Cohen v. Cont'l Motors, Inc.
| Decision Date | 07 September 2021 |
| Docket Number | No. COA20-418,COA20-418 |
| Citation | 864 S.E.2d 816 |
| Parties | Fred COHEN, Executor of the Estate of Dennis Alan O'Neal, Deceased, and Fred Cohen, Executor of the Estate of Debra Dee O'Neal, Deceased, Plaintiffs v. CONTINENTAL MOTORS, INC. (f/k/a Teledyne Continental Motors, Inc. and/or Teledyne Continental Motors); and Aircraft Accessories of Oklahoma, Inc., Defendants |
| Court | North Carolina Court of Appeals |
Blanchard, Miller, Lewis & Isley, P.A., by Philip R. Miller, III, Raleigh; and The Wolk Law Firm, by Michael S. Miska, pro hac vice, for plaintiff-appellant.
Armbrecht Jackson LLP, by Lacey D. Smith, Sherri R. Ginger, and Timothy A. Heisterhagen ; and Williams Mullen, Raleigh, by Elizabeth D. Scott, for defendant-appellee.
Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P., Raleigh, by J. Mitchell Armbruster, Christopher R. Kiger, and Amelia L. Serrat, for amicus curiae North Carolina Association of Defense Attorneys.
¶ 1 Fred Cohen (Plaintiff), Executor of the Estates of Debra Dee O'Neal and Dennis Alan O'Neal (the O'Neals), appeals from an Order granting a Motion to Dismiss for Lack of Personal Jurisdiction entered in favor of Continental Motors, Inc. (CMI). The Record before us tends to reflect the following:
The Accident
¶ 2 At approximately 12:30 p.m. on 31 March 2013, the O'Neals, residents of Blounts Creek, North Carolina, took off from Wilkes County Airport in North Wilkesboro, North Carolina, flying a Lancair LC42-550FG (the Aircraft) destined for Warren Field Airport in Washington, North Carolina. The O'Neals were licensed and experienced aircraft pilots; Debra O'Neal piloted the Aircraft. After the Aircraft climbed to 5,000 feet, at 12:46 p.m. "the pilot declared an emergency and reported[:] ... ‘low fuel pressure -- engine's quitting.’ " "[An] air traffic controller vectored the airplane toward" Smith Reynolds Airport in Winston-Salem. "[D]uring the descent[,] the pilot reported smoke in the cockpit and subsequently reported that the engine was ‘barely’ producing power." Data from the accident would later reveal the engine had lost power after losing oil pressure. At 12:50 p.m., approximately three miles west of Smith Reynolds Airport, the Aircraft made a forced landing, collided with trees and terrain, and burst into flames, killing both O'Neals. Plaintiff was appointed as the Executor of the O'Neals respective Estates.
Continental Motors, Inc.
¶ 3 CMI "is a Delaware corporation with a principal place of business in Mobile, Alabama." "CMI is engaged in the business of designing, manufacturing, and selling aircraft engines and component parts." According to its then-Director of Certification and Airworthiness, Michael E. Ward (Ward), during deposition, "C[MI] markets to the flying public at large ... [and] ha[s] an international market." In fact, CMI claims, "[f]rom 2010 to 2013, [it] sold parts in all fifty United States[,]" including North Carolina, "as well as in other countries."
¶ 4 CMI's business model involves "sell[ing] through distribution, so [it] ha[s] distributors that purchase [CMI] parts and sell [them] into the aviation public." Thus, from 2010 to 2013, "distributors would order parts from C[MI], and the[ ] [parts] would be shipped either to the distributor or drop-shipped to the customer at the distributor's request." "Triad Aviation" (Triad), "located in Burlington, North Carolina ... operated as a distributer for C[MI] parts from 2010 to 2013." More specifically, "[f]rom May 2010 to August 2013, C[MI] engaged in 2,948 sales of component parts with a total value of $3,933,480.65 through Triad ...." North Carolina "orders were taken from Triad ..., and the parts were delivered either to Triad or drop shipped at [customers’] instructions."1
¶ 5 During the 2010-2013 period, Air Care Aviation Services (Air Care), "a maintenance and avionics provider" headquartered and with principal place of business in North Carolina, sold and serviced CMI components. CMI made "no direct sales to Air Care"; however, "Triad ... purchased approximately twelve (12) products from C[MI] that were drop-shipped to Air Care from approximately May 2010 to August 2013." Although it does not appear it was standard practice to do so at the time, "on occasion" Air Care would call CMI for support.
¶ 6 CMI "[wa]s the Type Certificate Holder for IO-550-N series engines such as the" engine inside the Aircraft, "and provide[d] continued airworthiness instructions for that engine series in compliance with Federal Aviation Administration ... regulations[.]" During the 2010-2013 period, CMI's "in-house[,]" "online technical library and the service instructions it contained were available to service centers like Air Care through a subscription to C[MI]’s FBO2 Services Link." "To subscribe to C[MI]’s FBO Service[s] Link, a subscriber would go to C[MI]’s website to create a profile and pay a subscription fee." "Once that fee was paid, the computer program would authorize the subscription, and [subscribers] would have access to the publications." CMI would then "post[ ] service updates to service bulletins in its online library and notif[y] subscribers of those updates through e-mail broadcasts." Through this technical library, "subscribers would have access to manuals, overhaul manuals, [and] maintenance manuals, [all] for [the] subscription fee." Additionally, 3 In summary, during the 2010-2013 period, all this information was made available to subscribers directly from CMI. CMI "had fourteen North Carolina subscribers[,]" including Air Care.
¶ 7 At the time of the crash, the Aircraft was privately owned by the O'Neals and registered in North Carolina. Prior to the O'Neals’ purchase of the Aircraft in 2010, it had been owned by at least one other owner. The Aircraft, manufactured in 2003, "was equipped with a C[MI] IO-550N, 310-horsepower engine." "CMI designed and manufactured the IO-550-N2B engine ... at its facility in Mobile, Alabama." "The [e]ngine was sold and shipped to The Lancair Company ... in Bend, Oregon on or around March 31, 2002."
¶ 8 "The [e]ngine, as sold by CMI to Lancair, was assembled with a starter adapter4 ... in accordance with CMI's FAA-approved Type Design Data for the [e]ngine." "[T]h[is] original starter adapter ... assembled to the [e]ngine by CMI was removed and replaced with a different model starter adapter ... sometime while the Aircraft and [e]ngine were at Lancair's facility in Bend[.]"
¶ 9 The O'Neals were customers of Air Care, and Air Care provided service and maintenance for the Aircraft. As part of its servicing and maintenance of the Aircraft, "Air Care installed a third starter adapter" (the Starter Adapter), "which was on the [e]ngine at the time of the accident[.]" Air Care "purchased the Starter Adapter from [d]efendant Aircraft Accessories of Oklahoma, Inc." (Aircraft Accessories) "as an overhauled starter adapter unit on or around January 29, 2013." This overhauled replacement was made because the second starter adapter "was slipping."5 The third and final Starter Adapter was a CMI component, overhauled by Aircraft Accessories.
¶ 10 Air Care mechanic Justin Pearson (Pearson) installed the Starter Adapter "on or around February 11, 2013." Pearson used CMI's "maintenance manual to reinstall the engine and the engine mounts," as well as to "reinstall[ ] [the] A/C mount bracket, A/C compressor, air oil separat[o]r and starter with new O-ring ...." In fact, Air Care's mechanics at large "were expected to" use CMI's online library through Air Care's subscription when Air Care inspectors determined it was necessary for the mechanics to do so. Furthermore, "[t]he service instructions pertaining to the installation of the ... Starter Adapter were in C[MI]’s IO-550 Permold Series Engine Maintenance and Overhaul Manual ...." As to whether the Starter Adapter was installed pursuant to CMI's manual, Timothy J. Padgett (Padgett), Director of Maintenance at Air Care, testified the following in deposition:
¶ 11 On 12 March 2015, Plaintiff filed the Complaint on behalf of the Estates against CMI and Air Care, among others.6 Against CMI, Plaintiff alleged claims including: Strict Liability; Negligence; Breach of Express and Implied Warranties; Negligent Misrepresentation; Fraud; "Recklessness, Outrageousness, Willful and Wanton Conduct"; and a claim under N.C. Gen. Stat. Section 75-1.1. "[The] claims against C[MI] are predicated upon two theories of liability—that the ... Starter Adapter was subject to a design defect, and that the Service Manual...
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