Navagium Vectorium, LLC, et al v. Sutton, et al

Filing 100

ORDER: Denying Motion for Partial Summary Judgment 84 ). Please access entire text by document number hyperlink. Ordered and Signed on 05/19/2015 by Magistrate Judge Mark D. Clarke. (rsm)

IN THE UNITED STATES DISTRICT COURT
FOR TI-lE DISTRICT OF OREGON
MEDFORD DIVISION

NA VAGIUM VECTORIUM, LLC, a California
limited liability company; OUTFITTER ROTARY
LLC, a Delaware limited liability company; and
OUTFITTER AVIATION, LLC, a Delaware limited
liability company;
Plaintiffs;
V.

ROGER SUTTON and OUTFITTER AVIATION
OREGON, LLC, an Oregon limited liability company;
Defendants.

HADLEY & PECH, INC, a Nevada corporation,
Joined Counterclaim Plaintiff,
V.

OUTFITTER AVIATION, LLC, a Delaware limited
liability company,
Counterclaim Defendant.

I I I
Page I -ORDER

CaseNo. 1:13-cv-00162-CL

ORDER

CLARKE, Magistrate Judge.
Plaintiffs Navagium Vectorium LLC, Outfitter Rotary LLC, and Outfitter Aviation LLC
(collectively, "Plaintiffs") bring this action against Defendants Roger Sutton ("Sutton") and
Outfitter Aviation Oregon LLC (collectively, "Defendants"). Currently before the Court is
Defendants' motion (#84) for summary judgment on Plaintiffs' second and third claims for relief
which allege negligence and breach of contract in relation to an airplane crash. For the reasons
stated below, Defendants' motion is DENIED.

BACKGROUND
Sutton managed aircrafts owned by Plaintiffs, including a Cirrus SR22 N155ZS
("Cirrus"). Sutton AfT. ,J1. Plaintiffs fell behind in their payments to Sutton. Sutton Aff. ,J3. On
October 7, 2009, Plaintiffs instructed Sutton to sell the Cirrus in a "fire sale" and apply the
proceeds to Plaintiffs' delinquent account. Sutton AfT. Ex. 1.
Sutton located a buyer, Stan Leigh Investments ("SLI"), and negotiated the sale of the
Cirrus on Plaintiffs' behalf. Sutton AfT.

,I 5;

Wilson Dec!. Ex. 3. The sale was memorialized in a

contract between Plaintiffs and SLI dated January 25, 2010. Sutton Aff. Ex. 2. In pertinent part,
the contract provided:
4.1 The buyer will also wire a deposit of $4,000 directly to the seller for the
movement of the airplane to the buyer's location, the Stuart Airport in
Florida, prior to the aircrafl departing .... It is agreed that the seller will
move the aircraft to the buyer's airport after closing on or before February
8th, 2010 with the expectation of weather or circumstances beyond the
pilot's control. ...
1
6 ... It is agreed that the delivery location will be at the KMFR airport. ...
Title and risk of loss or damage to the Aircraft shall pass to Buyer at the
time of delivery ....
Sutton AfT. Ex. 2, at 2. Sutton signed the escrow instructions as the seller's broker/agent and
arranged for the disbursement of funds received from the sale. Wilson Dec!. Ex. 6-7.
1

Rogue Valley-Medford International Airport is known as "KMFR." Sutton Aff.

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,12.

SLI arranged with Sutton to transport the Cirrus from Medford to Florida. Sutton Aff.
8. SLJ agreed to pay Sutton $4,000 in ferrying fees. Sutton Aff.
from Medford to Florida. Sutton Aff.
emergency landing. Sutton Aff.

,I

,1,1

,I

,I

9. Sutton piloted the Cirrus

I 0-11. While in transit, Sutton made an unsuccessful

I 2. The plane was destroyed. Sutton Aff. ~ 12. SLJ filed suit

against Sutton and Plaintiffs to recover the value of the destroyed plane plus the ferrying fee.
Sutton Aff. Ex. 5.

STANDARD
Summary judgment is appropriate if "the movant shows there is no genuine dispute as to
any material fact and the movant is entitled to judgment as a matter of Jaw." FED. R. Clv. P.
56( a). Summary judgment is not proper if material factual issues exist for trial. Warren v. Citv of
Carlsbad, 58 F.3d 439, 441 (9th Cir. I 995).
The moving party bears the initial burden of establishing the absence of a genuine issue
of material fact. Celotex Corp. v. Catrett, 477 U.S. 3 I 7, 323 (1986); Devereaux v. Abbey, 263
F.3d I 070, I 076 (9th Cir. 200 I). An issue of fact is genuine "if the evidence is such that a
reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby.
Inc., 477 U.S. 242, 248 (I 986). If the moving party fulfills its burden, the burden shifts to the
non-moving party who must go beyond the pleadings to identify genuine issues of fact. Celotex
Corp., 477 U.S. at 324. Conclusory allegations, unsupported by factual material, are insufficient
to defeat a motion for summary judgment. Tavlor v. List, 880 F.2d I 040, I 045 (9th Cir. 1989).
Instead, the opposing party must, by affidavit or as otherwise provided by FED. R. Civ. P. 56,
designate specific facts which show there is a genuine issue for trial. Devereaux, 263 F.3d at
1076.

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The court must view the evidence in the light most favorable to the nonmoving party.
Szajer v. City of Los Angeles, 632 F.3d 607, 610 (9th Cir. 20 II). All reasonable doubt as to the
existence of a genuine dispute of material fact should be resolved against the moving party.
Hector v. Wiens, 533 F.2d 429, 432 (9th Cir. 1976). Where different ultimate inferences may be
drawn, summary judgment is inappropriate. Sankovich v. Life Ins. Co. of North America, 638
F.2d 136, 140 (9th Cir. 1981). However, facts must be "viewed in the light most favorable to the
nonmoving party only if there is a 'genuine' dispute as to those facts." Scott v. Harris, 550 U.S.
3 72, 3 80 (2007). "Where the record taken as a whole could not lead a rational trier of fact to find
for the nonmoving party, there is no 'genuine issue for trial."' Matsushita Elec. Industrial Co. v.
Zenith Radio Corp., 4 75 U.S. 574, 587 (1986).
DISCUSSION

I.

Second Claim for Relief: Negligence
Plaintiffs allege that as a result of Sutton's negligent emergency landing, they were

forced to expend $117,758 in attorney's fees and costs to defend themselves against the buyer's
ensuing lawsuit. Defendants assert the economic loss doctrine bars Plaintiffs' claim.
Oregon's economic loss doctrine is an exception to the fundamental rule of tort law that
all persons may be held liable for negligence if their conduct unreasonably creates a foreseeable
risk of harm to others. Harris v. Suniga, 344 Or. 301, 307 (2008). The doctrine is based on the
premise that "one ordinarily is not liable for negligently causing a stranger's purely economic
loss without injuring his person or property." Hale v. Groce, 304 Or. 281, 284 (1987).
The Oregon Supreme Court defines economic loss to mean "financial losses such as
indebtedness incurred and return of monies paid," distinguishable from "damages for injury to
person or property." Harris, 344 Or. at 310 (citing Onita Pacific Corp. v. Trustees of Bronson,

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315 Or. 149, 159 n.6 (1992). Building on that definition, the Oregon Court of Appeals has
explained "economic losses" are "financial losses to intangibles," like attorney's fees or lost
profits. Harris v. Suniga, 209 Or.App. 410,418 (2006), aff'd 344 Or. 301 (2008). In this case, the
parties do not dispute that Plaintiffs allege only economic damages flowing from Defendants'
negligence. Thus, the economic loss doctrine is implicated by their claim.
for a plaintiff to recover in a negligence action based purely on economic loss, she must
"show some source of duty outside the common lmv of negligence, such as a special relationship
or status that imposed a duty on the defendant beyond the common-law negligence standard."
Harris, 344 Or. at 308 (citations and quotation marks omitted). Here, Plaintiffs present evidence
that Sutton owed special duties to Plaintiffs as their agent. Oregon courts have previously
categorized principle-agent relationships as "special" for the purposes of the economic loss
doctrine. Abraham v. T. 1-Ienrv Const.. Inc., 230 Or.App. 564, 570 (2009), affd on other
grounds. 350 Or. 29 (20 II). In doing so, they have cautioned that whether a relationship
qualifies as "special" is a functional, not formal, inquiry. hl: at 571. "[T]he crucial aspect of the
relationship is not its name, but the roles that the parties assume in the particular interaction
where the alleged tort and breach of contract occur." Strader v. GranQ.e Mutual Ins. Co., 179
Or.App. 329, 334, rev. den., 334 Or. 190 (2002). The key is whether the defendant acted, at least
in part, to further the economic interests of the other party. Conwav v. Pacific Univ., 324 Or.
231' 236 ( 1996).
On the record before the Court, it is apparent that Sutton acted as Plaintiffs' agent
throughout the sale of the Cirrus and owed Plaintiffs the duties of care and loyalty during that
transaction. See Onita Pacific Corp., 315 Or. at 161 ("An agent owes duties of care and loyalty to
his or her principal."). The parties were in the kind of relationship that gives rise to a heightened

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standard of care. Loosli v. Citv of Salem, 215 Or.App. 502, 511 n.3 (2007) aff'd, 345 Or. 303
(2008) ("In a principal-agent relationship ... there is a heightened duty on the part of and an
entrustment of responsibility to the actor. .. to exercise independent judgment on the
principal's ... behalfto achieve a desired outcome or resolution.").
What is less clear is whether the parties were still in that relationship at the time of the
plane crash. When did Sutton's duties to Plaintiffs terminate? Did Sutton act on Plaintiffs' behalf
or in his own interest when he ferried the plane to Florida? What was the scope and timeline of
the parties' principal-agent relationship? To ansvver these questions, Defendants reference
Sutton's testimony that he independently contracted with SLI to ferry the plane. Defendants note
Plaintiffs' response to an interrogatory bolsters Sutton's testimony by identifying the buyer as
the only party who contracted with Sutton to deliver the aircraft. Campanella AfT. Ex. 4, at 4. In
response, Plaintiffs point out that the contract Sutton negotiated on their behalf obligated them to
transport the plane to Florida. However, they do not offer any affidavits or other evidence to
challenge Sutton's statement that, despite the contract terms,

he undertook delivery

independently.
On the record, it appears that Defendants have a strong defense to Plaintiffs' claims
involving the Cirrus. However, the sales contract between SLI and Plaintiffs creates some
confusion. Viewing the evidence in the light most favorable to the non-moving party, the Court
finds that persisting questions regarding the parties' roles in the plane's trip to Florida "particular interaction where the alleged tort. .. occur[ed]" -

the

preclude summary judgment.

Strader, 179 Or.App. at 334. Rather than determine as a matter of law whether Defendants owed
Plaintiffs any "special" obligations in relation to the plane's transportation and thus whether

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Oregon's economic loss doctrine bars Plaintiffs' negligence claim, the Court will consider these
issues during its upcoming bench trial.
II.

Third Claim for Relief: Breach of Contract

Plaintiffs allege Defendants breached their contract by failing to deliver the Cirrus to
Florida undamaged. In their summary judgment motion, Defendants argue the parties did not
have a contract and thus there was nothing to breach. Sutton contracted directly with SLI to
transport the aircraft to Florida. Plaintiffs were not involved in the transaction. Nor did they have
any interest in the aircraft at the time of the crash.
As discussed above, Defendants' rendition of the facts is not easily squared with section
4.1 of the sales contract between SLI and Plaintiffs. There, SLJ committed to pay $4,000 directly
to Plaintiffs for the movement of the plane. Sutton Aff. Ex. 2, at 2. In turn, Plaintiffs agreed to
"move the aircraft to the buyer's airport" in Florida. Sutton AlT. Ex. 2, at 2. This contractual
language suggests Plaintiffs were indeed involved in the Cirrus' transfer. It is at odds with
Sutton's testimony. Because genuine issues of fact remain regarding the parties' obligations as to
the plane's transportation, summary judgment is not appropriate.
ORDER

For the reasons stated above, Defendants' summary judgment motion (#84) is DENIED.

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