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August 2019

Gordon & Rees Boston Office Obtains $10.1 Million Jury Verdict

Attorneys Jay Gregory, Tara Lynch, and Stephen Orlando obtained a $10,171,155.20 jury verdict following a two-week product liability trial in Suffolk Superior Court.  Gordon & Rees represented the plaintiff, a customer who purchased an HVAC system for his 22,000 square-foot home in Boston. The manufacturer of the system was Daikin Industries, Ltd., a company headquartered in Osaka, Japan. The defendants included two U.S. distributors, Daikin AC and Daikin North America; a sales representative, Stebbins-Duffy; and a service and maintenance provider, Daikin Applied. 

The plaintiff purchased the HVAC system, known as the “VRV III” system, as part of an extensive renovation of his home. He selected the Daikin-brand system based on the defendants’ representations that the system provided superior heating and cooling for large residential properties. Shortly after installing the HVAC system, the plaintiff began experiencing repeated failures. 

In an attempt to remedy the problem, the plaintiff contacted representatives from Daikin North America and Daikin Applied. Daikin North America claimed that the plaintiff was experiencing a unique, isolated problem with his system. Executives from Daikin North America assured the plaintiff that no other customers experienced this issue. They recommended that he perform air-quality testing of his home and laboratory testing of his system, at his own expense, to diagnose the problem. Relying upon Daikin North America’s representations, the plaintiff conducted this testing.

When the plaintiff’s testing failed to show any external cause for the system failures, Daikin North America removed components of the system for internal testing.  The Vice President of Sales for Daikin North America subsequently sent the plaintiff a letter representing that Daikin’s internal testing confirmed that Daikin was not responsible for the system failures.  Daikin North America did not provide the plaintiff with a copy of the internal testing results.  Daikin North America offered to provide the plaintiff with 22 replacement components for the system if he signed a complete release of all legal rights against the defendants.

At trial, the Gordon & Rees' Boston team presented an expert witness from MIT who offered his opinion that a defect in the Daikin-brand HVAC system caused it to suffer premature corrosion and systemic failures. They also presented evidence suggesting that Daikin North America fabricated the results of its internal testing and allowed the laboratory to destroy the tested samples during litigation. Finally, they presented the jury with evidence that customers in New York, Massachusetts, Florida, Texas, and Georgia experienced similar issues with their systems and that Daikin North America concealed this information from the plaintiff.

The defendants presented three expert witnesses to rebut the plaintiff’s theory of defective design. During cross-examination of the primary defense expert, attorney Lynch elicited testimony that the defendants’ expert theory was merely a “possibility” and was not based upon a reasonable degree of scientific certainty.

Following eight hours of deliberation, the jury found that Daikin North America made material misrepresentations to the plaintiff; breached the implied warranty of merchantability; and committed unfair and deceptive practices in violation of M.G.L. c. 93A, the Massachusetts Consumer Protection Act. The jury also found that Daikin Applied breached the implied warranty of merchantability. 

The jury awarded $3.4 million for Daikin North America’s intentional misrepresentations and breach of the implied warranty of merchantability. The jury awarded $6.7 million in punitive damages for Daikin North America’s violation of the Consumer Protection Act. In total, the jury awarded $10,171,155.00 to the plaintiff.

 

Jay S. Gregory
Tara E. Lynch
Stephen J. Orlando