ADDITIONAL CASES Apical Industries, Inc. d/b/a Dart Aerospace, A California Corporation, Plaintiff v. Liberty Helicopters, Inc., Nyonair LLC, Flynyon LLC, Meridian Consulting I Corporation, Inc., Richard Vance, Airbus Helicopters, S.A.S, Airbus Helicopters, Inc., Eurotec Canada Ltd., Defendants; Third-Party 595884/2021 The following e-filed documents, listed by NYSCEF document number (Motion 002) 19, 20, 21, 22, 23, 37, 38, 39, 40, 41, 42, 43 were read on this motion to/for DISMISS. DECISION + ORDER ON MOTION In this subrogation action, defendant APICAL Industries Inc. d/b/a Dart Aerospace (“DART”) moves to dismiss the complaint based on the “economic loss doctrine.” Plaintiff United States Aviation Underwriters, Inc. (“USAU”) opposes the motion. The motion is denied. This subrogation action arises after the fatal helicopter accident on March 11, 2018, resulting in five fatalities and a total loss of the subject helicopter — a 2013 Airbus AS350B2 with the FAA registration number N350LH (“subject helicopter”). The wrongful death action is pending before this Court: Cadigan v. Liberty Helicopters, et al., Index No: 152286/2018 (“Cadigan action”). Although there has been no finding of liability yet in the Cadigan action, one of the primary theories of liability involves a failure of an aftermarket floatation device installed by DART. After Liberty Helicopters accepted delivery of the subject helicopter, Liberty engaged Eurotec Canada to install six aftermarket floatation devices manufactured by DART. In the event of an emergency water landing, the pilot manually activates DART’s floatation devices, causing the helicopter to float safely. During the fatal March 11, 2018 incident, the DART floatation system failed to inflate, and, as a result, the helicopter sank with the five passengers trapped inside. USAU issued an insurance policy (No. SIHL1-074V) to Liberty Helicopters, the subject helicopter’s operator, with an agreed value of $2,300,000. Following the accident, USAU paid approximately $2,275,000 for the loss of the subject helicopter and became subrogated to Liberty’s right of recovery against DART. On May 28, 2021, USAU filed its complaint in subrogation, seeking damages for the loss of the subject helicopter. USAU’s coverage does not include the wrongful death claims that exist in the Cadigan action. DART seeks to dismiss the complaint, arguing that the “economic loss doctrine” in a products liability claim bars tort recovery against a manufacturer for direct and consequential economic losses resulting from a defective product. Bocre Leasing Corp. v. General Motors Corp., 84 NY2d 685 [1995]. USAU argues that the “economic loss doctrine” does not apply because the floatation device was an aftermarket product added on to the helicopter by a third-party. As an aftermarket product, USAU believes that the floatation device destroyed “other property” — specifically the subject helicopter — and therefore, USAU can recover in tort against DART. See Elec. Waste Recycling Group. Ltd. v. Andela Tool & Mach., Inc., 107 AD3d 1627, 1629 [4th Dept 2013]. DART attempts to rebut this argument, showing that the floatation device was a necessary component of an integrated unit. While most of DART’s cases involve a component essential to operation (like an engine compressor blade in Bocre), a Third Department appeal of a summary judgment motion shows that tort claims caused by an optional auxiliary light bar that caught fire are barred by the “economic loss doctrine.” See AKV Auto Transp., Inc. v. Syosset Truck Sales, Inc., 24 AD3d 833 [3d Dept 2005]. The AKV Auto Transport case suggests that the “economic loss doctrine” can apply to aftermarket safety devices, such as the auxiliary light bar at issue in that case or a floatation device attached to a helicopter skid in the present case. As the instant application is a motion to dismiss and not a motion for summary judgment (as in the AKV Auto Transport case), the Court finds that further factual development is needed. Specifically, a factual showing will be necessary for the Court to decide whether the floatation device was sufficiently distinct, so the helicopter constituted “other property” for purposes of permitting tort claims to proceed against DART or if the floatation device was integrated into the unit, warranting dismissal under the “economic loss doctrine.” The Court is denying the motion without prejudice, allowing the parties to revisit this issue at the summary judgment phase once discovery is completed. Based on the foregoing, the Court need not reach arguments by the parties relating to a conflicts of law analysis at this juncture. Accordingly, it is hereby ordered that Motion Sequence 002 is denied. This constitutes the decision and order of the Court. CHECK ONE: CASE DISPOSED X NON-FINAL DISPOSITION GRANTED X DENIED GRANTED IN PART OTHER APPLICATION: SETTLE ORDER SUBMIT ORDER CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT REFERENCE Dated: July 14, 2023
