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PHI Inc. v. Apical Industries Inc.

United States District Court, W.D. Louisiana, Lafayette Division

October 26, 2017

PHI, INC.
v.
APICAL INDUSTRIES, INC., ET AL.

          RULING ON MOTIONS

          PATRICK J. HANNA UNITED STATES MAGISTRATE JUDGE

         Currently pending is the defendants' motion in limine (Rec. Doc. 224) seeking to exclude testimony regarding tort-based liability theories. The plaintiff filed a “trial brief, ” and to the extent it might be construed as a motion, argued that the defendants should not be able to put on evidence of comparative fault and tort-based affirmative defenses. (Rec. Doc. 229). The defendants objected to this “trial brief” on procedural grounds in their “trial brief” (Rec. Doc. 241), but substantively opposed the plaintiff's brief (to the extent it is construed as a motion). The grounds included prematurity as a procedural problem. Substantively, the defendants argued that if comparative fault is not applicable then the evidence of acts or omissions could still be admitted as relevant to causation and/or failure to mitigate damages. Finally, the defendants contend that, even if comparative fault is not applicable, if the defendants are found liable they are entitled to a 50% reduction in any award of damages based on PHI's settlement with a severed defendant, Rolls Royce, based on Louisiana law applicable to solidary obligors. Also pending are two aspects of the plaintiff's motion in limine (Rec. Doc. 228) that were not previously resolved. In particular, the plaintiff's motion in limine sought the preclusion of testimony at trial concerning the hammering of the helicopter engine's bearing and the preclusion of testimony concerning the value or repair cost of the helicopter engine. The issues in all of these pleadings are intertwined and, following oral argument at the pretrial conference, this Court deferred ruling on the motion(s) and ordered additional briefing. (Rec. Doc. 252). The parties submitted the required briefs. (Rec. Docs. 254, 255).

         Considering the evidence, the law, and the arguments of the parties, and for the following reasons, this Court will consider the plaintiff's trial brief regarding comparative fault and tort-based affirmative defenses (Rec. Doc. 229) as a motion that is opposed by the defendants (Rec. Doc. 241), which is GRANTED IN PART; the defendants' motion in limine regarding tort-based liability theories (Rec. Doc. 224) is GRANTED IN PART; the plaintiff's motion in limine (Rec. Doc. 228) concerning hammering of the bearing is GRANTED; the plaintiff's motion in limine (Rec. Doc. 228) concerning the value or repair cost of the engine is GRANTED; and related orders are issued, as detailed below.

         Background

         This lawsuit arises out of an incident in which the engine of the plaintiff's helicopter failed and the helicopter was forced to make an emergency landing in the Gulf of Mexico. The pilot executed a successful auto rotation, inflated the helicopter's floats, and landed safely in the water. The pilot and a passenger successfully exited the helicopter into separate life rafts and were rescued without injury. The helicopter remained upright and afloat for a period of time during which it was lashed to an offshore supply vessel with a rope and towed at slow speed to keep it from drifting away until it could be salvaged. After some period of time, one of the floats deflated, and the helicopter capsized and flooded. Although it did not sink and was ultimately successfully removed from the water, the salt water intrusion allegedly caused enough damage to the helicopter to render it a total loss.

         In this lawsuit, the plaintiff originally asserted claims against three defendants.[1]The plaintiff asserted a claim against Rolls Royce Corporation, the manufacturer of the engine, alleging that the engine's failure resulted in the loss of the helicopter. The plaintiff asserted a claim against Apical Industries, Inc., alleging that the float system manufactured and sold by Apical malfunctioned due to a redhibitory defect, resulting in the loss of the helicopter. The plaintiff asserted a claim against Offshore Helicopter Support Services, Inc., alleging that it breached its contractual obligation to properly repair and rework the helicopter's float system before the incident, resulting in the loss of the helicopter.

         Rolls Royce filed motions to sever and transfer the claims against it pursuant to a forum selection clause contained in its warranty, on which the plaintiffs' claim was based at least in part because the plaintiff also attempted to plead a claim in redhibition. This Court recommended denying the motion finding that severance was improper under F.R.C.P. Rule 21, and therefore, the forum selection clause would not be enforced. (Rec. Doc. 132). The district court adopted the recommendation “in toto.” (Rec. Doc. 142). Rolls Royce sought a writ of mandamus which was granted by the Fifth Circuit, and the plaintiff's claim against Rolls-Royce was severed from the other claims and transferred to Indiana pursuant to the forum selection clause contained in the warranty. (Rec. Doc. 150). The warranty also had an exclusive choice of law clause mandating the applicability of Indiana law without regard to Indiana choice of law rules. (Rec. Doc. 132, p. 2). The district court in Indiana denied summary judgment sought by Rolls Royce to limit PHI's recovery based on Rolls Royce's Limited Warranty due to disputes of material fact but noted that “[u]nder Louisiana law, PHI's redhibition claim against Rolls-Royce essentially amounts to a breach of warranty claim.”[2] However, that lawsuit was settled.

         “Severance under Rule 21 creates two separate actions or suits where previously there was but one. Where a single claim is severed out of a suit, it proceeds as a discrete, independent action, and a court may render a final, appealable judgment in either one of the two actions notwithstanding the continued existence of unresolved claims in the other.”[3] Therefore, implicit in the Fifth Circuit's ruling mandating the severance and transfer of the case against Rolls Royce was a finding that the case against Rolls Royce was sufficiently independent of the claims against the other defendants that it was not necessary that the claims be litigated in the same forum.[4]

         Analysis

         1. Evidence Concerning the Cause of the Engine Failure

         This Court is convinced that Apical's floatation system was designed to work only in the event that the helicopter to which it was attached and made a part of was forced to make an emergency landing in the water. Therefore, how or why the engine malfunctioned is immaterial to the issue of whether there was a redhibitory defect in Apical's float system and immaterial to whether OHS's alleged breach of contract led to the failure of the floatation system.

         Under Federal Rule of Evidence 401, evidence is relevant if it has a tendency to make a fact more or less probable and that fact is consequential in determining the action. This Court finds that evidence designed to establish why the engine failed would not make a finding regarding the existence of a redhibitory defect or breach of contract more probable and would not be of consequence to the issues that must be determined at trial.

         Even if such evidence were relevant, however, it would be excluded under Federal Rule of Evidence 403. That rule permits the exclusion of relevant evidence if its probative value is outweighed by a danger of unfair prejudice, confusing the issues, or misleading the jury. In this case, the plaintiff might be prejudiced and the jury might be confused if evidence were presented at trial regarding the cause of the engine failure. Accordingly, no evidence will be permitted at trial concerning the cause of the engine failure. This ruling includes not only evidence of the hammering of the bearing set forth in the plaintiff's motion in limine, but the entirety of the deposition testimony of Dr. Edney in his capacity as the corporate representative of Rolls Royce.

         2. PHI's Alleged Judicial Admissions in its allegations against Rolls Royce

         In their recent briefing used to supplement the arguments as to what type of offset or credit the defendants should get given the settlement between PHI and Rolls Royce, the defendants argued that they are entitled to a finding of a judicial admission that Rolls Royce's engine contained a redhibitory defect that proximately caused the helicopter to overturn in the water. This position is based on allegations to that effect set forth in the plaintiff's amended complaint. As set forth above, the plaintiff's claim against Rolls Royce is governed exclusively by Indiana law pursuant to the contract on which the case against Rolls Royce proceeded, not Louisiana law. There is no evidence offered or argued that PHI either did not nor could not have amended its complaint to eliminate that allegation after the case was transferred.

         “A judicial admission is a formal concession in the pleadings or stipulations by a party or counsel that is binding on the party making them” but may be withdrawn if allowed by the court.[5] Since redhibition is a doctrine peculiar to Louisiana law and no evidence was presented concerning its applicability under Indiana law, this Court finds that Apical and OHS are not entitled to ...


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