Action continues in both lawsuits against Ledar Transport Inc.

In both lawsuits against Ledar Transport Inc., the judge held Ledar accountable by ordering the carrier to return escrow funds to its former owner-operators. Federal regulations require a motor carrier to either return all escrow or account for their retention within 45 days of lease termination. Ledar refused to return these security deposit funds to owner-operators until recent court actions demanded the refunds.

Ledar I: Accountability of escrow funds
During a recent teleconference with attorneys for Ledar and the plaintiff class (which includes a number of OOIDA members), Magistrate Sarah W. Hays gave a preliminary indication that she will order Ledar to refund all unreturned escrow funds due the owner-operators in this lawsuit against Ledar.

On June 21, 1996, Judge Fernando J. Gaitan Jr. entered a final judgment ordering Ledar to provide the plaintiffs with an immediate accounting of all transactions and other activity relating to their escrow, and to immediately return the escrow funds with quarterly interest to plaintiffs and all other similarly situated owner-operators.

"Ledar has failed to comply with the court's order to immediately return the escrow funds and to provide an immediate accounting," said the plaintiff's motion. "Ledar apparently relies on its failure to render an immediate accounting as justification for its failure to return the escrow funds within 45 days of the respective lease terminations."

When Ledar finally gave forward the accounting, it was inaccurate and misleading, according to plaintiffs' attorney Tom McCann of The Cullen Law Firm.

"Ledar has strung the plaintiff class along, then only to produce this insufficient accounting with gross errors," McCann said. "We asked the judge to address the escrow fund issue again because Ledar wasn't making a good faith effort in the accounting."

Ledar II: More defendants
In the second case against Ledar, Judge Gaitan ordered Ledar to return all security deposits to the owner-operators who left Ledar on or after Nov. 3, 2000, when he issued a preliminary injunction banning Ledar from operating in interstate commerce with trucks it did not own (i.e. owner-operators' trucks). The order doesn't include the return of lease-purchase owner-operators' maintenance reserve funds, which will be decided by the judge later.

Additionally, OOIDA recently amended its newest class action complaint against Ledar by adding as defendants Ledar's leasing company Hawthorn Leasing Inc., and Ledar's principals Carl E. Higgs, Alice Norma Higgs and Scott L. Higgs.

According to OOIDA's motion requesting to add these defendants, "These parties are added as defendants because it has become evident to plaintiffs that those added parties have engaged in a course of conduct, and in concert, with defendant Ledar Transport Inc. to violate federal motor carrier leasing laws."

In the motion, OOIDA attorneys allege Hawthorn Leasing, which is under the control of Carl E. Higgs and other members of the Higgs family, is the alter-ego of Ledar Transport, as both entities hold out the same corporate address and share corporate officers and owners.

OOIDA also filed its class certification motion in May, asking the judge to recognize the four named plaintiffs - Daniel Day, David Horn, Kenneth Reinsch and Jason Buckallew - as representatives for about 800 other owner-operators who leased to Ledar, and to rule that the case should proceed as a class action. Ledar has until early July to respond. The court will schedule further discovery and trial dates after it rules on the class certification motion. --by Rene Tankersley, Feature Editor