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Hasler Aviation, L.L.C. v. Aircenter

August 3, 2007

HASLER AVIATION, L.L.C., PLAINTIFF,
v.
AIRCENTER, INC., GARY GADBERRY, GANN AVIATION, INC., TWIN COMMANDER AIRCRAFT LLC, AND ARNOLD BLANKENSHIP D/B/A FIRETRUCK AVIATION, DEFENDANTS.



The opinion of the court was delivered by: Chief Judge Curtis L. Collier

MEMORANDUM

The matter before the Court arises from the sale of an aircraft, which plaintiff Hasler Aviation L.L.C. ("Plaintiff") alleges was defective and not airworthy, notwithstanding representations to the contrary by the various defendants (Doc. No. 15). The Court has jurisdiction because the amount in controversy exceeds $75,000 and the parties are diverse. 28 U.S.C. § 1332(a). The Court applies the law of the forum state in a diversity action. See Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938). On December 14, 2006, defendant Twin Commander Aircraft LLC ("Twin Commander") filed a motion for judgment on the pleadings with supporting memorandum (Doc. Nos. 22 & 23).*fn1 Twin Commander argues the economic loss doctrine precludes Plaintiff's products liability claim (id.). In a timely filed response, Plaintiff asserts that its claims sound in negligence and not in products liability (Doc. No. 28). Twin Commander timely replied (Doc. No. 30). For the reasons set forth below, Twin Commander's motion is GRANTED.

I. FACTS

Plaintiff purchased a 1962 Aero Commander Model 500A ("aircraft") from Aircenter, Inc. ("Aircenter") (Doc. No. 15, ¶¶ 12--15). The purchase price included an upgrade package quoted by Aircenter and its proprietor, Gary Gadberry ("Gadberry") (id. ¶¶ 18--20). Aircenter guaranteed the aircraft would have a new annual inspection and comply with Federal Aviation Administration ("FAA") Airworthiness Directives (id. ¶ 21). After accepting delivery in December 2004, Plaintiff noticed, and Gadberry admitted, the aircraft was defective and was not airworthy (id. ¶¶ 29--31; Doc. Nos. 15-6 & 15-7). The long list of defects and non-conformities includes "wing spar corrosion" (id. ¶¶ 30, 44--46). Plaintiff suffered no personal injury or damage to other property but was left with an aircraft which cost over $250,000 and yet is unsafe to fly (id. ¶¶ 47--48). Plaintiff sued Aircenter, Gadberry, Gann Aviation, Inc., and Arnold Blankenship for breach of contract, breach of warranty, fraud and/or negligent misrepresentation, and violations of the Tennessee Consumer Protection Act.

Twin Commander is the "type certificate holder" for Model 500A ("Model 500A") Aero Commanders (Doc. No. 21, ¶ 33). Plaintiff asserts that federal regulations require type certificate holders to report defects discovered in their aircraft if those defects could cause structural failure, among other failures (Doc. No. 15, ¶ 32) (citing 14 C.F.R. §§ 21.3(a) & (c)(8)). Plaintiff claims Twin Commander knew its Model 500A aircraft had issues with wing spar corrosion (id. ¶ 35) and Twin Commander was negligent per se in failing to notify the FAA or issue a "Service Bulletin" regarding the corrosion problems (id. ¶¶ 74--75).*fn2

II. STANDARD OF REVIEW

A motion for judgment on the pleadings filed pursuant to Fed. R. Civ. P. 12(c) is evaluated under the same standard as a motion to dismiss filed pursuant to Fed. R. Civ. P. 12(b)(6). Grindstaff v. Green, 133 F.3d 416, 421 (6th Cir. 1998); Morgan v. Church's Fried Chicken, 829 F.2d 10, 11 (6th Cir. 1987). In reviewing a motion under either Rule, the Court construes the complaint in favor of the plaintiff and accepts the complaint's factual allegations as true. Bloch v. Ribar, 156 F.3d 673, 677 (6th Cir. 1998); Broyde v. Gotham Tower, Inc., 13 F.3d 994, 996 (6th Cir. 1994). The Court must decide whether the plaintiff has pleaded "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1974 (2007) (rejecting traditional Fed. R. Civ. P. 12(b)(6) analysis in Conley v. Gibson, 355 U.S. 41, 45--46 (1957)). The Court's concern is not whether the plaintiff will ultimately prevail, but whether the plaintiff "is entitled to offer evidence to support his claims." Swierkiewicz v. Sorema N.A., 534 U.S. 506, 511 (2002). At the same time, unsupported conclusions of law are insufficient and the complaint must contain direct or inferential allegations respecting all the material elements to sustain a recovery under some viable legal theory. Scheid v. Fanny Farmer Candy Shops, Inc., 859 F.2d 434, 436 (6th Cir. 1988).

III. DISCUSSION

Twin Commander cites the complaint and argues Plaintiff has suffered no personal injury or damage to other property. Twin Commander argues the Tennessee Products Liability Act ("TPLA"), Tenn. Code Ann. §§ 29-28-101 et seq., governs Plaintiff's Amended Complaint (Doc. No. 15), since the complaint alleges negligence and failure to warn against a product's manufacturer (Doc. No. 23, p. 6-7). If Plaintiff is asserting a products liability claim under a negligence or strict liability theory, and if Plaintiff is only seeking damages for the loss in value of the aircraft, Twin Commander claims the economic loss doctrine bars any recovery by Plaintiff (Doc. No. 23, p. 2--3).

Plaintiff counters that the Amended Complaint does not sound in products liability. Rather, Plaintiff alleges damages caused by Twin Commander's failure to fulfill a duty, imposed by federal law, to update the FAA and to issue a Service Bulletin about known technical defects in the Model 500A (Doc. No. 15, ¶¶ 32--36; Doc. No. 28, p. 1). Plaintiff alleges a negligence per se breach under 14 C.F.R. § 21.3(a) (Doc. No. 15, ¶ 75). In the Amended Complaint, Plaintiff does not allege fraud, negligent misrepresentation, or innocent misrepresentation against this defendant (id. ¶¶ 61--67).

These arguments raise two questions for this Court: (1) does Plaintiff assert a cause of action in products liability or in negligence, and (2) if Plaintiff asserts a negligence cause of action, does the economic loss doctrine bar Plaintiff's recovery?

A. THE COMPLAINT ASSERTS A CLAIM AGAINST TWIN COMMANDER AS THE AIRCRAFT'S MANUFACTURER

The Court recognizes its duty is to construe the Amended Complaint in Plaintiff's favor, but even read in this light, the Court finds this to be a case against a manufacturer. Though Plaintiff does not specifically refer to Twin Commander as the manufacturer, designer, or distributor of the aircraft and instead uses the term "type certificate holder," it appears, under FAA ...


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