Since OOIDA won a benchmark truth-in-leasing victory for truckers in 2007, the return of owner-operator escrow funds has moved as slow as molasses. The justice system has had to deal with a cavalcade of post-trial motions from the defendant, C.R. England. Meanwhile, the amount of those funds could now exceed $3 million.
At the core of all the holdups has been CRE’s objections to what items may be deducted from the driver’s escrow fund, the rate of interest due on the escrows and how that amount is calculated.
U.S. District Court Judge Ted Stewart, District of Utah, has recently issued two positive rulings in this case.
“It sends a clear message to the Salt Lake City-based motor carrier: It’s time to get this case moving again,” said attorney David A. Cohen of The Cullen Law Firm, OOIDA’s legal counsel in Washington, DC.
Judge Stewart’s first ruling was on C.R. England’s motion for “clarification” on how money returned to drivers at final settlement should be treated.
At final settlement it was not unusual for the motor carrier to credit drivers for their last trip, along with other refunds such as lease completion bonuses. In its motion, however, the company asked the court to rule that all funds returned at final settlement be deemed the return of escrow funds, which would have the effect of dramatically reducing C.R. England’s liability to class members.
The judge denied C.R. England’s motion for “clarification,” stating that it would not issue a blanket ruling as requested by the motor carrier.
Rather, the judge ruled that “the only way to appropriately evaluate” the nature of money returned at final settlement “is to evaluate each member of the class on a truck-by-truck basis.”
The court concluded that these issues should be addressed in the “damages phase” by the magistrate judge.
The second ruling addressed whether C.R. England could assert “newly discovered” setoffs against class members for alleged maintenance and repair costs.
OOIDA had moved to exclude these setoffs from consideration on the ground that the court required C.R. England to deduct any repair and maintenance charges from class members’ escrow funds when the motor carrier filed its final accounting in November 2008.
C.R. England opposed OOIDA’s motion on the ground that these repair and maintenance charges were “newly discovered” and were “legitimate setoffs.”
Magistrate Judge David Nuffer rejected C.R. England’s arguments and ruled that it could not assert any claim for repair or maintenance charges against class members during the current damages phase of the case. C.R. England appealed the magistrate judge’s ruling to Judge Stewart, who agreed with Judge Nuffer’s decision that CRE cannot revise its accounting at this late date.
Excluding the new “setoffs” keeps more than $600,000 in the pot for members of the class.
Judge Stewart also noted that granting C.R. England’s motion “would further delay an already protracted assessment of damages.”
Cohen explains that the effect of the two rulings is to jumpstart the equitable accounting, which had been at a standstill pending the court’s decisions on CRE’s motions. LL
– By OOIDA staff