United States District Court, S.D. Indiana, Indianapolis Division
WILLIAM BLAKLEY on behalf of himself and those similarly situated, HELEN BLAKLEY on behalf of herself and those similarly situated, and KIMBERLY SMITH on behalf of herself and those similarly situated, Plaintiffs,
CELADON GROUP, INC., CELADON TRUCKING SERVICES, INC., QUALITY COMPANIES, LLC, QUALITY EQUIPMENT LEASING, LLC, and JOHN DOES 1-10, Defendants.
ORDER ON MOTION FOR PARTIAL SUMMARY JUDGMENT
L. McKINNEY, JUDGE
matter comes before the Court on Defendants', Celadon
Group, Inc., Celadon Trucking Services, Inc., Quality
Companies, Inc., and Quality Equipment Leasing, Inc.
(collectively, “Celadon”), Motion for Partial
Summary Judgment (the “Motion”). Dkt. No. 59. In
the Motion, Celadon seeks to dismiss Counts IV, V, and VI of
Plaintiffs', William Blakely (“William”),
Helen Blakely (“Helen”), and Kimberly Smith
(“Smith”), on behalf of themselves and all others
similarly situated (collectively, “Plaintiffs”),
Second Amended Individual, Collective, and Class Action Civil
Complaint (the “Second Amended Complaint”), with
prejudice. Dkt. No. 59; see also, Dkt. No. 52. For
the foregoing reasons, the Court GRANTS in part and DENIES in
part the Motion.
and Smith, as well as many other commercial truck drivers
(the “Contracting Drivers”), each entered into a
written Contractor Operating Agreement (the
“Agreement”),  Dkt. No. 88, Ex. B-3 at 11-28; Dkt. No.
88, Ex. B-4 at 14-31, through which Celadon sought to utilize
vehicular equipment owned or leased by the Contracting
Drivers to provide services in connection with its business.
Agreement, § 1.03. The Agreement obligated Celadon to
pay a Contracting Driver for his delivery services
“within fifteen (15) days after submission by [the
Contracting Driver] to [Celadon] of [certain] accurately
prepared and fully completed documents with respect to such
services.” Id. at § 5.03. The Contracting
Drivers agreed “that [their] compensation for
services…may be withheld by [Celadon] for payment of,
and [Celadon] may set off against [their] compensation
for” various charges and expenses that may be incurred
during the duration of the Agreement, including
“[a]dvances and other extensions of credit by [Celadon]
to [the drivers].” Id. at § 5.05. The
Agreement also stated that the Contracting Drivers were
responsible for “[p]aying all operating costs and
expenses incidental to the operation of [their vehicular
equipment] including but not limited to” costs related
to fuel, insurance, oil, tires, repairs, licenses, plates,
and tolls. Id. at § 9.02(c). Furthermore, the
Agreement required each Contracting Driver to maintain an
escrow account and authorize Celadon, in its discretion,
“to apply all or any portion of [a driver's] Escrow
Account to the payment of any charges or indebtedness”
incurred during the term of the Agreement. Id. at
§10.04. If a Contracting Driver was indebted to Celadon
in an amount greater than that held in his escrow account,
his indebtedness would be reduced by the amount available in
his escrow account, and that Contracting Driver would be
personally liable to Celadon for any remaining indebtedness.
Id. at § 10.05. If any amounts remained in a
Contracting Driver's escrow account after his Agreement
was terminated, the remaining amounts would be returned to
that driver. Id. at §§ 10.05, 10.06.
working with Celadon, Plaintiffs regularly requested and
received advances from Celadon for personal use and for costs
associated with operating their vehicles, in exchange for
one-time service fees ranging from $3.50 to $7.50 for each
advance. Dkt. No. 79, Ex. 26 (“Isaacs
Dep.”), 26:1-28:4, 33:22-40:16; Dkt. No. 88, Ex. A
(“Isaacs Decl.”), ¶¶ 7, 11. Celadon
typically provides such requested advances to its drivers,
including the Plaintiffs, by either loading the funds onto
the drivers' fuel cards or by issuing an “express
code” that would allow the drivers to obtain cash at
truck stations. Isaacs Decl. ¶ 10; Isaacs Dep.,
37:10-38:9. These advances, and their associated service
fees, are generally “tied to the trip that [a driver
is] on when he takes the advance” and are reflected as
reductions on the driver's paycheck for that trip. Isaacs
Dep., 65:7-66:14. See also, Isaacs Decl., ¶ 9.
When the total amount due to a driver for a particular
paycheck does not cover the entire amount already advanced to
that driver, the remaining amount is reflected as a reduction
on the driver's subsequent paychecks until the entire
advanced amount can be accounted for. Isaacs Dep.,
50:21-51:2; Isaacs Decl., ¶ 11. If a driver's
Agreement is terminated after that driver received advances
that have not yet been accounted for on the driver's
paychecks, the remaining advanced amount would be deducted
from the driver's escrow account before the remaining
escrow account funds are returned to the driver. Isaacs Dep.,
51:12-52:25; Isaacs Decl., ¶ 12. Celadon has not sought
to recover any advanced amounts not otherwise covered by a
driver's paychecks or escrow account by taking legal
action, hiring collection agencies, or debiting a
driver's checking account in at least five years. Isaacs
Dep., 51:12-52:6; Isaacs Decl., ¶ 13.
their First Amended Complaint, Plaintiffs claimed that the
advances made by Celadon constituted loans in violation of
the Indiana Small Loans Act, Ind. Code §§
24-4.5-7-101 et seq. (“ISLA”), and
Indiana Consumer Loan Act, Ind. Code §§
24-4.5-3-101 et seq. (“ICLA”). Dkt. No.
21, ¶¶ 97-130, 160-165. Plaintiffs further asserted
that Celadon's deductions for items, such as “lease
payments, fuel purchases, insurance purchases, and payroll
advances, ” constituted wage assignments in violation
the Indiana Wage Assignment Act, Ind. Code §§
22-7-7-1 et seq. (“IWAA”), by including
transaction fees in excess of the permissible 8% rate and by
securing agreements for assignments exceeding thirty days.
Id. at ¶¶ 131-139, 166-168.
December 2, 2016, the Court dismissed Plaintiffs' claims
pursuant to the ISLA, ICLA, and IWAA without prejudice and
granted Plaintiffs leave to amend their First Amended
Complaint. Dkt. No. 50. On December 15, 2016, Plaintiffs
filed their Second Amended Complaint, in which they re-plead
their claims against Celadon under the ISLA, ICLA, and IWAA.
Dkt. No. 52. Celadon filed the Motion on January 12, 2017,
arguing that Plaintiffs' Second Amended Complaint still
fails to sufficiently plead their claims under the ISLA,
ICLA, and IWAA and that, in light of the undisputed material
facts of this case, these claims should be dismissed as a
matter of law. Dkt. No. 60; Dkt. No. 88.
SUMMARY JUDGMENT STANDARD
stated by the Supreme Court, summary judgment is not a
disfavored procedural shortcut, but rather is an integral
part of the federal rules as a whole, which are designed to
secure the just, speedy, and inexpensive determination of
every action. See Celotex Corp. v. Catrett, 477 U.S.
317, 327 (1986); see also United Ass'n of Black
Landscapers v. City of Milwaukee, 916 F.2d 1261, 1267-68
(7th Cir. 1990). Motions for summary judgment are governed by
Federal Rule of Civil Procedure 56, which provides in
relevant part: “The Court shall grant summary judgment
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).
party has made a properly-supported motion for summary
judgment, the opposing party may not simply rest upon the
pleadings but must instead submit evidentiary materials
showing that a fact either is or cannot be genuinely
disputed. Fed.R.Civ.P. 56(c)(1). A genuine issue of material
fact exists whenever “there is sufficient evidence
favoring the nonmoving party for a jury to return a verdict
for that party.” Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 249 (1986). The nonmoving party
bears the burden of demonstrating that such a genuine issue
of material fact exists. See Matsushita Elec. Indus. Co.
v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986);
Oliver v. Oshkosh Truck Corp., 96 F.3d 992, 997 (7th
Cir. 1996). It is not the duty of the Court to scour the
record in search of evidence to defeat a motion for summary
judgment; rather, the nonmoving party bears the
responsibility of identifying applicable evidence.
See Bombard v. Ft. Wayne Newspapers, Inc.,
92 F.3d 560, 562 (7th Cir. 1996).
evaluating a motion for summary judgment, the Court should
draw all reasonable inferences from undisputed facts in favor
of the nonmoving party and should view the disputed evidence
in the light most favorable to the nonmoving party.
See Estate of Cole v. Fromm, 94 F.3d 254,
257 (7th Cir. 1996). The mere existence of a factual dispute,
by itself, is not sufficient to bar summary judgment. Only
factual disputes that might affect the outcome of the suit in
light of the substantive law will preclude summary judgment.
See Anderson, 477 U.S. at 248; JPM Inc.
v. John Deere Indus. Equip. Co., 94 F.3d 270, 273 (7th
Cir. 1996). Irrelevant or unnecessary facts do not deter
summary judgment, even when in dispute. See Clifton v.
Schafer, 969 F.2d 278, 281 (7th Cir. 1992). If the
moving party does not have the ultimate burden of proof on a
claim, it is sufficient for the moving party to direct the
Court to the lack of evidence as to an element of that claim.
See Green v. Whiteco Indus., Inc., 17 F.3d 199, 201
& n. 3 (7th Cir. 1994). “If the nonmoving party
fails to establish the existence of an element essential to
his case, one on which he would bear the burden of proof at
trial, summary judgment must be granted to the moving
party.” Ortiz v. John O. Butler Co., 94 F.3d
1121, 1124 (7th Cir. 1996).
COUNTS IV AND V-VIOLATIONS OF THE INDIANA SMALL LOANS ACT
AND INDIANA CONSUMER LOAN ACT
Counts IV and V of the Second Amended Complaint, Plaintiffs
assert that the advances provided by Celadon constitute
“loans” that violate the ISLA and ICLA,
respectively. Dkt. No. 52 at 22-27, 31-32. However, Celadon
argues in large part that the advances do not meet the
definition of a “loan” under these statutes and,
therefore, do not violate the ISLA or ICLA. Dkt. No. 88 at
ICLA defines a “loan” to include (1) a debt
created “by the lender's payment of or agreement to
pay money to the debtor” or to a third party on the
debtor's behalf, (2) a debt created “by a credit to
an account with the lender upon which the debtor is entitled
to draw immediately, ” (3) a debt created
“pursuant to a lender credit card or similar
arrangement, ” and (4) “the forbearance of debt
arising from a loan.” Ind. Code § 24-4.5-3-106. As
the Court previously stated, this statutory definition
implies that a debt must be created in order for a loan to
exist. Dkt. No. 50 at 6. The definition of a
“loan” found in the ICLA is also applicable to
the ISLA. Ind. Code § 24-4.5-7-102(1) (“Except as
otherwise provided, all provisions of this article applying
to consumer loans…apply to small loans, as defined in
this chapter.”). Under the ISLA, a “small
loan” is defined as a loan (a) with a principal loan
amount between $50 and $550; and (b) “in which the
lender holds the borrower's check for a specific period,