Llc v. Jet Mgmt. Inc.

• Decision Date: 06 August 2010
• Docket Number: Case No. 3:07cv242/MCR/EMT
• Citation: 732 F.Supp.2d 1205
• Parties: JDI HOLDINGS, LLC, Plaintiff, v. JET MANAGEMENT, INC.; Southern Jet Center, LLC; and Jon Kerr, Defendants.
• Court: U.S. District Court — Northern District of Florida

732 F.Supp.2d 1205

JDI HOLDINGS, LLC, Plaintiff,
v.
JET MANAGEMENT, INC.; Southern Jet Center, LLC; and Jon Kerr, Defendants.

Case No. 3:07cv242/MCR/EMT.

United States District Court,
N.D. Florida,
Pensacola Division.

Aug. 6, 2010.

732 F.Supp.2d 1208

Robert Conrad Palmer, III, Austin Reeves Ward, Wade Palmer & Shoemaker PA, Pensacola, FL, Adrian N. Roe, Adrian N. Roe PC, Pittsburg, PA, for Plaintiff.

Michael James Schofield, Jeremy Chase Branning, Clark Partington Hart etc., Pensacola, FL, for Defendants.

Jon Kerr, Litchfield, CT, pro se.

ORDER

M. CASEY RODGERS, District Judge.

This case was tried before the court without a jury. The dispute involves several claims arising out of the purchase of an aircraft in December 2005 by Plaintiff JDI Holdings, LLC ("JDI").¹ See 28 U.S.C. § 1332. JDI asserts that the aircraft seller, Jet Management, Inc. ("Jet") breached the aircraft purchase agreement by delivering the aircraft with significant defects. JDI maintains that Jet and its affiliated repair and maintenance facility, Southern Jet Center, LLC ("Southern"),

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conspired together with Jon Kerr ("Kerr"), an aircraft broker hired by JDI, to minimize and conceal defects in the aircraft, thereby causing JDI to purchase an aircraft with significant defects.² JDI also claims that Jet and Southern intentionally interfered with its relationship with Kerr and that Kerr entered into a dual agency relationship with both JDI and Jet. JDI seeks damages from all defendants, rescission of the purchase agreement, and disgorgement of Kerr's commission.

Rule 52 Standards

At trial, following the close of the plaintiff's evidence, Jet and Southern moved for judgment on partial findings pursuant to Federal Rule of Civil Procedure 52(c), arguing that JDI had failed to set forth sufficient evidence to support its claims. Rule 52(c) permits the court during a nonjury trial and after a party has been fully heard on an issue to enter judgment on a claim or defense that "can be maintained or defeated only with a favorable finding on that issue," and requires that any "judgment on partial findings must be supported by findings of fact and conclusions of law as required by Rule 52(a)." Fed.R.Civ.P. 52(c). When ruling on a Rule 52(c) motion, "the court must weigh the evidence and may consider the witnesses' credibility," treating the motion "as if it were a final adjudication at the end of trial," though it occurs in the middle. Caro-Galvan v. Curtis Richardson, Inc., 993 F.2d 1500, 1504 (11th Cir.1993) (internal marks omitted). Thus, the court resolves the disputed issues on the basis of the preponderance of the evidence, without drawing any special inferences in favor of the plaintiff. Emerson Elec. Co. v. Farmer, 427 F.2d 1082, 1086 (5th Cir.1970) ³ (discussing the former Rule 41(b) ⁴). The court retains discretion under Rule 52(c) to "decline to render any judgment until the close of the evidence." The court declined to render judgment as to Jet until the close of evidence but granted Southern's Rule 52(c) mid-trial motion for judgment on partial findings, stating the relevant findings and conclusions of law on the record. That ruling stands, and the court therefore will enter final judgment in favor of Southern for the reasons stated on the record at trial.

The court now considers the claims against the remaining parties, Jet and Kerr. In rendering judgment following a nonjury trial, Rule 52(a) requires the district court to make specific findings of fact and to state conclusions separately. The rule "does not require a finding on every contention raised by the parties," but requires the court to provide sufficient detail demonstrating that care was taken in ascertaining and analyzing the facts necessary to the decision and providing "sufficient particularity" to facilitate meaningful review. Feazell v. Tropicana Prods., Inc., 819 F.2d 1036, 1042 (11th Cir.1987). Thus, in accordance with the requirements of Rule 52(a), having heard and considered all of the testimony, evidence, and arguments presented at trial, the court now enters the following findings of fact and conclusions of law.

732 F.Supp.2d 1210

FINDINGS OF FACT

Background

JDI, through its chief executive officer and sole member, Jared Isaacman,⁵ purchased a 1984 Cessna Citation Model 650 jet aircraft ⁶ ("the Cessna Citation 650" or "the aircraft") from Jet on December 5, 2005. Isaacman, who is now a licensed pilot and seasoned aircraft owner, had never owned or flown a plane in 2005; this transaction was his first aircraft purchase. Isaacman testified that he became interested in purchasing an airplane in the fall of 2005, after his company experienced a "liquidity event," which made a large purchase prior to the end of the year desirable from a tax standpoint. Additionally, Isaacman wanted an aircraft for personal and business use and to earn business revenue as a certified charter aircraft pursuant to Part 135 of the Federal Aviation Regulations,⁷ when not in use by Isaacman.

Isaacman was initially interested in an aircraft offered for sale by Jon Kerr. Emails confirm that Isaacman and Kerr were engaged in discussions related to that aircraft in September 2005. Although Isaacman's interest turned to different airplanes, he continued to rely on Kerr's assistance to identify a suitable aircraft for him to purchase. In November 2005, Kerr identified the Cessna Citation 650 offered for sale by Jet, which suited Isaacman's needs. The aircraft had recently undergone a Phase 1-5 inspection process at Southern. ⁸ Kerr and Isaacman's attorney, Don Dulac, negotiated a $3.2 million purchase price with Paul Watkins, Vice President of Acquisitions for Jet. ⁹

Aircraft Negotiations and Purchase Agreement¹⁰

There is no dispute that Jet and Southern knew that Kerr was representing JDI

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during the negotiations and pre-closing inspection and repair process. (Doc. 245.) Emails show that on November 21, 2005, Kerr informed Isaacman of the Cessna Citation 650 and informed Watkins, Jet's representative, that Isaacman was interested in it. (Plaintiff's Ex. 19.) The next day, November 22, Kerr sent an email informing Isaacman's attorney, Dulac, about this aircraft, and Kerr began arranging financing.

Email correspondence shows that within four days of identifying this aircraft, Kerr was discussing a fee arrangement with Watkins. Kerr and Watkins both testified that aircraft brokers often have trouble getting paid so they attempt to obtain payment for themselves from either side. Kerr had no written agency or broker agreement with Isaacman or JDI. He testified that he was instructed to communicate with Isaacman's attorney, Dulac, because Isaacman was very busy. According to Kerr's uncontradicted testimony, Dulac balked at Kerr's customary five percent commission, which would have yielded Kerr approximately $160,000 on a purchase price of $3,200,000, and Dulac instructed Kerr to see if he could get the seller to pay his commission.¹¹ Isaacman testified that he initially thought the seller would pay the broker fee.

As negotiations continued, Kerr informed Dulac that he believed the recently performed Phase 1-5 inspection was sufficient to qualify as a pre-purchase inspection for the aircraft but that the aircraft's flight and logbooks should be audited. (Plaintiff's Ex. 30.) By email on November 28, 2005, Isaacman advised Kerr that he had instructed Dulac to go forward with the deal and to make the required $50,000 deposit, but he preferred to get a "term sheet" first, meaning a preliminary agreement regarding the terms agreed upon. ¹² (Plaintiff's Ex. 34.) Dulac, however, had already begun preparing the purchase agreement and in his opinion, it was quicker and more efficient to proceed directly with a purchase agreement. (Defendant's Ex. 139.) Dulac told Isaacman by email

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that he could complete the purchase agreement once they talked about the monetary terms and advised him that the only outstanding issue was "getting the plane into an inspection facility where it, the logbooks and maintenance records can be reviewed." (Def.'s Ex. 139.) Dulac commented on the aircraft's recent Phase 1-5 inspection, but advised, "if we don't do a pre-purchase inspection, the risk is the incidence of airworthiness discrepancies between completion of the [Phase 1-5] inspections and today. I'm not competent to measure or quantify that risk." (Def.'s Ex. 139.)

The next day, November 29, 2005, negotiations continued. Kerr continued discussing a possible as-is purchase, the deposit, and his own potential fee with Watkins. In a series of email exchanges, Kerr stated he was ready to "pull the trigger on this deal" and asked Watkins if he would "mind signing a one page agreement" for Kerr's "protection." (Plaintiff's Ex. 37.) Watkins responded to Kerr's request by email stating:

I will sign an agreement that says we will pay you any money that is received that exceeds 3050m [$3,050,000] out of escrow at closing with the understanding that 3050m is our net price, the rest is Mr. Jon Kerr[']s as we previously discussed. The terms are as is with a logbook research and someone coming to see the plane books and records, to verify all work performed. Send deposit, let[']s get it done.

(Plaintiff's Ex. 37.) However, on the same day, email discussions between Kerr, Dulac, and Isaacman reflect that Isaacman was not interested in accepting an as-is purchase with only a records check. Kerr reported that the Cessna Service Center in Newburgh, New York, had confirmed that the recently performed Phase 1-5 inspections would qualify as a pre-purchase inspection, and he attached a quote from the Newburgh service center, confirming a quick turnaround, apparently for a logbook and cursory aircraft review. (Plaintiff's Ex. 50.) Kerr advised Isaacman to rely on the recently completed Phase 1-5 inspections and forego the greater expense of an extensive pre-purchase inspection, but Isaacman responded...