Walker v. Creech

460 So. 2d 657, 1984 La. App. LEXIS 10340
CourtLouisiana Court of Appeal
DecidedNovember 20, 1984
DocketNo. 83 CA 1179
StatusPublished
Cited by2 cases

This text of 460 So. 2d 657 (Walker v. Creech) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Walker v. Creech, 460 So. 2d 657, 1984 La. App. LEXIS 10340 (La. Ct. App. 1984).

Opinion

LOTTINGER, Judge.

This is an action ex contractu by C.R. Walker against G.L. Creech, doing business as Truck Services Hauling and Rentals, for the enforcement of a lease entered into by the parties, and for damages which resulted from the alleged breach of the lease by Creech. From a judgment in favor of defendant, plaintiff has appealed.

FACTS

G.L. Creech, doing business as Truck. Services Hauling and Rentals (Creech), was in the trucking business and contracted with shippers for the shipment of freight. Creech had obtained a permit from the Public Service Commission (Commission) to operate as a contract carrier, and owned a number of trucks and trailers which he used in his business.

C.R. Walker (Walker) was also in the trucking business, but was unable to obtain a permit from the Commission. Therefore, his principal business was derived from the leasing of his trucks to enterprises which had obtained the necessary permit. These enterprises would, for a fee, use Walker’s trucks to haul freight for a shipper.

During the period from July 1978 to February 1980 Walker leased a number of trucks to Creech. During this same period a number of lease agreements were utilized. All leases were identical, except for the description of the various trucks which were leased. These leases were in writing and met all the formal requirements of the Commission.

Under these leases, compensation to Walker for the use of his trucks was to be “70% gross revenue.” In accounting for the gross revenue, each week Creech would furnish Walker with a listing of the prior week’s shipping activity involving Walker’s trucks.- These lists contained a listing of each load of freight moved by Walker’s trucks, the shipper’s (customer’s) name, the amount from which Walker was to be paid, and 70% of that amount, which was to be Walker’s compensation. Walker never received any invoices or bookkeeping from Creech and relied on Creech to handle all billing and computations. Creech would pay Walker the amount due under their agreement on a weekly basis.

The dispute which prompted this lawsuit arose over the manner in which Creech calculated the “70% gross revenue” due Walker. Before calculating Walker’s compensation, Creech would deduct a portion of the actual amount received from the customer. This amount was applied by Creech as rental for his trailers, which were pulled by Walker’s trucks. After deducting this amount, Creech would use the remaining figure as gross revenue to compute Walker’s 70% compensation.

When Walker learned that Creech had been deducting this amount for trailer rentals, he filed suit for 70% of this money retained by Creech. In addition, Walker asked for damages which resulted from his borrowing of money to remain in business, which he would not have had to do if Creech would have paid him the proper amount of compensation. Walker alleges that “70% gross revenue” meant 70% of the total amount billed to Creech’s customers, and that any rental due Creech for his trailers was encompassed in the 30% retained by Creech. Creech, on the other hand, contends that the written lease was not intended to be the actual agreement between the parties and was merely used to meet the formalities of the Commission. Creech defended the lawsuit by contending [659]*659that the lease was not intended to be the operating agreement between the parties, and that it is therefore unenforceable. Creech further contends that the actual operating agreement between the parties was an oral agreement that varied the terms of the written lease.

TRIAL COURT

In his written reasons for judgment, the trial judge found that the lease was a “fraud and a sham” and was merely a formality to side step the Commission’s regulations and rules. The judge further found the existence of an oral agreement but did not reach the issue of the validity and legality of the oral agreement. Rather, the trial judge dismissed Walker’s claim because Walker failed to prove the existence of an enforceable agreement between the parties, since the written lease was not intended to be a contract between the parties. From this judgment, Walker appeals, alleging four assignments of error. However, the crucial issue on which the resolution of this case turns is the validity and enforceability of the written lease on file with the Public Service Commission.

ENFORCEABILITY OF THE WRITTEN LEASE

The Public Service Commission has been given broad authority to regulate and control all motor carriers, including contract carriers. La.R.S. 45:161 et seq. The purpose of this authority is one of public policy which arises from the effect which the operation of these motor carriers on public highways has on the public interest. La. R.S. 45:161. To carry out its function, the Commission has the authority-to adopt and enforce reasonable rules and regulations governing the operation of motor carriers. La. Const. Art. IV, § 21(B); La.R.S. 45:163.

Pursuant to this authority, the Commission has enacted and adopted Louisiana Public Service Commission Order No. 9901 to establish rules and regulations for the leasing of vehicles by licensed carriers and to prohibit the “farming out” of operating rights under the guise of a lease. In addition to providing the minimum requirements which must be incorporated into such a lease, Order No. 9901 provides that each lease must be in writing and filed with the Commission. More importantly, the order provides as follows:

There may be no arrangement or understanding between lessee and lessor other than that fully set forth in lease (sic) agreement on file with the Commission. Louisiana Public Service Commission Order No. 9901, as amended.

This order, as any order issued by the Commission, should be enforced by the courts and should not be overturned absent a clear showing of abuse of power or that the order is arbitrary or capricious. Dixie Electric Membership Corporation v. Louisiana Public Service Commission, 441 So.2d 1208 (La.1983). Considering the strong public interest in rate regulation, highway safety, and the proper maintenance of liability insurance, we find that Order No. 9901, which regulates these concerns when a lease of a vehicle is entered into by a licensed carrier, is not arbitrary, i capricious or abusive of authority.

Under Order No. 9901 the Commission has determined that it is in the best interest of the public and in furtherance of its regulatory scheme to have no agreement between a motor carrier and the lessor of a vehicle other than that which meets the formal requirements set forth by the Commission and filed with the Commission as required. We find that public policy mandates that there be only one agreement between these parties, that being the agreement on file with the Commission. Otherwise, the entire regulatory scheme of the Commission could be thwarted and avoided by the parties entering into a side agreement which varies from the requirements set forth by the Commission. Therefore, a lease filed with the Commission, as required, is the agreement between the parties, regardless of what the parties say or do to the contrary. There can be no other agreement, regardless of the intent of the parties.

[660]*660In the instant case, the parties entered into a valid written lease which fulfilled the Commission’s regulations and was filed with the Commission as required. This is the agreement between Walker and Creech and any other agreement is irrelevant and contrary to the Commission’s rules and regulations.

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Related

Walker v. Creech
509 So. 2d 168 (Louisiana Court of Appeal, 1987)
Walker v. Creech
464 So. 2d 316 (Supreme Court of Louisiana, 1985)

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Bluebook (online)
460 So. 2d 657, 1984 La. App. LEXIS 10340, Counsel Stack Legal Research, https://law.counselstack.com/opinion/walker-v-creech-lactapp-1984.