Unpublished Disposition, 932 F.2d 972 (9th Cir. 1990)

BOGAZICI HAVA TASIMACILIGI A.S., Turk Hava Yollari A.O.,London and Hull Maritime Insurance Company Ltd., LaPaternelle Risques Divers, English and American UnderwritingAgency Ltd., Insurance Company of North America (U.K.) Ltd.,The Insurance Company of North America, Plaintiffs-Appellants,v.MCDONNELL DOUGLAS CORPORATION, Defendant-Appellee.

No. 90-55868.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted April 3, 1991.Decided May 9, 1991.

Before SCHROEDER and REINHARDT, Circuit Judges, and KING, District Judge.^* 

MEMORANDUM^** 

Plaintiffs-appellants Bogazici Hava Tasimaciligi A.S., et al., appeal the district court's grant of summary judgment to defendant-appellee McDonnell Douglas Corporation, alleging that the district court erred in granting McDonnell Douglas Corporation's motion for summary judgment on a ground it did not urge. We agree and therefore reverse the district court's decision.

I. FACTS

In September 1972, plaintiffs-appellants Bogazici Hava Tasimaciligi A.S., et al., (hereinafter "Turkish Airlines"), purchased three DC-10 Series 10 aircraft from defendant-appellee McDonnell Douglas Corporation (hereinafter "MDC"). Article 12 of the purchase agreement for the three planes provided:

THE WARRANTY AND SERVICE LIFE POLICY PROVIDED IN THIS ARTICLE AND THE OBLIGATIONS AND LIABILITIES OF THE SELLER UNDER SAID WARRANTY AND SERVICE LIFE POLICY ARE EXCLUSIVE AND IN LIEU OF, AND BUYER WAIVES, ALL OTHER REMEDIES, WARRANTIES, GUARANTEES OR LIABILITIES, EXPRESS OR IMPLIED, WITH RESPECT TO EACH AIRCRAFT, PRODUCT OR ARTICLE DELIVERED HEREUNDER, ARISING BY LAW OR OTHERWISE (INCLUDING WITHOUT LIMITATION ANY OBLIGATION OR LIABILITY OF SELLER ARISING FROM NEGLIGENCE OR WITH RESPECT TO FITNESS, MERCHANTABILITY, LOSS OF USE, REVENUE OR PROFIT OR CONSEQUENTIAL DAMAGES.) THIS WARRANTY OR SERVICE LIFE POLICY SHALL NOT BE EXTENDED, ALTERED OR VARIED EXCEPT BY A WRITTEN INSTRUMENT SIGNED BY SELLER AND BUYER.

Approximately 14 years later, on September 26, 1986, MDC issued Service Bulletin 71-142. SB 71-142 was one in a series of bulletins detailing 19 reported instances of the doors surrounding the engine of DC-10 Series 10 aircraft becoming unlatched and being blown off in-flight. Whereas prior bulletins had suggested improved maintenance procedures and other precautions to alleviate the problem, SB 71-142 recommended that all DC-10 Series 10s be retrofitted with a secondary engine core cowl door latch system within 18 months. MDC informed all DC-10 Series 10 operators that it had "service kits" available for purchase to complete the recommended changes to the latch system. Turkish Airlines had ordered and received three of these kits by late 1987.

On January 5, 1988, one of the three Turkish Airlines DC-10 Series 10 aircraft which was the subject of the purchase agreement departed Istanbul, Turkey, on a routine charter flight to Milan, Italy. During the flight the left-hand engine core cowl door of the No. 1 (port) engine separated from the aircraft causing structural damage to the No. 1 engine and other sections of the plane. The pilot returned the plane to Istanbul without further incident and the engine core cowl door separation did not result in any injuries or loss of life among the passengers or crew.

Turkish Airlines filed suit against MDC in the United States District Court, Central District of California, on January 5, 1989, seeking damages for the in-flight separation. After a first round of discovery was fired, the parties agreed to discuss settlement. MDC maintained that the exculpatory clause contained in Article 12 of the purchase agreement barred all of Turkish Airlines' claims. The parties agreed that MDC would seek summary judgment on this issue, as it was potentially dispositive.

At a mandatory settlement conference on October 2, 1989, District Court Judge James M. Ideman met with the parties and endorsed their plan. He set out a discovery plan which limited the available discovery to:

[T]he enforceability and applicability of certain exculpatory, limitation of liability, and warranty provisions, which, according to the defendant, bar plaintiffs's claims.

After a series of maneuvers by the parties which ended with Turkish Airlines voluntarily dismissing all but Count V of its complaint, MDC filed an amended motion for summary judgment on March 19, 1990. MDC's motion was made on the ground that:

Plaintiffs' claim [Count V] is based on post-delivery negligence and the exculpatory clause precludes any recovery against MDC based on negligence, whether pre- or post-delivery in nature.

As part of its opposition to MDC's motion for summary judgment, Turkish Airlines submitted an affidavit pursuant to Federal Rule of Civil Procedure 56(f) to preserve its right to discovery should the district court "or any Appellate Court ultimately determine [it] failed to submit appropriate evidentiary material in opposition" to MDC's motion.

On June 5, 1990, Judge Ideman issued an order granting MDC summary judgment. Judge Ideman concluded that the exculpatory clause contained in Article 12 of the purchase agreement did not bar post-delivery negligent misrepresentation claims, relying on Continental Airlines, Inc. v. McDonnell Douglas Corporation, 216 Cal. App. 3d 388, 264 Cal. Rptr. 779 (Cal.App. 2 Dist.1989). In so doing, Judge Ideman assumed that Turkish Airlines had stated a sufficient claim for negligent misrepresentation. However, Judge Ideman then went one step further and determined that, as a matter of law, MDC could not be found liable for negligent misrepresentation because it had repeatedly warned Turkish Airlines of the potential problem with the engine core cowl doors and had sent Turkish Airlines a "service kit" to remedy the situation. Judge Ideman did not address Turkish Airlines' Rule 56(f) affidavit.

Turkish Airlines' motion for reconsideration was denied and it filed the instant appeal. Subsequently, it filed a motion to strike portions of MDC's brief, or in the alternative to supplement the record on appeal.

II. DISCUSSION

A. Turkish Airlines' Motion to Strike or in the Alternative to Supplement the Record on Appeal.

Preliminarily we address the issues raised by Turkish Airlines' December 10, 1990, motion to strike portions of MDC's brief or in the alternative to supplement the record on appeal.

Motions to strike are generally disfavored by courts. Stabilisierundfonds Fur Wein v. Kaiser, 647 F.2d 200, 201 (D.C. Cir. 1981). Turkish Airlines argues that certain assertions made in MDC's brief are not supported by the record, and are therefore subject to being stricken. However, our reading of the record does not support this contention. Thus, we decline to grant the motion to strike.

In the alternative, Turkish Airlines requests that we supplement the record on appeal with six documents not filed with the district court. Normally, papers not filed with the district court are not part of the clerk's record and cannot be part of the record on appeal. Kirshner v. Uniden Corp. of America, 842 F.2d 1074 (9th Cir. 1988). Only in "extraordinary circumstances" should the record on appeal be supplemented with material not before the district court. Barilla v. Ervin, 886 F.2d 1514, 1521 n. 7 (9th Cir. 1989). Turkish Airlines cites no "extraordinary circumstances" that would warrant our supplementing the record, nor have we discovered any ourselves. Therefore, we deny Turkish Airlines' alternative motion to supplement the record on appeal.

B. The District Court Erred by Granting Summary Judgment on a Ground Not Urged by MDC.

Time and time again prior to the district court's determination of MDC's motion for summary judgment, the parties' confirmed that the purpose of the motion was limited to determining whether the exculpatory clause in the purchase agreement barred Turkish Airlines' claim. Despite this agreement, which the district court was fully aware of, summary judgment was not granted on the enforceability of the exculpatory clause, but on the substance of Turkish Airlines' claim.

A district court may not grant summary judgment on a ground not urged by the moving party. Malhoutra v. Cotter & Co., 885 F.2d 1305, 1311 (7th Cir. 1989). We adopted the rationale behind Malhoutra years ago in Portland Retail Druggists Association v. Kaiser Foundation Health Plan, 662 F.2d 641, 645 (9th Cir. 1981), where we stated:

Before summary judgment may be entered against a party, that party must be afforded both notice that the motion is pending and an adequate opportunity to respond. Implicit in the opportunity to respond is the requirement that sufficient time be afforded for discovery necessary to develop facts essential to justify [a party's] opposition.

Here it is clear that Turkish Airlines had no notice that the district court would ignore the parties' agreement and consider the substance of the claim presented. Additionally, even if it might have anticipated the district court's action, Turkish Airlines' hands were tied by the district court's own order limiting discovery to the issue of the "enforceability" of the exculpatory clause. Basing the award of summary judgment on the merits of the negligent misrepresentation claim directly contravened the principles established in Portland Retail Druggists. Accordingly, we reverse the grant of summary judgment.

Our determination that the district court erred in granting MDC summary judgment makes it unnecessary for us to address Turkish Airlines' further argument that the district court also erred in failing to consider its Rule 56(f) affidavit.

III. CONCLUSION

Because the district court erred in granting defendant-appellee McDonnell Douglas Corporation summary judgment, we reverse the district court's decision and remand for proceedings consistent with this disposition.

REVERSED AND REMANDED.