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John McShain Inc. v. Cessna Aircraft Co.

argued: September 8, 1977.

JOHN MCSHAIN, INC., APPELLANT,
v.
CESSNA AIRCRAFT COMPANY V. WINGS, INC. AND BUTLER AVIATION-FRIENDSHIP, INC., - THIRD-PARTY DEFENDANTS, V. SUMMIT AVIATION, INC.



ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA. C.A. No. 72-808.

Van Dusen, Adams and Hunter, Circuit Judges.

Author: Per Curiam

Opinion OF THE COURT

The appeal in this case turns primarily on challenges to the evidentiary rulings of a trial court in a diversity case.

In May 1969, John McShain, Inc. purchased an aircraft manufactured by Cessna Aircraft Co. from Wings, Inc. for $282,136. In December 1969, several hundred landings and 147 hours of flight later, the main landing gear of the plane collapsed as the plane alighted on the runway in Baltimore. After notifying Cessna, McShain had the aircraft repaired by Butler Aviation-Friendship, Inc. at a cost of $11,734. During the course of the overhaul, Cessna representatives visited the Butler repair facilities. The plane was then returned to McShain.

After 5 hours of further flight, the plane's landing gear once more gave way upon touchdown. The cost of repairs this time totaled $24,681. McShain refused to fly the craft again.

Negotiations between McShain and Cessna regarding a new plane terminated when McShain filed an action in Pennsylvania Common Pleas Court seeking rescission of the original sales contract and the return of the purchase price.

McShain then filed the present action against Cessna in district court, alleging defective design in the landing gear and Cessna's failure to correct that design despite knowledge of the defects. McShain requested judgment for (a) the cost of the repairs, (b) consequential damages, and (c) $5,000,000 in punitive damages. Cessna joined Butler as a third party defendant on the theory that the second crash was the result of inept repairs.

Before the conclusion of the eighteen-day trial, Cessna accepted liability for the first collapse on the ground that the existence of an understrength bolt had been discovered in the landing gear, and that that bolt was the cause of the original breakdown.

The jury returned a verdict of $11,734 for the plaintiff as to the first accident, and a special verdict finding that there was no design defect in the landing gear. McShain moved for a new trial on the ground of six allegedly improper evidentiary rulings. The trial court denied the motion, and McShain has appealed from that denial.

McShain's two most substantial objections to the rulings below challenge Judge McGlynn's admission of McShain's pre-trial release of Butler from liability, and the trial court's refusal to admit copies of National Transportation Safety Board accident files. We conclude, however, that neither of these rulings, nor indeed any of the other rulings referred to on this appeal, warrants a new trial.

A. THE BUTLER-McSHAIN AGREEMENT

Before the action was filed in the district court, the plaintiff signed an agreement releasing Butler from any liability for the accident in exchange for $10 and the right to engage as a consultant Ralph Harmon, who was at the time an employee of Butler's sister corporation, Mooney Aircraft Corp. Mr. Harmon was thereupon retained by McShain, and ultimately testified as an expert witness in support of the design-defect contention. Judge McGlynn allowed the release to be entered into evidence and read to the jury for the purpose of impeaching Mr. Harmon's testimony.

McShain urges that, under Federal Rule of Evidence 408, agreements in compromise of a claim are generally inadmissible on the issue of liability on such claim. Cessna's reference to the Butler-McShain agreement, McShain insists, is such a proscribed use of evidence, since Cessna's counsel ...


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