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AAA Mid-Atlantic loses lawsuit over diversion of service calls
Seiple's Collision & Restoration, Inc. v. AAA Mid-Atlantic, Inc. - On October 14, 2007, AAA Mid-Atlantic, the provider of emergency roadside assistance (ERS) to millions of AAA members in six states, lost this lawsuit alleging that AAA illegally diverted thousands of service calls to its own fleet of tow trucks and away from the firm’s client, Seiple’s Collision & Restoration, Inc., a AAA contractor based in Lansdowne, Pennsylvania.
After an eight day trial in the Philadelphia Court of Common Pleas, the jury unanimously found that AAA violated the terms of its contract with Seiple by assigning thousands of service calls in Seiple’s contractual territory to the AAA fleet of service vehicles instead of to Seiple. The jury awarded Seiple all of its lost profits for the service calls diverted by AAA during the time period 2002 to November 2004, when AAA abruptly terminated Seiple’s contract because it complained about the diversion.
The jury found that AAA violated the terms of the standard ERS contract AAA used for all of its contractors in Delaware, Maryland, Washington, DC, and parts of Virginia, Pennsylvania and New Jersey, by assigning calls to the AAA fleet of service vehicles without amending the agreement.
The standard ERS contract provided that AAA could assign calls in the contractual territory only to other ERS contractors, and only if service conditions required. At the time Seiple entered into its contract with AAA, AAA did not own a fleet of service vehicles. That changed in 2002, when AAA acquired a large fleet of service vehicles, and Seiple noticed a precipitous drop in the number of service calls it received from AAA in its contractual territory.
AAA tried to persuade the jury that Seiple provided poor service and therefore service conditions required reassignment, but the jury did not believe the often contradictory testimony of AAA’s witnesses. However, the testimony of AAA’s witnesses did prove that AAA has engaged in similar conduct toward more than 300 other AAA contractors from 2002 until 2007, and a class action lawsuit has been filed.
Since this verdict was entered, many AAA contractors have contacted the firm to inquire about filing a class action lawsuit or individual lawsuits against AAA to recover their lost profits since 2002. The volume of calls to the firm jumped exponentially after November 5, 2007, when AAA issued a letter to its contractors demanding that they agree to amend their contracts and give up most of their legal rights or face termination.
A class action lawsuit was filed against AAA on behalf of its emergency roadside service contractors on November 14, 2007. The plaintiff in that case, Price's Lock Service, sought an injunction to preclude AAA from enforcing the contract amendments spelled out in AAA's November 7, 2007 letter to its contractors. However, at a hearing before the court, AAA stated that it sent to November 7, 2007 letter to Price by mistake and the proposed contract amendments did not apply to locksmiths, only towing contractors. Therefore, Price lacked standing to challenge the proposed contract amendments.
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