Cessna Aircraft Company v. Avior Technologies, Inc.

990 So. 2d 532, 2008 Fla. App. LEXIS 8456, 2008 WL 2356676
CourtDistrict Court of Appeal of Florida
DecidedJune 11, 2008
Docket3D07-299
StatusPublished
Cited by8 cases

This text of 990 So. 2d 532 (Cessna Aircraft Company v. Avior Technologies, Inc.) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cessna Aircraft Company v. Avior Technologies, Inc., 990 So. 2d 532, 2008 Fla. App. LEXIS 8456, 2008 WL 2356676 (Fla. Ct. App. 2008).

Opinion

990 So.2d 532 (2008)

CESSNA AIRCRAFT COMPANY, Appellant,
v.
AVIOR TECHNOLOGIES, INC., et al., Appellees.

No. 3D07-299.

District Court of Appeal of Florida, Third District.

June 11, 2008.
Rehearing and Rehearing En Banc Denied September 4, 2008.

*534 Knoblock, Kim, Coxhead & Penton and John S. Penton, Jr., Miami; Diaz Reus Rolff & Targ and Carlos F. Gonzalez, for appellant.

Kluger, Peretz, Kaplan & Berlin and Andrew P. Gold, Miami, and Dianne O. Fischer; Joel S. Perwin, for appellees.

Before COPE and SALTER, JJ., and SCHWARTZ, Senior Judge.

SALTER, J.

Cessna Aircraft Company appeals a jury verdict and final judgment awarding $5,414,619 to Avior Technologies and Avtech Executive Flight Center for breach of contract, negligence, professional negligence, and negligently supplying false information for the guidance of others. Avtech cross-appeals a remittitur of its contract damages against Cessna to $60,567 based on a written limitation of liability provision. We find that the economic loss rule applies to the tort claims and therefore reverse the trial court's judgment on those counts. We affirm the lower court's order for remittitur on Avtech's breach of contract claim against Cessna.

The Aircraft and Repair Efforts

Avior was the owner of a 1978 Cessna Citation II jet aircraft ("Aircraft"). Avior also owned, through subsidiaries, an FAA-licensed[1] air charter company and Avtech, an FAA-licensed aircraft maintenance and service center. The companies operated together at an airport in Georgia. Michael Nearing owned all of the stock of Avior, served as president of Avior and Avtech, and controlled each of them. The air charter company contracted with third parties for flights aboard the Aircraft. These flights generated revenue to pay debt and insurance on the Aircraft, insurance, salaries, and other expenses.

In April 1999, the Aircraft suffered damage while being towed from its hangar to the tarmac. The Aircraft was flown to Cessna's service center in Kansas for repair, and Cessna filled out a service order for the work. The service order, signed by an authorized representative of Avtech, contained a limitation of liability provision: "Cessna obligation, under any warranty which may be applicable, is limited to repair *535 or replacement of defective parts and/or workmanship." The service order also contained a representation by the signator "that he has full authority to bind the owner or operator of the Cessna Citation Aircraft described herein and authorizes the services described herein to be performed." The owner of the Aircraft, Avior, never disclaimed that representation or the binding effect of the terms within that service order (and later service orders on the same printed form). To the contrary, Nearing used Avior letterhead to fax his concerns about the repairs to Cessna, and Avior paid Cessna for those charges that were not covered by an insurer.

The Aircraft was initially with Cessna from April to August 1999. After completion of the repairs necessitated by the tug accident, Cessna noted problems with a loss of pressurization during flight and reported this to the Avior or Avtech representatives.[2] Because Avior or Avtech had previously scheduled to have the Aircraft repainted at another location, the Aircraft was removed from the Cessna service center and taken to the paint facility in early August 1999.

Avtech attempted to solve the pressurization problem at its own facility. After several months of unsuccessful effort, Avtech also found fuel leaks from the wing into the belly of the Aircraft. A representative of Cessna visited Avtech's facility in Georgia in late December 1999, and the Aircraft was then flown back to Cessna's service center in Kansas. Another service order, containing the same printed terms as the initial service order, was signed by Avtech's maintenance employee on December 22, 1999. The handwritten "services requested" were "evaluate fuel leak & repair." Cessna did further work and the Aircraft was returned to service in mid-January 2000.

On February 17, 2000, Nearing wrote a letter (on Avtech letterhead) to a representative of Cessna to thank him "for your help in resolving our pressurization/leakage problems on [the Aircraft]." Nearing noted that "the aircraft has been back in service now for almost three weeks without any grounding leaks."

On April 25, 2000, however, fuel was once again discovered in the belly of the Aircraft and it was returned to the Cessna service facility. Cessna concluded that the Aircraft had suffered an overload or a hard landing during its extensive operation (some 22 years, at that point). A series of delays followed while Avior's insurer evaluated the problems with the Aircraft and the anticipated costs of repair. Nearing asked Cessna for assurances that it could repair the fuel leak, and Cessna reported that it could only make such assurances if it replaced the wings on the Aircraft. The insurer refused to pay for that expense, ascribing the problem to wear and tear, and Cessna therefore did not proceed with the wing replacement.

One of the two mortgage-holders on the Aircraft, Gibraltar Bank, commenced an action to foreclose its second lien on the Aircraft in August 2000. The other mortgage-holder, *536 Textron, then foreclosed its first lien.[3] Avior and Avtech brought third-party claims in the foreclosure action to seek recoveries from Cessna and the insurers.

Avior and Avtech (but, as previously noted, identified by the single defined term "Avior" in each count against Cessna) asserted claims for breach of contract, negligence, professional negligence, and negligently providing false information for the reliance of others. Cessna argued at various stages of the proceedings that the economic loss rule precluded the tort claims. Cessna moved for directed verdict on Avior's contract claim and Avtech's negligence claim. The trial court granted both motions, but allowed a jury to hear all of Avior's tort claims and Avtech's contract claim. Following the jury's award of damages to Avior and Avtech in the full amount described by Avior's damages witness,[4] Cessna moved for remittitur on Avtech's contract claim. The motion was granted. This appeal and cross-appeal followed.

The Breach of Contract Claims

The service orders executed between Cessna and Avtech (for itself and Avior) contain a provision limiting Cessna's liability, a standard remedy limitation under the Uniform Commercial Code. See § 672.719, Fla. Stat. (1999); Metro. Dade County v. Worsham Bros., 563 So.2d 1107, 1108 (Fla. 3d DCA 1990).[5] Avtech and Avior have held themselves out to be agent and principal, respectively, throughout the underlying litigation, and whatever claims Avtech may have had were assigned to Avior in any event.

But having alleged in the Fourth Amended Complaint, and having argued in opposition to Cessna's motion to the directed verdict, that Avior was in contractual privity with Cessna, Avior now asserts that Cessna's argument was well taken (there was no Avior-Cessna contract) and that Cessna is estopped to rely on the limitation of damages provision as to Avior. We disagree.

The law of agency is as flexible as the inconsistent positions taken by the parties over the course of the litigation. Avtech as agent could (and did) bind Avior as principal to the terms of the service order. Avtech could bring suit in its own name for the benefit of Avior if authorized by Avior, or Avior could bring such an action in its own name.

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990 So. 2d 532, 2008 Fla. App. LEXIS 8456, 2008 WL 2356676, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cessna-aircraft-company-v-avior-technologies-inc-fladistctapp-2008.