Prichard Enterprises, Inc. v. Adkins

858 F. Supp. 2d 576, 77 U.C.C. Rep. Serv. 2d (West) 23, 2012 WL 874682, 2012 U.S. Dist. LEXIS 34180
CourtDistrict Court, E.D. North Carolina
DecidedMarch 14, 2012
DocketNo. 5:10-CV-274-D
StatusPublished
Cited by10 cases

This text of 858 F. Supp. 2d 576 (Prichard Enterprises, Inc. v. Adkins) is published on Counsel Stack Legal Research, covering District Court, E.D. North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Prichard Enterprises, Inc. v. Adkins, 858 F. Supp. 2d 576, 77 U.C.C. Rep. Serv. 2d (West) 23, 2012 WL 874682, 2012 U.S. Dist. LEXIS 34180 (E.D.N.C. 2012).

Opinion

ORDER

JAMES C. DEVER III, Chief Judge.

On October 9, 2006, Prichard Enterprises, Inc. (“Prichard Enterprises” or “plaintiff”) bought a 1975 Cessna SkyMaster airplane from Bobby R. Adkins (“Adkins” or “defendant”) for $132,500. Prichard Enterprises is unhappy with the purchase and wants to either rescind the transaction and get its money back or to recover damages. The main dispute between the parties centers on the meaning of “airworthy condition” in a warranty contained in the sales contract On May 28, 2010, Prichard Enterprises sued Adkins in the Superior Court of Wake County, North Carolina [D.E. 1-2]. On July 2, 2010, Adkins removed the case to this court. On August 2, 2011, following discovery, Adkins filed a motion for summary judgment and a supporting memorandum [D.E. 34-35]. Prichard Enterprises responded in opposition [D.E. 36], and defendant replied [D.E. 38]. As explained below, the plane was in “airworthy condition” when Adkins sold it. Thus, Adkins did not breach the warranty, and the court grants Adkins’s motion for summary judgment.

I.

Prichard Enterprises is a Nevada corporation and its sole shareholder and employee is Terry Prichard (“Prichard”). Compl. [D.E. 2-1] ¶¶1, 12; Def.’s Mem. Supp. Mot. Summ. J. [D.E. 35] 2. In 2006, Prichard became interested in purchasing an aircraft for business and recreational purposes. Def.’s Mem. Supp. Mot. Summ. J., Ex. 1 (“Prichard Dep.”) 10, 18. To minimize his personal tax liability, Prichard planned to purchase the aircraft through Prichard Enterprises. Id. 15.

Prichard focused his interest on Cessna SkyMasters, which are twin-engine, propeller aircrafts with four seats, a pressurized cabin, and retractable landing gear. Id. 18; Def.’s Mem. Supp. Mot. Summ. J., Ex. 2 (“Adkins Dep.”) 13, 37-38. Prichard believed that SkyMasters had good range, and had many of the flying characteristics of single-engine aircraft. Prichard Dep. 18. In the late 1980s, Prichard became licensed to fly single-engine aircraft. See id. 16. However, he planned to purchase a SkyMaster, have a friend and twin-engine-licensed pilot, Tim Sorrells (“Sorrells”), teach him to fly the twin-engine aircraft, and then attain a twin-engine pilot’s license from the Federal Aviation Administration (“FAA”). Id. 18-20. According to Prichard, Sorrells is a commercially-licensed pilot who is employed by United Parcel Service to fly 747 aircraft. Id. 28. Sorrells is not a licensed aircraft mechanic. Pl.’s Mem. Opp’n Mot. Summ. J., Ex. A (“Prichard Aff.”) ¶ 5.

Adkins is a resident of Dublin, Virginia. In 2006, he owned a Cessna SkyMaster aircraft that he was looking to sell (“plane” or “aircraft”). See Adkins Dep. 30. Adkins wanted to sell the plane because it did not have de-icing capabilities on its wing and tail surfaces, hindering his routine low-altitude flights to the northeastern United States. Id. Adkins estimated that he flew the plane approximately fifty or sixty hours during the one year that he owned it. Id. 79. He used the plane for personal travel, often carrying family members as passengers. Id. 79-80. Adkins intended to and did replace the plane with an almost identical model that had increased de-icing capabilities. Id. 37-38.

In 2006, through third-party broker Bill Crews (“Crews”), Prichard contacted Adkins about purchasing the plane. Id. 49. During pre-sale conversations, Prichard [579]*579arranged to have Sorrells inspect the plane. Prichard Dep. 26-29. Prichard requested through Crews that Adkins allow Sorrells to visually inspect the plane, review the logbooks, and fly the aircraft. Id.; Prichard Aff. ¶ 4. Through Crews, Adkins agreed to these requests and the parties scheduled Sorrells’s inspection for a date in October 2006. See Adkins Dep. 49.1 On the agreed-upon date, Sorrells arrived at the Rowan County, North Carolina Airport where the aircraft was hangared, and found that the plane could not be flown that day because mechanics were performing routine maintenance on its avionics system. See Prichard Dep. 26; Prichard Aff. ¶¶ 6-7. Unable to perform a test flight, Sorrells conducted a “walk around” examination of the plane’s exteri- or and interior and reviewed the plane’s logbooks. Prichard Dep. 26-28; Prichard Aff. ¶ 8.

Prichard then contracted with the maintenance shop of the Rowan County Airport to inspect the plane. Bove Aff. ¶ 8; see Prichard Dep. 55-56. Bove, a maintenance shop employee and certified airframe and powerplant (“A & P”) mechanic with an FAA Inspection Authorization (“LA”), performed the inspection on the same day as Sorrells’s inspection. See Bove Aff. ¶¶ 2, 8. Bove was familiar with the plane. In fact, in May 2006, Bove had performed the FAA-required annual inspection of the aircraft pursuant to a contract between his employer and Adkins. See id. ¶¶ 4-6.2 In the May 2006 inspection, Bove “complied with all airworthiness directives from the FAA” and performed the inspection pursuant to the Cessna-provided maintenance manual and checklist. Id. ¶ 5; see id., Ex. A (“May 2006 Inspection Checklist”). Thus, Bove inspected “the battery, battery box, and battery cables; propeller governor cables and controls; internal combustion heater; engines; and every other system or part in the aircraft required for an airworthiness certification.” Bove Aff. ¶ 5. After the May 2006 inspection, Bove informed Adkins of thirty-five mechanical problems and proposed remedial measures for them. Id. ¶ 6; see id., Ex. B (“May 2006 Invoice”). Adkins instructed Bove to perform all of the proposed remedial measures. Bove Aff. ¶ 6. Upon completing these repairs, Bove certified the aircraft as airworthy. Id. ¶ 7; see id., Ex. C (“May 2006 Logbook Entry”).

Bove’s October 2006 inspection for Prichard revealed a few minor mechanical problems, which Bove reported to Prichard. Bove Aff. ¶ 8; see October 2006 Invoice — Prichard; Bove Aff., Ex. E (“October 2006 Inspection Notes”). In his report, Bove proposed remedial measures for the identified problems. See October 2006 Invoice — Prichard. At Ad[580]*580kins’s expense, Bove then completed all but one of the proposed remedial measures. Bove Aff. ¶ 9; id., Ex. F (“October 2006 Invoice-Adkins”). Bove did not replace a worn cowling door at this time, because a “worn cowling [door] is a minor issue that in no way affects [an] aircraft’s airworthiness.” Bove Aff. ¶ 9. During the October 2006 inspection, Bove “saw no issues whatsoever that affected the aircraft’s airworthiness....” Id. ¶ 10. Bove believes that “the aircraft was airworthy when [he] completed the pre-purchase inspection and repairs.” Id. Bove made such assurances to Sorrells at that time. See Prichard Dep. 27; Prichard Aff. ¶ 8. Sorrells then reported to Prichard that, although Sorrells had not been able to fly the plane as planned, he did not discover anything about the plane that caused him concern. See Prichard Dep. 28; Prichard Aff. ¶ 9.

Based in part on Sorrells’s and Bove’s inspections, Prichard decided to have Prichard Enterprises purchase the plane. See Prichard Dep. 29, 56; Prichard Aff. ¶ 10. On October 9, 2006, Adkins and Prichard Enterprises signed a contract in which Prichard Enterprises agreed to purchase the 1975 Cessna SkyMaster, Model 1337G-P from Adkins for $132,500. Def.’s Mem. Supp. Mot. Summ. J., Ex. 5 (“Purchase Agreement”) ¶¶ 1-2.

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858 F. Supp. 2d 576, 77 U.C.C. Rep. Serv. 2d (West) 23, 2012 WL 874682, 2012 U.S. Dist. LEXIS 34180, Counsel Stack Legal Research, https://law.counselstack.com/opinion/prichard-enterprises-inc-v-adkins-nced-2012.