Rauenhorst v. United States

104 F.R.D. 588, 1985 U.S. Dist. LEXIS 22363
CourtDistrict Court, D. Minnesota
DecidedFebruary 22, 1985
DocketCiv. Nos. 4-79-241, 4-79-562 and 4-84-864
StatusPublished
Cited by7 cases

This text of 104 F.R.D. 588 (Rauenhorst v. United States) is published on Counsel Stack Legal Research, covering District Court, D. Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rauenhorst v. United States, 104 F.R.D. 588, 1985 U.S. Dist. LEXIS 22363 (mnd 1985).

Opinion

MEMORANDUM OPINION AND ORDER

DIANA E. MURPHY, District Judge.

Before the court are motions in several actions arising from the same airplane crash. Defendant and third-party plaintiff United States of America has moved for relief from judgment under Rule 60(b)(3) of the Federal Rules of Civil Procedure in two cases previously tried before this court, Rauenhorst v. United States, Civil No. [592]*5924-79-241, and Southwest Aircraft Leasing, Inc. v. United States, Civil No. 4-79-562. The United States has also brought an independent action for fraud seeking damages in excess of fourteen million dollars from attorneys and other parties involved in the investigation of the crash and the resulting litigation, United States v. Southwest Aircraft Leasing, Inc., et al., Civil No. 4-84-864. The new action is before the court upon motions of the defendants1 to dismiss or in the alternative for summary judgment and of the United States to amend its complaint. In all of the actions the parties opposing the United States seek the imposition of sanctions including attorneys’ fees.

I. BACKGROUND

These cases arise out of the July 12, 1978 airplane crash of a Beechcraft Duke airplane owned by Southwest Aircraft Leasing, Inc. (Southwest). The pilot, Howard A. Bellows, and all five passengers were killed in the crash. Trustees for the estates of the five passengers brought a negligence action against the United States. The United States settled with the five plaintiffs for $3,926,310.00.2 Remaining for trial was the United States third-party action for contribution and/or indemnity against the estate of the pilot Bellows. The United States claimed Bellows’ negligence as pilot caused the accident. This third-party action was consolidated and tried to the court with the action of Southwest against the United States for $122,422.80, the stipulated value of the airplane. In that case the United States brought a counterclaim for contribution and/or indemnity against Southwest on the grounds that Bellows was Southwest’s agent under Minnesota law.

On March 27, 1984, the court issued a Memorandum Opinion and Order for Judgment finding both the United States and the pilot Bellows negligent and assessing 90% of the responsibility to the United States. Thus, Bellows’ estate and Southwest were liable to the United States for 10% of the settlement paid to the estates of the passenger or $392,631.00. And the United States was found liable to Southwest for 90% of the value of the airplane or $110,180.52. This court found that the government air traffic controllers agreed to route the plane around bad weather and then failed to exercise reasonable care in not providing the pilot, Bellows, with vectors around the thunderstorm into which the aircraft flew. The unrefuted testimony of expert witness John Prodan was that the airplane flew into the northern or northwestern portion of a rapidly building thunderstorm. It was then buffetted and forced into a sharp turn by extreme downdrafts and updrafts. This caused the plane to break up in the air, catch fire, and crash. Bellows was also found to be negligent in his failure to take certain measures to alert the handoff air traffic controller of his situation. Judgment was entered on March 28, 1984. No post-trial motions were made, and no appeal was taken from the judgment.

Now the United States claims that it is entitled to relief from the judgment under Rule 60(b)(3) on the grounds of surprise, fraud, misrepresentation, and other misconduct. It alleges that opposing counsel wrongfully concealed a critical piece of evidence—a six-inch long metal punch allegedly found in the rubberized fuel cell of the [593]*593aircraft that crashed. It asserts in its complaint in the action for damages that the punch “most probably was the initiation of the sequence of events which led to the crash” of the aircraft.3 The action for damages is similarly based upon this allegedly fraudulent conduct and is brought against those parties that knew of and failed to disclose the existence of the punch.

Twelve parties, all involved in some capacity with the prior litigation, are named as defendants in the action for damages. Dean K. Johnson, Michael Lindberg, and their law firm of Lindberg and Johnson, Attorneys at Law4 were counsel for American States Insurance Company (ASIC) and Aviation Office of America, Inc. (AOA) who issued the insurance policy to Southwest on the aircraft itself. ASIC and AOA are also named defendants in this action. In 1979, Johnson along with Joe E. Thompson signed the complaint as attorneys for Southwest in its property damage action against the United States.5 ASIC and AOA disputed coverage under Southwest’s policy, up until the time the policy was held valid in a declaratory judgment action before the district court and the Eighth Circuit Court of Appeals. See American States Ins. Co. v. Southwest Aircraft Leasing, Inc., Civ. 4-81-541 (Lord, C.J. 1982), aff'd, 717 F.2d 1189 (8th Cir.1983). Accordingly, the actual trial of Southwest’s property claim involved only the insurer’s subrogation interest. Southwest was represented at the trial by Michael Lindberg. W.D. Flaskamp and the law firm of Meagher, Geer, Markham, Anderson, Adamson, Flaskamp and Brennan were retained by ASIC to represent the insurer’s interest in the United States claim for contribution and/or indemnity against the estate of Howard A. Bellows. Charles T. Hvass and the law firm of Hvass, Weisman, and King represented the trustees of the five passengers who died in the crash. Jack Beaulieu and the First Adjustment and Survey Company, of which Beaulieu is co-owner, engaged in an investigation of the crash on behalf of ASIC and AOA.

The punch was first discovered in the late fall of 1978 by Clarence Schroeder, an employee of River Bend Aero (River Bend), River Bend is a salvage and rebuilding company hired by AOA to transport the aircraft from a Faribault, Minnesota storage site where it remained after the crash to the River Bend facility. The National Transportation Safety Board (NTSB) had maintained possession of the aircraft from shortly after the crash until October 16, 1978 when it completed its investigation into the crash.6 At that time, Jack Beau-lieu made arrangements on behalf of the insurer and Dean Johnson to have the airplane removed to the River Bend facility.

Schroeder, who is nicknamed “Chicken”, claims to have discovered the punch lying inside an exposed fuel cell bladder while he was attempting to remove the left wing of the airplane. The punch appeared to Schroeder to be approximately six inches in length and rusted. He removed the punch from the rubberized fuel cell and placed it in his tool box, where it remained for al[594]*594most a year. He told no one of this discovery. In September of 1979, Schroeder assisted in loading the remains of the airplane for transportation to Packer Engineering in Naperville, Illinois. The move was made at the informal request of Charles Hvass, counsel for the passengers and was acceded to by Dean Johnson.

At the time of the loading, Schroeder informed his employer, Walter Wermerskirchen, of the existence of the punch and turned it over to him.

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Bluebook (online)
104 F.R.D. 588, 1985 U.S. Dist. LEXIS 22363, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rauenhorst-v-united-states-mnd-1985.