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Lawsuit: Company is selling bad parts

Lawsuit: Company is selling bad parts

HVAC manufacturer accused of knowingly selling defective coils

January 23rd, 2016 by Lynn LaRowe in Texarkana News

A class-action lawsuit filed last week in a Texarkana federal court alleges one of the country's largest manufacturers of heating, ventilation and air conditioning products is selling equipment it knows to be defective.

The suit alleges Darrell Sain of Foreman, Ark., and Ronnie Greathouse of Ashdown, Ark., are among a group of consumers who have suffered financial loss and frustration after purchasing central air conditioning units and heat pumps under the trade names Goodman and Amana produced by Goodman Manufacturing Co. of Houston.

In addition to seeking damages for Sain and Greathouse, the complaint seeks compensation on behalf of any Arkansan who bought, "air conditioners, air handlers and heat pumps manufactured by Goodman between January 2007 and the present."

"Defectively thin" copper evaporator coils in Goodman units leak Freon, a refrigerant, which leads to breakdowns and the need for repairs, according to the complaint. The leaking coils allegedly caused other parts of the systems, such as compressors, to fail as well, increasing the repair costs.

"Goodman knew the evaporator coils in the Goodman units sold since at least January 2007 were defective because the coils were failing at rates that far exceeded the industry average," the complaint states. "Furthermore, Goodman acknowledged the problem internally and even had a program to reimburse its direct customers, HVAC dealers, for costs associated with repairing and replacing the defective coils. Goodman, however, did not implement a similar program to reimburse consumers for their costs associated with replacing the coils."

The complaint alleges Goodman began reimbursing its dealers in 2011 for $350 in labor and $100 in Freon for defective evaporator coils, but did nothing to compensate the end user. Sain alleges the 3.5-ton Seer heat pump he bought in 2007 for $5,464.33 had to be serviced in 2011 because of leaking Freon from a defective coil. Sain's cost to repair the unit exceeded $350, according to the complaint.

Greathouse bought a Goodman 12 Seer 4-ton heat pump in June of 2008 for $5,298. The unit began experiencing problems in 2013, and Greathouse paid $343.04 for labor and materials. In August, dye was added to his system to find a leak in evaporator coils at a cost of $205. A month later, Greathouse allegedly paid $560 to replace the failing coils.

The complaint alleges Goodman's warranty has "unconscionable limitations." Customers who registered their products could expect the company to replace parts that broke because of defects for 10 years from the date of purchase if returned to the company by a licensed contractor. The warranties excluded labor costs, extra utility expenses and property damage.

Offering to provide customers with replacement evaporator coils isn't enough, the complaint argues.

"The consumer must first hire a licensed HVAC service technician to obtain the replacement coil from Goodman, and then pay the technician to remove the defective coil and install the new one," the complaint states. "The cost associated with this service can potentially exceed the cost of purchasing an entirely new air conditioning or heat pump system."

The complaint accuses Goodman of violating the Arkansas Deceptive Trade Practices Act and seeks to certify the case as a class action. The suit was filed Jan. 15 by Chad Trammell of the Texarkana firm Trammell Piazza; Jim Wyly of the Texarkana firm Wyly-Rommell; and Eric Bishop of the Bishop & Bishop firm of Ashdown. The lawyers are asking for damages for the named plaintiffs and class members, attorney fees and costs and an injunction preventing Goodman from continuing to engage in "wrongful and unlawful conduct."

Goodman has not been served with a copy of the complaint. The case has been assigned to U.S. District Judge Susan Hickey in the Texarkana Division of the Western District of Arkansas.


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