Gulfstream Aerospace Services Corp. v. United States Aviation Underwriters, Inc.

635 S.E.2d 38, 280 Ga. App. 747, 2006 Fulton County D. Rep. 2454, 2006 Ga. App. LEXIS 942
CourtCourt of Appeals of Georgia
DecidedJuly 27, 2006
DocketA06A0660
StatusPublished
Cited by4 cases

This text of 635 S.E.2d 38 (Gulfstream Aerospace Services Corp. v. United States Aviation Underwriters, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gulfstream Aerospace Services Corp. v. United States Aviation Underwriters, Inc., 635 S.E.2d 38, 280 Ga. App. 747, 2006 Fulton County D. Rep. 2454, 2006 Ga. App. LEXIS 942 (Ga. Ct. App. 2006).

Opinion

Bernes, Judge.

A used airplane caught fire during flight and sustained signifiant damage. Appellees commenced this tort action and alleged that ppellant negligently inspected the airplane’s maintenance logbooks n two separate occasions prior to the fire. Appellant moved for ummary judgment on appellees’ tort claims, contending that the [748]*748Utah economic loss doctrine barred the claims as a matter of law. The trial court declined to grant summary judgment in favor of appellant and denied appellant’s motion for reconsideration. Thereafter, the trial court granted a certificate for immediate review, and this Court granted the application. For the reasons discussed below, we affirm in part and reverse in part.

On appeal from the denial of summary judgment, “we view the evidence and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant.” (Citation and footnote omitted.) Snellgrove v. Hyatt Corp., 277 Ga. App. 119, 119-120 (625 SE2d 517) (2006). So viewed, the record reflects that a 1989 Gulfstream-IV business airplane was damaged as a result of a fire that ignited in its left engine in March 1999. Appellees (plaintiffs below) are the owners and operators of the damaged airplane — Wm. Wrigley Jr. Company and its aircraft division, Zeno Air, Inc. — and the airplane’s insurer, United States Aviation Underwriters, Inc. (“USAU”). Appellant (defendant below) is Gulfstream Aerospace Services Corporation f/k/a K-C Aviation, Inc. (“GASC”), which performed certain repair and inspection work on the airplane before the fire. GASC is a subsidiary of Gulfstream Aerospace Corporation (“Gulfstream”), the manufacturer of the airplane that issued certain airplane service bulletins at issue in this case.1

Service Bulletins Generally. Gulfstream issues three kinds of service bulletins to its customers regarding safety concerns, upgrades, and/or needed modifications to its airplanes. First, Gulf-stream issues Customer Bulletins (“CB”) to inform customers that a particular airplane part, system, or component is not fully performing as expected or potentially may create an unsafe condition. Compliance with all CBs is mandatory. Second, for problems that might pose an increased safety risk, Gulfstream issues Alert Customer Bulletins (“ACB”), which require action to correct an identified safety problem within a shorter period of time than CBs. Third, Gulfstream issues Aircraft Service Changes (“ASC”) when it develops a modification or upgrade for any parts or components on an airplane. An ASC may be optional, recommended, or mandatory.2

[749]*749By law, an airplane owner or operator must maintain a record of maintenance performed on the airplane. See 14 CFR § 91.417 (a). Accordingly, when an airplane owner or operator complies with a particular safety bulletin, the airplane’s logbooks must be annotated to reflect compliance. See id. Subsequent owners, operators, and maintenance personnel rely on the logbook entries in order to determine whether previous service bulletins have been complied with and thus to determine what kind of work needs to be performed on an airplane. To encourage complete and accurate disclosure in airplane logbooks, penalties exist to punish inaccurate or otherwise misleading logbook entries. See 14 CFR § 13.14.

The 1995 Service Bulletins. In 1995, Gulfstream discovered that the alternator feeder cable and hydraulic pump pressure line in the engine compartment of certain G-IV aircraft (which includes the airplane now owned by appellees) were prone to possible chafing. Accordingly, Gulfstream issued two service bulletins: (1) Alert Customer Bulletin No. 17 (“ACB 17”) and (2) Aircraft Service Change No. 372 (“ASC 372”). ACB 17 mandated a one-time inspection for the chafing condition and specifically required compliance with ASC 372. In turn, ASC 372 required the installation of clamps on the alternator feeder cable to eliminate chafing.

At the time the service bulletins were issued, the airplane was owned by a third party, Dresser Industries. On January 12, 1996, Dresser recorded in the airplane’s logbooks that it had complied with ACB 17. The licensed aircraft mechanic who performed the procedure for Dresser indicated in the aircraft logbook that there was “no chafing noted” on either the left or right engine alternator feeder cables. However, Dresser apparently did not comply with ASC 372; the anti-chafing clamps required by ASC 372 were never installed on the airplane.

K-C Aviation, Inc.’s 1997 Logbook Review. In 1997, a subsidiary of Wm. Wrigley Jr. Company purchased the used airplane. As a condition of sale, Wrigley arranged for a pre-purchase evaluation of the airplane by K-C Aviation, Inc. at the latter’s Dallas facility. To accomplish the evaluation, the parties entered into a Proposal for Work (the “Proposal”). The Proposal included a two-page document entitled “AIRCRAFT PREPURCHASE WAIVER OF LIABILITYAND ALL EXPRESS AND IMPLIED WARRANTIES” (the ‘Waiver Agreement").

Under the Proposal, K-C Aviation agreed to conduct certain inspections and evaluations of the airplane and its components, including a "Record Review Evaluation." Specifically, Paragraph 3.1 ~f the Proposal stated that K-C Aviation would "Perform a Prepurchase Records Review including . . . Customer Bulletins and I\ircraft Service Changes."

[750]*750In July 1997, K-C Aviation carried out its inspection and evaluation of the airplane and issued its “Aircraft Evaluation” report. The report included a section addressing the results of K-C Aviation’s review of the airplane’s logbooks for compliance with service bulletins. The report stated that there was “[n]o record of compliance” with CBs 71, 81 A, 82, and 83. By not including ACB 17 in the noncompliance list, the report correctly reflected that the airplane’s logbooks showed that there had been compliance with ACB 17. The report, however, did not include ASC 372 in the noncompliance list.

Gulfstream Appleton’s 1998 Logbook Review. A year and a half later, in December 1998, appellee Zeno Air asked Gulfstream Appleton to perform certain repair and inspection work on the airplane at the latter’s Wisconsin facility. Before the work was conducted, the parties entered into a “Work Authorization” contract. The Work Authorization did not mention or refer to any review of the airplane’s logbooks that would be conducted. Although the Work Authorization did not mention a review of the logbooks, the invoice prepared by Gulfstream Appleton after completing its repair and inspection work states that it “performed AD & CB research” and forwarded the results to Zeno Air. An “Aircraft Services Changes Research List” produced by Gulfstream Appleton during discovery suggests that the logbooks also were reviewed for compliance with over 30 different ASCs, including ASC 372.

The 1999 Fire. On March 13, 1999, as the airplane was in flight over Utah, a fire broke out in the airplane’s left engine, requiring the pilot to make an unscheduled landing in Colorado. No one was injured as a result of the fire or subsequent landing; however, the airplane itself was damaged and required significant repairs.

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635 S.E.2d 38, 280 Ga. App. 747, 2006 Fulton County D. Rep. 2454, 2006 Ga. App. LEXIS 942, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gulfstream-aerospace-services-corp-v-united-states-aviation-underwriters-gactapp-2006.