Munich v. Columbia Basin Helicopter, Inc.
Filing
54
ORDER ON MOTION FOR SUMMARY JUDGMENT: The Court GRANTS IN PART and DENIES IN PART defendant's motion for summary judgment 30 . The Court DENIES summary judgment as to plaintiff's breach of contract, unjust enrichment, and fraud cl aims. The Court GRANTS summary judgment as to plaintiff's intentional interference with contractual relations claim. Plaintiff's intentional interference with contractual relations claim is hereby DISMISSED. IT IS SO ORDERED. Signed on 8/26/16 by Magistrate Judge Patricia Sullivan. (dsg)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
PENDLETON DIVISION
HANS W. MUNICH,
Plaintiff,
v.
Case No. 2:13-CV-00906-SU
ORDER ON MOTION FOR
SUMMARY JUDGMENT
COLUMBIA BASIN HELICOPTER,
INC.,
Defendant.
SULLIVAN, United States Magistrate Judge:
Plaintiff Hans Munich, an Alaska resident, seeks to recover damages from Columbia Basin
Helicopter, Inc. (“CBH”), an Oregon company, on allegations of breach of contract, or alternatively
unjust enrichment. Plaintiff also alleges fraud and intentional interference with contractual relations.
Defendant moves for summary judgment and plaintiff opposes the motion. Both parties have
consented to this Court’s jurisdiction pursuant to 28 U.S.C. § 636. For the following reasons, the
Court grants defendant’s motion for summary judgment as to plaintiff’s intentional interference with
contractual relations claim. The Court denies summary judgment on the remaining breach of
contract, unjust enrichment, and fraud claims.
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BACKGROUND
This case concerns the sale of a helicopter and the condition of the helicopter at the time of
sale, specifically the helicopter’s “airworthiness.” Under the Federal Aviation Regulations (“FAR”),
“No person may operate a civil aircraft unless it is in an airworthy condition.” 14 C.F.R. § 91.7.
An aircraft is “airworthy” when it complies with extensive federal safety mandates set forth in the
FAR.1 14 C.F.R. § 3.5; see e.g. 14 C.F.R., Parts 21-49, 91, 125, 135. An aircraft must also comply
with Airworthiness Directives (“ADs”), added requirements that Federal Aviation Administration
(“FAA”) issues periodically to supplement the FAR. See 14 C.F.R. §§ 39.3, 39.5, 39.7, 39.11,
39.13. In order to verify regulatory compliance, the FAR require aircraft-owners to maintain detailed
and complete logbooks documenting inspections and work performed on the aircraft. See, e.g., 14
C.F.R. §§ 91.407(a), 91.417, 91.419, 43.9, 43.11. Furthermore, an aircraft may not be operated
unless the FAA has found it airworthy, and issued a certificate of airworthiness. 14 C.F.R. §§ 91.7,
21.183, 21.185. Once an aircraft owner obtains an airworthiness certificate, “it remains in full force
and effect as long as the [aircraft] complies with” essential maintenance, safety, and record-keeping
requirements in the FAR. Old Republic Ins. Co. v. Griffin, 402 F.3d 876, 877 (9th Cir. 2005); 14
C.F.R. § 21.181.2 In the case of noncompliance, an airworthiness certificate is no longer effective.
Id. If an aircraft is sold, the airworthiness certificate transfers to the new owner of the aircraft. 14
1
“Airworthy means the aircraft conforms to its type design and is in a condition for safe
operation.” 14 C.F.R. § 3.5. The aircraft’s functional ability to be airborne does not determine
its “airworthiness.”
2
The FAR’s 14 C.F.R § 21.181 provides: “Unless sooner surrendered, suspended,
revoked, or a termination date is otherwise established by the FAA, airworthiness certificates are
effective . . . as long as the maintenance, preventive maintenance, and alterations are performed
in accordance with Parts 43 and 91 of this chapter and the aircraft are registered in the United
States.”
Page 2 - ORDER ON MOTION FOR SUMMARY JUDGMENT
C.F.R. § 21.179.
In February 2012, plaintiff Munich contacted defendant CBH about purchasing one of its
helicopters. David McCarty Decl., at 2 (Doc. #32); David McCarty Decl. Ex. 1, at 1-3 (Doc. #321). Plaintiff owns Yakutat Coastal Airlines, a company that provides scenic and recreational
passenger flights in Alaska. Defendant, an eastern Oregon company, supplies helicopters and support
personnel for agricultural, forest firefighting, and general utility lift purposes. Munich Decl. Ex. 2,
at 1 (Doc. #39-2): David McCarty Decl., at 1; Def.’s Mot. Summ. J., at 3 (Doc. #30). Defendant’s
president, David McCarty, quoted plaintiff a price of $375,000 for a 1974 Hiller UH-12E Soloy
helicopter. David McCarty Decl. Ex. 1, at 3.
Before signing a contract with defendant, plaintiff had a mechanic conduct a pre-purchase
inspection of the helicopter. Munich Decl., at 3 (Doc. #39); David McCarty Decl., at 2-3. After
signing the contract but before consummating the sale, plaintiff had another mechanic conduct an
appraisal inspection for financing purposes. Munich Decl., at 3; David McCarty Decl., at 3-4. At
both inspections, the recently refurbished helicopter was in “cosmetically excellent condition.”
Munich Decl., at 2. The helicopter’s logbooks appeared to be in order and contained certifications
that the helicopter was airworthy and in compliance with a recent annual inspection and all applicable
ADs. Munich Decl., at 2-3. McCarty also represented to plaintiff that the helicopter was authorized
to fly charter and commuter passenger flights pursuant to 14 C.F.R., Part 135 (“Part 135”), which
sets forth stringent additional requirements beyond general airworthiness standards. Munich Decl.,
at 2; Smith Decl. Ex. 4 (Doc. #38-4) (Part 135 certification); see 14 C.F.R. §§ 135.1-135.43.
However, plaintiff alleges that defendant failed to provide the two mechanics with all of the
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helicopter’s logbooks including the engine logbooks.3 Munich Decl., at 3; Munich Decl. Ex. 8, at
1 (appraiser email); Grogan Decl., at 1-2 (Doc. #41). Plaintiff states he was aware that defendant
failed to provide the mechanics with complete logbooks and that defendant did not produce the
engine logbooks, “but given the otherwise excellent condition of the Helicopter, and the
representations and warranties provided, I was not concerned.” Munich Decl., at 3.
For a sales contract, plaintiff downloaded a generic form entitled “Aircraft Purchase/Sales
Agreement” from the Aircraft Owners and Pilots Association website. Munich Decl., at 2. The form
contained blanks and alternative clauses in italics. Munich Decl. Ex. 1, at 1-3. Plaintiff filled in
some of the blanks, signed the contract, and then faxed it to McCarty. Munich Decl., at 2; David
McCarty Decl., at 3; McCarty Decl. Ex. 1, at 5-7 (Doc. #32-1) (partially signed contract). After
reviewing the contract, McCarty signed it and sent it back to plaintiff. David McCarty Decl., at 3.
Plaintiff and defendant have submitted different, competing versions of the final signed contract. See
Munich Decl. Ex. 1, at 1-3 (signed contract); Brasel Decl., at 4-6 (Doc. #47) (signed contract);
Suppl. David McCarty Decl., at 3-5 (Doc. #49) (signed contract). Plaintiff’s version contains
additional handwritten notations not included in defendant’s version. Both parties assert that their
submission is a “true” copy of the final contract. Munich Decl., at 2; Suppl. David McCarty Decl.,
at 2; Def.’s Suppl. Reply, at 9-10 (Doc. #46).
Although questions remain as to handwritten notations in the final contract, the parties do not
dispute the printed text of the contract. The signed agreement contains two sections relating to the
3
There is an issue of fact in the record as to this point. Defendant submits into evidence
a declaration from David McCarty’s daughter, Jolee McCarty, who was present during both
inspections. She states that she provided the mechanics with all the records and they did not tell
her the records were unsatisfactory or incomplete. Jolee McCarty Decl., 2-3 (Doc. #33); see
David McCarty Decl., at 2-3.
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airworthiness and maintenance. Section No. 6 states, in pertinent part, “The Aircraft will be
delivered to Buyer in its present condition, normal wear and tear excepted, with a valid FAA
Certificate of Airworthiness.” Munich Decl. Ex. 1, at 2; Suppl. David McCarty Decl., at 4. Section
No. 7 of the form agreement provides two alternative clauses in italics that read:
7. Warranties. Alternative clauses for this section:
[Except as provided in this agreement, this Aircraft is sold ‘as is.’ There are no
warranties, either express or implied with respect to merchantability or fitness
applicable to the Aircraft or any equipment applicable thereto including warranties
as to the accuracy of the Aircraft’s logbooks, made by Seller. Buyer agrees that no
warranty has been expressed or implied by Seller and that Buyer has inspected the
Aircraft and understands that it is being purchased ‘as is.’ Buyer hereby expressly
waives any claim for incidental or consequential damages, including damages
resulting in personal injury against Seller].
[Seller warrants that (a) the Aircraft is in airworthy condition; (b) the Aircraft has
a current annual inspection; (c) the Aircraft has a currently effective Standard
Category airworthiness certificate issued by the Federal Aviation Administration; (d)
all of the Aircraft’s logbooks are accurate and current; (e) all applicable
Airworthiness Directives have been complied with; (f)_________________].
Munich Decl. Ex. 1, at 2; Suppl. David McCarty Decl., at 4.
In accordance with the contract, plaintiff paid $375,000 for the helicopter and took
possession of the helicopter and its records on or about October 30, 2012. Munich Decl., at
2. A few days before he picked up the helicopter, plaintiff, an FAA-certified mechanic,
performed his own brief inspection of the helicopter. David McCarty Decl., at 4; Ben
McCarty Decl., at 2. After purchase, plaintiff flew the helicopter and was satisfied with its
performance on those test flights. Munich Decl., at 3. However, plaintiff states that when
he reviewed the full logbooks after purchase, he found that the helicopter engine had been
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removed in 2005 but could not find any record from the date of its reinstallation. Munich
Decl., at 3. Further inspection of the logbooks revealed other gaps, raising concerns that
various engine components could be past their life limits and may not have been replaced as
required. Munich Decl., at 3-4.
In December, plaintiff contacted McCarty, who agreed to provide him with
replacement parts from another engine and asked plaintiff to ship the turbine section of the
engine to a Louisiana company, T&M Aviation, who would perform the work. Munich
Decl., at 4; Munich Decl. Ex. 9, at 2-3 (Doc. #39-9)(emails); Def.’s Reply, at 9 (Doc. #42).
Complying with McCarty’s request, plaintiff shipped the engine section to T&M Aviation on
January 17, 2013, and notified McCarty by email when it arrived. Munich Decl. Ex. 9, at
1 (emails); Munich Decl. Ex. 5, at 3 (UPS receipt) (Doc. #39-5). It is unclear how or when
discussions ceased between plaintiff and McCarty, but in March, plaintiff had the engine
section shipped from T&M Aviation to Sunrise Helicopter, Inc. in Texas. Larsen Decl. Ex.
1, at 36 (Doc. #31-1) (email); Peacocke Decl., at 1-2 (Doc. #40). When the engine section
was disassembled and examined, plaintiff alleges that his representatives found it was in poor
condition. Munich Decl., at 4. Also, even though CBH’s records attested to full compliance
with all ADs, the disassembled engine was missing the parts and modifications that AD 200510-13 required in order to prevent engine malfunctions during flight. Munich Decl., at 4;
Peacocke Decl., at 2; see Smith Decl. Ex. 2, at 1 (Doc. #38-2). Plaintiff continued to email
McCarty seeking resolution and advised McCarty that he would contact the FAA with his
concerns if defendant would not resolve them. Larsen Decl. Ex. 1, at 38, 40-41.
Page 6 - ORDER ON MOTION FOR SUMMARY JUDGMENT
On May 31, 2013, plaintiff filed the present complaint in federal court. Also in May
2013, plaintiff reported defendant to the Portland FAA, alleging defendant operated the
helicopter with certain engine parts past their legal life limit. Larsen Decl. Ex. 1, at 57 (Doc.
#31-1); Larsen Decl. Ex. 2, at 6 (Doc. #31-2); Def.’s Mot. Stay, at 2 (Doc. #12). While this
case was pending, the FAA corresponded with McCarty seeking records and information.
Smith Decl. Ex. 1, at 1-3 (Doc. #38-1) (CBH letter to FAA); Larsen Decl. Ex. 2, at 6. On
July 24, 2013, the FAA sent plaintiff a letter stating its findings that defendant did not operate
the helicopter with engine turbine wheels past their life limits. Larsen Decl. Ex. 2, at 6.
However, the FAA lacked sufficient information to determine the status of the other engine
parts: the compressor impeller and the bleed valve. Larsen Decl. Ex. 2, at 6. The FAA
stated that it found incomplete maintenance records and, as a result, it was opening a formal
investigation. Larsen Decl. Ex. 2, at 6. The FAA later informed McCarty of the results of
its investigation in a letter dated February 26, 2014. Smith Decl. Ex. 2. The FAA concluded
that defendant had failed to comply with AD 2005-10-13, had flown the plane when it was
out of compliance, and, in doing so, had violated multiple FAR requirements. Smith Decl.
Ex. 2, at 1-2. The letter stated, “As a result of the above, [CBH] operated [the helicopter]
when the aircraft was not in an airworthy condition.” Smith Decl. Ex. 2, at 1. The FAA
referred the case to the U.S. Attorney’s Office in October 2015. Suppl. Larsen Decl., at 85
(Doc. #50) (USAO letter); Pl.’s Status Report Ex. 1, at 1 (Doc. #51-1) (USAO letter). In
letters dated June 27, 2016, an Assistant U.S. Attorney (“AUSA”) informed the parties that
Page 7 - ORDER ON MOTION FOR SUMMARY JUDGMENT
he was declining the FAA’s request to file suit against defendant. Id. He stated, “My
declination is obviously not an authoritative comment on the merits.” Id.
In the present case, the Court granted defendant’s request to stay litigation pending
resolution of the FAA investigation and related proceedings. However, after more than a
year without resolution, the parties agreed to resume the case. Joint Status Report (Doc.
#27); see Doc. #19, 28. Plaintiff seeks damages, alleging breach of contract, unjust
enrichment, fraud, and intentional interference with contractual relations. Compl., at 2-5
(Doc. #1). On February 1, 2016, defendant filed a motion for summary judgment on all
claims. Plaintiff filed a response opposing the motion, and defendant filed a reply. On May
17, 2016, the Court heard oral arguments. After the U.S. Attorney’s Office informed the
parties it was declining the FAA’s request that it sue defendant, both parties filed
supplemental materials.
LEGAL STANDARD
A party moving for summary judgment must show there is “no genuine dispute as to
any material fact” and that the party is “entitled to judgment as a matter of law.” Fed. R. Civ.
P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the moving party meets this
burden, the burden shifts to the non-moving party to present specific facts that show there is
a genuine issue for trial. Celotex, 477 U.S. at 324. Disputed facts do not preclude summary
judgment unless they are material facts, facts that could “affect the outcome of the suit under
the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Thus, in
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reviewing the motion for summary judgment, the Court construes all facts in the light most
favorable to the non-moving party. Leisek v. Brightwood Corp., 278 F.3d 895, 898 (9th Cir.
2002). After doing so, if a “fair-minded jury still could not return a verdict for the plaintiff
on the evidence presented,” the Court must grant summary judgment. Anderson, 477 U.S.
at 252. Even in cases in which the parties agree on the material facts, “summary judgment
should not be granted where contradictory inferences may reasonably be drawn from
undisputed evidentiary facts” and could lead to a reasonable jury finding for the nonmoving
party. Hollingsworth Solderless Terminal Co. v. Turley, 622 F.2d 1324, 1335 (9th Cir.
1980); United States v. Diebold, Inc., 369 U.S. 654, 655 (1962).
DISCUSSION
Jurisdiction of this action is founded upon diversity of citizenship. Therefore, the
Court applies the substantive law of Oregon, where applicable, and the federal rules of civil
procedure. Snead v. Metro. Prop. & Cas. Ins. Co., 237 F.3d 1080, 1090 (9th Cir. 2001).
Before addressing the substance of plaintiff’s claims, the Court considers defendant’s
procedural arguments for summary judgment. Defendant argues (1) that the Court should
grant summary judgment as a sanction because “plaintiff has conceded his failure to preserve
crucial evidence;” and (2) that “[b]ecause plaintiff did not allege [defendant’s] failure to
comply with an Airworthiness Directive in his Complaint, he cannot rely on that assertion to
defeat summary judgment.” Def.’s Reply, at 3, 9; see Def.’s Mot. Summ. J., at 15.
First, defendant urges the Court to dismiss the case on summary judgment as a
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sanction for plaintiff’s alleged spoilation of evidence. District courts have inherent
discretionary power to impose appropriate sanctions, including dismissal, when a party has
destroyed or otherwise tampered with evidence. Leon v. IDX Sys. Corp., 464 F.3d 951, 958
(9th Cir. 2006); Lane v. Ingersoll-Rand Co., 2014 WL 4639854, at *8 (D. Or. Sept. 16,
2014); Woodard v. Ford Motor Co., 2013 WL 3024828, at *2-*3 (D. Or. June 13, 2013).
However, a “finding of willfulness, fault, or bad faith is required for dismissal to be proper.”4
Leon, 464 F.3d at 958; Lane, 2014 WL 4639854, at *9; see Grove City Veterinary Serv.,
LLC v. Charter Practices Int’l, LLC, 2015 WL 4937393, at *3 (D. Or. Aug. 18, 2015).
Here, defendant fails to establish that plaintiff tampered with or destroyed evidence, much
less that plaintiff did so willfully or in bad faith. Nor has defendant established plaintiff was
even at fault. Defendant is correct that the engine parts at issue in this case are no longer in
plaintiff’s possession, but it was defendant that initially instructed plaintiff to relinquish
4
Defendant argues that a “district court may grant summary judgment for a defendant on
the grounds that a party has failed to preserve evidence necessary for the other side’s case, even
in the absence of bad faith.” Def.’s Mot. Summ. J., at 15. However, in support of this
contention, plaintiff cites only cases in which the sanction was exclusion of the evidence, not
dismissal of the entire case. See Unigard Sec. Ins. Co. v. Lakewood Eng’g & Mfg. Corp., 982
F.2d 363, 368-69 (9th Cir. 1992) (affirming district court’s exclusion of expert testimony as
sanction for a party’s “willful” destruction of evidence); see also Weidler v. Spring Swings Inc.,
55 F. App’x 419, 419 (9th Cir. 2003) (unpublished) (affirming district court’s exclusion of key
evidence due to willful spoilation, an exclusion which resulted in dismissal for lack of evidence at
summary judgment in Weidler v. Spring Swings Inc., No. 3:99-cv-01199-HA (D. Or. April 27,
2001), ECF No. 65, at *8, *11. ). Moreover, “[e]ven when a court imposes a lesser evidentiary
sanction than outright dismissal, it must find that the party willfully destroyed the evidence.” Pirv
v. Glock, Inc., 2009 WL 54466, at *5 (D. Or. Jan. 8, 2009); see Akiona v. United States, 938
F.2d 158, 161 (9th Cir. 1991). Unlike in the cases defendant cites, defendant seeks dismissal as a
sanction and fails to establish that plaintiff acted willfully.
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possession of them. Munich Decl. Ex. 9, at 2-3 (emails). Defendant instructed plaintiff to
send the parts to T&M Aviation in Louisiana so defendant could make repairs. Munich Decl.
Ex. 9, at 2-3 (emails); Munich Decl., at 4; Def.’s Reply, at 9. Now, defendant argues that
because plaintiff no longer possesses the engine parts, plaintiff should be sanctioned. Indeed,
after negotiations with defendant broke down, plaintiff sold the parts to Sunrise Helicopter
in Texas and had them shipped there from Louisiana. Munich Decl., at 4. However, this
alone does not establish spoilation. In fact, Sunrise Helicopter’s president states in his
declaration that he has retained all relevant parts received from plaintiff and will make them
available for inspection and trial. Peacocke Decl., at 1-2. Defendant does not allege that it
sought parts as evidence and plaintiff withheld, destroyed, or otherwise spoiled them. There
is no evidence that defendant made any effort to obtain or inspect the parts during discovery,
despite defendant’s assertion that the parts are “crucial evidence” required “for CBH to
conduct an independent investigation and put on its defense.” Def.’s Mot. Summ. J., at 15;
Def.’s Reply, at 10. Absent any evidence of willful spoilation, the Court declines to impose
any sanctions at this time.
Regarding the second procedural argument, defendant seeks to prevent the Court from
considering “all references to CBH’s allegedly ‘egregious failure’ to comply with the
Airworthiness Directive, as well as all legal argument based thereon and issues of fact arising
therefrom.” Def.’s Reply, at 3. Defendant argues that because plaintiff did not include in
the complaint specific factual allegations concerning non-compliance with AD 2005-10-13,
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plaintiff is foreclosed from making the allegations at summary judgment. Def.’s Reply, at
3. Defendant misconstrues the role of the complaint in civil litigation. The purpose of the
complaint is to “give the defendant fair notice of what the claim is and the grounds on which
it rests,” but it “need not contain detailed factual allegations.” Mendiondo v. Centinela Hosp.
Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008); Bell Atl. Corp. v. Twombly, 550 U.S. 544,
555 (2007). Defendant’s reliance on Wasco Products, Inc. v. Southwall Techs., Inc., 435
F.3d 989, 992 (9th Cir. 2006) and other similar cases is misplaced. In Wasco, the plaintiff
alleged a claim of civil conspiracy for the first time at summary judgment in an effort to toll
the expired statute of limitations. Id., at 991-92. In the other cases cited by defendant, the
courts rejected efforts by plaintiffs at summary judgment to either add new claims, as in
Bepple v. Shelton, 2016 WL 633892, at *8 n.4 (D. Or. Feb. 17, 2016) and Shilling v.
Crawford, 2007 WL 2790623, at *9 n.2 (D. Nev. Sept. 21, 2007) or to add a new theory of
standing, as in La Asociacion de Trabajadores de Lake Forest v. City of Lake Forest, 624
F.3d 1083, 1089 (9th Cir. 2010). Here, the allegations of noncompliance with AD 2005-1013 do not create a new claim, a basis for tolling a statute of limitations, or new theory of
standing. Rather, they add factual detail to plaintiff’s existing claims that defendant breached
the contract and committed fraud by selling him a helicopter that was not airworthy.
Accordingly, the Court rejects defendant’s request that it disregard evidence and argument
concerning alleged noncompliance with AD 2005-10-13.
I. Plaintiff’s Claims
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Before addressing the disputed claims, the Court notes that plaintiff has agreed to drop
his claim for intentional interference with contractual relations. Pl.’s Resp. Mot. Summ. J.,
at 1 (Doc. #37). Accordingly the Court dismisses that claim. The Court examines each of
the remaining claims in turn.
A. Breach of Contract Claim
In his breach of contract claim, plaintiff alleges that defendant sold him a helicopter
that was not airworthy and, in doing so, breached two separate sections of the contract. Pl.’s
Resp. Mot. Summ. J., at 4, 17; Compl., at 3. In order to obtain summary judgment on this
claim, defendant must show that no “fair-minded jury could return a verdict for the plaintiff
on the evidence presented.” Anderson, 477 U.S. at 252. Not only does defendant fail to
meet that burden, defendant’s motion does not apply the correct law governing the breach of
contract claim. Defendant’s argument for summary judgment relies entirely on an Oregon
statute concerning a buyer’s right to revoke acceptance of nonconforming goods after their
delivery, O.R.S. § 72.6080. Def.’s Mot. Summ. J., at 11-12. The statute, entitled
“Revocation of acceptance in whole or in part,” applies when a buyer seeks to return
nonconforming goods and avoid any further obligation to pay for them, thereby rescinding
the purchase contract.5 Lytech Sols., Inc. v. Steller Inc., 2014 WL 7250695, at *2 (D. Or.
5
The statute reads as follows:
72.6080. UCC 2-608. Revocation of acceptance in whole or in part
(1) The buyer may revoke acceptance of a lot or commercial unit whose
nonconformity substantially impairs its value to the buyer if the buyer has accepted
it:
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Dec. 16, 2014); DCCI, LLC v. Keith, 2014 WL 1269696, at *5-*6 (D. Or. Mar. 26, 2014);
see In re Empire Pac. Indus., Inc., 71 B.R. 500, 506 (Bankr. D. Or. 1987); see also O.R.S.
§ 72.7110. When a buyer affirms the contract, pays for and retains nonconforming goods,
and seeks damages for breach, Section 72.6080 and its requirements are irrelevant. Instead,
the applicable statute is O.R.S. § 72.7140, entitled “Buyer's damages for breach in regard to
accepted goods.”6 Lytech Sols., 2014 WL 7250695, at *2 (D. Or. Dec. 16, 2014); see In re
Empire Pac., 71 B.R. 500 at 506. Here, plaintiff accepted the helicopter and paid for it.
Plaintiff does not seek to revoke his acceptance of the helicopter, to avoid paying for it, or
to rescind the contract. Rather, plaintiff affirmed the contract, notified defendant of the
helicopter’s nonconformity, and now seeks damages for breach. Compl., at 3. Accordingly,
Section 72.6080 is inapplicable to this case and defendant’s arguments based on the statute
(a) On the reasonable assumption that its nonconformity would be cured and
it has not been seasonably cured; or
(b) Without discovery of such nonconformity if the acceptance was
reasonably induced either by the difficulty of discovery before acceptance or
by the seller's assurances.
(2) Revocation of acceptance must occur within a reasonable time after the buyer
discovers or should have discovered the ground for it and before any substantial
change in condition of the goods which is not caused by their own defects. It is not
effective until the buyer notifies the seller of it.
(3) A buyer who so revokes has the same rights and duties with regard to the goods
involved as if the buyer had rejected them.
6
Under Section 72.7140, a buyer of goods may recover damages if he has accepted
goods from the seller and given sufficient notification to the seller of the goods’ nonconformity
with the contract.
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do not aid defendant’s motion for summary judgment.7
Rather, the salient question is whether defendant breached the terms of its contract
with plaintiff. In general, a “breach of contract is a failure, without legal excuse, to perform
any promise that forms all or part of the contract.” DCCI, 2014 WL 1269696, at *5.
Plaintiff alleges defendant breached two separate sections in the contract: Section No. 6 when
defendant allegedly failed to deliver the helicopter “with a valid FAA Certificate of
Airworthiness” and Section No. 7 when defendant delivered a helicopter not in airworthy
condition or as otherwise warranted. Pl.’s Resp. Mot. Summ. J., at 4, 8-10, 17.
(1) Alleged Breach of Section No. 6
Although the parties have submitted different versions of the final contract, both
versions contain Section No. 6, which promises defendant will deliver the helicopter “with
a valid FAA Certificate of Airworthiness.” Munich Decl. Ex. 1, at 3 (signed contract); Brasel
Decl., at 5 (signed contract). Neither side disputes that they agreed to this term. At issue is
whether defendant breached by delivering the helicopter with an invalid certificate. Plaintiff
argues defendant breached, because the helicopter’s airworthiness certificates ceased to be
valid when the helicopter failed to comply with “a long list of FAA mandated conditions.”
Pl.’s Resp. Mot. Summ. J., at 4. Defendant contends that the helicopter’s airworthiness
7
Similarly, defendant’s reliance on a single case, DCCI, LLC v. Keith, 2014 WL
1269696 (D. Or. Mar. 26, 2014), is misplaced. The plaintiff in DCCI sought to revoke his
acceptance of a defective classic car and rescind the contract for its purchase under Section
72.6080. Id., at *5.
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certificates were valid at the time of sale, because the FAA had not suspended, revoked or
terminated them. Def.’s Suppl. Reply, at 8.
The FAR and case law do not support defendant’s assumption that only FAA action
such as revocation or suspension may invalidate an airworthiness certificate. Noncompliance
with certain FAR also renders an airworthiness certificate invalid. Old Republic Ins., 402
F.3d at 877; see Lanners v. Whitney, 428 P.2d 398, 399-403 (Or. 1967); Ochs v. Avemco Ins.
Co., 636 P.2d 421, 422, 423 n.1 (Or. Ct. App. 1981). Under 14 C.F.R. § 21.181, “[u]nless
sooner surrendered, suspended, revoked, or a termination date is otherwise established by the
FAA, airworthiness certificates are effective . . . as long as the maintenance, preventive
maintenance, and alterations are performed in accordance with Parts 43 and 91 of [the FAR]
and the aircraft are registered in the United States.” 14 C.F.R. § 21.181 (a)(1). Thus, the
helicopter’s certificates of airworthiness would not have been effective at the time of sale if
defendant had failed to comply with regulations contained in parts 43 and 91 of the FAR.
Such noncompliance would violate the contractual requirement of a “valid FAA certificate
of airworthiness.”8
8
Although defendant does not argue the point, the Court notes there is no ambiguity as to
the meaning of “valid” in this context. The terms “valid” and “effective” are clearly synonymous
such that an ineffective certificate is the same as an invalid one. Other courts have reached the
same conclusion and used the terms synonomously. See, e.g., Luig v. N. Bay Enterprises, Inc.,
55 F. Supp. 3d 942, 953 (N.D. Tex. 2014), rev’d and vacated in part on other grounds, 2016
WL 1192529 (5th Cir. Mar. 28, 2016) (“aircraft must continually satisfy FAA airworthiness
requirements in order for airworthiness certificates to remain valid”); Bill Hames Shows, Inc. v. J.
J. Taylor Syndicate No. 173, 642 F.2d 179, 180 (5th Cir. 1981) (“The alteration, being major
under the FAR’s definition, invalidated the craft’s airworthiness certificate until such time as the
Page 16 - ORDER ON MOTION FOR SUMMARY JUDGMENT
Not only does Section 21.181 make clear that certificate-holders must continually
comply with regulations, defendant’s airworthiness certificates also notified defendant of this
obligation. Issued in 2001, the helicopter’s standard and special airworthiness certificates
advised defendant that their continued validity depended on compliance, under Section
21.181, with Parts 43 and 91 of the FAR. Defendant’s standard airworthiness certificate
states: “Unless sooner surrendered, suspended, revoked, or a termination date is otherwise
established by the Administrator, this airworthiness certificate is effective as long as the
maintenance, preventative maintenance, and alterations are performed in accordance with
Parts 21, 43, and 91 of the Federal Aviation Regulations.” Parsons Decl., at 6 (Doc. #48)
(Standard Certificate). The back of the defendant’s special airworthiness certificate reads:
“Unless sooner surrendered, suspended, or revoked, this airworthiness certificate is in effect
for the duration and under the conditions prescribed in FAR Part 21, Section 21.181.”
Parsons Decl., at 8 (Special Certificate).
Thus, defendant’s compliance with Parts 43 and 91 of the FAR is material to whether
or not defendant breached its contract with plaintiff. To prevail on summary judgment,
defendant must demonstrate the absence of any genuine issue of fact regarding the validity
of the airworthiness certificates at the time of sale. See In re Oracle Corp. Sec. Litig., 627
craft was approved to return to service by the FAA”); O’Connor v. Proprietors Ins. Co., 696
P.2d 282, 283, 285 (Colo. 1985) (using the terms “effective” and “valid” synonymously). Thus,
an ineffective airworthiness certificate would be invalid and would not satisfy the requirement of
Section No. 6 of the sales contract.
Page 17 - ORDER ON MOTION FOR SUMMARY JUDGMENT
F.3d 376, 387 (9th Cir. 2010); Fed. R. Civ. P. 56(a). Defendant fails to do so, instead
arguing vigorously that the Court should credit its evidence over that of plaintiff. Issues of
material fact preclude summary judgment.
For example, Part 91 includes 14 C.F.R. § 91.417 and § 91.419 which require an
aircraft owner to maintain and transfer to a new owner records containing the “total time in
service” and “current status of life-limited parts of . . . each engine.” 14 C.F.R. §§
91.417(a)(2), 91.419. Plaintiff alleges defendant violated this regulation when it failed to
provide records of the status and wear of several life-limited engine parts, including the
compressor impeller and the bleed valve. Pl.’s Resp. Mot. Summ. J., at 11. Moreover, the
FAA stated in its July 24, 2013 letter that the helicopter’s records were incomplete and
insufficient as to the impeller and bleed valve.9 Larsen Decl. Ex. 2, at 6 (Doc. #31-2).
Defendant argues that plaintiff’s allegations of deficiencies in the logbooks lack merit and that
the FAA never pursued the allegations. Def.’s Suppl. Reply, at 5-6. Whether defendant
invalidated the certificates of airworthiness by failing to comply with those regulations is one
of several disputes of material fact.
A valid airworthiness certificate also requires a certificate-holder to engage a qualified
mechanic to complete annual inspections certifying airworthiness. See, e.g., 14 C.F.R. §§
9
The FAA letter states “without documentation . . . it cannot be determined if the
Impeller had exceeded its life limit . . . the investigation of the Bleed Valve was inconclusive
because of the lack of documentation” and that “this finding, along with findings that other
maintenance entries could not be obtained, has led the office to open a formal investigation.”
Larsen Decl. Ex. 2, at 6 (Doc. #31-2).
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91.409(a), 43.11. The certificate-holder is required to maintain and transfer to a buyer
records of those inspections as well as records showing the “current status of applicable
airworthiness directives (AD) and safety directives including, for each, the method of
compliance, the AD or safety directive number and revision date.”
14 C.F.R. §§
91.417(a)(2), 91.419. The certificate-holder violates 14 C.F.R. § 43.12 if it makes or causes
to be made a “fraudulent or intentionally false entry in any record or report” of compliance.
Here, it is undisputed that defendant provided plaintiff records, signed by defendant’s
mechanic, attesting to defendant’s compliance with all applicable ADs, including AD 200510-13. Larsen Decl. Ex. 1, at 98 (Doc. #31-1); Munich Decl. Ex. 3, at 3 (Doc. #39-3). The
FAA’s subsequent investigation concluded that defendant had actually failed to comply with
AD 2005-10-13. Smith Decl. Ex. 2 (Feb. 26, 2014 FAA letter). Plaintiff alleges that
defendant’s mechanics certified in the aircraft records, at least once every year, that the
helicopter and its engine were airworthy and complied with ADs, even though there is a
dispute whether this is actually true. Pl.’s Resp. Mot. Summ. J., at 12. Plaintiff alleges those
records were false and fraudulent. Pl.’s Resp. Mot. Summ. J., at 13. Defendant argues
plaintiff’s allegations are merit-less as evidenced by the AUSA’s decision not to pursue
further action against defendant. Def.’s Suppl. Reply, at 6-7.
Defendant argues that “[p]laintiff’s complaints that certain parts were overflown and
that the Helicopter’s written records were inaccurate” lack any merit, because “the FAA has
outright rejected these claims as to both Mr. Parsons [defendant’s mechanic] and CBH.”
Page 19 - ORDER ON MOTION FOR SUMMARY JUDGMENT
Def.’s Suppl. Reply, at 6. However, the evidence is not as clear-cut as defendant claims.
Rather, the FAA records cited by defendant indicate that investigators could not reach a
conclusion whether the impeller and bleed valve were overflown due to incomplete records,
a finding that would be reiterated in the FAA’s July 24, 2013 letter. Suppl. Larsen Decl., at
95 (FAA records); Larsen Decl. Ex. 2, at 6 (letter). This is not the same as an “outright”
rejection. As for defendant’s mechanic, the FAA investigated Parsons for “an alleged
violation that reportedly occurred on Monday, February 28, 2005 in the vicinity of ECHO,
OR,” and did not find he committed an FAR violation. Parsons Decl., at 11 (FAA letter to
Parsons). It is unclear if the FAA investigated anything beyond the alleged violation on
February 28, 2005. If the investigation was limited to that date, the FAA did not “exonerate”
Parsons of all alleged violations, as defendant claims. Tr., at 44, 45-46 (Doc. #53). Nor do
the findings have any bearing on defendant CBH’s conduct, because Parsons, by his own
account, was not working for defendant until Spring of 2006, more than a year after the 2005
violation allegedly took place. Parsons Decl., at 1; Suppl. Larsen Decl., at 96. The
significance of the FAA’s determination regarding Parsons is unclear.
Contrary to
defendant’s assertions, the evidence in this case is not so one-sided as to permit summary
judgment in defendant’s favor.
This case presents factual disputes reserved for trial, not summary judgment.
Defendant’s compliance with Section 43.12 and related regulations is a genuine issue of
material fact, precluding summary judgment on the breach of contract claim.
Page 20 - ORDER ON MOTION FOR SUMMARY JUDGMENT
(2) Alleged Breach of Section No. 7
The Court need not address plaintiff’s allegations that defendant breached Section
No. 7 of the contract, because factual disputes related to Section No. 6 already preclude
summary judgment on the breach of contract claim. However, the Court notes that genuine
issues of material fact are also presented regarding Section 7 of the contract that would
preclude summary judgment.
The parties submit as evidence different versions of the final contract, and each side
states that its version is the true and correct one. Munich Decl., at 2; Suppl. David McCarty
Decl., at 2; Def.’s Suppl. Reply, at 9-10. This factual dispute is material, because it bears
on how the Court interprets Section No. 7. The section contains two “alternative” warranty
clauses. The first clause disclaims all warranties except those provided elsewhere in the
contract and states that the helicopter is sold “as is.” Munich Decl. Ex. 1, at 2 (signed
contract); Brasel Decl., at 5 (signed contract). By contrast, the second clause provides broad
warranty protections, including guarantees of airworthiness, accurate logbooks, and
compliance with all applicable ADs. Id. The first clause favors defendant and could relieve
it of some, if not all, liability. The second clause could bolster plaintiff’s case. Whether one,
both, or neither warranty clause applies could affect the outcome of the case.
However, at this point, the Court declines interpret Section No. 7, given the factual
discrepancy in the record. Plaintiff’s version of the signed contract includes a handwritten
asterisk next to the second of the two warranty clauses providing for broad protections for
Page 21 - ORDER ON MOTION FOR SUMMARY JUDGMENT
plaintiff. Munich Decl. Ex. 1, at 2 (fully signed contract). Defendant’s version does not
include any asterisk or other marking that could indicate that one or both parties selected a
particular warranty clause.10 Brasel Decl., at 5 (signed contract).
If the final contract
included an asterisk and it represented both parties’ agreement to select the second clause,
the asterisk could be determinative of Section No. 7’s meaning. Even if McCarty added the
asterisk on his own without consulting plaintiff, the asterisk could still be evidence of his
intent at the time he signed. The provenance and meaning of the asterisk presents an
ambiguity and an issue of material fact precluding summary judgment.
Nonetheless, defendant urges the Court to disregard the asterisk and accept its version
as the true version of the contract. Defendant argues that plaintiff did not rely on the asterisk
in his arguments and that defendant’s declarations from McCarty and plaintiff’s escrow agent
support defendant’s version of the final contract. Def.’s Suppl. Reply, at 10. However, such
a determination would be inappropriate at this stage. At summary judgment, the Court “must
view the evidence and all inferences therefrom in the light most favorable to the non-moving
party and may not weigh the evidence or make credibility determinations.” Hauk v. JP
Morgan Chase Bank USA, 552 F.3d 1114, 1117–18 (9th Cir. 2009); see Anderson, 477 U.S.
at 255.
The Court denies defendant’s motion for summary judgment on the breach of
contract claim.
B. Unjust Enrichment Claim
10
There are other differences between the versions but they do not appear to be material.
Page 22 - ORDER ON MOTION FOR SUMMARY JUDGMENT
Plaintiff’s second claim is for unjust enrichment. Defendant argues the Court should
dismiss the claim, because “a party to an express contract cannot recover under an unjust
enrichment theory.” Def.’s Mot. Summ. J., at 2. However, plaintiff states that he pleaded
the unjust enrichment claim “in the alternative in the event the Contract is found to be invalid
or incomplete. Until such time as the meaning of all terms, warranties and conditions
contained in the Contract are adjudicated, it would be premature to dismiss” the claim. Pl.’s
Resp. Mot. Summ. J., at 17. Indeed, a claim for unjust enrichment, also called quasicontract, “is not a claim based upon an express contract.” Kashmir Corp. v. Patterson, 616
P.2d 468, 469 (Or. 1980). Rather, it is a “remedial device which the law has formulated to
permit recovery . . . from a party even though under the law of express contracts that party
would not be obligated to pay.” Id. Here, although neither party disputes that the contract
is enforceable, the parties dispute the terms of the contract and their meaning. As the
contract’s parameters are yet to be determined, it remains possible that plaintiff could have
a claim not covered by the contract’s terms. The Court agrees with plaintiff that it would be
premature to dismiss the unjust enrichment claim.
C. Fraud Claim
Plaintiff alleges in his fraud claim that defendant provided false records and made
false assertions of airworthiness that induced plaintiff to purchase the helicopter. Pl.’s Resp.
Mot. Summ. J., at 13-14. Defendant argues the fraud claim should be dismissed, because
plaintiff will not be able to prove essential elements of the claim. Def.’s Mot. Summ. J., at
Page 23 - ORDER ON MOTION FOR SUMMARY JUDGMENT
8-11. The elements of common-law fraud claim are: (1) defendant made a material
misrepresentation that was false; (2) defendant did so knowing the representation was false;
(3) defendant intended plaintiff to rely on the misrepresentation; (4) plaintiff justifiably relied
on the misrepresentation; and (5) plaintiff was damaged as a result of that reliance. Strawn
v. Farmers Ins. Co. of Oregon, 258 P.3d 1199, 1209, adhered to on reconsideration, 256
P.3d 100 (Or. 2011). Defendant argues plaintiff cannot prove the first element, that
defendant made a false material representation, or the fourth element, that plaintiff justifiably
relied on the representation. Def.’s Mot. Summ. J., at 8. However, the evidence does not
support defendant’s arguments.
(1) False Material Representation
Defendant argues that plaintiff cannot prove the first element, because the facts show
defendant “did not warrant the Helicopter to be airworthy.” Def.’s Mot. Summ. J., at 8.
However, as the Court has already explained, there remain issues of material fact as to
whether Section No. 7 of the contract expressly warranted the helicopter as airworthy.
Moreover, it is undisputed that the contract included a promise that defendant would deliver
the helicopter with a valid airworthiness certificate that would include compliance with a long
list of airworthiness requirements. In addition, undisputed facts indicate defendant made a
variety of non-contractual representations to the plaintiff bearing on the helicopter’s
Page 24 - ORDER ON MOTION FOR SUMMARY JUDGMENT
airworthiness.11 For example, defendant provided to plaintiff’s two mechanics a signed
record attesting to defendant’s compliance with all applicable ADs. Larsen Decl. Ex. 1, at
98; Munich Decl. Ex. 3, at 3. Defendant provided plaintiff those same records when plaintiff
examined and took possession of the helicopter. Munich Decl., at 4. The helicopter’s
logbooks also contained certifications that the helicopter was airworthy and had passed a
recent annual inspection. Munich Decl., at 3-4. McCarty also represented to plaintiff that
the helicopter met Part 135 requirements and was authorized to fly air charter and commuter
flights. Munich Decl., at 2. These were all representations of fact bearing on the
airworthiness of the helicopter, which was unquestionably material to the transaction.12 See
Lanners, 428 P.2d at 402.
As for the falsity of those “representations of material fact,” there is evidence from
which a jury could reasonably conclude the representations were false. As noted earlier, the
FAA investigator concluded that defendant failed to timely comply with AD 2005-10-13.
Smith Decl. Ex. 2, at 1-2 (Doc. #38-2). If a jury credited the FAA findings, defendant’s
11
Fraud is an intentional tort and not a contract claim, and thus, it does not require the
material misrepresentation be part of a contract or take the form of a contractual warranty. See
Knepper v. Brown, 195 P.3d 383, 387 (Or. 2008). Actionable fraud may stem from noncontractual verbal misrepresentations as well as from misleading conduct, concealment of
material information, and other means of communication which relay false material facts. See,
e.g., Ogan v. Ellison, 682 P.2d 760, 765 (Or. 1984)(concealment); Smallwood v. Fisk, 934 P.2d
557, 559-660 (Or. Ct. App. 1997) (conduct).
12
All of the representations relate to whether plaintiff could legally fly the helicopter and
use it in his passenger air charter business.
Page 25 - ORDER ON MOTION FOR SUMMARY JUDGMENT
signed records attesting to compliance and airworthiness would be false. By presenting these
records to plaintiff and his mechanics, there is a question of fact whether defendant made
false material representations. As for the representations in the contract itself, there is
sufficient evidence from which a reasonable jury could conclude that the helicopter’s
airworthiness certificate was not valid at the time of sale as promised in the Section 6 of the
contract. Therefore, genuine issues of material fact preclude summary judgment.
(2) Justifiable Reliance
Defendant also argues that plaintiff cannot possibly establish the fourth element of
fraud, justifiable reliance. Def.’s Mot. Summ. J., at 8. In order for a plaintiff to justifiably
rely on a misrepresentation, the plaintiff must have had a right to rely. U.S. National Bank
v. Fought, 630 P.2d 337, 342, 348-49 (Or. 1981); Morasch v. Hood, 222 P.3d 1125, 1130
(Or. Ct. App. 2009). In other words, plaintiff’s reliance must be reasonable. Id. Whether
plaintiff had a right to rely on a given representation is a question of law. Fought, 630 P.2d
at 349; Womer v. Melody Woods Homes Corp., 997 P.2d 873, 875 (Or. Ct. App. 2000).
Defendant asserts that savvy buyers should not “blindly rely on a seller’s statements, but are
‘required to make use of their means of knowledge.’” Def.’s Mot. Summ. J., at 9 (quoting
Miller v. Protrka, 238 P.2d 753, 759 (Or. 1951)). While defendant’s statement is sound
advice, it is not necessarily the law unless the buyer and seller are on equal footing in terms
of expertise and access to information. Miller, 238 P.2d at 758-59; Soursby v. Hawkins, 763
P.2d 725, 729 (Or. 1988). The “maxim of caveat emptor applies . . . [when] the prospective
Page 26 - ORDER ON MOTION FOR SUMMARY JUDGMENT
buyers have or can obtain equal means of information and are equally qualified to judge
certain factors claimed to contribute to the value of the property offered for sale.” Miller, 238
P.2d at 758-59; see Soursby, 763 P.2d 725 at 729. Moreover, when a court determines the
buyer was on equal footing and thus, had a duty to investigate the seller’s representations, the
duty is “limited to exercising reasonable diligence or conducting a reasonable inquiry.”
Soursby, 763 P.2d at 729. “Thus, purchasers may rely on representations if discovering the
truth would be unreasonably difficult.” Id., at 730; Gamble v. Beahm, 257 P.2d 882, 886
(Or. 1953).
Here, plaintiff was equally qualified as defendant to judge the helicopter’s value, but
he arguably did not have “equal means of information.” Defendant owned, maintained,
operated, and had custody of the helicopter and its extensive records. Moreover, there is a
question of fact as to whether defendant withheld records from plaintiff’s representatives
during pre-purchase inspections. Even if the Court finds that plaintiff and buyer had equal
access to information and applies caveat emptor, plaintiff needed only to exercise “reasonable
diligence.” He was entitled to rely on the thoroughness and truthfulness of the helicopter’s
official logbooks and signed records, documents which the law required defendant to make,
maintain, and provide plaintiff.13 Plaintiff was not required to scour the helicopter’s records
13
See, e.g., 14 C.F.R. §§ 91.417(a)(2)(v) & (b)(2) (requiring aircraft owners to keep
records of ‘the current status of applicable Airworthiness Directives’ and transfer the records
upon sale of the aircraft); 14 C.F.R. § 43.11 (requiring mechanics and pilots to sign and certify a
vessel’s airworthiness for return to service after maintenance and inspection); 14 C.F.R. § 43.12
(prohibiting fraudulent or intentionally false records or reports).
Page 27 - ORDER ON MOTION FOR SUMMARY JUDGMENT
for omissions and inconsistencies that might reveal a misrepresentation in violation of the
FAR. Furthermore, plaintiff testifies that “[n]o amount of inspection, or flight testing, would
have revealed the problems found inside the engine,” at least nothing short of disassembling
the engine. Munich Decl., at 4. He testifies that it is not customary for sellers to allow
potential buyers to disassemble a turbine engine in a pre-purchase inspection as it is risky and
prohibitively time-consuming and expensive. Munich Decl., at 4. At oral argument,
defendant argued that pre-purchase disassembly would not have been unreasonable. Tr., at
39-40. However, there is no evidence in the record to support defendant’s contention.
Not only did plaintiff have a right to rely on representations in the helicopter’s
logbooks, he had no duty to second-guess warranties provided in the contract. It is wellestablished that a buyer may limit his risk in a transaction by negotiating for express
warranties and contractual provisions promising to deliver adequate goods. A “party to
whom an express warranty has been made is entitled to rely on that warranty without further
investigation.” Hayden Corp. v. Glacier Park Co., 896 P.2d 604, 607 (Or. Ct. App. 1995);
see F. C. Austin Co. v. J. H. Tillman Co., 209 P. 131, 140 (Or. 1922). “An express warranty
. . . by the great weight of authority gives the buyer a remedy notwithstanding the defects
were visible or open to discovery at the time they were received.” F. C. Austin, 209 P. 131,
140 (Or. 1922). Here, if defendant is found to have made express warranties in the contract
itself, plaintiff is not required to investigate and second-guess those warranties in order for
a court to enforce them. Thus, as a matter of law, the Court finds that plaintiff had a right to
Page 28 - ORDER ON MOTION FOR SUMMARY JUDGMENT
rely on express warranties and on legally mandated maintenance and safety records. Insofar
as there are issues of fact regarding the existence or meaning of warranties and records, those
issues must be reserved for trial.
The Court need not delve into the other elements of fraud as defendant’s motion for
summary judgment does not address them. However, the Court notes that there is evidence
from which a jury could reasonably conclude that those elements are satisfied. Defendant
bears the burden of demonstrating there no issues of material fact and fails to meet this
burden. The Court denies summary judgment on plaintiff’s fraud claim.
CONCLUSION
The Court GRANTS IN PART and DENIES IN PART defendant’s motion for
summary judgment (Doc. #30). The Court DENIES summary judgment as to plaintiff’s
breach of contract, unjust enrichment, and fraud claims. The Court GRANTS summary
judgment as to plaintiff’s intentional interference with contractual relations claim. Plaintiff’s
intentional interference with contractual relations claim is hereby DISMISSED. IT IS SO
ORDERED.
DATED this 26th day of August, 2016.
/s/ Patricia Sullivan
Patricia Sullivan
United States Magistrate Judge
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