ODAM Law

Jury finds IEA liable for contract violation

3rd August 2007

Jury finds IEA liable for contract violation

Date: 8/3/2007

by JOE POTENTE 

KENOSHA NEWS

A Kenosha County jury found a Kenosha manufacturer liable for more than $1 million in damages Thursday in a case over rights to sell locomotive radiators.

The jury awarded the damages to Lockport, N. Y.-based Niagara Cooler Inc., which previously engaged in an agreement to market and sell radiators built by IEA Inc., 9037 Sheridan Road.

Gino Alia, the attorney for Niagara Cooler, said the verdict concerned IEA’s decision to begin selling radiators directly to the National Railway Equipment Co. (NREC), a railroad equipment leasing company. Alia said the jury found doing so violated the terms of IEA’s contract with Niagara, which was to sell IEA’s equipment to NREC.

Alia said Niagara pulled out of that indefinite agreement in July 2006, a few months after IEA had begun selling products directly to NREC. Alia said IEA continued selling radiators after that, violating a term of the agreement stipulating IEA could not sell original equipment manufacturer locomotive radiators for two years after the deal was terminated.

Damages awarded to Niagara by the jury include:

$383,520 suffered as a result of IEA’s contract breach.

$254,592 in future damages suffered as a result of IEA’s interference of Niagara’s sales contract with NREC.

$366,733 in punitive damages, established from the jury’s belief that IEA acted with intentional disregard to Niagara’s rights.

No damages were assessed to Niagara, which was actually the defendant in the case. Michael Sanders, a former IEA executive, was also a co-defendant.

“The jury was asked repeatedly, ‘ Did Niagara do anything wrong?” Alia said. “And the answer was overwhelmingly, ‘ no. ’”

Fred Zievers, the attorney for IEA said his clients were disappointed in the verdict, which he deemed inappropriate.

Zievers said he believes significant issues will be corrected in the appeals process. He added that many motions were not acted upon in the case thus far.

“It’s the system, and the system is far from over in this regard,” Zievers said, also noting that IEA is a local business that has strived to assist Kenosha’s economy.

Alia said Niagara anticipates it will collect the verdict, however, given his belief that IEA is a profi table company.

“We intend to collect every penny of it,” Alia said.