China-based Hudson Yacht and Marine Industries blamed design flaws in Gunboat International’s models, not builder error, for problems that resulted in warranty claim disputes and eventually in Gunboat filing a lawsuit against HYM.
In addition to a breach-of-contract counterclaim, HYM filed a defamation counterclaim, saying Gunboat made a Facebook post and sent an email newsletter criticizing the skills and staff turnover at HYM, “indicating that only boats built in the United States or Europe can meet a certain standard of quality.”
Gunboat, a North Carolina builder of luxury carbon fiber sailing catamarans that had contracted HYM to construct some of its larger models in Taiwan, sued the company in Rhode Island’s U.S. District Court after alleging that HYM had built subpar boats and then refused to fix the problems.
HYM denied the allegations and filed a counterclaim that said HYM was not contractually liable for damages resulting from defective design.
“The Gunboat 60 specification … includes a unique element, namely, use of a centerboard as opposed to a daggerboard,” said the counterclaim, which was filed Wednesday and made available Thursday.
That specification “was proven to be defective by multiple independent engineers, as well as Gunboat’s own engineers,” attorneys for HYM said in its counterclaim. “Based on the recommendations of its own engineers, Gunboat modified the centerboard design in later models of the Gunboat 60 boat.”
Additionally, a unique hydraulic propeller system on the Gunboat 60 known as the skeg system also failed because of design flaws, the counterclaim alleged. Those design flaws led to the warranty claims.
Gunboat’s complaint accused HYM of using “unauthorized and undisclosed substitutions of inferior materials in deviation from design specifications.” The complaint also said HYM refused to perform warranty work, so Gunboat did it at the company’s own expense at its North Carolina plant.
The counterclaim HYM filed said Gunboat “interfered with and inserted itself into the warranty process and prevented HYM from being able to manage the warranty process.”
Gunboat made several accusations, including breach of non-compete and misappropriation of trade secrets, alleging that HYM stole trade secrets to launch a “knock-off and competing boat” despite a non-compete contract.
“The HH Catamaran 55 and 66 series designed and manufactured by HYM and Wang includes many features, elements and infusion technology that are identical and/or indistinguishable from Gunboat’s confidential and proprietary design specifications, which were disclosed to HYM and Wang in confidence,” Gunboat’s complaint said.
HYM denied those assertions in its response.