Condo owners unwittingly pay neighbor’s gas bill

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$230,408 verdict

The plaintiff was the board of trustees of a 167-unit condominium that brought a collection action against the defendant for failure to pay gas utility charges. The defendant is a Massachusetts attorney and owner of the condominium's only non-residential unit, which he used as his law office. The defendant's unit is approximately 5,000 square feet and much larger than any residential unit.

The condominium units were all heated by electricity and had separate electric meters for each unit. The units used gas only for cooking and hot water, and gas charges were paid as part of the each unit's monthly condominium fee, which in turn is based on the unit owner's percentage ownership interest in the condominium.

On about Dec. 19, 1995, the defendant approached the condominium board and requested permission to connect his unit to the main gas utility line serving the condominium for the purpose of converting the heating of his unit from electricity to gas. The board agreed to grant permission, provided that the owner be responsible for all costs associated with the conversion and that he install a separate gas meter so he could be billed for his gas usage directly by the gas utility. The owner converted the heating in his unit from electricity to gas.

Between 1996 and 2004, the board believed that the condo owner was being billed and paying for his gas usage separately by the gas utility and, therefore, did not issue any separate gas bill to the defendant. In March 2004, the condominium discovered that, although a sub-meter was attached to the defendant's unit, the gas utility had never installed such a sub-meter and had no knowledge of any such meter.

Also, the owner had never received or paid any gas bills from the gas utility for the past eight years. The gas charges associated with his gas usage were being billed to all the unit owners as part of their common area expenses or monthly condominium fees. In effect, the rest of the unit owners were unwittingly subsidizing that one owner's disproportionately large gas usage for heating his unit.

The owner, although aware that the gas utility was not billing him, never once informed the board that he was not receiving or paying any bills from the gas utility.

On about March 17, 2004, the board's attorney notified the owner that he was improperly tapping into the condominium gas line to heat his unit without paying for this appropriation of gas. The board also requested that the owner pay retroactively for his unit's gas usage from January 1996 to March 2004; the owner refused to do so.

On April 6, 2004, the board's attorney notified the owner that he was being assessed a fine of $75 per day for refusing to make any payment. On Sept. 21, 2004, the board's attorney notified the owner that he had been assessed $67,380, based on an approximation of his gas usage from January 1996 through September 2004 and including fines for non-payment, and demanded payment thereof. In November 2004, the board started measuring the owner's gas usage by reading the sub-meter attached to his unit and billing him monthly.

On Nov. 19, 2004, the board filed an action in Middlesex Superior Court to establish a debt for the owner's failure to pay the amounts assessed to him and to enforce its statutory condominium lien. On Oct. 26, 2006, the board terminated the gas connection to the owner's unit so that he could no longer use gas to heat his unit without paying for it.

At trial, the owner argued that he already paid for his gas usage because the payment was included in his percentage of monthly condominium fees. The court made findings in its written decision that the owner "made a promise, did not keep it and as a result others paid bills he rightfully owed" and that his actions were "no oversight or minor slip" but "‘misconduct' in any reasonable reading of the facts of this case" and even "little more than theft of services."

The court also found that the owner's "consumption of the unbilled energy was knowing and intentional" and that he was "aware that his position is lacking in merit and both his defense of the case against him as well as the filing of the declaratory judgment action were cynical and groundless efforts to avoid paying a clear financial obligation."

The court awarded the board $66,908 in retroactive charges for gas usage, $88,500 in fines and penalties; and $75,000 in attorneys' fees, finding that its assessments were enforceable as common expense under G.L.c. 183A, §6(a)(ii). The defendant expressed his intention to appeal the decision.

Type of action: Public utilities

Name of case: Thomas Graves Landing Condominium Trust v. Gargano, et al.

Court /case no.: Middlesex Superior Court, No. MICV2004-04613 (consolidated with Suffolk Superior Court No. SUCV2004-05018)

Tried before judge or jury: Judge

Name of judge: Nancy S. Holtz

Amount of verdict: $230,408 (including $75,000 attorneys' fees)

Date: June 16, 2008

Attorneys: Leonard Frisoli and Zaheer A. Samee, Frisoli Associates, Cambridge; Edmund P. Allcock, Marcus, Errico, Emmer & Brooks, Braintree (for the plaintiff)