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The warehouse owner recovered a judgment for damages from the pilot for the destruction of his warehouse and its contents, and the pilot has asserted a claim against the company to recover compensation on account of that liability.
A company operates an aircraft maintenance and repair business serving the needs of owners of private airplanes. A pilot contracted with the company to replace the engine in his plane with a more powerful engine of foreign manufacture. The company purchased the replacement engine through a representative of the manufacturer and installed it in the pilot's plane. A short time after it was put into use, the new engine failed, and the plane crashed into a warehouse, destroying the warehouse and its contents. The company was guilty of no negligence in the procurement, inspection, or installation of the engine. The failure of the engine was caused by a defect that would not be disclosed by inspection and testing procedures available to an installer. There was no negligence on the part of the pilot, who escaped the disabled plane by parachute.
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Following a finding of liability and payment of damages, multiple tortfeasors may seek to shift the entire loss among themselves based on indemnification. Parties can contract for a right to an indemnity. In a strict liability case, each supplier of a defective product is liable to the injured customer. In addition, each supplier has a right of indemnification against all previous suppliers in the distribution chain. However, the manufacturer is liable if the product was defective when it left its control.
A is correct. The company supplied and installed the defective engine as part of its normal course of business in maintaining and repairing private airplanes for customers. Therefore, the company is a commercial supplier of a defective product and can be held strictly liable for resulting damages. Therefore, the pilot can succeed in recovering full compensation for the damage caused to the warehouse due to the defective engine.
B is incorrect. the pilot can recover full compensation even though the company was not negligent. Unlike a negligence theory of products liability, in which a commercial supplier may potentially avoid liability through a defense that they satisfied a duty of care, under a strict products liability theory, a commercial supplier has an absolute duty to make a product safe. Under a strict products liability, the supplier can be held liable even if they exercised all possible care. Therefore, the company would still be strictly liable for the damages caused as a result of the defective engine, and thus would have to pay full compensation.
C is incorrect. The pilot could still receive full compensation from the company even though the pilot and the company were not negligent and the manufacturer was responsible for the defective engine because the company could be held strictly liable as a commercial supplier. Therefore, the company would be liable for all damages resulting from the defective engine. The company could then seek to be indemnified by the manufacturer of the defective engine.
D is incorrect. The pilot could still seek full compensation from the company even though the warehouse owner has a judgment against the pilot. In order for a defendant to cite assumption of risk as a defense to strict products liability, the defendant must establish that the plaintiff voluntarily and unreasonably encountered a known risk. The facts here do not indicate the pilot assumed the risk. The judgment against the pilot established liability, not fault, and the pilot could recover full compensation under a strict liability claim against the company.