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Eric Kraut, As Co-Administrator v. Raisbeck Engineering

August 17, 2011

ERIC KRAUT, AS CO-ADMINISTRATOR ON BEHALF OF THE ESTATE OF JON M. KRAUT, D.D.S., DECEASED; GARY KRAUT, AS CO-ADMINISTRATOR ON BEHALF OF THE ESTATE OF JON M. KRAUT, D.D.S. DECEASED; GLENN WOOD, AS CO-ADMINISTRATOR ON BEHALF OF THE ESTATE OF JON M. KRAUT, D.D.S., DECEASED; ROBERT SMITH, AS CO-ADMINISTRATOR ON BEHALF OF THE ESTATE OF ROBIN KRAUT, DECEASED; GAYLE DITZLER, AS CO-ADMINISTRATOR ON BEHALF OF THE ESTATE OF ROBIN KRAUT, DECEASED; GARY CANCELLIERE, AS ADMINISTRATOR OF THE ESTATE OF AVERY KRAUT, DECEASED, JESSICA KRAUT, DECEASED, AND APRIL KRAUT, DECEASED; GARY CANCELLIERE, AS ADMINISTRATOR AD PROSEQUENDUM AND ON BEHALF OF HIS MINOR SON, JUSTIN CANCELLIERE, PLAINTIFFS-APPELLANTS,
v.
RAISBECK ENGINEERING, INC.; PRATT & WHITNEY CANADA, INC.; UNITED TECHNOLOGIES CORPORATION; HONEYWELL INTERNATIONAL, INC.; HARTZELL PROPELLERS, INC.; SEGRAVE AVIATION, INC.; DALLAS AIRMOTIVE, INC.; PIEDMONT/HAWTHORNE AVIATION, INC.; PIEDMONT HAWTHORNE AVIATION, L.L.C.; PIEDMONT HAWTHORNE AVIATION, INC.; THE RECURRENT TRAINING CENTER, INC., DEFENDANTS, AND AIR WILMINGTON, INC., DEFENDANT-RESPONDENT.



On appeal from an interlocutory order of the Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-222-08.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued October 25, 2010

Before Judges Lisa, Reisner and Sabatino.

Five members of a New Jersey family were killed when the plane in which they were flying, piloted by one of them, crashed in South Carolina. This action was brought by the representatives of the deceased family members, and one other family member who was not in the plane, against numerous defendants, alleging liability on various grounds for the crash. One of those defendants is Air Wilmington, Inc. (Air Wilmington), a North Carolina corporation which owns and operates a facility that services airplanes at an airport in Wilmington, North Carolina, and which provided maintenance and repair service on the plane that crashed.*fn1

Air Wilmington moved to dismiss the complaint against it, asserting a lack of in personam jurisdiction. After extensive jurisdictional discovery, Judge Andrew J. Smithson granted Air Wilmington's motion. By leave granted, plaintiffs appeal the dismissal order, which was entered on March 25, 2010. Plaintiffs argue that the trial court erred in finding insufficient minimum contacts by Air Wilmington with New Jersey to provide a basis for in personam jurisdiction. We disagree with plaintiffs and affirm.

I.

The crash occurred on February 3, 2006. At that time, Dr. Jon Kraut, his wife, and their four children lived in Mercer County, New Jersey. Dr. Kraut maintained an office in which he conducted his orthodontic practice in Newtown, Pennsylvania. The Krauts owned a vacation home in South Carolina. A corporate entity, of which Dr. Kraut was the sole shareholder, purchased the plane involved in this crash in 2003. That corporation had previously owned a different plane, which was sold at the time of the new purchase. Dr. Kraut hangared the plane involved in this crash at an airport in Mercer County.

When the Krauts flew to and from their vacation home, they regularly stopped at Air Wilmington's facility for fuel. Apparently, Air Wilmington's fuel prices were low. Further, its location was convenient for this purpose in relation to the Krauts' vacation home.

From time to time, Dr. Kraut had service and repair work done on both of his planes at Air Wilmington's facility. When he purchased the plane that was later involved in the crash, he asked Air Wilmington to perform a cursory inspection of it. Air Wilmington did not perform the full pre-purchase four-phase inspection that was available for such purposes. Instead, the plane was brought by a broker, at Dr. Kraut's request, to Air Wilmington for only three to four hours, in order to perform what Air Wilmington's representative described as a "cursory or light inspection of the plane."

Several deficiencies were noted. In his deposition testimony, Air Wilmington's president and CEO stated that Dr. Kraut did not rely on Air Wilmington to perform a complete and thorough inspection, because, "[i]f he had wanted a complete pre-purchase [inspection], he would have directed [the service manager] to do a 1 through 4 inspection and go through it with a fine tooth comb." Nevertheless, Air Wilmington's president acknowledged that "Doctor Kraut relied on Air Wilmington to look at the aircraft and give him guidance as to what may be going on with this airplane."

In the ensuing two-and-one-half years from Dr. Kraut's purchase of the plane until the crash, Air Wilmington serviced it on four occasions. The most recent was about four months prior to the crash, and the service included work on the left engine. Plaintiffs allege that the left engine malfunctioned when the Krauts were making their final approach to the airport in South Carolina, and that was the cause, or a contributing cause, of the crash.

Air Wilmington is a North Carolina corporation. Its only facility is at the airport in Wilmington, North Carolina. It owns no property and maintains no offices or physical presence in New Jersey. It has no employees in New Jersey. It is not licensed to conduct business in New Jersey and has no agent for the service of process in New Jersey. It has never performed maintenance, service or repairs on any aircraft in New Jersey, nor provided inspections of aircraft in New Jersey. It has no New Jersey telephone number, facsimile number, or mailing address. Air Wilmington maintains no bank accounts in New Jersey and has never paid any New Jersey taxes. With the limited exceptions that we will discuss, Air Wilmington has never directed any advertising to New Jersey.

From time to time, Air Wilmington provided pilot services for aircraft owners, by which a pilot employed by Air Wilmington would fly a plane to a location designated by the aircraft owner in return for a fee. Over a span of five years, Air Wilmington pilots provided such a service by which planes were flown into New Jersey on about sixty occasions. These planes were owned by third-parties, not by Air Wilmington, and not by Dr. Kraut or his corporation. On each occasion, the pilot delivered the plane to New Jersey in exchange for a fee paid by the owner to Air Wilmington. On some occasions, the pilot purchased fuel in New Jersey as part of the service. Air Wilmington also paid the applicable landing fees in New Jersey. However, these were "pass-through" costs, which were completely reimbursed to Air Wilmington by the aircraft owner, resulting in no profit to Air Wilmington. These expenses were incurred for the convenience of the owner as part of the pilot service Air Wilmington provided.

Air Wilmington sometimes sent letters to the owners of aircraft who had used its facility or had landed at the adjacent airport, encouraging them to use its facility when they were in the area. The letters suggested that repeat users could obtain special discounts on fuel prices. The letters also advised that Air Wilmington provided a full service facility for maintenance and repairs. These were very short, one-page form letters.

The discovery revealed that Air Wilmington sent out 785 such letters. The recipients were identified in discovery. Only twenty of the letters were sent to New Jersey residents.

There is no evidence in the record of any advertising by Air Wilmington in New Jersey. Plaintiffs contend, however, that Air Wilmington reached out to and solicited the New Jersey market by advertising conducted through an arrangement with another entity, UVAir, a discount aviation fuel supplier. To support the claim, plaintiffs produced a posting on UVAir's website. In their brief, plaintiffs contend that the posting promoted Air Wilmington's services as a "fueling stop and customs clearance for potential customers traveling between Teterboro [A]irport in New Jersey and the Bahamas, with a diagram depicting planes traveling between Teterboro and [Air Wilmington's] facilities in North Carolina."

The ad provides a list of services provided by Air Wilmington and points out that its facility is a convenient stop-over for travelers to the Bahamas. The ad also refers to Odyssey Aviation Bahamas, and describes its services.

In her deposition testimony, Air Wilmington's customer service manager described the circumstances leading to the posting of that ad on UVAir's website. She explained that a UVAir representative had contacted her and wanted to promote Air Wilmington "in conjunction with Odyssey Aviation." This was because of the convenient stop-over location of Air Wilmington to the Bahamas, and it was for the purpose of selling aviation fuel provided by UVAir. The UVAir representative never told Air Wilmington's customer service manager that any other locations, such as Teterboro Airport, would be depicted on the ad, and Air Wilmington was never provided with an advance copy of the ad. Indeed, no one from Air Wilmington saw the ad until early ...


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