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Three Strikes and You’re Out Unless You’re Not.

Products Liability

A baseball umpire would call you out after three strikes.  But in a recent case, Piper Aircraft won once, twice, three times and then, a fourth time, in the Eleventh Circuit Court of Appeals.

The case began in 2008 when a South African company bought a new Piper aircraft from an aircraft dealer in South Africa.  The parties signed a purchase agreement identifying the aircraft by serial number, but in later communications the buyer asked to instead purchase another new aircraft (same model) with a different serial number.  The purchase agreement wasn’t amended in writing but everyone continued with the sale, and all required payments were made to the dealer.  A representative of the buyer eventually travelled to Florida for training and to tour the Piper facilities.  The aircraft was flown by a ferry pilot from Miami to South Africa.  Then, after 60 flight hours, a fuel leak was reported.  Instead of submitting a warranty claim and allowing Piper to simply repair the leak, the buyer refused to allow Piper to fulfill its warranty and chose to file suit.

So how was the case won so many times?

The buyer first filed suit in South Africa where he sued the aircraft dealer and Piper Aircraft, as the manufacturer.  Unable to overcome jurisdictional and other legal hurdles,  the buyer was forced to dismiss the case and was ordered to pay Piper’s legal costs, including attorney’s fees.

That was the first out.

Then the buyer refiled the case in the U.S. District Court for the Southern District of Florida in Miami, presumably expecting U.S. law to help him recover his claimed millions of dollars in losses from a single leak. Oddly, in the Miami case, the buyer changed his position and argued that he hadn’t really purchased the aircraft from the South African dealer, since the purchase agreement had never been updated to reflect a different serial number aircraft.  Instead, he said he bought the aircraft directly from Piper, through an oral agreement, made when he visited the Piper facility after making payments to the dealer.  Judge K. Michael Moore didn’t agree and granted Piper Aircraft dismissal because the claims were precluded by Florida’s economic loss rule.

That was the second out for this plaintiff.

But then came a change in the law as Florida’s Supreme Court, in an unrelated case, limited the applicability of the economic loss rule.  The buyer seized the opportunity and moved for reconsideration of the summary judgment.  An amended complaint under the new law was filed and Piper responded with another summary judgment motion.  In a well-reasoned opinion, Judge Moore found that, regardless of the discrepancies in the written purchase agreement, there was absolutely no evidence of a sales contract between the buyer and Piper Aircraft, nor was there any evidence that Piper made fraudulent representations to mislead the buyer, and Piper should have been given an opportunity to repair the leak under its warranty.  Judge Moore again granted summary judgment for Piper Aircraft.

That was the third out.

Not yet ready to concede the loss, the buyer appealed to the Eleventh Circuit Court of Appeals.  After extensive briefing and oral argument, the Court of Appeals, on July 3, affirmed the summary judgment issued by Judge Moore.  For the fourth time, after six years and hundreds of thousands of dollars spent in legal fees, Piper won its case.

Surely, four outs  and you’re done?

Maybe.  Time is still running for a request for a request for reconsideration and/or a writ of certiorari to the Supreme Court, so there’s always a chance for a fifth out . . .  maybe a sixth . . . even a seventh . . .

Stay tuned!

Three Strikes and You’re Out Unless You’re Not.