IN THE UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

OWNER-OPERATOR INDEPENDENT, )

DRIVERS ASSOCIATION, INC., et al., )

)

Plaintiffs, )

) No. 03 C 7869

v. )

) Mag. Judge Michael T. Mason

BULKMATIC TRANSPORT COMPANY, )

)

Defendant. )

MEMORANDUM OPINION AND ORDER

Michael T. Mason, United States Magistrate Judge:

Plaintiffs Owner-Operator Independent Drivers Association, Inc., et al.

(“plaintiffs”) filed a three-count complaint against defendant Bulkmatic Transport

Company (“defendant” or “Bulkmatic”) pursuant to 49 U.S.C. §§ 14102 and 14704. In

their complaint, plaintiffs allege that defendant violated the federal Truth-in-Leasing

regulations, 49 C.F.R. Part 376, which govern the leases between defendant and

individuals who lease their trucking equipment to defendant. Plaintiffs filed a motion for

partial summary judgment on the issue of liability on Count III. Bulkmatic filed a crossmotion for summary judgment on all three counts of plaintiffs’ complaint. For the

reasons set forth below, plaintiffs’ motion for partial summary judgment is granted and

defendant’s cross-motion for summary judgment is denied.

BACKGROUND

The Interstate Commerce Commission Termination Act of 1995, 49 U.S.C. §§

10101, et seq. (“ICCTA”), transferred the motor carrier regulatory functions previously
2

vested in the Interstate Commerce Commission to the Department of Transportation

(“DOT”) and the Surface Transportation Board. See 49 U.S.C. § 13501. The federal

Truth-in-Leasing regulations (“the regulations”), 49 C.F.R. Part 376, govern the leases

between motor carriers and owner-operators of trucks. These regulations were initially

promulgated pursuant to 49 U.S.C. §§ 13301 and14102. With the Motor Carrier Safety

Improvement Act of 1999, Congress transferred to the new Federal Motor Carrier Safety

Administration (“FMCSA”) all “duties and powers related to motor carriers or motor

carrier safety vested in the Secretary [of Transportation] by chapters . . . 133 through

149 . . . .” 49 U.S.C. § 113(f)(1). The Secretary thereby, in relevant part, delegated his

authority over the federal leasing regulations to FMCSA. See 49 C.F.R. §§ 1.73(a)(2),

(6), (8).

Bulkmatic is a regulated motor carrier that transports property in interstate

commerce under authority issued by the DOT. It does so utilizing tractors and driving

services leased from owner-operators (i.e., independent truckers). Plaintiff

Owner-Operator Independent Drivers Association, Inc. (“OOIDA”) is an association,

some of whose owner-operator members (including the individual plaintiffs) have leased

their trucking equipment, with a driver, to defendant. Defendant has entered into lease

agreements with the individual plaintiffs.

In Count I of the complaint, plaintiffs allege that the subject lease agreements do

not contain all of the provisions, or the precise wording, required by the applicable

leasing regulations. See 49 C.F.R. § 376.12. In Count II of the complaint, they allege

that Bulkmatic failed to provide rated freight bills to owner-operators on request, in

violation of 49 C.F.R. § 376.12(g). In Count III, plaintiffs allege that Bulkmatic
1

 The facts in this section are derived from the parties’ Rule 56.1 statement of facts or

the exhibits attached thereto. Unless otherwise specified, the facts in this section are

undisputed.

2

 Plaintiffs are the LESSORS and Bulkmatic is the LESSEE under the Lease

Agreements.

3

 The percentage of gross revenue specified in each Lease Agreement ranges from 62

percent to 67 percent.

3

understates its gross revenue before calculating plaintiffs’ percentage-of-revenue

compensation, thus underpaying them, in violation of 49 C.F.R. § 376.12(d) and (g).

UNDISPUTED FACTS1

Bulkmatic transports various products for third party shippers in bulk tank trailers. 

Included among the products transported in Bulkmatic tank trailers are food products

such as flour, sugar and grain; and non food products such as chemicals and plastics. 

Bulkmatic owns the tank trailers but sometimes leases tractors and drivers from owneroperators, who drive the freight to its destination. 

Each individual plaintiff has entered into a “Lease Agreement” with Bulkmatic

under which the owner-operator provides trucking equipment and driving services to

Bulkmatic. Bulkmatic uses a standard form Lease Agreement which is materially

identical for all owner-operators. Bulkmatic drafts the Lease Agreements.

Each Lease Agreement contains the following provisions:2

LESSOR does hereby lease to LESSEE the following motor

vehicle(s) equipment, with or without driver . . . . 

(Lease A.1).

LESSEE shall pay to LESSOR for the use of said equipment

and driver, or for equipment alone, if no driver is being leased,

as follows:

XX% of gross revenue3

(Lease D.1).
4

LESSEE agrees to pay LESSOR said net earnings (less

deductions) after LESSOR has submitted the necessary

delivery documents.

(Lease D.2(a)).

LESSEE shall provide LESSOR with a computerized report

verifying rates, gross revenues, and loads used to compute

payments to LESSOR hereunder. In addition, LESSEE shall

furnish to LESSOR a copy of the rated freight bill upon request.

(Lease D.3(b)).

With respect to truck earning [sic], LESSEE shall furnish

weekly to LESSOR a cartage sheet which itemizes the total

earnings, expenses and deductions.

(Lease D.3(c)).

LESSOR agrees to pay all of the operating expenses of the

above equipment, including but not limited to:

C All tolls and ferries

C All detention and accessorial charges

(Lease E.1, in pertinent part).

LESSOR hereby authorizes LESSEE to deduct from

LESSOR’s cartage checks covering truck earnings any sums

of money that shall be due and owing to LESSEE from

LESSOR. The items which may be unilaterally deducted from

the LESSOR’s settlement check, having been initially paid for

by LESSEE and/or its affiliated companies, are as follows,

provided that a written explanation and itemization be delivered

to LESSOR before any deductions are made:

C Maintenance and repair.

C Preload charges.

(Lease F.3 and F.6).

After the freight reaches its destination, Bulkmatic submits a freight invoice to the

shipper-customer. The freight invoice states the full amount owed to Bulkmatic by the

shipper. Bulkmatic bills the shippers for each shipment by forwarding an invoice either

in paper form or electronically. 

Shippers are charged by Bulkmatic for transportation services by various rates
5

including by flat rate, by hundred weight, by ton weight and by per mile rate. The freight

invoices include the charge for the actual transportation of freight from its point of origin

to its destination (the “line haul”). The line haul rates vary from shipper to shipper, and

are negotiated with each individual shipper. The line haul rates may change within

months, depending upon competition and other factors. A shipper may have different

line haul rates, depending on the freight’s point of origin, its destination and other

factors. 

The freight invoices also include charges for services other than transporting the

product, such as: transfer charges (relating to loading the tank/trailer), sealing charges,

cleaning charges, sifting charges, inspection charges, dedicated trailer fees, non-use

fees, extra equipment charges, fuel surcharges, tolls and detention (waiting time). 

Charges for services other than transporting the product are sometimes referred to as

“accessorial” charges. 

Some of the accessorial charges are for services provided by Bulkmatic itself,

while others are for services provided by third parties or by owner-operators. When

these accessorial services are performed by third parties, Bulkmatic pays the third

parties. The accessorial services may also be performed by Bulkmatic employees, who

are paid by Bulkmatic. Bulkmatic does not compensate owner-operators for accessorial

services performed by Bulkmatic employees or by third parties that do not involve the

use of owner-operators’ driving services or equipment. 

Instead, Bulkmatic calculates owner-operator compensation as a percentage of

the amount billed to the shipper that is attributable to the use of the owner-operators’

equipment and driver services. Accordingly, when owner-operators perform the
6

accessorial services, they are paid a percentage of the corresponding accessorial

charges billed to the shipper. When owner-operators do not perform the accessorial

services, they are not paid a percentage of the corresponding accessorial charges billed

to the shipper.

For example, loading the trailer, represented by the “transfer charge,” is

sometimes done by the owner-operator, other times by Bulkmatic or a third party. 

Loads that originate out of Bulkmatic’s Bronx, New York terminal, for instance, are preloaded by Bulkmatic, before the owner-operators arrive with their leased tractors. When

an owner-operator loads the trailer, he receives a percentage of the transfer charge. 

When the owner-operator does not load the trailer, he is not paid a portion of the

transfer charge. 

At times, Bulkmatic also bills shippers a “fuel surcharge.” When there is an

increase in fuel prices, Bulkmatic bills the shipper a percentage (ranging from

approximately 2% to 30% of the delivery charge, depending upon the varied price of

diesel fuel) to account for that increase. Bulkmatic, in turn, reimburses the owneroperators the full amount of the fuel surcharge.

Whether a shipper is charged by flat rate, by hundred weight, by ton rate or by

per mile rate, some or all of the services provided may be rolled into the rate charged

and not itemized on an invoice. Invoices from Bulkmatic to a shipper may show one

undivided total charge per load transported or may included a separate charge for

specified items which is then totaled on the invoice. The same amount may be charged

for transporting a load on the same delivery route regardless of whether certain services

are provided every time a load is carried over that route. For example, a tank wash may
7

be performed only when product build up in the tank requires that it be cleaned. The

account receivable for each shipment reported in Bulkmatic’s accounting system is

recorded as one total invoice amount which includes all charges billed on the invoice for

the shipment. 

Bulkmatic compensates its owner-operators on a weekly basis. Bulkmatic

provides the owner-operators with a settlement statement that sets out their

compensation for each individual shipment. Each invoice for a shipment moved by an

owner-operator can be linked to an owner-operator settlement by a unique identifying

number. The settlement statements contain the following information: (1) the load

number and date; (2) the line haul rate; (3) the fuel surcharge; and (4) all other

accessorial charges relating to the use of the owner-operator’s equipment and driver

services.

According to Bulkmatic, several plaintiffs purportedly admitted that they were to

be compensated based on the use of their equipment and driving services. In an

answer to Interrogatory No. 19, plaintiff Simon Jamel indicated that “gross revenue”

means “the amount that Bulkmatic charges the customer for anything that I was

involved with.” Mr. Jamel testified that he agrees there is a connection between “gross

revenue” and the services he provides. Plaintiffs David Paul, Nelson Hernandez and

John Robertson testified that they were not seeking payment for services that they did

not perform. 

In contrast, according to plaintiffs, their understanding of the term “gross

revenue” is consistent with its common usage - all sums associated with charges to the

shipper. Plaintiffs Peter Mango, John Smith and Thomas Taylor testified that a tank
8

wash should be included in gross revenue because it is part of the total amount charged

to the shipper. They also participate by bringing the trailer to the tank wash.

Additionally, in response to the same interrogatory discussed above, the remaining

plaintiffs all indicated that they understood “gross revenue” to be the total amount

Bulkmatic charges the shipper.

Bulkmatic submitted the affidavit of Kenneth M. Siegel, who has extensive

experience in the trucking industry. Mr. Siegel states that for several decades, it has

been a standard practice within the trucking industry to state the compensation to be

paid owner-operators under a lease agreement with motor carriers in terms of a

percentage of the carrier’s gross revenue. Mr. Siegel also states that it has been a

general practice in the trucking industry for carriers to calculate the compensation to be

paid an owner-operator under a lease agreement as a percentage of the revenues

derived by the carrier for services performed by the owner-operator, including the use of

the owner-operator’s vehicle and driving services. Mr. Siegel further states that it has

been a general practice in the trucking industry for carriers to exclude from calculations

of owner-operator compensation revenues derived as a result of services performed by

the motor carrier. The excluded items include matters such as: trailer cleaning, transfer

services, sealing charges, insurance surcharges, security surcharges, special billing or

invoice services, late payment fees or penalties or penalties assessed against a

shipper, or similar items which the service is performed, the expense incurred, or the

risk assumed by the motor carrier and not the owner-operator.

LEGAL ANALYSIS

Summary judgment is proper when “the pleadings, depositions, answers to
4

 Because Bulkmatic uses a standard form Lease Agreement which is materially

identical for all owner-operators, we will simply refer to the contract as “the Lease.” 

9

interrogatories, and admissions on file, together with the affidavits, if any, show that

there is no genuine issue as to any material fact and that the moving party is entitled to

a judgment as a matter of law. Fed. R. Civ. P. 56(c); see also, Celotex Corp. v. Catrett,

477 U.S. 317, 322-23 (1986). The moving party has the burden of demonstrating the

absence of genuine issues of material fact. Celotex, 477 U.S. at 323. “A genuine issue

of material fact exists only if there is sufficient evidence favoring the nonmoving party for

a jury to return a verdict for that party.” Alexander v. Dept. of Health and Family

Services, 263 F.3d 673, 680 (7th Cir. 2001). When making this determination, we

review the record in the light most favorable to the nonmovant, and draw all reasonable

inferences in his favor. Id. However, once the moving party has met its burden, the

opposing party must come forward with specific evidence, not mere allegations or

denials of the pleadings, which demonstrates that there is a genuine issue for trial. 

Howland v. Kilquist, 833 F.2d 639, 642 (7th Cir. 1987). Federal Rule of Civil Procedure

56(c) “mandates summary judgment when the nonmoving party fails to establish the

existence of an element essential to its case and on which that party will bear the

burden of proof at trial.” Jefferson v. City of Chicago, 2000 U.S. Dist. LEXIS 22081, *10

(N.D. Ill. 2000). 

I. Plaintiffs’ Motion for Partial Summary Judgment On Count III

Plaintiffs have moved for partial summary judgment as to liability on Count III. In

order to resolve plaintiffs’ motion for summary judgment, this Court must interpret the

Lease.4

 As an initial matter, because the Lease must comply with the federal
10

regulations applicable to authorized motor carriers as set forth in 49 C.F.R. §376.12,

this Court finds that it should be construed in accordance with federal common law and

general rules of contract interpretation. See Turner v. Miller Transporters, Inc., 852 So.

2d 478, 485 (La. Ct. App. 2003) (noting that leases between regulated carriers and

owner-operators are subject to federal law and further finding that claims for damages

related to a violation of 49 C.F.R. § 376.12 fall under the aegis of federal law rather than

state law); see also, Grun v. Pneumo Abex Corp., 163 F.3d 411, 419 (7th Cir. 1998).

When there are no triable issues of fact, the Seventh Circuit has held that

“contract interpretation is a subject particularly suited to disposition by summary

judgment.” Hickey v. A.E. Staley Mfg., 995 F.2d 1385, 1389 (7th Cir. 1993) (quoting

Metalex Corp. v. Uniden Corp. of America, 863 F.2d 1331, 1333 (7th Cir. 1988)). When

a court interprets a written contract, it must determine whether the contract is

ambiguous or unambiguous as a matter of law. Ryan v. Chromalloy American Corp.,

877 F.2d 598, 602 (7th Cir. 1989). Where the words of a contract are not ambiguous,

they are to be given their ordinary meaning. Harry F. Chaddick Realty, Inc. v. Maisel,

762 F.2d 534, 537 (7th Cir. 1985). “A term is ambiguous if it is subject to reasonable

alternative interpretations.” Hickey, 995 F.2d at 1389 (quoting Taylor v. Continental

Group, 933 F.2d 1227, 1232 (3rd Cir. 1991)). A court may consider extrinsic evidence

to resolve an ambiguity only after it has ruled that a contract is ambiguous. Id.; Ryan,

877 F.2d at 602. Therefore, when a motion for summary judgment requires

interpretation of a contract, “the district court must determine (1) if the contract is

ambiguous or unambiguous and (2) if it is ambiguous, whether after consideration of the

extrinsic evidence, there are any triable issues of fact.” Hickey, 995 F.2d at 1389. 
11

We begin by analyzing whether the Lease is ambiguous. In Count III, plaintiffs

allege that Bulkmatic reduces and understates the gross revenue actually received from

the shipper on the settlement statements provided to its owner operators before

calculating owner-operator compensation. According to plaintiffs, Bulkmatic underpays

its owner-operators by an amount equal to the amount of the reduction in gross revenue

times the percentage of gross revenue specified in each lease. Plaintiffs claim that

Bulkmatic’s conduct violates 49 C.F.R. § 376.12(d) and (g).

Section 376.12(d) provides: 

The amount to be paid by the authorized carrier for equipment and

driver’s services shall be clearly stated on the face of the lease or in

an addendum which is attached to the lease. Such lease or

addendum shall be delivered to the lessor prior to the commencement

of any trip in the service of the authorized carrier. An authorized

representative of the lessor may accept these documents. The

amount to be paid may be expressed as a percentage of gross

revenue, a flat rate per mile, a variable rate depending on the direction

traveled or the type of commodity transported, or by any other method

of compensation mutually agreed upon by the parties to the lease.

The compensation stated on the lease or in the attached addendum

may apply to equipment and driver’s services either separately or as

a combined amount.

Section 376.12(g) provides in pertinent part:

When a lessor’s revenue is based on a percentage of the gross

revenue for a shipment, the lease must specify that the authorized

carrier will give the lessor, before or at the time of settlement, a copy

of the rated freight bill or a computer-generated document containing

the same information, or, in the case of contract carriers, any other

form of documentation actually used for a shipment containing the

same information that would appear on a rated freight bill.

Plaintiffs argue that Bulkmatic’s undisclosed reductions to gross revenue are

inconsistent with the regulation’s requirement that owner-operator compensation must

be clearly stated on the face of the lease. See 49 C.F.R. § 376.12(d). Plaintiffs contend
5

 Each of these provisions is set forth in the Undisputed Facts section of this opinion.

12

that the compensation provision in section D.1, which provides that Bulkmatic pay the

owner-operators a certain percentage of gross revenue, is not qualified or modified in

any manner by the Lease or an addendum. Plaintiffs further argue that the Lease does

not specify any exclusions from gross revenue prior to calculation of owner-operator

compensation. 

In response to plaintiffs’ arguments, Bulkmatic contends that the Court must read

the Lease as a whole. More specifically, Bulkmatic argues that the clear and

unambiguous meaning of all of the Lease terms requires Bulkmatic to compensate

plaintiffs based on a percentage of gross revenue derived from the use of their trucking

equipment and driver services. Indeed, Bulkmatic considers gross revenue to include

only amounts charged to the shipper that relate to the use of the owner-operator’s

trucking equipment and driver services. 

Bulkmatic further contends that several Lease provisions demonstrate that

plaintiffs are wrong in asserting that gross revenue is not qualified or modified in the

Lease. Bulkmatic relies on the following provisions: A.1, D.1, D.2(a), D.3(b), D.3(c),

E.1, F.3 and F.6.5

 According to Bulkmatic, these provisions demonstrate

unambiguously that plaintiffs’ compensation is to be tied to the use of their trucking

equipment and driver services.

Simply put, the Court disagrees with Bulkmatic’s interpretation of the Lease. 

Read as a whole, the Lease does not unambiguously tie owner-operator compensation

to the use of their trucking equipment and driver services. The Lease states that
13

Bulkmatic shall pay the owner-operator “for the use of said equipment and driver, or for

equipment alone, if no driver is being leased, as follows: XX% of gross revenue.” 

However, the Lease does not define “gross revenue” nor does it specifically state which

items, if any, may be excluded from gross revenue before calculating owner-operator

compensation. 

Plaintiffs interpret “gross revenue” to mean the total amount charged to the

shipper on the invoice for a shipment. This is a reasonable interpretation and consistent

with the generally accepted meaning of the phrase. See City of Dallas v. FCC, 118

F.3d 393, 395 (5th Cir. 1997) (stating that “the phrase ‘gross revenue’ has a generally

accepted meaning: unless expressly limited by the terms of a statute, regulation or

contract, gross revenues means all amounts received from operation of a business,

without deduction.”) (citing Veterans Rehabilitation Center, Inc. v. Birrer, 170 Mont. 182,

185, 551 P.2d 1001, 1003 (1976) (noting that “generally the term ‘gross revenue’ means

gross receipts of a business before deduction for any purpose except those items

specifically exempted.”); Public Service Co. of Colorado v. Denver, 153 Colo. 396, 403,

387 P.2d 33, 36 (1963)(same)); see also, Merriam-Webster’s Collegiate Dictionary, 514

(10th Ed. 1999) (defining the adjective “gross” as “consisting of an overall total exclusive

of deductions”).

However, the Court could also interpret “gross revenue” to mean the total amount

charged to the shipper less the deductions set forth in section F of the Lease. Under

the terms of the Lease, items that are initially paid for by Bulkmatic and clearly set forth

in section F may be deducted from the owner-operator’s settlement check. That being

said, it remains unclear when those items are to be deducted. Section F does not state
14

that those items are to be deducted from gross revenue prior to calculating owneroperator compensation. 

Furthermore, it is unclear whether all of the accessorial charges that Bulkmatic

deducts before calculating an owner-operator’s compensation fall within section F of the

Lease. For instance, contrary to Bulkmatic’s argument, it is not clear to this Court that

tank washes or cleaning charges fall within the term “Maintenance and Repair” as that

phrase is not defined in the Lease. Additionally, when Bulkmatic charges shippers for

tank washes that were not actually performed, such a charge cannot be considered an

item that was “initially paid for” by Bulkmatic under section F.

Section E.1 adds another layer of confusion. That section of the Lease identifies

operating expenses for which the owner-operators are responsible. However, the

Lease does not state that Bulkmatic may charge the shipper for such items and reduce

owner-operator compensation by that amount. For example, section E.1 states that the

owner-operator agrees to pay tolls. Mr. Flaxmayer, Senior Vice President of Finance for

Bulkmatic, testified about several customer invoices and corresponding settlement

statements. One of those invoices listed a rate for the shipment, a transfer charge, a

cleaning charge, tolls and a fuel surcharge. Mr. Flaxmayer explained that the amount

for the tolls was not reflected on the corresponding settlement statement because tolls

are the owner-operator’s responsibility under section E of the Lease. Based on his

testimony, it appears that owner-operators pay the tolls out of pocket, Bulkmatic

charges the shippers for the tolls and then reduces gross revenue by the amount

charged for the tolls prior to calculating an owner-operator’s compensation. The Lease

does not provide for a reduction of gross revenue for items enumerated in section E.
15

Another confusing aspect of the Lease is the fact that many of its terms and

phrases are not defined and they are not used consistently throughout the Lease. For

instance, in section D.1, the Lease states that owner-operators are to be paid “XX% of

gross revenue.” The very next paragraph of the Lease, in section D.2(a), states

“LESSEE agrees to pay LESSOR said net earnings (less deductions, if any) no later

than fifteen (15) days after LESSOR has submitted the necessary delivery documents.” 

It is inconsistent and confusing to refer to owner-operator compensation in terms of

“gross revenue” in one paragraph and then refer to it in terms of “net earnings (less

deductions, if any)” in the next paragraph. Moreover, the phrase “net earnings (less

deductions, if any)” makes no sense. The phrase “net earnings” implies that deductions

have already been taken. Thus, it is unclear what the drafter of this Lease meant by 

the phrase “net earnings (less deductions, if any).” The Lease also refers to “truck

earnings” in sections D.3(c) and F. The Court has no idea what “truck earnings” means

and the Lease does not define the phrase. The Lease also interchangeably uses the

phrases “settlement checks” and “cartage checks.” Simply put, the Lease is unclear as

a result of these inconsistencies and undefined terms and phrases.

Based on this Court’s review of the Lease as a whole, we find that the amount to

be paid by Bulkmatic for the owner-operators’ equipment and driver services is not

clearly stated on the face of the Lease. Accordingly, the Lease violates 49 C.F.R. §

376.12(d). Moreover, we find that the Lease is ambiguous because the amount to be

paid to the owner-operators is subject to reasonable alternative interpretations. Hickey,

995 F.2d at 1389.

Because the Court has determined that the Lease terms relating to owner-
16

operator compensation are ambiguous, it is appropriate to consider extrinsic evidence. 

Id. Bulkmatic asks the Court to rely on the testimony of a few plaintiffs, who purportedly

admitted that they were to be compensated based on the use of their equipment and

driving services. In an answer to an interrogatory, plaintiff Simon Jamel indicated that

“gross revenue” means “the amount that Bulkmatic charges the customer for anything

that I was involved with.” Mr. Jamel testified that he agrees there is a connection

between “gross revenue” and the services he provides. Plaintiffs David Paul, Nelson

Hernandez and John Robertson testified that they were not seeking payment for

services that they did not perform. 

Plaintiffs argue that the subjective understanding of the plaintiffs is not relevant to

interpreting the terms of the Lease. Furthermore, plaintiffs contend that their

understanding of the term “gross revenue” is consistent with its common usage - all

sums associated with charges to the shipper. Plaintiffs Peter Mango, John Smith and

Thomas Taylor testified that a tank wash should be included in gross revenue because

it is part of the total amount charged to the shipper. Additionally, in response to the

same interrogatory Mr. Jamel answered, the remaining plaintiffs all indicated that they

understood “gross revenue” to mean the total amount Bulkmatic charges the shipper.

The plaintiffs’ subjective understanding of the Lease does not hold much weight

with this Court. First of all, the Lease is difficult for this Court to interpret. We cannot

expect a layperson to interpret the terms of a complex and in this case, confusing

Lease. Second, Bulkmatic’s reliance on a few plaintiffs’ subjective understanding of the

phrase “gross revenue” does not aid this Court in interpreting the Lease, particularly

because the majority of the plaintiffs understand “gross revenue” to mean the total
17

amount Bulkmatic charges the shipper.

Next, Bulkmatic asks the Court to look to evidence of standard practices in the

trucking industry. Bulkmatic submitted the affidavit of Kenneth M. Siegel, who has

extensive experience in the trucking industry. Mr. Siegel states that for several

decades, it has been a standard practice within the trucking industry to state the

compensation to be paid owner-operators under a lease agreement with motor carriers

in terms of a percentage of the carrier’s gross revenue. Mr. Siegel also states that it

has been a general practice in the trucking industry for carriers to calculate the

compensation to be paid an owner-operator under a lease agreement as a percentage

of the revenues derived by the carrier for services performed by the owner-operator,

including the use of the owner-operator’s vehicle and driving services. Mr. Siegel

further states that it has been a general practice in the trucking industry for carriers to

exclude from calculations of owner-operator compensation revenues derived as a result

of services performed by the motor carrier. 

While the Court has considered Mr. Siegel’s affidavit regarding industry practice,

it simply does not persuade us to adopt Bulkmatic’s interpretation of “gross revenue.” 

This Court has already found that the Lease violates 49 C.F.R. § 376.12(d) because the

amount to be paid to the owner-operators is not clearly stated on the face of the Lease. 

It makes little sense for this Court to interpret the phrase “gross revenue” to include only

amounts charged to the shipper that relate to the use of the owner-operators’ trucking

equipment and driver services. Such an interpretation would render § 376.12(d)

pointless because Bulkmatic would be permitted to violate the regulation by drafting a

Lease with ambiguous compensation provisions yet have those same ambiguous terms
6

 For the same reason, it make little sense to interpret the Lease as a whole as limiting

owner-operator compensation to a percentage of the revenue derived solely from their

equipment and driver services. Again, such an interpretation would allow Bulkmatic to violate §

376.12(d) by drafting a Lease with ambiguous compensation provisions yet have the same

ambiguous and confusing Lease interpreted in its favor.

18

interpreted in its favor.6 

One of the concerns underlying the Truth-in-Leasing regulations was the uneven

bargaining power of the owner-operators. Indeed, in Owner-Operator Indep. Drivers

Ass’n v. New Prime, Inc., 398 F.3d 1067, 1070 (8th Cir. 2005), the Eighth Circuit stated:

A review of the development in the Truth in Leasing regulations

indicates that they were intended to remedy disparities in

bargaining positions between independent owner operators

and motor carriers. The regulations were originally developed

by the Interstate Commerce Commission (ICC), and the ICC’s

notice of proposed rulemaking noted “the Commission’s deep

concern for the problems faced by the owner-operator in

making a decent living in his chosen profession.” 42 Fed. Reg.

59,984 (Nov. 23, 1977). In its notice of proposed final rules, the

ICC said that some of its rulemaking objectives were “to

eliminate or reduce opportunities for skimming and other illegal

or inequitable practices; and to promote the stability and

economic welfare of the independent trucker segment of the

motor carrier industry.” 43 Fed. Reg. 29,812 (July 11, 1978).

This Court declines to interpret the Lease in a manner that would circumvent the

very regulations that were enacted to protect the owner-operators.

Moreover, it is well settled that ambiguities in a contract are to be construed

against the drafter. Phillips v. Lincoln Nat'l Life Ins. Co., 978 F.2d 302, 306 (7th Cir.

1992) (stating that “[t]he rule of contra proferentum dictates that ambiguities in a

contract be construed against the drafter.”); Farmers Auto. Ins. Ass'n v. St. Paul

Mercury Ins. Co., 482 F.3d 976, 977 (7th Cir. 2007). Bulkmatic drafted the Lease. If

Bulkmatic intended to pay owner-operators a certain percentage of revenues derived
7

 The entry of partial summary judgment as to liability on Count III is limited to

Bulkmatic’s violation of 49 C.F.R. § 376.12(d). Count III also alleges that Bulkmatic violated 49

C.F.R. § 376.12(g). However, there is a genuine issue of material fact with respect to whether

Bulkmatic provides owner-operators with copies of freight bills or freight invoices upon request.

Accordingly, to the extent that plaintiffs seek summary judgment on Count III for Bulkmatic’s

violation of 49 C.F.R. § 376.12(g), that portion of plaintiffs’ motion is denied.

19

solely from the use of the owner-operators’ trucking equipment and driver services, the

Lease could have and should have specifically stated as much. However, the Lease

does not state that owner-operator compensation is limited to a percentage of revenues

generated from their equipment and driver service. For all of these reasons, we decline

to interpret “gross revenue” in the manner suggested by Bulkmatic.

Instead, the Court adopts plaintiffs’ interpretation of the phrase “gross revenue.”

In other words, the Court interprets “gross revenue” to mean the total amount charged

to the shipper on the invoice for a shipment. As stated above, this interpretation of

“gross revenue” is consistent with the generally accepted meaning of the phrase. It is

also consistent with how the phrase is commonly defined by the courts. See City of

Dallas, 118 F.3d at 395; Veterans Rehabilitation Center, 170 Mont. at 185; Public

Service Co. of Colorado, 153 Colo. at 403. Furthermore, again, the rule of contra

proferentum requires that contracts, if ambiguous, be construed against the drafter. 

Farmers Auto., 482 F.3d at 977.

Based on the foregoing, plaintiffs’ motion for partial summary judgment as to

liability on Count III is granted. Because the Lease violates 49 C.F.R. § 376.12(d),

summary judgment in plaintiffs’ favor is warranted.7 

II. Bulkmatic’s Motion for Summary Judgment On Count III

For the reasons set forth above, Bulkmatic’s motion for summary judgment on
20

Count III of the complaint is denied.

III. Bulkmatic’s Motion for Summary Judgment On Counts I and II

Bulkmatic’s argument with respect to Counts I and II hinges on their theory that

Bulkmatic properly compensated its owner-operators. Bulkmatic argues that summary

judgment is warranted on Counts I and II because plaintiffs cannot show any damages

resulting from the technical violations they allege. 

The parties have not briefed the issue of the amount of damages plaintiffs

suffered as a result of Bulkmatic’s violation of § 376.12(d). That issue is a matter for

another day. However, based on the undisputed facts submitted in connection with the

parties’ cross-motions for summary judgment, it is clear that plaintiffs have sustained

some damages here. Indeed, Bulkmatic concedes that it calculates owner-operator

compensation as a percentage of the amount billed to the shipper that is attributable to

the use of the owner-operators’ equipment and driver services. Bulkmatic also admits

that it does not compensate owner-operators for accessorial services performed by

Bulkmatic employees or by third parties that do not involve the use of owner-operators’

driving services or equipment. Instead, Bulkmatic excludes those amounts from gross

revenue prior to calculating owner-operator compensation. 

As discussed above, the Lease does not state that owner-operator compensation

is limited to a percentage of revenues generated from their equipment and driver

service. Likewise, the Lease does not specifically provide for a reduction of gross

revenue prior to calculating owner-operator compensation for items enumerated in

section E or section F. Based on this Court’s interpretation of the Lease, particularly our

interpretation of “gross revenue,” the undisputed facts demonstrate that plaintiffs have
21

not been properly compensated. Accordingly, Bulkmatic’s motion for summary

judgment on Counts I and II of plaintiffs’ complaint is denied. 

Finally, Bulkmatic asks this Court to enter summary judgment in its favor on

Count II of plaintiffs’ complaint. Like Count III, Count II alleges that Bulkmatic violated

49 C.F.R. § 376.12(g) because Bulkmatic failed to provide the owner-operators with

rated freight bills or other forms of freight documentation upon request. Bulkmatic

argues that it substantially complied with this regulation by providing plaintiffs with

settlement statements. Assuming for purposes of this discussion that the substantial

compliance standard applies here, the Court cannot conclude at this juncture that the

settlement statements constitute substantial compliance with § 376.12(g). Furthermore,

as discussed above, a question of fact exists with respect to whether Bulkmatic

provides owner-operators with copies of freight bills or freight invoices upon request. 

Accordingly, for this additional reason, Bulkmatic’s motion for summary judgment on

Count II is denied.
22

CONCLUSION

For the reasons set forth above, plaintiffs’ motion for partial summary judgment

as to liability on Count III is granted. Defendant’s cross-motion for summary judgment is

denied. It is so ordered.

ENTER:

_______________________________ 

MICHAEL T. MASON

United States Magistrate Judge

Dated: August 3, 2007