Clay v. Aig Aerospace Insurance Services, Inc., 488 S.W.3d 402

Background

AIG insured a Piper PA-32-250 (total loss after hurricane) and sold the whole salvaged aircraft "AS IS/WHERE IS" via its salvage website with photos and a bid contact; AIG did not inspect the aircraft before sale.
Bob Ruhe purchased the salvaged aircraft; it included logbooks and maintenance records but the logbooks did not reflect hurricane damage or a propeller strike. Ruhe later died; his son Eric sold the engine (with its logbook) to Air‑Tec, telling Air‑Tec the engine needed an overhaul because it had been in a salvaged aircraft.
Air‑Tec bought and resold engines as its ordinary business; its owner, Waters, testified Eric told him the engine was undamaged, and Air‑Tec sold the engine to plaintiff Phillips with the engine installed in Phillips’s plane.
During a flight after installation, the engine vacuum pump failed (causing attitude indicator loss) and the aircraft crashed, killing Phillips and his passenger; experts disputed whether the hurricane/prop strike had damaged the vacuum pump.
Plaintiffs sued AIG (strict products liability and negligence for failing to warn/record damage); a jury found AIG was not in the business of selling engines/vacuum pumps and that Phillips’s negligence was the proximate cause; trial court entered a take‑nothing judgment for AIG.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether AIG was "in the business of selling" aircraft engines and vacuum pumps for strict products liability	AIG sold salvaged aircraft frequently and thus should be treated as a seller of the engine components; AIG produced engines into the stream of commerce	AIG only sold whole salvaged aircraft and did not sell engines or pumps separately as part of its business	Jury finding that AIG was not in the business of selling engines/pumps was supported by factually sufficient evidence; affirmed
Whether AIG’s negligence (failure to note damage in logbooks) proximately caused the crash	AIG should have recorded hurricane/propeller damage or warned downstream purchasers, which led to installation without overhaul and caused the fatal failure	AIG disclosed damage in sale listing/photographs, had no industry/F AA duty to note such entries in logbooks for salvaged sales, and downstream actors had duty to insure airworthiness	Jury finding that any negligence by AIG did not proximately cause the deaths was supported by factually sufficient evidence; affirmed
Whether the trial court improperly commented on credibility when introducing AIG’s eminent witness (Gibson)	Comment (judge expressing familiarity/admiration) improperly bolstered the witness and should have been objected to; prejudicial	Comments referenced the witness’s notoriety, the plaintiffs failed to timely object, and comments were not egregious or incurable by instruction	No preserved error; comments not improper or harmless at most; affirmed
Whether the trial court erred in refusing plaintiffs’ additional language about the "as‑is" clause in jury instruction	Plaintiffs sought a clarifying sentence that the clause has no effect on non‑parties	Court’s given instruction already stated the clause binds only parties; the requested sentence was cumulative	Trial court did not abuse discretion by refusing redundant instruction; affirmed

Key Cases Cited

Dow Chem. Co. v. Francis, 46 S.W.3d 237 (Tex. 2001) (standard for factual‑sufficiency challenge)
Cain v. Bain, 709 S.W.2d 175 (Tex. 1986) (standard for factual sufficiency review)
Golden Eagle Archery, Inc. v. Jackson, 116 S.W.3d 757 (Tex. 2003) (jury as fact‑finder on credibility/weight of evidence)
Am. Tobacco Co. v. Grinnell, 951 S.W.2d 420 (Tex. 1997) (adoption of Restatement §402A principles for strict products liability)
New Tex. Auto Auction Servs., L.P. v. Gomez De Hernandez, 249 S.W.3d 400 (Tex. 2008) (strict‑products‑liability framework)
Shupe v. Lingafelter, 192 S.W.3d 577 (Tex. 2006) (trial court discretion and requirements for jury instructions)