March 9, 2010

City of Alameda Prevails on almost All of Vectren's Telecom Claims

Concluding a three-week trial in the federal court litigation brought against the City of Alameda by Vectren Communications Services, an eight-member jury rendered a unanimous verdict yesterday afternoon in favor of the City on all but one of Vectren's claims.  Commenced by Vectren in 2008, the lawsuit alleged that, in managing the telecom system since 2002, the City had breached its contract with Vectren, the original builder and operator of the system, by not managing the system properly.  Vectren claimed that, as a result of its allegations, it was entitled to damages from the City totaling $10.3 million.

The jury rejected all of Vectren's claims, either on the merits or because Vectren had waited too long to raise them, agreeing with Vectren solely on its claim that, in certain years, the City had not accounted for the net telecom revenues due Vectren in strict accordance with the terms of the contract.  Out of Vectren's total claims in excess of $10 million, the jury only awarded Vectren $1.9 million, less than 20 percent of the damages alleged.  The City is considering its options for an appeal of the jury's verdict on the accounting issue, based, among other reasons, upon Vectren's disregard of the law requiring it to provide the City notice of its claim before filing suit.

Press inquiries regarding the jury's verdict should be directed to Girish Balachandran, Alameda Municipal Power General Manager.

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