LeDonne v. Gulf Air, Inc.

700 F. Supp. 1400, 1988 U.S. Dist. LEXIS 13156, 1988 WL 125914
CourtDistrict Court, E.D. Virginia
DecidedNovember 21, 1988
DocketCiv. A. 88-0580-A
StatusPublished
Cited by27 cases

This text of 700 F. Supp. 1400 (LeDonne v. Gulf Air, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
LeDonne v. Gulf Air, Inc., 700 F. Supp. 1400, 1988 U.S. Dist. LEXIS 13156, 1988 WL 125914 (E.D. Va. 1988).

Opinion

MEMORANDUM OPINION

ELLIS, District Judge.

This diversity suit to enforce an Illinois default judgment presents threshold dis-positive issues concerning the Foreign Sovereign Immunities Act (“FSIA” or “the Act”), 28 U.S.C. §§ 1603 et seq. Plaintiff, seeking to enforce the Illinois judgment, argues that the FSIA is inapplicable and, alternatively, that, even if applicable, the FSIA confers no immunity on Gulf Air because the conduct underlying the default judgment falls within the Act’s “commercial activity” exception. See 28 U.S.C. §§ 1603(d), 1605(a)(2). Gulf Air responds, arguing for the applicability of the Act, the irrelevance of the exception and hence the protection of immunity. Gulf Air also argues that even if the exception applies to deprive Gulf Air of the FSIA’s immunity, plaintiff’s claim still fails because she failed to comply with the Act’s service requirements.

Because the essential facts are undisputed, this matter is appropriate for summary disposition pursuant to Rule 56, Fed.R. Civ.P. For the reasons set forth here, the Court concludes that FSIA applies, that the commercial activity exception operates to deny immunity to Gulf Air, but that plaintiff’s failure to comply with the Act’s service provisions is fatal to her claim.

Facts

Plaintiff, Jacqueline Smith LeDonne, is an Illinois citizen. Defendant, Gulf Air, Inc., (Gulf Air) is a joint stock company with limited liability created by a treaty among four Persian Gulf states: The Emirate of Abu Dhabi, the State of Bahrain, the State of Qatar and the Sultanate of Oman. These sovereign nations own 100% of Gulf Air’s stock. Gulf Air is a foreign passenger and freight airline headquartered in Bahrain. From there it flies west as far as London and east as far as Hong Kong. Although Gulf Air does not yet fly passengers into the United States, 1 for all times relevant here it has maintained sales offices in the United States for the purpose of marketing its services to those wishing to travel routes serviced by Gulf Air.

On August 27, 1985, plaintiff filed a civil action in the Circuit Court of Cook County, Illinois. Named as defendants were Gulf Air, Gulf Aviation Services (Aviation Services) and three individuals. Aviation Services, a corporation licensed to do business in Illinois, had once acted as Gulf Air’s general sales agent, but that relationship *1403 ceased as of January 18,1982. At the time the Illinois action was filed, there was, so far as this record shows, no contractual or ownership connection between Gulf Air and Aviation Services. One of the three individuals sued in the Illinois action, Michael Behou, was alleged to be Aviation Services’ Executive Vice President. The remaining individual defendants in the Illinois action, Joseph Khoury and Hrach Azadian, were alleged to be executives of Gulf Air. The Illinois complaint, prolix and lacking in clarity, alleged against all five defendants malicious prosecution, slander, libel and, arguably, civil conspiracy to commit these torts. Damages of $1,002,500 were claimed, with $1,000,000 attributed to general damages and $2,500 attributed to the attorney’s fees and other expenses incurred by plaintiff in defending herself against the allegedly unfounded and malicious accusations.

Plaintiff’s allegations in the Illinois action may be summarized as follows:

(1) that Gulf Air and Aviation Services jointly owned, furnished and conducted an air freight sales business office in Chicago.
(2) that plaintiff, who worked in this office, was led to believe that she was jointly employed by Gulf Air and Aviation Services and that these entities, in turn, were jointly owned and operated.
(3) that in February, 1982, plaintiff received permission from defendant Hrach Azadian to sign his name in requesting complimentary tickets from TWA for travel to Cairo, Egypt or alternatively, Los Angeles, California for use in connection with plaintiff’s planned honeymoon.
(4) that in August, 1982 Azadian told a TWA investigator (i) that plaintiff did not have authority to sign his name to a complimentary ticket request, (ii) that he had no knowledge of her requesting permission to do so, and (iii) that plaintiff was not a Gulf Air employee.
(5) that based on this information, TWA notified the FBI which then began a criminal investigation.
(6) that Azadian repeated to an FBI agent the statements he had made to the TWA investigator and that, as a result, plaintiff was indicted by a federal grand jury on mail and wire fraud charges pursuant to 18 U.S.C. § 1343.
(7) that the indictment was dismissed after plaintiff retained counsel and underwent a polygraph examination, the results of which supported her version of the facts.
(8) that the false and malicious acts and statements of Azadian and Behou to TWA, the FBI and other authorities were duly authorized by Gulf Air and Aviation Services and caused substantial damage to plaintiff.

We turn next to the important facts concerning attempts to serve the Illinois complaint and the resulting default judgment. As noted, the Illinois action was filed on August 25,1985. Two days later, the clerk of the Cook County Circuit Court issued a summons for service of the complaint on the C.T. Corporation, who plaintiff thought was Aviation Services’ agent for service of process. On September 5, 1985, a deputy sheriff filed an affidavit averring that service of the complaint was effected on the C.T. Corporation as agent for Aviation Services. It also appears that the server was informed at the time by C.T. Corporation that it was no longer Aviation Services’ authorized agent for service of process. Plaintiff made no effort to serve the complaint on Gulf Air, apparently because she was convinced that Gulf Air and Aviation Services were jointly owned, that she was jointly employed and that they were essentially the same company. 2 Plaintiff alleg *1404 es, however, that Gulf Air received actual notice of the complaint. This occurred, plaintiff alleges, in a telephone conversation between plaintiffs Illinois counsel and Mr. Joseph Khoury of Gulf Air sometime after September 5, 1985. Specifically, plaintiffs counsel alleges that Mr. Khoury acknowledged the complaint and promised to “follow it up personally or through his attorney.” (Affidavit of Haddad, ¶ 4).

The next pertinent event occurred on March 4, 1986. On this date the Cook County Circuit Court entered an Order of Default against Gulf Air and Aviation Services. Thereafter, the Clerk of the Court issued a summons for Gulf Air and Aviation Services for service on the Illinois Secretary of State in accordance with the Illinois long-arm statute. Ill.Rev.Stat. ch. 32 §§ 5.25(c), 5.30.

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

Related

Guardian Industries Corp. v. Commissioner
143 T.C. No. 1 (U.S. Tax Court, 2014)
European Community v. RJR NABISCO, INC.
814 F. Supp. 2d 189 (E.D. New York, 2011)
Rice Corp. v. Grain Board of Iraq
582 F. Supp. 2d 1309 (E.D. California, 2008)
Magness v. Russian Federation
247 F.3d 609 (Fifth Circuit, 2001)
Southway v. Central Bank of Nigeria
994 F. Supp. 1299 (D. Colorado, 1998)
Linton v. Airbus Industrie
934 S.W.2d 754 (Court of Appeals of Texas, 1996)
Bryks v. Canadian Broadcasting Corp.
906 F. Supp. 204 (S.D. New York, 1995)
In Re Hashim
188 B.R. 633 (D. Arizona, 1995)
Gardiner Stone Hunter v. Iberia Lineas Aereas
896 F. Supp. 125 (S.D. New York, 1995)
Credit Lyonnais v. Getty Square Associates
876 F. Supp. 517 (S.D. New York, 1995)
Mangattu v. M/V Ibn Hayyan
35 F.3d 205 (Fifth Circuit, 1994)
Linton v. Airbus Industrie
30 F.3d 592 (Fifth Circuit, 1994)

Cite This Page — Counsel Stack

Bluebook (online)
700 F. Supp. 1400, 1988 U.S. Dist. LEXIS 13156, 1988 WL 125914, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ledonne-v-gulf-air-inc-vaed-1988.