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Commitments and Contingencies | 9 Months Ended
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Sep. 30, 2017
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies | Commitments and Contingencies Environmental The Company’s policy with regard to environmental liabilities is to accrue for future environmental assessments and remediation costs when information becomes available that indicates that it is probable that the Company is liable for any related claims and assessments and the amount of the liability is reasonably estimable. The Company does not believe that any such matters will have a material adverse effect on the Company’s financial condition, cash flows or results of operations. Litigation From time to time, the Company is involved in various legal proceedings and other matters arising in the normal course of business. Corrosion, hydrogen enbrittlement, cracking, material hardness, wood pressure-treating chemicals, misinstallations, misuse, design and assembly flaws, manufacturing defects, labeling defects, product formula defects, inaccurate chemical mixes, adulteration, environmental conditions, or other factors can contribute to failure of fasteners, connectors, anchors, adhesives, specialty chemicals, such as fiber reinforced polymers, and tool products. In addition, inaccuracies may occur in product information, descriptions and instructions found in catalogs, packaging, data sheets, and the Company’s website. As of the date of this Quarterly Report on Form 10-Q, the Company is not a party to any legal proceedings, which the Company expects individually or in the aggregate to have a material adverse effect on the Company’s financial condition, cash flows or results of operations. Nonetheless, the resolution of any claim or litigation is subject to inherent uncertainty and could have a material adverse effect on the Company’s financial condition, cash flows or results of operations. Potential Third-Party Claims Nishimura v. Gentry Homes, Ltd., Civil No. 11-1-1522-07, was filed in the Hawaii First Circuit court on July 20, 2011. The Nishimura case involves claims by homeowners at Ewa by Gentry, a Honolulu development of approximately 2,400 homes. The claims arise out of alleged corrosion of strap-tie holdowns and mud-sill anchor products supplied by the Company. The plaintiff homeowners originally sued the developer, Gentry Homes, Ltd. (“Gentry”), as well as the Company. In 2012 and 2013, the Hawaii First Circuit granted the Company’s motions to dismiss and for summary judgment, resulting in the dismissal of all of the homeowners’ claims against the Company, and the Company has not since then been a party to the proceedings. The dismissed claims against the Company remain subject to potential appeal by the plaintiffs. Gentry and the plaintiff homeowners thereafter moved their dispute to arbitration, and the Hawaii state court stayed the lawsuit pending arbitration. The Company was not a party to the arbitration. Gentry initially reported no significant damage claims related to the Ewa development. In August 2016, Gentry advised the Company for the first time that a substantial number of plaintiff homeowners claimed serious corrosion of mudsill anchors and strap-tie holdowns. The plaintiff homeowners and Gentry proceeded to arbitration in April 2017. During the pendency of the arbitration, Gentry and the plaintiff homeowners reached a settlement of their dispute, pursuant to which Gentry agreed to pay approximately $90 million to the plaintiff homeowners. In October 2017, Gentry demanded that the Company pay Gentry the amount it paid the plaintiff homeowners to settle their claims, asserting the Company was responsible for breach of warranty, negligent misrepresentation and fraud in connection with the supply of strap-tie holdowns and mud-sill anchor products to Gentry. As of the date of this Quarterly Report on Form 10-Q, Gentry had not yet initiated legal proceedings against the Company. The Company admits no liability in connection with the Nishimura case. At this time, the Company cannot reasonably ascertain the likelihood that it will be found responsible for substantial damages to Gentry or to the homeowners should they appeal; whether any legal theory against the Company might be viable, or the extent of the liability the Company might face if Gentry were to proceed against it. The Company will vigorously defend any claims against it, whether appeal by the plaintiff homeowners, or third party claims by Gentry. Based on facts currently known to the Company and subject to future events and circumstances, the Company believes that all or part of any claims that any party might seek to allege against it related to the Nishimura case may be covered by its insurance policies. Charles Vitale, et al. v. D.R. Horton, Inc. and D.R. Horton-Schuler Homes, LLC, Civil No. 15-1-1347-07, a putative class action lawsuit, was filed in the Hawaii First Circuit on July 13, 2015, in which homeowner plaintiffs allege that all homes built by D.R Horton/D.R. Horton-Schuler Homes (collectively "Horton Homes") in the State of Hawaii have strap-tie holdowns that are suffering premature corrosion. The complaint alleges that various manufacturers make strap-tie holdowns that suffer from such corrosion, but does not identify the Company’s products specifically. The Company is not currently a party to the Vitale lawsuit, but the lawsuit in the future could potentially involve the Company’s strap-tie holdowns. If claims are asserted against the Company in the Vitale case, it will vigorously defend any such claims, whether brought by the plaintiff homeowners, or third party claims by Horton Homes. Based on facts currently known to the Company and subject to future events and circumstances, the Company believes that all or part of any claims that any party might seek to allege against it related to the Vitale case may be covered by its insurance policies. Given the nature and the complexities involved in the Nishimura and Vitale proceedings, the Company is unable to estimate reasonably a likelihood of possible loss or range of possible loss until the Company knows, among other factors, (i) whether it will be named in either lawsuit by any party; (ii) the specific claims and the legal theories on which they are based (iii) what claims, if any, might be dismissed without trial, (iv) the extent of the claims, including the size of any potential class, particularly as damages are not specified or are indeterminate, (v) how the discovery process will affect the litigation, (vi) the settlement posture of the other parties to the litigation, (vii) the extent to which the Company’s insurance policies will cover the claims or any part thereof, if at all, (viii) whether class treatment is appropriate; and (ix) any other factors that may have a material effect on the litigation. While it is not feasible to predict the outcome of proceedings to which the Company is not currently a party, or reasonably estimate a possible loss or range of possible loss for the Company related to such matters, in the opinion of the Company, either the likelihood of loss from such proceedings is remote or any reasonably possible loss associated with the resolution of such proceedings is not expected to be material to the Company’s financial position, results of operations or cash flows either individually or in the aggregate. Nonetheless, the resolution of any claim or litigation is subject to inherent uncertainty and could have a material adverse effect on the Company’s financial condition, cash flows or results of operations.

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