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Home / Verdicts and Settlements / Quad/Graphics, Inc., et al., v. HK Systems, Inc., et al.

Quad/Graphics, Inc., et al., v. HK Systems, Inc., et al.

Plaintiff counsel’s summary of the facts: An automated storage system at Quad/Graphics’ printing plant in Lomira collapsed after two months of use while carrying less than 42 percent of its required weight capacity. The collapse started a fire in the stored paper materials, which burned for three weeks. Quad/Graphics’ property insurer, Industrial Risk Insurers, paid $59,000,000 for the resulting property and business interruption damages.

Quad/Graphics and IRI filed suit against a number of parties invloved in the design and construction of the storage system. Plaintiffs recovered $19,790,000 in settlements before trial. Plaintiffs went to trial against three defendants and their insurers. HK Systems, Inc., is the company Quad/Graphcis hired to design and install the storage system. Rack Structures, Inc., is the subcontractor that HK hired to design and build the steel rack structure for that system. The walls and roof were attached directly to the rack structure, which was more than a block long and ten stories tall. Leavitt Tube Company, LLC, manufactured the steel tubes used to make the rack structure columns. Plaintiffs went to trial on their product liability claims against HK, Rack Structures and Leavitt and their breach of contract claim against HK.

Defendants contended that Quad/ Graphics was negligent for using the system after learning of weld-quality issues in the rack structure. The jury found that Quad/Graphics was not negligent.

Defendants contended that the architecture/engineering firm Graef, Anhalt Schloemer Associates, which provided engineering consulting to HK and Quad/ Graphics was negligent for allowing Quad/Graphics to use the system after weld-quality issues were discovered. Plaintiffs contended that Graef Anhalt reasonably relied on the advice of HK and Rack Structures that the system was safe to use despite the weld-quality issues.

Claims against HK were tried to the bench and claims against the others were tried to the jury

The court found as a matter of law that the storage system was defective and unreasonably dangerous. The jury determined who was responsible for the defective condition of that system. The jury returned a verdict allocating 51 percent of fault to HK, 39 percent to Rack Structures and 10 percent to Leavitt. The court has not yet rendered a decision on the claims against HK.

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