A Inv. v. Contact Aviation, LLC
| Decision Date | 11 May 2023 |
| Docket Number | 358212 |
| Parties | A INVESTMENT, LLC, AERO ATTACK SYSTEMS, INC., AERO ATTACK SYSTEMS, INC., and AVRAHAM ROD SALINGER, Plaintiffs-Appellees/Cross-Appellants, v. CONTACT AVIATION, LLC, and RAPTOR AVIATION, INC., Defendants-Appellants/Cross- Appellees and JOHN ROCKFORD SHIRK, FELICIA N SHIRK, and UNIQUE ONE AIRCRAFT INTERIORS, INC., Defendants/Cross-Appellees. |
| Court | Court of Appeal of Michigan — District of US |
UNPUBLISHED
Oakland Circuit Court LC No. 2019-175865-CB.
Before: MARKEY, P.J., and MURRAY and FEENEY, JJ.
Defendants-appellants/cross-appellees[1] Contact Aviation, LLC, and Raptor Aviation, Inc., appeal as of right the trial court's final order dismissing defendants' counterclaims as a discovery sanction, arguing that the purported discovery violations never occurred. Defendants further argue that the trial court abused its discretion by dismissing Raptor's counterclaim for its unintentional failure to amend its counterclaim to accurately reflect the amount of commission owed and by vacating defendants' possessory lien under the garage keepers act, contending that a constructive trust and equitable lien should be imposed to prevent an unconscionable or inequitable outcome. Defendants further argue that they were entitled to judgment on their breach of contract claim and that the trial court committed reversible error when it denied their motion to enforce the settlement agreement.
Plaintiffs-appellees/cross-appellants,[2] A Investment, LLC (AI), Aero Attack Systems, Inc. (AERO WI), Aero Attack Systems, Inc. (AERO BC), and Avraham Salinger, cross-appeal arguing that the trial court erred when it dismissed plaintiffs' claims for conversion, claim and delivery, and damages. Plaintiffs further argue that the trial court erred by failing to address their negligence and breach of fiduciary duty claims and that they were prejudiced by the trial court's alleged dislike of Salinger. We affirm.
Plaintiffs filed this action after AERO WI purchased a Dassault-Breguet Falcon 50 (Falcon) aircraft, and disputes arose over Raptor's sales commission and certain charges arising from Contact's repairs and storage costs of the Falcon.
In the latter part of 2017, Albert Heidinger, owner and operator of Raptor, an aircraft brokerage company based in Florida, conferred with Salinger about purchasing the Falcon from Echo Aviation (Echo) for $450,000. On January 15, 2018, Salinger, on behalf of AERO WI, and Raptor entered into a commission agreement for Raptor to negotiate the Falcon's sale price and terms with Echo. According to the agreement, Raptor would earn a 5% commission from the Falcon's sale price, roughly $22,500 after the closing. On January 17, 2018, Echo agreed to sell the Falcon to AERO WI for $450,000, and the parties entered into a purchase agreement.
According to defendants, Salinger funded a portion of the Falcon's purchase price with proceeds AERO BC earned from a prior dealing between Salinger and Raptor, where they purchased another charter plane, the Challenger, as an investment opportunity. Heidinger testified that the parties resold the Challenger for a profit, but due to an accounting error, Salinger was overpaid $2,500 from a portion of the proceeds actually belonging to Raptor. When Salinger, on behalf of AERO WI, contracted to purchase the Falcon on January 17, 2018, he utilized the Challenger proceeds as an initial down payment but lacked sufficient funding to pay the Falcon's balance. Allegedly, Raptor and Salinger agreed that AERO WI would use Raptor's $2,500 carryover commission from the Challenger deal and its expected commission on the Falcon of $22,500 towards the Falcon's purchase and, in exchange, Raptor would place a $25,000 lien on the Falcon. Raptor filed its claim of lien on April 20, 2018, for $25,000, and Salinger subsequently paid $10,000 to Raptor.
After Salinger took possession of the Falcon from Echo in late January of 2018, Salinger chartered the aircraft to Contact's facility at the Oakland International Airport, intending to store the aircraft overnight before taking off to his next destination the following morning. However, on the night of arrival, Salinger and Felicia and John Shirk went to dinner and Salinger's plans changed course. Salinger decided to store the Falcon in Contact's hanger and conferred with the Shirks at dinner about Contact performing several upgrades and repairs to the Falcon.
On January 31, 2018, Contact memorialized Salinger's requests in an email to Salinger, providing cost estimates for cockpit seat repairs, forward cabinet repair, and refurbishing the cabin armrests. In response, on February 1, 2018, Salinger sent back to Contact a list of "things needing to be done for the Falcon," expanding the work Contact quoted in its initial email.[3] Shirk and Salinger gave conflicting testimony at trial regarding whether Salinger's email established an agreement for Contact to perform work on the Falcon or a mere request to receive quotes from Contact. Shirk also testified that because Salinger instructed Contact to hire a reupholstery shop within a few days of that email, Contact began performing work on several other items listed in Salinger's email. Contact began washing and waxing the Falcon's exterior, providing paint touch-ups, and removing the carpet for cleaning. Contact immediately hired a reupholstery shop, Unique One Aircraft Interiors, Inc., to remove the seats to prepare them for the sheepskin reupholstery. When Unique removed the seats from the aircraft, broken and defective equipment was discovered, rendering the Falcon unairworthy. Contact ceased all work on the Falcon in early February of 2018 following Salinger's failure to pay an initial deposit of $7,500. Salinger and Contact agreed to store the Falcon inside Contact's hangar for $100 per day, set to accumulate on the days Contact was not performing work on the aircraft.
The record shows that Contact sent numerous requests to Salinger for the deposit payment to reengage in work and for approval to perform additional work on the Falcon. In response to Contact's requests, Salinger consistently promised to pay but provided no direction to Contact to perform any work. Meanwhile, the hangar rent accumulated. The record shows that Salinger paid $20,000 to Contact by three wire transfers, including $5,000 on May 30, 2018, $5,000 on June 12, 2018, and $10,000 on June 27, 2018.
It was not until April 23, 2019, that Contact sent an official invoice to Salinger detailing the work allegedly performed by Contact on the Falcon and the amount owed to Unique for reupholstery, totaling $15,364.30. When Contact's invoice went unpaid, Contact proceeded to sell the Falcon by public auction. The Falcon was sold by public auction on July 15, 2019. However, plaintiffs filed suit on August 14, 2019, and two days later, the court issued an ex-parte order restricting the sale, removing the Falcon from Contact's facility and moving it to Maven by Midfield.
Plaintiffs' complaint asserted claims for common-law and statutory conversion, claim and delivery, entitlement to equitable relief for the injunction as to the sale, piercing the corporate veil, and negligence against Contact, Shirk, and Felicia Shirk, and further asserted breach of fiduciary duty by Raptor.[4]
Several months after the plaintiffs filed their complaint, the parties entered a settlement agreement and stipulated to dismiss the action without prejudice. The settlement agreement was conditioned on, among other things, plaintiffs' inspection of the Falcon to ensure the authenticity and functionality of the Falcon's avionics equipment, that is, that nothing had been changed or damaged while in Contact's care. However, after plaintiffs inspected the Falcon, they filed a motion to set aside the settlement agreement and reinstate the case, arguing that the inspection revealed that defendants had removed or replaced the avionics equipment from the aircraft and that several avionics components were inoperable. The trial court granted plaintiffs' motion, setting aside the settlement agreement and reinstating the case. Defendants subsequently filed their counterclaim, asserting Raptor's breach of contract claim and Contact's claims for breach of contract, entitlement to damages in the amount of $82,728.53, and for claim and delivery and enforcement of its lien rights.
The trial court issued its scheduling order on September 28, 2020, requiring the parties to file their initial disclosures by October of 2020, expert witness lists by November 30, 2020, lay witnesses by December 20, 2020, and complete discovery by February 28, 2021. Defendants failed to file their initial disclosures, and both parties' expert witness lists were untimely. On February 23, 2021, the trial court issued an amended scheduling order, which, in relevant part, ordered the completion of discovery by April 30, 2021, and that a concise theory of the case be filed and depositions completed no later than June 7, 2021. The record shows that defendants failed to submit a concise theory of the case.
On March 16, 2021, plaintiffs served their interrogatories requests for the production of documents, and requests for admission on defendants. Although defendants timely answered plaintiffs' requests for admission, defendants neglected to respond to plaintiffs' interrogatories and requests to produce. Plaintiffs subsequently filed their motion to compel discovery, arguing that defendants failed to respond to their interrogatories and requests for production and provided inadequate responses to their request for admissions. The trial court granted plaintiffs' motion to compel defendants' discovery...
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