OOIDA pursues Prime in state court, includes corporate officers as defendants

| 1/17/2003

OOIDA has continued its ongoing legal efforts against New Prime Inc. by filing another suit, this time in Missouri Circuit Court.

On Jan. 2, 2003, OOIDA filed a class action lawsuit on behalf of individual owner-operators against the Springfield, MO, motor carrier in Green County, MO, Circuit Court. Also named as defendants in the case are Prime officers and directors Robert Lowe, Lawana Lowe and Vera Lowe. The complaint alleges unlawful workers’ compensation practices and seeks the return of insurance premiums paid for the procurement of workers’ compensation insurance where such premiums, under Missouri law, must be paid by Prime.

Joining OOIDA in the action is OOIDA member Jeffrey Warta, who, from 1996 until April 2000, was leased to Prime under the terms of a service contract. Warta also had a lease‑purchase agreement under which he leased his equipment from a Prime-related corporation, Success Leasing. Under the terms of the lease-purchase agreement, Warta obtained no ownership interest in the vehicle.

According to the complaint, Prime deducted weekly premiums from Warta’s compensation purportedly to pay premiums for workers’ compensation insurance. After sustaining severe injuries in April 2002 while performing services for Prime, Warta applied for workers’ compensation benefits before the Missouri Labor and Industrial Relations Commission. The complaint alleges that Prime intervened in Warta’s workers’ compensation proceeding as Warta’s employer and was thereby able to direct Warta’s medical treatment and obtain other benefits pursuant to Missouri’s workers’ compensation law.

Under Missouri law, an employee for purposes of workers’ compensation includes owner-operators who lease their vehicles under a lease-purchase agreement but who have no ownership interest in the truck. At the same time, Missouri’s workers’ compensation law prohibits an employer from charging an employee for workers’ compensation coverage.

Prime is alleged to have engaged in a scheme by which it deducted workers’ compensation premiums from Warta and other similarly situated drivers in violation of Missouri law and, at the same time, considered itself the employer of Warta and other drivers when a workers’ compensation claim was made.

The complaint alleges Prime and its three named officers and directors are liable to Warta and other members of the class for unjust enrichment and for fraud.

OOIDA and the plaintiffs in the case are seeking reimbursement for all Prime owner-operators of workers’ compensation premiums unlawfully deducted from owner-operator compensation, as well as a permanent injunction preventing Prime from engaging in such acts in the future. The complaint also seeks punitive damages against Prime and the Lowes.

The new lawsuit does not affect another lawsuit currently being heard in U.S. District Court, which was brought by OOIDA and two association members against Prime under the federal truth-in-leasing regulations. That action deals with alleged violations of federal law, while this new action is brought solely under Missouri state law.