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Turbomeca11/2/2005
Before GERSTEN, GREEN, and FLETCHER, JJ.
GREEN, J.
On this consolidated appeal, Turbomeca, S.A., defendant below, appeals an order denying its motion to vacate an arbitration award in favor of French Aircraft Agency, Inc. ("French Aircraft"). A final judgment was entered pursuant to an arbitration award, and a subsequent cost judgment was entered in French Aircraft's favor. For the reasons that follow, we affirm in part and reverse in part.
French Aircraft owned a helicopter manufactured by Aerospatiale Helicopter Corporation and powered by an engine manufactured by Turbomeca. The helicopter's original owner installed a "fuel flow limiter," also manufactured by Turbomeca, on the engine. The limiter was designed to protect the engine from potential "over temperature" failure during high altitude/high power demand operations.
On January 31, 1991, this helicopter crashed shortly after take-off. The pilot, Jacques Pierard, and two passengers, Combiz Shafa and Harold Lee, all survived but sustained personal injuries. The helicopter itself, however, was a total loss. Six days before the crash, the helicopter was inspected by Carl Abbott, certified airframe and power plant mechanic. Abbott's inspection revealed no mechanical problems. However, during the inspection, Abbot removed and improperly reinstalled the helicopter's airframe fuel filter upside down.
Pierard, Shafa and Lee filed lawsuits against 1) French Aircraft, the owner; 2) Aerospatiale, the manufacturer; 3) Abbott, the inspector; and 4) Turbomeca, the engine manufacturer. French Aircraft filed a third party action for contribution against Turbomeca, alleging that the cause of the accident was a defect in the engine's "fuel flow limiter."
Thereafter, French Aircraft settled Shafa's claim for $2.7 million. Shafa executed a general release of all claims against French Aircraft and Turbomeca. French Aircraft also settled with Lee; however, Lee did not release Turbomeca. Further, French Aircraft received $285,000 from its insurer for damages to the helicopter and its engine in the crash.
While these claims were pending, Turbomeca and French Aircraft entered into an agreement to sever and defer the third party action pending the outcome of the Pierard/Lee litigation. The agreement provided, among other things, that: 1) the parties would not introduce any evidence of the other's liability in the Pierard/Lee trial; 2) the verdict in the Pierard/Lee trial would not reflect the proper apportionment of liability between them; 3) they would not raise res judicata or any other avoidance defense in the deferred third party action; and 4) the parties were not precluded from asserting and proving the pilot or the manufacturer's liability.
Pierard's case proceeded to trial against French Aircraft. Turbomeca was granted summary judgment in this main action; it did not therefore participate in this trial. French Aircraft successfully defended the suit asserting that the cause of the accident was the inspector's inverted installation of the airframe filter and pilot error. The jury returned a defense verdict absolving French Aircraft of all liability.
After that trial, French Aircraft's third party contribution claim against Turbomeca was mediated. During mediation, the parties agreed to arbitrate the case but stipulated that the arbitration would be subject to review with respect to all issues of law. At arbitration, French Aircraft sought contribution from Turbomeca for: the $2.7 million Shafa settlement passenger; $285,000 in property damage for loss of the helicopter; and interest. The arbitration panel concluded that the pilot was 75% at fault for the ac
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