Market Overview

Leasing Company Sues Trucking Firm For $37 Million, Alleging Breach Of Contract

Leasing Company Sues Trucking Firm For $37 Million, Alleging Breach Of Contract

Arkansas-based PKE Western Truck Leasing, Inc. filed a $37 million lawsuit against Rich Transport, LLC and its parent company, RoadRunner Transportation Systems (NYSE: RRTS), alleging breach of contract on August 7.

According to the lawsuit filed in Pulaski County Circuit Court in Arkansas, PKE alleges it entered into a contract with Rich Transport on January 1, 2019. The terms of the contract stated that PKE would provide sufficient dedicated carriers and tractor capacity to transport a minimum of 350,000 miles per week of goods. 

In turn, the suit claims that Rich was required to pay PKE more than $83,300 per month as a "capacity fee," as well as $1.41 per mile each week.

PKE claims in the suit that its owner, Paul Keith Everett, received a letter from Rich's general counsel on August 3, alleging it failed to "provide the dedicated capacity required by the agreement," which PKE denies. On August 6, Rich advised PKE that it was no longer providing any loads to the company and was terminating the agreement, the lawsuit states.

As of press time, Rich and its parent company, RoadRunner, did not respond to FreightWaves' request for comment regarding the lawsuit.

PKE alleges that Rich did not live up to its end of the contract, which stated that that trucking company and logistics provider could terminate the agreement with a 60-day written notice after December 31, 2019, or give 10 days notice "in the event a party failed to cure a term of the agreement that was alleged to have been breached." 

Because of a non-compete provision in the agreement with Rich, PKE claims its trucks and drivers are unable to work elsewhere, which has caused the leasing company significant financial hardship. The company claims some of its drivers have terminated their employment with PKE because of the loss of loads previously provided by Rich.

PKE seeks more than $37 million, plus punitive damages, pre- and post-judgment interest, costs and attorney's fees.

RoadRunner, which owns Rich Transport, has been working to emerge from a financial scandal after three of its former executives were indicted by federal officials in an alleged accounting and securities fraud case that was discovered in May 2017.

Image Sourced From Pixabay

Posted-In: Freight Freightwaves lawsuit truckingNews Legal Markets General


Related Articles (RRTS)

View Comments and Join the Discussion!