Cover Story
Lawsuit Update
OOIDA wins longstanding class action involving Arctic Express, Comerica Bank and millions of dollars of long-overdue escrow
Can a motor carrier use escrow funds from its leased owner-operators' money to pay company debts? The Owner-Operator Independent Drivers Association says that's flat wrong and for 15 years put its money and legal team where its mouth is in what has been the Association's lengthiest legal skirmish.

By Sandi Soendker, editor-in-chief

Fifteen years ago, OOIDA and owner-operators Carl Harp and Michael Wiese filed a suit against Arctic Express for violating the escrow provisions of the truth-in-leasing regulations. This suit was resolved in OOIDA’s favor in 2004 when the court held that Arctic had violated the leasing regulations and ordered the return of the escrows in the amount of $5.5 million. Unfortunately, Arctic declared bankruptcy and was unable to pay most of the settlement.

During the bankruptcy proceedings OOIDA learned of Arctic’s financial arrangement with Comerica Bank and that bank’s receipt of the maintenance escrow funds that it was using to pay down Arctic’s debts to it.

OOIDA then sued Comerica on the theory that escrow funds were subject to a statutory trust created under the leasing regulations and that Comerica, as the recipient of trust property, was responsible to the drivers for the escrow funds. OOIDA sought the return of all of the escrow funds from Comerica.

A historical case with a history of its own

This case occupied a part of many people’s lives for years.

For The Cullen Law Firm, it was one of the first truth-in-leasing cases filed by the firm, which opened its doors in Washington, DC, in March of 1997. The class action was initiated on June 30, 1997.

Cullen Law Firm attorney Joyce Mayers has been lead attorney in the case for 12 years. She says she was assigned to the case the day she walked in the door at the firm.

“When Judge Algenon Marbley took the bench as a federal judge, this case was one of the first ones on his docket,” said OOIDA member plaintiff Mike Wiese. “When we were in Columbus in the fall, he told us that.”

For Jim Johnston, president and CEO of OOIDA, it was a truth-in-leasing win he was determined to see go down in the books. For the Association and its legal counsel, the case has been without question their longest active case.

“There are still processes to be completed, and the other side may file an appeal,” said Johnston, “but at this point it looks very good.”

In March 2011, the Sixth Circuit Court of Appeals agreed completely with OOIDA on all of the legal issues in the case: that escrow funds were subject to a statutory trust; that those funds were improperly received by Comerica to pay down Arctic’s debt to it; and that, unless barred by the statute of limitations, Comerica is required to return the escrow funds to the drivers.

The appeals court remanded the case to the federal court in Columbus, OH, to resolve factual questions surrounding the statute of limitations issue.

After a trial on Comerica’s statute of limitations defense, a federal court in Columbus, OH, reviewed the facts of the case and on March 20, 2012, ruled in favor of OOIDA, named plaintiffs, and the certified class of owner-operators. In OOIDA v. Comerica Bank, the court awarded the class restitution in the amount of more than $5.5 million. 

Comerica has a right toappeal the decision.

OOIDA President Jim Johnston says he is extremely pleased to see the case reaching a conclusion.

Plaintiff Carl Harp: “In my pursuit of the American dream, I found a nightmare.”

OOIDA Member Carl Harp was one of the original named plaintiffs and has been on board with the fight from the beginning. In the fall of 2011, when the federal court heard the case of OOIDA v. Comerica, Harp was a witness at the trial in Columbus. In fact, he rode his motorcycle 600 miles from his home in Doniphan, MO, to Ohio for the trial.

“We are seeing a light at the end of the tunnel and I’m happy to see that,” said Harp after the March 20 ruling. “I’m very, very pleased with the decision that was handed down by Judge (Algenon) Marbley. It’s not anything that I didn’t expect. I was confident from the very beginning that truth and justice would prevail and we would be the victors in this case.

“I’m just sad to think that it had to go the way that it did. And that it’s been so long. It’s been 17 years for me, 17 long years. We’re finally going to get back, at least monetarily, what was rightfully ours to begin with.

“I left Arctic Express in 1995 .... And I’ve been waiting for 17 years for my escrow, which was supposed to be returned to me in 45 days. I think they’re late.”

Harp said he started driving for Arctic Express in 1994, in what he thought was the “pursuit of an American dream,” which for him was to be an owner-operator. He signed on to Arctic’s lease-purchase program.

“And in my pursuit of the American dream, I found a nightmare.”

Harp turned the truck back into Arctic Express and went back to driving a company truck for another carrier. But the damage to Harp’s life and his career didn’t stop there.

He says he was so far behind at that point that there was no way to catch up. He filed bankruptcy, lost his home and his wife, and struggled for years to get back on his feet – and he says he wasn’t the only one.

“I don’t know if they’ve ever stopped for one minute to think about how profoundly this has affected so many people, how their lives have been changed – possibly for the worse because of this,” Harp said.

Harp can’t help but think about how things could have been very different in his life had his escrow been returned in 1995.

“I truly do believe that would have made all the difference in the world. The course of my whole life from 1995 to this point would have been different. I daresay it probably would have been better, at least a lot of it would have,” Harp said.

It was a long time before he could “crawl back out of the hole that had been dug” for him. He recently purchased another truck and is hauling local.

In spite of his deep belief his life could have been very different, he’s grateful that he will get the money due him.

“We can’t go back and change the past but we can be glad that finally, at least monetarily, we’re getting what’s rightfully ours, what we should have had all those years ago,” Harp said.

Harp said he is proud that he was a part in helping “right a terrible wrong.”

“I’m tickled to death that I as well as so many other drivers are finally going to get what they were supposed to have all those years ago,” he said. “I am forever indebted to Mr. Johnston, who I think is a fantabulous person. And to everyone there at OOIDA who is 100 percent on our side.”

Harp sees this decision as a clear message to motor carriers who play games with drivers’ escrow.

“Maybe this will be a deterrent for anyone who contemplates doing something like this in the future,” he said. “Now maybe those other carriers will think twice before they try to cheat their people like we’ve been cheated. And of course it wasn’t just Arctic. They had their cohorts too. And you know who I’m talking about: Comerica Bank.”

In the end, Harp really is pleased that justice prevailed.

“Praise the Lord,” says Carl. “It’s almost over.”

Member Plaintiff Mike Wiese: “I am sure they were hoping we would give up.”

OOIDA member plaintiff Mike Wiese started driving for Arctic Express as a company driver, then went to a lease-purchase program. When he quit, he wanted his estimated $8,000 in maintenance funds back, but Arctic told him that wasn’t going to happen. They wanted him to sign a piece of paper that he could not sue them “until the end of time.”

Weise, who is retired from trucking and living in Florida, still has that piece of paper. It’s one he never signed.

“We wouldn’t have gotten anything if OOIDA had not stuck with us,” said Wiese. “I would like to thank Jim Johnston and OOIDA with all my heart and The Cullen Law Firm. … To tell the truth, I wasn’t sure OOIDA would stick it out this long. I was hoping they would, but I wasn’t sure.”

Wiese says he is sure the “other side” was hoping OOIDA wouldn’t stick it out, either.

“In fact, I’m sure that’s probably why they drug it out so long. … I am sure they were hoping that we would give up.” LL