Car Transportation vs Spot Distributors Case

Freight held hostage is an issue in the transportation world and the most common is that of conversion due to unpaid invoices. A great example of this happened in the 1990's in the Car Transportation v Garden Spot Distributors case:

In Car Transportation v. Garden Spot Distributors which occurred in 1991 the trucking company (defendant) agreed to transport food from California to the East Coast.  During transport the truck had a mechanical failure in Arkansas where the carrier realized the seller of the goods owed them $9,000 that had not been collected for previous hauling services. 

According to case text: The facts of the case involve multiple parties in operating in multiple states. In November 1987 the buyers, doing business in California, New York, and Pennsylvania, contracted with De Sal Enterprises, Inc. (also called D L Trucking), a California business, through its principals, Nick and Sandy Lisella ("sellers") for the purchase of food products. The motor carrier agreed to transport the goods and thereafter loaded them in California on November 20, 1987. While in transit to the east coast, the truck broke down in Arkansas, according to the motor carrier. At that time the motor carrier discovered that the sellers owed it money (approximately $9,000) for previous trucking services provided in 1983 and 1984. The motor carrier demanded payment of $15,000 from the sellers to repair the truck. After negotiations between the sellers and the motor carrier, the sellers refused payment, whereupon the motor carrier refused to deliver the goods to the buyers and stored them in its place of business in Springdale, Arkansas. Two of the buyers, Garden Spot Distributors and Better Foods Foundation, Inc., had paid the sellers for the goods in advance. The third buyer, California Natural Products, had ordered the goods from the sellers for a customer on the east coast. When delivery was not made to that customer, the customer rescinded the contract. 

The buyers argue that they demanded the goods from the motor carrier in Springdale. The buyers did not, however, tender payment to the motor carrier for the current freight charges. Nor did the motor carrier specifically demand payment of those charges from the buyers. 

The buyers filed suit for conversion against the motor carrier and later filed a motion for partial summary judgment on the liability issue, which the trial court granted by an order entered on November 21, 1988, following a hearing. The motor carrier then filed a motion to set aside the court's order, which was denied by letter opinion on January 25, 1989, and by formal order on February 7, 1989. On March 30, 1990, after instructions by the trial court, the jury awarded total damages to the buyers of $20,340.30 plus interest and costs.