Published on August 22, 2019 |
by Johnna Crider
22. August 2019 by Johnna Crider
Have some coffee, because this is going to be a long, detailed read. In fact, you may want to simply move the coffee pot into your living room (or wherever you read this) and enjoy.
However, if we go back in time, we can actually see that Walmart's lawsuit against Tesla is pretty much a defense – not the offense that many seem to believe at first reading (naturally enough). In fact, Walmart appears to be just petty. Let me explain.
On August 20, 2019, Tesla filed a notice of violation and claim for cure for office in the New York County Clerk. This was before Walmart decided to sue Tesla. The document was dated July 27, 2019, but it was officially filed a month later.
"I am writing to follow up on the breach notice and demand that Tesla be sent to Walmart," the document begins. Read on for a quick overview of key takeaways from the document.
"Walmart's Material Breach of the Agreement"
Tesla installed, maintains and operates 248 solar power systems on the roofs of 248 Walmart stores. These systems are under a contract (Solar Power & Services Agreement or something similar).
Every system has a contract. Some may have specific terms that vary, but each has the same general points: Tesla supplies and maintains the systems, and Walmart pays for the use of the equipment or power it generates.
Walmart breached that contract, according to Tesla. 244 systems are disconnected because Walmart failed to comply with the agreement, according to Tesla's claims. Tesla says it has tried to accommodate Walmart's delays, unreasonable demands and changing positions. In other words, the implication is that Walmart made excuses and pulled this off.
“It is neither necessary nor realistic to try to document all of Walmart's violations, abuses, or bad faith in a single letter. Nevertheless, we will summarize the behavior to ensure that Walmart is under notice of the allegations Tesla has against it, ”the company wrote. Here is a summary of more info from Tesla's detailed letter:
1. “The Rooftop Solar Photovoltaic Systems”
Tesla began operating the systems around September 2010, and within 7 years the numbers dropped up to 248 systems. Each system passed local inspections and was allowed to operate. Between 2010 and March 2018, they generated over 600,000 MWh of electricity.
2. "Without contractual obligation, Tesla Walmart's concerns after unrelated thermal events in Spring 2018"
In March and May 2018, Beavercreek, OH and Indio, CA, experienced Walmarts unrelated thermal events . Following these two fires, Walmart demanded that Tesla power from the other systems on their sites, even though no one had any history of thermal events and posed no threat or risk – whether from thermal events or anything else.
Walmart had no right to require these unaffected systems to become powerless. Still, Tesla went out of its way to submit to the demands of a valued customer. Tesla also agreed to inspect each system to ensure that any problems were addressed – at its own expense. Tesla and investors are paid based on the energy generated by the systems.
3. "Walmart caused delays by reneging on the first inspection protocol"
This means that Walmart delayed the inspection process – repeatedly. An example of this was that both parties agreed to a protocol, but Walmart did not engage with Tesla regarding the inspection or the reports. It also gave no feedback.
Walmart also hired two consultants and insisted that the protocol be revised with input. This took months as it negotiated a new protocol and finally reached an agreement in December 2018
4. "Walmart caused delays by introducing extra contractual terms for re-energization, by failing to provide feedback on inspection reports, by failing to pay his consultant and by not following through "
In December, both agreed that Tesla would complete the inspections using the new protocol. The following month, Tesla reviewed the reports with the consultants, and they all agreed that all criteria were met for each site. Tesla then asked to power the sites. But instead, Walmart invited Tesla to headquarters to discuss revitalization and plans to maintain the progress the parties made the year before.
This means that Walmart decided on something else – it changed the deal it had just agreed to and wanted something else: for Tesla to pay for the damages on three sites, the legal fees incurred, and consultant fees.
If Tesla did not pay these fees, Walmart would say no to Tesla's request to power the sites, including the areas that had no problem whatsoever.
Initially: Walmart demanded that a third party attend and review the plans. They did, all parties agreed, and when Tesla wanted to power the systems, Walmart said, "Not unless you give us money."
5. "Walmart's delayed and new demand that 248 systems re-energize await further" rotor case "analyzes for 2 (or maybe 4) systems"
Walmart insists that none of the The 248 systems can be powered before Tesla provides the root cause. This means that Tesla now has to investigate why two panels caught fire, and until they know what started it, Walmart will keep all systems offline.
This specific section describes a continuation back and forth, with Walmart constantly changing its focus, making more demands, suddenly appearing happy, and then suddenly unhappy while making other new random claims.
Tesla bowed back for Walmart. Tesla went nine as far as making sure every one of the 248 roofing systems was safe. Tesla also went out of its way to make sure Walmart was happy.
However, Tesla suffered in doing so. It incurred expenses and losses, but it was okay with that because it wanted to make sure Walmart was happy. The only thing Tesla didn't do was waive his right under the contracts. Tesla did its part, but Walmart refused to power the systems.
Walmart is still trying to postpone this, and now the high-profile lawsuit is really just one of those delays. Tesla writes:
"The only barriers to providing power to the 30 sites already inspected are (a) Walmart's insistence that it must first send its consultant to confirm the reports, without taking any concrete steps to make and (b) Walmart's repeated practice of introducing unreasonable, non-contractual and re-energizing concessions, Tesla is confident that if Walmart were to actually investigate the inspected sites, it would have found that the concerns have been alleviated. Walmart cannot claim breaches of sites it has never inspected, agree to an inspection protocol as a means of cure, and then continue to claim violations because it refuses to confirm that cure requirements are met. In other words, Walmart is playing games – games that cost Tesla and the investors say, the obstacle to Walmart getting what it is entitled to under the contract. ”
ne lot of money.