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Atlas Air Inc. v. Biskay Holdings LLC

United States District Court, N.D. Texas, Dallas Division

June 28, 2018

ATLAS AIR, INC., Plaintiff,
v.
BISKAY HOLDINGS LLC, Defendant.

          MEMORANDUM OPINION AND ORDER

          IRMA CARRILLO RAMIREZ, UNITED STATES MAGISTRATE JUDGE.

         By consent of the parties and order of transfer dated September 15, 2017 (doc. 13), this matter has been transferred for the conduct of all further proceedings and the entry of judgment. Before the Court is Plaintiff Atlas Air's Motion for Summary Judgment, filed February 6, 2018 (doc. 15). Based on the relevant filings, evidence, and applicable law, the motion is GRANTED.

         I. BACKGROUND

         On July 26, 2017, Atlas Air, Inc. (Plaintiff) filed this lawsuit against Biskay Holdings, LLC (Defendant) alleging claims for breach of contract, and alternatively, unjust enrichment, restitution, and “for money had and received.” (doc. 1 at 1, 3-4.)[1]

         Based on prior oral and email discussions for an order of aircraft galley carts, Defendant sent Plaintiff an invoice on April 28, 2015. (docs. 17 at 4-5, 8; 21 at 3, 6.) The invoice provided for 300 “Full Size Galley Cart for 747 Aircraft - Comparable to Jamco Model F-Type 105 without mushroom tie down assembly Current Lead time would be 12-14 weeks ARO and drawing approval, ” to be shipped on August 25, 2015, at $795 for each cart, for a total of $238, 500. (doc. 17 at 4-5, 8.) Defendant's president avers that “[i]n none of the emails or phone conversations . . . leading up to the order and payment of the carts, was it ever requested or called-out that the carts needed to be certified in any manner, ” and its “understanding all along [was] that the equipment was going to be used on a transport freighter and did not need all of the certification.” (doc. 21 at 3-4.)

         Defendant emailed Plaintiff a “top level drawing” for signature on May 13, 2015, requesting that it “review dimensions, sign and return.” (Id. at 7-9.) The dimensions corresponded with “Jamco Full Size Cart JL-105-11 per CMM 25-36-11, which was the manual provided by James Lynch with the exception of the mushroom Tie-down.” (Id. at 7.) “The construction drawing of the carts did specify to meet [Federal Aviation Regulation] 25.853 and burn cert[ificate] construction per STCA23FW which is the construction of the STC cart . . . because [Defendant] agreed to use construction methods approved and burn cert's approved.” (Id. at 3-4, 9.) On May 14, 2015, Plaintiff inquired about when the cart would “be available for the first article inspection.” (Id. at 7.) Plaintiff signed the drawing to reflect its approval on May 21, 2015. (Id. at 9.) On June 9, 2015, Plaintiff paid the full $238, 500 by wire transfer, even though Defendant “only requested a 25% deposit.” (docs. 17 at 5, 10; 21 at 3, 7.)

         On July 30, 2015, Plaintiff advised Defendant of its color preference and requested samples, and Defendant responded that it would be sending color matches. (doc. 21 at 11-12.) Defendant also represented that an individual named James Hock would be coming out in the next few weeks as it began assembly of the carts, and that “[e]verything was moving along well, ” but it was “waiting on caster delivery to complete out all 300 carts.” (Id.) Plaintiff notified Defendant of its color selection on August 19, 2015. (Id. at 10.) On August 26, 2015, Defendant requested Plaintiff's logo information and provided a sample label. (Id.)

         Defendant “produced a First Article cart for [Plaintiff] to review and make changes where allowable in October-November 2015.” (Id. at 4, 7-8, 13-14.) The first article cart was apparently delivered on October 15, 2015, and Plaintiff rejected it because it lacked Federal Aviation Administration (FAA) approval. (Id. at 4, 13-14.) Defendant “decided to try to solve that problem for [Plaintiff] even though it was not part of the original agreement, ” and it had FAA approval and was obtaining “facilities approval” when Plaintiff informed it that the carts also needed Technical Standard Orders (TSO) approval. (Id. at 4.) This change was allegedly unexpected and “occurred after [Defendant was] well down the road to completing the order.” (Id.) Once Plaintiff advised it of what it was requesting in the way of certification, Defendant “tried to accommodate [its] request with the local [Aircraft Certification Office].” (Id.)

         On May 25, 2016, Defendant advised Plaintiff that it had carts ready to ship, but that it was not able to release them yet “due to FAA hold up.” (Id. at 15.) The email stated that Defendant needed Plaintiff's engineer to provide “some drawings and clarification on the galleys of Aircraft - N464MC and N465MC. [It had] the CMM pages provided 25-33-41 but [was] in need of installation data in order to cross reference the STC for the Jamco galley.” (Id.) D e f e n d a n t h a d b e e n in contact with the Boeing Company, but it was not able to answer questions, and Defendant “need[ed] to obtain this information to complete certification required by FAA to install onboard the aircraft.” (Id.) Defendant requested contact information for Plaintiff's Boeing representative and authorization to speak with him so it could “resolve this issue or at least move forward to a resolution.” (Id.) On June 1, 2016, Plaintiff sent Defendant an email stating, “No update on the carts and where are the containers we wanted?” (Id.)

         At some point in 2016, Defendant sent Plaintiff 160 carts that were “were boxed and tagged to go into service” as FAA-compliant “[a]t the insistence of employees of [Plaintiff] being very upset as their company had already paid for the equipment, ” but it was “understood that the carts were not considered airworthy” and were supposed to be stored until FAA approval was granted. (docs. 17 at 5; 21 at 4-5.) The parties do not dispute that the carts were not FAA-compliant, Plaintiff rejected them, and Defendant accepted their return. (docs. 17 at 5; 21 at 4.)

         In May 2017, Plaintiff received a second shipment of 48 carts, which “were certified by the FAA only for use with a Lockheed Martin L-1011 series aircraft, and not the Boeing 747 series aircraft, as specified in the invoice.” (docs. 17 at 5.) Plaintiff informed Defendant of the defect, and Defendant “confirmed that the carts were not certified as FAA compliant for use with Boeing 747 series aircraft.” (Id. at 6.) “Without the proper certification, the carts are unusable by [Plaintiff]”. (Id.) Plaintiff “sought instruction . . . to return the carts, but [Defendant] has not provided the relevant information, following a change in [Defendant's] shipping address.” (Id.)

         On June 22, 2017, Plaintiff sent Defendant a demand for information regarding the status of the order. (doc. 17 at 16.) The demand stated that it had yet to receive any FAA-compliant carts from Defendant, and that Defendant was not being responsive to requests for information. (Id.) It gave Defendant a deadline of June 30, 2017, to provide information about the status of the carts and an acceptable plan to provide the carts in the near term. (Id.) Otherwise, it would declare Defendant in breach of the contract and take legal action. (Id.) Plaintiff avers that it “has not received a single galley cart compliant with the terms of the contract” as of the date of filing its summary judgment motion. (Id. at 6.) Defendant counters that it has “spent an exorbitant amount of time and money in manpower and engineers trying to accommodate a request made by [Plaintiff] after the fact, ” including spending “over $58, 000.00 in custom tooling dies to fabricate the carts.” (doc. 21 at 5.)

         On February 6, 2018, Plaintiff filed its motion for summary judgment on the claims asserted in its complaint. (doc. 16.) It seeks “damages in an amount not less than $238, 500, plus applicable pre-judgment and post-judgment interest.” (Id. at 10.) With a timely filed response and reply, this motion is ripe for determination. (docs. 20; 22.)

         II. ...


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