Pacific Indemnity Co. v. McDermott Brothers Co.

336 F. Supp. 963, 10 U.C.C. Rep. Serv. (West) 604, 1971 U.S. Dist. LEXIS 12555
CourtDistrict Court, M.D. Pennsylvania
DecidedJuly 6, 1971
DocketCiv. A. 68-166
StatusPublished
Cited by9 cases

This text of 336 F. Supp. 963 (Pacific Indemnity Co. v. McDermott Brothers Co.) is published on Counsel Stack Legal Research, covering District Court, M.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pacific Indemnity Co. v. McDermott Brothers Co., 336 F. Supp. 963, 10 U.C.C. Rep. Serv. (West) 604, 1971 U.S. Dist. LEXIS 12555 (M.D. Pa. 1971).

Opinion

OPINION

MUIR, District Judge.

Before the Court is Plaintiff’s Motion for a New Trial on certain issues and Judgment in favor of the Plaintiff as to other issues.

This action arose from an airplane accident on January 13, 1966, near Green River, Wyoming, 1 and the only issues at trial concerned the locus of ultimate liability for the aircraft damaged in the crash.

Defendant McDermott Brothers Company (“McDermott Brothers”) sold a large piece of equipment to Defendant Allied Chemical Corporation (“Allied”) for use in conjunction with a mine owned and operated by Allied near Green River, Wyoming. Under the sales agreement between Allied and McDermott Brothers, the latter was to furnish customer service in the form of an engineer to inspect the equipment prior to initial operation. On January 12, 1966, John J. McGee, President and General Manager of McDermott Brothers, and Alvin Cunningham, an employee of Third-Party Defendant Hauck Manufacturing Company, left Pennsylvania for the Allied Chemical plant at Green River in a 1962 Cessna Skynight 320, N5707X, aircraft piloted by McGee, to fulfill the customer service provisions of the sales contract with Allied. At about noon on January 13, McGee landed the plane at Rock Springs, Wyoming, and telephoned the Allied Chemical plant approximately 45 miles away for directions *966 and information concerning the availability of a landing strip or suitable substitute for one near the Allied facility. An Allied employee, Gordon French, informed McGee that on occasion planes had landed near the plant on part of an abandoned East-West roadway. Leaving Rock Springs, McGee obtained a weather report and flew to the plant site on the directions of French. When the plane appeared over the proposed landing site, French, who had positioned himself at the point of intersection of the abandoned East-West roadway and a new unfinished North-South highway, waved to McGee. After a low pass over a portion of the new, graded, unpaved North-South highway, McGee brought the plane down on the North-South roadway. As the craft taxied down the strip, a gust of wind carried it slightly off course and the pilot opted to finish the landing off the highway. The plane taxied across unimproved land until it struck an irregularity in the East-West roadway and was damaged.

Pacific Indemnity Company, which insured the airplane, was substituted as Plaintiff for Continental Aircraft Sales, its insured, in an action against Mc-Dermott Brothers and McGee for negligence in piloting the aircraft and against Allied Chemical Corporation for negligence of Allied’s employee, French, in suggesting an unsuitable landing site. Joining Hauck Manufacturing Company (“Hauck”) as Third-Party Defendant, Allied alleged that Hauck and McDermott Brothers were engaged in a joint venture and that, by virtue of this connection, the alleged negligence of McGee is imputable to Hauck.

Trial of this case was bifurcated. The issues of liability were submitted to the jury on twelve special interrogatories. The jury was able to agree to answers to all but one question. 2

The jury’s special findings included factual determinations that McGee was negligent, but that his negligence was “slight,” that McDermott Brothers’ possession of the Cessna aircraft on the date of the accident was for the mutual benefit of McDermott Brothers and Continental Aircraft, Plaintiff’s insured, that Allied’s employee French was not negligent, and that Pacific Indemnity insured the plane for the benefit of Continental Aircraft Sales on the date of the accident.

Although the jury left unanswered the interrogatory relating to causal connection between McGee’s “slight” negligence and the accident, their findings nevertheless supply the basis for the legal inferences that neither McDermott Brothers nor Allied Chemical Corporation is liable to Plaintiff for damage to the plane; in Pennsylvania, a mutual benefit bailee is liable for damage to the bailed property caused by the bailee’s negligence only where such negligence is “ordinary” or “gross.” See, Cody v. Venzie, 263 Pa. 541, 546, 107 A. 383 (1919); Moon v. First National Bank of Benson, 287 Pa. 398, 402, 135 A. 114 (1926); 5 Pennsylvania Law Encyclopedia, Bailment, §§ 10-13. Here, the jury found that McGee’s negligence was “slight,” and did not rise to the level of “ordinary” negligence. (The jury’s special verdict is attached hereto.)

MOTION FOR NEW TRIAL

The Plaintiff’s position is that the jury’s special finding that Hauck and McDermott’s status at the time of the accident was that of joint venture is sound and should be preserved at a retrial of the issues of negligence and causation with respect to McDermott Brothers. This view is predicated upon the assumption that a new trial is required on these issues. Plaintiff assigns seven grounds for its Motion for a New Trial.

1. Admission of Insurance Policy Between Pacific Indemnity Company and McDermott Brothers. A written insurance contract between *967 Pacific Indemnity and McDermott Brothers was admitted into evidence over the objection of Plaintiff that the policy was irrelevant because it did not cover the damaged aircraft.

At trial, the testimony disclosed that the policy was purchased by McDermott Brothers to insure a twin-engine Beech-craft 641E airplane, which McDermott Brothers had purchased from Continental Aircraft Sales. As part of the sale, Continental was to take the Cessna aircraft as a trade-in and before delivery modify the new Beecheraft to meet McDermott Brothers' specifications. Since Continental was not in a financial position to undertake the costly modifications of the Beecheraft without assistance, Mc-Dermott Brothers agreed to transfer title to the Cessna prior to delivery of the Beecheraft to enable Continental to mortgage the Cessna and obtain sufficient capital to go ahead with modification of the Beecheraft. According to McGee’s testimony, under the agreement, McDermott Brothers was to retain possession of the Cessna for use in its business until modification of the Beecheraft was completed. At trial, McDermott Brothers and McGee advanced the theory that one part of the Continental-MeDermott Brothers transaction was the oral agreement that Continental would purchase insurance for the Cessna which would cover McDermott Brothers’ use in the interim and that McDermott Brothers would purchase insurance on the new Beecheraft, which remained in possession of Continental. Plaintiff assigns as error the admission of the latter insurance policy, which it contends was irrelevant. The document in question was an insurance policy written after the date of the accident; under its terms coverage commenced prior to the date of the accident. Defendants offered it to prove the terms of the transaction between Continental Aircraft, Plaintiff’s insured, and Mc-Dermott Brothers, and for that purpose it was relevant.

2. Failure of Jury to Answer Proximate Cause Interrogatory. The fact that the jury did not return an answer to Question #4 of the Special Interrogatories relating to causal connection, vel non,

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336 F. Supp. 963, 10 U.C.C. Rep. Serv. (West) 604, 1971 U.S. Dist. LEXIS 12555, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pacific-indemnity-co-v-mcdermott-brothers-co-pamd-1971.