United States District Court, W.D. Louisiana
APICAL INDUSTRIES, INC., ET AL. PHI, INC.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
PATRICK J. HANNA UNITED STATES MAGISTRATE JUDGE
consent of the parties pursuant to 28 U.S.C. § 636(c),
this matter came before the Court for trial by jury starting
on November 13, 2017 and concluding on November 15, 2017. The
case involves a helicopter that belonged to PHI, Inc. (PHI)
that ditched in the Gulf of Mexico after sustaining an engine
failure. The pilot successfully landed in the water with the
floats fully deployed. After a period of time, one of the
floats deflated and the helicopter capsized. PHI sued the
engine manufacturer, Rolls Royce, the float manufacturer,
Apical Industries, Inc. (Apical), and a company that
performed maintenance and repair on the float system,
Offshore Helicopter Support Services, Inc. (OHS). The claim
against Rolls Royce was severed and transferred to the
Southern District of Indiana by virtue of a forum selection
clause where it was settled prior to trial. The remainder of
the case was tried in this venue. This Court ruled that
evidence regarding the cause of the engine failure was not
jury found that the helicopter was a total loss and awarded
damages against Apical for the total market value of the
helicopter. OHS was exonerated. That verdict has not yet been
reduced to judgment because, by agreement of the parties,
this Court was called upon to determine the amount of offset
to the jury's verdict for the value of the engine and/or
the cost to repair the engine prior to the helicopter
capsizing assuming it could have been successfully recovered.
evidentiary hearing was held on January 18, 2018 at which PHI
introduced evidence from two expert witnesses concerning the
cost of repairs to the engine had the helicopter not capsized
and the engine not been immersed in salt water, as well as
the value of the engine assuming it was a total loss. Apical
contends that the Court should not consider the cost of
repairs assuming the engine had not been immersed in salt
water because PHI had previously taken the position in its
litigation with Rolls Royce that the engine was a total loss
regardless of whether it was immersed.Therefore, PHI is
bound by that position and should not be allowed take a
different position at this point. Apical also put forth
evidence by expert testimony as to its computation of the
value of the engine.
Court, having carefully considered the testimony of all of
the witnesses, the exhibits entered into evidence, the
record, the memoranda submitted by the parties, and the
applicable law, now makes the following findings of fact and
conclusions of law as required by Rule 52 of the Federal
Rules of Civil Procedure. To the extent any conclusion of law
is deemed to be a finding of fact, it is adopted as such.
Likewise, to the extent any finding of fact is deemed to be a
conclusion of law, it is adopted as such.
December 1, 2011, the engine in a Bell 407 helicopter owned
by PHI failed, causing the pilot to make a forced emergency
landing in the Gulf of Mexico. The pilot successfully engaged
the float system and landed in the water. Both the pilot and
the passenger were able to successfully exit the helicopter
in life rafts and were recovered without injury. Some period
of time passed with the helicopter afloat and secured to an
offshore supply vessel by a line. At some point, one of the
float bags deflated and the helicopter capsized, resulting in
complete immersion in salt water of the engine and various
electronics. Notwithstanding anything else to the contrary,
the lengthy immersion in salt water would have rendered the
helicopter a total loss.
engine was a Series 250-C47B engine manufactured by Rolls
Royce. Both parties agree that its value new was six hundred
fifteen thousand dollars ($615, 000.00). PHI took the legal
and factual position in the litigation against Rolls Royce,
complete with expert testimony, that design and manufacturing
defects in the engine rendered the engine a total loss
regardless of whether the helicopter capsized.Apical cannot be
liable for any damage to an engine that was already a total
loss when the float system failed.
PHI's position and the speculative nature of assuming
that the helicopter could have been successfully recovered
without further damage to the engine had it not capsized, the
Court finds that the cost of repair assuming the helicopter
did not capsize is not relevant.
presented the testimony of aviation appraisal expert Richard
Hart. Mr. Hart has had experience with valuing and selling
the Series 250 engine 40 to 50 times in the past. The Court
found his testimony credible and also found that his
methodology based on three different publications with
proprietary databases that are publicly available was
reliable. Utilizing what he described as a modified sales
approach to the appraisal of the engine, Mr. Hart valued the
engine based on its remaining life after deductions for the
cost of operating and a core value, to be four hundred fifty
thousand two hundred thirty dollars ($450, 230.00).
presented the testimony of Sharon Desfor, an expert in
appraisal of engines, to counter that of Mr. Hart. Ms.
Desfor's expertise was somewhat more limited than Mr.
Hart as she generally deals with the aircraft she appraises
as a whole rather than just the engine. Ms. Desfor utilized a
market/sales comparison approach after having determined that
the cost approach would have resulted in an excessive value.
She valued the engine at three hundred seventy-five thousand
dollars ($375, 000.00) before submersion. Part of the
approach Ms. Desfor took to arrive at this figure was based
on a quote she received from a transaction in 2011 between
two other companies. That quote indicated a sales price for a
used helicopter with no time since overhaul and one with 50%
operational time since overhaul. The Court finds that the
methodology followed by Mr. Hart was more reliable and,
therefore, does not accept the appraised value of the engine
set forth by Ms. Desfor.
plaintiff's recovery against Apical was based on the
jury's finding that the float system contained a
redhibitory defect which caused PHI's aircraft to
capsize, resulting in a total loss of the aircraft. The jury
awarded the fair market value of the aircraft to PHI,
however, in a redhibition claim the plaintiff's damages
are “limited to only those damages ‘caused
by' the redhibitory defect, and not those damages
attributable to other causes.” Hollybrook
Cottonseed Processing, LLC v. Carver, Inc., 2011 WL
2214936, at *3 (W.D.La. June 6, 2011) (citing La. Civ. Code
evidence is undisputed that the helicopter engine failed
prior to the helicopter ditching in the Gulf. PHI has taken
the position in pleadings filed in the Indian litigation
against Rolls Royce that the engine was a total loss
regardless of whether the helicopter capsized.
“Normally, factual assertions in pleadings and pretrial
orders are considered to be judicial admissions conclusively
binding on the party who made them.” White v.
ARCO/Polymers, Inc.,720 F.2d 1391, 1396 (5th
Cir. 1983); Morales v. Dep't. of Army, 947 F.2d
766, 769 (5th Cir. 1991); McCreary v.
Richardson,738 F.3d 651, 659 n.5 (5th Cir.
2013) (“Factual statements in the pleadings constitute
binding judicial admissions”); Johnson v.
Houston's Restaurant, Inc., 167 F. App'x. 393,
395 (5th Cir. 2006). Therefore, PHI is bound to