Jury gives runaway verdict

February 1, 2008 By    

Occasionally, I will read about a case that will demonstrate the importance of humanizing large manufacturers, gas companies and/or their insurers. Recently, I became aware of such an action that was tried in a Baldwin County circuit court in Alabama. We were not involved in this case.

 John V. Mccoy
John V. Mccoy

In Krantz v. A.O. Smith et al., the plaintiffs’ decedent was mortally injured after a gas water heater in his garage exploded. This was a natural gas explosion, not propane. The evidence demonstrated that, only days before the explosion, the decedent noticed that the pilot light on his home’s gas water heater had extinguished.

In trying to fix the problem, he asked for assistance from Ed Dismukes Plumbing Inc., which was working on another project near his home. Employees of Dismukes Plumbing replaced the gas water heater’s thermocouple. However, the water heater still would not work properly. Based upon this, Dismukes Plumbing contacted Greater Mobile Plumbing, the organization that sold the water heater to the Krantzes. At that time, Greater Mobile contacted A.O. Smith Water Products Co., the water heater’s manufacturer. In turn, A.O. Smith directed that Reinhardt Plumbing be contacted as that company was A.O. Smith’s service repair station for the area.

Ultimately, Earl Mabe, a Reinhardt employee, replaced both the thermocouple and the gas control valve after a phone conference with a customer service representative at A.O. Smith. Even after these efforts, Krantz noticed that the water in his home was not being heated. Eventually, he went into the garage and pressed the electric piezo igniter, which triggered the explosion.

The plaintiffs brought suit against seven parties. However, after summary judgment and settlement negotiations, the only defendants remaining were A.O. Smith, Reinhardt and Mabe.

Throughout the trial, the plaintiffs argued that A.O. Smith had incorrectly identified and designated Reinhardt as a certified service professional despite the fact that Reinhardt had no training in flammable vapor ignition resistant technology. The plaintiffs also alleged that A.O. Smith failed to verify Mabe’s credentials, that A.O. Smith directed the plumber to install a used and defective 7-year-old corroded control valve and that A.O. Smith failed to verify the valve’s serial number and match it with the model number of the water heater, thus eliminating the opportunity to discover that the gas control valve was outdated.

Moreover, the plaintiffs attempted to convince the jury that, although A.O. Smith had patented a multi-functional gas control valve equipped with vapor sensors, A.O. Smith failed to incorporate the safer piece of equipment into the subject water heater and reserved it only for A.O. Smith’s “higher-end products.”

A.O. Smith developed a gas migration theory as part of its defense. It contended that gas migrated through the plaintiffs’ front yard, went underneath a steel reinforced concrete slab and traveled through a visqueen vapor barrier and into the garage where it accumulated and ignited. In essence, A.O. Smith argued that the explosion had nothing to do with its product or its role in the events leading up to the accident. It also denied that it had a multi-functional gas control valve with vapor sensors and that Mabe was qualified to do the assigned work.

By the time the issues were submitted to the jury, A.O. Smith was the lone defendant as the other remaining defendants, Reinhardt and Mabe, each settled for $1,000. After 14 days of trial and only four hours of deliberation, the jury awarded the plaintiffs $50 million.

It is apparent the jury held A.O. Smith entirely accountable, and it accepted every allegation the plaintiffs set forth. In closing, the plaintiffs’ counsel argued that a large verdict would punish the large manufacturing company and “bring them to their knees.”

Runaway verdicts such as this usually occur when the corporate defendant is seen as a single dimension entity not concerned with safety and only with profit. Communicating the business concern for safety is a powerful and necessary part of defending these cases.

John V. McCoy is the president of McCoy & Hofbauer, S.C. and specializes in the representation of propane companies. He can be reached at 800-599-8300 or jmccoy@mh-law.us.

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