Jurors side with defendant in American Woodmark suit

By Sally Voth -- svoth@nvdaily.com

A federal jury has ruled in favor of a Kentucky man being sued by insurers for Winchester-based American Woodmark Co.

On Friday, a U.S. District Court jury sitting in Harrisonburg found there was not a preponderance of evidence showing that James Robert Wesley "J.R." Hoskins aided and abetted his father's breach of his fiduciary duty to the company, according to online court records.

The panel found that the father, Herbert H. Hoskins, did breach his fiduciary duty to American Woodmark.

Jurors also ruled J. R. Hoskins hadn't conspired to convert property from American Woodmark, hadn't conspired to commit fraud and didn't violate the Virginia Business Conspiracy Statute, according to court records. The Corbin, Ky. resident had a four-day trial last week, according to court records.

American Woodmark's insurers, St. Paul Fire and Marine Insurance Co., filed a $4.1 million lawsuit against Herbert Hoskins, his wife, Melanie Ann Burnett Hoskins, both of London, Ky., and their son about two years ago. Also sued were Kentucky Lumber Sales LLC and Bluegrass Wood Products LLC.

Three years after Herbert Hoskins started working for American Woodmark as a plant manager in Kentucky in 2002, he started buying wood from Kentucky Lumber -- which was owned by his wife and son -- at above-market prices, according to the lawsuit.

Bluegrass Wood Products was also owned by J.R. and Melanie Hoskins, and was getting scraps from American Woodmark for little to nothing, according to the suit, and then reselling them for profit.

In February, Judge Michael F. Urbanski granted a plaintiff motion for summary judgment and ordered both companies to repay St. Paul Fire and Marine about $2.5 million, plus interest, according to court records.

However, Herbert and Melanie Hoskins had filed for chapter 7 bankruptcy, causing Urbanski to stay a motion for summary judgment against them, according to court documents.

According to St. Paul Fire and Marine's suit, Melanie Hoskins used a different name when she signed contracts with American Woodmark. The Winchester firm was tipped off to the scheme by an anonymous letter.