Torrance Wins $2.3 Million in Suit Against Mobil Oil

The city of Torrance was awarded a $2.3-million judgment against Mobil Oil Corp. after the company refused to pay utility taxes on natural gas used at the refinery over the last four years.

The ruling Thursday in Los Angeles Superior Court found that the city was entitled to $1.57 million in unpaid taxes in addition to $745,000 in penalties and interest, said Torrance Mayor Dee Hardison. The lawsuit was filed in 1994 after an audit revealed that utility revenues paid by the company had dropped. Hardison said the audit found that Mobil had not paid the 6.5% utility users tax in about four years.

Mobil officials, who said they plan to appeal, contend that the company should be exempt from paying the tax because its natural gas, which is used for oil processing, is supplied by a Mobil subsidiary, not by the Southern California Gas Co.

But Superior Court Judge Florence T. Pickard said the gas would only qualify for exemption if it were part of a product for resale.