Missouri high court remands dispute between aviation supplier and distributor for new trial

By Sam Knef | Nov 11, 2017

JEFFERSON CITY — The Missouri Supreme Court has issued a mixed ruling in a contractual dispute between a manufacturer of aircraft instruments and a company that distributed its products. 

In a unanimous ruling issued Oct. 31, the full court reversed in part and remanded for a new trial on damages a case before Jackson County Circuit Judge James F. Kanatzar involving Sun Aviation's claims against L-3 Communications Avionics Systems.

Sun Aviation brought a four-count suit claiming L-3 violated the Franchise Act by failing to provide timely, written notice of termination; violated the Industrial Maintenance and Construction Power Equipment Act (IMCPE) by terminating the parties' business relationship without good cause; violated the Inventory Repurchase Act by refusing to repurchase inventory; and fraudulently concealed plans of its parent company's consolidation plans, which ultimately led to the dissolution of the parties' business relationship.

According to background information in the ruling, Sun Aviation distributed L-3's "gyros," which can calculate and display an aircraft's position, and power supply products. When L-3's parent company went through a consolidation process, it decided to end L-3's distributorship with Sun Aviation and directed L-3 to do so, the ruling states.

Prior to a bench trial, Kanatzar granted Sun Aviation's motion for partial summary judgment regarding liability, but not damages on the first, second and third counts, the ruling states. The case proceeded to trial on damages on those counts as well as liability and damages on the fourth count.

Kanatzar awarded damages to Sun Aviation on all counts.

L-3's appeal went to the Missouri Court of Appeals, and later the Supreme Court allowed it to be transferred to the higher court.

Regarding counts II and III, the Supreme Court held that "neither product at issue fits the definition of "industrial, maintenance and construction power equipment, as applicable in the IMCPE Act and the Inventory Repurchase Act."

Regarding count IV, the court held that "L-3 had no duty to disclose its parent's consolidation plan to Sun, which eventually led to the termination of the parties' business relationship. The circuit court's judgment on Count IV is reversed."

Chief Justice Zel M. Fischer wrote the opinion for the unanimous decision.

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