Free Motion in Limine - District Court of Colorado - Colorado

Case 1:01-cv-02056-JLK

Document 109

Filed 01/05/2007

Page 1 of 26

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 01-K-2056

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.

MOTION IN LIMINE BY PILATUS DEFENDANTS RE IDAHO LAW

Defendants Pilatus Business Aircraft, Ltd, Pilatus Flugzeugwerke Aktiengesellschaft and Pilatus Aircraft, Ltd (collectively "Pilatus") hereby move the court for an order that Idaho's modified comparative fault law applies to plaintiffs' fault. This motion shall be supported by the attached Memorandum, and documents.

MOTION IN LIMINE BY PILATUS DEFENDANTS RE IDAHO LAW

Case 1:01-cv-02056-JLK

Document 109

Filed 01/05/2007

Page 2 of 26

CERTIFICATE OF COMPLIANCE Defendants' attorneys advised Plaintiffs' attorneys in accordance with D.C.COLO.LCivR 7.1A and Plaintiffs did not respond. DATED this 5th day of January 2007. By__/s Robert Schultz_______________________ Robert Schultz Schultz & Associates 9710 W. 82nd Ave. Arvada, CO 80005 Tel (303) 456-5565 Fax (303) 456-5575 E-mail [email protected] Attorney For Defendants Pilatus Business Aircraft, Ltd And Pilatus Flugzeugwerke Aktiengesellschaft/ Pilatus Aircraft, Ltd

MOTION IN LIMINE BY PILATUS DEFENDANTS RE IDAHO LAW

Case 1:01-cv-02056-JLK

Document 109

Filed 01/05/2007

Page 3 of 26

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 01-K-2056

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.

PILATUS DEFENDANTS' MEMORANDUM IN SUPPORT OF MOTION IN LIMINE BY PILATUS DEFENDANTS RE IDAHO LAW

I. Introduction This airplane property loss occurred on the high seas in the Sea of Okhotsk between Japan and Russia. Plaintiffs' allege it was caused by a defective engine built by defendant Pratt & Whitney Canada (PWC) in Canada or a defective airplane built by defendant Pilatus Aircraft Ltd. (Pilatus) in Switzerland. After it was built, the aircraft was flown to Pilatus' subsidiary in Broomfield, Colorado where it was painted and the interior furnishings were installed. It was then flown to Idaho where it was sold to an Idaho company, Western Aircraft (not a party), which resold it to another Idaho company, DJS Aviation (not a party). Exhibit A. DJS Aviation took delivery in Idaho. Exhibit B. DJS Aviation leased the aircraft to another Idaho company,

MOTION IN LIMINE BY PILATUS DEFENDANTS RE IDAHO LAW

Page 1 of 8

Case 1:01-cv-02056-JLK

Document 109

Filed 01/05/2007

Page 4 of 26

Jeflyn Aviation, Inc. dba Access Air (a plaintiff), for commercial operations out of Boise, Idaho. Exhibit C. Access Air obtained hull insurance (property loss) from plaintiff USAU for commercial operations out of Boise, Idaho. Exhibit D. The airplane property loss occurred while the airplane was being flown on an around the world charter that was to start and end in Idaho. The pilot, Mike Smith (not a party) was and is an Idaho resident as were all the Access Air officers who negotiated the charter contract. Virtually the only contact between Colorado and the loss alleged is the fact that the airplane was painted and furnished here. Although it was built in Canada and Switzerland, under strict product liability law, that conduct is not at issue. The sole issue with respect to plaintiffs' case is whether defendants placed a defective product in the stream of commerce. That occurred in Idaho. Defendants allege that the airplane loss was caused in whole or in part by plaintiffs' fault in operating the charter flight in violation of Federal Aviation Regulations (FARs, 14 CFR) and in shutting down the engine and aborting a restart. The FAR violation occurred in Idaho when Access Air and its pilot Mike Smith contracted to fly the charter beyond the geographic limitations of their commercial operating certificate on a flight that necessarily required extended over water legs in violation of the FARs. There is a true conflict between the comparative fault law of Colorado and that of Idaho. 1 For ordinary negligence actions, both Idaho and Colorado law apply the same, modified comparative. That is both bar recovery if the plaintiff's fault is greater than that of the defendant. 2 With respect to product liability law, however, Colorado and Idaho differ in that

1 2

Idaho uses the term comparative responsibility synonymously with comparative negligence. CRS 13-21-111 (1) Contributory negligence shall not bar recovery in any action by any person or his legal representative to recover damages for negligence resulting in death or in injury to person or property, if such negligence was not as great as the negligence of the person against whom recovery is sought, but any damages MOTION IN LIMINE BY PILATUS DEFENDANTS RE IDAHO LAW Page 2 of 8

Case 1:01-cv-02056-JLK

Document 109

Filed 01/05/2007

Page 5 of 26

Colorado law reverts to pure comparative fault while Idaho law applies the same modified comparative fault. 3 Thus, if the jury finds that the fault of Access Air and its pilot, Mike Smith, is greater than the combine fault of defendants Pilatus and PWC, the result will differ depending on whether Idaho or Colorado law is applied. Since this matter is in Federal Court on diversity jurisdiction, Colorado's choice of law rules apply. Klaxon Co. v. Stentor Mfg. Co., 313 U.S. 487. Colorado has adopted the most "significant relationship" with the occurrence and the parties as stated in the Restatement (Second) Conflict of Laws §145 as its choice of law rule. First Nat'l Bank in Fort Collins v. Rostek, 182 Colo. 437 (1973). Section 145 states: "(1) The rights and liabilities of the parties with respect to an issue in tort are determined by the local law of the state which, with respect to that issue, has the most significant relationship to the occurrence and the parties under the principles stated in § 6. (2) Contacts to be taken into account in applying the principles of § 6 to determine the law applicable to an issue include: (a) the place where the injury occurred,

allowed shall be diminished in proportion to the amount of negligence attributable to the person for whose injury, damage, or death recovery is made. I.C. 6-801. Contributory negligence or comparative responsibility shall not bar recovery in an action by any person or his legal representative to recover damages for negligence, gross negligence or comparative responsibility resulting in death or in injury to person or property, if such negligence or comparative responsibility was not as great as the negligence, gross negligence or comparative responsibility of the person against whom recovery is sought, but any damages allowed shall be diminished in the proportion to the amount of negligence or comparative responsibility attributable to the person recovering. Nothing contained herein shall create any new legal theory, cause of action, or legal defense. 3 CRS 13-21-406 (1) In any product liability action, the fault of the person suffering the harm, as well as the fault of all others who are parties to the action for causing the harm, shall be compared by the trier of fact in accordance with this section. The fault of the person suffering the harm shall not bar such person, or a party bringing an action on behalf of such a person, or his estate, or his heirs from recovering damages, but the award of damages to such person or the party bringing the action shall be diminished in proportion to the amount of causal fault attributed to the person suffering the harm. I.C. 6-1404. Comparative responsibility shall not bar recovery in an action by any person or his legal representative to recover damages for product liability resulting in death or injury to person or property, if such responsibility was not as great as the responsibility of the person against whom recovery is sought, but any damages allowed shall be diminished in the proportion to the amount of responsibility attributable to the person recovering. MOTION IN LIMINE BY PILATUS DEFENDANTS RE IDAHO LAW Page 3 of 8

Case 1:01-cv-02056-JLK

Document 109

Filed 01/05/2007

Page 6 of 26

(b) the place where the conduct causing the injury occurred, (c) the domicil, residence, nationality, place of incorporation and place of business of the parties, and (d) the place where the relationship, if any, between the parties is centered. These contacts are to be evaluated according to their relative importance with respect to the particular issue." The principles of § 6 are: "(a) the needs of the interstate and international systems, (b) the relevant policies of the forum, (c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue, (d) the protection of justified expectations, (e) the basic policies underlying the particular field of law, (f) certainty, predictability and uniformity of result, and (g) ease in the determination and application of the law to be applied." Considering these contacts and applying these principles to the issue of comparative fault, it is clear that Colorado has virtually no relationship to the plaintiffs' fault while Idaho has a significant relationship. Accordingly, Idaho modified comparative fault should apply. II Arguments

Although The Loss Of The Airplane Occurred In International Waters, USAU's Loss, Upon Which They Are Suing, Occurred In Idaho Where They Paid The Subject Insurance Claim. As alleged in paragraph 11 of the Complaint, the loss upon which plaintiff USAU's claim is based occurred in Idaho where it paid Access Air's hull loss claim.

MOTION IN LIMINE BY PILATUS DEFENDANTS RE IDAHO LAW

Page 4 of 8

Case 1:01-cv-02056-JLK

Document 109

Filed 01/05/2007

Page 7 of 26

"Plaintiff ACCESS AIR presented a claim to plaintiff USAU's principals, subrogors and/or assignors, who latter indemnified ACCESS AIR for all or a portion of the damage to the Airplane and Engine assembly and other damages in an amount substantially in excess of the minimum jurisdiction of this Court. Plaintiff ACCESS AIR and LEADABRAND also suffered other losses or damages as a result of the Crash. 1. ACCESS AIR thereafter assigned and pledged all of its rights and causes of action in connection with the Crash to plaintiff USAU up to the extent of the payments made by USAU to ACCESS AIR. 2. As a result, plaintiff USAU is equitably, and/or contractually subrogated to the rights of ACCESS AIR, and plaintiff USAU is a proper Real Party In Interest by way of its rights of subrogation and assignment." This is significant because in establishing its premiums and evaluating its subrogation rights, USAU would have taken into account Idaho's comparative fault law as it applied to its Idaho insured, Access Air, not the fortuity of where a loss would occur. Access Air and Pilot Mike Smith's Violation of the FARs Occurred in Idaho Where They Illegally Contracted and Launched The Around the World Flight. Access Air and Pilot Mike Smith's primary comparative fault occurred in Idaho where defendants allege they violated the FARs by contracting and launching the around the world flight which was outside the geographic limitations of their commercial operating certificate and impossible to accomplish legally in a single engine airplane.

MOTION IN LIMINE BY PILATUS DEFENDANTS RE IDAHO LAW

Page 5 of 8

Case 1:01-cv-02056-JLK

Document 109

Filed 01/05/2007

Page 8 of 26

All of the Parties Whose Conduct is Relevant to the Comparative Fault Claim, Reside and Do Business in Idaho. Mike Smith, the pilot, Paul Leadabrand, a plaintiff and Access Air Vice President who arranged the illegal flight and Jim Hutchens, Access Air President who all approved the illegal charter all reside in Idaho. Idaho has an Interest in Applying its Modified Comparative Fault Law to Product Liability Claims by Its Plaintiffs While Colorado Has No Interest in Applying Pure Comparative Fault in a Product Liability Claim By Non-resident Plaintiffs Against Non-Resident Defendants. The legislatures of both Idaho and Colorado considered the issue of comparative fault in a product liability case. While both states adopted modified comparative fault for ordinary negligence cases, for product liability cases, Idaho expressly chose to adopt the same rule, while Colorado expressly chose to adopt pure comparative fault. Modified comparative fault is a compromise between the harshness of the complete bar to recovery of contributory fault and the more generous compensation of comparative fault. The adoption of modified comparative fault demonstrates a state interest in balancing deterrence of tortious conduct against compensation of injured victims. Since Idaho has an interest in the deterring tortious conduct in Idaho by Idaho residents and in compensation of injured Idaho residents and Colorado does not, Idaho's modified comparative fault should apply. Restatement (Second) Conflict of Laws §6(c) USAU Expected Or Should Have Expected Idaho's Modified Comparative Fault Law To Apply To Any Subrogation Action Arising Out Of The Payment Of Claims To An Idaho Resident. When USAU established the premium for Access Air's hull insurance policy, it knew or should have known that more likely than not, modified comparative fault could reduce its ability to recover properly loss payments to its negligent Idaho insured. By shopping the case to

MOTION IN LIMINE BY PILATUS DEFENDANTS RE IDAHO LAW

Page 6 of 8

Case 1:01-cv-02056-JLK

Document 109

Filed 01/05/2007

Page 9 of 26

Colorado, it should not expect to receive a windfall, should the jury find that USAU's insured's fault is greater than that of the defendants. Restatement (Second) Conflict of Laws §6(d) This Court Will Not have Any Difficulty in Applying Modified Comparative Fault Since it is the Same Law Applied to Ordinary Negligence Cases In Colorado. In ordinary negligence cases in Colorado, the courts are used to applying modified comparative fault. Indeed, it is a simple matter to use that Colorado's comparative fault instruction for this product liability case. Restatement (Second) Conflict of Laws §6(g). III. Conclusion For the foregoing reasons, this court must find that Idaho law applies to the issue of comparative fault and that Idaho's modified comparative fault law applies. DATED this 5th day of January 2007. By__/s Robert Schultz_______________________ Robert Schultz Schultz & Associates 9710 W. 82nd Ave. Arvada, CO 80005 Tel (303) 456-5565 Fax (303) 456-5575 E-mail [email protected] Attorney For Defendants Pilatus Business Aircraft, Ltd And Pilatus Flugzeugwerke Aktiengesellschaft/ Pilatus Aircraft, Ltd

MOTION IN LIMINE BY PILATUS DEFENDANTS RE IDAHO LAW

Page 7 of 8

Case 1:01-cv-02056-JLK

Document 109

Filed 01/05/2007

Page 10 of 26

CERTIFICATE OF SERVICE I hereby certify that on this 5th day of January 2007, I caused the forgoing MOTION IN LIMINE BY PILATUS DEFENDANTS RE IDAHO LAW to be served by electronically filing the foregoing with the Clerk of the Court using the CM/ECF system, which will send notification of such filing to the following addresses:

Jon A. Kodani Jeff Williams Law Offices of Jon A. Kodani [email protected] Thomas Byrne Byrne, Kiely & White LLP [email protected]

__s/ Robert Schultz__________ Law Offices of Robert B. Schultz [email protected]

MOTION IN LIMINE BY PILATUS DEFENDANTS RE IDAHO LAW

Page 8 of 8

Case 1:01-cv-02056-JLK

Document 109

Filed 01/05/2007

Page 11 of 26

EXHIBIT

B-2

Exhibit A

Case 1:01-cv-02056-JLK

Document 109

Filed 01/05/2007

Page 12 of 26

Exhibit A

Case 1:01-cv-02056-JLK

Document 109

Filed 01/05/2007

Page 13 of 26

Exhibit A

Case 1:01-cv-02056-JLK

Document 109

Filed 01/05/2007

Page 14 of 26

Exhibit A

Case 1:01-cv-02056-JLK

Document 109

Filed 01/05/2007

Page 15 of 26

Exhibit A

Case 1:01-cv-02056-JLK

Document 109

Filed 01/05/2007

Page 16 of 26

Exhibit A

Case 1:01-cv-02056-JLK

Document 109

Filed 01/05/2007

Page 17 of 26

Exhibit B

Case 1:01-cv-02056-JLK

Document 109

Filed 01/05/2007

Page 18 of 26

Exhibit C

Case 1:01-cv-02056-JLK

Document 109

Filed 01/05/2007

Page 19 of 26

Exhibit C

Case 1:01-cv-02056-JLK

Document 109

Filed 01/05/2007

Page 20 of 26

Exhibit C

Case 1:01-cv-02056-JLK

Document 109

Filed 01/05/2007

Page 21 of 26

Exhibit C

Case 1:01-cv-02056-JLK

Document 109

Filed 01/05/2007

Page 22 of 26

Exhibit C

Case 1:01-cv-02056-JLK

Document 109

Filed 01/05/2007

Page 23 of 26

Exhibit C

Case 1:01-cv-02056-JLK

Document 109

Filed 01/05/2007

Page 24 of 26

Exhibit D

Case 1:01-cv-02056-JLK

Document 109

Filed 01/05/2007

Page 25 of 26

Exhibit D

Case 1:01-cv-02056-JLK

Document 109

Filed 01/05/2007

Page 26 of 26

Exhibit D