The opinion of the court was delivered by: WERKER
These five actions arising from an airplane crash are presently before the Court on various motions and cross-motions for summary judgment and consolidation.
The following facts are not in dispute.
On June 24, 1974, Grumman Gulfstream II aircraft no. N72OQ crashed in the vicinity of Kline, South Carolina. All three persons aboard the aircraft, Thomas W. O'Brien, Paul F. Whitman and James M. Murphy, were killed as a result. O'Brien was an instructor pilot employed by Grumman American Aviation Corporation ("Grumman American") and Whitman and Murphy were pilots employed by International Business Machines Corporation ("IBM"). O'Brien was aboard the plane to provide Whitman with flight instruction, and Murphy accompanied them as an observer.
Aircraft no. N72OQ was the 58th plane in the Gulfstream II series. It was manufactured and assembled in Georgia pursuant to a design initially drafted in New York. The first 23 planes in the Gulfstream II series were manufactured in New York before Grumman Aircraft Engineering Corporation ("Grumman Aircraft") changed its manufacturing site to Georgia in 1968. Grumman Aircraft changed its corporate name to Grumman Corporation ("Grumman Corp.") on July 23, 1969, three weeks after it had transferred all of its aerospace business, including the Gulfstream II assets and liabilities, to Grumman Aerospace Corporation ("Grumman Aerospace"), its wholly-owned subsidiary. Responsibility for the Gulfstream II program was shifted once again in 1973, when Grumman Aerospace transferred all of its Gulfstream assets and liabilities to Grumman American in exchange for some of the latter's stock. From 1973 until 1978, approximately 81% Of Grumman American was owned by Grumman Corp. and/or Grumman Aerospace, and approximately 19% By AJI-Ohio Corp., an Ohio corporation.
Aircraft no. N72OQ was sold by Grumman Aircraft to IBM pursuant to a written contract executed in New York on September 27, 1966. The airplane was delivered to IBM in Savannah on June 10, 1969. Thereafter, the plane was operated from and maintained at IBM's facility at the Dutchess County Airport in Wappingers Falls, New York.
In 1970, Grumman Aerospace requested the British Air Registration Board (the "ARB") to evaluate its Gulfstream II aircraft to enable it to seek certification for sale in the United Kingdom. The ARB conducted an evaluation at Grumman Aerospace's facility at Bethpage, New York and issued a report on June 24, 1970 criticizing various aspects of the Grumman II ground spoiler system and design. As a result of the ARB report, Grumman Aerospace conducted its own study and concluded that certain modifications would cure the problems detected by the ARB. This study was prepared by Grumman Aerospace in New York and was issued on August 12, 1970.
The design changes suggested by the Grumman Aerospace report were embodied in Grumman Gulfstream II Aircraft Service Change no. 98, which was issued by Grumman Aerospace on August 20, 1971 in Georgia. The service change was circulated among the owners of Gulfstream II aircraft to be implemented at their option. IBM opted not to modify aircraft no. N72OQ.
In June 1974, prior to the accident, aircraft no. N72OQ was flown from New York to Georgia and Whitman and Murphy, who were New York residents, travelled from New York to Georgia to participate in the training flight. On June 24th, the aircraft departed from Grumman American's facilities at the Savannah municipal airport at approximately 3:20 p.m. The plane was scheduled to return to Savannah, but crashed near Kline, South Carolina at approximately 4:45 p.m.
The instant five lawsuits were filed as follows:
In action no. 75 Civ. 3026, Mrs. Whitman, as executrix of the Whitman estate, seeks wrongful death and survival damages from Grumman American on the grounds of negligence, strict liability in tort and breach of warranty. Grumman American has impleaded IBM and Mrs. Murphy, as administratrix of the Murphy estate, as third-party defendants. Mrs. Whitman was a New York resident both at the time of the accident and of the filing of this lawsuit and was appointed executrix of the Whitman estate by a New York court. After this action was commenced, Mrs. Whitman moved to Texas. Grumman American is an Ohio corporation with its principal place of business in Georgia. IBM is a New York corporation with its principal place of business in New York.
In action no. 75 Civ. 3027, Mrs. Murphy, as the administratrix of the Murphy estate, seeks wrongful death and survival damages from Grumman American on the grounds of negligence, strict liability in tort and breach of warranty. Grumman American has impleaded IBM and Mrs. Whitman as executrix of the Whitman estate. Mrs. Murphy was a New York resident both at the time of the accident and of the filing of this action and was appointed administratrix by a New York court. Mrs. Murphy moved to North Carolina some time after this suit was instituted.
Action no. 76 Civ. 988 is a suit brought by Mrs. O'Brien individually and as executrix of the O'Brien estate against Grumman Corp. and Grumman Aerospace for wrongful death and survival damages on negligence, strict liability in tort and breach of warranty grounds. Mrs. O'Brien was and has been since 1968 a resident of Georgia and was appointed executrix of the O'Brien estate by a Georgia court. The O'Briens were New York residents until 1968, when Mr. O'Brien was transferred to Georgia in the course of his employment with the Grumman companies. Grumman Corp. and Grumman Aerospace are and were at all relevant times New York corporations with their principal places of business in New York.
Action no. 76 Civ. 3575 was commenced by Mrs. O'Brien against IBM for wrongful death and survival damages on the grounds that IBM owned and negligently maintained aircraft no. N72OQ.
Action no. 77 Civ. 1146 involves a claim by IBM against Grumman American for loss of the airplane on theories of negligence and strict liability in tort.
In IBM v. Grumman American, Grumman American moves for summary judgment, alleging that IBM's claims for property loss are barred by a contractual exculpatory clause. In O'Brien v. Grumman, the parties have cross-moved for summary judgment with respect to the Grumman defendants' contention that Mrs. O'Brien's claims are barred by the Georgia workmen's compensation statute. In the Whitman, Murphy and O'Brien v. Grumman cases, the Grumman defendants move for partial summary judgment on the wrongful death claims premised on strict liability and breach of warranty, alleging that these claims are barred by the Georgia wrongful death statute. Additionally, the parties have filed various motions and cross-motions for consolidation.
A. The Warranties Disclaimer Defense
IBM's action against Grumman American for the loss of the aircraft is based on theories of strict liability in tort and negligence. In moving for summary judgment, Grumman American alleges that IBM is barred from proceeding on either of these ...