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COA affirms summary judgment against Celadon in class action

February 7, 2017

The Indiana Court of Appeals has affirmed summary judgment against a prominent trucking company in a class-action lawsuit, holding that the terms of the company’s contract with its independent drivers require the company to deduct the cost of fuel from their compensation based only on the lowest discounted price.

When Celadon Trucking Services Inc. hires employee and independent truck drivers, it provides all drivers with a “Comdata” card, which functions like a consumer credit or debit card, to pay for fuel while on the job. Drivers are encouraged to purchase their fuel from Pilot Flying J, which reduces the fuel price from the “credit” price to the “cash” price each time a Comdata card was swiped, an amount typically equal to about six cents less per gallon.

However, Celadon only paid Pilot Flying J the equivalent of the standard fuel cost minus eight cents per gallon, less than the displayed “cash” price. For independent contractors, the amount of Comdata fuel purchases is deducted from the contractor’s total compensation before Celadon pays them.

In the standard contract between Celadon and the members of this class action lawsuit, who are all independent contractors, a provision was included that held that contractors had “sole and complete responsibility” for paying for their fuel. Additionally, the contract held that Celadon could “advance” monies to the contractors at a rate based on whether they purchased discounted fuel. However, Comdata cards were not mentioned in the contractor contracts.

When Charles Wilmoth and Kent Vassey signed their contracts with Celadon, they were told that they would get the same discounts as Celadon on their fuel purchases. However, they later discovered that Celadon received a greater discount than was reflected in their compensation.

The two contractors filed a class action in 2013 seeking to recover the difference between the amount Celadon deducted from contractors’ pay and the amount the trucking company actually paid Pilot Flying J for fuel. A class of up to 2,495 members was created, and the Marion Superior Court entered summary judgment in favor of the class on its breach of contract claim.

The court found that damages totaled roughly $3.3 million, plus pre- and post-interest judgment and, further, denied Celadon’s motion for judgment on the pleadings. The trucking company appealed in Celadon Trucking Services, Inc. v. Charles Wilmoth and Kent Vassey, on behalf of themselves and all others similarly situated, 49A04-1512-PL-2104.

In its affirmation of summary judgment in favor of the class, the Indiana Court of Appeals first noted Tuesday that the language of the contract is ambiguous with respect to how much Celadon was allowed to deduct from contractors’ compensation for Comdata fuel purchases.  

While the contract does permit Celadon to deduct the pump price from compensation, there is no definition of an “advance” or “Comdata cards” in the contractual language, and, further, there is no explanation of how to calculate the amount for fuel costs, Judge Michael Barnes wrote. Because of that ambiguous language, Celadon’s motion for judgment on the pleadings was properly denied, Barnes said.

Further, the appellate panel defined the “advance” promised to contractors as the fuel itself, not the specific pump price of the fuel, because “Celadon never parted with the cash pump price as opposed to the lesser discount price and cannot be said to have ever ‘advanced’ or  ‘furnished’ a fuel purchase at the pump price.”  

“In sum, we agree with the Class and the trial court that the proper interpretation of the contract, construing its ambiguities against Celadon as its drafter, is that when making deductions from a trucker’s compensation for fuel purchases made at Pilot Flying Js using a Comdata card, Celadon could only make those deductions based on the lower discounted price and not the displayed pump price,” Barnes wrote.
 

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