Opinion ID: 672338
Heading Depth: 2
Heading Rank: 2

Heading: The Waranch Action.

Text: 9 The Waranch action against PSC was filed in May 1977. In their complaint, the plaintiffs (Mr. Waranch and his partner) alleged that during the policy period, PSC breached a contract with them by failing to provide natural gas service to a mobile home park they were then constructing, and that the failure to provide such service constituted common law discrimination and an unlawful statutory preference in violation of Colorado Revised Statutes Sec. 40-3-106 (1973). Plaintiffs sought compensatory damages, including lost profits of $3,000,000 and punitive damages of $2,000,000. 10 In July 1977 PSC's attorney, Mr. Bryans, notified Lloyd's of the suit by a letter. With regard to coverage, Mr. Bryans stated: 11 I expect there may be some argument over whether or not Public Service Company is covered under its excess policies in this action, but I did want to put you on notice in any event. 12 Principal Brief of Appellant, App. 1 at 0109. 13 In April 1980 the state trial judge granted partial summary judgment in favor of PSC on Waranch's contract claim. The judge also stayed the state court action, ordering the Waranch plaintiffs to exhaust their administrative remedies with the Colorado Public Utilities Commission (PUC) first. The PUC concluded that PSC had discriminated against the Waranch plaintiffs and other mobile home park owners in furnishing gas service in 1974. Principal Brief of Appellant, App. 1 at 0081-0083. However, before issuance of PUC's order, the state district judge set a jury trial on the remaining issues of common law discrimination and unlawful statutory preference. 14 In May 1983 the jury returned a general verdict against PSC, awarding the Waranch plaintiffs $300,000 in compensatory damages and $150,000 in punitive damages. Shortly thereafter the parties settled the Waranch litigation for $328,000 paid by PSC. 15