GE CAPITAL AVIATION SERVICES, INC. v. PEMCO WORLD AIR SERVICES, INC.
GE Capital Aviation Services, Inc., n/k/a GE Capital Aviation Services, LLC
v.
Pemco World Air Services, Inc., and Alabama Aircraft Industries, Inc.
No. 1090350.
Supreme Court of Alabama.
Decided December 2, 2011.
MAIN, Justice.
GE Capital Aviation Services, Inc., now known as GE Capital Aviation Services, LLC ("GE Capital"), and Pemco World Air Services, Inc., and Alabama Aircraft Industries, Inc. (hereinafter collectively referred to as "Pemco"),1 all national and international corporations in the aircraft industry, have fiercely litigated a commercial-contract dispute since 2004 in which each party alleged breach-of-contract and fraud claims against the other. GE Capital and Pemco each sought punitive damages in addition to compensatory damages. The litigation culminated in a jury trial that lasted approximately three weeks. The parties were ably represented by experienced counsel. The jury returned a verdict in favor of Pemco on all of its claims, awarded Pemco $2,147,129 in compensatory damages and $6,500,000 in punitive damages, and returned a verdict in favor of Pemco on all of GE Capital's counterclaims. GE Capital appeals from that aspect of the judgment entered on the jury verdict in favor of Pemco on its claims and from the trial court's order denying GE Capital's postjudgment motions. GE Capital does not appeal from that aspect of the judgment in favor of Pemco on GE Capital's counterclaims. We reverse and remand.
I. Factual Background and Procedural History
GE Capital is an international leader in commercial-aircraft leasing and financing. Pemco operates an aircraft-maintenance and repair business used by several major national and international airlines and is authorized by the Federal Aviation Administration ("FAA") to perform all types of aircraft maintenance and repairs. This case deals with a commercial dispute between these corporate entities involving the administration of a detailed multi-million-dollar contract negotiated and drafted over a period of months and executed by principals of GE Capital and Pemco.
Maintenance inspections on commercial aircraft are governed by the manufacturer of the aircraft. The purpose of a routine maintenance inspection is to make the aircraft airworthy and safe until the next maintenance inspection required by the FAA. An inspection known in the aircraft industry as an "8C check" is one of the most comprehensive maintenance inspections an aircraft can undergo. The tasks necessary to perform an 8C check are dictated by a manual issued by the manufacturer of the aircraft, which contains what the industry refers to as "routine task cards" specifying the inspection and maintenance tasks that must be completed. In addition to the routine tasks, both an 8C check and a check of the structure of the aircraft known as an "ISIP check" involve what the aircraft industry refers to as "nonroutine" maintenance for which there is no task card but which arises when an abnormal condition called a "discrepancy" is detected during an inspection. When a discrepancy is noted, a nonroutine card is generated, and FAA regulations require that any "discrepancy" that may impact safety or airworthiness must be repaired.
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