“Nuclear Verdict” Forces Arkansas-Based Carrier to Shut Down After Almost 20 Years
Little Rock, AR – An Arkansas-based carrier with nearly twenty years in business to its credit closed its doors for good yesterday after its insurance rates skyrocketed due to a multi-million dollar “nuclear verdict.”
In a message posted to its Facebook page on Monday, owner of RCX Solutions Inc., Randy Clifton Jr., expressed his appreciation to “customers, vendors, and the greatest bunch of employees and owner ops.”
According to the company’s website, RCX was founded in 2001 and offered an “array of services including any kind of van/flatbed service, long-haul or regional, and specialized high touch deliveries.”
The decision to shutter the carrier, which has 33 drivers according to data from the Federal Motor Carrier Safety Administration (FMCSA), was a painful one, Clifton said.
However, Clifton says he was left with no choice after he was unable to secure financing due, in part, to a giant verdict against the company.
“Over the last five years, we have been battling a lawsuit involving another carrier we let pull one of our RCX trailers that caused a major accident,” Clifton wrote. “Unfortunately, we were wrapped up in a lawsuit which we lost a $23 million dollar verdict. We appealed the ruling in 2017 and lost the appeal last summer. They did, however, lower the amount to $7.5 million.”
Clifton believed the troubled waters were beginning to calm after he says he worked a deal to “satisfy the judgement,” but unfortunately for RCX, the news got worse.
“This past week we were renewing our insurance and I was working with our bank on our credit line for insurance. The judgment for $6.5 million is still hanging out there and will for another year. Due to this judgment, we were unable to secure financing for our upcoming insurance.”
According to court documents in the case, the accident occurred on January 9, 2015.
Clifton brokered an RCX load through his brokerage, Sunset Transportation, to now-defunct About Tyme Transport Inc. and owner-operator, Randy Brown.
Brown was hauling an RCX trailer, leased from Xtra Lease, when he lost control of the tractor-trailer near Refugio, TX.
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The big rig crossed the median and struck a Dodge Ram pickup driven by 29-year-old Alexandro Puga.
Both vehicles burst into flames and Puga suffered extensive burns and numerous broken bones.
Brown sadly passed away at the scene.
Puga filed suit against About Tyme and Xtra Lease seeking compensatory and punitive damages.
Then approximately six months later, Puga filed a second suit against RCX.
A jury in the case against RCX initially awarded Puga $23 million, but it was later determined to be excessive and reduced to $7.5 million on appeal.
“This has been one of the hardest decisions I’ve ever had to make. To have a company taken away for something that wasn’t your fault is very gut-wrenching,” Clifton said about the case.
Further, he lamented about the litigious state of the trucking industry.
“Things like these nuclear verdicts are killing the industry and forcing thousands of carriers out of business,” he commented.
Even still, Clifton says that as the company closed, it was important to him to treat his drivers with respect.
“I am happy to say we were able to find good homes for many of our owner-operators and company drivers with many of our partner carriers.”
Photo courtesy RCX