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Aviat Aircraft, Inc. v. Saurenman

August 14, 2009

AVIAT AIRCRAFT, INC., A WYOMING CORPORATION, APPELLANT (DEFENDANT),
v.
EDWARD SAURENMAN, APPELLEE (PLAINTIFF).



Appeal from the District Court of Lincoln County The Honorable Dennis L. Sanderson, Judge.

The opinion of the court was delivered by: Hill, Justice.

Before VOIGT, C.J., and GOLDEN, HILL, KITE, and BURKE, JJ.

[¶1] Appellant, Aviat Aircraft, Inc. (Aviat), seeks review of the district court's "Judgment in Accordance with Verdict." We will explain the details below, but we briefly note here that Aviat actually appealed from a decision of the district court that was made independent of, but which was subsumed into, the above identified "Judgment." We also note that Aviat filed a motion for new trial that stayed the time for filing the notice of appeal, and that Aviat did not file its notice of appeal until an appropriate time after the motion for new trial was denied. We will affirm the district court.

ISSUE

[¶2] Aviat raises this issue:

Did the district court err when it determined as a matter of law that after wrongfully converting an aircraft owned by Aviat Aircraft, Inc., Mr. Saurenman became an involuntary bailee and that such involuntary bailment was a defense to Aviat's claim for conversion?

Saurenman restates the issue thus:

Based upon uncontroverted material facts, did the district court err in finding that Saurenman was an involuntary or gratuitous bailee, thereby precluding Aviat's claimed property damages to its airplane from exposure to elements and deterioration over time?

FACTS AND PROCEEDINGS

[¶3] This case has a long procedural history. Boiled down to its essence, there are two individuals and a corporation who figure in this story. The corporation is Aviat, of course. Saurenman worked for Aviat, which was a corporation wholly owned by Stuart Horn (Horn), who was its president and the person in control of its day-to-day operations. Aviat builds aerobatic airplanes, other small aircraft such as those used by bush pilots in Alaska, as well as "kit" airplanes for the truly adventurous. Saurenman worked for Aviat as an "engineer" who designed, built, and flew many types of aircraft. His work experience included working for other aircraft manufacturers, including some that produced personal and military aircraft (e.g., Learjet and Raytheon). Saurenman met Horn in 1995-96, and Horn hired him to work for Aviat in 1997. That employment relationship lasted until early 2004, when Saurenman chose to treat Horn's abusive conduct toward him as a constructive discharge and left that employment.

[¶4] Horn tried to impeach Saurenman's credibility by questioning him as to why one of the aircraft manufacturers Saurenman claimed to have worked for had no record of him ever being an employee. Without missing much of a beat, Saurenman explained that he worked for a subcontractor which worked directly for that manufacturer on site. Saurenman produced an internal phone book used by that aircraft manufacturer which showed his name and phone number for the time he claimed to have worked there. Horn also tried to make much of the fact that Saurenman had very little formal education, apparently to attempt to show that he had deceived Horn about his qualifications to work for Aviat. However, once again the record is devoid of any direct evidence that Saurenman purposely or maliciously ever tried to deceive Horn, or any one else, about the level of his academic achievements. He was not a degreed engineer, indeed, he did not have a high school diploma, although he did have a GED.

[¶5] Both of Saurenman's parents were aerobatic pilots and he grew up in that world. He built his first aerobatic plane as a teenager and had worked in one way or another in the design, building, and flying of aircraft of various sorts for his entire work life. Interestingly enough, the two principal designers of the bulk of the aircraft Aviat produced were both individuals who were not "college graduate" engineers, but rather experienced pilots intimately familiar with the design and building of the types of aircraft Aviat produced.

[¶6] The litigation that leads us to this juncture was initiated by Saurenman with the filing of a multi-count complaint in the district court on May 13, 2004. Saurenman asserted that he was approached by Horn (on behalf of Aviat) in 1997, and was hired to work for Aviat as an "advanced design engineer." Saurenman contended that he was either fired, or "constructively discharged," from Aviat in early 2004, when Horn became very angry after a meeting Aviat was hosting at its Afton headquarters with officials from the Federal Aviation Administration (FAA). Those meetings related to a new aircraft that Saurenman was designing known as the A-4000. That aircraft was essentially a modified version of a two-seat plane Aviat had manufactured for years, which was being enlarged to carry four passengers. Horn was frustrated at that time because he thought the progress of the project had been too slow, as well as because he "perceived" that Saurenman had been late for that meeting with the FAA that day. Saurenman explained in his testimony that he had forewarned Horn that he would necessarily be delayed in arriving at the meeting and had told Horn he would have to take care of the first half-hour or so of the meeting -- much of which was more social that substantive -- i.e., coffee, introductions, etc. According to Saurenman, after that meeting was over, Horn flew into a rage that included him seriously damaging one of the prototype A-4000 aircraft by repeatedly throwing heavy objects at it, screaming and hollering, and dangerously (to those persons present) accelerating his pickup truck out of the hangar in which the aircraft was being assembled. Horn did not dispute that an event much like that described by Saurenman occurred, although he did describe it in terms more favorable to his point of view, just as, perhaps, Saurenman described it in terms more favorable to his point of view.

[¶7] Immediately following this event, Saurenman left Afton, as he had planned to do before Horn's "tantrum" occurred, and returned to the State of New York, where he was doing his work for Aviat. However, shortly after returning to New York, Saurenman informed Horn that he would no longer work for Aviat. At that point in time, Saurenman had possession of two planes that were titled in Aviat's name, a Sukhoi plane and the Monocoupe. At that time those planes were being housed in a hangar in New York that was leased by Aviat. Horn e-mailed Saurenman and directed that he return both planes, as well as an extensive list of other Aviat property Horn claimed Saurenman had in his possession. By the time this litigation came to trial, the only property still in dispute was the Sukhoi and the Monocoupe. With respect to the Monocoupe, Saurenman had "revised" his position from one that he "owned" the Monocoupe, to one that he was entitled to an "interest" in the Monocoupe to the extent that he had owned the skeletal airframes and jigs (a sort of frame) that he had built before he went to work for Aviat, and which had been transported to Afton for completion of the plane. Eventually, Saurenman was determined not to have any interest of any sort in the Monocoupe.

[¶8] The employment "contract" between Horn and Saurenman was in many ways quite informal and the closest it ever came to being formalized was a draft letter from Horn to Saurenman that contained marginal notations made by Saurenman, but which was never signed by Horn. Saurenman claimed that they reached an agreement to that effect and Horn denied it. The record fully supports a conclusion that that letter best summarized their contractual relations, which was also the jury's conclusion at the end of the trial. In order to fill in the gaps, it is necessary to look to the testimony of both Horn and Saurenman and their views on that "contract," which frequently were directly at odds with one another. It is of some considerable significance to the resolution of the very limited issue that we must address in this appeal that Saurenman lived with Mr. Horn and his family, in their home in Afton, during almost all the time that he worked in Afton for Aviat. During that time they developed a very close personal relationship, as well as a fairly close working relationship.

[¶8] In his complaint, Saurenman contended:

1. Count I -- Breach of Contract (All Defendants). The claims detailed in this section of the nine-page complaint had to do with the terms and conditions of Saurenman's employment with Horn and Aviat.

2. Count II -- Breach of Contract (Defendant Aviat). This claim had to do with Saurenman's ownership of the rights, title, and interest in the design, the data, and the rights to manufacture the type of aircraft known as the Pitts S1-11 (Superstinker). On January 18, 1996, Saurenman sold his rights to that aircraft to Aviat. Sauernman contended that Aviat agreed to pay Sauernman $240,000.00 for the rights to that plane, but only paid $130,000.00 of that amount.*fn2

3. Count III -- Conversion by Aviat of the plans for the Superstinker airplane. This claim is closely interrelated with Count II, immediately above.

4. Count IV -- Conversion of Sukhoi Aircraft (All Defendants). This claim arose because Saurenman wanted to buy a Russian-made aerobatics plane known as a Sukhoi. The Sukhoi was to be for his personal use and he was to own it, once he had paid for it. Horn agreed to have Aviat use its credit to buy the plane, and then Saurenman was to make payments on it until he had paid off that "loan." Saurenman did not pay off that loan, but other deals were struck between Saurenman and Horn in the intervening years which were intended to effect a forgiveness by Aviat of any part of that loan that was yet unpaid. We briefly note here that the jury agreed with Saurenman that he owned the Sukhoi aircraft (and that Aviat did not), although that was disputed by Horn and Aviat until the very end of this litigation.

5. Count V -- Conversion of Monocoupe Aircraft (All Defendants). Saurenman owned the "Type Certificate" for the Monocoupe. The "Type Certificate" was registered with the Federal Aviation Administration and it included all the type data, drawings, and plans (there is no dispute about those facts). The Monocoupe was a 1930's vintage plane and the data and plans were in a format well-known to that time period, but none of those plans had been "translated" via computer assisted design (CAD) into a modern format. Saurenman had begun work on building two Monocoupe aircraft before he went to work for Aviat, and Aviat had potential buyers who were interested in acquiring such a plane. Saurenman claimed that he owned or, as it was later re-described, had a financial interest or stake in, one of the Monocoupe aircraft. He spent much of his initial time at Aviat working on those planes. Saurenman claimed that Aviat registered the Monocoupe in the name of Aviat without his permission and without any colorable right.

6. Count VI -- Conversion Monocoupe Type Data (All Defendants). Saurenman contended that Aviat retained much of his proprietary data relating to the Monocoupe after he was discharged by Horn.

7. Count VII -- Abuse of Process (Defendant Horn). When Saurenman was fired in early 2004, he was working most of the time in New York State on a new project that Horn had put Saurenman in charge of. Horn had rented office space in New York for Saurenman to use because Saurenman felt he was wasting too much time flying to and from New York, to Wyoming. For the purpose of commuting to and from New York to Wyoming, Horn provided Saurenman the use of one of the Monocoupe prototypes. In addition to the Monocoupe, Saurenman also had possession of the Sukhoi aircraft at his home in New York. Saurenman claimed he had partly paid for that latter plane and, to the extent he had not paid for it, that it was a substitute for part of his compensation package which Horn had not paid to him. After Saurenman left Aviat in early 2004, he kept both aircraft in his possession. Horn went to police authorities, first the local county sheriff and then the FBI, accusing Saurenman of stealing the two planes. Neither police agency opted to prosecute because Saurenman had obtained his possession of the aircraft legally and Horn admitted that.

[¶9] In response to Saurenman's complaint, on June 18, 2004, Aviat and Horn filed a voluminous answer and counterclaim. One of the first significant delays in this litigation came about when, on October 1, 2004, Horn and Aviat filed a "Notice of Removal" in the United States District Court for the District of Wyoming on the basis that an amendment to Saurenman's complaint gave rise to a copyright infringement claim. Although some proceedings continued in the state district court in the meantime, in a November 10, 2004 order, the federal district court directed that all "records and proceedings" be filed with that court. In a September 15, 2005 order, the matter was remanded back to the state district court because Horn and Aviat failed to demonstrate proper removal jurisdiction, because all of Saurenman's claims were state law claims, and because what Horn and Aviat deemed to be a copyright claim was only a traditional state-law conversion claim. That order also concluded that any further claims with regard to the asserted copyright claim would have to be vindicated in a separate civil action in federal court.

[¶10] While this case was in the process of going to and from the federal district court, the state district court issued an October 14, 2004 order resolving a motion for preliminary injunction filed by Horn and Aviat. That order covered a lot of ground, but for purposes of this appeal, it was important because it temporarily settled what was to be done with the Monocoupe aircraft:

4. [Monocoupe]. By October 4, 2004, Saurenman shall relinquish possession and control of a specific aircraft known as [Monocoupe] to a receiver agreed upon by the parties and paid for by [Aviat/Horn]. The receiver shall immediately hangar [that aircraft] at a hangar to be chosen by Aviat, which hangar may be located anywhere in the United States, so long as said hangar is not on property owned by Aviat. The receiver's duties shall include, possessing [the aircraft], ensuring that it is secure, hangared in a hangar that is in good repair, and issuing periodic reports to the parties detailing the condition of the [aircraft]. Aviat shall pay the cost of ...


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