Am. Eurocopter Corp. v. CJ Sys. Aviation Grp.
| Decision Date | 08 March 2013 |
| Docket Number | No. 05–10–00342–CV.,05–10–00342–CV. |
| Citation | 407 S.W.3d 274 |
| Parties | AMERICAN EUROCOPTER CORPORATION, Appellant v. CJ SYSTEMS AVIATION GROUP, Appellee. |
| Court | Texas Court of Appeals |
OPINION TEXT STARTS HERE
Michael V. Powell, Locke Liddell & Sapp, LLP, Dallas, TX, for Appellant.
Robert M. Cohan, Jackson Walker LLP, Dallas, Charles H. Smith & Moore, Dallas, TX, for Appellee.
Before Justices MURPHY, FILLMORE, and MYERS.
OPINION ON MOTION FOR REHEARING
Opinion By Justice MYERS.
We withdraw this Court's opinion of July 18, 2012 and vacate the judgment of that date; the following is now the opinion in this case.
On October 16, 2000, a Eurocopter AS 355 F2 Twinstar helicopter owned by Duke University Medical Center in North Carolina and operated by CJ Systems Aviation Group (CJ), crashed when the main rotor gearbox failed. American Eurocopter Corporation (American) had overhauled the gearbox and provided it to CJ. Eurocopter, a French company, manufactured the helicopter. The family of the deceased pilot sued American, which paid the family $2,250,000 in settlement of the claims. Duke's insurer sued American in an unsuccessful attempt to recover the amount it paid Duke for the helicopter. American then sued CJ for contractual indemnity to recover the amount of the settlement with the pilot's family and for American's attorney's fees in the different lawsuits. CJ counterclairned for breach of warranty on the failed gearbox. Following a jury trial, the trial court rendered a take-nothing judgment on American's claims against CJ and awarded CJ $78,935.62 on its counterclaim.
American brings six issues on appeal contending (a) the evidence is legally and factually insufficient to support a finding that American's negligence, if any, was a proximate cause of the crash; (b) the trial court erred by denying American judgment for contractual indemnity and attorney's fees in the amounts found by the jury; (c) the jury's answer concerning whether CJ's negligence was the sole legal cause of the crash was immaterial; and (d) there was no evidence of an express warranty for which CJ could be awarded money damages. We affirm the trial court's judgment.
Before the crash, CJ ordered an overhauled main rotor gearbox from American's facility in Grand Prairie, Texas. The gearbox arrived with the appropriate documentation certifying it as airworthy. On October 12, 2000, four days before the accident, CJ's mechanics installed the gearbox on the helicopter and tested it. The overhauled gearbox passed its tests and test flights without any problems and without any warning lights illuminating. This overhauled gearbox should have been good for 3000 hours of flying.
On the night of October 16, when the gearbox had only about three and one-half hours of use, the helicopter was needed to transfer a patient from Alamance Medical Center to Duke. The pilot, John Holland, and two nurses took off from Duke in the helicopter. During the flight, the oil-pressure warning light for the gearbox illuminated, but the oil-temperature warning light did not illuminate. Holland landed the helicopter safely at Alamance hospital, shut down the engines, and took the helicopter out of service. The nurses left the helicopter and arranged for the patient and themselves to be taken to Duke by ground ambulance.
Holland called CJ's mechanic on duty that night, Charles Edgerton, who arrived at Alamance with some tools but no maintenance manuals or spare parts. Edgerton checked for oil leaks, did not find any evidence of an oil leak, and did not smell any burnt oil. Edgerton turned on the battery switch, starting the electrical power but leaving the engines turned off. The oil-pressure warning light illuminated, but this was appropriate because, with the engines off, no oil pressure was generated. Edgerton then disconnected the oil-pressure switch, and the warning light turned off, which indicated the light was connected to the oil-pressure switch and was not being illuminated by a short circuit. Edgerton knew that when only the gearbox oil-pressure warning light illuminated, the problem was usually a faulty oil-pressure switch, which would be replaced. Edgerton did not have the tools and parts with him to change the switch. He rotated the main rotor and did not feel any unusual vibrations or hear any unusual sounds. Edgerton and Holland decided that because the gearbox was newly overhauled and had minimal use, the problem was a faulty oil-pressure switch. They decided that Holland would run the engines for a few minutes on the ground and then hover just off the ground. If no other warning lights illuminated, and if Holland felt comfortable flying the helicopter, Holland would fly the helicopter back to Duke for further maintenance. Holland asked Edgerton to leave the oil-pressure warning light disconnected so he would not be distracted from observing the oil-temperature warning light if it came on. Holland ran the helicopter on the ground, hovered for a few minutes, and then flew away. About one minute into the flight, the main rotor gearbox suffered a catastrophic failure. The helicopter crashed, and Holland was killed. Accident investigators testified that the crash was caused by the lack of cooling lubrication on the gears of the main rotor gearbox.
Unbeknownst to Edgerton and Holland, the newly overhauled gearbox from American had not properly passed its tests before being certified as airworthy. Under the procedures mandated by Eurocopter's overhaul manuals, before an overhauled main rotor gearbox may be certified for service, it must pass a rotation bench test in which it is brought up to a particular speed and run for ten to thirty minutes while monitoring the oil temperature and pressure. The first three times the gearbox was tested,2 the oil temperature exceeded the maximum permitted before the ten-minute test period expired. On the fourth test, the temperature reached, but did not exceed, the maximum permitted temperature at the ten-minute mark. However, at the ten-minute mark, the oil pressure dropped below the minimum permitted by Eurocopter's overhaul manuals.3 Despite never obtaining acceptable results on the bench test, American certified the gearbox as airworthy and transferred it to CJ.
CJ signed a Service Center Agreement with American, which authorized CJ to maintain and repair Eurocopter Helicopters for certain owners, including Duke. The agreement contained a provision in which CJ agreed to indemnify American against all losses, claims, and expenses including legal expenses with respect to defective work “arising from services furnished and work performed” by CJ.
Duke's insurer sued American in North Carolina for the loss of the helicopter, and American received a verdict in its favor. The Holland family brought this lawsuit against American to recover for John Holland's death, alleging American's negligence proximately caused Holland's death. American settled with the Holland family members, paying them $2,250,000. American filed a third-party action against CJ alleging CJ was liable to American under the indemnity agreement for American's payments to the Holland family in settlement of their claims and for American's attorney's fees in defending itself in this suit and in the litigation against Duke's insurer. CJ filed a counterclaim for breach of warranty against American for the cost of the gearbox.
On American's claims, the jury found CJ's defective work resulted in a loss or claim to American and that CJ, through reasonable diligence, could have discovered a matter that resulted in a loss or claim against American. The jury did not find that the loss or claim against American arose from CJ's sole negligence. The jury also found that American's negligence was a proximate cause of “the accident in question.” On CJ's breach of warranty claim, the jury found American breached the warranty and that CJ's damages were $78,935.62.
CJ moved for judgment notwithstanding the verdict requesting the court to disregard the jury's answers indicating that CJ's actions led to the claim against American and that CJ could have discovered the matter that led to the claims against American. American also moved for judgment notwithstanding the verdict on the jury's finding that American's negligence proximately caused the accident. The trial court granted CJ's motion and rendered judgment that American take nothing on its claims against CJ. The court also rendered judgment for CJ for $78,935.62 on its breach of warranty claim against American.
In its first issue, American contends there is no evidence of proximate cause to support the jury's finding that American's negligence proximately caused the accident and that the trial court erred by denying American's motion for judgment notwithstanding the verdict on American's contractual indemnity claim. In its second issue, American contends the jury's finding that American's negligence proximately caused the accident was against the great weight and preponderance of the evidence and that the trial court erred by overruling American's motion for new trial asserting factually insufficient evidence of proximate causation.
For an action to be the proximate cause of an injury, it must be both the cause in fact and the foreseeable cause of the injury. Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 582 (Tex.2007). These elements cannot be satisfied by mere conjecture, guess, or speculation. IHS Cedars Treatment Ctr. of DeSoto, Tex., Inc. v. Mason, 143 S.W.3d 794, 798–99 (Tex.2004).
In reviewing the legal sufficiency of the evidence, which also includes review of a ruling on a motion for judgment notwithstanding the verdict, we consider all the evidence before the jury, crediting evidence in support of the verdict if reasonable jurors could, and disregarding evidence contrary to the verdict unless reasonable jurors could not. City of Keller v. Wilson, 168 S.W.3d...
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