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COASTAL AVIATION, INC. v. COMMANDER AIRCRAFT CO.

November 3, 1995

COASTAL AVIATION, INC, Plaintiff, against COMMANDER AIRCRAFT COMPANY, Defendant.


The opinion of the court was delivered by: PARKER

 BARRINGTON D. PARKER, JR. U.S.D.J.

 Plaintiff, Coastal Aviation Incorporated ("Coastal"), brings this action against Defendant, Commander Aircraft Company ("Commander"), seeking $ 5,319,424 damages arising out of an alleged breach of a contract for Coastal's exclusive dealership rights to sell airplanes. Defendant now moves this Court for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. Plaintiff also cross moves for partial summary judgment. For the reasons stated below, both motions are denied.

 BACKGROUND

 Coastal's claims originate in January 23, 1992, when Matt Goodman, Commander's Vice President of Sales ("Goodman") telephoned Bruce Dorfman, Coastal's Sales Manager, and told him of Commander's interest in selling its model 114B aircraft ("114B") through a dealership network such as Coastal. Dorfman, enthusiastic about a dealership agreement, provided Goodman with Coastal's record, and the two planned a meeting in New York. Shortly after the phone call, Goodman sent Dorfman Commander's Standard Dealer package, which included copies of Commander's standard dealership agreement, purchase order forms, and detailed product marketing and pricing information.

 As planned, on February 17, 1992, Goodman and Dorfman met for breakfast in Rye, New York. At that time, Goodman indicated that Commander was interested in dealership territories in New York, New Jersey, Pennsylvania, Georgia, Alabama and Florida. Later that day, Coastal's President, Rocky Genovese ("Genovese"), met with Goodman. Both meetings focussed on pricing, dealer profit margins and payment terms.

 On March 12, 1992, William Morton of Coastal ("Morton"), Genovese and Dorfman travelled to Bethany, Oklahoma to attend the "roll-out" of the new 114B. During their visit, the three met with William Boettger, Commander's President, Richard Smiley, an employee of Commander, and Goodman to discuss the possibility of Coastal's obtaining higher profit margins. After the visit, the parties expressed interest through an exchange of follow-up letters. Goodman's letter indicated available dealership areas in New York, New Jersey, Virginia, Maryland, D.C. North Carolina and South Carolina. Goodman attached customer lists, sales data and profit margins to his letter.

 Boettger also wrote a follow-up letter to Morton in which he stated "I have requested [Goodman] to reserve New York and New Jersey until we have finished our discussions." Goodman, without informing Boettger or anyone else at Commander, awarded the territory to a competitor. On March 26, 1992, Morton telephoned Genovese to learn why the New York/New Jersey dealership had been awarded to a competitor. Genovese apologized and expressed interest in doing business with Coastal in the southeastern territories.

 On March 27, 1992, Dorfman called Goodman to submit an offer to become a Commander dealer in the Southeastern United States and to purchase a specific number of aircraft over a three year term. The offer was subject to approval of a third partner of Coastal. On March 30, 1992, Goodman wrote a letter to Dorfman in response to the March 27, 1992 phone call. The letter, which twice refers to Dorfman's phone call as an "offer" by Coastal, summarizes Commander's understanding of Coastal's terms:

 
1) Third partner approval from Coastal
 
3) First right of refusal on dealer opportunities north of New York
 
4) Commander Dealer program and deposit schedule as prescribed
 
5) 10 aircraft for year one, 20 aircraft for year two, 30 aircraft for year three, for the following marketing territory: MD, D.C. VA, NC, SC, GA, AL and subject to Florida.

 Goodman also refers to Dorfman's "offer [as] timely [and] diligent." Significantly, Goodman then addresses the above five terms as follows:

 
The items in the Dealership contract you reference in regard to paragraphs 11 & 12 pertaining to insurance coverages for the Dealership can be reworded to meet your satisfaction as well as that of Commander Aircraft Company. I have no problem with providing Coastal Aviation right of first refusal should dealership opportunities open in the New England states. . . .
 
At this time, I would like to propose an alternative program which would give Coastal Aviation the ...

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