MEMPHIS, Tenn. — Memphis Light, Gas and Water officials filed a lawsuit against a tree trimming company for breach of contract.
The complaint, filed Friday, June 7 in federal court, said that Asplundh Tree Expert, LLC, was chosen through bidding for line clearance in 2019 for a five-year contract.
The total contract amount was for $97.4 million over five years, $74.5 million of which went for cycle trimming.
"At all times during the bidding process and when the contract was in effect, Asplundh was well-informed of all material information related to the scope and performance of work because the material information was included in the bid request documents provided to Asplundh prior to entering into the contract," the complaint reads.
The complaint alleges that Asplundh began the work in Oct. 2019, but the performance was deficient from the beginning.
"In fact, in 2020, Asplundh only cycle trimmed 610 of the 1,400 required miles, and the number of miles trimmed each year by Asplundh thereafter dropped," the complaint reads.
The lawsuit alleges that the deficient performance resulted in many sections of the grid system being behind schedule, particularly in sections with older trees which resulted in higher risk of tree-related outages.
"Asplundh did not perform the cycle trimming in a timely manner and did not make sufficient progress on the assigned sections that would have resulted in it performing the entirety of the cycle trimming required under the contract," the complaint reads. "Asplundh also failed to hire, train and maintain a sufficient workforce to timely complete the cycle trimming that was assigned by MLGW, despite its obligation to do so and despite its own representations both during the bidding process and later that it would provide enough employees to achieve the 3-year cycle trimming."
The lawsuit claims that crew sizes dropped each year between 2020 and 2023, also claiming that Asplundh moved crews from Memphis to jobs in other states, "where upon information and belief, Asplundh knew it was able to profit more than it would profit under the bid prices it submitted for the contract."
The filing claims that Asplundh trimmed 610 miles in 2020, 552 miles in 2021, 190 miles in 2022 and only 26 miles in 2023 before the utility terminated the contract on July 13, 2023.
The lawsuit lists five counts in its cause of action, including breach of contract, negligent misrepresentation, intentional misrepresentation/fraudulent inducement, promissory fraud/fraudulent inducement and constructive fraud.
"Asplundh is contractually obligated to make prompt payment to MLGW for the expenses and financial loss to MLGW for completing the cycle trimming work to the extent such expenses and financial loss exceeds the amount payable under the contract had Asplundh completed the cycle trimming work," the filing reads.
The lawsuit claims that after the breach of contract, the new contracts total is over $227 million, caused by higher costs.
"For that time period of fall 2023 to fall 2024, the three new contracts' cycle trimming bids total $31,990,445 for that one period alone, which is twice the amount of Asplundh's contractual obligation to perform the same cycle trimming in the amount of $15,649,374 for that same time period," the filing reads. "As such, in the first year alone, the loss incurred or to be incurred by MLGW for the additional costs of the new contracts is over $16 million."
MLGW is seeking compensatory damages in an amount to be proven at trial, plus punitive damages. It also askes for MLGW to be awarded prejudgement and post-judgement interest.
