Management Catalysts v. Turbo West Corpac, Inc.

809 P.2d 487, 119 Idaho 626, 1991 Ida. LEXIS 32
CourtIdaho Supreme Court
DecidedMarch 5, 1991
Docket17794
StatusPublished
Cited by9 cases

This text of 809 P.2d 487 (Management Catalysts v. Turbo West Corpac, Inc.) is published on Counsel Stack Legal Research, covering Idaho Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Management Catalysts v. Turbo West Corpac, Inc., 809 P.2d 487, 119 Idaho 626, 1991 Ida. LEXIS 32 (Idaho 1991).

Opinions

BAKES, Chief Justice.

Plaintiff appellants Management Catalysts (M.C. Leasing), Transtector Systems (Transtector), and Richard Odenburg and Frank Honorof brought suit against defendant respondents Turbo West Corpac (Turbo), Piper Acceptance Corporation (Piper Accep.), and Piper Aircraft (Piper Air). Plaintiffs sought damages for economic loss arising out of the purchase of an allegedly defective airplane. Plaintiffs’ initial complaint claimed breach of contract, breach of warranty, misrepresentation, and violation of the Idaho Consumer Protection Act.

On December 9, 1983, M.C. Leasing and the individual appellants entered into a contract for the purchase of a Cheyenne IIIA aircraft (002) from Turbo, an authorized dealer of Piper Air. Piper Air manufactured 002. The contract contained a condition that 002 would be leased back to Piper Air for a 90-day period. The contract also contained a general disclaimer of warranties, except an express limited warranty for 360 days or 1000 flight hours, whichever occurred first. Turbo assigned its rights under the contract to Piper Accep. M.C. Leasing and the individual appellants then leased 002 to Transtector.

On June 22, 1984, on a flight from Rapid City to Coeur d’Alene, the pilots of 002 experienced some control problems which resulted in a loss of elevation and pitch oscillations, allegedly traumatizing both pilots and passengers alike. The pilots took several defensive measures, including disengaging the autopilot, which seemed to correct the problem, and continued to Coeur d’Alene without further incident.

On June 25, 1984, Turbo put together a team composed of Turbo mechanics, a Piper autopilot expert, and several engineers to investigate the incident. Representatives of appellants denied the Turbo team access to 002. Appellants denied access to 002 because Mr. Honorof claimed that Piper and its representatives had allegedly falsified documents and committed perjury in previous litigation and had been sanctioned therefor.

On July 6, 1984, appellants served a document on Piper Air purporting to revoke acceptance of 002. On July 11, 1984, this action was commenced by appellants by the filing of a 7-count complaint alleging, inter alia, breach of warranties, violation of the Consumer Protection Act, revocation of contract and rescission of contract. After [628]*628the complaint was filed, Piper obtained a discovery ruling finally allowing it to inspect 002.

In the meantime, Transtector ceased to use 002 and obtained use of an alternative aircraft while Piper’s inspections took place. On October 5, 1984, Piper and Turbo inspected 002 and concluded that it contained no defects and that the earlier incident was caused by pilot error. In February, 1985, 002 was flown to California for further separate testing by Transtector to determine what caused the earlier flight problems. The diagnosis from Transtector’s testing was that 002’s control cables froze in flight; the cause of the freezing was unknown. Piper and Turbo insisted that 002 was airworthy and, based on these assertions, Transtector put the aircraft back into service in July, 1985.

On October 31, 1985, Transtector employees were returning from Milwaukee on the aircraft. It had sat in the rain for several hours prior to flight. On the return home, at approximately 28,000 feet, the pilots again lost control of the elevator and rudder control, which had frozen up. Again the plane suffered a loss of altitude that was not cured until the plane dropped below freezing level. An accumulation of water apparently caused the blockage of certain drain holes that in turn caused the controls to freeze. After this incident, Transtector again refused to use 002.

On January 2, 1986, appellants filed an amended complaint adding claims based on negligence and gross negligence. On August 11, 1987, the trial court issued an order regarding cross motions for summary judgment in which the trial court dismissed plaintiffs’ claims for negligence and gross negligence on the basis that only economic loss was sought and, hence, could not be recovered in tort.

On April 7,1988, the trial court issued an additional order granting partial summary judgment in favor of the defendants. This order dismissed all of Transtector’s claims against Piper Aircraft and further dismissed M.C. Leasing’s and the individual appellants’ breach of contract and warranty claims against Piper Aircraft. The above dismissals were based upon a lack of privity between the parties. On June 30, 1988, the trial court issued a clarifying order reaffirming its dismissal of all appellants’ breach of contract and breach of warranty claims against Piper Aircraft and dismissing Transtector’s breach of contract and breach of warranty claims against Turbo and Piper Acceptance. Again, the basis for these dismissals was a lack of privity.

On July 22, 1988, at a pretrial conference, the trial court advised the parties that the issue of whether Piper’s express limited warranty failed of its essential purpose was alive and well and, to that extent, the April 4, 1988, order granting summary judgment was modified.

Jury trial on the remaining claims commenced on August 15, 1988, and went to the jury on September 7, 1988. The issues submitted to the jury upon special interrogatories were (1) fraudulent misrepresentation as to airworthiness of 002; (2) failure of the essential purpose of Piper’s express limited warranty; (3) breach of warranties as to Transtector contained in the Transtector-Piper lease; and (4) violation of the Consumer Protection Act. The jury returned its verdict in favor of Piper Aircraft and the other defendants. The court entered judgment on the verdict and awarded attorney fees and costs based upon I.C. § 12-120, I.C. § 12-121, and I.R.C.P. 54(e)(4).

Appellants raise the following issues on appeal: (1) whether the trial court erred in dismissing various plaintiffs’ claims for breach of contract and for breaches of express and implied warranties for lack of privity; (2) whether the trial court’s evidentiary rulings denied plaintiffs a fair trial; and (3) whether the trial court erred in awarding attorney fees to defendants.

Regarding the dismissal of appellants’ claims of breach of implied warranties for lack of privity, the record reveals that Piper Aircraft did extend an express limited warranty to appellants. That warranty provided essentially that Piper would repair or replace defective parts for a period of 360 days or 1000 flight hours, whichever occurred first. The express warranty pro[629]*629vided by its terms that it was exclusive and disclaimed all other warranties, express or implied. The U.C.C. expressly provides that the parties may contract away all or a part of express or implied warranties. I.C. § 28-2-316; Glenn Dick Equipment Co. v. Galey Constr., Inc., 97 Idaho 216, 541 P.2d 1184 (1975).

The issue of whether Piper complied with the express limited warranty, or whether the warranty failed of its essential purpose, was tried to the jury below. The parties presented evidence on that issue and the jury was instructed that: “To prove a breach of Piper Aircraft Corporations express limited warranty, plaintiffs ... must establish” (list of elements for recovery), and also that, “If you find that plaintiffs have proven each element, then you must find in favor of said plaintiffs and against Piper Aircraft Corporation.” Further, the jury was instructed that:

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Management Catalysts v. Turbo West Corpac, Inc.
809 P.2d 487 (Idaho Supreme Court, 1991)

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Bluebook (online)
809 P.2d 487, 119 Idaho 626, 1991 Ida. LEXIS 32, Counsel Stack Legal Research, https://law.counselstack.com/opinion/management-catalysts-v-turbo-west-corpac-inc-idaho-1991.