Appendix — Exportadora de Sal, S. A. de C. V. v. Sugimoto
Supreme Court brief1994
Ask Donna
What actually matters in this document.
Text
; Fliiap
o 4 65
No. 1 OCT 11 1994
U.S,
( ,
ri
iit { + ¥
fen
In the
SUPREME COURT OF THE UNITED STATES
OCTOBER TERM, 1994
EXPORTADORA DE SAL, S.A. DE C.V., Petitioner,
v.
HIROKO SUGIMOTO, et al., Respondents
On Petition for a Writ of Certiorari to the
United States Court of Appeals
for the Ninth Circuit
APPENDIX TO
PETITION FOR A WRIT OF CERTIORARI
Clyde C. Greco, Jr.
Counsel of Record
Scott A. Johnson
Greco & Traficante
750 "B" Street, Suite 2740
San Diego, California 92101
(619) 234-3660
Counsel for Petitioner
Page
APPENDIX A - Order Denying
Petition For Rehearing ...................... l
APPENDIX B - Opinion, Court Of Appeals
SE A NE hs ok ek sks ek ke 2
APPENDIX C - Transcript Of Findings
And Conclusions, District Court................ 12
APPENDIX D - Opinion, Court Of Appeals
te ora be ee ee en es a 88
APPENDIX E - Statutory Provision Involved -
Relevant Excerpts From The Foreign Sovereign
I 0 oo ve ok oe hs os ee 104
APPENDIX A
Order Denying Petition For Rehearing
Court of Appeals
August 2, 1994
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
HIROKO SUGIMOTO; ) No. 93-55716
KIMIKO KODANI; MAYUMI )
NUKIWA; ERI OMACHI; ) DC No. CV-88-01532-JMF
KUNIKO OMACHI,
ORDER
Plaintiff-Appellees,
Filed: August 2, 1994
EXPORTADORA DE SAL,
)
)
)
)
vs. )
)
)
S.A. DE C.V., )
)
)
Defendant-Appellant.
Before: TANG, PREGERSON and NOONAN, Circuit Judges
The panel as constituted in the above case has voted to
deny the petition for rehearing and to reject the suggestion for
rehearing en banc.
The full court has been advised of the suggestion for en
banc rehearing, and no judge of the court has requested a vote
on the suggestion for rehearing en banc. Fed. R. App. P.
35(b).
The petition for rehearing is denied, and the suggestion
for a rehearing en banc is rejected.
HUONOL
APPENDIX B
Opinion
Court Of Appeals
March 25, 1994
FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
Hioxo Sucmoto; Kimiko Kopant;
Mayumi Nuxiwa; Eri Omaci:
Kuniko OmacH, No. 93-55716
Plaintiffs-Appellees, D.C. No.
. CV-88-01532-IMF
Exportapora De Sat, S.A. DE OPINION
st
Defendant-Appellant.
On Appeal! from the United States District Court
for the Southern District of California
James M. Fitzgerald, District Judge, Presiding
Argued and Submitted
February 1, 1994—Pasadena, California
Filed March 25, 1994
Before: Thomas Tang, Harry Pregerson and
John T. Noonan, Jr., Circuit Judges.
Opinion by Judge Noonan
SUMMARY
Torts/Negligence/Aviation
The court of appeals affirmed a district court judgment. The
court held that under California law, a defendant was liable
for the negligence of an independent contractor whom it hired
to fly three visitors from its company town.
2887 vVCOC2
2888 SucpwoTo v. ExporTapora De SAL
Appellant Exportadora De Sal, S.A. De C.V. manufactures
salt in a company town in Guerrero Negro, Mexico. An
employee of Mitsubishi Corporation of Japan, which owns 49
percent of Exportadora, asked Exportadora to provide trans-
portation for Hideo Omachi to Guerrero Negro by car and
company plane. Mitsubishi pointed out to Exportadora that
Omachi was a manager for one of Exportadora’s most impor-
tant Japanese customers. Exportadora’s van transported
Omachi from San Diego to Tijuana. Omachi was transported
by company plane to Guerrero Negro.
Mitsubishi also asked Exportadora to arrange for transpor-
tation to Guerrero Negro for Katsuo Sugimoto and Yoshihito
Kodani, professors who were interested in an agricultural
project at Guerrero Negro. A representative of Exportadora
met Sugimoto and Kodani in San Diego, and had them tans-
ported to the Tijuana airport, from which they flew in a com-
pany plane to Guerrero Negro.
In Guerrero Negro, Omachi, Sugimoto and Kodani were
fed in Exportadora’s company dining room, and housed at
Exportadora’s guest quarters. Because the company plane was
not available on the scheduled date to return Omachi, Sugi-
moto and Kodani to Tijuana, an Exportadora employee char-
tered an air taxi company to carry the passengers from
Guerrero Negro to Tijuana.
The pilot of the air taxi crashed into a hill, and the plane
fell on American soil. The pilot, Omachi, Sugimoto and
Kodani were killed.
Appellees, Sugimoto’s, Kodani’s and Omachi’s survivors,
brought a wrongful death action against Exportadora.
Exportadora challenged the district court’s jurisdiction on the
ground of sovereign immunity. The court held that it had
parisdiction. Exportadora appealed.
The court of appeals held that in transporting the passen-
gers, Exportadora engaged in commercial activity in the
v000C8
oul
SuGmoTo v. ExporTADORA De SAL 2889
United States, and so fell within one of the exceptions of the
Foreign Sovereign Immunities Act. On remand, the district
court found that the crash was due to the pilot's negligence,
and found Exportadora liable.
Exportadora appealed, challenging the district court’s juris-
diction. Exportadora also contended that it should not have
been held liable for the pilot’s negligence when the pilot was
the employee of the air taxi, an independent contractor.
[1] Jurisdiction existed. [2] Exportadora was engaged in
commercial activity within the United States when the air taxi
flew in the United States air space. An element of the plain-
uffs’ claim consisted of the tortious flying of the plane in
United States air space.
[3] In addition, as a matter of California law, Exportadora
was liable for the tortious performance of the pilot. Exporta-
dora controlled the transportation offered to business visitors
to its plant and company town; Exportadora decided whether
visitors from abroad were welcome, approved them, arranged
for their transportation, paid all the expenses, fed them, and
determined where they would stay and how they would come
and how they would go.
COUNSEL
Clyde Greco, Jr., Greco & Traficante, San Diego, California,
for the defendant-appellant.
Robin Foor, Belmont, California, for the plaintiffs-appellees.
OPINION
NOONAN, Circuit Judge:
Exportadora De Sal, S.A. De C.V. (Exportadora) appeals
from the judgment entered after a bench trial in a wrongful
wOC OO d
2890 SucmoTo v. Exportapora De Sai
death action brought by the survivors of Katsuo Sugimoto,
Yoshihito Kodani and Hideo Omachi (the plaintiffs). We have
pnsdiction under 28 U.S.C. § 1330, and affirm.
FACTS
Exportadora is a manufacturer of salt owned 51 percent by
the government of Mexico and 49 percent by Mitsubishi Cor-
poration of Japan. Exportadora is a major producer of salt,
which it markets internationally. It has a manufactory of salt
at Guerrero Negro, Mexico. The plant is located in a company
town. The most convenient city in proximity to Guerrero
Negro is San Diego, California. Exportadora maintained an
office in San Diego.
It is possible to get to Guerrero Negro from San Diego by
bus, but the only convenient way of getting there is by
Exportadora arranging a flight from Tijuana, Mexico to Guer-
rero Negro. For visitors to Guerrero Negro accepted by
Exportadora, the practice was for the company to send a van
to its San Diego office to transport them to the Tijuana air-
port. There was no telephone at the plant and it communicated
with outside parties by telex to the San Diego office.
On September 4, 1987 an employee of Mitsubishi asked
Exportadora to provide transportation for Omachi to Guerrero
Negro by car and company plane. Mitsubishi's telex noted
that Omachi was a manager for Asashi, one of Exportadora’s
most important Japanese customers. A second telex from Mit-
subishi to Exportadora stated, “We hope that your beautiful
explanation and arrangements wil] charm him very much.” A
third telex thanked Exportadora for accepting “Omachi’s visit
to G.N.”
On September 18, 1987 Mitsubishi asked Exportadora to
arrange for transportation to Guerrero Negro for Sugimoto
and Kodani by pick-up tuck and company plane. Sugimoto
and Kodani were professors of Tottori University in Japan
00005
SuomoTo v. Exportapors De Sar 2891
and were interested in an agricultural project at Guerrero
Negro. On September 22 Sugimoto and Kodani arrived by air
in San Diego and were met by a representative of Exporta-
dora, who arranged for their overnight stay in San Diego. The
following day Exportadora had them transported to the
Tijuana airport from which they flew in the company plane to
Guerrero Negro. The company prepared a schedule showing
that they would return to Tijuana on September 30.
On September 27 Omachi arrived at San Diego and on the
following day was transported by Exportadora’s van to
Tijuana and by company plane to Guerrero Negro. His return
was also scheduled for September 30. In Guerrero Negro
Omachi, Sugimoto and Kodani were fed in the Exportadora
company dining room and were housed without charge at
Exportadora’s guest quarters.
The company plane was not available on September 30
because of a directors’ meeting. An Exportadora employee
chartered an air taxi company to carry the scheduled passen-
gers from Guerrero Negro to Tijuana.
Flying in heavy fog on the morning of September 30 in air
space of the United States, the pilot of the air taxi crashed into
a hill outside of Tijuana and fell on American soil. The dis-
trict court found the crash due to the pilot’s negligence in
descending below the proper glide path and in not executing
a missed approach when required to do so.
The crash killed the pilot and the passengers.
PROCEEDINGS
The plaintiffs brought suit against Exportadora. Exporta-
dora challenged the jurisdiction of the district court on the
ground of its sovereign immunity under 28 U.S.C. §§ 1603(a),
(b)(2) and when the district court held it had jurisdiction,
Exportadora appealed to this court. We held that in transport-
wil NG
2892 SucmoTo v. ExporTapora Dt Sar
ing Omachi, Sugimoto and Kodani Exportadora had been
engaged in commercial activity in the United States and so
fell within one of the exceptions of the Foreign Sovereign
Immunities Act, viz. “the action is based upon a commercial
activity carried on in the United States by a foreign state.” 28
U.S.C. § 1605(a)(2). Schoenberg v. Exportadora, 930 F.2d
777 (9th Cir. 1991). We found the commercial activity to lie
in Exportadora’s “arranging transportation for its prospective
business partners” in the case of Omachi and appeasing the
Mexican government in the case of the transportation pro-
vided to Sugimoto and Kodani. /d. at 780.
On remand, a bench trial was held in which the district
court found Exportadora liable on the basis of several theories
of liability. Exportadora appeals.
ANALYSIS
Jurisdiction
[1] Exportadora raises again the question as to jurisdiction.
contending that despite Schoenberg, the issue remains open in
the light of Saudi Arabia v. Nelson, 113 S.Ct. 1471 (1993).
The plaintiffs argue that Exportadora waived jurisdiction after
the decision in this court in Schoenberg. We need not address
that argument, because we hold that under the precise test set
by Saudi Arabia jurisdiction exists.
[2] According to Saudi Arabia, an action is based on com-
mercial activity in the United States if an element of the plain-
uff’s claim consists in conduct that occurred in commercial
activity carried on in the United States. Jd. at 1477. In the
instant case Exportadora was engaged in commercial activity
within the United States when the air taxi flew in United
States air space, and an element of the plaintiffs’ claim con-
sists in the tortious flying of the plane in United States air
space. The jurisdictional requirement of the first clause of
§ 1605(a)(2) was met.
00007
SuGmoOTO v. ExporTapora Dt SAL 2893
Tortious Conduct
On appeal Exportadora argues that the district coun found
pilot negligence by indulging the presumpuon that if the plane
hit a hill in the fog, the failure must have been the pilot's. On
the contrary, the district court eliminated a variety of other
possible causes of the crash and relied on the opinion of an
aviation accident investigator whom it found credible and reli-
able. There was no clear error in the district court's conclu-
sion that it was a negligent mistake by the pilot that was the
cause of the accident.
Basis for Liability
Exportadora presses that it should not be held liable for the
pulot’s negligence when the pilot was the employee of the air
taxi, which the distnct court characterized as “an independent
contractor.” The general rule is clear that one is not liable for
the tortious acts of an independent contractor. The rule is rid-
died with exceptions so that there is “only a smal] area in
which the so-called general rule operates.” 6 Witkin,
Summary of California Law § 1009 (1987). California law in
this respect is in harmony with the Restatement (Second) of
Torts § 409, comment b, which states that the rule “can now
be said to be general only in the sense that it is applied when
no good reason is found for departing from it.”
[3] Here there is good reason for departing from the
already-eroded rule. Exportadora controlled the transportation
Offered to business visitors to its plant and company town.
Exportadora decided whether visitors from abroad were wel-
come, approved them, arranged for their transportation, paid
all the expenses, fed them, determined where they would stay
and how they would come and how they would go. It would
be unconscionable to permit Exportadora to insulate itself
from liability for negligence by providing the transportation
for which it was responsible through an air taxi which carried
piteously smal] amounts of insurance per passenger. As a mat-
00008
2894 SucmoTo v. Exportapors De Sai
ter of California law Exportadora was liable for the tortious
performance of the pilot.
AFFIRMED.
PRINTED FOR
ADMINISTRATIVE OFFICE—US. COURTS
BY BARCLAYS / ELECTROGRAPHIC—SAN FRANCISCO—«4/5) 588-1155
The summary, which dors mot consutute s part of the opimos of the court, » copynghted
© 1994 by Barclays Lew Publishers.
eVOOOY
x ee
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
HIROKO SUGIMOTO;
KIMIKO KODANI; MAYUMI
NUKIWA; ERI OMACHI;
KUNIKO OMACHI,
No. 93-55716
DC No. CV-88-01532-J MF
ORDER AMENDING
Plaintiff-Appellees, OPINION
VS.
EXPORTADORA DE SAL,
)
)
)
)
)
)
)
)
)
)
S.A. DE C.V., )
)
)
Defendant-Appellant.
Filed: July 1, 1994
Before: TANG, PREGERSON and NOONAN, Circuit Judges
The opinion filed on March 25, 1994 is amended as
follows: At slip op. page 2893, 5 lines from the bottom, strike
the sentence beginning "It would be . . ." and replace it with the
following:
Exportadora remains liable for the enterprise,
although the air taxi was an independent taxi:
“the enterprise, notwithstanding the employment
of the independent contractor, remains, the
vo00o1LO
employer’s" when it "is the party primarily to be
benefited . . . selects the contractor . . . is free
to insist upon one who is financially responsible,
and to demand indemnity from him, [and] the
insurance necessary to distribute the risk is
properly a cost of the employer’s business."
Van Ar v. Hollinger, 68 Cal.2d 245, 253;
437 P.2d 508, 513 (1968).
v0O011
APPENDIX C
Transcript Of Findings And Conclusions
Before The Honorable James M. Fitzgerald
United States District Judge
March 9, 1993
SAN DIEGO, CALIFORNIA TUESDAY. MARCH 9, 1993
--000--
(Call to order of the Court.)
THE COURT: We’re here this morning in the
case of Sugimoto and others vs. Exportadora de Sal, 88-1532.
I’m going to begin this morning to place on the record my
findings of fact and conclusions of law. The findings and
conclusions will be largely taken from the notes which I have
made up during the trial of the case and from our investigation
of the legal issues which have been raised in the course of the
trial.
The findings and conclusions which I now place
of record will be my decision in the case. I do not intend to
enter a formal decision.
The court recorder will prepare a transcript, and
the transcript will be made part of the official record in the case
and will reflect my decision.
Upon the completion of the transcript, the court
recorder will notify the parties who I have requested to make
arrangements with the court recorder so that they may order out
the transcripts.
An additional copy of the transcript will be
provided to Judge John Rhoades who has had the responsibility
for the management of the case, and I would like a copy sent to
my chambers in the U.S. District Court for the District of
Alaska so that I may address any post-trial applications or
motions made by the parties.
I shall now begin with the findings, and I will
request that the findings and conclusions be entered in the
transcript by identifying each of the findings and conclusions by
number and that each of the findings and conclusions begin after
a double space.
FINDINGS
(1) The claimants in this litigation are the survivors of
«fn
v00012
é
Doctor Katsuo Sugimoto, Doctor Yoshihito Kodani and Mr.
Hideo Omachi who, until the time of their deaths on September
30, 1987, were citizens and residents of Japan. Doctor
Sugimoto and Doctor Kodani were at the time of their deaths
professors of agriculture at Tottori University in Hamasaka,
Japan.
For about five years prior to September 30, 1987,
Tottori University had been involved in an agricultural project
located in Guerrero Negro, Baja California, Mexico. Mr.
Omachi was at the time of his death the manager of the raw
materials section of the purchasing department of Asahi
Chemical Industrial Company. _
(2) The Defendant in the present litigation is
Exportadora de Sal, a corporation formed under the laws of
Mexico which is 51 percent owned by the United Mexican
States and 49 percent owned by Mitsubishi Corporation of
Japan. Exportadora manufactures salt from seawater at
Guerrero Negro and sells the product in domestic and
international markets. Exportadora is one of the world’s largest
producers of industrial salt producing about six million metric
tons each year.
Asahi Chemical is said to be one of Exportadora’s most
important customers for salt. Mr. Omachi had arranged to visit
and inspect Exportadora’s facilities.
(3) From 1974 until 1991, Exportadora maintained an
office at San Diego, California which was connected by telex
with Exportadora’s offices at Guerrero Negro and Mexico City.
The San Diego office was heavily involved in purchasing,
shipping and transporting materials for Exportadora’s business
and, to some extent, operated as a communication center with
Mitsubishi in Japan.
(4) In Schoenberg vs. Exportadora de Sal, 930 F.2d
777 (9th Cir. 1991), the Court of Appeals resolved jurisdictional
and choice-of-law issues raised by Exportadora on an appeal
taken from the rulings of the District Court. In its opinion, the
Court of Appeals set out the underlying facts leading up to the
present litigation with clarity and precision, and I quote:
= v00018
"Exportadora is a corporation which produces
salt in Mexico. The Mexican government owns
51 percent of the corporation, and the Mitsubishi
Corporation of Japan owns the remainder.
Exportadora maintained an office in San Diego
which communicated with outside parties on
behalf of the Exportadora plant in Guerrero
Negro, Mexico because the plant had no
telephone services. In September 1987, five
relatives of the Plaintiffs traveled from San
Diego to Exportadora’s Guerrero Negro facility.
Exportadora drove them form San Diego to the
Tijuana airport and then flew them from there to
Guerrero Negro on its own airplane. For the
return trip, Exportadora’s plane was unavailable.
It chartered another plane from Aviones de
Sonora, S.A., a Mexican corporation, to fly the
travelers back from Guerrero Negro to Tijuana.
On that flight back, fog at Tijuana necessitated
an instrument landing approach to the Tijuana
airport. Such an approach requires the airplane
to fly into United States air space in order to
land from the west. The plane failed to maintain
a sufficient altitude and crashed short of the
Tijuana airport in United States territory near the
Mexican border, killing all aboard. The
Plaintiffs in this action are the survivors.
The five travelers made the trip to Guerrero
Negro for different purposes. Ramon
Schoenberg and Manuel Hernandez, both
California residents, worked for a pump
manufacturer and traveled to Guerrero Negro to
solicit business. Hideo Omachi, a resident of
Japan, was a purchasing agent for a Japanese
company. Katsuo Sugimoto and Yoshihito
-3- v00014
Kodani, also residents of Japan, were
representatives of Tottori University in Japan
and were visiting an agricultural experiment in
Guerrero Negro adjacent to Exportadora’s salt
production facility.”
(5) Former U.S. District Judge J. Lawrence Irving
entered findings that Exportadora arranged transportation of the
decedents between Guerrero Negro and San Diego and
transported them. On review, the Ninth Circuit held the District
Court did not clearly err in making this finding. Continuing the
opinion, the court held that, quote:
"Exportadora engaged in commercial activity in
arranging transportation for its prospective
business partners, Schoenberg, Hernandez and
Omachi, bringing them to Guerrero Negro
facilitated potential commercial dealings. As for
the university representatives Sugimoto and
Kodani, Exportadora arranged transportation for
them at the behest of its majority stockholder,
the Mexican government. Appeasing one’s
majority stockholder is an activity that a private
entity can perform and benefits future
commercial dealings in other contexts by
maintaining good will.”
(6) The District Court also found that Exportadora
maintained a regular air and auto link between its San Diego and
Guerrero Negro offices as part of its commercial operations,
that it arranged through its San Diego office round-trip
transportation for the decedents from San Diego to Guerrero
Negro and that all five decedents began their trips to Guerrero
Negro in San Diego.
On review, the Court of Appeals upheld findings
of the District Court. Moreover, the court upheld the
conclusion of the District Court, and I quote:
- LVOOLY
"Given these findings, the District Court
correctly concluded that the relevant activity was
the round trip. The decedents did not make
arrangements for legs of the trips separately.
They made round-trip arrangements through the
San Diego office at the outset, so we consider
the arranged travel as a whole."
(7) At the beginning of the present trial, I addressed the
findings of the District Court that had been reviewed by the
Court of Appeals. Exportadora had at the outset of trial
suggested those findings need not and should not be accepted as
the law of the case. In my ruling, which I placed of record on
January 13, 1993, I noted that, in order to determine the
underlying jurisdictional issues, it had been necessary for the
Court of Appeals to review the findings; that is, unless those
findings were to be accepted, the jurisdictional issues could not
be resolved by the Court of Appeals.
The transcript of my ruling contains an error and should
be corrected to state that the decisions of the Court of Appeals
on Exportadora’s immunity claim are not subject to review in
this court. I ruled that the factual findings accepted by the
Court of Appeals must be followed in this court. I then went on
to decide to what extent the findings upon which the Court of
Appeals had relied were binding on trial in this court.
I held that it was clear that the Court of Appeals
had accepted the earlier findings in the District Court but
expressed no opinion as to the tort consequences of those
findings. While the legal consequences of findings
had been resolved by the Court of Appeals on the jurisdictional
issue, the extent to which those findings have tort consequences
remain an issue to be resolved at the trial. Nevertheless, as it
developed, a great deal of evidence has been presented relating
to the earlier findings of the District Court.
(8) Tottori University in Hamasaka, Japan had for some
years prior to September 30, 1987 been involved in an
agricultural project located at Guerrero Negro, Baja California,
5- LUO0016
Mexico. Exportadora’s production facilities and plant are
located in Guerrero Negro. The company maintained an office
in Mexico City and, from 1974 to 1991, had an office in San
Diego. On September 30, 1987, the manager of Exportadora’s
San Diego office was Manuel Guzman.
(9) In 1987, no regularly scheduled commercial airline
operated between San Diego and Guerrero Negro, Baja
California. The direct distance between the two cities is
approximately 312 nautical miles. Transportation between San
Diego and Guerrero Negro was by motor vehicle or by aircraft.
Travel by motor vehicle from Tijuana to Guerrero Negro
required nine hours. Exportadora operated a corporate jet
aircraft which often undertook round trips from Guerrero
Negro, where Exportadora maintained an aircraft hangar, to
Tijuana on Mondays, Wednesdays and Fridays. Exportadora
employed a pilot and copilot to fly its corporate aircraft, the
Westwind.
(10) Transportation aboard the Westwind had to be
approved by management or the directors of Exportadora. The
Westwind was not offered for public use. Travel aboard the
aircraft was limited to company directors, officers or employees
and their dependents or other passengers for whom permission
had been granted by Exportadora. Included among these
passengers were business visitors, vendors and other invitees.
When the Westwind was not available for a scheduled
flight, Exportadora entered into charter agreements with one of
several licensed air taxi operators who provided an airplane and
pilots for the charter.
(11) During the relevant time period in 1987, Mr.
Matsushita of Mitsubishi’s Tokyo office submitted requests or
offers on behalf of Japanese visitors who desired to visit
Guerrero Negro. In making arrangements for Japanese visitors
to Guerrero Negro, Matsushita often communicated with Juan
Luna who served in the administrative department of
Exportadora in Mexico City.
On other occasions, Matsushita went directly to the top
management of Exportadora to arrange a visit for the
/
v00017
_—
representative of a company whose business might be important
to Exportadora.
(12) An exchange of telex communications between
Luna and Matsushita in June of 1987 defined the program for
the Tottori agricultural project in the latter part of 1987. On
June 23rd, Luna sent a telex to Matsushita confirming travel on
the company aircraft and reservations at San Diego and
Guerrero Negro for Doctor Takeuchi and Doctor Toyama.
Luna requested more information on the agenda and
work program involving the agricultural project and any
documents that would support the visit of the two professors.
The following day, June 24, Matsushita responded to
Luna’s request for additional information. At the time
Matsushita notified Doctor Takeuchi that travel and reservations
had been arranged, Matsushita obtained from Doctor Takeuchi a
brief outline of the planned program for the agricultural project.
According to Matsushita, Dr. Takeuchi planned to remain at
Guerrero Negro from the end of August until early December
1987.
Two other professors planned to stay at Guerrero Negro
about three months, and several other professors would visit
from time to time for about a week. The theme of the
experiment planned for August to December 1987 included:
(1) Vegetable cultivation using water-holding
substances.
(2) Study about salt accumulations on the
surface of the ground.
In addition, Doctor Takeuchi planned to discuss with
Exportadora the future of the agricultural field at Guerrero
Negro inciuding the possibility of another project.
(13) Matsushita continued to inform Exportadora of the
names and travel itineraries of professors who were to visit the
agricultural project at Guerrero Negro. He sent a telex to Luna
on September 18 indicating that two professors of Tottori
University, Doctor Katsuo Sugimoto and Doctor Yoshihito
cVO01LS
Kodani, were expected to visit the project.
Matsushita requested that Luna arrange transportation
between San Diego and Guerrero Negro for the two professors
by pickup truck or company plane leaving on Wednesday,
September 23rd and returning on Thursday, October Ist, with
hotel reservations in San Diego and accommodations at Guerrero
Negro. Matsushita also informed Luna of the scheduled arrival
time of Doctor Sugimoto and Doctor Kodani at San Diego.
(14) The two professors, Doctor Sugimoto and Doctor
Kodani, were met at Lindbergh Field in San Diego on
September 22nd by Mikiko Izumi. She had previously met
Doctor Sugimoto in 1986 when he visited the agricultural
project at Guerrero Negro. On that occasion, she took Doctor
Sugimoto to a bus terminal in Tijuana to catch a bus traveling
overnight to Guerrero Negro.
When she met Doctor Sugimoto and Doctor Kodani on
September 22, she arranged to put them up at the Executive
Hotel and that evening had dinner with them. The expenses
were borne by Exportadora.
On the following morning, Wednesday, September 23rd,
they were taken to Tijuana airport by the company van and
boarded the Westwind for the flight to Guerrero Negro.
(15) Matsushita sent a telex on September 4, 1987 to
the attention of the manager of Exportadora, Manuel Millan,
concerning a request by Omachi to visit Exportadora’s salt field
at Guerrero Negro. Matsushita informed Millan that Omachi
was the new manager of the raw material section of Asahi
Chemical and that one of Omachi’s areas of responsibility was
the purchase of raw salt. He went on to say that Asahi
Chemical is one of the most important customers for
Mitsubishi’s Mexican salt business.
_ Matsushita provided Omachi’s proposed itinerary which
provided that Omachi depart San Diego from Guerrero Negro
on September 28, return from Guerrero Negro to San Diego on
September 30 and on to Los Angeles with departure from Los
Angeles en route to Japan at 12:50 p.m. on September 30th.
v00019
Matsushita sent a second telex to Millan on September 7
stating that Asahi Chemical and Omachi were awaiting Millan’s
confirmation for the visit to Guerrero Negro. Matsushita also
noted that Omachi was very anxious because he was being
pushed by his boss to finalize his business trip as soon as
possible.
The next day, September 8th, Matsushita sent a telex to
Millan thanking him for confirming Omachi’s visit to
Exportadora’s plant. Once again, Matsushita stressed that
Omachi had authority over salt purchases and that Asahi
Chemical was a major customer.
Matsushita requested that Millan instruct his staff to
make certain Omachi was given a good impression of
Exportadora’s salt. Finally, Matsushita sent yet another telex
concerning Omachi’s visit to Juan Bremer, Exportadora’s
subdirector of produ ion at Guerrero Negro, Mr: Shinohara, a
Mitsubishi representative and assistant to Exportadora’s co-
manager, and Isamu Hina at Guerrero Negro. Matsushita
summed up his telex by saying, "We hope that your beautiful
explanation and arrangements will charm him very much."
(16) Mr. Omachi was met-at Lindbergh Field in San
Diego on September 27, 1987 by an employee of Baja Bulk
Carrier, S.A., a company associated with Exportadora.
Arrangements had been made to put Omachi up for the night at
the Westgate Hotel in San Diego. On the morning of September
28, Mr. Omachi was taken in Exportadora’s van from San
Diego to Tijuana airport where he boarded the Westwind for the
flight to Guerrero Negro.
(17) Matsushita was employed by Mitsubishi in its
Tokyo office at all times relevant to this litigation.
Documentary evidence, including telex communications as well
as the testimony of witnesses, establish that Matsushita was
authorized on behalf of Exportadora at all times between June
and September 1986 to conduct negotiations with Japanese
representatives such as Mr. Omachi of Asahi Chemical and
Doctor Sugimoto and Doctor Kodani of Tottori University for
visits to the Exportadora facilities at Guerrero Negro.
9- 00020
(18) Matsushita received offers or requests by business
representatives such as Omachi or the Tottori University
professor to travel from Japan by way of San Diego to Guerrero
Negro, Baja California to visit Exportadora’s facilities. He was
authorized by Exportadora to offer accommodations to approved
visitors at San Diego and Guerrero Negro as well as
transportation, all at Exportadora’s expense, from San Diego to
Guerrero Negro and return.
(19) On the record there is little evidence of the actual
communications between Matsushita acting for Exportadora or
on Exportadora’s behalf and Mr. Omachi or the Tottori
professors, Doctor Sugimoto and Doctor Kodani.
The three visitors were killed in the aircraft accident of
September 30, 1987. Matsushita’s testimony, either by way of
deposition or otherwise, was not offered at trial. In addition,
the records are not complete. It cannot now be determined
whether the Japanese visitors submitted requests or made
definite offers including all of the terms and conditions of the
visits to Guerrero Negro. There is, however, ample evidence
provided by the documents and in the testimony of witnesses to
establish the basic terms and conditions of the agreement arrived
at between Exportadora and Mr. Omachi and between
Exportadora and Professors Sugimoto and Kodani.
(20) Mr. Omachi was to arrive at San Diego on
September 27th. He was met by a representative of Baja Bulk,
S.A. and put up overnight at the Westgate Hotel in San Diego.
Exportadora arranged transportation for him by company van
and airplane from San Diego to Guerrero Negro on September
28th and for his return from Guerrero Negro to San Diego on
September 30th.
(21) Professors Sugimoto and Kodani were met on
September 22nd at Lindbergh Field by Exportadora’s
representative, Mikiko Izumi. She arranged their
accommodations at the Executive Hotel, San Diego and on the
following day, September 23rd, transportation was provided by
Exportadora’s van to Tijuana airport where the two professors
boarded the Westwind for Guerrero Negro. They were
-10- vvood21
———————————————————————
scheduled to return to Tijuana by air on September 30th.
(22) All accommodations at San Diego and at Guerrero
Negro for the three Japanese visitors were arranged by
Exportadora. The transportation from San Diego to Guerrero
Negro and the return to San Diego was entirely arranged by
Exportadora. The three Japanese visitors took no part in
making arrangements for accommodations in San Diego or
Guerrero Negro, nor did they take any part in making the
arrangements for travel between San Diego to Guerrero Negro
and return to San Diego.
(23) In making the arrangements, Exportadora
undertook to accommodate the travel arrangements of the three
Japanese visitors, from the time of their arrival in San Diego
until the return of the visitors to San Diego. The early-morning
departure of the charter aircraft from Guerrero Negro to Tijuana
on September 30 was arranged by Exportadora to meet the
travel requirements of Mr. Omachi in order to return him to
San Diego in time for him to proceed on to Los Angeles to
make his scheduled departure from Los Angeles at 12:50 p.m.
(24) As the Ninth Circuit held in Schoenberg vs,
Exportadora, the transportation of Mr. Omachi and Professors
Sugimoto and Kodani from San Diego to Guerrero Negro and
return was in the nature of commercial transactions. In
exchange for its agreement to provide Omachi’s
accommodations and transportation, Exportadora received
consideration in the form of potential commercial dealings.
In return for providing accommodations and
transportation to Professors Sugimoto and Kodani, Exportadora
received consideration by way of future commercial dealings in
other contexts.
(25) In July of 1987, Carmen Chavez Frazier, at the
direction of Manuel Guzman, manager of Exportadora’s San
Diego office, sent a telex to Juan Bremer, advising him that two
technicians from Berkeley Pump Company desired to visit
Guerrero Negro for the purpose of providing information to
Exportadora employees on the use of Berkeley Pump products.
Exportadora was at that time a major customer of Berkeley
Ai- v0O0022
Pump. -On September 10th, Chavez sent another telex to
Bremer’s attention stating that two technicians from Berkeley
Pump were interested in visiting Guerrero Negro to offer
technical recommendations on use of Berkeley pumps at
Exportadora’s plant.
Finally, on September 18th, Bremer responded by telex
granting permission for the two technicians to arrive on
Monday, September 28 and to return to San Diego on
Wednesday, September 30. Chavez sent a telex to Bremer on
September 22nd confirming the arrangements. The two
technicians, Schoenberg and Hernandez, left San Diego aboard
the Westwind on September 28th.
(26) Ms. Peregrino, an attorney in the administrative
office of Exportadora, was authorized to schedule the company
aircraft, Westwind, and to obtain charters of air taxi companies
if the Westwind should not be available because of maintenance
or for other reasons.
Peregrino caused schedules to be prepared including lists
of passengers to be carried on the Westwind or on chartered
flights by air taxi companies. The passenger schedules were
published each week for the upcoming two-week period.
(27) Enrique Achoy was in charge of the guest house
and dining facilities of Exportadora and, when authorized or
instructed by Peregrino, arranged with air taxi companies to
obtain an aircraft of sufficient size to carry scheduled
passengers.
(28) The names of Doctor Sugimoto and Doctor Kodani
appear on the schedule published for the weeks of September
20th and September 27th. They were scheduled to arrive at
Guerrero Negro from Tijuana on Wednesday, September 23rd.
On the same schedule, arriving on Monday, September 28th
from Tijuana to Guerrero Negro, were the two Berkeley Pump
technicians, Mr. Schoenberg and Mr. Hernandez.
(29) Mr. Omachi’s name did not appear on the schedules
for September 20th but did appear on the schedules published
for the weeks of September 27th and October 4th. According to
those schedules, he was to arrive from Tijuana on September
-12- 00028
28th.
(30) The five passengers listed for departure from
Guerrero Negro on September 30th were Doctor Sugimoto,
Doctor Kodani, Mr. Omachi, Mr. Hernandez and Mr.
Schoenberg.
(31) The Westwind was not available for the flight
scheduled from Guerrero Negro to Tijuana and return on
September 30th. A directors’ meeting had been arranged in
Mexico City, and the Westwind was committed to provide air
transportation for Exportadora’s executives.
Peregrino authorized Achoy to obtain a charter of an air
taxi company to carry the scheduled passengers from Guerrero
Negro to Tijuana airport.
(32) For several years prior to September 30, 1987,
Exportadora arranged charters with several air taxi companies
on those occasions when the Westwind was not available. One
of the air taxi companies frequently chartered by Exportadora
was Aviones de Sonora. The records of Exportadora disclose
that Aviones charters often carried corporate directors and
officers and their wives and children.
Exportadora assumed the expenses for the charter and
made no charge to the passengers. In short, the transportation
of Exportadora’s personnel and their dependents or of business
visitors on charter flights was on the same basis as flights made
aboard the corporate aircraft, Westwind.
Until the accident of September 30, 1987, Aviones had
provided Exportadora with safe and reliable air service on
charter flights between Guerrero Negro and Tijuana and return.
(33) Achoy, upon being notified by Peregrino that the
Westwind would not be available to carry the scheduled
passengers from Guerrero Negro to Tijuana and return to
Guerrero Negro on September 30th, undertook to charter an
aircraft capable of carrying the number of passengers listed on
the schedule. Five passengers had been scheduled to depart
Guerrero Negro for Tijuana on that date and, on the return
flight to Guerrero Negro, two passengers had been scheduled.
(34) Achoy made his selection of an air taxi company
-13- uVO024
on the number of passengers to be carried and upon the
availability of the company to furnish an aircraft capable of
carrying the number of scheduled passengers.
Early in the afternoon of September 29th, Achoy
obtained a charter from Aviones. Exportadora, by selecting
Aviones, provided a licensed, qualified and fully competent air
taxi operator. Exportadora was entirely responsible for the
selection of Aviones, the passengers including the Japanese
visitors and had nothing to do with arranging the charter.
Achoy was aware that Mr. Omachi needed an early departure
from Guerrero Negro in order to make his scheduled flight out
of San Diego for Japan.
Achoy requested that the Aviones aircraft be flown from
Hermosillo to Guerrero Negro on September 29 to be available
for early-morning departure on September 30th.
(35) Pilot Raul Gutierrez Tellez was selected by
Aviones to undertake the flight. Neither Achoy nor anyone else
from Exportadora participated in selection of the pilot. Rather,
the selection of the aircraft and the pilot rested in the hands of
Aviones, a licensed and certified air taxi company.
(36) There is sharp conflict among the experts who
were qualified at trial concerning Pilot Gutierrez’ qualifications
to undertake the flight of AKOA on the morning of September
30, 1987. Jack Jaax, a very experienced and expert pilot,
testified for the Plaintiffs. In Jaax’ opinion, Pilot Gutierrez
lacked sufficient instrument or simulator time during the six-
month period immediately prior to the accident to remain
current for an instrument rating or to fly an ILS approach. Jaax
rested his opinion on an examination of the pilot’s log book, the
performance of the pilot in making the flight and the actual
approach of flight XAKOA to runway 09 at Tijuana as well as
the circumstances of the accident.
(37) Experts offered by the Plaintiffs and the
Defendants have relied in part on the pilot’s log book in
reaching their opinions. At trial, Plaintiffs sought to undermine °
the validity of the log book by offering evidence that a page in
the log book containing the validation of the pilot's license and
-14- LVO02Z0
instrument rating dated June 29, 1987 and several of the
following pages were not in the handwriting of the pilot.
Plaintiffs suggest by inference that falsification took
place in order to establish the qualifications of the pilot to fly
XAKOA from Guerrero Negro to Tijuana and return on the
morning of September 30, 1987.
The Defendant, Exportadora concedes that the
handwriting may not be in the writing of the pilot and indeed
Defendant’s expert, Robert Griscom in his testimony observed
that the handwriting in the pilot’s log book may be that of
different persons. He suggested, however, that this fact would
make little difference for, based upon his own experience as a
pilot and as a Federal Aviation Administrator, where he
examined hundreds of pilot logs, he found that entries in pilot
logs were often made by airline companies, secretaries, spouses
and others as well as by the pilot.
(38) At the close of the evidence, Plaintiffs sought to
offer a questioned-document examiner to testify that the
questioned handwriting in Gutierrez’ log book was not the
pilot’s handwriting. I did not accept the evidence offered by the
expert and have placed my reasons on the record.
Although I find that the questioned entries in Gutierrez’
log book were probably not in his handwriting, this in itself
does not prove the entries false, and other evidence supports my
finding that Gutierrez was qualified.
(39) Plaintiffs also offered Richard Taylor who
qualified as an expert pilot to testify to the competency of
Gutierrez as well as to other matters. While Taylor was unable
to say, based upon the regulations for air traffic (Mexico),
whether the pilot qualified for instrument flight, he did concede
that the pilot might have been qualified under the appropriate
regulations.
However, based upon his examination of pilot’s log
book and the performance of the pilot, Taylor expressed his
opinion that the pilot was neither competent nor qualified to
undertake an instrument flight at the time he made the flight
-15- KVOO2b
——
_—
from Guerrero Negro to Tijuana.
(40) Robert Griscom who qualified as an expert pilot
and as an expert accident investigator expressed a contrary view.
In his opinion, Gutierrez was in fact well qualified to operate as
pilot in command of a Cessna 340A. Griscom based his opinion
on a thorough investigation of the pilot’s qualifications.
In the course of his investigation, Griscom learned that
Gutierrez had graduated from the Flying School of Mexico and
had met all requirements for qualifying as a commercial pilot.
In order to qualify for an instrument rating, a pilot is
required to have 40 hours of instrument time. Gutierrez had
accumulated more than 123 hours of instrument time up to the
date of the accident, September 30th.
In order to maintain a current instrument rating, a pilot
must either fly two hours under the hood with a qualified
instructor or have six hours of simulator time within the past six
months.
Although records of pilot revalidation for Aviones were
kept in the office of the Commandante at Hermosillo airport, the
records are maintain! for only one year and are then destroyed.
However, Griscom in the course of his investigation found that
the records of revalidation of the pilot’s commercial licenses and
instrument ratings are also maintained by air taxi companies and
that Gutierrez had obtained a revalidation of his commercial
license and instrument rating on June 29, 1987 validating his
license and ratings until January 31, 1988.
Griscom further determined that Gutierrez did not log
simulator time in his log book and that the handwriting in the
log bouk may be of more than one person.
Finally, Griscom interviewed Commandante Juarez at
Hermosillo airfield concerning Gutierrez’ qualifications as a
pilot.
(41) Griscom’s investigation into pilot Raul Gutierrez
Tellez’ qualifications to operate as pilot in command of a Cessna
340A at the time of flight XAKOA from Guerrero Negro to
Tijuana, September 30th, were detailed, thorough and provided
reliable information upon which to rest his opinions.
-16- JU002?
(42) German Gaytan was qualified as an expert in the
examination and qualification requirements of pilots, air
controllers and aviation technical personnel in Mexico. He has
served as chief examiner of the licensing department in the
General Office of Civil Aviation and in the office of the
Attorney General of Mexico.
To qualify as an air taxi pilot in Mexico, the pilot must
have a commercial pilot license. In order to obtain a
commercial pilot license in Mexico, the pilot must have attended
a flight training school and accumulate 180 hours of flight time.
The pilot of XAKOA on September 30, 1987, Raul Gutierrez
Tellez, had flown 2,623 hours.
A pilot seeking an instrument rating must fly 40 hours
instrument time, and Pilot Gutierrez had flown 123.5 hours of
instrument time.
To be qualified for a multi-engine rating, the pilot must
fly 10 hours and Pilot Gutierrez had flown 2,079 hours.
Gaytan, who as chief examiner first issued a pilot’s license to
Gutierrez, reviewed the records maintained by the General
Office of Civil Aviation and Gutierrez’ log book.
On the basis of his investigation, Gaytan found that
Gutierrez’ commercial pilot license and instrument rating had
been revalidated on June 29, 1987 and were valid until January
31, 1988. Review by Gaytan of the General Office records
revealed that Pilot Gutierrez had no accidents and no recorded
reprimands or other disciplinary action taken against him prior
to the fatal accident on September 30, 1987.
(43) Gaytan made a careful and thorough inquiry into
the records available to him at the Department of Civil
Aeronautics and his testimony was credible and reliable. Pilot
Gutierrez at the time of the flight of XAKOA from Guerrero
Negro to Tijuana on September 30, 1987 was a qualified pilot
for the flight, and his commercial pilot license had been
revalidated June 29, 1987 and was current. His instrument
rating had been revalidated prior to the flight and would have
been valid until January 31, 1988.
(44) Richard Taylor examined the appropriate
17 LV0028
regulations for air traffic (Mexico) to determine the
requirements for a copilot on charter flights by an air taxi
company. The regulations do not require copilots on aircraft of
less than 12,500 pounds if the aircraft carries certain instruments
Or equipment including an autopilot. He was aware that
XAKOA was equipped with an autopilot. However, without
additional information, he could not say if the flight of XAKOA
on September 30th was in violation of the regulations requiring
a copilot.
(45) In Robert Griscom’s opinion, no copilot was
required for the flight of XAKOA from Guerrero Negro to
Tijuana on September 30th. Based on his examination of
Article 132(b) of the regulations for air traffic (Mexico), he
expressed his opinion that XAKOA carried the necessary
navigational equipment including an autopilot.
He also stated it was the practice or custom to qualify
pilots for operation of the autopilot at the time a pilot prepared
for revalidation of their licenses and instrument ratings.
German Gaytan who had reviewed the official records and pilot
log of Raul Gutierrez Tellez found that, at the time of departure
of XAKOA from Guerrero Negro on the morning of September
30th, the instruments and other navigational equipment installed
in the aircraft and the qualifications of Pilot Raul Gutierrez
Tellez allowed the flight from Guerrero Negro to Tijuana to be
conducted under the controlling regulations, Article 134(b)(II),
Mexican Air Regulations, without a copilot.
(46) I find that the instruments and other navigational
equipment installed on the aircraft and the qualifications of the
pilot, Raul Gutierrez Tellez permitted the flight of XAKOA to
be conducted without a copilot in full compliance with the
controlling Mexican air traffic regulations.
Immediately prior to the time of departure, XAKOA
shortly after 6:00 a.m. on the morning of September 30, 1987,
Pilot Gutierrez would fiave had available to him terminal
weather and airway reports for a flight to Tijuana. Access to
Tijuana airport weather could be obtained at that time by pilots
24 hours a day by telephone call to government-maintained
00029
-18-
facilities at Mazatlan.
(47) Following Gutierrez’ arrival at Guerrero Negro,
Enrique Achoy took the pilot to Exportadora’s guest quarters to
provide overnight accommodations for him. As they entered the
dining room, Achoy observed a group of Japanese at dinner.
The group included Doctor Sugimoto, Doctor Kodani, Mr.
Omachi, Mr. Hina and probably Doctor Takeuchi.
Achoy did not speak Japanese but spoke in either
Spanish or English to Mr. Hina or Doctor Takeuchi. Achoy
introduced Gutierrez saying that he would be their pilot for the
flight on the next day.
The departure of the flight from Guerrero Negro to
Tijuana had been originally scheduled at 7:00 a.m. The
Westwind would have been able to make the flight in
approximately one hour and, upon departure at 7:00 a.m.,
would arrive at Tijuana by 8:00 a.m., but the Cessna 340A
furnished by Aviones was a turbo-driven propeller aircraft and
required two hours to make the flight.
Gutierrez, when he learned that Omachi needed to arrive
at Tijuana at 8:00 a.m., informed Achoy that the departure of
XAKOA should be at 6:00 a.m.
Hina then informed Mr. Omachi, Doctor Sugimoto and
Doctor Kodani that departure of the flight was scheduled for
6:00 a.m.
Achoy also told Gutierrez that, if conditions were not
right in Tijuana airport, the pilot could proceed to Mexicali.
(48) Jose Blanco, the supervisor of salt production for
Exportadora at Guerrero Negro, informed Schoenberg and
Hernandez on the evening of September 29 that the aircraft was
leaving very early the next morning because a Japanese
passenger had to arrive at Tijuana in order to make a flight
connection.
(49) Exportadora scheduled the flight to depart so that
Omachi could meet his travel arrangements beyond San Diego.
But the decision to make the flight and fuil control of the
aircraft during the flight rested with Pilot Raul Gutierrez Tellez.
-19- vUOO80
Insofar as Exportadora was concerned, Aviones was an
independent contractor responsible for the selection of a
competent, qualified pilot and a suitably, properly maintained
aircraft. But the transportation of the passengers by Aviones
from Guerrero Negro to Tijuana was on behalf of Exportadora
in discharge of Exportadora’s obligation to the scheduled
passengers. The Aviones pilot and aircraft was nothing more
than a substitution for Exportadora’s pilot and the Westwind,
and the obligation to return the passengers from Guerrero Negro
to San Diego remained with Exportadora.
(50) Shortly after 6:00 a.m. on September 30, 1987,
the five passengers boarded XAKOA for the flight to Tijuana.
Prior to boarding, the pilot weighed the baggage of each
passenger. Victor Garcia, employed in the San Diego office of
Exportadora, estimated mail bags from Guerrero Negro weighed
five to seven pounds, although heavier loads might be taken in
mail bags from Tijuana to Guerrero Negro.
It has been suggested by Plaintiffs that XAKOA may
have been overloaded at the time of departure. Evidence related
to the takeoff weight of the aircraft fails to prove that XAKOA
was overloaded. No expert who testified as to the cause of the
accident has formed an opinion that improper overloading of
XAKOA was the cause of the accident.
I find that the Plaintiffs have failed to prove that
XAKOA was eitlier improperly loaded or overloaded for the
flight from Guerrero Negro to Tijuana airport on September 30,
1987.
(51) Plaintiffs offered evidence suggesting that
Exportadora caused the departure of XAKOA from Guerrero
Negro to Tijuana when Tijuana airfield was below IFR
conditions thereby causing the aircraft to make an approach to
Tijuana airport when the airfield was below IFR minimums or
had zero visibility.
Exportadora scheduled the flight of XAKOA to
accommodate Omachi’s travel schedule. The evidence is
conflicting on whether Gutierrez filed an IFR flight plan.
(52) Robert Griscom, the expert pilot and accident
-20- sVOO3L
ZZ
investigator, expressed an opinion that Gutierrez filed an IFR
flight plan designating Mexicali as an alternate airport. He
rested this opinion upon his investigation in which he learned of
the altitude flown by the pilot en route to Tijuana. The altitude
flown by the pilot, Gutierrez from Guerrero Negro to Tijuana
would have been inappropriate for VFR flight.
(53) Richard Taylor, a pilot expert for Plaintiffs, noted
that the preliminary report of the NTSB reported that an IFR
flight plan had been filed for the flight of XAKOA to Tijuana
the morning of September 30th. However, in the final NTSB
report, Taylor noted that the appropriate entry for an IFR flight
had not been entered in the report and believed that the NTSB
investigator, Wahl, found a lack of sufficient information.
I find the evidence given by Robert Griscom to be
credible and reliable on this point. It is more probable than not
that Pilot Gutierrez filed an IFR flight plan prior to departing
Guerrero Negro for Tijuana and that Gutierrez did so based on
whatever information may have been available to him prior to
departure of XAKOA from Guerrero Negro.
(54) After XAKOA departed for Tijuana airport, Achoy
sent a telex advising Guzman at San Diego of the departure
time. He backdated the telex to September 29.
(55) The two expert pilots who testified on behalf of the
Plaintiffs as to the cause of the accident on September 30, 1987,
Jaax and Taylor, were of the opinion that adequate fuel was on
board XAKOA at the time Pilot Gutierrez made the approach to
runway 09 at Tijuana.
(56) William Ross, who was qualified by the Plaintiffs
as an expert aircraft accident investigator, expressed his opinion
that at the time of impact the aircraft was neither at stall speed
nor low power setting.
(S7) But Plaintiffs also called a number of witnesses
who testified they were unable to detect the odor of fuel at the
time those witnesses were at the site of the wreckage September
30, 1987.
Among the witnesses who did not detect the odor of fuel
Or any signs of fuel spillage were James Evans, Jesus Cesena,
21- FVOO38Z
CL
Terrance Baird, William Johnson and Carl Eklund.
(58) Several witnesses testified that shortly before the
accident they heard an aircraft which they believed to have been
the aircraft that was involved in the accident and that the engines
of the aircraft sounded similar to engines running out of fuel or
not normally operating.
These witnesses also presented by Plaintiffs included
Juanita Reyes, Francisco Figueroa and Salvador Cervantes.
Finally, in an affidavit filed by Plaintiffs’ attorney,
Robin Foor, May 1, 1989, he stated, based on his personal
knowledge, that a defective condition in the Cessna 340A caused
a fuel leak which may have caused or contributed to the crash.
(59) Enrique Achoy, after the arrival of XAKOA on
September 29, 1987 at Guerrero Negro from Hermosillo, asked
Gutierrez whether the pilot had fuel for the flight. Gutierrez
responded that he had.
William Ross, who arrived at the site of the wreckage
on October Ist, examined the remaining wreckage of XAKOA.
Much of the wreckage of the aircraft had by then been carried
away since the NTSB investigator had failed to arrange for
guards or other law enforcement protection overnight at the site
of the crash.
Ross, however, was able to examine the remains of the
fuselage of XAKOA and detected the odor of fuel in the
upholstery. Ross was also able to examine photographs of the
wreckage taken on September 30th including a wing-tip fuel
tank. He found that a wing-tip tank had bulged forward from
fuel pressure at the time of impact. In his opinion, the fuel then
vaporized into the atmosphere. The fuel lines were torn and
retained no fuel.
(60) The witnesses who believed that they heard the
engines of the aircraft running out of fuel were not operating
normally were, I find, not reliable witnesses concerning the
condition of the engines or the fuel state of XAKOA shortly
before impact.
(61) Neither the tape, Exhibit YYY, or transcript,
Exhibit WW, indicate any communication between the pilot and
4. GUVO0388
the air controller having to do with low fuel state or engine
malfunction. The pilot on several occasions in his
communications with the air controller indicated that he was
considering an alternate field. It is highly improbable that the
pilot would consider an alternate field in the event of engine
malfunction or exhausted or low fuel state.
(62) The testimony of the pilot experts called by the
Plaintiffs and of the expert aircraft accident investigator, Ross
are credible, and their opinions having to do with fuel
exhaustion and power settings at the time of impact are reliable.
The impact of XAKOA on the hillside on the approach
of the aircraft to runway 09, Tijuana airport, was not caused by
fuel exhaustion or from lack of fuel aboard the aircraft on the
morning of September 30, !987.
(63) The opinions offered by the experts are in sharp
conflict on the cause of the accident. Plaintiffs’ pilot experts are
of the opinion that Raul Gutierrez Tellez was neither competent
nor qualified to make the flight from Guerrero Negro to Tijuana
on the morning of September 30, 1987 and in their opinion the
cause of the accident was due to errors on the part of the pilot.
On the other hand, Defense expert Griscom is of the
Opinion that the cause of the accident can never be known
because of the removal of the wreckage of the aircraft from the
site of the accident during the evening of September 30th and
the morning of October Ist.
Defendants’ expert is also of the opinion that the air
controller at Tijuana airport had taken full control of the
approach made by the pilot to runway 09 and, under the
circumstances then existing, contributed to cause the accident.
(64) Richard Taylor, a pilot expert qualified by the
Plaintiffs, was of the opinion that Pilot Raul Gutierrez Tellez
was neither qualified nor competent to make the flight from
Guerrero Negro to Tijuana on September 30th. He based his
opinion regarding the pilot’s qualification on the pilot’s log
book. I have earlier made findings that the pilot was fully
qualified to fly an IFR approach to runway 09 on September
-23- wUOR84
30th.
(65) In Taylor’s opinion, Pilot Raul Gutierrez Tellez
demonstrated his lack of competence by not ascertaining the
weather for the flight he was about to undertake, by attempting
an approach under conditions of zero visibility and by failing to
follow the proner glide slope to the runway.
In eat: «¢ findings, I found that Pilot Gutierrez probably
filed an IFR flight plan based on information available to him at
Guerrero Negro.
Taylor’s opinion that the pilot attempted an approach to
runway 09 under zero visibility rested upon his belief that the
pilot received information thai zero visibility existed at Tijuana
airport at the time the pilot made his first contact with the
Tijuana air controller, some 50 miles away from the airport.
According to Taylor, he was able to make out on the
tape, YYY, the Spanish words for zero visibility. The tape
itself was obtained from Plaintiffs’ attorney, Robin Foor after
Robert Griscom requested a copy.
According to Griscom, he was told by Foor, and I
quote, "It’s the best we have."
Tape, Exhibit YYY, was transcribed and, upon
examination of the transcript, Exhibit WW by qualified
interpreters and following an evidentiary hearing was received
into evidence as having been sufficiently authenticated and
reliable.
(66) Taylor statement that the words “zero visibility"
appear on the tape is not supported by the evidence. I find that
the section of the tape where Taylor is said to have the words
"zero visibility” is too garbled to understand on both the
enhanced and unenhanced versions.
Several expert translators retained by the parties have
been unable to discern the Spanish phrase for "zero visibility"
on either tape. Those words are not on the tapes.
(67) At trial, Plaintiffs offered another version of a
transcript, sometimes referred to as the "SENEAM" transcript.
That transcript does contain a communication from the air
controller to the pilot of XAKOA that Tijuana has zero
-24- LUVO080
visibility. Gaytan was able to examine some of the records
during his investigation into the pilot's qualifications and the
maintenance and inspection of Aviones air taxi operations. But
when Gaytan requested the file relating to the official
investigation of the crash of XAKOA by the Mexican
government, the records were withheld from him by the agency
having custody of the documents.
But Gaytan had reviewed the transcript designated as
identification 13, referred to as the "SENEAM*" transcript after
it had been provided to Defense Counsel by Plaintiffs several
days before Gaytan’s deposition of January 31, 1992.
Gaytan was unable to authenticate the transcript as a part
of the official record of the investigation by Mexican authorities
into the accident, nor was he able to obtain access to the original
tape of the communications between the air controller at Tijuana
airport and the pilot of XAKOA shortly before the accident.
While he said at his deposition that the air controller at
Tijuana airport had provided the pilot with weather information
and received information that the field was closed, Gaytan
explained at trial that those statements were entirely based upon
his review of the "SENEAM" transcript.
(68) After Gaytan examined the transcript, Exhibit
WW, prepared from the tape, Exhibit YYY, furnished by
Plaintiffs’ counsel, Gaytan changed the opinion expressed by
him at the deposition and believed at the time he testified during
the trial that the air controller did not inform Pilot Gutierrez of
weather conditions at Tijuana or that the airport was closed.
Although Gaytan has attempted to obtain additional
information relating to the recorded conversations from the
government agencies in Mexico, he has been unable to do so.
Following an evidentiary hearing, I found that the
"SENEAM*" transcript had not been sufficiently authenticated to
be received into evidence, and it has not been made an exhibit.
(69) There are other reasons which render it improbable
that Pilot Gutierrez attempted an approach to runway 09
believing that visibility was zero. According to transcript WW,
the controller mentions minimum conditions at the airport,
-25- cU003b
wees :
saying, quote:
"Okay, then...uh...the attempt... uh...where it
would adapt better to the minimums is to the
ILS to the runway 09 with calm wind. Uh...
considering this continue on radial 144 to
execute the arrival codified as Avena two and
the ILS to the runway zero nine."
(70) Earlier, after having been told by the controller
that the airfield was restricted to all operations, Pilot Gutierrez
inquired if the field is closed due to fog with winds. The
controller responds, quote:
"Uh...no, not closed, gentlemen. The airport is
restricted to all type of operations because it’s
[garbled]."
(71) The pilot, Raul Gutierrez Tellez, then indicated his
willingness to proceed to Tecate and at that point the controller
offered Pilot Gutierrez the opportunity to make an attempt with
the controller’s assistance.
(72) At the time that Gutierrez in XAKOA began an
approach to runway 09 at Tijuana airport, the pilot had not been
informed that the visibility on the runways was zero nor that the
field was closed to all operations, but rather the controller,
based on existing weather conditions, informed the pilot that an
ILS approach to runway 09 could be attempted.
(73) Upon reviewing transcript, Exhibit WW, Gaytan
reached the opinion that the approach of XAKOA was a radar
approach under regulations, Sections 3.1 through 3.1.6.1 of Part
III of the regulations for air traffic (Mexico).
According to the regulations, a radar approach may be
provided to any pilot who makes such a request regardless of
weather conditions or to any aircraft in an emergency or in
danger or to expedite traffic. Section 3.1.2.
However, a radar approach does not exempt the pilot
-26- 00037
ieee neaamanneaeaaeimeiliill
from cumpliance with weather minimums prescribed for the
airport. Section 3.1.2.1.
In the event of a radar approach, the controller is
required to provide an altimeter check, ceiling and visibility
information when the reported ceiling is under 1,500 feet and
visibility is less than five miles.
Although Gaytan describes the approach of XAKOA as
a radar approach to runway 09, when closely questioned,
Gaytan explained that the pilot of XAKOA began on a radar
approach to the localizer. But when the pilot captured the
localizer, he then began an ILS approach to the runway.
According to Section 3.2.5, Part III of the regulations
for air traffic (Mexico), during final descent to the airport under
a radar approach, the pilot shall be informed of the distance of
the aircraft from the head of the runway and the recommended
altitude at each nautical mile of final approach. Section
3.2.5().
The pilot is required to notify the controller when he
sees the runway or the approach lights. Section 3.2.5S(c).
But if the approach is conducted under IFR conditions
and the pilot has not given notice that he has the runway or
lights in sight when he has reached one nautical mile from the
head of the runway, the controller shall instruct the pilot
implement a failed approach. Section 3.2.5(b).
(74) Under the regulations for air traffic (Mexico), if a
pilot undertakes an approach, the controller may not prohibit the
approach, but it always remains the pilot’s duty to control the
aircraft in a safe manner.
If the pilot undertakes an ILS approach to a runway, it
is the pilot’s responsibility to execute the approach in a safe
manner and in full accordance with the regulations or to execute
a failed approach.
(75) Griscom testified that he was unable to form an
Opinion on whether pilot negligence was a contributing cause of
the accident. That is so, he stated, because the failure of the
NTSB to document and secure the wreckage of the aircraft
brought about the loss of critical information necessary to a
-27- AO LeLerexe
determination of whether the accident was caused by structural,
mechanical or instrument failure of the aircraft.
According to Griscom, the best evidence would be the
wreckage and, without that, there could be no actual
determination what caused XAKOA to descend below the glide
path and into contact with the terrain. Among the possibilities
that might have been considered, according to Griscom’s
opinion, is induction system icing resulting in impaired engine
performance while the pilot was making an attempt to execute a
failed approach.
(76) Griscom also expressed an opinion that the actions
and corduct of the air controller was a substantial factor in
bringing about the accident. Griscom suggested that, had the air
controller cleared Pilot Gutierrez to an alternate field at
Mexicali, no accident would have happened. However,
according to Griscom, not only did the air controller refuse to
grant the pilot clearance to alternate airports when requested by
the pilot, but the air controller failed to provide the required
visibility or ceiling information, did not declare a failed
approach when required to do so and actually took command of
the approach and required the pilot to make the approach,
misleading the pilot into believing that he was on a radar
surveillance to runway 09.
I find Griscom’s opinion concerning the pilot’s approach
to runway 09 and his evaluation of the air controller’s actions to
be contrary to the underlying evidence.
(77) Transcript, Exhibit WW, does include
conversations between the pilot and the controller relating to
alternate airports. After the controller informed Pilot Gutierrez
that airport operations were restricted to all types of operation at
Tijuana airport, the pilot suggested proceeding to Mexicali.
The controller then suggested Tecate, and at that point
the pilot responded that he was going to see if he could make it
to Tecate.
A moment later, the controller instructed the pilot to
activate 1205 {a frequency) for identification on the radar.
After obtaining XAKOA on radar, the controller
~28- LV0039
provided the pilot with a fix of XAKOA’s position and offered
to provide assistance if the pilot should desire to make an
attempt to Tijuana airport.
Minimum visibility to runway 09 was three quarters of a
mile. The pilot took a reading on the aircraft's DME and
decided to attempt an approach, telling the controller, quote,
"We'll see if we can make one attempt.”
(78) I find that the controller in this instance did not
refuse Pilot Gutierrez clearance to an alternate airport, but
instead offered to assist the pilot in the event that the pilot
wished to make an attempt at Tijuana airport. The pilot at that
point decided to make an attempt.
The controller then provided information to the pilot
with the best approach to the airport in view of the restricted
condition. He advised the pilot under the conditions an ILS
approach to runway 09 was best and provided the pilot with a
designated approach or a pattern to bring the aircraft to point
Alba at the proper altitude of 2,500 feet. See Exhibit XXX.
The pilot confirmed the indicated approach and, at the
request of the controller, announced the aircraft's altitude at the
time.
Shortly thereafter, the pilot reported a failure of the
DME and requested clearance for Tecate. The controller
responded, and I quote,
"I have you now on radar contact. If you wish,
I can give you vectors to the localizer so you
can make the attempt."
The pilot then declared his intention that he would
continue the approach informing the controller, quote, “Okay, if
it’s possible.” I find that the pilot, having informed the
controller of the failure of the DME, was then told by the
controller that he would provide assistance to bring the aircraft
to the localizer if the pilot wished.
The pilot chose this option and decided to proceed with
the attempt. The air controller provided the pilot with a vector
“> uVO040
to the localizer and provided the pilot with information to the
correct altitude. But the air controller also provided the pilot
with instructions in the event of missed approach and in that
event a clearance for Tecate.
(79) The evidence in transcript, Exhibit WW, indicates
that the controller did not take command of the approach;
rather, he provided assistance to the pilot and it was the pilot
who made the decisions to undertake and to continue the
approach. Moreover, the controller provided the pilot with
instructions should the pilot decide to execute a failed approach
and to continue on to Tecate.
(80) The controller continued to assist the pilot to point
Alba and approve descent of XAKOA below 2,500 feet upon
crossing Alba. The controller informed the pilot when the
aircraft was three and a half miles from the head of the runway.
The pilot promptly responded indicating that the altitude
of the aircraft was 1,200 feet.
At that point, the controller informed the pilot that the
runway and approach lights were on. Finally, the controller
informed the pilot that the aircraft was two miles out and the
pilot promptly acknowledged receiving that information.
(81) At 7:56 a.m., XAKOA impacted on the hillside in
line with the approach to runway 09 and all aboard the flight
were instantly killed. Transcript, Exhibit WW, does not
indicate a radar-controlled approach, but rather, because of the
aircraft’s DME failure, that the controller provided the pilot
with information relating to distance from the runway not
otherwise available to the pilot.
(82) Jack Jaax, pilot expert and air charter operator has
experience in both the United States and in Mexico for over 25
years and has accumulated 25,000 hours of flight time. He is
fluent in Spanish and has landed at Tijuana airport many times.
In his opinion, Pilot Gutierrez was making an ILS
approach to runway 09 with surveillance radar assistance. The
proper glide slope on an ILS approach enables a safe path to
landing.
Upon intersecting the localizer, an ILS approach
30- wBO041
Se
provides the pilot with a radio signal as the aircraft follows the
localizer along the flight path.
If the pilot deviates from the center line of the runway,
the instrument indicates the deviation, permitting the pilot to
correct his approach. If the pilot descends below the glide path,
the deviation is indicated on the instrument so that the pilot may
correct to a proper altitude.
A pilot executing an ILS approach must make a decision
at the prescribed altitude for that airport either to continue the
approach if the runway becomes visible or to execute a missed
approach if the pilot at the prescribed altitude is unable to see
the runway.
At Tijuana airport, the prescribed altitude to execute a
missed approach is 786 feet above sea leve! which is 300 feet
above runway 09.
(83) Although the air controller controls aircraft traffic
within restricted zones and in the vicinity of airports, the pilot in
command of an aircraft retains control over the aircraft in flight.
If a pilot is given clearance to execute an approach to an airport,
he is not required to make the approach.
I have earlier noted that the controller at Tijuana airport
informed Pilot Gutierrez that in the case of a missed approach
he was to ascend via radial two four zero, over the cap and
continue on to Tecate.
(84) In Taylor’s opinion, Pilot Gutierrez was not
executing a radar surveillance approach to runway 09 because
the controller did not provide the pilot with instructions to
correct course or of altitude deviations as would necessarily be
done on a radar surveillance approach.
Taylor expressed an opinion that, consistent with an ILS
approach, the controller provided the pilot with vectors to
intersect the localizer and inform the pilot of distances out from
the runway because of the failure of the aircraft DME.
(85) Both Jack Jaax and Richard Taylor agreed in their
opinions that Pilot Gutierrez descended below the proper glide
path during their approach to runway 09 and failed to execute a
missed approach when required to do so.
Bt. vUO042
Jaax and Taylor also agree in their opinions that Pilot
Gutierrez’ failure to properly follow the glide path and to
execute a missed approach.at the prescribed altitude contributed
to cause the accident.
(86) I find that Pilot Gutierrez was making an ILS
approach to runway 09 on the morning of September 30, 1987.
He was not misled by the controller into believing that the
approach was a radar surveillance approach.
During the approach, Pilot Gutierrez descended below
the proper glide path and did not execute a missed approach
when required to do so at the designated altitude of 786 feet
above mean sea level at Tijuana airport.
(87) Robert Griscom has expressed an opinion that the
failure of the NTSB to document and secure the wreckage of
XAKOA precludes any determination of whether the cause of
the accident was due to structural, mechanical or instrument
failure.
(88) William Ross qualified as an expert aircraft
accident investigator. He arrived at the site of the accident
between 8:30 a-m. and 9:00 a.m. on October Ist.
After examining the scene, Ross determined that the
aircraft impacted on a ridge running uphill. The left wing-tip
tank impacted the terrain first. The aircraft continued for a
short distance rotating toward the left. The propeliers and
engines impacted next leaving bits of wreckage strewn on the
hillside.
The main part of the fuselage and wings impacted and
then tumbled down the ridge and partially up a slope. The
fuselage came to rest on the wings which had become detached
following impact, out the right wing was to the left side of the
fuselage and the left wing to the right side.
Ross expressed an opinion that, at the point of impact,
the aircraft was traveling at a speed of 120 to 160 knots. Ross
examined numerous photographs which had been taken on
September 30th before removal of the wreckage from the site.
At the time of impact, landing gear on the aircraft was
up.
0. c00043
Inspection of the photographs revealed that the exhausts were
hot at time of impact; the impeller blades on the turbochargers
indicated both engines were operating.
Propeller blades and propeller hubs shown in the
photographs indicate that both engines were operating at power
settings when impact occurred.
Ross found no evidence of engine failure or other defect
in the aircraft.
(89) Michael Grimes, an accident reconstructionist
employed by Teledyne, testified that his inability to examine the
engines precluded him from determining whether the engines
were operable at the time, and removal of the wreckage impeded
his ability to determine the cause of the accident. I have
considerable doubt whether he made an effort to determine the
condition of the engines at the time of the accident or to
undertake any investigation into its causes.
Ross readily conceded that the removal of wreckage
during the night of September 30th and before 8:30 a.m.
October Ist hampered his investigation and determination of the
cause of the accident.
(90) However, Ross found enough evidence in his
examination of the site that he was satisfied with his opinions,
and most of the questions which he had entertained were
resolved.
In his opinion, the engines revealed signs of power and
high rotation. William Ross was a reliable and credible witness,
and I find that the accident of September 30th was not caused by
engine defect or failure.
(91) Nor do I find any probability of structural defect
since winds were calm at Tijuana airport and the vicinity was
shrouded with fog.
The pilot reported the aircraft DME not functioning, but
there’s nothing in the evidence otherwise indicating instrument
malfunction.
(92) Nor is there anything in the pilot’s communication
with the air controller to indicate engine malfunction. To the
contrary, the pilot indicated his readiness to proceed to an
-33- vU0044
alternate airport while he was well into the approach of runway
09 at Tijuana airport. The inference is that the aircraft was not
malfunctioning or was operating on a low fuel state.
(93) I find, based upon all the evidence, the probable
cause of the accident to be negligence on the part of Raul
Gutierrez Tellez who, as pilot of XAKOA, descended below the
proper glide path while making an ILS approach to runway 09,
Tijuana airport, on the morning of September 30, 1987.
I find that the pilot failed to execute a missed approach
as required when the aircraft reached the designated altitude of
786 feet above mean sea level at Tijuana airport.
Both of these errors on the part of the pilot amounted to
negligence and both caused and together contributed to cause the
accident and to the death of the passengers and the pilot on
September 30th, 1987.
CONCLUSIONS OF LAW ON LIABILITY
(94) California tort and contract law determines
Exportadora’s liability in this case. Schoenberg vs.
Exportadora, 930 F.2d 777, 783-84 (9th Cir. 1991).
Plaintiffs have made a claim that the agreement between
Exportadora and the decedents involved an implied contract for
non-negligent transportation. Defendants argue that this claim is
not properly at issue in this case.
By order dated November 9th, 1992, United States
District Judge John S. Rhoades ruled that Plaintiffs’ motion to
amend the complaint for the sixth time was unnecessary because
the amendment did not state new causes of action but merely
different theories under the same causes of actions. Judge
Rhoades ruled, and I quote,
"Of the theories listed in the proposed sixth
amended complaint, the only ground that is
arguably new is that of implied contract. This
approach, however, is merely one more theory
for holding Defendants directly liable.
-34- cUlV045
Additional discovery and amendment of the
complaint is thus unnecessary, and the implied
contract theory of liability may be addressed at
trial at the discretion of the trial judge."
(95) At trial, I have allowed evidence having to do with
negotiations and conduct of the parties relating to Plaintiffs’
contract claims. The parties have fully briefed legal issues of
implied contract in pretrial and post-trial briefs.
I conclude that the contract claims have properly been
brought before the Court in this case and, if necessary, I would
allow a motion to amend the complaint to conform to the proof.
(96) Plaintiffs may have suggested at some earlier time
that Exportadora operated as a common carrier in transporting
the decedents. But I conclude that Exportadora acted as a
contract or corporate carrier held to a standard of ordinary care.
A common carrier under California law is, quote,
"...one who offers to the general public to carry
goods or person and is bound to accept anyone
who tenders the price of carriage." Webster vs.
Ebright, 3 Cal.App.4th 784 (1992).
A common carrier must exercise the utmost care
towards passengers while a private or corporate carrier is held
to an ordinary standard of care, Webster at 788; Cal.Civ.Code §
2100.
The universal offer of carriage and the limited power to
reject qualified passengers distinguishes a common carrier from
a contract or corporate carrier. While commercial airlines are
generally common carriers, a flight school, which was not
shown to undertake to carry all student aviators indifferently,
was held not to be a common carrier, Dziura vs. California
Aviation Service, Inc., 4 Cal.App.3d 191 (1970).
(97) Exportadora did not undertake to carry all persons
indifferently to Guerrero Negro and back. Travel aboard the
al cUG04b
company airplane, the Westwind, was limited to company
directors, officers or employees and their dependents and other
passengers for whom permission had been granted by
Exportadora. Included among these passengers were business
visitors, vendors and other invitees.
I conclude that Exportadora did not operate as a
common carrier in transporting the decedents.
An entity that operates a transportation system to
support its primary business purpose has been held to an
ordinary standard of care in the operation of that system, Brown
vs. Feather River Lumber Company, 203 Cal. 493 (1928).
In Brown, the defendant, quote,
".,.was not a common carrier of passengers but
had built and was operating from its logging
camp to the main line a short railroad designed
for use in its logging and lumber business."
Brown at 497.
For clarity, I will refer to this type of carrier as a
contract or corporate carrier. I conclude that Exportadora
transported Doctor Sugimoto, Doctor Kodani and Mr. Omachi
as a corporate carrier.
As the Ninth Circuit held in Schoenberg, quote:
"Exportadora maintained a regular air-and-auto
link between its San Diego and Guerrero Negro
offices as part of its commercial operations."
Schoenberg vs. Exportadora de Sal, 930 F.2d
777 (9th Cir. 1991).
(98) Normally, the air portion of the transportation link
between Tijuana and Guerrero Negro utilized the Westwind.
When the Westwind was not available for a scheduled flight,
Exportadora entered into charter agreements with one of several
licensed air taxi operators who provided an airplane and pilots
for the charter.
-36- cU00 47
nt
Exportadora employed Aviones de Sonora as an
independent contractor to assist Exportadora in performing its
duties as a corporate carrier in the present case. As corporate
carrier, Exportadora had a duty to transport the passengers using
ordinary care.
The admitted fact that Aviones normally operated as a
Mexican common carrier is irrelevant to the determination of
Exportadora’s liability on its agreement with the Japanese
decedents.
(99) Plaintiffs contend that California Civil Code §
2090 imposes a common carrier level of care on all categories
of carriers until, quote,
"...the passenger is restored to as favorable a
position as before he commenced the carriage."
This interpretation of the statute would seem to suggest
that the distinction between common and other carriers has no
legal significance.
In any event, Webster vs. Ebright, 3 Cal.App.4th 784,
787 n.2 (1992) makes clear that § 2090 deals with the
distinction between common carriers with reward and common
carriers without reward. Section 2090 does not impose the
standard of care required of common carriers upon Exportadora
in the present case.
(100) Plaintiffs contend that Exportadora should be
liable for the breach of an agreement for the non-negligent
transportation of the decedents. I have made findings that an
agreement exists between Exportadora and the decedents for
round-trip transportation between San Diego and Guerrero
Negro.
I now conclude a covenant of non-negligent
transportation should be implied in the agreement, that this
contractual agreement was non-delegable and that Exportadora
has failed to properly discharge this obligation.
Under the majority rule, a passenger may sue a common
carrier for injuries under the contractual theory for breach of an
a. vU0048
i
implied covenant of non-negligent transportation.
While I have found no California authorities directly on
point, most jurisdictions do allow passengers to elect to sue a
common carrier either for negligence in tort or for breach of a
contractual obligation for non-negligent transportation, citing the
well vs. Nichol ir Servi Inc.,-748 F.2d 1499
(11th Cir. 1984) (applying Georgia law); Calhoun vs,
Greyhound Lines, Inc., 265 So.2d 18 (Fla. 1972); St. Michelle
vs. Catania, 250 A.2d 874 (Md. 1969); Griffith vs. United
Airlines, Inc., 203 A.2d 796 (Pa. 1964); Williams vs. Illingis
Central Railroad, 229 S.W.2d 1 (Mo. 1950); Doughty vs,
Maine Central Transportation Company, 39 A.2d 758 (Me.
1944).
England seems to follow the same rule, Protheroe vs,
The Railway Executive, 1 K.B. 376 (England 1951).
New York allows such an election in the case of
personal injury but not wrongfui death, Kilberg vs. Northeast
Airlines, Inc., 211 N.Y.S.2d 133 (N.Y. 1961).
Puerto Rican law does not allow a cause of action for
breach of contract for non-negligent transportation, Ocasio-
Juarbe vs. Eastern Airlines, Inc., 902 F.2d 117 (1st Cir. 1990)
(question answered by certification to Supreme Court of Puerto
Rico).
One court described it as, and I quote,
"...elemental that a contract of a common carrier
to transport a passenger to a given destination
imposes on the carrier an obligation to transport
the passenger to his destination in a reasonably
safe manner.” Heredia vs. Safeway Trails, Inc.,
369 So.2d 418, 420 (Fla. App. 1979).
Corpus Juris Secondum takes an inconclusive view, and
I quote,
"A common carrier may be liable for injuries to
its passengers not only on a tort theory but also
-38- cUQ049
on a breach of contract theory. However, it has
also been held that the carrier is liable only a
tort theory and not on a breach of contract or
breach of warranty theory." 13 C.J.S. Carriers,
§ 518 (1990).
(101) The only California case offered by the parties
that discusses an implied contract for non-negligent
transportation is Marshall vs. United Airlines, 35 Cal.App.3d 84
(1973).
Exportadora contends that Aviones acted as an
independent contractor on behalf of Exportadora in providing
transportation to the Japanese decedents. Exportadora argues
that, under California law, there is rarely any basis upon which
the principal may be held liable in tort, citing 2 Witkin,
Summary of California Law, Agency and Employment, § 125.
Exportadora relies upon Marshall vs. United Airlines,
35 Cal.App. 3d 84 (1973) as establishing the rule that even a
common carrier may not be held liable for the acts of its
independent contractor.
(102) Plaintiffs suggest that Marshall may be
distinguished under the facts of the present case. In Marshall,
the claimant sought to hold United Airlines liable in damages for
personal injuries suffered when she fell on an escalator in the
public airport at San Francisco. Claimant had bought a round-
trip ticket and was on her return from New York to Berkeley.
She purchased her ticket from United. The ticket provided
airline transportation for the return from New York to Berkeley.
She was to change from United’s flight in San Francisco to an
SFO Airlines helicopter flight to Berkeley. While passing from
the United area in a public airport on her way to the SFO
helicopter facility, she took an escalator and was injured when
she fell.
The California appellate court held that United’s duty to
the claimant after she disembarked from the aircraft was one of
ordinary or reasonabie care. However, United held no
Ownership or right or control or management of the property
= cU0050
where claimant was injured.
The court then undertook to consider whether United
had, by selling the ticket, including helicopter service between
San Francisco and Berkeley, either expressly or impliedly
contracted with the claimant to furnish non-negligent passage
from New York until claimant’s departure from the SFO
helicopter facility at Berkeley.
The court was unable to find California authority on
whether, under similar facts, an implied contract for non-
negligent passage to the passenger’s ultimate destination arises.
But the court noted that elsewhere throughout the nation the rule
seems to be well established.
Upon reviewing the authorities, the appellate court
concluded that generally, in the absence of a special contract to
the contrary, a carrier’s responsibility is discharged by safe
carriage over its own lines.
The mere sale of a through ticket over two or more
connecting lines is not evidence of a joint contract between the
two carriers sufficient to make one liable for the fault of the
other.
However, the court went on to distinguish an earlier
California case of Wheeler vs. S.F. & A. Railroad Company,
31 Cal. 46 (1866). That case held that, where several carriers
combine their operations by mutual arrangements over all their
lines upon one contract for a single price, each may be held
liable over the entire distance.
The court in Marshall undertook to distinguish Wheeler
concluding that United’s agreement with the injured passenger
provided only transportation to San Francisco and not beyond
San Francisco to Berkeley.
(103) The present case is more like Wheeler.
Exportadora agreed to transport the decedents round trip
between San Diego and Guerrero Negro. The agreement did
not separate the obligation into segments.
The Ninth Circuit in Schoenberg upheld Judge Irving’s
findings and stated, and I quote,
wU0051
",..decedents did not make arrangements for legs
of the trips separately." Schoenberg, 930 F.2d
781.
The evidence at trial has been consistent with Judge
Irving’s findings and the ruling of the Ninth Circuit.
(104) I conclude that Marshall must be distinguished on
its facts. Exportadora agreed to transport the decedents round
trip from San Diego to Guerrero Negro with return to San
Diego. Exportadora substituted Aviones to undertake the return
flight from Guerrero Negro to Tijuana only after Exportadora’s
aircraft, the Westwind, became unavailable.
The decedents were scheduled by Exportadora to make
the flight aboard the Westwind, and the charter with Aviones
amounted to nothing more than to provide Aviones as a
substitute for the purpose of carrying out Exportadora’s
obligation to the decedents.
(105) I conclude California courts would follow the
overwhelming rule and imply a covenant of non-negligent
transportation in contracts of carriage between a common carrier
and a passenger.
I recognize that a common carrier owes a duty of the
highest degree of care. I have held that Exportadora had a duty
to exercise ordinary or reasonable care toward the decedents in
providing transportation on its corporate aircraft or on the
Aviones aircraft which was substituted for the Westwind.
The implied covenant of non-negligent transportation
should apply not only to contracts between common carriers and
their passengers, but also to contracts between contract or
corporate carriers and their passengers.
By its terms, the covenant only requires non-negligent
transportation. The factual findings that I have made establish
the cause of the accident to have been the pilot’s negligence.
The implied covenant of non-negligent transportation does
nothing more than require a corporate carrier such as
Exportadora to exercise ordinary and reasonable care for the
safety of those who are accepted by Exportadora as passengers.
-41- cU0O052
(106) An implied contractual duty of non-negligent
transportation is not the same as an implied warranty of safe
transportation. Courts uniformly hold that a carrier is not the
insurer of the passenger’s safety, Tolan vs. Era Helicopters,
Inc., 699 P.2d 1265 (Alaska ‘985); Hunt vs. Sun Valley
Company, Inc., 561 F.2d 744 (9th Cir. 1977) (applying Idaho
law).
There is no implied warranty of safe passage which
would be breached even in the absence of negligence. 132
C.J.S. Carriers § 518 (1990).
Negligence remains the essence of both tort and contract
theories of recovery.
(107) Under California law, one who voluntarily
assumes a contractual duty agrees to carry out the duty in a
reasonable manner. California Civil Code Section 1655 implies
in a contract any term, quote,
".,.Mecessary to make a contract reasonable or
conformable to usage."
In interpreting this section, California precedent has split
between a strict test limiting the judicial creation of implied
contract terms and a liberal test generally allowing such terms.
The modern trend seems to be toward the liberal test.
See 1 Witkin, Summary of California Law, § 739-41 (9th ed.
1987).
However, even under the strict test established in
ins Investmen m vs. Hastin lothin mpany,
45 Cal.App.2d 141 (1941), I conclude that a covenant of non-
negligent transportation should be implied in the agreement of
round-trip transportation made between Exportadora and the
decedents in this case.
Using the five-part strict test established in Cousins, I
conclude that such a covenant: (1) is indispensable to effectuate
the intention of the parties; (2) was clearly within the
contemplation of the parties; (3) can be justified on the grounds
of legal necessity; (4) would have been made by the parties if
42. 600053
attention had been called to it; and (5) is not completely covered
by the contract.
(108) While contract or corporate carriers are not the
insurers of their passengers’ safety, I conclude that the
agreement includes a covenant to transport the passengers in a
reasonable and non-negligent manner.
This implied covenant is necessary to make the
agreement reasonable and conforms to the usage and
expectations of the parties.
(109) Under California law, a party to a contract cannot
escape liability by delegating performance of contractual duties
to an independent contractor, | Witkin, Summary of California
Law, § 943 (1987). I quote:
"[A] person who has assumed the contractual
duty to perform a service for another cannot
escape his contractual obligation to perform the
service in a competent manner by delegating
performance to another." Harold A. Newman
Company vs. Nero, 31 Cal.App.3d 490 at 496
(1973).
This general rule on the non-delegability of contractual
duties applies to the negligent performance by an independent
contractor, quote:
"One who contracts to perform an undertaking is
liable to his promisee for the negligence of an
independent contractor whom he delegates actual
performance." Citing Capital Chevrolet
Company vs. Lawrence Warehouse Company,
227 F.2d 169 (9th Cir. 1955).
If the promisee wants to be relieved of her obligation,
she must gain the promisor’s agreement to a modification.
Unilateral action by the promisee is not generally sufficient to
relieve her of contractual duties.
-43- cU00S4
(110) I conclude that the evidence fails to reveal any
modification of the agreement for accommodations in
transportation between Exportadora and the decedents. At no
time were the passengers told that Exportadora would not have
responsibility for their transportation back to San Diego.
At no time did any of the passengers agree to a
modification of the agreement. Although they were introduced
to a new pilot and observed the Aviones airplane, the passengers
had no reason to believe that Exportadora had been relieved of
responsibility for their transportation.
Exportadora employees or agents had met them in San
Diego, arranged for accommodations in San Diego, carried them
by van to Tijuana, flew them on the Westwind to Guerrero
Negro, provided their accommodations at Guerrero Negro,
introduced them to their new pilot, brought them to the Aviones
airplane and arranged for an Exportadora van to be waiting in
Tijuana to carry them to San Diego.
Nothing indicates that the passengers had anything to do
with any arrangements for their travel and accommodations.
The agreement between Exportadora and the Japanese
decedents was not modified, and the passengers continued to
rely upon Exportadora to carry them safely to San Diego on
their return from Guerrero Negro.
Exportadora-was free to choose the vehicles, drivers or
independent contractors it considered most appropriate to carry
Out its obligations under the agreement.
I conclude that Exportadora’s choice of carriers did
nothing to change its obligation of non-negligent transportation
to the decedents.
(111) I conclude that Exportadora had a non-delegable
obligation to transport Doctor Sugimoto, Doctor Kodani and
Mr. Omachi in a reasonable and non-negligent manner. On the
trip from San Diego to Guerrero Negro, Exportadora provided
its company van and the company airplane, the Westwind.
On the return irip, Exportadora used a Cessna 340A
chartered from Aviones de Sonora, an independent contractor,
and planned to use the company van. Exportadora had the same
-44-
wUOOSu
obligation in transporting the decedents from Guerrero Negro to
San Diego as it had in transporting them from San Diego to
Guerrero Negro: to see that the passengers were transported
with reasonable care.
(112) Plaintiffs contend that Exportadora had a non-
delegable tort duty toward the decedents. I reject Plaintiffs’
arguments based on the peculiar risk doctrine but conclude that
Exportadora had a non-delegable tort duty based on public
policy grounds.
In California, the general rule of non-delegability for the
negligence of an independent contractor is, quote,
"...Subject to exceptions of such wide scope that
they leave only a small area in which the so-
called general rule operates. Accordingly, it
seems proper to say that non-liability is now the
exception [and] the so-called general rule is
followed only where no good reason is found for
departing from it... Considerations of policy
frequently call for such departure." 6 Witkin,
Summary of California Law, § 1009 (1987).
(113) The Plaintiff contends that Exportadora had a
non-delegable tort duty toward the passengers of XAKOA and is
therefore liable for any negligence by Aviones de Sonora.
California courts find non-delegable tori duties in three
specific categories: public franchise, statutory duty and peculiar
risk. In addition, California courts may find a non-delegable
tort duty in other areas based on public policy criteria.
The present case does not fall neatly into either of the
three specific considerations. See Rozmajzl vs. Northland
Greyhound Lines, 49 N.W.2d 501 (Iowa 1951) (public
franchise); Maloney vs. Rath, 69 Cal.2d 442 (1968) (statutory
duty).
The fact that a particular category of non-delegable duty
does not apply does not preclude the Court from resting its
conclusion on public policy grounds. Alaska Airlines, Inc. vs.
-45-
00056
Sweat, 568 P.2d 916 (Alaska 1977) (court rejects liability under
Restatement (Second) of Torts § 428, but finds non-delegable
tort duty based on policy considerations).
(114) The “peculiar risk" exception to the general rule
that the defendant is not liable for the acts of an independent
contractor is codified in Sections 413 and 416 of the
Restatement (Second) of Torts. These provisions impose a duty
to take "special precautions" when a defendant should know that
an activity holds a "peculiar risk" of physical harm to others.
Section 413 imposes a direct duty on the defendant,
which the defendant can delegate to the independent contractor.
Section 416 imposes a vicarious, non-delegable duty on the
defendant to take special precautions.
Together, these provisions hold a defendant liable for
failure to take special precautions against peculiar risks, and the
contractual delegation of the peculiar risk to the independent
contractor serves only as a legal basis to obtain an indemnity
from the independent contractor. See § 416, comment c.
The definitions of both "peculiar risk" and “special
precaution” are identical for the two sections. See § 416,
comment b.
California has adopted the Restatement in this area,
Castro vs. State of California, 114 Cal.App.3d 503 at 510
(1981). Quote:
"Whether the particular work which the
independent contractor has been hired to perform
is likely to create a peculiar risk of harm to
others unless special precautions are taken is
ordinarily a question of fact."
(115) Liability under the peculiar risk theory requires:
(1) that the activity create a peculiar risk of harm unless special
precautions are taken; and (2) that the defendant knew or should
have known of the peculiar risk, Hughes vs. Atlantic Pacific
Construction Company, 194 Cal.App.3d 987 at 998 (1987).
The general risk that an independent contractor might be
-46- vU00S%
aie Sa A ip ait a ate at a
negligent in performing activity is not a peculiar one. To
impose liability, the risk must be, quote:
"...peculiar to the work to be done and arising
out of its character or out of the place where it
is to be done." See § 413 Restatement,
comment b.
To be peculiar, the risk does not have to “necessarily
and inevitably" arise but can be one likely to arise from the
activity. See § 416, comment e.
"*Peculiar’ does not mean that the risk must be
one which is abnormal to the type of work to be
done or that it must be an abnormally great risk.
It has reference only to a special recognizable
danger arising out of the work itself."
Restatement (Second) of Torts, § 413, comment
b.
(116) The California Supreme Court has suggested that
"special risk" is a more appropriate term, Aceves vs. Regal Pale
Brewing Company, 24 Cal.3d 502 at 509, n. 2 (1979).
"Where it is the manner in which a
subcontractor performs the work as opposed to
the work itself that introduces the danger to an
otherwise safe activity and work place, the
contractor is not vicariously liable." Ek vs.
Herrington, 738 F.Supp. 357 (D.C. Idaho
1990).
Negligence by the independent contractor in performing
the activity is sometimes referred to as "collateral" or "casual"
negligence which does not trigger liability under the peculiar
risk theory.
(117) One state appellate court has applied §§ 413 and
416 to aircraft case, Fagundes vs. State, 774 P.2d 343 (Idaho
= wU0058
App. 1989). In that case, the State of Idaho contracted with a
helicopter firm to fly state employees over park areas to count
game. The helicopter crashed and the pilot, an employee of the
contractor, was killed. The court rejected peculiar risk liability
on two independent grounds.
The court found that, under Idaho law, a defendant did
not owe a duty to the employee of an independent contractor.
The court based its ruling on the perceived unfairness of
worker’s compensation law limiting the liability of the
independent contractor but not that of the defendant general
contractor.
California takes the opposite view. In California, the
law is clear, quote,
",..that an employee of an independent
contractor... may sue the contractor’s employer
under the peculiar risk doctrine." Castro vs.
State of California, 114 Cal.App.3d 503 at 514
(1981).
To the extent that the Fagundes decision was based on
the fact that the plaintiff was the employee of the independent
contractor, the decision does not apply to the present case.
However, the court rested its decision on the alternate grounds
that the danger of a helicopter crash in the wilderness was not a
special risk in a contract for transportation by helicopter over
wilderness areas.
(118) In the present case, Plaintiffs have the burden of
proving a special risk in the flight from Guerrero Negro to
Tijuana beyond the generally recognized dangers of air travel
itself.
I conclude that the risk that a plane might crash through
pilot error is a type of “collateral” risk outside the scope of the
special risk doctrine.
The fact that fog at Tijuana might have been foreseeable
to Exportadora or to Pilot Raul Gutierrez Tellez does not change
this result. As the transcript of the conversation between the
-48- vUOO0E
pilot and the air controller indicates, the pilot knew that he had
the option to execute a missed approach at any time. It was not
a special risk that the pilot would deviate from the glide path or
an ILS approach to the airport or fail to execute the required
missed approach that caused this accident.
(119) As I have earlier suggested, Alaska Airlines, Inc,
vs. Sweat, 568 P.2d 916 (Alaska 1977) holds that, in addition to
the specific categories of non-delegable tort duties, a non-
delegable duty may be found on general policy grounds.
Plaintiffs argue that Exportadora controlled the flight
and is responsible for its departure under adverse weather
conditions.
I have found that Exportadora scheduled the flight but
that the conduct of the flight was under the control of the
Aviones pilot, Raul Gutierrez Tellez. The decision to undertake
the flight, how the flight would be conducted and whether under
the restricted conditions a landing at Tijuana airport should be
attempted rested with the pilot, not with Exportadora.
I have found that Aviones was an independent contractor
under its charter with Exportadora. However, as Alaska
Airlines vs. Sweat holds, a party may be liable for the
negligence of an independent contractor if public policy requires
that a non-delegable tort duty exists. California authorities
suggest a number of factors to consider in determining if a non-
delegable tort duty exists on the facts of a specific case, and I
quote:
"Some of the principal ones are that the
enterprise, notwithstanding the employment of
the independent contractor, remains the
employer’s because he is the party primarily to
be benefited by it, that he selects the contractor,
is free to insist upon one who is financially
responsible and to demand indemnity from him,
that the insurance necessary to distribute the risk
is properly a cost of the employer’s business and
that the performance of the duty of care is of
J : -49-
4
“i VO060
great importance to the public." Van Arsdale
vs. Hollinger, 68 Cal.2d 245 at 253 (1968).
(120) In the present case, Exportadora enjoyed the
primary benefit of the transportation of the decedents. Mr.
Omachi was the representative of a major purchaser of
Exportadora’s salt and the transportation of professors, Doctor
Sugimoto and Doctor Kodani was arranged at the request of
Mitsubishi, a major stockholder.
Exportadora could use any vehicles which suited its
purpose, including the company van, the company plane or air
taxi companies.
On those occasions when Exportadora elected to use an
air taxi company, Exportadora was free to use only financially
responsible companies or require indemnity. Exportadora was
better situated to analyze the amount and risks of the
transportation it was providing to determine the appropriate level
of insurance coverage.
Exportadora was in a better position to balance the risks
involved against the benefits it gained in continuing to provide
transportation to potential customers and other guests.
Finally, imposing a non-delegable duty of care on a
corporation that operates a regular transportation link assures,
quote,
".,.that, when a negligently caused harm occurs,
the injured party will be compensated by the
person whose activity caused the harm and who
may therefore properly be held liable for the
negligence of his agent, whether his agent was
an employee or an independent contractor."
Maloney vs. Rath, 69 Cal.2d 442 at 446 (1968).
Based on the foregoing public policy factors, I conclude
that Exportadora had a non-delegable duty of ordinary care in
the transportation of the decedents under California law.
(121) Plaintiffs suggest that, in the transportation
re vU00G]
industry, a carrier may not delegate its duty to transport
passengers safely. In support of that contention, Plaintiffs cite
Alaska Airlines vs. Sweat, 568 F.2d 916 (Alaska 1977). In the
Sweat case, the plaintiff purchased a ticket from Alaska Airlines
to fly from Cordova to Cape Yakataga, Alaska. Alaska
Airlines, a common air carrier, had previously hired Chitina
Air, an air taxi company, to service a number of the airline’s
smaller routes, including the flight from Cordova to Cape
Yakataga. Quote:
"There is not indication that Alaska Airlines
controls the maintenance of the planes, the
hiring of pilots or the day-to-day affairs of
Chitina. However, Alaska Airlines provides the
schedule, the tickets and rates, and Chitina then
charges Alaska Airlines an hourly rate." Swea
at 922.
(122) Plaintiff in Alaska Airlines vs. Sweat was
seriously injured when the aircraft encountered zero visibility
conditions and crashed into the Bering Glacier. Although Sweat
discusses the important responsibility a certificated common
carrier has for the safety of its passengers, I conclude that much
of the rationale of Sweat should apply to the facts of the present
case.
In both instances, the air taxi company operated as an
independent contractor with the ultimate responsibility for pilot
qualifications and aircraft maintenance.
In both instances, however, the passenger made an
agreement with the defendants that the defendant would
transport them.
I conclude that Sweat provides additional support for the
conclusion that Exportadora as a corporate carrier had a non-
delegable tort duty toward its scheduled passengers.
(123) Plaintiffs argue that Exportadora should be liable
for the negligence of Pilot Gutierrez on a theory of apparent or
ostensible agency. An ostensible agency is established, quote,
-51- vUu00QG6Z
"...when the principal intentionally, or by want
of ordinary care, causes a third person to believe
another to be his agent." Cal. Civ. Code §
2300.
The principal is liable to persons who reasonably rely on
the ostensible agency to their detriment. Cal. Civ. Code §
2334.
Ostensible agency and agency by estoppel are identical
legal concepts, 2 Witkin, Summary of California Law, § 40 (9th |
ed. 1987).
Despite these statutes, Exportadora, quote:
"...respectfully submits that... the ‘estoppel to
deny agency theory’ [has] absolutely no binding
effect under the law of the State of California."
Exportadora cites Professor Witkin’s treatise ror the
proposition that a principal is rarely liable for the torts of an
ostensible agent. However, the very next sentence in Professor
Witkin’s treatise clarifies that this is because, quote,
"...the essential element of reliance upon the
representations of conduct of the principal is
usually lacking.” 2 Witkin, Summary of
California Law, § 125 (9th ed, 1987).
Where such a reliance is shown, the principal is liable to
the injured party under clearly established California law.
(124) In Croce vs. Bromley Corporation, 623 F.2d
1084 (Sth Cir. 1980), Mustang Aviation, a common carrier,
agreed to transport the Jim Croce Group to various concert
locations. When Mustang’s plane was unavailable, Mustang
arranged for Roberts Airways to provide a replacement plane
and pilot. When the plane crashed due to pilot negligence,
Mustang was held liable on a theory of agency by estoppel. The
Court of Appeals upheld the District Court findings, quote:
“S2- vUO06S
"...there is no credible evidence that [Mustang]
informed the Croce Group that Roberts was the
owner and operator of the substitute or that
Roberts was solely responsible for the flight, nor
did anyone secure the Croce Group’s agreement
to the change from the original contract. While
the evidence on this point is sparse, the
reasonable inferences from the evidence left the
court with the firm belief that no such
communication occurred.
No one in the Croce Group knew or should have
known Mustang was not responsible for the
flight or that Roberts was flying it in Mustang’s
place." See Croce at 1088.
(125) In Roberts vs. Gonzalez, 495 F.Supp. 1310
(D.C.V.I. 1980), Caribbean Executive Airlines, a common
carrier, agreed to transport the plaintiffs round trip between San
Juan and St. Thomas. Ground transportation between the
airport and midtown was provided in both locations.
When Caribbean’s plane was unavailable, Caribbean
arranged for Conquest Airways to transport the plaintiffs by air.
Caribbean retained the responsibility for ground transportation.
The plane crashed due to engine malfunction and pilot
error in responding to the malfunction. Caribbean was held
liable on a theory of agency by estoppel. The court found
numerous manifestations by Caribbean, the principal, to the
passengers that Conquest was its agent.
_ “Among those manifestations is the total absence
of dealings with Conquest by the passengers.
Instead, their transfer was conducted entirely by
Caribbean officials and therefore left the
impression that they were still Caribbean’s
passengers. A similar conclusion is inferable
from the fact that the Conquest flight was an
cU00G64
-53-
unscheduled flight for the Caribbean passengers
alone. This perspective was also reinforced by
Caribbean’s retention of the responsibility for
the passengers’ ground transportation in San
Juan and St. Thomas. A final manifestation of
apparent authority was the fact that the
passengers were permitted to retain their
Caribbean tickets and to utilize them on the
Conquest flight.” See Roberts, 1314-15.
(126) In the present case, Exportadora agreed to
transport the decedents round trip between San Diego and
Guerrero Negro. Exportadora provided all of the decedents’
accommodations in San Diego and Guerrero Negro.
Exportadora provided ground transportation between San Diego
and Tijuana.-
On the flight from Tijuana to Guerrero Negro,
Exportadora flew the decedents on separate flights of the
Westwind. When the Westwind was unavailable for the return
flight, Exportadora arranged for Aviones de Sonora to transport
the five scheduled passengers.
Exportadora told the passengers the company van would
be waiting for them in Tijuana to take them to San Diego.
While at least some of the passengers were introduced to
the new Aviones pilot the night before the flight, all the
scheduled passengers knew at some time before they boarded the
flight that they would not be flying on the Westwind to Tijuana.
I conclude that the passengers were not informed that
Aviones would be assuming Exportadora’s obligations o: or
responsibility for the flight.
All transportation and accommodations between San
Diego and Guerrero Negro up to the flight of XAKOA from
Guerrero Negro had been arranged by Exportadora.
Exportadora continued to arrange transportation after the
expected arrival of XAKOA in Tijuana.
I conclude that the conduct of Exportadora induced a
reasonable belief in the passengers that Exportadora was
vUOQGa
7%
responsible of XAKOA from Guerrero Negro to Tijuana.
I conclude that the passengers relied on the continuing
responsibility of Exportadora for their transportation by
boarding the flight. These conclusions establish the required
elements of ostensible agency under California law.
(127) Exportadora relies upon Marshall vs. United
Airlines, 35 Cal.App.3d 84 (1973) to argue that a carrier’s duty
ends once the passenger has safely departed from the carrier’s
aircraft.
As I have noted, in Marshall the plaintiff attempted to
hold United Airlines liable for the alleged negligent maintenance
of an escalator in the San Francisco-Oakland airport. After
disembarking from a United flight and walking down the airport
corridors, the plaintiff fell and injured herself on the escalator.
The court held that United had no duty to maintain the
escalator and had safely discharged its common carrier
obligations toward the plaintiff.
Exportadora argues that its obligation toward the
decedents ended when the decedents boarded the Aviones plane.
I find Marshall distinguishable on the issue of ostensible agency.
There was no allegation in Marshall that United’s conduct or
statements had led the plaintiff to believe that United was
responsible for travel beyond its facility at San Francisco.
(128) Exportadora argues that, in order for the doctrine
of ostensible agency to apply, passengers must pay money for
their tickets and the defendant must be a common carrier.
Although both Croce and Roberts involved common carriers,
Exportadora has not offered any authority for the proposition
that the doctrine of ostensible agency is so limited.
I have previously held that Exportadora gained valuable
consideration for its transportation of the decedents including the
possibility of increased sales of salt to Asahi Chemical and
stockholder good will.
I conclude that Exportadora is liable for the negligence
of the Aviones pilot, Raul Gutierrez Tellez, based on the theory
of ostensible agency.
cU00G6b
£.
(129) Plaintiffs argue that the pilot negligence should be
inferred under the doctrine of res ipsa loquitur. In California,
the doctrine of res ipsa loquitur applies if the accident was: (1)
the kind that ordinarily does not occur in the absence of
negligence; (2) caused by an instrument in the exclusive control
of the plaintiff; and (3) not caused by actions of the plaintiffs.
Cal. Evid. Code § 646, Law Revision Comments (1970).
If a plaintiff establishes these three prerequisites and the
defendant does not produce “evidence which would support a
finding that [the defendant] was not negligent or that any
negligence on [the defendant’s] part was not a proximate cause
of the occurrence," the trier of fact must find negligence. Cal.
Evid. Code § 646(c).
If the defendant does not come forward with such
rebuttal evidence, the trier of fact cannot find liability unless the
trier finds, quote,
"...that it is more probable than not that the
occurrence was caused by some negligent
conduct on the part of the defendant." Cal.
Evid. Code § 646(c)(2).
A defendant cannot rebut a prima facie showing of res
ipsa loquitur with mere speculation about possible alternate
causes of the crash, Newing vs. Cheatham, 15 Cal.3d 351 at
365 (1975); Mittelman vs. Seifert, 17 Cal.App.3d 51 at 80
(1971). In more simple terminology, the doctrine allows an
inference against the defendant based on unrebutted
circumstantial evidence. Once this inference is rebutted, the
trier of fact is required to weigh all of the evidence,
circumstantial and direct, to reach a result.
(130) Plaintiffs cite numerous authorities holding an
aviation common carrier to a higher evidentiary standard to
rebut a passenger’s prima facie showing of res ipsa loquitur,
Irwin vs. Pacific Southwest Airlines, 133 Cal.App.3d 709
(1982); Roberts vs. Trans World Airlines, 225 Cal.App.2d 344
(1964); Colditz vs. Eastern Airlines, Inc., 329 F.2d 180 (Sth
-56- cVO067
Se ee eh ee oe
Cir. 1969).
I have previously held that Exportadora did not act as a
common carrier in transporting the decedents, but rather as a
corporate carrier under an analogy to the facts of Brown vs,
Feather River Lumber. Such carriers are required to exercise
ordinary care in the transportation of passengers.
Cases modifying the traditional res ipsa rules to reflect a
common carrier’s duty to exercise utmost care are inapplicable.
In particular, I reject Plaintiffs’ argument that an inference of
negligence arises in this case from an injury to passengers. The
decision in Foss vs. United States, 623 F.2d 104 (9th Cir. 1980)
clearly holds that there is no presumption of pilot negligence
from a crash under California law.
Like the trial court in Foss, I have based my rulings on
the evidence produced at trial rather than an inference of
presumption of negligence.
(131) In Newing vs. Cheatham, 15 Cal.3d 351 (1975),
the California Supreme Court held that the doctrine of res ipsa
loquitur applied as a matter of law to the crash of a private
airplane near Tijuana, Mexico. The first condition was met
because the plane took off in clear weather and there was,
quote,
"...no evidence that weather conditions
contributed in any way to the crash of the
plane." See Newing at 361.
The court distinguished cases in which natural conditions
could have affected the operation of the aircraft. See Newing at
361, note 4.
The second factor was established as a matter of law
because the pilot was in the exclusive control of the aircraft.
There was no reason to suppose that any other person was
operating or controlling the plane at the time of the accident,
Newing at 362.
Plaintiffs argue that the decision in Newing establishes
Exportadora’s liability in the present case.
-57- cvO068
(132) I conclude that the present case is distinguishable
from Newing. Unlike Newing, the evidence is certain that
Tijuana airport was restricted due to low visibility when
XAKOA approached runway 09. This is not a case of an
accident that ordinarily does not occur in the absence of
negligence.
At trial, there was conflicting evidence from qualified
expert witnesses about the issue of pilot negligence and
causation. The NTSB report was unable to conclude that pilot
error caused the accident. These evidentiary disputes and the
possible effect of low visibility effectively rebut the first
prerequisites to the application of res ipsa loquitur to this case.
In addition, Exportadora has presented expert testimony
that XAKOA was flying a radar surveillance approach and that
such an approach places the air traffic controller in effective
control of the aircraft.
While I have considered and ultimately rejected this
opinion in light of all the evidence, it nevertheless served to
effectively rebut Plaintiffs’ showing on the second prerequisite
to the application of res ipsa loquitur to this case.
Therefore, I am required by Section 646(c)(2) to reach a
decision based on all of the evidence.
(133) Because Exportadora’s expert witnesses
effectively rebutted the first and second prerequisites to a prima
facie showing of res ipsa loquitur, I do not express any opinion
about the legal effect of Plaintiffs’ previous allegations that a
fuel leak in the engine of the Cessna 340A caused the accident
or Exportadora’s suggestion that air induction icing caused the
accident. See Newing, 15 Cal.3d at 363. Dean Prosser has
stated that, quote,
"A res ipsa case is a circumstantial evidence
case which permits the [trier of fact] to infer
negligence from the mere occurrence of the
accident itself. Its first requirement is a basis of
past experience which will permit the triers of
fact to conclude that such events do not
cUUd6Y
-58-
a SEA Neri Blacated halal barat tai. ns
ordinarily happen unless someone has been
negligent." Prosser, Res Ipsa Loquitur in
California, 37 Cal.L.Rev. 183 at 191 (1949).
(134) I conclude that the present case involves complex
and specialized aviation issues beyond the ordinary experience
of triers of fact. Resolution of liability required the type of
expert opinion and detailed evidence presented at trial.
Accordingly, I reject Plaintiffs’ claim of res ipsa loquitur.
(135) Plaintiffs have urged this Court to find that Pilot
Raul Gutierrez Tellez was negligent per se for alleged violations
of the aviation laws of Mexico and the United States.
The Secretary of Transportation of the United States is
authorized by law to regulate the navigable air space of the
United States to ensure the safety of aircraft, 49 U.S.C. §
1348(a).
Mexican air safety laws and regulations apply to the
operation of Mexican aircraft in Mexican air space under
generally applicable ideas of national sovereignty. On the
border, Tijuana and San Diego air traffic control operations
have executed an agreement titled, "San Diego Tracon and
Tijuana Approach Control Letter of Agreement" effective June
15, 1981. This agreement requires Tijuana air traffic control to
notify San Diego air traffic control that an arriving airplane is
using the instrument approach to Tijuana and may require San
Diego to monitor the altitude of the airplane. However,
Tijuana, not San Diego, directs all approaches to Tijuana
airport.
I conclude that the letter agreement does not constitute
an assertion of control over the aircraft making an instrument
approach to Tijuana.
I conclude that the United States of America did not
assert regulatory control over the flight of XAKOA from
Guerrero Negro to Tijuana.
I conclude that the Via Generales safety regulations
establish the appropriate applicable air safety law in the present
case. The legal effect of a violation of the Via Generales is
-59- vU0070
determined by California tort law. Under California law,
violation of a safety regulation establishes negligence per se,
Haft vs. Lone Palm Hotel, 3 Cal.3d 756 (1970). California
Evidence Code Section 669(a) provides that, quote:
"The failure of a person to exercise due care is
presumed if: (1) He violated a statute,
ordinance or regulation of a public entity; (2)
The violation proximately caused death or injury
to person or property; (3) The death or injury
resulted from an occurrence of the nature which
the statute, ordinance or regulation was designed
to prevent; and (4) The person suffering the
death or the injury to his person or property was
one of the class of persons for whose protection
the statute, ordinance or regulation was
adopted."
Although the statute establishes only a presumption of
negligence from a violation, the presumption can only be
rebutted by evidence that the defendant was a child acting in a
reasonable manner for his or her age and experience or that the
violation of the statutory regulation was more reasonable than
compliance with the statute. Cal. Evid. Code § 669.
(136) The Plaintiffs argue that a number of alleged
Statutory violations are negligence per se in this case. Even if
proved, the alleged lack of a copilot, departure before sunrise
and failure to gather all available information were not causes of
this accident.
I have previously found that the pilot was qualified
under Mexican aviation law to make the flight from Guerrero
Negro to Tijuana, that the plane had all the required equipment
to do so and that no copilot was required.
Plaintiffs have failed to carry their burden of proof on
the question of whether XAKOA departed with sufficient fuel
reserves and whether XAKOA departed Guerrero Negro with
inadequate information on forecasts for less than minimum
60- GUOO71L
conditions in Tijuana.
Plaintiffs contend that the failure to follow the glide
slope and failure to execute a missed approach were negligence
per se. Plaintiffs cite federal air regulations rather than the Via
Generales for these propositions.
I find that the pilot’s failure to follow the glide slope
and execute a failed approach constitute negligence under the
evidence and the credible expert testimony presented at trial.
The Plaintiff has failed to carry its burden of proof that
these acts constituted negligence per se under the rule of the Via
Generales.
FINDINGS OF FACT ON DAMAGES
(137) Doctor Katsuo Sugimoto and Doctor Yoshihito
Kodani were professor on the faculty of Tottori University of
Hamasaka, Japan at the time of their visit to Guerrero Negro in
late September 1987. Mr. Omachi was the manager of raw
materials for Asahi Chemical Industry Company. All of the
decedents were married with families.
(138) Hiroko Sugimoto, who was born in Japan on
April 27, 1931, became acquainted with her future husband,
Doctor Sugimoto, while was a child of 3 or 4 years. He
proposed to her when she was 17, and she married Doctor
Sugimoto when she was 20. Mrs. Sugimoto testified that, while
many marriages in Japan were arranged, she and her husband
married for love. The couple had two children: the oldest son,
Mitsukini, and the youngest, Yasunobo, with whom the widow
Hiroko now lives.
(139) Doctor Sugimoto became employed at the
ministry of agriculture in Japan when he was 22 years old.
Through self-study he was able to obtain his Ph.D by 1973.
During his work with the ministry of agriculture he was
assigned to Malaysia for a two-year period from 1962 to 1964
and 1967 to 1969 and for a two-and-a-half-year period from
1980 to 1982. On these assignments he provided technical aid
for the development of rice crops. Doctor Sugimoto was also
“1- GU0072
away from home on assignment in Thailand for six months in
1973.
(140) After 35 years at the ministry of agriculture,
Doctor Sugimoto in 1982 became a member of the faculty in the
Department of Agriculture at Tottori University. For a number
of years since 1982, Doctor Sugimoto has been connected with
the agricultural project at Guerrero Negro.
(141) Doctor Sugimoto did not use tobacco. When
asked whether he used alcohol, Mrs. Sugimoto responded that
he did not, but later qualified her testimony stating that he drank
on social occasions or holidays. He was careful with his diet
since he had high blood pressure. He received surgical
operations on two occasions. On one occasion his condition was
described by Mrs. Sugimoto as benign. On the other occasion
he received an operation for cataracts on his eyes.
(142) Hiroko Sugimoto suffers from high blood
pressure for which she takes medicine. She received a surgical
operation for a thyroid condition and she has a light case of
diabetes. She does not use either tobacco or alcohol.
Mrs. Sugimoto was examined on January 8, 1993 by
Doctor Bressler, a qualified internist who treats geriatric
patients. Doctor Bressler reviewed Mrs. Sugimoto’s medical
records, examined her and had a number of laboratory tests
performed on her. He reviewed medical literature bearing upon
her condition. He found she is now 61 years of age and has
chronic diseases that will affect her life expectancy including
diabetes, hypertension and elevated cholesterol. In his expert
opinion, she has a ten-year life expectancy. I find his testimony
credible and reliable.
I find that Mrs. Sugimoto is in poor health, suffers from
chronic diseases that will shorten her life expectancy and that, at
the time of trial, she had a ten-year life expectancy.
(143) Hiroko Sugimoto testified that on three or four
occasions her husband slapped her. Later, she qualified her
testimony to say that on several occasions he “physically
admonished” her. This, she testified, had to do with the manner
in which she disciplined her sons. Doctor Sugimoto thought she
- v00078
NO on Hele eet oy ue =
was not strict enough.
For approximately 12 years, Doctor Sugimoto’s parents
resided with their son and daughter-in-law. They were in bad
health and required a good deal of care from Mrs. Sugimoto.
Much of her enjoyment in life came from raising the children
and in their accomplishments.
Her husband drove a motor vehicle, took her shopping
several times a week. Before his death, they went on walking
or day trips approximately once a month. Both enjoyed working
in the garden at their home in Ibaraki.
Doctor Sugimoto planned to remain a professor at
Tottori University until he would be compelled to retire at the
age of 65. He expressed interest upon retirement to return to
Malaysia and work for perhaps five years but had no definite
plans.
His hobby was to create tanka, a form of Japanese
poetry. Indeed, Doctor Sugimoto published a book of poetry.
At the time of his death in September 1987, Doctor Sugimoto
was 61 years of age.
(144) Kimiko Kodani was born in Japan on May 4,
1935. She first met her future husband, Doctor Kodani, in 1947
and a marriage was arranged for the two of them. She found
her husband to be very kind, jolly and well liked. She testified
that he was a good person, generous to his wife and others.
Doctor Kodani and his wife had two daughters: Mayu,
the oldest, and the second daughter, Kyoke. After the marriage,
Doctor Kodani’s parents moved in with their son and daughter-
in-law. Doctor Kodani’s father died nine years ago, but Mrs.
Kodani continues to care for Doctor Kodani’s mother who is
now 81 years of age.
(145) Doctor Kodani was the oldest son in his family
and during his life his home became a center for family
gatherings which were happy events. Doctor Kodani’s hobbies
included golf and bicycling. He loved sports and he loved to
sing.
(146) Doctor Kodani obtained a Ph.D in agriculture in
1977. He specialized in hydrology and irrigation research. He ~
al G00074
graduated from Tottori University in 1954 and became a
member of the faculty as an assistant professor in 1977. He
became well known for research in his field and made
presentations at professional meetings. In 1980, he went to the
United Arab Republic for one month to provide assistance.
Doctor Kodani would have retired at 65 from his position as
professor at Tottori University. He had nine years until
retirement and had no specific plans of employment at that time.
Her husband at the time of his death was 56 years of age. He
had been in good health.
(147) Kimiko Kodani relied upon her husband for
family support. However, she held several part-time jobs as a
dressmaker and a nurse’s aid. Her husband helped her at times
with the household duties and set aside 10,000 yen per month
from his salary into savings.
(148) Kimiko Kodani suffered depression and an attack
of osteomyelitis following the death of her husband. She
attributes her condition to the loss of her husband. Her sexual
relations with her husband were enjoyable, and she continues to
miss her husband’s company and support.
(149) Kuniko Omachi married Hideo Omachi in 1985
and the couple had one child. Mrs. Omachi was employed by
Tokyo Marine Fire Insurance, but after her marriage she relied
on her husband for support.
Hideo Omachi was employed as section manager in the
purchasing department of Asahi Chemical Industry, Limited,
Japan’s largest chemical company. In his position, Mr. Omachi
was required to travel frequently to the Soviet Union, China,
Europe and the United States and on the occasion of his death,
September 30, 1987, to Mexico.
(150) Mr. Omachi was sociable, sincere and
considerate. He liked to sing and at the university belonged to a
mountaineering club. He became a golfer and on one occasion
won a company tournament. But his dream was to become
director of the company which employed him.
When not traveling, he spent long hours at work,
leaving at 7:30 a.m. in the morning and returning home at 8:30
bd v000795
p.m. and often later. When he worked overtime, about twice a
week, he would arrive home at 11:00 p.m. or midnight. When
he was home and particularly during the pregnancy of his wife,
Mr. Omachi was helpful in performing household chores,
cooking and entertaining.
(151) Shortiy before undertaking his business trip to the
United States and Mexico, Mr. Omachi had been reassigned by
Asahi to a section that dealt with salt. He began to study salt
and planned to visit Exportadora’s salt plant in Mexico. In
September 1987, Mr. Omachi traveled to the United States with
Mr. Takeya, a member of the Asahi board of directors. Mr.
Omachi expected to introduce Takeya to American business
contacts for Asahi Chemical.
The arrangements for Mr. Omachi’s travel from San
Diego to Guerrero Negro to visit Exportadora’s salt plant were
made through Mr. Matsushita of Mitsubishi. As I have noted,
Mitsubishi is 49 percent owner of Exportadora.
(152) At trial, the Plaintiffs and Defendant Exportadora
offered the testimony of economic experts on the damage
claims. The methodology employed by the two experts in
arriving at their opinions on economic losses differed widely.
(153) Doctor Lowell Bassett qualified as Plaintiffs’
expert economist. Upon comparison of interest rates on
Japanese government bonds for the period of 1966 to 1990,
Doctor Bassett found the interest rate over the period of time to
average 7.08 percent. Wage increases over the same period,
1966 to 1990, he found to average 8.48 percent.
In Doctor Bassett’s opinion, wages have increased in
Japan slightly more than interest rates. Accordingly, in his
opinion, comparison of interest rates with inflationary factors
required that future economic loss should not be reduced to
determine present cash value.
(154) Based on Doctor Bassett’s research, including
review of depositions and interviews with decedents’ survivors,
Doctor Bassett arrived at the opinion that each of the deceased
would have contributed to their beneficiaries three and a half
hours per week in non-market services, such as driving a car,
-65- V007b
making house repairs and performing maintenance.
(155) Doctor Bassett concluded, based on the
information received from the survivors of Doctor Kodani and
Doctor Sugimoto, that the information was not reliable enough
to determine the consumption expenses of the deceased. He
reconstructed consumption expense for each of the deceased
based on information or data obtained through published
materials not he average personal expenses in Japan. He then
applied a formula on the increase in family personal expenses in
the United States and taking into account increasing family size.
(156) Information furnished to Doctor Bassett by Mrs.
Omachi appeared to be a sufficiently reliable basis to determine
Mrs. Omachi’s personal expenses. But when Doctor Bassett
compared the information supplied by Mrs. Omachi with
information obtained from Japanese published data, he found
that the information provided by Mrs. Omachi averaged slightly
less than the data based on the averages in Japan, and he opted
to use the general average in making his calculations of Mr.
Omachi’s personal consumption.
(157) Doctor Bassett determined the earning capacity of
each of the decedents based on historical data obtained from
records of wages earned annually by decedents in the positions
held by each up to the time of their deaths on September 30,
1987. To carry loss of income forward from September 30,
1987 until time of trial, Doctor Bassett calculated an average
based upon the historical record of earnings and applied that
average to determine economic loss to the time of trial.
(158) Since professors at Tottori University are
required to retire at age 65, Doctor Bassett computed lost
income caused by the death of Doctor Sugimoto and the loss of
future income caused by the death of Doctor Kodani to age 65.
Based on his research and knowledge, Doctor Bassett
formed the opinion that both professors would retire upon
reaching the age of 65, but would undertake other work for an
additional five years until reaching the age of 70. In his
opinion, the earnings between first retirement and second
— GU0077
;
retirement would be less and he fixed the amount of income to
be earned in this period until second retirement at two thirds of
earnings at the time of first retirement.
Although the widows of Doctor Kodani and Doctor
Sugimoto knew little concerning their husbands’ future plans
beyond retirement from Tottori University, they reported to
Doctor Bassett that their husbands planned to undertake some
employment and he took this information into account in
determining future economic loss.
(159) Doctor Bassett assumed Mr. Omachi would retire
upon reaching the age of 62, although most Japanese employed
by Japanese companies, according to published statistical data in
Japan, retire between ages 55 to 60. In 1985, according to
Statistical data, approximately 95 percent of all Japanese
industries had in place a mandatory retirement age between 55
years and 60 years. Doctor Bassett assumed that Japan’s aging
population, resulting in fewer young people in proportion to
numbers of older persons, would cause the age of retirement
from Japanese companies to rise to 62 in the future.
(160) Doctor Bassett obtained tables of life expectancy
from publications in Japan and calculated a life expectancy:
...for Mr. Omachi of 35.74 years until age 77.47.
...for Doctor Kodani of 23.13 years until age 79.16.
...for Doctor Sugimoto of 18.73 years until age 80.3.
Relying on life expectancy tables, Doctor Bassett
assumed that each of the wives would have outlived their
husbands.
In determining family size, he included Mrs. Omachi’s
daughter who was born in 1988. He was also aware that Mrs.
Sugimoto was now living with her son, but expressed doubt that
Doctor Sugimoto was supporting the son.
Accordingly, Doctor Bassett computer an alternate
determination excluding the son from the Sugimoto claims.
sl GU0078
(161) Doctor Bassett disclosed that his computation of
five hours per week for care and guidance of Mr. Omachi’s
child born in 1988 was received from Plaintiffs’ attorney, Mr.
Foor, and based upon the attorney’s instruction. He calculated
the sum of $130,828 for lost care and guidance. He conceded
that benefits based upon lost care and guidance are rarely
applied.
(162) Doctor Bassett conceded that his calculations have
been revised several times. He had also hoped to obtain
information from the employers of the decedents, but that
information was not forthcoming, so he was forced to compute
averages based on historical data.
Doctor Bassett recognized that Japan is now in a
recession and some economists believe that economic cycles,
when taken into consideration with other economic factors, lead
to more accurate results on economic losses. Doctor Bassett
however believes that, in the long run, the long period is more
reliable.
(163) Doctor Brodshatzer qualified as an expert
economist and testified for Exportadora. In order to compute
economic loss to the survivors of Doctor Sugimoto, Doctor
Kodani and Mr. Omachi, Doctor Brodshatzer extensively
reviewed publications containing statistical data having to do
with Japanese economic and business conditions.
In Brodshatzer’s opinion, Doctor Lowell Bassett has not
evaluated the impact of retirement upon economic losses to the
Plaintiffs from the deaths of Doctor Sugimoto, Doctor Kodani
and Mr. Omachi.
Doctor Brodshatzer also expressed his opinions that
Doctor Bassett had applied recognized economic methodology in
an inconsistent manner and has failed to consider cyctical trends
which necessarily bear on economic losses.
(164) Doctor Bassett stated his opinion that no discount
factor should be applied to reduce future economic losses to
present value. In the period from 1966 to 1990, comparison of
interest rates in Japan averaged 7.08 percent for that period, and
wage increases averaged out for the period at 8.48 percent. On
68- v0079
the basis of this Japanese statistical data, Doctor Bassett reached
an opinion that the discount factor amounted to zero.
(165) According to Doctor Brodshatzer, in the 15 years
from 1966 to 1981, wage increases in Japan have exceeded
interest rates, but in 1981 that trend was reversed and, since that
date, interest rates have exceeded wage increase in Japan.
Doctor Brodshatzer analyzed Japanese statistical data relating to
interest rates and wage increases in the period 1966 to 1990.
His approach, however, was to compare interest rates with wage
increase in five-year increments. His calculations disclose:
In the period 1966 to 1970, interest rates rose at 7.02
percent, wage increases 9.82 percent and the difference was that
wage increases rose 2.8 percent higher than interest rates.
In the period 1970 to 1975, interest rates rose at 7.81
percent, wage increases rose at 18.42 percent and the difference
was that the wage increase in that five-year period rose 10.61
percent over interest rates.
In the period 1975 to 1980, interest rates rose at 8.04
percent, wage increase rose at 8.05 percent and the two rates of
increase, wage and interest, were even.
In 1980 to 1985, interest rates rose at 7.75 percent,
wage increase at 3.97 percent, and the interest rates exceeded
wage increase by 3.78 percent.
In the period 1985 to 1990, interest rates rose 5.36
percent, wage increase rose 3.07 percent, and that period
interest rates exceeded wage increases by 2.29 percent.
(166) In Doctor Brodshatzer’s opinion, since the
number of years to date of retirement would vary with each of
the deceased, the remaining years of work life expectancy for
each decedent would also vary.
Assuming that each decedent would be available for
employment until the age of 70, the rate of discount to present
cash value would vary as to each of the decedents.
(167) Doctor Brodshatzer based his determinations of
lost income from the date of the fatal accident September 30,
1987 until the time of trial based on statistical data of
professors’ earnings in Japan and from the wage increases of
-69-
cU0080
companies employing more than 5,000 persons.
(168) Doctor Bassett and Doctor Brodshatzer differed as
well in the method followed by each in determining consumption
expense. Doctor Bassett’s approach was to obtain statistical data
from Japanese sources of personal expense and apply a formula
based upon the number of family members to project personal
consumption of each decedent.
After interviewing Mrs. Sugimoto and Mrs. Kodani,
Doctor Bassett sought to obtain additional information in order
to determine the personal consuinption for Doctor Sugimoto and
Doctor Kodani. When he was unable to obtain further
information, he concluded the information available was
unreliable and selected another method of computation. He was
satisfied, however, that the records of household expenses
maintained by Mrs. Omachi was sufficiently reliable to
determine Mr. Omachi’s consumption expense, but upon
comparing results from the alternate method, he opted to apply
the same method to determine Mr. Omachi’s personal
consumption as he employed in determining the personal
consumption of Doctor Kodani and Doctor Sugimoto.
(169) Doctor Brodshatzer relied upon the information
provided by Mrs. Sugimoto, Mrs. Kodani and Mrs. Omachi.
He found the information was sufficiently reliable to determine
personal consumption following this method. In support of his
methodology in estimating personal consumption, he expressed a
preference for using information exposed to examination by
counsel. The information which he relied upon for the most
part was found in the depositions of Mrs. Sugimoto, Mrs.
Kodani and Mrs. Omachi, together with corrections made to
their deposition testimony.
(170) Doctor Brodshatzer included pension payments as
an Offset to economic losses. Plaintiffs object on legal grounds
under the collateral source doctrine and Doctor Bassett did not
account for pension benefits in determining economic loss.
(171) I find that Doctor Brodshatzer’s computations are
more reliable than Doctor Bassett’s. It is true that the period
beginning in 1966 and ending in 1975 wages exceeded interest
-70- ivO081
rates. But beginning in 1981 and continuing until 1990, interest
rates have increased more than wage rates have increased. The
cyclical trend beginning in 1980 should be taken into account in
order to make computations of economic loss more accurate,
and reliable and future economic losses must be discounted to
present cash value.
(172) I find that Doctor Bassett has not considered
statistical data indicating that wages of older persons in Japan
increase less rapidly than younger persons. Doctor
Brodshatzer’s computation of lost income from September 30,
1987 based on statistical data of the earnings of university
professors in Japan, in computing economic losses for the
decedents, Doctor Sugimoto and Doctor Kodani, and
Brodshatzer’s use of the wage increases of employees in
companies employing more than 5,000 people and computing
economic loss for the decedent, Omachi are more reliable.
I also find that the methodology applied by Doctor
Bassett to determine the estimated personal consumption of
decedents to be unreliable. Doctor Brodshatzer’s estimates
based on evidence provided by the family members of the
decedents, I find to be more reliable.
(173) I find that Doctor Sugimoto on several occasion,
because of his work, lived apart from his wife for as long as
two years. He left her to care for his aging parents, a difficult
duty since the parents required much attention.
I find as well that Doctor Sugimoto was sometimes as
not as caring or pleasant to his wife and provided her with little
company and companionship. I find Mrs. Sugimoto entitled to
the sum of $20,000 per year for noneconomic losses reduced to
present cash value.
(174) Doctor Kodani and Mr. Omachi were more
caring and generous to their wives; however, both Doctor
Kodani and Mr. Omachi were ambitious and driven by their
efforts to obtain recognition and advancement in their work.
Omachi in particular worked long hours, sometimes returning
home at 11:00 p.m. or midnight.
I find Mrs. Kodani and Mrs. Omachi entitled to the sum
oF. cUO0082
of $25,000 per year for noneconomic damages reduced to
present cash value.
CONCLUSIONS ON DAMAGES
(175) While I accept Doctor Brodshatzer’s computations
for past economic losses brought about by the deaths of Doctor
Sugimoto, Doctor Kodani and Mr. Omachi, I conclude that
reduction of economic loss by the amount of pension benefits
which have been received by the survivors is a reduction of
income received from a collateral source. Under California law,
pension plan benefits are considered to come from a collateral
source and should not be used to offset tort damages, Hume vs,
Lacey, 112 Cal.App.2d 147 (1952).
(176) I conclude that Doctor Bassett’s projection of
retirement ages of decedents is largely unsupported by the
evidence and is contrary to statistical data or information.
Doctor Brodshatzer projected the initial retirement of Professor
Sugimoto and Professor Kodani at 65, the mandatory retirement
age of professors at Tottori University. He determined that Mr.
Omachi would retire from Asahi Chemical at the age of 60.
I conclude that the evidence of future employment and
compensation of the decedents beyond retirement to be so
uncertain and indefinite that future economic loss cannot be
estimated within any reasonable probability or amount.
(177) A claim is made on behalf of Eri Omachi, the
daughter of decedent Omachi. Eri was born some months after
the death of her father. The claim is supported on nothing more
than instructions given by Plaintiffs’ counsel, Mr. Foor to
Doctor Bassett to include five hours per week of special services
lost to Eri Omachi in computing damage estimates. I reject this
claim as unsupported on the information presented at trial.
(178) In a recent air crash case, the Ninth Circuit Court
of Appeals clarified the California law of damages in a wrongful
death case, and I quote,
"In California, the wrongful death plaintiff may
72- c0008s
recover ‘lost present and future economic
support as well as the pecuniary (as opposed to
sentimental) value of such factors as lost
comfort, society, companionship, care and
protection.’ Notwithstanding the fact that it is
the pecuniary value of lost society, comfort and
care that is recovered in a wrongful death action,
the California Supreme Court labeled these
damages as non-pecuniary because they do not
have an ascertainable economic value. To
recover for the loss of society, comfort and care,
however, the plaintiff must establish the
pecuniary value of such loss and the amount is
monetarily quantified. Under California law,
the damages for wrongful death must be reduced
to present value " In Re Air Crash Disaster
Near Cerritos, California, 982 F.2d 1271 at
1278 (9th Cir. 1992).
(179) Neither party has presented evidence on the
appropriate discount rate for noneconomic damages, and
Plaintiffs seem to argue that the Court should not discount
noneconomic damages at all.
As the Ninth Circuit ruled in Cerritos, noneconomic
damages must be discounted to present value in California. The
discount rate should reflect the rate of return over inflation an
ordinary investor seeking reasonable security could realize, Fox
vs, Pacific Southwest Airlines, 133 Cal.App.3d 565, 568, n. 2
and 570, n. 5 (1982).
(i180) In calculating economic damages, Doctor
Brodshatzer applied a three percent discount rate to future
nonmarket services. I find that, for the purpose of selecting a
proper discount rate, nonmarket services are analogous to
noneconomic damages. I have discounted the noneconomic
damages to present value using three percent as the proper
discount rate.
(181) Mrs. Mayumi Nukiwa is Doctor Kodani’s eldest
v00084
ae
a
daughter. I assume that Mrs. Nukiwa is an heir entitled to
recover for the death of Doctor Kodani under California Code
of Civil Procedure § 377. Ms. Nukiwa’s claims of economic
damages are by reason of increased telephone and travel
expenses to console her mother and her grandmother and the
loss of expected gifts from Doctor Kodani to Mrs. Nukiwa and
her children. I find that these claims of economic loss are too
speculative and tenuous.
(182) Mrs. Nukiwa claims noneconomic damages as
well. Since her marriage in 1982, Doctor Kodani and Mrs.
Nukiwa visited together only about twice a year. While I am
sure she suffered considerable grief and sorrow at the loss of her
father, their independent lives do not support a finding that she
suffered a significant loss of care and companionship. See
Krouse vs. Graham, 19 Cal.3d 59 (1977).
(183) Exportadora argues that this Court should
apportion the award of noneconomic damages between
Exportadora, Aviones, the government of Mexico, Cessna and
Teledyne based upon the relative culpability of the parties.
California law requires the apportionment of noneconomic
damages in, quote,
".,.an action for... wronyful death, based upon
principles of comparative fault." Cal. Civ.
Code § 1431.2.
In Miller vs. Stouffer, 11 Cal.Rptr. 2d 454 (Cal.App.
1992), the California Court of Appeals ruled that Section 1431.2
did not apply to judgments based on vicarious liability.
Exportadora is liable not only for its own negligence but
vicariously for the negligence of the pilot, Raul Gutierrez
Tellez, based upon implied contract, n
This text is long and has been trimmed here. Open the source document for the complete record.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.