A federal court jury in New Orleans on Monday (May 24) found in favor of RV manufacturer Recreation by Design LLC, Elkhart, Ind., in the third ”bellwether” lawsuit involving allegedly formaldehyde-laced trailers provided by the Federal Emergency Management Agency (FEMA) as temporary housing for victims of hurricanes Katrina and Rita.
The jury deliberated for about two hours after hearing eight days of testimony that alleged that Earlene Castanel’s health had been damaged by a trailer laden with formaldehyde.
”There have been three trials and all of them have resulted in defense verdicts,” said Andrew Weinstock, a partner in the Metairie, La., lawfirm of Duplass, Zwain, Bourgeois, Pfister and Weinstock.
Recreation by Design and other RV manufacturers sold tens of thousands of emergency living units to FEMA following the 2005 hurricanes.
Two previous suits involving Gulf Stream Coach Inc., Nappanee, Ind. — in which Weinstock was lead attorney — and Forest River Inc., Elkhart, Ind., have resulted in favorable verdicts for RV manufacturers.
Another lawsuit again Gulf Stream is expected to go to trial in September with a others to follow, unless plaintiffs and defendants come to a settlement.
Weinstock estimated that 60,000 lawsuits have been filed against builders of the FEMA trailers.
”That’s a guesstimate and I think it’s a pretty good one,” Weinstock said.
U.S. District Judge Kurt Engelhardt earlier ruled that the lawsuits couldn’t be combined as a class action, meaning that each lawsuit had to be tried individually.
The ”bellwether” trials for a handful of claims chosen from among hundreds that had been filed are designed to help the New Orleans court test the cases’ merits and possibly settle other claims over formaldehyde exposure in FEMA trailers.
Weinstock said that at some point, defendants are likely to find the lawsuits untenable if juries continue to deliver verdicts in favor of RV manufacturers.
”(Plaintiff attorneys) signed up a lot of people and at some point, we need to figure out which have cases and which don’t,” Weinstock said. ”The challenge (for defense attorneys) is figuring out what makes on a case with merit and which ones don’t.
”We’ve not done an inventory on who has filed suits. But obviously, we are not going to try 60,000 cases.”
A main point that Recreation by Design lawyers made in defense of the company was that there is little evidence that formaldehyde levels in the trailers were out of the ordinary.
The Centers for Disease Control and Prevention (CDC) tested more than 500 trailers and found only six with formaldehyde levels in excess of levels established by the U.S. Department of Housing and Urban Development for manufactured homes.
Nappanee, Ind.-based Gulf Stream Coach Inc. has introduced the all-new Aztec luxury fifth-wheel. Aztec is a completely new design, offering high-end features at a mid-range price point, according to a news release. Aztec offers seven floorplans, from a luxuriously appointed 29FRBW to an expansive 35FLFT loft design. Aztec features ½-inch thermal pane construction, an extra layer of thermofoil insulation and insulated frame rails. A G3 Grey fiberglass exterior adds to the luxury appearance, while providing superior shine and reduced chalking over time. Exterior speakers are placed low for better sound quality and to preserve wall construction integrity. A fold-down bulkhead wall in the main storage bay provides an extra 20 cubic feet of storage space, Upscale additions include a residential style stainless steel sink, solid hardwood two-tone cabinetry, optional memory foam mattress and cedar-lined closet. The 32FRBW starts at $29,000 MSRP. For more information, contact Gulf Stream Coach, 503 S. Oakland Ave., Nappanee, IN 46550, (800) 289-8787, www.gulfstreamrvtrailers.com.
Gulf Stream Coach Inc.’s EnduraMAX Cross-Over Toy Hauler division has surpassed 2009 full-year sales totals in the first three months of 2010.
More than 30 new dealers have signed on to represent the EnduraMAX brand during the first three months of 2010, according to a news release.
“We are proud to be represented by some of the largest dealers across North America, from Terry Vaughn RV in Texas, Quality RV in Utah, Little Dealer Little Prices in Arizona, McGeorges Rolling Hills in Virginia, Fraserway RV throughout Canada, to Paradise RV in Alberta Canada.” said A.J. Jones, EnduraMAX national sales manager.
“It has been very exciting to watch this product over the last year develop into one of the fastest-growing toy haulers in the market. We have an advantage in being able to provide our dealers with a variety of price points and sizes. We manufacture entry-level toy haulers all the way up to 40-foot laminated fifth-wheel toy haulers in the EnduraMAX brand line. I feel that this allows us to provide the dealers with a much more diverse toy hauler lineup. The key behind our success has been providing our dealers with unique floor plans and price points that cannot be compared to other products on the market.”
For more information, contact Gulf Stream Coach at (800) 289-8787 or www.gulfstreamrvtrailers.com
The Kingsport and Trailmaster Division of Gulf Stream Coach Inc. towables had an increase in wholesale shipments of 72% through April 30, according to a news release.
This relatively new division will celebrate its fourth anniversary at the beginning of June.
Much of the sales increase can be attributed to the addition of an aluminum-framed, vacuum-bonded fiberglass sidewall as a customer option for all slide-out floor plans. The aluminum frame option maintains the same popular full profile and front radius as standard construction Kingsport and Trailmaster models.
Aluminum-frame, fiberglass-sidewall construction is a unique option in the Kingsport/Trailmaster price range, adding only a few hundred dollars over traditional travel trailers. This construction method provides a longer lasting, smooth exterior that is typically found only on luxury fifth-wheels. Aluminum-frame construction is available on Kingsport and Trailmaster’s travel trailer, destination and park model series, with floorplans ranging from 18 to 40 feet.
“With this pricing structure, retail sales have gone through the roof,” according to Randy Baskerville, national sales manager. “This option is ramping up and fueling growth in the product line, and we are increasing production to ensure timely delivery for our customers.”
Some RV manufacturers say the pressure on the industry’s transportation channels continues to build and that backlogs of up to six weeks in delivering RVs from factories to dealers are common. But others claim the transportation situation is easing up.
Jayco Inc., Middlebury, Ind., and Gulf Stream Coach Inc., Nappanee, Ind., are facing up to six-week waits. “The situation has eased up to some extent, but it is still a tight situation,” said Sid Johnson, Jayco’s director of marketing.
As for dealers and customers, adds Johnson, they’ve been relatively patient thus far.
“As we are now into spring and better weather, there is going to be increasing pressure on trying to get the product to the dealership when needed,” he said. “There is absolutely no doubt that the pressure will increase between now and the first of June unless we can provide a more timely service for them.”
In addition to a four-to-six-week shipping backlog, said Phil Savari, executive vice president at Gulf Stream, the market is such that has company is facing a four-to-six-week backlog on manufacturing their towable RVs.
The upside to all of this: Business is good.
“It is the best backlog we’ve had at our company,” he said. “But we are feeling the heat from dealers and customers. Looking at the seasonality of this industry, most of the manufacturing and shipping is happening between January and April. That is when the dealers/manufacturers/suppliers/transport companies gear up.”
Savari would prefer a market that wasn’t so seasonal, but realizes that this is the way things have always been. “What we are experiencing is a good sign right now because the demand is up and I believe more finance companies are going to be loosening up,” he added. “This is the great U.S.A. and people are going to feel confident again.”
Lazydays RV SuperCenter, Seffner, Fla., is also experiencing a backlog in the delivery of towables. “Lazydays has been able to minimize that impact by having a strong relationship with the drive services and even sending our own drivers when needed in order to best serve our customers,” said Sharon Padly, inventory manager.
However, the situation at SunnyBrook RV, Middlebury, Ind., is more fluid.
“Star Fleet is our primary carrier and the most we are out is one week,” said Elvie Fry, president. “Star Fleet is our carrier of choice so that helps. They do take good care of us, plus we are not shipping the higher number of units that some of the other larger companies are. We are shipping an average of 150 towable RV’s a month.”
From a carrier standpoint, Wave Express, Goshen, Ind., earlier this year had a three-week backlog — not as long as some other transport companies, but still more than part-owner Anita Carpenter would prefer. But she says the backlog has now decreased to two weeks.
Honestly it seems it is easing up a little bit,” she said. “Part of that reason is we hired more drivers. We’re still busy. There is plenty of work, but our dispatchers aren’t wanting to pull their hair out. Considering where we were two years ago it is amazing how busy we are.”
Wave Express is shipping 100-125 towables weekly in the U.S. and Canada.
RV Transport Service in Portland, Ore., is only three days backlogged for U.S. deliveries, about a week for Canadian deliveries.
“We’re hiring about one driver a week,” said Leah Dilgarde, general manager. “Our key to not getting backlogged is only accepting the work that we know will be covered in a timely manner. I have turned down work when we don’t have the drivers available, which is probably different from other companies because they’ll take every load they can get, even if they don’t have the drivers available.”
Gulf Stream Coach Inc.’s Ultra Light Towable Division closed March and the first quarter of 2010 with record-breaking sales figures, according to a news release from the Nappanee, Ind.-based manufacturer.
The division posted the best retail registrations for March in the history of the division, up over 64% from last year. The Ultra Light Division shipped more units in the first three months of 2010 than in any previous first quarter.
Data is compiled from dealer registrations received from the Gulf Stream dealer base. Products included in this category are: Streamlite, Gulf Breeze and their Sport product lines, as well as the new Visa travel trailer.
“We attribute the increase to our new value-based lineup of products. I expect that we will continue to break records each month with this great lineup,” said Steve Jacobs, national sales manager. “We listen to what our customers are asking for and use that input in designing new products. Over the next month, we will be adding additional floorplans and features that will bring even more value to our ultralight products. ”
RV industry pioneer Franklin Coach Co. is lining up dealers now that it has resumed limited production of 12-foot-wide recreational park trailers in a rented facility in Nappanee, Ind.
Devastated by a 2007 tornado that leveled the 65-year-old company’s facility on the east side of Nappanee, Ind., Franklin has undergone a slow but steady revival, according to co-owner Don Abel, son of founder and industry pioneer Paul Abel.
Franklin Coach, which had about 60 employees at the time of the storm, was one of 107 commercial businesses in the southern Elkhart County community affected by the Oct. 18, 2007, F3 twister. Of that total, 28 businesses, including Franklin Coach, were a total loss and 352 residences were also affected.
The tornado not only leveled Franklin’s 65,000-square-foot factory and attached office building – and also damaged the nearby facilities of Gulf Stream Coach Inc. — but scattered debris, including company records, over a wide area on the city’s east side and surrounding countryside.
Company officials talked about rebuilding within a week of the storm.
In fact, Abel, 63, who subsequently bought out brothers Rick and Steve and is currently running the business with son Chris, first tried but failed to get a loan to rebuild on the site of the former Franklin Coach factory. So, he wound up selling off some land there to raise the capital needed to resume limited production.
“We pretty much started from scratch with our old name,” he said, adding that Franklin Coach resumed production earlier this year and by now has delivered six 12-wides to one of its most loyal dealers, Rose’s RV in Palmview, Texas. At the time of the storm, Rose’s RV was Franklin’s top Southwestern dealer. “I contacted Rose’s and they said, ‘Sure, I’ll take six of them.’” Abel relayed.
A skeleton workforce of five production workers today is toiling away in a 20,000-square-foot facility that formerly housed Quality Hardwoods on the west side of Nappanee.
“We hope to be building some of the same things as we did in the past — travel trailers, fifth-wheels and park models in addition to the 12-wides we’re building now,” Abel said. “By the end of this year, we hope to be back in full production.”
Chipping away “little by little” in rebuilding the company is “the only option we had,” he explained. “We couldn’t wait much longer or the dealers would forget about us.”
Abel said the company will resume production of conventional towables soon because few of his dealers handle only park models.
His long-term plan is to rebuild on the old factory site.
Gulf Stream Coach Inc., Nappanee, Ind., recently introduced the all new 255BH Amerilite travel trailer model. This model is designed with first time RVers in mind and has several features to make family camping comfortable and easy. The model is the first in the lightweight lineup to offer the Super Slide, nearly doubling the living room and kitchen space. The 255BH sleeps up to eight, while maintaining a private main bedroom and abundant storage. With a dry weight of 4,880 pounds, the Amerilite is towable with a small SUV, and is designed with an exterior profile under 9’6” and width of 7’6”, maximizing fuel efficiency and driver visibility. “This model is dominating the spring show sales,” said John Stringer, national sales manager. “Dealers are retailing five to six units for each stock model they bring into their showroom.” The average MSRP for the Amerilite 255BH is $15,540, including roof air conditioner, awning, microwave, stabilizer jacks, spare tire, refrigerator/freezer and water heater.
Two major liability trials begin today in federal court in New Orleans.
The claims of toxic formaldehyde emissions from FEMA-supplied trailers for hurricane refugees, and hazardous emissions from Chinese-made drywall, are both the second in a series of “test” trials of multidistrict litigation, in which plaintiffs and defendants change but the complaints remain essentially the same — long-term health problems from hazardous chemicals, and property damage in the drywall complaints, according to the Courthouse News Service.
Hundreds of thousands of such liability suits resulted from the chaotic rebuilding process after hurricanes Katrina and Rita in 2005. Building materials are blamed for widespread illnesses caused by breathing the toxic fumes.
In addition, the Chinese-made drywall has been blamed for corroding copper and other metal surfaces, causing problems with wiring and plumbing, and ruining household appliances such as refrigerators, washing machines and dryers.
Tatum and Charlene Hernandez are plaintiffs in the Chinese drywall trial; Knauf Plasterboard Tianjin is the lead defendant. U.S. District Judge Eldon E. Fallon will preside over that bench trial.
Judge Kurt D. Engelhardt will preside over the jury trial in the FEMA trailer trial brought by Lyndon Wright against trailer manufacturer Forest River Inc. and the environmental testing firm Shaw Environmental.
The United States will also be a defendant in this trial, through the Federal Emergency Management Agency (FEMA). Because of a last-minute decision by Judge Engelhardt last summer, FEMA was not included as a defendant in the first FEMA trailer trial against Gulf Stream Coach Inc., Nappanee, Ind.
The complaint to be tried beginning this week, filed in March 2009, claims Forest River supplied trailers to FEMA that contained toxic levels of formaldehyde.
Forest River and other manufacturers supplied tens of thousands of trailers for emergency use after hurricanes Katrina and Rita in 2005.
The trailer makers subsequently faced lawsuits from hurricane victims who said the formaldehyde made them sick.
Company lawyers say the trailers were safe.
On Sept. 24, a jury took just four hours to clear Gulf Stream Coach of such accusations from a family that occupied a trailer made by the company
Gulf Stream Coach Inc. recently introduced the all new 3912END EnduraMAX cross-over fifth-wheel toy hauler. The floorplan features several unique features like an industry-first, upper deck kitchen, 7-foot, 6-inch tall slideouts, a Jack & Jill bathroom, atrium room, a patent pending XL wall (removable vapor wall), 101-inch-long ramp door, 12-foot water resistant garage area, solid hardwood cabinetry, fireplace, “kegerator”, built-in security system, optional king bed and an optional grey fiberglass exterior. “The 3912END is a first of its kind. By separating the kitchen on the upper level there is room for huge opposing slideouts in the living area, with the slideouts and the patent pending XL wall in the open position it gives you massive living area that is unlike any toy hauler in the market and still gives you a 12-foot garage area,” said A.J. Jones, product manager. MSRP: Starting at $51,940.
Gulf Stream Coach Inc., Nappanee, Ind., recently introduced the all new Visa ultra lightweight travel trailer, and dealers are reporting “tremendous retail activity.” Dealers report record website traffic and customers crowding to see the Visa at retail shows, according to a news release. “It is exciting to have dealers selling Visas prior to their first stock delivery and having customers seek out the Visa at shows,” said Jeff Terhune, product manager. “We continue to expand the product based on customer feedback. The first three floorplans have done extremely well, and we anticipate introducing three additional floorplans this month.” Visa utilizes state-of-the-art eco-friendly materials inside and outside, producing a 22-foot 11-inch travel trailer with a total dry weight around 2,700 pounds that is towable with minivans and crossover vehicles. The Visa currently features amenities like walk-around queen beds and full baths.
Although Gulf Stream Coach Inc. has no formal agreement to build hybrid electric pickup trucks for Electric Motors Corp. (EMC), an executive with the Nappanee, Ind., RV manufacturer says he expects Gulf Stream to stay involved with the groundbreaking ”green” power project unveiled more than a year ago.
”Right now, there has been no change in the status of our position,” said Claude Donati, Gulf Stream vice president of motorized. ”(EMC) has assured us that things are going to remain the same. We look forward to helping support them where we can.”
EMC, with local headquarters in Wakarusa, Ind., announced in 2008 that it intends to build electric-hybrid pickups based on the Ford F-150 for fleet markets, including municipalities, utility and construction companies, the rental-car business and state and national parks.
The company was seeking federal grants and loans to get the company started, and EMC recently named Frank Jenkins, a 28-year executive at General Motors Corp., to be president and provide focus for the electric-vehicle startup.
EMC intends to debut its recreational version of a hybrid-electric truck, the Flash, in April at the New York International Auto Show, according to EMC CFO Ralph King in an interview this week with The Elkhart (Ind.) Truth.
King told The Truth that although EMC’s relationship with Gulf Stream was never solidified, talks between the two companies continue.
”We like the people there,” King said of Gulf Stream. ”We like the quality of work there. We think it’s a perfect fit.”
”There was no formal, written contractual obligation,” Donati told RVBUSINESS.com. ”There was an understanding that when they get further along with their development as a company and they received the orders they were hoping to receive, we were going to be the company that builds the product for them.
”We didn’t want to put any requirements on EMC and we didn’t want to put any requirements on us.”
Donati said talks between the companies are focusing on the manufacture and distribution of EMC products though EMC dealers that is unrelated to Gulf Stream’s dealer network.
”What I want to make clear is that when they get their orders, we will build the product for them,” Donati said. ”It’s not that we are partners in the business with them. They are going to get orders and they are going to give them to somebody like Gulf Stream that has the facilities, manpower and manufacturing know-how to build them.”
Gulf Stream Coach Inc. has rolled out the 32-foot, low-profile Montaj Class A motorhome on the modified 14,050 GVWR Ford E-450 chassis.
In the prototype stage since late 2008, a production version of the Montaj was introduced at December’s Louisville Show. The Montaj was tested and subsequently refined after a 15,000-mile trip last summer to dealers throughout the U.S.
As a result, Montaj floorplans have been extended and a heftier, 362-hp Ford Triton engine has been added standard with a V-10 option.
“People are looking for a motorhome that is a little smaller that gives them all the amenities that they had in their bigger unit,” said Claude Donati, vice president for the Nappanee, Ind., RV manufacturer’s RV division. “That’s where our Montaj design comes in. We went to Europe and looked at how they manage their space and took a couple of keen ideas and implemented them in the Montaj.”
Equipped with either one or two slideouts, the Montaj’s European design applications include an electric lift to raise the bed to reach a storage area beneath, curved cabinets, a twin-sized bed that swings down from over the cockpit, convertible horseshoe couches and seats that swivel and slide back toward to dash to become part of the living area.
“We’ve created a 40-foot motorhome in a 32-foot length vehicle,” Donati said, adding that the Montaj’s low profile, one-piece windshield allows better road vision, he added. MSRP: $114,000.
Gulf Stream Coach Inc., Nappanee, Ind., recently introduced the ultralight Visa travel trailer series intended for towing behind minivans and crossovers. Available in four 23-foot floorplans with dry weights of 2,830 pounds, Visa sports fiberglass sidewalls and a radius front end on an aluminum superstructure with lightweight SymaLITE composite substrate. “We reduced the weight by 600 pounds compared to a similar travel trailer,” said Jeff Terhune, Gulf Stream lightweight product manager. The low-profile Visa comes with a full bath, walk-around queen bed, 82-inch interior ceilings, balsa-core wood cabinets, LED running lights and independent torsion suspension. MSRP: $15,600.
The second FEMA trailer product-liability trial has been postponed due to talk of a settlement for thousands of claims from bankrupt defendant Fleetwood Enterprises Inc.
The Riverside, Calif.-based trailer manufacturer and its insurers are said to be negotiating a settlement even though a jury in September rejected a New Orleans’ family’s claim that a FEMA-supplied trailer built by Gulf Stream Coach Inc. exposed them to dangerous levels of carcinogenic formaldehyde, according to the Courthouse News Service.
Just days after the catastrophe of Hurricane Katrina in 2005, FEMA awarded $170 million in contracts to Fleetwood to provide 7,500 travel trailers and 3,000 manufactured homes to refugees from the storm.
Fleetwood was one of several manufacturers to receive FEMA contracts, and was awarded the second-highest dollar amount; Gulf Stream Coach received the largest order.
FEMA is not a party to either lawsuit – neither the one that Gulf Stream fended off in September, nor the second one, against Fleetwood.
The second bellwether trial was slated to start next Monday.
Plaintiff Elisha Dubuclet claims that formaldehyde leaking from the FEMA trailer where her family lived for 18 months aggravated her daughter’s eczema and increased her risk of cancer.
The complaint was taken from a batch of consolidated complaints. Class-action status was denied last year by presiding U.S. District Judge Kurt D. Engelhardt.
The Wall Street Journal reported in December 2008 that plaintiffs’ lawyers were disappointed, though “not surprised” by Engelhardt’s rejection of class certification, considering the number and variety of cases alleging formaldehyde-related ailments.
Several thousand lawsuits have been filed and more are expected.
“We’re looking forward to putting before a jury some good, instructive bellwether cases,” attorney Gerald Meunier told the Journal. “We’ll see what they do with those, and we’ll know more about how to conclude all of the other litigation.”
Fleetwood Enterprises filed for bankruptcy in March this year and sold its motorhome division to a private equity group.
A September article posted on rvbusiness.com paraphrased plaintiffs’ attorney Tony Buzbee as saying that the court allowed the formaldehyde lawsuit against Fleetwood Enterprises to proceed despite its bankruptcy because insurance money is available to pay any potential settlement.
Fleetwood Enterprises is the lone defendant in the Dubuclet complaint.
The Washington Post reported in 2007 that a man in Slidell, La., “was found dead in his trailer on June 27, 2006, after complaining about the formaldehyde fumes. In a conference call about the death, 28 officials from six agencies recommended that the circumstances be investigated and trailer air quality be subjected to independent testing. But FEMA lawyers rejected the suggestions, with one… cautioning that further investigation not approved by lawyers ‘could seriously undermine the Agency’s position’ in litigation.”
Later, House Oversight and Government Reform Committee Chairman, Henry A. Waxman, D-Calif., blasted FEMA’s indifference to storm victims and said the situation was “sickening.” He said the documents “expose an official policy of premeditated ignorance” and added that “senior officials in Washington didn’t want to know what they already knew, because they didn’t want the legal and moral responsibility to do what they knew had to be done,” according to the Post.
FEMA blames trailer manufacturers for the formaldehyde in the trailers. Cheaper, substandard wood products used in trailers assembled in a rush to meet production targets increased emissions of the carcinogen, industry officials and analysts said.
Trailer manufacturers say that because federal guidelines were inconsistent, they relied on suppliers, who are responsible for any shoddy materials they provided.
Gulf Stream was cleared in September in the first bellwether trial; three other bellwether cases are set for trial, involving Keystone RV Co., Forest River Inc. and Recreation by Design Inc. The bellwether trials are meant to indicate likely outcomes for all plaintiffs, in turn fostering settlement talks between parties.
Many attorneys were not immediately available for comment.
Judge Engelhardt has not yet set a new trial date.