China Falcon Flying Ltd. v. Dassault Falcon Jet Corp.

329 F. Supp. 3d 56
CourtDistrict Court, D. New Jersey
DecidedMay 8, 2018
DocketCiv. No. 15-6210 (KM) (MAH)
StatusPublished
Cited by10 cases

This text of 329 F. Supp. 3d 56 (China Falcon Flying Ltd. v. Dassault Falcon Jet Corp.) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
China Falcon Flying Ltd. v. Dassault Falcon Jet Corp., 329 F. Supp. 3d 56 (D.N.J. 2018).

Opinion

Kevin McNulty, United States District Judge

Dassault Falcon Jet Corporation ("Dassault Jet") engaged China Falcon Flying Limited ("China Falcon"), owned and led by its principal Cheung "Michelle" Wang, to promote specific models of its Falcon series of aircraft in the Chinese business jet market. In return, China Falcon would receive a commission or finder's fee of about 2%-2.5% for each sale made in that market. The parties dispute the commissions on four sales of Falcon aircraft in China. Dassault Jet now moves for summary judgment in its favor. For the foregoing reasons, I will grant Dassault Jet's motion for summary judgment as to the claims of breach of contract for the sales of s/n 721, s/n 212, and s/n 244, but deny the motion as to the breach of contract claim for s/n 141. I will also deny Dassault Jet's motion for summary judgment as to the claims for breach of the implied covenant of good faith and fair dealing, but grant its motion for summary judgment as to the claims of unjust enrichment and quantum meruit.

I. Summary of Facts1

On September 1, 2009, China Falcon and Dassault Jet entered into a Finder's Fee *61Agreement ("FFA"), which would expire on December 31, 2009. (Def. St. ¶ 1; Pl. Resp. ¶ 1.) Under this agreement, China Falcon would earn a 2.5% commission2 on the sale of certain Falcon aircraft to two companies, Minsheng Bank and DeerJet. (Def. St. ¶ 2; Pl. Resp. ¶ 2.) The agreement contained language stating that this commission percentage could "be reduced proportionally, if the sale occur[red] at a price less than [Dassault Jet]'s current list price." (Def. St. ¶ 3; Pl. Resp. ¶ 3.) The agreement also conditioned the eligibility of China Falcon to receive a commission on certain events:

(a) the buyer had to "enter into and sign a binding and enforceable contract of sale with [Dassault Jet] for the purchase of one or more new Falcon aircraft on or before December 31, 2009"; and

(b) "the buyer who enters into the contract of sale must [1] complete the acquisition, [2] fully pay for and [3] take title to the aircraft in accordance with the terms of the contract." (Def. St. ¶ 4; Pl. Resp. ¶ 4 ( [bracketed] numbers added.)

*62China Falcon disputes, however, that the parties actually acted in accordance with these provisions. It claims that through a course of dealing it was understood that China Falcon became eligible to receive its commission upon the completion of condition (a), supra , only (i.e., the signing of the purchase agreement) only. (Pl. Resp. ¶¶ 3-4.) The parties also dispute China Falcon's exact role in the execution of purchase agreements and the events after the signing those agreements. (Pl. St. ¶¶ 13-14; Def. Resp. ¶¶ 13-14.)

The FFA was first amended in January 2010. That amendment extended the duration of the FFA to December 31, 2011, if either Minsheng Bank or DeerJet purchased five Falcon aircraft before June 30, 2010. (Def. St. ¶¶ 5, 7; Pl. Resp. ¶¶ 5, 7.) If not, the FFA would expire on December 31, 2010. (Def. St. ¶ 7; Pl. Resp. ¶ 7.) China Falcon claims it was not aware of the condition governing termination at the time of the amendment's signing. (Pl. St. ¶ 1.)

The parties amended the FFA a second time on January 26, 2011. (Def. St. ¶ 9; Pl. Resp. ¶ 9.) This Second Amendment to the FFA dropped DeerJet as one of the two specified purchasers, leaving only Minsheng Bank. (Def. St. ¶ 10; Pl. Resp. ¶ 10.) Dassault Jet points to the language of the Second Amendment, which replaced the 2.5% commission with a flat fee of $732,500 for the sale of s/n3 101 and a 2.5% commission on the sale of s/n 133. (Def. St. ¶ 11; see also Tor. Decl., Ex. 5, § II.) As to aircraft other than s/n 101 and s/n 133, the Second Amendment left the prior terms and conditions unchanged, and specifically provided that the agreement would stay in force until December 31, 2011 (as agreed in the First Amendment). (Tor. Decl., Ex. 5, § III.)

Ms. Cheung claims that she did not read this Second Amendment but admits she "voluntarily" signed it after Dassault had signed it. (Def. St. ¶ 13; Pl. Resp. ¶ 13.) Ms. Cheung also asserts that she was not able to read English at the time and that the Second Amendment as orally described to her was different from the agreement as written. (Pl. Resp. ¶ 13.) "It's only a standard agreement," she testified, "and it's such a big company. I have a trust in the company." (Id. ) China Falcon alleges that "at all relevant times" and "[a]ccording to the parties' course of dealing" China Falcon would continue to earn a 2.5% commission for all sales to Minsheng and "each of its 'special purpose venture' subsidiaries." (Pl. Resp. ¶ 11; see also Pl. St. ¶ 2.)

Concurrently, on September 2, 2009, China Falcon and Dassault Jet entered into a Sales Representation Agreement ("SRA"), with an expiration date of December 31, 2010. Under the SRA, China Falcon would earn a 2% commission upon the sale of any aircraft model from a specified list of models to private companies in the People's Republic of China (other than Minsheng Bank or DeerJet, which were covered by the FFA). (Def. St. ¶¶ 18-20; Pl. Resp. ¶¶ 18-20.) To qualify for this commission, the sale had to result "predominantly and primarily" from China Falcon's services. (Def. St. ¶ 21; Pl. Resp.

*63¶ 21.) The parties subsequently amended the SRA four separate times, with the fourth amendment extending the SRA until December 31, 2013. (Def. St. ¶ 23; Pl. Resp. ¶ 23.)

The issues in this lawsuit involve the commissions for the sale of four aircraft. Those aircraft are designated s/n 721; s/n 212; s/n 244; and s/n 141. China Falcon claims that, regardless of the "technical" language of the agreements, the parties conducted themselves at all relevant times with the understanding that China Falcon would earn a 2.5% commission on sales to Minsheng and Deerjet, while earning a 2% commission on all other sales. (Pl. St. ¶ 8.) China Falcon claims moreover that this "understanding" between the parties survived the expiration of the relevant written agreements and is documented by email communications between them. (See Pl. St. ¶¶ 11-13.)

I review the facts as to each of the four aircraft sales at issue.

a. s/n 721

On June 26, 2013, De Hong Capital Co. Ltd. signed a contract with Dassault Jet to purchase s/n 721 for $27 million. (Def. St. ¶ 24; Pl. Resp. ¶ 24.) S/n 721 is a model 7200s airplane manufactured by Dassault Jet. (Def. St. ¶ 25; Pl. Resp. ¶ 25.) This model was not listed in the SRA. (See Tor. Decl., ex. 2 at 2 ("[Dassault Jet] is engaged in marketing and selling new Falcon 7X, Falcon 900 LX/DX, and Falcon 2000DX/LX.").) Dassault Jet contends that this sale does not fall within the SRA, and that China Falcon, by signing a separate agreement specific to the sale of s/n 721, agreed to a flat $200,000 commission for this sale. (Def. St. ¶ 26; Tor. Decl., Ex. 9, at 3.) China Falcon instead claims that the parties contemplated that this sale would fall within the SRA, entitling it to a larger, 2% commission. (Pl. Resp. ¶ 26.) China Falcon calculates that 2% commission to be at least a $540,260. (AC ¶ 35.)

At the time, the parties apparently disputed China Falcon's entitlement to a finder's fee.

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329 F. Supp. 3d 56, Counsel Stack Legal Research, https://law.counselstack.com/opinion/china-falcon-flying-ltd-v-dassault-falcon-jet-corp-njd-2018.