Cleveland Air Service Inc. v. Pratt & Whitney Canada et al

Filing 136

OPINION AND ORDER granting 72 Motion for Summary Judgment. Signed by District Judge Debra M. Brown on 8/5/16. (jtm)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF MISSISSIPPI
GREENVILLE DIVISION
CLEVELAND AIR SERVICE, INC.
V.

PLAINTIFF
NO. 4:13-CV-161-DMB-DAS

PRATT & WHITNEY CANADA

DEFENDANT

OPINION AND ORDER GRANTING SUMMARY JUDGMENT
Before the Court is the third motion for summary judgment filed by Pratt & Whitney
Canada. For the reasons below, the motion will be granted.
I
Summary Judgment Standard
“Summary judgment is appropriate when there are no genuine issues as to any material
facts, and the moving party is entitled to judgment as a matter of law.” Norwegian Bulk Transp.
A/S v. Int’l Marine Terminals P’ship, 520 F.3d 409, 411 (5th Cir. 2008) (citing Celotex Corp. v.
Catrett, 477 U.S. 317, 322–23 (1986)). To award summary judgment, “[a] court must be
satisfied that no reasonable trier of fact could find for the nonmoving party or, in other words,
that the evidence favoring the nonmoving party is insufficient to enable a reasonable jury to
return a verdict in her favor.” Id. at 411–12 (internal quotation marks omitted). To this end,
“[t]he moving party bears the burden of establishing that there are no genuine issues of material
fact.” Id. at 412.
“If, as here, the nonmoving party bears the burden of proof at trial, the moving party may
demonstrate that it is entitled to summary judgment by submitting affidavits or other similar
evidence negating the nonmoving party’s claim, or by pointing out to the district court the
absence of evidence necessary to support the nonmoving party’s case.” Morris v. Covan World

Wide Moving, Inc., 144 F.3d 377, 380 (5th Cir. 1998). If the moving party makes the necessary
demonstration, “the burden shifts to the nonmoving party to show that summary judgment is
inappropriate.” Id. In making this showing, “the nonmoving party must go beyond the pleadings
and by her own affidavits, or by the depositions, answers to interrogatories, and admissions on
file, designate specific facts showing that there is a genuine issue for trial.” Cotroneo v. Shaw
Env’t & Infrastructure, Inc., 639 F.3d 186, 191–92 (5th Cir. 2011) (internal punctuation
omitted). When considering a motion for summary judgment, the Court “resolve[s] factual
controversies in favor of the nonmoving party.” Little v. Liquid Air Corp., 37 F.3d 1069, 1075
(5th Cir. 1994).
II
Factual and Procedural Background
A. Sale and Delivery of Engine
Cleveland Air Service, Inc. (“Cleveland Air”), operates agricultural aircrafts.

See

generally Doc. #76-1. Pratt & Whitney Canada (“Pratt & Whitney”) designs, manufactures,
distributes, markets, and sells aircraft engines. Doc. #18 at 3. Pratt & Whitney manufactured a
PT6A-67AG turbine engine (“Engine”). Doc. #72-1 at ¶ 4. Air Tractor, Inc., purchased the
Engine on September 8, 1999. Doc. #72-2. On August 30, 2000, the Engine was shipped to
Frost Flying, Inc., in Marianna, Arkansas. Id. The Engine was delivered sometime in 20001
with a warranty that it would be free from defects in material and workmanship appearing within
1

Although the precise date of delivery is unclear, it is undisputed that the Engine was shipped to Frost Flying on
August 30, 2000. See Doc. #72-2. The Court takes judicial notice that the shipping address for Frost Flying
matches the business’ address listed on the Arkansas’ secretary of state website, as reported by a 1994 filing. See
Swindol v. Aurora Flight Scis. Corp., 805 F.3d 516, 519 (5th Cir. 2015) (taking judicial notice of address
information provided on Mississippi and Virginia’s secretary of state websites). Furthermore, throughout this
litigation, Pratt & Whitney, without objection from Cleveland Air, has asserted that the Engine was delivered in
1999 or 2000. Finally, Cleveland Air itself seems to concede that the Engine was delivered even earlier by asserting
that the Engine was installed in the aircraft in 1999. See Doc. #77 at 7. Under these circumstances, the Court
assumes that delivery occurred no later than 2000.

2

the first 1,000 hours of operation. Doc. #72-3. “Subsequently,” the Engine was installed in an
Air Tractor AT-802A agricultural aircraft, which was in turn sold to Cleveland Air in 2011.
Doc. #72-1 at ¶ 5; Doc. #76-1 at 1.
B. Revised Warranty
In December 2009, Pratt & Whitney issued a revised warranty policy (“2009 Warranty”).
Doc. #72-4. The 2009 Warranty provides that “[t]his warranty document supercedes [sic] the
Turbine Engine Warranty and Service Policy issued August 1998 and the applicable annexes.”
Id. at 15. Pursuant to the 2009 Warranty, Pratt & Whitney warranted against defects in material
or workmanship appearing within the first 1,000 hours of operation and, following the expiration
of the basic coverage period, offered a primary parts service policy that provided pro rata
coverage for certain parts. Id at 3–4. Included among the covered parts are the Engine’s bladecompressor, power turbine, and blade-compressor rotor assembly. Id. at 11–13. Under the terms
of the 2009 Warranty, coverage expires when the Engine reaches the Time Between Overhaul
(“TBO”). Id. For the Engine, the TBO is 3,000 hours. Id.
C. Engine Failure and Lawsuit
On September 5, 2012, the Engine suffered a power turbine blade failure after 5,042
hours of use. Almost a year later, on August 1, 2013, Cleveland Air filed suit against Pratt &
Whitney and Pro Turbine, Inc. (the servicer of the Engine), in the Circuit Court of Bolivar
County, Mississippi, seeking damages for the alleged repair cost of the Engine ($185,641.30),
other amounts related to aircraft rental ($73,053.98), and pilot pay ($19,550.00). Doc. #2. On
September 16, 2013, asserting diversity jurisdiction, Pro Turbine removed the suit to this Court.
Doc. #1. That same day, Pro Turbine filed an answer along with a counter-claim, seeking
$58,135.48 from Cleveland Air for services rendered. Doc. #3.

3

On October 21, 2013, Cleveland Air moved for an entry of default against Pratt &
Whitney. Doc. #7. The Clerk’s entry of default as to Pratt & Whitney was docketed the next
day. Doc. #9. Also that day, Cleveland Air filed a motion for default judgment and a “motion
for damages by default.” Doc. #10; Doc. #11.
On October 28, 2013, Cleveland Air moved the Court to: (1) set aside the Clerk’s entry
of default; (2) withdraw its request for an entry of default; (3) withdraw its motion for default
judgment; (4) withdraw its motion for damages by default; and (5) allow Pratt & Whitney to
“answer the allegations of Plaintiff’s complaint.” Doc. #14 at 1. On November 4, 2013,
Cleveland Air’s motion to withdraw was granted. Doc. #17.
On November 11, 2013, Pratt & Whitney filed its “Defenses and Answer” to the
complaint. Doc. #18. Of relevance here, the “Fourth Defense” states, “PRATT made tender of
delivery of the subject engine in August, 2000, thirteen years before this suit was filed. Plaintiff’s
claims arising under the Uniform Commercial Code are for this reason barred by the statute of
limitations set out in Miss. Code Ann. § 75-2-725.” Id. at 5.
On February 10, 2014,2 Pratt & Whitney filed a motion for summary judgment. Doc.
#33. On June 9, 2014, the Court, acting on the joint motion of Cleveland Air and Pro Turbine,
dismissed their respective claims against each other. Doc. #43; Doc. #44. On September 30,
2014, the Court granted in part and denied in part Pratt & Whitney’s motion for summary
judgment, granting summary judgment as to Cleveland Air’s products liability and breach of
express warranty claims and denying summary judgment as to its claim for breach of the implied
warranty of merchantability. Doc. #48.

2

This case was reassigned to the undersigned district judge on January 3, 2014. Doc. #30.

4

On October 17, 2014, Pratt & Whitney filed a second motion for summary judgment.
Doc. #50. The Court denied the second motion for summary judgment on August 27, 2015,
because no case management order had reset the previously expired dispositive motions deadline
and no leave to file another dispositive motion was sought or granted. Doc. #64.
On October 21, 2015, after the dispositive motions deadline had been extended,3 Pratt &
Whitney filed a third motion for summary judgment against Cleveland Air’s remaining claim for
breach of the implied warranty of merchantability. Doc. #72. In its third summary judgment
motion, Pratt & Whitney argues that the implied warranty of merchantability was not violated
and that, even if a violation occurred, a claim based on such violation would be untimely under
Miss Code Ann. § 75-2-725(1) and § 75-2-725(2). Id. at 10–11.
On November 23, 2015, Cleveland Air filed a response in opposition to the third
summary judgment motion. Doc. #76. In its response, Cleveland Air contends that Pratt &
Whitney breached the implied warranty of merchantability and waived its right to raise a statute
of limitations defense to such claim, declining to substantively respond to Pratt and Whitney’s
statute of limitations argument. Id. Among the exhibits included in Cleveland Air’s response is
an affidavit from Brad Ouzts, Cleveland Air’s owner, addressing Pratt & Whitney’s alleged
implied warranty breach. Doc. #76-1.
Ten days later, on December 3, 2015, Pratt & Whitney filed a rebuttal in support of its
third motion for summary judgment. Doc. #78. It also filed the same day “Pratt & Whitney’s
3

The motions deadline was extended to March 15, 2016, through order issued by United States Magistrate Judge
David A. Sanders on October 2, 2015. Doc. #68 at 5. Earlier, on January 16, 2014, following the initial case
management conference, Judge Sanders, “[a]fter considering the issues” in the case, ordered that “discovery is
hereby stayed for a period of six months. The defendants shall file their dispositive motions no later than February
10, 2014.” Doc. #32 at 1 (internal footnote omitted). In that order, Judge Sanders noted that “this deadline applies
to the defendants’ initial motions to dismiss or for summary judgment discussed during the case management
conference. This order does not preclude subsequent dispositive motions that may become applicable pursuant to a
case management order to be entered following the second case management conference.” Id. 1 n.1.

5

Fed. R. Civ. P. 56(c) and Fed. R. Evid. 103(a)(1) Objections to Plaintiff’s Inadmissible Evidence
in Opposition to Summary Judgment,” seeking the exclusion of certain opinions in, and exhibits
to, Ouzts’ affidavit. Doc. #79. On December 21, 2015, Cleveland Air responded to these
objections and, on January 26, 2016, designated Ouzts as an expert witness. Doc. #82; Doc. #88;
Doc. #101-1.
On March 15, 2016, Pratt & Whitney moved to exclude Ouzts’ opinions. Doc. #101.
Pratt & Whitney also moved to supplement its third summary judgment motion with testimony
derived from Ouzts’ recently-conducted deposition. Doc. #103. Cleveland Air responded in
opposition to both motions. Doc. #107; Doc. #109. Pratt & Whitney later filed three motions in
limine, which seek to exclude, among other things, certain testimony by Outz.4 Doc. #117; Doc.
#119; Doc. #121.
On July 29, 2016, the Court issued an order finding that the statute of limitations
argument was properly before the Court. Doc. #131. The order directed “additional briefing on
the issue of the timeliness of Cleveland Air Service, Inc.’s breach of implied warranty claim”
given that Cleveland Air had not substantively addressed Pratt & Whitney’s statute of limitations
argument. Doc. #131. Cleveland Air filed a supplemental response on August 2, 2016, Doc.
#133; and Pratt & Whitney filed a supplemental reply the same day, Doc. #135.
III
Analysis
Pratt & Whitney makes four arguments in support of its third motion for summary
judgment as to Cleveland Air’s remaining claim for breach of the implied warranty of

4

Pratt & Whitney moved to preclude Cleveland Air at trial from “referring to or offering any evidence of any other
purported engine failures,” from “referring to or offering into evidence any advertisements or other materials
concerning hours of operation of any other engines or aircraft,” and from “offering any evidence of any fear or
alarm experienced by Mr. Ouzts at the time of the engine failure ....” Doc. #117; Doc. #119; Doc. #121.

6

merchantability: (1) the claim for breach of the implied warranty of merchantability is time
barred (2) the successful, long-term use of a product satisfies the implied warranty of
merchantability; (3) an express warranty was offered in lieu of an implied warranty of
merchantability; and (4) any application of an implied warranty would be inconsistent with the
express warranty as prohibited under Miss. Code Ann. § 75-2-317. Doc. #72 at 1–2, 11.
A. Statute of Limitations
In seeking summary judgment on Cleveland Air’s breach of implied warranty claim, Pratt
& Whitney, in a section titled, “The Express Warranty was Offered in Lieu of the Implied
Warranty of Merchantability,” argues that “[i]f the breach [of the implied warranty] occurred at
the time of delivery, then Plaintiff’s claim became time barred in 2006, which is 6 years after
delivery of the engine.” Doc. #73 at 11. In support of this argument, Pratt & Whitney contends
that Miss. Code Ann. § 75-2-725(1) provides a six-year statute of limitations for Cleveland Air’s
breach of implied warranty claim; that under § 75-2-725(2), the claim accrued at the time of
delivery of the Engine; and that, therefore, the claim expired no later than 2006. Id.
In response, Cleveland Air argued that Pratt & Whitney waived its limitations argument.
Doc. #77 at 2. But, as explained above, the Court rejected Cleveland Air’s waiver argument in
the July 29, 2016, order, and provided Cleveland Air an opportunity only “to address the
timeliness of its breach of implied warranty claim” through additional briefing. Doc. #131 at 8.
Notwithstanding this clear direction, Cleveland Air did not use its opportunity to submit
additional briefing on the timeliness issue but, instead, used it to re-assert its argument that the
statute of limitations defense may not be considered by the Court. Doc. #133 at 1 (“The Plaintiff
would show unto the Court that, to raise the defense at this late stage constitutes undue
prejudice.”).

7

1. Consideration of Statute of Limitations Defense
In its supplemental response, Cleveland Air argues that Pratt & Whitney should be barred
from raising a statute of limitations defense because raising the defense “at this late stage,
constitutes undue prejudice.”5 Doc. #133 at 1. Specifically, Cleveland Air contends that it “has
expended much time, effort and expenses to prepare for trial. This constitutes undue prejudice.”
Id. at 2. To support this argument, Cleveland Air states:
The parties have nearly completed the pretrial order and the final pretrial
conference is set for August 4, 2016. Trial is set for August 15, 2016. Further
pending before the Court are numerous motions in limine which the Plaintiff
timely responded to. The Plaintiff has expended much time, effort and expenses to
prepare for trial. This constitutes undue prejudice. The longer the period of an
unexplained delay, the less will be required of the nonmoving party in terms of a
showing of prejudice. Block v. First Blood Assocs., 988 F.2d 344, 350 (2d Cir.
1993). Although addressing undue prejudice in allowing an amended complaint to
include a claim for a statute of imitation [sic] defense, the undue prejudice is the
same. The longer the delay, however, the greater the presumption against granting
leave to amend. Perrian v. O'Grady, 958 F.2d 192, 194 (7th Cir. 1992).
Id. (internal quotation marks omitted)
Both Block and Perrian held that a party may not amend a responsive pleading to assert a
defense if doing so would create undue prejudice.

Neither case, however, stands for the

proposition that the failure to assert a properly pleaded statute of limitations defense until late in
a proceeding justifies preclusion of the defense. Furthermore, even if undue prejudice could act
as a bar to raising a properly pleaded defense, Block explicitly rejected the same argument made
by Cleveland Air—that the time and expense of litigation constitutes prejudice sufficient to bar
the assertion of a defense. 988 F.2d at 351 (granting leave to amend answer where non-movants
argued “that they were prejudiced solely because of the time, effort and money they expended in

5

Despite Cleveland Air’s failure to stay within the scope of the additional briefing, the Court will, only out of an
abundance of caution, address the substance of Cleveland Air’s supplemental response.

8

litigating this matter.”). Accordingly, the Court confirms its conclusion that the statute of
limitations defense was properly raised in Pratt & Whitney’s third motion for summary
judgment.6
2. Application of Statute of Limitations
In its third motion for summary judgment, Pratt & Whitney argues that Mississippi law7
states:
An action for breach of any contract for sale must be commenced within six (6)
years after the cause of action has accrued.
A cause of action accrues when the breach occurs, regardless of the aggrieved
party's lack of knowledge of the breach. A breach of warranty occurs when tender
of delivery is made, except that where a warranty explicitly extends to future
performance of the goods and discovery of the breach must await the time of such
performance the cause of action accrues when the breach is or should have been
discovered.
Miss. Code. Ann. § 75-2-725(1) & (2).
The Mississippi Supreme Court has held that the plain language of the statute controls
and that the six-year clock begins to run upon delivery, as opposed to discovery of a defect. See
Rutland v. Swift Chem. Co., 351 So.2d 324, 325 (Miss. 1977) (“Plain language of the statute
6

In reaching this conclusion, the Court notes that, at the time the defense was argued in support of summary
judgment after being raised in Pratt and Whitney’s answer to the complaint, discovery was ongoing, and the
deadline for “[a]ll dispositive motions and Daubert-type motions” was March 15, 2016, nearly five months away.
Doc. #68 at 5.
7

“In Guaranty Trust Co. v. York, 326 U.S. 99 (1945), the [United States Supreme] Court read Erie R. Co. v.
Tompkins, 304 U.S. 64 (1938) to require application in federal court of state statutes of limitations when jurisdiction
rests on diversity of citizenship.” Mullen v. Sears, Roebuck, and Co., 887 F.2d 615, 616 (5th Cir. 1989) (internal
citations omitted). Notwithstanding that it appears the Engine was sold from a Canadian company to a Texas
corporation with delivery to be made in Arkansas, the parties do not dispute that Mississippi’s statute of limitations
controls. Generally, under Mississippi law, a court may apply Mississippi’s implied warranty statute of limitations
where the claim may otherwise be brought in Mississippi and the statute of limitations in the state of delivery is
deemed procedural. Price v. Int’l Tel. and Tel. Corp., 651 F.Supp. 706, 711 (S.D. Miss. 1986). Under Arkansas
law, “[s]tatutes of limitations are generally considered to be procedural in nature.” Middleton v. Lockhart, 139
S.W.3d 500, 502 (Ark. 2003). Likewise, “[u]nder Texas law, statutes of limitations are considered to be procedural,
not substantive.” Cypress/Spanish Ft. I, L.P. v. Professional Serv. Indus., Inc., 814 F.Supp.2d 698, 708 (N.D. Tex.
2011) (citing Johansen v. E.I. Du Pont De Nemours & Co., 710 F.2d 1377, 1381 (5th Cir. 1987). Furthermore, there
is no question this case may be heard in Mississippi. Accordingly, the Court will apply Mississippi’s statute of
limitations to this products liability action.

9

provides that a cause of action for breach of warranty accrues when tender of delivery of goods
is made .… Only one exception is made to the six-year limitation, and that is where under subsection (2) of the quoted statute a warranty ‘explicitly extends to future performance.’”).8 Under
this rule, the relevant delivery is delivery to the original purchaser,9 the time of discovery is
irrelevant,10 and the only exception to the six-year period is an express warranty. As recognized
in Forbes v. General Motors Corporation:
The statute in unmistakable language provides that in order for a warranty of this
type to extend beyond six years after the date of tender of delivery, such warranty
must explicitly relate to future performance of the goods. Explicit means
something expressed or clearly stated and is more than merely implied.
993 So. 2d 822, 825 (Miss. 2008) (internal citations, quotation marks, and emphasis omitted).
As explained above, there is no dispute the Engine was delivered no later than 2000.
Applying the plain language of subsections (1) and (2) of Miss. Code. Ann. § 75-2-725, the sixyear clock began to run upon delivery, thereby requiring the implied warranty claim asserted in
this case to have been commenced no later than September 2006. Cleveland Air has provided no
evidence or argument that a warranty explicitly extended the statute of limitations. Accordingly,

8

See also M. T. Reed Const. Co. v. Jackson Plating Co., 222 So. 2d 838, 840 (Miss. 1969) (“It is immaterial, so far
as the running of the statute of limitations is concerned, whether the negligence out of which the cause of action
arose, was the breach of a contract, or affirmative disregard of some positive duty; in either case the cause of action
accrues when the abstract of title is certified to and delivered. The statute of limitations runs from that time, and not
from the time the damage occurs.”) (quoting Johnson v. Crisler, 156 Miss. 266, 125 So. 724 (1930)); Huff v.
Hobgood, 549 So. 2d 951, 955 (Miss. 1989) (“This Court finds that as a matter of law this cause of action accrued in
December, 1978, when tender of delivery of the bulldozer was made to Huff, and the six year statute of limitations
ran out in December, 1984.”).
9

See Clark v. Gen. Motors, No. 3:14-cv-505, 2016 WL 3574408, at *2 (S.D. Miss. June 23, 2016) (breach of
warranty claim accrued at time of sale to original purchaser).
10

The Fifth Circuit, while reviewing this statue, has held that “the inability to sue for breach of warranty more than
six years after the date of the sale … is not, in our opinion, unconscionable.” Alexander v. Conveyors & Dumpers,
Inc., 731 F.2d 1221, 1228 (5th Cir. 1984).

10

the Court concludes as a matter of law that Cleveland Air’s implied warranty claim is barred by
the statute of limitations.11
B. Remaining Arguments and Motions
Having found that Cleveland Air’s remaining implied warranty claim is barred by the
statute of limitations, the Court declines to consider Pratt & Whitney’s remaining arguments for
summary judgment. See, e.g., Mendes Jr. Intern. Co. v. M/V Sokai Maru, 43 F.3d 153, 156 (5th
Cir. 1995) (“Having found this action barred by [the] statute of limitations, we find it
unnecessary to address the remaining issues dealing with Mendes’ damages claim.”). Likewise,
the remaining motions, which relate to trial and/or the merits (rather than the timeliness) of the
claim will be denied as moot.
IV
Conclusion
For these reasons, Pratt & Whitney’s motion for summary judgment [72] is GRANTED.
Additionally, the Court DENIES as moot Pratt & Whitney’s motion to exclude [101], Pratt &
Whitney’s motion to supplement [103], and Pratt & Whitney’s motions in limine [117] [119]
[121].
SO ORDERED, this 5th day of August, 2016.

/s/ Debra M. Brown
UNITED STATES DISTRICT JUDGE

11

In order to hold otherwise, the Court would need to assume that the Engine, which was shipped in August 2000,
was not delivered for more than six years. While this Court is required to draw all reasonable inferences in favor of
a non-movant, inferring a delivery time of more than six years is far from reasonable.

11