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AEP_complaint_against_GE_1719633702
AEP_complaint_against_GE_1719633702
AEP_complaint_against_GE_1719633702
PUBLIC
SERVICE
COMPANY
OFOKLAHOMA,
AND
SOUTHWESTERN ELECTRIC POWER COMPANY,
: ~~«IndexNo
Plaintiff(s),
|
-against-
Summons
GE RENEWABLES NORTH AMERICA, LLC,
You are hereby summoned to answer the complaint in this action and to serve
a copy of your answer, or, if the complaint is not served with this summons, to serve
a notice of appearance, on the Plaintiff's attorney within 20 days after the service of
this summons, exclusive of the day of service (or within 30 days after the service is
complete if this summons is not personally delivered to you within the State of New
York); and in case of your failure to appear or answer, judgment will be taken against
you by default for the relief demanded in the complaint.
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which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
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Defendant.
Company (collectively known as “AEP”), through its undersigned counsel, and for their Complaint
INTRODUCTION
purchase and sale of hundreds of wind turbine generators supplied by GE for three individual wind
power generation projects located in Oklahoma. Within only two to three years of commercial
operation, the GE wind turbine generators have exhibited numerous material defects on major
components and experienced several complete failures, at least one turbine blade liberation event,
have completely failed or have otherwise been rendered inoperable, requiring immediate repair.
An even larger portion have exhibited one or more material defects that are reasonably expected
This is a copy of a pleading filed electronically pursuant to New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
approved by the County Clerk. Because court rules (22 NYCRR §202.5[d]) authorize the County Clerk to reject
filings for various reasons, readers should be aware that documents bearing this legend may not have been
accepted for filing by the County Clerk. 2 of 35
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to result in failures within their useful service life that will require expensive repairs. AEP has
already incurred millions of dollars in costs and damages as a result of the wind turbine generator
AEP will inevitably need to repair and/or replace additional wind turbine generators in order to
meet the energy production requirements of its customers, and GE has refused to acknowledge its
responsibility to repair and/or replace all defective wind turbine generators.Therefore, in addition
to its claims for money damages,AEP seeks a declaratory judgment that GE is liable for expected
PARTIES
principal place of business located at 1 Riverside Plaza, Columbus, Ohio 43215. Southwestern
Electric Power Company is a Delaware corporation with its principal place of business located at
1 Riverside Plaza, Columbus, Ohio. Both are wholly owned subsidiaries of American Electric
Maverick Wind Project, LLC, Traverse Wind Energy Holdings, LLC, Traverse Wind Energy, LLC,
Sundance Wind Project Holdings, LLC, and SundanceWind Project, LLC (the “Buyer Entities”).
The Buyer Entities are all Delaware limited liability companies with their principal place of
located at 8301 Scenic Highway, Pensacola,Florida 32514 and another place of business located
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which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
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filings for various reasons, readers should be aware that documents bearing this legend may not have been
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7. This Court hasjurisdiction over this action as it involves claims for breachof
contract and breach of both express and implied warranties under New York State Law as well as
declaratory judgments pursuant to the Civil Practice Law and Rules (“CPLR”) § 3001, among
other relief.
among other things, GE maintains a place of business in the State of New York and the claims in
this action arise out of the purchase and sale of goods in the State of New York.
occurred in New York County and becausethe parties have consentedto proper venue in this Court
by agreement.
BACKGROUND FACTS
and three separate entities that were, as they existed at the time, owned by Invenergy, LLC, a
Illinois.
11. With the three contracts, Invenergy purchased certain wind turbine generatorsfrom
12. AEP purchased the assets of the individual Invenergy entities that executed the
This is a copy of a pleading filed electronically pursuant to New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
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accepted for filing by the County Clerk. 4 of 35
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The Contracts
13. On or about September 30, 2019, GE and Sundance Wind Project, LLC 1
(“Sundance’’) executed a Contract for the Sale of Wind Turbine Generators (Including Warranties)
for the SundanceWind Project (the “Sundance Contract”). The Sundance Contract is attached to
for a price of $125,580,000, sixty-five (65) model 2.82, 127-meter rotor wind turbines on 89-meter
hub height towers (full turbines), plus seven (7) model 2.3, 116-meter safe harbor units, along with
executed a Contract for the Sale of Wind Turbine Generators and Components (Including
Warranties) for the Traverse Wind Project (the “Traverse Contract”). The Traverse Contract is
for a price of $618,532,869.00, two hundred seventy-five (275) model 2.8, 127-meter rotor wind
turbines on 89 meter hub height towers (full turbines), sixty-one (61) model 2.8, 127-meter rotor
turbine “Blade Sets” and “Machine Head Sets” (turbines without towers), and twenty (20) model
2.5, 116-meter rotor turbine “Blade Sets” and 90-meter hub height towers (turbines without
machine head sets), along with certain ancillary equipment listed on a “Scope of Supply”
attachment.
1
Under the Sundance Contract, Sundance appointed Sundance Wind Project Holdings, LLC as sponsor to act as
Sundance’s limited agent to administer and assert Sundance’s rights under the Sundance Contract and until final
completion of the Sundance delivery, installation, and services project.
2
Under the Traverse Contract, Sundance appointed Traverse Wind Project Holdings, LLC as sponsor to act as
Traverse’s limited agent to administer and assert Traverse’s rights under the Traverse Contract and until final
completion of the Traverse delivery, installation, and services project.
This is a copy of a pleading filed electronically pursuant to New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
approved by the County Clerk. Because court rules (22 NYCRR §202.5[d]) authorize the County Clerk to reject
filings for various reasons, readers should be aware that documents bearing this legend may not have been
accepted for filing by the County Clerk. 5 of 35
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(“Maverick”) executed a Contract for sale of Wind Turbine Generators and Components (Including
Warranties) for the Maverick Wind Project (the “Maverick Contract”). The Maverick Contract is
for a price of $176,239,348.00, eighty-six (86) model 2.8, 127-meter rotor wind turbines on 89-
meter hub height towers (full turbines), five (5) model 2.82, 127-meter rotor wind turbine “Blade
Sets” and “Machine Head Sets” (turbines without towers), and twelve (12) model 2.82, 116-meter
rotor wind turbine “Machine Head Sets” (wind turbines without blades or towers), along with
equipment under each of the three contracts in accordancewith a “Schedule of Major Guaranteed
20. —_In
addition to delivery of all wind turbine generator components, GE agreed to
perform certain “start-up and commissioning activities” and provide certain “installation support”
Maverick Contract are attached as Exhibit A, Exhibit B, and Exhibit C, respectively, and all three
3
Under the Maverick Contract, Maverick appointed Maverick Wind Project Holdings, LLC as sponsor to act as
Maverick’s limited agent to administer and assert Maverick’s rights under the Maverick Contract and until final
completion of the Maverick delivery, installation, and services project.
This is a copy of a pleading filed electronically pursuant to New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
approved by the County Clerk. Because court rules (22 NYCRR §202.5[d]) authorize the County Clerk to reject
filings for various reasons, readers should be aware that documents bearing this legend may not have been
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22. Each Contract contained a substantially similar “Scope of Supply.” Article 2 of all
Seller agreesto sell to Purchaser and Purchaser agreesto purchase from Seller the
Equipment which consists of new parts and components when first delivered, and
Services, each as more fully described in Appendix B hereto (together with its
Attachments, the “Technical Specification”), subject to the terms and conditions as
set forth in this Contract.
23. | EachContractalsocontainedsubstantiallysimilarwarrantyprovisions.Article 8 of
Seller shall warrant the Equipment and the Services on the terms set forth in the
General Conditions until the end of twenty-four (24) months following the earlier
of (1) Purchaser’s achievement of Substantial Completion, as defined in Appendix
A or (ii) March 31, 2022 (the “Warranty Period”’).
24. Each Contract also contained substantially similar General Conditions with respect
to the warranties. Section 11(a) of the General Conditions for all three Contracts provided, in
the General Conditions for all three Contracts provided, in pertinent part, the following:
(c) Remedy. If the Equipment does not meet the above warranties during the
Warranty Period, as set forth in the Contract Document, Purchaser shall promptly
notify Seller in writing and shall promptly make the component(s) available for
6
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which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
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26. GE’s warranty also included coveragefor “serial defects,”and each Contract
contained substantially similar provisions related to “serial defects.” Section 11(d) of the General
Conditions for all three Contracts provided, in pertinent part, the following:
27. TheSundance
Contractwind turbinegenerators
weredeliveredandtheprojectwas
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life of the wind turbine generator main bearings is approximately 30 years. Within two or three
years of commercial use, however, the wind turbine generators for all three projects began
exhibiting significant signs of imminent complete failure and defects such as spalling, cracking,
31. A large portion of the spalling, cracking, etching, breaking, and/or other defects
32. The main bearingshold the drive shafts connectingthe rotors to the turbine
generators and allow the drive shafts to rotate freely to generateelectric power.
33. Themainbearingsarecrucialcomponents
to safeandproperoperationof the entire
three projects affecting components other than the main bearings. Additional defects include, but
a) Pitch Bearings. The pitch bearings connect the wind blades to the rotor hub and
allow the blades to rotate freely. Wind turbine generatorshave exhibited cracks
on the outer ring, which may propagate to the rotor hub casting and require
b) Gearbox Torque Pin Migration. The gearbox torque arm pins connect the
the wind turbine generators. The torque arm pins have exhibited downwind
migration that, if not remediated, will migrate to the point that the gearbox
This is a copy of a pleading filed electronically pursuant to New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
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filings for various reasons, readers should be aware that documents bearing this legend may not have been
accepted for filing by the County Clerk. 9 of 35
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becomes dismounted from the nacelle frame and lead to significant equipment
damage or failure.
c) TPI 9-meter Cracks at the SundanceProject. The TPI blades are connected to
the pitch bearing and drive the operation of the wind turbine generators.If the
cracks are not identified and remedied, they can cause failures of the blades,
d) The TPI blades have exhibited 48-meter to 52-meter Blade Edgewise Vibration
blade damage.
bearings and drive the operation of the wind turbine generators. All wind
turbine generators that utilize the LM blades at all projects are subject to
delamination at the blade root. If not detected and remedied, the delamination
can progress and cause blade failures that could result in blade liberation.
35. AEP promptly notified GE of all defects upon discovery in accordance with the
36. The defects identified herein are significant, and if they are not properly and timely
addressed,they could lead to calamitous property damage and/or catastrophic injuries. As of the
This is a copy of a pleading filed electronically pursuant to New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
approved by the County Clerk. Because court rules (22 NYCRR §202.5[d]) authorize the County Clerk to reject
filings for various reasons, readers should be aware that documents bearing this legend may not have been
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performed an inspection on Sundance project tower WTG-020. GE’s vendor identified a severe
blade crack that should have shut the turbine down immediately after the May 4, 2023 inspection.
despite having knowledge of the same. Lacking knowledge of the results of this particular
blade failure. Axis 1 (blade serial no. TPI-21317) experienced a blade liberation event that
originated from a crack on the leading edge at approximately 8-9 meters from the blade root.
020 would have been shut down had AEP known of the defects and blade cracks identified by GE’s
drone-basedinspection vendor.
Warranty Claims
41. After discovering the defects identified herein, AEP timely made warranty claims,
including Serial Defect claims, for wind turbine generators on all three projects.
42. AEP also notified GE that all main bearings for wind turbine generatorson all three
projects have been affected by the same or similar design defects and will fail prematurely if they
43. AEP continues to provide supporting documentation detailing how the material
defects and design defects identified on each project within the respective warranty periods have
44. Despite having clear documentation detailing how the material defects and design
defects has resulted or will continue to result in complete failure, GE continued to deny AEP’s
10
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which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
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warranty claims and repeatedly stated that the defects did not result in complete failure during the
Root CauseAnalyses
Defects claims, and GE eventually undertook a “root cause analysis,” as it was obligated to do
bearing defects to be, at least in part, the addition and/or application of a diamond-like carbon
47. GE also identified, as explained in its own root causeanalysis, a lack of a grounding
system as a contributing cause, at least in part, of the main bearing defects. A properly installed
grounding system may have prevented the failures and defects by redirecting stray electrical
currents away from the main bearing and/or other critical turbine components.
48. According to GE’s own root causeanalysis, the DLC coating, coupled with the lack
of a proper grounding system, caused the main bearings to exhibit premature and significant
replacement on all three projects. Others are showing significant signs that premature failure is
imminent.
certain generators in order to continue operation becausecomplete failures are occurring so quickly
11
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which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
approved by the County Clerk. Because court rules (22 NYCRR §202.5[d]) authorize the County Clerk to reject
filings for various reasons, readers should be aware that documents bearing this legend may not have been
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51. In addition to the main bearings, other defects and failures identified herein have
caused entire wind turbine generator systems to fail, degrade, fail completely, and/or otherwise
become inoperable.
the defects affecting other critical turbine components, including the pitch bearing defects, among
others.
53. The rate of operabilityon all three projectsis significantly lower than what is
reasonable and expected. The wind turbine generators are expected to achieve 98% availability,
and they have consistently fallen well below that expectation for all three projects. At one point in
time, only 70% of the wind turbine generators on one project were in operation or were operating
properly. AEP expects suboptimal operation figures in the future when the wind turbine generators
54. In responseto AEP’s warranty claims, and after performing the root causeanalyses
on all three projects, GE advised AEP that the project warranties only cover, or will ever cover,
55. GE took the position that any type of damageto any wind turbine generator
component, including the main bearings, other than a complete failure will not “count toward [the]
56. Therefore, GE advised AEP that it will only repair or replace the main bearings or
other components if, and not until, the main bearings or other components fail or shut down
12
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which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
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filings for various reasons, readers should be aware that documents bearing this legend may not have been
accepted for filing by the County Clerk. 13 of 35
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already been identified to be defective, even if the defect did not cause a complete failure of any
58. Accordingly, AEP’s warranty claims are all covered under the terms of the three
Contracts, and GE must repair and/or replace the main bearings and other defective components,
even if they have not yet failed completely, becausethe damageobserved in the main bearings and
other components that have completely failed is the same type of damagethat has been or will be
exhibited in the main bearings and other components for each and every wind turbine generator
that GE delivered.
59. In spite of overwhelming evidence and documentation that the wind turbine
generators for all projects were defectively designed and have material defects to several critical
components, GE has failed and refused to repair and replace the main bearings and other
components for all wind turbine generators, in violation of the terms of the Contracts for all three
projects.
under the Contracts, it took the complete opposite position with respectto at least one main bearing
manufacturer.
61. On or about October 20, 2023, GE sued SKF USA, Inc. (“SKF”) in the United
States District Court for the Southern District of New York, Case No. 1:23-cv-09274-PKC.
62. In its complaint against SKF, GE alleged that the main bearings that SKF sold to
GE were required to have a useful life of twenty years and, beginning in April 2021, SKF main
bearings began to repeatedly fail. A copy of GE’s first amendedcomplaint against SKF is attached
64. GE alsoasserted
thatit is reasonablyforeseeable
thatadditionalSKFmainbearings
will fail in the future within their 20-year useful lifespan. GE is seeking to recover damagesand a
declaratory judgment for the costs to repair or replace main bearings that will foreseeably fail,
65. Thus, despite GE’s allegations in the SKF lawsuit, GE is taking the opposite
position with respect to AEP’s warranty claims, contrary to both the express warranties contained
66. GE, therefore,knows and has even suedSKF becauseit knows, at the very least,
67. Asa result of GE’s continual failure to repair and/or replace defective turbine
generator components in accordance with the terms of the Contracts, AEP, through counsel,
notified GE of its failures and breaches on or about March 25, 2024. A true and accurate copy of
68. AEP’s March 25, 2024, notice letter demandedthat the dispute be referred to the
parties’ senior management, as required under the terms of all three contracts.
69. On March 29, 2024, GE respondedvia email to AEP’s March 25, 2024,notice letter
acknowledging receipt and stating, “[GE is] in the process of reviewing [the notice] thoroughly.”
and demand for a meeting between the parties’ respective senior management. GE’s April 18, 2024
14
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which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
approved by the County Clerk. Because court rules (22 NYCRR §202.5[d]) authorize the County Clerk to reject
filings for various reasons, readers should be aware that documents bearing this legend may not have been
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71. GE acknowledged in its April 18 responseletter that it received AEP’s Serial Defect
and warranty claim submissions and stated that its “Fleet Performance Engineers” reviewed the
documentation submitted on each claim to “determine whether the alleged issue is present and in
certain instances, will request the bearing supplier [to] perform an independent analysis,”
72. However, GE refused to accept responsibility for the fact that the bearings are
defective and will inevitably fail. Instead, GE claimed that its own personnel and the main bearing
manufacturer “noted normal wear and tear signs on operational bearings that do not impact the
performance of the main bearing.” Therefore, GE stated, those claims were denied.
73. GE then claimed that, basedon its “internal re-review of claims submitted and
calculations towards Serial Defect,” the 20% Serial Defect threshold “has not been satisfied for
any of the projects during their respective Warranty Periods,” and therefore GE denied any
74. — Instead,GEclaimed,thatAEP’s“contractualremedywouldbeatwelve(12)month
extended warranty for the components that ‘have not yet failed.’”
75. Similarly, with respectto the pitch bearing cracks, gearboxtorque arm pin
migration, the TPI 9-meter and blade edgewise vibration defects, and the LM root delamination,
76. In summary,GE’s position, asof April 18,2024,wasthat it met all of its contractual
obligations under the respective Contracts and none of the claims addressedherein have met the
Serial Defect thresholds. Even if the Serial Defect thresholds were met, which GE denied, GE’s
position would be that AEP’s remedy would not be proactive repair and replacement, but a 12-
month extended warranty for the components that “have not yet failed.”
15
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which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
approved by the County Clerk. Because court rules (22 NYCRR §202.5[d]) authorize the County Clerk to reject
filings for various reasons, readers should be aware that documents bearing this legend may not have been
accepted for filing by the County Clerk. 16 of 35
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time did GE ever address whether or not the wind turbine generators were defectively designed.
78. In May 2024, the parties participated in the “senior management” discussions
contemplated by the dispute resolution provisions included in the Contracts. GE and AEP
representatives discussed, among other things, the fact that only 70% of the wind turbine
generators were operational at the Sundance Project. GE merely listened to AEP’s concerns and
requestedmore time to review. GE agreedto meet again to continue discussions on May 23, 2024.
79. AEP and GE “senior management” met again on or about May 23, 2024. During
the meeting, GE offered certain services at no cost or at a discounted cost to AEP, but only for the
remainder of the 2024 calendar year. GE also offered to perform certain repairs on a limited number
of AEP’s wind turbine generators. However, GE’s “offers” fell well short of its obligations under
the Contracts and did not address major aspects of the issues, including the fact that the wind
80. Instead of complying with the Contracts, GE continued to deflect, evade, and deny
responsibility for failures or reasonably expected failures of components of the GE wind turbine
generators.As a result, the parties were ultimately unable to reach an agreement after the May 23,
81. AEP has complied with all dispute resolution provisions contained in the Contracts,
yet GE has completely failed, and continues to fail, to meet its contractual obligations.
82. Asaresult of the wind turbine generator design defects and other material defects,
AEP has incurred, and will continue to incur, significant costs, expenses,and/or damagesto repair
and replace wind turbine generator components for all three projects.
16
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which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
approved by the County Clerk. Because court rules (22 NYCRR §202.5[d]) authorize the County Clerk to reject
filings for various reasons, readers should be aware that documents bearing this legend may not have been
accepted for filing by the County Clerk. 17 of 35
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83. AEP has also incurred costs, expenses,and/or damages as a result of GE’s failure
to comply with the terms of the contracts for all three projects, including the warranty provisions,
among others.
84. As a direct and proximate result of GE’s failures and breached, AEP has also
incurred, and continues to incur, costs and damages related to its inability to meet its generation
87. AEP has standing to bring this cause of action against GE as the successor-in-
88. TheSundance
Contractincorporatedby referencecertainspecifications,
terms,and
conditions set forth in the attached Exhibit A.
generators began to fail and/or otherwise exhibit material defects. As of the date of the filing of
this Complaint, one or more failures and/or material defects have been detected in most, if not all,
generators did not conform to the terms of the Sundance Contract at the time of delivery. Such
17
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which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
approved by the County Clerk. Because court rules (22 NYCRR §202.5[d]) authorize the County Clerk to reject
filings for various reasons, readers should be aware that documents bearing this legend may not have been
accepted for filing by the County Clerk. 18 of 35
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non-conformity was not detectable or discoverable upon delivery and only became known when
associatedequipment and performing services that did not conform to the terms of the Sundance
Contract. GE also breached the SundanceContract by delivering wind turbine generators that were
defectively designed.
93. Sundance
andAEPperformedall of their obligationsunderthe Sundance
Contract,
SundanceContract and as required by New York law, including providing GE with prompt notice
upon initial discovery of the defects and/or failures and all subsequentdefects and/or failures.
95. Sundance and AEP have incurred, and will continue to incur, damages as a direct
96. Based upon the allegations set forth in this Complaint, AEP seeks a judgment for
money damagesin an amount to be determined at trial for breach of the Sundance Contract.
97. AEP incorporates by reference all previous allegations as if fully restated here.
certain wind turbine generators, together with associated equipment and services, as specifically
99, AEP has standingto bring this causeof action againstGE as the successor-in-
18
This is a copy of a pleading filed electronically pursuant to New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
approved by the County Clerk. Because court rules (22 NYCRR §202.5[d]) authorize the County Clerk to reject
filings for various reasons, readers should be aware that documents bearing this legend may not have been
accepted for filing by the County Clerk. 19 of 35
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100. The Traverse Contract incorporated by reference certain specifications, terms, and
101. GE delivered the Traverse Contract wind turbine generators, together with the
102. Within two years of commercial operation, the Traverse Contract wind turbine
generators began to fail and/or otherwise exhibit material defects. As of the date of the filing of
this Complaint, one or more failures and/or material defects have been detected in most, if not all,
103. These premature failures indicate that the Traverse Contract wind turbine
generatorsdid not conform to the terms of the Traverse Contract at the time of delivery. Such non-
conformity was not detectable or discoverable upon delivery and only became known when the
104. GE breached the SundanceContract by delivering the wind turbine generators and
associated equipment and performing services that did not conform to the terms of the Traverse
Contract. GE also breached the Traverse Contract by delivering wind turbine generators that were
defectively designed.
105. Traverse and AEP performed all of their obligations under the Traverse Contract
and as required under New York law, including full payment of the purchase price.
106. Traverse and AEP performed all conditions precedent to performance under the
Traverse Contract and as required under New York law, including providing GE with prompt notice
upon initial discovery of the defects and/or failures and all subsequentdefects and/or failures.
19
This is a copy of a pleading filed electronically pursuant to New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
approved by the County Clerk. Because court rules (22 NYCRR §202.5[d]) authorize the County Clerk to reject
filings for various reasons, readers should be aware that documents bearing this legend may not have been
accepted for filing by the County Clerk. 20 of 35
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108. Based upon the allegations set forth in this Complaint, AEP seeks a judgment for
money damagesin an amount to be determined at trial for breach of the Traverse Contract.
109. AEP incorporates by reference all previous allegations as if fully restated here.
110. The Maverick Contract a valid and enforceable contract for the purchase and sale
111. AEP has standing to bring this cause of action against GE as the successor-in-
112. The Maverick Contract incorporated by reference certain specifications, terms, and
113. GE delivered the Maverick Contract wind turbine generators, together with the
114. Within two years of commercial operation, the Maverick Contract wind turbine
generators began to fail and/or otherwise exhibit material defects. As of the date of the filing of
this Complaint, one or more failures and/or material defects have been detected in most, if not all,
115. These premature failures indicate that the Maverick Contract wind turbine
generators did not conform to the terms of the Maverick Contract at the time of delivery. Such
non-conformity was not detectable or discoverable upon delivery and only became known when
116. GE breachedthe Maverick Contract by delivering the wind turbine generators and
associatedequipment and performing services that did not conform to the terms of the Maverick
20
This is a copy of a pleading filed electronically pursuant to New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
approved by the County Clerk. Because court rules (22 NYCRR §202.5[d]) authorize the County Clerk to reject
filings for various reasons, readers should be aware that documents bearing this legend may not have been
accepted for filing by the County Clerk. 21 of 35
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Contract. GE also breachedthe Maverick Contract by delivering wind turbine generatorsthat were
defectively designed.
117. Maverick and AEP performed all of their obligations under the Maverick Contract
and as required under New York law, including full payment of the purchase price.
118. Maverick and AEP performed all conditions precedent to performance under the
Maverick Contract and as required under New York law, including providing GE with prompt
notice upon initial discovery of the defects and/or failures and all subsequent defects and/or
failures.
119. Maverick and AEP have incurred, and will continue to incur, damages as a direct
120. Based upon the allegations set forth in this Complaint, AEP seeks a judgment for
money damagesin an amount to be determined at trial for breach of the Maverick Contract.
121. AEP incorporates by reference all previous allegations as if fully restated here.
122. Under the Sundance Contract, GE expressly warranted, among other things, that
the goods would be delivered in accordancewith generally accepted operational practices of the
power producing industry and would be free from defects in material, workmanship, and title.
123. In the event that the goods did not conform to the warranty under the Sundance
Contract, GE was obligated to, at its sole expense, remove and replace the defective goods. GE
was also required, at its sole expense, to correct any warranty defect by either removing or
124. GE’s express warranty under the Sundance Contract was a promise that became
21
This is a copy of a pleading filed electronically pursuant to New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
approved by the County Clerk. Because court rules (22 NYCRR §202.5[d]) authorize the County Clerk to reject
filings for various reasons, readers should be aware that documents bearing this legend may not have been
accepted for filing by the County Clerk. 22 of 35
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125. Sundancerelied on GE’s expresswarranty as part of the reason for entering into the
Sundance Contract. AEP relied on GE’s express warranty as part of the reason for taking
126. The goods failed to conform to GE’s express warranty under the Sundance
Contract.
127. Upon AEP’s proper notice, GE failed to repair or replace the goods, as expressly
128. Sundance and AEP satisfied and performed all conditions precedent to GE’s
129. AEP has, and will continue to, incur costs, expenses,and damagesas a direct and
130. Based upon the allegations set forth in this Complaint, AEP seeks a judgment for
131. AEP incorporates by reference all previous allegations as if fully restated here.
132. Under the Traverse Contract, GE expressly warranted, among other things, that the
producing industry and would be free from defects in material, workmanship, and title.
133. In the event that the goods did not conform to the warranty under the Traverse
Contract, GE was obligated to, at its sole expense, remove and replace the defective goods. GE
was also required, at its sole expense, to correct any warranty defect by either removing or
22
This is a copy of a pleading filed electronically pursuant to New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
approved by the County Clerk. Because court rules (22 NYCRR §202.5[d]) authorize the County Clerk to reject
filings for various reasons, readers should be aware that documents bearing this legend may not have been
accepted for filing by the County Clerk. 23 of 35
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134. GE’s expresswarranty under the Traverse Contract was a promise that becamepart
135. Traverse relied on GE’s expresswarranty as part of the reason for entering into the
Traverse Contract. AEP relied on GE’s expresswarranty aspart of the reason for taking assignment
136. The goods failed to conform to GE’s expresswarranty under the Traverse Contract.
137. Upon AEP’s proper notice, GE failed to repair or replace the goods, as expressly
138. Traverse and AEP satisfied and performed all conditions precedent to GE’s
139. AEP has, and will continue to, incur costs, expenses,and damages as a direct and
140. Based upon the allegations set forth in this Complaint, AEP seeks a judgment for
141. AEP incorporates by reference all previous allegations as if fully restated here.
142. Under the Maverick Contract, GE expressly warranted, among other things, that
the goods would be delivered in accordance with generally accepted operational practices of the
power producing industry and would be free from defects in material, workmanship, and title.
143. In the event that the goods did not conform to the warranty under the Maverick
Contract, GE was obligated to, at its sole expense, remove and replace the defective goods. GE
was also required, at its sole expense, to correct any warranty defect by either removing or
23
This is a copy of a pleading filed electronically pursuant to New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
approved by the County Clerk. Because court rules (22 NYCRR §202.5[d]) authorize the County Clerk to reject
filings for various reasons, readers should be aware that documents bearing this legend may not have been
accepted for filing by the County Clerk. 24 of 35
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144. GE’s express warranty under the Maverick Contract was a promise that became
145. Maverick relied on GE’s expresswarranty as part of the reason for entering into the
Maverick Contract. AEP relied on GE’s express warranty as part of the reason for taking
146. The goods failed to conform to GE’s expresswarranty under the Maverick Contract.
147. Upon AEP’s proper notice, GE failed to repair or replace the goods, as required
148. Maverick and AEP satisfied and performed all conditions precedent to GE’s
149. AEP has, and will continue to, incur costs, expenses,and damages as a direct and
150. Based upon the allegations set forth in this Complaint, AEP seeks a judgment for
151. AEP incorporates by reference all previous allegations as if fully restated here.
152. GE designed the wind turbine generators that are the subject of the Sundance
153. GEisamerchant with respectto goods of the kind subject to the SundanceContract
(namely, wind turbine generators and their components) within the meaning of Section 2-104 of
the UCC.
154. The wind turbine generators(and their individual components) sold by GE pursuant
to the SundanceContract are goods within the meaning of Section 2-105(1) of the UCC.
24
This is a copy of a pleading filed electronically pursuant to New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
approved by the County Clerk. Because court rules (22 NYCRR §202.5[d]) authorize the County Clerk to reject
filings for various reasons, readers should be aware that documents bearing this legend may not have been
accepted for filing by the County Clerk. 25 of 35
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155. Accordingly, under N.Y. UCC § 2-314, there was an implied warranty in the sale
of the wind turbine generators (and their individual components) that they were merchantable, and
under N.Y. UCC § 2-315, there was an implied warranty that the goods sold and delivered were fit
156. Relying upon the implied warranties concerning the wind turbine generators (and
their individual components), Sundancepaid GE valuable consideration for the same.AEP relied
on the implied warranties as part of the reason for taking assignment of the SundanceContract.
157. GE breached its implied warranties by, among other things, delivering wind turbine
e) were not suitable or fit for the purpose of generating electric power.
suffer, damagesas a direct and proximate result of GE’s breachesof the SundanceContract implied
warranties of merchantability and fitness for a particular purpose in that, among other things, the
wind turbine generators have failed, have been derated, do not generate sufficient electric power,
159. Sundance and AEP were not aware, nor could they have become aware by ordinary
25
This is a copy of a pleading filed electronically pursuant to New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
approved by the County Clerk. Because court rules (22 NYCRR §202.5[d]) authorize the County Clerk to reject
filings for various reasons, readers should be aware that documents bearing this legend may not have been
accepted for filing by the County Clerk. 26 of 35
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160. Sundance and AEP materially complied with all notice requirements with respect
161. The express warranties and remedies included in the Sundance Contract fail their
essential purpose.
162. Based upon the allegations set forth in this Complaint, AEP seeks a judgment for
163. AEP incorporates by reference all previous allegations as if fully restated here.
164. GE designed the wind turbine generators that are the subject of the Traverse
165. GEisa merchant with respect to goods of the kind subject to the Traverse Contract
(namely, wind turbine generators and their components) within the meaning of Section 2-104 of
the UCC.
166. The wind turbine generators(and their individual components) sold by GE pursuant
to the Traverse Contract are goods within the meaning of Section 2-105(1) of the UCC.
167. Accordingly, under N.Y. UCC § 2-314, there was an implied warranty in the sale
of the wind turbine generators (and their individual components) that they were merchantable, and
under N.Y. UCC § 2-315, there was an implied warranty that the goods sold and delivered were fit
168. Relying upon the implied warranties concerning the wind turbine generators (and
their individual components), Traverse paid GE valuable consideration for the same. AEP relied
on the implied warranties as part of the reason for taking assignment of the Traverse Contract.
26
This is a copy of a pleading filed electronically pursuant to New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
approved by the County Clerk. Because court rules (22 NYCRR §202.5[d]) authorize the County Clerk to reject
filings for various reasons, readers should be aware that documents bearing this legend may not have been
accepted for filing by the County Clerk. 27 of 35
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169. GE breachedits implied warranties by, among other things, delivering wind turbine
d) failed, or will imminently fail, after only two or three years of useful
operation; and
e) were not suitable or fit for the purpose of generating electric power.
suffer, damagesas a direct and proximate result of GE’s breaches of the Traverse Contract implied
warranties of merchantability and fitness for a particular purpose in that, among other things, the
wind turbine generators have failed, have been derated, do not generate sufficient electric power,
171. Traverse and AEP were not aware, nor could they have become aware by ordinary
172. Traverse and AEP materially complied with all notice requirements with respect to
173. The express warranties and remedies included in the Traverse Contract fail their
essential purpose.
174. Based upon the allegations set forth in this Complaint, AEP seeks a judgment for
27
This is a copy of a pleading filed electronically pursuant to New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
approved by the County Clerk. Because court rules (22 NYCRR §202.5[d]) authorize the County Clerk to reject
filings for various reasons, readers should be aware that documents bearing this legend may not have been
accepted for filing by the County Clerk. 28 of 35
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175. AEP incorporates by reference all previous allegations as if fully restated here.
176. GE designed the wind turbine generators that are the subject of the Maverick
177. GEisamerchant with respect to goods of the kind subject to the Maverick Contract
(namely, wind turbine generators and their components) within the meaning of Section 2-104 of
the UCC.
178. The wind turbine generators (and their individual components) sold by GE pursuant
to the Maverick Contract are goods within the meaning of Section 2-105(1) of the UCC.
179. Accordingly, under N.Y. UCC § 2-314, there was an implied warranty in the sale
of the wind turbine generators (and their individual components) that they were merchantable, and
under N.Y. UCC § 2-315, there was an implied warranty that the goods sold and delivered were fit
180. Relying upon the implied warranties concerning the wind turbine generators (and
their individual components), Maverick paid GE valuable consideration for the same. AEP relied
on the implied warranties as part of the reason for taking assignment of the Maverick Contract.
181. GE breachedits implied warranties by, among other things, delivering wind turbine
28
This is a copy of a pleading filed electronically pursuant to New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
approved by the County Clerk. Because court rules (22 NYCRR §202.5[d]) authorize the County Clerk to reject
filings for various reasons, readers should be aware that documents bearing this legend may not have been
accepted for filing by the County Clerk. 29 of 35
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d) failed, or will imminently fail, after only two or three years of useful
operation; and
e) were not suitable or fit for the purpose of generating electric power.
suffer, damagesas a direct and proximate result of GE’s breachesof the Maverick Contract implied
warranties of merchantability and fitness for a particular purpose in that, among other things, the
wind turbine generators have failed, have been derated, do not generate sufficient electric power,
183. Maverick and AEP were not aware, nor could they have become aware by ordinary
184. Maverick and AEP materially complied with all notice requirements with respect
185. The express warranties and remedies included in the Maverick Contract fail their
essential purpose.
186. Based upon the allegations set forth in this Complaint, AEP seeks a judgment for
(Declaratory Judgment of Liability for Future Failures Under the Sundance Contract)
187. AEP incorporates by reference all previous allegations as if fully restated here.
188. A significant portion of the wind turbine generators that GE delivered pursuant to
189. Defects in design and materials have been detected in a significant portion of the
29
This is a copy of a pleading filed electronically pursuant to New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
approved by the County Clerk. Because court rules (22 NYCRR §202.5[d]) authorize the County Clerk to reject
filings for various reasons, readers should be aware that documents bearing this legend may not have been
accepted for filing by the County Clerk. 30 of 35
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190. The defects that causeda significant portion of the SundanceContract wind turbine
generators to prematurely and completely fail have been detected in all wind turbine generators
that GE delivered pursuant to the SundanceContract, even though they may not have completely
failed yet.
generatorswill imminently and completely fail. Such failures will require AEP to incur substantial
costs and damages to replace and/or repair the wind turbine generators in order to meet their
192. Inspite of the fact that the defects exhibited in the SundanceContract wind turbine
generators that have, to date, completely failed, GE has denied any responsibility for the
defectively designed wind turbine generators that are reasonably expected to fail in the future.
193. Accordingly, there is a genuine and material dispute between AEP and GE
involving a substantial legal interest under the Sundance Contract, and a declaration concerning
GE’s liability for future wind turbine generator failures will have substantial practical effect.
194. GE has acknowledged defects in Sundance Contract wind turbine generators that
have already completely failed, yet GE refuses to accept responsibility for the SundanceContract
wind turbine generatorsthat are reasonably expected to completely fail in the future.
195. AEP is entitled to a judgment declaring GE liable for costs and expensesassociated
with future Sundance Contract wind turbine failures that are caused by GE’s defective material
and design.
(Declaratory Judgment of Liability for Future Failures Under the Traverse Contract)
196. AEP incorporates by reference all previous allegations as if fully restated here.
30
This is a copy of a pleading filed electronically pursuant to New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
approved by the County Clerk. Because court rules (22 NYCRR §202.5[d]) authorize the County Clerk to reject
filings for various reasons, readers should be aware that documents bearing this legend may not have been
accepted for filing by the County Clerk. 31 of 35
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197. A significant portion of the wind turbine generators that GE delivered pursuant to
198. Defects in design and materials have been detected in a significant portion of the
199. The defects that caused a significant portion of the Traverse Contract wind turbine
generators to prematurely and completely fail have been detected in all wind turbine generators
that GE delivered pursuant to the Traverse Contract, even though they may not have completely
failed yet.
generatorswill imminently and completely fail. Such failures will require AEP to incur substantial
costs and damages to replace and/or repair the wind turbine generators in order to meet their
201. In spite of the fact that the defects exhibited in the Traverse Contract wind turbine
generators that have, to date, completely failed, GE has denied any responsibility for the
defectively designed wind turbine generators that are reasonably expected to fail in the future.
202. Accordingly, there is a genuine and material dispute between AEP and GE
involving a substantial legal interest under the Traverse Contract, and a declaration concerning
GE’s liability for future wind turbine generator failures will have substantial practical effect.
203. GE has acknowledged defects in Traverse Contract wind turbine generators that
have already completely failed, yet GE refuses to accept responsibility for the Traverse Contract
wind turbine generators that are reasonably expected to completely fail in the future.
31
This is a copy of a pleading filed electronically pursuant to New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
approved by the County Clerk. Because court rules (22 NYCRR §202.5[d]) authorize the County Clerk to reject
filings for various reasons, readers should be aware that documents bearing this legend may not have been
accepted for filing by the County Clerk. 32 of 35
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204. AEP is entitled to a judgment declaring GE liable for costs and expensesassociated
with future Traverse Contract wind turbine generator failures that are caused by GE’s defective
(Declaratory Judgment of Liability for Future Failures Under the Maverick Contract)
205. AEP incorporates by reference all previous allegations as if fully restated here.
206. A significant portion of the wind turbine generators that GE delivered pursuant to
207. Defects in design and materials have been detected in a significant portion of the
208. The defects that causeda significant portion of the Maverick Contract wind turbine
generators to prematurely and completely fail have been detected in all wind turbine generators
that GE delivered pursuant to the Maverick Contract, even though they may not have completely
failed yet.
generators will imminently and completely fail. Such failures will require AEP to incur substantial
costs and damages to replace and/or repair the wind turbine generators in order to meet their
210. Inspite of the fact that the defects exhibited in the Maverick Contract wind turbine
generators that have, to date, completely failed, GE has denied any responsibility for the
defectively designed wind turbine generatorsthat are reasonably expected to fail in the future.
211. Accordingly, there is a genuine and material dispute between AEP and GE
involving a substantial legal interest under the Maverick Contract, and a declaration concerning
GE’s liability for future wind turbine generator failures will have substantial practical effect.
32
This is a copy of a pleading filed electronically pursuant to New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
approved by the County Clerk. Because court rules (22 NYCRR §202.5[d]) authorize the County Clerk to reject
filings for various reasons, readers should be aware that documents bearing this legend may not have been
accepted for filing by the County Clerk. 33 of 35
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212. GE has acknowledged defects in Maverick Contract wind turbine generators that
have already completely failed, yet GE refuses to accept responsibility for the Maverick Contract
wind turbine generatorsthat are reasonably expected to completely fail in the future.
213. AEP is entitled to a judgment declaring GE liable for costs and expensesassociated
with future Maverick Contract wind turbine generator failures that are caused by GE’s defective
A. Judgment for money damages against GE for the costs that AEP has incurred to
repair and replace known failures of the wind turbine generators (or their
individual components) in an amount to be proven at trial;
B. Judgment for money damages against GE for other costs associated with known
wind turbine generator failures in an amount to be proven at trial;
D. Judgment declaring GE liable for the costs associated with the reasonably
foreseeable future failures of the wind turbine generators within their useful
service life;
E. Judgment against GE for the costs and expenses, including reasonable attorneys’
fees, in connection with this action and to the extent permitted by law;
G. All other and further relief as the Court may deemjust and proper.
33
This is a copy of a pleading filed electronically pursuant to New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
which, at the time of its printout from the court system's electronic website, had not yet been reviewed and
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Respectfully submitted,
Eric L. Singer
Taft Stettinius & Hollister LLP
111 East Wacker Drive, Suite 2600
Chicago, Illinois 60601-4208
Telephone: (312) 836-4191
Facsimile: (312) 527-4011
esinger@taftlaw.com
JosephP. Guenther
Taft Stettinius & Hollister LLP
41 S. High Street, Suite 1800
Columbus, Ohio 43215-6106
Telephone: (614) 220-0269
Facsimile: (614)221-2007
jguenther@taftlaw.com
133705776v1
34
This is a copy of a pleading filed electronically pursuant to New York State court rules (22 NYCRR §202.5-b(d)(3)(i))
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