Rolls-Royce v. Spirit Airlines, Inc.

• Decision Date: 28 February 2018
• Docket Number: No. 4D17–1215,4D17–1215
• Parties: ROLLS–ROYCE, PLC, a foreign profit corporation, Appellant, v. SPIRIT AIRLINES, INC., a Florida Corporation, Rolls–Royce Corporation, a foreign corporation, Rolls–Royce North America, Inc., a foreign profit corporation, IAE International Aero Engines AG, a foreign profit entity, Pratt & Whitney, a division of United Technologies Corporation, a foreign profit corporation, Appellees.
• Court: Florida District Court of Appeals

239 So.3d 709

ROLLS–ROYCE, PLC, a foreign profit corporation, Appellant,

v.SPIRIT AIRLINES, INC., a Florida Corporation, Rolls–Royce Corporation, a foreign corporation, Rolls–Royce North America, Inc., a foreign profit corporation, IAE International Aero Engines AG, a foreign profit entity, Pratt & Whitney, a division of United Technologies Corporation, a foreign profit corporation, Appellees.

No. 4D17–1215

District Court of Appeal of Florida, Fourth District.

[February 28, 2018]

Stephanie G. Kolman, J. Thompson Thornton, and Clayton W. Thornton of Clyde & Co US, LLP, Miami, for appellant.

Eric D. Griffin, Jr. and Juan R. Serrano of Griffin & Serrano, P.A., Fort Lauderdale, for appellee Spirit Airlines, Inc.

ON MOTION FOR REHEARING, MOTION FOR REHEARING EN BANC AND REQUEST FOR WRITTEN OPINION

KUNTZ, J.

Rolls–Royce, PLC moves for rehearing directed to our opinion affirming the circuit court's denial of its motion to dismiss for lack of personal jurisdiction. We agree that the court erred by denying its motion without holding an evidentiary hearing to resolve disputed issues of fact. As a result, we grant the motion for rehearing in part, withdraw our prior opinion, and substitute this opinion in its place. In our holding, we reverse the court's order denying the motion to dismiss and remand for further proceedings.

Background

Around twenty minutes after Spirit Airlines Flight 165 departed Dallas/Fort Worth International Airport for Hartsfield–Jackson Atlanta International Airport, one of the Airbus A319's engines exploded. Using its other engine, the A319 safely returned to Dallas without injury to any passengers or crew.

Spirit filed a lawsuit in the Broward County Circuit Court relating to the explosion, naming Rolls–Royce Corporation, Rolls–Royce North America, Rolls–Royce, PLC,¹ IAE International Aero Engines AG, and Pratt & Whitney, a division of United Technologies Corporation, as defendants. In its complaint, Spirit asserted claims of negligence and gross negligence against the three Rolls–Royce entities, gross negligence against IAE, and gross negligence against Pratt & Whitney.

In 2012, Rolls–Royce performed major repairs and alterations on the engine at issue, including "removal, inspection and replacement of various components of the Engine's turbine as well as a restoration and refurbishment of the Engine's hot section." After the repairs, the engine was delivered to Spirit in Fort Lauderdale for "installation on the number one position—on the left side—of one of Spirit's Airbus A319, identified as Aircraft Registration No. N516NK."

Spirit also alleged that Rolls–Royce "took a $200 million share of the Spirit Airlines order of the V2500–model engine," stating that this shows Rolls–Royce "actually participated to the tune of $200 million dollars in the business component of Spirit's utilizing the V2500 model engine in its Florida operation."

Rolls–Royce moved to dismiss for lack of personal jurisdiction. Attached to the motion to dismiss was an affidavit of Will Morris, the Chief Counsel, Civil Aerospace, for Rolls–Royce. Within the affidavit, Mr. Morris stated that Rolls–Royce is organized under the laws of the United Kingdom, has its principal place of business in the United Kingdom, and maintains all of its corporate records in the United Kingdom.

Mr. Morris stated that Rolls–Royce did not design, manufacture, or sell the subject engine; Rolls–Royce is not a shareholder, member, or participant in IAE, nor a party to any contract between IAE and Spirit; and Rolls–Royce did no work on the subject engine or subject aircraft in Florida. Mr. Morris also stated that IAE and Rolls–Royce entered into an agreement, to which Spirit was not a party, under which Rolls–Royce would conduct V2500 engine repairs at Rolls–Royce's engine repair facility in East Kilbride, United Kingdom.

Under Rolls–Royce's contract with IAE, IAE had Spirit deliver the subject engine to Rolls–Royce's "East Kilbride repair facility for a scheduled restoration shop visit." Mr. Morris stated that any funds Rolls–Royce received for work done on the subject engine were from IAE and not Spirit. As for Spirit's allegation that Rolls–Royce "took a $200 million share of Spirit Airlines order of the V2500–model engine," Mr. Morris stated that the allegation is based on an ownership interest in IAE that Rolls–Royce sold—and sold before any of the events alleged in Spirit's complaint.

Spirit responded to Rolls–Royce's motion to dismiss, attaching various documents. Spirit separately filed an affidavit of Jim Baumiller, Spirit's Director of Engineering and Technical Support. Mr. Baumiller stated that when Spirit evaluated the V2500 engine for use and began operating the V2500 engine, Rolls–Royce held around a one-third interest in IAE. He stated that "[a]s far as Spirit is concerned, at all times during my tenure, [Rolls–Royce] repaired, maintained and overhauled the majority of V2500 engines operated by Spirit in its Florida-based operation."

Mr. Baumiller asserted that "this Engine was serviced, inspected and critical components overhauled by" Rolls–Royce, and that "after service, inspection and overhaul, [Rolls–Royce] delivered the Engine directly from the UK to Spirit in Florida." He also stated that "along with the Engine, [Rolls–Royce] delivered the written records and certifications of the servicing, inspections and overhauls performed by [Rolls–Royce]. The records were delivered directly to Spirit in Florida." Finally, Mr. Baumiller provided information relating to four other engines repaired by Rolls–Royce, and ultimately delivered to Spirit.

In reply, Rolls–Royce filed an affidavit of Alan Kelly, the Customer Business Manager for Rolls–Royce V2500, BR710, and TAY engines. Mr. Kelly stated that he is personally familiar with Rolls–Royce's contract with IAE and with Rolls–Royce's "role in providing service to certain components" of Spirit's V2500 series engines. Rolls–Royce sold its interest in IAE in mid-2012, however, continued to provide service to IAE under an agreement he states is "customarily referred to as the Common Maintenance Center Agreement or ‘CMC Agreement.’ " Pursuant to that CMC Agreement, Rolls–Royce performed work on engines for IAE, including engines owned by airlines with which IAE had "Fleet Hour Agreements."

A Fleet Hour Agreement, he explained, works in concert with the CMC Agreement. Under the Fleet Hour Agreement, IAE's customers notify IAE when an engine requires service, and Rolls–Royce has "no involvement whatsoever" in the process. IAE then directs its customer, the airline, to ship the engine to one of the facilities that IAE has a CMC Agreement with for service to the engine. Rolls–Royce operates one of those facilities, the facility in the United Kingdom.

Spirit and IAE, according to Mr. Kelly, entered into a Fleet Hour Agreement in April 2005, "pursuant to which IAE agreed to manage a select number of Spirit Airlines' V2500 engines." Under that agreement, IAE designated the specific engine to be shipped to Rolls–Royce for "planned/convenience purposes." Rolls–Royce was not involved in IAE selecting its facility to service this engine and "had no role in the transport or shipment of the engine to the United Kingdom." After Rolls–Royce completed the work on the subject engine, and after "it [was] fully reassembled, it [was] placed back on the engine stand which is the property of the airline, and covered in the airline engine bag." Rolls–Royce then notifies IAE that the engine is available for release.

Finally, Mr. Kelly stated that Rolls–Royce "does not pay for, coordinate, or arrange for the return shipment of engines delivered to it pursuant to IAE's arrangements as described above. Rather, pursuant to the CMC Agreement ... IAE and/or its agent is directly responsible for coordinating the return of the engine to IAE's customer, who in this case was Spirit Airlines." He also disputed Mr. Baumiller's assertion that Rolls–Royce directly delivered the accompanying paperwork to Spirit in Florida. Instead, Mr. Kelly stated that Rolls Royce released the records to a representative of IAE "who took custody and possession of the engine and placed it on a lorry at the loading dock of [Rolls–Royce] in East Kilbride, Great Britain."

After the briefing was complete, the circuit court held a hearing. Spirit conceded that it was only requesting that the court exercise specific personal jurisdiction over Rolls–Royce. After the hearing, the court asked counsel to submit proposed orders on the motion and later rendered an order denying Rolls–Royce's motion to dismiss. Rolls–Royce timely appealed the court's order.

Analysis

We review a court's order denying a motion to dismiss for lack of personal jurisdiction de novo . NHB Advisors, Inc. v. Czyzyk , 95 So.3d 444, 447 (Fla. 4th DCA 2012).

Whether a Florida court has personal jurisdiction over a non-resident defendant involves a two-step inquiry. Venetian Salami Co. v. Parthenais , 554 So.2d 499, 502 (Fla. 1989). First, the court must determine whether the complaint alleges sufficient jurisdictional facts to bring the action within Florida's long-arm statute.² Id. If the plaintiff has met its burden in the first step, the court must determine whether sufficient "minimum contacts" are shown between the non-resident defendant and Florida to satisfy due...