## Facts

- Kirk P. Cappello, age 28, died in an airplane crash along with eight other occupants.
- The aircraft was a Hawker jet chartered from Duncan Aircraft Sales of Florida, Inc. (Duncan), which also supplied the pilot.
- The crash occurred shortly after a nighttime departure from Brown Field near San Diego; the plane struck the side of a mountain roughly two minutes after takeoff.
- Cappello’s parents, Phillip R. and Edna Cappello, sued Duncan in federal court for wrongful death, alleging negligent operation and flight planning by Duncan’s pilot.
- Duncan denied that its pilot was solely responsible and argued that two Federal Aviation Administration (FAA) employees—who were not parties to the suit—contributed to the crash (including a flight service station specialist and a controller).
- The case was tried under Tennessee law in a diversity action.
- On damages, Duncan presented an economist who calculated Cappello’s economic value at $732,829 by averaging Cappello’s earnings over the five years before his death, a period that included three lower-earning years while he was still in school and two higher-earning years after his income rose.
- Other witnesses gave testimony supporting a higher estimate of Cappello’s expected future earnings based on his recent upward earnings trend.
- The jury allocated 45% fault to Duncan’s pilot and 55% fault to the two nonparty FAA employees, then reduced the damages award accordingly, resulting in a net award of $329,773 to Cappello’s parents.
- Cappello’s parents appealed, challenging the reduction of the verdict based on fault assigned to nonparties and raising additional trial and damages issues, including punitive damages.

## Issues

1. Under Tennessee comparative fault principles applicable in a federal diversity action, may a jury allocate fault to nonparty FAA employees so as to reduce the defendant’s liability?
2. Did the district court err in its handling of damages issues—particularly lost earning capacity evidence—and what remedy, if any, was required on appeal?
3. Were punitive damages available on the record presented under Tennessee law?

## Decision

- The Sixth Circuit held the district court erred by permitting Duncan to assert comparative negligence based on the alleged fault of nonparty FAA employees and by allowing the jury to apportion fault to those nonparties.
- The court vacated the judgment and remanded for a new trial limited to compensatory damages, with liability fixed on Duncan (through the negligence of its pilot) rather than reduced by fault attributed to nonparties.
- The court rejected punitive damages on the facts and directed that punitive damages not be submitted on remand under Tennessee standards.
- Any challenged judicial comment bearing on witness credibility did not require reversal beyond the court’s disposition and was treated as non-dispositive to the remand.

## Legal Principles

- In a diversity case, state law governs comparative fault and the manner in which a defendant’s liability may be reduced based on others’ negligence.
- Under Tennessee comparative fault law as applied by the Sixth Circuit in this case, a defendant may not obtain a percentage reduction in liability by having the jury assign fault to nonparties in the way done at trial.
- FAA regulations place a central preflight-planning responsibility on the pilot in command, including the duty to become familiar with available information about the flight (14 C.F.R. § 91.103); air-traffic personnel do not assume the pilot’s core planning and operational duties.
- Tennessee punitive damages require aggravated misconduct beyond ordinary negligence; where the proof does not meet that threshold, punitive damages should not go to the jury.
- Lost earning capacity must be determined from evidence that reasonably reflects probable future earning history; where liability is fixed and the prior verdict was reduced due to an improper nonparty-fault allocation, a damages-only retrial is an appropriate remedy.

## Conclusion

The Sixth Circuit vacated a wrongful-death judgment that had been reduced after the jury assigned most fault to nonparty FAA employees, holding that Tennessee law did not permit that form of nonparty comparative-fault apportionment; the court remanded for a new trial limited to compensatory damages with Duncan bearing full liability, and it also rejected punitive damages under Tennessee standards.


Cappello v. Duncan Aircraft Sales of Florida, 79 F.3d 1465 (1996)