Fargo Cargo owners point fingers at each other over company’s collapse

Approximately one month after North Dakota trucking company Fargo Cargo left drivers stranded after allowing its insurance to lapse, a lawsuit has been filed between two of the owners.

Leland Swanson, a part owner of Fargo, N.D.-based Fargo Cargo, filed a lawsuit against James Lund, another part owner of the company. Swanson and Lund each own 47.5 percent of Fargo Cargo, with Joel Anderson owning the remaining 5 percent.

On April 9, Fargo Cargo lost its FMCSA operating authority after the company’s insurance lapsed on April 1. Drivers still on the road were held up for up to three days before they were granted temporary insurance coverage.

Legal action taken between owners
According to the lawsuit, Swanson accuses Lund of violations of state law and breaches of statutory duties while Lund was acting as general manager. Swanson claims damages of financial losses, reputation and good will.

Fargo Cargo’s liabilities exceed its assets by more than $5 million. Swanson claims this financial downfall and the subsequent insurance lapse is because of mismanagement and improprieties by Lund.

In 2008, Lund established his own trucking company called Cross the Line Transportation. Swanson claims he was never advised about Lund’s new trucking company. When Swanson discovered the company in 2017, Lund said “I did it because I have to make a living,” the lawsuit alleges.

Swanson accuses Lund of taking drivers of Fargo Cargo to Cross the Line. The suit alleges a scheme where Lund diverted truck sales from Fargo Cargo’s truck resale business. He then sold trucks to the former Fargo Cargo owner-operators working at Cross the Line. Fargo Cargo’s books allegedly show entries where Lund attempted to mask the sales. By 2015, all but “one, nearly worthless $15,000 tractor” was left at Fargo Cargo, the lawsuit claimed.

The lawsuit goes on to accuse Lund of several instances where he used Fargo Cargo’s resources for his own personal gain with Cross the Line, including Fargo Cargo checks payable to Cross the Line. Lund is also accused of using an unapproved credit card listed under Fargo Cargo’s expenses. Charges on the card included undocumented air travel, local bars/restaurants, grocery stores, Wal-Mart, Sam’s Club, Costco, liquor stores, Gordman’s and Bed, Bath and Beyond.

Swanson calls the maintenance of Fargo Cargo’s books and records “incompetent and haphazard.”

Essentially, Swanson accuses Lund of illegally taking from Fargo Cargo for his own personal gain and grossly mismanaging Fargo Cargo.

Land Line spoke to Lund’s attorney, Sean Foss, about the lawsuit. Long story short: Lund will be filing a countersuit.

Lund will be filing a counterclaim against Swanson for failing to properly oversee Fargo Cargo. A separate claim will also be filed against Anderson. According to Foss, that suit will allege that if anyone is responsible for decisions made in the day-to-day management of Fargo Cargo, it is Anderson, not Lund.