I. INTRODUCTION
Defendant Comerica Bank (“Comerica”) moves to dismiss (docket no. 28) the second amended complaint filed by Plaintiffs Owner-Operator Independent Drivers Association (“OOIDA”), Carl Harp, and Michael Wiese (collectively, “Plaintiffs”). For the reasons set forth below, the Court DENIES Comerica’s motion.
II. BACKGROUND
Plaintiffs seek to enforce the final judgment entered by this Court on July 16, 2004, in OOIDA v. Arctic Express, Inc., No. 97-750 (the “Arctic Litigation”). Harp and Wiese are “owner-operators” of trucking equipment and OOIDA is an owner-operator industry association with more than 141,000 members.
In the Arctic Litigation, the Court found that the Plaintiffs had entered into agreements whereby they leased their trucking equipment to Arctic. As part of these lease agreements, Arctic deducted nine cents per mile from the compensation owed to each owner-operator for purposes of repairing and maintaining the leased trucking equipment. This Court held that these “maintenance escrow funds” were subject to the requirements of the federal Truth-in-Leasing regulations, 49 C.F.R. § 376.12, and that Arctic therefore had unlawfully failed to return them to owner-operators upon termination of the lease agreements. This Court certified the case as a class action and granted final approval to a settlement awarding the Class $5,583,084, which equaled the total amount of maintenance escrow funds Arctic owed, plus interest.
On January 16, 2004, Plaintiffs filed this action against Comerica, alleging that Comerica has the maintenance escrow funds owed to Arctic Class members. 1 Plaintiffs allege that Arctic and Comerica entered into two revolving credit loan agreements, one dated May 3, 1993, and the other dated April 29, 1998. At the same time as the loan agreements were in effect, Arctic also maintained certain deposit accounts with Comerica, in which Arctic deposited its earnings. Pursuant to the loan agreements, Arctic borrowed enough money from Comerica to pay Class members’ weekly compensation, minus the nine cents per mile deducted for repair and maintenance of the trucking equipment. Plaintiffs allege that Comerica then collected the maintenance escrows from Arctic’s depository accounts and applied them toward paying down Arctic’s loan obligations to Comerica. Plaintiffs claim that the federal Truth-in-Leasing regulations, 49 C.F.R. § 376.12(k), created a statutory trust over their maintenance escrow fees, and that Arctic Class members are entitled to recover their trust property, whether from Arctic, or the subsequent holder of the trust property, in this case Comerica.
On May 16, 2006,
Plaintiffs thereafter moved to amend the complaint a second time. Plaintiffs sought to plead facts showing that they could not have discovered their claim against Com-erica until December 2003, and that any applicable statute of limitations did not begin to run until that time. Comerica did not oppose Plaintiffs’ motion, and in part on that basis, this Court granted the motion on March 20, 2007.
The second amended complaint contains identical substantive allegations as the pri- or version, and continues to seek relief in connection with the 1993 loan agreement. The only difference is that the second amended complaint adds new paragraphs twenty-four through thirty, which set forth facts regarding Plaintiffs’ discovery of their claim against Comerica. Plaintiffs allege that pursuant to the Lease Agreements between Arctic and Class members, Arctic disclosed to Class members only the amount of maintenance escrow fees it withheld from their compensation, not where or how the fees were maintained. Further, under the escrow provisions of the Truth-in-Leasing regulations, Arctic was not required to hold the maintenance escrow fees in a separate account; according to Plaintiffs, “[f]unds returned to the owner-operator may be drawn from any source available to the carrier.” Plaintiffs thus plead that they did not know, and did not have any reason to know, about any arrangements that Arctic made with respect to the maintenance escrow fees, let alone the loan agreements with Comerica. On October 31, 2003, shortly before the trial in the Arctic Litigation was scheduled to begin, Arctic filed a bankruptcy petition, thus halting the Arctic proceedings. Plaintiffs allege that they first learned about Comerica’s role in transferring the maintenance escrow fees out of Arctic’s depository accounts on December 2, 2003, through testimony given in the bankruptcy case. Six weeks later, on January 16, 2004, Plaintiffs filed an adversary proceeding against Arctic and Comerica in the bankruptcy court, seeking return of their escrow fees.
On April 11, 2007, Comerica moved under Federal Rule of Civil Procedure 12(b)(6) to dismiss the second amended complaint. Comerica argues that Plaintiffs have ignored this Court’s prior dismissal order and have improperly continued to plead that their entitlement to relief extends from July 1, 1993 to the present. The parties’ briefing requires the Court to answer the following questions: (1) whether the Court’s prior dismissal order permanently foreclosed any recovery for Plaintiffs in connection with the 1993 loan agreement; (2) whether Plaintiffs should be estopped from arguing that their claim arises out of the federal common law of trusts; and (3) whether Plaintiffs’ claim was timely filed. The Court will address each of these issues in turn.
Dismissal is proper under Federal Rule of Civil Procedure 12(b)(6) if a party “fail[s] to state a claim upon which relief can be granted.” “On a motion to dismiss, the Court must construe the complaint in the light most favorable to the plaintiff, accept all factual allegations as true, and determine whether the complaint contains ‘enough facts to state a claim to relief that is plausible on its face.’ ”
United States ex rel. Bledsoe v. Cmty. Health Sys.,
Ordinarily, dismissing claims as untimely under Rule 12(b)(6) is disfavored because plaintiffs have no duty to plead facts negating an affirmative defense, such as the statute of limitations.
Hollander v. Brown,
IV. ANALYSIS
A. The Effect of the Court’s Prior Dismissal Order
Comerica argues that Plaintiffs are improperly trying to re-litigate a settled issue, that is, their right to recover in connection with the 1993 loan agreement. Comerica insists that because the Court did not expressly state that its partial dismissal of Plaintiffs’ claim was
without prejudice,
the law presumes that the dismissal was
with prejudice. See Pratt v. Ventas, Inc.,
The Court disagrees. Comerica never satisfactorily accounts for the fact that Plaintiffs sought and were granted leave to file a second amended complaint. Comeri-ca says that “Plaintiffs cannot assume that this Court’s leave to file a second amended complaint was an invitation to re-litigate the statute of limitations defense under a new theory.” While perhaps not an “invitation,” the Court’s granting of Plaintiffs’ motion, along with Comerica’s non-opposition to that motion, was at least an opportunity for Plaintiffs to do that very thing, namely “re-litigate the statute of limitations defense under a new theory.” Plaintiffs were not exactly silent (nor could they have been) about their purpose in seeking leave to amend. They expressly stated in their motion that they sought to amend “to allege facts which establish that any applicable limitations period did not begin to run until Class Members discovered the cause of action against Defendant Comeri-ca Bank on December 2, 2003 during testimony in the bankruptcy proceeding----” If Comerica believed that Plaintiffs’ proposed pleading amendments were foreclosed by this Court’s prior dismissal order,
As for Comerica’s argument that Plaintiffs could have raised their discovery rule argument in the earlier briefing, and should not now be rewarded for their dilatory behavior, Comerica is wrong. For a party to avail itself of the discovery rule, it must affirmatively plead facts alleging the circumstances surrounding the discovery of its claim, including facts showing that the party acted diligently to ascertain the nature of the claim.
See e.g., Ormiston v. Nelson,
Finally, the Court rejects Comerica’s attempt to paint its dismissal order as conclusively adopting O.R.C. § 2305.07 as the statute of limitations governing Plaintiffs’ claim. True, Comerica relied upon § 2305.07 in its first motion to dismiss and this Court granted that motion insofar as Plaintiffs’ claim related to the 1993 loan agreement. Those facts, however, do not add up to the proposition that the Court endorsed § 2305.07 as the controlling limitations period. Rather, the Court merely held that dismissal was proper because Plaintiffs could not plead that, under Ohio law, their maintenance escrow funds constituted a “continuing and subsisting trust” exempt from any time bar. Thus, the Court’s rejection of Plaintiffs’ “continuing and subsisting trust” argument did not automatically imply its acceptance of Com-erica’s preferred statute of limitations.
B. The Basis for Plaintiffs’ Claim
The parties agree that whatever the precise source of Plaintiffs’ claim (see below), the Court must borrow the most analogous state statute of limitations. This, of course, is commonly done where federal law is silent about the controlling limitations period.
See N. Star Steel Co. v. Thomas,
Comerica says that § 2305.07 applies because it provides the statute of limitations
Before addressing which limitations period applies, the Court must consider two antecedent questions. First, should Plaintiffs be estopped from arguing that their claim is predicated on the federal common law of trusts? Second, if not, is Plaintiffs’ claim cognizable?
Comerica argued in its first motion to dismiss that the Court lacked subject matter jurisdiction over this case. Plaintiffs successfully rebutted Comerica’s contention by arguing that the Court could exercise federal-question jurisdiction because the federal Truth-in-Leasing regulations created a statutory trust over Plaintiffs’ maintenance escrow fees. In its latest motion to dismiss, Comerica argues that where Plaintiffs previously premised their claim on the statutory trust provisions of the Truth-in-Leasing regulations, they cannot now invoke the federal common law as the source for their claim. In other words, having prevailed on their statutory trust theory, Comerica says that Plaintiffs should be estopped from relying on a different theory just because it better serves their present purposes.
New Hampshire v. Maine,
The Court finds that Plaintiffs have not taken a contradictory position. They do not, as Comerica maintains, now disavow their earlier reliance on the Truth-in-Leasing regulations by seeking refuge in the federal common law. Plaintiffs have all along advocated the view that while the Truth-in-Leasing regulations provide the basis for this Court’s exercise of jurisdiction, the relief they seek — the return of their maintenance escrow fees — arises out of the federal common law of trusts. This distinction also has not been lost on the Court. In its prior dismissal order, the Court held that it had subject matter jurisdiction over the case because the statutory trust at issue is a creature of federal law. At the same time, the Court acknowledged that Plaintiffs did not plead their claim under the Truth-in-Leasing regulations, but instead sought restitutionary relief:
[W]hile the Court recognizes that 49 U.S.C. § 14704(a)(2) only authorizes suits against carriers, the resulting trust creates a legal basis for Plaintiffs’ federal claim against a third party to recover those trust funds. The statutory language precludes suits for damages against parties other than carriers, but the Complaint does not allege a violation of 49 U.S.C. § 14704(a)(2). Rather, the Complaint seeks restitution of money allegedly withdrawn improperly by a third-party from a trust account.
The Court therefore concludes that Plaintiffs are not seeking to alter their theory of the case mid-course and may continue to press their claim as one that grows out of the federal common law of trusts.
Although courts should not casually resort to crafting federal common law rules, there is ample authority for Plaintiffs to recover- under a federal common law trust theory here, should they succeed in proving their claim.
See In re Columbia Gas Sys., Inc.,
Moreover, courts will sometimes recognize a federal restitutionary remedy to recover property unjustly held by another party. In
Harris Trust and Savings Bank v. Salomon Smith Barney, Inc.,
C. The Timeliness of Plaintiffs’ Claim
Having concluded that Plaintiffs’ claim is one for restitutionary relief arising out of the common law of trusts, the Court is persuaded by Plaintiffs’ argument that O.R.C. § 2305.09 is the most analogous state statute of limitations. This provision specifies a four-year limitations period for “the recovery of personal property, or for taking or detaining it,” and further incorporates a “discovery rule” whereby claims “shall not accrue until the wrongdoer is discovered.... ” Even if § 2305.09 did not include a discovery rule, Plaintiffs would be entitled to the benefit of one because their claim is federal in nature and therefore federal rules of claim accrual apply.
See e.g., Miller v. Fortis Benefits Ins. Co.,
As described above, Plaintiffs contend that they could not have learned about the existence of their claim until December 2, 2003, when testimony in Arc
The problem with Comerica’s argument is that just because Plaintiffs knew they had been harmed as of June 30, 1997, hardly means that they knew the identity of all the wrongdoers. It was Arctic, not Comerica, that collected the maintenance escrow fees from Plaintiffs. That being the case, Plaintiffs took the natural and reasonable course of action when they discovered the loss of their property: they sued Arctic, the entity with whom they entered into the lease agreements, the entity that deducted the maintenance escrow fees from Plaintiffs’ regular compensation, and the entity that subsequently failed to return the fees.
Comerica asks the Court to take judicial notice of the pleadings in the Arctic Litigation, apparently as support for its argument that through the exercise of reasonable diligence, Plaintiffs could have discovered the basis for their claim against Comerica as of the filing of the Arctic complaint on June 30, 1997. But Comerica fails to bring its argument full circle. It nowhere states that information was disclosed in the Arctic Litigation that would have alerted Plaintiffs to Comeri-ca’s allegedly wrongful conduct in transferring their maintenance escrow fees out of Arctic’s accounts. Had Arctic defended in the Arctic Litigation by pointing the finger at Comerica as the possessor of Plaintiffs’ trust property, had Arctic provided discovery to Plaintiffs showing Com-erica’s involvement, or had some other fact implicating Comerica emerged, Com-erica’s statute-of-limitations argument might have traction. As it is, however, Comerica asks too much by insisting that Plaintiffs were on notice of their claim against Comerica on June 30, 1997, just because they were on notice of their claims against Arctic.
Accordingly, the Court finds that Plaintiffs’ claim against Comerica is timely.
Y. CONCLUSION
For the reasons described above, the Court DENIES Comerica’s motion to dismiss (docket no. 28).
IT IS SO ORDERED.
Notes
. Plaintiffs' suit was originally filed as an adversary proceeding in Arctic's bankruptcy. After a final judgment was entered in the Arctic Litigation on July 16, 2004, this Court withdrew the bankruptcy reference, and Plaintiffs' action against Comerica was lodged with the Court.