Sept. 4, 2001,
Grain Valley, MO -- A U.S. District Judge has issued his written opinion granting
summary judgment to the Owner-Operator Independent Drivers Association (OOIDA)
in its lawsuit against Arctic Express Inc.
members Carl Harp, Garvin Keith Roberts and Michael Wiese had filed suit against
Arctic Express Inc. of Hilliard, OH and its affiliate truck leasing company,
D & A Associates LTD, claiming violations of the federal truth-in-leasing
regulations for their failure to return escrow accounts after the termination
of the owner-operators' leases. Among the key issues being challenged by OOIDA
were clauses in the lease/purchase agreements stipulating conditions under which
the escrow accounts would be forfeited by the owner-operators.
his summary judgment, U.S. District Court Judge Algenon L. Marbley (for the
Southern District of Ohio, Eastern Division) has found in OOIDA's favor on the
merits of the case on both matters of law and matters of fact.
to the companies in his strongly worded opinion, Judge Marbley wrote "...this
Court concludes that the Lease Agreement and Lease/Purchase Option are in violation
of §376.12(k). The Defendants here did not substantially comply, nor did
they slightly comply. Arctic, behind the shield of an affiliated company, D
& A, absconded with the Plaintiff's escrow funds. Following the ICC's guidance,
this Court will not let pass 'abuses or the potential for abuse occasioned by
collusion between a carrier and the third party beneficiary of an equipment
purchase deduction.' "
the specific "conditions" for the return of escrow accounts contained
in the carrier's lease agreements, Judge Marbley concluded that evidence showed
that the maintenance fund to which the owner-operators had been contributing
was being considered by the companies as "a general fund to satisfy any
obligation incurred by the members, which is in violation of the letter and
spirit of the Regulations." Judge Marbley went on to add, "In its
final analysis, the Court concludes that the adoption of the Defendants' argument
that they have satisfied §376.12(k) by describing the "conditions"
for the return of escrow funds could lead to absurd results."
ruling is one of the most important court opinions that we have obtained to
date in challenging the abuses of carriers who disregard or manipulate the federal
leasing regulations out of personal or corporate greed," said OOIDA President
Jim Johnston. "Judge Marbley's language in this opinion makes the point
very clearly on behalf of owner-operators that the court recognizes their rights
under both the letter and the purpose of the truth-in-leasing regulations."
"This court ruling establishes a huge precedent under which OOIDA and its
members can even more aggressively pursue the many other carriers who are taking
advantage of owner-operators through lease agreements that violate federal law."