Years later, Water District eyes suing Hollywood pump maker to recover lost taxpayer dollars

UPDATE: Nov. 19 — The South Florida Water Management District last week approved a settlement with Hollywood’s Morrison Pump that it hopes will end a dispute that dragged on for five years without reaching court. In 2006, Morrison Pump sold the district 15 large pumps that cost $1.5 million. The pumps quickly failed and Morrison refused to honor its warranty, claiming the pumps were misused. Morrison now has agreed to fix the pumps, and provide an 18 month warranty. “In addition, district staff has recommended that Morrison be suspended from contracting with the district for three years” regarding the sale of the same kind of pumps.

By Dan Christensen, 

A flood control structure on Lake Okeechobee where pumps failed

Five years ago, the South Florida Water Management District took a $1.5 million bath when a Hollywood company sold it 15 large electric pumps that quickly failed, then refused to honor its warranty.

Now, the top lawyer for the budget-challenged independent taxing district is recommending it sue the Hollywood company that manufactured the pumps.

“If the district does not pursue this lawsuit, it will risk not being compensated for the damages it sustained,” the district’s nine-member governing board was told in a memo by General Counsel Carolyn Ansay.

The recommendation follows more than a year of failed negotiations with representatives of Hollywood’s Morrison Pump Company.

The talks began after Broward Bulldog reported last year how the Water District had been stuck with the faulty pumps, yet had done little to recover its money or enforce a threat to suspend Morrison as a vendor for failing to honor its five-year pump warranty.

It purchased replacement pumps from a different supplier for an additional $1.85 million.

Rather than go after Morrison, the district later allowed it to supply $2 million in additional pumps as a subcontractor for a pump station off U.S. 27 being built as part of the enormous Everglades restoration project.

The company’s Coral Gables lawyer, former Water District Chairman Nicolas Gutierrez, could not be reached for comment. He is serving a one-year suspension from the Florida Bar for falsifying and fabricating evidence in an unrelated civil case.

Morrison spokesman and sales manager Michael Murazzi did not respond to a request for comment.

Previously, Murazzi said district officials had sought to wrongly blame Morrison for their own mistakes. “Whatever their internal problems were, we were the fall guy,” he said.

The South Florida Water Management District is a regional agency with an unelected board that oversees water resources in 16 counties from Orlando the Florida Keys, including Broward. It’s 2013 fiscal year budget is $567.3 million – about 40 percent of which is generated by property tax dollars.

The district purchased 15 of Morrison’s 42-inch horizontal axial flow submersible pumps. They were needed to draw water from Lake Okeechobee in case of a drought. The pumps quickly failed. Ansay’s memo says the Water District retained experts to determine why.

“These experts concluded that the design of the pumps was the cause of the failure,” the memo says.

In contrast, Morrison previously declined warranty coverage claiming the pumps were misused. For months, a district spokesman had said a settlement with Morrison was near. What happened to derail it was not disclosed.

The memo says the district’s in-house lawyers will handle any litigation against Morrison using “budgeted” property tax revenues.

The board is expected to decide Thursday whether to authorize a lawsuit.

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