Fabas Consulting Int'l, Inc. v. Jet Midwest, Inc.

74 F. Supp. 3d 1026, 2015 U.S. Dist. LEXIS 16140, 2015 WL 542621
CourtDistrict Court, W.D. Missouri
DecidedFebruary 10, 2015
DocketCivil Action No. 14-00907-CV-W-JTM
StatusPublished
Cited by1 cases

This text of 74 F. Supp. 3d 1026 (Fabas Consulting Int'l, Inc. v. Jet Midwest, Inc.) is published on Counsel Stack Legal Research, covering District Court, W.D. Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fabas Consulting Int'l, Inc. v. Jet Midwest, Inc., 74 F. Supp. 3d 1026, 2015 U.S. Dist. LEXIS 16140, 2015 WL 542621 (W.D. Mo. 2015).

Opinion

ORDER

JOHN T. MAUGHMER, United States Magistrate Judge.

On October 17, 2014, plaintiff Fabas Consulting International, Inc. (“Fabas”) instituted the present federal litigation against defendant Jet Midwest, Inc. (“Jet”). According to the COMPLAINT, Fabas, a Florida corporation, is in the business of dealing in new and used commercial aircraft parts for resale and lease to scheduled and regional commercial airlines in Latin America. Conversely, Jet is a supplier of used commercial aircraft parts and components, including aircraft engines, landing gear, wheels, brakes, auxiliary power units, windshields and thrust reversers. In May of 2014, Fabas paid $150,000 for an auxiliary power unit1 for one of its customers in Mexico. The COMPLAINT alleges that the auxiliary power unit delivered to Mexico “was unserviceable and otherwise defective due to extensive contamination with sulfation, oxide, fungus and corrosion, and that the [auxiliary power unit] otherwise failed to meet the requirements of [Aviation Suppliers Association Quality System Standard] ASA100 and [Federal Aviation Administration Advisory Circular] FAA AC005.” Consequently, Fabas brought this suit against Jet alleging:

(a) fraudulent misrepresentation,

(b) negligent misrepresentation,

(c) breach of contract, and

(d) breach of the Florida Deceptive and Unfair Trade Practices Act [Fla. Stat. §§ 501.201 et seq.].

Presently pending before the Court is Jet’s MOTION TO DISMISS [Doc. 10], wherein Jet seeks dismissal under FED. R. CIV. P. 12(b)(6) of Fabas’ two misrepresentation claims as well as the claim for a violation of the Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”). For the reasons set out herein, the motion is granted.

With regard to some misrepresentation claims, Missouri2 law provides that the “economic loss doctrine” prohibits a plaintiff from seeking to recover in tort for economic losses that are contractual in nature. Captiva Lake Investments, LLC v. Ameristructure, Inc., 436 S.W.3d 619, 628 (Mo.App. [E.D.] 2014). Accordingly, in most contract cases:

Recovery in tort for pure economic damages [is] limited to cases where there is personal injury, damage to property other than that sold, or destruction of the property sold due to some violent occurrence.

[1029]*1029Id. Jet argues that this Missouri economic loss doctrine bars Fabas’ misrepresentation claims — whether based on negligence or based on fraud. The Court agrees.

Even a cursory reading of the COMPLAINT discloses that Fabas is seeking to recover in tort for economic losses that are contractual in nature. The fact that Fabas also alleges fraud does not change this conclusion. As explained by one Missouri court:

Two critical factors in examining whether a fraud claim is independent of a contract claim under the economic loss doctrine are (1) whether the subject matter of the alleged misrepresentations was incorporated into the parties’ contract, and (2) whether the plaintiff suffered additional damages outside the contract as a result of the alleged fraud.

Compass Bank v. Eager Road Associates, LLC, 922 F.Supp.2d 818, 827 (E.D.Mo.2013). In this case, in its Complaint, Fa-bas has directly plead:

In connection with this offer to sell, [Jet] represented to [Fabas] that the [auxiliary power unit] had been fully and properly inspected and was fully compliant with the requirements of [Aviation Suppliers Association Quality System Standard] ASA100 and [Federal Aviation Administration Advisory Circular] FAAAC0056.

Accordingly, in support of a claim of breach of contract, Fabas then logically pleads that Jet “breached the parties’ agreement for the purchase and sale of the [auxiliary power unit] by providing a defective unit and by failing and refusing to refund the moneys paid by [Fabas] for the purpose and shipment of the [unit].” Similarly, in asserting its claim for misrepresentation (both negligent and fraudulent), Fabas alleges that Jet:

made false statements of material fact to plaintiff, to wit: (1) that the APU had been fully and properly inspected; (2) that the APU was fully compliant with the requirements of [Aviation Suppliers Association Quality System Standard] ASA100 and (3) that the APU was fully compliant and by failing and refusing to refund the moneys paid by plaintiffs for the purchase and shipment of the [unit].

Under these facts, the Court concludes that the “economic loss rule” bars Fabas’ claims of both fraudulent misrepresentation and negligent misrepresentation.

As previously noted, the first issue to be determined in addressing Fabas’ FDUTPA claim is what substantive law applies. In this case, Fabas argues that Florida law should be applied while Jet argues for the application of Missouri law. Neither party argues for the application of Mexican law. Prior to engaging in any choice-of-law analysis, however, a trial court “must first determine whether a conflict exists” between the competing states. Prudential Insurance Co. of America v. Kamrath, 475 F.3d 920, 924 (8th Cir.2007). The Court concludes that such a conflict exists in this case with regard to the scope and application of consumer protection statutes in Florida and Missouri granting a private right of action.

In 1973, Florida adopted the FDUTPA, modeling the Act on the Federal Trade Commission Act, 15 U.S.C. § 45. R. Tennyson, The Deceptive and Unfair Trade Practices Act: A New Approach to Trade Regulation in Florida, 2 Fla. St. U.L.Rev. 223 (Spring 1974). As originally enacted and subsequently applied, the FDUTPA created a private right of action for aggrieved “consumer^] who ha[d] suffered a loss as a result of a violation” of the Act. Fla. Stat. § 501.211(2) (1973). Subsequently, however, some uncertainty arose as to whether the FDUTPA applied to business-against-business-claims. See, e.g., Warren Technology, Inc. v. Hines Interests Ltd. Partnership, 733 So.2d 1146, [1030]*10301147 (Fla.App. [3d Dist.] 1999). As a result, in 2001, Florida amended the FDUT-PA “to authorize any person or entity who suffered a loss as a result of an unfair or deceptive trade practice or act to bring a suit for damages.” Kelly v. Palmer, Reifler, & Associates, P.A., 681 F.Supp.2d 1356, 1372 (S.D.Fla.2010).3 Subsequently “courts have reasoned that this [2001] amendment ‘demonstrate[d] an intent to allow a broader base of complainants ... to seek damages” under FDUTPA.” Id. (quoting in part, Niles Audio Corp. v. OEM Sys. Co., Inc., 174 F.Supp.2d 1315, 1320 (S.D.Fla.2001)). More to the point for purposes of this case:

With these amendments, the Florida legislature adopted the case precedent authorizing a business entity, regardless of its status in the transaction, to sue for damages from unfair and deceptive trade practices by another business.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Tucker v. Ethicon, Inc.
E.D. Missouri, 2021

Cite This Page — Counsel Stack

Bluebook (online)
74 F. Supp. 3d 1026, 2015 U.S. Dist. LEXIS 16140, 2015 WL 542621, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fabas-consulting-intl-inc-v-jet-midwest-inc-mowd-2015.