Alaska Airlines, Inc. v. Lockheed Aircraft Corp.

• Decision Date: 18 April 1977
• Docket Number: Civ. No. A75-241.
• Citation: 430 F. Supp. 134
• Parties: ALASKA AIRLINES, INC., Plaintiff, v. LOCKHEED AIRCRAFT CORPORATION, Defendant, Lockheed-Georgia Co., Defendant, Does 1 through 10, Inclusive, Defendants.
• Court: U.S. District Court — District of Alaska

430 F. Supp. 134

ALASKA AIRLINES, INC., Plaintiff, v. LOCKHEED AIRCRAFT CORPORATION, Defendant Lockheed-Georgia Co., Defendant Does 1 through 10, Inclusive, Defendants.

Civ. No. A75-241.

United States District Court, D. Alaska.

April 7, 1977.

As Amended April 18, 1977.

COPYRIGHT MATERIAL OMITTED

Charles E. Cole, Fairbanks, Alaska, James J. McCarthy, Los Angeles, Cal., for plaintiff.

Robert B. Baker, Robertson, Monagle, Eastaugh & Bradley, Anchorage, Alaska, for defendants.

MEMORANDUM AND ORDER

VON DER HEYDT, Chief Judge.

THIS CAUSE comes before the court on defendants' motion for summary judgment. The basis for the motion is that most of the claims for relief are barred by various statutes of limitation, and that a claim based on strict liability in tort is not allowed in this case.

This case involves alleged wing crack defects in four aircraft purchased by the plaintiff. The basic facts constituting the timing of these purchases are not in dispute. Aircraft number N9263R (hereinafter "the first aircraft") was purchased by plaintiff from a division of Lockheed corporation on December 14, 1965. Aircraft number N9227R (hereinafter "the second aircraft") was purchased from the same party on September 26, 1966. Aircraft number N9248R (hereinafter "the third aircraft") was originally sold by Lockheed to a third party and leased by plaintiff from that party in November, 1968. Aircraft number N920NA (hereinafter "the fourth aircraft") was sold by Lockheed to the Republic of Zambia in August, 1966, and subsequently leased by plaintiff from National Aircraft Leasing in March, 1969.

The first aircraft was sold by plaintiff to Saturn Airways in December, 1971. The second aircraft was sold to Saturn in December, 1972. The lease on the third aircraft was terminated in September, 1969, and the lease on the fourth aircraft was terminated in September, 1971.

The present action was filed in the Superior Court for the State of Alaska on July 15, 1975, and defendants were served with a summons and complaint on July 25, 1975. On August 22, 1975, the case was properly removed to this court based on diversity of citizenship. 28 U.S.C. § 1441.

The present motion was filed in August, 1976, and after several extensions of time it was fully briefed and argued in late December, 1976. Upon a specific request from the court, further briefing and evidence was provided by both parties in order to clarify their positions on certain issues. The court notes that approximately two and one-half months have been afforded plaintiff to gather evidence on one specific point, fraudulent concealment, following oral argument.

Several of the issues presented in this case potentially involve complex choice of law issues with contacts in three states. Under such circumstances this court is required to adopt the conflicts rules that an Alaska State court would adopt in this instance. Klaxon v. Stentor Manufacturing Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941); Day & Zimmermann v. Challoner, 423 U.S. 3, 96 S.Ct. 167, 46 L.Ed.2d 3 (1975). Because of the paucity of conflicts decisions from the Alaska courts, and the vintage of those decisions in this rapidly changing and uncertain area of law, the court will base its decision on other grounds where possible.

Count I-Strict Liability in Tort

The potential choice of law issues involved in the motion on this count relate to which state's law governs the availability of this theory and what statute of limitations governs. However, as the court concludes that this theory is not available in any of the interested states the conflicts issues can be avoided.

In Alaska the Supreme Court has recently held that the theory of strict liability in tort is not available for purely economic damages. Morrow v. New Moon Homes, Inc., 548 P.2d 279, 285-86 (1976). The present complaint presents a theory of liability and a type of damage that is practically identical to that in Morrow and recovery under such a theory is not allowed in Alaska.

The same rule of law is followed in Washington. In Berg v. General Motors Corp., 13 Wash.App. 326, 534 P.2d 838 (1975) the Washington Court of Appeals explicitly recognized the implication of a prior case that strict liability is not allowed for this type of economic loss. Id. at 841; See Bombardi v. Pochel's Appliance & T. V. Co., 9 Wash.App. 797, 515 P.2d 540, 546 (1973), mod. on other grounds 10 Wash.App. 243, 518 P.2d 202 (1974).

In the final state with a possible contact with this transaction, Georgia, this action is barred for an entirely separate reason. In Georgia the theory of strict liability is not available to a corporate entity such as plaintiff. Center Chemical Co. v. Parzini, 234 Ga. 868, 218 S.E.2d 580 (1975), Ellis v. Richs, Inc., 233 Ga. 573, 212 S.E.2d 373 (1975). Thus Count I must be dismissed.

An entirely separate basis for dismissing this claim is that it is barred by the statutes of limitations in each of the respective states. See pg. 140, infra.

Count III-Breach of Implied and Express Warranties.

Defendant contends that the four year statute of limitations contained in the UCC as adopted by each state governs these actions. Plaintiff at one point agrees with that assessment, Memorandum of Oct. 7, 1976, at pg. 27, but at another point contends that under common law theories a longer period would apply, Memorandum of Oct. 7, 1976, at pg. 22.

The court will deal first with the UCC provision and the claims thereunder. All three states with potential interests in this claim have adopted the identical UCC provision. UCC section 2.725 provides that:

"(1) An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued. . . .

(2) A cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made, except where a warranty explicitly extends to future performance of the goods . ..

(4) This section does not alter the law on tolling of the statute of limitations . . .."

Alaska Statutes § 45.05.242, Code of Georgia, Title 109A, § 109A-2-725, Revised Code of Washington, Title 62A, § 62A.2-725.

This UCC provision makes it abundantly clear that absent some tolling of the statute of limitations that these claims are now time barred. Except for circumstances not applicable here, UCC § 2-725(2), the statute begins to run at the time of tender of delivery. The statute makes the aggrieved party's knowledge of the breach irrelevant and, therefore, "the clock ticks even though the buyer does not know that the goods are defective." White & Summers, Uniform Commercial Code, § 11-8, p. 341 (1972). Accordingly, absent some tolling as is allowed by section 2-725(4) all of these claims would be barred, as four years after tender of delivery of the last aircraft was March, 1973.¹

The only theories upon which plaintiff seeks to toll the statute of limitations are equitable estoppel and fraudulent concealment. Although defendants maintain that plaintiff should amend its complaint to comply with rule 9(b), Fed.R.Civ. Proc., before asserting fraudulent concealment the court does not need to pass upon that issue. The essence of both fraudulent concealment and equitable estoppel is that defendant should not be allowed to lead the plaintiff into believing the statute of limitations would not be applied or fraudulently conceal facts from the plaintiff and then profit thereby. Here, however, the facts preclude plaintiff from successfully asserting these tolling doctrines.

Following oral argument the court issued the following query by order to plaintiff:

"What specific information other than that which Alaska Airlines was aware of on August 27, 1970, led Alaska to the conclusion that it was entitled to file a complaint in this case?

Please submit affidavits or other admissible evidence to support this answer and include dates where important."

This order came nearly a year and a half after this suit was instituted, four months after this motion was filed, and plaintiff took nearly three months to respond. The sum total of the evidence presented on the issues is an affidavit of plaintiff's house counsel which indicates that the financial condition of plaintiff at the time precluded suit. The court of course is aware that summary judgment is not proper if the party opposing the motion has not had sufficient time to gather factual material. In this case, however, more than ample time has been granted and plaintiff has presented no facts which support the theory of fraudulent concealment or equitable estoppel after Aug. 27, 1970. As such the last possible date for bringing the UCC related actions, without respect to a reasonableness factor, would have been August 27, 1974. These claims are time barred.

The next issue is the availability of actions based on express and implied warranties outside of the UCC and the statute of limitations that would apply to such a claim. In Alaska the law is clear that when the UCC provides a specific right and remedy that the common law has been supplanted. Prince v. LeVan, 486 P.2d 959, 962 (1971). As was implicit in the previous discussion the UCC in Alaska is available for breaches of express and implied warranties. A.S. §§ 45.05.094-45.05.098; UCC § 2-314-318. Hence, in Alaska there is no right to a common law action for breaches of these warranties.

Unfortunately the court's research has not produced any cases from Georgia or Washington which have a similar holding. It might be logical to assume that as Washington and Georgia have adopted UCC sections similar to that upon which Prince v. LaVan, supra, was based, Code of Georgia, Title 109A, § 109A-1-103; Revised Code of Washington, Title 62A, § 62A.1-103 that those states would reach the same result. But see Code of Georgia, Title 3, § 3-705 (Harrison) Editorial Note. However, as the subsequent step in the...