Injunction issued against Mass. oil co.

Bryan Cohen Mar. 16, 2012, 2:00pm


BOSTON (Legal Newsline) - Massachusetts Attorney General Martha Coakley has announced that a preliminary injunction has been issued against an Oxford oil company that allegedly left families in the cold during the holiday season.

Kalami Fuels Inc., doing business as Action Oil & Septic, and its owner, George Papageorge, have been ordered not to destroy any records pertinent to business operations. In addition, Action Oil must issue refunds to all prepaid customers for any oil they did not get. The injunction will remain in place throughout Coakley's lawsuit, which seeks more than $75,000 in restitution for victims in addition to civil penalties.

The injunction was issued Wednesday in Worcester Superior Court.

"We are very pleased that the court has taken this important step to ensure restitution for some consumers but we are still aggressively pursuing our lawsuit to make certain all affected customers receive compensation," Coakley said. "The safety and well-being of several families were put at risk by Action Oil and we are determined to not let them get away with their irresponsible business practices."

Coakley's lawsuit, filed on February 28 in Worcester Superior Court, alleges that Action Oil and Papageorge violated the state's consumer protection laws by luring customers into entering unfair prepaid contracts for home heating oil and then consistently failing to deliver. On Feb. 28, Coakley's office sought, and the court approved, a temporary restraining order freezing all of Action Oil's financial assets. The preliminary injunction orders Action Oil to refund customers who prepaid for service at the beginning of winter.

Coakley's lawsuit alleges that when Action Oil did deliver to prepaid customers, it only provided enough oil for a week or two at most. The company allegedly said that it was delivering small amounts to everyone so it could supply all customers, while it continued to make prompt and full deliveries to customers who paid with cash.

Additionally, Action Oil's contracts allegedly contained unfair terms, such as not specifying how or when oil was to be delivered despite oral promises that it would be delivered regularly as needed, stating that deliveries of prepaid oil would be made between Oct. 1 and March 1, even though the heating oil season usually runs through April, and the specification that any balance remaining after March 1 would not be refunded but would carry over until the heating season starting Oct. 1, 2012, locking the customers into service with the company beyond the contract's stated term.

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