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ATLANTIC AVIATION CORP. v. COSTAS

July 29, 1971

ATLANTIC AVIATION CORPORATION, a Corporation of the State of Delaware, Plaintiff,
v.
The ESTATE of Emanuel COSTAS, deceased, and Josephine Costas, Individually and as Administratrix of the Estate of Emanuel Costas, deceased, Defendants


Dooling, District Judge.


The opinion of the court was delivered by: DOOLING

MEMORANDUM AND ORDER

DOOLING, District Judge.

 This puzzling case arises out of the crash of a privately owned and piloted aircraft in which the owner-pilot Emanuel Costas, died and three passengers, his daughter, Carol, and two additional passengers, both of whom apparently were pilots themselves, McCabe and Porzio, were injured. The present case is a sequel to the two lawsuits which followed upon the crash, both of which suits were compromised. In the present action a defendant in both of the two settled lawsuits, a firm which had serviced the aircraft some months before the accident, sues to recover from the estate of the deceased owner-pilot Costas $25,000 which plaintiff paid in the settlement of one of the lawsuits on account of the injuries sustained by the deceased owner-pilot's daughter, Carol, in the accident. On all of the facts such a recovery by the plaintiff would be so totally surprising an outcome that the problem in the case is locating the analysis which satisfactorily explains why the result would be not merely surprising but impossible under the applicable principles of law. For it is concluded that plaintiff may not recover and that the defendant is entitled to summary judgment.

 The facts must be stated with some particularity. The decedent Emanuel Costas lived in Queens, New York. He had three children, Carol, Carl and Jackie; his wife, and later his administratrix in New York, was Josephine Costas. During his lifetime, Costas owned a Beechcraft airplane. He normally kept it in New York and on the fatal trip to be adverted to the original point of takeoff was from Flushing, New York.

 The plaintiff is a Delaware corporation; its principal place of business is in Delaware and it operates a service facility in Bergen County in New Jersey. In October 1962, Costas had his Beechcraft serviced at plaintiff's facility in New Jersey and plaintiff's involvement in the later litigations traces entirely to that servicing job of October 1962.

 On or about May 30, 1963, Costas took off from Flushing, New York with three passengers, his daughter Carol, and Messrs. Porzio and McCabe. The aircraft must have touched down at Elkton, Maryland, because the accident happened very soon after a takeoff at Elkton, Maryland on May 30, 1963.

 In September 1963 Porzio and McCabe sued the estate of Emanuel Costas for the injuries they sustained in the crash. The Costas Estate impleaded Atlantic Aviation, the present plaintiff on a claimover, and, it appears, McCabe and Porzio then asserted their claims both against the Costas estate and against Atlantic Aviation. A little over a year later, on October 29, 1964, the decedent's widow, Josephine Costas, sued Atlantic Aviation in New Jersey on her own behalf and on behalf of all three of the children for the pecuniary loss which they suffered by reason of their father's death -- a loss for which they could recover under the law of Maryland (as they alleged) if and only if the deceased Costas could successfully have sued Atlantic Aviation if he had not died. The familial claim was pleaded in negligence, in contract, and in implied warranty. In addition the action comprehended a separate cause of action by the widow as administratrix of her husband's estate for his antemortem injuries, pain and suffering. Finally, the complaint embraced causes of action in negligence and warranty on behalf of Carol Costas for the personal injuries that she sustained in the accident.

 On or about May 3, 1967, the McCabe and Porzio actions were settled by the payment of $22,500 to Porzio and $17,500 to McCabe. The Costas estate contributed $37,000 to the settlement and Atlantic contributed $3,000 to the settlement. It does not appear that in that action Atlantic Aviation claimed over against the Costas estate for any amount for which Atlantic Aviation might be held directly liable to Porzio and McCabe.

 About a year later on April 19, 1968, the Costas action against Atlantic Aviation in New Jersey was settled. In that case Atlantic paid $35,000 to Josephine Costas and she gave a release individually, as administratrix of her husband's estate and as the suitor on behalf of her three children. The settlement hearing was explicit that the distribution of the proceeds of the $35,000 settlement would be $25,000 to Carol, $1,000 between the two younger children, Carl and Jackie, and $9,000 to the widow, Josephine Costas. The court indicated that the settlement was a sensible one because liability was highly doubtful and would be most difficult to establish. An order of judgment was entered on the settlement on April 19, 1968 awarding judgment in pursuance of the settlement to Josephine Costas (a) for $25,000 on behalf of Carol Costas, (b) for $1,000 on behalf of Carl and Jackie Costas, and (c) for $9,000 on her own behalf; it was ordered that the causes of action on behalf of the four parties plaintiff would be dismissed with prejudice, the counsel fees to be apportioned among the several awards and that "any and all liabilities of Atlantic Aviation Corporation shall be discharged upon payment of this judgment in accordance with the terms of this order".

 Atlantic Aviation now sues alleging the decedent's ownership of the aircraft, the servicing contract of October 1962 and the work done under it, the accident on takeoff from Elkton, the death of Costas, and the personal injuries sustained by Costas's daughter, Carol. It is then alleged that in consequence Atlantic Aviation was sued by the widow for the benefit of Carol and that Atlantic Aviation was "confronted with * * legitimate questions of fact with respect to its liability for consideration by a jury", and that in good faith on April 10, 1968, it entered into a bona fide settlement of the case which included a payment of $25,000 for the benefit of Carol Costas. It is then alleged that "as a result of settlement, the fault of Emanuel Costas and Atlantic Aviation was not determined." After alleging that the settlement was reasonable, it is then alleged that "all rights of action based on the aforementioned payments vested with the plaintiff." It is then alleged in four separate courts that, first, Costas was solely negligent and by reason of his negligence plaintiff was obligated to pay damages to Carol; second, that the crash and Carol's injuries resulted from the active primary negligence of Costas and it occasioned plaintiff's obligation to pay damages to Carol, Atlantic's own negligence, such as it was, being passive or secondary; third, the crash and Carol's injuries resulted from the reckless, wanton and gross negligence of Costas and such misconduct occasioned plaintiff's obligation to pay damages to Carol; and, fourth, that the negligence of Costas contributed to the accident and plaintiff was obligated to pay damages to Carol in consequence.

 It is nowhere alleged that Carol ever sued her father or his estate, and it is nowhere distinctly indicated that at any point in the course of the two settlements did Atlantic Aviation either assert or release its claimover, if any, against the Costas estate. Defendant argues that the claim now made was a compulsory counterclaim, Rule 13(a), and that failure to assert it, coupled with the res judicata effect of the judicial settlement of the New Jersey case, bars its belated assertion by separate, later action. To the argument that it is too late for Atlantic to sue because the issue of liability for loss and damage from the disaster as between the Costas Estate and Atlantic in the Porzio and McCabe action and in the Costas's action in New Jersey has been disposed of, Atlantic Aviation answers that a claim for indemnification does not accrue until a loss against which indemnification is sought has actually been sustained and, therefore, Atlantic's claim did not accrue until after the settlement had all been made, and more emphatically, that even if the claims for indemnification could have been anticipatorily advanced as a claimover in either or both of the two litigations, all three of the states the law of which might have applied (New York, New Jersey and Maryland) recognized the theory that a child could not sue her father in tort, and that the parental immunity from the child's tort action precluded a third-party wrongdoer's claimover for indemnification against the immune parent. Cf. Chamberlain v. McCleary, E.D. Tenn. 1963, 217 F. Supp. 591 (Tennessee law); LaChance v. Service Trucking Co., Inc., D. Md. 1963, 215 F. Supp. 162, 166 (contribution, not indemnity). The parental immunity no longer exists in New York and New Jersey. Hence, Atlantic Aviation asserts, it is now able for the first time to satisfy the Rule 13(a) requirement that the counter-claimant have a claim "at the time of serving the pleading". On either and on both grounds, argues Atlantic, it did not when it answered in the earlier actions have an opportunity to put forward its claim for indemnification against the Costas Estate.

 The second branch of Atlantic Aviation's argument assumes that its right to claimover for indemnification depends upon Carol's having had the right and capacity to sue her father. That central proposition in plaintiff's argument has neither the validity nor the consequence that Atlantic ascribes to it. In logic the fact that Carol could not sue her father in tort but could sue Atlantic Aviation as a tort-feasor also (jointly or concurrently) at fault does not have the consequence that Atlantic Aviation would be impotent to claimover against Carol's father. Every claim for indemnification rests upon the existence of a duty of conduct owed by the alleged indemnitor to the claimant-indemnitee which is, at least allegedly, ripe for litigation. The curious and troublesome law of contribution between tortfeasors both of whom are responsible for the same harm is governed by different principles (See Prosser, Law of Torts, 3rd Ed. 1964, 276, 278); the right to claim contribution flows from the fact that the payor has paid -- been required to pay -- the debt of another; it has for the most part taken legislative action to free such a payor from the defense that his tortious misconduct should as a matter of common law policy bar him from recovering what he paid -- and not as a volunteer -- to the use of the other tortfeasor. The claimant for complete indemnity, quite differently, proceeds on contract or implied contract, or on a comparative analysis of the contributions of conduct and status or relationship that the claimed indemnitor and indemnitee bring to the damage causing episode. If the analysis of the contract or status or conduct-relation of indemnitor and indemnitee establishes that the indemnitor is the one ultimately responsible for the damage arising out of the episode it is because, however difficult it may be to give it a precise expression in familiar legal categories, the indemnitor is in breach or at fault toward the indemnitee. In that analysis of indemnitor-indemnitee responsibilities inter sese the quantum of damages, the identity of the damage claimants, and their right to sue the indemnitor directly are not genuinely relevant.

 Injured employees covered by Workmen's Compensation may sue third-party wrongdoers who thereupon implead the employer on a prayer for indemnification based upon active-passive negligence concepts, express indemnification, or breach of warranty of workmanlike service. The immunity of the employer from suit at the instance of his employee does not bar the alleged indemnitee's claimover against the employer because the claimed indemnitee does not sue in the right of the employee (as Atlantic here does not sue in the right of Carol Costas) but in its own right as one to whom a duty was owed and breached by the third-party defendant. So Atlantic's claim is not that, having paid Carol Costas it can sue her father's estate for the tort her father committed toward her. Its claim is that Emanuel Costas owed it a duty of workmanlike maintenance and management of the aircraft which Costas breached either because he was negligent or wantonly negligent or qualitatively more negligent than Atlantic. Cf. Ryan Stevedoring Company, Inc. v. Pan-Atlantic S.S. Corp., 1956, 350 U.S. 124, 76 S. Ct. 232, 100 L. Ed. 133; Crumady v. Joachim Hendrik Fisser, 1959, 358 U.S. 423, 428-429, 79 S. Ct. 445, 3 L. Ed. 2d 413. Note: Halcyon Lines v. Haenn Ship. C. & R. Corp., 1952, 342 U.S. 282, 72 S. Ct. 277, 96 L. Ed. 318; Pope & Talbot, Inc. v. Hawn, 1953, 346 U.S. 406, 411-412, 74 S. Ct. 202, 98 L. Ed. 143; Italia Societa per Azioni di Navigazione v. Oregon Stevedoring Co., 1964, 376 U.S. 315, 318-321, 84 S. Ct. 748, 11 L. Ed. 2d 732. See Prosser, Law of Torts, 3rd Ed. 1964, 890, 891. There was little reason to believe that New York would pursue the dubious parent-child immunity (Prosser, supra 885-891) to the point of barring an alleged joint or concurrent tortfeasor's claimover for indemnity against an alleged primary wrongdoer. It could be argued that it had already rejected that concept in Schubert v. August Schubert Wagon Co., 1928, 249 N.Y. 253, 257-258, 164 N.E. 42.

 While it is not indispenable to the determination of the present motion, it is unlikely in the extreme that Atlantic had a valid claim for indemnification against the Costas Estate. Any liability imposed on Atlantic would have rested upon a charge of negligence that was active in the sense of consisting in a failure adequately to perform the repair, inspection and servicing operation which it undertook in October 1962. Its liability would not rest upon any responsibility imposed by operation of law as is, for example, the liability of the owner of a motor vehicle negligently operated in his absence by a normally careful operator. The plaintiff's negligence would not differ in kind or in character from the negligence of Costas himself. Something more than a greater degree of negligence is required to impose a duty of indemnification on the basis of primary and secondary, or active and passive, or comparative negligences. See Jackson v. Associated Dry Goods Corp., 1963, 13 N.Y. 2d 112, 242 N.Y.S. 2d 210, 192 N.E. 2d 167; Bush Terminal Buildings v. Luckenbach Steamship Co., 1961, 9 N.Y. 2d 426, 214 N.Y.S. 2d 428, 174 N.E. 2d 516; Caruloff v. Emerson Radio & Phonograph Corp., 2d Cir. 1971, 445 F.2d ...


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