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ECHELON INTERN. CORP. v. AMERICA WEST AIRLINES

March 6, 2000

ECHELON INTERNATIONAL CORP., PLAINTIFF,
V.
AMERICA WEST AIRLINES, INC., DEFENDANT.



The opinion of the court was delivered by: Motley, District Judge.

OPINION

This case involves a contractual dispute regarding a rental agreement for a commercial aircraft. Plaintiff has moved for summary judgment. For the reasons outlined below, the court now grants partial summary judgment for plaintiff regarding the rent shortfall and denies summary judgment regarding the rent resetting costs and attorneys' fees.

BACKGROUND

This case involves rental payments under a lease for a commercial aircraft. Defendant, America West Airlines ("America West") has been leasing a Boeing 757 aircraft from plaintiff, Echelon International Corp. ("Echelon") since 1989. In 1991 America West filed for bankruptcy. At that time Echelon and America West renegotiated the aircraft lease, lowering the basic rental rate from $400,000 to $315,000 per month. The terms of the renegotiation allowed this basic rental rate to be adjusted on three future rent reset dates to reflect the fair market value of such rental. The renegotiation set the following procedure for determining the fair market rental if the two parties could not agree: each party would select an appraiser to estimate the fair market rental; if the parties' appraisers could not agree the two appraisers would select a third independent appraiser; the determination of the third appraiser would govern.

As the rental reset date of March 10, 1998 approached, the parties could not agree upon a fair market rental rate. In keeping with the reset procedure, each party selected an appraiser to estimate the fair market rental. Echelon's appraiser, Morton Beyer, quoted a fair market rental rate of $395,000 per month. America West's appraiser, Avitas, quoted a monthly rental rate of $280,000. As provided in the renegotiation procedure if the parties' appraisers could not agree, a third appraiser was commissioned to determine the fair market rental. The two appraisers, by mutual assent, selected a third independent appraiser, GRA Aviation specialists ("GRA"). GRA appraised the fair market rental at $354,000 per month. Thus, Echelon contends that the rent was properly reset to $354,000 per month.

Despite GRA's appraisal, America West has continued to pay only $315,000 per month. Plaintiff seeks to recover this rent shortfall of $39,000 per month (the difference between $354,000 and $315,000) as accruing since March of 1998.

Plaintiff also seeks to recover all fees and expenses incurred during the rent resetting process as well as its legal fees and expenses arising from this litigation. Echelon contends that the lease agreement required America West to shoulder all costs related to the rent resetting process and all legal fees from any resulting litigation.

STANDARD FOR SUMMARY JUDGMENT

This circuit recognizes the value of summary judgment to expeditiously dispose of meritless litigation. See Quinn v. Syracuse Model Neighborhood Corp., 613 F.2d 438, 445 (2d Cir. 1980). The mechanism of summary judgment promotes judicial economy by preventing further litigation on an issue with an unalterably predetermined outcome. The standard for summary judgment ensures that issues are efficiently resolved without compromising the rights of the non-moving party.

Summary judgment may be granted only if the moving party can show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. The court must draw all reasonable inferences and resolve all ambiguities in favor of the non-moving party.

Ametex Fabrics, Inc. v. Just In Materials, Inc., 140 F.3d 101, 107 (2d Cir. 1998) (internal citations omitted). Thus, the mere existence of a factual dispute between parties does not preclude summary judgment when the dispute is not genuine or when the disputed facts are immaterial. A disputed fact is immaterial when the outcome of the case remains the same regardless of the disputed issue. Factual questions which prove immaterial fail to preclude summary judgment. See Knight v. U.S. Fire Insurance Co., 804 F.2d 9, 11 (2d Cir. 1986) (noting that the existence of unresolved immaterial issues does not suffice to defeat a motion for summary judgment).

A party may not rely on "mere speculation or conjecture as to the true nature of the facts to overcome a motion for summary judgment". Knight v. U.S. Fire Insurance Co., 804 F.2d 9, 11 (2d Cir. 1986).

Nor are judges any longer required to submit a question to a jury merely because some evidence has been introduced by the party having the burden of proof, unless the evidence be of such a character that it would warrant the jury in finding a verdict in favor of that party. Formerly it was held that if there was what is called a scintilla of evidence in support of a case the judge was bound to leave it to the jury, but recent decisions of high authority have established a more reasonable rule, that in every case, before the evidence is left to the jury, there is a preliminary question for the judge, not whether there is literally no evidence, but whether there is any upon which a jury could properly proceed to find a verdict for the party producing it, upon whom the onus of proof is imposed.

Anderson v. Liberty Lobby Inc., 477 U.S. 242, 251, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ...


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