Avco Corporation, Textron Lycoming Reciprocating Engine Division of Avo Corporation and Specialty Heat Treat, Inc. v. Interstate Southwest, Ltd

CourtCourt of Appeals of Texas
DecidedMay 4, 2004
Docket14-03-01099-CV
StatusPublished

This text of Avco Corporation, Textron Lycoming Reciprocating Engine Division of Avo Corporation and Specialty Heat Treat, Inc. v. Interstate Southwest, Ltd (Avco Corporation, Textron Lycoming Reciprocating Engine Division of Avo Corporation and Specialty Heat Treat, Inc. v. Interstate Southwest, Ltd) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Avco Corporation, Textron Lycoming Reciprocating Engine Division of Avo Corporation and Specialty Heat Treat, Inc. v. Interstate Southwest, Ltd, (Tex. Ct. App. 2004).

Opinion

Reversed and Rendered and Opinion filed May 4, 2004

Reversed and Rendered and Opinion filed May 4, 2004.

In The

Fourteenth Court of Appeals

____________

NO. 14-03-01099-CV

AVCO CORPORATION, TEXTRON LYCOMING RECIPROCATING ENGINE DIVISION OF AVCO CORPORATION, and SPECIALTY HEAT TREAT, INC., Appellants

V.

INTERSTATE SOUTHWEST, LTD., Appellee

On Appeal from the 278th District Court

Grimes County, Texas

Trial Court Cause No. 29,385

O P I N I O N


This is an accelerated appeal from a temporary anti-suit injunction obtained by the plaintiff below, Interstate Southwest Ltd. (AISW@), enjoining two of the defendants below, AVCO Corporation and Textron Lycoming Reciprocating Engine Division of AVCO Corporation (collectively ALycoming@), from prosecuting two suits that they filed in PennsylvaniaCone at law and one at equityCagainst three corporate affiliates of ISW:  Interstate Forging Industries (AIFI@), Citation Wisconsin, LLC, and Citation Corporation.  Finding that the trial court abused its discretion in granting the injunction, we reverse the court=s order and dissolve the injunction.

Background

Lycoming manufactures pistonBdriven aircraft engines.  Under a Master Supply Agreement (Athe MSA@), signed in 1995, IFI agreed to supply all of the rough forgings Lycoming required for making crankshafts for the engines.  It is undisputed that the forgings have always been produced in Navasota, Texas.  Originally, the forging facility was operated as IFI=s Southwest Division.  ISW contends that in October 1996, it was formed as a Texas limited partnership.[1]  IFI then sold its Southwest Division to ISW under a ABill of Sale and Assignment Assumption Agreement.@  Thus, according to ISW, it has been the sole producer of Lycoming=s rough forgings since 1996.  IFI allegedly ceased to produce forgings as of that time and, in 2002, was converted into Citation Wisconsin, a holding company, which is also a defendant in the Pennsylvania cases.  Lycoming maintains that it did not learn of the assignment until some point in 2002.

Beginning in 1999, crankshafts in Lycoming engines began to fail.  In 2002, the Federal Aviation Administration mandated a recall of Lycoming engines to replace the defective crankshafts.  Lycoming blames IFI=s forging process for the defects, and IFI and ISW blame Lycoming=s design specifications.  On October 14, 2002, Lycoming and ISW entered into a Replacement Crankshaft Production Agreement for the production of crankshafts to fulfill the recall requirements.


On May 2, 2003, ISW filed suit in Grimes County, Texas, alleging claims against Lycoming for business disparagement and breach of contract and seeking declaratory relief regarding the rights and obligations of the parties under the MSA.  Specifically, ISW claimed that Lycoming=s public statements regarding the cause of the crankshaft failures injured ISW=s reputation and that Lycoming breached the MSA by failing to pay for certain crankshafts.  ISW further requested declaratory judgment that ISW was entitled to indemnity from Lycoming and that ISW was not obligated to indemnify Lycoming.

On May 22, 2003, Lycoming initiated suit in Pennsylvania against IFI, Citation Wisconsin, and Citation Corporation.[2]  Ultimately, Lycoming brought two actions against these entities: an action at law seeking over $75 million in damages allegedly incurred as a result of the recall, and an action in equity requesting injunctive relief to force IFI to continue producing crankshafts under the MSA.  In the damages action, Lycoming also alleged that Citation breached the MSA by causing its subsidiary, ISW, to file the Texas action in violation of a mediation clause.[3]  Lycoming initially requested that the Pennsylvania court direct Citation to have ISW dismiss the Texas action pending mediation, but this request was subsequently withdrawn.

On May 23, 2003, a day after filing the Pennsylvania praecipe, Lycoming answered in the Texas litigation, asserting that ISW lacked standing to bring suit under the MSA because IFI, not ISW, was the signatory.  On June 24, ISW filed an amended petition in the Texas lawsuit, claiming that IFI had assigned all of its rights and obligations under the MSA to ISW and that ISW was attorney-in-fact for IFI on all matters pertaining to the MSA.  The amended petition further requested a declaratory judgment that the assignment was valid.

On June 12, 2003, the parties to the Pennsylvania litigation entered into, and the judge signed, an Agreed Order for Preliminary Injunction, requiring IFI, Citation Wisconsin, and Citation Corporation to continue to produce all crankshaft forgings ordered by Lycoming. 

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Avco Corporation, Textron Lycoming Reciprocating Engine Division of Avo Corporation and Specialty Heat Treat, Inc. v. Interstate Southwest, Ltd, Counsel Stack Legal Research, https://law.counselstack.com/opinion/avco-corporation-textron-lycoming-reciprocating-en-texapp-2004.