Owner-Operator Independent Drivers Ass'n v. Comerica Bank (860 F. Supp. 2d 519, 2012)

FINAL JUDGMENT

ALGENON L. MARBLEY, District Judge.

I. INTRODUCTION

Plaintiffs, Owner Operator Independent Drivers Association, Inc. (“OOIDA”), Carl Harp and Michael Wiese, as representatives of the certified class of owner-operators, seek to enforce the final judgment entered by this Court on July 16, 2004, in OOIDA v. Arctic Express, Inc., No. 97-750 (the “Arctic Litigation”) against Defendant Comerica Bank (“Comerica”), Arctic Express, Inc.’s (“Arctic”) creditor, for the return of maintenance escrow funds owed to the plaintiff class. A bench trial was held in this Court on Defendant’s affirmative statute of limitations defense, which is the sole remaining issue to be decided in the case. After the trial, parties submitted proposed findings of fact and conclusions of law to the Court, followed by final response briefs. For the reasons set forth below, the Court enters JUDGMENT for the Plaintiffs, and awards the class restitution DAMAGES in the amount of $5,583,-084.00.

II. PROCEDURAL HISTORY

A. The “Arctic Litigation”

The underlying lawsuit forming the basis for this action began over fourteen years ago in this Court, and its material facts have been memorialized in at least eight published opinions since. On June 30, 1997, the owner-operators initiated a class action suit against Arctic and D & A for return of the maintenance escrow funds and other equitable relief. The Plaintiffs alleged that Arctic and D & A violated the Truth-in-Leasing regulations of the Motor Carrier Act, 49 U.S.C. §§ 14101-02, 14704; 49 C.F.R. § 376 et seq., by failing to return unused maintenance escrow fund balances to the class of owner-operators whose lease agreements with Arctic did not run full term. Arctic is a federally regulated motor carrier that provides transportation services to the shipping public. D & A is a non-carrier company that leases truck units to independent owner-operators.

Arctic moved to dismiss Plaintiffs’ complaint, and Plaintiffs moved to certify their class action shortly thereafter. On December 18, 1997, Magistrate Judge King ordered that all discovery be limited to issues related to class certification, and stayed all merits discovery during the pendency of Arctic’s motion to dismiss. (97-cv-750, Dkt. 22.) Soon thereafter, on August 17, 1998, this Court entered an order staying all proceedings in the case pending the outcome of appellate rulings which held implications for the Arctic Litigation. (Id., Dkt. 35) On March 3, 2000, following the Eighth Circuit’s decision in Owner-Operator Indep. Drivers Ass’n v. New Prime, Inc., 192 F.3d 778 (8th Cir.1999), this Court denied Arctic’s motion to dismiss, and then vacated the stay previously entered in the Arctic Litigation. (97-cv-750, Dkt. 42.)

The Court granted partial summary judgment to the certified class of plaintiffs on the issue of liability, holding that Arctic’s “transformation of the maintenance fund into ‘nonrefundable’ monies [was] unrelated to the cost of maintenance of the Plaintiffs’ vehicles, and therefore [was] in violation of § 376.12(k),” because “the nonrefundable nature of the maintenance fund [was] no more than an early termination penalty thinly disguised by [Arctic].” Owner-Operator Indep. Drivers Ass’n, Inc. v. Arctic Express, Inc., 159 F.Supp.2d 1067, 1076 (S.D.Ohio 2001). The Court then ordered Arctic to return the net unused balance in the escrow accounts to Plaintiffs. See Owner-Operator Indep. Drivers Ass’n, Inc. v. Arctic Express, Inc., 288 F.Supp.2d 895 (S.D.Ohio 2003); Owner-Operator Indep. Drivers Ass’n, Inc. v. Arctic Express, Inc., 270 F.Supp.2d 990 (S.D.Ohio 2003).

B. Plaintiffs’ Bring Suit Against Comerica

In October 2003, Arctic and D & A filed a voluntary petition for bankruptcy in the United States Bankruptcy Court for the Southern District of Ohio, thus halting the Arctic Litigation. Plaintiffs maintain it was not until December 2003, through testimony given in the bankruptcy proceedings, that they first learned of Arctic’s financing arrangement with Comerica and Comerica’s actions in transferring the maintenance escrow funds out of Arctic’s depository accounts to repay amounts owed to Comerica pursuant to its loan agreements with Arctic. In January 2004, Plaintiffs commenced an adversary proceeding against Arctic, D & A, and Comerica in the bankruptcy court, seeking return of the escrow funds owed to the Arctic Litigation class members. In May 2004, Plaintiffs entered into a $5.5 million settlement agreement with Arctic and D & A, which was approved by this Court in July 2004. After entry of the judgment and finalization of Arctic’s plan of reorganization, the Plaintiffs then sought to satisfy their judgment against Comerica in federal court.

On May 27, 2005, Plaintiffs filed their First Amended Complaint against Comerica, seeking restitution or disgorgement of “the full amount in maintenance escrow funds plus interest in an amount equal to that awarded in Judgment entered in the Arctic Litigation.” (Dkt. 7.) Comerica moved to dismiss Plaintiffs’ claims, arguing, inter alia, that the statute of limitations barred Plaintiffs’ claim for recovery against them. This Court granted Comerica’s motion to dismiss as to the 1993 loan agreement because Ohio law specified a six-year statute of limitations for “an action ... upon a liability created by statute.” Ohio Rev. Code (“O.R.C.”) § 2305.07, and the maintenance escrow funds did not constitute a “continuing and subsisting trust,” the recovery of which would not be subject to the statute of limitations.

Plaintiffs amended their complaint a second time, and Comerica moved to dismiss again. This time, the Court “found that a four-year limitations period applied and that Defendants failed to allege that information was disclosed to Plaintiffs that would have alerted them to their claim against Comerica more than four years before they brought this suit.” Owner Operator, 615 F.Supp.2d at 698. The parties filed cross-motions for summary judgment. Regarding the statute of limitations defense, the Court held the following:

The relevant facts are undisputed, as it has been admitted that Plaintiffs received checks drawn on a Comerica account, so Plaintiffs were at least aware that Arctic had a checking account with Comerica. In addition, it has been admitted that Plaintiffs did not further investigate Comerica and Arctic’s relationship. Nevertheless, reasonable minds could differ as to whether Plaintiffs exercised reasonable diligence in discovering facts giving rise to the claim against Comerica. There is a genuine issue of material fact on this issue.

Id. at 701.

The Sixth Circuit, reviewing the issue de novo, affirmed this Court’s ruling “that genuine issues of material fact exist which preclude a ruling, as a matter of law, on Comerica’s statute of limitations defense.” See Owner Operator Indep. Drivers Ass’n v. Comerica Bank (In re Arctic Express, Inc.), 636 F.3d 781, 803 (6th Cir.2011). The appeals concluded that “Comerica must therefore disgorge the trust property received in breach of trust unless it can establish a viable defense.” Id. at 801.

In its August 11, 2011, Order this Court found that the Sixth Circuit’s holding conclusively established the issue of recoverable damages against Comerica at $5,583,084, and that the only issue at trial would be the viability of Comerica’s statute of limitations defense. (Dkt. 84.) The Court also granted Comerica’s request for extraordinary discovery “in the form of interrogatories and depositions to determine when they knew, or when they should have known, about the Defendant’s relationship with either Arctic Express, Inc. or D & A Associates, Ltd.” (Id.) The Court clarified there, and in multiple subsequent orders, that Comerica was only entitled to attorney fact work product, not opinion work product.

The Court presided over a bench trial on Comerica’s statute of limitations defense, which commenced on October 3, 2011. On October 5, 2011, Plaintiffs produced a small portion of documents responsive to Defendant’s prior requests for production. On Defendant’s request, the Court continued the trial to allow Plaintiffs the opportunity to produce all remaining responsive documents, and give Defendant sufficient time to review the late production and depose any necessary witnesses. (Dkt. 132.) The trial resumed on October 31, 2011, and concluded that same day. Defendant made an offer of proof after the close of trial, requesting the Court to reopen the issue of damages, but the Court denied this request.

III. FINDINGS OF FACT

A. The Plaintiffs and Their Counsel

Plaintiff OOIDA is a trade association that represents the interests of small-business truckers, owner-operators, and employee drivers at both the state and federal levels. (Tr. 10/4, 123:21; 125:2-9.) OOIDA protects its members through litigation, lobbying, and regulatory actions. (Id. at 125:6-9.) OOIDA was founded in 1973, and today has approximately 150,000 members and 250 employees. (Id. at 123:21-124:8.) OOIDA is a sophisticated organization that has a number of business operations. (Id. at 145:12-146:19.) Among the body of regulations OOIDA seeks to enforce for its members are the federal Truth-in-Leasing regulations. (Id. at 125:10-25; 126:14-128:11.) OOIDA was instrumental in helping to create a private right of action under these regulations when the Interstate Commerce Commission (“ICC”) was terminated in 1995. (Id. at 127:22-128:11.)

The Cullen Law Firm opened in 1997 as Cullen & O’Connell. Paul D. Cullen, Sr., was a named partner and founding member of Cullen & O’Connell, together with K. Michael O’Connell. In approximately 1998, Mr. O’Connell left the law firm, and the firm renamed itself The Cullen Law Firm. Cullen and O’Connell began representing OOIDA even before The Cullen Law Firm was formed. (Tr. 10/3, 156:6-158:5.) Mr. Cullen began serving as OOI-DA’s general counsel in 1998; he succeeded Mr. O’Connell as general counsel. (Id. at 162:9-163:6.) Mr. Cullen has brought a number of class actions on behalf of OOI-DA, and he has extensive experience in the areas of motor carrier transport litigation and associated Truth-in-Leasing litigation. (Id. at 140:7-16.)

In 1997, Gregory Cork started working for the Cullen Law Firm. (Id. at 194:5-7.) He left the firm in 1999 or 2000. (Tr. 10/4, 46:14-24.) Joyce Mayers, a Cullen Law Firm attorney, joined the firm in 2000. (Tr. 10/31,16:4-5.) Ms. Mayers graduated from law school in 1977. (Id. at 16:6-7.) On The Cullen Law Firm website, Ms. Mayers lists bankruptcy as one of her practice areas, and Ms. Mayers has represented OOIDA in at least four bankruptcy matters. (Id. at 18:18-19:10.) Ms. Mayers has never reviewed a lien search or conducted her own lien search. (Id. at 19:11-12:8.)

B. Comerica’s Lending Arrangement with Arctic

On February 4, 1991, Comerica entered into a revolving credit relationship with G & D Transport, Inc. (“G & D Transport”), (Tr. 10/3, 30:14-19; Ex. D40 at 110-39), which around 1993 became “Arctic Express, Inc.” (Id. at 31:6-12.) Mark Conen oversaw Comeriea’s lending relationship with Arctic. (Id. at 30:10-13.) Mr. Conen has been employed at Comerica Bank for thirty-two years. (Id. at 30:2-4). From 1991 to 1998, Mr. Conen worked for Comerica as the senior lender market manager for the Dayton, Ohio, loan production office. (Id. at 30:4-9.) Around 1993, G & D Transport changed its name to Arctic Express, Inc. (Id. at 31:6-12.) Comerica and Arctic executed a number of loan documents throughout the course of their relationship. (Tr. Exhs. D40; D41-1.) In furtherance of the lending relationship, Arctic gave security interests in its company assets to Comerica, evidenced by a security agreement granting Comerica a security interest in all of Arctic’s accounts receivable. (Id. at 33:11-21; Ex. D40.) As explained by the Sixth Circuit:

By operation of the loan agreements, Comerica collected the nine cents per mile in maintenance escrows along with Arctic’s receivables and, in sweeping Arctic’s cash collateral account, used the maintenance escrows to repay amounts borrowed by Arctic under the loan agreements.

In re Arctic Express, Inc., 636 F.3d at 801.

Comerica perfected its security interest in Arctic’s accounts receivable on January 16, 1991, by filing UCC financing statements with the Ohio Secretary of State and the Franklin County Recorder. (Id. at 34:13-20, 35:1-8, 39:257-40:7, 73:20-25; Ex. D41-1 at Comerica 355-56.) The UCC Financing Statement filed on January 16, 1991, identifies the debtor as “G & D Transport, Inc.,” and identifies the secured party as “Comerica Bank-Detroit.” Section 4 states that “[t]his financing statement covers the following types (or items) of property:

All accounts receivable, and general intangibles (including tax refunds), now owned or hereafter acquired by the Debtor evidencing any obligation to Debtor for payment of goods sold or leased or services rendered, all returned or repossessed goods, and Debtor’s interest in all goods the sales of which gave rise to an accounts receivable. All inventory now owned or hereafter acquired by Debtor, wherever located and all proceeds from any sale of inventory.

(Id. at 35:1-22; Def. Ex. 41-1, Comerica 0356). Comerica did not specifically identify “escrow funds” or “maintenance escrow funds” in its UCC Financing Statement. (Id.) None of the Loan Agreements, the Security Agreements, or the Revolving Credit Loan Agreements between Comerica Bank and Arctic was publicly filed, only the Financing Statement. (Id. at 58:18-20.) Defendant’s expert, Van Cohen, testified that “accounts receivable” are generally defined as “any money owed to the company.” (Id. at 74:1-8). As of 2008, however, Mr. Conen did not believe that the maintenance escrow funds at issue in this case were part of Arctic’s account receivables pledged as collateral for Comerica’s loan to Arctic. (Id. at 53:19-54:14.) He did not believe the maintenance escrow funds were “eligible accounts” under either the 1993 or 1998 loan agreements between Arctic and Comerica. (Id.)

Comerica periodically confirmed that its UCC Financing Statements were properly filed with both the Ohio Secretary of State and Franklin County Recorder. (Exhs. D40; D41-1.) Comerica maintained UCC financing statements on file with Franklin County Recorder’s Office and the Ohio Secretary of State’s ’ office against Arctic from January 1991 to December 1998. (Tr. 10/3, 42:25^13:5.) On December 29, 1998, Comerica recorded the termination of its security interest against Arctic’s accounts receivable and other assets. (Id. at 38:5-11; 41:19-42:4, 42:25-43:5; Ex. D98.) In 1998, Arctic transferred its lending relationship to Congress Financial. (Id. at 45:1-7.)

It was public record that Arctic and D & A had a lending relationship with Comerica Bank and that Comerica Bank had a lien on Arctic and D & A’s accounts receivables. (Id. at 34:13-20.) UCC financing statements are filed publicly, and one can obtain copies of them from either the Secretary of State or county agency without the consent of the borrower. (Id. at 74:23-75:9.) Comerica’s UCC filings against Arctic were standard filings that would have been accessible by conducting a lien search on Arctic. (Id. at 77:1-5, 77:12-14; Tr. 10/4, 86:17-19.)

C. The Lease Agreements and Arctic’s Failure to Return Maintenance Escrows

Arctic, a company primarily engaged in the hauling of refrigerated freight, had between 300 and 400 owner-operator drivers leased to it in 1997, which would have put the company in the upper range of a medium size motor carrier, if not a large carrier. (Tr. 10/4; 128:23-130:12). In the mid-1990s, OOIDA began receiving complaints from Arctic drivers about Arctic, specifically that drivers were not receiving a refund of their maintenance escrows accounts when they ended their relationship with Arctic. (Id. at 129:8-16, 152:7-13.) These complaints were made to the OOI-DA member assistance department. (Id. at 129:17-21.) During this time, OOIDA also received complaints that Arctic was overcharging and double charging drivers for repairs. (Id. at 150:9-152:6.)

Plaintiffs Carl Harp and Michael Wiese are members of OOIDA. On March 24, 1994, Carl Harp entered into an Independent Operator Motor Vehicle Lease Agreement (“Lease Agreement”) with Arctic. (Tr. 10/3, 84:13-85:9; Ex. D22.) In addition to the Lease Agreement, Mr. Harp entered into a Lease/Purehase Option at Termination (“Lease/Purchase Option”) with D & A Associates. (Id. at 87:24-88:6; Ex. D23.) In the Lease Agreement, Mr. Harp authorized Arctic to deduct nine cents per mile to establish a maintenance escrow account. (Id. at 87:3-7; Ex. D22.) The maintenance escrow funds covered repairs to equipment leased to Mr. Harp that were not covered by the manufacturer’s warranty, such as the replacement or repair of tires and preventative maintenance. (Id. at 87:8-14.) Mr. Harp understood that the escrowed maintenance funds were put in an account for him to use to maintain the truck. (Id. at 101:20-102:1, 102:19-25, 103:10-16,105:9-11.)

During his orientation, Arctic promised Mr. Harp a new truck, but when he finished orientation Arctic did not have a new truck available to give him. (Id. at 89:12-17.) On June 3, 1994, Mr. Harp signed a second set of these agreements so that he could have a new truck. (Id. at 89:12-90:2.) Arctic told Mr. Harp that the maintenance escrow fund from his first truck would be transferred to his new, second truck. (Id. at 90:9-11.) When Mr. Harp switched trucks, however, Arctic refused to transfer the balance to the new truck. (Id. at 90:12-17.) Mr. Harp was aware that Arctic refused to transfer the escrow balance to the second truck. (Id. at 90:3-17.) On or about August 22, 1994, Mr. Harp received a check from Arctic in the amount of $1.78. (Id. at 95:10-16.) The check provides on its face the identity of Comeriea as the issuing bank. (Ex. D21.) The check does not contain information of the existence of a debtor-creditor relationship between Arctic and Comeriea, i.e. the Revolving Loan Credit Agreement with Comeriea, or that Comeriea had an interest and control over Mr. Harp’s maintenance escrow funds. To this day, Mr. Harp has kept this check in his possession. (Id. at 95:17-23.)

Consistent with the language in its written agreements with drivers, Arctic expressly informed its drivers that if the lease was terminated early the escrow funds would not be returned. (Id. at 91:4— 18.) While Mr. Harp was driving for Arctic, there was no instance where Arctic failed to pay for any repair or maintenance performed on Mr. Harp’s equipment, or any instance of any check drawn on Arctic’s account bouncing. (Id. at 105:12-106:5). On March 6, 1995, Mr. Harp ended his relationship with Arctic. (Id. at 92:19-22.) He received a maintenance breakdown summary that detailed the balance of his maintenance escrow fund at the time he ended his relationship with Arctic. (Id. at 92:10-16.) The balance on Harp’s maintenance escrow account was approximately $6,000 — an amount that Arctic refused to refund. (Id. at 93:12-13.)

Mr. Harp believed that that once he built up a sizeable escrow fund Arctic engaged in freight manipulation to force him to quit in order to deprive him, unjustifiably, of his maintenance escrow funds. (Id. at 99:5-13; Ex. D106.) Mr. Harp asked Arctic for the return of his escrow funds, but Arctic told him that those funds would not be returned to him. (Id. at 93:17-22.) Mr. Harp considered taking legal action against Arctic and contacted OOIDA regarding the same within a few months of March 1995. (Id. at 108:3-18.) Mr. Harp specifically asked OOIDA to help him get his maintenance escrow funds back. (Id. at 108:20-22; 111:23-112:8.) After his termination with Arctic, Mr. Harp did not know what Arctic did with his escrow funds. (Id. at 123:2-13.)

On June 11, 1996, Michael Wiese entered into similar written lease agreements as Mr. Harp’s with Arctic that provided that Arctic would deduct nine cents per mile to a maintenance escrow account, and that Mr. Wiese would not have those funds returned in the event that he terminated his lease relationship with Arctic. (Id. at 127:21-128; Exs. D19 & D20.) Arctic paid Mr. Wiese weekly through a Comdata account. Mr. Wiese never had a problem accessing funds that Arctic deposited into his Comdata account. (Id. at 137:14-20). By December 14, 1996, Mr. Wiese knew he intended to terminate his relationship with Arctic and D & A, but he was concerned that he was not going to get his maintenance escrow fund back. (Id. at 129:19-24.) As a result of these concerns, Mr. Wiese wrote a letter to OOIDA dated December 14, 1996, expressing these concerns and that he had been advised not even to attempt, legally or otherwise, to get the maintenance funds back. (Id. at 130:8-15; Ex. P39.)

Mr. Wiese contacted OOIDA because he had read an article in Land Line, the official publication of OOIDA, regarding escrows and who owned them. (Id. at 130:16-131:5.) Mr. Wiese ultimately terminated his relationship with Acetic in March 1997. (Id. at 125:17-19.) At that time, Mr. Wiese believed that the money withheld by Arctic in fact belonged to him. (Id. at 133:3-13.) Although Mr. Wiese believed during the term of his relationship with Arctic that the maintenance funds were being withheld for his benefit, once his relationship ended and Arctic withheld the money, Mr. Wiese no longer believed that the Arctic was holding the money for his benefit. (Id. at 138:4-11.) In pursuing the return of his money, Mr. Wiese relied on his counsel and OOIDA to locate them and secure the return of his maintenance funds. (Id. at 133:16-20.)

When OOIDA received complaints from drivers about Arctic and D & A, they gathered information about the company and sent it to The Cullen Law Firm. (Tr. 10/4, 133:4-16.) OOIDA asked that the members submit documentation of the problems about which they complained. These documents included the member’s lease agreements and settlement statements. (Id. at 131:10-22). Mr. Harp complained in 1995 and Mr. Wiese in December 1996. (Id.) OOIDA believed that Arctic’s and D & A’s actions were a “clear violation of the leasing regulations.” (Id. at 133:4-9.) Based on the complaints made to it, OOIDA concluded that Arctic and D & A “had no intention of returning the escrow accounts,” and the final settlement sheets showed they indeed had not returned them. (Id. at 133:23-134:3.) OOIDA decided to sue Arctic based on: (1) the lease contracts themselves that indicated that the company had no intention of returning the maintenance escrow funds; and (2) the final settlement sheets that disclosed to OOIDA that the escrow funds were not returned. (Id. at 133:17-134:3.)

When suit was filed against Arctic in June 1997, OOIDA believed that Arctic controlled it members’ maintenance funds. The facts that supported OOIDA’s conclusion that Arctic controlled the maintenance funds were that: (1) that Arctic itself was deducting those funds from the owner-operators’ settlements; and that (2) Arctic was authorizing disbursement of those funds when they were required for maintenance of the truck. (Id. at 134:24-135:7).

D. Plaintiffs Bring Suit Against Arctic and D & A

On June 30, 1997, Plaintiffs filed a class action lawsuit against Arctic and D & A in this Court. In their Prayer for Relief, Plaintiffs only sought equitable relief; they did not request damages. (Tr. 10/31, at 51-54; 56.) The primary reason the lawsuit was filed was that Arctic and D & A were not returning the maintenance escrow funds to the owner-operators. (Tr. 10/3, 141:13-22.) The Cullen Law Firm represented Plaintiffs in the Arctic Litigation. (Id. at 140:21-141:12.) Twice in the Arctic Complaint, Plaintiffs requested an accounting of all transactions and other activities relating to the class members’ maintenance funds. (Ex. D81 ¶ 1, and at 22.) Plaintiffs also requested “an order enjoining and restraining Defendants from transferring, diverting, or otherwise concealing the class members’ funds at issue .... ” (Ex. D81, at 22.) The Arctic Complaint sought the equitable relief of the return of the escrow funds and never specifically requested monetary relief. (Tr. 10/31, 56:2-5; Ex. D81, at 21-22.)

Based on OOIDA’s and The Cullen Law Firm’s experience in motor carrier litigation generally and the Truth-in-Leasing regulations specifically, they knew that Arctic was not required to segregate or set aside the disputed maintenance funds. (Tr. 10/4, 74:11-75:12.) The Cullen Law Firm knew that the maintenance escrow funds could have been deposited into a bank account. (Id. at 77:8-11.) The Cullen Law Firm knew that Arctic legally could comingle the maintenance escrow funds with Arctic’s other assets. (Id. at 74:5-22.) The Cullen Law Firm knew that Arctic could have spent the maintenance escrow funds to purchase equipment or trucks, or to pay for their general operating expenses. (Id. at 77:12-78:12.) In other words, Plaintiffs and their counsel knew that there was nothing in the applicable regulations that would have restricted the method by which Arctic and D & A enjoyed custody of the maintenance escrow funds. (Id. at 77:17-19.) The Cullen Law Firm formed no belief as to what Arctic was doing with the maintenance escrow funds. (Id. at 75:13-17.)

Plaintiffs requested injunctive relief in the Arctic Complaint because they wanted to be sure that the Arctic defendants did not transfer or divert the maintenance funds. (Tr. 10/3, 143:4-10.) In Mr. Cullen’s experience motor carriers sometimes use driver money as their own personal “piggy bank,” spending it on impermissible items and overcharging the drivers. (Id. at 147:5-9.) Mr. Cullen considered the request for injunctive relief in the Complaint was important in such instances so that Plaintiffs could be sure that the motor carriers “had to account for the money that they had.” (Id. at 147:10-17.) Despite this knowledge, Plaintiffs and their counsel made a conscious decision in this case, based on counsel’s experience, not to seek preliminary or temporary injunctive relief to prevent Arctic and D & A from transferring the maintenance escrow funds to third parties. (Id. at 144:17-20.) Plaintiffs and their counsel decided they were “not going to try and solve all of the problems of the owner-operators in one suit .... ” They instead made a decision to focus their efforts on establishing a private right of action under 49 C.F.R. § 376.12(k). (Id at 96:15-97:7.) Plaintiffs and their counsel formed a “working hypothesis” that they would be able to obtain return of the maintenance escrows from Arctic. (Tr. 10/4, 87:18-25.)

Plaintiffs and their counsel had checks in their possession as early as 1995 issued by Comerica Bank and payable to owner-operators contracting with Arctic. (Tr. 10/3, 95:2-23; 176:3-14; Ex. D21.) Plaintiffs and their counsel did not conduct any public records searches to determine what Arctic and D & A might have done with the maintenance escrow funds. (Tr. 10/4, 97:13-98:23.) No evidence was produced, however, of any public record containing the nature. of the loan arrangement between Arctic and Comerica. Plaintiffs took no steps to look for the maintenance escrow funds until Arctic filed for bankruptcy in 2003 — more than six years after the Arctic complaint was filed. (Id at 116:14-19.)

Arctic’s consistent position in the Arctic Litigation was that the retained maintenance funds belonged to Arctic. (Id at 72:25-73:4.) Arctic took the position that the money was non-refundable, and that Plaintiffs would not get the maintenance funds back. (Id at 73:14-22.) The Cullen Law Firm determined that Arctic and D & A were somehow affiliated with Arctic Warehouse Services, Limited, EQI Investments, LLC, EQI Transport, and Elite Express. Plaintiffs do not recall, though, where they obtained this information about these related entities. (Tr. 10/31, 37:21-38:8.) There were no documents in either files of The Cullen Law Firm or OOIDA that identified these companies. (Id at 38:20-39:2.) OOIDA and The Cullen Law Firm were also able to obtain information relating to the affiliation between D & A and Arctic using public information. (Tr. 10/3, 198:22-199:3, 201:18-202:8; Ex. P36.) The Cullen Law Firm knows how to hire an asset investigator. In fact, The Cullen Law Firm hired an asset investigation firm, Ross Financial, to investigate Arctic and its individual officers. (Tr. 10/31, 63:17-64:18; Exs. D183 & 185.) Neither Arctic nor OOIDA was able to locate any copies of materials that Ross Financial generated. (Id at 66:2-7.)

E. Plaintiffs’ Actions Taken to Investigate Arctic

On July 24, 1996, Douglas Abel, a 49% percent owner of Arctic, filed suit against Richard Durst, a 51% percent owner of Arctic, in the Franklin County Court of Common Pleas, Case No. 96CVH07-5113 (“Abel Complaint”). (Ex. D215.) The Abel Complaint sets forth a verified, shareholder dispute. (Tr. 10/31 at 126:8-10; Ex. D215.) The Abel Complaint alleges that Mr. Durst and his wife Karen Durst were in possession of all the property owned by Arctic and that Mr. Durst had unlawfully excluded Abel from corporate matters and wrongfully terminated Abel’s compensation. (Ex. D215 ¶¶ 6-7.) Mr. Abel requested that he be “made a cosigner on any and all checking, savings, and depository accounts of Arctic and D & A.” (Id at 3.)

On September 23, 1997, Mr. Cork discussed with Rick Craig of OOIDA, the “split and current relations between D & A owners Durst and Abel, and implications with regard to [the Arctic] lawsuit.” (Tr. 10/31, 121:19-25.) On September 30, 1997, Mr. Cork spoke with Gary Green of OOI-DA about a state court action that had been filed against Arctic. (Id at 124:14-19; Ex. D228, at 2:OOIDA000020.) Plaintiffs and The Cullen Law Firm were not able to find any records of this lawsuit in their files. (Id at 125:3-6.) Despite actual knowledge of a lawsuit concerning the ownership of funds of Arctic, Plaintiffs and The Cullen Law Firm saw no need to take steps to try to locate and protect the maintenance escrow funds. (Id at 127:18-23.)

On February 2, 1998, Plaintiffs served discovery requests on Arctic and D & A that requested information regarding Arctic and D & A’s handling of the maintenance escrows. (Tr. 10/4, 98:24-99:7; Ex. D166, at Cullen000692-700.) The Cullen Law Firm’s earlier drafts of those discovery requests contained even more pointed language requesting specific information about accounts in which the maintenance escrows were held, but The Cullen Law Firm made the conscious decision not to ask those questions in the final requests. (Ex. D166, at TCLF00662.) Arctic objected to these discovery requests on the grounds that they were, inter alia, “beyond the scope” of the discovery order entered by Magistrate Judge King on December 18, 1997, and never provided Plaintiffs with answers to them. (Tr. 10/4, 9:7-25; Pis. Ex. 9.)

Magistrate Judge King, in an Order entered on June 9, 1998, addressed Plaintiffs’ discovery propounded upon defendants in the Arctic case, noting that “a dispute has arisen as to whether or not those requests are reasonably related to the motion to certify a plaintiff class.” (Pis. Exh. 15.) Magistrate Judge King directed Plaintiffs “to propound to defendants interrogatories relating to the number of persons who would be included in the putative class ...” Id. Judge King also limited document requests to 36 members of the putative class and limited the scope to the production of “the lease agreements, the lease/purchase agreements and settlement sheets for each such person.” (Tr. 10/4, 15:22-17:4; Pis. Ex. 15). The fact that, pursuant to the Court’s discovery orders, Arctic was not required to produce responsive documents to Plaintiffs’ requests for information regarding the disposition of the maintenance funds was in no way the fault of Plaintiffs or their counsel. (Id.)

In an April 15, 2002, letter, Arctic’s counsel informed attorneys from The Cullen Law Firm that the maintenance funds had “long since” been withdrawn from Arctic’s accounts, and it “remain[ed their] burden to identify and trace the maintenance funds in [Arctic’s] accounts.” (Tr. 10/31, 43:10-18; Ex. D214.) Despite being informed that (a) the maintenance escrow funds were maintained in an account, and (b) the escrow funds had been withdrawn from those accounts, The Cullen Law Firm did not serve additional discovery asking for the identity of the accounts, or asking Arctic to identify the amount of money that had been withdrawn from the accounts. (Id. at 44:2-45:7; 48:1-9.) Soon after, Plaintiffs filed an amended complaint in the Arctic Litigation, yet still took no action to name any entity to which the trust funds might have been transferred, such as naming a John Doe bank. (Id. at 49:14-22.)

On January 12, 2004, Ms. Mayers billed time to the Arctic matter for a discussion she had with Karen England (n/k/a Johnston) of OOIDA about a “Dun & Bradstreet” report on Comerica. (Id. at 22:17-21; Ex. D152, at TCLF3977.) Plaintiffs admit that Dun & Bradstreet reports are “routine tools” that businesses and lawyers use to find out, inter alia, a business’s debtor/creditor relationships. (Tr. 10/3, 172:20-173:5.) Neither Ms. Mayers nor OOIDA was able to find a copy of the Dun & Bradstreet report in their files. (Id. at 25:8-15.) OOIDA destroyed all of its files related to Arctic and Comerica in 2009. (OOIDA Dep., 20:13-15, 20:24-21:13, 30:17-22.)

F. The Four Boxes Produced by Arctic Containing Comerica Checks

On August 14, 1998, Plaintiffs’ counsel traveled to Columbus, Ohio, and reviewed documents produced by the Arctic defendants in the Arctic litigation. (Tr. 10/4, 42:13-14, 108-09; Ex. D152, at TCLF003560.) Plaintiffs do not know what documents were made available for inspection by the Arctic defendants. Plaintiffs selected four boxes of documents from the production to be shipped back to The Cullen Law Firm. (Tr. 10/31, 28:12-24; Ex. D174.) The four boxes contained 33 checks drawn on a Comerica Bank account attached to an operator settlement sheet. (Ex. D190, at OOIDA-Arctic 04885-918; Op. & Order at 12, Mar. 16, 2009, Dkt. 64.) According to The Cullen Law Firm’s attorney timesheets, the four boxes of documents, which were received by them in August 1998, were not reviewed for nearly two years. Plaintiffs’ attorneys decided to focus on matters they considered more significant. (Tr. 10/4, 114:9-115:5; Tr. 10/31, 36:21-37:5.)

Plaintiffs received one of the boxes, identified as “Box 28,” on or about August 24, 1998. (Op. & Order at 12, Mar. 16, 2009, Dkt. 64.) Box 28 contained checks made out to drivers, attached to operator settlement sheets, representing the net settlement the drivers received from Arctic after deductions were taken for contributions to the maintenance escrow fund, among other items. (Tr. 10/31, 29:5-31:12; 32:12-34:25; Ex. D174, at OOIDA-Arctic 4915.) After receiving the four boxes in August 1998, Plaintiffs did not serve a subpoena on Comerica. Plaintiffs never subpoenaed Comerica during the pendency of the Arctic Litigation. (Id. at 35:4-10.)

G. Plaintiffs’ Lack of Actions to Learn the Status of the Escrow Funds

From the time the Arctic Complaint was filed, OOIDA shared in the belief that Arctic was a viable company that would be able to pay a money judgment that would result from the Arctic Litigation. (Tr. 10/4, 137, 143:11-144:8.) OOIDA performs credit checks on entities to which it loans money, and runs Dun & Bradstreet reports for the same purpose, but OOIDA chose not to do a credit check on Arctic. (Id. at 147:1-148:5.) Plaintiffs never considered the issue of collectability of the Arctic defendants. (Id. at 89:10-18.) Instead, Plaintiffs focused on their overwhelming concern at the time: establishing the legal precedent that drivers had a private right of action under federal law. (Id. at 91:6-20.)

The Cullen Law Firm never asked their clients the entity on which their checks from Arctic were drawn. (Tr. 10/3, 171:20-22.) Plaintiffs never requested a Dun & Bradstreet report on Arctic or D & A. (Tr. 10/31, 21:6-10.) At the outset of the Arctic Litigation, The Cullen Law Firm did not perform a UCC-1 search on Arctic or D & A to determine whether Arctic had granted a security interest in any of its property. (Id. at 176:19-177:1.) The Cullen Law Firm never performed a title search on Arctic’s property. (Id. at 177:2-4.) It never searched for a tax lien on Arctic or D & A’s real property, (id. at 177:5-9), and it never searched for mortgages on D & A’s real property. (Id. at 177:11-13.)

When suit was filed against Arctic in June 1997, Mr. Johnston believed, based on his general knowledge of that company, that it was viable and solvent. In 1997, Arctic was using very good equipment, i.e. primarily late model trucks, which was above average for carriers of their size. The fact that Arctic was using late model trucks indicated to Mr. Johnston that Arctic was a successful company, one that was fairly well off. (Tr. 10/4, 130:20-137:6.) When suit was filed against Arctic in June of 1997, OOIDA had no knowledge of Comerica’s lending relationship with Arctic. Mr. Johnston first learned of Comerica Bank’s relationship to Arctic in 2003, through OOIDA’s attorneys litigating the Arctic bankruptcy. (Id. at 137:25-138:12). Nothing in Arctic’s court filings, from the outset of litigation through November 1997, including Arctic’s Motion to Dismiss Under Doctrine of Primary Jurisdiction and related pleadings, caused Mr. Cullen any concern about his understanding of who controlled and used the maintenance escrow funds at issue. (Id. at 3:6-6:15).

On August 28, 1997, Mr. Cork of The Cullen Law Firm spoke with Land Line magazine about information OOIDA had gathered from Florence and Robert Badger of Augusta, Georgia, about Arctic’s maintenance fund retention practices. (Tr. 10/31, 119:14-25; 120:3-6; D228, at 2:OOIDA000026.) Plaintiffs did not produce any documents or information gathered by the Badgers. (Id. at 121:5-11.) The Court finds that as of September 29, 1997, Plaintiffs and their counsel were aware that OOIDA’s members were investigating Arctic’s maintenance fund retention practices. Diligent counsel would have been prompted at that time to obtain knowledge of, to the extent possible, Arctic’s maintenance fund retention practices.

On September 23, 1997, Mr. Cork had a discussion with OOIDA members Steve Weed and Michelle Brickman about their former affiliations with Arctic. (Id. at 123:20-124:13; D228, at 2:OOIDA000019.) Plaintiffs did not produce any documents referencing Mr. Weed or Ms. Brickman. (Id. at 125:4-5.) On October 30, 1997, Mr. Cork spoke with Gary Green of OOIDA. (Id. at 130:14-131:2.) Mr. Cork and Mr. Green spoke about former Arctic maintenance fund supervisor, Briggs. (Id. at 131:13-15.) Plaintiffs did not produce any information about, or gathered from, Briggs. (Id. at 132:5-7.) Plaintiffs were prevented from discovering information from Arctic and D & A regarding the lending relationship between Arctic and Comerica from December 18, 1997, the date of Magistrate Judge King’s order staying merits discovery until March 3, 2000, the date that this Court lifted the stay on the Arctic Litigation following the Eighth Circuit’s decision in the New Prime case.

H. Plaintiffs’ Diligence in Similar Lawsuits for Return of Maintenance Escrows

On January 9, 2001, OOIDA’s counsel, a bankruptcy attorney (and co-counsel of The Cullen Firm), wrote a letter to Huntington National Bank (“Huntington”) informing Huntington that the bank may have escrow funds that rightly belonged to owner operators. (Tr. 10/31, 62:3-20, 87:13-16; Ex. D129.) Nine days later, on January 18, 2001, the trucking companies Roadrunner Trucking, Roadrunner Distribution Services, Advanced Distribution Systems and Eck Miller, declared bankruptcy. (Id. at 63:6-13.) These entities are subsidiaries of Intrenet.

Immediately after January 1, 2001, OOI-DA began receiving telephone calls from members leased to Intrenet’s subsidiary trucking companies, in which the members reported that the motor earner was ceasing operation immediately, that the contracts between the driver and the motor carrier were terminated immediately, and that the driver was told to deliver the load and that there would be no further relationship between the motor carrier and the driver. Drivers also reported that their settlement checks from Intrenet’s subsidiaries had bounced. (Id. at 89:15-92:15). Conversely, there were never any reports from OOIDA’s members that any Arctic checks had bounced or that Arctic was ceasing operations. (Id. at 91:25-93:8).

On April 5, 2001, The Cullen Law Firm, on behalf of OOIDA, filed a class action complaint against Huntington. (Id. at 59:15-60:4; Ex. D84.) In the complaint, OOIDA sought the return of escrow funds withheld by trucking companies. (Id. at 60:5-6.) In the class action complaint, OOIDA did not identify the type of banking accounts the trucking companies held at Huntington. (Id. at 60:25-61:10.) In fact, The Cullen Law Firm did not know the types of accounts the trucking companies held at Huntington. (Id.)

I. Arctic’s Representations Regarding the Maintenance Escrow Funds

Between March 5, 1998, and May 26, 1998, Plaintiffs’ counsel Mr. Cork and defendants’ counsel Charles Tell exchanged correspondence regarding discovery in the Arctic case. (Tr. 10/4; 19:4-20:5; Pis. Ex. 37). In a letter to Mr. Cork dated May 20, 1998, Mr. Tell addressed the issue of a potential stipulation relating to class certification. In the letter, Mr. Tell stated, in part, “I would be willing to stipulate that D & A retained the maintenance escrow funds for each putative class member and that there are a large number of such individuals.” (Id. 21:12-23, 23:25-24:17; Pis. Ex. 37, TCLF 001784). Plaintiffs and defendants in the Arctic case entered into a stipulation relating to class certification. (Id. at 39:13-19; Pis. Ex. 24). The stipulation was filed with the Court and is dated June 9, 2000. (Id. at 39:23-40:4) The stipulation states:

Defendants Arctic Express, Inc. and/or D & A Associates, Ltd. have retained and have not returned the ‘maintenance funds’ (as identified in Defendants’ responses to Plaintiffs’ Interrogatory Nos. 2-5 of Plaintiffs’ First Set of Interrogatories Directed to Defendants Arctic Express, Inc. and D & A Associates, Ltd.) collected from over 600 of the persons identified by Defendants in Defendants’ Response to Plaintiffs’ Interrogatory No. 1 of Plaintiffs’ First Set of Interrogatories Directed to Defendants Arctic Express, Inc. and D & A Associates, Ltd.

(Pis. Ex. 24).

Mr. Cullen believed this language to be consistent with his understanding that Arctic and D & A had retained dominion or control over the maintenance escrow funds. (Id. at 40:16-25.)

J. Arctic and D & A Bankruptcy

On October 11, 2001, D & A filed for bankruptcy, Case No. 01-bk-62009 (Bankr.S.D.Ohio). (Tr. 10/31, 50:10-13; 107:8-21; Ex. D194.) On November 16, 2001, D & A filed a financing statement in the bankruptcy court and disclosed that it had entered into a financing relationship with Comerica Bank. D & A provided Comerica’s address and also identified Mr. Conen as a contact. (Id. at 108:18-110:6; Exs. D194 & D228.) Plaintiffs learned that Arctic, also, was “operating in the vicinity of insolvency.” (Id. at 56:12-16.) Despite D & A’s bankruptcy and their understanding of Arctic’s dire financial condition, Plaintiffs did not at that time propound additional discovery requests in an attempt to locate the maintenance escrow funds. (Id. at 56:17-57:7.) Plaintiffs actually withdrew, and never re-filed, their motion to put aside a sum of money representing the amount of maintenance escrow funds that Arctic would be required to return to the drivers. (Id. at 57:17-23.) In May 2006, Ms. Mayers reviewed the filings from the first D & A bankruptcy (filed in 2001) to determine whether issues related to financing were disclosed. (Id. at 106:18-21; Ex. D228, at 2:OOIDA715.) Ms. Mayers claimed, however, that she never learned of any financing relationships between Comerica Bank and Arctic through the D & A bankruptcy. (Id. at 84:11-22.)

In 2003, Arctic filed for bankruptcy in the Bankruptcy Court for the Southern District of Ohio. On December 2, 2003, Plaintiffs counsel learned from the testimony of William Olipant, Arctic’s controller, that from 1991 to 2003 Arctic had a lending relationship with three different institutions. (Id. at 58:18-28.) Ms. Mayers was present for Mr. Olipant’s testimony, and it was hearing that testimony that caused Plaintiffs to bring the present action against Comerica. (Id. at 58:9-59:14.) At that hearing, Ms. Mayers first became aware of the mechanics of Comerica’s lending relationship with Arctic, including that Arctic had maintained a lockbox account with Comerica in which the maintenance escrows were deposited and taken by Comerica to reduce Arctic’s loan amount. (Id. at 80:25-81:12.) Prior to hearing Mr. Olipant describe the terms of the lending relationship between Arctic and Comerica, Plaintiffs did not believe it important to its claims whether Arctic was in a financing relationship with a financial institution. (Id. at 105:12-23.) Until Arctic filed for bankruptcy in 2003, Plaintiffs never looked for the maintenance funds to which they claimed they were entitled. (Tr. 10/4, 116:14-19.)

K. Plaintiffs’ Extraordinary Production

The Court’s Order of September 20, 2011, required Plaintiffs to produce both the “time records” and the “billing records” in the two cases. In response to the Court’s Order, Plaintiffs had produced “time records” for The Cullen Law Firm going back to December 11, 1997. Mr. Cullen testified at trial that his law firm had produced all of the time records available and that no time records were consciously destroyed. He testified that the inability of The Cullen Law Firm to find time records before December 11, 1997, may have been because the Cullen & O’Connell firm was a small start-up firm without an established billing system in place as well as because of the transition to The Cullen Law Firm, an event that occurred at approximately this time. (Tr. 10/4, 51:22-54:6). In response to questions from the Court, Mr. Cullen testified that while The Cullen Law Firm had produced all the time records relating to the Arctic and Comerica cases, neither he nor anyone associated with his law firm requested that OOIDA look for, and produce, the billing records sent to OOIDA by Cullen & O’Connell and The Cullen Law Firm. {Id. at 55:10-56:12).

The Court, in an Order dated October 5, 2011, adjourned the trial and ordered OOI-DA to produce all documents responsive to the Court’s Order of September 20, 2011. Mr. Johnston, appearing as OOIDA’s Rule 30(b)(6) witness, testified that in response to the Court’s Order of October 5, OOIDA made a complete production of all the billing records in its possession regarding the Arctic and Comerica cases. (Tr. 30(b)(6), 78:11-79:1881:24-84:8; Def. Ex. 228). Upon examination, the Court has no reason to suspect that the late billing records produced by OOIDA are not, in fact, a complete set of billing .records for both cases (Arctic and Comerica), and fill the gap of time missing from Plaintiffs’ time records: namely, the period prior to December 11, 1997. This Court, therefore, finds that Plaintiffs have now provided all the remaining billing records in their possession pertaining to the Arctic and Comerica cases.

According to the billing records produced by OOIDA, the law firm of Cullen & O’Connell began billing OOIDA for legal services relating to the Arctic matter beginning in April 1997. The billing records produced by OOIDA are copies of the billing statements sent by the law firms of Cullen & O’Connell and The Cullen Law Firm. {Id. at 78:11-79:1881:24-84:8; Def. Ex. 228). Besides the billing records, OOIDA produced an additional 636 pages of documents to Comerica in response to the Court’s Order of October 5, 2011. (Tr. 10/31; Pis. Ex. 41). These documents were mostly pleadings relating to the Arctic and Comerica cases kept by Mr. Johnston in his personal files, along with some e-mail communications maintained by OOI-DA relating to Arctic. (Tr. 30(b)(6), 87:8-90:11).

L. OOIDA’s Destruction of Case Documents

On August 23, 2011, Comerica served document requests on Plaintiffs. (Ex. D218.) OOIDA looked for documents responsive to the requests. (Tr. 30(b)(6), 28:7-12.) Angel Burnell, the Assistant to Mr. Johnston, contacted Karen Johnston of the Business Assistance Department about the requests {Id. at 29:10-18). Mr. Johnston learned that in 2009 OOIDA destroyed most of the documents related to the Arctic Litigation along with files from 16 other “old” cases, because they needed storage space {Id. at 20:10-21:13; 30:17-22). According to Mr. Johnston, the records that were destroyed were mainly lease contracts from owner-operators, all of which had previously been produced to OOIDA’s attorneys. {Id. at 20:25-21:13.) OOIDA documents relating to its member complaints against Arctic would have been destroyed in 2009. {Id. at 52:21-53:19.) Documents related to the Arctic Litigation, the 2001 D & A bankruptcy, the 2003 Arctic bankruptcy, and the 2004 Comerica case all were destroyed in 2009. {Id. at 55:9-56:10.) OOIDA did not consult with their attorneys prior to destroying any documents in 2009 {Id. at 21:17-21.)

Between August 2011 and October 2011, only Ms. Mayers of The Cullen Law Firm spoke to OOIDA representatives about their document collection efforts. {Id. at 65:12-16.) OOIDA told Ms. Mayers that the documents had been destroyed in 2009. {Id. at 62:15-63:1.) Between August 2011 and October 3, 2011, OOIDA did not undertake any efforts to look for electronic documents. {Id. at 68:3-8.) In September 2011, OOIDA found documents (communications with members) but did not provide them to The Cullen Law Firm for production to Defendants. {Id. at 33:11-34:5; 35:23-36:7.) OOIDA did not collect these documents until after the October 5, 2011, trial adjournment. (Id. at 34:6-10; 36:3-7.)

OOIDA did not receive a copy of the Court’s Order dated September 20, 2011, before the trial began (Id. at 43:1-12; Ex. D220), or if OOIDA did, they took it to be a scheduling order (Id. at 44:12-13). No one from The Cullen Law Firm talked to OOIDA about the September 20 Order. (Id. at 45:9-11.) The Cullen Law Firm provided no further instructions to OOIDA in September 2011 about document collection, despite the Court’s orders. (Id. at 40:10-17.) OOIDA did not search for documents between September 20 and October 3, 2011. (Id. at 45:16-21.)

Without a hold on OOIDA documents, all OOIDA emails are destroyed automatically after a year or two. (Id. at 69:11— 71:6.) The Cullen Law Firm never issued a document hold notice to OOIDA in connection with the Arctic Litigation. (Tr. 10/31, 25:17-20; 117:14-118:3; 30(b)(6) Dep. 70:14-16.) The Helmer law firm did not issue a hold notice to OOIDA in connection with the Arctic Litigation. (Tr. 10/31, 118:16-19.) Neither The Cullen Law Firm nor the Helmer law firm issued a litigation hold notice to OOIDA with respect to the bankruptcy filed by D & A or the one filed by Arctic. (Id. at 118:4-11, 118:20-25.) Neither firm issued a document hold notice to OOIDA in connection with the litigation against Comerica. (Id. at 25:13-16; 118:12-15; 119:1-3; Tr. 30(b)(6), 70:16-19.)

The Cullen Law Firm did not share Comerica’s Motion to Compel and Reply with OOIDA. (Tr. 30(b)(6), 59:18-22; Exs. D221 & D222.) The Cullen Law Firm did not give OOIDA a copy of Comerica’s Trial Brief, which was filed on September 30, 2011. (Id. at 94:1-8.) OOIDA first learned of Comerica’s spoliation allegations at trial, held between October 3 and 5, 2011. (Id. at 94:22-95:4.)

IV. CONCLUSIONS OF LAW

A. Defendant’s Request for an Adverse Inference Sanction

Comerica requests sanctions against Plaintiffs in the form of an adverse inference. Comerica claims that OOIDA’s destruction of case documents and The Cullen Law Firm’s failure to produce a complete set of responsive materials pursuant to Comerica’s discovery requests and the Court’s orders constitute spoliation and warrants an adverse inference that, to the extent Plaintiffs attempted to investigate Arctic’s finances, that investigation revealed the lending relationship between Comerica and Arctic. Because the Court’s determination on Comerica’s requested sanction implicates the Court’s findings of fact relevant to deciding the statute of limitations issue, the request for sanctions will be addressed prior to the merits of the statute of limitations defense.

Spoliation characterizes “the destruction or significant alteration of evidence, or the failure to preserve property for another’s use as evidence in pending or reasonably foreseeable litigation.” Forest Labs., Inc. v. Caraco Pharm. Labs., Ltd., Case No. 06-CV-13143, 2009 WL 998402, at *1, 2009 U.S. Dist. LEXIS 31555, at *6 (E.D.Mich. Apr. 14, 2009). Federal law governs the rules that apply to, and the range of sanctions a federal court may impose for, the spoliation of evidence. Adkins v. Wolever, 554 F.3d 650, 652 (6th Cir.2009). Among the district court’s inherent powers is the “broad discretion to craft proper sanctions for spoliated evidence ... including dismissing a case, granting summary judgment, or instructing a jury that it may infer a fact based on lost or destroyed evidence.” Adkins, 554 F.3d at 651, 653 (6th Cir.2009); see also In re Global Technovations, Inc., 431 B.R. 739, 779 (Bankr.E.D.Mich.2010) (“In a case tried to the court rather than a jury, the sanctions may include the court’s drawing such an adverse inference.”). Courts have advised that “[pjroper spoliation sanctions should promote two goals: (1) fairness (i.e., ‘leveling the evidentiary playing field’); and (2) punishment to' deter such improper conduct in the future, and to ‘plac[ej the risk of an erroneous judgment on the party that wrongfully created the risk.’ ” In re Global, 431 B.R. at 779 (citing Adkins, 554 F.3d at 652).

Comerica contends that it is entitled to an adverse inference that if Plaintiffs performed any diligent search to locate the maintenance escrow funds it would have revealed the “lending relationship” between Arctic and Comerica. Comerica argues that because much of OOIDA’s files and records related to both the Arctic Litigation and the instant case were destroyed in 2009, and The Cullen Law Firm’s files are incomplete, there is no way of knowing whether additional searches for the maintenance escrows were undertaken by the Plaintiffs and/or their counsel, and what, those searches revealed, at any time from the mid-1990s until 2003. Comerica claims that the attorney time and billing records make “numerous references” to documents that should have been produced by The Cullen Law Firm, but are now purportedly missing.

The document evidence Comerica claims should have been produced based on the time records include: (1) Reports from Ross Financial Services; (2) Files related to the 1996 lawsuit between Messrs. Durst and Abel; (3) Notes from discussions with Florence and Roger Badger regarding Arctic’s maintenance-fund retention practices; (4) Notes from discussions regarding Arctic’s maintenance fund supervisor; and (5) D & B reports referenced in billing statements. (Dkt. 150.) Since Plaintiffs produced no documentation from any of these efforts to investigate the location of the maintenance funds, Comerica urges the Court to infer that “the missing and destroyed evidence revealed the lending relationship between Arctic and Comerica.” (Comerica Reply, Dkt. 154, at 12.)

To establish an adverse inference instruction based on the destruction of evidence, Comerica, as the moving party, “must establish: (1) that the party having control over the evidence had an obligation to preserve it at the time it was destroyed; (2) that the records were destroyed with a culpable state of mind; and (3) that the destroyed evidence was relevant to the party’s claim or defense such that a reasonable trier of fact could find that it would support that claim or defense.” Beaven v. United States DOJ, 622 F.3d 540, 553 (6th Cir.2010) (quoting Residential Funding Corp. v. DeGeorge Fin. Corp., 306 F.3d 99, 107 (2d Cir.2002)).

OOIDA and The Cullen Law Firm undoubtedly had a duty to preserve documents related to this case and the underlying Arctic Litigation during the pendency of those lawsuits. It is “well established that the duty to preserve evidence arises when a party reasonably anticipates litigation.” In re Global, 431 B.R. at 780. Once the duty to preserve attaches, a party must “suspend its routine document retention/destruetion policy and put in place a ‘litigation hold’ to ensure the preservation of relevant documents.” Zubulake v. UBS Warbug LLC, 220 F.R.D. 212, 218 (S.D.N.Y.2003); see also In re Nat’l Century Fin. Enters., No. 2:03-md-1565, 2009 WL 2169174 at *7, 11*, 2009 U.S. Dist. LEXIS 68379 at *29, *41 (S.D.Ohio July 16, 2009) (relying, in part, on Zubulake).

Comerica’s first element of spoliation is met insofar as Plaintiffs and their counsel have had an ongoing duty to preserve case-related documents since the outset of the Arctic Litigation, at the latest. With regard to the second, ‘culpable state of mind,’ element of spoliation, Plaintiffs’ counsel admitted at trial that a litigation hold was never placed on OOIDA’s files related to the litigation. For that group of destroyed documents, therefore, Plaintiffs and their counsel were at least negligent in allowing its destruction, Zubulake, 220 F.R.D. at 218, and sanctions may be imposed as a remedy. See Beaven, 622 F.3d at 554 (“[T]he ‘culpable state of mind’ factor is satisfied by a showing that the evidence was destroyed ‘knowingly, even if without intent to [breach a duty to preserve it], or negligently.’”) (quoting Residential Funding Corp., 306 F.3d at 108).

The third factor in finding spoliated evidence asks the Court to determine whether the allegedly destroyed or missing evidence would have been relevant to the movant’s claims. As stated by the Second Circuit in Byrnie v. Town of Cromwell, to obtain the requested factual inference based on spoliation:

[A] court must determine “whether there is any likelihood that the destroyed evidence would have been of the nature alleged by the party affected by its destruction.” The burden falls on the “prejudiced party” to produce “some evidence suggesting that a document or documents relevant to substantiating his claim would have been included among the destroyed files.”

243 F.3d 93, 108 (2d Cir.2001) (quoting Kronisch v. United States, 150 F.3d 112, 127-28 (2d Cir.1998)).

Comerica, therefore, in addition to making an adequate showing that files from Plaintiffs are missing or destroyed, must also demonstrate a likelihood that the missing files were relevant documents related to the lending relationship between Arctic and Comerica, and Comerica’s security interest in Arctic’s accounts receivables. To determine whether Comerica has met its burden on this third factor, the Court will examine each category of allegedly missing evidence seriatim.

1. The Ross Financial report

The first area of “missing” documents identified by Comerica are alleged records referenced in The Cullen Law Firm’s attorney time records, but never produced. Plaintiffs’ attorney timekeeping and billing records indicate that Plaintiffs’ attorneys took certain measures to investigate the Arctic’s financials. First, in May 2002 they hired Ross Financial to conduct an asset investigation of Arctic, and the time records indicate that attorneys from The Cullen Law Firm followed up with telephone conversations about the materials they received from Ross Financial. Comerica argues that the materials produced by Plaintiffs should have included a final “report,” -which may have revealed