RESTON, Va.—A federal judge has ordered Sprint Nextel Corp. to pay a Pennsylvania-based collection company more than $17 million over a contract dispute.
Sprint Nextel had signed a three-year deal with Penncro Associates Inc. in 2002 for account collections work on wireless bills, and then cancelled the deal in early 2003 citing the performance of the Penncro call center in McAllen, Texas, that was handling the Sprint Nextel collections calls.
While Sprint Nextel cancelled Penncro’s contract for first-party collections work, in which Penncro represented itself to customers as Sprint Nextel, the judge noted that after the carrier cancelled the first-party contract, Sprint Nextel then awarded Penncro a contract for third-party collections work in which Penncro did collections work for Sprint Nextel under Penncro’s own name.
U.S. District Court Judge John Lungstrum reduced the award that Penncro wanted from $53.1 million to $17.1 million. The judge ruled that while Sprint Nextel had technically violated the terms of the contract, Penncro had not fully carried out the contract and had avoided some losses by not doing so.
Sprint Nextel has 30 days to appeal the ruling.
