ATLANTA — Railcar leasing company GATX has sued Georgia Power for at least $5 million, claiming the utility damaged hopper cars.
In the breach of contract suit, GATX claims Georgia Power returned 160 leased cars with damage from corrosion, according to documents filed Oct. 24 in the Georgia Northern District of U. S. Federal Court.
Terms of the lease required Georgia Power to use the cars only for a “non-corrosive, non-placarded commodity,” specifically gypsum and limestone, the GATX court filing says.
As Georgia Power returned cars to GATX in 2017 and 2018, “GATX and Georgia Power subsequently inspected the cars and discovered significant corrosion damage in excess of normal wear and tear,” the GATX filing says.
The damage would require $5 million to repair.
A Georgia Power spokesperson says the company believes the suit has no merit, Yahoo Finance reports.
National Steel Car Ltd. of Hamilton, Ontario, built the cars in 2007.
@Mike Holuba: Thanks for the update. Those HYWX cars have been sitting on that decrepit siding for who knows how long and there were a lot of them. Weeds up in the trucks.
Are these the cars marked “HYWX” along US-82 outside Dawson, Georgia?
We’re getting the HYWX cars on the Buffalo & Pittsburgh RR. They’re being restenciled to BPRR. Over a hundred have arrived so far.
HYWX reporting marks are on Georgia Power-owned coal hoppers.
Georgia Power may have an “out” here.
When I was still working; one of the chemical products we shipped was corrosive. We included a clause in our railcar leases that corrosion to the interiors of the cars could not be caused by the product because the leasing companies offered the cars as being suitable for the product service we intended for them. If the interiors incurred corrosion damage it was the lessors responsibility as the presence of corrosion was evidence the cars weren’t, in fact, suitable for the corrosive product service for which we leased them. Corrosion to the exteriors of the cars which could be caused by environmental exposure inside chemical plants or pulp mills was for our account.
Very rarely did I have a lessor challenge me on this and the few that did were unsuccessful.
If Georgia Power had the foresight to include a similar clause in their leases; GA may be out of luck.
From the Yahoo Finance article: “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.”
Paul Bouzide,
Most likely just coal, for one of their many former coal fired power plants…the corrosion could’ve come from sulpher that leached from the coal and got wet.
Wonder what they hauled. Coal ash/fly ash?