IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

PROJECT BOAT HOLDINGS, LLC,

 Plaintiff,

 v.

BASS PRO GROUP, LLC,

 Defendant.

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 C.A. No. 12606-VCS

MEMORANDUM OPINION

Date Submitted: February 1, 2019

Date Decided: May 29, 2019

John A. Sensing, Esquire of Potter Anderson & Corroon LLP, Wilmington, Delaware and 

Mark S. Baldwin, Esquire, Dylan P. Kletter, Esquire and Anthony J. Boccamazzo, Esquire 

of Brown Rudnick LLP, Hartford, Connecticut, Attorneys for Plaintiff Project Boat 

Holdings, LLC.

S. Mark Hurd, Esquire and Richard Li, Esquire of Morris, Nichols, Arsht & Tunnell LLP, 

Wilmington, Delaware and Mike Stenglein, Esquire and Tracey M. Robertson, Esquire of 

King & Spalding LLP, Houston, Texas, Attorneys for Defendant Bass Pro Group, LLC.

SLIGHTS, Vice Chancellor
1

On February 10, 2015, Project Boat Holdings LLC (“Project Boat”),

a manufacturer of recreational boats, sold three brands of its bass fishing boats to 

Bass Pro Group LLC (“Bass Pro”), a national outdoor recreational equipment 

retailer, for $260,000,000. After the sale, Bass Pro discovered that several 

purchasers of a particular line of boats included in the sale, the 2014 Triton 21 TrX 

(the “TrX”), had presented warranty claims to Project Boat after noticing that the 

hulls of the boats had cracked or delaminated.1 Project Boat did not disclose the 

warranty claims or increase its warranty reserve in the financial statements provided 

to Bass Pro in connection with the Membership Interest Purchase Agreement (the 

“Agreement”) that governs the transaction. 

Bass Pro determined the cracks and delamination in the hulls resulted from

Project Boat having manufactured the TrX hull with fewer layers of laminate than 

was called for in the boat’s design. Bass Pro also concluded that this production 

flaw affected an entire production run of 2014 TrX boats and, therefore, case-bycase repairs would be inadequate to solve the problem. Instead, following the adage, 

“should you find yourself in a chronically leaking boat, energy devoted to changing 

 

1 As discussed below, “delamination” is a process by which the fiberglass laminate 

comprising the boat’s hull decompensates. Delamination can occur in varying degrees. 
2

vessels is likely to be more productive than energy devoted to patching leaks,”2 Bass 

Pro elected to replace the hulls of every 2014 TrX produced with the allegedly 

defective hull. This decision prompted Bass Pro to initiate a “Replacement 

Program” whereby it recalled and replaced the hulls of every affected boat at an 

estimated total cost of $5 million. 

A month before commencing its Replacement Program, Bass Pro notified 

Project Boat of a claim for indemnification under the Agreement, asserting that 

Project Boat’s failure to disclose the manufacturing defect and account for it in its 

financial statements breached certain of the Agreement’s representations and 

warranties. Bass Pro stated that its expected damages caused by the breach, not 

coincidentally, were $5 million. In response, Project Boat notified Bass Pro that its 

indemnification claim was factually deficient and failed to comply with the 

Agreement’s notice requirements. Accordingly, it demanded that Bass Pro execute 

joint instructions for the release of the $2.6 million set aside in escrow under the 

Agreement to address post-closing indemnification claims. 

When Bass Pro denied Project Boat’s demand, Project Boat filed this action 

seeking a declaration that Bass Pro was in breach of the Agreement and an order 

compelling Bass Pro to release the escrow funds. Bass Pro counterclaimed for 

 

2 WARREN BUFFETT, THE ESSAYS OF WARREN BUFFETT: LESSONS FOR CORPORATE 

AMERICA (1st ed. 1998). 
3

breaches of representations and warranties, including those that represented Project 

Boat had supplied accurate financial statements prepared in accordance with 

generally accepted accounting principles (“GAAP”), had set aside an adequate 

warranty reserve, had disclosed all warranty claims outside the ordinary course of 

business and had not encountered a change or event that had a Material Adverse 

Effect on the business. Bass Pro also alleged fraudulent inducement and related tort 

claims. 

In this post-trial memorandum opinion, I conclude that the cracks and 

delamination in the TrX hulls were unusual and the warranty claims for the damaged 

hulls were outside the ordinary course of business. Nevertheless, Project Boat did 

not breach the Agreement by failing to disclose the warranty claims relating to the 

damaged hulls because Bass Pro did not prove that total replacement, rather than 

case-by-case repairs, of the hulls was the only means by which to address the 

warranty claims. Nor did Bass Pro prove that Project Boat’s warranty reserve was 

insufficient to address the warranty claims, assuming those claims were addressed 

by case-by-case repairs or replacement as appropriate. I am also satisfied there was 

no Material Adverse Effect that would trigger disclosure obligations under the 

Agreement. Finally, whether measured by a preponderance of evidence or a clear 

and convincing evidence standard of proof, Bass Pro did not prove that Project Boat 

fraudulently induced Bass Pro to enter into the Agreement.
4

Judgment will be entered in favor of Project Boat and against Bass Pro. The 

parties shall issue joint instructions to the escrow agent to release the escrow funds 

to Project Boat. There will be no award of attorneys’ fees. 

I. BACKGROUND

The Court held a four-day trial during which it heard live testimony from eight

witnesses and received over 400 trial exhibits along with the lodged deposition 

testimony of each trial witness and two additional fact witnesses. I have drawn the 

facts from the stipulations of fact entered in advance of trial, the testimony and 

exhibits presented during trial and from reasonable inferences that flow from that 

evidence.3 The following facts were proven by a preponderance of the evidence. 

A. The Parties and Relevant Non-Parties

Plaintiff/Counterclaim Defendant, Project Boat, is a Delaware limited liability 

company with its principal place of business in Beverly Hills, California.4 At the 

time of the transaction at issue, Project Boat was a portfolio company of Platinum 

Equity, LLC and Platinum Equity Advisors, LLC (together “Platinum Equity”).5 

 

3 Citations will appear as follows: “PTO ¶ __” shall refer to stipulated facts in the pre-trial 

order; “Tr. __ ([Name])” shall refer to witness testimony from the trial transcript; “JX__” 

shall refer to trial exhibits using the JX-based page numbers generated for trial; “JX__ 

([Name] Dep.) __” shall refer to witness testimony from a deposition transcript lodged with 

the Court for trial. 

4 PTO ¶ 9.

5

JX 192 §§ 4.27, 12.2(b); JX 312 (Wolf Dep.) 12–13, 180. 
5

Project Boat, in turn, owned PBH Marine Holdings, LLC (“PBH Marine” or the 

“Company”).

6 Through its 100% ownership of PBH Marine Group, LLC, which in 

turn owns 100% of Fishing Holdings, LLC (“Fishing Holdings”), PBH Marine 

owned fishing boat manufacturers Ranger Boats, Triton Boats and Stratos Boats.

7

 

The following chart depicts the assets Project Boat sold to Bass Pro along with the 

key personnel associated with each asset8:

 

6 PTO ¶ 11.

7

Id.

8

In the briefs and during trial, the parties at various times referred to the entities within the 

Project Boat family interchangeably. Because my understanding is that Fishing Holdings 

sat directly above the three boat lines—Ranger, Triton and Stratos—I will refer to Fishing 

Holdings when describing the operational issues that led to the warranty claims at issue 

here. 

Remainder of page intentionally left blank
6

9

Defendant/Counterclaim Plaintiff, Bass Pro, is a Delaware limited liability 

company with its principal place of business in Springfield, Missouri.10 It operates 

 

9 Stratos Boats not shown. 

10 PTO ¶ 10.

PBH MARINE HOLDINGS

Operating Committee included:

Randy Hopper

Mendel Hughes

PBH BASS PRO

PBH MARINE GROUP

FISHING HOLDINGS

CEO – Randy Hopper

CFO – Mendel Hughes

VP/Sales – Keith Daffron

Warranty Mgr. – Tim Houk

RANGER BOATS

CEO – Randy Hopper

CFO – Mendel Hughes

VP/Sales – Keith Daffron

TRITON BOATS

CEO – Earl Bentz (disputed)

VP/Sales & Marketing – Adam Adkisson

Head of New Product Dev. – Gary Zittrower
7

a national network of sporting goods retail stores and owns approximately 100 boat 

dealerships nationwide.11 

B. The Membership Interest Purchase Agreement 

On November 14, 2014, Project Boat and Bass Pro executed the Agreement 

under which Project Boat sold to Bass Pro all issued and outstanding interests of 

PBH Marine for $260,000,000.12 The Agreement contains representations and 

warranties from the seller13 and buyer.14 Bass Pro alleges Project Boat breached four 

representations and warranties set forth in Sections 4.8, 4.9, 4.23 and 4.26. 

Under Section 4.8, Project Boat warranted that the Company’s unaudited 

financial statements for the period between January 1, 2014 and July 27, 2014, 

presented fairly the Company’s financial condition in accordance with GAAP. More 

specifically, the provision states:

Financial Statements. Attached as Schedule 4.8 are (a) the audited 

combined balance sheets and statements of income, cash flow and 

members’ equity of Fishing Holdings, its Subsidiaries and 96 Ranger 

Road, LLC as of and for the twelve-month periods ended December 31, 

2013 and December 31, 2012 (the “Audited Financial Statements”) and 

(b) an unaudited combined balance sheet and statements of income and 

cash flow of Fishing Holdings, its Subsidiaries and 96 Ranger Road, 

 

11 JX 309 (Maliszewski Dep.) 16–17.

12 PTO ¶ 11; JX 192 at 6, § 2.2. 

13 JX 192 Article IV.

14 Id. Article V. 
8

LLC as of July 27, 2014, and for period commenced January 1, 2014 

and ended July 27, 2014 (the “Interim Financial Statements” and, 

together with Audited Financial Statements, the “Financial 

Statements”). Except as set forth on Schedule 4.8, the Financial 

Statements present fairly, in all material respects, the consolidated 

financial position and results of operations of the Company and its 

Subsidiaries as of the dates and for the periods indicated in such 

Financial Statements in conformity with GAAP consistently applied 

(except in the case of the Interim Financial Statements for the absence 

of footnotes and other presentation items and for normal year-end 

adjustments).15

Under Section 4.9, Project Boat represented that, as of November 14, 2015, 

the date of the Agreement’s execution, and February 10, 2015, the date of the 

closing, there were no undisclosed liabilities of a type required to be reflected or 

reserved for under GAAP16:

Undisclosed Liabilities. Except as set forth on Schedule 4.9, there is no 

liability, debt or obligation of or claim against the Company or any of 

its Subsidiaries of a type required to be reflected or reserved for on a 

balance sheet prepared in accordance with GAAP, except for liabilities 

or obligations (a) reflected or reserved for on the Financial Statements 

or disclosed in the notes thereto, (b) that have arisen since the date of 

the most recent balance sheet included in the Financial Statements in 

the ordinary course of the operation of the business of the Company and 

its Subsidiaries consistent with past practice, (c) incurred in connection 

with the transactions contemplated by this Agreement, or (d) which do 

not exceed $250,000 in the aggregate.17

 

15 Id. § 4.8. 

16 Tr. 186 (Hopper); JX 192 at 1. As part of the closing, Project Boat certified that its 

representations remained materially accurate. Id. § 9.2(a), (d).

17 Id. § 4.9.
9

Section 4.23 of the Agreement warrants that there has been no change or event 

that would result in a Material Adverse Effect on Project Boat. The Agreement 

defines Material Adverse Effect, with a number of exceptions that do not apply here, 

to mean “a material adverse effect on the business, results of operations, financial 

condition or assets of the Company and its Subsidiaries, taken as a whole.”18 

Section 4.23 states:

Absence of Changes.

a. Except as set forth on Schedule 4.23, from the date of the most recent 

balance sheet included in the Interim Financial Statements to the date 

of this Agreement, there has not been any change, event, development 

or occurrence that, individually or in the aggregate, has had or would, 

individually or in the aggregate, reasonably be expected to have a 

Material Adverse Effect on the Company.

b. Except as set forth on Schedule 4.23, and except in connection with the 

transactions contemplated by this Agreement, from the date of the most 

recent balance sheet included in the Interim Financial Statements to the 

date of this Agreement, the Company and its Subsidiaries have, in all 

material respects, conducted their business and operated their 

properties in the ordinary course of business consistent with past 

practice.19

Finally, in Section 4.26, Project Boat warranted:

Product and Service Warranties. There is no pending or, to the 

knowledge of Seller, threatened (in writing) claim alleging any breach 

of any warranty or guaranty as to goods sold by the Company or its 

 

18 Id. at 12.

19 Id. § 4.23.
10

Subsidiaries, other than as reserved for on the Reference Balance Sheet 

or for claims made in the ordinary course of business consistent with 

past practice, individually, which do not exceed $100,000.20

In the event of a breach of the representations and warranties, or a covenant 

or agreement contained within the Agreement, the affected party may seek 

indemnification by providing proper notice to the indemnitor21:

If any Indemnified Party becomes aware of any circumstances that may 

give rise to an Indemnification Claim for any matter not involving an 

Action, then such Indemnified Party shall promptly (i) notify the 

Indemnitor and (ii) deliver to the Indemnitor a written notice 

(A) describing in reasonable detail the nature of the circumstances 

giving rise to the Indemnification Claim, (B) including the Indemnified 

Party’s good faith estimate (based on the facts then known) of the 

amount of Damages that may arise from such circumstances, and 

(C) describing in reasonable detail the basis for the Indemnified Party's 

request for indemnification under this Agreement. Failure to notify the 

Indemnitor in accordance with this Section 11.3(c) will not relieve the 

Indemnitor of any liability that it may have to the Indemnified Party, 

except to the extent (1) the defense of such Indemnification Claim is 

actually materially prejudiced by the Indemnified Party’s failure to give 

such notice or (2) the Indemnified Party fails to notify the Indemnitor 

of such Indemnification Claim in accordance with this Section 11.3(c)

prior to the Survival Expiration Date; provided that an immaterial 

deficiency in a timely notice required by this Section 11.3(c) will not 

 

20 Id. § 4.26.

21 Id. Article XI, §§ 11.2(a), (b).
11

relieve the Indemnitor of any liability that it may have to the 

Indemnified Party.22

At Section 11.2(a), Project Boat agreed that it would indemnify Bass Pro “for 

any and all damages to the extent arising from [] any breach of any representation 

and warranty in Article IV.”23 Section 11.4(a) sets an “indemnification cap” and 

Section 11.4(b) creates an indemnification “claims basket.”24 For Bass Pro, the 

indemnification cap for claims of breach of the representations and warranties at 

issue here (non-“Fundamental Representations”) was the amount in the 

“Indemnification Escrow Fund.”25 The “claims basket” limits recovery for 

indemnification to circumstances where each individual claim exceeds $75,000, 

excluding costs and expenses, and the aggregate damages from all claims exceeds 

$350,000.26

Along with the Agreement, the parties executed an escrow agreement under

which Bass Pro deposited $2,600,000 as the “Indemnification Escrow Amount” (the 

 

22 Id. § 11.3(c). See also id. § 11.1 (explaining that any claim for indemnification must be 

asserted “on or before the Survival Expiration Date [February 10, 2016] . . . by proper 

written notice in accordance with this Article XI, specifying, in reasonable detail, the basis 

of the claim . . . .”).

23 Id. § 11.2(a). 

24 Id. §§ 11.4(a), (b). 

25 Id. at 10, § 11.4(a)(i), (ii).

26 Id. § 11.4(b).
12

“Escrow Agreement”).27 In Section 4(g) of the Escrow Agreement, the parties 

agreed to execute joint instructions to the designated escrow agent, Wells 

Fargo, N.A., for the release of the escrowed funds “at such times as releases are 

required by [the Escrow Agreement] and the [Agreement].”28 In Section 11.8(b) of 

the Agreement, the parties agreed that if Bass Pro properly asserted a claim for 

indemnification before February 10, 2016, and the claim remained pending as of that 

date, the aggregate amount of the pending claim would be withheld from the 

Indemnification Escrow Amount and released upon satisfaction or resolution of the 

claim.29 

C. The 2014 Triton 21 TrX

PBH Marine acquired Ranger, Triton and Stratos in 2010 at a time when each 

was a struggling manufacturer of recreational fishing boats.

30 After the acquisition, 

PBH Marine consolidated manufacturing for the three brands at Ranger’s 

headquarters in Flippin, Arkansas to take advantage of Ranger’s larger facility and 

to streamline operations.

31

 In the years following the consolidation, boat sales

 

27 JX 225. 

28 Id. at 4, 26. 

29 JX 192 § 11.8(b).

30 Tr. 152–55, 160-62 (Wolf); JX 315 (Bentz Dep.) 18.

31 Tr. 158–59 (Wolf); JX 409 (Zittrower Dep.) 10–11; JX 315 (Bentz Dep.) 18.
13

improved. In 2014, when Bass Pro acquired PBH Marine, its three boat brands 

manufactured 71 boat models.

32

 Ranger was regarded as the “premier” brand, 

manufacturing 37 models constituting 79 percent of PBH Marine’s sales in 2014.33 

Triton was considered the middle-tier brand and produced 24 models comprising

17 percent of sales in 2014.34 Stratos was a more discreet brand with ten models 

comprising four percent of annual sales in 2014.35 

This litigation concerns just one of the 71 boat models Bass Pro acquired in 

the sale. The TrX is a 21-foot fiberglass bass fishing boat introduced in May 2013 

to take the place of Triton’s aging flagship model, the 21 HP.36 With a more modern 

design, wider deck and 250-horsepower outboard engine,37 the TrX was not unlike 

Ranger’s best-selling Z521, a boat that was also approximately 21-feet in length with 

a wide beam and designed to carry high horsepower engines.

38

 But the hulls of the 

 

32 PTO ¶ 12.

33 Id.; JX 115 at 10; JX 313 (Adkisson Dep.) 27–28. 

34 Id.

35 Id.

36 Tr. 17–18, 99, 105 (Hopper), 441 (Zittrower); JX 313 (Adkisson Dep.) 26; JX 409 

(Zittrower Dep.) 22–23, 33–34.

37 Tr. 236 (Adkisson), 540 (Maliszewski); JX 313 (Adkisson Dep.) 26; JX 409 (Zittrower 

Dep.) 22–23.

38 Tr. 18–20 (Hopper), 360–61 (Adkisson); JX 339 at 13; JX 405 (Hopper Dep.) 163–64.
14

2014 Triton and Ranger boats had important differences. The fiberglass structure 

for the hulls of Triton boats, by design, included at least three layers of chopped 

strand mat and two to three layers of woven roving (the “Triton Layup”).39 Ranger 

boat hulls, on the other hand, were designed to have three layers of chopped strand 

mat but only a single layer of woven roving (the “Ranger Layup”).

40

 

With all manufacturing occurring at the Ranger facility, it is not surprising 

that PBH Marine sought to achieve certain economies of scale. Given the 

similarities in the boats, the Product Improvement Team floated the possibility of 

using the Ranger Layup on Triton models.

41

 In May 2012, a team of Ranger 

employees requested an order from Triton’s Vice President of Engineering, Gary 

Zittrower, to create a prototype Triton 21 HP constructed with the Ranger Layup 

(the “Test Boat”).42 Consistent with its typical testing practices, Fishing Holdings 

 

39 Tr. 369 (Adkisson), 638–39, 642–45, 664–67, 677–78, 851–52 (Taylor); JX 322 at 5–6, 

12–13; JX 339 at 15–17; JX 373; JX 376; JX 409 (Zittrower Dep.) 45–47. In a fiberglass 

boat, the laminate is the outer structural shell of the hull. Tr. 239–40 (Adkisson), 443–45 

(Zittrower). The lamination schedule determines the type and quantity of materials to be 

used in the laminate. Tr. 22 (Hopper), 443–45 (Zittrower); JX 373. Typically, the outer 

layer of the laminate is a gelcoat that is laid onto a boat mold, followed by layers of 

fiberglass, resin, chopped strand mat and woven roving. Tr. 239–40 (Adkisson); JX 372. 

40 Tr. 643, 667–68 (Taylor); JX 322 at 6; JX 372.

41 JX 314 (Houk Dep.) 75–76, 101; JX 405 (Hopper Dep.) 163–64.

42 Tr. 23–24, 99–102 (Hopper), 497 (Zittrower); JX 1; JX 399; JX 409 (Zittrower Dep.) 

23–25. Zittrower testified he was not aware that the Test Boat was made with the Ranger 

Layup, but had he known, he “wouldn’t have stopped them from building the boat to test 
15

took the Test Boat to a nearby lake where it was operated for 20 to 30 hours, 

including one day in rough seas, and then loaned the boat to two professional anglers 

for a few weeks of additional testing.

43

 After testing, the Test Boat was returned to 

the plant for inspection of the hull, which exhibited no signs of cracking or other 

structural issues.

44

 Satisfied with the Test Boat’s performance, in June 2013, Fishing 

Holdings decided to manufacture the 2014 line of TrX boats with the Ranger Layup

instead of the Triton Layup that had been deployed in prior Triton models.

45

 The 

first sign of trouble with the TrX surfaced less than a year later.

D. Early Problems with the TrX Hulls 

On April 17, 2014, Triton warranty manager, Marty Morris, received an email 

from a TrX owner reporting cracks on the side of his TrX hull below the rod box 

 

it to see what happens, because that’s how you learn things in this business.” Tr. 498 

(Zittrower). 

43 Tr. 23–24 (Hopper), 703 (Taylor); JX 252 at 2; JX 315 (Bentz Dep.) 11, 13–14, 17–18 

(testifying that testing of a fiberglass bass boat is typically performed in the water, not in a 

laboratory), 93 (testifying that boats were tested through 100 hours of “use and abuse,” not 

stress testing); JX 409 (Zittrower Dep.) 31. I note that Bass Pro’s expert, Robert Taylor, 

determined that the testing approach used by Fishing Holdings was inadequate. He reached 

that opinion, however, long after the time for expert discovery had closed. On Project 

Boat’s motion, I struck that portion of Taylor’s opinion as untimely. See D.I. 197 (letter 

opinion granting Project Boat’s motion to strike). After reviewing the matter anew, I stand 

by that decision. 

44 Tr. 25 (Hopper). 

45 Tr. 20–21 (Hopper); JX 313 (Adkisson Dep.) 26–27, 125; JX 353; JX 405 (Hopper Dep.) 

98, 146, 163–64, 225–26, 228, 238–43; JX 409 (Zittrower Dep.) 12, 17–18.
16

(the “Anderson Boat”).46 Later that day, Morris forwarded the email to Zittrower, 

who sent the report to an engineering team and asked them to check whether “there 

was anything unusual about [the] construction” of the boat.

47

Less than a month later, on May 7, 2014, Morris received a second complaint 

about a TrX with significant cracking on one side of the boat (the “Govreau Boat”).48 

This time, Morris forwarded the report to Zittrower and others, including Tim Houk, 

who was in charge of managing warranty claims for all three boat brands.

49

 Morris 

suggested that the team bring the boat to Flippin for inspection and repair to make 

sure there were no issues with the lamination.

50

 By mid-June, however, the Govreau 

Boat remained with its owner, and on June 16, 2014, the owner informed his boat 

dealer that the cracks on his boat had grown larger and new cracks had emerged on 

 

46 JX 19. The rod box is a hatch below the deck used to store fishing rods. Tr. 25 (Hopper). 

The reported cracks in the Anderson Boat and in the boats discussed below are distinct 

from cracks in the gelcoat layer (i.e., the painted surface) of the boat, which are typically 

viewed as a minor cosmetic problem. Cracks that extend past the gelcoat layer to the 

lamination can lead to delamination, which occurs when water pressure acts to separate the 

fiberglass and the layers beneath it. If left unrepaired, the hull can peel apart entirely. See

Tr. 457, 462, 467–68 (Zittrower); JX 351 (Taylor Dep.) 51, 53. 

47 JX 21. 

48 JX 43. 

49 JX 44; JX 314 (Houk Dep.) 9–10. Houk is now Bass Pro’s Director for Customer Service 

and Warranty for Ranger, Triton and Stratos. Id. His testimony was presented by 

deposition; he did not appear at trial. 

50 JX 44; JX 66. 
17

the other side of the boat.

51

 When Morris brought the issue to Houk’s attention and 

showed him photos of the Govreau Boat in its damaged state, Houk noted, “quite a 

bit of white glass” and asked, “what did he [the owner] hit?”52 Morris responded, 

“[i]t would appear that way [that the boat had hit something] with the exception of 

getting these photos a month ago prior to the delam.”53

A third TrX owner, who was also a boat dealer, reported damage to his hull

two days later, on June 18, 2014 (the “Boat Doc Boat”).54 The owner emailed several 

photos of his TrX directly to several members of the Fishing Holdings team and 

described multiple cracks as well as a “huge void” in the boat’s hull.55 Morris 

forwarded the email to Houk and stated, “[s]ure looks like impact to me.”56 Houk 

forwarded the report to the President and CEO of Fishing Holdings, Randy Hopper, 

and commented, “[h]ere’s another.”

57

 Later that day, Houk opined in an email to 

 

51 JX 66. 

52 JX 70. It is apparently easy to determine when fiberglass has been damaged by impact 

because it delaminates at the area of impact and turns white where it is usually clear. 

Tr. 42–43 (Hopper). 

53 JX 70. 

54 JX 81. 

55 Id. 

56 Id.

57 Tr. 14 (Hopper); JX 81. 
18

Morris and Zittrower that the damage was impact-related but asked if the cracks 

were in the same place as the previous boats.

58

 Morris confirmed that the cracks on 

the Govreau Boat and the Anderson Boat were in the same area and suggested 

“we may have an issue here.”

59

 Houk was not swayed, however, and expressed to 

Morris, Zittrower and later to Hopper that, in his judgement, the damage was caused 

by impact.60

E. Triton Discovers That the TrX Is Manufactured With the Ranger Layup

In May or June of 2014, Zittrower toured the Flippin manufacturing plant with 

Ron Marler, a process engineer for Ranger and Triton, and Vernon Goodman, 

Fishing Holding’s lamination manager who was also a member of the team in charge 

of introducing the Ranger Layup to the TrX.

61

 The trio discussed the recurrent issues 

with TrX hulls and viewed the damage on the Anderson Boat.

62

 Despite having 

verified Goodman’s request to produce the Test Boat with a different lamination 

 

58 JX 82.

59 Id.

60 JX 83; JX 84. 

61 Tr. 471–75, 517 (Zittrower); JX 1; JX 409 (Zittrower Dep.) 31, 35. The exact date of 

Zittrower’s visit to the Flippin plant, and whether it was before or after the Boat Doc Boat’s 

report, are not clear, Tr. 474–75 (Zittrower) (“That would have been in the late May, June, 

sometime in that—I’m not real familiar with the date . . . .”), but Zittrower made trips to 

Flippin roughly twice per month during the summer of 2014. JX 409 (Zittrower Dep.) 16–

17. 

62 Tr. 472–73 (Zittrower).
19

schedule, Zittrower was surprised when Goodman informed him that the TrX had 

“a more Ranger-like” laminate.

63

 Zittrower then informed Goodman, and later 

Hopper, that the laminate was too thin and that a change back to the original Triton 

Layup was required.

64

 On June 25, 2014, Fishing Holdings began manufacturing 

TrX boats with the Triton Layup.

65

F. Project Boat Begins Discussions of a Sale to Bass Pro as More Complaints 

of Hull Damage Surface

By June 2014, Hopper and Project Boat executives were preparing sales

materials for Bass Pro on the Ranger, Triton and Stratos boat lines.66 Bass Pro’s due 

diligence continued through November of that year. Kevin Maliszewski, Bass Pro’s 

Vice President of Finance, represented Bass Pro in the negotiations with the 

assistance of Moelis & Co. and PricewaterhouseCoopers LLP.

67

 The team that 

supported Project Boat’s diligence efforts included Hopper, CFO of Fishing 

Holdings, Mendel Hughes, Vice President of Sales for Fishing Holdings, Keith 

Daffron, Platinum Equity Principal, David Wolf and three other Company 

 

63 Tr. 472–73, 480 (Zittrower). Zittrower testified that Dan Goodwin, also a member of 

the team in charge of introducing the Ranger Layup to the Triton boats, expressed his belief 

that Zittrower knew about the lamination schedule change. Tr. 473 (Zittrower); JX 1. 

64 Tr. 116–17 (Hopper), 368–69 (Adkisson), 473–75 (Zittrower).

65 Tr. 115–17 (Hopper), 364–65, 368–69 (Adkisson), 482 (Zittrower). 

66 PTO ¶ 15; Tr. 168–70 (Wolf); JX 115. 

67 JX 309 (Maliszewski Dep.) 26–28, 49–51. 
20

representatives.68 Hopper, Hughes and Daffron were responsible for satisfying Bass 

Pro’s due diligence requests and ensuring Project Boat’s compliance with its 

representations and warranties.

69 They were also designated as three of the four 

Project Boat “Persons with knowledge” for purposes of certain covenants in the 

Agreement, along with another Ranger executive, Bart Schad.

70 Ernst & Young 

audited the Company’s financial statements, including Fishing Holding’s

methodology for assessing the sufficiency of the warranty reserve.

71

 

While Project Boat and Bass Pro negotiated the transaction, reports 

concerning problems with the TrX hulls continued to surface. On August 1, 2014,

Zittrower and then-Vice President of Sales and Marketing for Triton, Adam 

Adkisson, received a report of delamination that the owner thought might be due to 

the boat having hit a piece of rebar that cut through its gelcoat and fiberglass layers

(the “Card Boat”).72 Three days later, another TrX owner reported cracking and 

delamination on both sides of his hull in the same place as the Boat Doc Boat and 

 

68 JX 312 (Wolf Dep.) 17–18, 65‒69.

69 Id. 69, 73–76, 81, 93–94, 144–45, 155‒56, 217‒18. 

70 JX 192 § 1.3; JX 313 (Adkisson Dep.) 141. 

71 Tr. 552–53 (Maliszewski); JX 193 at 18, 31. 

72 Tr. 216 (Adkisson); JX 117. After Bass Pro purchased PBH Marine, Adkisson continued 

his role at Triton. Tr. 215 (Adkisson). He left the company only recently when Bass Pro 

decided to relocate Triton’s headquarters to Springfield, Missouri. Id. 
21

the Govreau Boat (the “Sensabaugh Boat”).73 The dealer expressed concern that 

“there may have been something out of the ordinary there.”74 In early September 

2014, three more TrX owners reported damage to their hulls.

75

With the exception of the Card Boat, which was covered by insurance,76

Fishing Holdings addressed each reported instance of TrX hull damage under the 

TrX warranty.77 As with all Triton fiberglass boats, Fishing Holdings/Triton 

represented to TrX purchasers that Triton would “repair or replace, at its sole 

discretion, defects in materials or workmanship that occur and are reported to Triton, 

 

73 Tr. 292, 377–81 (Adkisson), 495 (Zittrower); JX 118–20.

74 JX 119. 

75 Tr. 302–303, 305–308 (Adkisson); JX 366. Bass Pro prepared JX 366 as a compilation 

of other spreadsheets and databases concerning the TrX hull issues. Tr. 421–22 

(Adkisson). The supporting sources include JX 368 and JX 375 (printouts of the warranty 

claims database for Triton boats); JX 410 (a compilation of PDFs of warranty claims made 

for the TrX); JX 243 (a list Houk compiled of TrX hull repairs and replacements). See also

Tr. 259–62 (Adkisson) (explaining the warranty claims database). Although JX 243 was 

not introduced as an exhibit in Houk’s deposition, it is fair to assume from his descriptions 

of his list that it is the same compilation. JX 314 (Houk Dep.) 73–75, 80, 83–84. I note 

Project Boat’s limited objection to the “First Fail Notice” column in JX 366; the objection 

is moot, however, as these three September boat failures are also listed in Houk’s 

compilation with similar dates. 

76 JX 144 (Morris wrote to Houk, “Card’s boat has hull damage resulting from impact 

damage which caused port side delamination. The insurance company has requested an 

estimate for hull replacement cost transferring accessories over to the new hull.”). 

Adkisson testified that Triton later determined that the boat’s damage was due to the 

lamination schedule, though there is no credible evidence as to how or why that 

determination was made. Tr. 395–96, 398 (Adkisson). 

77 JX 366. In 2014, Fishing Holdings repaired five of the affected boats and replaced the 

hulls of three. Id.; JX 243. The hull of the Boat Doc Boat was replaced in 2015. Id.
22

or its factory authorized fiberglass dealer, within the applicable warranty periods.”78 

The warranty specifically covers a “Structural Hull Defect,” meaning, for fiberglass 

boats, “a substantial defect in the fiberglass boat’s Hull, which causes the fiberglass 

boat to be unfit or unsafe for general use as a pleasure craft under normal operating 

conditions.”79 

According to Houk, who, as a warranty manager, was “charged with making 

happy customers out of mad customers for the least amount that I have to spend to 

do that,” the normal course of dealing with damaged hulls was (and should be) to 

repair or replace the boats, as appropriate, when the customer reported a problem.80 

Indeed, Fishing Holdings had a number of employees devoted to repairs of fiberglass 

hulls since gelcoat and fiberglass damage comprised a large portion of its warranty 

claims.

81

 Because the hulls were consistently showing damage in the area around 

the rod box, an accessible central location, Fishing Holdings viewed the repairs as 

 

78 JX 395; JX 396. 

79 Id. 

80 JX 314 (Houk Dep.) 27, 86–87. 

81 Tr. 33–34 (Hopper), 166–67 (Wolf). 
23

easy to make and as a permanent solution.

82

 Moreover, the repairs were not costly, 

reaching, at most, just over $5,000 per hull.

83

 

At Triton, however, Adkisson and Triton’s CEO and founder, Earl Bentz, 

believed the hull damage, when viewed alongside the decision to use the Ranger 

Layup, indicated a serious problem affecting an entire production run of 2014 TrX 

boats.

84

 They reasoned that putting a patch inside of the hull would not be equivalent 

to putting an extra layer of lamination throughout the hull, and thus concluded the 

repairs were inadequate and likely to fail.85 According to Bentz and Adkisson, the 

only way to handle the problem properly would be to recall and replace all affected 

TrX hulls.

86

 

 

82 Tr. 25, 60, 71–72, 86 (Hopper); JX 278 at 4; JX 314 (Houk Dep.) 86–87; JX 405 (Hopper 

Dep.) 165.

83 JX 243; JX 410. 

84 Tr. 319–21, 325–26, 371, 431–32 (Adkisson); JX 315 (Bentz Dep.) 14, 16, 36–37, 87. 

When Triton was owned by Platinum Equity, Bentz reported to Hopper. JX 315 (Bentz 

Dep.) 22. Bentz continues to hold the title of CEO and founder of Triton at Bass Pro, where 

he works a few days a month. Id. His testimony was presented by deposition; he did not 

appear at trial. 

85 Tr. 321–22 (Adkisson); JX 313 (Adkisson Dep.) 189, 190; JX 315 (Bentz Dep.) 55, 86–

87. For his part, Zittrower testified that he did not know at the time whether the repairs 

would work but was hopeful they would solve the problem. Tr. 492 (Zittrower).

86 Bentz and Adkisson testified that, on a regularly scheduled conference call held shortly 

after Zittrower’s visit to Flippin, Bentz expressed to Fishing Holdings management his 

view that a recall of the TrX was necessary. Tr. 317–21 (Adkisson); JX 315 (Bentz Dep.) 

28–30. According to Bentz and Adkisson, Hopper disagreed and decided on this call to 

repair the affected boats on a case-by-case basis. Id. Neither Hopper nor Houk, who 

participated in the weekly calls, remember discussion of a recall or a decision to repair the 
24

In late September 2014, Triton and Ranger separately sponsored several 

participants at the Bassmaster Elite Series Angler of the Year event in Escanaba, 

Michigan (“Escanaba”).87 As the second largest bass fishing tournament of 2014, 

Escanaba hosted the top fifty professional bass fishermen for a nationally televised 

qualifier tournament for the Bassmaster Classic—the annual championship 

tournament for bass fishermen.88 The poor weather conditions at Escanaba were 

described as “unprecedented,” with steady winds over 20 mph causing high seas that 

resulted in a small craft advisory from the National Weather Service.

89

 Several 

practice days were cancelled and the tournament was suspended for three days due 

to “unsafe boating conditions.”90 When the anglers did make it onto the water, five 

of six TrX boats reportedly experienced damage to their hulls, and Triton sent two 

employees to Michigan to repair the boats so they could continue to fish the 

tournament.91 

 

boats on a case-by-case basis. JX 314 (Houk Dep.) 37–38; JX 405 (Hopper Dep.) 115–21. 

While it would appear that Bentz and Adkisson expressed their views concerning the issue 

to Hopper, I make no findings of fact with respect to whether Hopper decided on this call 

to address the cracks and delamination on a case-by-case basis. 

87 Tr. 51–52 (Hopper), 303–304 (Adkisson).

88 Tr. 49–50 (Hopper), 303–304 (Adkisson). 

89 Tr. 52–54 (Hopper), 765 (Taylor); JX 151; JX 351 (Taylor Dep.) 41–42. 

90 Id.; Tr. 310 (Adkisson).

91 Tr. 55–56 (Hopper), 485–87 (Zittrower); JX 153. 
25

The day after Escanaba concluded, on September 22, 2014, Zittrower

consulted with Bentz92 and emailed Hopper regarding the hull failures at the 

tournament.

93

 Zittrower explained,

The hull failures were due to the laminate reduction that I brought to 

your attention earlier this summer. The boat hulls that failed in 

Escanaba were manufactured last November. There are several other 

21 TRX hulls that have been repaired that were manufactured after 

November. Since we do not know when the laminate reduction in the 

hull was made, it is foreseeable the entire 2014 model year of 21 TRX’s 

is affected. 182-21 TRX models were manufactured in the 2014 model 

year. The potential for a significant increase in warranty cost for 2015 

is real for the 21 TRX models that did not get the proper laminate during 

the manufacturing process. . . .

94

Hopper did not respond to the email.95 Instead, based on conversations with Houk 

and the team’s previously demonstrated ability to repair hull cracks and 

delamination, he determined that Fishing Holdings should continue to repair the TrX 

hulls on a case-by-case basis.96 

 

92 JX 152.

93 JX 153.

94 Id.

95 Tr. 59 (Hopper).

96 Tr. 59–61 (Hopper). Hopper claims he spoke with Houk in making this decision. 

Id. Houk did not recall the conversation, but he estimated he spoke with Hopper about the 

TrX hull issues between five and ten times. JX 314 (Houk Dep.) 66–67, 94.
26

Four additional damaged TrX hulls were reported to Triton after Escanaba in 

September and October 2014.

97

 Project Boat repaired two of the boats in 2014 and 

replaced the hulls of the other two in 2015.

98

 On or about October 21, 2014, the 

owner of the Sensabaugh Boat, whose hull had been repaired in August 2014,

reported cracks on the opposite side of the boat.

99

 By November 14, 2014, the day 

the Agreement was executed, one more TrX had shown damage to its hull and was

repaired.

100

G. The Warranty Claims

Altogether, by the time of the Agreement, Project Boat had sold 172 TrX boats

and had received reports of 17 hull cracks or delamination, all of which appeared 

around the same area of the hull.

101

 Twelve of these hulls had been repaired and five

 

97 Tr. 311 (Adkisson); JX 243; JX 366. 

98 Tr. 311–13 (Adkisson); JX 243; JX 366.

99 Tr. 293–98 (Adkisson), 495 (Zittrower), 726 (Taylor); JX 249; JX 410 at 11–13.

100 Tr. 313–14 (Adkisson); JX 243; JX 366. I do not include the Buckingham Boat,

although it is referenced in JX 366 as having failed on November 1, 2014, because there is 

no credible evidence of a November failure date.

101 Tr. 314–15 (Adkisson); JX 366. This number for hull damage excludes the Card Boat 

and the Buckingham Boat. It also excludes the Coble Boat. JX 366 indicates a report of 

“port bow hull cracks” at the end of April 2014 for the Coble Boat, but it has no repair 

listed until the hull was replaced in the Replacement Program. The supporting exhibits, 

however, indicate repairs for “port bow hull gel separated, port bow hull cracks,” at a cost 

of $520 on April 29, 2014. JX 410 at 13; see also JX 368 at 1, JX 375 at 180 (repairs for 

“hull gelcoat flake” at the same cost). Additionally, the Coble Boat is not listed on JX 243. 

This evidence suggests the cracks were not of the type typically considered to reflect the 
27

had been replaced, or were expected to be replaced, under warranty.

102

 At the end 

of 2014, by Bass Pro’s count, Fishing Holdings had incurred approximately $59,000 

in third-party warranty costs for the TrX; $41,885 of those costs were related to the 

hull issue.103 The warranty reserve at that time was approximately $8,017,000.104

Neither the interim financial statements for the period between January 1, 

2014 and July 27, 2014, nor the disclosure schedules attached to the Agreement 

reported the TrX hull issue.105 The transaction closed on February 10, 2015. 

H. Bass Pro Learns of the TrX Lamination Issue

In May 2015, Bentz met with Bass Pro President, Jim Hagale, and its founder,

Johnny Morris, to discuss Triton’s loss of market share to a particular competitor.106 

Bentz expressed to Hagale that Hopper’s team was focused on Ranger and that 

management of the Triton brand should be turned over to Bentz.107 As one example 

 

lamination issue, or that the repair was not of the kind typically performed to address the 

issue. 

102 JX 243; JX 366.

103 JX 310 at 13, Ex. H. JX 313 (Adkisson Dep.) 42–43. These amounts are consistent 

with the repair costs listed on JX 243. 

104 JX 210 at 15.

105 JX 193. 

106 JX 315 (Bentz Dep.) 40.

107 Id. 42–43.
28

of poor management, Bentz cited the lamination problems with the TrX and 

suggested that the approach of making case-by-case repairs to the boats was

damaging the image of the Triton brand.108 According to Bentz, Hagale did not 

respond to, or even seem to register, the issue.109 

In late September or early October 2015, Bentz and Adkisson met with 

Maliszewski to inform him of the hull issue.110 Bentz stated that at least Hopper and 

Daffron had known about the problem prior to the sale but had done nothing 

about it.111 Maliszewski reported this to Bass Pro’s general counsel.112

 

108 Id. 43. 

109 Id. 43–44. 

110 Tr. 326 (Adkisson); JX 309 (Maliszewski Dep) 113. According to Bentz and Adkisson, 

Bentz told Maliszewski about the hull issue because Maliszewski was asking why the 

warranty costs were continuing to rise. Tr. 327 (Adkisson); JX 313 (Adkisson Dep.) 132; 

JX 315 (Bentz Dep.) 46. Maliszewski, however, did not recall that he noticed the warranty 

costs increasing; he recalled that he became aware of the TrX issues after Bentz told him 

that knowledge of the problem within the industry had spread after Escanaba. JX 309 

(Maliszewski Dep.) 113 (Q: Did he say why he was telling you now in September or 

October of 2015 about the hull issue? A: . . . [Bentz] had raised it to the leadership in 

Fishing Holdings who had done nothing about it, but yet at key events they were having 

these failures and it was becoming predominantly known within the industry that there 

were issues with the boats.”). 

111 JX 309 (Maliszewski Dep) 113–14. 

112 Id. 24, 114. 
29

In October 2015, Bass Pro hired a products liability attorney and Robert

Taylor, a marine forensics expert, to investigate the problems with the TrX.

113

 

Taylor visited the manufacturing facility at Flippin, inspected several boats, 

interviewed company management and employees and conducted a burn test of 

samples of the Ranger Layup and Triton Layup that confirmed the laminates were 

different.

114

 He concluded his investigation in late November or early December 

2015 and determined that a safety recall of the TrX was not necessary under 

U.S. Coast Guard regulations. 115 

After informing Bass Pro of this conclusion, Taylor was asked to determine 

what repairs were necessary to correct the affected boats.116 In December 2015, 

consistent with Bentz and Adkisson’s views, Taylor concluded that the TrX needed 

 

113 Tr. 329 (Adkisson); JX 351 (Taylor Dep.) 6.

114 Tr. 621–27, 694 (Taylor); JX 322. A burn (or “burnout”) test determines the 

constituents of a sample of laminate by melting the materials off at different temperatures. 

Tr. 637–38 (Taylor). Taylor did not conduct a load analysis to quantify the strength of the 

Ranger and Triton Layups until November 2017. Tr. 669–72 (Taylor); JX 320; JX 344; 

JX 351 (Taylor Dep.) 67.

115 Tr. 574 (Maliszewski), 628 (Taylor); JX 351 (Taylor Dep.) 62. Taylor concluded that 

the TrX failures did not prevent boat operators from returning to shore safely, that there 

were no reported injuries or deaths caused by the hull issue, and that the TrX is designed 

to have “upright level flotation,” a requirement of the Code of Federal Regulations 

mandating that the boat continue to float if it is filled with water. Tr. 627–29 (Taylor); 

JX 351 (Taylor Dep.) 42–43. For these reasons, the TrX defect “did not rise to the level of 

a safety recall to the Coast Guard.” Tr. 628 (Taylor).

116 JX 351 (Taylor Dep.) 63–66.
30

thicker lamination throughout the boat and any repair to the hull short of replacement 

would be expensive, complicated and ultimately insufficient.117 

While Taylor conducted his investigation, Adkisson was tasked with 

estimating the cost of replacing all TrX boats produced with the Ranger Layup.

118

 

He concluded that the “Replacement Program” would cost $5 million based on the 

costs to manufacture replacement hulls, transport defective hulls to the Ranger 

factory, transport replacement hulls to dealers and transfer owners’ equipment onto 

the replacement hulls, as well as the costs for legal and public relations assistance 

and miscellaneous smaller costs.119 

On March 14, 2016, by letter from Bentz to all TrX owners, Bass Pro

announced that it would replace the 209 boats determined to have been produced 

with the Ranger Layup.

120

 At the Replacement Program’s conclusion, Bass Pro had

inspected and replaced 173 hulls (not including those that had been replaced prior to 

 

117 Tr. 691–93 (Taylor); JX 351 (Taylor Dep.) 63–64. 

118 Tr. 331–32 (Adkisson). 

119 Tr. 332–33 (Adkisson); JX 313 (Adkisson Dep.) 186 (“Q: [Y]ou’re the guy who 

calculated per-boat cost of the replacement program, and you were projecting something 

just north of $23,000 on a per-boat basis, right? A: That’s correct.”).

120 Tr. 332–33 (Adkisson); JX 275; see also Tr. 334 (Adkisson) (explaining the process of 

establishing the databases for the Replacement Program, which took place between 

November 2015 and March 2016); id. 252–55 (explaining how Bass Pro determined the 

209 boats to be replaced). 
31

the program).

121

 Bass Pro identified cracks in 28 of the hulls; the remainder showed 

no signs of damage.122 As of trial, the program’s cost was $6,651,840.29, including 

attorneys’ and expert fees incurred in connection with the litigation and $62,880 for 

a social media expert.123

I. Bass Pro’s Claim Notice and the Commencement of Litigation 

About a month before Bass Pro notified TrX purchasers of the Replacement 

Program, it notified Project Boat of its indemnification claims in a February 10, 2016 

letter (the “Claim Notice”).124 The Claim Notice states that “certain [] 2014 

Triton 21 TrX boats have developed cracks in their hull-side panels and, in some 

cases have suffered delamination and/or required hull repairs due to such cracking,” 

and that “other 2014 Triton 21 TrX boats constructed with a Ranger hull lamination 

schedule are at risk for the same cracking and delamination issue.”125 As a result of 

these issues, Bass Pro predicted that the damages would be at least $5 million, 

including the cost of “repairing or replacing the deck/hull assembly, if and as 

appropriate, in certain 2014 Triton 21 TrX boats constructed with the Ranger hull 

 

121 JX 366.

122 Id.

123 Tr. 337–52 (Adkisson); JX 308; JX 352. 

124 JX 257. 

125 Id. 
32

lamination schedule” as well as “responding to any consumer claims based on the 

use of the Ranger hull lamination schedule in the construction of certain 2014 

Triton 21 TrX boats.”126 The Claim Notice made no reference to a plan to recall and 

replace all affected hulls.127 

Project Boat objected to the Claim Notice on March 3, 2016, arguing that Bass 

Pro had failed to provide the level of detail required under the Agreement and had 

failed to state a claim for relief.128 Almost two weeks later, Bass Pro notified Project 

Boat that it had decided to replace all affected boats through the Replacement 

Program.129

 

126 Id.

127 It appears that Bass Pro, and Taylor, were under the impression that Fishing Holdings 

had mistakenly utilized the Ranger Layup as a consequence of confusion at the “cut shop.” 

JX 351 (Taylor Dep.) 36l; JX 409 (Zittrower Dep.) 34–35 (explaining how he initially 

believed that use of the Ranger Layup in the TrX had been a mistake). It also appears that 

this was the factual predicate upon which the Claim Notice and Bass Pro’s Counterclaim 

rested—that Project Boat had discovered the “mistake” but had hidden the mistake from 

Bass Pro. See Answer to Verified Compl., Affirmative Defenses and Countercls. 

(“Answer”) (D.I. 19) 27 ¶ 6 (describing “hull mismatch”). It was not until the deposition 

of Hopper, taken on May 2, 2018, that it was made clear to all that Fishing Holdings had 

made a deliberate move to use a Ranger lamination schedule on the TrX hull. See JX 405 

(Hopper Dep.) 96–104 (Hopper confirming that Fishing Holdings had decided to use the 

Ranger Layup on the TrX and explaining the reasons for that decision). I will confess that 

Bass Pro’s change in narrative, and failure to own that change, has raised questions, in my 

mind, regarding the credibility of its current claims of breach and, especially, of its claim 

of fraud. See Answer 29 ¶ 11, 43 ¶ 51 (alleging fraudulent concealment of the “hull 

mismatch”). The about face was by no means dispositive, however. 

128 JX 267. 

129 JX 278. 
33

J. Procedural History 

On July 29, 2016, Project Boat filed its Verified Complaint setting forth two 

counts. Count I seeks a declaratory judgment that Bass Pro is not entitled to 

indemnification with respect to Project Boat’s alleged breaches of the Agreement

asserted in Bass Pro’s Claim Notice. Count II alleges that Bass Pro breached the 

Agreement by failing to release the escrowed funds to Project Boat and, on that basis, 

seeks an order compelling Bass Pro to release the escrow funds. Bass Pro answered 

the Complaint on October 5, 2016, asserting Affirmative Defenses and Verified 

Counterclaims for breach of warranty (Count I), indemnification (Count II), 

fraudulent concealment (Count III), fraudulent inducement (Count IV), breach of the 

covenant of good faith and fair dealing (Count V) and declaratory judgment and 

injunctive relief (Count VI).

130

 

On July 26, 2017, the Court dismissed Counts III and V of Bass Pro’s 

counterclaims and Count IV to the extent it alleged fraudulent inducement with 

respect to Section 4.8 of the Agreement regarding the accuracy of Project Boat’s 

financial statements.

131

 On May 1, 2018, the Court denied Project Boat’s motion for 

 

130 Answer 25–51.

131 D.I. 64. I dismissed Bass Pro’s fraudulent inducement claim with respect to Section 4.8 

upon finding that Bass Pro failed to allege facts allowing a reasonable inference that Project 

Boat’s failure to account for the warranty claims would materially affect the accuracy of 

the financial statements or their compliance with GAAP. See Arg. on Pl.’s Partial Mot. to 

Dismiss Tr. (D.I. 228) 67–68. 
34

partial summary judgment as to Counts I and II of Bass Pro’s counterclaims.132 Trial 

proceedings concluded on June 7, 2018, and the parties presented post-trial oral 

argument on February 1, 2019. On February 22, 2019, the parties submitted 

supplemental letters regarding their requests for attorneys’ fees.133 The matter was 

submitted for decision that day. 

II. ANALYSIS 

Bass Pro alleges Project Boat breached representations and warranties in the 

Agreement, specifically those set forth in Section 4.8, 4.9, 4.23 and 4.26, and 

fraudulently induced Bass Pro to enter the Agreement by intentionally concealing 

the TrX manufacturing defects and failing to set aside an adequate warranty reserve 

to address the inevitable warranty claims to follow. Project Boat counters that Bass 

Pro breached Sections 8.2 and 11.8 of the Agreement, and Section 4(g) of the Escrow 

Agreement, by improperly withholding the escrowed funds. Each party bears the 

burden of proving its claims or counterclaims by a preponderance of the evidence.134 

I first address Bass Pro’s breach and indemnification claims. To prevail on a

breach of contract claim, a party must prove: (1) the existence of a contract, (2) the 

 

132 D.I. 146.

133 D.I. 225; D.I. 226. 

134 See eCommerce Indus., Inc. v. MWA Intelligence, Inc., 2013 WL 5621678, at *13

(Del. Ch. Sept. 30, 2013).
35

breach of an obligation imposed by the contract; and (3) damages suffered because 

of the breach.135 Because the existence of a valid agreement is undisputed, I focus 

on the allegations of breach and resulting damages. For reasons I explain below, 

I have determined that Project Boat did not breach the seller’s representations and 

warranties in Section 4.8 and 4.9 by failing to set aside $5 million as an additional 

warranty reserve to cover the costs of replacing the TrX hulls. Though Project Boat 

should have disclosed the TrX warranty claims under Section 4.26, as they were 

claims made outside of the ordinary course of business, Bass Pro has not proven that 

the warranty claims could not be addressed under the existing warranty reserve, and 

so has not proven damages as a result of the non-disclosure. Bass Pro also has not 

proven that the warranty claims resulted in a Material Adverse Effect on PBH 

Marine as a whole, so I find no breach of Section 4.23. 

I next address Bass Pro’s claim for fraudulent inducement. Bass Pro has not 

provided credible evidence that Project Boat intended to induce Bass Pro to enter 

the transaction by withholding disclosure of the TrX warranty claims. Nor has 

Bass Pro proven that it would not have entered the transaction had it known about 

the warranty claims. Its claim for fraudulent inducement, therefore, fails as well.

 

135 Id. (citing Barkerman v. Sidney Frank Importing Co., 2006 WL 3927242, at *19 

(Del. Ch. Oct. 10, 2006)).
36

Next, I take up Project Boat’s claim that Bass Pro breached the Agreement 

and Escrow Agreement. As initial matters, I find that Bass Pro’s Claim Notice was 

sufficient under the Agreement, and Bass Pro did not breach the Agreement or the 

Escrow Agreement by withholding the escrowed funds pending the resolution of its

breach of contract claims. But, having failed to prove any breaches of 

representations and warranties under the Agreement, Bass Pro must now give its 

consent to the Escrow Agent to release the escrowed funds to Project Boat. 

Finally, I address the competing claims for counsel fees. Because neither 

party has breached the contract and neither is entitled to indemnification, I conclude 

that neither party is entitled to recover its attorneys’ fees under the Agreement. 

A. Project Boat Did Not Breach the Agreement by Failing to Set Aside an 

Additional $5 Million Warranty Reserve

The parties agree that, under GAAP, Project Boat was required to report and 

reserve for a contingent liability (which includes a warranty liability) if the 

information available to Project Boat as of July 27, 2014, November 14, 2014, and 

February 10, 2015, indicated that (1) it was probable a liability had been incurred 

and (2) the liability was reasonably estimable.136 The FASB ASC glossary defines 

 

136 JX 378 (Financial Accounting Standards Board (“FASB”) Accounting Standards 

Codification (“ASC”) at 460-10-25-5) (“Because of the uncertainty surrounding claims 

that may be made under warranties, warranty obligations fall within the definition of a 

contingency . . . losses from warranty obligations shall be accrued when the conditions in 

paragraph 460-20-25-2 are met.”); JX 379 at FASB ASC 460-20-25-2 (“An estimated loss 

from a loss contingency shall be accrued by a charge to income if both of the following 
37

“probable” to mean that “the future event or events are likely to occur.”137 

According to Bass Pro, if the liability was not estimable because the range of 

possible loss was too wide, then Project Boat should have postponed recording 

revenue from the TrX sales until after the warranty period or until it had more 

information regarding the likely magnitude of the liability.138 

Bass Pro’s breach claims under Sections 4.8 and 4.9 rest on the premise that 

Project Boat knew that each of the TrX boats produced with the Ranger Layup would 

probably have to undergo a total hull replacement.139 With this knowledge in hand, 

Bass Pro posits that Project Boat’s Financial Statements, as described in Section 4.8, 

did not “present fairly, in all material respects, the consolidated financial position 

and results of operations of the Company and its Subsidiaries . . . in conformity with 

GAAP . . . .”

140

 Nor, according to Bass Pro, could Project Boat accurately represent 

 

conditions are met: a. Information available prior to issuance of the financial statements 

indicates that it is probable that an asset had been impaired or a liability had been incurred 

at the date of the financial statements . . . b. The amount of loss can be reasonably 

estimated.”). See also Tr. 971 (Orr) (Bass Pro’s accounting expert explaining ASC 450’s 

“probability requirement”). 

137 FASB ASC 540-20-20, https://asc.fasb.org/glossarysection&trid=2127172 (last visited 

May 2, 2019). 

138 See JX 378 at FASB ASC 460-10-25-6. 

139 See Post-Trial Arg. Tr. (D.I. 227) 69 (counsel for Bass Pro acknowledging that if a 

repair or replace approach to addressing the TrX hull issues was adequate, Bass Pro does 

no “prevail on [its] breach claim”). 

140 JX 192 § 4.8. 
38

that “there is no liability, debt or obligation of or claim against the Company . . . of 

a type required to be reflected or reserved for on a balance sheet prepared in 

accordance with GAAP . . . .”141 

The problem with Bass Pro’s theory is that the preponderance of the evidence 

does not support that Project Boat knew that all TrX hulls produced with the Ranger 

Layup probably would have to be replaced. For that matter, the preponderance of 

the evidence does not support the contention that case-by-case repairs were

inadequate to address the cracking and delamination issues that plagued the TrX. 

Fishing Holdings historically did not issue broad product recalls unless the defect 

presented a fundamental safety issue.142 There is no evidence that the cracking and 

delamination of TrX hulls presented any safety concerns. Indeed, before assuming 

his role as a litigation expert witness, Taylor investigated that very issue on behalf 

of Bass Pro and determined that a product recall was not required by Coast Guard 

 

141 Id. § 4.9. 

142 JX 2 (email from Mendel Hughes indicating that Project Boat’s warranty reserve 

calculation was modified in 2012 to account for the recall of a digital start keypad); JX 11 

(financial analysis of the recall); Tr. 45 (Hopper) (testifying that he had no knowledge of a 

recall, except for safety issues); Tr. 522–23 (Zittrower) (testifying that since his time at

Triton beginning in 1997, he was not aware of a product recall); JX 405 

(Hopper Dep.) 171–73; 255–56 (testifying to prior recalls of an electrical component and 

steering component by vendors that were performed in cooperation with the Coast Guard). 
39

standards.

143

 Even Bentz stated that it was highly unlikely the TrX hull issues 

compromised boater safety given that the “boats have upright, level flotation, and a 

crack in the bottom of the hull may cause some delamination but it’s highly unlikely 

that it would result in a [sic] accident . . . .”144 

Rather than initiate full product recalls, Fishing Holding’s practice was to 

repair damaged boats as needed on a case-by-case basis, typically under warranty.145 

The damaged TrXs were treated no differently. This is not surprising given that the 

applicable TrX warranty covered cracks and delamination of the hulls and reserved 

to the boat manufacturer the right to repair or replace as it deemed appropriate.

146

 

According to Houk, a particularly credible witness, in my view, given his past 

position with Fishing Holdings and current position with Bass Pro, the practice of 

repairing or replacing on a case-by-case basis was a cost-efficient and effective 

 

143 Taylor does not mention the conclusion of his preliminary investigation into the safety 

of the hull issue in his report, but he explained his initial conclusions at trial. See Tr. 627–

29 (Taylor).

144 JX 315 (Bentz Dep.) 48–49. 

145 Tr. 31–32, 60–61 (Hopper). 

146 JX 395 (“THE SOLE AND EXCLUSIVE REMEDY UNDER THIS LIMITED 

WARRANTY AND ANY APPLICABLE IMPLIED WARRANTY IS THE REPAIR 

OR REPLACEMENT, AT TRITON’S SOLE OPTION, OF WARRANTED PARTS 

AND COMPONENTS.”) (emphasis in original). 
40

solution to dealing with all prior claims for damaged fiberglass hulls.147 In his 

opinion, even now, there was no reason to recall and replace all TrX hulls.

148

The cost-effectiveness of repairing or replacing as necessary is supported by 

Houk’s records, which show that the cost of repairs ranged from $2,250 to, at most,

$5,383.149 Indeed, Project Boat had incurred just $41,885 in third-party warranty 

costs due to the TrX hull issues by the end of 2014, when its warranty reserve was 

over $8 million.

150

 Not one hull was replaced prior to the date of the Interim 

Financial Statements.151 Indeed, the Company had not incurred a single dollar in 

warranty costs related to the alleged hull issues by the date of the Interim Financial 

Statements.152

Bass Pro argues that, at the time of the Interim Financial Statements, the 

warranty reserve did not reflect the earliest TrX claims. Project Boat agrees that 

 

147 JX 314 (Houk Dep.) 28, 81–82, 86–87. 

148 Id. 26–27, 86–87. 

149 JX 243. The maximum exposure, assuming repairs of all 209 TrX hulls produced with 

the Ranger Layup, at the highest projected cost of repair, is $1,125,047 (209 x $5,383). 

Of course, there is no evidence that all 209 boats would have required repairs, nor is there 

evidence that all repairs would have cost more than $5,000. 

150 JX 210 at 15; JX 310 at 13, Ex. H; JX 313 (Adkisson Dep.) 42–43. Bass Pro argued that 

there were costs in addition to the amount identified but did not put forward any credible

evidence to prove it. 

151 JX 243; JX 366.

152 Id. 
41

because the first three warranty claims had not yet been paid, the reserve as of 

July 27, 2014, did not yet account for the TrX issue.

153

 But there is no indication 

that the reserve at that time (approximately $7 million) would have been insufficient 

to address the claims, which included one repair and two replacements.

154

 According 

to Ernst & Young, the Company’s “[p]rovisions for estimated future warranty claims 

are made at the time of the product sale, with actual payments for such claims being 

charged against the reserve for warranty when incurred.”155 Consistent with this 

practice, the Interim Financial Statement reserve reflected an increase to 

accommodate the sale of each TrX that should have been sufficient for claims made 

under the warranty.156 

Going forward from the date of the Interim Financial Statements, the warranty 

reserve would have reflected and accommodated increasing warranty claims. 

 

153 Tr. 217–18, 249 (Hopper); JX 405 (Hopper Dep.) 193–94 (“It’s possible [that the 

warranty reserve in the interim financial statement would not have reflected anything to do 

with the 21 TrX lamination issue]. There was a—there’s a lag between, you know, actual 

and getting the claims paid. . . . If it hadn’t been, you know, posted, it shouldn’t be 

included.”); 252 (“[I]f the claims were not paid, they would not have been in the financial 

statement.”).

154 I note that Fishing Holdings was operating on a belief that the cracks in two of the first 

three TrXs reported to have hull problems were likely caused by impacts. See Tr. 41–42 

(Hopper); JX 72; JX 83; JX 314 (Houk Dep.) 70–72. 

155 JX 210 at 14. 

156 Additionally, Hopper testified that he and CFO Hughes tried to reserve more than 

was required and that the reserve was reviewed on a quarterly basis. JX 405 (Hopper 

Dep.) 216–17, 247–48, 252–53.
42

The Company calculated its reserve by using the total claims paid during a given 

year to find the percentage of the cost of goods sold attributable to the claims.

157

 

That percentage was used to project the costs of future claims.158 There is no 

suggestion that the Company’s reserve formula was unsatisfactory.159 Indeed, 

Ernst & Young noted in each of its audits of the 2012, 2013 and 2014 financial 

statements that the methodology and calculation were appropriate.

160

 The audit of 

the 2014 statements also reflects that, as of August 25, 2015, when the combined 

financial statements were available, no events had occurred that would require 

disclosure.161 

 

157 Tr. 862–63, 927 (Vanderveen) (Project Boat’s accounting expert explaining the 

warranty reserve calculation); Tr. 207 (Wolf); JX 324 at 9–10; see also Tr. 166 (Wolf) 

(explaining that a warranty reserve has two purposes—to capture what is known and to 

estimate what is unknown but may occur). 

158 Tr. 927 (Vanderveen); JX 324 at 9–10.

159 Bass Pro argues that the warranty reserve could not have accurately accounted for the 

TrX hull issues because the TrX was a new model and Fishing Holdings had never dealt 

with the particular hull issues it was encountering with that model. But, based on the 

language of the Triton warranty, the warranty reserve accounts for the possibility of

repairing or replacing the hull of every TrX sold. The record also shows that Fishing 

Holdings was familiar with repairs to damaged hulls and, as discussed below, does not 

support that the repairs were insufficient. For these reasons as well, the range of loss that 

PBH Marine faced as a result of the TrX issue was not so great as to be inestimable. 

160 JX 193 at 31; JX 210 at 14. 

161 JX 210 at 16. I also note that E&Y interviewed Houk on March 19, 2015, and reported 

that, “[w]arranty claims have remained consistent for the past 5 years. Claim cases are 

relatively similar between the three main product lines. [Houk] sees a greater amount of 
43

Of course, the evidence that the hull issue did not present a safety problem, 

that the case-by-case repairs were cost effective, and that the warranty reserve was 

audited by a third-party auditor and deemed appropriate would mean nothing if the 

hull repairs did not fix the problem such that hull replacement was the only option. 

But that is not what the evidence shows. At trial, Adkisson identified four instances 

where the hull repairs allegedly failed—the Beck Boat, the Coble Boat, the Govreau 

Boat and the Sensabaugh Boat. 

With regard to the Beck Boat and Coble Boat, Adkisson testified that 

previously repaired cracks were evident again when the boats were returned for 

inspection in connection with the Replacement Program.

162

 But no 

contemporaneous evidence corroborates that testimony, including the evidence that 

should be corroborative. Bass Pro provided dealers with a detailed inspection form

to be completed in connection with the Replacement Program.163 The inspection 

reports submitted as evidence, however, offer very little, and at times inconsistent,

 

claims being processed for the fiber glass boats than he does for the aluminum boats (and 

for a smaller dollar value), which is within EY’s expectations.” JX 205. 

162 Tr. 372–75, 380–81 (Adkisson).

163 See, e.g., JX 271 at 14.
44

detail.164 They certainly do not reveal to my satisfaction as fact-finder that the 

repairs on the Beck and Coble boats failed. 

As for the Govreau Boat, the record suggests the first and only repair to 

address the cracks from the thinner lamination was a replacement of the hull.165 

If any subsequent cracks occurred, they would not be related to a failed repair. 

This leaves the Sensabaugh Boat, which happened to serve as Taylor’s only 

evidence that case-by-case repairs were insufficient.166 The Sensabaugh Boat was 

returned to Flippin twice—the first time for cracks in the hull and the second time 

because the deck and hull had separated.167 In Taylor’s opinion, the separation of 

the hull occurred because the hull-deck joint was weakened when the boat was 

opened to conduct the initial repair of the laminate.168 During the repair of the 

separated hull, cracks further aft of the initial repair were reported, suggesting, in

 

164 See, e.g., JX 286 at BPG000240433 (inspection report for the Coble Boat referring only 

to the number of hours and apparently attaching a picture). Compare JX 286 at 

BPG000240349 (inspection report for TRT14131C414 indicating that cracks were found 

on port side and starboard side) and JX 366 (indicating inspection report for 

TRT14131C414 showed cracks on both sides) with JX 286 at BPG000240475 (inspection 

report for TRT15101J314 with same indications as for TRT14131C414) and JX 366 

(indicating a clean inspection for TRT15101J314).

165 Tr. 134 (Hopper), 373, 375–77 (Adkisson), 456–57, 460–64 (Zittrower); JX 366.

166 JX 322 at 20–21; JX 351 (Taylor Dep.) 79–83, 115–16. 

167 Tr. 85 (Hopper), 294–98 (Adkisson), 494–96 (Zittrower); JX 322 at 20–21. 

168 JX 322 at 20–21; JX 351 (Taylor Dep.) 79–82. 
45

Taylor’s opinion, that the initial repairs merely relocated the problem.169 But, in 

speaking with Sensabaugh, a former safety for the Dallas Cowboys and valued 

Triton customer,

170 Taylor learned that the owner had been operating the boat in four 

foot seas on Lake Champlain when it first cracked, and in four to five foot seas on 

Lake Eerie when the hull separated.171 At trial, Taylor opined that this was a normal, 

foreseeable use of a bass fishing boat because “[i]t’s fishing,” but he also admitted 

that these water conditions with a large operator would make a hull crack more 

likely.172 I cannot conclude, based on the repair history of the Sensabaugh Boat 

alone, that case-by-case repairs to the TrX hulls were inadequate such that a total 

product recall was required.

173

 

 

169 JX 322 at 20.

170 Tr. 86 (Hopper), 293 (Adkisson), 793 (Taylor). 

171 JX 351 (Taylor Dep.) 83–85. 

172 Tr. 833 (Taylor) (“Q: Would you agree with me that a large former NFL football player 

who uses his boat five times a week and jumps off 4- to 5-foot waves is more likely to 

crack his hull than someone who uses his boat occasionally on a placid lake. A: Sure.”). 

173 During post-trial argument, I inquired whether possible reputational harm caused by 

any publicity surrounding the hull issues might be a reason to employ a product recall 

strategy even if the case-by-case repair approach was adequate to address the problem. 

Post-Trial Arg. Tr. 36–39. As it turns out, after carefully reviewing the record and Bass 

Pro’s trial briefs, there is no evidence to suggest there was any meaningful publicity 

surrounding the hull issue, much less evidence of potential reputational harm. 
46

I also reject Bass Pro’s argument that the persuasive evidence reveals that 

every TrX hull produced with a Ranger Layup was destined to fail.174 I accept that 

a thinner laminate may crack more easily than a thicker one,175 but Taylor provided 

no cogent explanation as to how or why cracking and delamination occurs in bass 

boats generally, or the TrX in particular.

176

 Taylor performed a load analysis of the 

Triton and Ranger Layup samples to show that the Triton Layup breaks under less 

pressure than the Ranger Layup, but he provided no context or basis to assess how 

the “pressure” correlated to expected uses of the boat or conditions in which the boat 

might be operated.177 Taylor pointed out that the marketing materials for the TrX 

 

174 Tr. 674–79, 682, 685–86, 693, 695–96, 725–29 (Taylor); JX 322 at 3–4, 19–20; JX 347 

at 2–3.

175 See JX 351 (Taylor Dep.) 13–16 (explaining that when bending any material, a force or 

pressure pulls fibers apart at the outer edge, and the thinner the material the more stress 

that material will suffer). 

176 At best, Taylor credits the cracking to hydrodynamic forces present beneath “planing 

boats,” which include bass boats by design. Tr. 614–17 (Taylor). According to Taylor, 

planing boats are designed so that the force of the water beneath the boats allows them 

essentially to float above the surface. Id.; see also JX 322 at 18 (“When the Triton boats 

were mismatched with Ranger hulls, and built without the floatation foam in the space 

[between the deck and hull], the less-stiff Ranger hull was then able to deflect inwards due 

to the hydrodynamic forces being applied to the exterior of the hull. This deflection led to 

the failures that were seen on the [TrX].”). But Taylor failed to explain how these forces 

cause the boats to crack. See, e.g., Tr. 677–78 (Taylor) (when asked by the Court to identify 

a “prevailing principle by either naval architecture or engineering or some other discipline” 

that should have informed Fishing Holdings that the Ranger Layup would not work, Taylor 

responded, “I think responsible engineers would have known that if you lessen the laminate 

by two-thirds, it’s not going to be as strong”).

177 JX 322 at 14–16.
47

appeal to fisherman seeking a fast boat,178 but the history of the Sensabaugh Boat, 

testimony from Bentz, and the Escanaba tournament confirm that the TrX may be 

used in a variety of water and weather conditions.179 And Taylor provided no 

indication of how, if at all, the breaking points of the Triton and Ranger Layups 

differ in varying conditions.180

For his part, Bentz testified that different laminate schedules are used on 

different lengths of boats to prevent the boats from twisting and then cracking.181 

He stated that more laminate is required for longer boats.182 With this in mind, I note 

that Taylor did not credibly explain whether, much less why, the 21-foot Triton TrX 

should be produced with a different laminate schedule than the 21-foot Ranger boats. 

Instead, he posited that the thinner Ranger Layup does not crack because Ranger 

 

178 JX 322 at 19. 

179 Tr. 831–33 (Taylor) (testifying that whether a boat cracks is a function of usage, amount 

of usage, and aggressiveness of usage); JX 315 (Bentz Dep.) 87–88 (“Q: Did the incidence 

of failure that occurred prior to the replacement program give you a sense for how quickly 

these failures would occur in the boats at issue? A: Depends on the conditions that the boat 

is in.); 97 (“. . . if it was used on a lake that would have six-to-twelve-inch-high waves, 

there’s a possibility that it would not fail. . . . Q: So failure is dependent on how it’s used; 

would you agree with that? A: The conditions in which it is used.”). 

180 When asked about his lack of analysis of the Escanaba Tournament, Taylor simply 

stated, “[g]uys were fishing. The boats should take it.” Tr. 765 (Taylor). He then posited

that if the boats were on the water, “[i]t couldn’t have been that bad.” Id.

181 JX 315 (Bentz Dep.) 92. 

182 Id. 
48

boats achieve additional strength from foam between the bottom hull and top deck 

that is not used in Triton boats.183 Hopper, however, testified that the same type of 

foam (two pounds per cubic foot density) is used in Triton boats for flotation, and 

that it would not add structural integrity at that density.

184

 Taylor did not perform 

any substantial analysis of the role of foam in the two boats or how the presence, or 

not, of foam affected the integrity of the hulls in question.

185

 

The paucity of real analysis in Taylor’s report and testimony belies his 

conclusion that “any reasonably competent boat designer” would know that the TrX 

hulls would crack and delaminate with a thinner lamination schedule.186 Indeed, 

 

183 JX 322 at 3–4 (“[W]ithin a Ranger bass boat, there are additional structural components 

that provide support and rigidity for the hull (foam backing) that were not a part of the 

Triton boat design . . . . [The lamination substitution] error was exacerbated by not adding 

support/flotation foam, normally found in Ranger bass boats, but which the Triton intended 

hull laminate schedule did not need because it was designed strong enough to be viable 

without the Ranger design flotation foam providing additional backing support.”).

184 Tr. 47 (Hopper) (Q: Is the 21 TrX full of foam? A: It has foam, yes. Q: Is the foam 

there for structural support? A: No. The foam that’s used is floatation foam . . . I’ll say it’s 

like two-pound-per-cubic-foot density. So it wouldn’t lend a lot of structural integrity. 

It’s stiffness, sound deadening, and then obviously for flotation.); JX 405 (Hopper Dep.) 

162–63.

185 As best I can discern, the extent of Taylor’s analysis is as follows: JX 322 at 18 (“[T]he 

presence of flotation foam restricts the amount of deflection of the hull fiberglass 

material.”); Tr. 668–69 (“[The foam] is very good in compression. It’s 2 pounds per square 

foot, per cubic foot. . . . It’s put in under pressure. It expands, fills the gaps. And what it 

does is it provides, for the Ranger hull, it provides continuous support of that singlelaminate-layer outer hull that they have.”).

186 JX 322 at 4. 
49

Bass Pro, and the presumably “reasonably competent boat designer[s]” it employed,

did not make the decision to recall the boats until after they had investigated the 

issue for five months.187 Even then, Bass Pro’s decision was made in the midst of 

its post-closing fuss with Project Boat when it likely was anticipating the litigation 

to come.188 

Although the TrX hull failures may have been attributable to Project Boat’s 

decision to substitute lamination schedules, the evidence does not suggest that 

failures required Project Boat (or Bass Pro) to recall and replace all TrX hulls. The 

warranty reserve Project Boat set aside was sufficient to handle the repair or 

replacement of the boats, as deemed appropriate, in accordance with the warranty.

189

Accordingly, there was no liability incurred that was probable or reasonably 

estimable that had not already been disclosed and accounted for in the Financial 

Statements. 

 

187 Bass Pro did not record any warranty liability for the TrX in its December 31, 2014 

financial statements. Rather, that liability was not recorded until December 31, 2015. Tr. 

869 (Vanderveen). 

188 Tr. 557–59 (Maliszewski) (testifying that he alerted the legal department in September 

or October 2015, after which the primary focuses for the TrX problem were safety and the 

image of its newly acquired boat brands). 

189 In reaching his opinion that Project Boat was required to reserve for the Hull issue under 

Section 4.8, and to disclose the liability under Section 4.9, Bass Pro’s accounting expert, 

Terry Orr, was directed to assume that the hulls had to be replaced, rather than repaired, to 

address the problem. Tr. 978, 992–93 (Orr). With that assumption removed as a predicate 

of his opinion, Orr’s testimony does not support Bass Pro’s breach claim. 
50

B. Project Boat Did Not Breach the Agreement by Failing to Disclose the 

TrX Warranty Claims 

In Section 4.26 (“Product and Service Warranties”), Project Boat represented 

that:

[t]here is no pending or, to the knowledge of Seller, threatened 

(in writing) claim alleging any breach of any warranty or guaranty as 

to goods sold by the Company or its Subsidiaries, other than as reserved 

for on the Reference Balance Sheet or for claims made in the ordinary 

course of business consistent with past practice, individually which do 

not exceed $100,000.190

Before determining whether Project Boat breached Section 4.26, as alleged 

by Bass Pro, I must first construe the provision. When the parties presented 

competing reasonable constructions of this clause at the summary judgment stage, 

I determined it was ambiguous and invited the parties to submit extrinsic evidence 

in support of their respective positions.191 Despite presenting a rather large trial 

record, the parties elected not to accept the invitation to present extrinsic evidence 

regarding Section 4.26, so I am left to interpret that provision on my own.192 

Section 4.26’s inceptive phrase, “[t]here is no pending or, to the knowledge 

of Seller, threatened (in writing) claim alleging any breach of any warranty or 

 

190 JX 192 § 4.26.

191 Arg. on Pl.’s Mot. for Partial Summ. J. Tr. (D.I. 176) 62–63. 

192 See, e.g., Comerica Bank v. Glob. Payments Direct, Inc., 2014 WL 3779025, at *10 

(Del. Ch. Aug. 1, 2014) (interpreting contract provision where plaintiff offered no legal 

authority or extrinsic evidence to support its construction).
51

guaranty as to goods sold by the Company or its Subsidiaries” appears 

straightforward enough. It captures pending warranty claims and known claims that 

have been “threatened” in writing.193 The ambiguity lies in the balance of the 

provision. 

From the inceptive phrase we know that Project Boat was to disclose pending 

or threatened (in writing) warranty claims. But then the clause appears to create an 

exception, “. . . other than as reserved for on the Reference Balance Sheet or for 

claims made in the ordinary course of business consistent with past practice, 

individually which do not exceed $100,000.” At first glance, I interpreted “other 

than reserved for on the Reference Balance Sheet” to exclude from Project Boat’s 

representation those claims that are disclosed on the Reference Balance Sheet. 

The Reference Balance Sheet is defined in the Agreement,194 and the parties agree 

there are no TrX claims disclosed there. Again, easy enough if that clause stood on 

its own. But does it? The rest of the clause states, “. . . or for claims made in the 

ordinary course of business consistent with past practice, individually which do not 

exceed $100,000.” The placement of the comma to separate the final phrase,

 

193 See JX 193 (Schedule 4.26 cross-referencing Schedule 4.10, item #3 (Andre P. Guidry 

v. Ranger Boats, LLC and Cabela’s Retail LA, LLC, civil action 3:14-CV-00567, 

U.S. District Court, Middle District of Louisiana, filed September 11, 2014)). 

194 Section 2.4(a) defines Reference Balance Sheet as “the most recent audited balance 

sheet included in the Financial Statements.” JX 192 § 2.4; JX 193. 
52

“individually which do not exceed $100,000,” raises questions.195 Does that phrase 

modify the entire provision such that Project Boat would not be obliged to disclose 

warranty claims that were made outside the ordinary course of business if those 

claims, individually, did not exceed $100,000? Or, is Project Boat obliged to 

disclose all warranty claims made not in the ordinary course of business?

After carefully reading the provision, I interpret it as follows: Project Boat 

was required to disclose all pending claims or claims threatened in writing that 

individually exceeded $100,000, unless those claims were already disclosed on the 

Reference Balance Sheet. Project Boat was also required to disclose all pending 

warranty claims and all claims threatened in writing if those claims were not “made 

in the ordinary course of business consistent with past practice” regardless of the 

amount of those claims. In short, I agree with Bass Pro that the $100,000 threshold 

does not apply if the warranty claim was made outside of the ordinary course of 

business, which I interpret to mean “not consistent with past practice,” as stated in 

Section 4.26. In turn, I interpret “consistent with past practice” to mean the past 

practice of receiving and processing warranty claims on Triton boats.196 

 

195 See Gibraltar Private Bank & Trust Co. v. Bos. Private Hldgs., Inc., 2011 WL 6000792,

at *3 (Del. Ch. Nov. 30, 2011) (noting that the “the case would be much easier to decide” 

if the scrivener of a contract had been more careful in the placement of a comma); 

Microstrategy, Inc. v. Acacia Res. Corp., 2010 WL 5550455, at *6 (Del. Ch. Dec. 30, 2010) 

(holding that errant placement of a comma rendered contract ambiguous). 

196 Project Boat urges a construction of “ordinary course of business” that is consistent with 

the court’s construction of the phrase in Ivize of Milwaukee, LLC v. Compex Litig., LLC, 
53

The evidence relating to Fishing Holding’s history of receiving and 

processing warranty claims is difficult to distill. On the one hand, Bass Pro’s 

witnesses observed that cracks in the laminate of a Triton boat were nearly unheard 

of.197 The email correspondence following the first reports of cracks in the TrX hull 

lends some support to that observation. In response to the first customer complaint, 

Morris asked the engineering team to check if there was anything unusual about the 

construction of the boat.198 Houk had a similar initial reaction when he asked Morris 

if the cracks in the Boat Doc Boat were in the same location on that hull as the cracks 

 

2009 WL 1111179, at *9 (Del. Ch. Apr. 27, 2009). There, the court relied on Black’s Law 

Dictionary, which “defines ‘ordinary’ as ‘occurring in the regular course of events; normal; 

usual,’ and defines ‘course of business’ as ‘[t]he normal routine in managing a trade of 

business - Also termed ordinary course of business.’” Id. at *8 (internal citation omitted). 

According to Project Boat, its “ordinary course of business” encompasses “anything related 

generally to [the business of building and selling boats],” including warranty claims related 

to the manufacture of the TrX hull. Project Boat Hldgs., LLC’s Proposed Findings of Fact 

and Conclusions of Law (“PFF”) (D.I. 211) ¶ 190 (quoting JX 309 (Maliszewski Dep.) 29). 

Bass Pro does not appear to take issue with Project Boat’s definition of “ordinary course 

of business.” See Bass Pro Gp., LLC’s Resp. to Project Boat Hldgs., LLC’s Proposed 

Findings of Fact and Conclusions of Law (“DR”) (D.I. 218) 28 (citing Cooper Tire & 

Rubber Co. v. Apollo (Mauritius) Hldgs. Pvt. Ltd., 2014 WL 5654305, at *17 (Del. Ch. 

Oct. 31, 2014) (quoting Ivize, 2009 WL 1111179, at *9) (“This Court has previously 

interpreted the contractual term ‘ordinary course’ to mean ‘[t]he normal and ordinary 

routine of conducting business.’”). Instead, Bass Pro argues that the warranty claims at 

issue here relate to a product-wide defect in the hull and, therefore, cannot be within the 

ordinary course of Project Boat’s business. In this regard, Bass Pro argues there is no 

evidence that Project Boat previously faced this kind of defect, specifically “a too-thin 

laminate throughout the entire hull,” or resulting financial impact, specifically “a $5 

million liability affecting over 200 boats.” DR 27–28.

197 Tr. 242–44, 278 (Adkisson), 453, 471 (Zittrower).

198 JX 21. 
54

that had been reported on the Anderson and Govreau Boats.199 The dealer that sold 

the Boat Doc Boat also appeared surprised by the cracks and suggested they were 

out of the ordinary.200 

On the other hand, Project Boat’s witnesses suggested cracks in the laminate 

are relatively common, with fiberglass and gelcoat cracks by far comprising most of 

the warranty claims Fishing Holdings received and processed.201 As support, Project 

Boat introduced its third-party warranty claims database.

202

 According to Project 

Boat, this document demonstrates that it received 22 claims for reimbursement for 

third-party warranty work on cracking or delaminated Triton hulls, only two of 

which were for the TrX.203 Project Boat also points to the fact that Fishing Holdings 

maintains a fully-staffed facility dedicated to making repairs on fiberglass hulls.204 

Finally, Project Boat presented emails from the Boat Doc Boat dealer expressing 

concern about cracks in a “216FH,” a different boat model.

205

 

 

199 JX 82.

200 Id.

201 Tr. 29–30 (Hopper), 166–67 (Wolf); JX 314 (Houk Dep.) 86–87. 

202 JX 375. 

203 PFF ¶ 121. 

204 Tr. 33–34 (Hopper).

205 See JX 195, JX 201.
55

After carefully considering this evidence, I am satisfied that Bass Pro has 

carried its burden of proving that the warranty claims related to the cracked and 

delaminated TrX hulls were not claims made within the ordinary course of business, 

albeit just barely. Project Boat did not provide any substantial analysis of its past 

warranty claims, through either witness testimony generally, or in a useful 

explication of its third-party warranty claims database. While cracks in the hull of 

a boat may occur on occasion, the evidence suggests that these particular cracks in 

the TrX were unusual. Even though the warranty claims were individually less than 

$100,000, they were not within the ordinary course of business and Project Boat was 

obliged under Section 4.26 to disclose them.

Although Bass Pro has proven that disclosure was required under 

Section 4.26, it has not taken the further necessary step of proving that the nondisclosure matters.

206

 Bass Pro relies only on the costs of its Replacement Program 

to reach its $5 million damage number. Having determined that the Replacement 

Program was unnecessary, it follows that the disclosure of the handful of TrX 

warranty claims that had been made as of the Agreement would have readily been 

captured by the warranty reserve Project Boat had booked on its financial statements 

 

206 Post-Trial Arg. Tr. 54 (Bass Pro acknowledging that, “[t]he question . . . is whether 

Project Boat was obligated to disclose the whole defect and book a reserve for it”) 

(emphasis supplied). 
56

and disclosed to Bass Pro. In other words, I cannot find that Bass Pro was harmed 

in any way by Project Boat’s failure to disclose warranty claims.207 

C. The TrX Hull Failures Did Not Result in a Material Adverse Effect on 

the Company

In Section 4.23(a) of the Agreement, Project Boat represented to Bass Pro that 

there had “not been any change, event, development or occurrence that individually 

or in the aggregate, has had or would, individually or in the aggregate, reasonably 

be expected to have a Material Adverse Effect on the Company.”

208

 The Agreement 

defines Material Adverse Effect to mean “a material adverse effect on the business, 

results of operations, financial condition or assets of the Company and its 

subsidiaries, taken as a whole.”

209

While frequently alleged, breaches of a MAE clause are rarely proven.

210

“The ubiquitous . . . clause should be seen as providing a ‘backstop protecting the 

acquirer from the occurrence of unknown events that substantially threaten the 

 

207 Given this finding, I need not address Project Boat’s argument that Bass Pro has failed 

to present any claims that exceed the $75,000 Claims Basket in Section 11.04(b) because 

none of the individual warranty claims at issue would come close to reaching the $75,000 

threshold. JX 192 §11.04(b). See PFF at ¶¶ 156–59.

208 JX 192 § 4.23. 

209 JX 192 at 7. 

210 See, e.g., ChyronHego Corp. v. Wight, 2018 WL 3642132, at *9 (Del. Ch. July 31, 2018) 

(“A contractual material adverse effect (‘MAE’) is like a Delaware tornado—frequently 

alleged but rarely shown to exist.”). 
57

overall earnings potential of the target in a durationally-significant manner.’”211 

Buyers seeking to enforce a MAE clause, thus, face a “heavy burden” to prove an 

“adverse change in the target’s business that is consequential to the company’s longterm earnings power over a commercially reasonable period, which one would 

expect to be measured in years rather than months.”212

Bass Pro argues that the burden confronting a typical buyer seeking to enforce 

a MAE clause does not apply here because Bass Pro seeks to establish a MAE to 

support an indemnification claim, rather than to withdraw from the transaction. 

Instead of arguing that the TrX hull issues presented an adverse effect of any 

durational significance on the business it was acquiring, Bass Pro asks the Court to 

define materiality in reference to the Agreement’s indemnification provisions, 

which, as noted, provide for a per claim basket of $75,000 and an aggregate basket 

amount of $350,000. Alternatively, Bass Pro points to the materiality threshold used 

by Project Boat’s auditors—2% of net revenues or $2.6 million as of July 27, 2014,

and $4 million as of November 14, 2014—as a marker for materiality under the 

MAE clause.

213

 Since Project Boat’s alleged $5 million liability exceeds both the 

 

211 Hexion Specialty Chems., Inc. v. Huntsman Corp., 965 A.2d 715, 738 (Del. Ch. 2008) 

(quoting In re IBP, Inc. S’holders Litig., 789 A.2d 14, 68 (Del. Ch. 2001)).

212 Id.

213 JX 321 at 13.
58

claim baskets that support indemnification and the auditor’s definition for 

materiality, Bass Pro argues that Project Boat’s misrepresentations are “material” 

for purposes of establishing a MAE. 

After considering the evidence and the law, I am satisfied that Bass Pro has 

not demonstrated that a MAE occurred as a result of the TrX hull issues. First, as 

explained above, the evidence does not support Bass Pro’s claim that Project Boat 

should be accountable for the amounts Bass Pro incurred to implement its 

Replacement Program. Second, I decline to adopt Bass Pro’s definitions of 

materiality. Those definitions find no support in the Agreement or in Delaware 

law.

214

 The magnitude of the event that will trigger a finding of “materiality” must 

be substantial if the MAE clause is to serve its purpose as a contractual 

“backstop.”215 That purpose does not change just because a buyer seeks to invoke 

the clause to support an indemnification claim rather than to back out of the 

transaction. This is especially true where, as here, “MAE” is explicitly defined to 

require an effect on the Company as a whole, whether on its business, operations, 

 

214 Bass Pro relies on I/Mx

Info. Mgmt. Sols., Inc. v. MultiPlan, Inc., 2013 WL 3322293, at 

*6 (Del. Ch. June 28, 2013), where the court used basket amounts in the indemnification 

provision of an agreement to construe the standard for “material breach” and “material 

contract” in an agreement that did not define materiality. Here, the Agreement clearly 

defines MAE and Bass Pro has not provided a persuasive reason why that definition should 

not control Project Boat’s breach of the Agreement. 

215 Hexion, 965 A.2d at 738.
59

financial condition or assets. The amounts included in the Agreement’s provisions

limiting the indemnification rights do not speak to any of these aspects of the 

definition. 

Setting aside its “claims basket” argument, Bass Pro has provided no context 

in which to consider the impact of the TrX problem on the companies it acquired, 

and any effort to do so would face challenges. The hull issue relates to one 

production year of one model among 71 models produced by Project Boat. Not 

surprisingly, sales of the TrX were approximately 1% of the Company’s overall sales 

during the relevant time period.

216

 And assuming, at best for Bass Pro, that this is 

an isolated $5 million problem, it is difficult to discern how this would affect PBH 

Marine in a “durationally-significant manner.”217 Nor is it clear that there has been 

a negative impact on the Company’s earning power. Indeed, PBH Marine’s gross 

margin and net income improved from 2014 to 2016.

218

 Project Boat did not suffer 

a MAE. 

 

216 JX 115.

217 Hexion, 965 A.2d at 738.

218 JX 324 at 26–28. 
60

D. Bass Pro Has Not Proven Fraudulent Inducement 

Bass Pro argues that Project Boat knowingly made misrepresentations in 

Sections 4.9, 4.23 and 4.26 fraudulently to induce Bass Pro to execute the 

Agreement.219 Under Delaware law, 

[a] claim for fraud requires (i) a false representation, (ii) the defendant’s 

knowledge of or belief in its falsity or the defendant’s reckless 

indifference to its truth, (iii) the defendant’s intention to induce action 

based on the representation, (iv) reasonable reliance by the plaintiff on 

the representation, and (v) causally related damages.220 

There is some uncertainty in our law as to whether a plaintiff asserting fraud must 

prove the claim by clear and convincing evidence or whether a preponderance of the 

evidence will suffice.221 I need not decide the question, however, because Bass Pro’s 

proofs fail under either standard.

As an initial matter, I note that Bass Pro’s fraudulent inducement claim may 

well be an improper “bootstrap” of its “breach of contract claim into a claim of 

 

219 Bass Pro Gp. LLC’s Proposed Findings of Fact and Conclusions of Law (D.I. 210) 39–

40. Bass Pro includes Section 4.8 in its analysis but, as stated, the Court dismissed Bass 

Pro’s fraudulent inducement claim with respect to Section 4.8 on Project Boat’s motion to 

dismiss. 

220 Prairie Capital III, L.P. v. Double E Hldg. Corp., 132 A.3d 35, 49 (Del. Ch. 2015).

221 Compare Ross Hldg. & Mgmt. Co. v. Advance Realty Gp., LLC, 2014 WL 4374201, at 

*37 (Del. Ch. Sept. 4, 2014) (requiring plaintiffs to prove fraud by clear and convincing 

evidence), with Trascent Mgmt. Consulting, LLC v. Bouri, 2018 Wl 4293359, at *17 

(Del. Ch. Sept. 10, 2018) (requiring plaintiff to prove fraudulent inducement by a 

preponderance of the evidence).
61

fraud.”222 I decline to decide that issue, however, because the fraud claim fails for 

lack of proof. 

After carefully considering the evidence, I am satisfied that Bass Pro has 

failed to prove that Project Boat intended to induce Bass Pro to enter the contract by 

not disclosing the TrX warranty claims or any financial impact that might flow from 

those claims. “A result is intended if the actor either acts with the desire to cause it 

or acts believing that there is a substantial certainty that the result will follow from 

his conduct.”223 The evidence does show that Triton management told Hopper, 

a designated “knowledge person” under the Agreement, about the problem with the 

TrX hulls. Bentz recommended a recall of the TrX and Zittrower suggested that 

there would be an increase in warranty claims after the Escanaba Tournament.

224

 

But others within Fishing Holdings disagreed.225 Viewing this evidence most 

favorably for Bass Pro, there was uncertainty at Fishing Holdings about what they 

 

222 Narrowstep, Inc. v. Onstream Media Corp., 2010 WL 5422405, at *15 (Del. Ch. 

Dec. 22, 2010) (internal quotation omitted) (“Delaware law holds that a plaintiff cannot 

‘bootstrap’ a claim of breach of contract into a claim of fraud merely by alleging that a 

contracting party never intended to perform its obligations.”).

223 Vichi v. Koninklijke Philips Elecs., N.V., 85 A.3d 725, 811 (Del. Ch. 2014).

224 Tr. 317–21 (Adkisson); JX 315 (Bentz Dep.) 28–30; JX 153.

225 JX 314 (Houk Dep.) 86–87 (“My opinion to—at the time, and continues, is that the 

boats should have been dealt with as they come in with a problem, correct the problem, 

send them back out. . . . That would include either [repair or replace]. What needed to be 

done to correct it.”). 
62

were dealing with and how best to address it. There is no credible evidence that 

Hopper believed Fishing Holdings was confronting a massive product failure but 

failed to disclose that fact to Bass Pro in order to lock down the Agreement. Nor 

has Bass Pro presented credible evidence that it would not have executed the 

Agreement had it known of the TrX warranty claims, i.e., reasonable reliance, 

particularly given the limited scope of the problem when compared to the much 

broader scope of the transaction. In light of Fishing Holding’s history of dealing 

with hull damage on a case-by-case basis and Fishing Holding’s belief that the hull 

damage could be dealt with under the existing warranty reserve, I cannot find that 

there was fraudulent concealment or inducement, or that Bass Pro would not have 

closed the transaction if Project Boat had disclosed the warranty claims. 

E. Bass Pro Did Not Breach the Agreement by Failing to Release the 

Escrowed Funds 

Project Boat alleges Bass Pro breached Sections 11.8 and 8.2 of the 

Agreement as well as Section 4(g) of the Escrow Agreement by failing to release the 

escrowed funds and by failing to execute joint instructions when the release of the 

escrowed funds was required. Under Section 11.8, Bass Pro may withhold the 

escrowed funds if it properly asserts a claim for indemnification.226 To assert a claim 

 

226 JX 192 § 11.8 (“[I]f any claim pursuant to Article XI shall have been properly asserted 

by [Bass Pro] in accordance with the Agreement on or prior to [February 10, 2016] and 

remain pending on [February 10, 2016] (any such claim, a “Pending Claim”) . . . (ii) any 

funds that remain in escrow following [February 10, 2016] in respect of any such Pending 
63

properly under the Agreement, Bass Pro was required to notify Project Boat and 

provide Project Boat with 

a written notice . . . (A) describing in reasonable detail the nature of the 

circumstances giving rise to the Indemnification Claim, (B) including 

[Bass Pro’s] good faith estimate (based on facts then known) of the 

amount of Damages that may arise from such circumstances and 

(C) describing in reasonable detail the basis for [Bass Pro’s] request for 

indemnification under this Agreement.227

Importantly, however, “[f]ailure to notify [Project Boat] in accordance with this 

Section 11.3(c) will not relieve [Project Boat] of any liability that it may have to 

[Bass Pro], except to the extent . . . the defense of such Indemnification Claim is 

actually materially prejudiced by [Bass Pro’s] failure to give such notice . . . .”

228

Bass Pro’s Claim Notice, timely submitted to Project Boat by the one-year 

anniversary of the closing, identifies the issue related to the TrX hulls,

229 the

provisions of the Agreement potentially impacted by Project Boat’s failure to 

 

Claim . . . shall be released to Seller . . . upon resolution or (if applicable) satisfaction of 

such Pending Claim.”).

227 JX 192 § 11.3(c).

228 Id.

229 JX 257 at 2–3 (“[F]or some period of time 2014 Triton 21 TrX boats were constructed 

with a Ranger hull lamination schedule rather than a Triton lamination schedule; certain 

such 2014 Triton 21 TrX boats have developed cracks in their hull-side panels, and in some 

cases have suffered delamination and/or required hull repairs due to such cracking; that the 

cracking and delamination issues with 2014 Triton 21 TrX boats are attributable to the use 

of a Ranger hull lamination schedule rather than a Triton lamination schedule in their 

construction . . . and that other 2014 Triton 21 TrX boats constructed with a Ranger hull 

lamination schedule are at risk for the same cracking and delamination issues.”).
64

disclose the issue230 and the amount of expected damages with supporting reasons 

for the damages.

231

 The Claim Notice does not, however, reveal Bass Pro’s intention 

to recall and replace all TrX boats produced with the Ranger Layup. 

Project Boat maintains that it would have stopped Bass Pro from 

implementing the Replacement Program had Bass Pro disclosed that it intended to 

pursue that program in its Claim Notice. I reject the argument for two reasons. First, 

it is not clear that Bass Pro had determined to initiate the Replacement Program at 

the time it sent the Claim Notice. Second, and more importantly, Bass Pro apprised 

Project Boat of the possibility that it might seek to replace all affected TrX hulls

when it disclosed that its damages were in the range of $5 million. Accordingly, 

I am satisfied that Project Boat received sufficient notice of Bass Pro’s claims under 

the Agreement, and Bass Pro did not breach the Agreement by withholding the 

escrowed funds while it pressed its indemnification claims in court. 

F. Attorneys’ Fees

The indemnification clauses in Sections 11.2 (a) and (b) of the Agreement 

give the buyer and seller the right to indemnification for “any and all Damages” 

arising from a breach of the representations and warranties or of a covenant or 

 

230 Id. at 3–4. 

231 Id. at 4–5.
65

agreement to be performed after the closing.232 The parties agree that attorneys’ fees 

fall within the language providing for indemnification of “any and all Damages” 

incurred in connection with making an indemnification claim because the 

Agreement defines Damages to mean “all losses, damages and other costs and 

expenses.”233 But Sections 11.2 (a) and (b) provide for Damages only “to the extent 

arising from [] any breach of any representation or warranty” in Article IV or V.234 

Having concluded that neither party breached the Agreement, it follows that neither 

party is entitled to an award of attorneys’ fees. 

III. CONCLUSION

For the reasons stated above, I find for Project Boat and will enter final 

declaratory judgments in its favor as requested in the Complaint, with the exception 

of its request for attorneys’ fees. As for Bass Pro’s counterclaims, I find for Project 

Boat. Project Boat shall submit a conforming final judgment, upon notice as to form, 

within ten days. 

 

232 JX 192 § 11.2(a), (b). 

233 JX 192 at 4. 

234 Id.