Attorneys for the Owner-Operator Independent Drivers Association announced this week that it has prevailed in an ongoing legal action against Pacific Financial Association with a successful appeal. According to The Cullen Law Firm, OOIDA and several members will now be able to continue their legal battle stemming from unpaid loads, a bankrupt carrier and unsettled claims.
The Arizona Court of Appeals issued an important precedent-setting ruling on Jan. 3 that OOIDA’s lawsuit for breach of fiduciary duty under a BMC-85 trust could proceed.
The class action lawsuit was filed against Pacific Financial in 2013 by OOIDA and members Thomas and Karen Moore, Jasmine LLC, and K&S Trucking. Pacific Financial Association Inc. is a California corporation based in Phoenix, Ariz.
The lawsuit alleged that Pacific Financial breached its fiduciary duties under the BMC-85 trust by failing to pay claims promptly; failing to terminate the trust when the trust fund was exceeded; favoring certain beneficiaries to the detriment of others; and engaging in conflicts of interest.
The Court of Appeals reversed a lower court ruling that the lawsuit could not proceed under either Arizona statute or common law. The appeal court concluded that such claims were perfectly entitled to proceed under common law.
The Court of Appeals also reversed and vacated the lower court’s award of $85,000 for attorneys’ fees against OOIDA. The ruling paves the way for OOIDA to obtain discovery from Pacific Financial and for the case to be tried on the merits.
“The court’s ruling sets an extremely important precedent in holding trustees like Pacific Financial accountable for losses incurred by small-business truckers at the hands of brokers who have failed to pay their claims,” said OOIDA President and CEO Jim Johnston. “The case also sends a clear message to other BMC-85 trustees throughout the country and carries out the objective of protecting truckers against ‘dishonest and financially unstable middlemen in the transportation industry.’”
Johnston said that OOIDA will ensure that those interests are “fully vindicated in its suit against Pacific Financial” and other cases involving similar conduct.
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