COA affirms $813,000 award in Clark County water dispute

A judgment in favor of a utility that had an agreement to supply water to another utility serving customers in Clark County was affirmed Tuesday by the Indiana Court of Appeals.

The decision in favor of Indiana-American Water Co. Inc. was affirmed in all aspects. The utility sued Watson Water Co. after it stopped performing under terms of a 40-year contract signed in 1997 for the construction of a water main. The amended agreement also required Watson to purchase a minimum amount of water each year. Watson countersued, claiming it was due a refund of payments, and that its volume purchase requirement was limited to the recoupment of IAWC’s capital investments in water utility infrastructure.

After a two-day bench trial, the Clark Circuit Court ruled in favor of IAWC. It found Watson was bound by the contract and awarded IAWC more than $813,000 in unpaid amounts and late charges exceeding $24,000. The trial court also granted declaratory judgments that the 1997 agreement continues through 2037 and that Watson is required by its terms to purchase at least 108.3 million gallons of water annually.

Senior Judge Randall Shepard wrote for the panel that there was no error in the trial court’s findings and conclusions. On review, the COA found Watson breached its contract with IAWC, and that the trial court did not err in interpreting the agreement’s right of first refusal clause. The COA also agreed with the trial court that Watson could not avail itself of relief under the Uniform Commercial Code.

The case is Watson Water Company, Inc. v. Indiana-American Water Company, Inc.,10A01-1607-CC-1542.


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