Johnson v. Helicopter & Airplane Services Corp.

• Decision Date: 20 December 1974
• Docket Number: Civ. No. 72-832-Y.
• Parties: Harvey B. JOHNSON v. HELICOPTER & AIRPLANE SERVICES CORPORATION et al.
• Court: U.S. District Court — District of Maryland

389 F. Supp. 509

Harvey B. JOHNSON v. HELICOPTER & AIRPLANE SERVICES CORPORATION et al.

Civ. No. 72-832-Y.

United States District Court, D. Maryland.

December 20, 1974.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Lawrence F. Rodowsky, Baltimore, Md., Alan S. Hoffman, and John P. McKenna, Washington, D.C., for plaintiff.

John T. Ward and Robert R. Winter, Baltimore, Md., for defendant Societe Nationale Industrialle Aerospatiale of France.

Francis J. Ford, Rockville, Md., for defendant Societe Turbomeca of France.

Joseph S. McCarthy and Charles E. Wilson, Jr., Rockville, Md., for defendant Fairchild Industries, Inc.

John S. Yodice, Bethesda, Md., for defendants Helicopter & Airplane Service Corporation and Richard H. Sanders and Robert Sanders.

Edmund P. Dandridge, Jr. and Robert G. Smith, Baltimore, Md., for defendant Republic Aviation Corporation.

MEMORANDUM AND ORDER

JOSEPH H. YOUNG, District Judge.

The complaint in this personal injury action was filed more than two years ago against seven defendants. In his complaint, plaintiff alleges that on December 31, 1970, while he was piloting an Alouette II S.E. 3130 helicopter in Virginia, the engine ceased functioning properly, causing the aircraft to crash, injuring him. He also alleges that in the course of the crash, the seatbelt attachment failed to function properly, further aggravating the injury.

Three pre-trial motions are before the Court: the first is the plaintiff's motion to amend his complaint; the second is a summary judgment motion by defendant Helicopter and Airplane Services Corporation; and the third is a set of motions by defendant Republic Aviation Corporation arguing for dismissal on the grounds of lack of personal jurisdiction and venue, and lack of capacity, to which the plaintiff has responded with a motion to transfer under 28 U.S.C. § 1406(a). The facts relevant to each motion will be set forth below.

PLAINTIFF'S MOTION TO AMEND HIS COMPLAINT

Plaintiff has moved under Federal Rule of Civil Procedure 15 to amend his complaint to add Robert and Richard Sanders to Count III, the strict liability count, and to add a new Count V (which since Count IV has been previously dismissed would now be new Count IV), which in substance seeks to "pierce the corporate veil" of the Helicopter and Airplane Services Corporation (HASCO) in order to reach Robert Sanders, a HASCO stockholder. The proposed count asserts that HASCO has conducted its business with assets insufficient to satisfy claims of persons damaged by HASCO's acts and omissions, and that the stockholders of HASCO, specially Sanders, have directed HASCO's affairs in a manner in which HASCO's capital has been diverted to areas other than capital contributions, rendering HASCO insolvent. For these abuses of the corporate entity, plaintiff claims that the stockholders are personally liable to the plaintiff for damages.

Sanders does not oppose the amendment of Count III, but claims that he would be prejudiced by the addition of Count V to the complaint. Sanders states that prejudice would result because under the relevant caselaw, plaintiff is required to exhaust its legal remedies against HASCO before proceeding against the corporation's stockholders and because HASCO's liability will in any case be paid by its insurer. He asserts that forcing him to litigate such a claim would put him to unnecessary expense.

The function of Rule 15 is to provide parties an opportunity to assert new matters that may not have been known to them at the time they filed their original pleadings. 6 C. Wright and A. Miller, Fed. Prac. and Proc., Civil ¶ 1473, at 376 (1971).

The courts have taken a very liberal attitude toward motions to amend. This does not mean, however, that leave to amend must be granted in all cases. Generally the courts must follow the standard set by the rule: pleadings may be amended "when justice so requires." This standard implies its negative; when injustice such as undue prejudice would occur, amendments may not be made.

Prejudice will not occur here. Sander's objections to the motion go primarily to the merits of the claim raised by the new count. Nevertheless, the merits of the claim are irrelevant in determining whether a motion to amend should be granted, Key Pharmaceuticals, Inc. v. Lowey, 54 F.R.D. 447, 449 n.5 and cases cited therein (S.D.N.Y.1972). Other methods are available to the defendant to attack the substance of the claim. As long as the amendment is not a frivolous or dilatory measure, and is made in good faith, it should be granted. Billy Baxter, Inc. v. Coca-Cola Co., 47 F.R.D. 345, 346 (S.D.N.Y.1969), cert. denied, 401 U.S. 923, 91 S.Ct. 877, 27 L. Ed.2d 826 (1971).

In addition, the interest of judicial economy is served, since Sanders is already a defendant under Counts I and III of the complaint; plaintiff should be able to litigate his action against Sanders on all theories available to him at one time.

The motion to amend the complaint under Rule 15 is therefore granted.

HASCO'S MOTION FOR SUMMARY JUDGMENT

Defendant HASCO, which maintained the helicopter and employed Johnson on the day of the crash, has moved for summary judgment pursuant to Fed.R. Civ.P. 56, contending that the plaintiff's exclusive remedy is under the Maryland Workmen's Compensation Act, Md.Ann. Code art. 101, §§ 1-102, (1974 Cum. Supp.). In response, plaintiff insists that summary judgment should not be granted on the grounds that material facts and the inferences which may be drawn from them are in dispute, and because HASCO is not entitled to judgment at law because at the time of the accident, the plaintiff did not come within the ambit of the Workmen's Compensation Act because he was an independent contractor or a "casual" employee.

The rule in this Circuit for the grant of summary judgment requires that there be no dispute as to the material facts, and that the moving party must be entitled to judgment as a matter of law. As noted by the plaintiff, that standard has been elucidated by the Fourth Circuit as follows:

It is well settled that summary judgment should not be granted unless the entire record shows a right to judgment with such clarity as to leave no room for controversy and establishes affirmatively that the adverse party cannot prevail under any circumstances. Neither should summary judgment be granted if the evidence is such that conflicting inferences may be drawn therefrom, or if reasonable men might reach different conclusions. . . . Burden is upon party moving for summary judgment to demonstrate clearly that there is no genuine issue of fact, and any doubt as to the existence of such an issue is resolved against him.

Phoenix Sav. and Loan, Inc. v. Aetna Cas. & Sur. Co., 381 F.2d 245, 249 (4th Cir. 1967) citations omitted.

In Phoenix, the Fourth Circuit relied on American Fid. & Cas. Co. v. London & Edinburgh Ins. Co., 354 F.2d 214 (4th Cir. 1965), in which the Court of Appeals had earlier stated:

Not merely must the historic facts be free of controversy but also there must be no controversy as to the inferences to be drawn from them. It is often the case that although the basic facts are not in dispute, the parties nevertheless disagree as to the inferences which may properly be drawn. Under such circumstances the case is not one to be decided on a motion for summary judgment.

354 F.2d at 216.

HASCO does not meet this burden because conflicting inferences may readily be drawn from the facts presently before the Court.

The following facts have been brought forth by the parties: The plaintiff was employed on a full time basis by HASCO for a substantial length of time before December 31, 1969. He then left HASCO for employment as a civilian with the United States Navy until January 1, 1971. Beginning in the spring of 1969, Johnson began receiving offers for specific job assignments with HASCO. Johnson's affidavit asserts that he was under no obligation to accept any offer, that HASCO was not obliged to make such offers, and that the acceptance or rejection of any such offers was completely independent of any future or past employment. Johnson accepted some of these jobs and refused others. (Johnson affidavit) HASCO claims that Johnson only refused offers when he was unavailable for work with HASCO. (HASCO renewal of motion for summary judgment at 12) The defendant interprets this arrangement as the plaintiff's being available "on a part or full-time, as needed, basis." (Carey affidavit) On each occasion the helicopter which Johnson operated was supplied by HASCO.

Plaintiff also states in his affidavit that to the best of his recollection he flew a total of six days for HASCO in 1969 at the rate of $50 per day, and he flew a total of three days for HASCO from January 1, 1970 to December 29, 1970 at the same rate. For at least some of these jobs, no income was withheld by HASCO from Johnson's pay check.

On December 28, 1970, Mr. Alexander Carey, President of HASCO, called Johnson and asked him to operate a helicopter to set light poles along Route 95 in Alexandria, Virginia for Truland Construction Company. This job was part of HASCO's regular business of operating and maintaining helicopters for use in construction work. Johnson agreed to do so on December 30 and 31 for $50 per day. (Johnson affidavit) Defendant HASCO claims that payment was on a "per diem plus expenses" basis and that the job was to last "several weeks." (Carey affidavit)

On December 30, 1970, Johnson operated the helicopter successfully and set up light poles at the site. The plaintiff had full control over the operation of the helicopter and determined when and whether he would fly. He also had complete control of matters of flight safety. He was assisted on the ground by employees of HASCO and the construction company by means of signals. No other supervision of his work was undertaken. The same procedure was followed on December 31, the day the accident occurred....