Humvee maker wins $27.9M judgment against supplier

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A supplier of armored doors for Humvees made for the military overcharged the manufacturer, a federal judge ruled Monday, awarding South Bend-based AM General LLC a $27.9 million judgment.

District Judge William C. Lee of the United States Court for the Northern District of Indiana ruled in AM General LLC v. Demmer Corp., 3:12-CV-00333 that Lansing, Michigan-based Demmer had breached its contract that included a “not to exceed” cost per unit provision that was subsequently violated.

Lee presided over a four-day trial in June and in his 86-page opinion ruled in favor of AM General on all issues. Lee ruled AM General properly withheld more than $19.3 million in payments to Demmer.  

“Multiplying the overpayment per door by the quantities of Bi-Metal Doors shipped in 2010, AM General’s total overpayment to Demmer was $47,333,309,” Lee wrote. “After subtracting the $19,366,811 AM General withheld from Demmer in December 2010 and January 2011, … AM General is still owed $27,966,498.”

Lee also awarded AM General attorneys fees, costs and expenses to be determined by the parties within the next two weeks.

The verdict is the second in favor of AM General against a supplier it claimed overcharged for Humvee parts. Last year, the company was awarded $277 million in a judgment from St. Joseph Superior Court against BAE Systems. Judge Michael P. Scopelitis ruled BAE overcharged for protective armor parts.


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