National RV Holdings Inc. is moving forward with its lawsuit against fiberglass panel supplier Crane Composites Inc., claiming the company cost the Perris, Calif.-based builder at least $8 million due to defective materials.
The Press Enterprise, Riverside, Calif., reported that National RV sued Crane, which is also known as Kemlite Co., June 29, saying the faulty material forced National RV to tear apart and completely rebuild at least 76 motorhomes, many of which had already been sold to dealers or customers.
It accused Crane Composites, a subsidiary of Crane Co. based in Channahon, Ill., of breach of contract, breach of warranty and misrepresentation. It said the company knew about problems in its fiberglass production as far back as 2004 and had met with another manufacturer, Elkhart, Ind.-based Coachmen Industries Inc., about the situation.
The Press Enterprise reported that the matter may be decided during settlement talks or could have to wait for a trial in U.S. District Court in Riverside, possibly sometime this summer, according to Jonathan Corn, attorney for National RV Holdings.
Crane has indicated to National RV it may admit responsibility for some of the damages, Corn said in a recent interview. So the trial may “boil down to a fight over” how much money in damages Crane should have to pay, he said.
Crane attorneys didn’t return phone calls seeking comment.
There is also the possibility that the number of damaged units could increase.
“We built 260 motorhomes with Kemlite material and 76 have failed so far,” Corn said. “We think we have identified all of them, but there is a chance there could be failure within the remaining group. That is one of things we have to discuss.”
Although National RV Holdings has blamed the Crane situation, in part, for recent quarterly losses, the company has been losing money for five years.
Last week, it announced a revised plan to sell its 50-acre, 600,000-square-foot headquarters to a real-estate investment firm and then lease it back for 10 years. The sale would give National RV Holdings $31.75 million to help it pay off debt.
National RV Holdings negotiated a similar deal Nov. 22 with Perris-based Warrior Holdings Inc., which markets Weekend Warrior-branded recreational vehicles, but the agreement was terminated on Dec. 20 due to Warrior’s inability to obtain a timely financing commitment from its lender.
National RV Holdings is the parent company to National RV Inc. in Perris and Country Coach Inc. in Junction City, Ore. The company employs about 1,000 people in Perris.