Free Brief in Opposition to Motion - District Court of Colorado - Colorado

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

Civil Action No.

01-cv-2056-JLK

UNITED STATES AVIATION UNDERWRITERS, INC., a New York corporation; PAUL LEADABRAND, an Idaho resident; and JEFLYN AVIATION, INC. dba ACCESS AIR, an Idaho corporation, Plaintiffs, vs. PILATUS BUSINESS AIRCRAFT, LTD., a Colorado corporation; PILATUS FLUGZEUGWERKE AKTIENGESELLSCHAFT, a Swiss corporation; PILATUS AIRCRAFT, LTD., a Swiss corporation; PRATT & WHITNEY CANADA, INC., a Canadian corporation; and DOES 1 through 500, Inclusive, Defendants.

PLAINTIFFS' OPPOSITION TO "MOTION IN LIMINE BY PILATUS DEFENDANTS RE IDAHO LAW" (Doc. 109)

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TABLE OF CONTENTS

1.0 2.0 3.0 4.0

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . LEGAL STANDARDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IDAHO LAW SHOULD NOT BE APPLIED HERE . . . . . . . . . . . . . . 4.1 With Regard To The Particular Issue Of Comparative Fault, Colorado's Policies And Interests Are Substantially Greater Than Idaho's Policies And Interests . . . . . . . . . . . . . . . . . . . . . . The Parties' Domicile And The Center Of The Parties' Relationship Favors The Application Of Colorado's Comparative Fault Laws . . . . . . . . The Protection of Justified Expectations Weighs In Favor Of Applying Colorado Law . . . . . . . . . . . . . . It Will Be Much Easier To Determine And Apply Colorado Law Than Idaho Law . . . . . . . . . . . . . . . . . . .

2 3 3 4

4

4.2

7 9 10 12

4.3 4.4

5.0

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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TABLE OF AUTHORITIES

Cases B.G.'s, Inc. v. Gross ex rel. Gross, 23 P.3d 691 (Colo. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ITT Specialty Risk Services v. Avis Rent A Car Systems, Inc., 985 P.2d 43 (Colo.App. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Richard O'Brien Cos. v. Challenge-Cook Bros. Inc., 672 F.Supp. 466 (D.Colo. 1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ross v. Coleman Co., Inc., 114 Idaho 817 [761 P.2d 1169] (Idaho 1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sabell v. Pacific Intermountain Express Co., 36 Colo.App. 60 [536 P.2d 1160] (Colo.App. 1975) . . . . . . . . . . . . . . . . . . . . . . U.S. Aviation Underwriters, Inc. v. Pilatus Business Aircraft, Ltd., 358 F.Supp.2d 1021 (D.Colo. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . U.S. Aviation Underwriters, Inc. v. Pilatus Business Aircraft, Ltd., ­­ F.Supp.2d ­­, 2006 WL 2844173 (D.Colo. 2006) . . . . . . . . . . . . . . . . . . . . . . Vannoy v. Uniroyal Tire Co., 111 Idaho 536 [726 P.2d 648] (Idaho 1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Statutes COLO.REV.ST.ANN. § 13-21-111.5(3)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IDAHO CODE § 6-1404 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IDAHO CODE § 6-1405 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page ii
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1.0

INTRODUCTION. On the eve of trial, a Swiss defendant (Pilatus Aircraft Ltd.) and its Colorado

subsidiary (Pilatus Business Aircraft, Ltd.) jointly ask the Court to change the substantive law of comparative fault that will be used by the jury to resolve these claims. Specifically, the defendants seek to take advantage of the law of Idaho (instead of Colorado law), because if the jury finds that the fault of the plaintiffs is greater than the individual fault of any defendant, then Idaho law would completely exonerate that defendant. On the other hand, if Colorado law was applied in the same circumstances, then that same defendant would be held liable so long as the jury finds that the plaintiffs' fault was less than the combined collective fault of all defendants as a group. Idaho law should not be applied here. Among other things, the Pilatus defendants previously urged the court to apply Colorado's (not Idaho's) comparative fault statutes (Doc 74, p. 5.) Idaho has no interest in the issue of whether a Colorado jury assesses damages against Colorado and Swiss entities, especially since none of the disputed conduct occurred in Idaho. The Pilatus defendants have no connection with Idaho, they do not transact business in Idaho, and they did not sell this airplane in Idaho. In contrast, the Pilatus defendants have a real and substantial connection with Colorado, they transact significant business in Colorado, and they sold this particular airplane in Colorado pursuant to the terms of a written contract that calls for the application of Colorado law. Finally, the application of Idaho law would result in substantial delays and significant prejudice, because a change in the applicable law of comparative fault would require wholesale changes to the Pretrial Order, Jury Instructions, and Verdict Form. Based on the foregoing, the plaintiffs respectfully submit that the defendants' motion in limine (Doc. 109) should be denied. Page 2
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2.0

BACKGROUND. An almost brand-new airplane was ditched in the ocean after the pilot reported

unusual noises and sounds coming from the airplane's only engine. The plaintiffs in this lawsuit seek to recover $3.1 million in stipulated damages for the loss of the airplane, which has never been recovered. (See, Pretrial Order [Doc. 98, ¶ III(A)(2)(b), pp. 5-6].) Additional facts are set forth in the Pretrial Order, and in this Court's previous orders. (U.S. Aviation Underwriters, Inc. v. Pilatus Business Aircraft, Ltd., 358 F.Supp.2d 1021 (D.Colo. 2005), and U.S. Aviation Underwriters, Inc. v. Pilatus Business Aircraft, Ltd., ­ ­ F.Supp.2d ­­, 2006 WL 2844173 (D.Colo. 2006).)

3.0

LEGAL STANDARDS. "In resolving choice of law issues, Colorado follows the 'most significant

relationship' approach of the Restatement (Second) of Conflict of Laws (1971) (Restatement) for both tort and contract actions. [Citations omitted.] For both types of actions, courts are to evaluate various contacts ( e.g., place of contracting or of injury; residence of the parties) in deciding which state has the most significant relationship to the occurrence or transaction and to the parties under the principles stated in Restatement § 6. [Citation omitted.] Restatement § 6, in turn, lists factors relevant to the choice of law inquiry generally, including the policies of the interested states, the needs of the interstate and international systems, and the like." (ITT Specialty Risk Services v. Avis Rent A Car Systems, Inc., 985 P.2d 43, 47 (Colo.App. 1998).) When a conflict of laws issue arises in the specific context of comparative law statutes, the place where the injury occurred and the place where the conduct causing the injury occurred are of no real significance.

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Therefore, in applying the particular interests and policies of Colorado to comparative negligence controversies, and in endeavoring to minimize a case-by-case, Ad hoc, approach for the solution of comparative negligence conflicts questions, we hold that the specific approach to applying the choice of law rule of § 145 should be that the domicile, residence, nationality, place of incorporation and place of business of the parties, and the place where the relationship, if any, between the parties is centered, are to be weighed more heavily and are to be given more importance in such a choice of law determination, than the contacts of the place where the injury occurred, and the place where the conduct causing the injury occurred. (Sabell v. Pacific Intermountain Express Co., 36 Colo.App. 60, 69-70 [536 P.2d 1160, 1166] (Colo.App. 1975))1 4.0 IDAHO LAW SHOULD NOT BE APPLIED HERE. Plaintiffs respectfully submit that the Court should reject the defendants' eleventhhour attempt to change the substantive law applicable to the plaintiffs' tort claims. 4.1 With Regard To The Particular Issue Of Comparative Fault, Colorado's Policies And Interests Are Substantially Greater Than Idaho's Policies And Interests. The factors listed in sections 6(b) and 6(c) of the Restatement (Second) Conflict of Laws are significant in determining which state's comparative fault laws will be applied here. (Sabell v. Pacific Intermountain Express Co., supra, 36 Colo.App. at p. 69 [536 P.2d at p. 1166].)

1

This is a significant point here, because the defendants' motion focuses primarily on the

place where the injury and the conduct allegedly occurred. (Def. Mtn., pp. 4-6.) However, as noted in Sabell v. Pacific Intermountain Express Co., 36 Colo.App. 60, 69-70 [536 P.2d 1160, 1166] (Colo.App. 1975), these two factors are of secondary importance in this analysis.

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1.

First, "Colorado has adopted the basic policy that the harsh results of the contributory negligence doctrine should be abrogated, and that in its stead, the parties' negligence should be carefully measured and compared in first determining liability, and then in ascertaining an award of damages, if any." (Sabell v. Pacific Intermountain Express Co., supra, 36 Colo.App. at p. 69 [536 P.2d at p. 1166].) If Idaho law is applied, then "the harsh results of the contributory negligence doctrine" will be injected back into this case ­ thereby frustrating Colorado's policies ­ if the jury finds that the fault of any plaintiff is greater than the fault of any individual defendant. (IDAHO CODE § 6-1404; Ross v. Coleman Co., Inc., 114 Idaho 817, 830 [761 P.2d 1169, 1182] (Idaho 1988).)

2.

Second, "Colorado, as the state of the forum has a legitimate interest in applying its laws and policies not only to the conduct of its residents, but also to those who seek relief in its courts." (Sabell v. Pacific Intermountain Express Co., supra, 36 Colo.App. at p. 69 [536 P.2d at p. 1166].) Again, this policy would be frustrated by the application of Idaho law, because the plaintiffs have selected Colorado as the appropriate forum for the resolution of their claims against the defendants.

3.

Third, Idaho's interests in this lawsuit are limited to the fact that two of the plaintiffs (Access Air and Paul Leadabrand) are Idaho residents. The defendants seize upon this fact, and proclaim that Idaho law should be applied so as to compensate Idaho residents. (Def. Mtn., p. 6.) This argument has several flaws. While it is true that Access Air is an Idaho plaintiff, the Court has already ruled that Access Air's commercial and business losses will not be an issue during this Page 5
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trial (U.S. Aviation Underwriters, Inc. v. Pilatus Business Aircraft, Ltd., 358 F.Supp.2d 1021, 1027 (D.Colo. 2005).) Similarly, even though Mr. Leadabrand is also an Idaho plaintiff, his claims are insignificant when compared with the claims being asserted by the primary plaintiff, USAU, a New York citizen. And if the choice of law issue should be decided on the basis of which state's law will maximize the recovery for the Idaho plaintiffs (as defendants argue), then certainly Idaho would not object if its policies are displaced by Colorado law to the benefit of the Idaho plaintiffs.

4.

Fourth, the defendants are just plain wrong on the facts and the law when they say that "Colorado has no interest in applying pure comparative fault in a product liability claim by non-resident plaintiffs against non-resident defendants." (Def. Mtn., p. 6.) For starters, defendant Pilatus Business Aircraft, Ltd. is a resident of Colorado. Moreover, Idaho's "interests in the application of rules which will determine the ultimate issues of the quantum of negligence necessary to authorize or preclude recovery and damages, where one non-resident of [Idaho] seeks to recover against another non-resident, in a state other than [Idaho], although of some significance, are simply not as great as those of Colorado, where the parties ... have sought redress." (Sabell v. Pacific Intermountain Express Co., supra, 36 Colo.App. at p. 69 [536 P.2d at p. 1166].)

Simply put, Idaho has no interest in the issue of how a Colorado jury assesses damages against Colorado, Swiss, and Canadian entities.

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4.2

The Parties' Domicile And The Center Of The Parties' Relationship Favors The Application Of Colorado's Comparative Fault Laws. "The domicile, residence, place of incorporation and place of business of the

parties and the place where the relationship of the parties is centered assumes pivotal importance in determining the applicable law in negligence suits ..."2 (Richard O'Brien Cos. v. Challenge-Cook Bros. Inc., 672 F.Supp. 466, 469 (D.Colo. 1987); Sabell v. Pacific Intermountain Express Co., supra, 36 Colo.App. at p. 70 [536 P.2d at p. 1166].) 1. Plaintiffs Access Air and Paul Leadabrand are Idaho residents. Defendant Pilatus Business Aircraft, Ltd. is a Colorado resident and transacts significant business in Colorado. Plaintiff USAU is a New York corporation, and it also transacts With regard to the particular issue of

significant business in Colorado.

comparative fault laws, these facts weigh in favor of applying Colorado law, because Colorado law would maximize the recovery for all plaintiffs.3 2. The Pilatus defendants have no known links to Idaho. They do not transact significant business in Idaho, and they did not sell this airplane in Idaho. In contrast, the Pilatus defendants have a real and substantial connection with Colorado, because they transact significant business in Colorado, and defendant Pilatus Business Aircraft, Ltd., is a citizen and resident of Colorado.

2

Even though the plaintiffs have abandoned their negligence claims, the choice of law The defendants claim that USAU factored Idaho law into its calculation of premiums

issue raised by the defendants relates to the negligence (fault) of the pilot.
3

during the underwriting process. (Def. Mtn., pp. 5-7.) But there is nothing in the record to suggest that USAU considered Idaho's comparative fault laws when it calculated any relevant insurance premiums.

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3.

The plaintiffs and the defendants have no direct relationship with each other. However, the parties' relationship "as a whole" is centered in Colorado, where the airplane was placed in the American stream of commerce by defendant Pilatus Aircraft, Ltd., and then sold by defendant Pilatus Business Aircraft, Ltd. (See Pretrial Order, Doc. 98, p. 21, items 6 and 8.) (Richard O'Brien Cos. v.

Challenge-Cook Bros. Inc., supra, 672 F.Supp. at p. 469 ["I attach particular importance to the fact the relationship between the parties as a whole was centered here ..."] [italics in original].)

4.

The defendants correctly observe that after the airplane was brought into Colorado by defendant Pilatus Aircraft, Ltd, and then sold in Colorado by defendant Pilatus Business Aircraft, Ltd., the airplane was later resold and leased in Idaho. (Def. Mtn., pp. 1-2.) But these facts do not support the application of Idaho law, because the defendants ­ the parties who are asserting comparative fault ­ were not parties to the resale and lease transactions that occurred in Idaho. Moreover, when the airplane was sold in Colorado pursuant to a written Purchase Agreement (Exh. "1"), the Pilatus defendants agreed that even though the airplane was being sold to an Idaho entity (Western Aircraft), the sale would still be governed by Colorado (not Idaho) law. (Exh. "1," p. 3, ¶ 11(e).)

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4.3

The Protection of Justified Expectations Weighs In Favor Of Applying Colorado Law. When Pilatus sold the airplane in Colorado to a an Idaho entity (Western

Aircraft), it did so pursuant to the terms of a "Pilatus Center Aircraft Purchase Agreement." (Exh. "1"). In that agreement, Pilatus stipulated that the sale of the airplane would be governed by Colorado (not Idaho) law. (Exh. "1," p. 3, ¶ 11(e).) While this is not a breach of contract case, the fact that Pilatus agreed that the sale of the airplane would be governed by Colorado law shows that Pilatus reasonably expected that Colorado law could be applied if the airplane later proved to be defective. Plaintiffs also possessed similar justified expectations in favor of Colorado law. On April 18, 2002, the plaintiffs served Pilatus with a first set of interrogatories. (Fed.R.Civ.P. 33; Plntfs.' Exhs. "2" and "3".) These interrogatories asked the Pilatus defendants to identify the law that applied to the claims against Pilatus. (Plntfs.' Exh. "2," p. 7 [Interrogatory Nos. 31 and 32]; Plntfs.' Exh. "3," p. 7 [Interrogatory Nos. 35 and 36].) In response, the Pilatus defendants stated: Pilatus aircraft did not allege in its answer and does not contend at this time that the law of a state or jurisdiction other than Colorado governs this action against it. (Pilatus Aircraft Response, Plntfs.' Exh. "4," p. 12; Pilatus Business Aircraft Response, Plntfs.' Exh. "5," pp. 1112.)4 By applying Colorado law, the court is doing nothing more than protecting the parties' own justified expectations.

4

This response was never amended or supplemented.

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4.4

It Will Be Much Easier To Determine And Apply Colorado Law Than Idaho Law. One factor to be considered in the choice of law analysis is the "ease in the

determination and application of the law to be applied." (REST. (SECOND) CONFLICT OF LAWS, § 6(g).) This factor weighs in favor of applying Colorado law. The parties have devoted significant time and money to develop a Pretrial Order, Jury Instructions, and Verdict Forms based on the assumption that Colorado law would be applied here. The Court has already approved and signed the Pretrial Order. If the Court now determines that Idaho's comparative fault laws will be applied, then the Pretrial Order, Jury Instructions, and Verdict Forms will have to be rewritten to take into account the following differences between Colorado and Idaho comparative fault laws:

1.

If Idaho law is applied, then the Pretrial Order, Jury Instructions, and Verdict Forms will have to be rewritten to take into consideration the fact that under Idaho law, the fault of the plaintiffs is compared with the fault of each individual defendant. (Ross v. Coleman Co., Inc., 114 Idaho 817, 830 [761 P.2d 1169, 1182] (Idaho 1988) ["the Idaho legislature, when it enacted comparative negligence legislation, adopted the 'individual rule' which requires that, when comparing percentages of negligence, the negligence of the plaintiff must be compared against each individual defendant in determining whether the plaintiff may recover."]) On the other hand, if Colorado law is applied, then the fault of the plaintiffs is compared to the defendants collectively, as a group. (B.G.'s, Inc. v. Gross ex rel. Gross, 23 P.3d 691, 693 (Colo. 2001) ["Where multiple defendants are named in an action, this court has previously construed the statute to intend that the negligence of the injured person be measured against the Page 10
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combined negligence of the defendants, rather than separately against each individual defendant."])

2.

If Idaho law is applied, then the Pretrial Order, Jury Instructions, and Verdict Forms will have to be rewritten to take into consideration the fact that Idaho law specifically describes the kinds of conduct that does (and does not) constitute comparative fault. (IDAHO CODE § 6-1405.) No such descriptions are now included in the Pretrial Order, Jury Instructions, or Verdict Form. In this regard it should be noted that if Idaho law is applied, then the allegedly negligent conduct of the pilot probably does not constitute comparative fault under section 6-1405.

3.

If Idaho law is applied, then the Pretrial Order, Jury Instructions, and Verdict Forms will have to be rewritten to take into consideration the fact that Idaho law would allow the defendants to ask the jury to assign comparative fault to any person or entity. (Vannoy v. Uniroyal Tire Co., 111 Idaho 536, 542 [726 P.2d 648, 654] (Idaho 1985) ["We have interpreted I.C. § 6-801, the comparative negligence statute, to require all negligent actors contributing to the causation of any accident or injuries to be listed on the jury verdict form, whether or not they are parties to the action. [Citations omitted.] Reason and consistency in statutory interpretation dictate that products liability cases based on strict liability should be treated the same." Colorado, of course, only permits fault to be assigned to nonparties that have been properly designated by the defendants.

(COLO.REV.ST.ANN. § 13-21-111.5(3)(b).) To the extent the application of Idaho law allows the defendants to ask the jury to assign fault to non-parties who have Page 11
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never been properly designated under Colorado law, the pretrial documents will have to be completely rewritten to reflect those new claims.

5.0

CONCLUSION. Based on the foregoing, the plaintiffs respectfully request that the defendants'

motion in limine (Doc. 109) be denied.

Respectfully Submitted, Dated: January 25 , 2007 s/ Jeffrey J. Williams Jon A. Kodani, Esq. Jeffrey J. Williams, Esq. LAW OFFICES OF JON A. KODANI Attorneys for Plaintiffs United States Aviation Underwriters, Inc. et al. 2200 Michigan Avenue Santa Monica, CA 90404-3906 Tel: (310) 453-6762 Fax: (310) 829-3340 Email: [email protected]

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CERTIFICATE OF SERVICE U.S. Aviation Underwriters et al. v. Pilatus Business Aircraft etc. et al. D.Colorado Case No. 01-K-2056 [XXXXX] I hereby certify that on January 25, 2007 , I electronically filed the foregoing with the Clerk of Court using the CM/ECF system which will send notification of such filing to the following e-mail addresses: For Defendant Pratt & Whitney Thomas J. Byrne, Esq. Byrne, Kiely & White 1120 Lincoln Street, Suite 1300 Denver, CO 80203 Tel. (303) 861-5511 Fax (303) 861-0304 Email: [email protected] [email protected]

For Pilatus Defendants Robert B. Schultz, Esq. Law Offices of Robert B. Schultz 9710 W. 82nd Avenue Arvada, CO 80005 Tel. (303)456-5565 Fax (303)456-5575 Email: [email protected]

[

]

I hereby certify that on , I have mailed or served the document or paper to the following non CM/ECF participants in the manner (mail, hand delivery, etc.) indicated by the non-participant's name: s/ Jeffrey J. Williams Jeffrey J. Williams, Esq. LAW OFFICES OF JON A. KODANI Attorneys for Plaintiffs United States Aviation Underwriters, Inc. et al. 2200 Michigan Avenue Santa Monica, CA 90404-3906 Tel: (310) 453-6762 Fax: (310) 829-3340 Email: [email protected]

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