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June 24, 2013

Court to recalculate Jeffersonville's attorney fees

EMC won lawsuit in 2008 after contract was terminated

INDIANAPOLIS —

The Indiana Court of Appeals issued a ruling recently that will reduce the attorney fees Jeffersonville is required to pay to Environmental Management Corp. related to a breach-of-contract suit in 2008.

The lawsuit was filed in 2008 after EMC, the contractor for the former Jeffersonville sewer plant, was kicked out of the plant by then-Mayor Tom Galligan.

Galligan, during the trial, testified that he was fed up with EMC, and said it failed to properly perform collection-system maintenance and that such failures had resulted in the U.S. Environmental Protection Agency instituting an enforcement proceeding against the city.

EMC claimed the action breached its contract and the contractor sued the city. 

The city entered into the contract with EMC in 2004 and the terms of the deal were set to last through 2010.

A provision in the contract allowed the city to terminate the deal and EMC’s operations of the sewer plant with 90 days notice “in the event of a material breach or unsatisfactory performance of a material obligation.” A letter was sent to EMC from the city requesting lists of equipment and equipment maintenance, a history of work performed and customer complaints, but the letter did not indicate that the city intended to terminate the contract if the performance issues were not corrected, according to court documents.

As a result, EMC filed a suit against the city and the Jeffersonville Sewer Board requesting damages for lost profits and attorney fees. The suit included four claims: two Open Door Law claims, a breach-of-contract claim and a contempt claim against Jeffersonville, as well as the city’s counterclaim for trial.

A ruling from Clark County Circuit Court No. 4 Judge Vicki Carmichael — which at the time was Clark County Superior Court No. 1 — ruled in favor of EMC on all four of its claims and the city’s counterclaim. It awarded damages to EMC that included attorney fees. The amount awarded for lost profits was $268,560 and attorney fees totaled $315,554. 

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