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A fraud suit filed in federal court by an Israeli appliance dealer has resulted in a verdict of nearly $20 million. The case pitted Eden Electrical Ltd., a Tel Aviv, Israel-based distributor of household appliances, against Amana Co., the Cedar Rapids, Iowa-based refrigerator and appliance maker. Eden claimed that Amana, a subsidiary of Maytag Corp., fraudulently induced it to accept $2.4 million worth of obsolete inventory and then terminated Eden’s exclusive Israeli distribution contract without cause. Eden made the deal in February 1998. As part of the pact, it agreed to accept $2.4 million worth of Amana inventory. But less than three months later, Amana ended the agreement. Eden’s trial attorney, Kevin H. Collins, a partner at Cedar Rapids’ Shuttleworth & Ingersoll, said Amana initially gave no reason for its actions, although at trial it argued that the deal made poor business sense. Eden also alleged that the inventory did not arrive until after Amana had canceled the contract, and that when it did, Eden discovered that it was obsolete and discontinued. Collins, who tried the case with partners Sarah J. Gayer and Robert D. Houghton, said that after attempts by Eden to contact Amana were ignored, the company sued, alleging fraud, fraudulent misrepresentation and fraudulent concealment. On Jan. 31, the jury awarded Eden $2.1 million in damages for the two years of profits Eden said it lost by not operating as Amana’s exclusive distributor, and $17,875,000 in punitives. “Amana never intended to honor the agreement. They were simply looking for a way to unload the obsolete merchandise,” said Collins. J. Michael Weston, a partner at Cedar Rapids’ Moyer & Bergman, defended Amana, aided by partners Mark J. Herzberger and Eric W. Lam. “We were extremely disappointed with the outcome and intend to vigorously pursue legal remedies,” Weston said.

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