Case 3:10-cv-30233-MAP Document 1 Filed 12/06/10 Page 1 of 6

UNITED STATES DISTRICT COURT

DISTRICT OF MASSACHUSETTS

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FirstLight Power Resources, Inc., CIVIL ACTION NO.:
FirstLight Power Resources Management, LLC
and FirstLight Hydro Generating Company

Plaintiffs,

v.

ACE American Insurance Company, and

National Union Fire Ins. Co. of Pittsburgh ,
PA

Defendants. DECEMBER 6,2010

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COMPLAINT AND DEMAND FOR JURY TRIAL

The Parties

1. At all times relevant, FirstLight Power Resources, Inc., FirstLight Power

Resources Management, LLC and FirstLight Hydro Generating Company are a

Delaware corporation, a Delaware limited liability company and a Connecticut

corporation, respectively, each with a principal place of business in Hartford,

Connecticut (collectively, the "Pla intiffs").

2. At all times relevant, Defendant, ACE American Insurance Company

("ACE ") is a Pennsylvania corporation with a principal place of business in Phil adelphia ,

Pennsylvania.
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3. At all times relevant , Defendant, National Union Fire Ins. Co. of Pittsburgh ,

PA ("National Union") is a Pennsylvania corporation with a principal place of business in

New York, New York.

JURISDICTION AND VENUE

4. This Court has jurisdiction over th is matter pursuant to 28 U.S.C. § 1332

(a) (1) insofar as this is a diversity action between the citizens of different states and the

amount in controversy exceeds $75,000.00, exclusive of interests and costs.

5. Venue is appropriate in this District pursuant to 28 U.S.C. § 1391(a)(2)

insofar as a substantial part of the events and omissions which give rise to this legal

action occurred in this District.

FACTUAL BACKGROUND

The Policy

6. Plaintiffs are insureds under Commercial Property Insurance Policy issued

by ACE, No. PEXD 37794545, for the policy period of 5/31/2009 through 5/3 1/2010 (the

"Policy"). The Policy will be filed as Exhibit A.

7. The Policy provides coverage for property damage at the insured locations

and also provides coverage for business interruption , a/k/a time-element, damages.

8. The Policy is divided into two layers. Layer A conta ins limits of the USD

equivalent of EUR 7,500 ,000, based on the June 1, 2009 internal rate of exchange.

Layer B insures the difference between the USD equivalent of 600 ,000,00 EUR, based

on the June 1, 2009 internal rate of exchange, and the limits under Layer A.

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9. ACE insures 100% of Layer A and 69.5% of Layer B. National Union

insures 30.5% of Layer B. (ACE and National Union are referred to collectively as the

"Commercial Property Insurers.")

10. The Policy is an "all risk" policy, insuring all risks of loss except for those

subject to specific exclusions.

The Power Station

11. Plaintiffs own and operate a 1,080 Megawatt hydroelectric pumped

storage plant in Northfield , Massachusetts, which generates electric power (the "Power

Station").

12. The Power Station is located between an upper reservoir and lower

reservoir, and generates energy by releasing water from the upper reservoir through the

Power Station turbines to the lower reservoir.

13. The Power Station consists of a pressure shaft (through which water flows

from the upper reservoir) , four penstocks, an underground powerhouse, four reversible

pump turbine generators, draft tubes and a tailrace tunnel (leading to the lower

reservoir).

14. The 300-acre upper reservoir is located 800 feet above the Connecticut

River and has a capacity of 5.6 billion gallons of water, equivalent to 8,475 megawatt

hours of production.

15. The lower reservoir is a 20-mile stretch of the Connecticut River,

extending from the dam at Turners Falls in Massachusetts north to the Vernon Dam in

the State of Vermont.

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The Loss

16. On or about May 1, 2010 , Plaintiffs commenced the dewatering (i.e.,

draining) of the upper reservoir for the purpose of facilitating repairs to the Power

Station and maintenance to the upper reservoir.

17. The dewatering process involved pumping out water from the upper

reservoir through the Power Station and down to the lower reservoir.

18. During this process, a significant amount of silt (approximately 200 ,000

cubic yards) unexpectedly slumped and entered the Power Station , thereby physically

injuring the Power Station.

19. The silt hardened and clogged the pressure shaft, the connecting

penstocks, the turbine units, and the tailrace tunnel , which caused a complete shutdown

of operations from early May to late November 2010.

20. In addition to the cost of remedying/repairing the physical loss and

damages at the Power Station , Plaintiffs sustained a loss of revenue and business

interruption associated with the extended shutdown of operations.

The Claim

21. Plaintiffs provided timely notice of the Loss to the Commercial Property

Insurers.

22. The Commercial Property Insurers have failed or refused to adjust the

Plaintiffs' claim in a timely manner.

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FIRST COUNT (BREACH OF CONTRACT)

23. Plaintiffs repeat and re-allege all of the allegations contained in

Paragraphs 1 through 22 , as if fully set forth herein .

24. Despite demand , the Commercial Property Insurers have failed, refused

and/or neglected to pay any portion of the Plaintiffs' claim pursuant to the Policy in

breach of their contractual obligations to the Plaintiffs.

25. As a result of the Commercial Property Insurers' breach of contract,

Plaintiffs have suffered , and continue to suffer, damages from the Loss.

SECOND COUNT (DECLARATORY JUDGMENT)

26. Plaintiffs repeat and re-allege all of the allegations contained in

Paragraphs 1 through 22 , as if fully set forth herein.

27. The extent of Plaintiffs' physical loss and damages, and the extent of the

economic losses associated with the shutdown of operations at the Power Station , have

not yet been fully determined.

28. An actual and justiciable co ntroversy exists regarding the Commercial

Property Insurers' obligations under the Policy to pay Plaintiffs for their losses and

damages, and a declaratory judgment is necessary and appropriate to determine the

rights and duties of the Plaintiffs, ACE and National Union pursuant to the Policy.

29 . Plaintiffs seek a declaration as to the scope of coverage and indemnity

obligations by ACE and National Union , pursuant to the Policy, that is associated with

the Loss.

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WHEREFORE, Plaintiffs pray for the following relief:

1. An Order from this Court declaring and setting forth the Commercial

Property Insurers' duties and obligations to Plaintiffs, pursuant to Policy;

2. Damages;

3. Attorneys ' fees and costs incurred by Plaintiffs in this dispute;

4. Interest and costs; and,

5. All other damages this Court deems appropriate.

December 6, 2010
FirstLight Power Resources, Inc.
FirstLight Power Resources
Management, LLC and
FirstLigh dro Generating Company

Je . Vita, Esq . Bar No. 675191

~{ney for the Plaintiffs
p axe Doernberger & Vita. P.C.
Attorneys for Plaintiffs
1952 Whitney Avenue
Hamden, CT 06517
Tel.: 203.287.2100