O'BRIEN v. Grumman Corp.

• Decision Date: 03 July 1979
• Docket Number: 76 Civ. 3575 (HFW),No. 76 Civ. 988 (HFW),75 Civ. 3026 (HFW) and 75 Civ. 3027 (HFW).,77 Civ. 1146 (HFW),76 Civ. 988 (HFW)
• Citation: O'BRIEN v. Grumman Corp., 475 F. Supp. 284 (S.D. N.Y. 1979)
• Parties: Rosemary B. O'BRIEN, etc., Plaintiff, v. GRUMMAN CORPORATION and Grumman Aerospace Corporation, Defendants. Rosemary B. O'BRIEN, etc., Plaintiff, v. INTERNATIONAL BUSINESS MACHINES CORPORATION, Defendant. INTERNATIONAL BUSINESS MACHINES CORPORATION, Plaintiff, v. GRUMMAN AMERICAN AVIATION CORPORATION, Defendant. Angela W. MURPHY, etc., Plaintiff, v. GRUMMAN AMERICAN AVIATION CORPORATION, Defendant and Third-Party Plaintiff, v. INTERNATIONAL BUSINESS MACHINES CORPORATION and Mary Louise Whitman, etc., Third-Party Defendants. Mary Louise WHITMAN, etc., Plaintiff, v. GRUMMAN AMERICAN AVIATION CORPORATION, Defendant and Third-Party Plaintiff, v. INTERNATIONAL BUSINESS MACHINES CORPORATION and Angela W. Murphy, etc., Third-Party Defendants.
• Court: U.S. District Court — Southern District of New York

475 F. Supp. 284

Rosemary B. O'BRIEN, etc., Plaintiff, v.GRUMMAN CORPORATION and Grumman Aerospace Corporation, Defendants.

Rosemary B. O'BRIEN, etc., Plaintiff, v.INTERNATIONAL BUSINESS MACHINES CORPORATION, Defendant.

INTERNATIONAL BUSINESS MACHINES CORPORATION, Plaintiff, v.GRUMMAN AMERICAN AVIATION CORPORATION, Defendant.

Angela W. MURPHY, etc., Plaintiff, v.GRUMMAN AMERICAN AVIATION CORPORATION, Defendant and Third-Party Plaintiff, v.INTERNATIONAL BUSINESS MACHINES CORPORATION and Mary Louise Whitman, etc., Third-Party Defendants.

Mary Louise WHITMAN, etc., Plaintiff, v.GRUMMAN AMERICAN AVIATION CORPORATION, Defendant and Third-Party Plaintiff, v.INTERNATIONAL BUSINESS MACHINES CORPORATION and Angela W. Murphy, etc., Third-Party Defendants.

Nos. 76 Civ. 988 (HFW), 76 Civ. 3575 (HFW), 77 Civ. 1146 (HFW), 75 Civ. 3026 (HFW) and 75 Civ. 3027 (HFW).

United States District Court, S. D. New York.

July 3, 1979.

Geoghan, Tutrone & Grossman, New York City, for Murphy; Marc E. Grossman, New York City, of counsel.

Kreindler & Kreindler, New York City, for Whitman; Milton G. Sincoff, Steven Earl Anderson, New York City, of counsel.

Troutman, Sanders, Lockerman & Ashmore, Atlanta, Ga., Grossman, Neidoff, Ribando & Weinbaum, Brooklyn, N. Y., for O'Brien; Robert L. Pennington, Steven W. Korn, Atlanta, Ga., Samuel Weinbaum, Brooklyn, N. Y., of counsel.

Bigham, Englar, Jones & Houston, New York City, for IBM; John J. Martin, New York City, of counsel.

Haight, Gardner, Poor & Havens, New York City, for Grumman Corp., Grumman Aerospace and Grumman American; Walter E. Rutherford, Robert B. Haserot, New York City, of counsel.

OPINION

WERKER, District Judge.

These five actions arising from an airplane crash are presently before the Court on various motions and cross-motions for summary judgment and consolidation.

FACTS

The following facts are not in dispute.

On June 24, 1974, Grumman Gulfstream II aircraft no. N72OQ crashed in the vicinity of Kline, South Carolina.All three persons aboard the aircraft, Thomas W. O'Brien, Paul F. Whitman and James M. Murphy, were killed as a result.O'Brien was an instructor pilot employed by Grumman American Aviation Corporation("Grumman American") and Whitman and Murphy were pilots employed by International Business Machines Corporation("IBM").O'Brien was aboard the plane to provide Whitman with flight instruction, and Murphy accompanied them as an observer.

Aircraftno. N72OQ was the 58th plane in the Gulfstream II series.It was manufactured and assembled in Georgia pursuant to a design initially drafted in New York.The first 23 planes in the Gulfstream II series were manufactured in New York before Grumman Aircraft Engineering Corporation("Grumman Aircraft") changed its manufacturing site to Georgia in 1968.Grumman Aircraft changed its corporate name to Grumman Corporation("Grumman Corp.") on July 23, 1969, three weeks after it had transferred all of its aerospace business, including the Gulfstream II assets and liabilities, to Grumman Aerospace Corporation("Grumman Aerospace"), its wholly-owned subsidiary.Responsibility for the Gulfstream II program was shifted once again in 1973, when Grumman Aerospace transferred all of its Gulfstream assets and liabilities to Grumman American in exchange for some of the latter's stock.From 1973 until 1978, approximately 81% of Grumman American was owned by Grumman Corp. and/or Grumman Aerospace, and approximately 19% by AJI-Ohio Corp., an Ohio corporation.

Aircraftno. N72OQ was sold by Grumman Aircraft to IBM pursuant to a written contract executed in New York on September 27, 1966.The airplane was delivered to IBM in Savannah on June 10, 1969.Thereafter, the plane was operated from and maintained at IBM's facility at the Dutchess County Airport in Wappingers Falls, New York.

In 1970, Grumman Aerospace requested the British Air Registration Board(the "ARB") to evaluate its Gulfstream II aircraft to enable it to seek certification for sale in the United Kingdom.The ARB conducted an evaluation at Grumman Aerospace's facility at Bethpage, New York and issued a report on June 24, 1970 criticizing various aspects of the Grumman II ground spoiler system and design.As a result of the ARB report, Grumman Aerospace conducted its own study and concluded that certain modifications would cure the problems detected by the ARB.This study was prepared by Grumman Aerospace in New York and was issued on August 12, 1970.

The design changes suggested by the Grumman Aerospace report were embodied in Grumman Gulfstream II Aircraft Service Changeno. 98, which was issued by Grumman Aerospace on August 20, 1971 in Georgia.The service change was circulated among the owners of Gulfstream II aircraft to be implemented at their option.IBM opted not to modify aircraft no. N72OQ.

In June 1974, prior to the accident, aircraft no. N72OQ was flown from New York to Georgia and Whitman and Murphy, who were New York residents, travelled from New York to Georgia to participate in the training flight.On June 24th, the aircraft departed from Grumman American's facilities at the Savannah municipal airport at approximately 3:20 p. m. The plane was scheduled to return to Savannah, but crashed near Kline, South Carolina at approximately 4:45 p. m.

The instant five lawsuits were filed as follows:

In action no. 75 Civ. 3026, Mrs. Whitman, as executrix of the Whitman estate, seeks wrongful death and survival damages from Grumman American on the grounds of negligence, strict liability in tort and breach of warranty.Grumman American has impleaded IBM and Mrs. Murphy, as administratrix of the Murphy estate, as third-party defendants.Mrs. Whitman was a New York resident both at the time of the accident and of the filing of this lawsuit and was appointed executrix of the Whitman estate by a New York court.After this action was commenced, Mrs. Whitman moved to Texas.Grumman American is an Ohio corporation with its principal place of business in Georgia.IBM is a New York corporation with its principal place of business in New York.

In action no. 75 Civ. 3027, Mrs. Murphy, as the administratrix of the Murphy estate, seeks wrongful death and survival damages from Grumman American on the grounds of negligence, strict liability in tort and breach of warranty.Grumman American has impleaded IBM and Mrs. Whitman as executrix of the Whitman estate.Mrs. Murphy was a New York resident both at the time of the accident and of the filing of this action and was appointed administratrix by a New York court.Mrs. Murphy moved to North Carolina some time after this suit was instituted.

Actionno. 76 Civ. 988 is a suit brought by Mrs. O'Brien individually and as executrix of the O'Brien estate against Grumman Corp. and Grumman Aerospace for wrongful death and survival damages on negligence, strict liability in tort and breach of warranty grounds.Mrs. O'Brien was and has been since 1968 a resident of Georgia and was appointed executrix of the O'Brien estate by a Georgia court.The O'Briens were New York residents until 1968, when Mr. O'Brien was transferred to Georgia in the course of his employment with the Grumman companies.Grumman Corp. and Grumman Aerospace are and were at all relevant times New York corporations with their principal places of business in New York.

Actionno. 76 Civ. 3575 was commenced by Mrs. O'Brien against IBM for wrongful death and survival damages on the grounds that IBM owned and negligently maintained aircraft no. N720Q.

Actionno. 77 Civ. 1146 involves a claim by IBM against Grumman American for loss of the airplane on theories of negligence and strict liability in tort.

In IBM v. Grumman American, Grumman American moves for summary judgment, alleging that IBM's claims for property loss are barred by a contractual exculpatory clause.In O'Brien v. Grumman,the parties have cross-moved for summary judgment with respect to the Grumman defendants' contention that Mrs. O'Brien's claims are barred by the Georgia workmen's compensation statute.In the Whitman, Murphy and O'Brien v. Grummancases, the Grumman defendants move for partial summary judgment on the wrongful death claims premised on strict liability and breach of warranty, alleging that these claims are barred by the Georgia wrongful death statute.Additionally, the parties have filed various motions and cross-motions for consolidation.

DISCUSSION

A.The Warranties Disclaimer Defense

IBM's action against Grumman American for the loss of the aircraft is based on theories of strict liability in tort and negligence.In moving for summary judgment, Grumman American alleges that IBM is barred from proceeding on either of these theories by virtue of a disclaimer provision in the contract of sale.

Article IX(f) of the contract provides:

ARTICLE IX-WARRANTIES

. . . . .

(f) THE WARRANTY SET FORTH IN THIS ARTICLE IS EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES AND REPRESENTATIONS, EXPRESS, IMPLIED OR STATUTORY, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS.This warranty is also in lieu of all other obligations and warranties (including without limitation the implied warranties of merchantability and fitness) related to any modifications, repairs, replacement parts or service change kits which may hereafter be furnished by Grumman to Buyer for use on the aircraft either pursuant to this warranty clause or otherwise.Except for the obligations expressly undertaken by Grumman in this article, Buyer hereby waives and releases all rights, claims and remedies with respect to any and all warranties, express, implied or statutory (including without limitation, the implied warranties of merchantability and fitness), duties, obligations and liabilities arising by law or otherwise and including, but without being limited to, any obligation of Grumman with respect to incidental or consequential damages or damages for loss of use.No agreement or

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