Continental Motors accused of price gouging

By Kyla Asbury | Apr 6, 2017

BECKLEY – Continental Motors Inc. and Continental Motors Services Inc. have been named in a lawsuit alleging price gouging.

CP #1109 is the owner of an aircraft that is frequently stores and serviced at Raleigh County Memorial Airport, according to a complaint filed March 23 in Raleigh Circuit Court.

CP and Martin E. O’Boyle claim in November 2010 the aircraft was serviced at Albatross Air Inc. in Beaver the mechanic servicing the plane noticed that oil was leaking from the engine and that the crankhouse on the aircraft was cracked and needed repaired and/or replaced.

The plaintiffs contacted Continental Motors to determine what work needed to be performed on the engine and who was qualified to perform the work, according to the suit.

The plaintiffs claim Continental recommended Mattituck to perform the work on the engine and Mattituck was contacted to fix the aircraft’s engine.

Mattituck, unilaterally, decided to replace two of the engine’s 6-cylinders and reported to the plaintiffs and Albatross Air that the cylinder replacement was necessary to ensure airworthiness, according to the suit.

The plaintiffs claim the repairs and/or replacements were not covered by any warranty and Mattituck returned to engine to Albatross in March 2011, alleging that the engine was repaired, airworthy and ready to be reinstalled in the aircraft.

Continental and Mattituck did not truthfully inform the plaintiffs or Albatross of the defects associated with the engine and, after the engine was reinstalled, it experienced various problems, including overheating and a noticeable lack of power creating dangerous conditions in flight, which got progressively worse over the next year, according to the suit.

The plaintiffs claim during this period, they were told the engine needed to be “broken in” and they were unaware of the potentially fatal defect lurking within the engine.

Unknown to the plaintiffs at the time, there were several near fatal crashes and forced landings as a result of contaminated liquid cooled cylinders manufactured by the defendants, according to the suit.

The plaintiffs claim the defendants alerted the FAA of the dangerous situation and told the FAA they were taking remedial action, including tracking down the locations of the cylinders and notifying the buyers.

The defendants informed the FAA they had completed the remedial action by notifying each of the buyers in November 2012, however, the plaintiffs were never contacted, according to the suit.

The plaintiffs claim in early 2013, their mechanic completed the aircraft’s annual inspection and determined the aircraft was airworthy and ready for service, however, when the aircraft’s pilot began his return trip to West Virginia, he had to abort the flight shortly after take-off due to extreme overheating of the engine.

When the plaintiffs contacted Continental, they were finally advised of the “bad batch” of cylinders, according to the suit.

The plaintiffs claim the defendants’ employees inspected the engine and determined the cylinders manufactures were indeed part of the “bad batch” and when the plaintiffs spoke with Continental about the necessary resolution of the dangerous issue, Continental represented that it had the right to make any repairs to the engine they deemed appropriate pursuant to the terms of the contract between the plaintiffs and the defendants.

In March 2013, the defendants transmitted a false warranty to the plaintiffs in order to deceive and defraud them about their legal rights, all to the benefit of Continental Motors, according to the suit.

The plaintiffs claim despite the fact that they did not purchase a new engine, the defendants provided a warranty titled “Continental Motors Premium OEM Engine Warranty” which provided limited coverage for “new aircraft engines” and insisting to the plaintiffs that their rights were subject to and limited by the warranty.

As of October 2013, Continental Motors has refused to complete the necessary repairs or replacements and compensate the plaintiffs for their ascertainable losses, according to the suit.

The plaintiffs claim they brought a civil suit against Continental Motors and Mattituck in November 2013 in the Superior Court o New Jersey and the parties are litigating post-trial motions in that proceeding.

In Summer 2016, the plaintiffs attempted to mitigate the damages and attempted to purchase a new motor from the defendants, however, the defendants demanded a payment of $300,000 for a new motor with no warranty, which was approximately five times more than the originally quoted price, according to the suit.

The plaintiffs claim after the defendants’ unconscionable price gouging demand, the plaintiffs instead decided to rebuilt their engine and ordered parts that were advertised as being available for purchase by the defendants, however, a portion of the parts were delivered in January, but the defendants they sent notice they were refusing to deliver the remainder of the parts.

The plaintiffs are seeking actual damages. They are being represented by Thomas W. White and Christopher J. Prezioso of Dinsmore & Shohl.

Raleigh Circuit Court case number: 17-C-170

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