Agape Flights, Inc. v. Covington Aircraft Engines, Inc. et al

Filing 259

OPINION AND ORDER by Judge Frank H. Seay granting 248 Motion for Summary Judgment. Defendant Covington is in all respects, dismissed from this action(trl, Chambers)

IN THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF OKLAHOMA
AGAPE FLIGHTS, INC.,

)
)
)
)
)
)
)
)
)
)
)
)

Plaintiff,
v.
COVINGTON AIRCRAFT ENGINES,INC.;
KANSAS AVIATION OF INDEPENDENCE,
LLC; and JOHN DOE DEFENDANTS
2-25,
Defendants.

No. CIV-09-492-FHS

OPINION AND ORDER
This matter comes before the Court on the Motion for Summary
Judgment (Dkt. No. 248) filed by Covington Aircraft Engines, Inc.
(“Covington”). In its motion, Covington contends it is entitled to
summary

judgment

on

the

claims

asserted

by

Plaintiff,

Agape

Flights, Inc. (“Agape”), for strict products liability, negligence,
breach of contract, and breach of warranty arising out of a
December 20, 2007, crash of Agape’s aircraft.

Covington asserts

the following arguments: (1) Agape’s claims for strict products
liability and negligence are barred by the economic loss doctrine;
(2) Agape’s strict products liability claim fails because the
record establishes that the subject engine was not defective; (3)
Agape’s negligence claim fails as a matter of law because Covington
complied with all regulations and service requirements promulgated
pursuant to the Federal Aviation Act of 1958 (“FAA”) through the
Administrator of the Federal Aviation Administration; and (4)
Agape’s breach of contract/warranty claims fail because Covington
complied with the express warranty in the parties’ contract and,
further, that such contract excludes all implied warranties.
1

The

parties have fully briefed the issues and this matter is ripe for
ruling.

Having fully considered all matters submitted by the

parties, the Court finds that Covington’s Motion for Summary
Judgment (Dkt. No. 248)(“Covington’s Motion”) should be granted for
the reasons set forth below.
SUMMARY JUDGMENT STANDARD
The standards relevant to the disposition of a case on summary
judgment are well established.

Having moved for summary judgment

in its favor under Rule 56 of the Federal Rules of Civil Procedure,
Covington’s initial burden is to show the absence of evidence to
support Agape’s claims.
(1986).

Celotex v. Catrett, 477 U.S. 317, 325

Covington must identify those portions of "the pleadings,

depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any," which establish the absence
of any genuine issue of material fact.

Universal Money Centers v.

AT&T, 22 F.3d 1527, 1529 (10th Cir.), cert. denied, 115 S.Ct. 655
(1994) (quoting Fed. R. Civ. P. 56(c)).

Covington need not negate

Agape’s claims or disprove Agape’s evidence, but rather, its burden
is to show that there is no evidence in the record to support
Agape’s claims. Celotex, 477 U.S. at 325. Agape, as the nonmoving
party, must go beyond the pleadings and "must set forth specific
facts showing that there is a genuine issue for trial as to those
dispositive matters for which [it] carries the burden of proof."
Applied Genetics v. First Affiliated Securities, 912 F.2d 1238,
1241 (10th Cir. 1990).
Summary judgment is not appropriate if there exists a genuine
material factual issue.

Anderson v. Liberty Lobby, Inc., 477 U.S.

242, 249-51 (1986). "A fact is 'material' only if it 'might affect
the outcome of the suit under the governing law,' and a dispute
2

about a material fact is 'genuine' only 'if the evidence is such
that a reasonable jury could return a verdict for the non-moving
party.'" Thomas v. IBM, 48 F.3d 478, 486 (10th Cir. 1995) (quoting
Anderson, 477 U.S. at 248). In this regard, the court examines the
factual record and reasonable inferences therefrom in the light
most favorable to Agape.

Deepwater Invs. Ltd. v. Jackson Hole Ski

Corp., 938 F.2d 1105, 1110 (10th Cir. 1991). This Court's function
is not "to weigh the evidence and determine the truth of the matter
but to determine whether there is a genuine issue for trial."
Anderson, 477 U.S. at 249.
FACTUAL BACKGROUND
On November 20, 2007, a Cessna Grand Caravan Model 208B
aircraft, serial number 208B0556, U.S. Registration No. N954PA (the
“Aircraft”) crashed into the ocean waters near the Bahamas.
result of the crash, the Aircraft was destroyed.

As a

The Aircraft was

owned and operated by Agape and it was being powered by a PT6A-114A
engine, Serial No. PCE-17014 (the “Engine”), which Agape had rented
from Covington pursuant to a November 7, 2007, Engine Rental
Agreement (“Rental Agreement”). Pratt & Whitney Canada Corporation
(“P&WC”) is the manufacturer of the Aircraft’s Engine and Hamilton
Sundstrand Corporation (“Sundstrand”) is the manufacturer of the
Fuel Pump, Part No. 025323-150, Serial No. 839 (“Fuel Pump”), which
was part of the Aircraft’s Engine. In its Amended Complaint, Agape
contends the crash and resultant destruction of the Aircraft were
caused by the “defective and unserviceable condition of the Engine,
including

the

fuel

Complaint

(Dkt.

pump

No.

installed

60),

¶

in

13.

the
In

Engine.”

Amended

particular,

Agape’s

investigation has led it to conclude that the crash occurred as a
result of an in-flight power loss resulting from the Fuel Pump
drive shaft splines being severely worn.
3

Agape seeks to recover

from Covington for the loss of the Aircraft under theories of
strict products liability, negligence, breach of contract, and
breach of warranty.

Agape seeks to recover only economic damages

resulting from the loss of the Aircraft.

Agape does not present

any claims for personal injury or damage to property other than the
Aircraft itself.
Agape also brought this action against P&WC, Sundstrand, and
Kansas Aviation of Independence, LLC (“Kansas Aviation”).

On June

28, 2011, the Court granted the motions to dismiss filed on behalf
of P&WC and Sundstrand on the basis that the 18-year statute of
repose under the General Aviation Revitalization Act of 1994
(“GARA”) barred all claims asserted by Agape against P&WC and
Sundstrand.

As to Kansas Aviation, Agape alleges Kansas Aviation

overhauled the Fuel Pump on or about February 10, 2006, and that
the

Fuel

Pump

was

placed

on

the

Engine

and

maintained

in

Covington’s rental pool until the Engine, with the refurbished Fuel
Pump, was placed in the Aircraft for Agape’s use pursuant to the
Rental Agreement between Agape and Covington.

Agape’s claims

against Kansas Aviation are limited to negligence and breach of
warranties.

On September 27, 2011, the Court entered an order

granting Kansas Aviation’s motion to dismiss Agape’s negligence
claim as barred by the applicable statute of limitations.1

Agape’s

breach of warranty claim against Kansas Aviation remains pending.
As noted, the Fuel Pump was overhauled by Kansas Aviation and
approved

for

return

to

service

1

on

February

10,

2006.

No

After hearing argument on Agape’s request for
reconsideration of the dismissal of the negligence claim against
Kansas Aviation, the Court authorized Agape to file a Motion to
Revise within twenty (20) days of the close of discovery. Thus,
the Court’s dismissal of Agape’s negligence claim against Kansas
Aviation is potentially subject to reconsideration.
4

abnormalities or excessive wear were noted by Kansas Aviation with
respect to its overhaul of the Fuel Pump.

The Fuel Pump was later

sold to Covington and was installed on the Engine by Covington
during its overhaul of the Engine.

Covington approved the Engine

for return to service on September 6, 2006.

Between September 6,

2006, and November 3, 2007, the Engine and Fuel Pump were installed
on multiple aircraft - all in accordance with FAA regulations. One
such aircraft involved an Engine Rental Agreement with Capcana
S.A./Africair, Inc. (“Capcana”). On March 26, 2007, Capcana rented
the Engine from Covington.

Capcana installed the Engine on its

aircraft while its engine was being overhauled by Covington.

At

Capcana’s direction, the Engine was installed on its aircraft by
Banyan Air Service, Inc. (“Banyan”).

While the Engine was in

Capcana’s possession, Banyan performed the FAA required 100 hour
inspection of the Engine and certified the Engine as airworthy on
May 6, 2007.2
The Engine was returned by Capcana to Covington and it was
ultimately placed in Agape’s Aircraft by Covington on or about
November 7, 2007, pursuant to the Rental Agreement. At the time of
installation, the Fuel Pump had accumulated approximately 504 hours
of time in service since overhaul.

At the 504 hours of service

mark, there is no inspection, disassembly, or maintenance required
by applicable FAA regulations.

The P&WC Engine maintenance manual

mandates a 600-hour in-situ safety inspection to determine unusual

2

As noted in the Court’s Opinion and Order (Dkt. No. 187)
granting Banyan’s motion to dismiss the third-party claims of
P&WC and Sundstrand and the cross-claims of Covington for lack of
personal jurisdiction, Banyan removed the Fuel Pump and fuel
control unit in late July or early August 2007 after Capcana
experienced performance issues with the Engine. Banyan installed
a new fuel control unit on or about August 2, 2007, and
reinstalled the Fuel Pump on the Capcana aircraft.
5

wear at the fuel pump drive shaft and drive coupling splines.3

At

the time Covington installed the Engine on Agape’s Aircraft, the
Engine and Fuel Pump had been overhauled, inspected, and certified
in compliance with all applicable FAA regulations.

Covington

conducted a run-up of the Engine prior to placing it on any
aircraft, including Agape’s Aircraft.

After receiving the Engine

from Covington, Agape performed the 600-hour in-situ inspection as
set forth in the P&WC maintenance manual.
noted by Agape.

No unusual wear was

This inspection by Agape took place after Agape

had operated the Aircraft for approximately five weeks and 93 hours
of

service

since

taking

delivery

from

Covington.

After

approximately 33 more hours of service time, the Aircraft was
involved in the December 20, 2007, crash.
The Rental Agreement between Covington and Agape includes an
express warranty by Covington “that at the time of delivery the
rental engine will be in flight-worthy condition and conform to
applicable P&WC specifications.”4

The Rental Agreement further

excludes all other warranties by providing that “[t]his warranty is
given in place of all other warranties, express or implied,

3

The PW&C manual also provides that at 1800-hour
intervals, maintenance personnel must “remove the pump and
inspect the drive coupling and cover for signs of reddish-brown
(iron oxide) stains.” Expert Report by Engineering Systems, Inc.
(“ESI Report”), Exhibit No. 1, p. 9 to Covington’s Motion.
4

Additional warranty language provides “P&WC shall be
responsible for repair or replacement of the engine in case of
damage resulting from normal operation in accordance with
applicable manuals and operating instructions, and without fault
or negligence on the Customer’s part.” In its Opinion and Order
(Dkt. No. 208) granting the motions for summary judgment of P&WC
and Sundstrand, the Court found that this warranty language
suggesting some obligation on the part of P&WC does not bind P&WC
as it was included in error and without P&WC’s approval or
assent.
6

including

without

limitation

any

warranties

as

to

the

merchantability or fitness for purpose of the rental engine.”
ECONOMIC LOSS DOCTRINE
Covington argues that Agape’s claims for strict products
liability and negligence are barred by the economic loss doctrine.
This doctrine, as adopted by Oklahoma Supreme Court in Waggoner v.
Town & Country Mobile Homes, Inc., 808 P.2d 649, 653 (Okla. 1990),
bars recovery under tort theories for “injury only to the product
itself resulting in purely economic loss.”

See also Oklahoma Gas

& Electric Company v. McGraw-Edison Company, 834 P.2d 980 (Okla.
1992)(relying on Waggoner and concluding that a plaintiff in a
products liability action may not recover damages for injury to a
defective product itself and consequential economic harm flowing
from that injury).

Damages to the product itself are recoverable

under contract law in actions brought under the Uniform Commercial
Code.

Waggoner, 808 P.2d at 652.

The Oklahoma Supreme Court has

also recognized, however, that damages to “other property” apart
from the product itself are recoverable in tort actions.

Id.; see

also Oklahoma Gas & Electric, 834 P.2d at 982 (claims for personal
injury or damage to other property would not fall within ambit of
economic loss doctrine).
Here,

Covington

contends

Agape’s

tort

claims

are

barred

because it is seeking to recover purely economic losses associated
with the loss of the Aircraft.

Covington argues the Aircraft is

the “product” for purposes of application of the economic loss
doctrine because the Aircraft, Engine, and Fuel Pump are one
“integrated unit.”

The Court rejects this argument.

While the

Oklahoma Supreme Court has not addressed the “integrated unit”
argument in the context of the economic loss doctrine, this Court
7

concludes that any analysis in this area requires a focus on the
object of the parties’ bargain or contract.

See American Eagle

Ins. Co. v. United Technologies Corp., 48 F.3d 142, 144-45 (5th Cir.
1995)(recognizing

that

the

controlling

inquiry

in

an

“other

property” evaluation of the economic loss doctrine is “whether the
parties bargained separately for individual components of the
vessel” and if they did, then recovery in strict products liability
would be allowed where individually defective components cause
damage to the whole of the vessel); Mays Towing Co., Inc. v.
Universal

Mach

Co.,

Inc.,

755

F.Supp

830,

833

(S.D.

Ill.

1990)(damage to boat was considered “other property” where the
parties

had

bargained

for

construction of the boat).

the

sale

of

engines

and

not

the

A focus on the object of the parties’

bargain properly limits the scope of the economic loss doctrine.
Under the Rental Agreement, Covington and Agape entered into a
lease of the Engine and its component parts.
arrangement

exists

between

Aircraft.

Consequently,

Covington

for

and

purposes

of

Agape

No contractual
regarding

application

of

the
the

economic loss doctrine, the Engine and its component part Fuel Pump
are the “product” and the Aircraft is considered “other property.”
The economic loss doctrine, therefore, bars recovery for damages to
the Engine and its component part Fuel Pump only.

Agape is

entitled to proceed under its tort theories of recovery for damages
to the Aircraft itself as “other property.”5

5

Covington’s reliance on Sea-Land Service, Inc. v. Gen.
Elec. Co., 134 F.3d 149 (3rd Cir. 1998), Argotors, Inc. v. Bell
Helicopter Textron, Inc., 2004 WL 2039954 (E.D. Pa. 2004), and
Americoach Tours, Inc. v. Detroit Diesel Corp., 2005 WL 2335369
(W.D. Tenn. 2005) does not assist it in its argument that
essential component parts of an integrated unit are considered
one product. In all three cases the plaintiffs contracted for a
completed product, including component parts which were allegedly
defective. Here, the completed product - the Aircraft - was not
bargained for by Agape. Rather, the Rental Agreement involves
8

PRODUCTS LIABILITY CLAIM BARRED DUE TO LACK OF DEFECT
In order to prove its strict products liability claim under
Oklahoma law, Agape must show (1) the product caused Agape’s
injury; (2) a defect in the product existed at the time if left
Covington’s possession and control; and (3) the defect rendered the
product unreasonably dangerous.

Kirkland v. General Motors Corp.,

521 P.2d 1353, 1363 (Okla. 1974).

Covington contends that Agape’s

strict products liability claim fails as a matter of law because
the undisputed evidence establishes that the Engine and Fuel Pump
were not defective at the time Covington installed them on Agape’s
Aircraft.

Covington’s argument is two-fold.

First, Covington

contends that this Court’s previous Opinion and Order (Dkt. No.
208) granting summary judgment in favor of P&WC and Sundstrand
operates to preclude a strict products liability claim against it
as a distributor of the Engine and Fuel Pump.

In its previous

Opinion and Order, this Court determined that the 18-year statute
of repose under the General Aviation Revitalization Act of 1994
(“GARA”) barred all claims asserted by Agape against P&WC and
Sundstrand,

the

respectively.

manufacturers

of

the

Engine

and

Fuel

Pump,

Covington contends it would be contrary to the

underlying rationale of GARA to allow a strict products liability
claim to proceed against a distributor, who is sued solely on the
basis of its position in the chain of distribution, when the same
claim has been dismissed against the manufacturer under the statute
of repose.

This Court agrees.

GARA was enacted to address problems affecting the general
aviation industry, in particular, “the enormous product liability
costs that our tort system had imposed upon manufacturers of

the Engine only.
9

general aviation aircraft.” Lyon v. Augusta S.P.A., 252 F.3d 1078,
1084 (9th Cir. 2001).

GARA’s 18-year statute of repose is “a legal

recognition that, after an extended period of time, a product has
demonstrated its safety and quality, and that it is not reasonable
to hold a manufacturer legally responsible for an accident or
injury occurring after that much time has elapsed.”

Altselmer v.

Bell Helicopter Textron, Inc., 919 F.Supp. 340, 342 (E.D. Cal.
1996)(quoting

140

Cong.

Rec.

1994)(statement of Rep. Fish)).

H4998

(daily

ed.

July

27,

Implicit within the rationale

behind GARA’s 18-year statute of repose is the inability to
establish the defective condition of a product for purposes of
successfully

prosecuting

a

strict

products

liability

claim.

Although neither the Tenth Circuit nor any Oklahoma court has
addressed the issue of whether GARA’s statute of repose bars a
strict product liability claim against a distributor of a product in light of a finding that the statute of repose bars the same
claim against the manufacturer of the product - Oklahoma case law
does suggest the application of GARA’s statue of repose to bar
Agape’s claim against Covington.

In Braden v. Hendricks, 695 P.2d

1343, 1350 (Okla. 1985), the Oklahoma Supreme Court recognized that
in a strict products liability action, “[t]he liability of the
manufacturer and distributor is co-extensive, even though the
distributor was not responsible for the presence of the defect.”
Here, Agape’s claim against Covington is based solely on its
position in the chain of distribution with respect to the Engine
and Fuel Pump. No allegation is made that Covington is responsible
for the defect by virtue of something that occurred during the
distribution process.

Thus, while Covington’s liability is co-

extensive with P&WC and Sundstrand, as the manufacturers of the
Engine and Fuel Pump, respectively, it is also dependent upon a
showing of liability against such manufacturers.
Oklahoma

Supreme

Court

held

that
10

under

such

In Braden, the
circumstances

a

distributor’s liability is vicarious, i.e., imposed by law when one
person is made answerable for the actionable conduct of another.
Id. at 1351 (“Where, as here, a defect is said to be attributable
solely to the manufacturing process rather than to some conduct in
the distribution system, a distributor’s liability may be termed
vicarious.”). Consequently, this Court’s finding that neither P&WC
nor Sundstrand are liable to Agape in strict products liability
necessarily operates, as a matter of law, to exonerate Covington
from any liability to Agape on such claim.

Id. at 1352.

Covington also argues that the undisputed facts establish that
the Engine and Fuel Pump were not defective. In support, Covington
points to the testimony of Agape’s experts, William Baumheuter, II
(“Baumheuter”) and Clifford C. Bigelow (“Bigelow”), who did not
offer any opinions about either the Engine or Fuel Pump being
defective.6

See Baumheuter Deposition, Exhibit 3 to Covington’s

Motion, p. 172, lines 15-25 and p. 173, lines 1-12 and Bigelow
Deposition, Exhibit 6 to Covington’s Motion, p. 161, lines 20-25
and p. 162, lines 1-4.

In response, Agape points to the testimony

of both Baumheuter and Bigelow that the wear progression on the
spline drives is indicative of “wear that was quite long,” Bigelow
Deposition, Exhibit E to Agape’s Response to Covington’s Motion, p.
131, line 22, and that the “shaft was deficient in some way at the
time of its overhaul [by Kansas Aviation],” Baumheuter Deposition,
Exhibit B to Agape’s Response to Covington’s Motion, p. 34, lines
14-15.

When questioned further, however, both Baumheuter and

6

As reflected in the ESI Report, Bigelow is a Senior
Consultant for Engineering Systems, Inc. Baumheuter’s position
or title is neither reflected in his report (Exhibit 2 to
Covington’s Motion) nor in the portions of the deposition
transcripts provided by the parties. The record is also silent
as to the qualifications and backgrounds of both Bigelow and
Baumeuter.
11

Bigelow failed to attribute the alleged cause of the crash - the
excessive wear of the Fuel Pump drive shaft splines - to any defect
in the Fuel Pump.

Rather, Baumheuter stated that “the damage that

I saw on that shaft is the result of what damage would have been
initiated at the time of overhaul.” Baumheuter Deposition, Exhibit
3 to Covington’s Motion, p. 49, lines 2-4.

Baumeuter listed

misalignment of the female and male coupling, abuse, and not
following the correct procedure for reassembly as possible causes
of the damage.

Id. at p. 49, lines 13-25.

The testimony of

Baumeuter and Bigelow also indicates that the materials used in the
manufacture of the Fuel Pump were not defective.

Id. at p. 80,

lines 4-7 and Bigelow Deposition, Exhibit 6 to Covington’s Motion,
p. 151, lines 10-21.

Thus, the evidence presented by Agape

suggests shortcomings in the overhaul procedures by Kansas Aviation
as the cause of the crash, not any defect in the Fuel Pump itself.
Absent any evidence establishing a defect in the Fuel Pump, this
Court finds Covington is also entitled to summary judgment on
Agape’s strict products liability claim.
NEGLIGENCE CLAIM BAR
Covington contends the applicable standard of care in a case
involving aviation safety is not established by reference to state
law.

Rather, with respect to Agape’s negligence claim, Covington

contends such claim is evaluated by reference to the applicable
federal regulations promulgated pursuant to the FAA regarding
maintenance of the Aircraft.

In response, Agape argues that while

federal law may establish the requisite standard of care, a fact
question for the jury’s consideration still exists as to whether
that standard of care has been met.
The Tenth Circuit Court of Appeals has undertaken a field
12

preemption analysis in determining whether “Congress intended to
occupy the field of aviation safety to the exclusion of the
states.”

US Airways, Inc. v. O’Donnell, 627 F.3d 1318, 1325 (10th

Cir. 2010).

In O’Donnell, the Tenth Circuit held that “[b]ased on

the FAA’s purpose to centralize aviation safety regulation and the
comprehensive regulatory scheme promulgated pursuant to the FAA, we
conclude that federal regulation occupies the field of aviation
safety to the exclusion of state regulations.

The FAA was enacted

to create a uniform and exclusive system of federal regulation in
the field of air safety.”

Id. at 1326 (citation omitted).

Under

the FAA, the Administrator of the Federal Aviation Administration
has been directed to promulgate regulations for the “safe flight of
civil aircraft in air commerce.”

49 U.S.C. § 44701(a).

Pursuant

to this authority, regulations regarding maintenance and preventive
maintenance of aircraft have been issued.

Under 14 C.F.R. §

43.13(a), service providers such as Covington are required to
perform

maintenance

and

preventive

maintenance

according

to

“methods, techniques, and practices prescribed in the current
manufacturer’s maintenance manual.”
It is undisputed that P&WC’s maintenance manual mandates an
in-situ inspection of the Fuel Pump at 600-hour intervals. The insitu inspection at the 600-hour interval is required to detect the
presence of any reddish-brown iron oxide deposits which would be
indicative of “fretting wear between the mating splines of the fuel
pump drive shaft and drive coupling.”

ESI Report, p. 9.

At the

time Covington received the Fuel Pump from Banyan in November of
2007, the Fuel Pump had accumulated 504 hours since overhaul.
Because the 600-hour interval had not been reached, no in-situ
inspection, or any other more detailed inspection, was required of
Covington under the P&WC manual.

Covington thereafter installed

the Engine and Fuel Pump on the Aircraft and Agape conducted the
13

600-hour inspection of the Fuel Pump after it had been in its
possession for 93 hours.

Covington’s actions in this regard

satisfy the applicable standard of care set forth under the FAA
regulations.
inspection

Agape is attempting to impose on Covington an

requirement

not

mandated

by

the

P&WC

consequently, one not mandated under the FAA.

manual

and,

Agape’s expert

testified as much in his deposition:
Q.

A.
Q.
A.

You’ve already agreed with me that there was
no inspection required of Covington of the
fuel pump when they received that engine back
from Banyan, correct?
I agree there was no FAA requirement.
This is an inspection that you would require
that the FAA doesn’t require, correct?
That’s correct.

Baumheuter Deposition, Exhibit 3 to Covington’s Motion, p. 147,
lines 5-9 and p. 155, lines 7-9.

Based on Covington’s compliance

with all FAA inspection requirements for the Fuel Pump, this Court
concludes the evidence establishes that Covington has satisfied the
applicable standard of care and is entitled to judgment as a matter
of law on Agape’s negligence claim.
BREACH OF CONTRACT/BREACH OF WARRANTY
Covington

contends

Agape’s

breach

of

contract/breach

of

warranty claims must fail as a matter of law because the Rental
Agreement unambiguously excludes all implied warranties and the
undisputed evidence establishes that Covington complied with the
Rental

Agreement’s

limited

express

warranty.

The

warranty

provision of the Rental Agreement provides, in its entirety:
[Covington] warrants that at the time of delivery the
14

rental engine will be in flight-worthy condition and
conform to applicable P&WC specifications. P&WC shall be
responsible for repair or replacement of the engine in
case of damage resulting from normal operations in
accordance with applicable manuals and operating
instructions, and without fault or negligence on the
Customer’s part.
THIS WARRANTY IS GIVEN IN PLACE OF ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY
WARRANTIES AS TO THE MERCHANTABILITY OR FITNESS FOR
PURPOSE OF THE RENTAL ENGINE.
IN NO EVENT SHALL
[COVINGTON] OR P&WC BE LIABLE FOR INDIRECT OR
CONSEQUENTIAL DAMAGES.
Rental Agreement, ¶8 of Exhibit 7 to Covington’s Motion (caps in
original).

In response to these arguments, Agape contends the

Rental Agreement should be rescinded due to Covington’s unilateral
mistake in seeming to obligate P&WC under the warranty provision.
If the Rental Agreement is rescinded, Agape contends the warranties
of fitness for a particular purpose and merchantability can be
imposed on Covington.

Agape also argues that if the Rental

Agreement is not rescinded, it is entitled to the benefit of the
full warranty language, including the P&WC warranty provision, and
that the evidence establishes that the Engine was not flight-worthy
at the time of delivery.
In its response brief to this motion for summary judgment,
Agape has for the first time claimed that the Rental Agreement
should be rescinded for Covington’s unilateral mistake of including
language which appears to make P&WC responsible for repair or
replacement of the Engine. As noted above, the Court has held that
this provision was included in error and without P&WC’s approval or
assent.
not

This drafting error on the part of Covington, however, is

necessarily

transformed

into

an

obligation

imposed

on

Covington. The obligations imposed on Covington under the terms of
the

Rental

Agreement

are

limited
15

to

the

express

language

referencing Covington’s responsibilities and obligations, i.e., the
limited express warranty to provide an engine that is flight-worthy
and in conformity with applicable P&WC specifications.

Moreover,

in making this rescission argument for the first time in its
response brief, Agape has not demonstrated an entitlement to invoke
this doctrine.
rescind.

Agape has not acted promptly in attempting to

Under Oklahoma law, specifically 15 O.S. § 255, a party

seeking rescission is required to “rescind promptly.”

The Tenth

Circuit has stated that “[t]he prompt action requirement is to be
strictly enforced.”

Federal Deposit Ins. Corp. v. Palmero, 815

F.2d 1329, 1339 (10th Cir. 1987); see also United States v. Pyle,
248 F.Supp. 40, 42 (E.D. Okla. 1965)(“When a party rescinds a
contract, the pleadings must affirmatively allege prompt rescission
and restoration or an offer of restoration.”). Agape did not plead
rescission in its Complaint nor did it raise the issue immediately
following this Court’s June 28, 2011, Opinion and Order (Dkt. No.
208) finding that the P&WC warranty language was included in error.
Agape waited nearly nine months after the Court’s ruling to raise
rescission for the first time.

Clearly, Agape has not acted

promptly in asserting rescission. See Harmon v. Phillips Petroleum
Co., 196 Okla. 607, 167 P.2d 360, 364-65 (Okla. 1946)(five-month
delay bars rescission claim) and Creach v. Home Owners’ Loan Corp.,
191 Okla. 484, 131 P.2d 108, 110 (Okla. 1942)(sixteen-month delay
bars rescission claim).

Consequently, the Court rejects Agape’s

attempt to rescind the Rental Agreement and impose additional
warranty provisions on Covington.
With respect to the existing limited warranty provision that
the Engine would be flight-worthy, the record is undisputed that
Covington complied with its obligations.

Prior the Engine being

placed in Agape’s Aircraft pursuant to the November 7, 2007, Rental
Agreement, the Engine had been certified as airworthy by Banyan on
16

May 6, 2007.

At the time of this installation by Covington, the

Fuel Pump had 504 hours of service and it had been overhauled,
inspected, and certified in compliance with all applicable FAA
regulations.

In addition, Covington conducted run-ups of the

Engine before placing it on Agape’s Aircraft.

Agape’s expert,

Baumheuter, testified these run-ups were “reasonable and prudent”
and that he didn’t “doubt that it ran normally.”

Baumheuter

Deposition, Exhibit 3 to Covington’s Motion, at p. 177, lines 1419. Moreover, Agape itself conducted an inspection some five weeks
and 93 hours of service after taking delivery from Covington and
Agape certified the Engine as airworthy at the conclusion of its
inspection.

Id. at p. 164, lines 6-25, p. 165, lines 1-4, p. 189,

lines 18-25; Bigelow Deposition, Exhibit 6 to Covington’s Motion,
p.

98,

lines

10-16.7

Agape’s

certification

of

the

Engine

as

airworthy took place just 33 hours of service prior to the crash.
These undisputed facts establish that the Engine was not only
certified as airworthy at the time of delivery to Agape on November
7, 2007, but it was also certified by Agape as airworthy 93 service
hours after Covington’s delivery pursuant to the Rental Agreement.
Consequently, the Court finds Covington has complied with the terms
of the Rental Agreement’s limited express warranty by delivering
the Engine to Agape in a flight-worthy condition and in conformity
with applicable P&WC specifications.

The record before the Court

does not suggest otherwise and Covington is entitled to summary
judgment as a matter of law on Agape’s breach of warranty claim.

7

Given the testimony of Agape’s experts regarding the
validity of the previous certifications of the Engine and the
fact that Agape’s inspection certified the Engine as airworthy,
no factual issue regarding airworthiness is generated from the
same experts’ testimony that the wear damage on the spline drives
was not normal wear progression. Baumheuter Deposition, Exhibit
B to Agape’s Response to Covington’s Motion, p. 34, lines 4-15
and Bigelow Deposition, Exhibit E to Agape’s Response to
Covington’s Motion, p. 131, lines 1-24.
17

CONCLUSION
Based on the foregoing reasons, Covington’s Motion for Summary
Judgment (Dkt. No. 248) is granted and Covington is, in all
respects, dismissed from this action.
It is so ordered this 9th day of July, 2012.

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