Opinion
No. 05-10-00342-CV
07-18-2012
AMERICAN EUROCOPTER CORPORATION, Appellant v. CJ SYSTEMS AVIATION GROUP, Appellee
AFFIRM; Opinion issued July 18, 2012
On Appeal from the 298th District Court
Dallas County, Texas
Trial Court Cause No. 02-03974-M
OPINION
Before Justices Murphy, Fillmore, and Myers
Opinion By Justice Myers
On October 16, 2000, a Eurocopter AS 355 F2 Twinstar helicopter owned by Duke University Medical Center in North Carolina and operated by CJ Systems Aviation Group (CJ), crashed when the main rotor gearbox failed. American Eurocopter Corporation (American) had overhauled the gearbox and provided it to CJ. The family of the deceased pilot sued American, which paid the family $2,250,000 in settlement of the claims. Duke University's insurer sued American in an unsuccessful attempt to recover the amount it paid Duke for the helicopter. American then sued CJ for contractual indemnity to recover the amount of the settlement with the pilot's family and for American's attorney's fees in the different lawsuits. CJ counterclaimed for breach of warranty on the failed gearbox. Following a jury trial, the trial court rendered a take- nothing judgment on American's claims against CJ and awarded CJ $78,935.62 on its counterclaim.
American brings six issues on appeal contending (a) the evidence is legally and factually insufficient to support a finding that American's negligence, if any, was a proximate cause of the crash; (b) the trial court erred by denying American judgment for contractual indemnity and attorney's fees in the amounts found by the jury; (c) the jury's answer concerning whether CJ's negligence was the sole legal cause of the crash was immaterial; and (d) there was no evidence of an express warranty for which CJ could be awarded money damages. We affirm the trial court's judgment. BACKGROUND
Many of the facts related below were disputed in the trial court. This factual summary presents the evidence in the light most favorable to the jury's decision.
Before the crash, CJ ordered an overhauled main rotor gearbox from American's facility in Grand Prairie, Texas. The gearbox arrived with the appropriate documentation certifying it as airworthy. On October 12, 2000, four days before the accident, CJ's mechanics installed the gearbox on the helicopter and tested it. The overhauled gearbox passed its tests and test flights without any problems and without any warning lights illuminating. This overhauled gearbox should have been good for 3000 hours of flying.
The Crash
On the night of October 16, when the gearbox had only about three and one-half hours of use, the helicopter was needed to transfer a patient from Alamance Medical Center to Duke University Medical Center. The pilot, John Holland, and two nurses took off from Duke University Medical Center in the helicopter. During the flight, the oil-pressure warning light for the gearbox illuminated, but the oil-temperature warning light did not illuminate. Holland landed the helicopter safely at Alamance hospital, shut down the engines, and took the helicopter out of service. The nurses left the helicopter and arranged for the patient and themselves to be taken to Duke by ground ambulance.
Holland called CJ's mechanic on duty that night, Charles Edgerton, who arrived at Alamance with some tools but no maintenance manuals or spare parts. Edgerton checked for oil leaks, did not find any evidence of an oil leak, and did not smell any burnt oil. Edgerton turned on the battery switch, starting the electrical power but leaving the engines turned off. The oil-pressure warning light illuminated, but this was appropriate because, with the engines off, no oil pressure was generated. Edgerton then disconnected the oil-pressure switch, and the warning light turned off, which indicated the light was connected to the oil-pressure switch and was not being illuminated by a short circuit. Edgerton knew that when only the gearbox oil-pressure warning light illuminated, the problem was usually a faulty oil-pressure switch, which would be replaced. Edgerton did not have the tools and parts to change the switch with him. He rotated the main rotor and did not feel any unusual vibrations or hear any unusual sounds. Edgerton and Holland decided that because the gearbox was newly overhauled and had minimal use, the problem was a faulty oil-pressure switch. They decided that Holland would run the engines for a few minutes on the ground and then hover just off the ground. If no other warning lights illuminated, and if Holland felt comfortable flying the helicopter, Holland would fly the helicopter back to Duke University for further maintenance. Holland asked Edgerton to leave the oil-pressure warning light disconnected so he would not be distracted from observing the oil-temperature warning light if it came on. Holland ran the helicopter on the ground, hovered for a few minutes, and then flew away. About one minute into the flight, the main rotor gearbox suffered a catastrophic failure. The helicopter crashed, and Holland was killed. Accident investigators testified that the crash was caused by the lack of cooling lubrication on the gears of the main rotor gearbox.
The Gearbox
Unbeknownst to Edgerton and Holland, the newly overhauled gearbox from American had not properly passed its tests before being certified as airworthy. Under the procedures mandated by Eurocopter's overhaul manuals, before an overhauled main rotor gearbox may be certified for service, it must pass a rotation bench test in which it is brought up to a particular speed and run for ten to thirty minutes while monitoring the oil temperature and pressure. The first three times the gearbox was tested, the oil temperature exceeded the maximum permitted before the ten-minute test period expired. On the fourth test, the temperature reached, but did not exceed, the maximum permitted temperature at the ten-minute mark. However, at the ten-minute mark, the oil pressure dropped below the minimum permitted by Eurocopter's overhaul manuals. Despite never obtaining acceptable results on the bench test, American certified the gearbox as airworthy and transferred it to CJ.
There is evidence showing American's retesting of the gearbox violated Eurocopter's overhaul manuals. Doug Stimpson, CJ's expert witness for maintenance and overhauling, testified that Eurocopter's overhaul manuals required products that did not pass approval tests to follow different procedures and not simply be retested.
Eurocopter's overhaul manuals required the oil pressure be no less than 3 bars, which is 43.5 psi. On the fourth test, the oil pressure after ten minutes was 41 psi, which is 2.8 bars and below the required 3 bars of pressure.
The Indemnity Agreement
CJ signed a Service Center Agreement with American, which authorized CJ to maintain and repair Eurocopter Helicopters for certain owners, including Duke University. The agreement contained a provision in which CJ agreed to indemnify American against all losses, claims, and expenses including legal expenses with respect to defective work "arising from services furnished and work performed" by CJ.
The Litigation
Duke University's insurer sued American in North Carolina for the loss of the helicopter, and American received a verdict in its favor. The Holland family brought this lawsuit against American to recover for John Holland's death, alleging American's negligence proximately caused Holland's death. American settled with the Holland family members, paying them $2,250,000. American filed a third-party action against CJ alleging CJ was liable to American under the indemnity agreement for American's payments to the Holland family in settlement of their claims and for American's attorney's fees in defending itself in this suit and in the litigation against Duke's insurer. CJ filed a counterclaim for breach of warranty against American for the cost of the gearbox.
On American's claims, the jury found CJ's defective work resulted in a loss or claim to American and that CJ, through reasonable diligence, could have discovered a matter that resulted in a loss or claim against American. The jury did not find that the loss or claim against American arose from CJ's sole negligence. The jury also found that American's negligence was a proximate cause of "the accident in question." On CJ's breach of warranty claim, the jury found American breached the warranty and that CJ's damages were $78,935.62.
CJ moved for judgment notwithstanding the verdict requesting the court to disregard the jury's answers indicating that CJ's actions led to the claim against American and that CJ could have discovered the matter that led to the claims against American. American also moved for judgment notwithstanding the verdict on the jury's finding that American's negligence proximately caused the accident. The trial court granted CJ's motion and rendered judgment that American take nothing on its claims against CJ. The court also rendered judgment for CJ for $78,935.62 on its breach of warranty claim against American.
CAUSATION
In its first issue, American contends there is no evidence of proximate cause to support the jury's finding that American's negligence proximately caused the accident. In its second issue, American contends the jury's finding that American's negligence proximately caused the accident was against the great weight and preponderance of the evidence. American also contends the trial court erred in denying American's motion for judgment notwithstanding the verdict because, as a matter of law, any alleged negligence by American was not a legal cause of the helicopter crash.
For an action to be the proximate cause of an injury, it must be both the cause in fact and the foreseeable cause of the injury. Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 582 (Tex. 2007). These elements cannot be satisfied by mere conjecture, guess, or speculation. IHS Cedars Treatment Ctr. of DeSoto, Tex., Inc. v. Mason, 143 S.W.3d 794, 798-99 (Tex. 2003).
In reviewing the legal sufficiency of the evidence, which also includes review of a ruling on a motion for judgment notwithstanding the verdict, we consider all the evidence before the jury, crediting evidence in support of the verdict if reasonable jurors could, and disregarding evidence contrary to the verdict unless reasonable jurors could not. City of Keller v. Wilson, 168 S.W.3d 802, 823, 827 (Tex. 2005); Morris v. Wells Fargo Bank, N.A., 334 S.W.3d 838, 842 (Tex. App.-Dallas 2011, no pet.). If there is more than a scintilla of evidence to support the finding, the evidence is legally sufficient. Formosa Plastics Corp. USA v. Presidio Eng'rs & Contractors, Inc., 960 S.W.2d 41, 48 (Tex. 1998). When the evidence offered to prove a vital fact is so weak as to do no more than create a mere surmise or suspicion of its existence, the evidence is no more than a scintilla and, in legal effect, is no evidence. Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex. 1983). If the evidence furnishes a reasonable basis for differing conclusions by reasonable minds as to the existence of a vital fact, then there is legally sufficient evidence, more than a scintilla, to support the fact. Id.
When reviewing the factual sufficiency of evidence, we examine all the evidence and set aside a finding only if it is so contrary to the evidence as to be clearly wrong and unjust. Maritime Overseas Corp. v. Ellis, 971 S.W.2d 402, 407 (Tex. 1998); Cameron v. Cameron, 158 S.W.3d 680, 683 (Tex. App.-Dallas 2005, pet. denied). In conducting our review of both the legal and factual sufficiency of the evidence, we are mindful that the jury, as fact finder, was the sole judge of the credibility of the witnesses and the weight to be given their testimony. City of Keller, 168 S.W.3d at 819; Hinkle v. Hinkle, 223 S.W.3d 773, 782 (Tex. App.-Dallas 2007, no pet.). We may not substitute our judgment for the fact finder's, even if we would reach a different answer on the evidence. See Maritime Overseas Corp., 971 S.W.2d at 407; Hinkle, 223 S.W.3d at 782.
Foreseeability
American argues that any negligence by it in overhauling and inspecting the gearbox could not be a proximate cause of the helicopter crash because Holland and Edgerton's operation of the aircraft with the oil-pressure warning light illuminated was not foreseeable as a matter of law. American's argument is, in effect, that Holland and Edgerton's actions were a new and independent and superseding cause of the crash.
To determine whether an act or omission alleged to be a new and independent cause is a concurring cause or a superseding cause, the court must determine whether the second act or omission was foreseeable at the time of the first negligent act or omission. If the second act or omission was foreseeable, then the causation is concurring and the first actor remains liable. However, if the second act or omission was not foreseeable, then its causation supersedes the first instance of negligence, and the first actor has no liability for the resulting damages. Columbia Rio Grande Healthcare, L.P. v. Hawley, 284 S.W.3d 851, 857 (Tex. 2009); Dew v. Crown Derrick Erectors, Inc., 208 S.W.3d 448, 451 (Tex. 2006) (plurality opinion); Biaggi v. Patrizio Rest. Inc., 149 S.W.3d 300, 305 (Tex. App.-Dallas 2004, pet. denied). Moreover, where the risk resulting from the intervening act is the same as the risk from the original actor's negligence, the intervening act cannot be classified as a superseding cause. Columbia, 284 S.W.3d at 859; Dew, 208 S.W.3d at 453 (citing Restatement (Second) of Torts § 442B).
Section 442B, styled "Intervening Force Causing Same Harm As That Risked By Actor's Conduct," provides,
Where the negligent conduct of the actor creates or increases the risk of a particular harm and is a substantial factor in causing that harm, the fact that the harm is brought about through the intervention of another force does not relieve the actor of liability, except where the harm is intentionally caused by a third person and is not within the scope of the risk created by the actor's conduct.Restatement § 442B
In this case, there is conflicting evidence regarding whether American could have foreseen Edgerton's action in approving the aircraft for the flight and Holland's action in flying the aircraft when the gearbox oil-pressure warning light was disconnected and when the warning light would have been illuminated had it been connected.
Eurocopter's fault-isolation manual provides that the corrective action when only the oil-pressure warning light illuminates is (1) to check the warning light electrical circuit, (2) to replace the oil-pressure switch, and (3) if there is no electrical anomaly, to remove the gearbox for major overhaul. The parties also presented witnesses testifying to facts relevant to determining whether American could have foreseen the second flight.
William Monk, a helicopter mechanic employed by CJ, testified that the manufacturer's manuals did not allow the aircraft to be flown before these steps were completed. Monk testified that he never deviated from the manuals and that he would comply with all the maintenance and troubleshooting requirements possible before permitting anyone to fly an aircraft, even for a maintenance flight.
James Lynn, CJ's chief pilot, testified that CJ's operations manual permitted nonroutine flight operations, but only if the aircraft met a special definition of "airworthy." That definition required that the aircraft be inspected to determine that it is in a "safe" condition for flight. The word "safe" was defined in the operations manual as meaning "Not apt or able to cause or incur damage or harm, free from hazard." Lynn testified he trained pilots to perform nonroutine flight operations in safe aircraft only, and an aircraft with a failing gearbox is not safe. Lynn also testified that an aircraft on which the oil-pressure warning light illuminates could have a problem with the gearbox even if the oil-temperature warning light does not illuminate.
William Force, an expert witness for American concerning piloting helicopters, testified that Holland should not have made the second flight. The flight was a "ferry flight" to reposition the aircraft for maintenance purposes. He testified that a pilot may not fly a helicopter, even on a ferry flight, unless all the warning lights are operable and none of them are turned on. If the warning lights are not operable, then the aircraft may not be flown. Force testified that Holland violated CJ's operations manual by flying the helicopter with a warning light disabled and when the warning light would have been turned on if it had not been disabled. He testified the accident was preventable and that it would not have occurred if Eurocopter's required procedures had been followed.
Doug Stimpson, CJ's expert witness concerning the overhaul procedures for the gearbox and the work of aircraft mechanics, testified that Holland and Edgerton's actions were appropriate under the circumstances. Stimpson testified, and Eurocopter's fault-isolation manual provided, that the warning-light system warns of low oil pressure when both the oil-pressure and oil-temperature warning lights illuminate. The manual states that possible causes of only the oil-pressure warning light illuminating are a faulty warning light or a faulty oil-pressure switch. Stimpson testified that a helicopter with a faulty warning light or a faulty oil-pressure switch is not technically airworthy for normal flight operations but is safe to fly. In that situation, he testified, it was appropriate for Holland and Edgerton to decide to make a "ferry flight" to fly the aircraft to a base where repairs and maintenance could be performed. See 14 CFR § 21.197(a)(1). To perform a ferry flight, one presents an application to the Federal Aviation Administration's (FAA) local office for a special flight permit. According to Stimpson, if the form is filled out properly, the FAA issues the permit without inspection of the aircraft. Edgerton and Holland did not apply for the special flight permit before making the flight because the FAA's office was closed. However, Stimpson testified that if they had applied, they would have received the permit to fly the aircraft back to Duke, and the result would have been the same.
Keith McCutchen, CJ's expert witness on helicopter piloting, testified that ferry flights with minor problems are customary in the industry. McCutchen testified that the oil-pressure warning light illuminating would appear to a pilot to be a problem with the oil-pressure indicator and not a sign of low oil pressure. The pilot in this situation would have no reason to believe a newly overhauled gearbox was in imminent danger of failing. He stated that a ferry flight back to Duke for further maintenance in this situation was appropriate. McCutchen thought Edgerton and Holland should have gotten a special flight permit before Holland made the ferry flight; however, he testified that "not having a ferry permit would not have caused the failure and the crash." He also stated that disconnecting the oil-pressure warning light was a good idea. The oil-temperature warning light was located immediately below the oil-pressure warning light. With the oil-pressure warning light disabled, the pilot would know immediately if the oil-temperature warning light came on. McCutchen also testified that the flight manual's rule that all warning lights must be off before flying did not apply to ferry flights because those flights are governed by the federal air regulations, which permit ferry flights.
Stimpson and McCutchen's testimony that a ferry flight in this situation would be a normal occurrence constitutes some evidence that the ferry flight in this case was foreseeable to American. See Ernst & Young, L.L.P. v. Pac. Mut. Life Ins. Co., 51 S.W.3d 573, 581 (Tex. 2001) ("General industry practice or knowledge may establish a basis for foreseeability to show negligence . . . ."). We also conclude this determination is not so contrary to the evidence as to be clearly wrong and unjust; accordingly, we conclude it is supported by factually sufficient evidence.
In support of its argument that the ferry flight was unforeseeable, American relies on this Court's opinion in Aerospatiale Helicopter Corp. v. Universal Health Services, Inc., 778 S.W.2d 492 (Tex. App.-Dallas 1989, writ denied), which involved a twin-engine helicopter crash. In that case, the pilot took off while the cowling for one of the engines was open. During flight, the cowling separated from the aircraft, snagged a fuel line, and cut off fuel to that engine. Id. at 495. The helicopter was designed to fly with only one engine, and it automatically shifted the power requirements to the second engine. Id. at 496. The instruments in the cockpit reflected that one engine was off line and the second engine was running at higher than normal torque and temperature. The pilot then shut off the fuel to the second engine. The helicopter crashed, killing everyone on board. Id. Aerospatiale, the helicopter manufacturer, asserted the cowling separation, as a matter of law, was not a proximate cause or producing cause of the crash. Id. at 496 We agreed with Aerospatiale. Id. at 497. In explaining why there was no proximate causation, we relied on authority stating,
In applying the test of foreseeability to situations where a negligently created pre- existing condition combines with a later act of negligence causing an injury[,] there is a distinction between a situation in which one has created a dangerous condition and a later actor observes, or by the circumstances should have observed, the existence of the dangerous condition and a situation in which the dangerous condition is not apparent and cannot be observed by the actor. In regard to the first situation, the intervening act interrupts the natural sequence of the events and cuts off the legal effect of the negligence of the initial actor. This is based upon the premise that it is not reasonable to foresee or expect that one who actually becomes cognizant of a dangerous condition in ample time to avert the injury will fail to do so.Id. at 497 (quoting Wolf v. Friedman Steel Sales, Inc., 717 S.W.2d 669, 673 (Tex. App.-Texarkana 1986, writ ref'd n.r.e.)). We observed that all the testimony showed that if the pilot had followed the proper procedures, the accident would not have occurred. The pilot failed to follow the operator's manual's procedures for isolating a defective engine, and he had to take extraordinary steps to shut off the fuel supply to the second engine, including breaking a wire. We concluded, "the pilot's actions in this regard were not foreseeable by Aerospatiale." Id.
Aerospatiale is distinguishable because, in this case, the evidence shows that "the dangerous condition is not apparent and cannot be observed by the actor." Id. (quoting Wolf, 717 S.W.2d at 673). Stimpson, McCutchen, and Armond Edwards, an aviation accident investigator, testified that Edgerton and Holland could not have known that the gearbox was facing imminent failure.
American also cites In re Air Crash at Dallas/Fort Worth Airport, 919 F.2d 1079 (5th Cir. 1991). That case involved a Delta Airlines flight that crashed at DFW Airport when the flight encountered downdraft windshear while attempting to land during a thunderstorm. Id. at 1084. The crew members of the flight had observed the thunderstorm at the end of the runway and knew that it contained windshear, but they made the decision to land there anyway. Id. at 1085. The district court found the sole proximate cause of the catastrophe was the deliberate decision of the flight crew to enter a storm cell despite having observed the lightning that clearly marked it as a thunderstorm. Id. at 1087. The Fifth Circuit affirmed, concluding that although the flight controllers at the airport were negligent in failing to relay weather information to the aircraft, that negligence was not a proximate cause of the crash because the flight crew already knew all the weather information. "Any failure of the air traffic controllers to warn a pilot of the presence of a storm in his path cannot be regarded as a continuing proximate cause after the pilot himself discovered its presence, appreciated the danger, and decided to fly ahead into it." Id. at 1085 (quoting district court's opinion). The Fifth Circuit stated,
[W]e cannot gainsay the [district] court's apparent view that when Flight 191 chose to fly into a thunderstorm at a low altitude and speed it chose to dice with death. . . . The court's finding that the crew's deliberate decision to land through a known thunderstorm located at the end of the runway, when they could easily have gone around, was the sole proximate cause of this disaster is not clearly erroneous . . . ."Id. at 1087-88. That case is distinguishable from the one before us because the crew members in that case knew they were flying into a thunderstorm with windshear. In this case, the evidence supports a finding that Holland and Edgerton had no reason to know that the newly overhauled gearbox was about to fail.
American also cites McLennan v. American Eurocopter Corp., 245 F.3d 403 (5th Cir. 2001). In that case, a helicopter crashed after running out of fuel. The pilot had ignored the low-fuel warning light, failed to make proper calculations of fuel consumption, and knowingly continued to fly without refueling after he reached the mandatory twenty-minute reserve. Id. at 410-14. The pilot sued American, alleging the fuel gauge had stuck at around eighteen or eleven percent, came unstuck at about three percent when the helicopter was almost out of fuel, and that American failed to warn that the fuel gauge might be inaccurate. Id. at 413-14. The Fifth Circuit concluded the pilot failed to establish proximate causation because, inasmuch as he disregarded the many warnings American and the helicopter itself provided about the fuel gauge and being low on fuel, he failed to prove he would have heeded any additional warnings. Id. at 433-34. The court concluded the causal connection was too remote. McLennan is distinguishable because the low-fuel warning light in that case meant the helicopter was low on fuel; while in this case, there is evidence that when only the oil-pressure warning light comes on, there is a problem with the oil-pressure switch, and the warning light does not mean there is low oil pressure.
American also argues it was not foreseeable that Holland and Edgerton "would ignore mandatory procedures in the manufacturer's troubleshooting manual, take affirmative action to bypass the warning system, a critical safety device, or contravene FAA regulations." The fault-isolation manual provides that the corrective action when only the oil-pressure warning light illuminates is (1) to check the warning light electrical circuit, (2) to replace the oil-pressure switch, and (3) if there is no electrical anomaly, to remove the gearbox for major overhaul. Edgerton complied with step (1) by disconnecting the oil pressure switch and checking that the light coming on was not caused by a short circuit, but he and Holland decided the aircraft could be flown back to Duke in a ferry flight to complete the remaining steps. Stimpson and McCutchen testified this was an appropriate decision. Although the flight manual states the warning lights must be off before a takeoff, Stimpson and McCutchen testified that this provision did not apply to a ferry flight. The jury could conclude from the evidence that Edgerton's disabling the oil-pressure warning light did not cause the crash. This determination is not so contrary to the evidence as to be clearly wrong and unjust.
American's argument that Holland and Edgerton's decision to perform a ferry flight of the helicopter back to Duke was a superseding cause also fails because, where the risk resulting from the intervening act is the same as the risk from the original actor's negligence, the intervening act cannot be classified as a superseding cause. Columbia, 284 S.W.3d at 859. In this case, the risk from American's negligence was the same as the actual risk from Holland's and Edgerton's decision to fly the helicopter knowing the oil-pressure light would be illuminated if it were connected: catastrophic failure of the main rotor gearbox during flight and the resulting crash killing Holland.
Cause in Fact
American also argues that its negligence was not a cause in fact of the crash. "Cause in fact" means the act or omission was a substantial factor in bringing about the injury and that, without it, the harm would not have occurred. IHS Cedars, 143 S.W.3d at 799. Cause in fact is not established where the actor's negligence does no more than furnish a condition which makes the injuries possible. Id. In other words, the actor's conduct may be too attenuated from the resulting injuries to the plaintiff to be a substantial factor in bringing about the harm. Id. American asserts its negligence furnished, at most, a condition that allowed the subsequent negligent decisions of Edgerton and Holland to result in the crash.
American first argues there was no cause in fact because the danger from American's negligence had "come to rest" before the second flight commenced. American argues,
The helicopter's first flight that night was dangerous, but . . . the helicopter landed safely, its occupants deplaned, and the danger passed. . . . With the helicopter on the ground, there was no danger this particular main rotor gearbox would fail during flight, and there was no danger that as a result, the helicopter would crash. Taking the second flight that night was inexplicable recklessness by CJ's mechanic and pilot.However, there is evidence that Holland and Edgerton's actions in making the second flight were not "inexplicable recklessness," namely, Eurocopter's fault-isolation manual and the testimony of the expert witnesses on piloting and maintaining this type of helicopter. This evidence showed the oil-pressure warning light meant the newly overhauled gearbox had a bad oil-pressure switch, a not uncommon problem, which did not make the helicopter dangerous. Edgerton completed the fault- isolation steps as far as he was able with the equipment he had with him, and he and Holland approved flying what appeared to them to be a safe helicopter back to Duke to finish the maintenance. Evidence before the jury showed this decision was normal within the industry.
American relies on two cases in support of its argument that its negligence was not a cause in fact of the crash: Union Pump Co. v. Allbritton, 898 S.W.2d 773 (Tex. 1995), and Bell v. Campbell, 434 S.W.2d 117 (Tex. 1968). In Union Pump, an employee at a chemical plant assisted in extinguishing a fire at the plant caused by a defective pump. After the fire was extinguished, the employee slipped and fell in some water or firefighting foam and was injured. She sued the pump's manufacturer, asserting that but for the pump fire, she would never have slipped on the water or foam. Union Pump, 898 S.W.2d at 774. In Bell, a vehicle pulling a trailer on a highway rear-ended another vehicle. In the accident, the trailer broke off and came to rest on the highway. People stopped to help move the trailer off the highway. As they were doing so, another vehicle struck three of the people, killing two of them. Bell, 434 S.W.2d at 119. The people struck in the second accident sued the drivers in the first accident. Id. at 118. In both cases, the supreme court determined the defendants' negligence was not a proximate cause because the forces generated by their negligence had come to rest when the plaintiffs' injuries occurred. In Union Pump, the fire was extinguished when the employee slipped due to the slick footing from the firefighting. In Bell, the vehicles and unhooked trailer had come to rest before a passing car struck the people helping to move the trailer out of the roadway. In these situations, the supreme court concluded the defendants' negligent actions (making a pump that catches fire and rear-ending another vehicle) were too remotely connected to the plaintiffs' injuries to constitute the legal causes of those injuries. Union Pump, 898 S.W.2d at 776; Bell, 434 S.W.2d at 122.
In this case, however, the "forces" generated by American's negligence had not come to rest. In Union Pump, all the potential injury from the fire caused by the negligently constructed pump ceased as soon as the fire was extinguished. The employee was not injured in the fire, so her injuries were not caused by the pump starting the fire. Union Pump, 898 S.W.2d at 776. In Bell, all the potential injury from the first accident ceased when the vehicles came to rest. The people were not injured in the initial accident, so their injuries were not caused by the defendants' negligence in the first accident. Bell, 434 S.W.2d at 122. In this case, however, the potential injury from American's negligence remained active in the form of the gearbox facing imminent failure. The danger created by American's negligence, imminent failure of the gearbox, remained active after the helicopter landed safely at Alamance.
American also asserts that cause in fact did not exist because American's negligence did no more than furnish a condition that made the injury possible-that is, it allowed Holland's and Edgerton's negligence in deciding to fly the helicopter to cause the crash. See IHS Cedars, 143 S.W.3d at 799. American relies on IHS Cedars in support of this argument. In that case, Mason was a patient at IHS Cedars mental institution where she had voluntarily admitted herself for depression. During her stay, she became friends with her roommate, Thomas. On the same day, both Mason and Thomas requested to be released. Id. at 796. Mason told the nurse she planned to spend time with Thomas after her release. Id. at 796-97. Mason's and Thomas's physicians released them the same day without consulting with one another. The next day, Mason was riding in a car driven by Thomas when Thomas had a psychotic episode, drove at high speed, swerved to avoid a dog in the road, lost control of the car, and crashed injuring Mason. Id. at 797. Mason sued the doctors, the nurse, and the clinic alleging negligence in failing to provide adequate care and treatment, inappropriately deciding to discharge her, failing to adequately train physicians and staff, and failing to warn Mason of the danger posed by Thomas. Id. Mason argued that her uncorrected mental condition left her vulnerable to Thomas's manipulative and controlling behavior and caused Mason to be in the car with Thomas. The supreme court concluded the alleged negligence may have allowed Mason to be in the car with Thomas, but it did not cause Thomas to experience a psychotic episode, drive wildly, swerve to avoid the dog, or crash the car. Id. at 801-02 ("It is clear, however, that Thomas's speeding and psychotic episode and swerving the car to miss the dog in the road caused Mason's injuries, not negligent treatment or negligent discharge."). The defendants' negligence merely created the condition in which the accident occurred, but it did not cause the accident or Mason's injuries. Id. IHS Cedars is distinguishable from the case before us because American's faulty gearbox did not merely furnish the condition that allowed the accident to occur. The faulty gearbox was the reason the helicopter crashed.
After considering all the evidence in the record, we conclude there is some evidence to support the jury's finding that American's negligence was a proximate cause of the accident. We conclude the trial court did not err in denying American's motion for judgment notwithstanding the verdict. We further conclude the jury's finding that American's negligence was a proximate cause of the accident is not so contrary to the evidence as to be clearly wrong and unjust; accordingly, the evidence is factually sufficient to support the jury's finding. We overrule American's first and second issues.
INDEMNITY AGREEMENT
In its third issue, American contends the trial court erred in not rendering judgment for American because the jury's answers entitled it to judgment on its cause of action for breach of the indemnity agreement.
The parties' agreement contained a provision in which CJ agreed to indemnify American against all losses, claims, and expenses including legal expenses with respect to defective work "arising from services furnished and work performed" by CJ. The agreement also provided,
[CJ's] indemnity and hold harmless obligations specifically extend to any and all losses, damages, injuries, claims, demand and expenses, including legal expenses of any kind and nature, arising from [CJ's] sole negligence. Without limiting the foregoing, in no event shall American Eurocopter be liable for any loss, damage, injury, or claim resulting from any matter, which could have been discovered by [CJ] through the exercise of reasonable diligence in connection with the undertaking of any inspection, maintenance, and/or repair performed by [CJ].The jury found that CJ "performed defective work that resulted in any loss, damage, injury, demand or expense to, or claim against" American, and that CJ "could have discovered through the exercise of reasonable diligence in connection with the undertaking of any inspection, maintenance, and/or repair a matter which resulted in any loss, damage or injury to, or claim against" American. American argues that it is entitled to judgment on its indemnity claim based on these jury findings.
CJ argues that the express negligence doctrine bars American's claim for indemnity. Under that doctrine, parties seeking to indemnify themselves for their own negligence must express that intent in specific terms in the indemnity agreement. Fisk Elec. Co. v. Constructors & Assocs., Inc., 888 S.W.2d 813, 814 (Tex. 1994) ("We hold that no obligation to indemnify an indemnitee for the costs or expenses resulting from a claim made against it for its own negligence arises unless the indemnification agreement complies with the express negligence test."); Ethyl Corp. v. Daniel Constr. Co., 725 S.W.2d 705, 708 (Tex. 1987) ("The express negligence doctrine provides that parties seeking to indemnify the indemnitee from the consequences of its own negligence must express that intent in specific terms."). The doctrine also applies to situations where the indemnitee's negligence proximately causes injury jointly and concurrently with the indemnitor's negligence. In that situation, the indemnity provision must expressly provide for the parties' concurrent negligence. Ethyl Corp., 725 S.W.2d at 708. The doctrine is not an affirmative defense; it is a rule of contract interpretation determinable as a matter of law. Fisk, 888 S.W.2d at 814.
All of American's "losses, damages, injuries, claims, demand and expenses, including legal expenses" arose out of the helicopter crash. The jury found American's negligence was a proximate cause of "the accident in question," i.e., the helicopter crash. The last sentence in the indemnity provision provides that, "[w]ithout limiting the foregoing, in no event shall [American] be liable for any loss, damage, injury, or claim resulting from any matter, which could have been discovered by [CJ] through the exercise of reasonable diligence in connection with the undertaking of any inspection, maintenance, and/or repair performed by [CJ]." In other words, the parties appeared to contemplate that should damage result from American's negligence, but CJ could have discovered that negligence as part of its inspection, maintenance, or repair, American would not be responsible for those losses-that is, American would not be responsible for its own negligence, and CJ would be required to indemnify American based on the jury's finding that the losses could have been discovered by CJ through the exercise of reasonable diligence in its undertakings. Applying the express negligence doctrine, we conclude the parties did not express their intent in clear, unambiguous terms within the four corners of the contract as to both indemnification for American's own negligence and application to CJ's concurrent negligence. See Storage & Processors, Inc. v. Reyes, 134 S.W.3d 190, 192 (Tex. 2004) (quoting Ethyl Corp. and stating under express negligence doctrine intent must be specifically stated within four corners of contract); Ethyl Corp., 725 S.W.2d at 708 (applying express negligence doctrine to concurrent negligence).
American's argument the express negligence doctrine does not apply because American seeks indemnification for the consequences of CJ's negligence and not for its own negligence is unpersuasive. The supreme court addressed a similar argument in Ethyl Corp. The dispute there originated from a worker's compensation claim. When the employee of a construction company sued the premises owner, the owner sought indemnity from the construction company. The jury in the indemnity suit apportioned responsibility for the injuries ninety percent against the owner and ten percent against the construction company. Following the jury's verdict, the trial court granted indemnity to the owner, and the court of appeals reversed the judgment based on its conclusion that the indemnity provision did not clearly and unequivocally require indemnification for the owner's own negligence or the parties' concurrent negligence. Affirming the appellate decision, the supreme court adopted the express negligence doctrine and applied it to proportionate responsibility, stating,
Indemnitees seeking indemnity for the consequences of their own negligence which proximately causes injury jointly and concurrently with the indemnitor's negligence must also meet the express negligence test. . . . In Texas, there exists no right to indemnity on a comparative basis under the common law. . . . Parties may contract for comparative indemnity so long as they comply with the express negligence doctrine set out herein.Ethyl Corp., 725 S.W.2d at 708-09 (citations omitted).
American also argues the express negligence doctrine is not implicated because the indemnity clause between CJ and American does not reference American's own negligence. As described above, we disagree with such characterization. The agreement between CJ and American implicates indemnification for American's negligence in the event CJ could have discovered-through the exercise of reasonable diligence in connection with its undertaking of any inspection, maintenance, or repair-the matter causing the loss. The jury found both CJ's and American's negligence were causes of the crash, which resulted in all of the losses for which American seeks indemnity. Because the indemnity provision did not express in clear, unambiguous terms that CJ was indemnifying American for its own negligence and that its indemnification applied if the loss was due to the parties' concurrent negligence, application of the express negligence doctrine bars American's claim for indemnity. See Ethyl Corp., 725 S.W.3d at 708. We overrule American's third issue.
Because of our determination of American's third issue, we need not address its fourth issue. The parties have informed us they have reached an agreement as to the fifth issue; accordingly, we need not address that issue.
In its fourth issue, American contends the jury's determination that there was insufficient evidence to find CJ's actions were the "sole cause" of American's loss was immaterial and that CJ's being the sole cause of American's loss was established as a matter of law. Because the evidence supports the jury's verdict that American's negligence was a proximate cause of "the accident in question," and the express negligence doctrine prohibits American from recovering on its indemnity claim, this issue is not material to the final disposition of the appeal and need not be addressed. See Tex. R. App. P. 47.1.
BREACH OF WARRANTY
In its sixth issue, American contends there is no evidence of an express warranty for which money damages is a remedy. The jury found American failed to comply with an express warranty relating to the gearbox that products overhauled by American would be free from defects in material and workmanship under normal use and service, and that the failure to comply with the warranty was a producing cause of damages to CJ. The jury found CJ's damages were $78,935.62, which was the amount listed on American's invoice to CJ for the gearbox. The trial court rendered judgment for CJ for $78,935.62.
American argues that CJ was not entitled to the award of damages under the warranty because (1) CJ did not comply with the warranty's terms to invoke any right to recovery under the warranty; and (2) the warranty limited CJ's recovery to the repair or replacement of the parts, not money damages. The warranty provided:
7. LIMITED WARRANTY(Emphasis omitted.)
. . . .
(c) Seller warrants all overhauled Products by . . . American Eurocopter Corp. to be free from defects in material and workmanship under normal use and service. Seller's obligation under this warranty is limited to replacing or repairing parts that, at the time of any repair or replacement, shall have been recognized by Seller in sole discretion of Seller, as subject to this warranty and that shall have been returned to Seller's facility and, in the sole discretion of Seller, the alleged failure therein shall have occurred within the following time limits:
(1) 500 flying hours . . . or. . . .
(2) 6 Months after they are delivered to the Buyer.
(e) This warranty shall apply only to the extent the helicopter and the parts installed therein are operated and maintained in accordance with the instructions contained in the Flight Manual and the Maintenance Manual.
. . . .
(g) This warranty shall not apply to any helicopter or part which has been repaired or altered outside Seller's factory in any way so as, in Seller's sole discretion, to affect its stability, safety or reliability, or which has been subject to misuse, common neglect, abuse, negligence or accident.
. . . .
(i) This warranty is made expressly in lieu of (i) all other warranties including, but not limited to, statutory, express or implied (including warranties of merchantability and fitness for a particular purpose) and (ii) any obligation, liability, right, claim or remedy in contract or tort whether or not arising from Seller's negligence, actual or implied or strict liability. The rights and remedies provided herein are exclusive in connection with the sale of Seller's product(s) and the stated express warranty provided herein is in lieu of all liabilities or obligations of Seller for damages of any type including, but not limited to, all incidental or consequential damages, and all loss, damage or expense arising out of or in connection with the use, loss of use or performance of Seller's products, and damages from any other cause except as specifically contained in this warranty clause.
American argues the warranty did not apply because, by flying the helicopter with the oil-pressure warning light disconnected when it would have been illuminated if it had been connected, and by flying the aircraft before completing the steps in the fault-isolation manual, CJ violated paragraph 7(e) of the warranty by not operating and maintaining the helicopter "in accordance with the instructions contained in the Flight Manual and the Maintenance Manual." As discussed above, the maintenance was proceeding according to the troubleshooting manual when Edgerton and Holland decided to return the helicopter to Duke in a ferry flight to continue the maintenance at Duke, which some evidence shows was a reasonable decision. Also, some evidence shows the flight manual's prohibition against flying the aircraft when warning lights were on (or would be on if connected) did not apply to ferry flights. We conclude there is some evidence CJ did not violate paragraph 7(e) of the warranty.
American also argues CJ violated paragraph 7(g), which provided that the warranty would not apply to any part "which has been subject to misuse, common neglect, abuse, negligence or accident." The evidence shows CJ installed the gearbox without incident. CJ then flew the helicopter with the gearbox for only three and one-half of its intended three thousand hours of use before the gearbox's catastrophic failure. As discussed above, the evidence shows Edgerton and Holland were not aware that the gearbox was subject to imminent failure. This evidence supports the jury's implicit finding that CJ did not subject the gearbox to "misuse, common neglect, abuse, negligence or accident" before its failure.
American also argues that even if CJ had a claim under the warranty, CJ's remedy is limited to repair or replacement of the gearbox. Section 2.719 of the Texas Business & Commerce Code provides,
(a) Subject to the provisions of Subsections (b) and (c) of this section and of the preceding section on liquidation and limitation of damages,Tex. Bus. & Com. Code Ann. § 2.719 (West 2009). Paragraph 7(i) of the warranty stated that the remedies in the warranty were the exclusive remedy.
(1) the agreement may provide for remedies in addition to or in substitution for those provided in this chapter and may limit or alter the measure of damages recoverable under this chapter, as by limiting the buyer's remedies to return of the goods and repayment of the price or to repair and replacement of non-conforming goods or parts; and
(2) resort to a remedy as provided is optional unless the remedy is expressly agreed to be exclusive, in which case it is the sole remedy.
(b) Where circumstances cause an exclusive or limited remedy to fail of its essential purpose, remedy may be had as provided in this title.
CJ argues that it is entitled to recover damages under the warranty for the gearbox because the limitation of remedy to repair or replacement "fail[ed] of its essential purpose." Id. § 2.719(b). In its counterclaim, CJ pleaded that because the gearbox was destroyed in the crash, the remedy of repair and replacement failed in its essential purpose. Therefore, CJ argues, it is entitled to other remedies, including monetary damages. See id. § 2.714 (measure of damages for accepted goods is difference in value between goods as accepted and "the value they would have had if they had been as warranted"). American argues CJ is not entitled to damages because CJ did not request a jury question or obtain a jury finding that the warranty failed of its essential purpose.
When an independent ground of recovery is not conclusively proved, and no element is submitted or requested, then the ground of recovery is waived. Tex. R. Civ. P. 279; DiGiuseppe v. Lawler, 269 S.W.3d 588, 598 (Tex. 2008). When a ground of recovery or defense has multiple elements, at least one of the elements necessarily referable to the ground of recovery or defense is submitted to the jury, the opposing party does not object to the omission of the other elements, then an omitted finding that is supported by some evidence shall be deemed found by the court in such a manner as to support the judgment. Tex. R. Civ. P. 279; DiGiuseppe, 269 S.W.3d at 598. The "necessarily referable" requirement is designed to give parties fair notice of, and an opportunity to object to, a partial submission. DiGiuseppe, 269 S.W.3d at 599. If a party is on notice of the independent ground of recovery or defense due to a jury question "necessarily referable" thereto, and that party fails to object or request submission of the missing elements, then the party cannot be heard to complain on appeal and is said to have consented to the court's findings on the missing elements. Id. (quoting Superior Trucks, Inc. v. Allen, 664 S.W.2d 136, 144 (Tex. App.-Houston [1st Dist.] 1983, writ ref'd n.r.e.)).
In this case, the jury questions asked whether American failed to comply with the warranty and to determine the amount of CJ's damages "in dollars and cents" "that resulted from such conduct," i.e., American's breach of warranty. These questions put American on notice that CJ was seeking monetary damages for breach of the warranty. Cf. DiGiuseppe, 269 S.W.3d at 599 (in breach of real estate contract case, jury questions concerning breach of contract and monetary damages did not put defendant-seller on notice of buyer's claim for specific performance). American did not object to the submission of the damages question on the ground that monetary damages were not a permitted remedy under the warranty or on the ground that CJ had not included the element that the limitation of remedy failed of its essential purpose. Accordingly, American cannot be heard to complain on appeal about CJ's failure to obtain a jury finding on the limitation of warranty's failing of its essential purpose. See id.
American objected to the submission of the breach of warranty questions on the ground that CJ lacked standing to assert the breach of warranty because CJ failed to prove it owned or paid for the gearbox. American does not assert this ground on appeal.
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In this case, there is some evidence that the warranty's limitation of remedy to repair or replacement of the gearbox failed of its essential purpose. The warranty required the parts be returned to American to be repaired or replaced. Some evidence shows the gearbox was destroyed in the crash and resulting fire and thus could not be returned to American for repair or replacement. Therefore, some evidence supports the deemed finding that the circumstances of this case caused the limitation of remedy to fail of its essential purpose, which permitted the award of alternative damages, including the damages awarded in this case. We overrule American's sixth issue.
CONCLUSION
We affirm the trial court's judgment.
LANA MYERS
JUSTICE
100342F.P05
Court of Appeals Fifth District of Texas at Dallas JUDGMENT
AMERICAN EUROCOPTER CORPORATION, Appellant
V.
CJ SYSTEMS AVIATION GROUP, Appellee
No. 05-10-00342-CV
Appeal from the 298th District Court of Dallas County, Texas. (Tr.Ct.No. 02-03974- M).
Opinion delivered by Justice Myers, Justices Murphy and Fillmore participating.
In accordance with this Court's opinion of this date, the judgment of the trial court is AFFIRMED. It is ORDERED that appellee CJ Systems Aviation Group recover its costs of this appeal and the full amount of the trial court's judgment from appellant American Eurocopter Corporation and Travelers Casualty and Surety Company of America as surety on appellant's supersedeas bond.
Judgment entered July 18, 2012.
LANA MYERS
JUSTICE