups referred this case to Chief Magistrate Judge Paul M. Warner pursuant to 28 U.S.C. § 636(b)(1)(B).[1] Before the court are (1) Defendants C.R. England, Inc. (“C.R. England”) and Horizon Sales and Leasing's (“Horizon”) (collectively, “Defendants”) motion to dismiss;[2] (2) Plaintiff Adam Brent Wallace's (“Plaintiff”) motion for partial summary judgment;[3] (3) Defendants' motion for leave to respond to Plaintiff's sur-reply on Defendants' motion to dismiss;[4] and (4) Plaintiff's motion for entry of default.[5] The court has carefully reviewed the written memoranda submitted by the parties. Pursuant to civil rule 7-1(f) of the Rules of Practice for the United States District Court for the District of Utah, the court has concluded that oral argument is not necessary and will determine the motions on the basis of the written memoranda. See DUCivR 7-1(f).

         BACKGROUND[6]

         Plaintiff's complaint in this case alleges that Defendants breached two agreements between Plaintiff and Defendants. The two agreements at issue are the Horizon Truck Sales and Leasing Vehicle Lease Agreement (“VLA”) and the C.R. England, Inc. Independent Contractor Operating Agreement (“ICOA”) (collectively, “Agreements”).[7] Plaintiff and Defendants entered into the Agreements on June 21, 2010.[8]

         Through the VLA, Plaintiff leased a vehicle from Horizon.[9] The VLA contains a two-year contractual limitations provision, which provides:

THE PARTIES AGREE THAT ANY CLAIM OR DISPUTE ARISING FROM OR IN CONNECTION WITH THIS AGREEMENT, WHETHER UNDER FEDERAL, STATE, LOCAL, OR FOREIGN LAW . . ., SHALL BE BROUGHT EXCLUSIVELY IN THE STATE OR FEDERAL COURTS SERVING SALT LAKE CITY, UTAH, WITHIN TWO YEARS OF THE ACCRUAL OF SUCH CLAIM OR DISPUTE . . . .[10]

         Through the ICOA, Plaintiff in turn leased to C.R. England the vehicle he leased from Horizon.[11] The ICOA provides that Plaintiff would operate the vehicle he possessed and leased to C.R. England under C.R. England's control as required by federal regulations.[12] Addendum 1 to the ICOA provides that in the event of Plaintiff's illness, vacation, or other reasonable absence, Plaintiff could bring the vehicle to C.R. England's yard, and C.R. England would lease the vehicle without Plaintiff's driving services during the period of Plaintiff's absence.[13] Addendum 1 to the ICOA further provides that said period would begin at the time Plaintiff transferred “physical possession of the [vehicle] to [C.R. England]” and would end “upon [C.R. England] transferring physical possession of the [vehicle] back to [Plaintiff].”[14] T h e IC O A contains a two-year contractual limitations provision, which provides:

THE PARTIES AGREE THAT ANY CLAIM OR DISPUTE ARISING FROM OR IN CONNECTION WITH THIS AGREEMENT, WHETHER UNDER FEDERAL, STATE, LOCAL, OR FOREIGN LAW . . ., SHALL BE BROUGHT EXCLUSIVELY IN THE STATE OR FEDERAL COURTS SERVING SALT LAKE CITY, UTAH, WITHIN TWO YEARS OF THE ACCRUAL OF SUCH CLAIM OR DISPUTE . . . .[15]

         On or about July 16, 2010, Plaintiff informed Defendants that he needed to go to the hospital and that C.R. England would need to find another driver to fulfill Plaintiff's obligations.[16] Plaintiff did not deliver his vehicle to C.R. England so that a relief driver could fill in during his absence.[17] Plaintiff alleges that “[o]n or [a]bout July 20, 2010, the repo man showed up instead of a relief driver and repossessed the [vehicle].”[18]

         Several years later, on July 6, 2016, Plaintiff initiated this action against Defendants seeking damages for Defendants' alleged breach of the Agreements.

         LEGAL STANDARD

         To survive a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a complaint must contain factual allegations that “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). In determining whether this standard has been met, the court must accept as true “all well-pleaded factual allegations in a complaint and view these allegations in the light most favorable to the plaintiff.” Kerber v. Qwest Group Life Ins. Plan, 647 F.3d 950, 959 (10th Cir. 2011) (quotations and citation omitted).

         ANALYSIS

         I. Defendants' Motion to Dismiss

Defendants argue that this action should be dismissed because (A) the two-year contractual limitations provisions in the Agreements are valid, and (B) those limitations periods expired long before Plaintiff's complaint was filed.

         A. Validity of Contractual Limitations Provisions

         Under Utah law, “parties may contractually limit the time in which to bring an action in contract to a period shorter than that of the applicable statute of limitations, so long as the limitation is reasonable.” Deer Crest Assocs. I, LC v. Silver Creek Dev. Grp., LLC, 222 P.3d 1184, 1187-88 (Utah Ct. App. 2009) (holding that a contractually negotiated limitations period of thirty days was not unreasonable); see also Burkett v. Convergys Corp., No. 2:14-cv-376-EJF, 2015 WL 4487706, at *8 (D. Utah July 23, 2015) (unpublished) (holding that a contractually negotiated six-month limitation period was not unreasonable and was enforceable). Honoring contractual provisions that shorten the statute of limitations “is good public policy . . . [as] [t]wo prime objectives of contract law are to protect the justified expectations of the parties and to make it possible for them to foretell with accuracy what will be their rights and liabilities under the contract.” Barajas v. Myriad Genetic Labs., Inc., No. 2:13-cv-997-DN, 2014 WL 5681691, at *2 (D. Utah Nov. 4, 2014) (unpublished) (quotations, citation, and footnote omitted) (holding that a contractually negotiated six-month limitations was not unreasonable). Indeed, “Utah courts have repeatedly emphasized that parties are entitled to contract on their own terms without the intervention of the courts.” Id. (quotations, citation, and footnote omitted).

         Based on those authorities, Defendants contend that the two-year contractual limitations provisions in the Agreements are reasonable and, therefore, are valid. In response, Plaintiff contends that the limitations provisions are somehow invalid because similar agreements are a subject of a pending but different lawsuit against Defendants. However, Plaintiff provides no legal authority for that proposition. Furthermore, Plaintiff has not alleged in the amended complaint that the Agreements are invalid, and he is suing Defendants for damages for breach of the Agreements. Importantly, Plaintiff specifically alleges in the amended complaint that both Agreements are “valid and enforceable.”[19] Further, although Plaintiff argues that “the contractual limitations do not apply in this case because the [Agreements are] invalid, ”[20] he is still alleging breach of contract and seeking what he claims he was entitled to under the Agreements.

         For those reasons, the court concludes that Plaintiff's arguments concerning the invalidity of the contractual limitations provisions are without merit. Moreover, based upon the authority cited by Defendants, the court concludes that the two-year contractual ...


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