Grupo Porcelanite Ordered To Pay $56.8 Million

Phoenix, AZ, Aug. 20, 2009--A Phoenix flooring company has been awarded almost $57 million in damages as a result of a 2007 lawsuit that accused a Mexican tile manufacturer of unfair business practices.

A U.S. District Court jury ordered Grupo Porcelanite of Mexico City to pay $56.8 million in compensatory and punitive damages to Atlas Flooring, LLC.

Atlas accused Porcelanite of fraud, breach of contract, intentional interference and other counts for allegedly reneging on a promise to let Atlas be the exclusive distributor of Porcelanite ceramic tiles to retailers, consumers and homebuilders. Atlas also was given an especially lucrative right to be the main distributor to Lowe's stores.

Porcelanite denied any wrongdoing in a September 2007 motion to dismiss the suit and contended that Atlas didn't live up to its agreement.

The lawsuit claimed that Porcelanite, which manufactures several lines of high-gloss ceramic tiles popular in Mexico, was not successful at selling them in the U.S. Atlas decided that the products would sell well to Hispanic-Americans and in 2002 was given the exclusive right to sell the tiles in Arizona.

Atlas then persuaded Lowe's to sell the tiles in Arizona and other states and said it secured the exclusive rights to sell Porcelanite tiles in Lowe's stores throughout the country. Atlas leased several warehouses to stock the products and eventually the Porcelanite sales through Lowe's accounted for about a fourth of Atlas's sales.

But in early 2007, Atlas learned that Porcelanite was selling directly to Lowe's. That year, Porcelanite also told Atlas it was terminating the agreement that let Atlas be the exclusive distributor to Lowe's.