Mansfield Heliflight, Inc. v. Freestream Aircraft USA, Ltd.

• Decision Date: 10 October 2019
• Docket Number: Case No. 2:16-cv-28
• Court: U.S. District Court — District of Vermont
• Parties: MANSFIELD HELIFLIGHT, INC., Plaintiff, v. FREESTREAM AIRCRAFT USA, LTD., Defendant.

MANSFIELD HELIFLIGHT, INC., Plaintiff, v. FREESTREAM AIRCRAFT USA, LTD., Defendant.

Case No. 2:16-cv-28

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF VERMONT

October 10, 2019

ENTRY OF FINAL JUDGMENT AND AWARD OF COSTS

Plaintiff Mansfield Heliflight, Inc. brought this action against Defendant Freestream Aircraft USA, Ltd. alleging the following state-law claims arising out of the purchase and sale of a Gulfstream IV jet (the "Aircraft"): fraudulent inducement, tortious interference with a contract, tortious interference with a prospective business relationship, civil conspiracy, and unjust enrichment.

Following a five-day trial held from July 12 through July 16, 2019, the jury found in favor of Plaintiff on its claims of fraudulent inducement, tortious interference with a contract, tortious interference with a prospective business relationship, and unjust enrichment, and in Defendant's favor on Plaintiff's civil conspiracy claim. The jury awarded Plaintiff $420,000 in restitution damages for the unjust enrichment claim, $800,000 in compensatory damages, and $2,440,000 in punitive damages, for a total award of $3,660,000.

On July 22, 2019, the court issued an Entry Order requesting supplemental briefing from the parties regarding whether the jury's verdict on Plaintiff's unjust enrichment claim should be vacated because there exists an adequate remedy at law. On August 5, 2019, Plaintiff and Defendant each filed supplemental briefing addressing this issue.

Pending before the court is Plaintiff's August 5, 2019 motion for entry of final judgment and award of prejudgment interest and costs. (Doc. 161.) Plaintiff requests that the court enter an order "reflecting the jury's award ($3,660,000) plus prejudgment interest at the rate of twelve percent per annum from October 28, 2015 up to the date of entry of judgment, plus costs in the amount of $11,249.87." (Doc. 161 at 5.)

Plaintiff is represented by Jennifer E. McDonald, Esq., and Walter E. Judge, Jr., Esq. Defendant is represented by Courtney R. Rockett, Esq., Jack G. Stern, Esq., Jonathan R. Voegele, Esq., Patrick J. Rohan, Esq., and Richard B. Drubel, Esq.

I. Whether to Award Plaintiff Damages for Unjust Enrichment.

Defendant requests that the court vacate Plaintiff's $420,000 award for unjust enrichment because Plaintiff has an adequate remedy at law and cannot be allowed to recover twice for the same harm. Alternatively, Defendant requests that the court reduce the amount of the unjust enrichment verdict to $85,000, which it asserts is the net profit that Defendant received from the sale of the Aircraft.¹ Plaintiff asks the court to enter judgment for the full amount awarded by the jury and argues that equitable damages are permissible because compensatory damages did not afford a complete remedy and because the remedy at law and the equitable relief reflect two different types of harm.

Unjust enrichment requires a party seeking equitable relief to prove: "'(1) a benefit was conferred on defendant; (2) defendant accepted the benefit; and (3) defendant retained the benefit under such circumstances that it would be inequitable for defendant not to compensate plaintiff for its value.'" Kellogg v. Shushereba, 2013 VT 76, ¶ 31, 194 Vt. 446, 463, 82 A.3d 1121, 1133 (quoting Center v. Mad River Corp., 561 A.2d 90, 93 (Vt. 1989)); JW, LLC v. Ayer, 2014 VT 71, ¶ 22, 197 Vt. 118, 129, 101 A.3d 906, 914 (observing that unjust enrichment may be awarded in equity where "'[t]he law implies a promise to pay [because] a party receives a benefit and the retention of the benefit would be inequitable.'") (alterations in original) (quoting Cedric Elec., Inc. v. Shea, 472 A.2dbe inequitable.'") (alterations in original) (quoting Cedric Elec., Inc. v. Shea, 472 A.2d 757, 757 (Vt. 1984) (per curiam)). "In determining whether a quasi-contract should be implied under an equitable theory of unjust enrichment, the inquiry is whether, in light of the totality of the circumstances, equity and good conscience demand that the defendant return that which the plaintiff seeks to recover." Brookside Mem'ls, Inc. v. Barre City, 702 A.2d 47, 50 (Vt. 1997).

"[W]here a case involves both legal and equitable claims, the jury verdict must come first, after which the court may issue findings on the equitable claims that must be consistent with the jury verdict." LeBlanc v. Snelgrove, 2015 VT 112, ¶ 39, 200 Vt. 570, 588, 133 A.3d 361, 373. "In an action not triable of right by a jury, the court, on motion or on its own[,] . . . may try any issue with an advisory jury[.]" Fed. R. Civ. P. 39(c); see also Sturgis Motorcycle Rally, Inc. v. Rushmore Photo & Gifts, Inc., 908 F.3d 313, 343 (8th Cir. 2018) ("To bind the district court's equitable powers, a jury's findings must be on an issue 'common' to the action's legal and equitable claims; otherwise, the court is free to treat the jury's findings as 'merely advisory' under Federal Rule of Civil Procedure 39(c).").

"Equitable remedies are available when there is not an adequate remedy at law on the very subject in question." Wynkoop v. Stratthaus, 2016 VT 5, ¶ 50, 201 Vt. 158, 183-84, 136 A.3d 1180, 1196. "To be adequate the legal remedy must be able to provide complete relief for the case before the court and must be equally convenient, beneficial, and effective." Id. at ¶ 18; see also Moreau v. Sylvester, 2014 VT 31, ¶ 20, 196 Vt. 183, 193, 95 A.3d 416, 423 ("Equity will not afford relief where there is a plain, adequate, and complete remedy at law.") (citation omitted).

[B]efore a court's equitable jurisdiction is foreclosed because of the availability of a legal remedy, the legal remedy must be competent to afford relief on the very subject matter in question, and be equally convenient, beneficial and effective as the equitable remedy which would otherwise be available. In other words, to be adequate the remedy at law must be practical and as efficient to the ends of justice and its prompt administration as the remedy in equity.

court recognized that "[i]n the event Plaintiff's adequate recovery at law is established, Plaintiff's equitable claims will be dismissed." Mansfield Heliflight, Inc. v. Freestream Aircraft USA, Ltd., 2016 WL 7176586, at *17 (D. Vt. Dec. 7, 2016). This result is mandated because if a plaintiff has an adequate remedy at law "and the main cause of action is of a legal nature, equity has no jurisdiction." Gerety v. Poitras, 224 A.2d 919, 921 (Vt. 1966).

An unjust enrichment claim does not require proof of a monetary loss suffered by Plaintiff. See Restatement (Third) of Restitution and Unjust Enrichment § 1 (2011) (noting that unjust enrichment claims do not necessarily require proof that "the claimant has suffered a loss"); see also Birchwood Land Co. v. Krizan, 2015 VT 37, ¶ 9, 198 Vt. 420, 425, 115 A.3d 1009, 1012 ("We frequently have adopted provisions of [the Restatement (Third) of Restitution and Unjust Enrichment] where our law is undeveloped."). Instead, unjust enrichment addresses the harm of benefiting from tortious behavior. See Weed v. Weed, 2008 VT 121, ¶ 17, 185 Vt. 83, 90, 968 A.2d 310, 315 ("[T]he equitable doctrine of unjust enrichment rests upon the principle that a man shall not be allowed to enrich himself unjustly at the expense of another.") (citation omitted). It is not available, however, "where it simply duplicates, or replaces, a conventional contract or tort claim[.]" Corsello v. Verizon New York, Inc., 967 N.E.2d 1177, 1185 (2012). Because "a plaintiff is generally not permitted to recover twice for the same injury," Will v. Mill Condo. Owners' Ass'n, 2006 VT 36, ¶ 7, 179 Vt. 500, 503, 898 A.2d 1264, 1267, Plaintiff generally cannot recover both compensatory and restitution damages for the same harm.²

At trial, the jury received instructions regarding Plaintiff's legal claims as well as its equitable claim for unjust enrichment. In the event the jury found in favor of Plaintiff on the unjust enrichment claim, the jury was instructed to consider whether Plaintiff was entitled to restitution damages, which were described as follows: "Unjust enrichment requires that the party who has been unjustly enriched surrender the benefit it received at the expense of the other party. With regard to this equitable claim, you must determine as a fact what you believe that benefit is." (Doc. 148 at 20.) The jury was not instructed to determine whether Plaintiff had an adequate remedy at law, nor would it be permissible to ask it to make that determination. See Loose-Wiles Biscuit Co. v. Deering Vill. Corp., 48 A.2d 715, 717 (Me. 1946) ("Whether a litigant seeking equitable relief has an adequate remedy at law is a question of law.").

Plaintiff introduced into evidence a "Settlement Statement" prepared for Defendant which showed that upon closing the sale of the Aircraft to Blackjet, LLC on October 28, 2015, Defendant received $210,000, Rudolph Melk received $210,000, and Galaxy Aviation Ltd. received $180,000. (Plaintiff's Ex. 99.) Rebecca Posoli-Cilli, Defendant's President and Owner, testified that Defendant earned "[$]210,000 before expenses and commission payouts" on the sale of the Aircraft, but that after paying expenses and commissions, Defendant kept approximately $85,000 to $90,000. (Doc. 158 at 160.) In closing argument, Plaintiff stated that Defendant's "unjust enrichment for the benefit that Freestream got from buying the jet that it would not have gotten if Mansfield's deal had gone through is $600,000." (Doc. 160 at 69.) Defendant countered that if the jury were to find it liable for unjust enrichment, the jury should award $85,000, the "net profit" that it received upon sale of the Aircraft. Id. at 80. The jury found that Defendant was unjustly enriched and that the restitution damages owed for unjust enrichment amounted to $420,000. Because these findings pertained only to Plaintiff'sequitable claim for unjust enrichment, they are merely advisory. See Fed. R. Civ. P. 39(c).

With regard to...