Turbomeca, Sa v. French Aircraft Agency

Citations: 913 So. 2d 714; 2005 Fla. App. LEXIS 17204; 2005 WL 2862141Docket: 3D05-276, 3D04-1636, 3D04-1270

Court: District Court of Appeal of Florida; October 26, 2005; Florida; State Appellate Court

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Turbomeca, S.A. appeals a decision denying its motion to vacate an arbitration award in favor of French Aircraft Agency, Inc. French Aircraft owned a helicopter that crashed shortly after takeoff on January 31, 1991, injuring the pilot and two passengers, while the helicopter was declared a total loss. The crash followed an inspection by mechanic Carl Abbott, who improperly reinstalled the helicopter's airframe fuel filter. French Aircraft faced lawsuits from the pilot and passengers, subsequently settling claims with them, including a $2.7 million settlement with one passenger, Shafa, who released all claims against both French Aircraft and Turbomeca. A separate settlement was made with another passenger, Lee, who did not release Turbomeca. French Aircraft also received $285,000 from its insurer for damages.

Turbomeca and French Aircraft had previously agreed to defer third-party actions pending the outcome of the litigation, stipulating terms to prevent the introduction of each other's liability in the trial. Turbomeca was granted summary judgment and did not participate in the trial, where French Aircraft successfully defended against liability, attributing the crash to the mechanic's error and pilot error, resulting in a jury verdict in French Aircraft's favor.

Following the trial, French Aircraft's third-party claim against Turbomeca was mediated and subsequently agreed to arbitration, with the stipulation that issues of law would be subject to review. During arbitration, French Aircraft sought contribution from Turbomeca for the settlements and property damage incurred. The District Court of Appeal of Florida affirmed in part and reversed in part the lower court's ruling regarding the arbitration award.

The arbitration panel determined that the pilot was 75% responsible for the accident, assigning 25% fault to Turbomeca, and awarded French Aircraft $746,250 in damages along with $847,204 in interest. Arbitration costs were not awarded. Turbomeca's motion to vacate the arbitration award was denied by the trial court, which subsequently confirmed the award and issued a final judgment while retaining jurisdiction for further orders, including cost taxation. Following a hearing on French Aircraft's motion to tax costs, the court awarded it $54,000 for arbitration costs. Turbomeca appealed, challenging the final judgment on several grounds, but only two issues were considered. The court agreed with Turbomeca that the damage award for the helicopter loss was barred by the economic loss rule, referencing the precedent set in Indemnity Ins. Co. v. American Aviation, Inc., which states that a manufacturer has no duty to prevent a product from damaging itself in a commercial relationship. French Aircraft's claims for purely economic loss arising from an alleged defective product were not recoverable under tort theories, as the injuries to the pilot and passengers did not allow French Aircraft to assert claims for personal injuries. The court affirmed the economic loss rule's application, stating that the helicopter and engine were considered a single product, and thus, no independent tort for economic loss could be established. The portion of the judgment awarding damages for the helicopter loss was reversed and vacated, while the remainder of the final judgment was affirmed. The court also concurred that the trial court erred in awarding arbitration costs to French Aircraft, as neither the stipulation nor the arbitration award allowed for such an award.

The trial court lacked authority under section 682.11, Florida Statutes (2002), to award costs related to arbitration, as this section mandates that such expenses be covered in the arbitration award itself. Courts have consistently interpreted this provision to limit judicial jurisdiction over costs not included in arbitration outcomes. Notable cases affirm this interpretation: Zac Smith Co. v. Moonspinner Condo. Ass'n, Inc. establishes that only arbitration panels can grant these costs; McDaniel v. Berhalter highlights the trial court's error in adding arbitration costs to an arbitrator's award; and Rock v. Prairie Bldg. Solutions, Inc. demonstrates the proper refusal to modify an arbitrator's cost award. Consequently, the absence of cost awards in the arbitration led to the conclusion that the trial court's cost award was incorrect. Additionally, the economic loss rule prevents French Aircraft from recovering helicopter loss under a negligence claim. The cost judgment is reversed, with remaining points deemed meritless. The decision is affirmed in part and reversed in part.