Mohawk Mulls Appeal of $5.35M Verdict - Update

Chattanooga, TN, August 4--Mohawk Industries Inc. has yet to decide whether to appeal a judgment against the company rendered last week near Nashville, a company vice president said Tuesday, according to the Chattanooga Times-Free Press. A Williamson County jury found that Mohawk improperly interfered in a business relationship between a Brentwood, Tenn., carpet dealer and one of its customers. The jury directed Mohawk to pay $3.75 million in punitive damages and part of a $1.6 million compensatory award. "At the present time, we’re reviewing our options with the attorneys who represented us," said Sal Perillo, general counsel for the Calhoun, Ga.-based carpet giant. "We need to sit down with our outside counsel and go through the merits of the case," Perillo said. R. Scott Jackson Jr., a Nashville attorney representing Watson’s Carpet and Floor Coverings, said his client claimed that Rick McCormick, the head of a competing business, conspired with a friend, Mohawk sales representative Fred Woods, to put Watson’s out of business. Jackson said the plan was for Mohawk to stop selling Watson’s a particular carpet that a longtime Watson’s customer, Nashville home builder Centex Homes, wanted to use. The jury directed McCormick to share in paying the $1.6 million compensatory payment, Jackson said. Perillo said Mohawk officials were disappointed with the verdict. He said Mohawk’s position was that Watson’s wasn’t sufficiently supporting its Mohawk stock. "Our point was that we have dealers who support us and dealers who don’t," Perillo said. "We felt another dealer supported our line, so we worked with that dealer." Jackson, though, said Mohawk’s argument didn’t hold water. "Watson’s was one of the top sellers of this particular Mohawk product in the Southeast," he said. "Tennessee law says you’re prohibited from using improper motives or means to interfere with a business relationship. "A lot of times, big corporations think they can run roughshod over local businessmen. This jury basically told Mohawk, ‘You don’t come in to our county and decide to run local businessmen out of business that way,’" he said.

Related Topics:Mohawk Industries, Coverings

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