Tap Manutenção E Engenharia Brasil S.A. v. Int'l Aerospace Grp., Corp.

• Decision Date: 01 September 2015
• Docket Number: No. 14–CV–5364 (VEC).,14–CV–5364 (VEC).
• Citation: 127 F.Supp.3d 202
• Parties: TAP MANUTENÇÃO E ENGENHARIA BRASIL S.A., Plaintiff / Counter–Defendant, v. INTERNATIONAL AEROSPACE GROUP, CORP., Defendant / Counter–Claimant.
• Court: U.S. District Court — Southern District of New York

127 F.Supp.3d 202

TAP MANUTENÇÃO E ENGENHARIA BRASIL S.A., Plaintiff / Counter–Defendant,

v.INTERNATIONAL AEROSPACE GROUP, CORP., Defendant / Counter–Claimant.

No. 14–CV–5364 (VEC).

United States District Court, S.D. New York.

Signed Sept. 1, 2015.

Christopher Rocco Nolan, Marie Elizabeth Larsen, Holland & Knight LLP, New York, NY, Brian W. Toth, Holland & Knight LLP, Miami, FL, for Plaintiff/Counter–Defendant.

Doron Aviram Leiby, Miller, Leiby & Associates, P.C., New York, NY, Richard Lincoln Richards, Jason Goldstein, Richards & Associates, Coral Gables, FL, for Defendant/Counter–Claimant.

MEMORANDUM OPINION & ORDER

VALERIE CAPRONI, District Judge:

This case arises from poor communication between companies. Plaintiff TAP Manutenção e Engenharia Brasil S.A. ("TAP") was repairing an aircraft that belonged to Defendant International Aerospace Group, Corp. ("IAG"). When the needed repairs were more extensive (and expensive) than the parties' initial contract contemplated, TAP sought to verify that IAG nonetheless wanted TAP to repair the aircraft. The parties dispute the nature and sufficiency of IAG's response to these requests. IAG has concededly paid less than it owes under the contract, but the parties cannot agree on how much more it owes. Moreover, again because of a lapse in communication, TAP possesses unserviceable aircraft parts that belong to IAG. Accordingly, TAP sued IAG for breach of contract (based on its nonpayment), and IAG counter-sued for conversion of the unreturned parts. Both parties have moved for summary judgment on their own claims, and TAP has also moved for summary judgment on IAG's claims. For the following reasons, TAP's motion is GRANTED IN PART and DENIED IN PART, and IAG's motion is DENIED.

BACKGROUND¹

TAP is an aircraft maintenance, repair, and overhaul company located in Brazil. Pl. 56.1 Opp. ¶ 2.² On April 16, 2012, TAP entered into a contract with IAG, a Florida corporation that sells aircraft and aircraft parts. Def. 56.1 Opp. ¶¶ 6–7. Pursuant to the contract, TAP would provide a C-check, an extensive regular maintenance check-up, on IAG's aircraft. Id. ¶ 8. As is relevant here, IAG engaged TAP to service a DC–10 owned by IAG Ventures, which had consigned the aircraft to IAG. Id. ¶¶ 9–10.

The parties do not dispute that TAP performed the basic services expressly contemplated by the contract. Id. ¶ 13. The fixed price for the C-check was $480,000. Am. Compl. Ex. 1 § 5.1. So far, IAG has paid TAP $400,000. Def. 56.1 Opp. ¶ 36. IAG accepted the return of the aircraft on August 6, 2012. Id. ¶ 31.

In addition to the work contemplated by the contract, TAP has performed additional work and provided additional materials ("over and above work"). Id. ¶¶ 14–15. Over and above work was contemplated by Section 5.4 of the contract, which provided:

All additional work ... which may be required, shall be quoted separately, on a Time & Material basis and will be submitted for prior written approval of [IAG]'s Representative.

Any labor required to rectify defects found per each routine item and in excess of 50 man hours per non routine single item will be charged in a Time & Material basis, per rates bellow [sic] and paragraph 3, and after receiving [the IAG] Representative's written approval.

Am. Compl. Ex. 1 § 5.4. TAP invoiced and charged IAG for $1,042.980.08, representing the initial contract price for the C-check ($480,000) plus $562,980.08 for the time and materials associated with the over and above work. Def. 56.1 Opp. ¶ 35. Although TAP alleges that the invoiced amount reflects the appropriate contractual cost of the services rendered, IAG alleges that "TAP overcharged for some of its work." Id. ¶ 34.

The parties dispute the extent to which TAP complied with the contract's requirements before performing over and above work. Id. ¶¶ 15–30. Much of the dispute stems from the role of Juan Rojas, who was IAG's agent on the ground during the aircraft repair. Id. ¶¶ 16–17. IAG denies that Rojas had the actual or apparent authority to approve TAP's proposed additional services and materials. Id. ¶¶ 17, 23–25. Moreover, the parties cannot agree as to how frequently TAP obtained Rojas's written permission prior to performing over and above work. Id. ¶¶ 23–25. IAG contends that its representatives "specifically objected to Additional Work performed without approval," whereas TAP alleges that no "IAG representative ever objected to approving any Additional Work and Material after it had been commenced or performed by TAP." Id. ¶ 26.

The parties could have agreed as to the allocation of blame for the failure to solve this problem without bringing the matter to federal court. Id. ¶ 39–40. IAG maintains that it "is willing to pay [some indeterminate] amount because the amount claimed by TAP stems from overcharges and additional work that was never approved." Id. ¶ 43.

At the conclusion of the project, on October 9, 2012, Rojas sent an email to Maciel Albuquerque, a TAP point of contact, asking that TAP return certain aircraft parts from the DC–10 that were listed on a lengthy attachment.Id. ¶ 45, see Albuquerque Decl. Ex. 4. Albuquerque responded the next day, confirming which parts TAP had and asking Rojas to send him the address to which the parts should be shipped. Id. ¶ 46. Neither Rojas nor any other IAG representative responded to Albuquerque's email. Id. ¶ 47. TAP never returned the aircraft parts and continues to retain them. Pl. 56.1 Opp. ¶¶ 6–7. TAP avers that it "does not want the Aircraft Parts, and stands by ready, willing, and able to return the Aircraft Parts to IAG on request." Id. ¶ 15. IAG no longer seeks the parts, but wants TAP to pay the value that the parts would have had if they had been returned in 2012.

Accordingly, with the parties at an impasse, TAP initiated this lawsuit. IAG asserted its counter-claims, seeking the value that the now-unwanted parts would have had in 2012. The parties cross-moved for summary judgment.

DISCUSSION

Summary judgment is appropriate when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a) ; see also Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). " ‘Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial.’ " Scott v. Harris, 550 U.S. 372, 380, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586–87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (internal quotation marks omitted)).

Summary judgment is appropriate on a contract-based claim "where the language of the contract is unambiguous, and reasonable persons could not differ as to its meaning." Fulton Cogeneration Assocs. v. Niagara Mohawk Power Corp., 84 F.3d 91, 98 (2d Cir.1996) (quoting Rothenberg v. Lincoln Farm Camp, Inc., 755 F.2d 1017, 1019 (2d Cir.1985) (internal quotation marks omitted)); see also Thompson v. Gjivoje, 896 F.2d 716, 721 (2d Cir.1990) ("Only where the language is unambiguous may the district court construe it as a matter of law and grant summary judgment accordingly."). Whether a contract is ambiguous is a question of law for the Court. See Law Debenture Trust Co. of N.Y. v. Maverick Tube Corp., 595 F.3d 458, 465 (2d Cir.2010) ; see also Sutton v. E. River Sav. Bank, 55 N.Y.2d 550, 554, 450 N.Y.S.2d 460, 435 N.E.2d 1075 (1982) ("[T]he threshold decision on whether a writing is ambiguous is the exclusive province of the court.").

A "contract is unambiguous if the language it uses has a definite and precise meaning, as to which there is no reasonable basis for a difference of opinion." Lockheed Martin Corp. v. Retail Holdings, N.V., 639 F.3d 63, 69 (2d Cir.2011) (citation omitted). "[A] written agreement that is complete, clear and unambiguous on its face must be interpreted according to the plain meaning of its terms, without the aid of extrinsic evidence." Law Debenture Trust, 595 F.3d at 467 (citations, alteration, and internal quotation marks omitted). On the other hand, a contract is ambiguous if it is capable of "more than one meaning when viewed objectively by a reasonably intelligent person who has examined the context of the entire integrated agreement...." Bayerische Landesbank, N.Y. Branch v. Aladdin Capital Mgmt. LLC, 692 F.3d 42, 53 (2d Cir.2012) (quoting World Trade Ctr. Props., LLC v. Hartford Fire Ins. Co., 345 F.3d 154, 184 (2d Cir.2003) (internal quotation marks omitted)). "Where contractual language is ambiguous and subject to varying reasonable interpretations, intent becomes an issue of fact and summary judgment is inappropriate." Thompson, 896 F.2d at 721 (citing Leberman v. John Blair & Co., 880 F.2d 1555, 1559 (2d Cir.1989) ).

I. TAP Is Entitled to Partial Summary Judgment on Its Breach of Contract Claim

TAP moves for summary judgment on its breach of contract claim. "The essential elements of a cause of action to recover damages for breach of contract are the existence of a contract, the plaintiff's performance pursuant to the contract, the defendant's breach of its contractual obligations, and damages resulting from the breach." El–Nahal v. FA Mgmt., Inc., 126 A.D.3d 667, 668, 5 N.Y.S.3d 201 (2d Dep't 2015) ;³ see also Johnson v. Nextel Commc'ns, Inc., 660 F.3d 131, 142 (2d Cir.2011). For the purposes of TAP's motion, the Court takes all facts in the light most favorable to IAG and resolves all ambiguities in its favor. Smith v. Cnty. of Suffolk, 776 F.3d 114, 121 (2d Cir.2015).

TAP and IAG agree that a contract exists and that TAP performed pursuant to the contract. See Def. Opp. at 3. The sole issue is "how much money IAG owes TAP, as IAG disputes whether the Additional Work performed on the Aircraft received prior written approval as is required under the Agreement." Id. Insofar as TAP performed pursuant to the contract, IAG would owe TAP for the work that was done, according to...