By Rip Watson, Senior Reporter This story appears in the Jan. 10 print edition of Transport Topics.
Settlement discussions will continue in an $18.5 million breach of contract dispute between Truck-Rite Distribution Systems Corp. and R+L Carriers Inc., an executive with Truck-Rite said.
Paul Pompa Jr., president of Truck-Rite, New York, told Transport Topics Jan. 5 that talks will take place in the coming weeks. He spoke with TT following a meeting held to discuss settling the case, which is being heard by U.S. District Judge Susan Dlott.
Less-than-truckload carrier R+L in August sued Truck-Rite, which was contracted in 2000 to deliver Wilmington, Ohio-based R+L’s freight in New York City. R+L in its lawsuit asked the court to rule that its move to switch that freight to another carrier last year didn’t violate the terms of the contract.
“We had a good chance to articulate our case,” Pompa said. “We will have some more discussions. I think they were surprised by the merits of our case. It seems like their arrogance has been humbled.”
R+L didn’t return calls requesting comment.
Truck-Rite argued that the contract, which runs until March 2013, is an exclusive agreement. Truck-Rite, which said the deal was generating $5.2 million in revenue, claims it was hurt by a requirement to pay R+L $75,000 a month to lease a terminal.
Pompa, who said he had to lay off 35 workers after the contract was abruptly canceled, vowed to proceed to trial if there is no settlement agreement.
Dlott is considering R+L’s December bid to dismiss the case, based on submitted written evidence.
In that Dec. 8 motion, R+L asserted that “the plain and unambiguous language of the cartage agreement demonstrates that R+L is not required to use Truck-Rite for all of its freight in New York City,” the filing stated.
Page 1 of the contract states the contract was awarded on a non-exclusive basis, R+L’s filing stated, citing cases from 1978, 1989, 1997 and 2003 to buttress its case.
Truck-Rite’s response urged the judge to reject the Ohio fleet’s bid to dismiss the case, arguing that a 1984 ruling by the Sixth Circuit Court, which hears Ohio cases, supports Truck-Rite’s view that the contract was exclusive.
That 1984 case, American Anod-co vs. Reynolds Metals, includes contract language that Truck-Rite claims is virtually identical to its agreement with R+L.
