aviamax aviation ltd v. bombardier aerospace corp complaint

8/7/2019 AVIAMAX AVIATION LTD v. BOMBARDIER AEROSPACE CORP Complaint

1/12

Case 3:08-cv-01958-CFD Document 1 Filed 12/29/08 Page 1 of 12

F \ \ . ~ E D 1 n n ~ {Wf. 2q A q: l\1UNITED STATES D I ~ i r u t T COURTFOR THE DISTRICT OF , G ; O ~ f t G ! ~ f : ~ : T

, ' :- ~ : ~ _or .- - ' ~ : ~ : , T1 Ct.:, "-------------------------------------------------------------- ) (

AVIAMA)( AVIATION LTD., CIVIL ACnONNO. 3: O ~ C V I q5!(C.F6Plaintiff,

vs. DECEMBER 23, 2008BOMBARDIER AEROSPACE CORPORAnON

Defendant.-------------------------------------------------------------- ) (

COMPLAINT

Plaintiff, Aviamax Aviation Ltd., by its attorneys, Gilbride, Tusa, Last & Spellane, as and for itsComplaint ("Complaint"), alleges as follows:

1. Plaintiff, Aviamax Aviation Ltd. ("Aviamax"), is a corporation duly organized under thelaws of the Cayman Islands with its principal place of business located at Boundary Hall, Cricket Square,P.O. Box 1111, Grand Cayman, KY1-1102, Cayman Islands.

2. Upon information and belief, Defendant, Bombardier Aerospace Corporation("Bombardier"), is a corporation organized under the laws of the State ofDelaware, with its principal placeofbusiness located at 3400 Waterview Parkway, Suite 400, Richardson, Texas 75080.

3. Bombardier is licensed and duly authorized to conduct business in the State of Connecticut,maintains a facility in Windsor Locks, Connecticut and delivers many of the aircraft that it builds toConnecticut as well as conducting other significant business in the State ofConnecticut.


2/12


4. This Court has jurisdiction over the controversy pursuant to 28 U.S.C. 1332(a)(2) in thatthe matter in controversy exceeds $75,000 exclusive of interests and costs and is between citizens of a stateand a citizen or subjects of a foreign state.

5. Venue lies in this district pursuant to 28 U.S.C. 1391(a).AS AND FOR A FIRST CLAIM FOR RELIEF

6. A viamax repeats and realleges each and every allegation contained in paragraphs 1 through5 of the Complaint as if set forth in full hereat.

7. A viamax is a company which specializes in aviation.8. By aircraft purchase agreement dated January 30, 2006 ("Agreement") between A viamax

GmbH ("GmbH") and Bombardier, GmbH agreed to purchase a Bombardier Challenger aircraft, modelCL-600, Variant 605, serial number 5716 ("Aircraft"), for $25,850,000.00 with delivery of the completedAircraft to be made on or before October 31, 2007 at Bombardier's facilities in Windsor Locks,Connecticut.

9. On or about March 20, 2007, the Agreement was assigned to Aviamax from GmbH withBombardier's knowledge and express consent.

10. Although Bombardier contracted pursuant to the Agreement to deliver a completed Aircraft,the Agreement provided that the outfitting of the Aircraft was to be subcontracted by Bombardier toMidcoast Aviation Inc. ("Midcoast").

11. Bombardier represented that both Bombardier's own staff and Midcoast had the requiredcertifications and expertise to outfit the Aircraft, and that Midcoast could perform the work in the sametime frame as Bombardier.

2


3/12


12. Based on Bombardier's representations and assurances as to Midcoast's then currentabilities, Aviamax agreed to permit Bombardier to subcontract with Midcoast for the outfitting of theAircraft.

13. In or around March, 2007, Aviamax entered into an agreement with GE Capital SolutionsGmbH & Co., KG ("GE") to finance the purchase of the Aircraft, whereby Aviamax's rights under theAgreement as purchaser of the Aircraft were transferred to GE, in return for GE financing the purchase ofthe Aircraft ("GE Contract"). The GE Contract provided for a lease back of the Aircraft to Aviamax upondelivery.

14. Pursuant to the terms of the GE Contract, all the rights and claims against Bombardier withrespect to the Aircraft and the Agreement were assigned by GE to Aviamax.

15. In February, 2007, Aviamax was informed by Bombardier that the allocated aircraft shallbear the Serial Number 5713 and subsequently asked Bombardier for a different serial number whichBombardier complied with by assigning Serial Number 5716. As a result of this change, Bombardier toldAviamax that delivery would be delayed but only until November 29, 2007. Amendment No.2 to theAgreement between Aviamax and Bombardier, dated as of February 27, 2007 amended the Agreement toprovide for the change in delivery date.

16. Bombardier timely completed the shell and operating systems of the Aircraft and, in oraround May 2007, the Aircraft was delivered by Bombardier in "green" condition to GE and GE acquiredownership of the Aircraft, subject to the GE Contract. It was then delivered by Bombardier to Midcoast forcompletion in accordance with the terms of the Agreement. A "green" aircraft is one where the aircraftshell and operating systems are completed so that it can fly, but the aircraft still requires exterior painting,work on its interior, and outfitting with the particular equipment and furnishings requested by the buyer.

3


4/12


17. Prior to green delivery, Aviamax paid to Bombardier $7,500,000.00 pursuant to theAgreement.

18. Upon delivery of the Aircraft in green condition and the payment of an additional$15,000,000.00 to Bombardier, the ownership of the Aircraft was transferred to Continental Aircraft TrustNo. 1006, a Cayman Islands Trust, beneficially owned by GE.

19. Such ownership transfer was registered with the Federal Aviation Administration ("FAA").20. On or about July 5, 2007, Aviamax entered into a contract to sell the Aircraft to Ranch

Assets Holding Ltd. ("Ranch") for $29,260,000.00 plus interest payments in the amount of$160,000.00 permonth through the day of delivery of the Aircraft ("Resale Contract").

21. Thereafter, Bombardier and Midcoast failed to meet the revised delivery date and thedelivery date was changed to December 20, 2007.

22. Bombardier and Midcoast both knew of the Resale Contract based upon the writtenauthorization provided to them for Ranch's agents to be able to inspect the Aircraft and due to Ranch'semployees regular attendance at Midcoast's facility in St. Louis, Missouri where Midcoast was completingthe green Aircraft and where Bombardier maintained employees.

23. In January, 2008, Bombardier notified Aviamax that delivery of the Aircraft would befurther delayed until July or August, 2008. At this time, Aviamax discovered what Bombardier alreadyknew but had concealed from A viamax, specifically that Midcoast was not duly certified by the FAA andhad not obtained the required approvals and supplemental type certificates ("STC") from the FAA to outfitthe Aircraft or any other Bombardier Challenger 605. Without these approvals and certifications, Midcoastcould not complete the Aircraft.

4


5/12


24. Prior to entering into the Third Amendment to the Agreement ("Third Amendment") onApril 25, 2008, which provided for delivery no later than August 2008, Aviamax asked Bombardier to takethe Aircraft back to its Montreal facility for completion of the work so that timely delivery of thecompleted Aircraft at Windsor Locks, Connecticut could be assured.

25. Upon information and belief, at the time, Bombardier knew that Midcoast also did not havea sufficient work force to do the required work on the Aircraft and the other aircrafts subcontracted byBombardier to Midcoast for outfitting.

26. Bombardier rejected Aviamax's request to move the Aircraft to Bombardier's facility forcompletion, and advised Aviamax that Midcoast could do the work faster than Bombardier and wouldcomplete the work no later than August 2008, even though Bombardier knew at the time of thisrepresentation that Midcoast was not certified and/or had not obtained the necessary approvals and STCs toperform the work and did not have the necessary work force to complete the work.

27. When Aviamax learned of Midcoast's lack of certification, it questioned Bombardier, butBombardier assured Aviamax that the certifications would be forthcoming shortly and that Midcoast'scurrent lack of certification would not further delay the delivery of the Aircraft. Moreover, Bombardiertold Aviamax that it should not inquire with the FAA as to the status of Midcoast's certification as thatcould cause problems for Midcoast and Bombardier with the FAA and result in further delays in thedelivery of the Aircraft.

28. When A viamax specifically questioned Bombardier about the certainty of the delivery datebecause of its importance to Aviamax due to the Resale Contract and other opportunities for the sale of theAircraft, Bombardier represented and promised that the Aircraft would be completed and delivered by July2008, with an absolute outside date of August, 2008.

5


6/12


29. Based upon these representations and promises, which Bombardier knew at the time werefalse, A viamax was induced into signing the Third Amendment which provided that in return for Aviamaxnot canceling the Agreement due to Bombardier's breach, Bombardier would pay a certain amount per dayto Aviamax for the admitted unexcusable delays caused by Bombardier and Midcoast and that Bombardierwould deliver the Aircraft on or before August, 2008.

30. Thereafter, based upon and in reliance upon Bombardier's representations as describedabove, A viamax cancelled the Resale Contract with Ranch on June 6, 2008 and entered into a new contractwith a different purchaser on June 15, 2008 to sell the Aircraft for a price of $34,000,000.00.

31. Bombardier failed to deliver the Aircraft by July 15,2008, as promised, and Aviamax's newpurchaser for the Aircraft canceled its contract with A viamax.

32. Aviamax thereafter, on August 16, 2008, entered into a letter of intent for the sale of theAircraft for $33,500,000, but that purchaser allowed the letter of intent to expire in September, 2008 sincethe Aircraft still was not delivered by Bombardier, nor did it appear at such time that delivery wasimminent.

33. By the time Aviamax lost the new purchasers due to Bombardier's failure to make its newrequired delivery date, the market for the resale of the Aircraft had become significantly depressed suchthat the Aircraft was no longer worth the amount that Aviamax paid to Bombardier, and Aviamax has beenunable to find another buyer.

34. Bombardier made the above-referenced representations regarding Midcoast's certificationand Bombardier being able to deliver the Aircraft by August, 2008, knowing such representations to befalse when made in that, among other things, Bombardier knew that such delivery date was not possiblegiven the work that remained to be done on the Aircraft, Midcoast's continued lack of certification needed

6


7/12


in order to complete such work, and Midcoast's lack of sufficient work force to complete the requiredwork.

35. Upon information and belief, Bombardier had further knowledge of the falsity of the abovedescribed representations because Midcoast had failed to timely deliver several other Bombardier 605aircraft to Bombardier customers due to Midcoast's lack of certification and lack of sufficient work force tocomplete the work.

36. During the same time period, upon information and belief, Midcoast also failed to timelydelivery several Bombardier 850 aircraft with the delivery delays exceeding one year for the same reasonsstated herein.

37. Upon information and belief, despite Bombardier knowing that Aviamax would rely onthese representations in its dealings regarding the Agreement and the Resale Contract, Bombardier madethese representations in order to prevent Aviamax from canceling the Agreement, which would haverequired Bombardier to take the Aircraft back and reimburse approximately $22,500,000.00 paid byA viamax to Bombardier under the terms of the Agreement, and despite Bombardier knowing that A viamaxwould rely on these representations in its dealings regarding the Agreement and the Resale Contract.

38. At the time of the above-referenced representations by Bombardier, Bombardier was awareof the Resale Contract for a higher price than that for which Bombardier had sold the Aircraft to A viamax.

39. Bombardier intended for Aviamax to rely upon the above described representations, andA viamax did so rely to its detriment.

40. Aviamax reasonably relied on Bombardier's representations in canceling the ResaleContract and entering into a new contract and letter of intent with the assurance that Bombardier woulddeliver the Aircraft in August, 2008.

7


8/12


41. Had Bombardier revealed to A viamax that the delivery of the Aircraft would be delayedwell beyond the promised date of August, 2008, it would not have cancelled the Resale Contract whichrequired Ranch to buy the Aircraft regardless of when the Aircraft was delivered, and A viamax would havesold the Aircraft to Ranch.

42. As a result of the foregoing, Aviamax has been damaged in an amount not yet ascertainedbut believed to be in excess of $8,200,000.00.

AS AND FOR A SECOND CLAIM FOR RELIEF43. Aviamax repeats and realleges each and every allegation contained in paragraphs 1 through

41 of the Complaint with the same force and effect as if set forth in full hereat.44. To the extent Bombardier's representations to Aviamax described above were not

intentionally false, such representations were negligent in that Bombardier knew, or should have known inthe exercise of reasonable care, that Midcoast was not certified to complete the work on the Bombardier605 and that the delivery date of August, 2008 was not possible at the time the representations were madegiven the circumstances, including but not limited to the facts that Midcoast was not certified andsignificant work on the Aircraft was still required.

45. Bombardier had a duty to Aviamax based upon the terms of the Agreement to usesubcontractors who were permitted to and able to complete the necessary work in order to timely deliverthe Aircraft, which duty was breached by Bombardier as a result of, among other things, the abovedescribed misrepresentations.

46. As a result of the negligent misrepresentations made by Bombardier to A viamax, which werereasonably relied upon by A viamax, A viamax cancelled the Resale Contract and entered into a new

8


9/12


contract and letter of intent which were thereafter cancelled by the purchaser due to Bombardier's failure todeliver the Aircraft in August, 2008 as promised.


AS AND FOR A THIRD CLAIM FOR RELIEF48. Aviamax repeats and realleges each and every allegation contained in paragraphs 1 through

41 and 43 through 46 of this Complaint with the same force and effect as if set forth in full hereat.49. Upon information and belief, Bombardier was aware at the time it entered into the

Agreement that Midcoast was not certified to conduct the work for which Bombardier recommendedMidcoast to A viamax.

50. Pursuant to the Agreement, Bombardier owed a duty to Aviamax to produce the Aircraftwithin the time frame required under the Agreement and to employ contractors and subcontractors whowere certified to work on the Aircraft and who could complete such work in a timely manner.

51. Upon information and belief, Bombardier was aware that a new certification would berequired by the FAA before Midcoast could perform work on a Bombardier 605 despite existingcertification for a Bombardier 604, since the Canadian equivalent of the FAA had required Bombardier toobtain new certification to complete the Bombardier 605 despite certification on its predecessor, theBombardier 604.

52. Bombardier breached its duty to Aviamax by recommending Midcoast as the subcontractorand continuing to insist that A viamax use Midcoast when Bombardier knew that it would be impossible forMidcoast to timely complete the work on the Aircraft.

9


10/12


53. Bombardier's breach of duty caused significant damage to Aviamax, including the loss ofthe Resale Contract, which loss was reasonably foreseeable.


AS AND FOR A FOURTH CLAIM FOR RELIEF55. Aviamax repeats and realleges each and every allegation contained in paragraphs 1 through

41, 43 through 46, and 48 through 53 of the Complaint with the same force and effect as if set forth in fullhereat.

56. At all times relevant hereto, Bombardier was a person as defined in the Connecticut UnfairTrade Practices Act ("CUTPA"), C.G.S. 42-11O(a)(3).

57. At all times relevant hereto, Bombardier was engaged in trade or commerce within themeaning ofC.G.S. 42-11O(a)(4).

58. Upon information and belief, Bombardier has made similar representations to other aircraftpurchasers and has subcontracted for Midcoast to outfit aircraft for which Midcoast lacked FAAcertification, and has failed to inform purchasers that Midcoast was not an authorized outfitter of theBombardier 605 aircraft, thereby causing significant delays or cancellation of aircraft deliveries inConnecticut of aircraft ordered from Bombardier.

59. Upon information and belief, many, if not all, of the deliveries of these aircraft, includingthe Aircraft, were to be delivered or were delivered late to Windsor Locks, Connecticut, where Bombardieroperates a facility.

10


11/12


60. As a result of Bombardier's improper conduct described above, and improper, fraudulent onegligent misrepresentations, and other improper business practices, Bombardier committed unfair anddeceptive acts or trade practices as defined in C.G.S.42-llO(B).

61. In accordance with C.G.S.42-110(g)(C), a copy of this Complaint is being mailed to theAttorney General and the Commissioner ofConsumer Protection for the State of Connecticut.

62. As a direct and proximate result ofBombardier's conduct, Aviamax has suffered damages inan amount not yet ascertained, but believed to be in excess of $8,200,000.00. In addition, pursuant toCUTPA, Aviamax is entitled to punitive damages in an amount to be determined by the Court, its costs anddisbursements together with its reasonable attorney's fees.

WHEREFORE, A viamax prays as follows:(a) On its first claim for relief against Bombardier in an amount not yet ascertained, but

believed to be in excess of $8,200,000.00.(b) On its second claim for relief against Bombardier in an amount not yet ascertained, but

believed to be in excess of $8,200,000.00.(c) On its third claim for relief against Bombardier in an amount not yet ascertained, but

believed to be in excess of $8,200,000.00.(d) On its fourth claim for relief against Bombardier in an amount not yet ascertained, but

believed to be in excess of $8,200,000.00, together with punitive damages, its costs anddisbursements, and its reasonable attorney's fees for this action.

11


12/12


(e) Its costs and disbursements, including reasonable attorneys' fees, and such other and furtherrelief as this Court deems just and proper.

THE PLAINTIFF

ETT H. LAST, ESQ.lFed Bar # CT07188Gilbride, Tusa, Last & Spellane LLC31 Brookside DrivelP.O. Box 658Greenwich, Connecticut 08636(203) 622-9360

andGilbride, Tusa, Last & Spellane LLC420 Lexington AvenueNew York, New York 10170(212) 692-9666

Its Attorneys

12

aviamax aviation ltd v. bombardier aerospace corp complaint

Documents