Starr Indemnity and Liability Co. v. Rolls-Royce Corp.

          ORDER

          Honorable Bruce G. Macdonald United States Magistrate Judge

         Currently pending before the Court is Defendant Rolls-Royce Corporation's Motion for Summary Judgment (Doc. 90). Defendant has also filed a Separate Statement of Facts in Support of Motion for Summary Judgment (“SOF”) (Doc. 91). Plaintiff has responded (“Response”) (Doc. 97) and filed its Controverting Statement of Facts in Opposition to Rolls-Royce Corporation's Motion for Summary Judgment (“CSOF”) (Doc. 98). Defendant replied (Doc. 104) and filed a Supplemental Statement of Facts and Controverting Statement of Facts in Support of Rolls-Royce Corporation's Reply in Support of its Motion for Summary Judgment (“SSOF”) (Doc. 105). Plaintiff then filed a Motion to Strike Defendant Rolls-Royce Corporation's Supplemental Statement of Facts in Support of its Reply in Support of its Motion for Summary Judgment (Doc. 106), which Defendant opposed (Doc. 107). As such, the motions are fully briefed and ripe for adjudication.

         In its discretion, the Court finds this case suitable for decision without oral argument. See LRCiv. 7.2(f). The Parties have adequately presented the facts and legal arguments in their briefs and supporting documents, and the decisional process would not be significantly aided by oral argument.

         I. MOTION TO STRIKE

         As an initial matter, Plaintiffs seek to strike Defendant's Supplemental Statement of Facts and Controverting Statement of Facts (Doc. 105) because it is not allowed by the local rules. See Pls.' Mot. to Strike (Doc. 106). Plaintiffs further urge that Defendant's Supplemental Statement “contains objections to Plaintiffs' evidence and is littered with legal arguments” also in violation of the local rules. Id. at 3. The Court is not inclined to strike Defendant's submission based on a perceived technical procedural violation. The Court will evaluate the evidence, as necessary, in the course of its resolution of Defendant's summary judgment motion. As such, Plaintiffs' motion to strike is DENIED.

         II. FACTUAL BACKGROUND^[1]

         A. The Aircraft

         The helicopter involved in the incident giving rise to the current litigation was a 1998 Bell 407 emergency medical services helicopter, bearing serial number 53281 and FAA registration number N509MT (the “Aircraft”). Compl. (Doc. 1-1) at ¶ 6. On January 28, 2003, Med-Trans purchased the Aircraft from Augusta Aerospace that contained a different engine than the one involved in the incident. Def.'s SOF (Doc. 91), Aircraft Bill of Sale 1/28/2003 (Exh. “1”); see also Pls.' CSOF (Doc. 98). At the time of the incident, the Aircraft contained a 250-C47B turbine engine, with serial number CAE-847656 (the “subject engine”). Compl. (Doc. 1-1) at ¶ 9. The subject engine was manufactured by Rolls-Royce Corporation (“RRC”) and sold to Bell Helicopter Canada, also known as Bell Helicopter Textron, Inc., (“Bell”) and was shipped to Bell on April 28, 2004.^[2] Def.'s SOF (Doc. 91), Certificate of Conformance 4/28/2004 (Exh. “2”); see also Def.'s SSOF (Doc. 105), Sain Decl. 11/6/2018 (Exh. “13”) at ¶ 4. When Bell originally sold the subject engine, it was in a helicopter with FAA registration number N515MT (“originating helicopter”), which is a separate helicopter from the Aircraft at issue in this case. Def.'s SOF (Doc. 91), Service Record, Engine Assembly, Engine Serial No. 847656 (Exh. “4”); see also Pls.' CSOF (Doc. 98), Service Record, Engine Assembly, Engine Serial No. 847656 (Exh. “D”). On October 6, 2004, Bell notified RRC to begin the warranty of the subject engine on January 15, 2005 and identified Med-Trans as the customer.^[3] Def.'s SOF (Doc. 91), Gerdes e-mail to Model 250 - Customer Support 2/4/2005 (Exh. “3”). On November 16, 2009, Premier Turbines replaced the subject engine's Third Stage Turbine Wheel, serial number X536586, with serial number X589849 (the “subject Turbine Wheel”). Def.'s SOF (Doc. 91), Assembly Record, Turbine Assembly, Turbine Serial No. CAT-44958 (Exh. “5”). On November 28, 2009, the subject engine with the subject Turbine Wheel was installed in the Aircraft. Def.'s SOF (Doc. 91), Exh. “4.”

         B. The Hard Landing

         All of Plaintiffs' damages arise from an alleged “hard landing” of a Bell 407 helicopter that occurred on April 14, 2012, in Aberdeen, South Dakota.^[4] See Compl. (Doc. 1-1) ¶ 8. The hard landing occurred over thirty (30) months and over a thousand hours after the subject Turbine Wheel was installed in the subject engine. See Def.'s SOF (Doc. 91), Aircraft Status Sheet 4/10/2012 (Doc. 91-1) at 6, 11 & Post-Incident Photo. of Hobbs Meter (collectively Exh. “6”).^[5]

         C. Warranties 1. Engine Warranty

          The subject engine was warrantied as being free from defects in materials and workmanship for twenty-four months from the date of delivery to the aircraft manufacturer or one thousand hours of operation, “whichever period expires first.”^[6] Def.'s SOF (Doc. 91), Rolls-Royce Model 250-C40/C47 Series New Original Equipment Engine Warranty and Disclaimer Summary (Exh. “7”) at 13; see also Def.'s SSOF (Doc. 105), Sain Decl. 11/6/2018 (Exh. “13”) at ¶ 6. The warranty states in relevant part:

(PURCHASER) ACCEPTS AND AGREES THAT THE WARRANTIES GRANTED TO THE (PURCHASER UNDER CLAUSE 5 OF THE PURCHASE CONTRACT AND, SO FAR AS THEY RELATE TO THE SUPPLIES AND EQUIPMENT, THE PRODUCT ASSURANCE GUARANTEES GRANTED TO THE (PURCHASER) UNDER CLAUSE 4 HEREOF ARE EXCLUSIVE AND ARE EXPRESSLY IN LIEU OF AND THE (PURCHASER) HEREBY WAIVES, RELEASES AND DISCLAIMS (I) ALL OTHER CONDITIONS AND WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR OF FITNESS, AND ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OR TRADE, (II) ALL OTHER OBLIGATIONS AND LIAGBILITIES WHATSOEVER OF ROLLS-ROYCE WHETHER IN CONTRACT, WARRANTY OR TORT (INCLUDING WITHOUT LIMITATION, NEGLIGENCE, ACTIVE, PASSIVE OR IMPUTED LIABILITY OR STRICT LIABILITY) OR BY STATUTE OR OTHERWISE FOR ANY NON-CONFORMANCE, DEFECT, DEFICIENCY, FAILURE, MALFUNCTIONING, OR FAILURE TO FUNCTION OF ANY ITEM OF THE SUPPLIES OR OF THE EQUIPMENT REFERRED TO IN CLAUSE 5.2 OF THE PURCHASE CONTRACT, (III) STRICT LIABILITY OR PRODUCT LIABILITY, AND (IV) ALL DIRECT, INDIRECT, SPECIAL, CONSEQUENTIAL AND INCIDENTAL DAMAGES OF ANY NATURE WHATSOEVER[.]^[7]

Def.'s SOF (Doc. 91), Exh. “7” at 13. At the time of the hard landing, the subject engine's warranty had long expired by time and hours.^[8] Def.'s SOF (Doc. 91), Service Record, Compressor Assembly, Compressor Serial No. CAC-45317 (Exh. “8”); see also Def.'s SSOF (Doc. 105), Exh. “13” at ¶ 7.

         2. Third Stage Turbine Wheel Warranty

         The Third Stage Turbine Wheel replacement part was subject to the Rolls-Royce M250 Spare Module/Part Limited Warranty (“Limited Warranty”) which was “in effect for twenty-four (24) months from the date of shipment from the Rolls-Royce Authorized Distributor or one thousand (1, 000) hours of operation, whichever occurs first.”^[9] Def.'s SOF (Doc. 91), Rolls-Royce M250 Spare Module/Part Limited Warranty (Exh. “9”); see also Def.'s SSOF (Doc. 105), Exh. “13” at ¶ 8. At the time of the hard landing, the subject Turbine Wheel had operated for thirty (30) months and had 1096.3 hours.^[10] See Compl. (Doc. 1-1) at ¶ 8; see also Def.'s SOF (Doc. 91), Exh. “6.”

         D. The Instant Litigation

         Med-Trans insured the Aircraft through Plaintiff Starr Indemnity and Liability Company (“Starr”) under policy number SASICOM60005611-02. Compl. (Doc. 1-1) at ¶ 13. Med-Trans submitted an insurance claim to Starr that later indemnified Med-Trans “in an amount of $1, 317, 403.35 for the damage to the Aircraft.” Id. at ¶ 14. Plaintiffs claim that the incident was caused by the subject Turbine Wheel that failed causing the hard landing. See Id. at ¶¶ 10-11. Although Plaintiffs also allege that the incident caused injury to the pilot, they do not allege that they themselves have incurred any loss as a result of personal injuries.^[11] See Compl. (Doc. 1-1). Both Med-Trans and Starr, as its subrogee, filed suit against RRC alleging strict liability, negligence, and breach of express and/or implied warranty claims. Id. at ¶¶ 15, 17-38.

         III. ...