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Hallmark Aviation Limited v. Awas Aviation Services

April 30, 2013

HALLMARK AVIATION LIMITED, PLAINTIFF,
v.
AWAS AVIATION SERVICES, INC., FORMERLY DOING BUSINESS AS PEGASUS AVIATION FINANCE CO. DEFENDANT.



The opinion of the court was delivered by: John F. Keenan, United States District Judge:

OPINION & ORDER

Before the Court is Defendant AWAS Aviation Services, Inc.'s motion to dismiss the complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Plaintiff Hallmark Aviation Limited claims that it is owed a broker's commission for introducing Defendant's alleged predecessor corporation, Pegasus Aviation Finance Co., to a third party in connection with an airplane purchase. Briefly stated, Defendant argues that the terms of the contract between the parties bar Plaintiff's claims, and also that the complaint lacks facts showing that Defendant succeeded Pegasus or assumed its liabilities.

For the reasons that follow, Defendant's motion is denied, except that count two of the complaint, which asserts a duplicative cause of action for breach of the implied covenant of good faith and fair dealing, is dismissed with prejudice.

I.Background

Plaintiff Hallmark Aviation Limited ("Plaintiff" or "Hallmark") is a Maryland corporation with its principal place of business in Maryland. Defendant AWAS Aviation Services, Inc. ("Defendant" or "AWAS") is a New York corporation with its principal place of business here. Plaintiff alleges that AWAS was formerly known as Pegasus Aviation Finance Co. ("Pegasus").*fn1

(Compl. ¶¶ 2--3.)

Plaintiff is in the business of brokering the purchase and sale of airplanes. Plaintiff alleges that it brokered an agreement between one of its clients, SWIRU Holding AG ("Swiru"), and Defendant. Defendant (as Pegasus) had previously entered into a purchase agreement with Boeing to purchase a 787 Dreamliner airplane (the "Dreamliner"), and was asked by Plaintiff if it wanted to sell its "delivery position" - that is, assign its right to buy the Dreamliner to Swiru. Plaintiff claims that as a result of this introduction, Defendant entered into a letter agreement to sell the plane to Swiru on October 6, 2006. As a consequence of Plaintiff making that introduction, Plaintiff and Defendant executed a commission agreement on October 30, 2006 (the "Agreement"). The Agreement directs Defendant to pay Plaintiff a commission of 0.75% of the sale price paid by Swiru, payable in two installments. The first installment, which AWAS paid in November 2007, was due upon execution of a final purchase agreement between Defendant and Swiru, and receipt by Defendant of Swiru's security deposit. The second installment was to be due upon delivery of the Dreamliner to Swiru. (Compl. ¶¶ 8--18.)

After Boeing struggled with delays in manufacturing Dreamliners, Swiru decided not to purchase the Dreamliner and attempted to cancel its purchase agreement with Defendant. Plaintiff alleges that Defendant refused to release Swiru from that contract without its anticipated profit of $17 million. Plaintiff claims that Defendant decided to cancel the Swiru agreement but (1) retained Swiru's $10 million security deposit; and (2) "simultaneously entered into a second aircraft purchase transaction with Boeing to provide AWAS with, at minimum, an additional $7 million in profit to satisfy the original anticipated profit of $17 million." (Compl. ¶ 28.) Defendant did this by making a deal with Swiru for different aircraft in lieu of the delayed Dreamliner. See Pl. Opp. at 2 ("Although SWIRU had declined to purchase the Boeing 787 due to the delays at Boeing, AWAS conditioned its agreement to cancel the purchase agreement upon SWIRU's entry into a restructured transaction for other Boeing aircraft."); Oral Arg. Tr. at 6 (counsel for Defendant acknowledging that "[l]ater there were aircraft that were sold to Swiru under a separate transaction"); id. at 8. Plaintiff argues that Defendant structured its dealings with Swiru in this way to avoid the second commission payment to Plaintiff, since the Agreement conditioned that payment upon Swiru's receipt of the Dreamliner, which never happened. (Compl. ¶¶ 25--29.)

Plaintiff asserts causes of action for breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment.*fn2 It seeks damages of at least $369,375, plus interest, fees, costs, and expenses.

In moving to dismiss the action, Defendant argues that the breach of contract claims are barred by the terms of the Agreement. It also contends that the unjust enrichment claim is barred at law by the existence of an express contract. Defendant further argues that Plaintiff has not sufficiently supported its claim that AWAS was formerly known as Pegasus or assumed its liabilities. Substantively, Defendant asserts that because Swiru cancelled its purchase agreement with Pegasus and never paid in full for the Dreamliner, the terms of the Agreement with Plaintiff relieve Pegasus of the obligation to make the second and final commission payment to Plaintiff.

II.Discussion

A.12(b)(6) Legal Standard

On review of a motion to dismiss for failure to state a claim under Rule 12(b)(6), a court must accept the plaintiff's allegations of fact as true, and draw all reasonable inferences in the plaintiff's favor. See Ganino v. Citizens Util. Co., 228 F.3d 154, 161 (2d Cir. 2000); Lee v. Bankers Trust Co., 166 F.3d 540 (2d Cir. 1999). To survive a 12(b)(6) motion, the complaint "must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The issue on a 12(b)(6) motion to dismiss is not whether the plaintiff will ultimately prevail, but whether she is entitled to offer evidence to support her claim. The court's task is therefore to determine "the legal feasibility of the complaint, not to assay the weight of the evidence which might be offered in support thereof." Geisler v. Petrocelli, 616 F.2d 636, 639 (2d Cir. 1980).

Review of a motion for failure to state a claim "is limited to the facts as asserted within the four corners of the complaint, the documents attached to the complaint as exhibits, and any documents incorporated in the complaint by reference." McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 191 (2d Cir. 2007) (citing Taylor v. Vt. Dep't of Educ., 313 F.3d 768, 776 (2d Cir. 2002)). Therefore, a court must either exclude evidentiary materials that are extrinsic to the complaint, or convert the 12(b)(6) motion into a summary judgment motion under Rule 56. See Fed. R. Civ. P. 12(d); Friedl v. City of New York, 210 F.3d 79, 83--84 (2d Cir. 2000). Conversion to a summary judgment motion is not appropriate unless the parties have had "the opportunity to conduct ...


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