882 F.3d 680
7th Cir.2018Background
- Thomas Mervyn, an independent owner-operator, leased his truck and services to Ace World Wide Moving, Inc. (an agent for Atlas Van Lines) under a 2009 written lease governed by Wisconsin law.
- The lease’s Schedule B-1 set compensation: “Linehaul 58%” and “Fuel Surcharge 100%,” and expressly stated linehaul and accessorial charges would be determined by applying Atlas’s effective bottom line discount (EBLD).
- Atlas applied the EBLD (and sometimes a predetermined EBLD) to customer tariff charges to allocate discounts among agents; Ace paid Mervyn based on the resulting distributable amounts recorded in RTDS and Settlement Sheets.
- Paragraph 11(f) of the lease provided that financial entries on payment documents are “conclusively presumed correct” if not disputed within 30 days after distribution, and after 30 days such documents are primary/prima facie business records.
- Mervyn waited until 2013 to sue Atlas and Ace alleging breach of contract (he was underpaid relative to his reading of the lease) and violations of the Truth‑In‑Leasing regulation, claiming compensation terms were not “clearly stated.” The district court granted summary judgment for Atlas and Ace; the Seventh Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Paragraph 11(f) bars Mervyn’s breach claims for failing to timely dispute payment entries | Mervyn: 30‑day dispute clause should not bar later contract claims about correct compensation | Atlas/Ace: Clause conclusively presumes entries correct if not disputed within 30 days, barring late challenges | Held: Clause is clear and bars Mervyn’s claims because he did not dispute within 30 days |
| Whether Paragraph 11(f)’s language creates only a rebuttable prima facie presumption | Mervyn: second sentence makes presumption rebuttable; entries can be challenged later | Atlas/Ace: first sentence creates a conclusive presumption; two sentences are consistent | Held: First sentence is conclusive; second sentence describes evidentiary effect after 30 days; not rebuttable |
| Whether the lease’s compensation terms require paying 58% of billed tariff or 58% after EBLD; and fuel surcharge entitlement | Mervyn: entitled to 58% of amount billed to customer (tariff) and 100% of tariff fuel surcharge | Atlas/Ace: Lease explicitly ties linehaul to EBLD and pays 100% of fuel surcharge that customer paid; Mervyn was paid per lease | Held: Lease plainly applied EBLD to linehaul and paid 100% of the fuel surcharge the customer paid; Mervyn was paid according to lease |
| Whether Truth‑In‑Leasing claims survive if breach claims fail | Mervyn: lease did not “clearly state” compensation as required by regs | Atlas/Ace: regulatory claim depends on contract interpretation; if contract claims fail so do regulatory claims | Held: Because breach claims fail, Truth‑In‑Leasing claims fail as well |
Key Cases Cited
- Betco Corp. v. Peacock, 876 F.3d 306 (7th Cir. 2017) (standard of review for summary judgment)
- Seitzinger v. Community Health Network, 676 N.W.2d 426 (Wis. 2004) (contract interpretation focuses on parties’ intentions)
- Ash Park, LLC v. Alexander & Bishop, Ltd., 866 N.W.2d 679 (Wis. 2015) (contracts construed by plain and ordinary meaning)
- Maryland Arms Ltd. v. Connell, 786 N.W.2d 15 (Wis. 2010) (clear, unambiguous contract terms are enforced as written)
- Gorton v. Hostak, Henzl & Bichler, S.C., 577 N.W.2d 617 (Wis. 1998) (same)