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Driver Solutions, LLC v. Downey

Supreme Court of Arkansas

October 24, 2019

DRIVER SOLUTIONS, LLC APPELLANT
v.
MICHAEL DOWNEY, PAUL MITCHELL, AND JOSEPH MCAFEE APPELLEES

          APPEAL FROM THE PULASKI COUNTY CIRCUIT COURT [NO. 60-CV-17-3242] HONORABLE MACKIE M. PIERCE, JUDGE

          Conner & Winters, LLP, by: Robert L. Jones III, and Kerri E. Kobbeman, for appellant.

          Holleman & Associates, P.A., by: John Holleman and Timothy A. Steadman, for appellees.

          JOSEPHINE LINKER HART, ASSOCIATE JUSTICE

         Driver Solutions, LLC, appeals the June 5, 2018 class-certification order and the June 27, 2018 supplemental order of the Pulaski County Circuit Court. Our jurisdiction is proper pursuant to Ark. R. App. P. -Civil 2(a)(9). We affirm.

         I. Background

         Driver Solutions, LLC (Driver Solutions) filed separate lawsuits in North Little Rock District Court against Michael Downey, Paul Mitchell, and Joseph McAfee (counter-plaintiffs). In each case, Driver Solutions sought to recover "unpaid principal balance for . . . Tuition Charge(s)[.]" Mitchell and McAfee initially defaulted, but the district court later set aside both default judgments for improper service. Downey timely answered. Downey, Mitchell, and McAfee all filed class-action counterclaims. The cases were transferred to the Pulaski County Circuit Court and consolidated.

         The general substance of the allegations contained in the class-action counterclaim is as follows. Driver Solutions is in the business of providing education and placement services to individuals who wish to work in the commercial truck-driving industry. Driver Solutions and C-1 Truck Driver Training, LLC (C-1), are both owned by Driver Holding, LLC. Counter-plaintiffs allege that Driver Solutions attracts potential students from around the country to the C-1 facility in North Little Rock, Arkansas by advertising "company-paid training" and good-paying driver jobs ("up to $50, 000 per year") with large carriers, such as P.A.M. Transport.

         Once students arrive at C-1 for training, they are presented with what counter-plaintiffs characterize as a "one-sided, unconscionable adhesion contract." The contract in the record provides that students who complete the training will owe Driver Solutions $5, 995. The contract contains a provision allowing for the total cost of the program to be reduced. If after completion of the program participants then go work for the designated carrier for an entire year, during which $45 will be deducted from the participant's paycheck each week and placed in an "Employee Savings Account," the participant will receive a $4, 000 credit toward the cost of the program and remain liable for $1, 995. The contract contains no indication as to what the designated carrier's compensation package for the participant will be. If participants fail to go work for the designated carrier for an entire year, the full $5, 995 becomes due and payable to Driver Solutions on demand.

         The counterclaim alleges that after completing the program, participants find that their earning potential with the designated carrier is nowhere near what had been represented when they signed the enrollment agreements with Driver Solutions. Participants rarely, if ever, earn $50, 000 in a year of working for the designated carrier-far less, according to the counter-plaintiffs. However, if participants leave the designated carrier to work somewhere else, they become liable for $5, 995, due and payable on demand. In this way, counter-plaintiffs allege that the contract functions as a "sword of Damocles," tying program participants to a low-wage job.

         The counterclaim further alleges that Driver Solutions has filed at least 433 lawsuits in North Little Rock District Court, and that Driver Solutions has failed to obtain proper service in every single one of those lawsuits, including 143 cases in which Driver Solutions already obtained default judgments. Additionally, the counterclaim alleges that Driver Solutions is operating its driver-education program without ever obtaining the applicable licenses statutorily required to do so, while also violating numerous regulations established by the State Board of Private Career Education.

         Based upon these allegations, the counterclaim sets forth ten claims for relief. The first five are Arkansas Deceptive Trade Practices Act (ADTPA) claims: Count I - ADTPA (False and Misleading Statements); Count II - ADTPA (Violating Statutes and Regulations Pertaining to Private Career Education); Count III - ADTPA (Unenforceable Penalty); Count IV - ADTPA (Usury); and Count V - ADTPA (Totality of Conduct). Count VI seeks a declaratory judgment. The last four are common law claims: Count VII - Usury; Count VIII - Fraud; Count IX - Promissory Estoppel; Count X - Unjust Enrichment.

         After consolidation, the counter-plaintiffs moved for class certification. Following a hearing, the circuit court entered an order granting class certification on June 5, 2018. The order certified the following class:

All individuals who attended C-1 Truck Driving School in North Little Rock between January 19, 2009, and the present, through Driver Solutions' "company-paid training" and did not complete one ...

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