City of Albuquerque owes Amarillo gasoline company $744,547 in damages

KFDA News Channel 10
By Sergio Garcia
Published: Jul. 3, 2023 at 2:34 PM GMT-7

AMARILLO, Texas (KFDA) - A federal judge has ordered the City of Albuquerque to pay an Amarillo gasoline supply company nearly three quarters of a million dollars.

According to court documents, on January 21, 2020 the city and Davidson Oil entered into a contract as the city issued a request for bids for the purchase and delivery of fuel.

The contract required the gasoline company to purchase financial security for their supplies to protect against price spikes.

During the pandemic, oil and gasoline prices plummeted causing the City of Albuquerque to purchase fuel oil from TAC Energy through a statewide agreement.

Albuquerque then invoked the “Termination for Convenience” clause to terminate the contract with Davidson Oil on May 19, 2020.

The court stated that this was a breach of the implied covenant of good faith and fair dealing.

Davidson Oil claimed losses from the City’s breach in four categories:

• Net loss on hedge contracts in the amount of $601,858.99
• Additional interest payments in the amount of $13,883.89
• Net loss in freight profits in the amount of $53.561.68

The court found the City of Albuquerque liable to Davidson Oil for $744,574.55 in damages.

Davidson Oil lost profits on:

• Fuel sales: $96,648.76
• Fuel transport: $46,066.80
• Hedge losses: $601,858.99

The City of Albuquerque can still appeal the ruling.