Maumelle Firm Southland Metals Wins $3.8M Judgment

by Mark Friedman  on Monday, Aug. 18, 2014 12:00 am  

Southland Metals’ total judgment could reach $4.6 million. Ron Crawford, Southland CEO, shown in inset.

Southland Metals Inc. of Maumelle won a $3.84 million judgment last month when a federal court jury in Fayetteville considered its breach-of-contract case against a former client, American Castings LLC of Pryor, Oklahoma.

The total judgment against American Castings could climb to $4.6 million. On Aug. 6, Southland’s attorneys, Kenneth Shemin of Rogers and Grant Fortson of Little Rock, asked U.S. District Judge Timothy Brooks to award them $155,439 for prejudgment interest, attorneys’ fees of $585,496 and costs of $3,546. Brooks hasn’t ruled on the attorneys’ request as of Thursday.

The civil judgment was one of the highest awarded in a federal court in Arkansas in the last year.

American’s attorney, John Morrow of Birmingham, Alabama, said his client is considering all its options, including an appeal to the U.S. Court of Appeals for the 8th Circuit. He declined to make any other comment on the case.

The lawsuit could serve as a cautionary tale on the risks and benefits of having a written contract in place.

Founded in 1974, Southland Metals was a casting sales and service company, according to the company’s website. “After years of successfully engineering and manufacturing ductile iron, gray iron, bronze, aluminum and stainless steel castings, Southland Metals today is better defined as an integral part of a cast metals consortium,” the website said.

In 2003, Southland began serving as the exclusive sales representative for American Castings, which is a “flexible supplier of world-class quality ferrous castings,” American Castings said on its website. Ferrous, of course, means made of iron.

For years, Southland and American Castings operated only with a verbal arrangement because of the “close relationship” of Southland’s founder, Ron Crawford, and his son, Keith Crawford, and the former management of American, Southland’s filing said.

“However, in 2009, Southland became concerned about the investment it was making in promoting American with no protections, and negotiations began to reach a written agreement,” Shemin and Fortson said in a filing. “Southland’s concern was based largely on the Crawfords’ concerns about the trustworthiness of American’s present management.”

Under the terms of the agreement, Southland would represent American for a 5 percent commission. But the key point in the lawsuit was this: Either side could cancel the contract at any time by giving 90 days’ notice. If that happened, American agreed to pay Southland commissions for two years and Southland wouldn’t compete against American during that time. But each side could cancel the contract with 30 days’ notice if either party failed to fix a breach of the contract following the termination notice. If that happened, American wouldn’t have to pay Southland commissions.

On Oct. 4, 2012, American notified Southland that the contract was being canceled in 30 days. Southland said it contacted American to see if it could repair any alleged problem, but Southland didn’t hear back from American.

Southland filed its lawsuit on Jan. 31, 2013, for breach of contract.

 

 

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