Country Shindig Opry, Inc. v. Cessna Aircraft Co., 84-2427
| Decision Date | 10 February 1986 |
| Docket Number | No. 84-2427,84-2427 |
| Citation | 780 F.2d 1408 |
| Parties | COUNTRY SHINDIG OPRY, INC., Appellee, v. CESSNA AIRCRAFT COMPANY, Appellant. Walston Airbusiness, Inc., Teledyne Industries, Inc. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Thomas C. Walsh, St. Louis, Mo., for appellant.
Mark H. Goodrich, Des Moines, Iowa, for appellee.
Before HEANEY and BOWMAN, Circuit Judges, and WANGELIN, * Senior District Judge.
In November 1981, plaintiff-appellee Country Shindig Opry, Inc. (Country) purchased a new Cessna P-210 aircraft. After experiencing considerable difficulty with the aircraft, Country flew the airplane to the dealer from whom it was purchased and disclaimed any further obligation to make payments. Country thereafter filed this diversity suit against defendant-appellant Cessna Aircraft Company (Cessna) and others, alleging inter alia, fraudulent misrepresentation and breach of express and implied warranties. At trial, the District Court submitted only the fraudulent misrepresentation claim to a jury after denying Cessna's motion for a directed verdict. 1 The jury returned a verdict in favor of Country of $114,700 in actual damages and $3 million in punitive damages. Cessna timely moved for judgment n.o.v. and the District Court denied that motion as well. Cessna now appeals from the District Court's entry of judgment on the jury's verdict, asserting as error the District Court's denial of its motion for a directed verdict and the District Court's rulings on certain other matters. We reverse the judgment of the District Court and remand the case for a new trial.
Country produces a family entertainment variety show in a country music format at Lake of the Ozarks in Missouri. Dennis Hilton is the president and sole shareholder of Country. Country first purchased an airplane for its business in 1976 and used the plane primarily to transport "key personnel" to performances "on the road." In November 1981, Country acquired the 1981 model Cessna P-210 aircraft that is the subject of this action from Walston Airbusiness, Inc. (Walston), a Cessna dealer in East Alton, Illinois. Country purchased the 1981 P-210 after a Walston employee crashed Country's 1979 model Cessna P-210 while returning it to Country from Walston's service department.
Country experienced significant problems with the 1981 P-210. A detailed recitation of the poor service record of Country's 1981 P-210 neither would be helpful to our resolution of this case nor a desirable use of many pages of the Federal Reporter. In short, Country's 1981 Cessna was a lemon with wings. The avionics, the fuel system, the pressurization system, and especially the exhaust system required continual repair, as did various other gauges and components on the plane. 2 After sixteen months of trouble, Country flew the aircraft back to Walston and demanded a refund of the purchase price. When Cessna would not agree to this request, Country abandoned the aircraft at Walston's place of business and refused to make any further payments to Cessna Finance Corporation.
In July 1983, Country commenced this lawsuit. Country's complaint contained five counts, including the fraudulent misrepresentation count relevant to this appeal. In its misrepresentation count Country claimed that Cessna
did falsely represent and warrant to [Country], through representations in sales manuals, advertisements, news releases, pilot's operating data and other communications, as follows:
* * *
* * * (b) That the AIRCRAFT was capable of safe and dependable flight during conditions of darkness, flight into poor weather (instrument meteorological conditions), and flight into known icing conditions.
* * *
* * *
(f) That the AIRCRAFT and the POWER PLANT ... were airworthy, dependable, safe and fit for the transportation of persons by air. 3
Country sought both actual and punitive damages.
After a lengthy trial, the case was submitted to a jury. The court properly instructed the jury on the elements of fraud under Missouri law and informed the jury that it could return a verdict for Country if it found that Cessna represented either (1) that the 1981 P-210 was "free from defects in material in the exhaust system, intending that [Country] rely upon such representation in purchasing the aircraft" or (2) that it was "safe for flight in bad weather and known icing conditions, intending that [Country] rely upon such representation in purchasing the aircraft ..." The jury returned its verdict for Country.
The Missouri Supreme Court plainly has set forth the elements of a fraud claim under Missouri law.
The elements of fraud are: 1) a representation, 2) its falsity, 3) its materiality, 4) the speaker's knowledge of its falsity, or his ignorance of its truth, 5) the speaker's intent that it should be acted on by the person and in the manner reasonably contemplated, 6) the hearer's ignorance of the falsity of the representation, 7) the hearer's reliance on the representation being true, 8) his right to rely thereon, and 9) the hearer's consequent and proximately caused injury.
Sofka v. Thal, 662 S.W.2d 502, 506 (Mo.1983) (en banc). A plaintiff must produce sufficient evidence that logically and convincingly supports each element of his cause of action. See: Grosser v. Kandel-Iken Builders, 647 S.W.2d 911, 914 (Mo.App.1983).
In reviewing the record to determine whether there is sufficient evidence of fraud in this case, we are bound by a strict standard of review. The standard for reviewing a ruling on a motion for a directed verdict is the same as that for reviewing a ruling on a motion for judgment n.o.v. SNCO Barge Lines v. Anderson Clayton & Co., 745 F.2d 1188, 1192 (8th Cir.1984). To assess whether a ruling on a motion for a directed verdict was proper, the courts consider the evidence in the light most favorable to the prevailing party, assuming as true all facts that the prevailing party's evidence tended to prove and giving him the benefit of all favorable inferences that reasonably may be drawn from the proven facts. Brown v. Missouri Pacific Railroad, 703 F.2d 1050, 1052 (8th Cir.1983). If, in light of the above, reasonable jurors could differ as to the conclusions that could be drawn from the evidence, the court must deny the motion for a directed verdict. Id.
Country asserts that the misrepresentations allegedly made by Cessna occurred in a conversation between Dennis Hilton and Cessna's Manager of Customer Services and were contained in service information letters and owner advisories from Cessna, the Pilot's Operating Handbook (POH) for the 1981 P-210, and a Cessna product brochure. Cessna, on the other hand, contends that none of the above sources support Country's fraud theory. 4 We will review each source to determine whether it contains a misrepresentation sufficient to sustain the jury verdict. 5
Our review of Hilton's testimony fails to reveal any representations whatsoever that were made by Joseph Quackenbush, Cessna's Manager of Customer Services, when Hilton called to complain about exhaust system cracks in Country's 1981 P-210. In fact, Hilton stated that Quackenbush simply referred him to the service department of his Cessna dealer. Even had a potentially fraudulent statement been made during that conversation, however, it could not support the jury verdict in this case. The jury was instructed that it could return its verdict for Country only if a representation was made to Country intending that Country rely on that representation in purchasing the aircraft. Since Hilton's conversation with Quackenbush occurred after the purchase of the aircraft, it cannot be the source of any misrepresentation that would validate the jury's verdict.
Likewise, our review of the Cessna service information letters and owners advisories cited by Country as containing misrepresentations does not reveal anything that would support the verdict here. These materials relate solely to Country's 1979 P-210 and made no representation concerning the 1981 model P-210. In addition, Country has not referred us to any place in the record, nor have we found any place, that indicates that Hilton or anyone else acting on behalf of Country relied on any representation in these materials from Cessna in purchasing the 1981 aircraft. Reliance on an alleged misrepresentation is an essential element of Country's fraud claim and the verdict could not stand even on the basis of misrepresentations in these service letters and owner advisories absent testimony logically and convincingly showing Country's reliance on those representations. Sofka, 662 S.W.2d at 506.
For similar reasons, the POH also cannot sustain the fraud verdict here. Country pleaded in its complaint that representations that the aircraft was safe...
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