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Tsybikov v. Dovgal

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

October 16, 2019




         Defendants move to dismiss all claims in Plaintiff's Complaint. For the reasons stated herein, Defendants' Motion to Dismiss is granted in part and denied in part.

         I. BACKGROUND

         Plaintiff, a truck driver who worked for the two Defendant trucking companies, sued them for violating the Illinois Wage Payment and Collection Act (IWPCA) and implementing a scheme to defraud him by misclassifying him as an independent contractor when he was an employee so that they could reduce his pay, charge him with illegal deductions from his take home pay for a variety of alleged misdeeds, and doctor his driving records.

         Plaintiff learned of the opening for a position of a truckdriver at Defendants' corporations from a friend and employee who was leaving the company. Defendant Dovgal conducted a phone interview with Plaintiff in August 2014. Plaintiff was told in the interview that he would be paid $0.48 per mile driven but that he could only work for the Defendant and no other trucking company. He accepted the offer and commenced working. He does not recall signing any documents or contracts during the first year of employment. After one year, Defendant Dovgal told Plaintiff that he had to sign a lease agreement whereby he would lease a truck from Defendant and lease it back so that Plaintiff could drive under Defendants' companies DOT number and motor carrier authority. He was told if he refused to sign, he would be terminated.

         During the periods in question, Plaintiff was a resident of Illinois and reported and worked out of Defendants' Illinois facilities. During his tenure as a driver for Defendants, he was paid by three different measures. First, from August 2014 to July 2015, he was paid on a mileage basis. In the second phase, from July 2015 to May 2017, his compensation was based on a percentage of a load/freight confirmation basis. In May 2017, he became “a quasi-owner-operator” and was paid on a per load basis. He remained in this capacity until he left the company in August 2017.

         During the mileage pay phase, Defendants shorted his compensation by approximately 10%. He also had significant sums deducted from his pay without his agreement, for reasons such as “violations” or “bad tires.” During the second phase, he was underpaid by approximately $1, 000.00 per month through the doctoring his freight confirmations by defendants. He also had money deducted from his pay for towing, “DVL claim, ” and “improper delivery.” In the third phase where he was paid as a “quasi-owner-operator, he was charged for numerous alleged wrongdoings and was underpaid by about $1, 000.00 per month, similar to phase two.

         The Defendants exerted full control over Plaintiff's workdays and working conditions, including those after Plaintiff was designated an owner-operator. The defendants also prohibited him from hauling freight for any other company. He was required to report to company dispatchers in order to obtain delivery assignments, which included specifics such as time of pickup and time of delivery. The Defendants further designated the insurance companies he was required to deal with and the specific amounts of coverage he was required to carry. The Plaintiff was required to give defendants advance notice in order to take time off. Also, Plaintiff was required to submit all bills of lading, log books, and all other required paper work to Defendants for their approval.

         The Complaint further alleges that DVL Express Inc. was an Illinois corporation engaged in transportation and delivery business in Illinois and throughout the United States and had its principal place of business in Markham, Illinois. Defendant Oleksandr Dovgal is a resident of Illinois and is the sole shareholder of DVL, its incorporator, registered agent, president, and key decision maker. Defendant Altex Logistics is also an Illinois corporation and maintains its principal place of business in Markham, Illinois. The Defendant, Alina Kim, is the wife of Dovgal, a resident of Illinois, sole shareholder of Altex and its incorporator, registered agent, president as well as key decision maker.

         Plaintiff has filed a nine-count Complaint based on the foregoing: Count I - Violation of of the Illinois Wage Payment and Collection Act (“ISPCA”); Count II - Fraud in the inducement; Count III - Fraudulent Misrepresentation; Count IV - Fraudulent Concealment; Count V - Fraudulent Misrepresentation; Count VI - Civil Conspiracy; Count VII - Declaratory Judgment; Count VIII - Accounting; and Count IX - Unjust Enrichment. Defendants have moved to dismiss each of the counts.


         A. Count I - IWCPA

         Defendants argument for the dismissal of Count I is based on two contentions: first, that Plaintiff was not the person with whom Defendants contracted. Rather it was through a corporation by the name of Motom Corporation, so the IWCPA does not apply, and, that Plaintiff, not being a resident of Illinois, was another reason why he is not entitled to the protection of the IWCPA.

         We can make quick work of these two arguments. First, Plaintiff alleges in his Complaint, which the Court must accept as true for purposes of this Motion to Dismiss, that he was hired in August 2014 by the two Illinois based Defendant trucking companies, though an oral contract to perform trucking services in Illinois and elsewhere. Defendants attached to their Answer what purports to be a written agreement, dated May 27, 2015, between an alleged “Motom Corp.” and Defendant DVL, which Defendants contend makes Plaintiff an independent contractor rather than an employee and therefore not subject to the IWCPA. Second, Plaintiff alleges in his Complaint that he is a resident of Illinois, an allegation that the Court must also accept as true for purposes of this Motion. Defendants attempt to counter this allegation, by attaching to their ...

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