Summary
affirming grant of summary judgment on joint venture and joint enterprise claims where the relationship was not "anything other than that of landlord-tenant"
Summary of this case from Trustees of Graphic Comm. Intl. Union v. BjorkedalOpinion
No. A04-1262.
Filed February 1, 2005.
Appeal from the District Court, Becker County, File No. C3-02-1463.
Diane B. Bratvold, Stephen P. Watters, Joseph S. Lawder, Rider Bennett, Llp, (for appellant).
Rex A. Hammarback, Hammarback Dusek Associates, P.L.C., (for respondent Roger Oberg)
Frank A. Dvorak, Thomas W. Pahl, Megan A. Blazina, Foley Mansfield, P.L.L.P., (for respondents City of Detroit Lakes, et al.)
Considered and decided by Kalitowski, Presiding Judge; Lansing, Judge; and Wright, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2004).
UNPUBLISHED OPINION
Appellant trustee challenges the district court's grant of summary judgment in favor of respondents City of Detroit Lakes, County of Becker, the Detroit Lakes Becker County Airport Commission (collectively Airport Commission), and Roger Oberg. We affirm summary judgment as to the Airport Commission but reverse and remand summary judgment as to the common-law-negligence claim against Oberg.
FACTS
Respondent Roger Oberg served as the manager of the Detroit Lakes/Becker County Airport. He also owned Detroit Lakes Aircraft, Inc., a repair shop that did business at the airport and leased property from the Airport Commission. In May 1999, Oberg conducted an annual inspection of the airplane in question, which had been in storage since 1995. The purpose of the inspection was to determine whether the airplane could be certified as airworthy and safe for operation under Federal Aviation Administration (FAA) regulations. Oberg completed the inspection and certified the plane.
After the inspection, the owner of the airplane sold the airplane to a buyer who hired Michael C. Stern to fly the airplane from Minnesota to Georgia. On July 29, 1999, Stern and the seller arrived at the Detroit Lakes/Becker County Airport. Stern prepared the airplane for flight and requested that the fuel tanks be filled. It took 43 gallons of fuel to fill the fuel tank of the airplane, which had a capacity of 60 gallons.
According to appellant's witnesses, the engine began to surge and sputter shortly after takeoff. An auto mechanic at a nearby truck stop testified that the engine did not sound like it was running right. According to this witness, the plane reached an altitude of approximately 150 feet and began to change direction as if looking for a place to land. The witness noticed smoke trailing behind the plane, heard the engine stop, saw the airplane take a nose dive and drop below the tree line, and then heard a loud thump followed by a roaring blast. Michael Stern was killed in this accident.
Appellant Laura Mills brought a wrongful-death claim as trustee for the heirs and next of kin of Michael C. Stern against Oberg, alleging that he negligently inspected and maintained the fuel system of the airplane. Appellant also sued the Airport Commission, claiming that its relationship with Oberg gave rise to vicarious and joint liability and that the Airport Commission was liable for Oberg's failure to obtain public-liability insurance. Oberg and the Airport Commission filed separate motions for summary judgment, and the district court granted both motions.
DECISION
On appeal from summary judgment, this court asks whether there are any genuine issues of material fact and whether the district court erred in its application of the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990). A district court properly grants summary judgment "when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that either party is entitled to a judgment as a matter of law." Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993). On appeal, this court views the evidence in the light most favorable to the party against whom summary judgment was granted. Id. No genuine issue of material fact exists if the nonmoving party relies on evidence that merely creates a metaphysical doubt as to a factual issue and that is not sufficiently probative to permit reasonable persons to draw different conclusions. DLH, Inc. v. Russ, 566 N.W.2d 60, 71 (Minn. 1997).
I.
Appellant sued the Airport Commission under theories of respondeat superior, negligent supervision and retention, joint venture, joint enterprise, partnership, and failure to maintain insurance. Appellant argues that the district court failed to consider evidence establishing the interconnected rights, obligations, and control Oberg and the Airport Commission had over each other. Appellant states that the Airport Commission did not just act as a landlord, but operated the airport to provide a broad range of general aviation services, including maintenance and inspection. Appellant claims that because the agreement between Oberg and the Airport Commission was not a typical landlord-tenant agreement, vicarious liability is a jury question. We disagree.
Appellant relies on the property lease and the "Airport Manager Agreement" to support her claim that the Airport Commission had a right to control Oberg's maintenance and inspection activities at Detroit Lakes Aircraft, Inc., thereby giving rise to vicarious liability. Appellant argues that the Airport Commission had the right and duty to supervise the services Oberg provided under the manager agreement. But those services relate to Oberg's role as airport manager and do not apply to Oberg in his role as mechanic and inspector at Detroit Lakes Aircraft, Inc. And Oberg's alleged negligence does not arise out of his actions as airport manager. Appellant also points to a lease provision stating that the "Lessee's agents, officers, and employees will obey such rules and regulations as made from time to time to be promulgated by Lessor. . . ." But this lease provision further states that it is designed "to insure safety and orderly conduct of flying operations," and it does not mention either repair or inspection activities.
Appellant states that the Airport Commission had the right to terminate the lease if Oberg used the premises "for any other purpose or manner that is hereinbefore specified or violate any other covenant or agreement contained" in the lease. Appellant contends this language gives the Airport Commission the "right to discharge Oberg if he performed his activities deficiently." We disagree. In the context of the lease this so-called "right to discharge" language does not constitute substantial evidence that the Airport Commission exercised control over Oberg in his role as mechanic and inspector at Detroit Lakes Aircraft, Inc.
The manager agreement states that "the [m]anager shall be an independent contractor" and that the manager "will neither hold itself out nor claim to be an officer or employee of the [Airport] Commission. . . ." The manager agreement speaks to duties related to the airport itself and does not apply to Oberg's actions as a mechanic or inspector at Detroit Lakes Aircraft, Inc. The manager agreement also provides that the agreement is independent of the companion property lease, which creates a landlord-tenant relationship and nothing more.
We conclude that the district court properly determined that appellant failed to present substantial evidence that the relationship between Oberg, in his role at Detroit Lakes Aircraft, Inc., and the Airport Commission was anything other than that of landlord-tenant. Nor does appellant present substantial evidence that the Airport Commission exercised control over Oberg in his role at Detroit Lakes Aircraft, Inc. Therefore, we affirm the district court's decision to grant summary judgment in favor of the Airport Commission with respect to all of appellant's claims that the Airport Commission is vicariously liable for Oberg's alleged negligence.
Appellant's suit against the Airport Commission also included a claim that the Airport Commission breached a contractual obligation and a duty to require Oberg to obtain public-liability insurance. Appellant based this claim on a provision in the property lease stating that the "[l]essee hereby agrees it will maintain public liability insurance and property damage insurance in sums as required by [l]essor." Appellant contends that she is an intended beneficiary to the insurance provision of the property lease and that there exists a jury issue on appellant's breach-of-contract claim. We disagree.
The district court properly determined that appellant was not an intended beneficiary of the property lease under either the duty-owed test or the intent-to-benefit test. To determine whether a party may assert third-party beneficiary rights, Minnesota courts follow the approach outlined in Restatement (Second) of Contracts § 302 (1979). Mears Park Holding Corp. v. Morse/Diesel, Inc., 427 N.W.2d 281, 285 (Minn.App. 1988). In Mears Park, the court of appeals held that "a third-party can recover as an intended beneficiary if recognition of third-party beneficiary rights is appropriate and either the duty-owed or intent-to-benefit test is met." Id. The court explained that the duty-owed test is satisfied if "the performance of the promise will satisfy an obligation of the promisee to pay money to the beneficiary," and the intent-to-benefit test is satisfied if "the circumstances indicate that the promisee intends to give the beneficiary the benefit of the promised performance." Id. Appellant meets neither test. Therefore, we affirm the district court's decision to grant summary judgment in favor of the Airport Commission with respect to appellant's claim that the Airport Commission is liable for Oberg's failure to obtain public-liability insurance.
II.
1. Negligence per se
Appellant's suit against Oberg included a claim of negligence per se. Negligence per se may exist where the legislature replaces the reasonable-person standard with a statutory standard of care to express a policy for the protection of a certain class of persons. Seim v. Garavalia, 306 N.W.2d 806, 810 (Minn. 1981). Negligence per se, however, is not liability per se, and the defense of proximate cause remains. Id. Proximate cause is the sole issue on appeal with respect to appellant's claim of negligence per se.
Appellant claims that Oberg was negligent per se for allegedly violating FAA regulations by (1) intentionally misrepresenting himself as a properly certified inspector, performing the inspection without a current FAA inspection authorization, and using an unlicensed engine mechanic; (2) failing to properly sign off on the annual inspection form; and (3) failing to create and keep adequate maintenance records related to the inspection. The district court properly held that, even taking the alleged violations as true, appellant's claim of negligence per se must fail because appellant did not present any facts to show that these alleged violations were the proximate cause of the crash. Thus, we affirm the district court's decision to grant summary judgment in favor of Oberg on appellant's claim of negligence per se.
2. Common-law negligence
Appellant's suit against Oberg also included a claim of common-law negligence. In order to establish common-law negligence, a plaintiff must show that (1) the defendant had a legal duty, (2) the defendant breached the duty, (3) the plaintiff suffered an injury, and (4) the breach of the duty was the proximate cause of the plaintiff's injury. Hudson v. Snyder Body, Inc., 326 N.W.2d 149, 157 (Minn. 1982). Duty is the sole element on appeal with respect to appellant's common-law-negligence claim.
Appellant employed accident reconstructionists William Twa, Erik Rigler, and Donald Sommer to investigate the crash. Twa reported that Oberg failed to comply with FAA regulations for documenting the maintenance and inspection of the airplane. Twa stated that Oberg's records were incomplete, confusing, and false. He also stated that Oberg erred by designating the airplane as unairworthy in the aircraft logbook rather than the engine logbook, thus giving the impression that the engine was airworthy.
Rigler reported that because the airplane had not been started in four years, Oberg had a responsibility to perform more maintenance and inspection than would have been necessary on an airplane that had been flown on a regular basis. Rigler concluded that Oberg's maintenance was "improper, unreasonable, illegal and careless."
Sommer opined the airplane's engine failure was "caused by poor and inadequate maintenance" by Oberg, who "failed to take the necessary and proper steps to return an airplane that had been stored for a period of years to airworthy condition prior to releasing it to service." Sommer stated:
When performing an annual inspection on an aircraft and engine that has been stored for a period of years, mechanics must pay close attention to age related discrepancies such as corrosion, rust and carbon in and on the engine and components. Inspections areas shall include but not be limited to the crankshaft, piston, connecting rods, valves, valve seats, lifters, pistons, cylinders, and camshaft. Inspection of the fuel system shall include, but not be limited to: fuel contamination, stale fuel, residue, dried fuel or water in the fuel system, contaminants or other forms of age related deterioration; furthermore, any residual fuel residing in the fuel system for a period of years must be removed. Aviation fuel, like automotive fuel, deteriorates with age. There are no records or any indications in deposition testimony that any of these items were completed during the annual inspection. Furthermore, the annual inspection report does not indicate that Mr. Oberg completed the steps necessary to ensure the airworthiness of the fuel system including the carburetor or air intake filter. The carburetor and fuel pump should have been inspected internally by simply removing them, disassembling them and completing an inspection for contaminates. Gaskets, such as the carburetor bowl gasket, rocker gaskets, and accessory gaskets shrink with age and screw torque such as carburetor bowl screws must be checked after long storage.
In addition Sommer concluded that:
A dangerous condition relating to the fuel system was present during and after the annual inspection conducted by Mr. Oberg in June 1999, in part, due to 16 gallons of fuel that had remained in the aircraft since at least the last time it was previously flown, sometime in 1995. This means that fuel was allowed to remain in the aircraft for more than three years. This dangerous condition would have worsened over time because of the build up of moisture, condensation and other contaminants in the fuel and was never addressed during the annual inspection conducted by Mr. Oberg on June 25, 1999 and would significantly affect the proper operation of the fuel system and engine.
Relying on the reconstructionists' reports, appellant claims that Oberg knew or should have known that old fuel had remained in the airplane's fuel tanks since 1995. Appellant claims Oberg (1) did not perform tests or measures of the engine and fuel-system performance; (2) did not remove the fuel from the tanks; (3) did not take any measures to address stale or contaminated fuel; and (4) did not make any meaningful inspection of the fuel system.
The district court found that there was an issue of material fact "regarding whether fuel was a proximate cause of the crash." But the district court ruled that there was no issue of material fact as to whether Oberg had a duty to inspect the quality of the fuel, simply stating that "[n]o regulations cited by [appellant] specifically required that [respondent] Oberg should have inspected the quality of the fuel during the annual inspection."
Although the FAA regulations do not specifically refer to fuel inspection, appellant's accident reconstructionists reported that Oberg had a duty to ensure the quality of the fuel and failed to meet that duty. And while we make no evaluation of the merits of the reconstructionists' reports, we conclude that the evidence presented by appellant creates an issue of material fact as to whether Oberg had a common-law duty to inspect the airplane's fuel. Therefore, we reverse and remand with respect to appellant's common-law-negligence claim against Oberg.