Settlement Proposed in Lawsuit Against Peterson Oil.
Thousands of Customers Potentially Eligible for $5.6 Million Settlement:
In a recent development, thousands of customers of a Worcester-based home heating company may be eligible to participate in a proposed $5.6 million settlement. The lawsuit revolves around allegations that Peterson Oil, the defendant, misrepresented the contents of the fuel oil it sold to an estimated 15,000 former and current customers.
Allegations Against Peterson Oil:
According to the lawsuit, Peterson Oil assured customers they were purchasing ordinary heating oil, also known as “#2 oil,” but instead provided a blend containing a high percentage of biodiesel. Biodiesel, derived from plants and animals, is promoted as a cleaner energy alternative. However, the lawsuit claims that the excessive biodiesel content caused damage to some customers’ heating systems, leading to malfunctions and shutdowns.
Legal Proceedings:
Initially filed in Worcester Superior Court and later transferred to Suffolk Superior Court, the lawsuit highlights concerns regarding the energy efficiency of the fuel provided. It alleges that the fuel sold by Peterson Oil had lower energy content compared to standard heating oil, resulting in customers needing to purchase larger quantities to achieve the same level of heat.
On April 8, a judge approved a proposed settlement agreement between the customers represented by their legal counsel and Peterson Oil’s insurer, Philadelphia Indemnity Insurance Company. A final approval hearing is slated for July 16. This settlement period spans from July 5, 2016, to July 5, 2019, coinciding with Philadelphia Indemnity’s tenure as Peterson’s insurer. Litigation for other timeframes remains ongoing.
Opposition and Denial by Peterson Oil:
Despite the settlement approval, Peterson Oil expressed opposition, stating that the claims against them lack merit. Louis A. Ciavarra, one of Peterson’s lawyers, reiterated their stance that the company did not engage in any wrongdoing. Other insurers of Peterson share this view.
Proposed Settlement Terms:
If finalized, the settlement would entitle customers to compensation for expenses incurred due to heating system failures and damages caused by the allegedly corrosive fuel. The lawsuit contends that customers were not informed about the high percentage of biodiesel in the fuel they purchased from Peterson Oil.
Industry Response and Previous Settlements:
Although biodiesel is endorsed by various industry groups and environmental advocates, the lawsuit focuses on the alleged excessive amount blended into Peterson’s fuel. Previous settlements include a $450,000 agreement with the state over allegations of violating contracts by delivering fuel containing more than the permitted 5 percent biodiesel.
While the proposed settlement marks a significant development, the Attorney General’s office, which negotiated the settlement, has declined to comment on the ongoing case involving Peterson Oil.
