Goodrich Walloped in O.C. Courtroom
In a double pummeling of B.F. Goodrich Co., an Orange County judge ruled that the tire maker was so clearly wrong in a $2.8-million contract dispute that the only question for jurors was punitive damages--which the jury promptly assessed at $48 million.
Superior Court Judge Francisco Firmat said in his ruling Friday that the case was the first time in 16 years on the bench that he has issued a directed verdict, a decision that settles the basics of a case without deliberations by the jury.
The case stems from a $24-million purchase of aerospace firm Tolo Inc. in Irvine and its parent company, Rohr Inc., in December 1997.
Firmat’s decision to award Tolo shareholders $2.4 million plus $400,000 in interest and the huge punitive damages imposed by jurors late Friday afternoon left Goodrich stunned but vowing to appeal.
“It’s twice what we paid for the company--and 20 times what we were withholding” in the contract dispute, Goodrich spokesman Kevin Ramundo said Monday. “We believe the appeals court will validate what we believe--that there were serious errors in the course of the trial.”
The contract for Tolo’s purchase included a provision that 10% of the price, or $2.4 million, would be held back for two years in case unforeseen claims arose against Tolo.
As the two-year deadline loomed, Goodrich announced it would withhold the $2.4 million, accusing Tolo of misconduct. It alleged that Tolo knowingly shipped kits missing airplane parts to the federal government under a contract to supply parts for KC-135 military cargo planes.
Attorney William B. Hanley of Irvine, representing Tolo’s former shareholders, accused Goodrich of concealing the fact that none of the alleged problems occurred before the company was sold and some of them were fabricated.
James J. Lockshaw, who founded Tolo in his garage in 1956 and built it into a company with $24 million a year in sales and 200 employees, said he tried to explain to Goodrich that the allegations weren’t true.
“And they wouldn’t listen to us. We told them, ‘You’re making a mistake.’ We told them to go to our customers--go to the government and ask them,” Lockshaw said.
The Tolo shareholders sued Goodrich for breach of contract and fraud last May.
In awarding punitive damages, the jury voted 11 to 1 that Goodrich acted fraudulently and agreed 9 to 3 on the $48 million in damages, Hanley said.
Gregg C. Sindici of San Diego, an attorney for Goodrich, said the company wouldn’t allow him to talk about the case. Ramundo declined to discuss details.
Hanley said the appeal could take three years.
Times staff writer Jeff Gottlieb contributed to this report.
