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NYAD MOTOR FREIGHT v. W.T. GRANT CO.

November 17, 1972

Nyad Motor Freight, Inc., Plaintiff
v.
W.T. Grant Company, Defendant


Bauman, D.J.


The opinion of the court was delivered by: BAUMAN

BAUMAN, D.J.:

Plaintiff Nyad Motor Freight, Inc. (NYAD) seeks recovery of the sum of $130,958.57 in alleged undercharges and rebates in the assessment of motor freight charges for services it rendered defendant W.T. Grant Company *fn1" (GRANT). GRANT does not deny that NYAD performed the services alleged, but claims that it did not perform them within the scope of the authority granted to it by the Interstate Commerce Commission (ICC).

 GRANT contends that NYAD performed pursuant to an oral agreement unauthorized by the ICC and further, that GRANT paid NYAD the full amount due when it paid each NYAD bill as submitted. NYAD seeks the difference between this amount and that prescribed by the schedule of rates filed with the ICC, as well as certain amounts it credited to GRANT's account for equipment which was paid for by GRANT but not used.

 I.

 NYAD is a New York corporation which performed motor freight services for GRANT as an exclusive contract carrier from 1960 to 1967 pursuant to permits issued by the ICC. The permit in question, here authorized NYAD to transport GRANT's merchandise and equipment over irregular routes "between New York, N.Y. and Metuchen, N.J. on the one hand, and, on the other, points in New York, New Jersey, Connecticut, Rhode Island, Massachusetts and Pennsylvania." In addition, it contained a restriction limiting the scope of NYAD's operating authority to services "to be performed under a continuing contract, or contracts, with W.T. Grant Company."

 In accordance with the permit NYAD and GRANT entered into various written contracts before 1966 providing for various services which NYAD filed with the ICC along with various minimum rate schedules. Its services consisted mainly of delivering merchandise from GRANT's Metuchen, New Jersey warehouse and GRANT's consolidation center at Pier 22, New York City, to GRANT stores within the area authorized by the ICC and returning merchandise from the stores to Metuchen or Pier 22. Prior to pick-up by NYAD at Metuchen or Pier 22, the merchandise was sorted and placed in hampers. The driver loaded the hampers onto his truck and proceeded to the GRANT stores on his route where he exchanged the loaded hampers for empty hampers and return merchandise.

 The charge for service to and from the stores was determined by a zone system. Zone 1 included all the stores which could be serviced by a driver in one ten hour day from Metuchen or New York City. Typically, a Zone 1 trip include as many as nine stops.

 In April, 1966 a change in GRANT's warehousing procedure caused a change in the services rendered by NYAD. The new services were never incorporated into a written agreement and a schedule of minimum charges relating to these new services was never filed.

 The new service came about in the following manner. In April, 1966 the consolidation operation at Pier 22 was discontinued and a new consolidation center was opened at the former Raritan Arsenal in Edison Township, New Jersey, several miles away from Metuchen, New Jersey. A smaller consolidation center was also established in the Bronx, New York, which received merchandise from vendors in the New York City area for shipment to the consolidation center at Raritan. Merchandise received from vendors in the Bronx was unloaded from a vendor's truck directly into a trailer which was hauled to Raritan when full.

 These services were materially different from those rendered under the ICC permit. A NYAD driver hooked up an empty trailer at Raritan in the morning, drove to the Bronx consolidation center, unhooked the unloaded trailer and hooked onto a loaded trailer. The loaded trailer was then taken back to Raritan. The NYAD driver on a "Bronx-Raritan switching" run did not participate in loading and unloading the trailer as did the driver in a Zone 1 trip under the written agreement between NYAD and GRANT. The entire procedure known as "Bronx-Raritan switching" could be accomplished in less than five hours and, presumably, the oral agreement that the charge for two round trips on this "switching" service would be the same charge as for one Zone 1 trip was based on the fact that two round trip Bronx to Raritan switches could be completed in about the time necessary to complete one Zone 1 trip under the existing written agreement between NYAD and GRANT.

 On June 16, 1966 NYAD and GRANT entered into a new written agreement for transportation services to be performed by NYAD for GRANT. This agreement did not describe or provide for the Bronx-Raritan switching service nor did an amendment signed December 19, 1966 changing the earlier rate schedules.

 On August 6, 1966 a new schedule of minimum rates filed by NYAD with the ICC became effective (M.F.I.C.C. No. 5 and supplements #1 and #2), but it did not describe or provide for the Bronx-Raritan switching service. NYAD and GRANT's new agreement of January 2, 1967, which superseded the agreement of June 16, 1966, likewise did not refer to it.

 NYAD regularly invoiced GRANT for the charges for all Bronx-Raritan switching services rendered at the rate which had been orally agreed upon and these invoices were routinely paid.

 The January 2, 1967 written agreement required GRANT to pay equipment charges for forty-eight (48) tractor-trailer combinations per day five days per week (Monday-Friday) so long as they were available, regardless of their actual use. This resulted in GRANT occasionally paying for equipment it was unable to use because of bad weather or holidays. On other occasions, NYAD ...


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