Full opinion text
FINDINGS OF FACT AND CONCLUSIONS OF LAW McCOTTER, United States Magistrate Judge. INTRODUCTION This case came on for a bench trial in Wilmington, North Carolina, pursuant to 28 U.S.C. § 636(c). Plaintiffs were represented by Richard L. Masters, of the law firm of Masters, Mullins & Arrington in Louisville, Kentucky, and Junius B. Lee, III, of the firm of Lee & Lee in Whiteville, North Carolina. Defendant Central Transport, Inc. (“Central” or the “Company”) was represented by John J. Doyle, Jr., of the firm of Constangy, Brooks & Smith in Winston-Salem, North Carolina. The case was tried on the question of liability from Monday, October 24, 1994, through Friday, October 28, 1994; from Monday, October 30, 1994, through Wednesday, November 2, 1994; and from Tuesday, November 8, 1994, through Thursday, November 10, 1994, when the trial ended. During the trial the court admitted into evidence a collection of joint trial exhibits (hereafter “Joint Exhibits”) together with exhibits pertaining to each Plaintiff (for example, Garbrough Exhibits). ISSUES PRESENTED The trial was based on the following issues presented by the pre-trial order: 1. Whether Central breached the written lease agreements between plaintiffs and Central. 2 Whether Central violated 49 C.F.R. 1057.2-1057.12 governing contractual requirements between common carriers and lease operators. 3. Whether Central engaged in fraudulent misrepresentation with respect to matters governed by the lease agreements between plaintiffs and Central. 4. Whether Central engaged in unfair and deceptive trade practices in violation of N.C.G.S. § 75-1.1 with respect to matters governed by the lease agreements between plaintiffs and Central. 5. Whether plaintiffs’ claims under N.C.G.S. § 75-1.1 are preempted by federal law. 6. Whether plaintiffs’ claims under N.C.G.S. § 75-1.1 are otherwise barred as a matter of law. 7. What is the statute of limitations governing plaintiffs’ claims. FINDINGS OF FACT Based upon the stipulations of the parties, the testimony presented at trial, and the exhibits which have been received into evidence, the Court makes the following findings of fact: BACKGROUND 1. Plaintiffs are twenty-one (21) present and former lease operators with Central. Plaintiffs leased tractors, which they owned and operated, to Central and hauled a variety of bulk commodities in trailers provided by the Company. 2. One of the plaintiffs, Paul Hilliker, also was employed by Central for a short period of time as a Company driver. Three of the plaintiffs, James Pulley, Kendall Goodman and Deborah Goodman, presently are employed by Central as Company drivers. In their original and amended complaints the Garbrough plaintiffs alleged a separate cause of action relating to their employment as Company drivers. This claim was dismissed by the Court at trial. Accordingly, the Court will consider only those claims asserted by plaintiffs which relate to their status as lease operators. 3. Defendant Central is a trucking company based in High Point, North Carolina, where it is engaged primarily in the transportation of commodities in bulk. Central maintains a fleet of tractor trailer units, employing both Company drivers and lease operators such as the plaintiffs. Central operates its fleet of vehicles in interstate and intrastate commerce and is subject to regulation by the Interstate Commerce Commission (the “ICC”) and similar regulatory agencies in each of the states where it conducts business. At the time these actions were instituted against Central, the Company maintained eighteen (18) major terminals and three satellite terminals in a total of thirteen (13) states. Joint Exhibit 31. 4. Plaintiffs Garbrough, Sharp, Pickett, Kendall Goodman, Deborah Goodman, Burden, Pulley, Langford, and Richerson were residents of the state of Kentucky. Each of them reported to and worked out of the Company’s Louisville, Kentucky, terminal. While he was leasing with Central, plaintiff Paul Hilliker was a resident of Indiana working out of the Company’s Louisville terminal. Plaintiffs Jacobs, Albert Smith, Hahn, Set-zer, Adams, and Taylor were residents of North Carolina. They were assigned to and worked out of the Company’s terminals in Charlotte (Smith, Hahn, Setzer), High Point (Adams, Taylor) and Wilmington (Jacobs). Plaintiff Lloyd Raffaldt was a resident of South Carolina, working out of the Charlotte, North Carolina, terminal. Plaintiffs Lorman and John Smith were residents of Pennsylvania, assigned to and working out of the Company’s Karns City, Pennsylvania, terminal. Plaintiff Williams was a resident of Tennessee, assigned to and working out of the Company’s Nashville, Tennessee, terminal. Plaintiff Giles Fisher was a resident of Virginia but was assigned to and worked out of the Company’s Kingsport, Tennessee, terminal. 5. Central entered into a series of standard equipment leases with the owner operators. These were not leases for specific trips (“trip leases”), but instead governed all trips made by the plaintiffs during the periods when they were in effect. Central’s leases, which are the subject of extensive regulation by the ICC, controlled the relationship between Central and its lease operators. All leases were in writing and were presented to plaintiffs by Central at their respective terminals. Plaintiffs were given time to review the leases and to consider them before deciding whether to sign the agreements. The signed leases were then returned to Central where they were placed in files maintained by the Company for each lease operator. Each lease agreement was made and entered into by the plaintiffs at their respective places of domicile or home terminals. The leases were substantially performed by plaintiffs at their respective home terminals, from which they were initially dispatched and to which they regularly returned for additional trips. 6. Central’s leases were presented to the owner operators on a non-negotiable basis. If the lease operator wanted to work for Central, he or she had to sign the lease as it was presented by the Company. This conformed with general practice throughout the trucking industry. The operators had to accept provisions like purchasing workers’ compensation insurance through the Company and deducting overhead allocations, or terminate the lease arrangement. 7. Central’s leases provided for a revenue-sharing arrangement between the lease operators and the Company. The leases also addressed a number of other items, including insurance coverage, overhead allocation, and escrow arrangements. Until March, 1991, the Company’s leases required each owner operator to purchase workers’ compensation insurance through Central. From July, 1987 to March, 1991, the leases also imposed an overhead allocation charge which was deducted from the lease operator’s bi-weekly settlements. 8. Each of plaintiffs’ leases contained a formula for determining their portion of the freight revenues billed by Central for the trips made and additional services and auxiliary equipment provided by the lease operators. Although the formulas changed somewhat over the years, each lease maintained a basic revenue-sharing arrangement between the parties. 9. Many of the plaintiffs testified that they believed they were receiving 60 to 62 percent of the freight revenues billed and collected from the Company’s customers. In fact, Central’s leases in 1979 and 1981 paid its lease operators 60 percent of gross revenues. A. Smith Exhibits 1 and 2, Paragraph 19. The 1984 lease, which was in effect from January, 1984 through June, 1987, changed the formula to pay the lease operators 60 percent of drivers’ base revenue plus mileage fuel surcharge and additional pay. A. Smith Exhibit 3, Paragraph 19(a). The net result of this formula was to pay the lease operator 66.1 percent of the freight revenue billed on all interstate shipments. Joint Exhibit 1. The formula used in the 1987 lease was in effect from July, 1987 until June, 1989. A. Smith Exhibit 6, Paragraph 22(a). The 1989 lease, which became effective in June, 1989, and continued through February, 1991, simply restated the formula in the 1984 and 1987 leases. Like its predecessor, the 1989 lease resulted in lease operators receiving 66.1 percent of freight revenue billed for their interstate trips. Joint Exhibit 1; A. Smith Exhibit 7. Even though plaintiffs believed their portion of freight revenues received from Central was only 60 to 62 percent, during the entire period from January, 1984, until January, 1991, they actually were paid 66.1 percent on all interstate trips, which comprised the vast portion of the loads they handled for Central. Joint Exhibit 1. Plaintiffs’ Claims 10. The plaintiffs assert claims of violation of ICC regulations, breach of contract, fraudulent misrepresentation, and unfair or deceptive trade practices. 11. The plaintiffs contend that: (1) Central did not remit to them the correct portion of the freight revenues generated by trips they had made on behalf of the Company; (2) Central overcharged them for workers’ compensation insurance; (3) Central improperly charged or overcharged them for overhead allocation; (4) Central improperly deducted fuel surcharge overpayments from their settlements; and (6) Central overcharged them for miscellaneous items, such as fuel and license tags, which they purchased from the Company. Additionally, plaintiffs asserted a general claim that Central breached their lease agreements by not providing them with adequate information relating to the calculation of their pay. At trial, plaintiffs did not pursue their allegations that Central had overcharged them for fuel bought from the Company and thereby abandoned their right to any recovery for that contention. 12. At trial, plaintiffs introduced evidence concerning two new claims. Specifically, plaintiffs asserted that Central had made unauthorized deductions from some of their escrow accounts. Also, plaintiffs contended that defendant had illegally required them to purchase workers’ compensation coverage from the Company in violation of several state statutes. These claims were not specifically included in plaintiffs’ complaints or raised by plaintiffs during the extensive discovery conducted by the parties. The plaintiffs moved to amend their pleadings to conform to the evidence and theories they advanced at trial. Defendant opposed plaintiffs’ motion. The Court withheld any ruling pending its receipt of the parties’ post-trial submissions. The defendant’s objection is overruled and the plaintiffs’ motion to amend is ALLOWED as these contentions are fairly raised by the pleadings and the pre-trial order. Workers’ Compensation 13. Plaintiffs alleged that they were overcharged by Central for workers’ compensation insurance. Basically, they contend that the Company charged them too much for workers’ compensation insurance and that had Central allowed them to do so, they could have obtained similar coverage by purchasing occupational hazard policies at a greatly reduced cost. Central failed to produce copies of policies or certificates of insurance for the plaintiffs despite repeated demands. 14. Prior to March, 1991, each lease operator was required by the company to purchase workers’ compensation insurance through the company as a condition of entering into each lease. The deductions made by Central for workers’ compensation coverage of the plaintiffs were authorized under their lease agreements. As an example, the Company’s June, 1987 lease contained the following provision: “The CONTRACTOR is required to carry through the CARRIER Workmen’s Compensation Insurance for the CONTRACTOR and his driver/employees at the rate established by the state of domicile. This premium will be deducted on a monthly basis.” Garbrough Exhibit 1, paragraph 12. Similar provisions appeared in the June, 1989 lease. Central dropped this requirement fi’om its March, 1991 lease. Central historically had required that its lease operators obtain workers’ compensation coverage through the Company to make certain that the owner operators and their co-driver employees were fully protected in the event of a job-related illness or injury. 15. In March, 1991 Central eliminated the requirement in its leases that owner operators purchase workers’ compensation insurance through the Company. Joint Exh. 23. This change resulted not only from lease operators’ recurring complaints about the high cost of workers’ compensation coverage but also from Central’s concern about several very large claims generated by lease operators and the Company’s desire to reduce its overall workers’ compensation claims exposure. Central amended the leases to require that the lease operators obtain their own workers’ compensation or occupational accident coverage and furnish Central with evidence of compliance. Id. The only requirement under the lease was that proof of insurance be furnished to the company prior to a lease operator being dispatched. 16. The cost of the alternative coverage in the form of occupational accident coverage ranged from approximately $110.00 to $125.00 per month, for a total of approximately $1440.00 per year as compared with the greater amounts which had been deducted by the company for workers’ compensation premiums. An occupational accident policy does not provide as broad coverage as a workers’ compensation policy; for instance, it does not cover occupational diseases or illnesses. As a result of these substantial differences in coverage and benefits provided, occupational hazard policies are less expensive to obtain than workers’ compensation policies. 17. Before signing the lease agreements, each lease operator knew and understood that Central’s leases obligated them to obtain workers’ compensation coverage through the Company. Plaintiffs began to complain about the cost of their workers’ compensation insurance when the rates began to escalate in the late 1980s. 18. Several plaintiffs asked the Company for copies of their workers’ compensation policies but Central never furnished the policies to them. This led plaintiffs to question whether they actually were receiving the workers’ compensation coverage for which they were being charged. However, Central established that plaintiffs were covered for workers’ compensation purposes. In accordance with a practice that went back to the 1979 lease, Central covered all lease operators under its own workers’ compensation policy. For purposes of workers’ compensation coverage, Central Transport treated the lease operators the same as employees. Most of the plaintiffs did not know that their workers’ compensation coverage was through Central’s employee group workers’ compensation policy. 19. Plaintiffs also complained that they did not receive individual workers’ compensation policies which they understood were required under their leases. However, the leases did not require individual policies. 20. The plaintiffs complained that Central had charged them too much for the workers’ compensation coverage. Plaintiffs paid for their workers’ compensation insurance in accordance with a long-standing, well-published formula that was used to calculate their premiums. The formula appeared in Central’s 1979, 1981, and 1984 leases. See Paragraph 11 of A. Smith Exhibits 1 and 2; also see Paragraph 10 of A. Smith Exhibit 3. The formula also was set out in memos issued by Hezzie Hodges, the Company’s Vice President of Finance, dated December 2, 1985 (Joint Exhibit 19) and February 25, 1988 (Joint Exhibit 20). These memos together with another January 9, 1990, memo from Hodges (Joint Exhibit 21) informed all lease operators of the modified state rates which were used by Central to calculate their workers’ compensation premiums. Central consistently used the same formula to calculate workers’ compensation premiums until the requirement was ended in March, 1991. The formula had been given to Central by Liberty Mutual Insurance Company, the Company’s workers’ compensation carrier. There is no evidence that Central ever deviated from the formula or that plaintiffs’ workers’ compensation premiums were calculated in any manner other than that communicated by the Company to its lease operators. 21. The formula for computing the workers’ compensation premium was GROSS PAY x .3333 X STATE RATE = PREMIUM Joint Exhibit 19. The “state rates” are actually modified state rates as contained in the insurance policy. The modification factor was based on the company’s claims experience. None of the rates differentiated between company drivers and lease operators. 22. At trial, plaintiffs introduced statistical data to support the allegation that their workers’ compensation premiums “subsidized” Central’s workers’ compensation expenses for its employees. See Joint Exhibit 37. The company-wide workers’ compensation premium for 1988 company-wide was $1,297,088.00, and of that amount lease operators paid a total of $341,682.00 or 26% of the total cost of the workers’ compensation insurance premium company-wide. During 1989, the total amount paid by the company for workers’ compensation insurance coverage for all employees, including lease, operators, was $1,085,508.00. Of that amount, the lease operators paid the sum of $342,187.00 or 31% of the total cost. During 1990, the total amount paid by the company for workers’ compensation for all employees, including lease operators, was $1,342,373.00, of which the lease operators paid the sum of $493,-311.00, representing a total of thirty-seven percent (37%) of the total company premium. During this same period the company had between six and seven hundred (600-700) employees, including company drivers and, in addition, had contracts with one hundred fifty (150) lease operators, representing less than twenty percent (20%) of the total company work force. 23. Central’s workers’ compensation policy was entitled “Workers Compensation and Employers Liability Policy.” Joint Exhibit 22. Along with workers’ compensation insurance the standard policy also provided for “Employers Liability Insurance.” Id. Item 3B. Under Central’s leases with the lease operators, the company is required to provide liability insurance at no cost. See para. 8 of the 1987 lease. A. Smith Exhibit 6. Overhead Allocation Charges 24. In the leases effective July 1, 1987, Central included a $200 per pay period overhead allocation charge. For example, see Garbrough Joint Exhibit 1, Paragraph 22(a). This charge remained in effect in Central’s June, 1989 leases. Garbrough Exhibit 2, Paragraph 22(b). Through a lease amendment in November, 1990, the charge was increased to $260 per pay period. Garb-rough Exhibit 4. The overhead allocation charge was eliminated from Central’s leases effective March 1, 1991. Garbrough Exhibit 5. 25. In June 1987, Central notified all of its lease operators that the overhead allocation would become a part of its leases effective July 1,1987. In a memorandum of June 16,1987, Company President Gary Honbarrier stated: “The overhead allocation is exactly what the term implies, a nominal charge to absorb a portion of overhead costs such as: * liability insurance * waste treatment * improved tank cleaning facilities * sales and customer relations expenses * general administrative expenses These and other related costs are all part of the business expenses associated with keeping trailers on the road and in good operating [condition].” Joint Exhibit 15. 26. After they received the Honbarrier memo, the lease operators were given new leases to consider and execute. Every plaintiff who was leasing with Central in June, 1987 agreed that they knew and understood the overhead allocation requirement before they signed their July, 1987 leases. This was also true for the 1989 leases. Although they never liked the overhead allocation charge, plaintiffs continued to lease with Central. 27. The overhead allocation was deducted from the pay of the lease operators if they worked as few as one (1) day during a week. The proceeds of the overhead allocation were used to defray the costs of the Company’s overhead, including such things as office supplies and equipment, sales, travel and entertainment. The overhead allocation was also used for capital expenditures of the Company in construction of tank cleaning, tank wash, and waste treatment facilities. 28. Prior to increasing the overhead allocation in November, 1990, Central again sent a written notice to all lease operators. Joint Exhibit 16. The Company then forwarded the lease amendment to the owner operators for their review and execution. Joint Exhibit 17.0. Central provided the lease operators with ample notice about the change in the overhead allocation charge before they were asked to sign the lease amendment including the increase charge. 29. Similarly, lease operators were given advance notice when the Company decided to eliminate the $260 per pay period charge. By memo dated February 4, 1991, Central presented the lease operators with a new lease which became effective March 1, 1991. Joint Exhibit 18. The memorandum highlighted the changes in the lease agreement, including the changes in workers’ compensation, overhead allocation and the driver pay formula. 30. In their complaint, Jacobs and Williams alleged that Central had charged them “with an overhead allocation which was never explained to them” and which “included such items as a regular charge for tank washing, a service seldom, if ever, performed”. See Jacobs complaint, paragraph 8g. However, the Honbarrier memo, which Jacobs and Williams both acknowledged receiving, explained that the overhead allocation charge was to be used to defer general operating expenses of the Company. Joint Exhibit 15. 31. The Garbrough plaintiffs alleged that Central “repeatedly overcharged” them for “overhead”. See Paragraph 16 of the Garb-rough amended complaint. However, plaintiffs failed to introduce any evidence to establish that they were charged more than the amounts specified in their leases. 32. Plaintiffs have objected to the overhead allocations charges on several different grounds. Some plaintiffs, such as Williams, contended that they should not have been required to pay overhead allocation charges because they hauled primarily DMT, which required dedicated equipment and no tank washing. However, trailer cleaning was but one of many different elements of Central’s general overhead expenses, and the Company never made any representation to plaintiffs that the overhead allocation charges were being implemented solely or primarily to cover the cost of tank cleaning services provided by Central. Joint Exhibit 15. Further, the fact that some Central customers were charged for tank cleaning and waste treatment services has no effect on the validity of Central’s overhead allocation charges. 3B. Plaintiffs contended that the overhead allocation charges served to reduce their net portion of the freight revenues billed and collected for the trips which they made. Although this may be true, plaintiffs’ leases requiring the overhead allocation charges made it clear that the charges would be deducted from the percentage of freight revenues retained by them. The plaintiffs were on notice that the overhead allocation charge would be used to defray a portion of the Company’s normal operating costs, including tank cleaning expenses. Inadequate Pay Documentation 34. Lease operators, upon assignment of a load, received a delivery receipt from Central. Joint Exhibit 2, page 3. The operator filled out certain information on the delivery receipt at the time the load was picked up and later when it was delivered. After completion of the delivery, the lease operator gave one copy of the delivery receipt to the consignee, kept a copy, and returned the remaining copies to the Company. The information completed by the lease operator included notations of any assessorial charges for services rendered by the operator. However, the actual charge to the customer was not shown on the lease operator’s copy. During the late 1980s and early 1990s the delivery receipts retained by the lease operators also did not include the actual shipping charges for the loads delivered by the operator. 35. Lease operators received bi-weekly settlement statements from Central. Upon settlement, plaintiff lease operators would receive their paychecks, their pay stubs, and Driver Pay from Waybill sheets. Sometimes lease operators would receive a yellow sheet reflecting changes in pay as a result of billing changes or errors. For Example, see Sharp Exhibit 7 and 8. The lease operator would also receive a fuel ticket and a slip showing fuel calculations for any fuel purchases made through the Company. 36. The Driver Pay from Waybill sheet detailed each trip made by the lease operator and the total pay received for that trip. Joint Exhibit 2, page 1. If the freight charges were calculated on a rate per hundredweight basis, the Driver Pay from Waybill sheet also contained the freight weight and other information showing the calculation of the driver’s share of freight revenues. If the freight charges were calculated in any other way, the driver’s pay was shown as a Code 20 charge on the Driver Pay from Waybill sheet. 37. According to the leases, '.he company was to share with the lease operators a percentage of the revenue billed to the customer. The specific rates were not listed on their paysheets unless the load in question involved freight measured in cents per hundredweight. However, the majority of freight which the plaintiffs hauled during the period in dispute were “Code 20” loads for which the rate information was not shown on the paysheet. 38. The Code 20 description is a special commodity rate (based on a mathematical equation) and is used whenever a load’s line-haul charges are not expressed in dollars and cents per hundredweight. Joint Exhibit 7. The “Code 20” rates were, in part, a function of contracts with private customers of Central Transport. Some of the agreements prohibited information from being shared with third-parties, including lease operators. In the case of Code 20 charges, the total freight amount billed to the customer, although not shown on the face of the Driver Pay from Waybill sheet, could be calculated, with considerable difficulty, by dividing the driver’s pay by the applicable pay percentage and any assessorial charges by the applicable percentage. As to Code 20’s, the Driver Pay from Waybill sheets did not contain enough information for the lease operator to calculate pay. 39. Plaintiffs’ leases included a provision dealing with the pay documentation they were to receive from Central. As an example, the June, 1989 lease contained the following paragraph covering driver pay documentation: “The CARRIER will furnish to the CONTRACTOR before, or at the time of settlement, the necessary information to calculate the CONTRACTOR’S payroll. CARRIER will also make available during normal business hours at the office of the CARRIER at High Point, North Carolina, the CARRIER’S tariffs for inspection by the CONTRACTOR.” Garbrough Exhibit 3, page 6. This provision was mandated by applicable ICC regulations governing the relationship between Central and its lease operators. 49 C.F.R. § 1057.12(g). 40. By 1988, all rating and billing had been transferred to High Point. Central had a high volume of contracts and tariffs. Negotiated contracts became more prevalent after deregulation in 1980. Fifty percent of Central’s business became based on Code 20 rates. The terminal managers didn’t have the training to rate the bills. Despite this, in February 1988, Central informed the lease operators not to call High Point about rate and payroll, but get this information from the terminal managers. Joint Exhibit 9. When lease operators directed their rate inquiries to the terminal managers, as they were instructed, in most cases the terminal managers could not provide the information necessary to determine how pay was computed and were not able to compute the information themselves. 41. Because of the competitive market, volatile rates, and confidentiality agreements, it was impossible for Central to provide rate information to lease operators before they drove a load. 42. The Plaintiffs regularly asked in advance of hauling for rate information on shipments which they hauled, and generally the rate information was not provided. In addition, the lease operators would regularly seek rate information subsequent to receiving their settlement sheets or Driver Pay from Waybill sheets along with their paychecks and could not get adequate explanations in most cases as to how rates were calculated. Central did not furnish rated freight bills or tariffs for Code 20 loads. Without the information billed to a customer, the lease operators couldn’t determine if their pay was correct. Prior to filing the lawsuit, satisfactory responses to questions about pay could not be obtained by the plaintiffs. In fact, on many occasions when asked, Company officials either refused to supply the information or did not have the expertise to assist the lease operators in determining how their pay was calculated. 43. Central’s pay system was very complicated, and individual pay calculations were difficult, particularly those involving fuel surcharges. The intricacies in Central’s pay system resulted not only from the complexity of the rates themselves, but also from a fundamental decision made by the Company in the early 1980s. At that time Central and other motor carriers regulated by the ICC were instructed by the Commission to roll all fuel surcharges into their freight rates or lose the charges. The ICC then further complicated pay calculations by mandating that lease operators receive a minimum of twelve cents per mile if the freight rates contained rolled-in fuel surcharges. 44. Many of Central’s competitors simply rolled the fuel surcharges into their rates and maintained the same pay percentage arrangement which was in effect before the roll-in took place. The result of this practice was to lower the overall revenues paid to the lease operators. Unlike its competitors, Central decided to insure that its lease operators received the same amount of revenue before and after the fuel surcharges were rolled into the Company’s rates. This necessitated tracking the rolled-in fuel surcharge which became known as the “internal fuel surcharge.” The tracking process and the calculations it required led to a complete revision of the driver pay formula which first appeared in the Company’s 1984 leases. As noted above, that complicated formula was retained in the June, 1987 lease but was eventually abandoned for a simpler mathematical expression that was used in the Company’s June, 1989 lease. Joint Exhibit 1. 45. Driver pay became even more complicated in 1989-1990 when the ICC once again authorized the imposition of new fuel surcharges. Because Central was already tracking the rolled-in portion of the earlier fuel surcharges — the internal fuel surcharges — the Company then had to account for and pay to its lease operators the full amounts of these new “external” fuel surcharges authorized by the Commission. Central did exactly that, paying its lease operators both the internal and external fuel surcharges as well as their percentage of the freight charges to the customer. The driver’s portion of the freight revenue and the fuel surcharges (internal and external) were shown on the Driver Pay from Waybill sheets given to plaintiffs and other lease operators at the time of their weekly settlement. See Joint Exhibit 2, page 1, first transaction. 46. Even for a Code 20, Central would have to calculate freight revenue before the lease operator was paid. So when Central generated the Driver Pay From Waybills, Central knew the freight revenue and could have shown this on the Driver Pay from Waybill sheet. Instead, Central treated freight revenue as assessorial pay because Central (1) wanted to preserve the secrecy of its rate structure and (2) didn’t want to reprogram its computer to show these computations. 47. The documentation provided by the company did not contain sufficient information to allow plaintiffs to determine how their pay was calculated for each pay period, particularly as to Code 20 loads. 48. After August 1992, Central provided the lease operators with waybill information from which they could calculate their pay. Improper Pay 49. The plaintiffs testified that during their tenure with the company various charges for services rendered to customers, assessorial charges such as demurrage and pump charges, were to be shared with them. While the Company prepared a worksheet, “Driver Pay Seales,” showing various codes for various such charges, prior to viewing same as Joint Exhibit 6, the lease operators had never seen this document before. Similarly, the lease operators did not know if all such service charges which they incurred were in fact billed or collected. Assessorial pay represents pay for other services for which the company received extra fees. There were some assessorial charges which the drivers did not have a right to share. 50. Plaintiffs have alleged that Central did not accurately compute their pay and did not share with them all of the freight revenues to which they were entitled under their leases. Specifically, the Garbrough plaintiffs alleged that Central “failed to collect, account for and remit [to them] ... the full amount of monies due them as a percentage of the actual amount billed to and collected by Central from its customers.” Garbrough Complaint, paragraphs 13 and 21. The Jacobs plaintiffs made similar assertions in their complaint (Jacobs Complaint, paragraph 9) and went even further by alleging that Central had deliberately “ ‘skimmed’ from tariff and contract rates charged, a portion thereof.” Jacobs Complaint, paragraph 13. Indeed, the Jacobs plaintiffs alleged that they had been underpaid “by as much as $200.00 to $400.00 per shipment, or more than $5,000.00 per month throughout the time each of them performed under the contracts with the defendant.” Id. Finally, both groups of plaintiffs specifically alleged that Central “maintained multiple sets of records to prevent access to information relevant to its billing, payments and compensation of its drivers.” Garbrough Complaint, paragraph 9(h) and 2(h); Jacobs Complaint, paragraph 8(k). None of these allegations was substantiated by the evidence presented to the Court. 51. In order to simplify the discovery process on these claims and to minimize that expense, the parties agreed to an independent audit of the Company’s pay records and other relevant documentation. The parties engaged the accounting firm of Royster, Smith, Shelton & Company, of Winston-Salem, North Carolina. Plaintiffs and defendant stipulated to the scope of the audit of Central’s records, which was reflected in a letter from the auditor to counsel for the parties dated December 15, 1993. Joint Exhibit 12. 52. The audit consisted of a detailed review of one hundred (100) randomly sampled transactions involving all of the plaintiffs. The auditors examined Central’s shipping records, driver pay documentation, applicable contracts or tariffs and many other records to determine the accuracy of the pay received by the plaintiffs. Additionally, the auditors selected ten (10) more items which were traced through Central’s system from the point of shipment through customer payment. Joint Exhibit 12, page 2. The overall purpose of the audit was to determine whether in fact plaintiffs had been paid correctly by Central and also whether the Company had engaged in the systematic shorting of plaintiffs’ pay. 53. The audit was conducted during January and February 1994, and the auditors submitted a written report summarizing their findings. Joint Exhibit 13. Those findings are set out in a series of exhibits attached to the written report. Id. The pertinent findings of the auditors were: (1) despite the complexity of the transactions sampled, Central had paid its lease operators correctly for the work they performed; (2) a few minor discrepancies were discovered, principally involving assessorial charges paid to the lease operators; (3) as a group, plaintiffs were actually paid more than they were entitled to receive under their leases; in other words, the Company’s pay errors, although relatively small, tended to be in favor of the plaintiffs; and (4) no evidence was discovered of the systematic underpayments, shortages, and dual sets of records alleged by the plaintiffs. The overall audit results confirmed that plaintiffs had been paid properly in accordance with their lease agreements. 54. Additionally, the auditors reported no incidences in which Central had written off or reduced freight or assessorial charges as claimed by the plaintiffs. In fact, one of the four shortages cited by the auditors did not actually constitute a contractual violation by Central. During their random sampling the auditors identified a shipment from Nitro, West Virginia, to Dalton, Georgia, made by plaintiff Herman Sharp on September 21, 1989. After reviewing the applicable contract under which the freight had moved, the auditors determined that a different rate should have applied to the shipment. Using the correct freight rate, the shipment would have paid Sharp an additional $16.61. Joint Exhibit 13, Exhibit II. However, the audit also determined that Central had correctly shared with Sharp the revenues billed to and collected from its customer for this load which is all that the Company was required to do under its lease. Id. 55. The only other errors identified by the auditors involved three loads handled by plaintiff Howard Jacobs. Joint Exhibit 13, Exhibit II. In each instance, Central had paid him 62% rather than 100% of the pumping charges to the customer. The Company’s records reflected that Central owned the pump; however, Jacobs owned the pump and never used one provided by the Company. 56. Although the total underpayments to plaintiffs were $35.34, the overpayments they received from Central amounted to $381.71. Joint Exhibit 13, Exhibit III. The audit itself was designed to achieve a 95% confidence level, thereby insuring that the random sample accurately reflected the population from which it was drawn — all trips made by plaintiffs during the period from January 1, 1989, through December 31, 1992. Thus, the audit demonstrated that plaintiffs had received the pay to which they were entitled under their leases. Fuel Surcharge Recoupments 57. Revenues payable to the drivers were adjusted to reflect the fuel surcharges allowed by the Interstate Commerce Commission and the various governing bodies of the various states in which Central operated. However, no single governing body controlled all of Central’s rates and charges in that it operated on both an interstate and an intrastate basis. Pursuant to both federal and state laws and regulations, the company was required to pay lease operators additional revenues attributable to fuel surcharges which were authorized from time-to-time by state and federal government agencies. 58. Plaintiffs asserted that Central improperly deducted fuel surcharge overpay-ments from their earnings. In August 1986, Central found out that it had overpaid lease operators for fuel surcharges on certain Code 20 loads and immediately corrected the mistake. Lease operators were notified of the error, but Central did not make any effort to recover the overpayments. Joint Exhibit 25. 59. In September, 1990, Central realized that another mistake had been made with respect to fuel surcharge payments for certain Code 20 loads. The error had occurred over an eighteen-month period and resulted in significant overpayments to many of its lease operators. The overpayments to each of the plaintiffs are summarized in Joint Exhibit 26. 60. After discovering the error, Central notified each lease operator about the mistake and presented them with computerized summaries and as well as a corrected Driver Pay from Waybill sheet for each trip for which there had been an overpayment. See Joint Exhibit 26, pages 2-4 and 5-7. These documents were hand-delivered to each lease operator by their terminal managers. All lease operators were informed that the Company would recoup the overpayments in equal installments over the next eighteen months. Central documented each deduction, itemizing them on the Driver Pay from Waybill sheets delivered to the lease operators with their settlement statements. For example, see Burden Exhibits 19 and 20. 61. No company customers had been ov-erbilled for these fuel surcharges. Central simply had paid its lease operators twice for these fuel surcharges. 62. Although there was no express provision in plaintiffs’ leases addressing the fuel surcharge recoupments, the leases did specify what monies were to be paid to the lease operators. None of the leases authorized plaintiffs to receive and retain duplicate fuel surcharge payments. Indeed, with one or two exceptions, each plaintiff admitted at trial that Central was entitled to recover any duplicate fuel surcharge payments which had been made to them. Plaintiffs’ only caveat was that the Company provide them with proof that the overpayments had occurred. Central did that in September, 1990, giving the plaintiffs detailed documentation identifying every fuel surcharge overpayment which they had received. Joint Exhibit 2. 63. Plaintiffs also complained that some lease operators did not have to repay the full amount of the fuel surcharge overpayments they received because Central had imposed a $3,000.00 cap on all such recoveries. Central put a cap on the recoupments to ease the financial impact on the lease operators. Further, Central made no secret of the existence of the cap, and all of the plaintiffs were aware of it at the time. Further, to the extent that Central decided to forego recovery of any portion of the fuel surcharge overpayments to the plaintiffs and other lease operators, it was the Company’s right to do so. Escrow Account Deductions 64. At trial, several plaintiffs maintained that defendant had made unauthorized deductions from their escrow accounts in violation of the leases and ICC regulations. Fuel surcharge overpayments were withheld from the escrow accounts of Randal J. Adams, Ronald B. Hahn, Paul E. Hilliker, Cecil W. Pickett, Larry C. Rieherson and John W. Smith when they left Central. Joint Exhibit 36. Also, plaintiff Giles Fisher asserted that Central had deducted approximately $2,000.00 from his escrow account for damages to the Company’s equipment and deductions for unpaid workers’ compensation premiums and overhead allocation. 65. These plaintiffs did not authorize Central to deduct fuel surcharge overpay-ments from their escrow accounts. Nothing in their leases specifically authorized the company to make the deductions, nor did the plaintiffs consent to the deductions. Adams, Hahn, Pickett, and Rieherson received refunds of these escrow funds after they complained. Id. 66. Neither the Garbrough nor Jacobs complaints made any reference to unauthorized deductions to their escrow accounts. Similarly, plaintiffs failed to identify Central’s escrow account practices among those challenged in their lawsuits. Joint Exhibit 42. Central objected to the introduction of any evidence relating to these claims on the ground that they had not been the subject of any prior pleading by the plaintiffs. The court overrules these objections, as these claims are fairly raised by the pleadings governing their pay concerns and the pre-trial order. 67. Plaintiffs’ initial leases with Central established a $1,000.00 escrow account through payroll deductions. Garbrough Exhibit 1, Paragraph 14. Eventually, the escrow requirement was increased to $1,500.00. Garbrough Exhibit 4, Paragraph 14. None of the leases provided a comprehensive list of permissible deductions from their escrow accounts. But escrow account deductions were expressly authorized to cover the cost of permits and insignia identifications as well as physical damage to Central’s trailers. Garb-rough Exhibit 1, paragraphs 14 and 15. 68. Defendant produced documentation regarding its escrow account deductions for fuel surcharge overpayments. Joint Exhibit 36. Only two plaintiffs, Paul Hilliker ($506.16) and John Smith ($310.53), had un-refunded deductions made from their escrow accounts for fuel surcharge overpayments. Both plaintiffs conceded at trial that Central was entitled to recover from them the full amount of any fuel surcharge overpayments which they had received. 69. Giles Fisher had a rollover accident, damaging his tractor and Central’s trailer. Central cancelled Fisher’s lease because of the accident and DOT log violations. 70. Fisher’s lease expressly authorized Central to deduct up to $1,000.00 from his escrow account for unreimbursed physical damage to Central’s equipment. Fisher Exhibit 2, paragraph 15. Central prepared a written explanation of its deductions from Fisher’s escrow account. Fisher Exhibit 3, page 3. However, Central did not provide this to Fisher prior to making the deductions, as required by the lease. Fisher Exhibit 2 paragraph 15. Furthermore, the written explanation was not sufficiently detailed to clearly describe the deduction. Id.; see also, 49 C.F.R. 1057.12(k)(3)(i). The statement only reflects a $1,000 deduction as “Max deduction for Damages to our equipment.” The statement contains no itemization of physical damage to the trailer. The statement focuses only on wrecker costs: “Per our Contract we can deduct 100% of Wrecker Cost, plus cost to move our equipment to a safe location. Wrecker Bill was $7000.00 + .” Id. The lease had no provision providing for the recoupment of wrecker cost from the escrow account. License Tag Overcharges 71. All of Central’s leases contained a requirement that the lease operator provide his/her own license plates. The leases also included the following provision: “If such license plates are procured by the CARRIER for the CONTRACTOR, the CONTRACTOR will reimburse the CARRIER for such expenditures at the CARRIER’S actual cost.” (Emphasis added.) See Garbrough Exhibit 1, paragraph 5(a); Garbrough Exhibit 2, paragraph 5(a); Garbrough Exhibit 4, paragraph 5(a). Almost all the plaintiffs exercised their option to purchase their license plates through Central, partly because it was more convenient for them and also because Central advanced the cost of the plates which it then recovered in three installment payments. 72. Several plaintiffs contended that they had been overcharged by Central for the license tags they had purchased through the Company. After cancelling their leases with Central they bought their own tags while working for other motor carriers, and the cost of those tags was less than they had paid to Central. 73. Central’s costs for the license tags bought for the lease operators were passed on to the plaintiffs exactly as specified in their leases. Central took the total cost of all of the tags for lease operators and company drivers and divided it by the number of tags to arrive at the cost per tractor. Joint Exhibit 27 documents the actual costs incurred by Central for license plates purchased from 1988 through 1992. 74. However, in 1988 Central inadvertently made a fourth installment deduction for license tags which was subsequently refunded to plaintiffs and other lease operators for whom the Company had purchased license tags. However, the refund was not reflected on the end-of-year settlement state-merits received by the lease operators. Compare Joint Exhibit 27, page 1 with Raf-faldt Exhibit 7, page 2. 75. Plaintiffs also argued that Central’s cost for license tags was higher than the cost with other carriers for whom they worked. However, the cost of an apportioned license tag, such as those purchased by Central, varied from carrier to carrier, depending upon the miles which the carrier (and its drivers) ran in a given state. IRS Form 1099 76. Central did not provide amended IRS form 1099 to the any of the plaintiffs in regard to fuel surcharge overpayment re-coupments. As the lease operators were cash basis tax payers, Central was not required to submit amended 1099 forms whenever the Company made adjustments to their pay. Individual Pay Claims Albert Smith 77. Smith claimed that he should have received straight demurrage pay for a total of ninety-six (96) hours on a trip he made from Conroe, Texas, to Carteret, New Jersey, and eventually on to Mt. Vernon, Indiana. See A. Smith Exhibit 18. A Company dispatcher had told Smith that as the trip would be unusual, he would receive straight demurrage pay rather than a combination of layover and demurrage pay while he was at a customer’s plant in Carteret. Smith was paid $324.00 in layover pay (Code 12) and $504.00 in demurrage pay (Code 21) for the trip. A. Smith Exhibit, page 2. 78. Smith contended that he was entitled to receive straight demurrage pay for all time spent in Carteret (1) because it had been promised to him by the Company’s dispatcher and (2) because he had to remain near the customer’s loading/unloading site until the load was cleared for departure. Central’s tariff authorized demurrage pay when the lease operator was in “immediate readiness to perform his duties” during the time of the layover. A. Smith Exhibit 35, p. 7. “[Ijmmediate readiness” required the driver to be standing by his unit waiting to actively participate in the ongoing process of loading or unloading the trailer. Id. Smith slept, took meals, fueled his tractor, and otherwise relaxed during the three days he waited to depart from Carteret. Smith was not in “immediate readiness” to perform his duties during the layover. 79. Smith also questions his pay for a 9/14/90 trip from Nitro, W. Va., to Fresno, California, Waybill # 725 (A. Smith Exhibit 21). He compares this with earlier trips taken by Giles Fisher on March 1, 1990, Waybill #499 (A. Smith Exhibit 22), on December 7, 1990, Waybill #432 (A. Smith Exhibit 23) and two trips taken by Ronald Hahn on February 7, 1990 (A. Smith Exhibit 24) and May 25, 1990, Waybill #638 (Smith Exhibit 25). Smith actually received more for his trips than the other operators. Although the freight rate and weight were the same for all loads, each driver reported different miles. More significantly, Smith received a $260.23 external fuel surcharge that was not in effect for the other trips. 80. Smith also questions whether he was paid for his mileage, unloaded, from Fresno to Houston after he unloaded in Fresno. Waybill #725 doesn’t show any unloaded miles. The lease operators were not normally paid for unloaded miles. Deborah and Kendall Goodman 81. The Goodmans are former lease operators with Central. They drove together as a team for Central from November, 1983, until June, 1994, when they sold their tractor. Eighty-five to ninety percent (85%-90%) of their loads were Code 20. Central employed the Goodmans as Company drivers in July, 1994. 82. The Goodmans raised several pay concerns. They asserted that their pay was shorted by $211.40 on a load they had handled on November 20, 1991, from Fayette-ville, North Carolina, to Jamestown, New York. The Goodmans introduced a copy of a Borden, Inc., form relating to the shipment. Goodman Exhibit 11, page 1. According to the Goodmans, the freight rate and pump charge shown on the Borden document did not conform to the information on their Driver Pay from Waybill sheet. Goodman Exhibit 11, page 2. 83. The Company’s waybill inquiry form showed a pump charge (Code 16) of $19.00 to Borden, not the $8.00 shown on the Borden record. K. Goodman Exhibit 14, page 6. The Goodmans received the full amount of that pump charge. Id., page 1. Central’s contract with Borden also reflected a shipping rate of $1.85, not the $3.61 rate shown on the Borden document. Id., page 8. The Goodmans were paid $712.76 for this load, which was the correct pay under their lease agreement (.64 x $1,113.70). Id., pages 1 and 6. More importantly, the Borden document was a customer acknowledgement form, not a bill of lading, and it did not control Central’s freight charges to Borden. 84. The Goodmans also contended that they were entitled to receive straight demur-rage pay for a Conroe to Carteret to Mt. Vernon load which they handled on March 6-10, 1989. D. Goodman Exhibit 24, page 1. Central dispatcher Scott Gross had told them they would receive straight demurrage for all of the time they spent in Carteret. Instead, they earned a combination of demurrage (Codes 21 and 22) and layover (Code 12, weekend demurrage) pay. The Goodmans claimed that they should have received straight demurrage for the seventy-two (72) hours they spent in Carteret at the rate of $18 to $22 per hour. 85. The Goodmans stayed with their truck at the customer’s terminal for three (3) days. Gross specifically instructed the Good-mans to be available at the shipper’s plant to load when the customer was ready. Despite the fact that the Goodmans were required to remain at the customer’s premises, available to load, for approximately seventy-two (72) hours, they were not paid straight demur-rage. 86. Demurrage was billed on both legs of the trip, Goodman Exhibit 24, unloading demurrage on the first leg (Waybill # 780) and loading plus overnight (code 12) on the second leg (Waybill # 790). The shipper was billed according to Tariff 6001780, see Goodman Exhibit 24, page 2, and A. Smith Exhibit 35, pages 6-8. The tariff authorized demurrage pay when the lease operator was in “immediate readiness to perform his duties” during the time of the layover. A. Smith Exhibit 35, page 7. Central billed the shipper for 16 hours unloading demur-rage of $480.00, the Goodmans’ 62% being $297.60. Central erroneously billed the shipper on the second leg (790) for layover at the rate for a single operator, $360, lease operator share, $223.20. Goodman Exhibit 24, pages 3-4. Central also reduced the demur-rage to 9 hours and weekend layover, Goodman Exhibit 24, pages 4, 5-7, reducing the demurrage from $480 to $270, the drivers’ 62% being $167.40, and increasing the layover from $360 to $670, the drivers’ share $415.40. Goodman Exhibit 24, pages 5 and 7. 87. Central failed to comply with the tariff by failing to bill the shipper for detention rather than overnight and weekend layover. The drivers were required to stand by at the shipper’s plant in “immediate readiness” to perform their duties. A. Smith Exhibit 35, page 7. Thus, the detention provisions of the tariff would apply rather than the overnight and weekend layover provisions. Note B, Item 672, Tariff, A. Smith Exhibit 35, page 7. However, Central paid the Good-mans based on its billing to the customer. This complied with the lease. 88. The Goodmans claim entitlement to receive “out of route” mileage pay for 13 trips they had made hauling duPont loads between Old Hickory, Tennessee, and Charleston, South Carolina. Goodman Exhibit 13. On May 24,1993, after this lawsuit was filed, the Goodmans submitted a Non Revenue Pay Report for extra mileage incurred because of a bridge closure. See Goodman Exhibit 13. A “Non Revenue Pay Report” is used any time a driver is paid for something that a customer is not billed for, such as extra miles for having to go out of route. Joint Exhibit 4. Although the terminal manager approved the submission, High Point did not. The leases do not provide for non-revenue pay. Central had not billed or collected this additional pay from its customer. Central’s terminal managers could only make recommendations regarding non-revenue pay items. High Point retained the final authority to grant or deny non-revenue pay requests. The Goodmans are not entitled to the non-revenue pay. 89. Finally, the Goodmans claimed that they were entitled to additional pay resulting from alleged fuel surcharge underpayments that had occurred beginning in August, 1986 on Dupont loads hauled by the Goodmans from Old Hickory, Tennessee. D. Goodman Exhibit 14. Plaintiffs maintained that there was a shortage of $131.28 on each of eighty-five (85) loads itemized on their Driver Pay from Waybill sheets. Id. In support, they show that prior to August, 1986, their Driver Pay from Waybills reflected a fuel surcharge of $131.28 and pay percents of 62%. See Goodman Exhibit 14, pages 1 and 2. The Goodmans contend that after August 1986, the Driver Pay from Waybills still reflected pay at 62%, but no pay for fuel surcharges. See Goodman Exhibit 14, pages 4-22. Code 20 loads became more prevalent in 1986. Around August 26, 1986, the Good-mans received a copy of a memo from Ben Keller concerning Code 20 charges. Goodman Exhibit 15. This memo was sent to all lease operators. The memo stated that more loads were being billed as “Code 20 rather than a weight and rate,” that “your pay was increased from 60% (62%) to 66.11 (67.8% for a team) on a Code 20 charge ... to compensate for the internal fuel surcharge not applying on that code ...,” that in error the lease operators had been overpaid the mileage surcharge of 12 cents/mile and that while Central would not be recouping the overpay-ments, the error would be corrected immediately. Id. 90. The Code 20 pay had the fuel surcharge built into it; thus the pay had an internal fuel surcharge. The mileage fuel surcharge of 131.28 at 12 cents/mile was paid in error. The Goodmans were actually paid on these loads at the correct rate of .678. The Driver Pay from Waybills merely reflected the lease-stated percentage of 62%. See Goodman Exhibit 14, page 16, Goodman Exhibit 19, p. 50. However, 62% of driver revenue equaled 67.8% of freight billed to and collected from the customer. 91. The Goodmans also complained that in 1991, although their rate increased to 64%, they actually received less pay. See Goodman Exhibits 14, 22. However, while the pay percentage on the Driver Pay from Waybills increased to 64% to reflect the lease percentage, See Goodman Exhibit 7, this actually reflected a decrease in the actual percentage. Under the February 1991 lease, the drivers were paid a straight percentage ■without additions. Thus, the lease rate and the effective rate were the same, 64%. The Goodmans were paid correctly under the lease. Goodman Exhibit 19, p. 87. 92. The Goodmans question Waybills # 601 and # 854, two Carrollton to Gurnee trips which paid differently for the same load. Waybill # 601 was a trip on 11/12/90 which produced a pay amount of $548.90. Goodman Exhibit 16, p. 1. The same trip on 3/11/90, Waybill #584, produced a pay amount of $518.14, although at an increased waybill percent of 64%. 93. The pay is correct. Waybill #601 was calculated at 67.8%, see Goodman Exhibit 20, p. 1 & Exhibit 6, while Waybill # 584 was actually billed at the lower percentage of 64% in effect on 3/11/91 per the lease of March 1, 1991. Goodman Exhibit 20, page 2 & Exhibits 7 & 23. James Burden 94. James Burden is a current lease operator with Central. He challenges a reduction in his pay for a trip on 9/18/91 from Louisville to Fresno, Waybill # 912. Burden Exhibit 19. Central initially paid Burden $5,024,41 in accordance with what the Louisville terminal manager, Mose Miller, told Burden prior to taking the load. Subsequently, Central rebilled this trip under a Code 20, resulting in a $1,107.87 reduction in Burden’s pay. Burden Exhibit 20, B-27, p. 3. The original rate was based on cents per hundredweight, Burden Exhibit 27, p. 2, and was rebilled based on a Code 20 contract rate that was published the same day the load was picked up. Burden Exhibit 27, pages 1 & 5. Once Central concludes negotiations on a contract rate, the Company has to publish the rate. 95. Burden received the corre