Eighth Circuit Court of Appeals Opinion in Favor of Aviation Client

06.01.2016

The Eighth Circuit Court of  Appeals in St. Louis, Missouri ruled on May 23, 2016, that the federal district court for the Southern District of Iowa was correct to dismiss an aviation case against a client of Whitfield & Eddy Law.  Gosiger v. Elliott Aviation, Inc., Case No. 15-2235, date filed May 23, 2016.

Whitfield & Eddy Law represented Elliott Aviation, Inc. in case involving work done on a Beechcraft King Air B200 turboprop corporate aircraft.  The owner of the aircraft, Gosiger, Inc., an Ohio concern, had hired Elliott Aviation to repair the aircraft and to upgrade the avionics.  In the course of doing so, a mechanic inadvertently cut into the wing spar, a primary structural component of the aircraft.  Elliott Aviation  immediately informed the owner about what had happened, and obtained a factory-approved repair procedure from the designer and manufacturer of the aircraft, Raytheon Beechcraft.  The approved repair to the wing spar was then made at no cost to the owner.  After the repair, the evidence was undisputed that the wing was as strong if not stronger than it was originally made, and that the aircraft was airworthy in all respects.

After the cut spar incident, and notwithstanding its repair, the owner claimed (through the testimony of an expert witness) that the aircraft had sustained a “diminution in value” of over $300,000.  Elliott Aviation denied that it was responsible for “diminution in value” to this extent, and noted that the written contract under which the work was done disclaimed any and all liability for this element of damages, by virtue of language in the contract that stated: “IN NO EVENT SHALL COMPANY BE LIABLE FOR ANY LOSS OF USE OF THE AIRCRAFT OR LOSS OF PROFITS, DIMINUTION IN VALUE. . . DAMAGES OR OTHER LOSSES.”  The parties negotiated back and forth for several months in an attempt to settle the claim for diminution in value, but the parties were not able to resolve the case by settlement.  Elliott Aviation made at least two settlement offers to pay for diminution in value, but those offers were rejected by the owner.

In the trial court, after discovery was completed and a mediation was unsuccessful, Elliott Aviation filed a motion for summary judgment, seeking to dismiss Gosiger’s claim for diminution in value and pointing to the exculpatory language set forth in all capital letters in the original, written contract governing the work that was done.  Gosiger claimed that this language did not apply because, inter alia, the parties had subsequently negotiated back and forth as to various amounts payable for diminution in value in an attempt to resolve the matter, effecting a “waiver” of that provision.

The trial court, the Honorable John A. Jarvey, presiding, granted the motion and dismissed the case.  Gosiger thereafter appealed to the Eighth Circuit Court of Appeals, which affirmed the dismissal of the case in favor of Elliott Aviation.

For more information, contact attorney Kevin M. Reynolds at 515-288-6041. 

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