In the case of OOIDA v. Comerica Bank, on March 27, the Ohio federal court amended OOIDA’s judgment against Comerica Bank to include $2,647,330.62 in prejudgment interest for a total judgment in the amount of $8,230,414.62.
The original suit was filed in 1997 on behalf of about 1,600 drivers who drove for Arctic Express out of Hilliard, OH. A court agreed with OOIDA that Arctic had illegally held on to money in the truckers’ escrow accounts after they left the company.
But Arctic declared bankruptcy and, for a while, the lawsuit appeared dead. During the bankruptcy proceedings, OOIDA learned of Arctic’s financial arrangement with Comerica Bank in which the bank received the maintenance escrow funds and used that money to pay down Arctic’s outstanding loans.
“That’s when we decided – in 2004 – to go after Comerica Bank,” said OOIDA President Jim Johnston. OOIDA then sued the bank to recover the money.
Johnston said that the result in this case is a prime example of the Association’s mission.
“We are here to serve the interests of our members” said Johnston. “No matter how long it takes, we will keep fighting until the final word is in. The final word here proves the fight has been worth it.”
In the recent ruling on March 27, the court noted that Comerica had use of the money for eight years past the date that the judgment against Arctic Express had been entered and that some drivers had been waiting for more than 15 years to get their money returned to them.
OOIDA and the plaintiffs were represented by The Cullen Law Firm, the Association’s legal counsel. The case was one of the first truth-in-leasing lawsuits filed by the firm.
Cullen Law Firm attorney Joyce Mayers has been lead attorney in the case. She says she was assigned to the case the day she walked in the door at the firm. Mayers said that while the final judgment was a long time in coming, she is grateful to have had the support of Harp and Wiese, the two Arctic drivers who have represented the class in these lawsuits.
“Without Carl and Michael, we might not have been able to finish the job we started with our lawsuit against Arctic,” said Mayers.
Paul Cullen Sr. of The Cullen Law Firm cited the full commitment from OOIDA as well, in the Association’s willingness to support litigation to “finally get justice for drivers whose rights have been violated.”
OOIDA, along with Harp and Wiese, filed a suit in June 1997, 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.
The case became OOIDA v. Comerica Bank in January 2004 when OOIDA 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, an action that resulted in eight more years of litigation.
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 the bank.
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. The $5.5 million included total maintenance escrows to the class action members in the amount of $4,070,190, plus interest of $1,512,894.
OOIDA and its attorneys moved to amend the court’s final judgment regarding prejudgment interest. In the March 27, 2013, ruling from Judge Algenon Marbley, he agreed that “the relief granted would fall short in making the [plaintiff] whole because he has been denied the use of money that was his.” The court pointed out that allowing a defendant to retain the interest it earned on funds wrongfully withheld “would be to approve of an unjust enrichment.”
The court decided that because the base damages of $5.5 million included interest up to July 16, 2004, it was proper to award prejudgment interest for the entire period of deprivation. That period is from July 16, 2004 until March 20, 2012, the date of the final Comerica judgment. Accordingly, Judge Marbley awarded the truckers prejudgment interest in the amount of $2,647,330.62. The total Comerica judgment for the trucker plaintiffs amounts to $8,230,414.62.
“In our class actions, we always seek to change practices in the industry that are abusive to truckers,” said Johnston. “I think the case did correct practices somewhat with Arctic. Arctic is still in business. After their bankruptcy, they reformed and as far as I know they are not doing lease purchases.”
Johnston said there was much accomplished in the long, hard-fought case, in addition to recovering refunds for truckers.
“We set a pretty substantial precedent in this case putting fiduciary responsibility on those trust accounts,” he said. “And of course, we are pleased to be recovering refunds for truckers. Hopefully, we will be able to recover most of the attorney fees we spent over the 15 years that we fought it. Our attorneys deserve it. They worked hard for us.”
Johnston said the class originally represented about 1,600 truckers and that OOIDA will make every effort to reach those people.
“When Arctic was paying a little bit at a time we were not able to reach all of them, but we will be publishing a notice in Land Line to try to reach those truckers in the class.”
Johnston said most will receive a pretty sizeable refund because the interest alone has amounted to $2.6 million in this case.
Johnston said even though he is pleased with the ruling, he pointed out that the completion of this ruling reactivated an appeal filed last year by Comerica. That appeal had been stayed during this final judgment phase.
In order to keep the payment of the judgment from being executed, Comerica must post what they call a “supersedeas bond” in the amount of the judgment, now more than $8 million. At press time, Comerica had not posted bond.
Johnston said that during this latest appeal process, the interest on the judgment will continue to accumulate. While he’d like to see this long case come to an end, he is certain it will come to a positive conclusion soon.
“We feel that the judge issued a very clear and definitive ruling,” said Johnston, “and I am confident we will be able to win the appeal.”
“Land Line Now” News Anchor Reed Black contributed to this article.
OOIDA wins longstanding suit involving Arctic, Comerica