Profit-Share – Contract

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Case Name: Hubert E. Walker et al. v. Trailer Transit, Inc.

Case No.: 15-1482

Officials: POSNER, EASTERBROOK, and WILLIAMS, Circuit Judges

Focus: Profit-Share – Contract

Class of drivers not entitled to profits from profit share arrangement after-the-fact

“Perhaps the Drivers could have argued that the exclusion of “items intended to reimburse [Trailer Transit] for special services” limits this category to items provided at cost. They then would be entitled to 71% of everything else on the bill sent to the shipper. So if Trailer Transit paid someone $1,000 to accompany an over-wide shipment and display a “WIDE LOAD” banner, and billed the shipper $1,250, then the Driver would be entitled to $887.50 for that escort service—and Trailer Transit would lose $637.50 ($1,250 less $1,000 less $887.50 equals -$637.50). But that’s not the argument made in the district court. The Drivers asked for $177.50 (71% of Trailer Transit’s gain of $250) on this item, and their appellate brief is full of similar examples in which they claim 71% of the net. Only in passing (a few sentences in the brief, and one at oral argument) did the Drivers suggest that the use of the word “reimburse” entitles them to 71% of the gross on all special services billed at even a dollar over cost. That’s not enough to preserve the argument—which as this example shows also has little to recommend it. Why would Trailer Transit lock itself into automatic losses on special services?”

Affirmed

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.