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Stampley v. Altom Transport, Inc.

United States District Court, N.D. Illinois, Eastern Division

September 15, 2016

Michael Stampley, Plaintiff,
v.
Altom Transport, Inc., Defendant.

          MEMORANDUM OPINION AND ORDER

          Manish S. Shah United States District Judge

         Plaintiff Michael Stampley leased his truck and services to defendant Altom Transport, Inc., a motor-carrier company, in exchange for “70% [of] gross.” Customers hired Altom to transport chemicals by truck, and these shipments often required that the tanks be washed after delivering the chemicals to their recipient. Customers paid for the cleanings, but Altom did not include these payments as part of “gross” when it calculated Stampley's compensation. Stampley thinks he should have received 70% of that money, and brought claims for breach of contract, unjust enrichment, and a violation of the federal Motor Carrier Act and its regulations. Altom disagrees and says the tank-wash payments were simply expense reimbursements unrelated to Stampley's services and therefore not part of “gross.” Altom now moves for summary judgment on plaintiff's claims. For the following reasons, the motion is denied.

         I. Legal Standards

         Summary judgment is appropriate if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Spurling v. C & M Fine Pack, Inc., 739 F.3d 1055, 1060 (7th Cir. 2014). A genuine dispute as to any material fact exists if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The party seeking summary judgment has the burden of establishing that there is no genuine dispute as to any material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). “When the material facts are not in dispute, the existence and interpretation of a contract are questions of law that the court may decide on a motion for summary judgment.” Citadel Group Ltd. v. Wash. Reg'l Med. Ctr., 692 F.3d 580, 587 (7th Cir. 2012). A court must “construe all facts and reasonable inferences in the light most favorable to the non-moving party.” Apex Digital, Inc. v. Sears, Roebuck & Co., 735 F.3d 962, 964 (7th Cir. 2013).

         II. Facts

         Plaintiff Michael Stampley, the owner and operator of a truck, entered into an Independent Contractor Agreement with defendant Altom Transport, Inc., a for-hire motor-carrier company. [123] ¶¶ 1-2, 10.[1] Under the contract, Stampley hauled shipments for Altom from September 28, 2012, through sometime in March 2014. [123] ¶ 11. The contract states that Stampley “shall provide [Altom] transportation related services and the use of the equipment set forth below or in an appendix.” [123] ¶ 17; [113-8] at 2. And it specifies that “equipment” refers to Stampley's truck. [123] ¶¶ 18, 24. Stampley had the right to accept or refuse shipping jobs that Altom offered him without penalty, and he was free to choose his routes when he did accept one. [123] ¶ 28. Altom often shipped oils and chemicals for its customers. [123] ¶ 3. That meant that, after unloading a shipment at the customer's location, Stampley had to get the inside of the trailer washed to avoid contaminating the next shipment. [123] ¶ 5; [130] ¶¶ 17-18. This involved driving the empty trailer, or “tank, ” to a tank-wash facility, sometimes participating in readying the tank for cleaning by lifting heavy hoses, and waiting at the facility while the tank was washed. [130] ¶¶ 17-23.

         Stampley's compensation appears in Appendix A to the contract, which is based on a standard form provided by the Illinois Commerce Commission. [123] ¶¶ 22-23. According to that document, Stampley was to be compensated in an amount equal to “70% [of] gross.” [123] ¶ 25. Section 9B of the contract provided that “[w]here payment is predicated upon a percentage of gross revenues, [Altom] shall present [Stampley] with copies of rated freight bills, or a computer-generated document containing all of the same information, for all shipments transported in or with Equipment leased pursuant to the [Agreement].” [123] ¶ 26.[2]

         Along with every paycheck, Altom would send Stampley a document itemizing the shipments he made, their delivery dates and locations, the amount invoiced to the customer for freight, the 70% share of that amount paid to Stampley, and additional payments for fuel, loading, unloading, tolls, weigh fees, and other items. [123] ¶ 29. But those information sheets did not include the amount invoiced to the customer for the tank wash. [130] ¶¶ 1, 3. In fact, throughout his tenure with Altom, Stampley did not know that Altom received money from customers for tank washes that was excluded from the information sheets and his compensation. [130] ¶ 27. Stampley believes he is entitled, under the contract, to 70% of the money that Altom received from its customers. [123] ¶ 38.

         III. Analysis

         Under Illinois law, [3] contracts are construed to effectuate the intent of the parties. Gallagher v. Lenart, 226 Ill.2d 208, 232 (2007) (citations omitted). A court first looks solely at the contract's language, since it is the best indication of the parties' intent. Id. (citations omitted). The contract must be examined “as a whole, viewing each part in light of the others.” Id. (citations omitted).

         The Illinois “four corners” rule provides a threshold inquiry, which asks whether the contract is ambiguous. Bourke v. Dun & Bradstreet Corp., 159 F.3d 1032, 1036 (7th Cir. 1998). A contract is ambiguous “only if the language used is reasonably or fairly susceptible to having more than one meaning.” Flora Bank & Trust v. Czyzewski, 222 Ill.App.3d 382, 388 (5th Dist. 1991) (internal citations omitted). A contract is not ambiguous, however, “if a court can discover its meaning simply through knowledge of those facts which give it meaning as gleaned from the general language of the contract.” Id. That the parties disagree as to the meaning of a contract's terms does not render the contract “ambiguous” under this rule. Id.

         The contract says Stampley is to be paid “70% [of] gross.” [123] ¶ 25. The parties agree that the word “gross” refers to gross revenue, and they seem to agree that gross revenue is limited to each invoiced shipment in which Stampley was involved-Stampley does not seek a percentage of Altom's gross revenues on a company-wide basis, nor does he seek a percentage for any shipments involving other drivers or trucks. The parties dispute whether they further limited the term. Altom argues that “gross” is further limited to the revenue attributable to Stampley's services in hauling shipments with his truck, and that tank washes are unrelated to those services. Stampley believes “gross” refers to all of the money paid by customers in relation to each shipment he made, including tank-wash payments. Both parties have argued that the contract is unambiguous, and each party thinks its own interpretation is the only reasonable one.[4] “Both can be wrong, but both cannot be right.” Bourke, 159 F.3d at 1037. The first step is to determine whether Altom's interpretation of the agreement is reasonable.

         Altom focuses its argument on the context of the contract and the regulatory framework that governs leases in the trucking industry-the Motor Carrier Act and its implementing regulations. See 49 U.S.C. § 14102; 49 C.F.R. § 376.1 et seq. Altom notes that the contract is a lease of Stampley's “transportation related services” and the use of his truck. [113-8] at 2. The lease provision that defines Stampley's compensation as a percentage of “gross” appears on an Illinois Commerce Commission form, titled “Equipment Lease Motorized (Power) Units Only”-also referring to his truck. [113-8] at 23. And Section 9(b) of the contract, in discussing Stampley's percentage-based compensation, refers to “all shipments transported in or with Equipment leased pursuant to this Agreement.” [113-8] at 11. Altom believes the contract's references to Stampley's services, his equipment, and shipments indicate that Stampley's compensation is limited to 70% of gross revenue derived from Stampley's services in hauling shipments with his truck, and that the tank-wash payments are separate.

         Altom also argues that the contract mirrors the governing regulations, and that those regulations provide additional context. For example, the regulation governing compensation provisions in this type of lease refers to “equipment and driver's services.” 49 C.F.R. § 376.12(d). That regulation permits driver compensation to be expressed as “a percentage of gross revenue, a flat rate per mile, a variable rate depending on the direction traveled or the type of commodity transported, or by any other method of compensation mutually agreed upon by the parties to the lease.” 49 C.F.R. § 376.12(d). Another subsection refers to compensation “based on a percentage of the gross revenue for a shipment.” 49 C.F.R. § 376.12(g). When viewed in conjunction with the rest of the contract and with the regulatory framework in mind, Altom argues, the term “gross” is limited to ...


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