Houston Helicopters, Inc. v. Canadian Helicopters Ltd.

901 F. Supp. 1225, 1995 WL 616035
CourtDistrict Court, S.D. Texas
DecidedOctober 16, 1995
DocketCiv. A. G-94-818
StatusPublished
Cited by2 cases

This text of 901 F. Supp. 1225 (Houston Helicopters, Inc. v. Canadian Helicopters Ltd.) is published on Counsel Stack Legal Research, covering District Court, S.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Houston Helicopters, Inc. v. Canadian Helicopters Ltd., 901 F. Supp. 1225, 1995 WL 616035 (S.D. Tex. 1995).

Opinion

ORDER

KENT, District Judge.

Pending before the Court is the Motion of Defendant Canadian Helicopters Limited (CHL) to Dismiss for Lack of Personal Jurisdiction and on Grounds of Forum Non Con-veniens. Also before the Court is the Motion of Plaintiff Houston Helicopters, Inc. (HHI) for Interlocutory Summary Judgment, and CHL’s Motion to Extend Date to File Responses to Dispositive Motions. For the reasons set forth below, CHL’s Motion to Extend Date to File Responses is hereby GRANTED, and CHL’s Motion to Dismiss and HHI’s Motion for Summary Judgment are hereby DENIED.

I. BACKGROUND

CHL is a Canadian corporation with its headquarters located in St. John’s, Newfoundland, Canada. CHL has never had an office in Texas and has never been licensed to do business in Texas. HHI is a Texas corporation located in Pearland, Texas. In March 1994, CHL and HHI entered into four lease agreements through which CHL leased helicopters from HHI for a period of fifteen months, at which time CHL was to return the helicopters to Houston. The leases designated the laws of Ontario as governing, and provided that CHL could enforce the leases in the courts of Newfoundland. The leases were executed by fax, with CHL signing the leases at its headquarters in Newfoundland, and HHI signing at its offices in Texas. The final leases were exchanged through the mail or by courier.

CHL sent Mark Yalpy to Pearland to inspect the helicopters and HHI’s maintenance records, who remained in the Pearland/Hous-ton area for approximately four weeks. After the leases were executed, the helicopters were deleted from the FAA’s United States registry and were registered in Canada. While the leases stated that CHL took delivery of the helicopters in Houston, two of the helicopters were flown by HHI pilots from Texas to Monterrey, Mexico, where they were disassembled and shipped to Africa. The two remaining helicopters were flown by HHI pilots from Texas to Vancouver, where they were likewise disassembled and shipped to Africa. In Africa, CHL used the helicopters to transport persons and goods pursuant to a contract between CHL and the United Nations. HHI mailed invoices to CHL in Canada, and CHL apparently mailed the payments due under the leases to HHI in Texas.

*1229 At approximately the same time as the execution of the leases, CHL retained HHI to paint two helicopters leased by CHL from third parties. These helicopters were also used by CHL in connection with its United Nations contract.

In addition to the transactions with HHI, CHL has had other business dealings in Texas. In January 1993, CHL entered into a two year agreement with American Eurocop-ter Corporation (AEC), a Delaware corporation with its principal place of business in Grand Prairie, Texas. Under the contract, CHL agreed to operate as a service facility in Canada performing maintenance on AEC helicopters. The AEC contract provided that it was to be governed by the laws of Texas.

In January 1994, Canadian Helicopters Limited, Western Division (CHL West) entered into a one year service facility agreement with Bell Helicopter Textron, Inc., through which CHL West became an authorized Bell service provider and agreed to perform maintenance and repairs to Bell helicopters in Canada. The contract required CHL West to purchase parts and special tools from Bell’s Customer Service Facility in Fort Worth, Texas. Under the contract, management of the contractual relationship was handled by the Customer Service Center in Fort Worth.

Various other entities related to CHL have also engaged in business transactions connected to Texas. In 1990, Canadian Helicopters Corporation (CHC) entered into a support and maintenance agreement with Tur-bomeca Engine Corporation (TEC), a Texas corporation located in Grand Prairie. The TEC contract provided that it was governed by Texas law and that any action related to the contract must be brought in Tarrant County, Texas. CHC is a holding corporation and is the parent company of CHL.

In August 1994, Canadian Helicopters International (CHI) entered into an agreement with UMC Equatorial Guinea Corporation (UMC), a Delaware corporation with offices in Houston, through which CHI agreed to provide helicopters and pilots to transport UMC equipment and personnel in Equatorial Guinea. Under the contract, the parties designated the laws of Texas as governing, and agreed to resolve any disputes related to the contract in Houston. CHI is another subsidiary of CHC, and is a division of CHL. 1

Several months after the executions of the leases, a dispute arose between CHL and HHI over the condition of the helicopters. CHL contended the helicopters had substantial latent defects and were not airworthy, forcing CHL to make substantial repairs to the helicopters. Attempts to resolve the dispute failed, and CHL withheld lease payments after August 1994 as a result of the defects and repairs.

HHI brought this action for breach of contract, unjust enrichment, and quantum meruit, seeking $800,000 plus interest for unpaid lease payments, as well as the cost of restoring the helicopters to the condition they were in when leased to CHL. CHL answered, denying it breached the lease agreements and claiming that if it did breach the lease agreements, the breach was justified. CHL also counterclaimed, contending HHI made material misrepresentations about the condition of the helicopters, and that HHI breached the lease agreements by providing helicopters that were not airworthy. CHL seeks recovery of approximately $700,000, the value of the repairs and “betterment” to the helicopters. The helicopters have been returned to HHI, and are presently sitting idle at the Houston airport.

II. PERSONAL JURISDICTION

CHL contends this action must be dismissed because the Court lacks personal jurisdiction over it. In Federal Court, personal jurisdiction over a non-resident defendant is proper if: (1) the defendant is amenable to service of process under the forum *1230 state’s long-arm statute; and (2) the exercise of personal jurisdiction over the defendant is consistent with due process. Jones v. Petty-Ray Geophysical Geosource, Inc., 954 F.2d 1061 (5th Cir.1992). The Texas long-arm statute authorizes service of process on a non-resident defendant if the defendant “does business” in Texas by contracting by mail or otherwise with a Texas resident, if the contract requires either party to perform the contract in whole or in part in Texas. Tex.Civ.Prac. & Rem.Code Ann. §§ 17.042-.044 (1986). Because the contracts between CHL and HHI called for partial performance in Texas, 2 CHL is subject to service of process in Texas. Therefore, the remaining question is whether the exercise of jurisdiction over CHL by this Court is constitutional.

Whether the exercise of personal jurisdiction over CHL is consistent with the Due Process Clause of the United States Constitution involves a two-pronged inquiry. First, the Court must conclude that CHL has “minimum contacts” with Texas. International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct.

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901 F. Supp. 1225, 1995 WL 616035, Counsel Stack Legal Research, https://law.counselstack.com/opinion/houston-helicopters-inc-v-canadian-helicopters-ltd-txsd-1995.