Huntsville Utilities wins millions in supplier suit ProLiance may pay more than $33M; refunds possible Friday, February 11, 2005 By STEVE DOYLE Times Staff Writer [EMAIL PROTECTED] DECATUR - A federal jury Thursday ordered Indianapolis-based ProLiance Energy Corp. to pay Huntsville Utilities $33.5 million for fraud, conspiracy, breach of contract and other misdeeds.
The verdict, which could be increased to nearly $50 million under federal racketeering laws, was a huge relief for utility General Manager Bill Pippin. For more than two years, he's claimed ProLiance suckered the city into a long-term natural gas supply deal with promises of cheap gas, then devised an elaborate billing scheme to hide the true charges. "A gas company tried to rip us off, and they got caught," Pippin said. "This is a victory for the customers of Huntsville Utilities." Just how big a victory remains to be seen, however. Pippin said part of the ProLiance money will be used to replenish the utility's cash reserves and complete natural gas projects delayed because of tight finances. The rest could go to the utility's 47,000 natural gas customers in the form of lower rates or even individual refunds, he said. Huntsville increased rates twice last fall because of soaring natural gas prices on the commodities market. The rate hikes - 5 percent in October, followed by 8.15 percent in November - are costing customers an extra $13 a month, on average. Jurors sided with Huntsville on almost every claim against ProLiance: Breach of contract, breach of fiduciary duty, fraud, fraudulent inducement, conspiracy to defraud, and intentionally interfering with the utility's business relations by threatening to sue a gas supply company the city tried to hire after the ProLiance problems came to light. It wasn't a clean sweep, though. Jurors rejected utility claims that ProLiance illegally converted the city's natural gas reserves to its own use. The jury said ProLiance is liable for $8.2 million in actual damages and $25 million in punitive damages. Harry Bush, the ProLiance salesman at the center of the scandal, was ordered to pay $200,000, and ProLiance attorney Briane House $35,000. Greg Revera, a utility attorney, said actual damages could be tripled - to $24.9 million - under the federal Racketeer Influenced and Corrupt Organizations (RICO) Act. However, Huntsville Utilities probably won't collect for a while. House hinted ProLiance would ask the U.S. Court of Appeals in Atlanta to review several "potentially reversible errors" he said were made during the nearly three-week trial. The instruction form jurors used in their deliberations wasn't clear enough on some claims, House said. Also, ProLiance criticized U.S. District Judge Virginia Hopkins' decision not to let jurors examine paperwork showing John DeMent, the utility's former natural gas manager, agreed to a controversial "Winter Leveling" payment plan and subsequent selling of the city's gas reserves. Hopkins ruled before the trial began that DeMent was not authorized to enter into such deals without his bosses' knowledge. Huckaby said the jury's $25 million punitive damage award makes a "strong statement" about ProLiance's conduct. "I'm enormously gratified," he said, "that the jury was able to see the wrong done, really to the city of Huntsville." In his closing argument Wednesday, ProLiance attorney Jere White conceded Bush was a "pushy salesman." But he said there was no evidence Bush meant to harm Huntsville Utilities. _______________________________________________ RTF mailing list RTF@rolltidefan.net http://rolltidefan.net/mailman/listinfo/rtf_rolltidefan.net
