Owner–Operator Indep. Drivers Ass'n v. Comerica Bank

• Decision Date: 20 March 2012
• Docket Number: Case No. 05–CV–0056.
• Citation: 860 F.Supp.2d 519
• Parties: OWNER–OPERATOR INDEPENDENT DRIVERS ASSOCIATION, Carl Harp and Michael Wiese, 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

860 F.Supp.2d 519

OWNER–OPERATOR INDEPENDENT DRIVERS ASSOCIATION, Carl Harp and Michael Wiese, 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.

Case No. 05–CV–0056.

United States District Court,

S.D. Ohio,

Eastern Division.

March 20, 2012.

Joyce E. Mayers, Paul D. Cullen, Sr., David A. Cohen, The Cullen Law Firm, PLLC, Washington, DC, Guy Robert Humphrey, Chester Willcox & Saxbe, Columbus, OH, Paul B. Martins, Helmer, Martins, Rice & Popham Co., L.P.A., Lisa Marie Ellis, Reisenfeld & Associates, LPA LLC, Mark Alan Greenberger, Katz Greenberger & Norton, Cincinnati, OH, for Plaintiffs.

Gerald Paul Ferguson, Michael Gary Long, Tiffany Strelow Cobb, Timothy B. McGranor, Alycia N. Broz, Vorys, Sater, Seymour and Pease LLP, Columbus, OH, for Defendant.

FINAL JUDGMENT

ALGENON L. MARBLEY, District Judge.

I. INTRODUCTION

Plaintiffs, Owner Operator Independent Drivers Association, Inc. (“OOIDA”), Carl Harp and Michael Wiese, as representatives of the certified class of owner-operators, 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 Comerica Bank (“Comerica”), Arctic Express, Inc.'s (“Arctic”) creditor, for the return of maintenance escrow funds owed to the plaintiff class. A bench trial was held in this Court on Defendant's affirmative statute of limitations defense, which is the sole remaining issue to be decided in the case. After the trial, parties submitted proposed findings of fact and conclusions of law to the Court, followed by final response briefs. For the reasons set forth below, the Court enters JUDGMENT for the Plaintiffs, and awards the class restitution DAMAGES in the amount of $5,583,084.00.

II. PROCEDURAL HISTORY

A. The “Arctic Litigation”

The underlying lawsuit forming the basis for this action began over fourteen years ago in this Court, and its material facts have been memorialized in at least eight published opinions since.¹ On June 30, 1997, the owner-operators initiated a class action suit against Arctic and D & A for return of the maintenance escrow funds and other equitable relief. The 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. Arctic is a federally regulated motor carrier that provides transportation services to the shipping public. D & A is a non-carrier company that leases truck units to independent owner-operators.

Arctic moved to dismiss Plaintiffs' complaint, and Plaintiffs moved to certify their class action shortly thereafter. On December 18, 1997, Magistrate Judge King ordered that all discovery be limited to issues related to class certification, and stayed all merits discovery during the pendency of Arctic's motion to dismiss. (97–cv–750, Dkt. 22.) Soon thereafter, on August 17, 1998, this Court entered an order staying all proceedings in the case pending the outcome of appellate rulings which held implications for the Arctic Litigation. ( Id., Dkt. 35) On March 3, 2000, following the Eighth Circuit's decision in Owner–Operator Indep. Drivers Ass'n v. New Prime, Inc., 192 F.3d 778 (8th Cir.1999), this Court denied Arctic's motion to dismiss, and then vacated the stay previously entered in the Arctic Litigation. (97–cv–750, Dkt. 42.)

The Court granted partial summary judgment to the certified class of plaintiffs on the issue of liability, holding that Arctic's “transformation of the maintenance fund into ‘nonrefundable’ monies [was] unrelated to the cost of maintenance of the Plaintiffs' vehicles, and therefore [was] in violation of § 376.12(k),” because “the non-refundable nature of the maintenance fund [was] no more than an early termination penalty thinly disguised by [Arctic].” Owner–Operator Indep. Drivers Ass'n, Inc. v. Arctic Express, Inc., 159 F.Supp.2d 1067, 1076 (S.D.Ohio 2001). The Court then ordered Arctic to return the net unused balance in the escrow accounts to Plaintiffs. See Owner–Operator Indep. Drivers Ass'n, Inc. v. Arctic Express, Inc., 288 F.Supp.2d 895 (S.D.Ohio 2003); Owner–Operator Indep. Drivers Ass'n, Inc. v. Arctic Express, Inc., 270 F.Supp.2d 990 (S.D.Ohio 2003).

B. Plaintiffs' Bring Suit Against Comerica

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 maintain it was not until December 2003, through testimony given in the bankruptcy proceedings, that 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 Comerica pursuant to its loan agreements with Arctic.² 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 in federal court.³

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 moved to dismiss Plaintiffs' claims, arguing, inter alia, that the statute of limitations barred Plaintiffs' claim for recovery against them. This Court granted Comerica's motion to dismiss as to the 1993 loan agreement because Ohio law specified a six-year statute of limitations for “an action ... upon a liability created by statute.” Ohio Rev. Code (“O.R.C.”) § 2305.07, and the maintenance escrow funds did not constitute a “continuing and subsisting trust,” the recovery of which would not be subject to the statute of limitations.

Plaintiffs amended their complaint a second time, and Comerica moved to dismiss again. This time, the Court “found that a four-year limitations period applied and that Defendants failed to allege that information was disclosed to Plaintiffs that would have alerted them to their claim against Comerica more than four years before they brought this suit.” Owner Operator, 615 F.Supp.2d at 698. The partiesfiled cross-motions for summary judgment. Regarding the statute of limitations defense, the Court held the following:

The relevant facts are undisputed, as it has been admitted that Plaintiffs received checks drawn on a Comerica account, so Plaintiffs were at least aware that Arctic had a checking account with Comerica. In addition, it has been admitted that Plaintiffs did not further investigate Comerica and Arctic's relationship. Nevertheless, reasonable minds could differ as to whether Plaintiffs exercised reasonable diligence in discovering facts giving rise to the claim against Comerica. There is a genuine issue of material fact on this issue.

Id. at 701.

The Sixth Circuit, reviewing the issue de novo, affirmed this Court's ruling “that genuine issues of material fact exist which preclude a ruling, as a matter of law, on Comerica's statute of limitations defense.” See Owner Operator Indep. Drivers Ass'n v. Comerica Bank (In re Arctic Express, Inc.), 636 F.3d 781, 803 (6th Cir.2011). The appeals concluded that “Comerica must therefore disgorge the trust property received in breach of trust unless it can establish a viable defense.” Id. at 801.

In its August 11, 2011, Order this Court found that the Sixth Circuit's holding conclusively established the issue of recoverable damages against Comerica at $5,583,084, and that the only issue at trial would be the viability of Comerica's statute of limitations defense. (Dkt. 84.) The Court also granted Comerica's request for extraordinary discovery “in the form of interrogatories and depositions to determine when they knew, or when they should have known, about the Defendant's relationship with either Arctic Express, Inc. or D & A Associates, Ltd.” ( Id.) The Court clarified there, and in multiple subsequent orders, that Comerica was only entitled to attorney fact work product, not opinion work product.

The Court presided over a bench trial on Comerica's statute of limitations defense, which commenced on October 3, 2011. On October 5, 2011, Plaintiffs produced a small portion of documents responsive to Defendant's prior requests for production. On Defendant's request, the Court continued the trial to allow Plaintiffs the opportunity to produce all remaining responsive documents, and give Defendant sufficient time to review the late production and depose any necessary witnesses. (Dkt. 132.) The trial resumed on October 31, 2011, and concluded that same day. Defendant made an offer of proof after the close of trial, requesting the Court to reopen the issue of damages, but the Court denied this request.

III. FINDINGS OF FACT

A. The Plaintiffs and Their Counsel

Plaintiff OOIDA is a trade association that represents the interests of small-business truckers, owner-operators, and employee drivers at both the state and federal levels. (Tr. 10/4, 123:21; 125:2–9.) OOIDA protects its members through litigation, lobbying, and regulatory actions. ( Id. at 125:6–9.) OOIDA was founded in 1973, and today has approximately 150,000 members and 250 employees. ( Id. at 123:21–124:8.) OOIDA is a sophisticated organization that has a number of...