A recent suit between Marine Power, LLC and Malibu Boats, LLC for a breach of contract has been concluded in Marine Power’s favor, according to documents obtained by Boating Industry.
Marine Power, a company that designs, manufacturers and sells high-performance sport boat engines, alleges the company entered into a business relationship with Malibu Boats. Through it, Malibu agreed to buy engines through purchase order 557 PO, which called for Marine Power to manufacture 571 engines for a total purchase price of $5,954,102.00. By the end of March 2014, Malibu informed Marine Power that it did not wish to pursue a long-term agreement with the company and would not be using Marine Power as a supplier of any engines for model year 2015.
Marine Power alleged it entirely or substantially performed its obligations under the 557 PO and Malibu breached its obligations, damaging Marine Power.
A jury in the United State District Court of the Eastern District of Louisiana found that a contract existed between the two companies and that it was a contract to build. The jury determined Malibu Boats owes Marine Power $1.8 million as a result of Malibu’s termination of the contract. Because the jury determined the contract was terminated in bad faith, Malibu Boats owes Marine Power an additional $1.3 million in damages for lost profits, for a total of $3.1 million.
“We are pleased that the federal court jury in New Orleans rendered a verdict in Marine Power’s favor finding that Malibu’s unilateral termination of a Purchase Order with Marine Power for 571 custom engines designed for Malibu’s Wakesetter boats was without just cause and in bad faith, and awarding Marine Power its full damages in the amount of $3.1 million,” a spokesperson from Marine Power told Boating Industry. “Marine Power has always been committed to working with its customers as partners and to building and delivering the highest quality engines, and the jury’s verdict in this case vindicates these core values of our company. While it is likely that Malibu will appeal, we are confident that the jury’s verdict will be upheld.”
“We were disappointed with the outcome of the case and while we disagree with the jury’s findings we respect the process,” a spokesperson for Malibu Boats told Boating Industry. “We are now considering all of our legal options including appeal. Based on our understanding of the facts we believe that we have several alternatives available to us and expect that in due time we along with our legal team will proceed with our next steps.”
The case was filed in April 2014. Though it was originally terminated in May 2014, it was reopened in June 2015.
As a dealer for Malibu boats from 1993 through 2003, I am not surprised at all by Malibu's termination of their contract with Marine Power. It was Malibu's unfair business practices that put an end to our relationship as a dealer for their boats after 10 years of lies and deceit. I went to Skier's Choice, (Supra & Moomba), and never looked back. As a dealer for Chaparral Boats for over 32 years, and Skier's choice for over 13 now, business ethics matter, you either have them, or you don't ! With this termination of the Marine power contract, Malibu proves nothings changed, they don't have any.
Alibi boats has a history of screwing vendors and dealers over and hiding behind their banks of attorneys assuming that most little guys won't be able to fight them. Well kudos to Marine Power for having the courage to take them to court. terrible company with poor ethics.
Wake boarding has been my family's world since we bought our first wakeboard boat many years ago. We put so many hours on it that my son became a pro and now patiently teaches it. My husband,president ofMarinePower,bought a house with two boat slips for our family to now reside. This was so he could test and do research and development for Malibu Boats. We were granted a very large contract by them after much money was spent over three years of meetings and travel in an effort to build a trusting relationship. The company moral skyrocketed. Louisiana may be known for the partying, but our dedicated employees work as hard as they play. We were all up for the task. Then out of the clear blue Malibu pulled the orders. We were in shock. All the years we spent getting to know them and doing r and d for their boat went by the wayside. Yet they learned information from us that would have never been shared if we really didn't believe on building a relationship both on a personal level as well as a business one. Marine Power won the case against Malibu which is a huge company. One thing I can say for our guys ( and our mother of all of them,Dee)is they are the hardest working people I know. Justice was served. Would I like to have my uninsurable house paid for? 0f course. We lost a lot in this past flood. Insurance pays nothing and never will in the future. But my dedicated husband will make the best of it. At least when he is helping a family in his easy chair on the weekends fix a boat problem, he is in the air conditioning!! He always practices the golden rule. Maybe Malibu executives weren't in the Scouts.