2.4 Issues

The captioned complaint was filed on behalf of Castlerock and Breiholz, with Breiholz signing the complaint and providing verification, ostensibly as the president of the corporation. The complaint raised two issues:

First, complainants asserted that when the contracts were made in 1988, they were informed that only "non-refundable" contracts were available. The complainants later learned this not to be true. Accordingly, their complaint seeks to have both contracts reformed to make them "refundable."

Second, complainants asserted that in 1988 they had been informed that the gross-up had to be paid whether or not the utility actually paid any tax. When in 1989 they obtained the Annual Reports of Toro and Cal Utilities, they discovered that each showed a taxable loss. Complainants relied upon the first two sentences of Conclusion of Law 12 to claim that neither utility was in a "taxable position" in 1988, and that consequently both owed Castlerock refunds of the tax gross-ups.