Panting v. The United States of AmericaPanting v. The United States of America
This matter is before the Court on the government‘s motion for summary judgment (filing 109). But in a joint motion (filing 134), the parties have requested that the Court stay consideration of summary judgment, “except as to the Covenant Not To Sue issue,” to allow for further discovery. Accordingly, the Court will limit its analysis in this Order to whether the plaintiff‘s
I. BACKGROUND
The LeMay Aero Club is a flight club located at Offutt Air Force Base in Omaha, Nebraska, and an instrumentality of the United States. Filing 111 at 3-4. According to Air Force Instruction (AFI) 34-217, aero clubs are “recreational activities” that give “eligible personnel” an opportunity to, among other things, participate in professional aviation training programs, and develop and maintain aeronautical skills. Filing 120-31 at 5. Eligible personnel who can apply for membership at Air Force aero clubs include, in part, active duty, reserve, guard, and retired military and certain family members of these individuals, as well as various federal employees and Civil Air Patrol members. See filing 120-31 at 5.
To support these programs, the LeMay Aero Club retains flight instructors—either as employees or individual contractors—to develop and conduct trainings. Filing 120-31 at 10, 12. These flight instructors are considered authorized members of the club. See filing 120-31 at 5. Additionally, the club allows Designated Pilot Examiners (DPEs) to conduct practical exams, or checkrides, with club members in its aircraft. See filing 111 at 4; filing 127 at 38; filing 120-31 at 25. DPEs are “private individuals” that arе appointed as representatives of the Federal Aviation Administration (FAA) to “examine, test, and/or make inspections necessary to issue airman or aircraft certificates.” Filing 120-25 at 15-17, 132.
The claims in this case arise from a crash involving a Beechcraft Baron aircraft operated by the LeMay Aero Club. See filing 111 at 3. On July 24, 2016, Ronald Panting and Michael Trubilla were on the aircraft, and both sustained fatal injuries when it crashed near Leshara, Nebraska. Filing 111 at 4. Lynne Panting has now brought six claims under the Federal Tort Claims Act against the United States on behalf of her late husband‘s estate.
Mr. Panting served as LeMay Aero Club‘s Chief Flight Instructor from 2014 until July 2015, when he was appointed by the FAA as a DPE and resigned his position to avoid any conflict of interest “with respect to Aero Club members seeking check rides for Pilot certificаtion.” Filing 110-2 at 2; filing 111 at 4. However, on July 19, 2016, while still acting as an authorized DPE, Mr. Panting entered into a contract with the LeMay Aero Club to serve as a part-time Flight Instructor. Filing 120-1 at 6-7; filing 127 at 3. But the parties agree that on the day of the crash, Mr. Panting was acting exclusively in his role as a DPE and was administering a checkride to Mr. Trubilla, a Captain in the United States Air Force who was seeking his Airline Transport Pilot certification. See filing 111 at 4-5; filing 127 аt 41.
It is not disputed that on July 19, 2016, Mr. Panting signed a covenant not to sue the LeMay Aero Club. Filing 111 at 4; filing 127 at 3. This covenant stated:
I, Ronald Panting, am about to voluntarily participate in various activities, including flying activities, of the LeMay Aero Club as a pilot, student pilot, copilot, instructor, or passenger. In consideration of thе Aero Club permitting me to participate in these activities, I, for myself, my heirs, administrators, executors, and assigns, hereby covenant and agree that I will never institute, prosecute, or in any way aid in the institution or prosecution of any demand, claim, or suit against the US Government for any destruction, loss, damage, or injury (including death) to my person or property which may occur from any cause whatsoever as a result of my participation in the activities of the Aero Club.
If I, my heirs, administrators, executors, or assigns should demand, claim, sue or aid in any way in such a demand, claim or suit, I agree, for myself, my heirs, administrators, executors, and assigns to indemnify the US Government for all damages, expenses, and costs it may incur as a result thereof.
I know, understand, and agree that I am freely assuming the risk of my personal injury, death, or property damage, loss or destruction that may result while participating in Aero Club activities, including such injuries, death, damage, loss or destruction as may be caused by the negligence of the US Government.
I also understand and agree that I may be held liable for any damages or loss to the US Government which is caused by my gross negligence, willful misconduct, dishonesty or fraud, and for limited damages or loss to the US Gоvernment which is caused by my simple negligence.
Filing 110-24 (emphasis added).
But the plaintiff argues that the covenant does not bar the current action because (1) Mr. Panting signed the covenant exclusively in his capacity as a flight instructor, making it inapplicable to claims arising from his activities as a DPE, or in the alternative, (2) the covenant is void against public policy under Nebraska law. See filing 127 at 41-47.
II. STANDARD OF REVIEW
Summary judgment is proper if the mоvant shows that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law. See
On a motion for summary judgment, facts must be viewed in the light
III. DISCUSSION
The plaintiff has brought this action under the Federal Torts Claim Act (FTCA), which “waives federal sovereign immunity for injuries ‘caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment, under circumstances where the United States, if a private person, would be liable.‘” Newcombe v. United States, 933 F.3d 915, 917 (8th Cir. 2019) (citing
The Court must determine whether the covenant not to sue signed by Mr. Panting bars the plaintiff‘s action as a matter of law. While the Court does not adopt the entirety of the plaintiff‘s reasoning, it agrees with the plaintiff‘s ultimate conclusion—the covenant at issue is contrary to public policy and unenforceable in the instant matter. Filing 127 at 44-47.
A covenant not to sue is “an agreement not to enforce an existing cause of action.” McCurry v. Sch. Dist. of Valley, 496 N.W.2d 433, 441 (Neb. 1993).
And as both parties concede, certain covenants not to sue are enforceable under Nebraska law. See filing 127 at 40. But these clauses are not valid per se, as the “freedom to contractually limit [a] party‘s liability” may need to be “restricted for the public good.” New Light Co. v. Wells Fargo Alarm Servs., 525 N.W.2d 25, 30 (Neb. 1994). Accordingly, a covenant not to sue is void as against public policy if it is “quite clearly repugnant to the public conscience.” Bedrosky v. Hiner, 430 N.W.2d 535, 540 (Neb. 1988).
Whether such an exculpatory provision violates public policy is ultimately a question of law. Law Offices of Ronald J. Palagi, P.C., L.L.O. v. Howard, 747 N.W.2d 1, 12 (Neb. 2008). But to make this determination, the Court must consider “the facts and circumstances of the agreement and the parties involved.” See New Light Co., 525 N.W.2d at 30. And while the Court must not take lightly the freedom of private parties to contract, the
The Nebraska Supreme Court has upheld private contracts that exculpate a party from liability for ordinary negligence. See New Light Co., 525 N.W.2d at 29-31. For example, where there was no disparity in bargaining рower, the court enforced a commercial lease that exculpated the lessor from liability for any damage to the lessee‘s property caused by the lessor‘s ordinary negligence. See Bedrosky, 430 N.W.2d at 541. Later, relying on Bedrosky, the court held that a similar contract exculpating a private company from its ordinary negligence in the maintenance of a restaurant‘s fire alarm system would also be enfоrceable. See New Light Co., 525 N.W.2d at 29. And in Mayer v. Howard, the court determined whether relieving “the owner of a racetrack from liability to one of the racers is repugnant to the public conscience.” 370 N.W.2d 93, 98 (Neb. 1985). The court ultimately held that the exculpatory provision was not contrary to public policy given that the plaintiff (1) agreed to inspect the track and satisfy himself that it was in proper condition before racing, and (2) acknowledged that racing could result in serious injury or death. Id. at 98. According to the court, the agreement clearly brought to the plaintiff‘s attention the matters necessary to make an informed decision, and therefore, was not contrary to public policy. Id.
As in Mayer, the plain language of the covenant signed by Mr. Panting clearly states that he and his “heirs, administrators, executors, and assigns” would not institute claims against the United States arising from his participation in Aero Club activities, including for damages caused by the government‘s ordinary negligence. See filing 110-24. However, Mr. Panting did not explicitly agree in the covenant to inspect the aircraft and determine it was maintained to his satisfaction. The parties dispute whether Mr. Panting had a duty as a DPE to verify the airworthiness of the aircraft before starting the checkride, regardless of the language in the covenant. See filing 111 at 6; filing 127 at 7. But the Court need not decide if such a duty existed, as the circumstances in the present case are distinguishable from Mayer and lead the Court to conclude the covenant signed by Mr. Panting is contrary to Nebraska‘s public policy.
The decision in Mayer is not unique, as many jurisdictions, including Nebraska, have repeatedly upheld contracts entered by adults engаging in recreational activities that exculpate the activity provider‘s ordinary negligence. See, e.g., Sinu, 313 Neb. 218 (upholding exculpatory agreement relieving university from claims by student that the university‘s negligence caused injuries he sustained while training as a member of the soccer team); Chadwick v. Colt Ross Outfitters, Inc., 100 P.3d 465 (Colo. 2004); Massengill v. S.M.A.R.T. Sports Med. Clinic, P.C., 996 P.2d 1132 (Wyo. 2000); Vodopest v. MacGregor, 913 P.2d 779 (Wash. 1996). But in his role as a DPE, Mr. Panting was not boarding the government‘s aircraft to engage in a high-risk recreational activity.
Instead, оn the day of the accident, Mr. Panting was serving as a designee of the United States appointed by the FAA. See filing 111 at 4. And the government provided its aircraft knowing Mr. Panting was executing an important government function—administering a test on behalf of the
Thus, it would be a far cry to say that DPEs boarding government aircraft are voluntarily engaging in high-risk recreational activities simply
because this conduct occurs at an Aero Club used by others for recreational activities. Accordingly, “the facts and circumstances of the agreement and the parties involved” in the present case are significantly distinguishable from those in Sinu and Mayer, greatly reducing their instructive value. New Light Co., 525 N.W.2d at 30. The New Light Co. court made clear that Bedrosky was not “a blanket approval of exculpatory clauses in all factual situations.” Id. at 29. The Nebraska Supreme Court simply has yet to consider a covenant not to sue in circumstances similar to those presently in front of the Court. And where there is not “clear direction from [the] court, we must conduct our analysis as a predictive exercise, interpreting state law in the manner we believe the state‘s highest court would rule.” Graham v. CIOX Health, LLC, 952 F.3d 972, 974 (8th Cir. 2020).
The Nebraska Supreme Court has acknowledged the state‘s public policy interest in limiting exculpatory clauses in contracts for public or essential services. Sinu, 313 Neb. 218. And although the government, through the LeMay Aero Club, was not agreeing to provide Mr. Panting with an essential service in a traditional sense, it did implicitly agree to provide an aircraft on which a government designee would complete an essential government function. Such an arrangement appears to be relatively common, as both the Air Force and FAA have policies governing practical tests that are conducted by DPEs on military aircraft. See filing 120-31 at 25; filing 120-25 at 136-37. The nature of these circumstances—that both the parties to the contraсt and the subject of their relationship are inextricable from an essential government function—should not be easily overlooked.
And this dynamic also raises concerns regarding bargaining power. This is a case with peculiar facts when it comes to the contracting parties. As a designee of the FAA, Mr. Panting is in a “symbiotic relationship” with the United States government. Filing 120-25 at 16. For his designation to be renewed, and to avoid being terminated for cause, it must be determined that Mr. Panting‘s designation is justified and in the FAA‘s interest. See filing 120-25 at 26, 28. In making this determination, the FAA may consider, in part, whether Mr. Panting‘s designation helps provide convenient services to the public and reduces the number of complaints it receives regarding lack of availability of certain certification testing. Filing 120-25 at 28. And while a DPE may
To avoid similar concerns, the Nebraska Supreme Court has held that contracts allowing an employer to escape liability to its employees for negligence are against public policy. Maucher v. Chicago, R.I. & P.R. Co., 159 N.W. 422 (Neb. 1916). This rule is driven by the state‘s “interest in the lives and healthy vigor of its citizens, which it will not allow the master to endanger by contracting against liability for his negligently endangering them.” Id. And while neither party argues that Mr. Panting was a legal employee of the government in his capacity as a DPE, similar public policy concerns exist when the government is allowed to designate citizens to carry out vital government functions while simultaneously limiting its liability for any injuries the designee sustains while carrying out this role in a government aircraft. This is especially problematic considering FAA Inspectors, who are in the government‘s direct employ but perform “the same tasks as DPEs when administering checkrides,” are “covered by the Federal Employees Compensatiоn Act for workplace injuries.” Filing 128 at 2. For these reasons, the Court concludes that, if faced with the question, the Nebraska Supreme Court would hold that the covenant not to sue signed by Mr. Panting in his capacity as a DPE is repugnant to the public conscience and void as against public policy.3 Accordingly, the government‘s motion for summary judgment is denied to the extent it argues that the covenant not to suе bars the plaintiff‘s action as a matter of law.
IV. CONCLUSION
For the foregoing reasons, the defendant‘s motion for summary judgment is denied as to the issues presented by the covenant not to sue. The parties suggest that the remaining issues presented by the defendant‘s summary judgment motion can be “stayed” pending further discovery, and that they can file supplemental briefing based on any new evidence. See filing 134 at 3-4.
The Court isn‘t persuaded that will be as easy as the parties assume. This case is complicated enough without trying to hit a moving target. For instance, the Court would be in a difficult position trying to sort out whether facts are contested or not, see NECivR 56.1, and that‘s only one example of the ways in which the Court would be required to determine whether the parties’ positions had or had not shifted on critical issues.
Rather, the Cоurt is convinced that the better approach is to start clean. The parties can, of course, copy-and-paste significant sections of their previous briefing where their argument remains viable, and may cite to previously filed exhibits without the bother of refiling them. But the certainty associated with fresh briefing outweighs any inconvenience to the parties imposed by having to reassert their arguments. Accordingly, the Court will deny the motion for summary judgment in its entirety, without prejudice to reasserting any arguments not disposed of in this memorandum and order in a renewed motion for summary judgment. The parties should be prepared to discuss a deadline
IT IS ORDERED that the defendants’ motion for summary judgment (filing 109) is denied.
Dated this 24th day of January, 2023.
BY THE COURT:
John M. Gerrard
United States District Judge