Becker v. Cont'l Motors, Inc.
| Decision Date | 02 November 2015 |
| Docket Number | CIVIL ACTION NO. 4:13-CV-520-BJ |
| Parties | RONALD G. BECKER PLAINTIFF v. CONTINENTAL MOTORS, INC. DEFENDANT |
| Court | U.S. District Court — Northern District of Texas |
Plaintiff Ronald G. Becker ("Becker") filed suit to recover damages allegedly incurred as a result of problems with an airplane engine Becker purchased from Continental Motors, Inc. ("Continental"). On May 30, 2013, Becker filed a petition in state court alleging claims against Continental for (1) breach of contract and express warranty, (2) violations of the Texas Deceptive Trade Practices Act ("Texas DTPA"), and (3) declaratory relief. (Pl.'s Pet. at 9-13.) Becker sought recovery of the "costs incurred by Becker to acquire and install the defective engine from Continental, Becker's lack of an ability to use his aircraft since September 5, 2012, . . . including both the intrinsic value associated with owning and operating his own aircraft, expenses associated with flying commercially as opposed to being able to utilize his own aircraft, the value of his lost time and attorney's fees incurred." (Pl.'s Pet. at 9.) Continental removed the case to this Court on June 27, 2013.1 After careful consideration of the evidence and arguments presented at trial and all of the written submissions by the parties, the Court issues this memorandum opinion with findings of fact and conclusions of law.
1. Becker is a resident and citizen of Texas.
2. Continental is a corporation formed and registered in Delaware with its principal place of business in Alabama.
3. The amount in controversy exceeds $75,000.
4. Jurisdiction and venue is proper in the United States District Court for the Northern District of Texas, Fort Worth Division.
5. Becker is the owner of a 1999 Mooney Ovation M20R aircraft (the "Aircraft"), bearing registration number N321EL.
6. In late 2010 and/or early 2011, the engine in Becker's Aircraft was approaching 2,000 hours of operational time, which is the recommended "Time Between Overhaul" per the manufacturer, Continental.
7. The Aircraft is certificated by the FAA and is suitable only for a Continental IO-550-N8B Engine.
8. Becker researched his options at such time in terms of either a field overhaul, a factory remanufactured engine, or a new engine from Continental.
9. Following such research, Becker, in part based upon his reliance on the New Engine Warranty and/or Cylinder Warranty that would accompany a new Engine from Continental, elected to purchase a new IO-550-N8B Engine with serial number 1004170 (the "Engine") that was manufactured and sold by Continental.
10. The relevant portion of the "New Engine Warranty" stated:
1. (a) For a period of thirty-six (36 months) or one thousand (1000) hours of operation, whichever occurs first, after the warranty activation date TCM [Teledyne Continental Motors] will at its option repair or replace on an exchange basis any engine, component or part manufactured or supplied by it which within the thirty-six (36) month or one thousand (1000) hour period is returned to a TCM representative authorized to handle the engine covered by this warranty and which upon examination is found to the satisfaction of TCM to be defective in material or workmanship. . . .
11. In addition, the relevant portion of the "Cylinder Warranty" stated:
1. For a period of twenty-four (24) months or one thousand (1000) hours of operation, whichever occurs first, after the warranty activation date, TCM will at its option repair or replace on an exchange basis any cylinder component or related part manufactured or supplied by it which within the applicable twenty-four (24) month or one thousand (1000) hour period is returned to a representative of TCM authorized to handle the engine in which the cylinder component or related part covered by this warranty is installed and which upon examination by TCM is found to be defective in material or workmanship. . . .
12. Moreover, the Cylinder Warranty contained the following language:
THIS WARRANTY IS A WARRANTY TO REPAIR OR REPLACE AND NOT A WARRANTY OF THE CONDITION OR FUTURE PERFORMANCE OF THE PRODUCTS WHICH IT COVERS. THERE ARE NO OTHER WARRANTIES, EXPRESSED OR IMPLIED, SPECIFICALLY, BUT WITHOUT LIMITATION, THERE ARE NO IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT WILL TCM BE RESPONSIBLE FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF ANY DEFECT IN ANY CYLINDER OR RELATED PART, ARISING OUT OF THE FAILURE OF ANY CYLINDER OR RELATED PART TO OPERATE PROPERLY, OR ARISING OUT OF ANY BREACH OF THE WARRANTY MADE HEREIN. . . .
13. The Engine Warranty contained language almost identical to that set forth in paragraph 12.
14. Upon purchase by Becker, the Engine was properly installed by Stephen Sherman ("Sherman"), an aircraft mechanic at Dugosh Aircraft Service Company ("Dugosh"), inBecker's Aircraft in April 2011, in accordance with Continental's instructions and specifications.
15. In his 15 years working as an airplane mechanic at Dugosh, Sherman has replaced approximately 15 to 20 engines and replaced approximately 200 sets of cylinders.
16. Since approximately 1999, Sherman has performed work on various aircraft owned by Becker, including the Aircraft.
17. Becker operated his Aircraft with the Engine from approximately April 2011 to September 5, 2012 for a total of 336.5 hours.
18. Becker brought his Aircraft to Dugosh on or about September 5, 2012 for routine maintenance and repairs.
19. Following performance of the routine repairs and maintenance service by Sherman at Dugosh, the Aircraft was certified as airworthy and had been signed off by and approved for return to service by Dugosh.
20. Immediately following Dugosh approving the return of Becker's Aircraft to service on or about September 5, 2012, Becker reported to Sherman at Dugosh that he believed the Engine to have a high oil consumption rate of approximately one quart for every two hours of operation.
21. That same day, Sherman at Dugosh contacted Continental's warranty department (Roger Gradle ("Gradle"), Warranty Administrator) to report the high oil consumption issue under both the New Engine Warranty and/or Cylinder Warranty applicable to the Engine.
22. Based on such report, Gradle at Continental instructed Sherman at Dugosh to complete and submit a Warranty Claim Form to Continental.
23. On September 5, 2012, Dugosh submitted a warranty claim form to Continental related to the high oil consumption issue reported to Continental.
24. The Warranty Claim Form listed Becker as the Customer/Owner and Dugosh as the Repair Agency.
25. The Warranty Claim Form included a "Description of Difficulty" of: "High oil consumption-1 quart every 2 hours; Crankcase pressure normal; Borescope shows oil in cylinders[.]"
26. The Warranty Claim Form was submitted within the applicable warranty periods under both the New Engine Warranty and Cylinder Warranty.
27. Both the New Engine Warranty and the Cylinder Warranty apply only in the event that the Engine or cylinders are, "upon examination by" Continental, found "to be defective in material or workmanship."
28. Following submission of the warranty claim form to Continental, Continental instructed Dugosh to remove the cylinders from Becker's Engine and to send those cylinders to G&N Aircraft, Inc. ("G&N").
29. Sherman at Dugosh removed the cylinders, and they were shipped to G&N.
30. Continental did not request that Becker sign a work order or any other document prior to Dugosh sending the cylinders to G&N.
31. Continental did not examine the Engine or the cylinders prior to the shipment of the cylinders to G&N.
32. G&N received the cylinders from Dugosh in September 2012 and inspected and repaired the cylinders under G&N's Work Order No. 69042.33. G&N was authorized by Continental to perform the cylinder inspection and repair pursuant to the New Engine Warranty and/or Cylinder Warranty.
34. According to its paperwork, G&N performed the following cylinder work: disassemble, sand blast, replace valve and valve seats, install valve guides, hone, final inspection, assembly and check, torque studs, and fit rings.
35. During its inspection and repair and according to its paperwork, G&N rejected some of the parts/materials contained in the Cylinders, specifically the exhaust guides.
36. G&N's Work Order No. 69042 reflects the cylinder work was being performed pursuant to Continental's New Engine Warranty and/or Cylinder Warranty.
37. Following submission of the warranty claim form by Dugosh related to the Engine and/or Cylinders, Continental assigned Warranty Claim No. 224418 to Becker's warranty claim.
38. Continental paid G&N for the work it performed on the cylinders (Work Order No. 69042) under Warranty Claim No. 224418 pursuant to the New Engine Warranty and/or Cylinder Warranty.
39. In mid-October 2012, G&N returned the cylinders to Dugosh to reinstall in the Engine.
40. Following the return of the cylinders from G&N to Dugosh in October 2012, Sherman, among other Dugosh employees, properly reinstalled the cylinders on the Engine in accordance with Continental's instructions and specifications.
41. Following the reinstallation of the cylinders in October 2012, the high oil consumption issue had not been resolved, and, in fact, worsened.
42. Following the reinstallation of the cylinders in October 2012, the Engine fouled spark plugs, burned oil, pushed blue smoke through its exhaust system indicating the presenceof oil being burned, ran rough, dripped oil out of the tailpipes, and failed a magneto check, all of which rendered the Engine not airworthy.
43. Sherman at Dugosh contacted Gradle at Continental and reported the continued problems with the Engine and cylinders.
44. Gradle at Continental suggested that Dugosh fly the Aircraft, which Dugosh refused to do because Dugosh considered the Aircraft unsafe and not airworthy.
45. Dugosh and...
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