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Baltimore, former Circulator operator must arbitrate contract dispute

Some developers believe the Charm City Circulator has been a big factor in encouraging people to live downtown. (The Daily Record/Maximilian Franz)

Some developers believe the Charm City Circulator has been a big factor in encouraging people to live downtown. (The Daily Record/Maximilian Franz)

A Baltimore judge sided with the former operators of the Charm City Circulator Wednesday, requiring its contract dispute with the city to go to arbitration rather than being resolved in a lawsuit.

Baltimore filed suit against Transdev North America Inc. and Transdev Services Inc. in September alleging the companies overcharged the city more than $20 million for operating the free buses. The lawsuit, filed in Baltimore City Circuit Court, alleges breach of contract.

But Transdev asked the judge to compel arbitration as required by the contract and called the lawsuit a “surprise litigation attack,” claiming the city itself breached the contract by withholding money and suing in bad faith.

Judge Wanda Keyes Heard told the parties after a hearing Wednesday that she will be issuing a decision soon holding that the clause cited by Transdev is an enforceable agreement to arbitrate all disputes, effectively dismissing the city’s lawsuit, according to Suzanne Sangree, director of affirmative litigation for the Baltimore Law Department.

“We are disappointed with the outcome,” Sangree said Wednesday. “The city is evaluating its appeal options.”

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.

The defendants claim a city employee made an oral agreement to amend the contract allowing Transdev to invoice for more hours than it operated. The city argued in response that city contracts cannot be orally amended.

Transdev said the city was unable to acquire the number of buses promised when the agreement began, which gave the company the option to cancel the agreement. 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.

A spokesperson for Transdev said the company is “pleased the judge found the arbitration provision for disputes between the parties enforceable and looks forward to vindicating our position with regard to this matter.”

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


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