U.S. District Court Rules in Favor of American Standard in Haynes Case
October 26 2006 - 4:18PM
PR Newswire (US)
Judge Orders No Payment to Haynes, Citing Persistent Pattern and
Practice of Fraud PISCATAWAY, N.J., Oct. 26 /PRNewswire-FirstCall/
-- The U.S. District Court for the District of Colorado ruled
yesterday in favor of American Standard in Frederick (Fred) Haynes'
lawsuit against the company. In Haynes Trane Service Agency, Inc.
and Frederick M. Haynes v. American Standard, Inc., d/b/a the Trane
Company, which was filed by Haynes in 1995, Frederick Haynes
claimed that American Standard and its Trane business had
wrongfully terminated an agency agreement with Mr. Haynes. On Dec.
7, 2005, a federal jury returned an advisory verdict recommending
that the court award Mr. Haynes $4.78 million on this wrongful
termination claim. However, the trial judge was responsible for
issuing a final ruling on the merits of this claim, and the judge
has now ruled that Mr. Haynes is not entitled to collect any
portion of the verdict recommended by the jury. The judge's ruling
rested on Mr. Haynes' failure to deal fairly with Trane in
connection with Trane's investigation of fraudulent conduct
directed against Trane by Haynes Trane Service Agency, Inc. (HTSA),
a former distributor of the company's unitary air conditioning
business owned by Mr. Haynes. On Dec. 7, 2005, in connection with a
claim raised by Trane against HTSA, the federal jury in Colorado
concluded that HTSA had defrauded Trane. In denying payment to
Haynes in his ruling, Judge Richard Matsch said, "Fred Haynes did
not fairly deal with Trane by permitting his employees to engage in
a persistent pattern and practice of fraud in obtaining payments
under the payback program for distributors of Trane's unitary
products and in his adamant and persistent refusal to assist in the
investigation of those fraudulent practices and his denial of
responsibility for it." "We are pleased with the decision delivered
by Judge Matsch today," said Mary Beth Gustafsson, senior vice
president and general counsel of American Standard. "Our right to
expect honest and ethical behavior from our distributors and
business partners has been affirmed." Separately, the U.S. District
Court has appointed a special master to quantify the damages to
which the company is entitled in its claim of fraud against HTSA.
American Standard is a $10.3 billion global manufacturer with
market-leading positions in three businesses: air conditioning
systems and services, sold under the Trane(R) and American
Standard(R) brands for commercial, institutional and residential
buildings; bath and kitchen products, sold under brands such as
American Standard(R) and Ideal Standard(R); and vehicle control
systems, including electronic braking and air suspension systems,
sold under the WABCO(R) name to the world's leading manufacturers
of heavy-duty trucks, buses, SUVs and luxury cars. The company
employs approximately 61,000 people and has manufacturing
operations in 28 countries. American Standard is included in both
the S&P 500 and the Dow Jones Sustainability North America
Index, which recognizes the top 20 percent of leaders in corporate
sustainability in North America. DATASOURCE: American Standard
Companies Inc. CONTACT: Kevin Bryla, +1-732-980-3017, , or Shelly
London, +1-732-980-6175, Web site: http://www.americanstandard.com/
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