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TravelCenters of America emerges victorious from legal fight with fuel-card provider Comdata

 

TravelCenters of America April 2017
TravelCenters of America won a lawsuit this week against a fuel-card provider that jacked up transaction fees on the company in February, in the middle of a contract dispute. (Michelle Jarboe/The Plain Dealer)

WESTLAKE, Ohio -- TravelCenters of America, LLC, could receive a payout of more than $6.8 million from a vendor, based on a court decision issued Monday.

The Westlake-based operator of truck stops, travel centers and convenience stores emerged victorious this week from a court battle with Comdata, a fuel-card provider that serves the trucking industry. A Delaware judge found that Comdata improperly charged TravelCenters higher fees to process fueling transactions, in a violation of an agreement between the companies.

In a 101-page opinion, Chancellor Andre Bouchard of the Delaware Court of Chancery ordered Comdata to honor the terms of a pre-existing contract and to reimburse TravelCenters for excessive fees charged since Feb. 1, plus interest and legal fees. The exact payout amount hasn't been determined yet.

But TravelCenters has estimated its excess payouts to Comdata at $900,000 a month - or $30,715 a day, according to court filings. Based on that math, Comdata could owe TravelCenters upwards of $6.8 million to make up for more than seven months of overcharging.

In a regulatory filing last month, TravelCenters also noted that it had spent nearly $8.9 million on legal expenses related to the dispute between Jan. 1 and June 30.

In a news release issued late Monday, TravelCenters applauded the court decision.

TravelCenters of America April 2017A customer walks into a TravelCenters of America facility in Lodi in April. The publicly traded company operates truck stops, travel plaza, convenience stores and restaurants across the United States and Canada.

"I personally want to say a special 'thank you' to all the TA customers who remained loyal to TA during our dispute with Comdata," Tom O'Brien, president and chief executive officer at TravelCenters, said in the news release.

"I sincerely hope that normal business may now continue without any efforts by Comdata to direct business away from TA."

Comdata and FleetCor Technologies, Inc., its parent company, have not publicly responded to the court's decision.

Though TravelCenters prevailed, the company didn't get everything it wanted.

The judge rejected TravelCenters' attempt to pierce the corporate veil and to hold FleetCor responsible for the fuel-card provider's actions - and the costs. And the court didn't buy TravelCenters' argument that the company actually deserved triple damages under the Tennessee Consumer Protection Act. Comdata is based in Tennessee.

TravelCenters operates truck stops and travel plazas in 43 states and Canada under the TravelCenters of America, TA, Petro Stopping Centers and Petro brand names. The company also runs freestanding convenience stores in 11 states and restaurants in 14 states.

Comdata provides cards that truckers use to buy fuel and make other purchases. The company is the largest single processor of such transactions for TravelCenters, accounting for more than 40 percent of diesel sales at TravelCenters' truck stops and plazas last year, according to court filings.

In late November, a disagreement between the companies over terms of a long-running merchant agreement boiled into a legal fight.

In a lawsuit filed in Delaware state court, TravelCenters basically accused Comdata of holding the truck-stop operator hostage for more money. Comdata claimed that TravelCenters hadn't lived up to its end of the agreement, which not only covered transactions and processing but also governed installation of new technology at more than 200 travel center to make payments simpler.

So Comdata terminated the agreement. And in February, the fuel-card business started charging TravelCenters much higher transaction fees.

The court held a four-day hearing in early April. The judge ultimately determined that TravelCenters didn't breach the agreement with Comdata and, in turn, that Comdata shouldn't have terminated the contract.

Source of article click here : realestate cleveland

 


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