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Aveos Fleet Performance, Inc. v. Vision Airlines, Inc.

United States District Court, Second Circuit

May 21, 2013

AVEOS FLEET PERFORMANCE, INC., Plaintiff,
v.
VISION AIRLINES, INC., Defendant.

JOHN MAGGIO, ESQ., CONDON & FORSYTH LLP, New York, NY, Counsel for Plaintiff.

BRIAN E. FOONT, ESQ., THE FOONT LAW FIRM, Potomac, MD, Counsel for Plaintiff.

ROBERT E. GANZ, ESQ., GANZ WOLKENBREIT & SIEGFELD LLP, Albany, NY, Counsel for Defendant.

MEMORANDUM-DECISION and ORDER

GLENN T. SUDDABY, District Judge.

Currently before the Court in this diversity action for breach of contract is a motion for summary judgment filed by Aveos Fleet Performance Inc. ("Plaintiff") (Dkt. No. 28) against Vision Airlines, Inc. ("Defendant"). For the reasons set forth below, Plaintiff's motion is denied.

I. RELEVANT BACKGROUND

A. Plaintiff's Claim

Generally, liberally construed, Plaintiff's Complaint alleges that Defendant breached the terms of an Agreement entered into by the parties on April 2, 2009, and that as a result, Plaintiff is entitled to damages of $3, 959, 256.49 plus interest through the date payment is made in accordance with the Agreement, as well as prejudgment interest and costs.

B. Motion for Summary Judgment by Plaintiff

Generally, in support of its motion for summary judgment, Plaintiff argues that (1) it performed its obligations under the Agreement, (2) Defendant breached the Agreement, and (3) as a result, Plaintiff has suffered damages. ( See generally Dkt. No. 28-18 [Pl.'s Mem. of Law].)

In Defendant's response to Plaintiff's motion for summary judgment, it argues that Plaintiff is not entitled to summary judgment because (1) Plaintiff did not perform all of its obligations under the Agreement, (2) Defendant did not breach the Agreement because it paid for the work Plaintiff completed and objected to the invoices that currently remain unpaid, and (3) Plaintiff owes Defendant its remaining engines and parts. ( See generally Dkt. No. 30 [Def.'s Response Mem. of Law].)

In its reply, Plaintiff argues that (1) it is undisputed that it performed its obligations under the Agreement, and (2) it is undisputed that Defendant breached the Agreement because (a) Defendant has failed to provide evidence of payment, and (b) Defendant has failed to provide evidence of its alleged notices of dispute. ( See generally Dkt. No. 31 [Pl.'s Reply Mem. of Law].)

C. Factual Background

Unless otherwise noted, the following material facts have been asserted and supported by Plaintiff in its Local Rule 7.1 Statement of Undisputed Material Facts, and either admitted or denied without a supporting record citation by Defendant in its Local Rule 7.1 Response. ( Compare Dkt. No. 28-1 [Pl.'s Rule 7.1 Statement] with Dkt. No. 30-2 [Def.'s Rule 7.1 Response].)

The parties entered into the Engine Technical Services Agreement ("the Agreement") on April 2, 2009. Pursuant to Annex E of the Agreement,

[Plaintiff] will work collectively with [Defendant] to produce six (6) JT9D-7R4D engines to support the current three (3) B767 aircraft in [Defendant's] fleet. [Plaintiff] shall purchase on behalf of [Defendant][1] and subsequently transfer to [Defendant] title to six (6) engines from Air Canada for parts to support the program, so collectively there will be twelve (12) engines to produce (6).[2] The program will be governed by the following guidelines, and should there by additional JT9D-7R4D engines for repair, they will be managed under the Rates and Charges set forth in Annex A.
It is understood that [Defendant] shall not have the obligation to commit to any minimum volume [of] Work to be entrusted to [Plaintiff], but that, given the exclusive nature of this service agreement, should any Shop Visit work be required regarding the engines listed below, such work may not be entrusted to any party other than [Plaintiff] without the prior written consent of [Plaintiff].

(Dkt. No. 28-3, at 88 [Ex. 1 to Decl. of Jean-Pierre Bastien, July 5, 2012].) Annex E identifies by serial number the six Air Canada Engines as well as the six engines of Defendant's that are involved in the program. See id. Plaintiff interprets Annex E to state that it was to combine parts from the six "donor engines" (the Air Canada engines) and the six "receiver engines" (Defendant's engines) to produce a total of six overhauled engines for Defendant. ( See Dkt. No. 28-1, at § 4 [Pl.'s Rule 7.1 Statement].) Defendant counters that Annex E provides that Plaintiff would repair up to six JT9D-7R4 engines, at Defendant's election to the volume of work to submit to Plaintiff. ( See Dkt. No. 30-2, at § 4 [Def.'s Response to Pl.'s Rule 7.1 Statement].)

The parties agree that the work would be performed in accordance with a mutually agreed schedule that would specify the applicable turnaround time ("TAT"). Further, the Agreement provides that

[Defendant] shall pay the full amount of invoices without any off-set or deduction. Invoices not paid within thirty (30) days from the date of receipt of the invoice shall be considered overdue. All overdue payments shall bear interest at a rate of one and a half percent (1.5%) per month (eighteen percent (18%) per annum), until paid, without prejudice to [Plaintiff's] right to terminate this Agreement for nonpayment of charges, when due, including interest on overdue payments. Notwithstanding..., in the event that [Defendant] has a legitimate, substantiated reason(s) for believing that an error has been made in an invoice sent by [Plaintiff] to [Defendant], ... [Defendant] shall notify [Plaintiff] in writing or by fax (with delivery confirmation) or by email of the precise nature of the alleged error(s) within thirty (30) Business Days of the date of invoice.

(Dkt. No. 28-3, at 13 [Ex. 1 to Decl. of Jean-Pierre Bastien, July 5, 2012].) According to the sworn declaration of Defendant's former Vice President, Brad Carucci, "[n]otwithstanding the Agreement's notice and dispute provisions, [the parties, ] throughout their relationship under the Agreement, worked out their issues informally without regard to those provisions." ( See Dkt. No. 30-1, at § 34 [Decl. of Brad Carucci, August 12, 2012].)[3]

Plaintiff began to work on the Annex E Program in approximately May of 2009. After starting the Annex E Program, Plaintiff assisted Defendant in purchasing an engine from Air China that was already at Plaintiff's facilities. Plaintiff used this Air China engine in the place of Defendant's first overhauled engine under the Annex E ...


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