Central Freight Lines Inc. and Trendsetter HR have settled a lawsuit over workers’ compensation, ending a three-year litigated dispute.
The carrier, based in Waco, Texas, signed a deal with Trendsetter in 2008 to perform administrative services for the company and its employees. For more than three years, Central Freight alleged Trendsetter accepted payments but failed to deposit the funds for workers’ compensation coverage.
Central Freight stopped making payments after it conducted an audit, and Trendsetter sued for breach of contract in 2013.
However, a jury in December 2015 ruled Trendsetter breached the contract and awarded Central Freight $1.85 million. Jurors found that Trendsetter-HR and its owner, D.W. Bobst, failed to honor the terms of the contract and wrongfully billed Central Freight for services and coverage that were never provided. Central Freight is asking that interest be added to the verdict amount, which could push the final award to more than $2 million.
“It’s rare to receive a verdict of this magnitude in a counterclaim, but Trendsetter’s failures and wrongs were particularly egregious,” said attorney William Chamblee, who is with the Dallas firm of Chamblee Ryan, which represented Central Freight. “Trendsetter, its affiliates and its owner made numerous misstatements to my client in an effort to hide the facts and justify their wrongdoing,” Chamblee said.
Trendsetter reportedly signed a contract with Central Freight in 2008 before adding several amendments to broaden the administrative services provided to the company and its employees, according to a statement from the law office. “For more than three years, Trendsetter accepted payments from Central Freight but failed to properly deposit the funds for workers’ compensation coverage,” according to the statement.
Central Freight Lines ranks No. 94 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers, and has operations in California.
The case was on appeal when the deal was reached. “Central is satisfied that this settlement will allow both parties to move on.” said its attorneys.
Trendsetter owner D.W. Bobst said in a statement that neither he nor any affiliates were implicated in any wrongdoing, calling this a resolution to a contract dispute.
Terms of the settlement were not disclosed
Trendsetter also sued AIG for failure to provide workers’ compensation to Central Freight Lines, claiming that it directed the insurer to do so. That case is ongoing.