Northwest Airlines v. Glenn L. Martin Company

• Decision Date: 18 April 1958
• Docket Number: Civ. No. 9518.
• Citation: 161 F. Supp. 452
• Parties: NORTHWEST AIRLINES, Inc., a Minnesota corporation v. The GLENN L. MARTIN COMPANY, a Maryland corporation.
• Court: U.S. District Court — District of Maryland

161 F. Supp. 452

NORTHWEST AIRLINES, Inc., a Minnesota corporation v. The GLENN L. MARTIN COMPANY, a Maryland corporation.

Civ. No. 9518.

United States District Court D. Maryland.

April 18, 1958.

Arthur W. Machen, Jr., Baltimore, Md., and Francis D. Butler, St. Paul, Minn. (Joseph France of Venable, Baetjer & Howard, Baltimore, Md., Craig Spangenberg, of Harrison, Spangenberg & Hull, Cleveland, Ohio, and Doherty, Rumble & Butler, St. Paul, Minn., on the brief), for plaintiff.

J. Gilbert Prendergast & Benjamin C. Howard, Baltimore, Md. (Edward D. Crocker and Victor DeMarco, Cleveland, Ohio; Clark, Smith & Prendergast and Miles & Stockbridge, Baltimore, Md.; Arter, Hadden, Wykoff & Van Duzer, and Jones, Day, Cockley & Reavis, Cleveland, Ohio, on the brief), for defendant.

R. DORSEY WATKINS, District Judge.

The Glenn L. Martin Company (Martin), defendant, has moved for summary judgment in its favor in a two-claim cause of action brought by Northwest Airlines, Inc. (Northwest) on the ground that the action was not commenced within time limited by law for the commencement thereof, and that there was in dispute no issue of fact.

Northwest is a common carrier by air. Martin was and is in the business of producing airplanes for sale to common carriers by air, such as Northwest. On August 31, 1946, Northwest and Martin entered into a contract for the manufacture by Martin and the sale to and purchase by Northwest of certain airplanes, including No. 44, the one in controversy. Said contract contained specific provisions with respect to warranties under the caption "Warranty by Martin". Under this section, Martin warranted "all parts, accessories and equipment of each airplane and all spare parts delivered hereunder against failure, under normal use, due to (i) defects in material or workmanship furnished by Martin, (ii) defects arising from Martin's selection of material or process of manufacture, and (iii) defects inherent in design." The warranty section also contained the following pertinent provisions:

"(c) With respect to failures due to defective workmanship or material or due to improper selection of material or process of manufacture, Martin's liability under this warranty is limited to the repair or replacement of any part, accessory or equipment which shall have failed, upon submission of reasonable proof that the failure was due to a matter embraced within Martin's warranty hereunder and upon the return of the defective item, with all shipping charges prepaid, either to Martin's factory at Middle River, Maryland, or if that not be feasible, to a point on NWA's system or to such other place as may be agreeable to Martin and NWA, within six (6) months or two thousand (2,000) flight hours, whichever shall first expire, after delivery of the airplane or spare part to NWA. With respect to failures due to defects inherent in design, Martin's liability under this warranty is limited to the correction, in all the airplanes and spare parts embodying such defective design, of all such defects which shall have become apparent within one (1) year or three thousand (3,000) flight hours, whichever shall first expire, but not less than eight (8) months after the delivery of the airplane or spare part involved. Martin shall make all such repairs, replacements and corrections promptly in order that the airplanes involved may not be kept out of service longer than necessary.

"(d) The warranty set forth in this Section 20 is in lieu of all other warranties, express or implied, arising by law or otherwise; and shall not be extended, altered or varied except by Change Order as hereinabove in Section 9 provides.

"(e) Nothing contained in this Contract, however, shall relieve Martin from liability imposed on it by law for its negligence, if any, in the production or delivery of the items covered by this Contract, provided, however, that the damages recoverable in such case by NWA, or anyone claiming through NWA, shall be limited to (i) damages sustained on account of bodily injuries (including death) and physical injury to or destruction of property, and (ii) damages due to loss of use of (but not to loss of revenue or profits from) each airplane physically injured or destroyed."

On November 8, 1947, plane No. 44 was delivered by Martin to Northwest and accepted by Northwest. On August 29, 1948, plane No. 44 crashed near Fountain City, Wisconsin, causing the death of all passengers and crew. On April 14, 1949, Northwest (later joined by Northwest's insurers) commenced an action against Martin for recovery of damages for the destruction of plane No. 44; for workmen's compensation benefits paid for the death of the crew of plane No. 44; and for loss of use of other planes grounded by Northwest after the loss of plane No. 44.

Between May 24, 1949 and August 24, 1950, claims were made and actions were brought by representatives of passengers on plane No. 44 against Northwest and Martin. From December 28, 1954 to June 29, 1956, settlements of these claims and actions were made by Northwest, with the full knowledge of Martin. Such settlements discharged all liability of Martin to the representatives of the deceased passengers with whom such settlements were made.

On March 4, 1957, the present suit was filed by Northwest against Martin. The gravamen of the complaint, containing two causes of action, is alleged negligence on the part of Martin in the production of the airplanes manufactured by it and sold to plaintiff, Northwest, and particularly No. 44, by reason of which said airplane was not suitable for regular passenger service. The complaint contains specific allegations of negligence not here important. The complaint further alleges the bringing of actions in the State of Ohio by the representatives of deceased passengers against Northwest and Martin "jointly or severally for damages resulting from the death of such passengers" and the settlement thereof. "Such settlements were made without any admission that Northwest knew or had reason to know of the defects in the airplane furnished to it by defendant, or that Northwest was in any way negligent * * *."

The complaint further alleges that the amounts in settlement were made in good faith and were reasonable amounts and "discharged all liability of Martin to the representatives of the deceased passengers who were plaintiffs in such actions."

The first cause of action is for the recovery by way of indemnity of the sum of $232,750, representing the amounts paid by Northwest in settlement, with interest from the dates of payment and costs of suit. The second cause of action is based upon the theory that "the negligence of defendant heretofore alleged contributed to the loss of" airplane No. 44 and the death of all the passengers therein. It seeks the recovery of $116,375 or one-half the total settlement figures with interest upon one-half of each settlement from the date of payment, and costs of the suit.

The parties are in agreement that the applicable period of limitations is the three year statute of the forum, Maryland, as embodied in the Annotated Code of Maryland, Article 57, Sec. 1; and see Mandru v. Ashby, 1908, 108 Md. 693, 695, 71 A. 312.¹

The instant suit was commenced on March 4, 1957, more than nine years after delivery by Martin of plane No. 44 to Northwest; eight and one-half years after the loss of that plane with the death of the passengers and crew; nearly eight years after institution of suit by Northwest against Martin with respect to damages for the destruction of plane No. 44, workmen's compensation benefits with respect to the crew of that plane and for loss of use of other grounded planes; six and one-half years after the filing of the last suit by representatives of decedent passengers in plane No. 44; but within three years of the earliest settlement of any of such death actions.

Martin contends that Northwest's causes of action accrued prior to the settlements effected in 1954, 1955 and 1956. Northwest contends that the causes of action asserted in the instant case did not accrue until Northwest had discharged by payment a primary liability of Martin entitling Northwest to indemnification; or until Northwest, by payment, had discharged more than its proportionate share of the common liability of Northwest and Martin and thereby became entitled to contribution.

Martin claims that granting of its motion for summary judgment is required by Judge Chesnut's decision in this court in New Amsterdam Casualty Co. v. Baker, D.C.D.Md.1947, 74 F.Supp. 809. In that case, the Casualty Company had insured a retailer which had been sued by a customer for damages sustained from an allegedly defective fire-hazardous bathrobe, sold by the retailer to the customer. The Casualty Company settled this suit, and then as subrogee brought an action against Baker, the manufacturer, who had sold the robe in question, along with many others, to the insured retailer. The suit was not for indemnity or contribution, but expressly for breach of the manufacturer's implied warranty of fitness. The suit was brought within one year after settlement of the purchaser's claim, but more than three years after the sale from the manufacturer to the retailer, the sale by the retailer to the customer, and the customer's injuries. A motion was filed to dismiss on the grounds of limitation.

The court found no controlling Maryland decision, and therefore reviewed the general law, which it assumed would be followed by the Maryland Court of Appeals. While expressing sympathy with the contention of plaintiff that limitations with respect to breach of an implied warranty should run only from the time that the ultimate damages are ascertained, the court found the general rule to be that limitations on an implied warranty ran from the breach of warranty, whether or not the damages were then ascertained, or ascertainable. It therefore sustained the defense of limitations, and dismissed the...