First Tech. Capital, Inc. v. Airborne, Inc.
| Decision Date | 02 August 2017 |
| Docket Number | 6:15–CV–06063 EAW |
| Citation | 261 F.Supp.3d 371 |
| Parties | FIRST TECHNOLOGY CAPITAL, INC., Plaintiff, v. AIRBORNE, INC. d/b/a Firstflight, Defendant. |
| Court | U.S. District Court — Western District of New York |
Michael J. Gartland, DelCotto Law Group PLLC, Lexington, KY, for Plaintiff.
W. Bradley Hunt, Neil Joseph Smith, Mackenzie Hughes LLP, Syracuse, NY, for Defendant.
DECISION AND ORDER
Plaintiff First Technology Capital, Inc., ("Plaintiff") brings this action against Airborne, Inc. d/b/a Firstflight ("Defendant"), for damages allegedly sustained when Defendant breached a contract to purchase an aircraft from Plaintiff. (Dkt. 1). On April 2, 2014, Plaintiff and Defendant entered into a contract for the sale of a 1999 McDonnell Douglas DC–9–83 aircraft carrying the tail number N973TW and the serial number 53623 ("the Aircraft"). (See id. at ¶¶ 8, 30). Incorporated as part of that contract was a Technical Summary Report with information/specifications pertaining to a McDonnell Douglas MD–83 that, as it turns out, was not the Aircraft. (Id. at ¶ 28). Ultimately, Defendant rejected the Aircraft because it did not comply with the information/specifications contained in the Technical Summary Report. (Id. at ¶ 37).
Plaintiff contends that while both parties believed that the Technical Summary Report related to the Aircraft at the time the contract was executed (id. at ¶¶ 28, 31), Defendant later relied upon the failure of the Aircraft to comply with those specifications as an excuse to back out of the deal (id. at ¶¶ 35–37). In other words, according to Plaintiff, Defendant had other reasons for not wanting to proceed with the transaction, but relied upon the failure to comply with the technical terms of the contract to renege on the deal.
Presently before the Court is Defendant's motion for judgment on the pleadings (Dkt. 30), Defendant's motion to amend/correct its answer (Dkt. 39), Plaintiff's motion for summary judgment to dismiss Defendant's "perfect tender" defense (Dkt. 47), and Plaintiff's motion for summary judgment to reform the contract (Dkt. 57). For the reasons set forth below, Defendant's motion for judgment on the pleadings is granted, and all other pending motions are denied as moot.
The following facts are drawn from the complaint (Dkt. 1) unless otherwise stated. On or about September 30, 2010, Plaintiff acquired full ownership interest in the Dougherty Air XVIII Investment Trust, which was controlled by Dougherty Air Trustee, LLC ("Dougherty") as trustee. (Id. at ¶ 6). At approximately the same time, Dougherty obtained the Aircraft. (Id. at ¶ 8). The Aircraft was acquired on a lease with American Airlines ("American"), but, in 2012, the lease was amended and was scheduled to terminate on May 1, 2014. (Id. at ¶¶ 8, 10–11). In March of 2014, Dougherty entered into negotiations with Tailwind Capital, LLC ("Tailwind") to sell the Aircraft (id. at ¶ 18); Tailwind was acting as Defendant's "broker/agent" during these discussions (id. ). Defendant was interested in purchasing the Aircraft in order to immediately sell it to an undisclosed Middle Eastern airline. (Id. at ¶ 34).
On March 28, 2014, Alan Weingart ("Weingart"), a Senior Vice President of Dougherty, sent two emails with various PDF documents containing the specifications for the Aircraft to Bryson Monteleone ("Monteleone"), an "ISTAT" certified appraiser with Tailwind. (Id. at ¶ 19). On April 1, 2014, Weingart sent an email to Monteleone containing a form "Offer to Purchase" with blank spaces appearing in the "Sale Price" and "Sale Terms" sections ("Initial Offer"). (Id. at ¶ 20; Dkt. 1–1 at 2).
On April 2, 2014, Benjamin Dow ("Dow"), Defendant's Director of Aircraft Sales, executed the Initial Offer with alterations ("Purchase Contract"). (Dkt. 1 at ¶¶ 25–26; Dkt. 1–2). These changes included a modification to the "Sales Terms" section and the attachment of the Technical Summary Report. In the Initial Offer, the final provision in the "Sale Terms" section provided that the "Aircraft is sold ‘as is/where is’ with no representations or warranties of any kind except for the warranty of title." (Dkt. 1–1 at 2). However, in the Purchase Contract, the provision continues with: (Dkt. 1–2 at 2 (emphasis added)). A Technical Summary Report was attached as "Annex I" to the Purchase Contract, and was labeled as the "Aircraft Specification." (Id. at 6–12).
That same day, Weingart, on behalf of Dougherty, executed the Purchase Contract. (Dkt. 1–3 at 6). Weingart confirmed that the Purchase Contract had been executed in an email correspondence, and also indicated that he would "endeavor to get [American] to confirm the items on the Technical [S]ummary Report that is dated December 3, 2013." (Dkt. 1–3 at 2).
Within the next two days, Weingart sent an email to Monteleone at Tailwind containing a summary of the actual specifications for the Aircraft. (Dkt. 1–4 at 2–6; Dkt. 1 at ¶ 32). Less than a week later, on April 9, 2014, Tailwind informed Weingart that the "bridging costs"1 involved in preparing and conditioning the Aircraft for subsequent resale were too great to proceed with the instant transaction. (Dkt. 1 at ¶ 35). The next day (April 10, 2014), Tailwind confirmed that Defendant would not purchase the Aircraft. (Id. at ¶ 36).
On April 15, 2014, Dow transmitted an email to Monteleone, which noticed his reasons for rejecting the Aircraft, and primary among them was the " ‘incorrect and inaccurate technical specification’ " attached to the Purchase Contract. (Id. at ¶ 37). Dow claimed that the Technical Summary Report had been provided by Plaintiff, when in fact Defendant or its broker/agent had attached it to the Purchase Contract. (Id. at ¶¶ 37, 38). Plaintiff has since sold the Aircraft to another buyer for $575,000, which is $1,575,000 less than the amount Defendant had contracted to pay. (Id. at ¶ 39).
On February 5, 2015, Plaintiff commenced this action alleging that Defendant had breached its obligations under the Purchase Contract by rejecting the Aircraft. (Dkt. 1). On March 2, 2015, Defendant timely answered the complaint, denying all material allegations and raising various affirmative defenses. (Dkt. 9). On July 6, 2015, Defendant filed the present motion for judgment on the pleadings, claiming that it had acted properly by rejecting the Aircraft pursuant to the "perfect tender" rule, and, in any event, the Purchase Contract was voidable under the Impossibility Doctrine. (Dkt. 30). On August 3, 2015, Plaintiff requested that Defendant's motion be converted to a motion for summary judgment and opposed the motion, arguing that: (1) Plaintiff had waived the affirmative defense of Impossibility by failing to raise it in its answer and, in any event, such a defense was inapplicable; and (2) there was at least a genuine issue of material fact regarding whether Defendant had acted in good faith in rejecting the Aircraft. (Dkt. 37). On August 10, 2015, Defendant filed the present motion to amend/correct its answer, requesting permission to add the affirmative defense of Impossibility. (Dkt. 39). Plaintiff opposed this motion. (Dkt. 41).
On October 2, 2015, Plaintiff filed its first motion for summary judgment presently pending before the Court, requesting that Defendant's "perfect tender" defense be dismissed because, as a matter of law, Plaintiff acted in bad faith in rejecting the Aircraft. (Dkt. 47; Dkt. 47–17). Defendant opposed this motion. (Dkt. 52). On October 30, 2015, Plaintiff filed its second motion for summary judgment presently pending before the Court, requesting that the Purchase Contract be reformed to reflect the parties' intent. (Dkt. 57). Defendant opposed this motion as well. (Dkt. 61).
On March 8, 2016, the Court heard oral argument on all pending motions. (Dkt. 67). On August 31, 2016, Defendant apprised the Court that it had filed for Chapter 11 bankruptcy, and the matter was stayed pursuant to 11 U.S.C. § 362. (Dkt. 68). On October 3, 2016, the Court was informed that the bankruptcy proceedings had terminated and it then notified the parties that the stay would be lifted unless it received objections by October 7, 2016. (Dkt. 69). The Court lifted the stay on October 10, 2016, after receiving no objections from the parties. (Dkt. 70).
"Judgment on the pleadings may be granted under Rule 12(c) where the material facts are undisputed and where judgment on the merits is possible merely by considering the contents of the pleadings." McAuliffe v. Barnhart , 571 F.Supp.2d 400, 402 (W.D.N.Y. 2008). "In deciding a Rule 12(c) motion for judgment on the pleadings, the court should ‘apply the same standard as that applicable to a motion under Rule 12(b)(6), accepting the allegations contained in the complaint as true and drawing all reasonable inferences in favor of the nonmoving party." ’ Aboushama v. EMF Corp. , 214 F.Supp.3d 202, 205 (W.D.N.Y. 2016) (quoting Mantena v. Johnson , 809 F.3d 721, 727–28 (2d Cir. 2015) ). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face." ’ Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ).
The Court first addresses Plaintiff's request to convert Defendant's motion for judgment on the pleadings to a motion for summary judgment. "Generally, a motion for judgment on the pleadings must be based upon the...
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