Aviation Consultants, Inc. v. Timken Alcor Aerospace Technologies, Honaker Aviation, Inc. and Jet Access Aviation, LLC (mem. dec.)
10A04-1609-CT-2230
| Ind. Ct. App. | Feb 24, 2017Background
- ACI owned Beechcraft King Air 200 used for commercial charter; lacked FAR certificate and affiliated with Jet Access which held the FAR certificate; Timken agreed to overhaul engines and provide Leased Engines under the Timken Agreement; ACI transported aircraft to Honaker for engine change; October 20, 2012 flight with Leased Engines ended in takeoff failure and aircraft damage; Arizona settlement between Timken and ACI resolved certain claims and excluded Indiana claims; Indiana lawsuit filed October 17, 2014 against Timken, Honaker, and Jet Access alleging defects in Leased Engines and related negligence; trial court granted summary judgment to Timken, Honaker, and Jet Access; ACI appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Settlement Agreement supersedes the Timken Agreement | ACI argues the Arizona Settlement supersedes the Timken Agreement | Timken argues the Settlement covers only released claims and does not void Timken's hold harmless clause | Settlement does not supersede the Timken Agreement for Indiana claims |
| Whether there is a genuine issue of fact regarding the hold harmless provision | ACI contends factual questions exist about bargaining and mutual assent | Timken shows arm's-length negotiations and meaningful consideration; no factual issue defeats summary judgment | No genuine issue of material fact; Timken hold harmless clause applies |
| Whether the Jet Access indemnification provisionbars claims against Honaker | ACI contends indemnification does not apply to Honaker | Indemnification expressly covers affiliated entities including Honaker; no liability for consequential damages | Indemnification provision bars ACI's claims against Honaker and Jet Access |
| Whether Honaker, as an affiliated entity, may enforce the Jet Access indemnification | ACI argues Honaker cannot enforce because not named | Honaker is affiliated and has right to enforce; indemnification protects affiliated entities | Honaker may enforce the indemnification provision; neither Jet Access nor Honaker liable |
Key Cases Cited
- Salt River Project Agric. Improvement and Power Dist. v. Westinghouse Elec. Corp., 694 P.2d 198 (Ariz. 1984) (public policy and bargaining strength considerations for exculpatory clauses)
- Pinnacle Peak Developers v. TRW Inv. Corp., 631 P.2d 540 (Ariz. 1980) (integration clause limits parol evidence; supersession issues)
- Aztar Corp. v. U.S. Fire Ins. Co., 224 P.3d 960 (Ariz. 2010) (plain meaning of contract terms governs interpretation of integration clause)
- Hargis v. Baize, 168 S.W.3d 36 (Ky. 2005) (exculpatory clause valid if clearly expresses intention to exonerate for negligence or related criteria)
- Cumberland Valley Contractors, Inc. v. Bell Cnty. Coal Corp., 238 S.W.3d 644 (Ky. 2007) (upholds arm’s-length indemnity between sophisticated parties)
- Speedway SuperAmerica, LLC v. Erwin, 250 S.W.3d 339 (Ky. Ct. App. 2008) (indemnity enforceability in commercial transactions)