Godwin Aircraft v. Houston

Ray Houston (defendant) was an aircraft inspector certified by the Federal Aviation Administration. Houston performed the annual inspection on an airplane he owned, certifying in one of the airplane’s logbooks that the airplane was airworthy. Approximately 127 flight hours after the annual-inspection entry, Houston sold the airplane at an auction. The auction catalog provided a disclaimer that all aircraft bought at the auction would be bought as is, where is. Buyers had an opportunity to inspect Houston’s airplane for three days prior to the auction. During the auction, buyers were also given an opportunity to inspect the airplane and its logbooks shortly before the bidding opened. Godwin Aircraft, Inc. (Godwin) (plaintiff) inspected the airplane’s logbooks during this brief window. Relying on the statement that the airplane had been declared airworthy 127 flight hours earlier, Godwin bid on and won the airplane. After Godwin received possession of the airplane, it learned that the airplane had numerous, significant issues that made the airplane dangerous and not airworthy. Several of the issues clearly existed prior to the annual inspection listed in the logbook, and others could have existed at that time. Godwin sued Houston for fraud, misrepresentation, and breach of contract. Houston responded that he had perhaps made a mistake in the logbook or that the defects had appeared after the inspection. Houston also claimed that the as-is disclaimer meant that he could not be held liable for any defects, especially because Godwin had three days to inspect the airplane before the auction. Among other findings, the trial court determined that (1) Houston had misrepresented the information in the logbook and (2) the as-is disclaimer was not a defense to Godwin’s claims. The trial court entered judgment requiring Houston to pay Godwin approximately $51,500 in compensatory and punitive damages. Houston appealed.