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12/23/87 Holland Motor Express, Inc v. the Illinois Commerce

December 23, 1987

HOLLAND MOTOR EXPRESS, INC., ET AL., PLAINTIFFS-APPELLANTS

v.

THE ILLINOIS COMMERCE COMMISSION ET AL., DEFENDANTS-APPELLEES



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, THIRD DIVISION

520 N.E.2d 682, 165 Ill. App. 3d 703, 117 Ill. Dec. 331 1987.IL.1907

Appeal from the Circuit Court of Cook County; the Hon. Thomas J. O'Brien, Judge, presiding.

APPELLATE Judges:

JUSTICE FREEMAN delivered the opinion of the court. McNAMARA, P.J., and WHITE, J., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE FREEMAN

Plaintiffs, Holland Motor Express, Inc., and Rudolf Express Company, appeal the trial court's order which affirmed the order of the Illinois Commerce Commission (the Commission) granting the application of defendant, Smith Movers, Inc. (Smith), for an extension of its authority as a common carrier. Plaintiffs contend on appeal that the orders of the Commission are contrary to the manifest weight of the evidence, contrary to law, and constitute an abuse of discretion by the Commission. For the reasons stated below, we affirm the decision of the circuit court affirming the Commission's grant of extended authority.

A hearing was held on Smith's application and the following evidence was adduced. Smith, the applicant, is a minority business concern, wholly owned by Johnnie C. Smith, a black male. Smith has held a common carrier certificate issued by the Commission since 1973 and operates a fleet of motor vehicle equipment consisting of seven tractors, five van trailers, and three straight trucks. The authority Smith has held since 1973 is a common carrier of property by motor vehicle to transport furniture, accessories and appliances within the terminal area of Chicago (a statutorily defined area); food products, corrugated materials, and commodities dealt in by chain, retail, and mail order stores, and fuel oil within the terminal area of Chicago; and corrugated containers to points within an 80-mile radius of Chicago for a shipper within such authorized area; also dirt, sand and gravel within Chicago. By the application which is the subject of this suit, Smith sought to expand its authority, both as to authorized commodities and geographical scope of the territory served. The extended authority would allow Smith to transport general commodities as a common carrier by motor vehicle, except in armored or tank vehicles, between points within a 75-mile radius of Chicago on the one hand, and certain points in Illinois on the other.

Five witnesses testified in support of Smith's application. William Spicer, purchasing agent for the City of Chicago, testified that the city supports the application in order to increase Smith's potential to serve the city's shipping requirements and to increase minority participation in city contracts. Pursuant to temporary authority, Smith has been servicing the City of Chicago since October 1985. Spicer stated that the grant of extended authority to Smith would not displace or replace existing carriers who previously have been servicing the city. On cross-examination Spicer admitted that it would be necessary to extend Smith's authority to a radius of 100 miles of the city, rather than the 75-mile radius area sought in the application, in order to meet existing needs. Spicer also stated that he was not testifying about any inadequacies in existing trucking services available to the city.

Jerry E. Zahara, corporate traffic manager for Zenith, testified that Zenith would like to increase its use of Smith's services pursuant to a written contract. Since 1975, Smith has been providing service to Zenith and has dedicated certain equipment to the exclusive use of Zenith. Zahara testified that Smith is an outstanding carrier. Further, Zenith is attempting to advance its relationship with minority-owned businesses. Zahara testified that while Zenith has had some service problems with other carriers, it never had those problems with Smith. Further, Zahara stated that extended utilization of Smith's services would not replace or displace existing carriers.

Paula Thomas, manager of office services for the Illinois Department of Employment Security, testified to a need for the transportation of office furniture throughout the State of Illinois to and from its warehouse in Chicago. The department has utilized the services of Smith in the past and has been satisfied with Smith's service. Thomas testified that all past utilization of Smith's services by the agency has been pursuant to a contract.

A. C. Hopkins, president of Hopkins Foods (Hopkins), a retail grocery chain that operates five stores in Chicago, testified that Smith has serviced his stores in the past. Hopkins testified to the need to increase Smith's geographical authority to extend to a wider area in the State, including Bloomington, Illinois, and to increase Smith's commodity authority to include a variety of commodities, such as hardware, fixtures, and equipment.

Richard Joseph Funck, manager of governmental and postal affairs for Ward, testified that Ward utilizes Smith's service on a contract basis by utilizing two trucks dedicated to Ward's exclusive use. Smith has been servicing Ward since 1975. Ward pays Smith for its services on a weekly basis, for an eight-hour day, even if Ward does not use the dedicated trucks. Ward would prefer to utilize Smith's service in order to utilize more fully the equipment for which it contracted. Ward seeks to broaden Smith's authority to avoid having the trucks sitting idle. Ward seeks to use Smith's trucks for any commodity that it may ship, including some commodities not presently included in Smith's authority, and to ship goods within a wider geographical scope than that which is included in Smith's existing authority. Funck stated that Ward's utilization of Smith's extended authority would not divert traffic from existing carriers.

Three witnesses, representing intervening parties, testified in opposition to Smith's application. James Shock, vice-president-Sales of Burren Transfer Company (Burren), an interstate and Illinois intrastate motor carrier, testified regarding Burren's transport business. Shock was unfamiliar with the existing scope of Smith's authority. Shock was aware of the identity of Smith's supporting shippers, but stated that Burren was not servicing any of those companies. Shock testified to a decline in general business volume in Illinois over the past few years. He stated that Burren competes with a number of other carriers, and an additional carrier such as Smith could divert business from Burren. Shock stated that diversion of freight would be harmful to Burren, especially since the company earned a profit of only 1 1/2% from operations during the prior year. Shock was unable to identify any specific existing customers which would be diverted by Smith. Shock stated that the volume of traffic available in Illinois would not support an additional motor carrier service. On cross-examination, Shock stated that Burren was objecting to the extension of Smith's territorial authority, specifically to territory south of Route 80.

Daryl E. Clark, vice-president of Rudolf Express Company (Rudolf), testified that Rudolf has common carrier authority to transport general commodities within Illinois. Additionally, Rudolf holds interstate and intrastate authority to serve through and in 15 States. Rudolf operates a fleet of motor vehicle equipment consisting of 73 tractors, eight straight trucks, and 178 trailers. Rudolf introduced at trial an abstract of traffic which it transports. The abstract indicates traffic which would be subject to diversion by Smith. Rudolph earned a profit in 1984 of only .4%. Clark testified that existing business and the volume of freight now moving intrastate in Illinois will not support an additional general commodity carrier. Clark admitted that the only company ...


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