Owner-Operator Indep. Drivers Ass'n v. Comerica Bank
| Decision Date | 01 December 2011 |
| Docket Number | Case No. 05-CV-0056 |
| Parties | OWNER-OPERATOR INDEPENDENT DRIVERS ASSOCIATION, CARL HARP and MICHAEL WISE, as Representatives of the Class and THE CERTIFIED CLASS OF OWNER-OPERATORS, Case No. C2-97-740 United States District Court for the Southern District of Ohio, Plaintiffs, v. COMERICA BANK, Defendant. |
| Court | U.S. District Court — Southern District of Ohio |
OPINION AND ORDER
Proof Related to Damages, which seeks an Order from this Court requiring Plaintiffs' to prove their damages in this case. On October 31, 2011, at the close of trial, the Court granted Defendant leave to file a written proffer in light of new evidence on the issue of Plaintiffs' damages, which had been established prior to trial and were therefore not at issue in the trial. The matter is now fully briefed and ripe for decision. For the reasons stated below, Defendant's request that Plaintiffs be required to prove the amount of their damages recoverable from Defendant Comerica Bank is DENIED.
The essential facts concerning the amount of Plaintiffs' damages in this case are as follows. Plaintiffs seek to enforce the final judgment entered by this Court on July 16, 2004, in OOIDA v. Arctic Express, Inc., No. 97-750 (the "Arctic Litigation") against Defendant ComericaBank, Arctic's creditor, for the return of maintenance escrow funds owed to the plaintiff class of owner-operators.
In October 2003, Arctic and D & A filed a voluntary petition for bankruptcy in the United States Bankruptcy Court for the Southern District of Ohio, thus halting the Arctic Litigation. In January 2004, Plaintiffs commenced an adversary proceeding against Arctic, D & A, and Comerica in the bankruptcy court, seeking return of the escrow funds owed to the Arctic Litigation class members. In May 2004, Plaintiffs entered into a $5.5 million settlement agreement with Arctic and D & A, which was approved by this Court in July 2004. After entry of the judgment and finalization of Arctic's plan of reorganization, the Plaintiffs then sought to satisfy their judgment against Comerica.
On May 27, 2005, Plaintiffs filed their First Amended Complaint against Comerica, seeking restitution or disgorgement of "the full amount in maintenance escrow funds plus interest in an amount equal to that awarded in Judgment entered in the Arctic Litigation." (Dkt. 7). Comerica filed a motion to dismiss Plaintiffs' claims, arguing, inter alia, that Comerica could not be bound by the judgment against Arctic because Comerica was not a party to the prior lawsuit. (Dkt. 10). This Court denied that basis for dismissal in its May 16, 2006, Order, ruling that "the Class may continue to seek restitution from Defendant for the return of Plaintiffs' escrow funds." Owner Operator Indep. Drivers Ass'n v. Comerica Inc., Case No. 05-cv-056, 2006 U.S. Dist. LEXIS 29756, at *23 (S.D. Ohio 2006).
Plaintiffs amended their Complaint once more, seeking the same recovery for the full amount of the Arctic Litigation judgment. (Dkt. 26). On April 11, 2007, Comerica moved to dismiss the Second Amended Complaint, but did not again raise the issue of whether Comerica could be bound to the judgment from the Arctic Litigation. (Dkt. 28). The Court deniedComerica's motion, opining that the funds held in escrow were subject to a statutory trust for Plaintiffs' benefit, and Plaintiffs were entitled to pursue a common law claim against Comerica for restitution. See Owner Operator Indep. Drivers Ass'n, Inc. v. Comerica Inc., No. 2:05-CV-00056, 2006 U.S. Dist. LEXIS 29756, at *4 (S.D. Ohio May 16, 2006) (unpublished).
The parties filed cross-motions for summary judgment. Comerica disputed the amount of damages Plaintiffs could prove against it, arguing that "Plaintiff must be able to prove that all of the [maintenance escrow] funds are somehow in the hands of Comerica." (Dkt. 54). In its March 16, 2009, Order granting Comerica's motion for summary judgment and denying Plaintiffs' cross-motion, the Court disagreed, finding that, "[r]egardless of Comerica's lack of participation in the damages calculation in the Arctic Litigation, Plaintiffs can seek restitution of the judgment amount from Comerica." Owner Operator Indep. Drivers Ass'n, Inc. v. Comerica Bank, 615 F. Supp. 2d 692, 703 (S.D. Ohio 2009). Plaintiffs appealed that order to the Sixth Circuit.
On March 3, 2011, the Sixth Circuit affirmed the Court's ruling on summary judgment in part and reversed in part. With respect to the damages issue, the panel found that "the particulars of Arctic's banking relationship with Comerica were accurately explained by the district court," Owner Operator Indep. Drivers Ass'n v. Comerica Bank (In re Arctic Express), 636 F.3d 781, 788 (6th Cir. 2011), and thus Comerica "must therefore disgorge the trust property received in breach of trust unless it can establish a viable defense." Id. at 801.
On remand, this Court ordered pretrial briefing from parties on the issues of whether extraordinary discovery should be allowed and whether damages should be an issue at trial. Comerica once again took the opportunity to contest the amount of damages and argued it should be proved by Plaintiffs at trial. (Dkt. 80). In its August 11, 2011, Order this Court found that the Sixth Circuit's holding conclusively established the issue of recoverable damages againstComerica at $5,583,084, and that the only issue at trial would be the viability of Comerica's statute of limitations defense. (Dkt. 84). Trial commenced on October 3, 2011, and on October 5, 2011, the Court stayed proceedings and ordered Plaintiffs to produce materials in their possession that were responsive to Defendant's extraordinary discovery requests and the Court's prior orders.
Defendant now claims that documents produced by Plaintiffs pursuant to the Court's October 5, 2011, Order provide new evidence that shows Plaintiffs and Arctic colluded together in the damages amount reached at settlement, and therefore Plaintiffs should have to prove their damages against Comerica.
Defendant's Proffer to the Court can be divided into two separate requests: First, Defendant argues that the judgment reached against Arctic through settlement in the amount of $5,583,084 reflects Plaintiffs' damages against Arctic, not Comerica, and therefore Plaintiffs should be required to prove the amount of restitution Comerica owes under their statutory trust theory of recovery. Second, Defendant offers new documents produced by Plaintiffs during the October 2011 trial which, they argue, show that the amount of the damages in this case was inflated by Plaintiffs and Arctic during settlement, as both parties had an incentive to agree to a higher amount. Plaintiffs, Defendant argues, should therefore have to prove the accurate amount of damages for which Comerica is liable, which they have not done. The Court will treat each argument in turn.
Defendant's first argument, that it should not be held liable for the amount of damages reached in the Arctic Litigation, is essentially a motion for reconsideration of this Court's August19, 2011, Order which, in interpreting the Sixth Circuit's prior opinion, held that "the question of the amount of damages that the Defendant owes to Plaintiffs has therefore already been determined" in the amount of $5,583,084. (Dkt. 84). The judgment of the Court determining the damages in this case will stand, therefore, unless Defendant could not have discovered the current theory for reconsideration at the time even with the exercise of due diligence:
The purpose of a motion to alter or amend judgment is to correct manifest errors of fact or law. It is not ordinarily the function of a motion to reconsider either to renew arguments already considered and rejected by a court or to proffer a new legal theory or new evidence to support a prior argument when the legal theory or argument could, with due diligence, have been discovered and offered during the initial consideration of the issue. If a party disagrees with the Court's decision on a legal issue, its "proper recourse" is not by way of a motion for reconsideration "but appeal to the Sixth Circuit."
Jones v. Brunsman, Case No. 2:08-cv-0026, 2009 U.S. Dist. LEXIS 108241, at *1 (S.D. Ohio 2009) (citing McConocha v. Blue Cross and Blue Shield Mut. of Ohio, 930 F. Supp. 1182, 1184 (N.D. Ohio 1996); see also Am. Marietta Corp. v. Essroc Cement Corp., 59 F. App'x 668, 671 (6th Cir. 2003) ().
Defendant argues that the most recent production of documents from Plaintiffs "bears directly on the accuracy and applicability [of] the amount Plaintiffs are seeking in restitution from Comerica," (Proffer at 2); however, with respect to this first issue—the applicability— Defendant does not point to anything within the new production that supports its claim. Rather, Defendant argues that the trial record now demonstrates that Plaintiffs have not "tied the maintenance funds to an amount of restitution against Comerica" and therefore "it is imperative that Plaintiffs prove their damages against Comerica" (Proffer at 3).
This argument is the same one Defendant made in pre-trial briefing which the Court rejected in its August 19, 2011, Order. In Defendant's pre-trial brief, it similarly argued that"Plaintiffs should be required to prove their damages against Comerica to establish their claim for breach of trust," making more or less identical arguments regarding the nature of Plaintiffs' theory of recovery against Comerica. (Dkt. 80). The Court did not require further evidence, or a trial, to interpret the Sixth Circuit's holding as establishing the amount of damages against Comerica. (Dkt. 84) (citing In re Arctic Express, Inc., 636 F.3d at 801). Defendant's renewed...
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