In a filing in the U.S. District Court for the Northern District of Georgia in Atlanta, GATX said Georgia Power violated its leasing agreement because the power company returned 160 railcars with signs of corrosion damage, but Georgia Power is refusing to pay for any damages. GATX said the damages will cost $5 million to repair.
“GATX has demanded payment from Georgia Power in writing and given Georgia Power an opportunity to cure its breach [of contract], but Georgia Power has refused and its breach remains uncured,” GATX said in an October 24 court filing.
GATX return didn’t request for comment about the lawsuit, but Georgia Power said it plans to fight GATX’s claims.
“We are aware of the lawsuit filed by GATX and believe that the claims have no merit. Georgia Power will vigorously defend itself in this case,” said Georgia Power spokesperson John Kraft. Georgia Power is a subsidiary of Southern Co (NYSE: SO).
The original leasing agreement between Georgia Power and GATX began in 2004. The alleged damages were for railcars that were returned to GATX in 2017 and 2018.
GATX is seeking damages of $5 million as well as financial awards for court-related expenses.
This suit is actually the second lawsuit in recent years that GATX has brought against Georgia Power. GATX filed a similar lawsuit addressing the same claims with the U.S. District Court of the Southern District of New York, but the court dismissed that case on September 19, 2019 on the grounds that the alleged issues didn’t occur in the state of New York. GATX is a New York corporation with its principal place of business in Illinois.
In a filing in the New York court, Georgia Power said the railcars in question were used to transport limestone and gypsum from locations in the Southeast, including Tennessee and Kentucky, to Georgia Power’s Bowen, Scherer and Wansley power plants in Georgia.