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EDITORS NOTE: The Texas Lawbook provided extensive coverage of the trial. For previous articles about the case, please scroll down.
By Natalie Posgate
Staff Writer for The Texas Lawbook
(April 25) – Lawyers for Hunt Consolidated and Honeywell International pointed fingers at each other during closing arguments of the three-week products defects trial.
“This case is about a large, international corporate bully,” said Hunt’s lawyer, Michael Hurst. “I told you this was a case about hiding the truth to protect the profits. For the last three weeks, we heard from Honeywell trying to explain away why this isn’t the case.”
Honeywell’s lawyer Jessica Everett-Garcia had a different spin.
“We’re not here because Honeywell was a bully,” she said. “This is a dispute for two large companies about who should pay for a repair [of an engine] 19 months after the warranty expired.”
Eight women and four men will decide who was right in this $2.3 million dispute. The jurors begin their first full day of deliberation Friday to determine whether Honeywell committed fraud against Hunt by keeping certain information about its Learjet turbofan engines from the private Dallas-based oil and gas company.
Hunt owns two corporate jets that are powered by Honeywell engines. The company brought fraud claims upon Honeywell in 2011 after it discovered major secondary damage in its engines due to broken blade retainers. Hunt claims Honeywell purposely deceived Hunt about its blade retainers’ tendency to break off and cause secondary damage to the engines by leaving out important information in a 2008 service bulletin that announced a new blade retainer design.
Honeywell disagrees, arguing that the language in the service bulletin – “more robust design” – is common knowledge in the field that suggests a product has an improved design because the older model was not as reliable. The New Jersey-based conglomerate giant also asserts that the incompetence of Hunt’s former director of maintenance, Tim Crain, is why Hunt did not get the new blade retainers installed before the warranty expired in 2009. Honeywell also insists it did not conceal information about the blade retainers because it presented the information to various National Business Aviation Association conferences – presentations it asserts Crain should have attended.
Both Hurst and Everett-Garcia brought in personal stories about their children to go along with their argument.
Hurst explained that like Hunt, his 11-year-old daughter had recently been bullied.
“It’s rare that my job as a trial lawyer ever overlaps with what I do as a parent,” he said. “When jury selection was going on in this case, my worlds collided. What was going on with my daughter was also going on in this case.”
He summarized two pieces of advice he gave his daughter when one stands up to a bully. First, the bully will “hide behind someone else.” Second, the bully will often blame the victim.
“Honeywell hides behind three meaningless words: ‘More robust design.’ Nobody thinks ‘more robust design’ means ‘parts routinely breaking,’” Hurst said. ‘New and improved?’ Yes. ‘Causing damage inside?’ No.
“One of the first things they (Honeywell) did was say, ‘We’re not the bully, that’s you. How dare you, Hunt, to come after us, to get us to do the right, ethical thing,’” Hurst added.
Everett-Garcia connected dots to Hurst’s story.
“I have an 11-year-old daughter too,” she said. “It breaks my heart that anybody’s daughter or son would be bullied. But this case is not about Honeywell bullying anyone. It couldn’t be further from the truth.”
She referenced to a story she told jurors during voir dire three weeks ago about her son, who is in kindergarten. He came home from school one day and said, “Mommy, a kid punched me today.” Everett-Garcia described the feeling of shock about who would bully her little boy, until she learned the full story: her son had thrown the first punch, and both had been sent to the principal’s office – not just the boy Everett-Garcia’s son told her about.
She reminded jurors that Hunt is like her son in this instance by not telling the full story. Once one learns the full story, it completely changes.
Everett-Garcia walked jurors through the legal definition of fraud, emphasizing that it’s not a light allegation to make nor to charge someone with.
“Fraud isn’t just knowing more than you say,” she said, alluding to the problem language that was left out in Honeywell’s 2008 service bulletin. “Fraud is intentional tricking. Saying less than you know… that’s not fraud. Fraud has very stringent elements. We don’t go around accusing people of lying and deceiving us and harming us without it being true.”
Hurst also alluded to something he told jurors during voir dire – an acronym he invented to describe what Honeywell did in this case.
“I said they put a L.I.D. on it,” Hurst said. “L: they lied and concealed the truth. I: they did it with intent. D: they caused us damages.
“You can put an ‘E’ in there and say they L.I.E.D., because they came up with lots of excuses,” Hurst added.
The three-week jury trial was the second trial for this case. In June 2013, Dallas County District Judge Martin Hoffman declared a mistrial due to concerns of the jury – which had been deliberating for four days – delivering a verdict before some jurors left town for vacation (deliberation took place close to Father’s Day Weekend).
Hurst, Shonn Brown and Steve Hopkins, all attorneys at the Dallas law firm Gruber Hurst Johansen Hail Shank, serve as Hunt’s counsel.
Everett-Garcia and Joe Mais, both Phoenix, Ariz.-based partners at Perkins Coie, serve as Honeywell’s lead counsel. Before the second trial, Honeywell also hired Monica Latin, a seasoned trial and appellate lawyer and partner at Carrington, Coleman, Sloman & Blumenthal.
A handful of colleagues, friends and family members of the attorneys were present for closing arguments. Amongst the crowd was Hunt’s CEO, chairman and president Ray Hunt.
Hurst and Latin, who are good friends, hugged each other after closing arguments ended, seemingly relieved that they no longer had to argue with one another.
Highlights of Week 3 Testimony
An expert witness for Hunt told jurors Wednesday that when he examined the Honeywell engines of Hunt’s Learjets, he could tell that the damage “occurred over a long period of time” – even before their 2009 warranty expiration.
Aviation consultant Arthur Lee Coffman’s opinion contradicts Honeywell’s argument that it’s no coincidence Hunt reported its defective engines to Honeywell after their warranty had expired.
Coffman, also a certified pilot and A&P mechanic, told jurors that while the engine’s blade retainers do not serve much of a purpose when the jet is in the air, they should at least stay in place.
“If they’re moving, they’re not serving their purpose,” Coffman said.
As part of his expert opinion, Coffman visited Dallas Airmotive, the local aircraft service center that had Hunt’s Learjet engines. One engine had every blade retainer missing, and the other had all but one missing, he told the jury. Pictures of the engines’ blades were displayed, which Coffman said suffered “very heavy domestic object damage” due to the blade retainers breaking off.
He also addressed his opinion on the blade retainers’ movement once they break off. Honeywell engineers and lawyers have argued throughout the case that because the engine is moving so fast, the force causes blade retainers to immediately exit through the tailpipe once they break.
Coffman disagreed. He compared the blade retainer separation to what would happen if one threw a rock at a fan moving at high speed: because it can’t get past the fan by slipping between the blades, it bounces back. Because of this, the blade retainers bounced around inside of the engine, he explained.
“The particle gets kicked back and forth, and can sit there until it tears everything to shreds,” Coffman said.
During cross examination, Honeywell’s lawyer Joe Mais pointed out that Coffman formed his opinion for this case without even examining the broken blade retainers. Mais pulled up a previous deposition in which Coffman stated, “As a mechanic, I wasn’t interested in seeing a broken blade retainer.”
To contradict Coffman’s expert opinion, Mais called Honeywell’s chief engineer of commercial propulsion, Fred Fuller, to the witness stand. Fuller, also a Honeywell corporate representative, is the engineer in charge of the safety, design, development, certification and fielding of various Honeywell turbofan engines.
Fuller told jurors Thursday morning that he did not agree with Coffman’s opinion that Hunt’s engines experienced damage within their warranty period. To Fuller, it was “inconceivable” that nobody would notice damage in the engines until 19 months after the warranty had expired because a great number of inspections occurred in that period of time.
He also disagreed with Coffman’s argument that the blade retainers could have moved upstream in the engine once they broke off. To justify his opinion, he repeated previous testimony of Honeywell engineer Jim Niessink, who told jurors that the horsepower of a Honeywell turbofan engine reaches 7,000 RPM (revolution per minute).
Another expert
Earlier this week, jurors heard from Honeywell’s expert witness, Charles Joe Fisher, who refuted Hunt’s first expert witnesses’ opinion that Hunt’s Learjets suffer a 16 to 18 percent diminution rate in its value.
Fisher, a certified pilot and the owner of an aircraft sales, brokerage and consulting firm, said he didn’t agree with expert witness Dennis Blackburn’s opinion because once an engine is repaired, the plane is “basically as good as new.”
During cross examination, Hunt’s lawyer Michael Hurst tried to make the point that Fisher had been found liable for fraud in a Florida trial to impeach the credibility of his firm and Fisher as a witness. Judge Hoffman instructed the jury to disregard this allegation because Hurst could not produce any written proof of a fraud judgment.
Fuller’s Video Deposition
Fuller has been present for the entire trial as a Honeywell corporate representative. But because of a vocal chord dysfunction that prevents him from speaking for long periods of time, Fuller delivered the bulk of his testimony to jurors via pre-recorded video deposition.
Earlier this week, Fuller told the jury that he did not agree with various Honeywell engineers’ decision to omit the problem language in the 2008 service bulletin that explained the reason for the new retainer design – that the old model had not been as reliable as Honeywell had hoped.
He also admitted that if he knew about the domestic object damage inside Hunt’s engine, he would not have advised Hunt to fly the plane.
But he later insisted that the blade retainer separation issue was never a safety threat to customers because the Federal Aviation Administration would require Honeywell to take more proactive measures if there was more than even a one in one billion chance of serious injury occurring on a flight that had blade retainer separation.
To put this statistic in perspective, Fuller explained other highly unlikely occurrences that would be more likely to happen than this less than one in a billion probability.
He said the chance of a serious injury occurring on a flight with blade retainer separation is less likely to happen than the FAA’s definition of reasonable probability of serious injury to occur on any next flight (one in one billion), which is less than the chance of winning the Powerball lottery with a single ticket (one in 175 million), which is less than the chance of a person being struck by lightning this year (one in one million).
Throughout this trial, Hunt has alleged that Honeywell’s reasoning for saying it released a blade retainer with a “more robust design” that could be installed “at next access” in the service bulletin instead of explaining the old blade retainers’ reliability issue was a business decision to protect corporate profits. Honeywell engineers have testified that it would be a tremendous cost to proactively install these more robust blade retainers before each of their 1,500 customers’ scheduled 2,500 flight hour maintenance checkup.
Fuller asserted, however, that the wording choice for the service bulletin was never a business decision. In fact, finance executives at Honeywell weren’t “even allowed in the room” for safety discussions involving the 2008 service bulletin.
Doug Stears, a technical engineering manager at Honeywell who ran a financial analysis of the new blade retainers, echoed Fuller’s argument when he took the stand. He said the decision to advise customers on the service bulletin to install the new blade retainer design “at next access” had already been made before he ran his financial analysis of the profitability of the new blade retainer designs.
Expert Witness: Hunt’s Learjet Value is Significantly Diminished
By Natalie Posgate
Staff Writer for The Texas Lawbook
DALLAS (April 22) – Hunt’s first expert witness testified Friday that the damages Hunt’s corporate jet suffered diminished the value of the aircraft by 16 to 18 percent, which he said was a “significant” amount.
Aircraft appraisal expert Dennis Blackburn said the amount is significant because the book value of Hunt’s Learjet has already diminished to $3.5 million from being a 10-year-old model, a small amount compared to the $50 million to $85 million it would cost to purchase a brand new Learjet. With a 16 to 18 percent diminution calculated in, the value could be deducted by an additional $530,000 to $630,000, Blackburn said.
The cause of the diminished value, Hunt claims, is due to damage the Dallas-based oil and gas company’s Learjet engine underwent due to mass blade retainer failure and domestic object damage. Hunt discovered this in 2011 after one of the jet’s engines failed to start during pre-flight operations.
Hunt seeks $2.3 million from Honeywell in damages in this case. In addition to the diminished value of the jet, this amount also includes rental and repair fees and interest charges.
Blackburn added that the 16 to 18 percent deduction could be a conservative estimate. Because 2008 marked the switch to a “buyer’s market,” consumers have been more in control, which could make it more difficult for sellers whose Learjets have a damage history, Blackburn said.
Because of this, a potential buyer of Hunt’s jet might be unwilling to purchase it at the 16 to 18 percent range, instead asking for a much higher deduction percentage. The amount could even be as high as 50 percent, Blackburn told jurors.
He added that of the original pool of buyers interested in Hunt’s Learjet, 40 percent would remain interested after learning about the diminished value.
During cross-examination, Honeywell’s lawyer Monica Latin brought up the idea that Hunt delaying the repair of the engine and flying on rental engines for a period of time contributed to the diminution of the jet’s value. She asked Blackburn if this was true, and he said yes.
Friday afternoon, jurors heard from Michael Branch, a designated engineering representative for Honeywell. Branch’s position allows him to serve as a liaison between the Federal Aviation Administration and Honeywell, and he ultimately has the same authority as an FAA representative, he said.
A central argument by Honeywell in the trial is it did not fraudulently leave out crucial safety information in a 2008 service bulletin about the history of its blade retainers breaking off inside Learjet engines and often creating domestic object damage. Honeywell argues that there was nothing wrong with the service bulletin because the FAA itself approved it.
One of Hunt’s main arguments is that the FAA’s approval is no good because the FAA representatives (Branch, for example) were really employed by Honeywell.
“It’s important that this jury knows they (Honeywell and the FAA) have a substantial business relationship,” said Michael Hurst, one of Hunt’s lawyers.
Within a few minutes of his cross-examination, Hurst made his strike with his question of the hour.
“With respect to the two hats you’re wearing, don’t you have a conflict of interest?” Hunt’s lawyer Michael Hurst asked Branch.
“No,” Branch replied.
The assertiveness was a side of Hurst that his young daughter – who was in the courtroom on the Good Friday afternoon – was not used to seeing (later she asked him to “promise to be nice to everyone”).
Honeywell’s lawyer Jessica Everett-Garcia asked Branch if he ever felt pressure from Honeywell executives to alter a decision because they wanted a different outcome.
He replied no, because there is a very strict policy that would prevent him from doing that.
Testimony picks up again today.
Hunt Maintenance Chief: Honeywell Service Docs Say Take ‘No Action Whatsoever’
By Natalie Posgate
Staff Writer for The Texas Lawbook
DALLAS (April 18) – Hunt Consolidated’s former director of maintenance told jurors Thursday that the wording of a 2008 service bulletin prompted him to take “no action whatsoever” with regards to installing updated blade retainers in the Honeywell engines that powered two of Hunt’s corporate jets.
Tim Crain, who was Hunt’s director of maintenance until January 2012, assured the jury that if the history of the defects in the old design of Honeywell’s blade retainers had been described in the service bulletin, he would have pursued service immediately.
“I would have grounded the aircraft immediately,” Crain said, which echoed the thoughts of Hunt pilot George Vaeth’s testimony on Tuesday.
The problem language Crain wished he had seen in the service bulletin included the fact that the old blade retainers had a trend of breaking off, which often led to secondary damage to the engine.
Instead, the service bulletin merely said that Honeywell had released “a more robust design” for Learjet engine blade retainers and they could be installed “at next access,” which is typically a routine maintenance checkup a plane undergoes at 2,500 flight hours.
Because Hunt’s planes were not even close to reaching 2,500 flight hours when the service bulletin was issued, Crain said he filed the service bulletin away for later reference.
In October 2008, Honeywell issued a service information letter to Hunt, which included more details about the new, “more robust” blade retainer design. Crain testified that this document also said nothing about the old blade retainers’ defective nature and that it didn’t tell Crain “to take any other action than wait.”
Hunt claims in this case that the waiting did no good for the Dallas-based oil and gas company and only occurred because Honeywell fraudulently kept the engine defect information from Hunt for the sake of gaining corporate profits.
In January 2011, Hunt discovered defects in its plane engines during pre-flight operations when one of the plane’s turbofan engines failed to start. Further investigation revealed that the blade retainers suffered widespread failure, which had caused secondary damage to the engine.
Hunt claims the engine failure, which “by the grace of God” took place at ground level, could have been a serious safety threat if it had occurred in the air – even costing lives.
Horse manure, says Honeywell. The New-Jersey based conglomerate giant argues that the only reason Hunt brought this lawsuit is because it didn’t catch the problem until after its engines’ warranty had expired. Honeywell also claims that Hunt declined to purchase an extended warranty package that would have covered the expenses Hunt incurred in rental and repair fees.
Crain’s testimony clashed with Honeywell lawyer Joe Mais’ effort to prove to the jury that Crain knew about the engine defects in 2008 from reading the service information letter and Crain’s failure to reach out to Honeywell for more information is what led to the engine problems Hunt’s Learjets underwent.
Mais brought up presentations Honeywell employees made in 2007 and 2008 in Dallas at the annual National Business Aviation Association that included information about the problems the old blade retainers had caused. He asked Crain if he had attended any of these presentations and alluded to the fact that they were particularly important for chief maintenance executives.
Crain said he did not make any of the presentations because he had scheduling conflicts.
Several times, Mais showed the jury Crain’s testimony from previous depositions and a previous trial in an attempt to impeach his credibility as a witness and serve as a contrast for his current testimony.
“It seems you’re having a hard time telling the same story as last year,” Mais said.
Crain disagreed.
Mais asked Crain if he investigated whether the rental engines Hunt used contained the old blade retainer models – a truth Hunt did not discover until this case’s first trial in 2013.
Crain replied that he did not because it was not his responsibility to do so – it was Honeywell’s.
Mais then asked Crain, “Wasn’t it true that they [still] performed flawlessly?”
Crain agreed.
One of Hunt’s expert witnesses, Dennis Blackburn, testified Friday morning. Check later for updates.
Hunt Pilot: ‘We Would Have Grounded the Airplane on the Spot’
By Natalie Posgate
Staff Writer for The Texas Lawbook
DALLAS (April 16) – One of Hunt Consolidated’s pilots told jurors Tuesday that if Hunt had known about the high probability that there was damage in the engines of the company’s two Learjets, the planes would not fly until the engines had a proper inspection.
Hunt claims in this case that Honeywell International, the maker of the jet engines, kept crucial information from Hunt about a history of Honeywell plane engine defects and the results could have been deadly for Hunt employees, who frequently fly in the corporate jets for business.
The crucial information Hunt claims Honeywell fraudulently hid would have changed everything, Hunt pilot George Vaeth said. Earlier in the trial, Honeywell engineer Jim Niessink testified that in 2006 he knew 20 to 50 percent of Honeywell’s engines experienced broken blade retainers. And once the blade retainers broke, there was an estimated 90 percent chance that the engine would suffer from a moderate to high amount of a severe engine defect called domestic object damage (DOD).
“If we had that information, we would have grounded the airplane on the spot,” said Vaeth, who has been a pilot for Hunt since 1985. “It’s unsafe to fly.”
Vaeth would have led a January 2011 flight that would have transported a group of Hunt’s employees and family members from Dallas to Austin for a business trip. Travel plans came to a halt during pre-flight operations when one of the plane’s engines failed to start.
Further investigation revealed that there was shrapnel in the tail pipe of the engine, Vaeth testified. One of Honeywell’s technicians arrived on the scene and took the engine to a nearby service center for investigation, which revealed widespread failure of the blade retainers, which had caused DOD to the engine.
Hunt has argued throughout the trial that Honeywell misled Hunt with a 2008 service bulletin that was issued to Learjet customers regarding a “more robust blade retainer design” that could be installed “at next access.”
Honeywell should have also included the “problem language,” or the widespread tendency for the blade retainers to break off inside the engine and often lead to DOD, Hunt claims.
“I was not able to assess anything,” Vaeth said of the service bulletin’s wording.
Clark Rodgers, a field service engineer for Honeywell, testified Tuesday afternoon that issuing a service bulletin in the first place means that something needed to be addressed or improved – something Honeywell’s lawyers have argued that Hunt should have realized. He added that the service bulletin was classified as “category 2,” which meant it was addressing a reliability issue. If customers’ safety had been at stake, Honeywell would have issued a “category 1” service bulletin and it would likely be issued from the Federal Aviation Administration itself, he said.
Honeywell’s lawyer Joe Mais argued during cross-examination of Vaeth that the blame for the damage in Hunt’s engines lays in the Dallas-based oil and gas company’s own hands. He pointed out that Hunt’s former head of maintenance, Tim Crain, determined Honeywell’s 2008 service bulletin was not applicable to Hunt’s engines, therefore he was responsible for the engines not getting looked at sooner and while they were still under warranty.
Mais asked Vaeth why he inexplicably fired Crain, who has previously testified that he was shocked to be terminated and had consistently received positive annual evaluations from Vaeth. But Vaeth answered that the firing had nothing to do with the blade retainer issues related to Hunt’s lawsuit.
Wednesday morning, Mais asserted that Hunt claims Honeywell is acting fraudulently with its customers in regard to safety issues, yet Hunt still owns planes with Honeywell engines.
Vaeth replied that Hunt is currently in negotiations to get rid of them. He testified Tuesday that he was the person who bought the plane on behalf of Hunt, and due to all that has happened, he feels like he let his company down.
“I will never buy another Honeywell product ever again,” he said.
Vaeth’s testimony continues today.
Hunt is seeking $2.3 million in damages, including the $1.1 million Honeywell declined to pay Hunt for jet rental charges and the repair costs of the engines, as well as the diminished value of Hunt’s plane and interest charges.
Ray Hunt: Honeywell Put Corporate Profits in Front of Safety
By Natalie Posgate
Staff Writer for The Texas Lawbook
DALLAS (April 11) – Ray L. Hunt told jurors Friday afternoon that Honeywell International “put corporate profits in front of safety” by not telling Hunt Consolidated about the history of defects in the blade retainers of the engines that powered two of Hunt’s corporate jets.
“They did so knowingly, they did so without telling us, they fraudulently concealed it, and they didn’t tell us the whole truth,” said Hunt, who was on the witness stand for about an hour and a half.
The information, Hunt and his company assert, could have been included in a 2008 service bulletin that Honeywell issued to Hunt and other customers announcing a more robust design in the blade retainers that need not be installed until next access, which is generally once the plane reaches 2,500 flight hours. At the time, Hunt’s Learjets had not met that amount of flight hours.
Hunt compared the wording of the service bulletin to a notice a Volvo owner would receive from the dealership about a service that could be held off on being completed until the car’s 50,000 mile checkup.
The information that Hunt claims Honeywell intentionally left out is that Honeywell’s corporate jet engines had a history of blade retainers breaking off which, in many instances, caused secondary damage in the engine.
Hunt experienced this phenomenon in January 2011 during pre-flight operations that would have transported a group of Hunt employees and their family members from Dallas to Austin for a business trip.
By leaving out such information, Honeywell put the safety of Hunt Consolidated in its own hands, Mr. Hunt testified. If Honeywell had decided to include the information about the blade retainer defects, Hunt, who said he oversees all safety matters at his company, would have worked to resolve the problem.
“The fact that we had defective engines poses a risk,” Hunt said. “Did I make that decision to assume that risk? No. Some unnamed bureaucrat at Honeywell made the decision that that was the risk for us to take.”
During cross-examination, Dallas lawyer Monica Latin pointed out that most of the facts that Hunt knew in this case derived from attorney-client privilege to impeach his credibility. She asked if Hunt had personally read the service bulletin or the service information letter that talked about the more robust design of the new blade retainers, and he said no.
She also pointed out that not a single in-flight shutdown has occurred in the Honeywell engines that Hunt owns as related to blade retainer defects. These kinds of engines had incurred more than 11 million flight hours with no such in-flight shutdowns, she said.
But Hunt emphasized that statistics don’t comfort him.
“It only takes one time for those statistics to change,” Hunt said. “I don’t want to be on the plane that one time that all the statistics change.”
Honeywell Engineers’ Testimony
Earlier this week, two engineers for Honeywell International testified that in hindsight, their employer possibly should have disclosed the reason behind releasing a more robust design for the blade retainers in the engines for Learjets on a 2008 service bulletin that was sent to customers.
But both continually defended Honeywell, insisting to the jury that the Fortune 100 company took the right approach and did not use fraud to deceive its customers about the story behind the release of the new blade retainers.
Because the warranty for Hunt’s Learjet engines had already expired by 2011, it cost more than $1 million for the oil and gas company in rental, repair and replacement fees. But Hunt is far less concerned about the money in this case than it is about its employees’ safety, claiming this engine mishap could have cost lives if it had failed in the air instead of at ground level.
Honeywell denies the fraud claims, asserting that Hunt waited until well after its engines’ warranty had expired to bring any problems to Honeywell’s attention and that Hunt declined the offer for an extended warranty program that would have covered the $1 million expenses that Hunt incurred to replace the engines. Honeywell also argues that the blade retainer defect was a reliability issue rather than a safety threat.
The first witness in the trial was Jim Niessink, a Honeywell employee who formerly was the project engineer in charge of the redesign of the blade retainers. He testified that he knew 20 to 50 percent of Honeywell’s engines have broken blade retainers by the time they reach 2,500 flight hours – the time they are required by law to be inspected – and that broken blade retainers often lead to domestic object damage (DOD).
DOD is defined as damage to the components in the gas path of a jet engine caused by failure of the parts within the engine itself, but Hunt’s lawyers have described DOD as the blade retainers “pinballing” around the engine after they break off.
But Niessink emphasized throughout his testimony that broken blade retainers are not safety issues. At one point jurors were taken to the basement of the courthouse to take a peek at a live model of the Honeywell 731-50 engine, which resembled a giant bullet or a chubby torpedo. Niessink said he played a large role in approving the design for the 731-50 engine.
Blade retainers could not be seen in the engine since they lie deep inside, but have been pictured in testimony as 1-inch pieces of metal that have bends on both ends.
Niessink explained the various components of the engine and said that when a blade retainer breaks off, it quickly flows out of the tailpipe rather than “pinballing” around because “the force is too great” from the other moving components of the engine, which he described as moving at the “speed of sound” when in operation.
Niessink, as well as fellow Honeywell engineer and second trial witness John Pursell, told jurors that the purpose of the redesign was to address a customer issue – not to mislead customers about the blade retainers’ problematic history.
Pursell, currently a principal product supports engineer, was involved with the drafting of the service bulletin that Honeywell released to Hunt and other customers in April 2008. He told jurors that the service bulletin said Honeywell had released a “more robust design” of the jet engines’ blade retainers and that customers could have them installed “at next access,” which was the 2,500 hour checkup.
At this point, Hunt’s engines had not reached 2,500 flight hours, and still did not even exceed 2,000 hours when it discovered the engine defect in 2011.
Michael Hurst, one of Hunt’s lawyers, displayed various language in internal Honeywell documents that did not make it to the final draft of the service bulletin.
One document was an email exchange between Pursell and others at Honeywell in which Pursell provided his feedback on the way the service bulletin was written. He suggested that they omit a phrase that said a reason for the new blade retainer design was that the current design has not “provided the level of reliability that was suspected.”
Pursell wrote, “Why remind them? I would only say that we have developed a more robust design and leave it at that.”
He explained that he suggested the omission of the statement to avoid redundancy, since the word “reliability” had already been used a few times and the classification of the service bulletin was a “Category 2,” which meant it was a reliability issue that it was addressing.
But Hurst continued to ask Pursell if there were any legitimate reasons why Honeywell wouldn’t have been allowed to include more information in the service bulletin about the history of the blade retainer issues.
“We could have said lots of things, and in hindsight, maybe we should have,” Pursell replied.
But, echoing Niessink’s testimony, Pursell said he didn’t think Honeywell intentionally left out the problem language to deceive Hunt and other customers.
George Vaeth, a Hunt pilot who was going to lead the flight that was halted in January 2011 when the jet’s engines failed to start during pre-flight operations, took the stand Friday afternoon after Mr. Hunt. His testimony will continue next week.
Honeywell’s Lawyers in Opening Statements: ‘The Bully is Hunt’
By Natalie Posgate
Staff Writer for The Texas Lawbook
DALLAS (April 8) – Hunt Consolidated’s lawyers told jurors during opening statements that Honeywell International “played Russian Roulette” by lying to their airplane engine customers for years about a defect that was occurring in the engines, which ultimately put Hunt employees’ safety at risk.
Hunt owns two corporate jets that are powered by Honeywell’s engines that had to be replaced due to defective blade retainers in the engines that were discovered in 2011 during pre-flight operations for a business trip that would have flown a group of Hunt employees and their family members from Dallas to Austin.
Hunt and its leader Ray L. Hunt must prove to the Dallas County jury that Honeywell fraudulently kept crucial information from Hunt about the engine defect and because of that, it owes the giant private oil and gas company $2.3 million in damages, which includes the $1.1 million Honeywell refused to pay Hunt for rental charges and the replacement of engines.
“Hunt is trying to get Honeywell to do the right thing, to do the ethical thing and to not be a corporate bully,” said Shonn Brown, one of Hunt’s attorneys, during Tuesday morning’s opening statements.
“You’ll learn that safety is not just a word; it’s an action,” she said. “Just because nobody got hurt in this situation doesn’t mean it’s not a safety issue.”
But lead Honeywell attorney Joe Mais contested, telling jurors that Honeywell had no intent to deceive Hunt, that it doesn’t owe Hunt a dime because Hunt did not bring any of the issues to Honeywell’s attention until after the engine’s warranty had expired, and that the blade retainers play no role whatsoever when the plane is in the air.
Mais pointed out to jurors that out of Honeywell’s 1,500 customers who use these particular blade retainers, Hunt is the only one who has brought a lawsuit against the conglomerate giant.
“There’s a bully in this courtroom, but it is not Honeywell,” Mais said. “The bully is Hunt.”
Brown told jurors that Honeywell could have informed Hunt about the defects in a 2008 service bulletin that it released to its customers about a new, more robust design for the blade retainers that Honeywell was offering. But because Hunt’s planes had not met the suggested flight hours at the time to receive a checkup and have the new retainers installed, Hunt did not discover the defects until after the warranty had expired.
If Honeywell had disclosed the real reason for redesigning a more robust blade retainer on the service bulletin – that Honeywell was aware that the blade retainers were breaking off inside many of the engines – Hunt would have “taken action immediately” to fix the problem, Brown said.
Brown compared Honeywell’s defenses of leaving out information on the service bulletin to her upbringing with her grandparents.
“They told me, ‘the truth is the truth and a lie is a lie,’” said Brown, a partner at Gruber Hurst Johansen Hail Shank. “When you have to start explaining, that’s when the lie starts. When you tell the truth, the whole truth, and nothing but the truth, you don’t have to worry about explaining.”
Not so fast, Mais said, arguing that the fact that Honeywell could have said more on the service bulletin doesn’t mean that the information it actually included was a lie.
“Everything we told them was true, and nothing that was left out made any statement,” he said.
Mais explained that there were no safety issues for Honeywell to describe on the service bulletin and that Honeywell had even consulted with the Federal Aviation Administration to make sure that their blade retainers were safe.
“Honeywell voluntarily developed a more reliable retainer – [there was] no agency beating over our head to do it,” Mais said.
Brown also pointed out that Honeywell knew since the 1990s that their blade retainers were defective, and that Honeywell knew in 2006 that there had been four in-flight shutdowns because of the blade retainers breaking off and moving around inside the engine.
But Mais argued that the in-flight shutdowns occurred in engines with a different kind of blade retainer than those that were in Hunt’s Learjets, and that the shutdowns happened to engines that were built in the 1970s.
In the afternoon, Hunt called up its first witness, Honeywell engineer Jim Niessink, who was in charge of the redesign of the more robust blade retainers.
Niessink testified that he knew 20 to 50 percent of Honeywell engines have broken blade retainers by the time they reach 2,500 hours of use, which frequently leads to a major defect in the engine called a domestic object damage (DOD).
Hunt attorney Michael Hurst spent much of Tuesday afternoon pressuring Niessink to admit that Honeywell’s decision to not mention the defect in the blade retainers in the 2008 service bulletin was a business decision because it would cost a substantial amount of money to replace every customer’s blade retainers.
Niessink disagreed, saying it would be a big cost for customers to replace their blade retainers who never had problems in the first place.
Niessink’s testimony will continue Wednesday.
UPDATE: Jury Selected for Ray Hunt’s Products Defect Trial Against Honeywell
By Natalie Posgate
Staff Writer for The Texas Lawbook
DALLAS (April 4) – Billionaire Texas oilman Ray L. Hunt has been trying for three years to force Honeywell International to admit that the New Jersey-based conglomerate purposely didn’t warn him and others about defects in the engines it made for Hunt’s corporate Learjets – defects, he claims, that could have had disastrous, possibly deadly, results.
Next week, Hunt finally gets the chance when his lawyers begin to question Honeywell executives and engineers under oath in Dallas County District Court as part of Hunt’s civil lawsuit that demands Honeywell pay $2.3 million in damages to replace the bad engines and for the cost of renting a replacement jet.
Honeywell contends that it doesn’t owe Hunt a dime because the engines were covered by warranty for several years – years in which the planes operated without any problems – and that Hunt allowed the warranty to expire before bringing any problems to the company’s attention.
The trial, which was scheduled to occur last fall but was delayed due to the illness of a key witness, is expected to last more than two weeks.
The case presents a rare opportunity for Hunt, who Forbes estimates is worth $5.7 billion, and Hunt Consolidated, one of America’s largest private oil and gas companies, to be perceived as the “little guy.” Honeywell generated $39 billion in revenue last year and had market capitalization of $73 billion at Friday’s market close.
“Hunt Consolidated and Ray Hunt are dwarfed by the size of Honeywell,” said Michael Hurst, Hunt’s lead attorney. “Honeywell is essentially the schoolyard bully in this case.”
The Dallas jury must decide whether Honeywell acted fraudulently by deliberately leaving out information in an April 2008 service bulletin announcement about a severe manufacturing defect in the blade retainers of Honeywell’s engines while Hunt’s engines were still under warranty.
Employees of Hunt Consolidated discovered the defects on Jan. 14, 2011 during pre-flight preparations when one of the Honeywell engines malfunctioned by failing to rotate and start, according to court documents. The flight was scheduled to transport a group of Hunt employees and their family members from Dallas to Austin for a business trip.
Hurst said the case has nothing to do with the money, but rather hits home on a more personal level for Hunt, who is normally anti-litigation and will likely spend more in legal fees than the $2.3 million in damages he is seeking – some of which he claims he will donate to charity if his side wins.
“Hunt views his employees the same as his family,” said Hurst, a prominent complex commercial litigator and a founding partner of Dallas-based Gruber Hurst Johansen Hail Shank. “Taking unknown risks is repugnant.”
Damages Hunt seeks include the $1.1 million Honeywell refused to reimburse Hunt for engine rental charges and the repair and replacement of the two engines, as well as the diminished value of the jet and interest charges.
Honeywell denies Hunt’s claims, arguing they lack merit because Hunt waited until after the warranty on the engines expired before saying anything to Honeywell about the defects.
In previous court filings, Honeywell has noted that Hunt declined Honeywell’s offer to purchase an additional maintenance service plan, which would have provided Hunt the coverage it now seeks.
A jury of eight women and four men were selected Thursday. The jurors include a motorcycle maker, a woman with a fear of flying, a juror whose last name is Scales and another juror with the last name Justice.
Arizona-based attorneys from Perkins Coie serve as lead counsel for Honeywell, but Honeywell also hired Dallas trial and appellate lawyer Monica Latin of the local firm Carrington, Coleman, Sloman & Blumenthal after the first trial. Latin declined to comment about the case.
Along with Hurst, fellow Gruber Hurst law partners Shonn Brown, Anthony Magee and Steven Hopkins comprise Hunt’s legal team.
Hunt v. Honeywell originally went to trial last year in June, but Dallas County District Judge Martin Hoffman declared a mistrial due to concerns of the jury returning a verdict before some jurors left town for vacation.
Jury selection consumed most of Thursday. Counsel met with Judge Hoffman – who oversees the case again – at the end of the day to discuss pre-trial matters, including issues over pre-admitted evidence that had been used in the previous jury trial.
According to Hurst, Hoffman has not given either side a time restriction on presenting their case.
Mr. Hunt himself is expected to be the star witness in the case. Other key witnesses the plaintiff will call to the stand include the senior Honeywell engineer who designed the plane engine’s blade retainer, Hunt’s chief pilot, Hunt’s former head of maintenance and two expert witnesses.
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