Uselmann v. Pop
| Decision Date | 27 January 2023 |
| Docket Number | 19-cv-13652 |
| Parties | MIRELA USELMANN, D/B/A SAPPHIRE TRUCKING, INC., ET AL., Plaintiffs, v. RAZVAN POP, ET AL., Defendants. |
| Court | U.S. District Court — Eastern District of Michigan |
Before the Court is Plaintiffs' Motion for Class Certification [ECF No. 42]. They seek to certify a class of: “All owner-operators who contracted with Defendants from January 1, 2010, to January 1, 2020[,]” pursuant to Fed.R.Civ.P. 23(a)-(b) (“Rule 23”). [ECF No. 42 PageID.1143].
The putative class seeks to have Plaintiffs' counsel Bruce Miller of Miller Cohen P.L.C to serve as class counsel under Fed.R.Civ.P. 23(g). [Id]. They appoint named Plaintiffs Mirela Uselmann d/b/a Sapphire Trucking, Inc.; Gabriel Biclea d/b/a MB Trucking, Inc.; Ion Gutu d/b/a GPA Trucking, Inc.; and Dumitru Marius Rendenciuc d/b/a DMR Express, Inc. as class representatives.
Plaintiffs filed their Motion to Certify Class on November 18, 2021. Defendants responded on January 13, 2022, and Plaintiffs filed a reply on January 27, 2022. The Court heard oral argument on September 22, 2022.
On November 14, 2022, the Court ordered Plaintiffs to file supplemental briefing and address the issue: whether the class is certifiable under Fed.R.Civ.P. 23(b)(3). Plaintiffs filed the supplemental brief on November 21, 2022. Defendants responded on November 29, 2022, and Plaintiffs filed a reply on December 5, 2022. The Motion for Class Certification is now fully briefed.
For the following reasons, the Court GRANTS Plaintiffs' Motion and CERTIFIES the class under Fed.R.Civ.P. 23(a) and (b)(3).
IT IS FURTHER ORDERED that the Court modifies the class definition to include all owner-operators who contracted with Defendants from January 1, 2011, to January 1, 2015.
Plaintiffs' Amended Complaint alleges that Razvan Pop (“Pop”), Maria Pop, RSP Express Inc. (“RSP”), and NA Truck Repair, LLC, (“NA”) (Collectively “Defendants”) engaged in two counts (“count I” and “count II”) of civil violations under the Racketeering Influenced Corrupt Organization Act (“RICO”), 18 U.S.C. § 1964 (c), et seq. Plaintiffs say Defendants cheated them out of millions of dollars of contract proceeds through systematic fraud.
Plaintiffs also allege state law claims for breach of contract (“count III”), unjust enrichment (“count IV”), promissory estoppel (“count V”), and conversion (“count VI”). The Court previously granted Defendants' motion for summary judgment on count II. [see ECF No. 75]. Only count I and counts III-VI remain. Plaintiffs seek monetary damages as their sole remedy.
The factual background of this case is detailed in the Court's Opinion and Order Granting in Part and Denying In Part Defendants' Motion for Summary Judgment. [ECF No. 75, PageID.2796- 2800]. The Court incorporates it by reference and will only discuss the facts most pertinent to Plaintiffs' motion for class certification.
Plaintiffs say the Defendant companies are part of a family of businesses owned or operated by Defendants Razvan Pop and Maria Pop, which each have a separate and distinct relationship to the fraud enterprise. [ECF No. 42, PageID.1159].
Plaintiffs are independent truck owner-operators who contracted with Defendant RSP to transport freight for third-party shippers between 2006 and 2015. See Uselmann v. Pop, 495 F.Supp.3d 528, 532 (E.D. Mich. 2020). RSP is a transportation provider that handles third-party businesses' transportation needs to move goods across the United States and Canada.
As the allegedly fraudulent scheme goes, these third-parties paid RSP directly for each freight delivery. Id. RSP then contracted with Plaintiffs-who are all truck owner-operators-to transport the third parties' haul. [ECF No. 14-1, PageID.406-420]. Plaintiffs say they are aware of at least sixty owner-operators with nearly identical agreements from 2011-2015. [ECF No. 42, PageID.1156-57].
[ECF No. 49-6, PageID.1633].
The gross revenue was “the amount that the customer agre[ed] to pay RSP for a shipment load.” [ECF No. 48-7, PageID.1538]. When a freight job became available, RSP dispatchers assigned it to an owner-operator. [ECF No. 48-7, PageID.1539]. The dispatcher explained the job's details, including the route, pickup and drop-off times, and purported payment amount. Id. That payment amount was “the gross revenue” from which “the owner operator[s] [were] being paid 80 percent. . .” Id. at PageID.1534.
Plaintiffs say the gross revenue amount RSP dispatchers disclosed to the owner-operators was not based on the actual third-party payments made to RSP; it was based on an amount that Defendant Razvan Pop advised the dispatchers to disclose. Id. at PageID.1542. Dispatchers never disclosed to the owner-operators the actual amounts third-parties paid RSP. Id. at PageID.1529.
RSP mailed Driver/Contractor Settlement statements (the “Settlement Statements”) to Plaintiffs once they completed a freight job. Id. These Settlement Statements also purportedly represented the gross revenue paid to RSP by third-party customers. Id. The Settlement Statements are the source of the alleged fraud underlying this action. According to Plaintiffs, the Settlement Statements represented a fraction of the actual gross revenue RSP received.
Plaintiffs accuse Defendants of violating the Agreements by understating the gross revenue from transactions between RSP and third parties, then pocketing the difference for themselves. Id. Plaintiffs deny any potential claims that the Agreements were modified to allow payment for less than the contract price, and they say this fraudulent scheme was followed uniformly in relation to all owneroperators. [ECF No. 19, PageID.547].
However, there is no dispute that this allegedly fraudulent arrangement ceased as late as the beginning of 2015. Id.
Plaintiffs rely on Defendants' own records to illustrate the amount of money lost due to the allegedly fraudulent enterprise. They say 2012-2014 Driver Payroll History and Fleet Revenue Reports from Dr. Dispatch-a computer program that Defendants used to record both accounts receivable and payroll-show that the invoice price (the actual gross revenue) significantly exceeded the revenue price on the Driver Payroll Records. The amounts on the Driver Payroll Records correspond to the amounts listed on the Settlement Statements.
Allegedly, 2012 owner-operators were shorted a total of $812,723.80; 2013 owner-operators were shorted $1,180,044.17; and 2014 owner-operators were shorted $1,876,205.68. Records for years 2011 and 2015 are purportedly still subject to discovery. Plaintiffs seek to recover these contract proceeds.
Class action lawsuits provide a vehicle by which similarly situated claimants can litigate their causes of action in a single judicial forum. As such, they are intended to promote judicial economy, efficiency in the adjudicatory process, and fairness to the participating claimants. Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 349 (2011). To certify a class, the court must conduct a “rigorous analysis” to determine whether a proposed class complies with the requirements of Rule 23. In re Whirlpool Corp. Front-Loading Washer Prods. Liability Litig., 772 F.3d 838, 851 (6th Cir. 2013) (citing In re Am. Med. Sys., Inc., 75 F.3d 1069, 1079 (6th Cir. 1996)).
Fed. R. Civ. P. 23(a) imposes four prerequisites to class certification: (1) numerosity, (2) commonality, (3) typicality, and (4) adequacy of representation.
These four requirements are intended to assure that the claims of the class as a whole fit within the contours of the class representatives' claims. In re Whirlpool Corp., 772 F.3d at 850. The requirements limit the class claims to those fairly encompassed by named plaintiffs' claims. Dukes, 564 U.S. at 349. “[C]lass representatives must share the same interests and injury as the class members.” Id.
Rule 23 requirements are more than “a mere pleading standard.” Dukes, 564 U.S. at 350. “There must be an adequate statement of the basic facts to indicate that each requirement of the rule is fulfilled.” In re Am. Med. Sys., Inc., 75 F.3d at 1079 (quoting Weathers v. Peters Realty Corp., 499 F.2d 1197, 1200 (6th Cir. 1974)). The party seeking class certification bears the burden of proof to satisfy Rule 23 certification requirements. Id. at 1079.
The district court maintains substantial discretion in determining whether to certify a class, as it possesses the inherent power to manage and control its own pending litigation.” Randleman v. Fid. Nat. Title Ins. Co., 646 F.3d 347, 351 (6th Cir. 2011).
Under the numerosity requirement, the proposed class must be “so numerous that joinder of all members is impracticable.” Fed.R.Civ.P. 23(a)(1). Rather than apply “a...
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