February 16, 2005 Jury Instructions and Verdicts in the Lycoming Case

Email this article |Print this article

CASE NO. 29,385

CHARGE TO THE JURY

LADIES AND GENTLEMEN OF THE JURY:

This case is submitted to you by asking questions about the facts, which you must decide from the evidence you have heard in this trial. You are the sole judges of the credibility of the witnesses, and the weight to be given their testimony; but in matters of law, you must be governed by the instructions in this charge. In discharging your responsibility on this jury, you will observe all the instructions which have previously been given you. I shall now give you additional instructions which you should carefully and strictly follow during your deliberations.

1. Do not let bias, prejudice or sympathy play any part in your deliberations.

2. In arriving at your answers, consider only the evidence introduced here under oath and such exhibits, if any, as have been introduced for your consideration under the rulings of the Court; that is, what you have seen and heard in this courtroom, together with the law as given you by the Court. In your deliberations, you will not consider or discuss anything that is not represented by the evidence in this case.

3. Since every answer that is required by the charge is important, no Juror should state or consider that any required answer is not important.

4. You must not decide who you think should win, and then try to answer the questions accordingly. Simply answer the questions, and do not discuss nor concern yourselves with the effect of your answers.

5. You will not decide the answer to a question by lot or by drawing straws, or by any other method of chance. Do not return a quotient verdict. A quotient verdict means that the Jurors agree to abide by the result to be reached by adding together each juror’s figures and dividing by the number of Jurors to get an average. Do not do any trading on your answers; that is, one juror should not agree to answer a certain question one way if others will agree to answer another question another way.

6. You may render your verdict upon the vote of ten or more members of the Jury. The same ten or more of you must agree upon all of the answers made and the entire verdict. You will not, therefore, enter into an agreement to be bound by a majority, or any other vote of less than ten Jurors. If the verdict and all of the answers therein are reached by unanimous agreement, the Presiding-Juror shall sign the verdict for the entire Jury. If any Juror disagrees as to any answer made by the verdict, those Jurors who agree to all findings shall each sign the verdict.

These instructions are given you because your conduct is subject to review the same as that of the witnesses, parties, attorneys and the Judge. If it should be found that you have disregarded any of these instructions, it will be Jury misconduct, and it may require another trial by another Jury; then all of our time will have been wasted.

The presiding juror or any other who observes a violation of this court’s instructions shall immediately warn the one who is violating the same and caution the juror not to do so again.

During the trial it was permissible for you to take notes. You may carry those notes to the jury room for your personal use during the deliberation on the court’s charge. You may not share those notes with other jurors. Your personal recollection of the evidence takes precedence over any notes you have taken. A juror may not rely on the notes of another juror. If you disagree about the evidence, the presiding juror may apply to the court and have the court reporter’s notes read to the jury.

When words are used in this charge in a sense that varies from the meaning commonly understood, you are given a proper legal definition, which you are bound to accept in place of any other meaning.

During this trial, certain testimony and evidence has been presented to you by way of deposition and may also have been videotaped. A deposition consisted of questions and sworn, recorded answers to those questions that were given in advance of this trial. You must give this testimony the same consideration and is to be judged in the same way as if the witness had been present and testified from the witness stand.

During trial, certain deposition testimony presented by way of videotape contained various captions inserted between separate excerpts of the deposition testimony. These captions are not part of the evidence in this case and are not to be considered by you as evidence. If your recollection of the evidence differs from the caption, rely on your recollection of the evidence.

Answer “Yes” or “No” to all questions unless otherwise instructed. A “Yes” answer must be based on a preponderance of the evidence unless otherwise instructed. If you do not find that a preponderance of the evidence supports a “Yes” answer, then answer “No.” The term “preponderance of the evidence” means the greater weight and degree of credible testimony or evidence introduced before you and admitted in this case. Whenever a question requires other than a “Yes” or “No” answer, your answer must be based on a preponderance of the evidence unless otherwise instructed.

A fact may be established by direct evidence or by circumstantial evidence, or both. A fact is established by direct evidence when proved by documentary evidence or by witnesses who saw the act done or heard the words spoken. A fact is established by circumstantial evidence when it may be fairly and reasonably inferred from other facts proved.

If you answer questions about damages, answer each question separately. Do not increase or reduce the amount in one answer because of your answers to any other questions about damages. Do not speculate about what any party’s ultimate recovery may or may not be. Any recovery will be determined by the court when it applies the law to your answers at the time of judgment. Do not add any amount for interest on damages, if any.

In this charge, the parties, entities and documents shall be referred to as follows:

“Interstate” includes Interstate Southwest, Ltd. and Interstate Forging Industries, Inc.

“Lycoming” includes AVCO Corporation and its unincorporated division, Textron Lycoming Reciprocating Engine Division, which division is also known as the Textron Lycoming and/or Lycoming Engines division of AVCO Corporation.

“MSA” means the Master Supply Agreement and includes Addendum No. 1 and Addendum No. 2 to the MSA.

“Addendum No. 1 to the MSA” means the May 4, 1995 document entitled “Addendum to Master Agreement.”

“Addendum No. 2 to the MSA” or “Second Addendum to the MSA” means the 2001 document entitled “Addendum to Master Supply Agreement.”

“Person” means any natural person, partnership, unincorporated association, division or corporation.

You are instructed that Interstate Forging Industries, Inc. and then Interstate Southwest, Ltd. owned and operated the forging facility in Navasota, Texas that produced Lycoming’s crankshaft forgings. You are further instructed that the court has determined as a matter of law that Interstate Southwest, Ltd. may bring its claims and the claims of Interstate Forging Industries, Inc. against Lycoming, including claims against Lycoming relating to the MSA.

QUESTION NUMBER ONE

Did Lycoming fraudulently induce the extension of the MSA through the Second Addendum to the MSA?

You are instructed that the law prohibits a person or entity from inducing another person or entity into entering a contract through fraud.

Fraud occurs when—

a. a party makes a material misrepresentation,

b. the misrepresentation is made with knowledge of its falsity or made recklessly without any knowledge of the truth and as a positive assertion,

c. the misrepresentation is made with the intention that it should be acted on by the other party, and

d. the other party relies on the misrepresentation and thereby suffers injury.

Fraud also occurs when—

a. a party fails to disclose a material fact within the knowledge of that party or actively conceals material facts within the knowledge of that party,

b. the party knows that the other party is ignorant of the fact and does not have an equal opportunity to discover the truth,

c. the party intends to induce the other party to take some action by failing to disclose the fact, and

d. the other party suffers injury as a result of acting without knowledge of the undisclosed fact.

“Misrepresentation” means:

A false statement of fact; or

A statement of opinion based on a false statement of fact; or

A statement of opinion that the maker knows to be false; or

An expression of opinion that is false, made by one claiming or implying to have special knowledge of the subject matter of the opinion

“Special knowledge” means knowledge or information superior to that possessed by the other party and to which the other party did not have equal access.

Answer “yes” or “no.”

Answer: YES

QUESTION NUMBER TWO

Did Lycoming commit fraud on Interstate?

Fraud occurs when—

a. a party makes a material misrepresentation,

b. the misrepresentation is made with knowledge of its falsity or made recklessly without any knowledge of the truth and as a positive assertion,

c. the misrepresentation is made with the intention that it should be acted on by the other party, and

d. the other party relies on the misrepresentation and thereby suffers injury.

Fraud also occurs when—

a. a party fails to disclose a material fact within the knowledge of that party or actively conceals material facts within the knowledge of that party,

b. the party knows that the other party is ignorant of the fact and does not have an equal opportunity to discover the truth,

c. the party intends to induce the other party to take some action by failing to disclose the fact, and

d. the other party suffers injury as a result of acting without knowledge of the undisclosed fact.

“Misrepresentation” means:

A false statement of fact; or

A statement of opinion based on a false statement of fact; or

A statement of opinion that the maker knows to be false; or

An expression of opinion that is false, made by one claiming or implying to have special knowledge of the subject matter of the opinion

“Special knowledge” means knowledge or information superior to that possessed by the other party and to which the other party did not have equal access.

Answer “yes” or “no.”

Answer: YES

QUESTION NUMBER THREE

If your answer to Question Number One or Number Two is “Yes,” then answer the following question, otherwise, do not answer the following question.

What sum of money, if any, if paid now in cash, would fairly and reasonably compensate Interstate for the damages, if any, that were proximately caused by such fraud?

“Proximate cause” means that cause which, in a natural and continuous sequence, produces an event, and without which cause such event would not have occurred. In order to be a proximate cause, the act or omission complained of must be such that a person using the degree of care required of him would have foreseen that the event, or some similar event, might reasonably result therefrom.

Consider the following elements of damages, if any, and no other. Answer separately in dollars and cents for the following:

a. The increase in aviation products liability

insurance premiums sustained in the past .

Answer: $1,700,000

b. Reasonable and necessary expert expenses incurred in the investigation of the crankshaft failures.

Answer: $2,715,623.17

QUESTION NUMBER FOUR

If your answer to Question Number One or Number Two is “Yes,” then answer the following question. Otherwise, do not answer the following question.

Do you find from clear and convincing evidence that the harm to Interstate resulted from fraud or malice?

“Clear and convincing evidence” means the measure or degree of proof that produces a firm belief or conviction of the truth of the allegations sought to be established.

“Malice” means:

(a) a specific intent by Lycoming to cause substantial injury to Interstate; or

(b) an act or omission by Lycoming,

(i) which, when viewed objectively from the standpoint of Lycoming at the time of its occurrence involves an extreme degree of risk, considering the probability and magnitude of the potential harm to others; and

(ii) of which Lycoming has actual, subjective awareness of the risk involved, but nevertheless proceeds with conscious indifference to the rights, safety, or welfare of others.

Answer “Yes” or “No.”

Answer: YES

QUESTION NUMBER FIVE

If your answer to Question Number Four is “Yes,” and is based on a finding of malice, if any, then answer the following question. Otherwise, do not answer the following question.

Do you find from clear and convincing evidence that the harm to Interstate resulted from a specific intent by Lycoming to cause substantial injury to Interstate?

Answer “Yes” or “No.”

Answer: YES

QUESTION NUMBER SIX

If you have answered “Yes” to Question Number Four, then answer the following question. Otherwise, do not answer the following question.

Did Lycoming secure the execution of Second Addendum to the MSA by deception?

“Securing the execution of a document by deception” occurs when a person causes another person to sign any document affecting property, or services, or the pecuniary interest of any person, having a value of $1,500 or more, and does so by deception, with the intent to defraud or harm any person.

“Pecuniary interest” means a direct interest related to money.

“Property” means: (a) real property; (b) tangible or intangible personal property, including anything severed from land; or (c) a document, including money, that represents or embodies anything of value.

“Deception” means:

(1) Creating or confirming by words or conduct a false impression of fact that is likely to affect the judgment of another in the transaction, and that the actor does not believe to be true; or

(2) Failing to correct a false impression of fact that is likely to affect the judgment of another in the transaction, that the actor previously created or confirmed by words or conduct, and that the actor does not now believe to be true; or

(3) Preventing another from acquiring information likely to affect his judgment in the transaction.

A person acts with intent with respect to the nature of his conduct or to a result of his conduct when it is the conscious objective or desire to engage in the conduct or cause the result.

Answer “Yes” or “No.”

Answer: YES

QUESTION NUMBER SEVEN

What is a reasonable fee for the necessary services of Interstate’s attorneys in this case, stated in dollars and cents?

Answer with an amount for each of the following:

1. For preparation and trial.

Answer: $4,760,027.80

2. For an appeal to the Court of Appeals.

Answer: $350,000

3. For filing or responding to a petition for review to the Supreme Court of Texas.

Answer: $30,000

4. For briefing and argument on the merits in the Supreme Court of Texas.

Answer: $170,000

In determining what is a reasonable fee, consider the following factors:

a. the time and labor involved, the novelty and difficulty of the questions involved, and the skill required to perform the legal services properly;

b. the likelihood that the acceptance of the particular employment will preclude other employment by the lawyer;

c. the fee customarily charged in the same locality for similar legal services;

d. the amount involved and the results obtained;

e. the time limitations imposed by the client or the circumstances;

f. the nature and length of the professional relationship with the client;

g the experience, reputation, and ability of the lawyer or lawyers performing the services; and

h. whether the fee is fixed or contingent on results obtained or uncertainty of collection before the legal services can be rendered.

QUESTION NUMBER EIGHT

Was a defect, if any, in Lycoming’s design of the crankshafts the sole cause of the crankshaft failures and the resulting service bulletins, airworthiness directives, crankshaft recall and grounding of aircraft with Lycoming engines?

A cause is a “sole cause” if it is the only cause of an event or occurrence. If a cause is the sole cause of an event or occurrence, then the act or omission of another person cannot be a cause of the event or occurrence.

A “defect” means a condition of the product that renders it unreasonably dangerous. An “unreasonably dangerous” product is one that is dangerous to an extent beyond that which would be contemplated by the ordinary user of the product, with the ordinary knowledge common to the community as to the product’s characteristics.

Answer “Yes” or “No.”

Answer: YES

QUESTION NUMBER NINE

If your answer to Question Number Eight is “No,” then answer the following questions. Otherwise, do not answer the following questions.

In answering this question, you are instructed that an answer of “No” must be based on a preponderance of the evidence.

Do you find that the crankshaft failures and the resulting service bulletins, airworthiness directives, crankshaft recall and grounding of aircraft with Lycoming engines were directly caused by the following:

A. Performance of the crankshaft forgings provided pursuant to the MSA?

Answer “Yes” or “No:”

Answer: ______________

B. Defects (including manufacturing defects), if any, in the crankshaft forgings created during the forging process at Interstate?

Answer “Yes” or “No:”

Answer: ______________

C. The breach, if any, of any express warranty for the crankshaft forgings provided pursuant to the MSA?

Answer “Yes” or “No:”

Answer: ______________

SEQ CHAPTER \h \r 1 “Direct cause” means that cause which in a natural and continuous sequence produces an event, and without which cause such event would not have occurred. There can be more than one direct cause of an event.

A “defect” means a condition of the product that renders it unreasonably dangerous. An “unreasonably dangerous” product is one that is dangerous to an extent beyond that which would be contemplated by the ordinary user of the product, with the ordinary knowledge common to the community as to the product’s characteristics.

You may find that Interstate breached an express warranty under the MSA only if you find that, because of Interstate’s conduct:

a. the crankshaft forgings did not conform to the specifications, drawings, samples or other descriptions furnished, specified or adopted by Lycoming; or

b. the crankshaft forgings were not free from defects in material and workmanship.

QUESTION TEN

If you answered “Yes” to any single Question in Question Number Nine, then answer the following Question. Otherwise, do not answer the following question.

Do you find that the crankshaft failures and the resulting service bulletins, airworthiness directives, crankshaft recall and grounding of aircraft with Lycoming engines were directly caused by the negligence of Lycoming, if any?

“Negligence” means failure to use ordinary care, that is, failing to do that which a person of ordinary prudence would have done under the same or similar circumstances or doing that which a person of ordinary prudence would not have done under the same or similar circumstances.

“Ordinary care” means that degree of care that would be used by a person of ordinary prudence under the same or similar circumstances.

Answer “Yes” or “No.”

Answer ______________

QUESTION NUMBER ELEVEN

SEQ CHAPTER \h \r 1

If you answered “Yes” to any single Question in Question Number Nine and also answered “Yes” to Question Number Ten, then answer the following Question. Otherwise, do not answer the following question.

The percentages you find must total 100 percent. The percentages must be expressed in whole numbers. The percentage attributable to any one named below is not necessarily measured by the number of acts or omissions found.

For each entity found by you to have directly caused the crankshaft failures and the resulting service bulletins, airworthiness directives, crankshaft recall and grounding of aircraft with Lycoming engines, find the percentage caused by --

a. Lycoming __________________ %

b. Interstate __________________ %

Total 100 %

SEQ CHAPTER \h \r 1After you retire to the Jury room, you will select your own Presiding Juror. The first thing the Presiding Juror will do is to have this complete charge read aloud, and then you will deliberate upon your answers to the questions asked.

It is the duty of the Presiding Juror:

1. To preside during your deliberations;

2. To see that your deliberations are conducted in an orderly manner and in accordance with the instructions in this charge.

3. To write out and hand to the bailiff any communications concerning the case that you desire to have delivered to the Judge;

4. To vote on the questions;

5. To write your answers to the questions in the spaces provided; and

6. To certify to your verdict in the space provided for the Presiding Juror’s signature, or to obtain the signatures of all the Jurors who agree with the verdict, if your verdict is less than unanimous. You should not discuss the case with anyone, not even with other members of the Jury, unless all of you are present and assembled in the Jury room. Should anyone attempt to talk to you about the case before the verdict is returned, whether at the courthouse, at your home, or elsewhere, please inform the Judge of this fact.

When you have answered all the questions you are required to answer under the instructions of the Judge, and your Presiding Juror has placed your answers in the spaces provided and signed the verdict as Presiding Juror, or obtained the signatures, you will inform the bailiff at the door of the jury room that you have reached a verdict, and then you will return into court with your verdict.

January ___, 2005

___________________________________

JUDGE PRESIDING

CERTIFICATE

We, the Jury, have answered the above and foregoing questions as herein indicated, and herewith return same into court as our verdict.

(To be signed by the Presiding Juror if unanimous.)

___________________________________

PRESIDING JUROR

(To be signed by those rendering the verdict if not unanimous.)

_________________________________

_________________________________

_________________________________

_________________________________

_________________________________

_________________________________

_________________________________

_________________________________

_________________________________

_________________________________

_________________________________