Court Opinion

ID: 18151
Source: CourtListenerOpinion
Date Created: 2010-04-25 07:11:31+00
Date Added: 2024-06-11T15:04:41.817459
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS

                       FOR THE FIFTH CIRCUIT

                       ____________________

                           No. 98-31366
                         Summary Calendar
                       ____________________

     TONY B JOBE, Individually and as Assignee of
     Air New Orleans, Inc,

                                    Plaintiff-Appellant,

     v.

     ATR MARKETING, INC; AEROSPATIALE, S.N.I.; FINMECCANICA
     S.P.A.; AVIONS DE TRANSPORT REGIONALE (GIE); AEROSPATIALE
     INC,

                                    Defendants-Appellees.

_________________________________________________________________

           Appeal from the United States District Court
               for the Eastern District of Louisiana
                           (96-CV-3396-C)
_________________________________________________________________

                           June 23, 1999

Before KING, Chief Judge, POLITZ and BARKSDALE, Circuit Judges.

PER CURIAM:*

     Plaintiff-appellant Tony B. Jobe, suing individually and as

the assignee of Air New Orleans, Inc., brought a detrimental

reliance claim against defendants-appellees ATR Marketing, Inc.,

Aerospatiale, S.N.I., Finmeccanica S.p.A., Avions de Transport

Regionale (G.I.E.), and Aerospatiale, Inc.     The district court

     *
      Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
granted summary judgment in favor of the defendants-appellees.

After careful consideration of the pleadings, summary judgment

evidence, briefs, and relevant case law, we affirm.

                I.   FACTUAL AND PROCEDURAL BACKGROUND

     Plaintiff-appellant Tony B. Jobe is the former president and

chief executive officer of Air New Orleans, Inc. (“Air New

Orleans” or “ANO”), a bankrupt Louisiana airline.1       Avions de

Transport Regionale (G.I.E.) (“ATR”) is a French business

association similar to a joint venture.    The joint venturers are

Aerospatiale, S.N.I., a government-owned French aerospace

corporation, and Finmeccanica, S.p.A., a somewhat analogous

entity operated by the Italian government.    ATR Marketing, Inc.

(“ATR Marketing”) is an ATR sales subsidiary headquartered in

Virginia.

     Air New Orleans began operating as a regional airline in

1981.    In 1986, Air New Orleans became a Continental Airlines

(“Continental”) code-sharing partner, meaning that passengers

could book Air New Orleans flights through Continental’s computer

reservations system, and a carrier for Continental Express,

providing commuter service to cities in Louisiana, Mississippi,

Alabama, and Florida.    In August of that year, Hugh Schmittle, a

sales representative for ATR Marketing, contacted Air New Orleans

to propose a meeting at which he could make a marketing

     1
        Air New Orleans’s trustee in bankruptcy assigned the
estate’s claims to Jobe.

                                   2
presentation for ATR-42 aircraft.2    Schmittle made such a

presentation several weeks later to Jobe and Gordon Long, Air New

Orleans’s vice-president of operations.

     The result of Schmittle’s efforts was a protracted series of

negotiations for the purchase of ATR-42 aircraft by Air New

Orleans.    In September 1986, Jobe and Long attended the

Farnsborough Air Show in England and toured ATR’s plant in

Toulouse, France with Schmittle and Sheldon Best, ATR Marketing’s

chief operating officer.    Soon afterward, according to Air New

Orleans, ATR made a “written commitment” to provide two aircraft

at $7.6 million each, and Air New Orleans agreed to all but the

“details” of the “commitment.”    Later that month, Long met with

Schmittle in Dayton, Ohio to discuss “what the terms of the

agreement might be.”    Long also traveled to ATR Marketing’s

Virginia headquarters, where he met with Schmittle and other ATR

Marketing representatives to discuss the “fine points” of the Air

New Orleans-ATR transaction.    In October 1986, Jobe and Long met

again with Schmittle and other ATR Marketing representatives in

Las Vegas, Nevada, and on the following November 6, Long met with

Schmittle and ATR Marketing’s president, Joel LeBreton, in

Virginia.    Schmittle’s report of the October meeting and Long’s

notes of the November meeting both indicate that Air New Orleans

contemplated that an ATR-Air New Orleans deal would involve

Continental’s participation.

     2
        The ATR-42 aircraft is a 42- to 50-seat turboprop
commuter plane in wide use throughout the United States.

                                  3
     Finally, on December 2, 1986, Jobe wrote to LeBreton to

advise him that Air New Orleans was preparing a proposal for

Continental to expand its service at the New Orleans airport and

to be the “hub feeder” for Continental at Houston

Intercontinental Airport.   Jobe informed LeBreton that it was

“absolutely necessary that we have the proposal outlined by

yourself at our meeting in Las Vegas in writing, so that we can

demonstrate Aerospatiale’s intentions in this matter as they

currently stand.”   At an Air New Orleans shareholders meeting

four days later, Jobe informed those present that the company

“[r]equire[d] ATR-42s or British Aerospace Jetstreams” and that

it was “[g]etting [a] written proposal from Aerospatiale to

provide [a] loan with aircraft; British Aerospace [is] trying to

make [the] same type of proposal.”

     Soon after the shareholders’ meeting, Air New Orleans

received an ATR proposal for the supply of four ATR-42's.    The

proposal set forth, among other things, payment and financing

conditions of the offer and noted that Air New Orleans had

acknowledged that it was “not . . . in a position to make the

down and progress payments usually required by [ATR] and would

have to obtain financing covering 100% of the price of the

aircraft.”   Because Air New Orleans’s “current creditworthiness”

was “not sufficient” to permit such an arrangement, ATR required

that Texas Air Corporation, Continental’s parent company, provide

certain financial guarantees.   The proposal stated that ATR’s

“present offer is valid until January 15, 1987" and that if Air

                                 4
New Orleans accepted it, the parties would enter into a written

agreement.    Air New Orleans did not accede to ATR’s proposal by

January 15, 1987.    Jobe testified in his deposition that his

company was “attempting to get some of these minor points that to

us, being a small carrier, were fairly major[,] refined.”

     Negotiations for the sale of the ATR-42's continued after

January 15, 1987.    In March 1987, Best attended an Air New

Orleans board meeting to address the points remaining to be

resolved with reference to a sale of ATR-42's to Air New Orleans,

and Long enjoyed a weekend of skiing with ATR executives, after

which he wrote Schmittle, “Hopefully our relationship will

someday result in the acquisition of ATR-42's for Air New

Orleans.”    In June 1987, Jobe traveled to the Paris Air Show,

where he met with Best, Schmittle, and Neal Meehan, the president

of Continental’s commuter division, to discuss the guarantees

that ATR’s December 1986 proposal required.    Jobe testified at

his deposition that his meeting with Meehan left him somewhat

“pessimistic” because Meehan had not given him “a more firm

agreement” enabling Air New Orleans to “go ahead and get the ATR

aircraft.”    In July 1987, following the Paris negotiations, Jobe

notified Air New Orleans employees that he had begun negotiating

with Beech for the lease of more C-99 aircraft and with Fairchild

for the acquisition of several larger aircraft.    No mention was

made of ATR-42's.    Later that same month, Jobe submitted a second

proposal to Continental stating that Air New Orleans planned to

operate an expanded commuter service “with Beech C-99 and

                                  5
Fairchild Metro III aircraft, and is currently negotiating the

terms and conditions of acquisition with Fairchild.”     Once again,

he did not mention ATR or its planes.

     On July 31, 1987, ATR and Texas Air Corporation entered into

an agreement for the sale of sixteen ATR-42's, with an option to

purchase an additional thirty-four aircraft.     Jobe continued

discussions with Best regarding a potential acquisition of ATR

aircraft through August or September 1987, but, in January 1988,

Air New Orleans declared bankruptcy without ever having acquired

a single ATR-42.

     In October 1996, Jobe filed a diversity suit against the

defendants in the United States District Court for the Eastern

District of Louisiana.   He brought six claims:    breach of

contract, detrimental reliance, breach of a nondisclosure

agreement, breach of fiduciary duty, solidary liability, and

unjust enrichment.   After both sides had taken extensive

discovery, the defendants moved for summary judgment on all

claims, which the district court granted.   Jobe appeals only the

district court’s grant of summary judgment on his detrimental

reliance claim.

                      II.   STANDARD OF REVIEW

     We review a district court’s grant of summary judgment de

novo, applying the same standards as the district court.       See

United States v. Johnson, 160 F.3d 1061, 1063 (5th Cir. 1998).

After consulting applicable law in order to ascertain the

material factual issues, we consider the evidence bearing on

                                  6
those issues, viewing the facts and the inferences to be drawn

therefrom in the light most favorable to the non-movant.          See Doe

v. Dallas Indep. Sch. Dist, 153 F.3d 211, 214-15 (5th Cir. 1998).

Summary judgment is properly granted if “the pleadings,

depositions, answers to interrogatories, and admissions on file,

together with the affidavits, if any, 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.”       FED. R. CIV. P.

56(c).

     The moving party may demonstrate the absence of a genuine

issue of material fact by pointing out the lack of evidence to

support the non-moving party’s case.        See Duffy v. Leading Edge

Prods., Inc., 44 F.3d 308, 312 (5th Cir. 1995).       Once this

showing is made, the burden shifts to the non-movant to identify

specific evidence in the record showing that there is a material

fact issue for trial and to state the “precise manner” in which

the record supports his claims.        See ContiCommodity Servs., Inc.

v. Ragan, 63 F.3d 438, 441 (5th Cir. 1995).       A summary judgment

motion will not be defeated by the “existence of some alleged

factual dispute.”   Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

247-48 (1986).   The non-movant must “do more than simply show

there is some metaphysical doubt as to the material facts,”

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,

587 (1986), and a mere scintilla of evidence does not suffice to

prevent summary judgment, see Davis v. Chevron U.S.A., Inc., 14
F.3d 1082, 1086 (5th Cir. 1994).

                                   7
                          III.    DISCUSSION

     Louisiana law provides:

     A party may be obligated by a promise when he knew or should
     have known that the promise would induce the other party to
     rely on it to his detriment and the other party was
     reasonable in so relying. Recovery may be limited to the
     expenses incurred or the damages suffered as a result of the
     promisee’s reliance on the promise. Reliance on a
     gratuitous promise made without required formalities is not
     reasonable.

LA. CIV. CODE ANN. art. 1967.    The essential elements of a

detrimental reliance theory of recovery in Louisiana are:      (1) a

representation by conduct or word; (2) justifiable reliance

thereon; and (3) a change of position to one’s detriment because

of the reliance.   See Breaux v. Schlumberger Offshore Servs., 817
F.2d 1226, 1230 (5th Cir. 1987) (citing John Bailey Contractor,

Inc. v. State, 425 So. 2d 326, 328 (La. Ct. App. 1982), aff’d,

439 So. 2d 1055 (La. 1983)).      Jobe need not prove the existence

of a contract to establish his detrimental reliance claim, even

in a context where a contract would normally govern.      See Newport

Ltd. v. Sears, Roebuck & Co., 6 F.3d 1058, 1069 (5th Cir. 1993)

(citing Morris v. People’s Bank & Trust Co., 580 So. 2d 1029,

1036 (La. Ct. App.), writ denied, 588 So. 2d 101, 102 (La. 1991);

Morris v. People’s Bank & Trust Co., 580 So. 2d 1037, 1043 (La.

Ct. App. 1991)).

     We must first identify the representations on which Jobe

allegedly relied to his detriment.      The district court indicated

“some confusion as to the specific promise or representation

allegedly made by the defendants” but read Jobe’s pleadings as

alleging that the defendants had represented (1) that “a sale had

                                    8
been confected or a preliminary agreement reached,” and (2) that

the December 5, 1986 proposal’s expiration date was “of no

moment.”   Our review of Jobe’s pleadings in the district court

and his briefs on appeal reveals that his detrimental reliance

claim is indeed based on defendants’ alleged representations that

ATR and Air New Orleans entered into an agreement for the sale of

ATR-42 aircraft and that the expiration date for the December 5

proposal was not a firm deadline.      In addition, Jobe suggested

below, and argues vehemently on appeal, that he is entitled to

relief because the defendants represented that they were

bargaining in good faith when, in fact, they had no intention of

selling ATR-42's to Air New Orleans.      We address each of these

alleged representations in turn.

     The record does not support Jobe’s claim that the

defendants-appellees represented that ATR and Air New Orleans

reached a preliminary agreement on the sale of ATR-42's to Air

New Orleans.   Air New Orleans’s interrogatory answers state that

“[a]t the conclusion of [the first Virginia] meeting, ANO

believed that it had entered into a binding contract with ATR

Marketing and the other Defendants for the delivery of six (6)

ATR-42 aircraft.”   But the summary judgment evidence does not

show that the defendants represented that a contract existed at

any point prior to or during this meeting.      Although Jobe alleges

that ATR Marketing made a “written commitment” in September 1986,

no such writing appears in the record.      Furthermore, the

testimony of Air New Orleans’s own witness, Long, indicates that

                                   9
no firm contract existed in the fall of 1986.     Long stated that

during the trip to the Farnsborough Air Show, he participated in

“discussions” with Schmittle and Best, the “substance” of which

was that Air New Orleans was “very interested in receiving the,

acquiring the ATR 42, along with the financing package that

included an over financing to allow cash fusion to Air New

Orleans, and that ATR was quite interested in placing the

airplanes with Air New Orleans.”     At his first meeting at ATR

Marketing’s Virginia headquarters, Long testified, Schmittle told

him that “the acquisition of the airplanes was going forward,”

and while Long was “not sure that we finalized the fine points”

of the deal, “we probably moved along in establishing the fine

points.”   This testimony in no way demonstrates that the

defendants represented that Air New Orleans had a binding

contract for the purchase of ATR-42 aircraft.

     Jobe also contends that, after the first Virginia meeting,

the defendants represented that Air New Orleans had a contract to

buy ATR-42's.   In his deposition, for example, he testified that

the December 5, 1986 proposal was, in fact, a written contract.

That document does not represent that ATR and Air New Orleans had

a binding contract, however; on the contrary, it states on its

face that it is a “proposal” and an “offer” that was valid only

until January 15, 1987, does not reflect any final agreement on

the price of the aircraft or financing conditions, and concludes

by expressing a hope that “the above proposal will be of

interest” to Air New Orleans.   Although Schmittle testified that

                                10
the December 5 proposal could have been accepted at any time, it

is undisputed that Air New Orleans never did so, and our review

of the record reveals no other evidence that the defendants-

appellees represented that Air New Orleans had a binding contract

to purchase ATR-42's.

     Even assuming that the defendants did, in fact, make such a

representation, the record demonstrates that Air New Orleans did

not rely on it.   Jobe’s actions in December 1986 indicate that he

did not believe that Air New Orleans had a firm contract.    His

December 2 letter requested a “proposal” from ATR, not a copy of

the contract, so that Air New Orleans could demonstrate ATR’s

intentions “as they currently stand.”    At the Air New Orleans

shareholders meeting, Jobe told attendees that the company was

attempting to acquire “ATR-42s or British Aerospace Jetstreams”

(emphasis added) and, as late as July 1987, Jobe informed Air New

Orleans employees and Continental executives that Air New Orleans

was considering purchasing Beech or Fairchild planes, omitting

any mention of ATR-42's.   Such conduct is inconsistent with

Jobe’s allegation that he relied on a representation that Air New

Orleans had a firm contract to buy ATR-42's.

     Moreover, under the circumstances, any reliance on a

representation that Air New Orleans had a binding contract would

have been unjustified.   Although Jobe could not recall any other

instance in which Air New Orleans purchased or leased aircraft

without a written contract, he never signed a written purchase or

lease agreement with the defendants.    Furthermore, at no point

                                11
did the parties agree on certain major contract terms, including

the exact price of each aircraft and the amount of the cash

infusion to accompany each plane.     Nor did Air New Orleans ever

obtain the support from Continental that ATR and ATR Marketing

had demanded since October 1986.     Thus, the situation in this

case is markedly different from that in Breaux, in which we held

that the plaintiff reasonably relied on the defendant’s written

promise to rent a building because “[t]he terms of the lease, the

price, the duration, and the square footage had been agreed to by

the parties” and the plaintiff knew that the defendant had

negotiated with signmakers, interior decorators, and architects

to prepare the rented office space for its occupancy. 817 F.2d

at 1231.

     We next consider defendants’ alleged representation that the

December 1986 proposal’s January 15, 1987 expiration date was “of

no moment.”   Although there is ample evidence that the defendants

did make such a promise, Jobe does not explain how any reliance

it placed on defendants’ representation was detrimental, as Air

New Orleans never attempted to accept the December 1986 offer.

We therefore agree with the district court that “even if [the

expiration dates’s] extension was undisputed, that fact remains

immaterial.   Again, Jobe has not indicated how or when any offer

was accepted, or how or when any ‘preliminary agreement’ was

reached.”   Nor does a promise that an expiration date will be

extended constitute a representation that the parties had an

agreement for the purchase or lease of aircraft; indeed, such a

                                12
statement suggests that no agreement existed.   The defendants’

alleged representation that the putative deadline for acceptance

of the December 1986 proposal was “of no moment” cannot be the

basis for a detrimental reliance claim.

     Finally, we turn to Jobe’s assertion that defendants

represented that they were negotiating in good faith when, in

fact, they had no intention of selling ATR-42's to Air New

Orleans.    This argument states a claim for fraud, not detrimental

reliance.   See Automatic Coin Enters., Inc. v. Vend-Tronics,

Inc., 433 So. 2d 766, 768 (La. Ct. App.) (holding that a promise

made with the present intent not to perform constitutes fraud),

writ denied, 440 So. 2d 756 (La. 1983).3

     Jobe fails to show that there is a genuine issue of material

fact with respect to his detrimental reliance claim.   The

defendants are therefore entitled to judgment as a matter of law,

     3
        Jobe also contends that the district court erred in
failing to draw an adverse inference from the defendants’ failure
to produce certain reports of visits made by ATR Marketing
representatives to Air New Orleans. A district court’s refusal
to draw an adverse inference is reviewed for abuse of discretion.
See In re Evangeline Ref. Co., 890 F.2d 1312, 1321 (5th Cir.
1989). The party requesting an adverse inference must first show
that the documents in question exist or existed and were within
the control of the opposing party. See Brewer v. Quaker State
Oil Ref. Corp., 72 F.3d 326, 334 (3d Cir. 1995). Although Jobe
claims that “[t]here is no question that the reports had been in
Defendants’ possession,” he points to no evidence in the record
supporting this assertion. Moreover, a party seeking to obtain
an adverse inference based on non-production or destruction of
documents must show bad faith. See Vick v. Texas Employment
Comm’n, 514 F.2d 734, 737 (5th Cir. 1975). Jobe does not
identify, nor have we been able to find, any record evidence
showing bad faith on the part of the defendants. We therefore
conclude that the district court did not abuse its discretion in
declining to draw an adverse inference from the non-production of
the trip reports.

                                 13
and the district court properly granted it.

                         IV.   CONCLUSION

     For the foregoing reasons, we AFFIRM the judgment of the

district court.

                                14