Pease v. Beech Aircraft Corp.
| Decision Date | 05 April 1974 |
| Citation | 113 Cal.Rptr. 416,38 Cal.App.3d 450 |
| Court | California Court of Appeals Court of Appeals |
| Parties | Dawn PEASE et al., Plaintiffs, Respondents and Appellants, v. BEECH AIRCRAFT CORPORATION, Defendant, Appellant and Respondent. Civ. 11323. |
There are involved here cross-appeals by the respective plaintiffs in five different actions consolidated for trial, and by the single defendant against which judgment was entered in those five actions.
All five actions arose out of the crash and destruction of an aircraft manufactured by defendant Beech Aircraft Corporation (Beech). In that crash Roy W. Gregory, Jr., pilot of the airplane, and his passengers, Donald Pease, Gaylord Warnick and Calvin Martin Evelhoch, were killed.
The plaintiffs in four of the actions were heirs respectively of the four named decedents; plaintiff in the fifth action was Fletcher Jones, doing business as Westerly Stud Farms, owner of the aircraft, who had purchased it new from Norm Larson Beechcraft (Larson), distributor for the manufacturer.
Jones and the estate of Gregory had also been defendants in the Pease, Warnick and Evelhoch actions until dismissed as mentioned hereafter.
The airplane crashed at the Fullerton airport on June 25, 1968 at approximately 1:27 p.m.
In a jury trial in the Superior Court of Orange County, verdicts against Beech were returned on June 4, 1971 in the following amounts in favor of:
There was a verdict in favor of Pacific Indemnity Company, a workmen's compensation carrier for Pease's employer, which had paid a death benefit on Pease. There was a verdict in favor of Larson, which had been made a defendant.
The trial court, on August 23, 1971, granted Beech's motion for new trial as to each of the awards of punitive damages on the ground there had been error in instructing the jury, and on the ground the damages were excessive. The court granted a new trial as to the award of compensatory damages as to each of the four sets of heirs upon the latter ground, unless those plaintiffs would accept reductions in the following amounts respectively:
Pease heirs $ 500,000
Evelhoch heirs 750,000
Warnick heirs 90,000
Gregory heirs 1,250,000
The motions for new trial were denied as to all other grounds urged.
On August 25, 1971, the trial court filed a specification of its reasons for holding the damages excessive. On the same day, each of the four sets of heirs filed a written consent to a reduction of damages in the amount specified by the court.
Beech has appealed from the judgments, from an order denying its motion for judgment notwithstanding the verdict, and from the order fixing the amounts of the reductions consented to by plaintiff heirs.
Each set of plaintiffs has appealed from the order granting a new trial as to punitive damages, and from the conditional order granting or denying a new trial.
The determinative issues presented by Beech's appeal are these:
1. Was there substantial evidence to support a verdict imposing liability upon Beech?
Subordinate to that issue are the claims the verdicts imposing liability for compensatory damages were the result of a wrongful interjection of the issue as to punitive damages based upon alleged fraud; that it cannot be determined from the verdict for compensatory damages whether it was based upon a finding of fraud or upon strict products liability; and that an erroneous instruction as to the elements of fraud necessarily vitiated all the verdicts.
2. If none of the decedents had a cause of action that survived his death, could there be an award of punitive damages in favor of his heirs?
3. Was there substantial evidence upon which an award of punitive damages could be made in favor of any of the plaintiffs?
4. May punitive damages be awarded against a corporation?
5. Was it error not to inform the jury that agreements had been made between Jones and the administratrix of the Gregory estate on one side, and on the other side the Pease heirs, the Evelhoch heirs and the Warnick heirs, by which each of those three latter sets of heirs agreed to give dismissals, not to be construed or considered as retraxits, of their respective causes of action against Jones and the Gregory estate in consideration of the promise of the two latter, in the event recovery from Beech did not equal amounts stipulated as to each set of heirs respectively, to pay the respective deficiencies up to the total of the amounts respectively stipulated.
The cross-appeals from the order granting new trial require resolution of these issues:
(a) Whether there was error in the jury instruction on fraud which justified setting aside the awards of punitive damages on that ground.
(b) Whether the plaintiffs may appeal from an order conditionally granting a new trial unless remittiturs are consented to, when such remittiturs have been consented to.
Because of our holding as to certain of the issues it has become unnecessary to deal with the questions whether there was error in permitting the plaintiffs to amend their complaints to add causes of action for fraud, and after verdict to amend the prayers for punitive damages to equal the amounts of the verdicts; whether in granting a new trial as to punitive damages and a conditional new trial as to compensatory damages, the trial court's specifications of reasons were sufficient to satisfy the statutory requirement.
As to the time and cause of the deaths of Gregory, Pease, Warnick and Evelhoch, it was stipulated 'they died as a result of this accident and in this accident.'
The crash of the airplane as the last incident in the following sequence:
On the day of the crash, Gregory picked up the airplane at the Fullerton airport in order to flight-test newly installed radio equipment. On board the airplane for the test flight with Gregory were: Pease (a radio mechanic of Aviation Communications (Aviation)), Warnick (owner and operator of Aviation), and Evelhoch.
At approximately 1:13 p.m., the aircraft was cleared by the FAA ground controller at the Fullerton airport to taxi from the Aviation radio shop to runway 24 in preparation for takeoff.
At 1:19 p.m. Gregory was told by the air traffic controller at the airport to hold short of the runway. Three minutes later the air traffic controller told Gregory to taxi into position on the runway and hold. Some seconds later Gregory was cleared for takeoff. Gregory then made a ground turn to the left, in order to align himself properly with adjacent runway 24, and proceeded down the runway in a westerly direction.
During acceleration down the runway (while the airplane was still on the ground), unusual engine sounds were heard coming from the craft, which were described as 'pops', 'erratic sounds,' 'abnormal or different sounds,' and 'interruptions in power.' Gregory continued his takeoff, although he appeared to settle back toward the runway after initial liftoff, and barely cleared a six-foot chainlink fence at the west end of the runway. The airplane then made a gradual climb to approximately 300 to 400 feet above the ground, then made a slow shallow turn toward the north (a right turn) and climbed to an altitude of 600 to 700 feet, at which point the right wing dipped (a maneuver which indicated another attempted right turn). Shortly thereafter the airplane went into a spin to the right and spun to the ground.
The aircraft was of a model called the Beechcraft Baron. Jones ordered it in a telephone call in April 1968 to Larson, with which he had done business before; at the same time he ordered a Beechcraft Debonair airplane, which was delivered some time before the Baron. Gregory at that time was the chief pilot for Computer Sciences Corporation (Computer), a corporation of which Jones was chief executive officer and board chairman. Gregory had been employed as a pilot by Computer for four and one-half or five years. During that period he had flown Beechcraft Queenairs, a Baron twin-engine aircraft, as well as other Beechcraft equipment. Jones also had flown a Baron.
On May 17, 1968, Beech completed the Beechcraft Baron airplane, model 95-B55, serial $TC1101, registered with FAA under the number N8442N, and so informed Jones. Gerald Forston, an employee of Larson, took over the airplane at the Beech factory in Wichita, Kansas and flew it to California. When Forston obtained the airplane it had three hours of flying time behind it.
Forston flew the aircraft on local flights in Southern California before its delivery to Jones, and on one such occasion experienced a failure of the left engine. At that time the propeller-feathering mechanism on the left engine did not operate...
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