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.