Carmayer, LLC v. Koury Aviation, Inc.
| Decision Date | 11 September 2017 |
| Docket Number | 16 CVS 2717 |
| Citation | 2017 NCBC 80 . |
| Court | Superior Court of North Carolina |
| Parties | CARMAYER, LLC, Plaintiff, v. KOURY AVIATION, INC.; BRADFORD A. KOURY; and THOMAS HURLOCKER, Defendants. |
Rossabi Reardon Klein Spivey PLLC, by Amiel J. Rossabi and Elizabeth M. Klein, for Plaintiff.
Tuggle Duggins P.A., by Denis E. Jacobson, Jeffrey S. Southerland and Richard W. Andrews, for Defendants.
Michael L. Robinson Judge.
1. THIS MATTER is before the Court on Plaintiff Carmayer, LLC's ("Carmayer") Motion to Amend Complaint (the "Motion to Amend") and Defendants Koury Aviation, Inc. ("Koury Aviation"), Bradford A. Koury ("Koury"), and Thomas Hurlocker's ("Hurlocker") (collectively, the "Defendants") Motion for Summary Judgment. The Motion to Amend and the Motion for Summary Judgment are collectively referred to herein as "the Motions." Having considered the Motions, the briefs, and the arguments of counsel, the Court DENIES the Motion to Amend and GRANTS in part and DENIES in part the Motion for Summary Judgment.
2. This litigation arises out of Carmayer's purchase of a 1976 Cessna 421C twin-engine propeller aircraft (the "Cessna 421C"). Carmayer sought advice from Defendants in purchasing a plane that it could charter for hire under part 135 of the Federal Aviation Regulations ("Part 135"). In October 2014, Carmayer purchased the Cessna 421C from a third-party for the purpose of putting it on Koury Aviation's Part 135 Charter Certificate ("Koury Aviation's Part 135 Certificate"). After purchasing the Cessna 421C, it was flown back to Koury Aviation's facility in Greensboro, North Carolina where Defendants made repairs to the aircraft in order to add it to Koury Aviation's Part 135 Certificate. Ultimately, the Federal Aviation Administration ("FAA") did not certify the Cessna 421C under Part 135. Carmayer learned that the Cessna 421C may never be capable of Part 135 certification or, at the very least, that such certification would require enormous cost.
3. The Court sets forth here only those portions of the procedural history relevant to its determination of the Motions.
4. Carmayer initiated this action by filing its Complaint on January 11, 2016. (ECF No. 1.) The Complaint asserts claims against Defendants for negligent misrepresentation, unfair and deceptive trade practices ("UDTP"), breach of fiduciary duty, negligence, and gross negligence. (ECF No. 1 at 8, 10-12.)
5. This action was designated as a mandatory complex business case by order of the Chief Justice of the Supreme Court of North Carolina dated February 17, 2016, (ECF No. 3), and assigned to Chief Business Court Judge James L. Gale by order dated February 19, 2016, (ECF No. 4). This case was later reassigned to the undersigned by order dated July 5, 2016. (ECF No. 21.)
6. On March 16, 2016, Defendants filed their answer and counterclaims, raising, inter alia, the economic loss doctrine as an affirmative defense. (Defs.' Answer to Compl. & Countercls. 6, ECF No. 9.)
7. On April 11, 2016, Carmayer filed its reply. (ECF No. 11.)
8. Following the completion of discovery, on March 17, 2017, Defendants filed the Motion for Summary Judgment pursuant to Rule 56 of the North Carolina Rules of Civil Procedure ("Rules(s)"), (ECF No. 45), and a brief in support, (ECF No. 46).
9. On May 16, 2017, the Court held a hearing on the Motion for Summary Judgment.
10. On June 2, 2017, the Court entered an order directing the parties to submit supplemental briefing on whether the economic loss rule applied to any of Plaintiff's claims. (ECF No. 64.)
11. Defendants and Plaintiff filed their supplemental briefs on the application of the economic loss rule on June 16, 2017 and June 26, 2017, respectively. (ECF Nos. 65-66.)
12. On June 28, 2017, Plaintiff filed the Motion to Amend pursuant to Rule 15(a), (ECF No. 71), and a brief in support, (ECF No. 73).
13. The Motions have been fully briefed and are now ripe for resolution. Pursuant to Rule 7.4 of the General Rules of Practice and Procedure for the North Carolina Business Court ("BCR"), the Court elects to rule on the Motion to Amend without a hearing.
14. The Court does not make findings of fact when ruling on a motion for summary judgment, but it may either state those facts that it believes are not in material dispute, state those facts on which a material dispute forecloses summary adjudication, or summarize the underlying facts to provide context for its ruling. E.g., In re Estate of Pope, 192 N.C.App. 321, 329, 666 S.E.2d 140, 147 (2008). The following statement of facts is solely for the purpose of this Order and Opinion.
15. Carmayer is a North Carolina limited liability company. (ECF No. 1 at ¶ 1; ECF No. 9 at 1, ¶ 1.) Rocco Scarfone ("Scarfone") and Amiel Rossabi ("Rossabi") are Carmayer's managers and its only members. (Defs.' Mot. Summ. J. Ex. C, at 7:15- 21, ECF No. 48.)
16. Koury Aviation is a North Carolina corporation. (ECF No. 9 at 8, ¶ 1; Reply & Affirmative Defenses ¶ 1, ECF No. 11.1.) Koury is the President of Koury Aviation. (ECF No. 1 at ¶ 3; ECF No. 9 at 1, ¶ 3.) Hurlocker is a mechanic and Koury Aviation's director of maintenance. (Mem. Opp'n Defs.' Mot. Summ. J. Ex. A, at 83:1-6, ECF No. 54.)
17. A Part 135 certificate allows an aircraft to be operated for hire. (ECF No. 54 at Ex. B, 14:16-15:4.) To add an aircraft to a Part 135 certificate, an operator must submit the aircraft and its documentation to the FAA for an inspection. (ECF No. 54 at Ex. B, 17:11-21:8.) The documentation, sometimes referred to as a conformity binder, must include the inspection and maintenance program that the operator intends to observe in inspecting and maintaining the aircraft. (ECF No. 48 at Ex. E, 24:15-25, 29:1-20; ECF No. 54 at Ex. B, 15:5-18:24.) Under the Federal Aviation Regulations, the FAA may approve one of several different inspection and maintenance programs for an aircraft, including the aircraft manufacturer's factory program, an Approved Aircraft Inspection Program ("AAIP"), or a traditional part 43D program written by the operator. (ECF No. 54 at Ex. B, 15:5-21:8.) The FAA, through the principal maintenance inspector at the local flight standards district office, has exclusive authority over whether to certify an aircraft under Part 135. (ECF No. 48 at Ex. I, 23:19-24:4.)
18. On January 17, 2013, the FAA issued Koury Aviation's Part 135 Certificate. (Defs.' Mot. Summ. J. Ex. K, ECF No. 49.) By October 2014, Defendants had successfully added six aircraft to Koury Aviation's Part 135 Certificate. (ECF No. 48 at Ex. B, 74:1-2.)
19. In the spring of 2014, Scarfone began investigating the possibility of purchasing an aircraft. .) After looking at aircraft on the internet, Scarfone went to Carolina Aircraft, Inc. ("Carolina Aircraft") in Greensboro to look at a Baron BE 58 listed for sale. While looking at the Baron BE 58, Scarfone explained to George Johnson, the owner of Carolina Aircraft, that Scarfone was looking for an aircraft to place on a charter program. (ECF No. 48 at Ex. D, 94:10-22.) Johnson suggested that Scarfone speak with Koury Aviation and walked Scarfone to Koury Aviation's office. (Aff. Rocco Scarfone ¶ 4, ECF No. 56; ECF No. 48 at Ex. D, 96:13-97:17.) Scarfone left his contact information with Koury Aviation and indicated that he was interested in purchasing an aircraft to place on a charter program. (ECF No. 48 at Ex. D, 97:18- 25.)
20. On April 24, 2014, Koury e-mailed Scarfone to discuss Scarfone's interest in purchasing an aircraft. Koury informed Scarfone of two websites that listed aircraft for sale.
21. During the summer of 2014, Rossabi and Scarfone agreed to invest, by and through Carmayer, in purchasing an aircraft. (ECF No. 48 at Ex. C, 13:14-19.) The primary purpose of purchasing an aircraft was to charter it, specifically on Koury Aviation's Part 135 Certificate. After partnering with Rossabi, Scarfone continued to search for aircraft for sale on the internet. (ECF No. 48 at Ex. D, 104:17-105:12.)
22. During Scarfone's search, Koury told Scarfone that a twin-engine propeller aircraft would work well on a Part 135 certificate. (ECF No. 54 at Ex. C, 62:2-24.) Koury stated that adding a twin-engine propeller aircraft to Koury Aviation's Part 135 Certificate would help Koury Aviation attract new customers, as all of Koury Aviation's aircraft available for charter were jets. On more than one occasion during Scarfone's search for an aircraft, Scarfone sent Koury internet links to specific twin-engine aircraft for sale that Scarfone thought may be suitable for Carmayer to purchase. (ECF No. 48 at Ex. D, 105:1-6; ECF No. 56 at ¶ 9.) Koury responded with his feedback, occasionally with input from Hurlocker. (ECF No. 48 at Ex. D, 105:1-6; ECF No. 56 at ¶ 9.)
23. On June 25, 2014, Koury e-mailed Scarfone a pro forma for a Cessna 414 (the "Pro Forma"). (ECF No. 56 at Ex. D.) In his e-mail, Koury stated "[Scarfone], attached is a somewhat conservative sheet which I feel will work for the 414, it was difficult to find much info, but I think we will be pretty close to the income, if not low." (ECF No. 56 at Ex. D.) The Pro Forma projected an annual profit of $44, 192 if a Cessna 414 was chartered for 250 hours, and an annual profit of $159, 212 if a Cessna 414 was chartered for 500 hours. (ECF No. 56 at Ex. D.)
2...
To continue reading
Request your trial