IN THE SUPREME COURT OF FLORIDA CASE NO. SC08-1922 LOWER TRIBUNAL NUMBER 3D07-299 Circuit Court Case No. 00-19074 AVIOR TECHNOLOGIES, INC. and GEM CITY AVIATION, INC. d/b/a AVTECH EXECUTIVE FLIGHT CENTER, Petitioners, v. CESSNA AIRCRAFT COMPANY, Respondent. PETITIONERS CORRECTED BRIEF ON JURISDICTION KLUGER, PERETZ, KAPLAN & BERLIN, P.L. 201 South Biscayne Boulevard, 17 th Floor Miami, Florida 33131 Telephone: (305) 379-9000 Facsimile: (305) 379-3428 By: Andrew P. Gold Fla. Bar No. 612367 Dianne O. Fischer Fla. Bar No. 994560 JOEL S. PERWIN Florida Bar No. 316814 Suite 1422, Alfred I. DuPont Building 169 East Flagler Street Miami, Florida 33131 Telephone: (305) 779-6090
TABLE OF CONTENTS PAGE TABLE OF AUTHORITIES... ii I. INTRODUCTION... 1 II. STATEMENT OF THE CASE AND FACTS... 2 III. SUMMARY OF THE ARGUMENT... 4 IV. ARGUMENT... 6 A. The 3 rd DCA s Decision Conflicts With Nash v. Wells Fargo... 6 B. The 3 rd DCA s Decision Conflicts With Brown v. Colonial Penn... 7 C. The 3 rd DCA s Opinion Conflicts with Parsons v. Motor Homes of America... 8 D. The 3 rd DCA s Decision Conflicts with Moransais v. Heathman and Mercury Motors v. Smith... 9 E. The 3 rd DCA s Decision Conflicts with Russell v. Sherwin Williams... 10 V. CONCLUSION...10 CERTIFICATE OF SERVICE...11 CERTIFICATE OF COMPLIANCE...12 i
TABLE OF AUTHORITIES CASES PAGE(S) Brown v. Colonial Penn Insurance Co., 666 So. 2d 226 (Fla. 2d DCA 1995)...5, 8 Frank Griffin Volkswagen, Inc. v. Smith, 610 So. 2d 597 (Fla. 1 st DCA 1992)...5, 8 Mercury Motors, Exp. v. Smith, 393 So. 2d 545 (Fla. 1981)... 6, 9, 10 Moransais v. Heathman, 744 So. 2d 973 (Fla. 1999)... 1, 6, 9, 10 Nash v. Wells Fargo Guard Services, Inc., 678 So. 2d 1262 (Fla. 1996)... 5, 6, 7 Orange Motors of Coral Gables v. Dade Co., 258 So. 2d 319 (Fla. 3d DCA 1972)... 9 Parsons v. Motor Homes of America, Inc., 465 So. 2d 1285 (Fla. 1 st DCA 1985)... 5, 8, 9 Russell v. Sherwin Williams Co., 767 So. 2d 592 (Fla. 4 th DCA 2000)...6, 10 Tampa Farm Serv., Inc. v. Cargill, 356 So. 2d 347 (Fla. 2d DCA 1989)... 9 RULES AND STATUTES Fla. R. App. P. 9.210(a)(2)...12 Fla. Stat. 672.719... 8 OTHER 552 of the Restatement Second of Torts...3, 6 ii
I. INTRODUCTION Petitioners, Avior Technologies, Inc. ( Avior ) and Gem City Aviation ( Avtech ), sued Cessna, in contract and tort, after it repeatedly failed to repair Avior s Cessna Citation (the Aircraft ). At trial, Cessna successfully moved for a directed verdict dismissing Avior s contract claims, arguing Avior was not a party to the service agreements. Avior thus went to the jury solely on its negligence claims, including a claim for professional negligence, and obtained a verdict of $5,414,619.00. On appeal, Cessna reversed its position arguing that Avior was a party to the service contracts, and therefore was bound by a limitation of remedy provision contained therein. Incredibly, the Third DCA ignored Cessna s flip-flop, and found Avior to be a party to the service agreements and therefore bound by the limitation of remedy provision. Additionally, while acknowledging that this Court s opinion in Moransais v. Heathman, 744 So. 2d 973 (Fla. 1999) created an exception to the economic loss rule for professional negligence, the Third DCA held the exception did not apply because Petitioners sued the engineers employer rather than the engineers themselves. Based upon these holdings, the Third DCA reduced Petitioners verdict to $60,567.72. 1
Because the Third DCA s decision expressly and directly conflicts with opinions of this Court and other district courts of appeal, as discussed in detail below, this Court should exercise its discretionary jurisdiction and grant review. II. STATEMENT OF THE CASE AND FACTS Avior owned the Aircraft. Op. at 2. Avtech, a subsidiary, owned and operated an aircraft maintenance and service center. Id. In April 1999, the Aircraft was damaged while being towed from its hangar to the tarmac. Id. at 3. The Aircraft was taken to Cessna for repair, and Cessna filled out a service order for the work, which Avtech signed. Id. The service order, and subsequent service orders between the parties, contained the following limitation of remedy provision: Cessna s obligation, under any warranty which may be applicable, is limited to repair or replacement of defective parts and/or workmanship. Cessna released the Aircraft back to Avtech, but noted it had difficulty maintaining pressurization during flight. Id. at 3. Avtech attempted to solve the pressurization problems itself, and ultimately uncovered fuel leaks from the wing into the belly of the Aircraft. Id. at 4. The Aircraft was returned to Cessna, another service order containing the same limitation of remedy provision was signed, and Cessna did further work on the Aircraft. Id. In April 2000, fuel was again discovered in the belly of the Aircraft and returned to Cessna. Cessna informed the Petitioners incorrectly, it turns out -- 2
that the fuel leaks could be fixed only if the wings were replaced, at a cost of nearly $1 million, which Petitioners could not pay and which Avior s insurance carrier refused to pay for. Id. On August 8, 2000, the two lienholders on the Aircraft foreclosed their mortgages. Id. at 5. Ultimately the first and second liens totaled over $1,680,000 and the Aircraft was sold in partial satisfaction of that indebtedness. Id. at 5 n. 3. Petitioners cross-claimed against Cessna, seeking recovery for Cessna s misdiagnosis and failure to repair the aircraft, alleging claims for breach of contract, negligence, professional negligence, and negligent provision of information for the guidance of others (pursuant to 552 of the Restatement Second of Torts). At the conclusion of Petitioners case, Cessna moved for a directed verdict on Avior s contract claim, arguing that the service orders were with Avtech only, not Avior. The trial court granted the motion and dismissed Avior s contract claim. Op. at 6. Avior s negligence claims went to the jury, as did Avtech s contract claim. Id. The jury found for Avior on its professional negligence and 552 claims, and for Avtech on its breach of contract claim, awarding $5,414,619.00. Id. at 6, 2. Cessna sought remittitur on Avtech s contract claim, based upon the limitation of remedy provision, which the trial court granted, reducing it to $60,567.72. Id. 3
Cessna appealed the verdict, based upon a bald-faced reversal of its position at trial, arguing that Avior was a party to the service agreements and that its verdict should be reduced to the cost of repair, based upon the contractual limitation of remedy provision. On June 11, 2008, the Third DCA issued its 2-1 opinion (with Judge Cope, the lone dissenter, rejecting the propriety of Cessna s turnaround in position and finding that any error by the trial court had therefore been invited by Cessna [Op. at 15]) and essentially sanctioned Cessna s position-change, holding, among other things, that (1) Avior was a party to the service agreements through its agent, Avtech; (2) the service agreement s limitation of remedy provision did not fail of its essential purpose; (3) Avior s claim for negligent provision of information for the benefit of others was barred by the economic loss rule; and (4) Avior s claim for professional negligence was barred because Avior sued the employer rather than an individual professional. Based upon these rulings, the Third DCA reduced Avior s $5.4 million verdict to the repair cost of $60,567. Rehearing and rehearing en banc were denied on September 4, 2008. III. SUMMARY OF THE ARGUMENT The Third DCA s decision expressly and directly conflicts with decisions of the Florida Supreme Court and other District Courts of Appeal. First, the district court s finding that Cessna could assert a position on appeal that contradicted a position it asserted and prevailed upon at trial contravenes this Court s holding in 4
Nash v. Wells Fargo Guard Services, Inc., 678 So. 2d 1262 (Fla. 1996), which holds that a party is estopped from reversing its position in this way. The Third DCA s related holding, that Avior was bound by allegations in its pleadings that it was a party to the service agreements, notwithstanding Cessna s subsequent successful attack of such allegations on directed verdict, expressly and directly conflicts with Brown v. Colonial Penn Insurance Co., 666 So. 2d 226 (Fla. 2d DCA 1995), which holds that a party is not bound to allegations made in its pleadings when such allegations are successfully attacked by the other side. Third, the district court s holding that the service agreements limitation of remedy provisions did not fail of its essential purpose expressly and directly conflicts with Parsons v. Motor Homes of America, Inc., 465 So. 2d 1285 (Fla. 1 st DCA 1985), which holds that a repair warranty fails of its essential purpose when the warranting party repeatedly fails to make the necessary repairs. Moreover, by directing a verdict on such issue, without Avior having had the opportunity to put its evidence before the jury on that point, the district court s opinion expressly and directly conflicts with the district court s holding in Frank Griffin Volkswagen, Inc. v. Smith, 610 So. 2d 597, 602 (Fla. 1 st DCA 1992) (holding that whether a warranty fails of its essential purpose is a question of fact for the jury to decide). Fourth, by reversing the jury s professional negligence verdict because the claim was brought against the employer rather than the individual professionals, 5
the Third DCA s opinion expressly and directly conflicts with this Court s holdings in Moransais v. Heathman, 744 So. 2d 973 (Fla. 1999) (professional negligence is an exception to the economic loss rule) and Mercury Motors, Exp. v. Smith, 393 So. 2d 545 (Fla. 1981) (an employer is vicariously liable for the negligence of its employees). Finally, in concluding that Avior s claim for Negligent Provision of Information for the Benefit of Others pursuant to Restatement 552 is barred by the economic loss rule, the Third DCA s opinion expressly and directly conflicts with the district court s holding in Russell v. Sherwin Williams Co., 767 So. 2d 592 (Fla. 4 th DCA 2000) ( 552 claim is an exception to the economic loss rule). IV. ARGUMENT A. The 3 rd DCA s Decision Conflicts With Nash v. Wells Fargo. By permitting Cessna to prevail on appeal based on an argument (that Avior was a party to the service agreements) that contradicted Cessna s argument at trial (that Avior was not a party to the service agreements resulting in the trial court s dismissal of Avior s contract claims), the Third DCA s opinion expressly and directly conflicts with this Court s holding in Nash v. Wells Fargo Guard Services, Inc., 678 So. 2d 1262 (Fla. 1996) that a party may not, during the course of litigation, occupy inconsistent and contradictory positions. In Nash, a hospital employee sued the hospital s contract security company for negligence after she 6
was assaulted in a parking garage. After the close of testimony at trial, the security company moved to apportion noneconomic damages to the hospital a request that flatly contradicted the company s position throughout the trial that the hospital s negligence was not an issue because it was not a defendant. The Florida Supreme Court held that, under such circumstances, the security company had waived its right to apportion damages to the hospital because it had asserted a contrary position throughout trial. Id. Here, the Third DCA allowed Cessna to do what the Nash court forbid: prevail on appeal based upon a position that conflicted with a position Cessna asserted and prevailed upon -- at trial. Because this expressly and directly conflicts with this Court s decision in Nash, the Court should exercise jurisdiction. B. The 3 rd DCA s Decision Conflicts With Brown v. Colonial Penn. To make matters worse, the Third DCA not only allows Cessna to argue an inconsistent position on appeal, but it penalizes the Petitioners for its opposing position below. Specifically, the court binds Avior to statements it made in its pleadings in support of its breach of contract claim, which was dismissed that it was a party to the service agreements. According to the opinion, Petitioners are bound by such statements, which are accepted as facts without the necessity of further proof. Op. at 7. While it is true that Avior alleged, in the alternative, that it was a party to the service agreements, such allegations were successfully 7
attacked by Cessna in their motion for directed verdict, resulting in the dismissal of Avior s contract claim. A party is not bound by allegations which are subsequently and successfully attacked by the opposing party. Brown v. Colonial Penn Insurance Co., 666 So. 2d 226 (Fla. 2d DCA 1995). C. The 3 rd DCA s Opinion Conflicts with Parsons v. Motor Homes of America. This Court should exercise jurisdiction in this case for a separate and independent reason: the Third DCA s opinion expressly and directly conflicts with Parsons v. Motor Homes of America, Inc., 465 So. 2d 1285, 1292 (Fla. 1st DCA 1985) (where a contractual warranty limits an owner s remedy to repair or replacement, but efforts at repair or replacement repeatedly fail, such warranty fails of its essential purpose pursuant to Fla. Stat. 672.719), and Frank Griffin Volkswagen, Inc. v. Smith, 610 So. 2d 597, 602 (Fla. 1 st DCA 1992) (whether a warranty fails of its essential purpose is a question of fact for the jury to decide). In Parsons, the plaintiffs purchased a motor home, pursuant to a written warranty which was limited to repair or replacement of defective parts. 465 So. 2d at 1292. The motor home repeatedly broke down, and the buyers ultimately sued the seller and manufacturer for damages. Id. The trial court enforced the written warranty and found for the defendants. Id. at 1289. The First DCA reversed, holding that the seller s repeated failures to repair the motor home caused the warranty to fail of its essential purpose, analogizing to a line of cases involving 8
repeated failures to repair automobiles in violation of written warranties limiting a buyer to repair or replacement of defective parts. Id. at 1292; citing Tampa Farm Serv., Inc. v. Cargill, 356 So. 2d 347 (Fla. 2d DCA 1989), and Orange Motors of Coral Gables v. Dade Co., 258 So. 2d 319 (Fla. 3d DCA 1972). In this case, Petitioners argued that Cessna s repeated failures to repair the Aircraft caused the limitation of remedy provision to fail of its essential purpose. The Third DCA rejected the argument, along with Parsons and the cases cited therein, ostensibly because the case related to a family s purchase of a motor home with a service contract and additional federal trade commission remedies. 1 Opinion at 13. The Third DCA fails to explain why such a distinction justifies enforcement of Cessna s warranty (despite its repeated failure to repair) and rejection of the rationale of Parsons especially since the Parsons is itself based upon an extension of cases involving automobiles. Because the Third DCA cites no justification for its express and direct conflict with Parsons, this Court should grant jurisdiction. D. The 3 rd DCA s Decision Conflicts with Moransais v. Heathman and Mercury Motors v. Smith. The Third DCA s holding that Petitioners professional 1 As for the Third DCA s attempt to distinguish Parsons claiming that case involved the existence of additional trade commission remedies, the Parsons court specifically stated that its holding that the warranty failed of its essential purpose was separate and independent of its finding that the plaintiffs were also entitled to FCC remedies. Id. at 1292. 9
negligence claim is barred by the economic loss rule because it was not brought against Cessna s engineers individually expressly and directly conflicts with Moransais v. Heathman, 744 So. 2d 973 (Fla. 1999) and Mercury Motors, Exp. v. Smith, 393 So. 2d 545 (Fla. 1981). In Moransais, this Court plainly held that professional negligence is an exception to the economic loss rule. In Mercury Motors, this Court held that an employer is vicariously liable for the negligent acts of employees committed within the scope of their employment. Id. at 549. Such holding is based upon the public policy that victims injured by the negligence of employees acting within the scope of their employment should be compensated even though it means placing vicarious liability on an employer. Id. The Third DCA cited no basis for its departure from the holdings of these cases or the underlying public policy, and therefore, this Court should grant review. E. The 3 rd DCA s Decision Conflicts with Russell v. Sherwin Williams. The Third DCA s holding that a claim for negligent provision of information for the guidance of others is barred by the economic loss rule expressly and directly conflicts with the Fourth DCA s decision in Russell v. Sherwin Williams Co., 767 So. 2d 592 (Fla. 4 th DCA 2000). V. CONCLUSION Based upon the foregoing, Petitioners request that the Court exercise its discretionary jurisdiction and review this case. 10
KLUGER, PERETZ, KAPLAN & BERLIN, P.L. Attorneys for Petitioners Miami Center, Seventeenth Floor 201 South Biscayne Boulevard Miami, Florida 33131 Telephone: (305) 379-9000 Facsimile: (305) 379-3428 By: Andrew P. Gold Fla. Bar No. 612367 Dianne O. Fischer Fla. Bar No. 994560 JOEL S. PERWIN Florida Bar No. 316814 Suite 1422, Alfred I. DuPont Building 169 East Flagler Street Miami, Florida 33131 Telephone: (305) 779-6090 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing was served via facsimile and mail this day of October, 2010 to Carlos F. Gonzalez, Esq., Diaz Reus Rolff & Targ LLP, 100 S.E. 2nd St., Miami, Florida 33131; John S. Penton, Jr., Esq., Cole, Scott & Kissane P.A., 1390 Brickell Ave, 3 rd Floor, Miami, FL, 33131; and Henry Knoblock, Esq., Kim, Coxhead & Penton, P.A., 7901 S.W. 67 th Ave., Ste 203, Miami, Florida 33143. Dianne O. Fischer 11
CERTIFICATE OF COMPLIANCE WE HEREBY CERTIFY that this response complies with the font requirements of Fla. R. App. P. 9.210(a)(2). Dianne O. Fischer M0593059 12