Aeropower, Ltd. v. Matherly

511 F. Supp. 2d 1139, 2007 U.S. Dist. LEXIS 4866, 2007 WL 163082
CourtDistrict Court, M.D. Alabama
DecidedJanuary 18, 2007
Docket1:03-cv-00889
StatusPublished
Cited by4 cases

This text of 511 F. Supp. 2d 1139 (Aeropower, Ltd. v. Matherly) is published on Counsel Stack Legal Research, covering District Court, M.D. Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Aeropower, Ltd. v. Matherly, 511 F. Supp. 2d 1139, 2007 U.S. Dist. LEXIS 4866, 2007 WL 163082 (M.D. Ala. 2007).

Opinion

MEMORANDUM OPINION AND ORDER

W. KEITH WATKINS, District Judge.

Plaintiffs AeroPower, Ltd., and Kama International, Inc., successor to AeroPow *1143 er II, Ltd. (collectively “AeroPower”), bring this civil action against Defendants Steve Matherly (“Matherly”), SM & T Aircraft, Inc. (“SM & T”), Aero Records and Title Company (“Aero Records”), Sharon Shroeder (“Schroeder”), and Lori Crowell (“Crowell”) alleging claims under the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961-1968. (Doc. # 158, Second Am. Compl.) AeroPower also alleges various claims under Alabama state law against the defendants. (Id.)

This action is presently before the court on the motions to dismiss filed by the defendants. (Docs. # 159 & 163.) For the reasons that follow, the court concludes that the motion to dismiss 1 filed by Aero Records, Schroeder and Crowell (Doc. # 159) is due to be GRANTED, and the motion to dismiss filed by Matherly and SM & T (Doe. # 163) is due to be GRANTED in part and DENIED in part.

I. FACTS 2 AND PROCEDURAL HISTORY

The allegations in the Second Amended Complaint set forth the following facts:

A. Facts

This case arises out of the sale of used military aircraft. AeroPower is a foreign corporation 3 which primarily engages in the purchase and resale of military-related equipment of historic value. As part of its usual business, AeroPower sells historic military-related items to the United States Military Museum (“USSM”) in exchange for surplus defense articles, such as helicopters and other military aircraft. AeroPower sells the aircraft for non-military reasons to third parties. The third parties in turn use the aircraft for non-military purposes, including construction, timber surveys, fire control, and rescue services.

According to AeroPower, for almost ten years, it employed Matherly 4 as an independent contractor to perform a variety of tasks, including:

(a) Examining log books to determine the remaining useful life that is left on the defense articles offered by the USMM;
(b) Inspecting the defense articles externally to determine their condition;
*1144 (c) Making recommendations to AeroPower about the defense articles to accept from USMM;
(d) Coordinating communications between AeroPower and USMM;
(e) If an exchange transaction occurred, ensuring that all parts subject to the sale were included and that the defense articles were properly transported from the military bases and stored properly;
(f) Locating potential after-market purchasers of the defense articles obtained from the USMM;
(g) Negotiating the sale of the aircraft and aircraft parts to third parties;
(h) Advising AeroPower on the quality and value of helicopters and the wisdom of making certain deals; and
(i) Maximizing the resale of helicopters or defense articles to AeroPower’s customers.

(Doc. # 158, ¶ 19.) On October 25, 1994, Matherly’s employment was solidified by an “independent contractor contract” as well as a “power of attorney document” which allowed Matherly to represent AeroPower in the aircraft transactions. (Id. at ¶ 20.) AeroPower paid Matherly on a commission basis 5 and reimbursed him for expenses.

On May 6, 2003, Matherly’s employment contract was terminated because AeroPower discovered that Matherly, through his company SM & T, had “engaged in wrongful conduct” summarized as follows:

(a) Removed valuable parts from AeroPower’s helicopters and converted the parts to their own use;
(b) Selected helicopters of higher quality for their own use and the use of others and selected helicopters of lesser value for AeroPower;
(c) Obtained helicopter parts that should have belonged to AeroPower and sold the parts to third parties without AeroPower’s knowledge or consent;
(d) Sold equipment on behalf of AeroPower to third parties for more money than disclosed to AeroPower and kept the difference between the sales price and the disclosed price;
(e) Altered bills of sale in order to deceive AeroPower about funds actually received or products actually sold;
(f) Prevented AeroPower from receiving the higher value helicopters on a first-in, first-out basis;
(g) Sold the higher value helicopters to AeroPower’s customers before AeroPower obtained the lesser value helicopters, thereby flooding the market, preventing AeroPower from selling its products, and further reducing the value of AeroPower’s helicopters;
(h) Falsely represented to AeroPower that Matherly was obtaining higher value helicopters for AeroPower, reporting and turning over all the money and property that belonged to AeroPower, and otherwise acting in AeroPower’s best interest;
(i) Suppressed or concealed from AeroPower that Matherly was obtaining higher value hehcopters for himself and others, was not reporting or turning over all the money and property that belonged to AeroPower, was altering bills of sale to hide money and property, and was otherwise not acting in AeroPower’s best interest;
*1145 (j) Falsely submitted expenses for reimbursement from AeroPower while working for the interests of third parties against those of AeroPower;
(k) Acted in concert to accomplish the conduct described ...; and
(l) Associated in fact for the common purpose of enriching themselves by defrauding AeroPower with respect to AeroPower’s sale of equipment to the USMM and obtaining defense articles from the USMM in return.

(Id. at ¶ 22.)

In addition to the wrongful acts alleged above, the Second Amended Complaint describes four specific aircraft transactions which form the basis of this lawsuit. (Id. at ¶¶ 23-53.) In regard to the four transactions, AeroPower includes allegations against Aero Records, 6 the escrow agent for the transactions at issue, and two Aero Records employees, Schroeder 7

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Bluebook (online)
511 F. Supp. 2d 1139, 2007 U.S. Dist. LEXIS 4866, 2007 WL 163082, Counsel Stack Legal Research, https://law.counselstack.com/opinion/aeropower-ltd-v-matherly-almd-2007.