On Time Aviation, Inc. v. Bombardier Capital, Inc.

354 F. App'x 448
CourtCourt of Appeals for the Second Circuit
DecidedOctober 2, 2009
DocketNos. 07-4866-cv, 09-0250-cv
StatusPublished
Cited by4 cases

This text of 354 F. App'x 448 (On Time Aviation, Inc. v. Bombardier Capital, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
On Time Aviation, Inc. v. Bombardier Capital, Inc., 354 F. App'x 448 (2d Cir. 2009).

Opinion

SUMMARY ORDER

Plaintiff On Time Aviation, Inc. (“On Time”) appeals from awards of (1) summary judgment in favor of defendant Bombardier Capital, Inc. (“Bombardier”), and (2) sanctions against On Time’s counsel under Federal Rule of Civil Procedure 11. We assume the parties’ familiarity with the facts and the record of prior proceedings, which we reference only as necessary to explain our decision to affirm.

We review an award of summary judgment de uovo, viewing the evidence in the light most favorable to the non-moving party. Mathirampuzha v. Potter, 548 F.3d 70, 74 (2d Cir.2008). We will affirm a grant of summary judgment only where the record reveals “no genuine issue as to any material fact” and the movant’s entitlement to judgment “as a matter of law.” Fed.R.Civ.P. 56(c). We “apply an abuse-of-discretion standard in reviewing all aspects of a district court’s Rule 11 determination.” Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 405, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990).

1. The Contract Claim

a. Disclaimer

On Time argues that the district court erred in determining that an explicit disclaimer in the parties’ final purchase and sale agreement (the “Agreement”) stating that Bombardier was selling a particular aircraft “ ‘AS IS, WHERE IS’, with no representations or warranties of any kind or nature by [Bombardier], including but not limited to warranties of merchant[450]*450ability and fitness for a particular purpose,” Callahan Affirmation, Exhibit C at 1, was unambiguous and clearly covered the aircraft engines. Whether a contract is ambiguous is a question of law for the court. See Aon Fin. Prods., Inc. v. Societe Generate, 476 F.3d 90, 95 (2d Cir.2007). Accordingly, we construe the contract de novo. See Jessica Howard Ltd. v. Norfolk S. R.R. Co., 316 F.3d 165, 168 (2d Cir.2003). Plaintiff relies on a Delivery and Acceptance Receipt (the “Delivery Receipt”) confirming acceptance of “the Equipment ‘AS IS, WHERE IS,’ ” Fish-man Affirmation, Exhibit 17 at 1 (emphasis added), to argue that the variance between the two disclaimer clauses — one referring to the “Equipment,” the other to the “Aircraft” — gives rise to ambiguity as to whether Bombardier disclaimed responsibility for necessary engine repairs to the aircraft. Like the district court, we are not persuaded by this argument.

While the Delivery Receipt does not define the term “Equipment,” it states that On Time’s execution and delivery of the document constituted “without further act, the unconditional and irrevocable acceptance by Purchaser of the Aircraft under the Agreement.” Id. Further, it explicitly defines the Aircraft to include two engines, providing their make, model, and serial numbers. The Agreement, moreover, references the Delivery Receipt, stating that the documents taken together “shall evidence the purchase by [On Time]” of the Aircraft. Read together, this language admits of no ambiguity: Bombardier’s sale of the aircraft “AS IS” disclaimed responsibility for any defects, including those pertaining to the engines. See United Illuminating Co. v. Wisvest-Conn., LLC, 259 Conn. 665, 670, 791 A.2d 546 (2002) (stating that “words of the contract must be given their natural and ordinary meaning” and that court “will not torture words to impart ambiguity where ordinary meaning leaves no room for ambiguity” (internal quotation marks omitted)); Conway v. 287 Corporate Ctr. Assocs., 187 N.J. 259, 269, 901 A.2d 341 (2006) (noting that “polestar of construction is the intention of the parties to the contract as revealed by the language used, taken as an entirety” (internal quotation marks omitted)); O’Brien Bros.’ P’ship, LLP v. Plociennik, 182 Vt. 409, 414, 940 A.2d 692 (2007) (observing that unambiguous contract terms “will be given effect and enforced in accordance with their language” (internal quotation marks omitted)).1

b. Agreement To Assign and To Transfer the Service Plan

On Time argues that the district court nevertheless erred in failing to recognize that Bombardier’s refusal to pay for engine repairs raised a triable issue of fact as to its breach of the Agreement’s promise to assign and to transfer the service plan. We disagree. Bombardier’s service contract with Honeywell sets out various conditions for transfer of the plan, none of which allocates responsibility for the cost of engine repairs. Moreover, in the months following the sale of the Aircraft, [451]*451Honeywell indicated that it was prepared to transfer the service plan once the damaged engines were repaired and the aircraft deemed airworthy. Plaintiffs service-plan arguments thus reduce to a claim that the assign-and-transfer clause itself constitutes an implied engine warranty obligating Bombardier to pay for engine repairs. As already explained, however, all such warranties were explicitly disclaimed by the “AS IS” provision of the sale contract. See U.C.C. § 2-316(3)(a) (“[U]nless the circumstances indicate otherwise, all implied warranties are excluded by expressions like ‘as is’... or other language that in common understanding calls the buyer’s attention to the exclusion of warranties [and] makes plain that there is no implied warranty.”).

Accordingly, judgment was properly entered in favor of Bombardier on plaintiffs contract claim.

2. The Fraud Claim

Plaintiffs fraud claim rests on two theories: (1) that Bombardier promised to assign and transfer the Honeywell service plan when it had no intention of doing so, and (2) that Bombardier fraudulently induced On Time to sign the sale contract with false representations that the engines were in good standing under the plan. The first theory merits little discussion, as it turns on Bombardier’s refusal to pay for engine repairs. As stated above, the Agreement’s disclaimer of warranties shifted any risk of engine damage to On Time, removing Bombardier’s payment for repairs as a condition of performance.

With respect to the fraudulent inducement claim, plaintiff argues that the district court erred in failing to apply New Jersey or Vermont law. We conclude that the claim does not survive under the law of either state. To establish fraudulent inducement, a plaintiff must prove that its reliance on the alleged misstatements was reasonable (New Jersey) or justifiable (Vermont). See Rowen Petroleum Props., LLC v. Hollywood Tanning Sys., Inc., No. 08-4764, 2009 WL 1085737, at *3 (D.N.J. Apr.20, 2009) (citing Banco Popular N. Am. v. Gandi, 184 N.J. 161, 173, 876 A.2d 253 (2005)); Von Turkovich v. APC Capital Partners, LLC, 259 F.Supp.2d 314, 321 (D.Vt.2003) (citing Sugarline Assocs. v. Alpen Assocs., 155 Vt. 437, 586 A.2d 1115 (1990)).

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354 F. App'x 448, Counsel Stack Legal Research, https://law.counselstack.com/opinion/on-time-aviation-inc-v-bombardier-capital-inc-ca2-2009.