Tuesday, August 2, 2016
Ohio Judge Denies Pilot Motions to Dismiss
By Walter F. Roche Jr.
A Franklin County Ohio judge has flatly denied a series of dismissal motions filled in behalf of Pilot Flying J in a suit charging the Tennessee based firm with cheating two trucking firms out of promised rebates.
In a 17-page decision issued today Judge David C. Young said the trucking firms, FST Express and HB Logistics, had presented sufficient evidence to pursue claims that Pilot and two of its former executives engaged in charges ranging from fraudulent inducement to breach of contract and violations of state consumer protection laws.
The decision also denied dismissal motions filed in behalf of former Pilot executives John Spiewak and Arnold Ralenkotter. Spiewak has entered not guilty pleas to mail and wire fraud charges. Ralenkotter has pleaded guilty and is awaiting sentencing on a charge of conspiracy to commit mail and wire fraud.
Charges against both stem from a federal grand jury probe into allegations that Pilot cheated truckers out of millions of dollars of promised diesel fuel rebates.
Young's ruling is the latest development in remaining civil suits brought against the Knoxville, Tenn. based truck stop giant.
Young's ruling is likely to lead to renewed efforts to depose Pilot's top executive James A. Haslam, who has repeatedly denied any knowledge of the scheme by Pilot sales executives to cheat unsuspecting truckers out of promised rebates.
Haslam, also the owner of the Cleveland Browns, at first resisted efforts to depose him but later said he would agree to questioning if a series of conditions were first met. His testimony is also being sought in a suit pending in Alabama.
"The court finds that the cause of action for fraudulent inducement is properly brought by plaintiffs," Young wrote.
The judge did strike limited language from a section of the complaint alleging unjust enrichment, but all other charges now go forward.
"The court finds that FST has sufficiently alleged a claim of breech of contract," the ruling states, "adding "FST has alleged actual and consequential damages as a result of Pilot's breech."
The ongoing civil litigation stems from charges in federal court documents, that Pilot sales executives routinely cheated truckers out of promised rebates. Subsequently 10 former Pilot sales staffers have entered guilty please to charges including mail and wire fraud.
Pilot also has paid some $175 million to settle related claims from other truckers and the federal government.