A federal judge on Tuesday denied Siemens Industry’s motion to dismiss the City of Monticello’s fraudulent misrepresentation claim against the company and ordered Siemens’ parent company, the international conglomerate Siemens AG, to be added as a defendant in the case.

In one of numerous claims in a May 2015 lawsuit, the City of Monticello, through its attorney Cliff Gibson of Monticello, claims Siemens Industry, Inc. fraudulently induced the city into entering into a $10 million contract by identifying Siemens as the “fourth largest company in the world.”

According to the city’s lawsuit, Siemens solicited the city to hire it to replace all of the city’s water meters and a part of the city’s water mains/lines. As part of that solicitation, Siemens’ representative Tony Ardillo represented to the Monticello City Council that Siemens is the fourth largest company in the world – an obvious reference to the international conglomerate Siemens AG, not Siemens Industry.

However, when the contract form was submitted to the city, the contract bore the name “Siemens Industry” and made no mention of Siemens AG. “With the sleight of hand arising from the deceptive similarity of names of Siemens Industry and Siemens AG the 4th largest company in the world that the City thought it was dealing with on the project was not included as a party to the contract submitted to the City for approval,” the city’s response to the lawsuit reads. “That is fraud in the inducement.”

Siemens subsequently filed a motion to dismiss the city’s claim of fraud saying the city’s allegations failed to meet statutory requirements. The company also said the contract clearly discloses Siemens Industry as the contracting party and does not identify Siemens AG as a contracting party.

“The City could have easily discovered that Siemens AG was not party to the contract simply by looking at the contract,” Siemens attorney Don S. McKinney wrote in the motion to dismiss. “Moreover, the City has made payments only to Siemens Industry pursuant to the contract and has allowed Siemens Industry to perform under the contract. The City was, therefore, not justified in reliance on any alleged misrepresentations.”

The city argued that Siemens tricked the city with false statements to the city council and provided the city deceptive financial statements to convince the city to give Siemens the job.

The financial statements reflect gross revenues of over 73 billion euros in 2011, and specifically shows the net income to shareholders of “Siemens AG” as being over 6 billion euros and that the total equity attributable to shareholders of “Siemens AG” is 31 billion euros. It also shows that “Siemens AG” has over 402,000 employees worldwide, which mirrors the statement in the cover letter of Siemens’ response to the city’s request for qualifications that the company seeking the contract has more than 400,000 employees worldwide and is the fifth largest employer in the world, according to the city’s response to Siemens’ motion to dismiss the fraud claim.

Nowhere, according to the city, is Siemens Industry, Inc., reflected on any of those financial statements, but that is what Siemens “slipped to the city as part of its scheme to trick the city into thinking that it would be contracting with a big company with plenty of financial power, rather than a Delaware corporation of unknown financial strength that has the deceptively similar name of Siemens Industry, Inc.”

U.S. District Judge D.P. Marshall, Jr. disagreed with Siemens’ conclusions and denied the company’s motion to dismiss the city’s fraud claim.

“Monticello pleaded with particularity — the who, what, when, where, and how of its claim — about whether Siemens Industry secured a contract with Monticello to fix water lines and replace meters through misrepresentations about Siemens Industry’s financial backing by Siemens AG, its indirect parent corporation … The Court directs the Clerk to add Siemens AG as a counter-defendant in this case,” Judge Marshall wrote in his order.

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