An Orange County plastics company has sued two trucking companies for $6 million for allegedly reneging on a deal to deliver the goods at fixed shipping rates.
Interboro Packaging Corp., Montgomery, accused New Penn Motor Express and YRC Inc. of fraud, in a Dec. 10 complaint filed in U.S. District Court, White Plains.
After agreeing to shipping rates, Interboro claims, the trucking companies “systematically began to assess unjustified and unexplained fees and costs.”
When Interboro objected, the trucking companies allegedly terminated the long-term contract, forcing Interboro to find substitute carriers at substantially higher costs.
“We do not comment on matters in litigation, New Penn”™s and YRC”™s attorney, Thomas C. Martin, said in response to an email asking for his clients’ side of the story.
New Penn and YRC are subsidiaries of Yellow Corp., of Overland Park, Kansas. They specialize in LTL shipments ”“ Less Than truckLoad ”“ where loads are consolidated from several customers for next-day delivery in the Northeast and Mid-Atlantic and 48 hours beyond the region.
Interboro is a wholesaler of plastic bags such as trash can liners, garment bags and pallet wrap, as well as disposable gloves and aprons, that are shipped from its 85,000-square-foot warehouse.
Interboro claims it has a “time-honored reputation for providing customers with on-time delivery and high-quality disposable products at low and cost-effective prices.”
Much of its business is based on government contracts that require competitive bidding, according to the complaint, so the company stresses fixed shipping rates and quick delivery when it negotiates trucking contracts.
New Penn and YRC solicited Interboro”™s business, the complaint states, and Interboro made it clear that its business model “required long-term relationships with common carriers to provide for the fixed costs necessary to maintain profitability.”
It required “clean” bills unencumbered by contrived surcharges, such as fees for security checkpoints, school zones, loading docks, redeliveries and fuel surcharges.
The truckers agreed to the terms, according to Interboro, but after receiving significant business they began to assess unexplained fees.
Interboro objected and the truckers allegedly terminated the long-term contract in March 2018.
New Penn sued Interboro in Orange County Supreme Court in 2019, claiming that it was owed $6,220. Interboro filed counter-claims. Last year, Justice Catherine M. Bartlett dismissed both actions on procedural grounds.
Now Interboro is accusing New Penn and YRC of breach of contract, fraud and misrepresentation, and conversion and loss of shipments, in a complaint filed Oct. 10 in Orange County Supreme Court. It asked for $1 million in compensation and $5 million in punitive damages.
New Penn and YRC moved the case to federal court on Dec. 12, arguing that interstate shipments are governed by federal law.
Interboro is represented by Newburgh attorney Richard M. Mahon.
