Prichard Enters., Inc. v. Adkins
| Decision Date | 14 March 2012 |
| Docket Number | No. 5:10-CV-274-D,5:10-CV-274-D |
| Court | U.S. District Court — Eastern District of North Carolina |
| Parties | PRICHARD ENTERPRISES, INC., Plaintiff, v. BOBBY R. ADKINS, Defendant. |
On October 9, 2006, Prichard Enterprises, Inc. ("Prichard Enterprises" or "plaintiff") bought a 1975 Cessna SkyMaster airplane from Bobby R. Adkins ("Adkins" or "defendant") for $ 132,500. Prichard Enterprises is unhappy with the purchase and wants to either rescind the transaction and get its money back or to recover damages. The main dispute between the parties centers on the meaning of "airworthy condition" in a warranty contained in the sales contract On May 28, 2010, Prichard Enterprises sued Adkins in the Superior Court of Wake County, North Carolina [D.E. 1-2]. On July 2,2010, Adkins removed the case to this court. On August 2, 2011, following discovery, Adkins filed a motion for summary judgment and a supporting memorandum [D.E. 34-35]. Prichard Enterprises responded in opposition [D.E. 36], and defendant replied [D.E. 38]. As explained below, the plane was in "airworthy condition" when Adkins sold it. Thus, Adkins did not breach the warranty, and the court grants Adkins's motion for summary judgment.
Prichard Enterprises is a Nevada corporation and its sole shareholder and employee is Terry Prichard ("Prichard"). Compl. [D.E. 2-1] ¶¶ 1,12; Def.'s Mem. Supp. Mot. Summ. J. [D.E. 35] 2. In 2006, Prichard became interested in purchasing an aircraft for business and recreational purposes.Def.'s Mem. Supp. Mot. Summ. J., Ex. 1 ("Prichard Dep.") 10, 18. To minimize his personal tax liability, Prichard planned to purchase the aircraft through Prichard Enterprises. Id. IS.
Prichard focused his interest on Cessna SkyMasters, which are twin-engine, propeller aircrafts with four seats, a pressurized cabin, and retractable landing gear. Id. 18; Def.'s Mem. Supp. Mot. Summ. J., Ex. 2 ("Adkins Dep.") 13, 37-38. Prichard believed mat SkyMasters had good range, and had many of the flying characteristics of single-engine aircraft. Prichard Dep. 18. In the late 1980s, Prichard became licensed to fly single-engine aircraft. See id. 16. However, he planned to purchase a SkyMaster, have a friend and twin-engine-licensed pilot, Tim Sorrells ("Sorrells"), teach him to fly the twin-engine aircraft, and then attain a twin-engine pilot's license from the Federal Aviation Administration ("FAA"). Id. 18-20. According to Prichard, Sorrells is a commercially-licensed pilot who is employed by United Parcel Service to fly 747 aircraft. Id. 28. Sorrells is not a licensed aircraft mechanic. Pl.'s Mem. Opp'n Mot. Summ. J., Ex. A ("Prichard Aff.") ¶ 5.
Adkins is a resident of Dublin, Virginia. In 2006, he owned a Cessna SkyMaster aircraft that he was looking to sell ("plane" or "aircraft"). See Adkins Dep. 30. Adkins wanted to sell the plane because it did not have de-icing capabilities on its wing and tail surfaces, hindering his routine low-altitude flights to the northeastern United States. Id. Adkins estimated that he flew the plane approximately fifty or sixty hours during the one year that he owned it. Id 79. He used the plane for personal travel, often carrying family members as passengers. Id 79-80. Adkins intended to and did replace the plane with an almost identical model that had increased de-icing capabilities. Id. 37-38.
In 2006, through third-party broker Bill Crews ("Crews"), Prichard contacted Adkins about purchasing the plane. Id 49. During pre-sale conversations, Prichard arranged to have Sorrellsinspect the plane. Prichard Dep. 26-29. Prichard requested through Crews that Adkins allow Sorrells to visually inspect the plane, review the logbooks, and fly the aircraft. Id.; Prichard Aff. ¶ 4. Through Crews, Adkins agreed to these requests and the parties scheduled Sorrells's inspection for a date in October 2006. See Adkins Dep. 49.1 On the agreed-upon date, Sorrells arrived at the Rowan County, North Carolina Airport where the aircraft was hangared, and found that the plane could not be flown that day because mechanics were performing routine maintenance on its avionics system. See Prichard Dep. 26; Prichard Aff. ¶¶ 6-7. Unable to perform a test flight, Sorrells conducted a "walk around" examination of the plane's exterior and interior and reviewed the plane's logbooks. Prichard Dep. 26-28; Prichard Aff. ¶ 8.
Prichard then contracted with the maintenance shop of the Rowan County Airport to inspect the plane. Bove Aff. ¶ 8; see Prichard Dep. 55-56. Bove, a maintenance shop employee and certified airframe and powerplant ("A&P") mechanic with an FAA Inspection Authorization ("IA"), performed the inspection on the same day as Sorrells's inspection. See Bove Aff. ¶¶ 2, 8. Bove was familiar with the plane. In fact, in May 2006, Bove had performed the FAA-required annual inspection of the aircraft pursuant to a contract between his employer and Adkins. See id. ¶¶ 4-6.2In the May 2006 inspection, Bove "complied with all airworthiness directives from the FAA" and performed the inspection pursuant to the Cessna-provided maintenance manual and checklist. Id. ¶ 5: see id., Ex. A ("May 2006 Inspection Checklist"). Thus, Bove inspected "the battery, battery box, and battery cables; propeller governor cables and controls; internal combustion heater; engines; and every other system or part in the aircraft required for an airworthiness certification." Bove Aff. ¶ 5. After the May 2006 inspection, Bove informed Adkins of thirty-five mechanical problems and proposed remedial measures for them. Id. ¶ 6: see id. Ex. B ("May 2006 Invoice"). Adkins instructed Bove to perform all of the proposed remedial measures. Bove Aff. ¶ 6. Upon completing these repairs, Bove certified the aircraft as airworthy. Id. ¶ 7; see id. Ex. C ("May 2006 Logbook Entry").
Bove's October 2006 inspection for Prichard revealed a few minor mechanical problems, which Bove reported to Prichard. Bove Aff. ¶ 8; see October 2006 Invoice - Prichard; Bove Aff., Ex. E ("October 2006 Inspection Notes"). In his report, Bove proposed remedial measures for the identified problems. See October 2006 Invoice - Prichard. At Adkins's expense, Bove then completed all but one of the proposed remedial measures. Bove Aff. ¶ 9; id., Ex. F ("October 2006 Invoice - Adkins"). Bove did not replace a worn cowling door at this time, because a "worn cowling [door] is a minor issue that in no way affects [an] aircraft's airworthiness." Bove Aff. ¶ 9. During the October 2006 inspection, Bove "saw no issues whatsoever that affected the aircraft's airworthiness . . . ." Id. ¶ 10. Bove believes that "the aircraft was airworthy when [he] completed the pre-purchase inspection and repairs." Id Bove made such assurances to Sorrells at that time. See Prichard Dep. 27; Prichard Aff. ¶ 8. Sorrells then reported to Prichard that, although Sorrells had not been able to fly the plane as planned, he did not discover anything about the plane that caused him concern. See Prichard Dep. 28; Prichard Aff. ¶ 9.
Based in part on Sorrells's and Bove's inspections, Prichard decided to have Prichard Enterprises purchase the plane. See Prichard Dep. 29, 56; Prichard Aff. ¶ 10. On October 9, 2006, Adkins and Prichard Enterprises signed a contract in which Prichard Enterprises agreed to purchase the 1975 Cessna SkyMaster, Model 1337G-P from Adkins for $132,500. Def.'s Mem. Supp. Mot. Summ. J., Ex. 5 ("Purchase Agreement") ¶¶ 1-2. In the purchase agreement, Adkins expressly warranted that "the Aircraft is in airworthy condition . . . ." Id. ¶6. This was the only warranty or specific representation about the plane's condition that Adkins made to Prichard Enterprises. Prichard Dep. 54; see also Purchase Agreement ¶ 6.
On the sale date, Adkins, Prichard, and Sorrells met at a Charlotte, North Carolina airport. Compl. ¶ 12; Prichard Dep. 63. Adkins then flew the plane (with Prichard and Sorrells as passengers) to the Rowan County Airport. Compl. ¶12; Prichard Dep. 63. Prichard had not ridden in or flown the plane before this flight. Prichard Dep. 63. When Adkins and Prichard landed at the Rowan County Airport, they finalized the contract, and Adkins departed on a different plane. See Compl. ¶ 12; Prichard Dep. 63.
The following day, Crews met Prichard and Sorrells at the Rowan County Airport to give them "kind of an orientation ride . . . ." Prichard Dep. 64. However, when Crews attempted take-off, the plane began to shudder and vibrate, causing Crews to abort the flight. Id. 64-65. Prichard called Adkins, who informed Prichard that it was common for SkyMasters to shudder in the way that Prichard experienced, and that a pilot could minimize such shuddering by applying back pressure on the yoke. See id. 65-66. Prichard then spoke with Bove, who stated that a wheel imbalance caused the shuddering and that such an imbalance was common on SkyMasters. Id. In subsequent flights, Prichard's pilots took Adkins's advice and the shuddering did not recur. Id.
On December 5,2006, Sorrells flew the plane, with Prichard as a passenger, from the Rowan County Airport to Dallas, Texas, stopping to refuel in Little Rock, Arkansas. Id. 19-20; Def.'s Mem. Supp. Mot. Summ. J., Ex. 6 ( ) ¶ 7. The following day, Sorrells flew the plane to Little Rock, leaving Prichard in Dallas. See Prichard Dep. 19-20; Pl.'s Am. Interr. Ans. ¶ 7. Before each of these flights, Sorrells performed a walk around inspection of the plane and examined the plane's logbook, as required by FAA regulations. Prichard Dep. 92-93; see 14 C.F.R. § 91.7.
Prichard planned to hangar the plane in Little Rock, where Sorrells lived. Prichard Dep. 19-20. Prichard was to fly to Little Rock on a routine basis in order to receive lessons from Sorrells on flying the twin-engine aircraft. See id. However, Sorrells developed health problems soon thereafter and was unable to provide the lessons. Id. As a result, the plane sat in the Little Rock hangar and was not...
To continue reading
Request your trial