CUC argues against new evidence in defective equipment lawsuit

Lawyers for CUC, headquartered in George Town, are opposing new evidence from Howard Industries alleging that the power company did not practise due diligence regarding defective equipment.

Lawyers for the Caribbean Utilities Company have motioned for two rebuttal arguments raised by Howard Industries to be dismissed by the court in ongoing litigation over defective electrical equipment.

CUC is suing the Mississippi-based manufacturer over claims that it sold the company defective equipment, costing Cayman’s power provider “millions of dollars” in damages.

Howard Industries has filed for a partial summary judgment in the case, which would avoid some of the pain of a full trial by the US Southern District Court of Mississippi.

CUC first filed a complaint in November 2017 alleging that numerous stainless-steel distribution transformers purchased from Howard Industries between 2000 and 2016 were defective and eventually failed.

“Such defects were latent, and it took time for the latent defects to manifest,” CUC stated in its November 2017 filing.

The two parties failed to come to a settlement last year and now Howard has submitted evidence alleging that CUC did not practise due diligence after discovering the problem with the transformers in June 2011.

“CUC had ongoing knowledge after June 2011 that the transformers continued to leak,” reads a 29 July submission to the court by Howard Industries.

“CUC’s internal emails in 2013 definitively show CUC continuously knew the transformer leaks CUC identified to Howard in June 2011 were an ongoing issue, and that CUC did not exercise due diligence. …

“CUC could and should have hired a consultant in 2011. CUC admits it could have hired a consultant in June 2011 to do a root-cause analysis of the leaking Howard transformers, but it failed to do so.”

In response, CUC’s lawyers argue that the new evidence was improperly submitted by Howard Industries during the rebuttal stage and should be stricken.

“Although Howard’s original motion relied exclusively on June 2011 as the trigger date for its statute of limitations arguments, Howard now raises purported CUC communications from 2013 to support a new theory about ‘ongoing knowledge’ in support of its summary judgment arguments,” CUC’s 5 Aug. response states.

“Because those 2013 communications were not addressed in Howard’s moving papers, CUC did not have a chance to oppose Howard’s arguments regarding the supposed ‘ongoing knowledge’ issue or to otherwise put the new out-of-context emails into perspective.”

CUC has requested a second argument by Howard Industries be stricken on the same grounds.

In this argument, Howard Industries states, “CUC contemplated asserting a claim against Howard years before any alleged inducement not to file a lawsuit allegedly occurred, and CUC had an affirmative plan to try to get Howard to admit liability.”

CUC’s lawyers say the utility company was not provided an opportunity to address the assertion and that the new argument mischaracterises the evidence. The attorneys have requested that the evidence be stricken or that the company be provided time to submit a rebuttal to Howard’s new evidence.