Owner-Operator Independ. Drivers v. Arctic Exp.

Decision Date03 March 2000
Docket NumberNo. C297-CV-00750.,C297-CV-00750.
Citation87 F.Supp.2d 820
PartiesOWNER-OPERATOR INDEPENDENT DRIVERS ASSOCIATION, INC., et al., Plaintiffs, v. ARCTIC EXPRESS, INC. and D & A Associates, Ltd., Defendants.
CourtU.S. District Court — Southern District of Ohio

James Burdette Helmer, Jr., Helmer Martins & Morgan, Cincinnati, OH, Paul D. Cullen, Sr., Gregory Michael Cork, Cullen & O'Connell, Washington, DC, for plaintiffs.

A. Charles Tell, Baker & Hostetler, Columbus, OH, for Defendants.

MARBLEY, District Judge.


This matter is before the Court on the Defendants' Motion to Dismiss for Failure to State a Claim Upon Which Relief Can be Granted filed on September 5, 1997, and on Defendants' Motion to Dismiss Under Doctrine of Primary Jurisdiction filed on January 15, 1998. By Order dated August 17, 1998, this Court stayed this action pending the Defendants' appeal to the Sixth Circuit. On appeal, this case was transferred to the Eighth Circuit Court of Appeals for consolidation with three other cases.

The Eighth Circuit issued the opinion of Owner-Operator Independent Drivers Association, Inc. v. New Prime, Inc., 192 F.3d 778 (8th Cir.1999), on August 10, 1999, and denied the petition for review of this case. By Order dated October 13, 1999, the Eighth Circuit denied the Petition for Rehearing and for Rehearing En Banc.

The Plaintiffs allege that the Lease Agreements they entered into with the Defendants violate the Motor Carriers Act, 49 U.S.C. §§ 14101-02 and 14704, and the Regulations promulgated under the Act, 49 C.F.R. Part 376. This matter is now before the Court on both of the Defendants' Motions to Dismiss.


The following facts are based on the Plaintiffs' Complaint. The Plaintiff, Owner-Operator Independent Driver's Association Inc. ("OOIDA"), is a business association comprised of individuals and entities who own and operate motor vehicle equipment. The three Plaintiffs, Carl Harp, Garvin Keith Roberts and Michael Wiese, ("Members"), are individuals who have entered into a Lease Purchase Agreement with Defendant, D & A Associates, Ltd. ("D & A"), and a Motor Vehicle Lease Agreement with Defendant, Arctic Express, Inc. ("Arctic"). Arctic is a regulated motor carrier engaged in the business of providing transportation services to the shipping public. D & A is a non-carrier company engaged in the business of leasing truck tractor units, with the option to purchase, to independent owner-operators. D & A and Arctic are under common ownership and control.

Owner-operators are small business men and women who own or control truck tractors used to transport property on the country's highways. Owner-operators either transport commodities exempt from Department of Transportation ("DOT") Regulations or, as independent contractors, lease or provide their equipment and services to motor carriers who possess the legal operating authority under DOT regulations to enter into contracts with shippers to transport property. The relationship between independent truck owner-operators and regulated carriers is set forth in an agreement between the parties regulated by DOT.1 See 49 U.S.C. § 14102; 49 C.F.R. pt. 376.

Under the contract between D & A and Members, the Independent Contractor Motor Vehicle Lease Agreement, ("Lease Purchase Agreement"), Members lease from D & A, with the option to purchase, truck tractor units. Under this Lease Purchase Agreement, Members are obligated to make weekly equipment rental payments to D & A and are also obligated to make payments to a maintenance fund based on mileage. This Agreement is not directly regulated by the Motor Carriers Act.

Arctic and Members entered into a "Independent Contractor Motor Vehicle Lease Agreement," ("Lease Agreement"), whereby each Member leased a truck unit and the services of a qualified driver to Arctic. This Lease Agreement is subject to the terms of 49 C.F.R. Part 376.

Defendants, through the Affidavit of Steven R. Russi, Executive Vice President of Defendants Arctic and D & A, acknowledge that the Members have entered into separate Agreements with D & A and Arctic. Before the D & A and Arctic Agreements were executed, the Members were given an orientation program where the terms and conditions of each Agreement were explained; the details of the individual Member's financial obligations were discussed; and the amount and circumstances of each monetary deduction from Member's settlements were disclosed and reviewed. The Member's acceptance of the terms of the Agreement was established when each individual Member placed his or her initials at the end of the Agreement. Each of the Plaintiffs in this case initialed in the appropriate space at the end of the Agreement.

Under the Lease Purchase Agreement between D & A and Members, each individual Member leased a motor vehicle and was required to make weekly truck rental and maintenance payments at the rate of 9¢ per mile. The maintenance payments were collected in a "maintenance fund." Arctic deducted the rental and "maintenance fund" payments directly from the Member's compensation on a weekly basis.

The maintenance fund balances were refundable if the lease ran its term, or if the lease was terminated before the end of the specified term, when the Members exercised their purchase option. The fund balance was not refundable if the lease was terminated mid-term without the Member exercising his or her purchase option. If the lease was terminated mid-term, the maintenance fund balance was applied to the cost of reconditioning and repairing the vehicle for future use. None of the Members in the present case exercised his purchase option and therefore his maintenance fund balance was not refunded to him under the D & A Agreement.2

When the commercial driver's licenses of two of the Members, who are Plaintiffs to this suit, were canceled or suspended, they notified Arctic and their equipment leases were terminated.3 The third Member voluntarily terminated his equipment lease with Arctic. The Plaintiffs could have hired other drivers for the vehicles they leased from D & A; however, they did not, and as a result their Lease Purchase Agreements with D & A were terminated before the end of the specified lease term, and their maintenance fund monies were not returned to them.

The Plaintiffs are seeking monetary damages and declaratory and injunctive relief, for themselves and on behalf of other similarly situated independent truck owner-operators, that arise from being deprived of their escrow funds and other funds deposited with the Defendants during the term of their Lease Agreements.


The Federal Rules of Civil Procedure provide that when a motion to dismiss brought under Rule 12(b)(6) includes "matters outside of the pleading," that the motion should be treated as one for summary judgment under Rule 56(c). FED. R. CIV. P. 12(b); see also Greenberg v. Life Ins. Co., 177 F.3d 507 (6th Cir.1999) (finding that attached illustrations were outside the pleadings but that the insurances policies in question were not); McCottry v. Runyon, 949 F.Supp. 527, 528 n. 1 (N.D.Ohio 1996) (finding that attached affidavits and deposition transcripts converted the motion to dismiss a motion for summary judgment).

Here, the Defendants have submitted the affidavit of Steven Rossi in their Motion to Dismiss. In their Response, the Plaintiffs argued that the Defendant's Motion should be treated as one for summary judgment, and in their Reply, the Defendants agreed with this assertion. Therefore, the Defendants' Motions will be consolidated and treated as one for summary judgment under Federal Rule of Civil Procedure 56(c).

Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." FED. R.CIV.P. 56(c). The movant has the burden of establishing that there are no genuine issues of material fact, which may be accomplished by demonstrating that the nonmoving party lacks evidence to support an essential element of its case. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Barnhart v. Pickrel, Schaeffer & Ebeling Co., L.P.A., 12 F.3d 1382, 1388-89 (6th Cir.1993). The nonmoving party must then present "significant probative evidence" to show that "there is [more than] some metaphysical doubt as to the material facts." Moore v. Philip Morris Cos., Inc., 8 F.3d 335, 339-40 (6th Cir.1993). "[S]ummary judgment will not lie if the dispute is about a material fact that is `genuine,' that is, if the evidence is such that a reasonable jury could return a verdict for the non-moving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); see also Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (summary judgment appropriate where the evidence could not lead a trier of fact to find for the non-moving party).

In evaluating such a motion, the evidence must be viewed in the light most favorable to the non-moving party. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). The mere existence of a scintilla of evidence in support of the non-moving party's position will be insufficient; there must be evidence on which the jury could reasonably find for the non-moving party. See Anderson, 477 U.S. at 251, 106 S.Ct. 2505; Copeland v. Machulis, 57 F.3d 476, 479 (6th Cir.1995).


This case was stayed pending the Defendants appeal to the Sixth Circuit. On appeal, this case was transferred to the Eighth Circuit for consolidation with three other cases. In Owner-Operator Independent Drivers Association, Incorporated v. New Prime, Inc., 192 F.3d 778 (8th Cir. 1999), the Eighth Circuit denied a petition to hear ...

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