O'Hagin's Inc., et al. v. Monier Inc., et al.
Published: Feb. 2, 2002 | Result Date: Jan. 29, 2001 | Filing Date: Jan. 1, 1900 |Case number: SCV207168 Verdict – $9,524,000
Judge
Court
Sonoma Superior
Attorneys
Plaintiff
Defendant
Experts
Plaintiff
Barry Ben-Zion Ph.D.
(technical)
Lawrence J. Kashar Ph.D.
(technical)
Harold Brown
(technical)
Glenn M. Desmond
(technical)
Thomas F. Smegal Jr.
(technical)
Defendant
Ronald Ogawa
(technical)
John K. Grant
(technical)
William W. Kolthoff
(technical)
Peter D. Costigan
(technical)
Harris Zimmerman
(technical)
Facts
Plaintiff OÆHaginÆs Inc. was a small roofing company based in Sebastopol. The plaintiff company was owned
and operated by plaintiffs Harry and Carolina OÆHagin. In late 1989, one of the OÆHaginÆs roofing customers
wanted his new tile roof to be installed without bulky, ugly "dormer" vents, which are louvered and half-moon
shaped. In response, Harry OÆHagin went to work in his metal shop to find a solution. Harry OÆHagin
produced a copper vent which was shaped like a tile, and which ventilated the attic space by facilitating the
flow of air through the front, back and sides of a hollow tile design. The result was a roof vent which was
virtually undetectable to visual inspection and, when placed properly throughout the field of tiles on the roof,
allowed for superior attic ventilation.
The OÆHagin roof vent was designed to be placed above eave (near the bottom of the roof line) and just below
the ridge (near the top of the roof line) which promoted the expulsion of hot air through the ridge vents and the
induction of fresh, cool air into the eave vents via the principles of convection. The result was a constant
passive flow of air throughout the attic or rafter space in a cathedral ceiling, a roof which would last as it was
designed due to adequate ventilation, which in cases of clay roofs, could be 30 to 50 years.
Over the next two years, the plaintiffs continued to improve on the design for the hollow tile vent. The plaintiffs
expanded the design to allow for adaptation to fit many different brands of concrete and clay tiles from various
manufacturers.
In late 1991, the plaintiffs continued the development of their hollow tile design and began to advertise their
products in national trade publications.
In early 1992, the plaintiffs received an inquiry and order for vents from a Monier sales manager in Florida. In
the 1992 time-frame, defendant Monier Inc. was in the business of concrete tile manufacturing and sales. At
that time, defendant Monier Inc., a California corporation, was the largest manufacturer of concrete roofing tile
in the United States and a wholly-owned subsidiary of Redland PLC, a British holding company.
In December 1991, Redland PLC commissioned a study of the roofing accessories
market in the United States as a potential way of increasing the profitability of its subsidiary,
defendant Monier Inc. This examination of the roofing accessories market in the United States
took place from Jan. - Feb. 1992. "Roofing accessories" was a catch-all term used to describe all
of the items used in the construction of a roof other than the tile or other roofing material.
Examples of roofing accessories were flashings, clips and roof vents. Roof vents facilitate
ventilation of the attic or other rafter space in the roof. Without adequate ventilation, the roof
timbers and other roofing materials may spoil and compromise the integrity of the roof. * * *
Settlement Discussions
At the pre-trial settlement conference, the defendants offered $150,000 pursuant to C.C.P. Section 998 to settle the case. The plaintiffs demanded $2 million to settle the case. No other settlement discussions took place after the commencement of the trial.
Damages
The plaintiffs put on evidence of damages incurred in reliance on the promise of defendant Thripp. Their expert, Glenn Desmond, testified as to $524,000 in damages due to their under utilization of the plant during the pendency of the plaintiffsÆ and defendantsÆ business relationship.
Result
On June 26, 2001, the court granted motion for new trial subject to remittitur of $5 million from compensatory damage award based on no evidence of such damage in reliance of any fraudulent promise. The plaintiffs accepted the reduction of the award on July 2, 2001. Hence, the final award was $4,524,000 divided as between $524,000 in damages for fraud against Monier and Thripp and $4,000,000 in punitive against Monier. The original verdict, prior to the remittitur, was $9,524,000, represented by $5,524,000 damages for fraud against Monier and Thripp and punitive damages of $4,000,000 against Monier.
Other Information
* * * Following evaluation of U.S. Accessories market, Monier contracted with Redland Engineering Ltd., an English subsidiary of Redland, for the design of several accessories in the United States. Later, the plaintiffs made a sales presentation to personnel from Monier at a Monier manufacturing facility located in Stockton and met defendant Thripp. The chain of events was disputed at trial. The evidence also allegedly indicated that defendant Thripp first visited OÆHaginÆs facility in August 1992 and made frequent visits to the OÆHagin manufacturing facility while it was in operation and spent a substantial amount of time with the inventor of the OÆHagin tile vent, plaintiff Harry OÆHagin. During that relationship, plaintiff Harry OÆHagin allegedly explained the design and manufacturing process for his existing vent products to defendant Thripp in detail. The plaintiffs contended that the only reason they allowed such unfettered access and assistance to defendant Thripp was that Thripp had represented that if the plaintiffs made a few modifications to the vent, that he should be able to "buy all the OÆHagins could make." During the time frame from August 1992 to April 1993, the plaintiffs made changes to the ventÆs design at the alleged request of Monier. The changes included increasing the size and capacity of the vents from a one-tile wide vent to a double-tile wide vent, which is currently the plaintiffsÆ primary product line. In the 1992-93 time frame, the plaintiffs were reluctant to make some of the requested changes and never could come to an agreement on the final vent design suitable to both sides. Then, in April 1993, defendant Monier claimed that plaintiff OÆHagin went behind its back to sell the vents to Kaufman & Broad, a large tract home builder, at a cheaper price. Defendant Monier then terminated it relationship with the plaintiffs, which the defendants contended was a vendor (OÆHagin)-vendee (Monier) relationship. After the relationship was terminated, the plaintiffs started marketing and selling the vent directly and have been experiencing substantially increased sales ever since. In October 1992, defendant Monier applied for a patent on a plastic multitile wide vent called the Leading Edge Vent. That patent was issued in August 1996, but the Leading Edge Vent was never sold because it failed Class A fire tests. In late 1996, early-1997, an English-based subsidiary of Redland PLC applied for a patent in the United Kingdom on a vent that was made out of plastic and combined a plumbing vent and a roof vent in the same product. OTHER INFORMATION: Judge Sawyer granted nonsuit as to all three defendants on plaintiffÆs causes of action for breach of oral joint venture, breach of oral contract for purchase by defendants of all vents plaintiffs could make, breach of fiduciary duty, trade libel and interference with prospective economic advantage. Judge Sawyer granted nonsuit as to Redland PLC based on fraud (false promise and intentional concealment). The only causes of action that went to jury were fraud and trade secrets. The court denied the defendantÆs motion for judgment notwithstanding the verdict but granted a conditional new trial on the issue of compensatory damages unless the plaintiff consented to a reduction to $524,000.
Deliberation
2.5 days (compensatory), + day (punitive damages)
Poll
12-0 (fraud as to Monier and Thripp), 10-2 (punitive damages as to Monier). Defense verdict on misappropriation of trade secrets, finding no causation, no damages. Redland PLC previously received nonsuit ruling on the fraud claim. The court granted nonsuit on all other claims.
Length
36 days
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