Owner-Operator Indep. Drivers Assoc., Inc. v. Comerica Bank

• Decision Date: 02 April 2014
• Docket Number: No. 12-3491,12-3491
• Parties: OWNER-OPERATOR INDEPENDENT DRIVERS ASSOC., INC., et al., Plaintiffs-Appellees, v. COMERICA BANK, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

OWNER-OPERATOR INDEPENDENT DRIVERS ASSOC., INC., et al., Plaintiffs-Appellees, v. COMERICA BANK, Defendant-Appellant.

No. 12-3491

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

Filed: April 2, 2014

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION

File Name: 14a0253n.06

ON APPEAL FROM THE

UNITED STATES DISTRICT

COURT FOR THE SOUTHERN

DISTRICT OF OHIO

OPINIONS

BEFORE: MOORE and COOK, Circuit Judges; GWIN, District Judge.^*

JAMES S. GWIN, District Judge. In this case, Defendant Comerica Bank appeals from a $5,583,084 judgment the district court gave Plaintiffs after a non-jury trial. With this appeal, we look to whether sufficient evidence supported the district court's finding that the statute of limitations did not bar the lawsuit.

In an opinion earlier in the district court case, the district court found Comerica Bank was liable for $5,583,084 on a breach of trust theory, but then gave Comerica Bank judgment on other grounds. The Plaintiffs appealed that decision. Comerica Bank never cross appealed the district court's $5,583,084 damage finding in the first appeal and this Court tacitly accepted the $5,583,084damage calculation when we reversed the district court's judgment for Comerica. Now, we also consider whether Comerica Bank waived a challenge to the damage computation and whether that damage computation became the law of the case after the first appeal.

As described, this is the second appeal in a case involving Owner-Operators' Independent Drivers Association ("Owner-Operators") members' escrow maintenance funds. After an earlier appeal, we found that Comerica Bank had breached a trust obligation to the Owner-Operators but remanded the case to the district court to decide if the statute of limitations barred the Plaintiffs' claims.

After remand following the first appeal and after the parties waived a jury trial, the district court found this lawsuit was timely and gave Plaintiffs Owner-Operators judgment. Defendant Comerica Bank now appeals the district court's judgment awarding $5,583,084 to Plaintiffs Owner-Operators. Comerica Bank says that the district court erred when it: (1) concluded that the statute of limitations does not bar the claim against Comerica; (2) awarded damages based on a retroactive application of the private right of action under the Interstate Commerce Commission Termination Act ("ICCTA"); (3) refused to allow Comerica to challenge the amount of damages; and (4) made an excessive award of prejudgment interest. For the reasons that follow, we AFFIRM the district court's judgment with respect to the statute-of-limitations, ICCTA-retroactivity, and prejudgment-interest issues.

Judge Cook and Judge Moore find that this case should be remanded to the district court to determine damages. I respectfully dissent from the majority's conclusions regarding the damages determination and I would find that Comerica waived its right to challenge the damage calculationwhen Comerica failed to appeal an earlier and specific finding that Comerica Bank had taken $5,583,084, of Plaintiffs funds.

I. BACKGROUND

A. Factual Background

This Court's previous opinion outlines the case's background:

This lawsuit has its origins in a $5.5 million class action settlement agreement that Arctic and its affiliate, D & A Associates Ltd. ("D & A"), entered into with Plaintiffs, representatives of a certified class of "owner-operators," who independently own, lease, and operate motor carrier equipment for the transportation of commodities. . . .

The underlying basis for the class action suit was the owner-operators' contractual arrangement with Arctic and D & A. . . . Under the agreements, . . . the owner-operator agreed to have Arctic deduct a flat fee of nine cents per mile from his or her compensation on a weekly basis for the purpose of repairing and maintaining the leased trucking equipment. . . . The maintenance payments were kept by Arctic in a maintenance escrow fund. . . .

In June 1997, the owner-operators initiated a class action suit (the "Arctic Litigation") against Arctic and D & A in the United States District Court for the Southern District of Ohio, seeking monetary damages and other relief. The certified class of plaintiffs . . . alleged that Arctic and D & A violated the Truth in Leasing regulations of the Motor Carrier Act, 49 U.S.C. §§ 14101 02, 14704; 49 C.F.R. § 376 et seq., by failing to return unused maintenance escrow fund balances to the class of owner-operators whose lease agreements with Arctic did not run full term. . . .

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. Plaintiffs allege that in December 2003, through testimony given in the bankruptcy proceedings, they first learned of Arctic's financing arrangement with Comerica and Comerica's actions in transferring the maintenance escrow funds out of Arctic's depository accounts to repay amounts owed to it pursuant to its loan agreements with Arctic. . . .

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. The bankruptcy court lifted the automatic stay to allow the district court to complete the Arctic Litigation and liquidate the class claims, and, in May 2004, plaintiffs entered into a $5.5 million settlement agreement with Arctic and D & A, which was approved by the district court in July 2004. The settlement equaled the total amount of maintenance escrow funds, plus interest, owed by Arctic and D & A to the owner-operators . . . ."

In re Arctic Express Inc., 636 F.3d 781, 786-89 (6th Cir. 2011) (footnotes omitted).

B. The Instant Action

In January 2004, and while Arctic's bankruptcy case was pending, the Owner-Operators filed an adversary proceeding against Arctic, D & A, and Comerica in the bankruptcy court. The Owner-Operators sought the return of Plaintiffs' escrow funds from Arctic, D & A, and Comerica Bank. While this lawsuit was pending, the plaintiffs agreed to a $5.5 million settlement with Arctic and D & A in May 2004.

Comerica Bank never challenged the settlement amount although the bankruptcy court adversary complaint against Comerica Bank, Arctic, and D & A had asked the district court to "[e]nter judgment against Comerica Incorporated ordering that payment be made. . . to return the full amount in maintenance escrow funds plus interest in an amount equal to that awarded pursuant to final judgment entered by the District Court [in the Arctic and D & A case]."

The district court approved the settlement in July 2004. In approving the settlement, the district court found that the settlement amount reflected the total amount of maintenance escrow funds, plus interest, that Arctic and D & A owed to the Owner-Operators. The settlement agreement also said the Owner-Operators would not seek to recover more than $900,000 from Arctic. As thedistrict court described in the first decision, "Plaintiffs accepted this lower amount [from Arctic] with the express purpose of seeking the remainder of the settlement amount from Comerica."

After settling with the other two defendants, the Owner-Operators continued the lawsuit against Comerica and sought to enforce the judgment against Comerica Bank. In this litigation, Plaintiffs bring a single claim seeking restitution or disgorgement of the maintenance escrow funds deposited by Arctic into Comerica's accounts and purportedly used by Comerica to pay down Arctic's indebtedness.

1. 2009 District Court Summary Judgment Ruling

In the earlier litigation before the district court, Comerica first argued that the statute of limitations stopped the Plaintiff Owner-Operators' claims against Comerica. Next, Comerica argued that imposition of a trust obligation would retroactively apply a newly created private right of action for violation of Truth-in-Leasing provisions. Finally, Comerica said the settlement agreement did not stop Comerica from challenging "the validity and amount of the consent judgment."

a. Statute of limitations

In the summary judgment decision, the district court first considered Comerica Bank's argument that the Owner-Operators' claims were time-barred. After considering the parties' respective arguments and evidence, the district court found that a genuine issue of material fact existed as to whether Plaintiffs exercised reasonable diligence to discover facts that would cause the statute of limitations to accrue for its claim against Comerica.

b. ICCTA retroactivity

With regard to ICCTA, the district court found that "whether the ICCTA can be applied retroactively to pre 1996 leases is not even an issue in this case." The district court specifically found the Plaintiffs were not suing Comerica under the ICCTA, Instead, the Owner-Operators were bringing an action for restitution under the federal common law of trusts.

c. Damages

During the first round before the district court, the district court considered Comerica's arguments that Comerica Bank should not be bound by damages calculation agreed to in the settlement and approved by the district court. With that argument, Comerica Bank said "that Plaintiffs cannot rely on the doctrine of issue preclusion to establish the amount of Plaintiffs' alleged damages."

The district court rejected Comerica's argument, finding "[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." In reaching this conclusion, the district court reasoned " if this Court determines that Comerica withdrew funds from that account in breach of trust, then Comerica would be liable for the entire amount of trust property (provided Comerica is not a bona fide purchaser)."

The district court followed this reasoning: (1) Arctic held the escrow amounts in trust, the money was the...