Just Returned from the DRI Products Liability Steering Committee Fly-In Meeting

I just returned from the yearly "fly-in" meeting of the DRI Products Liability Steering Committee.  This is an annual meeting in June where members of the committee get together to discuss and plan the next year's Products Liability Conference.  It is a productive meeting, and it is also a chance to get together with friends on the committee and catch up in between conferences. 

Go ahead and mark your calendar for the 2014 DRI Products Liability Conference, which is scheduled for April 9-11, 2014 at the Arizona Biltmore in Phoenix, Arizona.  There are going to be a few format changes for the 2014 conference.  The most significant change (for me) is that the Specialized Litigation Group ("SLG") that I chair -- Agricultural, Construction, Mining and Industrial Equipment -- is scheduled to do a one-hour "main stage" presentation.  In the past, the SLGs have done breakout sessions.  This year, certain SLGs are being asked to provide a main stage presentation, and ACMIE is one of them.  I need to submit our topic by July 9, so if you have any ideas and care to share them, let me hear from you!

We also discussed  other topics for the conference, general themes, and membership matters.  We also had an interesting discussion on future venues and how to respond to participant feedback in terms of programming, the preferred month for the conference (as April seems to run into spring break for many people), venue, etc.  It was a productive meeting, and now that I have been involved with this group for four or five years, I have made some good friends and enjoyed the opportunity to catch up with them. 

Unfortunately, my travel home was brutal.  Storms in Chicago, and a missed connection in Charlotte led to a 1:00 a.m. arrival, as opposed to the planned 9:30 p.m. arrival.  But, it is always good to get home.

If you have any interest in DRI, please let me know, as I would be happy to assist with getting you involved. 

Verdict Survey: Tankless Water Heaters in Dorchester County

The May 2013 issue of Verdict Search included a South Carolina products liability case tried in Dorchester County.  The details of the case are set forth below.

Capsule Summary:   On March 1, 2013, a Dorchester County jury returned a verdict in favor of the plaintiff for $750,000 in a case involving tankless water heaters purchased by the plaintiff plumbing company.  Plaintiff alleged the tankless water heaters it purchased failed once temperatures began to drop in the winter, causing water pipes in the homes in which they were installed to burst. 

 

Case Information: Amo, LLC v. Eccotemp Systems, LLC, Greenwave Hot Water Heaters, LLC/Eccotemp Systems, LLC v. Hurricane Construction, Inc., C/A No. 2010-CP-18-01920, Dorchester County Court of Common Pleas.

 

Date of Verdict:  March 1, 2013

 

Venue: Dorchester County Court of Common Pleas

 

Judge: The Honorable Michael G. Nettles

 

Factual Background:  In 2008, Plaintiff Amo, LLC (“Amo”) (a plumbing company) purchased 75 tankless water heaters and installed them in various homes.  Amo purchased the units from Eccotemp Systems, LLC (“Eccotemp”).  The water heaters were supposed to produce warm water on demand and conserve energy.  They were also allegedly 30 to 40 percent less expensive than the price of competitor products that were similar.  Amo paid $498 per unit.  In the winter of 2008, and as temperatures began to fall, the units Amo purchased began to fail and caused water pipes in the homes in which they were installed to burst. 

 

Allegations and Procedure: Amo sued Eccotemp and claimed Eccotemp manufactured and sold a defective product.  Amo alleged causes of action for breach of warranty, breach of contract, and violation of the South Carolina Unfair Trade Practices Act.  Amo also named the retailer that sold the water heaters, but the retailer was dismissed later by Plaintiff’s counsel.  Eccotemp then impleaded Hurricane Construction, Inc. (the homebuilder) for whom Amo installed the units, but Hurricane was dismissed from the case prior to trial.

 

At trial, Amo's counsel argued Eccotemp’s products included broken thermostats, which caused water pipes to freeze.  The thermostats also caused the units to malfunction and not heat water inside the units if temperatures dropped below 37 degrees fahrenheit.   There was testimony at trial that 70 percent of units sold to Amo by Eccotemp failed.  Eccotemp replaced 40 of the units, and 14 of them froze again.  Amo's counsel argued that several homeowners experienced as many as three Eccotemp water heater failures in their homes during the cold months.  When Amo replaced the Eccotemp units with a competitor’s units, those units did not fail.  Amo introduced evidence of a pattern of behavior by Eccotemp, including evidence that homeowners in several states had similar problems with the water heaters.

 

Eccotemp argued that the products' failure was not the result of a product defect.  Instead, it argued Amo's employees installed the units in the homes incorrectly.  Eccotemp also claimed the homeowners contributed to failure of the units and frozen water pipes by not allowing their pipes to drip during cold weather.

 

Experts: Amo's expert was Gary Roland, a plumber in Lexington, South Carolina.  Defendant’s expert was Michael Richmond, a plumber in Charleston, South Carolina. 

 

Alleged Damages:  Amo's counsel sought a recovery of $158,000, as well as attorney’s fees and costs.  Amo's counsel requested that the damages be trebled pursuant to the South Carolina Unfair Trade Practices Act.  Defendant’s counsel disputed these damages.

 

Result: The jury returned a Plaintiff’s verdict, in favor of Amo and determined the damages for breach of warranty, breach of contract, and unfair trade practices totaled $750,000.  The jury apportioned $125,000 to breach of warranty, $158,000 to breach of contract, and $474,000 to the unfair trade practices claim.

 

Miscellaneous:  The last demand in the case was $85,000.  The last offer was $42,500, which the write-up indicates was withdrawn.  After the verdict, Eccotemp filed a motion for a mistrial, which was denied.  Eccotemp filed a Notice of Appeal with the South Carolina Court of Appeals and also filed for United States Bankruptcy Chapter 11 bankruptcy protection.  The write-up indicates the information contained therein was provided by Plaintiff’s counsel, and none of the Defendants’ counsel responded to inquiries.

 

Thanks to the May 2013, Volume 12, Issue 5 of Verdict Search for this information.  I also frequently use their verdict search engine, www.verdictsearch.com.

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CLE for ACC-South Carolina Chapter was a Success

 

 

My firm is a proud sponsor of the Association of Corporate Counsel - South Carolina Chapter, and I am the firm's primary liaison for this group.  Last Friday, we conducted a three-hour continuing legal education seminar for the chapter, and I am happy to say that it went off without a hitch.

 

My partners Christian Stegmaier and Rebecca Halberg presented on ethics in mediation.  Joey McCue presented on unconscionability in contractual provisions and leveraged from his experience in the recent South Carolina Supreme Court case of Gladden v. Boykin.  Tom Bacon presented on management of workers compensation claims.  We also had Otis Rawl from the South Carolina Chamber of Commerce join us.  He was kind enough to provide an overview of South Carolina's current business climate and the most recent legislative session.

The picture above is of yours truly and was taken during my presentation: "How Did You Arrive at that Number?  Objective and Quantitative Methods for Case Management and Evaluation."  As I told our group, I had an experience in my first or second year of practice where a client asked me how I arrived at a certain settlement figure for a case.  When my answer failed to provide any real process, I could tell that my client was "less than impressed."  In other words, it was not apparent that I was adding any real "value" to the case.

Since that time, I have taken an interest in how to evaluate a case and how to use a process to arrive at exposure, settlement value, etc.  I finally had an opportunity to put it together in this presentation, and I enjoyed sharing it with our ACC attendees.  Recently, I heard a speaker say, "All trial is theater."  I think there is a lot of truth to that statement, so I arranged the presentation so as to approach case evaluation from the standpoint of a broadway play: the stars of the show, supporting case, directors, stage, etc.  The picture above profiles two very different plays: "Phantom of the Opera" (considered by many to be the standard of excellence in terms of theater) and "Moose Murders" (widely considered to be the standard of awfulness, as it was shut down after one performance).  As I told the crowd, is your case a "Phantom of the Opera," or is it a "Moose Murders"?  We then went into the variables that can assist with this determination.  It was a fun presentation to put together, and I may convert it to an article in the future.

Thanks to all of my colleagues and Otis Rawl for their diligence in putting together this CLE!