AUBURN — A federal lawsuit disputes the amount of money owed to a New Hampshire-based consultant by an Auburn company that serves as an electricity supplier to Maine homes and businesses.
At issue is an arbitrator’s decision in which former Maine Supreme Judicial Court Justice Paul Rudman ruled that Electricity Maine LLC had breached a three-year contract with Freedom Logistics LLC, awarding the consultant nearly $1 million in damages. The contract had a clause that provided for arbitration in the event of a contract dispute in an effort to head off litigation.
Freedom Logistics filed in state court to have the arbitrator’s award amount confirmed. Electricity Maine countered by filing in U.S. District Court in Portland an appeal of the arbitrator’s award, claiming the arbitration process lacked a hearing phase on damages and sought to have set aside the retired judge’s damages award.
Freedom Logistics filed a motion to dismiss Electricity Maine’s federal suit. A judge last month denied Freedom Logistics’ motion, according to court papers. Freedom Logistics has filed a motion to have the court confirm Rudman’s decision on the award.
If Electricity Maine’s appeal is successful, the court could send the two parties back to an arbitrator to redetermine the amount of damages that should be awarded to the New Hampshire company, following a hearing that would allow the parties to present evidence.
Rudman awarded to that company $25,000 per month, the maximum allowed by the contract, representing the commission Freedom Logistics might have earned on sales made by Electricity Maine for the duration of the three-year contract. He also ruled that Electricity Maine pay the sums of $127,756 and $379,820, plus fees and expenses.
That company claims the total award should be offset by the amount that Freedom Logistics could have made by signing a similar contract with another supplier as well as the savings Freedom Logistics would realize by no longer performing services for Electricity Maine for the remainder of the three-year contract.
The two companies had signed that contract in July 2011.
Electricity Maine was interested in becoming a licensed competitive electricity provider in the wake of deregulation in the early 2000s in Maine. Freedom Logistics, with knowledge of the New England power pool, was to act as Electricity Maine’s agent to secure electricity in the market, a service it had performed for other suppliers, according to court papers.
Less than a year into the three-year term of the contract, Electricity Maine sent notice to Freedom Logistics on May 21, 2012, to end the agreement. In June 2012, Freedom Logistics demanded arbitration under the terms of the contract, according to court papers.
cwilliams@sunjournal.com
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