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Mervyn v. Atlas Van Lines, Inc.

United States District Court, Seventh Circuit

October 2, 2013

THOMAS MERVYN, individually and on behalf of others similarly situated, Plaintiffs,
v.
ATLAS VAN LINES, INC., and ACE WIDE MOVING & STORAGE CO., individually and on behalf of others similarly situated Defendants.

ORDER

RONALD A. GUZMN, District Judge.

Defendants' motion to dismiss [20] is granted in part and denied in part. The RICO claim is dismissed with leave to replead in 21 days provided Plaintiff may do so commensurate with his obligations under Rule 11. The remainder of the motion to dismiss is denied. Defendants' motion for partial summary judgment [23] is granted in part.

STATEMENT

Thomas Mervyn ("Plaintiff") brings suit on behalf of himself and others similarly situated against Atlas Van Lines, Inc. ("Atlas") and Ace World Wide Moving & Storage Co., Inc., individually and on behalf of others similarly situated. Plaintiff alleges that Atlas and Ace[1] knowingly and unlawfully miscalculated and reduced payments to truck owner-operators. Defendants move to dismiss and for partial summary judgment as to the request for injunctive relief.

I. Facts

Plaintiff is an owner-operator of a moving truck and van. (Compl., Dkt. # 1, ¶ 3.) He entered into a leasing agreement listing with Atlas, a motor carrier, which claims to be the second largest van line and carrier of household goods in North America. ( Id . ¶ 4(a).) Atlas operates through a network of agents and is the assignee of lease agreements from owner-operators of equipment. ( Id .) Ace is a moving company headquartered in Wisconsin, and on Plaintiff's information and belief, has been and continues to be one of the top revenue-producing agents of Atlas. ( Id . ¶ 4(b).) On Plaintiff's information and belief, because of Ace's past and believed present leadership positions held with Atlas, Ace plays a high-level role in shaping the way Atlas does business. ( Id .) Ace was one of eleven agents that orchestrated the repurchase of Atlas in 1988 and its Chairman of the Board, John W. Steiner, was and continues to be a director and stockholder of Atlas. ( Id .)

Under the terms of the relevant lease agreement, Plaintiff was supposed to receive compensation based on a fixed percentage of the line haul and accessorial service charges. ( Id . ¶ 18.) Instead, defendants used understated line haul and accessorial service amounts to calculate owner-operator compensation, thus reducing the amount of compensation Plaintiff received under the lease agreement. ( Id . ¶ 19.) Plaintiff brings the following claims: (1) violation of 49 C.F.R. § 376.12(d); (2) breach of contract; (3) violations of the Racketeering Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1961, et seq . Defendants move to dismiss each claim.

II. Standard

Plaintiff contends that the complaint should not be dismissed in part because the "dismissal is warranted only if it can be determined to a certainty that Plaintiff cannot prove any facts that would allow relief under the allegations of the complaint, " and cites to Conley v. Gibson , 355 U.S. 41-46 (1957), but Plaintiff is incorrect. The United States Supreme Court rejected this language when analyzing the federal pleading standards in 2007. See Bell Atl. Corp. v. Twombly , 550 U.S. 544, 563 (2007) ("[A]fter puzzling the profession for 50 years, this famous observation has earned its retirement").

When considering a Rule 12(b)(6) motion to dismiss, the Court accepts the well-pleaded factual allegations as true and draws all reasonable inferences from them in plaintiff's favor. Hecker v. Deere & Co. , 556 F.3d 575, 580 (7th Cir. 2009). However, a complaint must "give the defendant fair notice of what the... claim is and the grounds upon which it rests'" and set forth facts sufficient "to raise a right to relief above the speculative level." Bell Atl., 550 U.S. at 555 (quoting Conley v. Gibson , 355 U.S. 41, 47 (1957)). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Ashcroft v. Igbal , 556 U.S. 662, 678 (2009).

III. Analysis

A. Motion to Dismiss

1. Terms of Agreement

Defendants first argue that the complaint should be dismissed in its entirety because Mervyn was paid consistent with the unambiguous terms of the contractor agreement. Specifically, Defendants challenge Plaintiff's characterization of how he was supposed to be paid. While Plaintiff states that he was supposed to receive compensation based on a fixed percentage of line haul and accessorial service charges, Defendants point to the language of the Contractor Agreement ...


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