Jury Instructions and Verdicts in the Lycoming Case

AVweb has obtained a copy of the jury instructions and jury verdicts in the case against Lycoming Engines.

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CASE NO. 29,385

INTERSTATE SOUTHWEST, LTD.,

Plaintiff,

v.

avco corporation, TEXTRON LYCOMING RECIPROCATING ENGINE DIVISION OF AVCO CORPORATION,

Defendants.

IN THE DISTRICT COURT OF

GRIMES COUNTY, TEXAS

278th JUDICIAL DISTRICT

CHARGE TO THE JURY

LADIES AND GENTLEMEN OF THE JURY:

This case is submitted to you by asking questionsabout the facts, which you must decide from the evidence youhave heard in this trial. You are the sole judges ofthe credibility of the witnesses, and the weight to be giventheir testimony; but in matters of law, you must begoverned by the instructions in this charge. Indischarging your responsibility on this jury, you willobserve all the instructions which have previously beengiven you. I shall now give you additionalinstructions which you should carefully and strictly followduring your deliberations.

1. Do notlet bias, prejudice or sympathy play any part in yourdeliberations.

2. Inarriving at your answers, consider only the evidenceintroduced here under oath and such exhibits, if any, ashave been introduced for your consideration under therulings of the Court; that is, what you have seen and heardin this courtroom, together with the law as given you by theCourt. In your deliberations, you will not consider ordiscuss anything that is not represented by the evidence inthis case.

3. Sinceevery answer that is required by the charge is important, noJuror should state or consider that any required answer isnot important.

4. Youmust not decide who you think should win, and then try toanswer the questions accordingly. Simply answer thequestions, and do not discuss nor concern yourselves withthe effect of your answers.

5. Youwill not decide the answer to a question by lot or bydrawing straws, or by any other method of chance. Donot return a quotient verdict. A quotient verdictmeans that the Jurors agree to abide by the result to bereached by adding together each jurors figures and dividingby the number of Jurors to get an average. Do not doany trading on your answers; that is, one juror should notagree to answer a certain question one way if others willagree to answer another question another way.

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

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

The presiding juror or any other who observes a violationof this courts instructions shall immediately warn the onewho is violating the same and caution the juror not to do soagain.

During the trial it was permissible for you to takenotes. You may carry those notes to the jury room foryour personal use during the deliberation on the courtscharge. You may not share those notes with otherjurors. Your personal recollection of the evidencetakes precedence over any notes you have taken. Ajuror may not rely on the notes of another juror. Ifyou disagree about the evidence, the presiding juror mayapply to the court and have the court reporters notes readto the jury.

When words are used in this charge in a sense that variesfrom the meaning commonly understood, you are given a properlegal definition, which you are bound to accept in place ofany other meaning.

During this trial, certain testimony and evidence has beenpresented to you by way of deposition and may also have beenvideotaped. A deposition consisted of questions andsworn, recorded answers to those questions that were givenin advance of this trial. You must give thistestimony the same consideration and is to be judged in thesame way as if the witness had been present and testifiedfrom the witness stand.

During trial, certain deposition testimony presented byway of videotape contained various captions inserted betweenseparate excerpts of the deposition testimony. Thesecaptions are not part of the evidence in this case and arenot to be considered by you as evidence. If yourrecollection of the evidence differs from the caption, relyon your recollection of the evidence.

Answer Yes or No to all questions unless otherwiseinstructed. A Yes answer must be based on apreponderance of the evidence unless otherwise instructed. If you do not find that a preponderance of the evidencesupports a Yes answer, then answer No. The termpreponderance of the evidence means the greater weight anddegree of credible testimony or evidence introduced beforeyou and admitted in this case. Whenever a questionrequires other than a Yes or No answer, your answer mustbe based on a preponderance of the evidence unless otherwiseinstructed.

A fact may be established by direct evidence or bycircumstantial evidence, or both. A fact isestablished by direct evidence when proved by documentaryevidence or by witnesses who saw the act done or heard thewords spoken. A fact is established by circumstantialevidence when it may be fairly and reasonably inferred fromother facts proved.

If you answer questions about damages, answer eachquestion separately. Do not increase or reduce theamount in one answer because of your answers to any otherquestions about damages. Do not speculate about whatany partys ultimate recovery may or may not be. Anyrecovery will be determined by the court when it applies thelaw to your answers at the time of judgment. Do notadd any amount for interest on damages, if any.

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

Interstate includes Interstate Southwest, Ltd. andInterstate Forging Industries, Inc.

Lycoming includes AVCO Corporation and its unincorporateddivision, Textron Lycoming Reciprocating Engine Division,which division is also known as the Textron Lycoming and/orLycoming Engines division of AVCO Corporation.

MSA means the Master Supply Agreement and includesAddendum No. 1 and Addendum No. 2 to the MSA.

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

Addendum No. 2 to the MSA or Second Addendum to theMSA means the 2001 document entitled Addendum to MasterSupply 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 theforging facility in Navasota, Texas that produced Lycomingscrankshaft forgings. You are further instructed thatthe court has determined as a matter of law that InterstateSouthwest, Ltd. may bring its claims and the claims ofInterstate Forging Industries, Inc. against Lycoming,including claims against Lycoming relating to the MSA.

QUESTION NUMBER ONE

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

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

Fraud occurs when-

a. a partymakes a material misrepresentation,

b. themisrepresentation is made with knowledge of its falsity ormade recklessly without any knowledge of the truth and as apositive assertion,

c. themisrepresentation is made with the intention that it shouldbe acted on by the other party, and

d. theother party relies on the misrepresentation and therebysuffers injury.

Fraud also occurs when-

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

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

c. theparty intends to induce the other party to take some actionby failing to disclose the fact, and

d. theother party suffers injury as a result of acting withoutknowledge of the undisclosed fact.

Misrepresentation means:

A false statement of fact; or

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

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

An expression of opinion that is false, made by oneclaiming or implying to have special knowledge of thesubject matter of the opinion

Special knowledge means knowledge or informationsuperior to that possessed by the other party and to whichthe 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 partymakes a material misrepresentation,

b. themisrepresentation is made with knowledge of its falsity ormade recklessly without any knowledge of the truth and as apositive assertion,

c. themisrepresentation is made with the intention that it shouldbe acted on by the other party, and

d. theother party relies on the misrepresentation and therebysuffers injury.

Fraud also occurs when-

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

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

c. theparty intends to induce the other party to take some actionby failing to disclose the fact, and

d. theother party suffers injury as a result of acting withoutknowledge of the undisclosed fact.

Misrepresentation means:

A false statement of fact; or

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

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

An expression of opinion that is false, made by oneclaiming or implying to have special knowledge of thesubject matter of the opinion

Special knowledge means knowledge or informationsuperior to that possessed by the other party and to whichthe 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 isYes, then answer the following question, otherwise, do notanswer the following question.

What sum of money, if any, if paid now in cash, wouldfairly 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 andcontinuous sequence, produces an event, and without whichcause such event would not have occurred. In order to be aproximate cause, the act or omission complained of must besuch that a person using the degree of care required of himwould have foreseen that the event, or some similar event,might reasonably result therefrom.

Consider the following elements of damages, if any, and noother. Answer separately in dollars and cents for thefollowing:

a. The increase in aviation productsliability

insurance premiumssustained in the past .

Answer: $1,700,000

b. Reasonable and necessary expert expensesincurred 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 isYes, then answer the following question. Otherwise,do not answer the following question.

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

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

Malice means:

(a) a specificintent by Lycoming to cause substantial injury toInterstate; or

(b) an act oromission by Lycoming,

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

(ii) of whichLycoming has actual, subjective awareness of the riskinvolved, but nevertheless proceeds with consciousindifference to the rights, safety, or welfare of others.

Answer Yes or No.

Answer: YES

QUESTION NUMBER FIVE

If your answer to QuestionNumber 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 harmto Interstate resulted from a specific intent by Lycoming tocause substantial injury to Interstate?

Answer Yes or No.

Answer: YES


QUESTION NUMBER SIX

If you have answered Yes to Question Number Four, thenanswer the following question. Otherwise, do not answer thefollowing question.

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

Securing the execution of a document by deceptionoccurs when a person causes another person to sign anydocument affecting property, or services, or the pecuniaryinterest of any person, having a value of $1,500 or more,and does so by deception, with the intent to defraud or harmany person.

Pecuniary interest means a direct interest related tomoney.

Property means: (a) real property; (b) tangible orintangible personal property, including anything severedfrom land; or (c) a document, including money, thatrepresents or embodies anything of value.

Deception means:

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

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

(3) Preventinganother from acquiring information likely to affect hisjudgment in the transaction.

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

Answer Yes or No.

Answer: YES

QUESTION NUMBER SEVEN

What is a reasonable fee for the necessary services ofInterstates attorneys in this case, stated in dollars andcents?

Answer with an amount for each of the following:

1. Forpreparation and trial.

Answer: $4,760,027.80

2. For anappeal to the Court of Appeals.

Answer: $350,000

3. Forfiling or responding to a petition for review to the SupremeCourt of Texas.

Answer: $30,000

4. Forbriefing and argument on the merits in the Supreme Court ofTexas.

Answer: $170,000

In determining what is a reasonable fee, consider thefollowing factors:

a. thetime and labor involved, the novelty and difficulty of thequestions involved, and the skill required to perform thelegal services properly;

b. thelikelihood that the acceptance of the particular employmentwill preclude other employment by the lawyer;

c. thefee customarily charged in the same locality for similarlegal services;

d. theamount involved and the results obtained;

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

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

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

h. whether the fee is fixed or contingent on results obtainedor uncertainty of collection before the legal services canbe rendered.

QUESTION NUMBER EIGHT

Was a defect, if any, inLycomings design of the crankshafts the sole cause of thecrankshaft failures and the resulting service bulletins,airworthiness directives, crankshaft recall and grounding ofaircraft with Lycoming engines?

A cause is a sole cause if it is the only cause of anevent or occurrence. If a cause is the sole cause ofan event or occurrence, then the act or omission of anotherperson cannot be a cause of the event or occurrence.

A defect means a condition of the product that renders itunreasonably dangerous. An unreasonably dangerousproduct is one that is dangerous to an extent beyond thatwhich would be contemplated by the ordinary user of theproduct, with the ordinary knowledge common to the communityas to the products characteristics.

Answer Yes or No.

Answer: YES


QUESTION NUMBER NINE

If your answer to QuestionNumber Eight is No, then answer the following questions. Otherwise, do not answer the following questions.

In answering thisquestion, you are instructed that an answer of No must bebased on a preponderance of the evidence.

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

A. Performance of the crankshaft forgings providedpursuant to the MSA?

Answer Yes or No:

Answer: ______________

B. Defects (including manufacturing defects), ifany, in the crankshaft forgings created during the forgingprocess at Interstate?

Answer Yes or No:

Answer: ______________

C. The breach, if any, of any express warranty forthe 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 andcontinuous sequence produces an event, and without whichcause such event would not have occurred. There can bemore than one direct cause of an event.

A defect means a condition of the product that renders itunreasonably dangerous. An unreasonably dangerousproduct is one that is dangerous to an extent beyond thatwhich would be contemplated by the ordinary user of theproduct, with the ordinary knowledge common to the communityas to the products characteristics.

You may find thatInterstate breached an express warranty under the MSA onlyif you find that, because of Interstates conduct:

a. the crankshaft forgings did not conform tothe specifications, drawings, samples or other descriptionsfurnished, specified or adopted by Lycoming; or

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


QUESTION TEN

If you answered Yes toany single Question in Question Number Nine, then answer thefollowing Question. Otherwise, do not answer thefollowing question.

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

Negligence means failureto use ordinary care, that is, failing to do that which aperson of ordinary prudence would have done under the sameor similar circumstances or doing that which a person ofordinary prudence would not have done under the same orsimilar circumstances.

Ordinary care means thatdegree of care that would be used by a person of ordinaryprudence under the same or similar circumstances.

Answer Yes or No.

Answer ______________

QUESTION NUMBER ELEVEN

SEQ CHAPTER h r 1

If you answered Yes toany single Question in Question Number Nine and alsoanswered Yes to Question Number Ten, then answer thefollowing Question. Otherwise, do not answer thefollowing question.

The percentages you findmust total 100 percent. The percentages must be expressed inwhole numbers. The percentage attributable to any onenamed below is not necessarily measured by the number ofacts or omissions found.

For each entity found byyou to have directly caused the crankshaft failures and theresulting service bulletins, airworthiness directives,crankshaft recall and grounding of aircraft with Lycomingengines, 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 firstthing the Presiding Juror will do is to have this completecharge read aloud, and then you will deliberate upon youranswers to the questions asked.

It is the duty of the Presiding Juror:

1. Topreside during your deliberations;

2. To seethat your deliberations are conducted in an orderly mannerand in accordance with the instructions in this charge.

3. Towrite out and hand to the bailiff any communicationsconcerning the case that you desire to have delivered to theJudge;

4. Tovote on the questions;

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

6. Tocertify to your verdict in the space provided for thePresiding Jurors signature, or to obtain the signatures ofall the Jurors who agree with the verdict, if your verdictis less than unanimous. You should not discuss thecase with anyone, not even with other members of the Jury,unless all of you are present and assembled in the Juryroom. Should anyone attempt to talk to you about thecase before the verdict is returned, whether at thecourthouse, at your home, or elsewhere, please inform theJudge of this fact.

When you have answered all the questions you are requiredto answer under the instructions of the Judge, and yourPresiding Juror has placed your answers in the spacesprovided and signed the verdict as Presiding Juror, orobtained the signatures, you will inform the bailiff at thedoor of the jury room that you have reached a verdict, andthen you will return into court with your verdict.

January ___, 2005

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JUDGE PRESIDING


CERTIFICATE

We, the Jury, have answered the above and foregoingquestions as herein indicated, and herewith return same intocourt as our verdict.

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

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PRESIDING JUROR

(To be signed by those rendering the verdict if notunanimous.)

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