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 ...