SkyJet, Inc. v. CSDS Asset Mgmt.
| Decision Date | 15 November 2022 |
| Docket Number | 22-cv-21651-COOKE/DAMIAN |
| Parties | SKYJET, INC., a Texas for profit corporation, Plaintiff, v. CSDS ASSET MANAGEMENT, LLC, a Nevada limited liability company, Defendant. |
| Court | U.S. District Court — Southern District of Florida |
REPORT AND RECOMMENDATION ON PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION [ECF NO. 7]
THIS CAUSE is before the Court on Plaintiff, Skyjet, Inc.'s (“Plaintiff” or “Skyjet”), Motion for Preliminary Injunction, filed June 3, 2022 (the “Motion”). [ECF No. 7]. The Motion was referred to the undersigned by the Honorable Marcia G. Cooke, United States District Judge, for a Report and Recommendation. [ECF No. 14]. See 28 U.S.C. § 636(b)(1)(B).
The undersigned has reviewed the Motion, the parties' memoranda [ECF Nos. 16 and 19], the pertinent portions of the record, and all relevant authorities and is otherwise fully advised in the premises. The undersigned also heard from the parties, through counsel, at an evidentiary hearing held on July 13, 2022. [ECF No. 33].
In the Motion, Skyjet seeks a preliminary injunction compelling specific performance of terms of the parties' contract. For the reasons that follow, it is recommended that the Motion for Preliminary Injunction [ECF No. 7] be denied.
This action arises out of a transaction for the purchase and sale of an aircraft. On May 9, 2022, Skyjet filed a six-count Amended Verified Complaint in the Circuit Court of the Eleventh Judicial Circuit in and for Miami-Dade County Florida, seeking injunctive relief, equitable relief declaratory judgment, and damages. See Am. Compl. [ECF No. 1-2]. Defendant, CSDS Asset Management, LLC (“CSDS”), removed the action to this Court on May 27, 2022. [ECF No. 1].
These allegations are taken from the Amended Complaint and the attachments thereto, as well as the affidavit of Skyjet's principal, Ahmed Mustafa, submitted in support of the Motion. See Mustafa Aff. [ECF No. 7-1].
Skyjet is an air charter and commercial flight operator incorporated in Texas with its principal place of business and office in Miami-Dade County, Florida. Am. Compl. at ¶¶ 3, 10. CSDS is an aircraft sale and leasing limited liability company based in Nevada and California.[1] Id. at ¶¶ 4, 11. In June 2021, the parties began negotiations for the purchase and sale of a Boeing 757-200 Cargo Aircraft with Manufacturer Serial Number 25014 and registration N755CS (the “Aircraft”), of which CSDS was the registered owner. Id. at ¶ 12. Pursuant to a Letter of Authorization, dated June 28, 2021, CSDS authorized Skyjet to operate the Aircraft and promised to cooperate with Skyjet in its efforts to get the Aircraft into operation. Id. at ¶ 13; ECF No. 1-4 (the “Authorization Letter”).
On September 7, 2021, the parties entered into a Sale-Purchase Agreement (the “Agreement”) in which Skyjet agreed to purchase the Aircraft, with no engines installed, from CSDS for three-million dollars ($3,000,000.00). Am. Compl. at ¶ 14; Ex. A to Am. Compl. [ECF No. 1-3]. According to the payment terms of the Agreement, Skyjet was required to make a one-million-dollar ($1,000,000.00) down payment and twenty (20) subsequent payments of one-hundred thousand dollars ($100,000.00) per month thereafter. See Agreement at ¶ 3. The Agreement did not specify any dates on which the down payment and subsequent monthly payments were due. However, in the Amended Complaint, Skyjet alleges the course of conduct between the parties dictated that the down payment was not due until Skyjet inspected and technically accepted the Aircraft. Am. Compl. at ¶ 16. Pursuant to the Agreement, after the twentieth payment was made, title to the Aircraft would pass to Skyjet free and clear of any liens or encumbrances. Agreement at ¶ 3. At the time the Agreement was signed, Skyjet had already paid CSDS an initial deposit of seven-hundred fifty thousand dollars ($750,000.00) to be applied to the down payment once Skyjet inspected the Aircraft. Am. Compl. at ¶ 18; see also Mustafa Aff. at ¶ 11.
Skyjet alleges that upon receipt of the initial deposit, CSDS agreed to “remove the [A]ircraft from the market until such time [Skyjet] has technically inspected and has accepted or rejected the [A]ircraft.” Am. Compl. at ¶ 19; Mustafa Aff. at ¶ 12. According to Skyjet, the initial deposit was refundable until Skyjet “technically accepted” the Aircraft, as that term is defined in the Agreement. Am. Compl. at ¶ 20; Mustafa Aff. At ¶ 13. Skyjet bases this contention on the following provisions in the Agreement: “Deposit shall remain refundable until Purchaser has accepted the aircraft technically” and “Soon after technical acceptance, Deposit shall be non-refundable in all instances ....” Agreement at § 4.
Skyjet alleges that on September 9, 2021, its representative went to the Miami International Airport (“MIA”) to perform a technical inspection of the Aircraft. Am. Compl. at ¶ 23; Mustafa Aff. at ¶ 16. Skyjet further alleges it was not able to perform the inspection because MIA authorities informed its representative that all access to the Aircraft was prohibited due to liens attached to the Aircraft. Am. Compl. at ¶ 24. According to the Notice and Claim of Lien attached to the Amended Complaint, the Aircraft had incurred storage or parking charges and other fees at MIA that caused MIA to assert liens on the Aircraft. Id.; Ex. D to Am. Compl. [ECF No. 1-6]. Skyjet alleges it was not notified prior to the date of inspection of any existing liens attached to the Aircraft. Am. Compl. at ¶ 26; Mustafa Aff. at ¶ 19. Skyjet also alleges it informed CSDS that it could not technically accept the Aircraft because the lien prevented Skyjet from inspecting the Aircraft as agreed. Am. Compl. at ¶ 27; Mustafa Aff. at ¶ 20. Skyjet further alleges it did not pay the remaining two-hundred and fifty thousand dollars ($250,000.00) of the required down payment because it was Skyjet's understanding that the rest of the down payment was not due until Skyjet had inspected the Aircraft. Am. Compl. at ¶ 28.; Mustafa Aff. at ¶ 22.
On February 1, 2022, CSDS informed Skyjet by email that the Agreement was terminated due to default, that Skyjet's initial deposit would be refunded, and that the Aircraft was committed to another operator. Am. Compl. at ¶ 29; Mustafa Aff. at ¶ 22. On February 24, 2022, CSDS refunded a total of five-hundred thousand dollars ($500,000.00) to Skyjet. Am. Compl. at ¶ 30; Mustafa Aff. at ¶ 24 and Ex. G. Skyjet alleges that CSDS has refused to return the outstanding initial deposit in the amount of two-hundred fifty thousand dollars ($250,000.00) despite Skyjet's entitlement to a full refund of the initial deposit per the Agreement. Am. Compl. at ¶ 31. Skyjet also alleges that CSDS wrongfully terminated the Agreement because Skyjet was not in default as it was the parties' understanding that the outstanding down payment and subsequent monthly payments were not due until Skyjet inspected and technically accepted the Aircraft. Id. at ¶ 33.
In the Amended Complaint, Skyjet asserts six causes of action: (1) request for declaratory judgment regarding when the full one-million-dollar down payment was due per the terms of the Agreement (Count I); a temporary injunction to enjoin CSDS from selling the Aircraft to a third party until Skyjet is able to inspect the Aircraft and accept or reject it (Count II); specific performance of CSDS's obligations under the Agreement, including clearing any liens attached to the Aircraft to allow Skyjet to inspect the Aircraft (Count III); breach of contract for CSDS's failure to remove the Aircraft from the market, for its wrongful termination of the Agreement, for allowing liens to be attached to the Aircraft, and for failing to refund Skyjet's full initial deposit (Count IV); unjust enrichment for CSDS's failure to refund the outstanding $250,000.000 initial deposit (Count V); and permanent injunction to enjoin CSDS from selling the Aircraft to a third party until Skyjet is able to inspect the Aircraft and accept or reject it (Count VI).
On June 3, 2022, CSDS filed an Answer and Affirmative Defenses to the Amended Complaint, in addition to a Counterclaim for breach of contract against Skyjet. [ECF No. 13].
In the Counterclaim, CSDS alleges the parties initially entered into an agreement for the purchase and sale of the Aircraft on May 24, 2021 (the “First Agreement”). Id. at ¶ 125 and Ex. F to the Counterclaim. According to CSDS, under the terms of the First Agreement, Skyjet was required to pay a down payment of $1,000,000.00 and, “soon after,” to make monthly payments of $100,000.00 until the total purchase price of $3,000,000.00 for the Aircraft was paid. Id. CSDS further alleges that after Skyjet paid a deposit of $200,000.00 on May 25, 2021, CSDS gave Skyjet access to the Aircraft, which was situated at MIA, and to its records for inspection. Id. at ¶¶ 126-27. CSDS claims that Skyjet “was satisfied with the results of the inspection and technically accepted” the Aircraft. Id. at ¶ 127.
CSDS alleges that after the satisfactory inspection of the Aircraft, Skyjet paid an additional $100,000.00 on June 29, 2021, and an additional $200,000.00 on July 15, 2021. Id. at ¶ 128. According to CSDS, as of the time of the technical acceptance, Skyjet had paid half of the $1,000,000.00 down payment required by the First Agreement. Id. at ¶ 129. CSDS also claims that it “brought this up” with Skyjet, which “repeatedly assured that the remainder of the down payment was forthcoming as well as the commencement of the monthly payments of $100,000.” Id. Meanwhile, CSDS alleges the Aircraft was incurring parking charges at MIA. Id. at ¶ 130.
Thereafter on August...
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