Venable-owned company target of lawsuit

Matthew Lane • Jun 12, 2014 at 9:14 AM

KINGSPORT — Volvo Financial Services has filed a lawsuit against former Sullivan County Mayor Richard Venable and the trucking company he founded, claiming the company defaulted on the payment for seven tractor-trailer trucks purchased six years ago.

However, Venable and the company have filed a counterclaim against Volvo, saying the trucks required continuous repairs and costly engine work, which prevented the company from keeping the vehicles in service.

VFS filed the lawsuit in U.S. District Court in Greeneville last month naming Venable and RSV Inc., as the defendants. Venable founded the business and is still the president but has not been involved with the day-to-day operations since 2002.

Venable served as Sullivan County mayor from 2002 to 2006, then as president of NETWORKS -- Sullivan Partnership until December 2013. Last month, Venable defeated two-term incumbent Steve Godsey in the Republican primary for the Sullivan County mayor's race.

With no other challengers, Venable will be sworn in as Sullivan County's next mayor later this year.

According to the lawsuit, in July 2008 RSV purchased four 2008 tractor-trailer trucks, financing $436,000 over a six-year period with VFS. In September 2008, RSV purchased three similar trucks, financing $340,000, again over a six-year period.

After RSV became delinquent on the payments, in May 2010, VFS — at the request of RSV — modified both contracts, raising the interest rate of the loan, providing one month of nonpayment and three months at reduced amounts.

However, RSV failed to make payments in a timely manner and defaulted on the contracts, the lawsuit states.

In August 2013, Volvo notified the defendants of all outstanding amounts due and requested payment in full. RSV failed to pay off the loans and Volvo repossessed the seven trucks, selling them in November 2013 via private sale.

The difference between what RSV owed and the selling price came to just over $143,000.

Volvo notified RSV in December 2013 the company had 10 days to pay the $143,000, but to date the company has not paid, the lawsuit states.

Volvo claims breach of contract and is seeking $143,000 from the defendants.

In a response filed last month, RSV denies the breach of contract claim and denies the seven trucks were sold in a commercially reasonable manner. RSV also claims the $143,000 difference is an inflated amount.

RSV has also filed a counterclaim against Volvo, saying after the company took possession of the trucks and placed them into service, RSV began having mechanical problems and breakdowns with the vehicles.

"The vehicles required continuous repairs and costly engine work. RSV could not keep the vehicles in good repair, on the road and in service," the counterclaim states. "The vehicles failed to generate income sufficient to make payment under the contracts. RSV reported the problems to Volvo on several occasions with no resolution."

RSV claims a breach of warranty in its counterclaim and argues if the vehicles had been manufactured in a workmanlike manner and suitable for the purpose for which they were purchased, no deficiency (of $143,000) would have occurred.

Reached by phone this week, Venable said lawsuits such as this one are common in business and that it would not be appropriate for him to comment at this time.

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