Boston Helicopter Charter v. Agusta Aviation

Decision Date20 June 1991
Docket NumberCiv. A. No. 89-2605-C.
Citation767 F. Supp. 363
PartiesBOSTON HELICOPTER CHARTER, INC., Martin Cole, Mark Carney, Patrick Carney, Robert Medeiros, Hugh Carney, Paul Cusson and Mary Thornton, Plaintiffs, v. AGUSTA AVIATION CORPORATION, B.L. Jet Sales, Inc., and Costruzioni Aeronautiche Agusta, S.p.A., Defendants.
CourtU.S. District Court — District of Massachusetts

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Frank C. Corso, Sarrouf, Tarricone & Felmming, Boston, Mass., for plaintiffs.

Gerald Tutor, Corrigan, Johnson & Tutor, Boston, Mass., Chad Browne, Chalres F. Clark, Macfarlane, Ferguson, Allison & Kelly, Tampa, Fla., for Hydroplanes, Inc. f/k/a Jet Sales.

Brian P. Voke, Campbell & Assoc., Cambridge, Mass., Rudolph V. Pino, Patricia A. Fried, Condon & Forsyth, New York City, for Agusta Aviation Corp. and Construzioni Aeronautiche Agusta S.p.A.

MEMORANDUM

CAFFREY, Senior District Judge.

This action arises out of the sale, resale, and eventual crash of an Agusta A109 helicopter. Defendant Costruzioni Aeronautiche Giovanni Agusta S.p.A. ("CAGA") is the Italian manufacturer of the helicopter, and defendant Agusta Aviation Corporation ("AAC")1 is its subsidiary responsible for marketing, distribution and support of CAGA products in North America. AAC sold the helicopter to co-defendant Hydroplanes, Inc.,2 who in turn sold it to the plaintiff, Boston Helicopter Charter, Inc. ("Boston Helicopter"). Boston Helicopter and the individuals injured in the accident3 filed this action against all three defendants. Hydroplanes then filed a cross-claim against CAGA and AAC for indemnity. CAGA and AAC responded with a cross-claim against Hydroplanes for indemnity and contribution, alleging negligence against Hydroplanes in its maintenance and operation of the helicopter. The case is currently before this Court on AAC's and CAGA's motion for partial summary judgment on Boston Helicopter's warranty claims, and on Hydroplanes' motion for summary judgment on its claim seeking indemnity from AAC and CAGA.

I.

The following facts are undisputed, except where otherwise indicated. Defendant AAC sold the 109A helicopter to Hydroplanes on May 4, 1984 for $1,000,000.00. Hydroplanes did not take delivery of the helicopter until July 26, 1984. The purchase agreement between AAC and Hydroplanes contained the following warranty:

6. Warranty
a. New Equipment. The Equipment is purchased subject to Seller's standard warranty which is as follows:
Seller hereby warrants to the original purchaser only each new helicopter and part thereof sold by Seller to be free from defects in material and workmanship under normal use and service, Seller's obligation under this warranty being limited to replacing or repairing such part at its designated place of business, with the charges payable by Purchaser for such repair or replacement to be prorated for hours of use against the established life of the part or 2,000 hours, whichever is the lesser (with no charges being payable to Purchaser in the event of repair or replacement within the first 500 hours of use), provided that such part shall have been returned to Seller's designated place of business, with transportation charges prepaid, within 1,000 hours of operation or one year, whichever shall first occur, after delivery of such part to the original purchaser, and provided further that Seller's examination shall disclose, to Seller's satisfaction, such part to have been defective. THIS WARRANTY IS GIVEN EXPRESSLY AND IN PLACE OF ALL OTHER EXPRESS OR IMPLIED WARRANTIES, INCLUDING MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, AND THIS WARRANTY IS THE ONLY WARRANTY MADE BY SELLER OR THE AGUSTA GROUP. The obligations of Seller under this warranty are limited to the repair of helicopter parts as provided herein and liability is excluded for incidental or consequential damages, including without limitation, damage to the helicopter or other property, and costs of expenses for commercial losses or lost profits due to loss of use of grounding of the helicopter or otherwise.

The 500 hour period for free replacement was substituted by the parties in lieu of a standard 200 hour provision. Moreover, the agreement between AAC and Hydroplanes provided that the warranty was transferrable.4

More than one year later, on October 31, 1985, Hydroplanes entered into a purchase and sale agreement through which it agreed to sell the helicopter to the plaintiff, Boston Helicopter, for approximately $875,000.00.5 Paragraph 14I of the purchase and sale agreement between Hydroplanes and plaintiff provided for the transfer of the warranty to plaintiff. This provision read as follows:

Seller agrees that it shall be a condition of closing that Seller shall deliver to Buyer at closing all documentation necessary to transfer to Buyer the extended factory warranty, on which there are approximately 200 hours of Aircraft operation time remaining, which extended factory warranty is equivalent to the factory warranty offered with a new aircraft of this type and model. Seller agrees, at the time of closing, to deliver to Buyer such evidence as is reasonably required by Buyer to satisfy Buyer that the transfer of warranty will be recognized by the Agusta Aviation Corporation.6

In accordance with its obligation under this paragraph of the purchase and sale agreement, Hydroplanes executed a document by which it authorized AAC to transfer the balance of the warranty to plaintiff. This document, dated November 19, 1985, stated that the balance of the warranty as of that date was "approximately 200 hours." At the bottom of the same document, however, the following was written: "Balance of Warranty at November 19, 1985 is 185.1 hours." A representative of AAC initialed the document, indicating that the "Assignment of Warranty" had been "Confirmed & Accepted." The plaintiff took delivery of the helicopter on that same day. Plaintiff contends that it never received a copy of the warranty; for purposes of this motion, this Court assumes that such is the case.

The plaintiff did, however, make use of this warranty. By a letter dated January 10, 1986, plaintiff notified AAC of its appointment of North Atlantic Air, Inc. as its warranty claims agent. According to the affidavit of James Minogue, the customer service manager and warranty administrator, plaintiff made 33 claims from January 10, 1986 until December 30, 1986. The claim forms have a place to note the number of hours the helicopter had been in flight. It appears that AAC honored one claim when the helicopter had a total aircraft operation time of 504 hours. In addition, on several of these claims forms, although CAGA had made a notation that "the warranty has expired due to calendar limits," AAC honored the claim under what it referred to on the forms as the "AAC Agreement," or "AAC Special Warranty." (See Defendants' Exhibit 7).

The accident took place on January 13, 1987, when the helicopter had a total operation time of 566.8 hours. According to the factual report of the National Transportation Safety Board, the helicopter experienced a tail rotor blade failure shortly after liftoff from the helipad while hovering at twenty-five feet. The rotor blade that failed had a certified expected life of 1,400 hours. A certified expected life refers to the period of time that the certifying authorities permit the part to remain in use. (See Plaintiff's Exhibit L, Deposition of Paolo Ferreri at 115). The pilot attempted to set the helicopter down on the helipad, but made a hard landing. According to an estimate prepared by the defendants, it would cost $1,015,447.90 to repair the helicopter.

II.

The first motion to be addressed is that by AAC and CAGA for partial summary judgment on Counts VII, VIII, IX, X, XI, XII, XIII, LXXVIII and LXXVIX of the plaintiff's amended complaint, which allege the following claims: breach of express warranty by AAC and CAGA; breach of implied warranty by AAC and CAGA; breach of warranty of fitness for a particular purpose by AAC and CAGA; failure of the warranty to achieve its essential purpose against AAC only; and violation of Mass. Gen.L. ch. 93A against AAC and CAGA. Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986); Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970). One way of meeting this burden is by showing that there is an absence of evidence to support the nonmoving party's case. Celotex Corp., 477 U.S. at 325, 106 S.Ct. at 2553. Once he or she has done so, the opposing party must come forward with enough evidence to demonstrate that there is a genuine issue of material fact for trial. Celotex Corp., 477 U.S. at 324, 106 S.Ct. at 2553. To determine if a dispute is genuine, a court must ask whether "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). It is with this framework that the defendants' motion is evaluated.

A. Express Warranty

Article two of the Uniform Commercial Code states that express warranties may be created by any affirmation of fact or promise, any description of the goods, or any sample or model. Mass.Gen.L.Ann. ch. 106, § 2-313 (West 1990). In this case, the plaintiff bases its claim for breach of express warranty on the warranty that Hydroplanes transferred to it. (Plaintiff's Answer to Defendants' Interrogatory No. 4). In addressing defendants' motion for summary judgment, the first...

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