Crete Carrier Corp. v. Sullivan & Sons, Inc.
| Decision Date | 04 March 2022 |
| Docket Number | Civil Action ELH-21-328 |
| Court | U.S. District Court — District of Maryland |
| Parties | CRETE CARRIER CORP., Plaintiff, v. SULLIVAN & SONS, INC. d/b/a SULLIVAN'S GARAGE Defendant. |
This Memorandum resolves a motion for sanctions filed under Fed.R.Civ.P. 11 in an ongoing dispute between a long-haul trucking company, plaintiff Crete Carrier Corp. (“Crete”), and a towing and recovery company defendant Sullivan & Sons, Inc. d/b/a Sullivan's Garage (“Sullivan”). The suit is rooted in an incident that occurred on August 28, 2020, when a 53-foot tractor-trailer (the “Vehicle”) owned by Crete carrying a load of cargo (the “Load”), was involved in a single-vehicle accident on Interstate 95 in Harford County, Maryland. The Vehicle could not be driven from the scene, and the Maryland State Police (“MSP”) asked Sullivan to recover the Vehicle.
Sullivan towed the Vehicle as well as the Load to its property, and subsequently sent an invoice (the “Invoice”) to Crete for its services. Sullivan charged for its services by the pound, rather than on an hourly basis. Based on the allegedly excessive Invoice, Crete refused to pay Sullivan. In turn, Sullivan refused to release the Vehicle and the Load to Crete.
At first glance, the foregoing allegations present a common billing dispute. But, on February 9, 2021, Crete filed a wide-ranging, eight-count complaint against Sullivan (ECF 1 the “Complaint”), alleging that Sullivan conspired with other towing companies in Maryland “to charge for nonconsensual tows by the pound, not by the hour, ” in order to inflate the charges, id. ⁋ 19, and asserting claims, inter alia, for antitrust violations and a violation of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961, et seq. In particular, the suit contains claims for replevin (Count I); injunctive relief (Count II); tortious interference with contract (Count III); tortious interference with economic and business relations (Count IV); conversion (Count V); violation of the Sherman Antitrust Act, 15 U.S.C. § 1 (Count VI); a RICO violation (Count VII); and violation of the Maryland Antitrust Act, Md. Code , § 11-204 of the Commercial Law Article (Count VIII). The Complaint is supported by two exhibits, which are docketed at ECF 1-2 and ECF 1-3.
Curiously, Sullivan never moved to dismiss any of the claims under Rule 12(b)(6). Instead, it answered the Complaint. ECF 6 (the “Answer”).[1] But, it has since moved for sanctions, pursuant to Fed.R.Civ.P. 11. ECF 47. The motion is accompanied by a memorandum of law (ECF 47-1) (collectively, the “Motion”) and two exhibits. ECF 47-2; ECF 47-3.
In the Motion, Sullivan contends that Count VI, Count VII, and Count VIII are frivolous and thus sanctionable. Defendant seeks a “restorative sanction, ” in the amount of $233.47, which reflects the amount that Sullivan paid its counsel to respond to these claims in the Answer. ECF 47-1 at 5. Sullivan also requests the imposition of punitive sanctions against Crete in the amount of $10, 000. Id.
Pursuant to the Court's Order of January 19, 2022 (ECF 134), Crete responded to the Motion. ECF 154 (the “Opposition”). It is supported by numerous exhibits. Sullivan has not replied, and the time to do so has expired. See Local Rule 105.2(a).
No hearing is necessary. See Local Rule 105.6. For the reasons that follow, I shall deny the Motion.
On August 28, 2020, “an employee and/or agent of Crete was operating [the Vehicle] transporting [the Load] from CG Sports in Lidnen, New Jersey to Variety Wholesale in Henderson, North Carolina . . . .” ECF 1, ⁋ 8. While traveling south on I-95 near Joppa, Maryland, the Vehicle was involved in a single-vehicle accident. Id. ⁋ 10. Thereafter, the MSP arrived at the scene for purposes of “investigat[ing] and assist[ing] with clearing the scene.” Id. ⁋ 11.
Crete avers that the MSP “maintains a list of towing companies that are authorized by the MSP to perform towing and recovery services at MSP's request.” Id. ⁋ 12. Such services are generally referred to as “‘nonconsensual tows.'” Id. And, the MSP contacted Sullivan, a towing company on the MSP's list, to perform the towing and recovery services at issue. Id. ⁋⁋ 12-13.
According to Crete, the MSP “engaged Defendant to perform the towing and recovery services related to the Vehicle and the Load.” Id. ⁋ 14. Plaintiff asserts: “Neither Crete nor any of its employees or agents requested, engaged, and/or directed Defendant to perform any towing and recovery services following the Accident.” Id. However, Sullivan contends that, at the scene, its agent contacted a Crete representative who authorized Sullivan to recover the Vehicle. See ECF 151, at 13-14, ⁋⁋ 31-32. Sullivan “remov[ed] the Vehicle and the Load from the roadway and transport[ed] the Vehicle and the Load to Defendant's tow yard.” ECF 1, ⁋ 15.
Plaintiff alleges that Sullivan originally charged approximately $142, 000 for the cost of the towing and recovery. Id. ⁋ 16; see ECF 1-2.[2] The charges were calculated, in part, based on the weight of the Vehicle and the Load. See ECF 1-2. However, Crete claims that, “[h]istorically, charges for towing and recovery services have been charged on an hourly basis based on the type of equipment necessary to perform the services.” ECF 1, ⁋ 17. Thus, plaintiff maintains that “charging services rendered by the pound[ ] conflicts with accepted and well-known industry standards.” ECF 1, ⁋ 18.
Further, Crete maintains that “in or about March 2020, Defendant and other towing companies on the MSP and other law enforcement agencies' lists improperly conspired and agreed to charge for nonconsensual tows by the pound, not by the hour, for the sole and improper purpose of artificially inflating the charges for services associated with nonconsensual tows.” Id. ⁋ 19. By way of example, Crete avers that “[l]ess than a year prior to the Accident, Defendant issued an invoice in the amount of $24, 559.00 based on hourly billing for the same and/or similar services for a nonconsensual tow of a commercial vehicle as those that Defendant rendered following the Accident.” Id. ⁋ 21; see ECF 1-3. Accordingly, in plaintiff's view, “[t]he conspiracy and agreement between Defendant and its co-conspirators to fix prices has resulted in Defendant and its co-conspirators charging six times the accepted industry standard amount for their services.” ECF 1, ⁋ 21.
“Crete objected to the charges as unreasonable, excessive, and a deviation from accepted industry standards.” Id. ⁋ 22. And, Crete “demanded that Defendant release the Load and the Vehicle to Crete and that Defendant cease assessment of any additional storage and/or other charges.” Id.
Nonetheless, Sullivan “refused to return the Vehicle and the Load to Crete and continued to assess storage charges associated with [its] retention of Crete's property, advising Crete that [it] would not return the Vehicle and the Load until Crete paid the full amount of the Invoice.” Id. ⁋ 23. Crete again “objected to the Invoice, continued assessment of storage charges, and Defendant's continued detention of the Load and the Vehicle.” Id. ⁋ 24. Still, Sullivan “refused to release the Load and Vehicle” until Crete paid the Invoice. Id.
This suit followed.
As mentioned, the case would appear to involve a somewhat ordinary billing dispute. But, in addition to a challenge to Sullivan's entitlement to recover the monies that Sullivan claims is due and owing, Crete has leveled serious claims against Sullivan: violations of Section 1 of the Sherman Antitrust Act (Count VI); RICO (Count VII); and the Maryland Antitrust Act (Count VIII).
With respect to the State and federal antitrust claims, plaintiff alleges: “Defendant along with other towing companies on the MSP approved towing list, engaged in a contract, combination, and/or conspiracy to deviate from industry standard billing practices and to begin charging for nonconsensual tows of commercial vehicles on a per pound basis for the sole purpose of artificially inflating invoices . . . .” Id. ⁋⁋ 61, 78. As a result, “[t]he contract, combination and/or conspiracy in which Defendant engaged imposed an unreasonable restraint on trade in that it prohibits competition in pricing and quality of services for nonconsensual towing of commercial motor vehicles.” Id. ⁋⁋ 63, 80. Further, Crete claims: “There is no appropriate or legitimate business justification for Defendant to force motor carriers to pay for nonconsensual towing and recovery services on a per pound basis . . ., as this manner of billing bears absolutely no relationship to the actual type or amount of work and/or services provided.” Id. ⁋⁋ 64, 82. And, Crete contends that it “was, and continues to be, injured by being forced to pay . . . an excessive and unreasonable sum that bears no relationship to the nature and scope of work performed by Defendant in order to secure the release of the Vehicle and the Load.” Id. ⁋⁋ 66, 83.
As to Crete's RICO claim, the Complaint avers that defendant “knowingly and willfully conducted and/or participated directly and indirectly in a pattern of racketeering activity . . . .” Id. ⁋ 72. Plaintiff states Sullivan “extort[ed] and/or attempt[ed] to extort motor carriers by illegally and improperly holding property under threat of economic harm unless and until Defendant receives payment of money in amounts to which Defendant is not entitled . . . .” Id. ⁋ 73. And, in Crete's view, “Defendant's predicate acts are part of a scheme and are not isolated events, ” but part of a “pattern of racketeering activity [that] is ongoing and amounts to or poses a threat of continued...
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