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Wumac, Inc. v. Eagle Canyon Leasing, Inc.

United States District Court, D. Nevada

March 5, 2015

WuMAC, INC., Plaintiff,
v.
EAGLE CANYON LEASING, INC., Defendant.

ORDER

LARRY R. HICKS, District Judge.

Before the Court is Defendant Eagle Canyon Leasing, Inc.'s ("Eagle") Motion for Summary Judgment. Doc. #49.[1] Plaintiff WuMac, Inc. ("WuMac") filed an Opposition (Doc. #52), to which Eagle Replied (Doc. #55). Also before the Court is WuMac's Motion to Strike an exhibit included in Eagle's Motion for Summary Judgment. Doc. #54. Eagle filed an Opposition (Doc. #56), to which WuMac Replied (Doc. #59).

I. Facts and Background

On June 18, 2008, Eagle entered into a Aircraft Purchase Agreement ("APA") to purchase a Canada Regional Jet ("CRJ") aircraft with the serial number 7471 from Atlanta Jet, Inc. ("Atlanta Jet") for $19.2 million. Doc. #49 at 4. The contract specified that Atlanta Jet was to deliver CRJ 7471 fully converted for private use, and that Flying Colours, Inc. ("Flying Colours") would perform the conversion work. Id. Eagle states that when it formed this contract, it was unaware that CRJ 7471 was owned by WuMac. Id. On June 19, 2008, Atlanta Jet and WuMac entered into an APA whereby WuMac would sell CRJ 7471 to Atlanta Jet for $18.3 million. Id. at 5. The contract provided that WuMac would deliver CRJ 7471 fully converted for private use, and Flying Colours would perform the conversion work. Id.

Both of these contracts provided for a "target Delivery Date of on or about October 15, 2008 or such other date as may be mutually agreed upon by both parties in writing." Id. at 6; id., Ex. 7 at ECL00039; id., Ex. 10 at PLF711. Both contracts also provided that the third deposit on the purchases would be paid once the selling party provided the purchasing party with a 90 Day Notice that the aircraft would be completed by a certain date. Id. at 7; id., Ex. 7 at ECL00038; id., Ex. 10 at PLF710-11. On August 11, 2008, WuMac delivered the 90 Day Notice to Atlanta Jet, which then delivered the 90 Day Notice to Eagle. Id. at 6. The 90 Day Notice stated that the anticipated delivery was November 15, 2008, "which should include all necessary test flights and operational review." Id .; see id., Ex. 13. After Eagle Senior Vice President Norm Freeman ("Freeman") expressed concerns about the delay, Atlanta Jet President Rick Steelman ("Steelman") responded that "a small variance in delivery date is standard in the industry hence the on or about' language mentioned in our agreement." Id. at 8; see id., Ex. 16. The aircraft was not converted and delivered by August 9, 2009, because Flying Colours was unable to obtain the required Federal Aviation Administration ("FAA") certifications for the aircraft's modifications by that date. Id. On November 25, 2008, Eagle notified Atlanta Jet that it was in default and that Eagle was terminating their contract. Id. The FAA certified the modifications to CRJ 7471 on April 28, 2009. Id., Ex. 35. WuMac subsequently tendered the aircraft to Atlanta Jet on July 2, 2009, and Atlanta Jet tendered the aircraft to Eagle on August 4, 2009. Id. Having previously stated its intent to terminate the contract, Eagle rejected Atlanta Jet's tender. Id.

Eagle filed suit against Atlanta Jet, requesting the return of $2.25 million that Eagle had spent in deposits for the aircraft on December 4, 2008. Id. at 9. This action was subsequently consolidated with an action filed by Atlanta Jet against Eagle and WuMac in the Northern District Court in Georgia. Id. at 10. All parties were voluntarily dismissed from this action under Federal Rule of Civil Procedure 41. See id., Ex. 25. On September 30, 2010, Atlanta Jet filed for Bankruptcy under Chapter 7 of the United States Code. Id. Eagle pursued payment from Atlanta Jet through the bankruptcy court, and the parties ultimately reached a settlement. Id.

WuMac filed suit against Eagle on June 1, 2012, alleging causes of action for breach of contract on multiple theories, promissory estoppel, and quantum meruit. Doc. #1. On February 14, 2013, the Court granted Eagle's Motion to Dismiss in part, dismissing WuMac's claims for promissory estoppel and quantum meruit. Doc. #30 at 7. Eagle filed its Motion for Summary Judgment on July 25, 2014 (Doc. #49), and WuMac filed its Motion to Strike on August 22, 2014 (Doc. #54).

II. Legal Standard

Summary judgment is appropriate only when the pleadings, depositions, answers to interrogatories, affidavits or declarations, stipulations, admissions, and other materials in the record show that "there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). In assessing a motion for summary judgment, the evidence, together with all inferences that can reasonably be drawn therefrom, must be read in the light most favorable to the party opposing the motion. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Cnty. of Tuolumne v. Sonora Cmty. Hosp., 236 F.3d 1148, 1154 (9th Cir. 2001). A motion for summary judgment can be complete or partial, and must identify "each claim or defense-or the part of each claim or defense-on which summary judgment is sought." Fed.R.Civ.P. 56(a).

The party moving for summary judgment bears the initial burden of informing the court of the basis for its motion, along with evidence showing the absence of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). On those issues for which it bears the burden of proof, the moving party must make a showing that no "reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). On an issue as to which the nonmoving party has the burden of proof, however, the moving party can prevail merely by demonstrating that there is an absence of evidence to support an essential element of the non-moving party's case. Celotex, 477 U.S. at 323.

To successfully rebut a motion for summary judgment, the nonmoving party must point to facts supported by the record that demonstrate a genuine issue of material fact. Reese v. Jefferson Sch. Dist. No. 14J, 208 F.3d 736, 738 (9th Cir. 2000). A "material fact" is a fact "that might affect the outcome of the suit under the governing law." Liberty Lobby, 477 U.S. at 248. Where reasonable minds could differ on the material facts at issue, summary judgment is not appropriate. See v. Durang, 711 F.2d 141, 143 (9th Cir. 1983). A dispute regarding a material fact is considered genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Liberty Lobby, 477 U.S. at 248. The mere existence of a scintilla of evidence in support of the party's position is insufficient to establish a genuine dispute; there must be evidence on which a jury could reasonably find for the party. See id. at 252. "[S]peculative and conclusory arguments do not constitute the significantly probative evidence required to create a genuine issue of material fact." Nolan v. Cleland, 686 F.2d 806, 812 (9th Cir. 1982).

III. Discussion

A. Motion to Strike

WuMac moves to strike a letter attached as Exhibit 21 to Eagle's Motion for Summary Judgment because it "constitutes a communication between Plaintiff's counsel and counsel for a party in a separate action then being conducted in Georgia." Doc. #54 at 2. Eagle argues that the letter should not be stricken because nothing in the letter indicates that it was meant as part of settlement negotiations, and Rule 408 therefore does not apply. Doc. #56 at 3. The letter from WuMac counsel Marilyn Mistretta ("Mistretta") to Atlanta Jet counsel Adam Katz states: "The only agreement to which WuMAC is a party is the purchase agreement between it, as seller, ...


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