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McGraw v. Superior Aviation Ltd.

United States District Court, E.D. Wisconsin

January 3, 2017



          William C. Griesbach, Chief Judge

         Plaintiffs Daniel McGraw and Susan McGraw filed suit against Superior Aviation, LTD., Kubick Aviation Services, Inc., and QBE Insurance Corp. asserting claims for compensatory and punitive damages resulting from injuries suffered due to the defendants' allegedly negligent repair and inspection of Daniel McGraw's airplane. This Court has diversity jurisdiction under 28 U.S.C. § 1332. Presently before the Court are Kubick Aviation Services Inc.'s (“Kubick”) motion for summary judgment and Plaintiffs' 7(h) motion to amend the complaint. For the reasons that follow, Kubick's motion for summary judgment will be granted and Plaintiffs' motion to amend the complaint will be denied.


         Kubick entered into an Asset Purchase Agreement (“APA”) with Superior Aviation, Ltd. (“Superior”) on April 7, 2014. Kubick purchased nearly all of Superior's assets for the purpose of expanding its current operations and providing charter and other aviation services to the public.

         Under the express terms of the APA, Kubick only purchased Superior's assets, did not assume any of Superior's liabilities, and “shall not be obligated for any liabilities incurred by [Superior] during the operation of [Superior's] business.” (ECF No. 31-1, pp. 2.) Furthermore, a choice of law clause established that the agreement was to be governed, construed, and enforced in accordance with Michigan law. Plaintiffs contend the APA provided in this case is incomplete as it does not include a copy of the Operating Agreement referenced in Paragraph 5.2. (Id. at pp. 3.) The asset purchase sale between Kubick and Superior became final on April 18, 2014.

         Prior to the completion of the sale, Superior conducted an annual inspection and performed maintenance and repairs on Daniel McGraw's amateur-built Lancair airplane. All work was completed by April 11, 2014-the day McGraw picked up the plane from Superior's facility. The Superior technician who performed the work, Alex Dupras, failed to update the plane's logbooks. McGraw requested the logbooks when he picked up his plane, but the lineman handing off the plane did not know where they were. McGraw also called on at least two other occasions in an unsuccessful attempt to retrieve the logbooks.

         On May 6, 2014 after approximately five hours of flight time, McGraw's plane suffered a loss of engine power. McGraw executed a forced landing in a field near Crivitz, Wisconsin. He alleges he sustained severe injuries and that Superior caused the accident by failing to reasonably and adequately maintain his aircraft during the inspection, maintenance, and repairs. At the time of the crash, McGraw was flying to Kubick to discuss what should be done next on the plane.

         After the May 6, 2014 crash, Superior employee Timothy Spreen contacted Dupras regarding the status of McGraw's logbooks. By that time, Dupras was working for Kubick as he was retained after the sale. Spreen requested that Dupras update McGraw's logbook to reflect the work Dupras had done on the plane. Dupras thereafter made entries in the logbook reflecting the work he had previously performed but then backdated the entries to April 10, 2014. The parties dispute whether Dupras was acting on behalf of Kubick, Superior, Spreen, or a combination of the three at the time he updated the logbooks. The parties also dispute whether Spreen (and thus Superior) maintained possession of the logbooks following the asset sale or whether the logbooks were stored in Superior's hanger-which Kubick took control of after the sale.

         Daniel and Susan McGraw filed this action on November 30, 2015. As it relates to the pending motions before the Court, Plaintiffs alleged that Kubick assumed all of Superior's liabilities by virtue of being a continuation or reincarnation of Superior. Plaintiffs also moved on November 30, 2016 to amend their complaint, alleging a negligence cause of action against Kubick. Plaintiffs alleged Kubick took possession of McGraw's logbooks after the sale, negligently failed to provide McGraw with the logbooks, and that McGraw suffered injury as a result. The matter is now before the Court on Kubick's motion for summary judgment and Plaintiffs' motion to amend the complaint.


         A motion for summary judgment should be granted “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). Where factual disputes do exist, the non-movant's version of events is accepted as true at this stage of the proceedings. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). The mere existence of some factual dispute does not defeat a summary judgment motion; however, there must be a genuine issue of material fact for the cause of action to survive. Id. at 247-48. “Material” means that the factual dispute must be outcome-determinative under governing law. Contreras v. City of Chicago, 119 F.3d 1286, 1291 (7th Cir. 1997). Failure to support any essential element of a claim renders all other facts immaterial. Celotex, 477 U.S. at 323. A “genuine” issue of material fact requires specific and sufficient evidence that, if believed by a jury, would actually support a verdict in the nonmovant's favor. Fed.R.Civ.P. 56(e); Anderson, 477 U.S. at 249. Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

         Federal courts sitting in diversity cases must apply state substantive laws and must look to the conflict of laws rules of the forum state for the applicable substantive law. See Klaxon Co. v. Stentor Elec. Mfg. Co., 312 U.S. 487, 496 (1941); Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938). In this case, the parties dispute whether Wisconsin or Michigan law controls. The APA between Kubick and Superior contains a choice of law clause specifying that the agreement was to be governed, construed, and enforced in accordance under Michigan law. Although Wisconsin generally favors the enforcement of choice of law and forum selection clauses, the presumption of enforcement is not absolute. See Drinkwater v. Am. Family Mut. Ins. Co., 2006 WI 56, ¶¶ 25-31, 290 Wis.2d 642, 714 N.W.2d 568. These provisions are entitled to less weight when third party litigants are involved. See Gallenberg Equip. Inc., v. Agromac Int'l, Inc., 10 F.Supp.2d 1050, 1052-53 (E.D. Wis. 1998) (citing Allstate Ins. Co. v. Hague, 449 U.S. 302, 328 (1981) (Stevens, J., concurring)). As Plaintiffs were not a party to the APA between Kubick and Superior, the choice of law provision is afforded less weight.

         Nevertheless, “[a] court need resort to conflicts of laws rules only when the parties point to a difference among state laws which will make a difference to the outcome of the case.” Ziolkowski v. Caterpillar, Inc., 800 F.Supp. 767, 778 (E.D. Wis. 1992), aff'd, 996 F.2d 1220 (7th Cir. 1993).

         The doctrine of corporate successor liability is substantially similar under both Wisconsin and Michigan law and neither party has identified any outcome determinative conflicts between the laws. As a result, I will apply Wisconsin substantive law. ...

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