SPECIAL REPORT: Court rules in favor of OOIDA against AAFAB Inc., orders return of escrow funds

| 2/18/2004

Feb. 18, 2004, Grain Valley, MO –  A U.S. District Court has ruled in favor of owner-operator truckers in a lawsuit filed by the Owner-Operator Independent Drivers Association against AAFAB Inc., Smyrna, GA. The court granted a motion by OOIDA for summary judgment on Feb. 4, 2004.

The OOIDA lawsuit was filed on behalf of two of its owner-operator members, James Goode and Fred Loveless, claiming AAFAB had refused to return escrow funds following the termination of their leases. Federal truth-in-leasing regulations mandate that escrow funds be returned within 45 days of termination. The complaint alleged that a forfeiture provision in AAFAB’s written lease, stipulating that escrow accounts would be forfeited to AAFAB if three days’ notice of termination was not given by owner-operators, violated federal regulations. The complaint also went on to assert that AAFAB was engaged in the unlawful provision of transportation services because its lease agreements were illegal.

Citing several other OOIDA cases in which similar issues had been addressed, U.S. District Judge Jack T. Camp (for the Northern District of Georgia, Atlanta Division) ruled that AAFAB’s lease did not comply with federal regulations and enjoined them from using it again. He further ruled the lease’s escrow provision did indeed violate federal regulations and ordered the carrier to comply with 49 C.F.R § 372.12 relating to escrow funds, including returning any funds due the plaintiffs.

He dismissed the carrier’s argument that the case was moot since it no longer used the illegal leases. AAFAB had adopted new leases after the lawsuit was filed; however, Judge Camp pointed out that, while he considered the new leases to be irrelevant to the case, the company had not demonstrated it complied with federal regulations either.

"This was a clear victory for the association and the owner-operators involved," said OOIDA President Jim Johnston. "Rulings such as this continue to help clearly spell out for the industry the rights of owner-operators, especially to their escrow funds held in trust."

Johnston added, “This case also demonstrates our commitment to pursue those unscrupulous motor carriers, regardless of their size, that systematically enrich themselves by bilking hard-working owner-operators.”