C.R. England To Pay $37.8 Million To Settle Lease Purchase “Fraud” Case
Salt Lake City, Utah – Mega-carrier C.R. England has agreed to a $37.8 settlement to resolve a lawsuit by a class of truck drivers alleging the company “fraudulently” represented claims about its lease purchase program.
The suit alleged that C.R. England violated the Utah Truth in Advertising Act, the Utah Business Opportunity Disclosure Act, and the Utah Consumer Sales Practices Act, and that England committed “fraud, negligent misrepresentation, unjust enrichment, and breach of fiduciary duty.”
The suit was filed in 2011 on behalf of former C.R. England drivers Kenneth McKay and Charles Roberts.
A U.S. District Court certified the case as a class action in January 2017 after what was described by both parties as six years of “vigorous litigation.”
The Class consists of those who entered into a Vehicle Lease Agreement (VLA) with Opportunity Leasing, Inc. and an Independent Contractor Operating Agreement with C.R. England, Inc. between May 27, 2007 and January 31, 2017, drove for at least one day under those agreements, and did not previously opt-out of the Class Action.
According to the agreement, Class Notices were sent to more than 17,500 drivers in May of 2018 with a deadline to join the Class of June 18, 2018.
Those now eligible to be compensated will be paid a minimum of $1,000 as part of the Class.
Some Class members could be eligible to receive as much as $2,000 or more.
Class representatives McKay and Roberts will receive a total of $68,500. Kenneth McKay will be compensated $43,500 and the estate of Charles Roberts will receive $25,000.
A total of up to $16,250,000 has been allocated to pay for Class Counsel’s attorneys’ fees and litigation expenses.
Additionally, as part of the agreement, C.R. England will forgive approximately $48 million in unpaid debts consisting of permits, licenses, and truck lease payments the company says is owed to them.
England has also agreed to continue to refrain from actively collecting student tuition debt, totaling approximately $13 million, of Class Members.
England also agreed to take affirmative steps to inform credit reporting agencies that the debts are no longer collectible and/or are cancelled.
Further, England agreed it will, for a two-year period, provide a written disclosure to independent contractor recruits, the company’s annual turnover, average time in job, and average income for independent contractor drivers (based on the company’s then-current independent contractor drivers over the prior calendar year).
In response to the announced settlement, a C.R. England spokesperson said, “We are proud of the opportunity we offered to enterprising people to start and grow their own businesses … However, we understand that some were not happy with their experience, and we hope that this settlement resolves any lingering concerns.”
As reported by Landline, some of the allegations in the 2011 complaint included that:
- Drivers were often charged $3,000 for tuition at C.R. England’s truck driving school to be repaid out of future earnings at 18% interest.
- If a driver resisted entering a lease-purchase and insisted on obtaining employment, they were told that they must enter the lease-purchase agreement for at least six months or wait an indefinite period for a truck to become available.
- Defendants concealed that most drivers fail within a year or two and do not make any significant net earnings as a driver, if they earn anything at all.
- Drivers were presented a nonnegotiable form “Truck Sales and Leasing Vehicle Lease Agreement” that each driver was required to sign.
- Defendants provided false, misleading and omitted material information in connection with the business opportunity.
The settlement is pending approval by the Court.
The Settlement Final Approval Hearing is scheduled for July 9, 2019, at 1:30 p.m. before the Honorable Robert J. Shelby in the United States District Court for the District of Utah.
For more on the details of the settlement click HERE.