RLWPC Water Utility Client Settles Insurance Dispute

RLWPC client Combined Consumers Special Utility District ("CCSUD")settled its breach of contract and bad faith insurance claim against the Texas Municipal League Intergovernmental Risk Pool. The suit was filed in Travis County District Court after the TMLIRP denied a claim made by CCSUD upon learning that its former General Manager had wrongfully transferred substantial sums from the utility to her personal account.

The former GM claimed that the payments to herself -- made in a series of wire transactions within a single day after her termination by the CCSUD Board -- constituted payment for accrued but unused vacation. CCSUD considered the funds stolen, and its Board contended that the payments were not authorized, and that they far exceeded any amount that could have been due under the utility's employee compensation policies.

CCSUD presented criminal charges to the Hunt County District Attorney's office, which eventually indicted the former General Manager for theft of the funds. Nevertheless, TMLIRP -- the utility's insurer -- denied CCSUD's claim for benefits under a "Employee Dishonesty Policy."

CCSUD's Board of Directors retained Trey Wilson to file suit against TMLIRP, seeking a Court declaration that the claim was covered under the TMLIRP-issued "Employee Dishonesty Policy," and damages for breach of contract. The suit was filed in Travis County because it is the principal County of TMLIRP's operations in Texas. The suit was eventually settled on confidential terms, and CCSUD has dismissed its claims.

Although the dispute and lawsuit involved insurance and contract law, as opposed to water law, it served as another example of R L Wilson, P.C. Law Firm's full service representation to its water utility clients. RLWPC has also assisted CCSUD in drafting and reviewing various Water Supply Agreements and various District governance matters.

CCSUD provides water utility service to approximately 2820 retail customers in Hunt, Kaufman, and Van Zandt Counties in north and northeast Texas utilizing water from Lake Tawakoni. The Lake covers approximately 36,700 acres, and is fed by the Sabine River and area creeks.