Held v. Mitsubishi Aircraft Intern., Inc., Civ. No. 4-85-1148.
| Decision Date | 14 August 1987 |
| Docket Number | Civ. No. 4-85-1148. |
| Citation | 672 F. Supp. 369 |
| Parties | Betsy HELD, Trustee for the heirs-at-law and next of kin of Paul Robert Held, Jr.; Viola Patricia White, Trustee for the heirs-at-law and next of kin of John T. White, Chloe Held, Trustee for the heirs-at-law and next of kin of Paul Robert Held, Sr.; Chloe Held, Trustee for the heirs-at-law and next of kin of Charles O. Held; United Dressed Beef Company, Southeastern Aviation (Illinois) Corp.; and The Insurance Company for the State of Pennsylvania, Plaintiffs, v. MITSUBISHI AIRCRAFT INTERNATIONAL, INC., and Mitsubishi Heavy Industries, Ltd., Defendants. |
| Court | U.S. District Court — District of Minnesota |
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Steven Rau, Maun, Green, Hayes, Simon, Johanneson & Brehl, St. Paul, Minn., and David J. Adams and Diane I. Jennings, Lord, Bissel & Brock, Chicago, Ill., for The Insurance Company for the State of Pa. and Southeastern Aviation (Illinois) Corp.
Charles T. Hvass, Jr., Hvass, Weisman & King, Chartered, Minneapolis, Minn., for Betsy Held and Viola White, trustees.
Winthrop A. Rockwell, Faegre & Benson, Minneapolis, Minn., for Chloe Held, trustee.
Eric L. Koch, John Lommen, and Craig D. Peterson, Mark N. Stageberg, Lommen, Nelson, Cole & Stageberg, P.A., Minneapolis, Minn., and Duncan A. Fraser and Marshall Turner, Condon & Forsyth, New York City, for defendants.
This matter is before the Court on defendants' motions for summary judgment and on plaintiffs' motion for summary judgment, motion to preclude, motion for default judgment, and motion to strike defenses. Defendants' motions will be granted in part and denied in part. Plaintiffs' motions will be granted in part and denied in part.
This case arises from the December 6, 1980 crash of a 1979 Mitsubishi MU-2b-40 Aircraft International at Crystal Airport in Anoka County, Minnesota in which five persons were killed. Plaintiffs in this case are (1) United Dressed Beef Company, a Minnesota corporation with its principal place of business in Minnesota and the purchaser of the plane; (2) Southeastern Aviation (Illinois) Corporation, an Illinois corporation with its principal place of business in Illinois and insurer of the aircraft for United; (3) The Insurance Company For the State of Pennsylvania, a Pennsylvania corporation with its principal place of business in Pennsylvania, also United's insurer of the aircraft;1 and (4) Betsy Held, Viola White and George McClintock, all Minnesota citizens as trustees on behalf of four of the deceased passengers.
The two2 defendants in this case are (1) Mitsubishi Heavy Industries, Ltd., a Japanese corporation with its principal place of business in Japan and the designer and manufacturer of the plane (Heavy Industries); and (2) Mitsubishi Aircraft International, Inc., also a Texas corporation with its principal place of business in Texas which assembled the aircraft and sold it to United (Aircraft International). Jurisdiction of the Court is founded on the diversity provision of 28 U.S.C. § 1332.
Plaintiff United purchased the airplane in question for $912,000 from Aircraft International pursuant to a contract entitled Retail Purchase Order dated September 4, 1979. The contract lists Aircraft International as seller; in its definitional section it specifies that any reference to Mitsubishi or MAI means Aircraft International.3 The name of Heavy Industries, the designer and manufacturer of the plane, nowhere appears on the document. The contract contains a number of warranty disclaimers and limitation of remedies provisions which are at the crux of the dispute before the Court. It also specifies that it should be interpreted and applied according to Texas law.
On December 6, 1980 the plane purchased by United crashed while making its final approach at Crystal Airport in Anoka, Minnesota, killing all five occupants aboard. The plane was completely destroyed in the crash. Plaintiffs commenced this action against Aircraft International and Heavy Industries on December 2, 1983. United on its own behalf and on behalf of its insurers,4 seeks to recover $897,000 for the value of the aircraft, $3,000 for the deductible on United's insurance policy, $3,896.95 for costs incurred in removing the wreckage, and $130,000 paid in settlement of one of the passenger claims. The trustees on behalf of the four other victims are asserting wrongful death claims and seek an amount in excess of $50,000 for each victim.
Plaintiffs allege that the defendants were negligent in the design, construction and manufacture of the aircraft and its components, as well as in its overhaul, service and repair and that the negligence was the proximate cause of the crash. Amended Complaint, Count I, par. 11. In addition, plaintiffs seek to recover on theories of strict liability in tort, as well as for breach of express and implied warranties of fitness and safety. See Amended Complaint, Count VII, par. 11, 13.
Defendants request that the Court dismiss all claims asserted by United arising from the loss of the aircraft and settlement of third-party claims. Defendants argue that the nature of United's loss is purely economic, thereby barring claims in either strict liability or tort. In addition, they also argue that the disclaimer of warranties and limitation of remedies provisions in the contract preclude United from maintaining an action for breach of express or implied warranties or otherwise recovering under the contract. The Court holds that United cannot proceed under a theory of strict liability in tort against either defendant. The Court also holds that as against defendant Heavy Industries United may proceed under theories of breach of implied warranty of merchantability and negligence. As regards defendant Aircraft International the Court holds United may proceed under a theory of negligence as well as pursue its contractual remedies, as interpreted by the Court. The Court finds that as applied to the alleged design defect of the airplane, the time limitations of the repair and replace clause in the contract are manifestly unreasonable and therefore unenforceable.
I. Warranties
A defendant is not entitled to summary judgment unless the defendant can show that no genuine issue exists as to any material fact. Fed.R.Civ.P. 56(c). Summary judgment is an extreme remedy that should not be granted unless the moving party has established a right to judgment with such clarity as to leave no room for doubt and unless the nonmoving party is not entitled to recover under any discernible circumstances. E.g., Vette Co. v. Aetna Casualty & Surety Co., 612 F.2d 1076, 1077 (8th Cir.1980). In considering a summary judgment motion, a court must view the facts most favorably to the nonmoving party and give that party the benefit of all reasonable inferences that can be drawn from the facts. E.g., Hartford Accident & Indemnity Co. v. Stauffer Chemical Co., 741 F.2d 1142, 1144-45 (8th Cir.1984). The nonmoving party may not merely rest upon the allegations or denials of the party's pleading, but must set forth specific facts, by affidavits or otherwise, showing that there is a genuine issue for trial. Salinas v. School District of Kansas City, 751 F.2d 288, 289 (8th Cir.1984).
Both parties agree that Texas law in general, and the Texas Uniform Commercial Code in particular, controls the contractual issues in this case due to the choice of law clause in the contract. A federal court sitting in diversity must apply the law of the state in which it sits, including the choice of law rules of that state. Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938); Klaxon Co. v. Stentor Electric Manuf. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). Because the dispute in the present case involves the sale of goods (see Minn.Stat. § 336.2-105), the rights and liabilities of the parties are governed to a great extent by the Uniform Commercial Code. Minnesota's Uniform Commercial Code choice of law section provides in relevant part:
(1) ... When a transaction bears a reasonable relation to this state and also to another state or nation the parties may agree that the law either of this state or of such other state or nation shall govern their rights and duties. Failing such agreement this chapter applies to transactions bearing an appropriate relation to this state.
Minn.Stat. § 336.1-105 (1986). Minnesota courts are committed to honoring agreements between parties as to choice of law. Milliken and Co. v. Eagle Packaging Co., 295 N.W.2d 377, 380 n. 1 (Minn.1980); Combined Insurance Co. of America v. Bode, 247 Minn. 458, 77 N.W.2d 533, 536 (1956). The airplane in question was assembled and sold in Texas and thus it bears a reasonable relationship to that state. See, e.g., Lafayette Stabilizer Repair, Inc. v. Machinery Wholesalers Corp., 750 F.2d 1290 (5th Cir.1985) (). There is therefore no reason to question the parties' agreement that Texas law governs the contract. Of course, plaintiffs' tort claims do not arise from the contract; therefore, contractual choice of law provisions do not necessarily control. See, e.g., L. Frummer & M. Friedman, 2 Products Liability, § 3.015 at 3-48 (1986) (). Both parties, however, have noted that Minnesota law does not differ from Texas law as regards any of the issues in this case.5 There is, therefore, no reason not to apply Texas law since both parties are in agreement that it should apply even as to the tort claims.
The amenability of either defendant to claims based on strict liability in tort requires an...
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