In a win for some propane customers, a county judge ruled Tuesday that the propane business DeCarli’s violated a 2011 settlement agreement by failing to bill a handful of customers for three years, and prohibited the company from seeking payments on bills sent to those customers more than 45 days after meter readings.
Judge Geoffrey Howard also ordered a small-scale accounting audit of 30 of the company’s roughly 2,000 “gallons” customers, who are billed each time a tank is filled and who constitute the vast majority of the business. The audit, to be finished by March, will help the judge determine whether DeCarli’s has inappropriately sought payment for old bills, with some catch-up bills sent this year amounting to thousands of dollars in fees.
Lawyers for the business and for the three plaintiffs—Susan Deixler, Scott Yancy and Luigi Venezia—are supposed to discuss how the business will handle older bill collections sometime before April. Both sides agree, however, that customers should pay current bills.
The case, brought this fall, is an attempt to enforce a settlement agreement from the plaintiffs’ 2009 class action lawsuit. The agreement stipulated metered customers (of which the company has only eight) must be billed within 45 days of readings, which led the judge to exonerate those customers from three years of bills. The agreement also said gallons customers should be billed in a “timely” way, though it did not define that term.
The plaintiffs, represented by the law firm Chavez and Gertler LLP and Legal Aid of Marin, alleged that recent catch-up bills violated the agreement. A number of customers who received the catch-ups argued in filingsdeclarations that they have paid every bill ever received. Nance Becker, a lawyer for Chavez and Gertler, also noted during Tuesday’s hearing that bills left at people’s homes after deliveries sometimes blew away and that the company did not send invoices for tank rentals.
Customers “never received past-due notices” for unpaid bills, she said, and she questioned whether all customers have received proper invoices in the first place.
Lawyers for DeCarli’s, from the law firms Perkins Coie LLP and DeMartini and Walker LLP, admitted that metered customers were not billed for three years due to a “mistake” related to employee turnover. Still, lawyer James Snell pressed the judge not to simply wipe away those customers’ charges, given that they used the energy. “[They] counted on this mistake to get free propane,” he said.
Judge Howard, who asked pointed questions of both sides during the 90-minute hearing, expressed little sympathy for that line of reasoning, says DeCarli’s “essentially ignored” the 45-day limit.
“It seems to me you’re very close…to a finding of reckless violation of a court order and contempt,” significantly more serious than simply forgiving bills, he said. “Characterizing customers as taking advantage of the situation is not the right way to approach it…. If you don’t comply with [the order], you don’t get paid.”
In court filings last month, DeCarli’s lawyers also argued that the agreement expired three years ago, but the judge rejected that contention, saying it applied only to future successors to the agreement.
As for gallons customers, Mr. Snell argued that not only were tags left after deliveries, but customers were mailed invoices. He admitted the company had “not been as diligent” in alerting customers to unpaid invoices, but said it recently put into place a new billing system to remedy that.
He also countered complaints about the lack of tank rental billing, arguing that customers knew when they signed up for service about annual rental fees.
To provide more answers about billing practices, Ms. Becker advocated for a full audit of customer charges—a feat Mr. Snell said would be an enormous undertaking for 2,000 customers. “You’ve seen the ledgers. To go through those ledgers would be extremely burdensome,” he said.
Mr. Snell appeared unable to directly answer a question from the judge about whether DeCarli’s is seeking late payments from as far back as seven or eight years. He said the “only way to answer” the question was to say that records go back to 2008, and that DeCarli’s put customers’ money toward the oldest bills. “If you try to sort out which invoices got paid,” he said, it would be “difficult.”
Judge Howard decided that an audit of 30 customers—each side chooses 15—struck a workable compromise, with the results determining whether a larger audit was necessary.
Though the fate of many customers’ bills is still unclear, at least one felt jubilant about the results. “You are awesome!” a woman rejoiced to Ms. Becker outside the courtroom. “You are awesome!”