Hurley v. Beech Aircraft Corporation

• Decision Date: 28 February 1966
• Docket Number: No. 15065.,15065.
• Citation: 355 F.2d 517
• Parties: John R. HURLEY, and The Merchants National Bank of Muncie, Co-Executors of the Estate of Anson G. Hurley, Deceased, John R. Hurley, Special Administrator of the Estate of Shirley P. Hurley, Deceased, W. Gale Pheneger and The Merchants National Bank of Muncie, Co-Administrators of the Estate of Inez Elizabeth Hurley, Deceased, Plaintiffs-Appellants, v. BEECH AIRCRAFT CORPORATION, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

355 F.2d 517 (1966)

John R. HURLEY, and The Merchants National Bank of Muncie, Co-Executors of the Estate of Anson G. Hurley, Deceased John R. Hurley, Special Administrator of the Estate of Shirley P. Hurley, Deceased W. Gale Pheneger and The Merchants National Bank of Muncie, Co-Administrators of the Estate of Inez Elizabeth Hurley, Deceased, Plaintiffs-Appellants, v. BEECH AIRCRAFT CORPORATION, Defendant-Appellee.

No. 15065.

United States Court of Appeals Seventh Circuit.

January 26, 1966.

Rehearing Denied February 28, 1966.

James J. Stewart, Indianapolis, Ind., William F. Radcliff, Muncie, Ind., Terence L. Eads, Murray, Stewart, Irwin & Gilliom, Indianapolis, Ind., Bracken, Defur, Voran & Hanley, Muncie, Ind., for appellants.

Erle A. Kightlinger, Indianapolis, Ind., Harry A. Wilson, Jr., Howard J. DeTrude, Jr., Indianapolis, Ind., Armstrong, Gause, Hudson & Kightlinger, Indianapolis, Ind., of counsel, for appellee.

Before HASTINGS, Chief Judge, and KNOCH and KILEY, Circuit Judges.

(En Banc).

HASTINGS, Chief Judge.

This is an appeal by plaintiffs¹ from the judgment of the district court resulting from the dismissal of count 1 of plaintiffs' complaint against Beech Aircraft Corporation.

Plaintiffs' complaint alleged in count I that on April 17, 1961, Dr. Anson G. Hurley, a qualified and licensed pilot, purchased from a dealer of Beech Aircraft a Beech "Bonanza" airplane, which airplane was expressly and impliedly warranted to be airworthy, free from defects, and safe for flight and use in the manner and for the purposes for which it was designed and intended.

On June 24, 1961, Hurley and his wife, Inez Elizabeth Hurley, and his sister-in-law, Shirley P. Hurley, took off on a routine flight in the plane from Muncie, Indiana to Teeterboro, New York. Dr. Hurley was flying the plane at about 11,000 feet when, suddenly, the complaint alleges the left wing of the plane separated from the fuselage due to the failure of the upper main span attachment bolt and nut; and that, as a result, the airplane became uncontrollable and crashed, killing Hurley, his wife and his sister-in-law.

The complaint further alleges that the airplane warranty had been tortiously breached because the aircraft was defective, not airworthy, and unsafe for flight and use in the manner and for the purposes for which it was intended and designed. The defect in the plane was alleged to have existed because of the faulty design, construction, assembly, and attachment of the left wing to the aircraft.

Count II of the complaint makes substantially the same allegations, but proceeds under a negligence theory of action rather than implied warranty.

Because of the trial court's holding that privity of contract was essential to an implied warranty cause of action in Indiana, it dismissed count I of plaintiffs' complaint.

Trial was had without a jury on count II, the negligence action, and the court found in favor of defendant. Plaintiffs have not appealed from the adverse judgment on count II.

Plaintiffs assert as error the action of the district court in dismissing count I of plaintiffs' complaint, based on implied warranty and the failure of the district court to grant plaintiffs' motion to alter or amend judgment, or in the alternative, for a new trial.

On appeal, both parties are agreed the trial court misinterpreted the law of Indiana and that the decision of this court in Dagley v. Armstrong Rubber Company, 7 Cir., 344 F.2d 245 (1965), holding privity of contract is not essential to an implied warranty cause of action in Indiana, is controlling.

In fairness to the learned district court, it should be noted that this dismissal of count I came about nine months prior to our ruling in Dagley, and the trial court's ruling in the instant case was consistent with its prior ruling in Dagley.

Defendant, however, argues the trial court committed no prejudicial error in dismissing the implied warranty count because the findings of fact necessarily made by the trial court in the trial of the negligence count collaterally estop plaintiffs from proceeding to a trial on the breach of warranty count. It is asserted the factual allegations upon which the plaintiffs must rely in the implied warranty suit, defect in the aircraft, have already been adjudicated adversely to plaintiffs in the negligence trial.

Plaintiffs, on the other hand, argue it was not necessary for the trial court to make findings with respect to defect in the negligence suit and, therefore, they are not estopped to proceed under the implied warranty count.

Both plaintiffs and defendant assert that Dagley, supra, supports their respective positions. Plaintiffs contend the action taken in Dagley, a remand to the district court for a trial on the issue of implied warranty raised in count I of the complaint, is appropriate.

Defendant, on the other hand, insists that Dagley is distinguishable from the instant case and cites the following language in support of its contention that had Dagley come before us on appeal in the posture of the instant case, it would not have been remanded.

"Since the jury returned a general verdict on the negligence counts, we cannot determine the basis of its verdicts for defendants. It could have found, e. g., that there were defects in the tire but that defendants were not negligent in designing or manufacturing the tire, or, that Collins was negligent in the operation of the truck and such negligence contributed to the accident.

"We hold that the jury verdict and judgment on the negligence counts were not res judicata as to the warranty counts." Dagley, supra, 344 F.2d at 250.

The essential allegations of defect in the aircraft in count I are:

"7. * * *. That said deceased was on said date flying said aircraft at about 11,000 feet over Licking County, Ohio when suddenly and without warning the left wing of said aircraft became detached therefrom, due to the failure of the upper main span attachment bolt and nut, and said aircraft became uncontrollable and as a consequence crashed to the ground as a result of which the said Anson G. Hurley and his wife, Inez Elizabeth Hurley, then and thereby suffered fatal injuries.

"8. That said aircraft was not as expressly and impliedly warranted by the defendant, but was in fact defective, not airworthy, and unsafe for flight and use in the manner and for the purpose for which it was intended and designed in that the left wing thereof as designed, constructed, and assembled, was not properly and securely fastened or attached to the fuselage * * *."

Count II of plaintiffs' complaint, the negligence action, recites the following as the essential allegations of negligence: incorporates by reference as rhetorical paragraph 6, rhetorical paragraph 7 from count I, quoted supra; and repeats verbatim, with the exception of replacement of the breach of implied warranty allegation with a negligence allegation, as rhetorical paragraph 7 of count II, the language of rhetorical paragraph 8 of count I, quoted supra.

At a pre-trial conference, plaintiffs were required to amend count II to make rhetorical paragraph 7 more specific. The paragraph was amended to allege in substance that defendant was (a) negligent in the design of the aircraft in that the wing attachment bolts were loaded in tension; (b) negligent in manufacture through a partial stripping or weakening of the nut and bolt assembly by over-torquing; (c) negligent in the assembly through over-torquing the nut and bolt assembly and failure to inspect and test the assembly; (d) negligent in selling a defective and unsafe product; (e) negligent in securing the wing to the fuselage through weakening the nut and bolt assembly by over-torquing and providing less than the designed strength. At the court's request, (d) was made more specific by alleging as particulars, (a), (b), (c), and (e).

Until the amendment of count II, there was an identity of factual allegations between counts I and II. The only substantive difference between the counts lay in their respective theories of action. Reading the original count I and amended count II together, it is clear that the defect in the aircraft alleged in count I is the same defect which was particularized in amended count II. Proof of the same defect was essential to recovery under either theory of the complaint.

On the question of the particular structural defect involved in both theories of action, the trial court made the following relevant findings at the conclusion of the trial on the negligence action:

"26. * * *. Each of the four nut and bolt assemblies attaching the left wing to the carry through structure had a maximum torque applied in installation of not to exceed 2300 inch pounds. The threads on each of the bolts and in each of the nuts used in attaching such left wing were not stripped or sheared and were not weakened. Such nut and bolt attachments were properly attached and would withstand the designed positive and negative load limits of the plane in question.

"27. The torquing of the nuts and bolts referred to in item 26 did not partially strip, or shear, or otherwise weaken any one of the nut and bolt assemblies attaching the left wing to the carry through structure of the plane below the designed strength and security of each nut and bolt.

"* * *.

"29. The aircraft in question as actually assembled and sold by defendant was not dangerous, as alleged in count two of plaintiffs\' complaints, to the lives of the intended users thereof."

According to these findings, the particular defect in the aircraft on which the negligence action was tried did not exist. Further, according to general finding 29, the aircraft was not found to have been dangerous to the lives of the intended users, as...