New Orleans developer Anthony Marullo, owner of a large portfolio of residential and commercial properties, is suing the Sewerage and Water Board, alleging that the utility tanked his credit score and harmed his reputation over disputed water bills.
The lawsuit, filed in the Orleans Civil District Court earlier this week, concerns two multi-family apartment buildings in Central City, which together have 23 rental units.
Marullo alleges that after he contested bills totaling nearly $62,000 last year, the S&WB sent the disputed bills to its collections department without giving him any notice. It also claims he was never given notice of the findings of the dispute process.
A long history of disputes
Marullo’s lawsuit highlighted the growing frustrations among S&WB ratepayers over the local utility’s billing systems, which have recently sparked a bigger political tussle between Mayor LaToya Cantrell and the City Council.
At issue is a long history of disputed water bills as well as general questions about the utility’s finances and how it will pay for much needed infrastructure upgrades.
The S&WB declined to comment on Marullo’s lawsuit, but said that it turns final bills over to a collection agency 30 days after their due date, and that it makes “every effort” to notify customers.
The water board’s Executive Director Ghassan Korban last week said the utility has picked a vendor for its $65 million project to replace its manual-read meters with new “smart meters” that will eventually help stanch its billing woes. He said he hopes the project will start this year but conceded that it will take three years to complete.
Marullo declined to comment beyond the allegations in the lawsuit.
As a result of putting Marullo’s $62,000 debt into the water board’s collections department, the lawsuit claims that Marullo’s score at credit rating agencies plummeted from around 750 to around 500.
Credit scores — also referred to as FICO scores — are compiled by three main credit rating agencies and effect a person’s ability to borrow money and the cost of borrowing.
Banks and other lending institutions are typically restricted by regulation in terms of the loans they can make to people with poor credit scores. A FICO score above 740 is considered “very good”, while one below 579 is “poor” and would limit a person’s ability to borrow.
Marullo’s lawsuit claims that the S&WB’s actions means that he currently is unable to secure funding for his property development projects. It also claims that it has caused “irreparable harm to his reputation” and could affect his ability to remain on the board of the American Bank and Trust in Covington.
Marullo, who is the third generation of the family that has owned the French Market Restaurant & Bar on Decatur Street since 1965, also owns multi-family dwellings with nearly 1,000 rental units in the greater New Orleans area.
He also owns a portfolio of commercial properties, including recently acquired The Forum at 3131 Veterans Memorial Boulevard and Lakeside Plaza, a strip mall on 17th Street in Metairie.
Marullo’s lawsuit is seeking an immediate injunction to order the disputed bills to be removed from the water board’s collections process; a hearing is scheduled for Friday. He also seeks unspecified damages and attorneys’ fees.