Hubert Walker v. Trailer Transit, Inc.
Filing
Filed opinion of the court by Judge Easterbrook. AFFIRMED. Richard A. Posner, Circuit Judge; Frank H. Easterbrook, Circuit Judge and Ann Claire Williams, Circuit Judge. [6754726-1] [6754726] [15-1482]
Case: 15-1482
Document: 37
Filed: 06/01/2016
Pages: 5
In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 15-‐‑1482
HUBERT E. WALKER, on behalf of himself and a class,
Plaintiff-‐‑Appellant,
v.
TRAILER TRANSIT, INC.,
Defendant-‐‑Appellee.
____________________
Appeal from the United States District Court for the
Southern District of Indiana, Indianapolis Division.
No. 1:13-‐‑cv-‐‑00124-‐‑TWP-‐‑DKL — Tanya Walton Pratt, Judge.
____________________
ARGUED SEPTEMBER 16, 2015 — DECIDED JUNE 1, 2016
____________________
Before POSNER, EASTERBROOK, and WILLIAMS, Circuit
Judges.
EASTERBROOK, Circuit Judge. Trailer Transit relies on in-‐‑
dependent truckers, which following the parties’ convention
we call the Drivers (though they also provide the rigs that
carry the cargo). Trailer Transit contracts with shippers for
the movement of cargo, then contracts with Drivers to pro-‐‑
vide transportation. It promises Drivers 71% of the gross
revenues, with exclusions. Here is the language:
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No. 15-‐‑1482
The parties mutually agree that [Trailer Transit] shall pay to
[Driver], as rental for the equipment leased herein, for trips un-‐‑
der [Trailer Transit]’s operating authorities or in [Trailer Trans-‐‑
it]’s service, a sum equal to seventy-‐‑one percent (71%) of the
gross revenues derived from use of the equipment leased herein
(less any insurance related surcharge and all items intended to
reimburse [Trailer Transit] for special services, such as permits,
escort service and other special administrative costs including,
but not limited to, Item 889).
In this suit a class of about 1,000 Drivers contends that Trail-‐‑
er Transit made a profit on its “special services” and owes
71% of that profit to the Drivers. The district court held oth-‐‑
erwise. 1 F. Supp. 3d 879 (S.D. Ind. 2014); 2015 U.S. Dist.
LEXIS 20250 (S.D. Ind. Feb. 19, 2015).
The Drivers contend that only items provided at cost can
be classified as “special services” (such as permits, licenses,
flashing lights, and escort vehicles for over-‐‑wide or over-‐‑
long loads). If Trailer Transit bills a customer for more than
its cost, then the service cannot be an item “intended to re-‐‑
imburse” Trailer Transit, as the Drivers see things. The dis-‐‑
trict court faulted this contention because it amounts to say-‐‑
ing that the Drivers are entitled to 71% of the gross revenue
on the principal charge for transportation (which Trailer
Transit bills at a price per mile) and 71% of the net revenue
on everything else. That just isn’t what the contract says.
Drivers are entitled to 71% of the gross charge for “use of the
equipment” (that is, the Drivers’ rigs), but the contract does
not provide for a share of Trailer Transit’s net profit on any
other part of the bill. It would be possible to write such a
contract, but the parties didn’t. Indiana law governs the
meaning of this contract in this diversity litigation, and the
Drivers do not invoke any principle of Indiana law that
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turns “71% of gross on X and nothing on Y” into “71% of
gross on X plus 71% of net on Y”.
True enough, one standard meaning of “reimburse” is to
recover costs. Someone who submits a voucher for expenses
incurred on a business trip seeks reimbursement of actual
outlays rather than a profit. But this is not the only possible
meaning of “reimburse.” The word also is used to mean
“compensate” or “pay.” If the contract had said “reimburse
the expense of special services,” that would limit the word’s
meaning to recovery of actual costs. But those italicized
words aren’t in the contract.
Perhaps the Drivers could have argued that the exclusion
of “items intended to reimburse [Trailer Transit] for special
services” limits this category to items provided at cost. They
then would be entitled to 71% of everything else on the bill
sent to the shipper. So if Trailer Transit paid someone $1,000
to accompany an over-‐‑wide shipment and display a “WIDE
LOAD” banner, and billed the shipper $1,250, then the Driv-‐‑
er would be entitled to $887.50 for that escort service—and
Trailer Transit would lose $637.50 ($1,250 less $1,000 less
$887.50 equals -‐‑$637.50). But that’s not the argument made
in the district court. The Drivers asked for $177.50 (71% of
Trailer Transit’s gain of $250) on this item, and their appel-‐‑
late brief is full of similar examples in which they claim 71%
of the net. Only in passing (a few sentences in the brief, and
one at oral argument) did the Drivers suggest that the use of
the word “reimburse” entitles them to 71% of the gross on all
special services billed at even a dollar over cost. That’s not
enough to preserve the argument—which as this example
shows also has little to recommend it. Why would Trailer
Transit lock itself into automatic losses on special services?
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(We put to one side all questions about whether the $250 in
our example is a profit in the first place. Trailer Transit has
employees and other overhead expenses to cover; lining up
and managing escorts is costly. The difficulty of determining
Trailer Transit’s real economic profit on any service may be
among the reasons why the contract does not entitle Drivers
to a portion of its net revenue.)
A better line of argument for the Drivers might have
started from the principle that parties cannot take opportun-‐‑
istic advantage of contractual commitments. See Keystone
Carbon Co. v. Black, 599 N.E.2d 213, 214–15 & n.1 (Ind. App.
1992). Suppose that, after a given Driver had signed the con-‐‑
tract, Trailer Transit reduced its standard mileage rate and
increased the price of special services to shippers in a way
that left shippers indifferent (they don’t care how line items
on a bill are parceled out) but reduced the portion of the bill
subject to their 71% share. We asked the Drivers’ lawyer
whether they are making an argument of this kind. The an-‐‑
swer is no; they do not contend that Trailer Transit has
moved charges from the standard shipping fee to special
services. The whole of the Drivers’ position is that they are
entitled to a slice of any net profit on special services, and
the contract provides no support for that.
Hubert Walker, the representative plaintiff, furnished
services to Trailer Transit for seven years. He must have
found the remuneration satisfactory. Only in retrospect did
he look for more, filing this suit about two years after haul-‐‑
ing his last load. The judiciary does not rewrite contracts af-‐‑
ter the fact to favor one side. Walker and the other Drivers
might have insisted on receiving some part of the profit from
special services (and then perhaps Trailer Transit would
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have offered less than 71% of the gross), but that’s not what
this contract says.
AFFIRMED
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