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AIRCRAFT GUAR. CORP. v. STRATO-LIFT

July 28, 1997

AIRCRAFT GUARANTY CORPORATION, Plaintiff,
v.
STRATO-LIFT, INC. and KENNETH F. GOODRICH d/b/a K.F. GOODRICH ASSOCIATES, INC., Defendants, VS. BERNARD VAN MILDERS, and BERNARD VAN MILDERS, b.v., Defendants on the Counterclaim.



The opinion of the court was delivered by: JOYNER

 JOYNER, J.

 JULY 28, 1997

 On April 10, 1996, Plaintiff Aircraft Guaranty Corporation ("AGC") filed this lawsuit alleging that Defendants Strato-Lift, Inc. ("SLI") and Kenneth F. Goodrich d/b/a K.F. Goodrich Associates, Inc. ("Goodrich") breached a contract for the sale of a used business jet. The action was removed to the United States District Court for the Southern District of Texas, Houston Division, which granted AGC's Unopposed Motion to Transfer Venue to this Court on July 22, 1996. Subject matter jurisdiction is proper under 28 U.S.C. ┬ž 1332.

  SLI and Goodrich filed their answer to AGC's Amended Complaint on January 6, 1997. In this pleading, SLI and Goodrich also asserted breach of contract, misrepresentation and estoppel counterclaims against Plaintiff AGC and two additional parties, Mr. Bernard Van Milders ("Van Milders") and Bernard Van Milders, b.v. ("BVM"). *fn1" Van Milders and BVM moved to dismiss the counterclaims for lack of personal jurisdiction pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure on March 21, 1997. According to a stipulation of the parties, we have deferred ruling on the instant motion to allow Mr. Van Milders' deposition to be completed and additional relevant materials to be submitted for our consideration. For the reasons stated below, we decide today that the motion must be denied.

 BACKGROUND

 Van Milders is a resident of Antwerp, Belgium, and owner of BVM, a Belgian company that buys, sells and leases airplanes. In late 1995, Van Milders learned of a potential customer's interest in purchasing an "as good as new" Cessna Citation or Citation II business jet. In mid-December 1995, Van Milders enlisted Mr. Connie Wood ("Wood"), the President of AGC--a Delaware corporation with its principal place of business in Houston--to locate a plane suitable for resale to this customer. Wood, who was then working out of AGC's office in Germany, and Van Milders executed no written agency or joint venture agreement at this time.

 The first plane located by Wood was a Cessna Citation II, serial number 550-0716 (the "Cessna 716"), owned by Mr. Bruce Taylor ("Taylor") of Penn-Aire Aviation, Inc. ("Penn-Aire") in Franklin, Pennsylvania. Wood and Van Milders initiated contact with Taylor and Penn-Aire and negotiations ensued, but their eventual offer to purchase the Cessna 716 was not accepted.

 As negotiations for the Cessna 716 faltered, Wood and Van Milders became interested in a Cessna Citation II, serial number 550-0725 (the "Cessna 725"), owned by SLI, a Pennsylvania corporation with its principal place of business in Morgantown, Pennsylvania. *fn2" Wood made an initial inquiry regarding the Cessna 725 on December 18, 1995, via fax to Kenneth Goodrich, whom SLI had retained to broker the sale of the jet. Goodrich was then doing business as K.F. Goodrich and Associates, Inc., a dissolved corporation formerly incorporated in Connecticut. Wood's fax indicated that he was inquiring on behalf of an unidentified trust client, later identified as BVM. Goodrich and Wood then exchanged a series of faxes over the next few days between Goodrich's office in Connecticut and Wood's office in Germany regarding the Cessna 725. On December 27, 1995, Wood faxed an offer to Goodrich in which AGC, "on behalf of [its] trust client, Bernard Van Milders B.V." agreed to purchase the plane for $ 3,500,000, subject certain conditions. This fax, which is signed by Wood and Goodrich and does not identify SLI as the Cessna 725's owner, is the contract sued on in this case.

 Neither Van Milders nor Wood ever communicated directly with SLI (or anyone in Pennsylvania) at any point during the Cessna 725 negotiations and, in fact, Van Milders never even spoke directly to Goodrich. Nonetheless, Goodrich states that "there is no question that AGC was told, orally and in writing that the [Cessna 725] which it was buying as Van Milders' agent was owned by [SLI] ... and was located in Pennsylvania." Goodrich Declaration, App. in Supp. of Defs.' Opp'n. to Mot., Tab 4, P 10. Goodrich explains that "it is [his] usual practice to disclose the identity of the seller and location of the airplane" and that he "know[s]" that he did so orally on several occasion in this case. Id. at PP 4, 9. Goodrich also points to the following written correspondence: two faxes sent to Wood indicating that the Cessna 725 "spent time in" Pennsylvania and Florida; a Cesscom 10-Aircraft Status report faxed to Wood on December 19, 1995, identifying SLI as the plane's owner; a December 27, 1995, fax referring to Jim Ridings (of SLI) as the plane's owner; and a December 30, 1995, fax to Wood stating that the plane would be flown from Pennsylvania to the prepurchase inspection facility. Goodrich also states that he and Wood had a conversation regarding the cost of this flight. Id. at P 10.

 As we explain in our previous Memorandum in this matter, see 951 F. Supp. at 76, AGC filed this lawsuit after disputes arose concerning the scope and duration of the prepurchase inspection (which occurred in Alabama) prompting SLI to terminate the inspection. AGC filed the suit-- even though Wood negotiated and entered into the contract on behalf of BVM--as a result of two agreements it has with BVM. The first is a Joint Venture & Agency Agreement (the "Joint Venture Agreement") which authorizes Wood "to act as agent in those matters necessary to execute the purchase of [Cessna 716 or Cessna 725] (or other aircraft mutually designated)...." This agreement authorized Wood, inter alia, to spend or obligate money and sign "necessary sales contract documents for the purchase on behalf of [BVM]...." The cost of all monies expended was to be shared equally by AGC and BVM, "with the exception of the provisioning and interest cost of the monies for payment of the final purchase price of the aircraft which shall be the responsibility of [BVM]." AGC and BVM would also share equally in any profits generated by the syndication or sale of the purchased aircraft.

 The second agreement assigns to AGC all of BVM's rights against SLI and Goodrich for the alleged breach of contract. This agreement (the "Assignment Agreement") was strictly an oral understanding between Wood and Van Milders until sometime in the spring of this year, approximately one year after AGC instituted this action, when the agreement was reduced to writing. In the written Assignment Agreement, retroactively made effective March 1, 1996, "BVM ... assigns to AGC all rights and claims held by each of them to recover against any parties who may be liable for damages, in tort or in contract, in connection with the breach of the agreement to purchase the [Cessna 725] from [SLI]." No mention is made either of (1) any assignment of liabilities or (2) the oral agreement that both Wood and Van Milders testified to in their depositions that BVM would share equally in any recovery obtained by AGC.

 DISCUSSIO ...


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