Wainwright's Vacations v. Pan American Airways, CIV. CCB-99-1145.

• Decision Date: 08 February 2001
• Docket Number: No. CIV. CCB-99-1145.,CIV. CCB-99-1145.
• Citation: 130 F.Supp.2d 712
• Parties: WAINWRIGHT'S VACATIONS, LLC v. PAN AMERICAN AIRWAYS CORP.
• Court: U.S. District Court — District of Maryland

130 F.Supp.2d 712

WAINWRIGHT'S VACATIONS, LLC v. PAN AMERICAN AIRWAYS CORP.

No. CIV. CCB-99-1145.

United States District Court, D. Maryland.

February 8, 2001.

COPYRIGHT MATERIAL OMITTED

Stuart M. Salsbury, Leslie Hayes Russo, Israelson, Salsbury, Clements and Bekman, LCC, Baltimore, MD, Robert M. Beckman, Bode & Beckman, Washington, DC, for Plaintiff.

John R. Fornaciari, Robert M. Disch, Ross and Hardies, Washington, DC, for Defendant.

MEMORANDUM

BLAKE, District Judge.

This case arises from two contracts in which Defendant Pan American Airways Corporation ("Pan Am") agreed to provide air transportation for customers of Plaintiff Wainwright's Vacations, LLC ("Wainwright's"). In an earlier opinion, the court dismissed several of the original allegations and permitted Wainwright's to proceed on a claim for injurious falsehood. (CCB-99-1145, Memorandum and Order issued February 25, 2000.) That ruling left the injurious falsehood claim and Pan Am's counterclaim for money owed it under the contract to be resolved at trial. On May 23, 2000, however, the court dismissed the complaint with prejudice and entered a default in favor of Pan Am on its counterclaim. (CCB-99-1145, Memorandum and Order issued May 23, 2000.) Wainwright's now moves this court to vacate the entry of default pursuant to Fed. R.Civ.P. 55(c) and to reconsider the dismissal of its complaint pursuant to Fed. R.Civ.P. 60(b). Pan Am opposes this motion and moves the court to enter a judgment by default against Wainwright's. This matter has been fully briefed and no hearing is necessary. See Local Rule 105.6. The court will grant the plaintiff's motion and vacate both the entry of default and its dismissal of the complaint with prejudice. Accordingly, it will deny Pan Am's motion for entry of judgment by default.¹

BACKGROUND

The Contracts

At the time this lawsuit was filed, Wainwright's was in the business of selling vacation packages which included air transportation, hotel accommodations, and other amenities. Pan Am owned and operated several aircraft that it chartered to tour companies. (Compl.¶ 1-2.) In January 1999, the parties agreed that Pan Am would provide the air transportation for a series of Las Vegas, NV vacation tour packages to be marketed by Wainwright's. The tours were to originate in Baltimore, MD and Louisville, KY each Monday and Friday from March 5, 1999 to March 6, 2000. (Id. ¶ 6; Ex. B, "Feb. 12 Aircraft Charter Agreement," at 8.) Under the agreement, Wainwright's was to pay Pan Am at a stipulated rate for each hour flown. Wainwright's would make advance payments based on estimates of hours to be flown, and, subsequent to the flight, the advance payments would be adjusted according to the actual hours flown and cost of the fuel used. (Feb. 12 Aircraft Charter Agreement § 3.) The parties also agreed that Pan Am would operate a single flight on January 29, 1999 from Dulles Airport in Virginia to Las Vegas via Louisville to serve as an introduction for travel agents to the Las Vegas tour program. (Compl. ¶ 7; Ex. A, "Jan. 28 Aircraft Charter Agreement.") These agreements were codified in two written contracts. One was signed January 28, 1999 and covered the initial, introductory flight; the other, covering the period from March 5, 1999 to March 6, 2000, was signed on February 12. The parties agreed that the contracts would be interpreted according to Florida law. (Jan. 28 and Feb. 12 Aircraft Charter Agreements § 16.)

In addition to incorporating the provisions of the January meeting, the agreement covering the January 29th flight provided that, subject to later reconciliation, Wainwright's would pay Pan Am in advance $11,056 for aircraft fuel. (Jan. 28 Aircraft Charter Agreement at 8.) Wainwright's paid that amount to Pan Am on January 28, 1999. (Compl.¶ 11.)

The January 29, 1999 flight carried 82 passengers including travel agents on the leg from Louisville to Las Vegas. (Id. ¶ 12.) Pan Am's pilot, Captain David Andersen, had in his possession a fuel certificate issued by Pan Am to use to buy fuel in Louisville. The fuel supplier there, however, would not accept the certificate, as it was addressed to a different supplier that was no longer in business. (Id. ¶ 13.) Captain Andersen informed Pan Am of the problem, and, after a 3.5 hour delay, Pan Am paid for the fuel. (Id. ¶ 15.)

During the delay, Captain Andersen addressed the passengers over the airplane's public address system. He explained that the delay was due to an inability to fuel the plane, that Pan Am was not responsible for the fuel, and that Wainwright's should have paid for it, but had not. Captain Andersen told the passengers that the fuel supplier would not fuel the plane until Wainwright's paid. (Id. ¶ 13.) He also offered to "throw in the first dollar to see who comes closest to the time when Wainwright's decides to pay for our fuel." (Id. ¶ 14.)

On or about February 6, 1999, the vice president for the leisure travel operations of Carlson Wagonlit posted a message regarding Wainwright's on the company's computer network. The following message appeared on the computer screens of all 340 travel agents working for that company in the Louisville area:

I think we should not sell Wainwright. If you have future bookings and can recover the deposit talk to your clients about scheduled air. Just be sure you have a signed disclaimer on every booking. Rhonda said Wainwright took a three hour delay recently because their check for fuel had not arrived and they could not find a credit card to charge the fuel. All of this makes for a not too bright future.

(Id. ¶ 16.) Additionally, Captain Andersen's statements were made known to employees of AMR Service Corporation, the handling agency at Louisville, who allegedly repeated them. (Id. ¶ 17.) According to Wainwright's, these statements caused passengers to cancel their bookings.²

The program of round trip Pan Am flights from Baltimore to Louisville to Las Vegas began on March 5, 1999. When the first two flights were late, passengers, travel agents, and personnel from the Louisville handling agency commented that the delay occurred because Wainwright's failed to pay for fuel; in fact, Wainwright's had paid the fuel supplier. (Id. ¶ 19.) This pattern of late departures plagued the program, with frequent delays of several hours. (See id. ¶¶ 21-23, 25-30 35.) According to Wainwright's, Pan Am employees repeatedly blamed these delays on a failure by Wainwright's to pay for fuel. (Id. ¶¶ 21, 35.) In addition, Pan Am also allegedly told the Atlantic Bank of New York that Wainwright's owed unidentified sums to Pan Am. Wainwright's claims that, as a result, the bank withheld money due to the company. Id. ¶ 36. Wainwright's claims that sales dropped from approximately $25,000 per day to approximately $3,000 per day, (id. ¶ 31), and that previously supportive travel agents stopped selling Wainwright's tours (id. ¶ 20).

On April 7, 1999, Wainwright's received a telefax letter from Pan Am demanding payment of $81,268.00 by noon on April 8, 1999 for "actual block hour flying" and threatening to discontinue service if not paid. Pan Am had not previously informed Wainwright's of the actual block hours flown. (Id. ¶ 33.) Neither, however, had Wainwright's paid in advance as was required by the contract. Wainwright's protested the demand for payment by noon the next day, informing Pan Am that its action to strand passengers violated Department of Transportation regulations. Pan Am informed Wainwright's that it would provide air service on April 9, 12, and 16, 1999, but would provide no other service after that date. (Id. ¶ 34.)

The Lawsuit

On April 23, 1999, Wainwright's sued Pan Am alleging breach of contract, intentional interference with contractual relations, negligent and intentional misrepresentation, and intentional interference with prospective economic advantage. In response, Pan Am counterclaimed seeking more than $242,000 it claimed Wainwright's owed under the contract. Pan Am also stated a claim for unauthorized use of its trademarks and filed a motion to dismiss the complaint. The court granted the motion to dismiss in part; it dismissed the four counts stated by Wainwright's but permitted the plaintiff to proceed on a claim for injurious falsehood. (CCB-99-1145, Memorandum and Order issued February 25, 2000.) At that time, the court also entered a scheduling order requiring, initially, that the parties confer about deposition hours and the appropriateness of a settlement or ADR conference and report back to the court by March 10.

Counsel for Pan Am sent a letter to the court dated March 9 which stated, in relevant part, that he had repeatedly tried to contact counsel for Wainwright's but had been informed that the "plaintiff is in the process of changing counsel in this matter." (Pan Am's Opp., Ex. A.) Accordingly, counsel stated, no agreements had been reached about deposition hours or a settlement conference. At that time, Wainwright's was represented by Robert Beckman, a member of the firm Bode and Beckman, LLP. Mr. Beckman also submitted a letter to the court on March 9. His letter stated:

Wainwright's Vacations, LLC is out of business. I have advised Mr. Thomas Wainwright, President, that I and my firm must withdraw and I requested the name of substitute counsel which Mr. Wainwright said had been retained. I have made several phone calls to Mr. Wainwright's present office. I failed to make contact and left messages on his voice mail reminding him that I need the name of substitute counsel to file a motion for leave to withdraw.

Early this week, Mr. Dish diligently telephoned me to remind me of our joint commitments to this Court commencing March 10, 2000. I explained the foregoing to Mr. Dish. I hope that substitute counsel will be appointed promptly.

(Id., Ex. B.) On March 14, Pan Am served upon Bode and Beckman a set of interrogatories and a document request. (Id. at 4; Mot. to Compel, Ex. A, B.)...