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New York Towns Battle in Court Over Breach of Contract

Posted on Jan 01, 2016

To provide clean water and reduce costs for local residents, the town of Halfmoon, New York, built its own water treatment plant in 2002.

Now, the water commissioners of the town of Waterford have brought suit against the town of Halfmoon. The suit is being heard in Saratoga County Supreme Court. Waterford alleged that Halfmoon breached its obligation to buy water under a shared contract. The contract in question was signed in 1981. As a result of the alleged breach, Waterford claims that it is more than $7.6 million in debt.

Both Halfmoon and Waterford have their own water treatment plants that draw water from the Hudson River. The two towns are located in Saratoga County. In May of 2009, Halfmoon issued a written notice that it would no longer buy water under the original contract because of the risk that the water was subject to contamination by PCBs.

The contract relating to the purchase of water was supposed to run through 2021. Under its terms, Halfmoon was billed on a monthly basis for water. The exact amount was based on consumption and a supplemental charge to cover debt service and capital improvements. Waterford’s complaint against Halfmoon alleged that Halfmoon’s past and future supplemental charges under the contract amount to more than $1.9 million.

While the contract was amended several times over the years, the most recent amendment, made in 1995, committed Halfmoon to buying a minimum of 27 million gallons of water per quarter. Waterford alleged that it began discussions to buy out the remainder of Halfmoon’s contract, but Halfmoon refused to pay any charges that accrued after May 2009.

Waterford alleged that it has suffered and will continue to suffer damages that include:

  • Past and future lost consumption charges
  • Lost supplemental charges
  • Loss of all other amounts and obligations as set forth in the contract

Contact a New York breach of contract attorney today at (888) 497-3410 for more information about breach of contract and other business litigation matters.

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