Jury Produces $10 Million Verdict Against Grocery Store Ownership

New owners of El Rancho Supermercado found to have breached transportation contracts, promises with vendor

DALLAS--(BUSINESS WIRE)--A Dallas County jury has returned a $10 million verdict against the shipping arm of the El Rancho Supermercado chain, finding the organization which operates under the corporate name of Mexico Foods breached contractual agreements and promises with Dallas-based Skyward Transportation.

According to court documents, Skyward, founded by Curtis Lawrence when he was 19 years old, managed the majority of grocery delivery and backhaul services for the chain for more than a decade and enjoyed a mutually positive relationship until the acquisition of El Rancho in June 2023 by Heritage Grocers, a portfolio company of private equity firm Apollo Global Management.

Shortly following that sale to Heritage, a California-based company with a recent record of purchasing regional Hispanic-focused grocery chains, Skyward began receiving what the company believed to be a series of falsified records and fabricated complaints, while unpaid invoices began totaling hundreds of thousands of dollars.

Despite the attempts by Skyward to salvage the relationship, the Skyward contracts were terminated and the company, with more than 90% of its business devoted to serving El Rancho, was replaced as the chain’s preferred transportation provider in favor of companies already serving other Heritage brands.

“We’re pleased that the jury carefully considered the evidence that Heritage management intentionally breached agreements, broke promises, and betrayed the longstanding and productive business relationship between Skyward and El Rancho,” says Michael K. Hurst, Skyward’s legal counsel.

“Skyward’s performance and commitment was exceptional, but the new ownership was determined to create new `synergies' because it believed it could save costs and make more profits, notwithstanding the 5-year contracts and 10-year relationship with Skyward. Now they have to pay the price. Most people and companies wouldn’t dare take on a business giant like Apollo, but most people aren’t Curtis Lawrence,” says Hurst.

El Rancho operates 27 stores, with 18 locations in North Texas and others in Austin, Houston and Liberal, Kansas.

The verdict does not include attorney fees and interest to be awarded to Skyward at a later date. Other attorneys representing Skyward included Jared Eisenberg, David Coale, Jamie Drillette, and Andy Kim, all with Lynn Pinker Hurst & Schwegmann LLP, and Anthony Farmer with the Farmer Law Group.

The case is Skyward Transportation LLC v. Mexico Foods LLC et al., No. 23-15759, in the160th District Court of Judge Aiesha Redmond.

Lynn Pinker Hurst & Schwegmann is a Dallas-based, nationally recognized commercial litigation firm whose philosophy is based on trial-tested experience, creativity and an uncompromising will to win. The firm has a consistent track record of success, trying business disputes of all types, including breach of contract, intellectual property and trade secret, class action, financial services, securities, breach of fiduciary duty, employment, and professional malpractice cases. To learn more, visit http://www.lynnllp.com.