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Howard v. Ferrellgas Partners, LP

United States District Court, D. Kansas

September 16, 2014

RANDY HOWARD, Individually and on Behalf of All Others Similarly Situated, Plaintiff,


J. THOMAS MARTEN, Chief District Judge.

Plaintiff Randy Howard ("Plaintiff"), on behalf of himself and all others similarly situated, seeks damages against Defendants Ferrellgas Partners, L.P., Ferrellgas, L.P., and Ferrellgas, Inc. (collectively "Defendant")[1] for allegedly engaging in unfair, unconscionable, deceptive, misleading, and unlawful conduct in connection with the marketing and sale of propane and related equipment and services. This matter is before the court on Plaintiff's Motion for Leave to Submit an Expert Report (Dkt. 89). To the extent outlined below, Plaintiff's motion is granted.

I. Factual and Procedural Background

Plaintiff alleges that, in August 2008, he "decided to order propane and lease a propane tank from Ferrellgas because Ferrellgas advertised low prices" to service his residence in Yucca Valley, California. Dkt. 1, ¶ 23. Plaintiff therefore reached out to Defendant on August 21, 2008. Plaintiff alleges that, on that date, the parties entered into an agreement (the "oral contract") for both the initial delivery and fill of a propane tank as well as all subsequent fills of the tank. According to Plaintiff, Defendant "stated that the first fill would occur at an introductory rate and that subsequently the price of propane would be billed at market price." Dkt. 1, ¶ 23. On August 27, 2008, Defendant installed a 250-gallon propane tank on Plaintiff's property and filled it with fifty (50) gallons of propane. Dkt. 1, ¶ 26. Defendant delivered an additional 167.70 gallons of propane on September 5, 2008. Dkt. 1, ¶ 26.[2] Defendant billed Plaintiff for the initial fill at the introductory rate on September 9, 2008. Dkt. 1, ¶ 28. Plaintiff paid this bill on September 19, 2008. Dkt. 38-8, at 4.

On December 3, 2008, Defendant delivered 57.80 gallons of propane to Plaintiff. Dkt. 38-8, at 4. On December 7, 2008, Defendant issued a bill for this fill in the amount of $278.17, making the price of propane $4.71 per gallon. Plaintiff disputed this charge, alleging that the national average price for home delivery of consumer-grade propane was $2.37 per gallon. Dkt. 1, ¶ 30. Defendant agreed to modify the price to $2.85 per gallon and re-billed Plaintiff on December 21, 2008. Dkt. 38-8, at 5. Plaintiff paid this invoice on December 29, 2008. Dkt. 38-8, at 6.

On January 27, 2009, Defendant delivered 79.90 gallons of propane to Plaintiff, at a price of $4.92 per gallon. Dkt. 38-8, at 7. Plaintiff again disputed this rate and Defendant modified the price to $2.95 per gallon. Dkt. 38-8, at 8. Plaintiff paid this bill on February 17, 2009. Dkt. 38-8, at 9. On March 12, 2009, Defendant delivered 53.20 gallons of propane to Plaintiff at a price of $2.82 per gallon. Dkt. 38-8, at 10. Plaintiff paid this bill without complaint on March 27, 2009. Dkt. 38-8, at 11. Plaintiff received another 28.40 gallons of propane on May 20, 2009, priced at $2.82 per gallon, which he also paid for without complaint on June 19, 2009. Dkt. 38-8, at 11-12. On August 25, 2009, Defendant charged Plaintiff a $65 annual tank rental fee, which Plaintiff paid on September 10, 2009. Dkt. 38-8, at 12-13. Defendant made another delivery of 47.30 gallons on October 14, 2009, at a price of $3.22 per gallon. Dkt. 38-8, at 13. Plaintiff disputed this rate, which Defendant ultimately lowered to $2.25 per gallon. Dkt. 38-8, at 14. Defendant made two more deliveries, one on December 17, 2009, of 76.80 gallons, and one on January 22, 2010, of 67.00 gallons. Dkt. 38-8, at 15-16. Plaintiff paid both invoices without complaint. Dkt. 38-8, at 16-17.

Plaintiff alleges that Defendant did not provide him any written agreement until he specifically requested one. Dkt. 1, ¶ 33. In his Complaint, Plaintiff alleged that he requested and received a copy of Defendant's terms, entitled "Master Agreement for Propane Sales and Equipment Rental" ("Master Agreement") in February 2010. Dkt. 1, ¶ 34. However, Defendant claims that it sent Plaintiff a confirmation letter, with the Master Agreement attached, on September 24, 2008. Dkts. 38-6, 38-7. In his deposition, Plaintiff stated that while it was possible that he received this confirmation letter and Master Agreement in 2008, he does not actually remember receiving it. Dkt. 60-2, at 24-25, 28-29, 35-36.

In addition to basic provisions governing the relationship between the parties, the Master Agreement also contained dispute-resolution clauses that required the parties to settle any dispute through arbitration:

You agree that any claim, dispute or controversy, whether in contract, tort (intentional or otherwise) including without limitation, product liability, property damage, personal injury claims or claims based on strict liability, whether pre-existing, present or future, and including constitutional, statutory, common law, regulatory and equitable claims in any way relating to (a) the Service; (b) any Rented Equipment or equipment sold to you by us; (c) the Agreement; (d) Propane delivered or sold by us; or (e) the Safety Plan, advertisements, promotions or other brochures or writings prepared by us in any way relating to the Service or this Agreement and/or the relationship between you and us, including the validity, enforceability or scope of this Section or any part thereof (collectively, a "Claim") shall be resolved, upon the election of either you or us, by binding arbitration.
You acknowledge that you have a right to litigate claims in court before a judge or jury, but you prefer to resolve any such claims through arbitration and knowingly and voluntarily waive your rights to litigate such claims in court before a judge or jury, upon election of arbitration by you or by us. You will not have the right to participate as a representative or member of any class of claimants pertaining to any claim subject to arbitration, even if such class action is pending on the effective date of this arbitration provision, except that this arbitration provision will not preclude your participation in a class which has already been certified on the effective date of this arbitration provision. This Section 8 applies only to the extent permitted under your state law.

Dkt. 38-7, at 18, 19-20.

The Master Agreement did not require Plaintiff's signature; rather, it set forth three alternative means by which Plaintiff would be deemed as having accepted its terms: (1) request or accept delivery of propane, service, or equipment from Defendant; (2) pay for delivery of propane, service, or equipment from Defendant; or (3) permit propane or equipment from Defendant to remain on Plaintiff's property for more than thirty (30) days after Plaintiff's receipt of the Master Agreement. Dkt. 38-7, at 3.

Defendant contends that Plaintiff accepted the Master Agreement by: (1) accepting delivery of propane, (2) paying for delivered propane, and (3) allowing the propane tank to remain on his property for more than thirty days after his receipt of the Agreement. While Plaintiff admits these facts, he disputes that this behavior constituted acceptance of the Master Agreement. Rather, Plaintiff argues that the oral contract governed the dealings between the parties and the Master Agreement was merely an offer to modify the terms of the oral contract, which Plaintiff argues he never accepted. Plaintiff also denies that the oral contract was conditional upon acceptance of the Master Agreement. Dkt. 42, at 5. In response, Defendant argues that the oral contract only applied to the initial fill and that subsequent deliveries were "predicated on [Plaintiff's] agreement to [the Master Agreement's] terms and conditions." Dkt. 43, at 6.

On October 13, 2010, Plaintiff filed a Class Action Complaint against Defendant seeking monetary damages for alleged breach of contract, breach of implied covenant of good faith and fair dealing, violation of the Kansas Consumer Protection Act, promissory estoppel, and unjust enrichment (Dkt. 1). On September 6, 2011, Defendant filed a motion to compel Plaintiff to submit to arbitration, pursuant to the terms of the Master Agreement (Dkt. 37). Plaintiff opposed the motion, arguing that the parties were governed by the oral contract, which lacked any provision concerning arbitration. In an order dated August 27, 2012, this court found that the parties did indeed enter into an oral contract in August 2008. Dkt. 45, at 7. However, based on the conflicting evidence, the court was unable to determine the scope of that contract, noting:

The scope of the oral agreement is material as to whether or not [Plaintiff] accepted the Master Agreement. If the oral agreement established continuous propane service, then the Master Agreement might have been an offer to modify the existing oral contract... [Defendant] argues there were two agreements, an oral agreement which ended after the initial fill, and the Master Agreement which applied to all subsequent service. If any oral agreement covered only the initial installation and fill, the Master Agreement might govern the long-term relationship between the parties and the arbitration clause would apply.

Dkt. 45, at 7. The court therefore denied Defendant's motion to compel arbitration and ordered the parties to take limited discovery as to the scope of the oral ...

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