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TRANS STATES AIRLINES v. PRATT & WHITNEY CANADA

October 20, 1993

TRANS STATES AIRLINES (formerly RESORT AIR, INC.), d/b/a TRANS WORLD EXPRESS, Plaintiff,
v.
PRATT & WHITNEY CANADA, INC., a subsidiary of UNITED TECHNOLOGIES CORPORATION, a corporation, Defendant.


Kocoras


The opinion of the court was delivered by: CHARLES P. KOCORAS

CHARLES P. KOCORAS, District Judge:

 This matter is before the Court on the defendant's motion for summary judgment as to Counts I and III. For the reasons set forth below, the motion is granted in part and denied in part.

 BACKGROUND

 This case arose from the failure of an airline engine that necessitated an emergency landing and resulted in damage to the airplane and minor personal injury. Plaintiff Trans States Airlines ("Trans States") is a common carrier which provides airline service to the public. Trans States is incorporated in Missouri and has its principal place of business in St. Louis, Missouri. Defendant Pratt & Whitney Canada, Inc. ("Pratt & Whitney") manufactures gas turbine engines for commercial aircraft. It manufactured an engine that was assembled into the plane in question by Societe Nationale Industrielle Aerospatiale, Usine de Toulouse, Service de Compatablite ("Aerospatiale"). That plane was sold to McDonnell Douglas Finance Corporation by the manufacturer. McDonnell Douglas Finance leased the plane to GPA ATR, Inc., which in turn subleased it to Trans States.

 On July 17, 1991, Trans States Flight 7128 experienced an overload failure of the left engine while approaching the Greater Peoria Airport. The engine failure resulted in an in-flight fire and necessitated an emergency landing. The engine was manufactured by Pratt & Whitney.

 As a result of this incident, Trans States filed this lawsuit against Pratt & Whitney alleging negligence, breach of warranty, and strict liability. Pratt & Whitney now moves for summary judgment on Counts I and III on the grounds that economic losses are not recoverable under the tort theories of negligence and strict liability. While the motion is styled as one for summary judgment, it is more in the nature of a motion to strike or dismiss certain damages counts or a motion in limine concerning whether the claimed losses are economic losses. We now turn to the merits of the motion.

 DISCUSSION

 The first issue raised by the parties is what law should be applied in deciding this motion. Our prior Memorandum Opinion established that Illinois law will be applied. Memorandum Opinion at 3 (Aug. 20, 1992). Following the law of the case doctrine, we will apply Illinois law to this motion as well.

 Now we must determine whether Illinois law will allow Trans States to recover under the theories of negligence and strict liability. The United States Supreme Court in East River S.S. Corp. v. TransAmerica Delaval, Inc., 476 U.S. 858, 90 L. Ed. 2d 865, 106 S. Ct. 2295 (1986), held that "a manufacturer in a commercial relationship has no duty under either a negligence or strict products-liability theory to prevent a product from injuring itself." Id. at 871. However, tort recovery is available for personal injuries and injuries to other property caused by product malfunctions. Id. at 870. As personal injury was clearly alleged in the instant case, we are left with determining whether any damage to "other property" occurred here.

 Pratt & Whitney asserts that this is merely a case of a product injuring itself and thus, no recovery in tort is available. Specifically, it asserts that the engine was an integral part of the airplane and that the damaged airframe is therefore not "other property." Defendant's Reply Memorandum at 7. Pratt & Whitney cites East River for the proposition that when a component part damages the machine into which it is incorporated, there is no "other property damage." See East River, 476 U.S. at 867. That proposition is true. However, a fuller reading of East River shows that the case does not support Pratt & Whitney's argument. In East River, the allegedly defective product was a steam reversing ring in a turbine that was manufactured by the defendant. The ring disintegrated and damaged the turbine but not other parts of the ship. The Court found that the product damaged only itself. East River, 476 U.S. at 867. The negative implication of that finding is that if damage occurred to other parts of the ship, "other property" would have been damaged.

 Further, the predicate for the Court's finding that the product damaged only itself was a finding that the ring was a component of the turbine. That is not equivalent to finding that the ring was a component of the ship, yet that is the finding that Pratt & Whitney essentially asks us to make. Pratt & Whitney's position is that the incorporation of the allegedly defective bolts into a Pratt & Whitney engine and the incorporation of the engine into an Aerospatiale airframe makes the bolts a component of the airframe. However, we find that that position is foreclosed by the East River case, where the Supreme Court stated that the "defectively designed turbine components damaged only the turbine itself. Since each turbine was supplied by [the defendant] as an integrated package, each is properly regarded as a single unit." East River, 476 U.S. at 867. Here, Pratt & Whitney supplied each engine as an integrated package; hence, each engine is a single unit and damage to anything other than the engine is damage to "other property." We are not persuaded otherwise by National Union Fire Ins. Co. v. Pratt & Whitney Canada, Inc., 107 Nev. 535, 815 P.2d 601 (Nev. 1991) cited by Pratt & Whitney.

 Based on the foregoing, we find that damage to the airframe is damage to "other property" and is compensable in tort. However, damage to the engine is not damage to other property and therefore, is not compensable in tort. Having established these principles, we must now determine which of the claimed damages are compensable in tort. *fn1"

 Trans States seeks $ 278,617.16 for the cost of repairing the engine, $ 1,279,254.58 for the cost of repairing the airframe, $ 194,923.55 in lost revenues resulting from cancelled flights, and $ 22,500 it paid in settlement of personal injury claims. The cost of repairing the engine is not compensable under Trans States' negligence and strict liability theories. East River, 476 U.S. at 867 (holding that injury to the product itself is not compensable in tort). The costs for repairing the airframe will be compensable in tort, subject of course to proof of causation, liability of the defendant, and amount of damages. The lost revenues are economic losses that are not compensable in tort. Id.; Moorman Manufacturing Co. v. National Tank Co., 91 Ill. 2d 69, 435 N.E.2d ...


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