First Technology Capital, Inc. v. Airborne, Inc.

261 F. Supp. 3d 371
CourtDistrict Court, W.D. New York
DecidedAugust 2, 2017
Docket6:15-CV-06063 EAW
StatusPublished

This text of 261 F. Supp. 3d 371 (First Technology Capital, Inc. v. Airborne, Inc.) is published on Counsel Stack Legal Research, covering District Court, W.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
First Technology Capital, Inc. v. Airborne, Inc., 261 F. Supp. 3d 371 (W.D.N.Y. 2017).

Opinion

DECISION AND ORDER

ELIZABETH A. WOLFORD, United States District Judge

INTRODUCTION

Plaintiff First Technology Capital, Inc., (“Plaintiff’) brings this action against Airborne, Inc. d/b/a Firstflight (“Defendant”), for damages allegedly sustained when Defendant breached a contract to purchase an aircraft from Plaintiff. (Dkt. 1). On April 2, 2014, Plaintiff and Defendant entered into a contract for the sale of a 1999 McDonnell Douglas DC-9-83 aircraft carrying the tail number N973TW and the serial number 53623 (“the Aircraft”). (See id. at ¶¶8, 30). Incorporated as part of that contract was a Technical Summary Report with information/specifications pertaining to a McDonnell Douglas MD-83 that, as it turns out, was not the Aircraft. {Id. at ¶ 28). Ultimately, Defendant rejected the Aircraft because it did not comply with the information/specifications con[374]*374tained in the Technical Summary Report. (Id. at ¶ 37)..

Plaintiff contends that while both parties believed that the Technical Summary Report related to the Aircraft at the time the contract was executed (id. at ¶¶ 28, 31), Defendant later relied upon the failure of the Aircraft to comply with those specifications as an excuse to back out of the deal (id. at ¶¶ 35-37). In other words, according to Plaintiff, Defendant had other reasons for not wanting to proceed with the transaction, but relied upon the failure to comply with the technical terms of the contract to renege on the deal.

Presently, before the Court is Defendant’s motion for judgment on the pleadings (Dkt. 30), Defendant’s motion to amend/correct its answer (Dkt. 39), Plaintiffs motion for summary judgment to dismiss Defendant’s “perfect tender” defense (Dkt. 47), and plaintiffs motion for summary judgment to reform the contract (Dkt. 57). For the reasons set forth below, Defendant’s motion for judgment on the pleadings is grafted, and all other pending motions are denied as moot.

BACKGROUND

The following facts-are drawn from the complaint (Dkt. 1) unless otherwise stated. On or about September 30, 2010, Plaintiff acquired full ownership interest in the Dougherty Air XVIII Investment Trust, which was controlled by Dougherty Air Trustee, LLC (“Dougherty”) as trustee. (Id, at ¶6). At approximately the same time, Dougherty obtained the Aircraft. (Id. at ¶8). The Aircraft was acquired on a lease with American Airlines (“American”), but, in 2012, the lease was amended and was scheduled to terminate on May 1, 2014. (Id. at ¶¶ 8,10-11). In March of 2014, Dougherty entered into negotiations with Tailwind Capital, LLC (“Tailwind”) to sell the Aircraft (id. at ¶18); -Tailwind was acting as Defendant’s “broker/agent” during these discussions (id.). Defendant was interested in purchasing the Aircraft in order to immediately sell it to an undisclosed Middle Eastern airline. (Id. at ¶ 34).

On March 28, 2014, Alan Weingart (“Weingart”), a Senior Vice President of Dougherty, sent two emails with various PDF documents containing the specifications for the Aircraft to Bryson Monteleone (“Monteleone”), an “ISTAT” certified appraiser with Tailwind. (Id. at ¶ 19). Oh April 1, 2014, Weingart sent an email to Monteleone containing a form “Offer to Purchase” with blank spaces appearing in the “Sale Price” and “Sale Terms” sections (“Initial Offer”). (Id. at ¶ 20; Dkt. 1-1 at 2).

On April 2, 2014, Benjamin Dow (“Dow”), Defendant’s Director of Aircraft Sales, executed the Initial Offer with alterations (“Purchase Contract”). (Dkt. 1 at ¶¶ 25-26; Dkt. 1-2). These changes included'a modification' to the “Sales Terms” section and the attachment of the Technical Summary Report. In the Initial Offer, the final provision in the “Sale Terms” section provided that the “Aircraft is sold ‘as is/where is’ with no representations or warranties of any kind except for the warranty of title.” (Dkt. 1-1 at 2). However, in the Purchase Contract, the provision continues with: “per the specification attached (Annex I) provided by [Dougherty]. ‘As is/where is’ condition includes all engines, APU, Gear and components listed here within in [sic] the specifications; no deviation from the specification, removal or exchange of parts will be acceptable.” (Dkt. 1-2 at 2 (emphasis added)), A Technical Summary Report was attached as “Annex I” to the Purchase Contract, and was labeled as the “Aircraft Specification.” (Id. at 6-12).

That same day, Weingart, on behalf of Dougherty, executed. the Purchase Contract. (Dkt. 1-3 at 6). Weingart confirmed [375]*375that the Purchase Contract had been executed in an email correspondence, and also indicated that he would “endeavor to' get [American] to confirm the items on the Technical [S]ummary Report that is dated December 3,2013.” (Dkt. 1-3 at 2).

Within the next two days, Weingart sent an email to Monteleone at Tailwind containing a summary of the actual specifications for the Aircraft. (Dkt. 1-4 at 2-6; Dkt. 1 at ¶ 32). Less than a week later, on April 9, 2014, Tailwind informed Weingart that the “bridging costs”1 involved in preparing and conditioning the Aircraft for subsequent resale were too great to proceed with the instant transaction. (Dkt. 1 at ¶ 35). The next day (April 10, 2014), Tailwind confirmed that Defendant would not purchase the Aircraft. (Id. at ¶ 36).

On April 15, 2014, Dow transmitted an email to Monteleone, which noticed his reasons for rejecting the Aircraft, and primary among them was the “ ‘incorrect and inaccurate technical specification’ ” attached to the Purchase Contract. (Id. at ¶37). Dow claimed that the Technical Summary Report had been provided by Plaintiff, when in fact Defendant or its broker/agent had attached it to the Purchase Contract. (Id. at ¶1¶ 37, 38). Plaintiff has since sold the Aircraft to another buyer for $575,000, which is $1,575,000 less than the amount Defendant had contracted to pay. (Id. at ¶ 39).

PROCEDURAL HISTORY

On February 5, 2015, Plaintiff commenced this action alleging that Defendant had breached its obligations under the Purchase Contract by rejecting the Aircraft. (Dkt. 1). On March 2, 2015, Defendant timely answered the complaint, .denying all material allegations and raising various affirmative defenses. (Dkt. 9). On July 6, 2015, Defendant filed the present motion for judgment on the pleadings, claiming that it had acted properly by rejecting, the Aircraft pursuant to the “perfect tender” rule,- and,,, in any -event, the Purchase Contract was voidable under the Impossibility Doctrine. (Dkt. 30). On August 3, 2015, Plaintiff requested that Defendant’s motion be converted to a motion for summary judgment and opposed the motion, arguing that: (1) Plaintiff had waived the affirmative defense of Impossibility by failing to 'raise it in its answer and, in any event, such, a defense was inapplicable; and (2) there was at least a genuine issue of material fact regarding whether Defendant had acted in good faith in rejecting the Aircraft. (Dkt. 37). On August 10, 2015, Defendant filed the present motion to amend/correct its answer, requesting permission to add the affirmative defense of Impossibility. (Dkt. 39). Plaintiff opposed this motion. (Dkt. 41).

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Bluebook (online)
261 F. Supp. 3d 371, Counsel Stack Legal Research, https://law.counselstack.com/opinion/first-technology-capital-inc-v-airborne-inc-nywd-2017.