Arkansas trucking company, Hotfoot Logistics has collected from an out of state delinquent account after seven long years of litigation.
David Lasater, the CEO of Hotfoot Logistics in Little Rock, Ark., has perhaps made it easier for Arkansas trucking companies to collect from out-of-state creditors. All because of an unpaid $5,700 trucking bill.
The bill was “the perfect amount of money. It’s enough that it hurts, but not enough we can afford to send lawyers after it for years,” Lasater said.
In Nov. 2008, Hotfoot agreed to a contract with Shipping Points Marketing and its broker Western Brokerage of Phoenix to transport produce from Arizona to Albany, NY, and Scranton, Pa.
Laseter assigned the job to Justin Pierce, a driver with Freight Ambulance of Cabot, Ark. Pierce delivered the goods and returned the bill of lading to Lasater, who then sent the invoice to Phoenix.
When the broker disbanded, Shipping Points said it wasn’t responsible for the balance. However, Shipping Points and Western Brokerage had the same billing address, and David Fishgold ran Shipping Points and Louis Fishgold ran Western.
Lasater sued both companies and the Fishgolds in Arkansas. The case was dismissed originally because of jurisdiction issues, but Lasater doubled down and kept appealing.
Small Arkansas trucking companies are familiar with this issue. Turning down business isn’t an option, but if the company that refuses to pay is in another state, how much money will it take to go to that state and try to get it through the court system?
For Hotfoot, the transaction took place in Little Rock. Driver Pierce had started his trip from Cabot, and the bill was sent to and from Little Rock.
“It might cost $10,000 to get the $1,000, and they were using that to say they can’t afford to come after us,” Lasater said. “We decided we had to fight that out. If it was $100,000, everybody knows you have to go after it. This is death by a thousand cuts.”
The Arkansas Supreme Court ruled that Hotfoot did have the ability to sue an Arizona-based entity in Arkansas because much of the business was transacted in Arkansas through faxes. After the Supreme Court issued its ruling in November, Shipping Points settled with Lasater rather than continue the court battle.
The Supreme Court also issued a ruling that could have a huge effect on his fellow Arkansas trucking brokers and carriers conducting business with parties outside of Arkansas.
“They carried all the water for the entire industry,” said Shannon Newton, the president of the Arkansas Trucking Association. “This was a really big problem. This is especially important for small carriers that don’t have the resources to chase down creditors across the country.”
“It would have been a serious financial hit,” Lasater said. “We would have gotten stuck for six years of lawyer fees. The most important thing is the ruling. We’re not a big carrier that can throw five law firms at someone and scare them.