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State trying to ban Munce's from selling prebuy contracts

The state asked a judge to keep Munce’s from entering any prepaid contacts for home heating oil last week, but Munce’s contests the validity of the state’s reasons. (Photo by Erik Eisele) (click for larger version)
July 28, 2010
GORHAM — The state attorney general asked a judge to prohibit Munce's Superior Petroleum Products from selling customers prepaid home heating oil contracts last week.

Attorney General Michael Delaney filed the request, called an injunction, in Merrimack County Superior Court last Wednesday.

According to a press release from the state Department of Justice, the attorney general's office alleges Munce's has entered prepaid home heating oil contracts without including "'a clear explanation of the means by which the dealer will meet the obligations of the contract for the entire contract period, including supplier agreements, futures contracts, bonding, or a line of credit,'" the attorney general press release said, quoting the state law regarding oil sales. "The prepaid contracts used by Munce's do not include the required language."

"It was a technical problem," said Robert Munce of Munce's Superior Petroleum Products, and customers shouldn't be alarmed. "We suspect it will be worked out shortly."

One line in the contract that was supposed to be bold and in italics wasn't, he said, that was the issue. "We made that change as soon as possible."

The state is asking for more than a change in typeface, however. The attorney general's office asked the court to force Munce's to give the state the money the company collected from customers for prepaid contracts so they can put in an escrow account. Either that, the state said, or Munce's should post a bond or a letter of credit.

Mr. Robert Munce said the company sells between 500,000 and 750,000 gallons of oil through prepaid contracts each year.

The state also asked the court to grant it an attachment on any real estate owned by Munce's or by other businesses owned or operated by Harold Munce, the owner of Munce's Superior Petroleum Products.

The state filed its lawsuit against Munce's in an effort to secure protection for those consumers who have prepaid for their heating oil, the Department of Justice press release said.

"The Attorney General's Office remains concerned about businesses which enter into prepaid contracts for home heating oil and which fail to comply with the law," Attorney General Delaney said. "We will continue to work to protect New Hampshire consumers against any business which attempts to take advantage of them by obtaining prepayment for goods or services that are not delivered."

The request comes less than a month after Harold Munce appealed the suspension of the company's motor fuel distributor license to the governor and executive council. The Department of Safety suspended Munce's license because of an outstanding tax bill of more than $250,000. The governor and council decided not to get involved in the matter.

Mr. Robert Munce said the company was likely under more scrutiny because of the tax bill.

"We've been doing this for 40 years," he said, and as far as the state concerned is concerned, "we think they're dead wrong."

Martin Lord & Osman
Varney Smith
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