Apolinario v. Avco Corp.

• Decision Date: 30 June 1982
• Docket Number: Civ. No. H-81-133.
• Citation: 561 F. Supp. 608
• Court: U.S. District Court — District of Connecticut
• Parties: Cesario M. APOLINARIO and Valentin Smrekar, Administrator of the Estate of Miro W. Smrekar v. AVCO CORPORATION and Aerospatiale Helicopter Corporation.

561 F. Supp. 608

Cesario M. APOLINARIO and Valentin Smrekar, Administrator of the Estate of Miro W. Smrekar v. AVCO CORPORATION and Aerospatiale Helicopter Corporation.

Civ. No. H-81-133.

United States District Court, D. Connecticut.

June 30, 1982.

George D. Royster, Jr., Halloran, Sage, Phelon & Hagarty, Hartford, Conn., for plaintiffs.

Allan B. Taylor, and Philip S. Walker, Day, Berry & Howard, Hartford, Conn., Edward W. Dunham, and Shaun Sullivan, Wiggin & Dana, New Haven, Conn., for defendants.

RULING ON DEFENDANT AEROSPATIALE HELICOPTER CORPORATION'S MOTION TO DISMISS

BLUMENFELD, Senior District Judge.

This law suit by two Canadian citizens seeks damages sustained as a result of a crash of a helicopter into the frozen surface of Heaven Lake, Ontario during a flight from Edmonton to Montreal. Plaintiff Apolinario, the pilot of the helicopter, seeks damages for personal injuries he sustained, and plaintiff Valentin Smrekar sues as Administrator of the estate of his son Miro W. Smrekar, the engineer aboard the aircraft who died in the crash. Together they constituted a crew employed by Canadian Helicopters, Ltd., a Canadian corporation with an office in Calgary, Alberta, to operate the ship for its owner Associated Helicopters Co., Ltd., another Canadian corporation of Edmonton, Alberta. The plaintiffs sue Aerospatiale Helicopter Corporation (AHC), the distributor of the aircraft, and Avco Corporation (Avco), the manufacturer of the helicopter's engine, on product liability theories. Both defendants have moved to dismiss pursuant to Rule 12. AHC's motion is based on lack of jurisdiction, improper venue and forum non conveniens. Avco's motion alleges improper venue and forum non conveniens. This ruling deals only with AHC's motion.

A brief description of the circumstances out of which these claims arise is essential to an analysis and disposition of the issues raised by these motions.

Facts

The subject helicopter, a model AS 350-C ASTAR bearing factory serial number 1014 and Canadian registration C-GBVS, was manufactured in France by a French corporation, Societe National Industrielle Aerospatiale (SNIA). SNIA purchased the aircraft's original engine, serial number 43012, from Avco's Lycoming Division located in Connecticut, and incorporated it into the helicopter in France. SNIA also test flew and inspected the aircraft in France, and then sold it to AHC on May 7, 1978. AHC, a Delaware corporation with a principal place of business in Grand Prairie, Texas, is a subsidiary of SNIA and the North American distributor of SNIA helicopters. After AHC purchased the aircraft, it was disassembled in France and shipped to Texas, where it was reassembled and once again inspected and test flown. Pursuant to a contract executed in Texas on May 30, 1978, AHC sold the helicopter to Bow Helicopters Ltd. (Bow), a Canadian corporation with offices in Calgary, Alberta. Bow took physical delivery of the helicopter at AHC's headquarters in Texas on July 2, 1978.

Sometime after Bow took possession of the aircraft, it removed the original engine, number 43012, and replaced it with a second engine manufactured by Avco bearing serial number 43026. It was this engine, number 43026, which failed and allegedly caused the crash out of which this suit arises. The history of engine number 43026 is, therefore, of crucial importance.

As part of the consideration for the purchase of an ASTAR 350 helicopter from AHC, the customer receives a warranty of 600 hours on the engine. The warranty runs directly from Avco, the manufacturer of the engine, to the customer. If an engine malfunctions and must be replaced during the warranty period, the customer enters into a "warranty exchange" with Avco, whereby a replacement engine is sold with an appropriate adjustment in the purchase price depending on the number of hours of operation on the original engine being replaced.

Engine number 43026 had originally been sold and shipped to AHC in France on or about March 31, 1978 and incorporated into an ASTAR 350 airframe not involved in this accident. This craft was then shipped to Texas and, after final manufacturing and testing, was sold by AHC to Petroleum Helicopters, Inc. After 29 hours of operation, engine number 43026 was removed from this aircraft and, on or about March 2, 1979, was shipped back to Avco in Stratford, Connecticut, pursuant to a "warranty exchange" because of some problem or malfunction of the engine. This engine remained at Avco from approximately March 7, 1979 to July 17, 1979, during which time it underwent "general updating" at the Avco plant in Connecticut. Engine number 43026 was shipped to Bow on or about July 17, 1979 and subsequently installed in the ASTAR helicopter which was involved in the accident at issue in this litigation. At the time engine number 43026 was exported to Bow in Canada it was certified by the F.A.A. as airworthy and as not requiring overhaul until 2,400 hours of operation.

On October 31, 1979 the helicopter involved in this litigation was sold by Bow to Alberta Ltd., which in turn sold it to Associated Helicopters on November 1, 1979. The crash occurred on January 26, 1980, after only 288 hours of operation of engine number 43026 (since new) and after 887 hours of operation of the airframe.

The crash was allegedly caused by engine failure resulting from a fatigue fracture of a blade of the compressor module. The fractured blade was ingested into the engine resulting in further damage to and eventual failure of the engine. The plaintiff Apolinario alleges that he did not become immediately aware of this problem for two reasons. The ASTAR 350 aircraft is not equipped with instrumentation to warn a pilot of loss of engine RPM or engine failure. Further, the "airspeed indicator" (comparable to a speedometer of a car) of the craft had malfunctioned, apparently due to the freezing of the "pitot tube," and thus the pilot was not immediately made aware of the loss of airspeed due to engine failure. When he finally did become aware of the failure, the airspeed had decreased to such an extent that a safe landing, utilizing the technique of "autorotation," was not possible.

The claims against both defendants are based on product liability theories. The claim against Avco relates to the failure to adequately design, manufacture, test and inspect engine number 43026 and the LTS-101 type engine in general, such that it would result in total failure of the engine after only 288 hours of operation. The claim against AHC relates to design failures of the airspeed indicator (the "pitot tube" in particular) and the failure to include a "tachometer" type instrument to warn a pilot of loss of engine RPM. It is claimed that this resulted in the inability of the pilot to timely perform a successful autorotation descent.

Plaintiffs claim in their complaint that the accident

and the personal injuries sustained were caused by either the negligence and carelessness of one or both of the defendants; or by their breach of warranties, either expressed or implied; or their failure to discharge a duty to warn or inspect; or their non-disclosure of information which would have been important to the safe operation of this aircraft; or by their strict liability under Public Act 79-483 of the Connecticut General Assembly.

The plaintiffs claim jurisdiction over AHC pursuant to section 33-411(b) of the Connecticut General Statutes, which provides in pertinent part:

Every foreign corporation which transacts business in this state in violation of ... Section 33-396 shall be subject to suit in this state upon any cause of action arising out of such business.

Conn.Gen.Stat. § 33-411(b). Section 33-396 requires any foreign corporation which transacts business in this state to file a certificate of authority with the Secretary of State. The filing of such a certificate of authority makes a foreign corporation amenable to suit in this state under section 33-411(a). AHC admittedly has not filed such a certificate. Where no such certificate has been filed by a corporation required to do so by section 33-396, the sanction provided by section 33-412 is to bar it from access to any court of this state. See Armor Bronze & Silver Co. v. Chittick, 221 F.Supp. 505, 510 (D.Conn.1963).

It is well settled that a federal district court sitting in a diversity case must look to state law to determine whether it may exercise jurisdiction over foreign corporations. Arrowsmith v. United Press International, 320 F.2d 219 (2d Cir.1963) (en banc); Marvel Products, Inc. v. Fantastics, Inc., 296 F.Supp. 783, 785 (D.Conn.1968).

Since Arrowsmith, the federal courts in this district have applied "a two-tiered consideration of (1) whether the appropriate state statute reaches the foreign corporation and (2) whether such statutory reach exceeds the constitutional `minimum contacts' test required by due process." McFaddin v. National Executive Search, Inc., 354 F.Supp. 1166, 1168 (D.Conn.1973). See also Marvel Products, Inc. v. Fantastics, Inc., 296 F.Supp. 783 (D.Conn.1968); Electric Regulator Corp. v. Sterling Extruder Corp., 280 F.Supp. 550, 554 (D.Conn.1968).

Subject Matter Jurisdiction Under Conn.Gen.Stat. § 33-411(b)

AHC's challenge to the exercise of jurisdiction over it has been clearly circumscribed in the first of two stages of the analysis which must be made:

Whether or not AHC has transacted business in Connecticut, it is clear that plaintiffs cannot satisfy the fundamental requirement of § 411(b), for they have not stated — and could not state, in light of the facts — any cause of action "arising out of such business."

Defendant's Memorandum in Support of Its Motion to Dismiss the Complaint at 7 (footnote omitted, emphasis in original).

The plaintiffs argue strenuously that the "arising out of" language of section 33-411(b) does not mandate a direct relationship between the cause of action and the business transacted in this state....