The Caribbean Utilities Company is in settlement talks with U.S.-based manufacturer Howard Industries Inc., which CUC claims sold defective electrical equipment that cost the power company “millions of dollars” in damages and potentially endangered Cayman’s residents.
According to documents filed with the U.S. Southern District Court of Mississippi, CUC states that it purchased numerous stainless-steel distribution transformers for its operations from the Mississippi-based Howard Industries Inc. between 2000 and 2016.
However, the transformers and/or their component parts were defective and eventually failed, CUC claims.
“Such defects were latent, and it took time for the latent defects to manifest,” Cayman’s power company states in its claim, which was filed last November.
CUC claims that Howard Industries intentionally concealed design defects, manufacturing deviations, substandard manufacturing practices and other problems in order to “induce” the utilities company to continue to buy equipment from the manufacturer.
“The failures in and defects to the transformers made them dangerous to human life and to property,” CUC states in its lawsuit. “The danger includes, but is not limited to, the transformers leaking hazardous oil on persons and/or property and falling from high locations on persons and/or property and causing damage due to their defective condition.”
CUC is seeking refunds for its costs and damages, which it claims to be in the millions of dollars.
In a response filed in January, Howard Industries denied the allegations of wrongdoing against it, including the allegations that the transformers were defective.
“[Howard Industries] respectfully requests that [CUC’s] complaint against it be dismissed with prejudice, with costs assessed against [CUC],” Howard Industries states in its response.
U.S. District Court Judge Keith Starrett initially set a pretrial conference for May 16, 2019, and a trial to begin on June 3, 2019.
Since then, however, the judge has also set a settlement conference for June 20. Before that conference, both parties are required to submit memoranda outlining their arguments on the points of law and fact, the settlement negotiations history of the case, and possible settlement figures.
“The purpose of the settlement conference is to effectuate settlement of the case if possible, but the settlement conference will be conducted in such a manner as not to prejudice any party in the event settlement is not reached,” states Judge Starrett’s order, which was made earlier this month. “All matters communicated to the settlement conference judge in confidence will be kept confidential by the judge, and will not be disclosed to any other party.”