Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca7-15-01482/USCOURTS-ca7-15-01482-0/pdf.json

Parties Involved:
Trailer Transit, Inc.
Appellee
Hubert E. Walker
Appellant

Document Text:

In the

United States Court of Appeals

For the Seventh Circuit ____________________

No. 15-1482

HUBERT E. WALKER, on behalf of himself and a class,

Plaintiff-Appellant,

v.

TRAILER TRANSIT, INC.,

Defendant-Appellee.

____________________

Appeal from the United States District Court for the

Southern District of Indiana, Indianapolis Division.

No. 1:13-cv-00124-TWP-DKL — Tanya Walton Pratt, Judge.

____________________

ARGUED SEPTEMBER 16, 2015 — DECIDED JUNE 1, 2016

____________________

Before POSNER, EASTERBROOK, and WILLIAMS, Circuit 

Judges.

EASTERBROOK, Circuit Judge. Trailer Transit relies on independent truckers, which following the parties’ convention 

we call the Drivers (though they also provide the rigs that 

carry the cargo). Trailer Transit contracts with shippers for 

the movement of cargo, then contracts with Drivers to provide transportation. It promises Drivers 71% of the gross 

revenues, with exclusions. Here is the language:

Case: 15-1482 Document: 37 Filed: 06/01/2016 Pages: 5
2 No. 15-1482

The parties mutually agree that [Trailer Transit] shall pay to 

[Driver], as rental for the equipment leased herein, for trips under [Trailer Transit]’s operating authorities or in [Trailer Transit]’s service, a sum equal to seventy-one percent (71%) of the 

gross revenues derived from use of the equipment leased herein 

(less any insurance related surcharge and all items intended to 

reimburse [Trailer Transit] for special services, such as permits, 

escort service and other special administrative costs including, 

but not limited to, Item 889).

In this suit a class of about 1,000 Drivers contends that Trailer Transit made a profit on its “special services” and owes 

71% of that profit to the Drivers. The district court held otherwise. 1 F. Supp. 3d 879 (S.D. Ind. 2014); 2015 U.S. Dist. 

LEXIS 20250 (S.D. Ind. Feb. 19, 2015).

The Drivers contend that only items provided at cost can 

be classified as “special services” (such as permits, licenses, 

flashing lights, and escort vehicles for over-wide or overlong loads). If Trailer Transit bills a customer for more than 

its cost, then the service cannot be an item “intended to reimburse” Trailer Transit, as the Drivers see things. The district court faulted this contention because it amounts to saying that the Drivers are entitled to 71% of the gross revenue 

on the principal charge for transportation (which Trailer 

Transit bills at a price per mile) and 71% of the net revenue 

on everything else. That just isn’t what the contract says. 

Drivers are entitled to 71% of the gross charge for “use of the 

equipment” (that is, the Drivers’ rigs), but the contract does 

not provide for a share of Trailer Transit’s net profit on any 

other part of the bill. It would be possible to write such a 

contract, but the parties didn’t. Indiana law governs the 

meaning of this contract in this diversity litigation, and the 

Drivers do not invoke any principle of Indiana law that 

Case: 15-1482 Document: 37 Filed: 06/01/2016 Pages: 5
No. 15-1482 3

turns “71% of gross on X and nothing on Y” into “71% of 

gross on X plus 71% of net on Y”.

True enough, one standard meaning of “reimburse” is to 

recover costs. Someone who submits a voucher for expenses

incurred on a business trip seeks reimbursement of actual 

outlays rather than a profit. But this is not the only possible 

meaning of “reimburse.” The word also is used to mean 

“compensate” or “pay.” If the contract had said “reimburse

the expense of special services,” that would limit the word’s 

meaning to recovery of actual costs. But those italicized 

words aren’t in the contract.

Perhaps the Drivers could have argued that the exclusion 

of “items intended to reimburse [Trailer Transit] for special 

services” limits this category to items provided at cost. They 

then would be entitled to 71% of everything else on the bill

sent to the shipper. So if Trailer Transit paid someone $1,000 

to accompany an over-wide shipment and display a “WIDE 

LOAD” banner, and billed the shipper $1,250, then the Driver would be entitled to $887.50 for that escort service—and 

Trailer Transit would lose $637.50 ($1,250 less $1,000 less 

$887.50 equals -$637.50). But that’s not the argument made 

in the district court. The Drivers asked for $177.50 (71% of 

Trailer Transit’s gain of $250) on this item, and their appellate brief is full of similar examples in which they claim 71% 

of the net. Only in passing (a few sentences in the brief, and 

one at oral argument) did the Drivers suggest that the use of 

the word “reimburse” entitles them to 71% of the gross on all 

special services billed at even a dollar over cost. That’s not 

enough to preserve the argument—which as this example 

shows also has little to recommend it. Why would Trailer 

Transit lock itself into automatic losses on special services?

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4 No. 15-1482

(We put to one side all questions about whether the $250 in 

our example is a profit in the first place. Trailer Transit has 

employees and other overhead expenses to cover; lining up 

and managing escorts is costly. The difficulty of determining 

Trailer Transit’s real economic profit on any service may be 

among the reasons why the contract does not entitle Drivers 

to a portion of its net revenue.)

A better line of argument for the Drivers might have 

started from the principle that parties cannot take opportunistic advantage of contractual commitments. See Keystone 

Carbon Co. v. Black, 599 N.E.2d 213, 214–15 & n.1 (Ind. App. 

1992). Suppose that, after a given Driver had signed the contract, Trailer Transit reduced its standard mileage rate and 

increased the price of special services to shippers in a way 

that left shippers indifferent (they don’t care how line items 

on a bill are parceled out) but reduced the portion of the bill 

subject to their 71% share. We asked the Drivers’ lawyer 

whether they are making an argument of this kind. The answer is no; they do not contend that Trailer Transit has 

moved charges from the standard shipping fee to special 

services. The whole of the Drivers’ position is that they are 

entitled to a slice of any net profit on special services, and 

the contract provides no support for that.

Hubert Walker, the representative plaintiff, furnished 

services to Trailer Transit for seven years. He must have 

found the remuneration satisfactory. Only in retrospect did 

he look for more, filing this suit about two years after hauling his last load. The judiciary does not rewrite contracts after the fact to favor one side. Walker and the other Drivers 

might have insisted on receiving some part of the profit from 

special services (and then perhaps Trailer Transit would 

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No. 15-1482 5

have offered less than 71% of the gross), but that’s not what 

this contract says.

AFFIRMED

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