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Former Circulator operator seeks arbitration in contract dispute with Baltimore

08.15.2011 BALTIMORE, MD- Photos of a Charm City Circulator bus driving up Charles Street in Baltimore. (The Daily Record/Maximilian Franz).

A Charm City Circulator bus driving up Charles Street in Baltimore. (File photo)

The former operator of the free Charm City Circulator is asking a judge to compel arbitration for the city’s lawsuit alleging Baltimore was overcharged more than $20 million.

Transdev North America Inc. and Transdev Services Inc. have been accused by the city of breach of contract by invoicing for thousands more hours of passenger transport than it performed. The defendants claim a city employee made an oral agreement to amend the contract allowing Transdev to invoice for more hours than it operated.

Transdev filed a motion Thursday seeking to enforce the arbitration provision in the contract, which they say is required since no agreement has been reached since Transdev submitted its billing dispute over unpaid invoices to the city in August.

The city filed a petition Oct. 15 to stay arbitration proceedings denying the existence of an arbitration agreement and seeking a ruling on the enforceability of the dispute resolution provision.

Baltimore filed suit Sept. 12 after a city consultant discovered a discrepancy in the Circulator’s invoices and service reports from July 2015 to July 2017. The report indicated Transdev had billed the city for more than 29,000 hours when a bus had not been available for passenger transport. The city claims it overpaid more than $16 million since 2010.

But according to the defendants’ Oct. 1 demand for arbitration, there was an oral agreement permitting Transdev to invoice for scheduled hours rather than actual service hours because the city was unable to acquire the number of buses promised when the agreement began.

The lack of available buses gave Transdev the option to cancel the agreement and instead Jamie Kendrick, former deputy director of the Baltimore City Department of Transportation, allegedly agreed to the invoice policy. Transdev claims it did not memorialize the agreement in writing at the city’s request.

“Transdev inquired whether the City could increase the rates to account for the reduced service hours,” the filing states. “The City stated that it did not want to do this, as such an increase would require the approval of the Board of Estimates, which would require the City to explain publicly the various problems it was having with the buses that it selected over Transdev’s objection to operate the Circulator service.”

Transdev called the lawsuit a “surprise litigation attack” and claims the city has itself breached the contract by withholding money and suing in bad faith after Kendrick allegedly confirmed the contract amendment.

In its Oct. 15 filings, the city argues its contracts, under Maryland law, cannot be amended through oral agreement with one government employee.

The case is Mayor and City Council of Baltimore v. Transdev North America Inc. et al., 24C18005123.

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