On February 3, a jury in the U.S. District Court in Cleveland, OH, ruled that Goodyear didn’t breach its “implied warranty of merchantability” when it sold approximately 25 million ft of “Entran II” hose to Heatway.
Heatway had claimed that Goodyear’s Entran II hoses had failures resulting from Goodyear’s use of inadequate antioxidants, inappropriate volatile plasticizers, and inexpensive clay filters. As a result, homeowners in several states were left with damaged and irreparable radiant heating systems.
Goodyear claimed that the hoses were not defective and improper maintenance, design, and installation caused that damage.
The suit, filed in 1997, triggered a long battle between Goodyear and the Springfield, MO-based maker of radiant floor and snow-melting systems (The News, Sept. 14, 1998).
As a direct result of the jury’s decision, Heatway announced that it has filed for relief under Chapter 11 reorganization laws and its assets will be acquired by Watts Industries (see related story at right).
Mike Chiles, president of Heatway, said the jury’s decision came as a surprise to him, in light of expert testimony from scientists who tested the Entran II hose.
“Our evidence presented at the trial showed that a bad thing happened at the Goodyear hose plant; the problem just showed up in the field,” Chiles said.
Heatway vice president Dan Chiles said the jury did not hold Goodyear blameless, but they were not instructed to rule on defects or negligence.
“The jury felt that 658 cases of hose failure out of 10,000 installations was not enough overwhelming proof of hose failure,” he added.
Goodyear spokesperson Fred Haymond said his company maintains that Heatway “did not inform the installers and the homeowners on how to maintain the [radiant heat] systems.
“We consistently tried to get the point across that the problem with the hoses appeared through the design, operation, and maintenance of the system,” he said.
“There will be other court cases in the future and we will be there to help with testimony,” said Dan Chiles.
Goodyear’s Haymond said that each complaint will have to be examined on an individual basis, and said he hopes that homeowners will be treated fairly.
“We have tried to maintain compassion for the homeowners,” said Haymond. “They should be able to find a satisfactory solution to their problem.”
“Having this case heard in Ohio, where Goodyear Corporation headquarters are located, appears to have worked to their distinct advantage,” he said. “It remains to be seen what will happen when the Colorado cases come to trial.
“The ultimate insult goes to us, the plumbers and pipefitters that installed the product. From all of the testimony I have heard and witnessed from the Goodyear group, we were at fault for installing this product incorrectly. How ridiculous!”
Clay Thornton, of Thornton Plumbing & Heating Inc., Midvale, UT, said it was a shame that Heatway lost the decision.
“Heatway has done their best to take care of the problem with their contractors. Mike Chiles is one of the most honorable human beings I have ever met. It was just tough to win in Ohio,” said Thornton.
Dan Chiles said his company remained loyal to its contractors.
“Our decision to risk the company in order to tell the truth made us a lot of friends in our contracting community,” he said.
He added that contractors should keep up on the litigation progress, although they are not responsible for hose failures. Chiles said that a remediation theory has been tested that would help strengthen the Entran II hoses by injecting a special liquid into the hose lines. Right now, that process is under the restraints of sealed testimony.
The number of contractor-installers, estimated to be in the hundreds by Chiles, will only be affected if Goodyear drags them into the complaints, he said.
Watts Industries, a global company based in North Andover, MA, is a diversified valve maker and has affiliated manufacturing facilities in the flexible hose, brass fittings, drain, and faucet markets.
“We filed [for Chapter 11] because of an adverse ruling in the ongoing dispute with the Goodyear Tire & Rubber Co. over Entran II [hose],” said Chiles. (See main story, page 1.)
“Watts intends to create a new subsidiary focused on the radiant heating and snow-melting market,” said Mike Fifer, Watts Industries president. “The new company will sell an expanded line of products and services, including Heatway’s Onix and EPEX product lines.” Chiles said the proposed Watts purchase would mark a fresh beginning.
“We’ll be able to expand our current product line with some exciting new radiant technologies inside the coming year,” said Chiles.
“I’m going to work hard to make this new company a success and I’ve asked our associates to do the same. We are negotiating an arrangement with Watts that we believe maximizes the sale value of the assets, both for the benefit of our trade creditors and the warranty claims.
“How the proceeds will be divided is in the hands of the judicial system, and will not be determined until the [reorganization] plan is approved by the court. We are assembling information packages for interested parties.”
For more information, visit the gme2.com website or contact Heatway at 800-255-1996.