Lumber suit defendants declare bankruptcy

American Woodmark claims former manager, wife cheated company

By Sally Voth -- svoth@nvdaily.com

HARRISONBURG -- A Kentucky couple being sued by the insurers of Winchester-based American Woodmark have declared bankruptcy.

Herbert H. and Melanie Ann Hoskins and their son, James Robert "J.R." Wesley Hoskins are being sued in U.S. District Court by St. Paul Fire and Marine Insurance Co. for $4.1 million.

The lawsuit says that when Herbert Hoskins worked as a lumber manager at American Woodmark's Kentucky plant, he directed business to companies owned by his wife and son, and cheated American Woodmark. American Woodmark was tipped off by an anonymous letter writer.

Mrs. Hoskins used a different name when signing contracts with American Woodmark, the lawsuit says.

According to online court records, Herbert Hoskins filed for Chapter 7 bankruptcy on Jan. 9, and her husband did the same on Dec. 31.

Last month, J.R. Hoskins filed a brief supporting an objection to St. Paul's motion for summary judgment.

"The Plaintiff's lawsuit is abusive litigation designed only to embarrass, humiliate, and maliciously prosecute the Defendant, J.R. Wesley Hoskins," it says.

The brief says J.R. Hoskins didn't know about his father's fiduciary duties, and had heard him say that Herbert Hoskins' supervisor approved the transactions between the companies.

"The Defendant mistakenly believed that his father did make the disclosure about his familial relationship," the brief says.

In January, St. Paul filed for default judgment against Melanie and J.R. Hoskins' companies, Bluegrass Wood Products LLC and Kentucky Lumber Sales, according to online court records.

Bluegrass Wood Products hasn't hired counsel, in violation of the judge's order, according to a St. Paul memo filed Jan. 10. It is seeking about $1 million from that firm.

Kentucky Lumber Sales also hasn't hired counsel, and St. Paul says it is seeking damages of $243,381, plus fees, from it.

St. Paul's lawsuit says American Woodmark was paying above-market price for lumber from Kentucky Lumber, and providing Bluegrass Wood Products with scrap lumber for little or nothing. Bluegrass Wood Products then sold it on for profit, it says.