Merrill et al v. Pathway Leasing LLC et al
Filing
355
FINDINGS OF FACT AND CONCLUSIONS OF LAW AND ORDER OF JUDGMENT by Magistrate Judge Kristen L. Mix on 7/21/21. (lgale, )
Case 1:16-cv-02242-KLM Document 355 Filed 07/21/21 USDC Colorado Page 1 of 45
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Magistrate Judge Kristen L. Mix
Civil Action No. 16-cv-02242-KLM
FRANKLIN MERRILL,
et al.,
Plaintiffs,
v.
PATHWAY LEASING LLC, a Colorado limited liability company,
MATTHEW HARRIS, an individual,
Defendants.
_____________________________________________________________________
FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER OF JUDGMENT
_____________________________________________________________________
I. Background
Plaintiffs filed their initial Complaint [#1]1 on September 6, 2016. In that pleading,
they asserted that they leased trucks from Defendants Pathway Leasing LLC (“Pathway”)
and its owner, Matthew Harris (“Harris”), “believing they could operate those trucks as
independent contractors and improve their lives through the exercise of entrepreneurial
spirit.” Complaint [#1] at 2; see also Fourth Am. Compl. [#82] at 2. Nevertheless, they
claimed that Defendants “controlled every aspect” of their work and willfully misclassified
them as independent contractors instead of employees, in violation of the Fair Labor
Standards Act, 29 U.S.C. § 216, et seq. (“FLSA”). Fourth Am. Compl. [#82] at 2. They
1
“[#1]” is an example of the convention the Court uses to identify the docket number
assigned to a specific paper by the Court’s case management and electronic case filing system
(CM/ECF). This convention is used throughout this document.
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asserted that Defendants are their “joint employers” along with certain former-party carrier
companies for whom Plaintiffs used their trucks to deliver goods. Id. at 14.
Plaintiffs brought a collective action on behalf of themselves and other similarlysituated individuals under the FLSA to recover money damages as a result of Defendants’
alleged failure to pay them minimum wages, as well as damages based on purportedly
unlawful retaliation under the FLSA. Id. at 20-21, 24. They also sought to rescind or void
their leases and other agreements with Defendants based on Defendants’ alleged material
misrepresentations about the condition of the leased trucks and about the purpose of the
agreements. Id. at 21-22. Finally, they brought claims under state law for “unjust
enrichment and restitution” and “quantum meruit,” seeking to disgorge “all amounts paid”
by them under their various agreements with Defendants, including the leases. Id. at 2224. Meanwhile, on March 20, 2017, Defendants asserted two counterclaims: (1) setoff
against any damages obtained by Plaintiffs to cover “all amounts lawfully due and payable
under each Plaintiff’s respective lease agreement,” and (2) breach of contract against
fifteen Plaintiffs regarding their Equipment Lease Agreements and against nine of those
Plaintiffs regarding promissory notes. Counterclaims [#95] at 41-42. On June 19, 2017,
Plaintiffs’ FLSA minimum wage claims were conditionally certified as a collective action.
Order [#115].
After significant pretrial proceedings, a bench trial was held in this matter on June
25-26, July 2-3, and July 5-6, 2018. See [#268, #269, #270, #271, #272, #273, #274].
Fifteen named Plaintiffs and thirty opt-in Plaintiffs remained in the case at the time of trial.
The named Plaintiffs were Eric Ard, Anthony Dennis, Ronald Dennis, Anthony Glover,
Zigmund Gutowski, Keith Herring, Tim Hollingsworth, Joseph Horion, Larry Jurcak, Rodney
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Lacy, Franklin Merrill, Sami Nasr, James Newberry, Tami Potirala, and Craig Williams. The
following claims were tried:
(1) the fifteen named Plaintiffs’ and the thirty opt-in Plaintiffs’ FLSA minimum wage
claims against Defendants, see [#264] at 26 ¶ 6;
(2) Plaintiff Larry Jurcak’s claim for unlawful retaliation in violation of the FLSA
against Defendants, see id. at 26 ¶ 7 (citing Order [#242] at 30);
(3) the fifteen named Plaintiffs’ individual Colorado state law claims for rescission
of their leases with Defendant Pathway, see id. at 26 ¶ 8;
(4) the fifteen named Plaintiffs’ individual Colorado state law claims for unjust
enrichment against Defendants, see id.;
(5) the fifteen named Plaintiffs’ individual Colorado state law claims for quantum
meruit against Defendants, see id.;
(6) Defendants’ counterclaims for breach of contract against Ronald Dennis,
Anthony Glover, Zigmund Gutowski, Keith Herring, Joseph Horion, Franklin Merrill, James
Newberry, Tami Potirala, and Craig Williams, see [#264] at 27 ¶¶ 10 & 10 n.9; and
(7) Defendants’ counterclaims for setoff against all Plaintiffs, see id. at 27 ¶ 10. See
also [#266] at 2-3 (discussing remaining claims).
After the trial, on July 27, 2018, Defendants filed a Motion to Decertify 29 U.S.C. §
216(b) Collective Action [#275]. After briefing and a hearing, the Court granted the
decertification request and dismissed the thirty opt-in Plaintiffs’ claims, which consisted
solely of FLSA minimum wage claims made via the collective action. Response [#285];
Reply [#288]; Hearing Minutes [#304]; Order [#333]. In light of this ruling, the remaining
named Plaintiffs were given the opportunity to move for a new trial, including one narrowly
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tailored to address the taking of “additional testimony” pursuant to Fed. R. Civ. P. 59(a)(2),
but they chose not to do so. See Order [#333] at 11, 11 n.7, 18.
Over the course of post-trial proceedings, the Court has permitted the parties leave
to file amended proposed findings of fact and conclusions of law. Plaintiffs’ Second
Revised Proposed Findings of Fact and Conclusions of Law [#336] and Defendants’ Third
Amended Proposed Findings of Fact and Conclusions of Law [#350] are the most recent
such filings by each side. See Pls.’ Brief [#348] at 17 (declining to file a Third Revised
Proposed Findings of Fact and Conclusions of Law).2
II. Findings of Fact
A.
General Background Facts
1.
In general, a commercial truck driver can choose to work for a freight company as
a company driver, or choose to become an owner-operator3 and sell hauling and
delivery services as he or she desires. Plaintiffs are commercial truck drivers who
are also owner-operators. They entered into agreements with Defendant Pathway
Leasing (“Pathway”) to lease a truck or trucks. Defendant Matthew Harris is the
President of Pathway. Plaintiffs also entered into agreements with XPO, Con-Way
2
The Court also asked the parties to address in post-trial briefing the impact, if any, of a
new Department of Labor rule on this case, and both sides timely submitted such briefs. Pls.’ Brief
[#348]; Defs.’ Brief [#349]. Ultimately, however, the Court’s rulings rest on unrelated legal grounds.
3
The Court notes that the parties and witnesses tended to use the phrases “owneroperator” and “independent contractor” interchangeably. See, e.g., Depo. of Hunt [#284-1] at
37:17-22 (“Q. And I apologize. So I’ve sometimes been referring, and I think you have too, to
drivers as independent contractors and sometimes as owner/operators. Do you understand and
are you using those terms as one in [sic] the same? A. Yes, sir.” Throughout the “Findings of
Fact” section, the Court uses the phrase “owner-operator”. The legal issue regarding which
Plaintiffs, if any, are independent contractors for purposes of the FLSA is reserved for the
“Conclusions of Law” section below.
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and/or CFI (collectively, the “Carrier”),4 known as Contract Hauling Agreements, to
haul freight. See, e.g., Vol. I [#276] at 39, 118, 194; Vol. III [#278] at 67 Trial Ex.
128; Trial Ex. 129.
2.
Plaintiffs made their own decisions about whether to drive their truck or trucks
individually, as a team, or to hire others to haul freight for them. Vol. III [#278]
553:6-13 (testimony by Plaintiff Ronald Dennis that he “decided to drive as part of
a team” with a friend and then later “decided [he] wanted to switch to a solo lease
with Pathway”); Depo. of Thomas J. Hunt [#284-1] at 30:16-21 (testimony by XPO’s
former Senior Manager of Operations that XPO could not force drivers to drive solo
or as a team and could not force drivers to hire other(s) to drive the trucks for them).
Drivers who elected to drive a team had the flexibility to drive more miles for more
pay than they otherwise would have been able to earn as solo drivers. Trial Ex. 45.
3.
In the commercial trucking business, the frequency and rates of pay for owneroperators and company drivers are different. Depo. of Melinda Creed [#336-2] at
20:4-7 (testimony by CFI employee Melinda Creed that company drivers are paid
bi-weekly and owner-operators are paid weekly), 21:23-22:2 (stating that CFI pays
owner-operators $0.97 per mile plus a fuel surcharge), 22:5-23:2 (stating that CFI
pays company drivers employee benefits, a potential safety bonus, and a per-mile
rate which varies by experience level); Depo. of Hunt [#284-1] at 15:9-20 (stating
that XPO has different pay rates for company drivers versus owner-operators
4
There is no dispute among the parties that XPO, Con-Way, and CFI all refer to the same
entity. See, e.g., Vol. I [#276] at 8:10-13 (Plaintiffs’ counsel’s statement), 12:10-11 (Defendants’
counsel’s statement). Throughout these Findings of Fact, the Court has identified the Carrier by
the language used by each witness during his or her testimony.
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because owner-operators pay their own expenses, including fuel costs and truck
maintenance, in addition to their lease payments, while company drivers are paid
a flat wage regardless of their efficiency, and CFI/XPO pays all other costs),
53:17-54:2 (stating that a “fuel surcharge” is connected to a rate table in the
Contract Hauling Agreement which shows compensation provided to owneroperators when fuel prices rise above a certain threshold).
4.
Before deciding to become owner-operators, Plaintiffs conducted, or had the
opportunity to conduct, their own independent evaluations regarding whether to
lease or purchase their trucks and whether to lease their trucks from Pathway or a
different leasing company, including the opportunity to contact other leasing
companies and compare lease terms if they chose to do so. Vol. V [#280] at
831:6-832:5 (testimony by Plaintiff Nasr that, when discussing whether he would
come back to XPO as an owner-operator or a company driver, XPO gave him the
names of several leasing companies, only one of which was Pathway; Plaintiff Nasr
specifically rejected one leasing company, Long Mountain, due to the amount of
money required for a down payment on a truck); Vol. I [#276] at 186:11-190:16
(testimony by driver Becky Austin that, before signing a lease with Pathway, she did
her due diligence by talking to other drivers, researching the type of truck she
wanted, and calling at least three other leasing companies).
5.
As owner-operators, Plaintiffs were exposed to a risk of monetary loss based on a
number of factors relating to fuel efficiency. Vol. V [#280] at 837:8-12 (testimony by
Plaintiff Nasr that drivers could spend more money on fuel in a week than could
actually be earned, “if you don’t know what you are doing”).
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6.
As owner-operators, Plaintiffs needed business acumen and financial proficiency to
make a profit, because they controlled whether to drive solo or as a team, which
loads to accept from carriers, which routes to take, how to manage their fuel
efficiency and maintenance, and when to work. Vol. I [#276] 50:3-9 (testimony by
Plaintiff Merrill that drivers were responsible for following Department of
Transportation regulations), 119:10-14 (stating that it was the driver’s responsibility
to determine how to load or secure cargo); Depo. of Hunt [#284-1] at 36:8-37:24
(stating that owner-operators “could take time off anytime they wished,” unlike
company drivers); Vol. V [#280] at 833:4-8 (testimony by Plaintiff Nasr that the
decision to take time off for vacation was up to him, “like any other business
owner”), 833:20-835:16 (stating that it was his decision as an owner-operator where
to drive and whether to decline loads based on “business sense” relating to
profitability of runs, including such considerations as the cost of fuel and meals and
the length of the haul), 835:17-836:4 (stating that he had to make business
decisions regarding whether to take a load based on its profitability); Vol. I [#276]
at 71:22-72:8 (testimony by Plaintiff Merrill that Pathway “didn’t tell me what to do,”
despite the fact that he would sometimes get calls from Defendant Harris if he was
running behind on lease payments or staying home too long); Vol. II [#277] at
301:23-302:14 (testimony by Plaintiff Lacy that it was his decision where not to
drive, including places with lots of mountains, it was his decision not to haul freight
over a certain weight, and he did not know any company drivers who owned their
own trucks), 302:24-303:8 (stating that
Pathway did not establish rules or
requirements regarding drivers’ meal, rest, or sleeping breaks); Vol. III [#278] at
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502:2-23 (testimony by Plaintiff Williams that it was his decision to turn down a load
that would not be profitable enough based on considerations like weight, mileage,
and safety); Vol. IV [#279] at 613:13-22, 626: 13-21 (testimony by Plaintiff Anthony
Dennis that it was his decision where to haul and whether to haul heavy loads,
despite advice from Defendant Harris that he should not restrict his runs in such
ways), 615:25-616:9 (stating that Pathway did not establish any rules or
requirements for drivers regarding meal or sleep breaks); Vol. IV [#279] at 642:1-3
(testimony by Plaintiff Potirala that it was her decision whether to decline a load for
“pretty much” any reason that she wanted to); Vol. V [#280] at 833:20-835:21 (Depo.
of Hunt [#284-1] at 37:23-40:2 (stating that it was the owner-operators’ responsibility
to decide how and when to maintain their trucks); Depo. of Garcia [#284-3] at
134:24-135:2 (stating that it was his decision where to fuel and which route to take
because he paid for the fuel); Vol. V [#280] at 901:14-24 (testimony by Defendant
Harris that Pathway did not control its clients’ driving routes, refueling timing or
location, or meal, rest, or sleep breaks); Trial Ex. 50 at 2-4, ¶¶ 7, 13, 15 (Pathway
leases indicating that Plaintiffs were responsible for managing insurance, repairs,
maintenance, and accounting for excess mileage charges relating to their trucks).
7.
Many of the work duties performed by owner-operators were the same as those
performed by company drivers. Vol. I [#276] I at 57:13-19 (testimony by Plaintiff
Merrill that “you’re still doing everything that you do as a company driver,
everything”), 58:1-59:14 (stating that both company drivers and owner-operators
had to “move freight from Point A to Point B,” “maintain the trailer,” “secure the
load,” “complete pre-trip inspections,” “communicate,” “babysit the load if there was
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a breakdown,” and “fuel”); Vol. I [#276] at 161:12-162:24 (testimony by driver Becky
Austin that she was “doing the same job” as an owner-operator and as a company
driver, including driving the truck, taking care of the freight, sweeping the trailer, and
doing 72-point pre-trip inspections); Vol. I [#276] at 248:22-250:5 (testimony by
Plaintiff Lacy that he felt like “a glorified company driver” and that he did the “[e]xact
same thing” as an owner-operator that he had done as a company driver, including
ensuring that there were proper seals on loads, going into weigh stations, and
paying traffic tickets, if received); Rule 30(b)(6) Depo. of Hunt on behalf of CFI, Inc.
[#336-1] at 41:2-12 (stating that both company drivers and owner-operators haul
freight within the CFI network), 97:6-13 (stating that, from a customer’s point of view,
nothing distinguishes a company driver from an owner-operator while at the
customer’s property).
8.
Defendant Harris testified that, in his sixteen years of industry experience, he could
not predict what or when something might go wrong with any truck. Vol. V [#280]
at 872:18- 873:5 (testimony by Defendant Harris that, despite testing and performing
preventative maintenance, it is impossible to know whether or when a particular
truck will break down, especially when adding in such variables as how the driver
is driving the truck, in what kind of conditions the truck is being driven, the weights
of loads being hauled, and the type and quality of maintenance done on the truck
after it leaves Defendant Pathway’s lot).
9.
There is “a direct correlation” between how a truck “is maintained and driven as to
its longevity and reliability over the course of time.” Depo. of Hunt [#284-1] at
49:7-14, 50:1-3 (stating that “[e]ven a new piece of equipment will start going
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downhill pretty quick if it’s not taken care of properly”).
B.
Facts Bearing on Relationship Between Plaintiffs and Carrier
10.
Plaintiffs were required to secure a lease or own a truck to perform work for XPO.
Depo. of Hunt [#284-1] 11:8-19 (stating that an owner-operator who contracted with
CFI/XPO either owned his/her own truck or used his/her own financing to lease a
truck from an entity of his/her choice).
11.
As of mid-2018, about thirty of Pathway’s clients had contracts with XPO, but that
number varied over time. Vol. V [#280] at 855:4-22 (testimony by Defendant Harris
that the number varies based on market forces, lease completions, and driver
decisions whether to remain with CFI or switch to a different motor carrier).
12.
XPO’s owner-operators lease trucks from a number of different companies in
addition to Defendant Pathway. Depo. of Leslie Killinger [#284-4] at 39:21-40:19
(naming lessors Lone Mountain, Arkansas Equipment Leasing, Wholesale Truck
and Finance, LRM, Cure Truck Leasing, Quality Truck Leasing, Bush Truck Leasing,
Schneider Finance, One Leasing, and Mission Financial); Depo. of Hunt [#284-1]
at 10:13-11:7 (noting that “[t]here were a variety of leasing companies that had
drivers on at CFI/XPO” and that “XPO would take a driver and tractor that met the
qualifications from any number of companies with the exception of two that they no
longer did business with” due to certain business practices by those companies),
11:8-22 (stating that an owner-operator who contracted with CFI/XPO could lease
a truck from an entity of his/her choice, only one of which was Pathway), 11:23-12:6
(stating that, “[a]t the peak size of the fleet, which would have been 550 trucks in the
contractor fleet, roughly 120 to 130 of those would have been . . . leased through
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Pathway”); Vol. V [#280] at 831:6-832:5 (testimony by Plaintiff Nasr that XPO gave
him the names of several leasing companies, one of which was Pathway, and that
he believed he could lease a truck through any of them).
13.
Drivers who wanted to haul freight for the Carrier were required to enter into written
agreements with the Carrier to do so. See, e.g., Vol I [#276] at 118-19, 194; Vol. III
[#278] at 116-17. XPO’s Contractor Hauling Agreement provides for a fixed period
of two years and can be terminated by either party, with or without cause, by giving
ten days’ written notice. Trial Ex. 128 at 14, ¶ 30.
14.
Pursuant to the terms of their Contractor Hauling Agreements with XPO, Plaintiffs
are responsible for “hiring, setting the wages, hours and working conditions and
adjusting the grievances of, supervising, training, disciplining, and firing all drivers,
driver’s helpers, and other workers necessary for the performance of [Plaintiffs’]
obligations.” Trial Ex. 128 at 4, ¶ 7A.
15.
As owner-operators, Plaintiffs use their own business judgment to determine
whether to decline loads from XPO based on profitability considerations such as the
weight of the freight and fueling costs. Plaintiffs further set their own restrictions on
where they will drive, the routes they will travel, and other conditions, all without
needing or obtaining the Carrier’s or Pathway’s permission. Vol. II [#277] at
301:23-302:17 (testimony by Plaintiff Lacy that he chooses not to drive in
mountainous regions, that he chooses not to haul freight over a certain weight, and
that he chooses the routes he drives); Vol. III [#278] at 502:2-23 (testimony by
Plaintiff Williams that he can decline to take a load if it would not be profitable
enough based on considerations such as weight, mileage, and safety risks, and that
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those decisions are honored without risk of the agreements being terminated); Vol.
IV [#279] at 613:13-22 (testimony by Plaintiff Anthony Dennis that he ultimately
decides whether to refuse loads despite “get[ting] harassed about it” and that he
self-imposes certain restrictions such as avoiding the East Coast, primarily running
loads in the South, and avoiding heavy loads because they use more fuel and create
more maintenance needs based on wear and tear—even though Defendant Harris
calls and speaks with him about these choices); Vol. IV [#279] at 641:8-642:15
(testimony by Plaintiff Potirala that she can decline a load for practically any reason,
including destination, mileage, pay, and waiting-time considerations, without first
having to seek Pathway’s permission); Vol. V [#280] at 830:7-19 (testimony by
Plaintiff Nasr implying that, as an owner-operator, he does not have others telling
him where to go or when to work), 833:20-834:13 (stating that he is able to tell ConWay that he does not want to drive in certain areas such as the Northeast, which he
characterizes as a business decision because of operating costs there, like the cost
of fuel and meals, and because the likelihood that short runs will not make enough
money to justify the hauls), 834:14-23 (stating that he told Con-Way that he did not
want to drive in the Northwest or Northern California because of the chain
requirement and the expense of buying those chains), 834:24-835:1 (stating that he
never talks to Pathway about his self-imposed restrictions), 835:2-21 (stating that
he has the right to decline loads and will do so when they do not make business
sense, such as when his income would mostly only cover fuel costs); Depo. of Hunt
[#284-1] at 37:23-40:2 (stating that company drivers do not have any financial
responsibility for their trucks, but that owner-operators are required to maintain their
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own trucks); Depo. of Jose Garcia [#284-3] at 134:24-135:2 (stating: “And I say, ‘I’m
glad I’m an owner. I work my own route.’ Because that’s part of the freedom. I can
fuel where I want because I pay for the fuel, and I can route myself where I want.”).
16.
Company drivers for XPO are subject to “forced dispatch,” i.e., they cannot decline
loads under most circumstances except for reasons like illness. Vol. I [#276] at
71:7-18 (testimony by Plaintiff Merrill that company drivers have the right to refuse
loads for only limited reasons such as an emergency or having the truck under
repair); Vol. I [#276] at 248:2-12 (testimony by Plaintiff Lacy that company drivers
cannot refuse freight and have to go wherever the company tells them to go); Vol.
III [#278] at 554:7-14 (testimony by Ronald Dennis that “forced dispatch” means
that, when he was a company driver, he had to go wherever the company told him
to go); Depo. of Hunt [#284-1] at 31:15-32:8 (stating that “forced dispatch” applies
only to company drivers and means that, if they can permissibly drive under
Department of Transportation regulations, they are required to do so).
17.
Unlike owner-operators, company drivers are required to follow certain fueling
requirements. Depo. of Hunt [#284-1] at 35:17-37:12 (stating that company drivers
are only permitted to fuel at company-approved fuel stops with pre-negotiated fuel
discounts, but that owner-operators can fuel anywhere that will take their credit
cards).
18.
Company drivers are required to follow a “driver handbook” that does not apply to
owner-operators. Depo. of Hunt [#284-1] at 28:13-29:1 (stating that XPO does not
provide company handbook or policies to owner-operators because they are only
subject to the terms of their Contract Hauling Agreements).
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19.
Unlike owner-operators, company drivers are not responsible for managing regular
truck maintenance in order to maintain profitability in connection with variables like
fuel efficiency. Depo. of Hunt [#284-1] at 37:23-40:2.
20.
As owner-operators, Plaintiffs are not subject to forced dispatch. Vol. III [#278] at
436:20-24 (testimony by Plaintiff Ard that, as an owner-operator, he is free to accept
or reject assignments from the carrier), Vol. III [#278] at 502:21-503:1 (testimony by
Plaintiff Williams that owner-operators have more freedom and can independently
decide whether to follow suggested routes, but, if a company driver does not follow
a specific route, the driver is charged for using extra fuel); Depo. of Hunt [#284-1]
at 32:9-22 (stating that “forced dispatch” does not apply to owner-operators and that
the Contract Hauling Agreement protects this right by stating that contractors have
the right to accept or decline freight).
21.
As owner-operators, Plaintiffs are subject to no contractual or policy restrictions on
when or how much time they take off. Vol. V [#280] at 833:4-8 (testimony by
Plaintiff Nasr that owner-operators do not earn vacation time and that, “like any
other business owner,” they can take time off but do not earn paid time off); Vol. V
[#280] at 899:18-20 (testimony by Defendant Harris that owner-operators do not
seek Pathway’s permission to take time off for any reason); Depo. of Hunt [#284-1]
at 36:8-37:12 (stating that owner-operators can take time off whenever they want
for any reason, unlike company drivers).
22.
XPO pays solo owner-operators an additional $.03 per mile once the driver exceeds
11,000 miles in a month as an incentive to drive more miles. Depo. of Creed [#2651] at 32:17-33:4 (further stating that owner-operators who drive as a team receive
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an additional $.06 per mile for trips after driving 18,000 miles in a month).
23.
Pursuant to written agreements between Plaintiffs, Pathway and the Carrier, some
Plaintiffs occasionally receive bonuses and equipment deposits from XPO which
XPO is permitted to remit to Pathway rather than to Plaintiffs. Vol. II [#277] at
337:11-340:15; Trial Ex. 136 at 14, 24, 27, 46, 48 50, 60 (“Other Damages Sought
as Part of Claim for Unpaid Wages”); Trial Ex. 50 at 23 (“This letter shall serve as
Franklin Merrill’s authorization and direction to remit to Pathway Leasing each and
all settlement compensation and other amounts, less chargebacks, Franklin Merrill
is owed pursuant to its [sic] independent contractor agreement with Con-Way
Truckload.” (emphasis added)). These amounts were applied by Pathway to
equipment lease payments, promissory notes, maintenance escrow, and back lease
payments. Vol. V [#280] at 769:18-771:10.
C.
Facts Bearing on Relationship Between Plaintiffs and Pathway
24.
Each Plaintiff executed an “Equipment Lease Agreement” with Pathway which
contains the terms and conditions of his or her truck lease with Pathway. Trial Ex.
50; Vol. I [#276] at 5:12-23 (counsel stipulating that all such agreements are
materially similar). Each Plaintiff also executed a separate “Contractor Hauling
Agreement” with XPO defining the terms and conditions of his or her freight hauling
services for XPO. Trial Ex. 128; Trial Ex. 129; Vol. I [#276] at 5:12-23 (counsel
stipulating that all such agreements are materially similar). Pathway and XPO
executed a “Carrier Agreement” in May 2013 to govern their relationship. Trial Ex.
127.
25.
Each Plaintiff who wanted to lease a truck from Pathway had the option to sign
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either a single-person or a team lease with Pathway. Trial Ex. 50 at 4, ¶ 13(c); Vol.
V [#280] 846:11-847:10 (testimony by Defendant Harris discussing differences
between driving solo versus driving as a team). Similarly, Plaintiffs were not
required by XPO to drive the truck themselves but were instead permitted to hire
their own drivers or work as a team. Trial Ex. 128 at ¶ 19.
26.
Some Pathway clients, including Steven Kortman, Joey Brown, and Melanie Brown,
drove as a team with their spouses. Trial Ex. Z6.
27.
Plaintiff Hollingsworth chose to drive as a team. Vol. VI [#281] at 938:17-22
(testimony by Defendant Harris that Plaintiff Hollingsworth “started off as a solo,
transitioned into a team operation. The team driver that he was running with, Ethan
Thrasher, once they stopped running as a team—and this was this year—Ethan
then leased a truck from us . . . .”).
28.
Plaintiff Hollingsworth hired his own contractor for his team, a man he knew “like a
son,” paying him a percentage of his net profit after fuel and lease expenses
instead of a fixed or hourly wage. Vol. V [#280] at 760:4-10, 14-25.
29.
Seven of the fifteen Plaintiffs (Eric Ard, Anthony Dennis, Ronald Dennis, Tim
Hollingsworth, Larry Jurcak, Rodney Lacy, and Sami Nasr) as well as some other
Pathway clients (including Andre Ellis, Paula Horion, Steven Kortman, Jaime
Parrales, Eric Robertson, Eduardo Sustaita, Gerord Thomas, and Earnest Ward)
successfully completed their leases and purchased their trucks from Pathway. See
Trial Exs. C, G, K, W, Z, T1, H2, K2, M3, S3, S4, B5, V5, A6, H6.
30.
The seven Plaintiffs who successfully completed their leases then had the
opportunity to earn substantially more than their peers, in addition to owning their
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trucks. Vol. II [#277] at 294:16-295:23 (testimony by Plaintiff Lacy that he took
ownership of his truck in October 2015 after finishing his lease early, that he
grossed over $200,000 in 2014, over $170,000 in 2015, and over $155,000 in 2016,
and that, as of mid-2018, he was still driving the same truck); Vol. III [#278] at
492:13-24 (testimony by Plaintiff Williams that he made more money as an owneroperator than he did as a company driver); Vol. III [#278] at 555:16-556:4 (testimony
by Plaintiff Ronald Dennis that, although by mid-2018 he had no further business
relationship with Pathway, he had purchased and taken ownership of his truck and
was still driving and making money off of his investment); Vol. V [#280] at 759:17-24
(testimony by Plaintiff Hollingsworth that he completed his lease with Pathway in
March of 2018 and purchased the truck, which he was still driving and earning
money from as of mid-2018); Vol. V [#280] at 830:20-831:5 (testimony by Plaintiff
Nasr that, at one point, he had two trucks and hired a driver to drive one of them,
and that he ran, and continues to run, those trucks as a business).
31.
For at least one driver, Pathway provided the best economic option to be an owneroperator. Vol. I [#276] at 186:23-187:19 (testimony by driver Becky Austin that she
had a high credit score and enough money for a down payment on a new truck, but
that she decided instead to lease a truck from Pathway).
32.
As of June 2018, thirty-eight drivers (nearly twenty percent of Pathway’s lessees)
were leasing their second truck from Pathway. Vol. VI [#281] at 936:2-937:14
(testimony by Defendant Harris identifying drivers who completed their payments
and other lease obligations relating to their first truck from Pathway and who then
chose to lease another truck from Pathway, something which was generally
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uncommon in the industry).
33.
Pathway’s repossession rate is lower than that of many other companies in the truck
leasing business. Vol. V [#280] at 925:3-926:6 (testimony by Defendant Harris that
Defendant Pathway’s repossession rate in 2017 was just under twenty percent and
in 2016 was just under twenty-six percent); Depo. of Hunt [#284-1] at 19:4-13
(stating that it was more common for Pathway’s lessees to complete the lease and
take ownership of the truck than it was for the lessees of the other leasing
companies with which XPO did business).
34.
Pursuant to their leases with Pathway, Plaintiffs are responsible for truck payments,
maintenance and repairs, fuel costs, business liability insurance, and taxes. Trial
Ex. 50 at 2-4, ¶¶ 7, 13, 15; Vol. II [#277] at 306:20-307:10 (testimony by Plaintiff
Lacy that he “invested too much money to turn around and give” the truck back to
Pathway).
35.
Pursuant to their leases with Pathway, Plaintiffs are responsible for paying their own
business-related taxes.
Trial Ex. 50 at 5, ¶ 20; Vol. IV [#279] at 596:12-19
(testimony by Plaintiff Anthony Dennis that he retains his own business records for
tax purposes).
36.
Some of Pathway’s clients established and registered their own companies. Vol. I
[#276] at 194:23-195:2 (testimony by driver Becky Austin that she owned Cherokee
Nomad Express prior to becoming a lessee with Pathway and that she still owned
the company as of mid-2018); Vol. IV [#279] at 687:19-21 (testimony by Plaintiff
Horion that he started his own business account and obtained his own business
license from the State of Texas, although he later had to close the account); Vol. V
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[#280] at 833:9-19 (testimony by Plaintiff Nasr that, just prior to leasing a truck with
Pathway, he started an entity for his business called Nasr Transportation LLC).
37.
As Pathway’s business grew and the freight market adapted to changing economic
conditions and new technologies, Pathway’s clients contracted with an increasing
number of carriers, of which XPO is only one. Vol. V [#280] at 849:10-850:22
(testimony by Defendant Harris that in 2016 clients contracted with carriers
numbering in the “low twenties to high teens,” that in 2017 the number was in the
“upper twenties,” and as of mid-2018 the number was “over 30”).
38.
The Carrier Agreement between the Carrier and Pathway permits either the Carrier
or Pathway to terminate the parties’ relationship with 120 days’ notice. Trial Ex. 127
at 3. At the same time, Pathway’s leases provide for a fixed term, although several
drivers, including Plaintiff Hollingsworth, negotiated changes to their lease terms.
Trial Ex. Z6 (listing lease terms of all Plaintiffs by number of months). Plaintiffs have
the option of completing their leases before expiration of the term by purchasing
their trucks. Trial Ex. 50 at 10 (“Option to Purchase”).
39.
Once drivers buy their trucks, Pathway has no further interaction with them unless
the drivers want to lease another truck from Pathway, which occurred with
approximately twenty percent of Pathway’s clients. Vol. VI [#281] at 935:20-937:25
(testimony by Defendant Harris that clients who complete their leases generally
have no further formal business relationship with Pathway).
40.
Some Plaintiffs whose contracts were terminated by XPO, or who asked to switch
carriers, continued to lease from Pathway while driving for other carriers. Vol. VI
[#281] at 942:5-944:24 (testimony by Defendant Harris that XPO has sometimes
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terminated a particular Contractor Hauling Agreement with one of Pathway’s clients,
and that Pathway had no role in that decision-making process but would continue
to work with the client to find a favorable path forward).
41.
Similarly, Plaintiffs who complete or buy out their leases often continue to drive for
XPO, even though they no longer have a relationship with Pathway. Depo. of Hunt
[#284-1] at 19:4-20:16 (stating that once a driver owned his/her truck outright, a new
Contractor Hauling Agreement is signed with XPO to change and correct details
such as titles, entity names, and tractor numbers, but the terms of the agreement
otherwise remain the same); Vol. II [#277] at 295:24-296:12 (testimony by Plaintiff
Lacy that after he completed his lease, he had no further relationship with Pathway
but continued to drive for XPO); Vol. III [#278] at 447:5-448:23 (testimony by Plaintiff
Ard that he had no further relationship with Pathway after he bought the truck, and
that he continued to drive for XPO for another year-and-a-half while he paid off his
private bank loan); Vol. IV [#279] at 583:2-20 (testimony by Plaintiff Anthony Dennis
that he traded his Pathway truck into a dealership, thereby ending his relationship
with Pathway, but continued to drive his newly-purchased used truck for CFI for an
unspecified period); Vol. V [#280] at 755:12-19 (testimony by Plaintiff Hollingsworth
that after he bought his truck and ended his relationship with Pathway, he drove for
CFI for about a month longer before moving to another company); Vol. V [#280] at
828:21-829:6 (testimony by Plaintiff Nasr that, after he purchased his truck, his
formal business relationship with Pathway ended, but that he continues to earn
income from driving his truck).
42.
Plaintiffs were able to review Pathway’s Equipment Lease Agreements before
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signing them. Vol. III [#278] at 500:24-501:12 (testimony by Plaintiff Williams that
he entered into an equipment lease agreement with Pathway in May 2016, that he
browsed through the agreement before signing it, that no time limit was put on him
to review the agreement, that he did not talk to anyone at Con-Way about the
agreement before signing it, and that he did not have any concerns about the
agreement before signing it); Vol. IV [#279] at 601:24-602:4 (testimony by Plaintiff
Anthony Dennis that he had the opportunity to review the entire lease if he wanted
to, because it was on his phone).
43.
Plaintiffs knew and understood that the Equipment Lease Agreements constituted
contracts. Vol. I [#276] at 190:17-19 (testimony by driver Becky Austin that she
understood that the Equipment Lease Agreement was a contract); Vol. III [#278] at
439:21-440:4 (testimony by Plaintiff Ard that he understood that the Equipment
Lease Agreement was a contract, that it set out the terms for leasing a truck through
Pathway, and that signing a contract means agreement to the terms of the contract);
Vol. IV [#279] at 602:5-9 (testimony by Plaintiff Anthony Dennis that he knew that
he was signing a contract when he signed the Equipment Lease Agreement).
44.
The Equipment Lease Agreement signed by Plaintiffs states that Pathway makes
no representations or warranties regarding the condition or fitness of the leased
trucks and makes clear that the lessee accepts the truck “AS IS, WHERE IS, AND
WITH ALL FAULTS.” Trial Ex. 50 at 1, ¶ 2 and 5, ¶ 21.
45.
Under the Equipment Lease Agreements, and subject to Pathway’s limited service
contracts, Plaintiffs agreed that they are solely responsible for covering the cost of
truck repairs and maintenance during the lease term. Trial Ex. 50 at 2-3, ¶ 13(f) and
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24 (“Truck Acceptance Form”).
46.
The Equipment Lease Agreements contain a limited service contract for a defined
period of time and/or mileage, which Plaintiffs refer to as a “warranty.” Trial Ex. 50
at 18-20; Vol. III [#278] at 445:23-446:1 (testimony by Plaintiff Ard that he believes
he has a warranty through the limited service contract part of the lease agreement).
This provision sets forth repairs that are covered by Pathway, and the terms and
conditions governing Pathway’s and Plaintiffs’ obligations with respect to repairs.
Trial Ex. 50 at 18-20.
47.
The Equipment Lease Agreements state that the agreements, “together with the
other documents maintained herein or executed contemporaneously herewith,
constitute[] the entire agreement of the parties and Lessor shall not be charged with
any agreement or representation not contained in a writing executed by it as
provided in this section.” Trial Ex. 50 at 5, ¶ 26.
48.
Although some Plaintiffs testified about what they “thought” they were getting when
they leased a truck from Pathway, no Plaintiff testified about any specific promise
or misrepresentation made by either Defendant with respect to a truck or the
Equipment Lease Agreement. Vol. I [#276] at 55:3-17 (testimony by Plaintiff Merrill
that he thought the warranty covered the vehicle by helping the driver keep the truck
“up and working”).
49.
Not all Plaintiffs fully understood all portions of the Equipment Lease Agreement.
Vol. I [#276] at 39:20-40:16 (testimony by Plaintiff Merrill that he took a day off to
read the agreement, but that he did not read it through all the way and signed it
even though he did not understand “parts of it,” because he felt that he needed to
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get back to work and make money). However, no Plaintiff testified as to which
portions of the lease he or she did not understand.
50.
Pathway gave no verbal warranties or assurances to Plaintiffs about the condition
of their leased trucks. Vol. VI [#281] at 961:19-962:4 (testimony by Defendant
Harris that Pathway does not make verbal warranties to clients, although they “do
discuss the make-ready process that [they] put trucks through,” and that any issues
which do not meet Department of Transportation standards are addressed).
51.
When entering into a working relationship with Pathway, some Plaintiffs were
handed a lease, told where to sign, and directed to a truck without the opportunity
to take a test drive. Vol. I [#276] at 230:15-16 (testimony by Plaintiff Lacy that he
“kind of got forced into signing” the contract), 234:10-13 (stating that Defendant
Harris told him that he “couldn’t test drive the truck,” that Plaintiff Lacy “had to . . .
sign the contract that afternoon,” and that he was “faxed the contract at the
dealership”), 240:9-13 (stating that “whoever” sent the contract to him had it
highlighted where he needed to initial and sign); Vol. III at 485:1-13 (testimony by
Plaintiff Williams that he reviewed the paperwork before signing it, he understood
only some of it, including that he was signing a contract and that he was going to be
an owner-operator for CFI); Vol I [#276] at 46:17-21 (testimony by Plaintiff Merrill
that he had to sign the lease before he got the truck or the keys to the truck and that
he was not allowed to inspect the truck ahead of time).
52.
Some Plaintiffs testified that they were more comfortable taking on the risk of
leasing a commercial truck because they thought the truck came with a warranty
that would cover major repairs. Vol. V [#280] at 740:11-17 (testimony by Plaintiff
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Glover that, when he signed the lease, he thought that he was going to get a
warranty and that he did not know that he was going to be held responsible for “any
type of repairs or anything dealing with that truck” while he was under the lease,
because “most companies you lease from . . . are responsible for everything until
you actually purchase the vehicle”).
53.
Defendants offered Plaintiffs loans documented by promissory notes on an asneeded basis to cover repair costs for which the Plaintiffs had responsibility under
the leases, and some Plaintiffs received little take-home pay after making payments
on the notes. Vol. IV [#279] at 585:4-25 (testimony by Plaintiff Anthony Dennis that,
“[a]fter the warranty went out,” he spent most of his time paying promissory notes
for a whole year, that “[a] promissory note is if you don’t have the money and you
borrow the funds from Pathway Leasing, they will send you a promissory note which
will charge you interest to pay them back,” and that he might only get $100-$900 a
week from his paycheck after making that payment); Vol. IV [#279] at 661:21-662:4
(testimony by Plaintiff Gutowski that, in September 2016, he could not afford to take
out any more promissory notes because he could not pay his bills after making the
payments on the notes).
54.
Several Plaintiffs defaulted on their lease obligations to Pathway, resulting in
Pathway’s repossession of their trucks. Trial Ex. T6; Vol. VI [#281] at 940:25-942:1
(testimony by Defendant Harris that Trial Exhibit T6 accurately reflects
repossessions except that Pathway agreed to release Plaintiff Williams from his
lease obligations).
55.
Excluding Plaintiff Williams, the outstanding balances owed by each Plaintiff whose
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truck was repossessed by Pathway are set forth in Trial Exhibit T6. Vol. VI [#281]
at 1032:7-17 (testimony by Defendant Harris regarding Trial Exhibit T6 that the
“Repo Cost” column includes repossession costs, repair costs, and past-due rent),
1031:24-1033:16 (stating that proceeds from sale of a truck are deducted from what
is owed by the driver, and that the chart does not account for whether a truck was
re-leased), 1034:9-18 (stating that “N/A” or “not applicable” under the Sale Proceeds
column means that the vehicle was re-leased, although the chart does not indicate
the date of re-leasing or the amount of the new lease payments).
56.
Excluding Plaintiff Williams, no direct evidence was presented by Plaintiffs listed on
Trial Exhibit T6 disputing that they defaulted on their Equipment Lease Agreements
or contesting the amounts owed.
III. Conclusions of Law
A.
Plaintiffs’ FLSA Minimum Wage and Retaliation Claims
Among other things, the FLSA establishes minimum wage standards and retaliation
protections in certain employment situations. 29 U.S.C. § 206(a)(1)(C) (minimum wage);
29 U.S.C. § 215(a)(3) (retaliation). A threshold issue is whether Plaintiffs were employees,
hence covered by the FLSA, or independent contractors who are not covered by the FLSA.
The FLSA defines “employee” as “any individual employed by an employer,” so long
as the individual does not fall under an exemption. 29 U.S.C. § 203(e)(1). The economic
realities test is used to determine whether a person is an employee and therefore covered
by the FLSA. Baker v. Flint Eng’s & Constr. Co., 137 F.3d 1436, 1440 (10th Cir. 1998).
Courts generally look at six factors in connection with this test: “(1) the degree of control
exerted by the alleged employer over the worker; (2) the worker’s opportunity for profit or
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loss; (3) the worker’s investment in the business; (4) the permanence of the working
relationship; (5) the degree of skill required to perform the work; and (6) the extent to which
the work is an integral part of the alleged employer’s business.” Id. The Court must use
a “totality-of-the-circumstances approach,” because no one factor alone is dispositive. Id.
at 1441.
In deciding whether an individual is an employee or an independent
contractor under the FLSA, a district court acting as the trier of fact must first
make findings of historical facts surrounding the individual’s work. Second,
drawing inferences from the findings of historical facts, the court must make
factual findings with respect to the six factors set out above. Finally,
employing the findings with respect to the six factors, the court must decide,
as a matter of law, whether the individual is an “employee” under the FLSA.
Id. at 1440. As outlined below, the Court finds that Plaintiffs were independent contractors,
regardless of whether Defendant Pathway is considered independently as an employer or
whether XPO and Defendant Pathway are considered collectively as joint employers.
Regarding the first factor, i.e., the degree of control exerted by the alleged employer
over the worker, the Court finds that this factor weighs heavily in favor of finding
independent contractor status. Each Plaintiff had the option to sign either a single-person
or a team lease. Finding of Fact #2. Plaintiffs were not required to drive the leased trucks
themselves but were instead permitted to hire their own drivers or work as a team.
Findings of Fact #2; #25. Neither Defendants nor XPO could decide for Plaintiffs whether
they drove individually, drove as a team, or hired their own employees to drive the leased
trucks. Findings of Fact #2, #25. For example, some clients of Pathway drove as teams
with their spouses. Finding of Fact #26. Plaintiff Hollingsworth chose to drive as a team
by hiring his own contractor, a man he knew “like a son,” paying him a percentage of his
net profit after fuel and lease expenses were covered rather than a fixed or hourly wage.
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Finding of Fact #27. Drivers who elected to drive as part of a team had the flexibility to
drive more miles for more pay than they otherwise would have been able to earn as solo
drivers. Finding of Fact #2. Pursuant to the terms of their Contractor Hauling Agreements,
Plaintiffs were responsible for “hiring, setting the wages, hours and working conditions and
adjusting the grievances of, supervising, training, disciplining, and firing all drivers, driver’s
helpers, and other workers necessary for the performance of [Plaintiffs’] obligations.”
Finding of Fact #14.
Further, as owner-operators, Plaintiffs used their own business judgment to
determine whether to decline loads based on profitability considerations such as the weight
of the freight and fueling costs, and further set their own restrictions on where they would
drive, the routes they would travel, and other conditions, all without needing Pathway’s
permission. Finding of Fact #15. In contrast, company drivers were subject to “forced
dispatch,” i.e., they could not decline loads under most circumstances except for reasons
like illness. Finding of Fact #16. Similarly, unlike owner-operators, company drivers were
required to follow certain fueling requirements. Finding of Fact #17. As owner-operators,
Plaintiffs were subject to no contractual or policy restrictions on when or how much time
they took off. Finding of Fact #21. Finally, company drivers were required to follow a
“driver handbook” which does not apply to owner-operators.
Finding of Fact #18.
Considered as a whole, these facts demonstrate a relatively low degree of control exerted
by Defendants and/or XPO over Plaintiffs, and the Court therefore finds that this factor
weighs in favor of finding that Plaintiffs were independent contractors, not employees. See,
e.g., Acosta v. Paragon Contractors Corp., 884 F.3d 1225, 1235 (10th Cir. 2018) (finding
that this factor weighed in favor of independent contractor status where the worker “could
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set his own hours and determine how best to perform his job within broad parameters,”
despite the requirement that he periodically report to the company).
Regarding the second factor, i.e., the worker’s opportunity for profit or loss, the Court
finds that this factor weighs in favor of finding independent contractor status. Seven of the
fifteen Plaintiffs as well as other Pathway clients successfully completed their leases and
purchased their trucks from Pathway. Finding of Fact #29. The seven Plaintiffs who
successfully completed their leases could earn substantially more than their peers, in
addition to owning a valuable asset in the form of their trucks. Finding of Fact #30.
Plaintiffs and those who leased trucks from Pathway conducted, or at least had the
opportunity to conduct, their own independent evaluations of (1) whether to lease or
purchase their trucks and (2) whether to lease their trucks from Pathway or a different
leasing company. Finding of Fact #4. For some, Pathway provided the best economic
lease option for owner-operators. Finding of Fact #31. In fact, as of June 2018, thirty-eight
drivers (nearly twenty percent of Pathway’s lessees) were leasing a second truck from
Pathway, which had a repossession rate much lower than that of many other companies
in the truck leasing business. Findings of Fact #32, #33.
Further, the frequency and rates of pay for owner-operators differed from that for
company drivers. Finding of Fact #3. XPO paid solo owner-operators an additional $.03
per mile once the driver exceeded 11,000 miles in a month as an incentive to drive more
miles. Finding of Fact #22. Unlike owner-operators, company drivers were not responsible
for managing regular truck maintenance in order to maintain profitability. Finding of Fact
#19. Plaintiffs, on the other hand, were exposed to the risk of monetary loss based on a
number of factors concerning their decision-making as related to fuel efficiency. Finding
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of Fact #5. Considered as a whole, these facts demonstrate that Plaintiffs’ opportunities
for profit or loss were largely within their own control, and the Court therefore finds that this
factor weighs in favor of finding independent contractor status. See Baker, 137 F.3d at
1441 (noting that having opportunity for profit or loss is “consistent with the characteristics
of being [an] independent businessm[a]n”); see, e.g., Acosta, 884 F.3d at 1236 (finding that
this factor weighed in favor of employee status because the worker was “paid only a flat
fee” and “could not increase or decrease his profit based on how well he did his job”).
Regarding the third factor, i.e., the worker’s investment in the business, the Court
finds that this factor weighs in favor of finding independent contractor status. Plaintiffs were
required to secure a lease or own a truck to perform their work for XPO. Finding of Fact
#10. Plaintiffs were responsible for truck payments, maintenance and repairs, fuel costs,
workers compensation and business liability insurance, and tax and accounting services.
Finding of Fact #34. Plaintiffs were responsible for paying their own business-related
taxes. Finding of Fact #35. In addition, as owner-operators, some of Pathway’s clients
established and registered their own hauling companies. Finding of Fact #36. Considered
as a whole, these facts demonstrate that Plaintiffs substantially invested in their chosen
business, and the Court therefore finds that this factor weighs in favor of finding
independent contractor status. See Acosta, 884 F.3d at 1236 (noting that “[t]he mere fact
that workers supply their own tools or equipment does not establish status as independent
contractors; rather the relevant ‘investment’ is ‘the amount of large capital expenditures,
such as risk capital and capital investments, not negligible items, or labor itself’”); see id.
(finding that employee status was indicated where the supplies and equipment were
provided by the company, and where the worker’s only expense (supplying buckets for
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families who had not brought buckets) was negligible), id. at 1236 n.8 (implying that a
worker supplying his own truck could justify independent contractor status where that
worker does not later obtain reimbursement from the company for use of the vehicle).
Regarding the fourth factor, i.e., the permanence of the working relationship, the
Court finds that this factor weighs slightly in favor of a finding of independent contractor
status. Seven of the fifteen Plaintiffs and several other Pathway clients successfully
completed their leases and purchased their trucks from Pathway. Finding of Fact #29. As
Pathway’s business has grown and the freight market has adapted to changing economic
conditions and new technologies, Pathway’s clients have contracted with an increasing
number of carriers, of which XPO is only one. Finding of Fact #37. As of mid-2018,
approximately thirty of Pathway’s clients had contracts with XPO, a number which varies
over time. Finding of Fact #11. XPO’s owner-operators lease trucks from a number of
different companies in addition to Pathway. Finding of Fact #12. The Carrier Agreement
permits either XPO or Pathway to terminate the parties’ relationship with 120 days’ notice;
at the same time, Pathway’s leases provide for a fixed term, although several drivers
negotiated changes to their lease terms. Finding of Fact #38. Plaintiffs had the option of
completing their leases earlier than the fixed term by purchasing their trucks. Finding of
Fact #38. Once drivers buy their trucks, Pathway has no further interaction with them
unless the drivers want to lease another truck from Pathway, which occurred with
approximately twenty percent of Pathway’s clients. Finding of Fact #39. XPO’s Contractor
Hauling Agreement provides for a fixed period of three years and could be terminated by
either party, with or without cause, by giving ten days’ written notice. Finding of Fact #13.
Plaintiffs whose contracts were terminated by XPO, or who asked to switch carriers,
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continued to lease from Defendant Pathway while driving for other carriers. Finding of Fact
#40. Similarly, Plaintiffs who completed or bought out their leases often continued to drive
for XPO, even though they no longer had a relationship with Pathway. Finding of Fact #41.
Considered as a whole, these facts demonstrate impermanence in the working relationship
between the drivers and Pathway, based primarily on completion of the lease, and the
Court therefore finds that this factor weighs slightly in favor of a finding of independent
contractor status. See Dole v. Snell, 875 F.2d 802, 811 (10th Cir. 1989) (stating that
“‘[i]ndependent contractors’ often have fixed employment periods and transfer from place
to place as particular work is offered to them, whereas ‘employees’ usually work for only
one employer and such relationship is continuous and of indefinite duration”).
Regarding the fifth factor, i.e., the degree of skill required to perform the work, the
Court finds that this factor weighs slightly in favor of a finding of independent contractor
status. Many of the work duties performed by owner-operators were the same as those
performed by company drivers. Finding of Fact #7. However, in addition to the required
skills both company drivers and owner-operators possessed with respect to driving
commercial trucks, Plaintiffs needed business acumen and financial proficiency to be
profitable, because they controlled whether to drive solo or as a team, what loads to
accept, what routes to take, how to manage their fuel efficiency and maintenance, and
when to work. Finding of Fact #6. Although these skills were required for those in
Plaintiffs’ position to be successful (measured in terms of profit), there was no evidence
regarding whether these were skills that company drivers possessed as well but simply did
not need to utilize given the parameters of their work. In other words, it is unclear whether
Plaintiffs possessed skills not possessed by company drivers which they needed to have
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to perform their work. Nevertheless, taken as a whole, these facts demonstrate that certain
additional skills were required to perform Plaintiffs’ work, as compared to the skills required
for company drivers, and the Court therefore finds that this factor weighs slightly in favor
of a finding of independent contractor status. See Acosta, 884 F.3d at 1237 (stating that
“we consider whether the job contains a ‘requirement of specialized skills’; if such a
requirement exists, the worker is more likely to be considered an independent contractor”
and that “[t]hese specialized skills are distinct from general ‘occupational skills’ that ‘any
good employee in any line of work must [have]’”); see, e.g., id. (holding that employee
status was indicated where there were no specialized skills needed to attend to day-to-day
operations of a pecan grove, provide security, perform general maintenance, and clean
debris out of the nuts).
Regarding the sixth factor, i.e., the extent to which the work is an integral part of the
alleged employer’s business, the Court finds this factor to be neutral. Neither party
presented adequate evidence regarding this factor. On the one hand, it is obvious that
Defendant Pathway could not remain in business without Plaintiffs performing the hauling
work for which trucks are required. On the other hand, the actual freight hauling done by
Plaintiffs was performed for XPO, and no work was performed directly for Pathway beyond
the requirements necessary to fulfill lease obligations. Regardless, in the absence of a
sufficient evidentiary showing by the parties here, the Court finds this factor to be neutral.
In sum, the Court finds that application of the six-factor test results in the conclusion
that Plaintiffs were not Defendants’ employees for purposes of the FLSA. Considering the
totality of the circumstances, the Court finds that Plaintiffs acted with a “degree of
independence” which “set[s] them apart from what one would consider normal employee
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status.”
Baker, 137 F.3d at 1436.
In other words, Plaintiffs were “in business for
[themselves].” Id. at 1443. Because the Court finds that Plaintiffs’ status precludes them
from coverage under the FLSA, the Court concludes that judgment must enter in favor of
Defendants on Plaintiffs’ FLSA minimum wage claims and Plaintiff Jurcak’s FLSA retaliation
claim.
B.
Plaintiffs’ Rescission Claims
Plaintiffs seek rescission of their leases based on a theory of misrepresentation by
Defendants. See, e.g., Pls.’ Brief [#336] at 41-42. Where “one seeks rescission by reason
of misrepresentation,” one “need not prove that the seller had knowledge of the falsity of
the representations or was utterly indifferent to their truth or falsity.” Bassford v. Cook, 380
P.2d 907, 910 (Colo. 1963). Instead, Plaintiffs must prove: (1) Defendants made a
fraudulent
misrepresentation
of
material
fact;
(2)
Plaintiffs
relied
upon
the
misrepresentation; (3) Plaintiffs were justified in doing so; and (4) the reliance resulted in
damages.5 M.D.C./Wood, Inc. v. Mortimer, 866 P.2d 1380, 1382 (Colo. 1994). Whether
a party seeking rescission has a right to rely on the misrepresentation is a question of fact.
Id. (citing Bassford, 380 P.2d at 907) (holding a contract is voidable if the plaintiff is justified
in relying on the misrepresentation).
Rescission may be available even after full performance of a contract. See, e.g.,
Jacobson v. XY, Inc., No. 07-cv-02670-WYD-BNB, 2009 WL 4267950, at *5 (D. Colo. Nov.
20, 2009) (allowing rescission of contracts several years after full performance). “Where
the general rule is that a party seeking to rescind a contract must return the opposite party
5
The parties agree that Colorado law governs the state law claims. See [#336] at 42-44;
[#350] at 9, 78.
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to the position in which he was prior to entering the contract, this is not a technical rule, but
an equitable one . . . The standard used is substantial restoration of the status quo.” Id.
(citing Smith v. Huber, 666 P.2d 1122, 1124 (Colo. App. 1983)).
Plaintiffs assert that Defendants’ “primary material misrepresentation” is that
Plaintiffs “thought they were going to [be] true independent contractors or owner operators,”
and that “was never [going] to be true.” Pls.’ Brief [#336] at 48. However, the Court finds
that, as to each and every Plaintiff, this claim fails on the first element, i.e., whether
Defendants made a fraudulent misrepresentation of material fact. See M.D.C./Wood, Inc.,
866 P.2d at 1382.
First, as fully discussed above, the Court finds that Plaintiffs were indeed
independent contractors for purposes of the FLSA, and there is no argument that any
different standard regarding independent contractor status should be applied for purposes
of the rescission claims.
Second, there is a decided lack of evidence regarding any specific material
misrepresentations made by Defendants. Findings of Fact #48, #50. Although Plaintiffs
may have believed that work as owner-operators would be better than work as company
drivers, or their lives as owner-operators would somehow be better than their lives as
company drivers, there is a lack of evidence that this misunderstanding was based on
particular material misrepresentations by Defendants. Findings of Fact #48, #50.
Third, regarding the Equipment Lease Agreement, although there is a noticeable
lack of evidence about which parts of the contract any given Plaintiff did not understand,
there is simply no evidence that any particular Plaintiff did not realize he or she was signing
a contract. Findings of Fact #42, #43, #49. Some Plaintiffs testified vaguely about feeling
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time-pressured to sign their agreements, but there was no evidence that Plaintiffs could not
take the time to review, ask questions, and understand the leases had they chosen to do
so. Findings of Fact #42, #43, #49. A few Plaintiffs’ testimony that they were not permitted
to test drive the trucks before signing leases (Finding of Fact #51) fails to establish that any
Defendant made a fraudulent misrepresentation of a material fact. Moreover, ignorance
of the contents of an agreement admittedly signed by a party does not constitute fraud,
absent circumstances demonstrating a level of duress which was not present here. Platt
v. Winnebago Indus., Inc., 960 F.3d 1264, 1275-76 (10th Cir. 2020) (“Under Colorado law,
however, ‘in the absence of fraud or concealment, a party signing a contract without
reading it cannot deny knowledge of its contents and is bound by what she [or he] signed.”
(quoting Day v. Snowmass Stables, Inc., 810 F. Supp. 289, 294 (D. Colo. 1993))); Motto
Franchising, LLC v. McCabe, No. 19-cv-02103-CMA-STV, 2021 WL 662306, at * (D. Colo.
Feb. 19, 2021) (“Although the concept of duress has expanded since the days of common
law, not all coercive business practices amount to duress.”) (citing Cooper v. Flagstaff
Realty, 634 P.2d 1013, 1015 (Colo. App. 1981)).
Fourth, the Equipment Lease Agreement contains a limited service contract for a
defined period of time and/or mileage, which Plaintiffs referred to as a “warranty,” and
which sets forth repairs that would be covered by Pathway, as well as the terms and
conditions governing Pathway’s and Plaintiffs’ obligations with respect to repairs. Finding
of Fact #46.
The Equipment Lease Agreement states that Pathway made no
representations or warranties regarding the condition or fitness of the leased trucks and
makes clear that Plaintiffs accepted the trucks “AS IS, WHERE IS, AND WITH ALL
FAULTS.”
Finding of Fact #44.
The Equipment Lease Agreement states that the
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agreement, “together with the other documents maintained herein or executed
contemporaneously herewith, constitute[] the entire agreement of the parties and [Pathway]
shall not be charged with any agreement or representation not contained in a writing
executed by it as provided in this section.” Finding of Fact #47. Plaintiffs agreed that,
under the lease agreements, and subject to Pathway’s limited service contracts, they would
otherwise be solely responsible for covering the cost of truck repairs and maintenance
during the lease term. Finding of Fact #45. Defendant Harris testified that, in his sixteen
years of industry experience, he could not predict what or when something might go wrong
with any vehicle, and there is “a direct correlation” between how a truck “is maintained and
driven as to its longevity and reliability over the course of time.” Findings of Fact #8, #9.
Although some Plaintiffs testified that they were more comfortable in taking on the risk of
leasing a commercial truck because the truck was supposed to come with a warranty that
would cover major repairs, they have not directed the Court’s attention to any specific
misrepresentations made by Defendants in this regard. Finding of Fact #52. Defendants
offered Plaintiffs optional loans evidenced by promissory notes to cover repair costs, and
often Plaintiffs received little take-home pay after paying on the notes, but, again, there is
no evidence of any specific misrepresentations made to any particular Plaintiff in
connection with these loans. Finding of Fact #53.
In short, despite the evidence that Plaintiffs thought that their working lives would
generally improve after signing their truck leases, there is no evidence that this was based
on any material misrepresentation(s) by either Defendant to any particular Plaintiff.
Accordingly, the Court finds that judgment must enter in favor of Defendants on Plaintiffs’
rescission claims.
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C.
Plaintiffs’ Quantum Meruit and Unjust Enrichment Claims
In Colorado, a claim for unjust enrichment is the same as a claim for quantum
meruit. Dudding v. Norton Frickey & Assoc., 11 P.3d 441, 444 (Colo. 2000) (“Application
of the doctrine of quantum meruit, also termed quasi-contract or unjust enrichment, does
not depend upon the existence of a contract, either express or implied in fact.”); see also
Cahey v. Intel Bus. Maces. Corp., No. 20-cv-00781-NYW, 2020 WL 5203787, at *11 (D.
Colo. Sept. 1, 2020) (stating that, “[i]n Colorado, the doctrine of quantum meruit is
synonymous with the doctrine of unjust enrichment,” and therefore addressing the claims
together).
“Quantum meruit is an equitable doctrine that invokes an implied contract where the
parties either have no express contract or have abrogated it.” Matter of Gilbert, 346 P.3d
1018, 1023 (Colo. 2015). “The doctrine does not depend on the existence of a contract,
either express or implied in fact, but rather applies where a need arises to avoid unjust
enrichment to a party in the absence of an actual agreement to pay for the services
rendered.” Id. “That is, the equitable doctrine of quantum meruit seeks to restore fairness
when a contract fails by ensuring that the party receiving the benefit of the bargain pays a
reasonable sum for that benefit.” Id. (internal quotation marks omitted).
“To recover in quantum meruit, a plaintiff must demonstrate that: (1) the defendant
received a benefit, (2) at the plaintiff’s expense, and (3) it would be unjust for the defendant
to retain that benefit without paying for it.” Id.; cf. City of Arvada ex rel. Arvada Police Dep’t
v. Denver Health & Hosp. Auth., 403 P.3d 609, 616 (Colo. 2017) (“To recover under an
unjust-enrichment theory, a plaintiff must prove three elements: (1) the defendant received
a benefit (2) at the plaintiff's expense (3) under circumstances that would make it unjust for
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the defendant to retain the benefit without commensurate compensation.” (internal
quotation marks omitted)). “Whether retention of the benefit is unjust is a fact-intensive
inquiry in which courts look to, among other things, the intentions, expectations, and
behavior of the parties.” Melat, Pressman & Higbie, L.L.P. v. Hannon Law Firm, L.L.C., 287
P.3d 842, 847 (Colo. 2012).
Under most circumstances, a party may not recover under a theory of quantum
meruit or unjust enrichment when there is an express contract addressing the subject of
the alleged obligation to pay. Interbank Invs., LLC v. Eagle River Water & Sanitation Dist.,
77 P.3d 814, 816 (Colo. App. 2003). The only exceptions are if (1) “the express contract
fails or is rescinded,” or (2) “the claim covers matters that are outside of or arose after the
contract.” Pulte Home Corp., Inc. v. Countryside Cmty. Ass’n Inc., 382 P.3d 821, 833
(Colo. 2016). Here, given the Court’s judgment in favor of Defendants on Plaintiffs’
rescission claims, any recovery under quantum meruit or unjust enrichment must hinge on
the second exception, i.e., the claims must cover matters outside of or arising after the
contracts. See id.
Plaintiffs contend that Defendants were “unjustly enriched by the amount of the
lease payments that the Plaintiffs made because the Plaintiffs could not fulfill the terms of
their leases given the conditions of the truck or other things that were beyond their
control[.]” Vol. VII [#282] at 1067:12-17. Plaintiffs also contend that conduct outside of the
contract includes “when the Plaintiffs experienced . . . a need for a repair that they could
not pay for, that was not covered by the express terms of the contract, and when they
sought help from Pathway[ ] Leasing in getting that repair paid for” and Defendant Pathway
agreed to loan money for the repair as long as the driver would sign a promissory note. Id.
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at 1077: 7-15. In addition, Plaintiffs’ purported damages include bonuses and equipment
deposits which XPO remitted to Defendants rather than to Plaintiffs, because (according
to Plaintiffs) the Equipment Lease Agreement allegedly did not permit XPO to do that.
Finding of Fact #23.
The difficulty with Plaintiffs’ unjust enrichment claims is that the matters which form
the basis of the claims are not “outside of” the contracts at issue. Essentially, each of
Plaintiffs’ contentions regarding why Defendants were unjustly enriched relates
unequivocally to circumstances that are governed by their written agreements with
Defendants. For example, Plaintiffs assert that Defendants were unjustly enriched by the
lease payments Plaintiffs made because Plaintiffs weren’t always able to drive the trucks
due to breakdowns. But the leases between Plaintiffs and Defendant Pathway expressly
provide that Plaintiffs accepted the trucks “AS IS,” that certain repairs would be made by
Pathway for a certain period of time, but that ultimately other repairs would be the financial
responsibility of Plaintiffs. In other words, pursuant to the parties’ agreement, Plaintiffs
assumed the risk that they would have to make lease payments despite the fact that they
might not be able to drive their trucks due to the need for repairs that they had to pay for
themselves. The parties’ contract expressly so provides. Trial Ex. 50 at PATHWAY000003PATHWAY000004. Because the contract signed by Plaintiffs clearly governs these
circumstances, an unjust enrichment claim based on Plaintiffs’ continuing obligation to
make lease payments despite breakdowns is not tenable.
Likewise, Plaintiffs’ contention that Pathway was unjustly enriched by their
agreements to borrow money from the company for repairs, their execution of promissory
notes in exchange and their payments on those notes according to their terms also lacks
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merit.
Just like the Equipment Leases, the promissory notes at issue are likewise
“contracts” to which Plaintiffs are bound; hence, these circumstances are also expressly
governed by the parties’ contracts. See, e.g., Trial Ex. 72 (Promissory Note signed by
Plaintiff Merrill). As discussed above, no evidence has been provided to suggest that the
contracts are unenforceable. Because the parties’ express written agreements govern
these circumstances, an unjust enrichment claim based on Plaintiffs’ obligation to repay
promissory notes is not tenable.
Finally, Plaintiffs’ assertion that Pathway was unjustly enriched by the Carrier’s
payment of driver bonuses and equipment deposits to Pathway also relates to conduct
which is squarely governed by the parties’ leases, and thus cannot be said to fall “outside
of” their contracts. Trial Ex. 50 at PATHWAY000023. By executing the leases, Plaintiffs
expressly agreed to allow XPO to make these payments to Pathway on their behalf, in
further reduction of their lease obligations. An unjust enrichment claim is therefore also
untenable in these circumstances. Moreover, it is difficult for the Court to discern how
these payments made to Pathway by XPO were “at the plaintiffs’ expense,” as the evidence
established that the payments were used to reduce Plaintiffs’ lease obligations, and thus
benefitted Plaintiffs. Finding of Fact #23.
The Court finds that Plaintiffs’ claims for unjust enrichment all relate to financial
obligations they undertook as parties to legally enforceable contracts. As indicated above,
no evidence has been presented to invalidate or rescind these agreements. Plaintiffs’ lack
of understanding of the full extent of their obligations, although regrettable, does not void
the contracts and give them the right to get their money back. Nor does it give rise to
viable claims for unjust enrichment, when the circumstances complained of are governed
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by their written agreements, to which both parties are bound. Great N. Ins. Co. v. 100 Park
Homeowners Assoc., Inc., No. 16-cv-02009-CMA-KLM, 2021 WL 2660778, at *2 (D. Colo.
June 29, 2021) (“In general, a party cannot recover for unjust enrichment by asserting a
quasi-contract when an express contract covers the same subject matter because the
express contract precludes any implied-in-law contract.” (quoting Interbank Invs., LLC, 77
P.3d at 816)). Accordingly, the Court finds in favor of Defendant and against Plaintiffs on
their unjust enrichment claims.
D.
Defendants’ Breach of Contract Claims
At the outset, the Court notes that, during trial, Defendant Harris testified that
Plaintiff Williams has been released from his lease obligations. Finding of Fact #54. See
also Defs.’ Brief [#350] at 86 (stating that Plaintiff Williams does not owe the balance set
forth in Trial Exhibit T6); Vol. VII [#282] at 1100:8-14 (Defendants’ counsel conceding
during closing argument that Defendants “are not seeking any affirmative relief” from
Defendant Williams on the breach of contract claim). Moreover, Plaintiffs Ronald Dennis
and Tami Potirala completed their leases. Finding of Fact #29; Vol. IV [#279] at 632:15633:4, 635:1-6. Thus, the Court’s discussion below pertains only to Plaintiffs Anthony
Glover, Zigmund Gutowski, Keith Herring, Joseph Horion, Franklin Merrill, and James
Newberry.
A prima facie case for breach of contract requires: “(1) the existence of a contract;
(2) performance by the [counter-]plaintiff[s] or some justification for nonperformance; (3)
failure to perform the contract by the [counter-]defendant; and (4) resulting damages to the
[counter-]plaintiff[s].” W. Distrib. Co. v. Diodosio, 841 P.2d 1053, 1058 (Colo. 1992)
(citations omitted).
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At trial, the Court asked Plaintiffs’ counsel: “[F]or those [Plaintiffs] who did not
complete their lease, they are not really contending that they didn’t breach the contract.
Right? They’re simply contending that they have an alternative basis as a defense to
breach of contract which is their restitution/rescission claim. Right?” Vol. VII [#282] at
1072:14-19. Plaintiffs’ counsel responded: “Yeah, they are contending they are excused
from performance in that manner, yes, Your Honor.” Id. at 20-21. Thus, based on this
concession and the Court’s judgment in favor of Defendants on Plaintiffs’ rescission claims,
the only issue here as to each Plaintiff against whom this claim is made concerns damages.
Finding of Fact #54, #56.
“Proof of actual damages is not an essential element of a breach of contract claim,”
and “[w]hen a [party] establishes breach, but does not prove actual damages, the [party]
is entitled to nominal damages.” Interbank Invs., LLC, 77 P.3d at 818. Damages flowing
from a breach of contract must be established with “reasonable certainty by a
preponderance of the evidence.” Pomeranz v. McDonald’s Corp., 843 P.2d 1378, 1381
(Colo. 1993).
The six Plaintiffs at issue on this claim argue that Defendants’ Trial Exhibit T6, which
lists Defendants’ damages calculations, is unreliable when considered with Defendant
Harris’s testimony about the document. Pls.’ Brief [#336] at 44-45. Plaintiffs argue that the
figures are unreliable because they do not include offsets for whether a repossessed truck
was re-leased, because the column for “repossession costs” includes truck repair costs and
past-due rent, and because there is no date or amount listed in connection with any truck
that was leased again after repossession. Id. However, Plaintiffs have not explained why
combining truck repair costs and past-due rent into an overall “repossession costs” number
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makes that number unreliable. Findings of Fact #54, #55. Plaintiffs have also not
explained why, under the terms of the Equipment Lease Agreements, whether a
repossessed truck is re-leased (and when and for how much) is relevant here. Findings
of Fact #54, #55. In the absence of any clearly-developed argument to explain why
Defendant’s calculations are unreliable or inaccurate, the Court finds that Defendants have
sufficiently proven their damages as reflected in the Total Outstanding Balance column of
Trial Exhibit T6.
Accordingly, the Court enters judgment on Defendants’ breach of contract claims as
follows:
(1) in favor of Defendants and against Plaintiff Glover in the amount of $15,971.41;
(2) in favor of Defendants and against Plaintiff Gutowski in the amount of
$28,018.60;
(3) in favor of Defendants and against Plaintiff Herring in the amount of $24,917.59;
(4) in favor of Defendants and against Plaintiff Horion in the amount of $12,348.15;
(5) in favor of Defendants and against Plaintiff Merrill in the amount of $10,794.18;
(6) in favor of Defendants and against Plaintiff Newberry in the amount of $6,612.05;
and
(7) in favor of Plaintiffs Williams, Potirala, and Ronald Dennis and against
Defendants.
E.
Defendants’ Set-off Claims
“Setoff is a right grounded in concepts of fairness and equity.” In re Myers, 362 F.3d
667, 672 (10th Cir. 2004) (citing G.S. Omni Corp. v. United States, 835 F.2d 1317, 1318
(10th Cir. 1987)). “The right of setoff ‘allows entities that owe each other money to apply
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their mutual debts against each other, thereby avoiding the “absurdity of making A pay B
when B owes A.”’” Myers, 362 F.3d at 672 (quoting Citizens Bank v. Strumpf, 516 U.S. 16,
18 (1995)). “By definition, setoff is a ‘common right, which belongs to every creditor, to
apply the unappropriated moneys of his debtor, in his hands, in extinguishment of the debts
due to him.’” Myers, 362 F.3d at 672 (quoting Gratiot v. United States, 40 U.S. 336, 370
(1841)).
Defendants concede that if Plaintiffs are entitled to no damages on their claims, then
their claim for set-offs automatically fails. See Defs.’ Brief [#350] at 10 (“Pathway alleges
that if Plaintiffs are entitled to any damages, the amounts must be set off by the amounts
they still owe Pathway under their lease agreements.” (emphasis added)); id. at 87
(“Pathway also asserts a counterclaim for setoff against all Plaintiffs presuming they are
entitled to damages under the FLSA.” (emphasis added)).]
In short, the asserted basis for these setoff claims, as summarized by Defendants
in their Counterclaim [#95] is that, if Defendants are found liable under the claims asserted
by Plaintiffs in the Amended Complaint [#6], then Defendants are “entitled to a setoff which
represents all amounts lawfully due and payable under each Plaintiff’s respective lease
agreement, in amounts to be determined at trial.” Counterclaim [#95] 42 ¶ 35; see also id.
41-42 ¶¶ 25-34. In light of the Court’s findings against Plaintiffs and in favor of Defendants
on Plaintiffs’ claims, Defendant’s set-off claim fails. See, e.g., Myers, 362 F.3d at 672
(noting that set-off only applies where each side owes money to each other).
IV. Order of Judgment
Based on the foregoing,
IT IS HEREBY ORDERED that judgment shall enter in favor of Defendants and
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against Plaintiffs on Plaintiffs’ claims under the FLSA regarding minimum wages.
IT IS FURTHER ORDERED that judgment shall enter in favor of Defendants and
against Plaintiff Jurcak on Plaintiff Jurcak’s claim under the FLSA regarding retaliation.
IT IS FURTHER ORDERED that judgment shall enter in favor of Defendants and
against Plaintiffs on Plaintiffs’ claims regarding rescission.
IT IS FURTHER ORDERED that judgment shall enter in favor of Defendants and
against Plaintiffs on Plaintiffs’ claims regarding quantum meruit and unjust enrichment.
IT IS FURTHER ORDERED that judgment shall enter in favor of Defendants and
against Plaintiffs Anthony Glover, Zigmund Gutowski, Keith Herring, Joseph Horion,
Franklin Merrill, and James Newberry, in the amounts set forth above on Defendants’
claims regarding breach of contract.
IT IS FURTHER ORDERED that judgment shall enter in favor of Plaintiffs Ronald
Dennis, Tami Potirala, and Craig Williams and against Defendants on Defendants’ claim
regarding breach of contract.
IT IS FURTHER ORDERED that judgment shall enter in favor of Plaintiffs and
against Defendants on Defendants’ claims regarding set-off.
IT IS FURTHER ORDERED that the Clerk of Court shall CLOSE this case after
entry of judgment as set forth above.
Dated: July 21, 2021
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