Drew Industries Inc.’s motion to reduce punitive damages in a workplace injury suit against the White Plains, N.Y.-based company’s subsidiary, Lippert Components Inc., was denied in a state court in California.
Previously the court rendered a verdict in favor of the former Lippert employee, awarding compensatory damages of $464,000 and punitive damages of $4 million. The case stems from an incident at Lippert’s California facility.
Counsel for Lippert had advised that, under California law, the award for punitive damage would likely be reduced to four times the compensatory damages, or $1.9 million. Accordingly, Drew recorded a charge of $1.9 million, which reduced fourth quarter 2004 earnings by approximately 9 cents per diluted share.
Following the March 17 ruling, Drew will record an additional charge of $2.1 million plus interest, which will reduce earnings by approximately 10 cents per diluted share in the company’s first quarter of 2005.
Drew said Lippert intends to appeal the verdict as well as the punitive damage award, as counsel for Lippert asserts that the verdict is unsupported by the evidence and the punitive damage award exceeds the limit generally permitted in California.