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SOUTH GLENS FALLS — At first, Village Hall workers thought it was a scam.

They got a letter with bold print from National Grid, claiming a payment was delinquent. It included the boilerplate phrase, “shutoff notice.” They checked with National Grid; the village power bill was paid on time.

Then a second notice came.

Only then did they figure out that the bill had nothing to do with their electrical usage.

Last September, a village worker who was picking up leaves backed a payloader into a pole on Hamilton Street and broke it, Mayor Harry Gutheil said.

National Grid wanted $16,000, in an itemized bill that included the cost of all work, the pole itself and even 20 cents for each washer and bolt.

But the village’s insurance denied the claim, citing a state Court of Appeals case that determined municipalities could not be sued for property damage during normal duties. Claimants would have to prove the damage was caused by reckless behavior.

“They’re not going to prove recklessness in that case,” village attorney Mike Muller said. “You’re good.”

National Grid didn’t think so. The company never heard from the village’s insurance, New York Municipal Insurance Reciprocal, said company spokesman Patrick Stella. That’s why the company began billing the village with increasingly threatening letters.

Gutheil thought, until he spoke with Muller, that the village had to pay.

He was crafting a plan to negotiate, based on a similar situation he once dealt with while supervisor of Moreau.

“I said, ‘If that’s what these poles are worth, I’m going to talk to the assessor and get those poles revalued,” he said. “And the case went away.”

Public Works Supervisor Richard Daley tried to offer a positive spin on it.

“We’ll get even with them when they hit a water line,” he said.

Then Muller told them not to pay the bill.

“A municipality is not liable for mere negligence,” he said, adding that the village insurance company, NYMIR, also promised to defend the village in court if needed.

Gutheil hesitated.

“Do you think they’ll sue?” he asked.

Muller shrugged.

“If they do, the village gets a defense,” he said. “And it’s going to be an excellent defense because it’s going to rely on that Court of Appeals case.”

Stella made no threat of a lawsuit. He said the fight was an error of miscommunication.

“The unusual part in this case is we had no prior communication with the insurance company,” he said. “We will proactively reach out to their insurance company now.”

You can reach Kathleen Moore at 742-3247 or kmoore@poststar.com. Follow her on Twitter @ByKathleenMoore or at her blog on www.poststar.com.

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