Patron Aviation, Inc. v. Teledyne Industries Inc., s. 58998

• Citation: 267 S.E.2d 274,154 Ga.App. 13
• Decision Date: 28 May 1980
• Docket Number: 58999,Nos. 58998,s. 58998
• Parties: , 29 UCC Rep.Serv. 445 PATRON AVIATION, INC. v. TELEDYNE INDUSTRIES, INC. et al. TELEDYNE INDUSTRIES, INC. v. PATRON AVIATION, INC. et al.
• Court: Georgia Court of Appeals

Page 274

267 S.E.2d 274

154 Ga.App. 13, 29 UCC Rep.Serv. 445

PATRON AVIATION, INC. v. TELEDYNE INDUSTRIES, INC. et al.

TELEDYNE INDUSTRIES, INC. v. PATRON AVIATION, INC. et al.

Nos. 58998, 58999.

Court of Appeals of Georgia.

Submitted Nov. 6, 1979.

Decided Feb. 29, 1980.

Rehearing Denied March 18, 1980 in No. 58999.

Certiorari Denied May 28, 1980.

C. Ronald Patton, Rome, for appellant in No. 58998.

Robert M. Brinson, Harold N. Wollstein, Rome, for appellees in No. 58998.

Robert M. Brinson, Rome, for appellant in No. 58999.

C. Ronald Patton, Harold N. Wollstein, Rome, for appellees in No. 58999.

CARLEY, Judge.

The facts pertinent to this appeal are as follows: Plaintiff-appellant Patron Aviation (Patron) bought an airplane engine from appellee-defendants Owens and Alred d/b/a L & M Aircraft (L & M). The engine was assembled and shipped to L & M by appellee-Teledyne Continental Motors, Inc. (Teledyne), an Alabama corporation. The engine was installed by L & M in Patron's airplane. It was then discovered that a seal was missing between the generator and the engine causing oil to "squirt out." The missing seal was requested from and sent by Teledyne and attached to the engine. However, during a subsequent flight the engine was subjected to overheating up to a temperature of 300o Centigrade with excessive oil consumption. Appellee-Owens, a certified FAA mechanic, diagnosed the engine problem as resulting from the installation of an incorrect set of piston rings by "quality control" or from the improper installation of the correct set of rings. Teledyne was contacted and sent a representative who observed and advised L & M as to repair. A partial or "top overhaul" of the engine was performed. The evidence adduced at trial was that the plane would be dangerous to fly in the absence of a complete overhaul because running the engine at excessive temperatures could result in damage to the engine which would not appear in a less thorough overhaul. Patron refused to accept the engine with only a "top" overhaul. Despite several contacts with Teledyne concerning the problem, no authorization for a replacement of the engine was forthcoming nor was a more thorough overhaul authorized.

Patron brought suit against Owens and Alred and Teledyne, alleging negligent manufacture of the engine and breach of warranty. The suit was answered and Owens and Alred counterclaimed against Patron for the cost of the engine and other services. The case came on for trial and at the close of the evidence the parties stipulated that any action based on negligence had been abandoned and the case would proceed on breach of warranty only. Teledyne moved for a directed verdict or, in the alternative, for dismissal on the ground of lack of personal jurisdiction. The court denied the former motion and granted the latter. Owens and Alred moved for and were granted a directed verdict on Patron's breach of warranty claim against them and on their counterclaim. In Case No. 58998 Patron appeals from the grant of Teledyne's and Owens' and Alred's respective motions. In Case No. 58999 Teledyne cross appeals from the denial of its motion for directed verdict.

1. We first consider whether jurisdiction over Teledyne existed pursuant to our Long Arm Statute, Code Ann. § 24-113.1. At the close of the evidence the remaining claim against Teledyne, the manufacturer of the engine, was for breach of warranty. Chrysler Corp. v. Wilson Plumbing Co., 132 Ga.App. 435, 208 S.E.2d 321 (1974). In J. C. Penney Co. v. Malouf Co., 230 Ga. 140, 196 S.E.2d 145 (1973), it was held that the manufacture and shipment of merchandise covered by a warranty-indemnity by a nonresident defendant for delivery in Georgia placed the merchandise in the stream of Georgia commerce and amounted to "transacting any business" in Georgia under Code Ann. § 24-113.1(a). The term "transacting any business" as used in the Long Arm Statute is not limited by its definition in Corporation Title of the Code. Cf. McIntosh v. Mid-State Homes, 232 Ga. 871, 209 S.E.2d 203 (1974). "Under (the) Long Arm Statute jurisdiction over a nonresident exists on the basis of transacting business in this state if the nonresident has purposefully done some act or consummated some transaction in this state, if the cause of action arises from or is connected with such act or transaction, and if the exercise of jurisdiction by the courts of this state does not offend traditional fairness and substantial justice." Davis Metals v. Allen, 230 Ga. 623, 625, 198 S.E.2d 285, 287 (1973). Contrary to Teledyne's argument, the merit or lack of merit of Patron's breach of warranty claim does not establish or defeat personal jurisdiction. It is not the lack of substantive merit that is addressed in a motion to dismiss for lack of personal jurisdiction. Such a motion addresses itself solely to whether the court has jurisdiction over the person of the defendant so as to enforce its judgment if the plaintiff's claim proves to have substantive merit. Whether plaintiff's claim has merit is properly addressed by a Code Ann. § 81A-112(b)(6) motion or a motion for a directed verdict. In the present case Teledyne, an out-of-state manufacturer, sent the engine in question in an admittedly defective condition to L & M knowing it would be placed in the stream of Georgia commerce. Teledyne later sent one of its employees here to attempt to rectify the problem. And the engine was accompanied by a warranty intended for delivery to the ultimate consumer, in this case, Patron. We hold these facts sufficient to establish Teledyne was "transacting any business" in Georgia within the meaning of our Long Arm Statute. It was error to grant the motion to dismiss. J. C. Penney Co. v. Malouf Co., 230 Ga. 140, 196 S.E.2d 145, supra.

2. We turn now to the directed verdict granted to Owens and Alred. Patron cites us to no part of the transcript which would support a finding that L & M made any express warranty as to the engine. Apparently they merely advised Patron that in their opinion Teledyne's product was "a more suitable" engine. This is not evidence of an express warranty. Code Ann. § 109A-2-313(2); cf. Wilkinson v. Walker, 143 Ga.App. 838, 240 S.E.2d 210 (1977).

However, there was evidence that Owens and Alred were "merchants" with respect to airplane engines. Code Ann. § 109A-2-104(1). Therefore, implied warranties under Code Ann. §§ 109A-2-314 and 109A-2-315 arose from the sale of the engine to Patron. We find arguments that Owens and Alred can avoid the implication of such a warranty because of the limited express warranty issued by Teledyne, the manufacturer, to be without merit. Chrysler Corp. v. Wilson Plumbing Co., 132 Ga.App. 435, 439, 208 S.E.2d 231, supra. Without reciting the evidence at length, suffice it to say that there was testimony which would show that the engine was not fit for the ordinary purposes for which such products are used and that, as the result of that breach of warranty, Patron was damaged. Ford Motor Co. v. Hooks, 143 Ga.App. 823, 240 S.E.2d 205 (1977). There is no evidence that these implied warranties were excluded or modified within the definition of Code Ann. § 109A-2-316. The trial court erred in directing a verdict in favor of Owens and Alred as to the warranty claim and as to their counterclaim against Patron for the full cost of the engine. Pierce v. Liberty Furniture Co., 141 Ga.App. 175, ...