Late Mailings Lead to Lawsuit
California company filed a lawsuit against Advo Inc., Windsor, CT, claiming that lost revenue due to alleged mailings by Advo’s lettershop sent the company from bankruptcy reorganization into liquidation.
The complaint, filed Sept. 15 in Los Angeles federal court, was dismissed a week later for procedural reasons. A new complaint will be filed, according to a source close to the case.
NDR Auctioneers Inc., a Reseda, CA, company established in 1993, hired Advo around March 1998 to print, stamp and ship to its customers time-sensitive mailings announcing its auctions, according to the complaint.
The court papers allege that to save itself money-and in contradiction of the agreement-Advo routed the mailings “on several occasions” to a U.S. Postal Service bulk mail center, rather than the quicker USPS sectional center facility. The complaint alleges that Advo’s action caused delays of more than 10 days and that Advo knew the mailings would arrive at the customers’ homes after the auctions took place.
“As a result of [Advo’s] conduct,” the complaint says, “NDR lost most, if not all, of its transactional clientele” and thousands of dollars in revenue.
Advo denies any potential liability. “They were a customer of ours this spring,” says general counsel David Stigler. “We did a number of mailings with them before and after the mailing in question. Some mailings were delivered other than how they wanted and arrived late. We gave them a credit that they used toward a subsequent mailing, so they couldn’t have been too unhappy with us.”
Stigler says that under the contract NDR was entitled only to the cost of the mailing, not to damages. “To say we did this with intent, malice or fraud-it’s absurd that we would mess something up on purpose.”
He says that if the case is refiled, “We’d move to get it thrown out pronto. “
The court papers allege that Advo regularly engages in the behavior with other clients in the state. The case was filed both on behalf of the named plaintiffs and, under the California Business and Professions Code, “on behalf of the California general public to forever restrain and enjoin Advo from continuing to defraud and deceive members of the California general public who have purchased, and who will continue to purchase Advo’s services.”
Stigler denies Advo conducted itself that way, adding that it “makes no business sense” to do so.
