MDC cannot use insurance policy to offset costs it faces in case of imposing illegal charges on homeowners
The decision, a win for
The MDC's lawyers and other officials did not respond to questions about the ruling and about what other coverage, if any, the district has.
The MDC filed a claim with
The insurer responded that it is not obligated to pay the claim because the district violated three policy exclusions -- the surcharges were intentional, not negligent; the MDC knew from an earlier court ruling in a related suit by the town of
The MDC sued, unsuccessfully, to force payment on the policy. U.S. District Judge
The 9,000 customers in the class action buy MDC water, but live in towns that are not member towns of the district. The MDC has said in the past it is entitled to impose surcharges in nonmember towns because, unlike member towns, they do not contribute to the upkeep of the regional water and sewer infrastructure.
Ratepayers in the four towns complain that they have been made to pay surcharges not imposed on the member towns and that the money has been spent on capital improvements that benefit customers elsewhere in the MDC network.
Surcharges on nonmember towns have been imposed for decades. But nonmember ratepayers complained loudly in 2012 and 2013 when the surcharges soared. The lawsuit cites successive annual surcharges, ranging from
After the complaints, the MDC reduced the surcharge and the state legislature, which created the regional water and sewer authority and controls its operations by statute, enacted a law to limit surcharges on nonmembers. The legislature also gave the nonmember towns seats on the MDC board.
The 9,000 water customers paid more than
Any financial judgment against the MDC will depend on factors such as how interest is calculated, how many years of surcharges are considered and whether the MDC is found to have unjustly enriched itself at the expense of customers in towns with no representation on the commission board.
___
(c)2019 The Hartford Courant (Hartford, Conn.)
Visit The Hartford Courant (Hartford, Conn.) at www.courant.com
Distributed by Tribune Content Agency, LLC.
Todd Dorman: Iowa GOP muzzles Miller to enable Trump
Hedge funds add another $1.5 billion for California wildfire victims in PG&E takeover war
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News