Opinion ID: 888353
Heading Depth: 1
Heading Rank: 5

Heading: The Instant Lawsuit and Summary Judgment, Round I

Text: ¶ 16 Corporate Air filed suit on March 3, 2003, alleging that Edwards Jet had refused to take delivery of the two aircraft and had failed to pay the $4.2 million required by the terms of the Agreement. Corporate Air's first amended complaint enumerates twelve counts: breach of contract, failure of consideration, specific performance, breach of the covenant of good faith and fair dealing, fraud, constructive fraud, negligent misrepresentation, deceit, unjust enrichment, intentional interference with prospective economic advantage, promissory estoppel, and punitive damages. Edwards Jet's answer to Corporate Air's first amended complaint includes eight counterclaims: breach of contract, breach of the implied covenant of good faith and fair dealing, constructive fraud, negligent misrepresentation, fraud/deceit, violation of the Lanham Trademark Act, common-law trademark infringement, and punitive damages. ¶ 17 The parties filed cross-motions for summary judgment and briefs for and against these motions. For its part, Corporate Air asserted that the parties had a binding contract to purchase the two aircraft and that Edwards Jet's rejection of the aircraft was pretextual since Edwards Jet had ample opportunity to inspect the planes and since Edwards Jet flew or inspected the aircraft on five occasions in 2001 and once in 2002. Corporate Air argued that Edwards Jet accepted both aircraft upon execution of the Agreement on May 23, 2002, and thus was contractually obligated to pay for them. Furthermore, Corporate Air claimed that the two aircraft conformed to the requirements of the Agreement, which contains language that the planes are being purchased as is. Corporate Air also argued that it was entitled to summary judgment on all of Edwards Jet's counterclaims. ¶ 18 Edwards Jet claimed that it was entitled to partial summary judgment on four issues: (1) A. Clifford Edwards properly rejected the two aircraft because they did not conform to the Agreement; (2) Corporate Air's claims were governed by contract law (specifically, the Uniform Commercial CodeSales, Title 30, chapter 2, MCA (UCC)) to the exclusion of the tort and equitable claims advanced by Corporate Air; (3) Corporate Air's tort and equitable claims were meritless; and (4) dismissal of Edwards Jet Center as a defendant was required because it had fully performed its sole obligation under the Agreement to purchase the FBO. Edwards Jet asserted that the relevant and material facts were uncontested and that Corporate Air and the Overstreets were attempting a cram down of the two aircraft. Edwards Jet argued that Corporate Air knew the aircraft were deficient and made it difficult for Edwards Jet's mechanics to inspect the logbooks and the aircraft. According to Edwards Jet, it was only after they had a chance to inspect the logbooks and the aircraft that they discovered the wing damage to one plane and the five-year gap in the airframe logbooks for the other. As a result of these deficiencies, Edwards Jet asserted that it had lawfully rejected the two aircraft. Edwards Jet also contended that Corporate Air's remedy, if any, was found in contract law and that its tort and equitable theories of relief should be dismissed. Finally, Edwards Jet claimed that the statement no known damage history on the specification sheets constituted an express warranty that could not be disclaimed. ¶ 19 The District Court held a hearing on the motions and, on September 29, 2004, issued a memorandum and order. The court granted partial summary judgment in favor of Corporate Air on the breach-of-contract and express-warranty claims. The court reasoned that Edwards Jet had reasonable and sufficient opportunity to fully inspect both airplanes and that Edwards Jet's employees were able to fly the planes on several occasions, with the log books in the aircraft and easily accessible, prior to closing. The court found that the wing damage and the five-year gap in the airframe logbooks was known by Edwards Jet prior to signing the Agreement, though Edwards Jet had presented evidence to the contrary with its motion for summary judgment. The court decided that Edwards Jet had failed to object when it was aware of or at least should have been aware of the `nonconformities'; that Edwards Jet took the planes as is under the Agreement; that the aircraft conformed to the Agreement's requirements; and that Edwards Jet, therefore, had breached the Agreement by not paying Corporate Air for the two aircraft. The court declined at this juncture to rule on any of the parties' other claims.