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My Canary LLC v. Cessna Aircraft Co.

United States District Court, N.D. Illinois, Eastern Division

January 18, 2017

My Canary LLC and Chicago Aviation, Inc., Plaintiffs,
v.
Cessna Aircraft Company, Textron Aviation, Cessna Service Direct, LLC, d/b/a Mesa Citation Service, SusieAir, LLC, and Scott Bender, Defendants.

          MEMORANDUM OPINION AND ORDER

          MANISH S. SHAH, UNITED STATES DISTRICT JUDGE

         My Canary LLC and Chicago Aviation, Inc. bring various contract and tort claims against defendants Cessna Aircraft Company, Textron Aviation, Cessna Service Direct, LLC, (d/b/a Mesa Citation Service), SusieAir, LLC, and Scott Bender arising out of the allegedly botched sale of a Cessna Mustang aircraft. The Cessna defendants (Cessna Aircraft, Textron Aviation, and Mesa) move to dismiss plaintiffs' second amended complaint for lack of personal jurisdiction, for improper venue, and for failure to state a claim. For the following reasons, the motion to dismiss is granted in part.

         I. Background

         The following allegations are taken from the plaintiffs' second amended complaint. [60].[1] In May 2014, SusieAir, LLC, engaged a broker, Chicago Aviation, Inc., to sell a Cessna Mustang 510 aircraft. In early June 2014, My Canary LLC made an offer to purchase the Mustang. Chicago Aviation communicated the offer to SusieAir through Scott Bender, SusieAir's principal. My Canary and SusieAir entered into an aircraft purchase agreement on June 13, 2014. The agreement provided for a closing date of June 25, 2014, and provided that the sale was contingent on the results of a pre-purchase inspection of the aircraft-called a “pre-buy survey”-at My Canary's expense. My Canary could accept the inspection results, subject to SusieAir's obligation to correct any discrepancies, or could reject the aircraft and cancel the agreement. Bender also agreed to pay Chicago Aviation a 1% commission of the Mustang's gross sale price of $1.7 million. My Canary paid a deposit into escrow and arranged financing to purchase the plane. Cessna Service Direct, LLC, d/b/a Mesa Citation Service (Mesa) represented to My Canary that it would perform the inspection on its behalf. Mesa began conducting the pre-buy survey of the Mustang in Mesa, Arizona, on June 18, 2014.

         Unbeknownst to My Canary and Chicago Aviation, however, SusieAir had already entered into a contract with Cessna Aircraft Company in or around May 2014. Under the terms of this deal, SusieAir would purchase a Cessna Citation M2 aircraft from Cessna and would trade-in the Mustang to reduce the Citation's price. SusieAir would also receive a discount off the Citation's sales price if the sale was completed by June 27, 2014, the end of Cessna's fiscal quarter. While Mesa was conducting the pre-buy survey for My Canary, SusieAir was communicating with Cessna Aircraft and Textron Aviation (Cessna Aircraft's parent company) about trading in the Mustang for the Citation. Mesa, Textron Aviation, and Cessna Aircraft were aware of SusieAir's deal with My Canary.

         While Mesa was conducting the pre-buy survey, it discovered what appeared to be corrosion within the Mustang's engines. On June 23, 2014, a Cessna engineer specializing in Mustang models advised Mesa that the only way to determine the seriousness of the corrosion (to determine whether it was a discrepancy under the purchase agreement) was to partially dismantle the engines. Mesa communicated this information to SusieAir and estimated that the work would cost around $1, 100 to $1, 300 to perform. SusieAir did not inform My Canary about the work necessary to determine whether corrosion constituted a deficiency under their agreement. The next day, a Mesa maintenance supervisor told one of My Canary's principals that he had been instructed by a Cessna representative to stop cooperating with My Canary because Cessna had purchased the Mustang. On June 25, 2014, the contractual closing date, SusieAir sent My Canary notice that it was canceling the agreement because My Canary had missed the deadline to close. Additional inspections of the Mustang performed a few days later revealed that the corrosion was only in the “layers” of the engine and would not have required significant repair.

         My Canary, Chicago Aviation, and Richard Bodee (Chicago Aviation's principal) brought suit against Cessna Aircraft, Textron Aviation, SusieAir, and Bender in the District of New Jersey. [1]. The complaint was dismissed without prejudice for inadequate allegations as to diversity of citizenship. [23]; [24]. The plaintiffs filed an amended complaint, adding Mesa as a defendant, [30], and the defendants filed motions to dismiss. [33]; [34]. The court ordered the parties to show cause why the case should not be transferred under 28 U.S.C. § 1404(a) to the District of Kansas or the Northern District of Illinois. [40]. While briefing the issue, My Canary, Chicago Aviation, SusieAir, and Bender agreed that, with the exception of Mesa's pre-buy survey in Arizona, the parties appeared to have largely communicated with each other through phone, e-mail, or mail from their respective locations: SusieAir and Bender in Texas, Cessna Aircraft and Textron Aviation in Kansas, Chicago Aviation in Illinois, and My Canary in New Jersey. [42] at 6; [44] at 4. My Canary also stated that its sole Illinois principal is a silent partner who played no part in the transactions at issue in this case. [42] at 5. The court transferred the case from New Jersey to this district, finding that plaintiffs My Canary, Chicago Aviation, and Bodee were all Illinois citizens, that Bodee and Chicago Aviation were contacted in Illinois by My Canary, that Bodee and Chicago Aviation contacted SusieAir from Illinois through Bender, that the negotiations concerning the purchase of the airplane were conducted through Bodee in Illinois, and that the plaintiffs were asserting a violation of the Illinois Consumer Fraud Act. [45]; [46].

         After the case was transferred, the plaintiffs filed a second amended complaint, which dropped Bodee as a plaintiff. This second amended complaint brought several claims against the Cessna defendants: breach of contract, breach of implied covenant, and fraud claims against Mesa, and tortious interference and conspiracy claims against Cessna Aircraft, Textron Aviation, and Mesa. [60]. The Cessna defendants now move to dismiss the case for lack of personal jurisdiction, for improper venue, and for failure to state a tortious interference claim.

         II. Personal Jurisdiction

         A. Legal Standards

         Federal Rule of Civil Procedure 12(b)(2) governs dismissals based on lack of personal jurisdiction. Plaintiffs have the burden of establishing personal jurisdiction, and where, as here, the issue is raised by a motion to dismiss and decided on the basis of written materials rather than an evidentiary hearing, the plaintiffs need only make a prima facie showing of jurisdictional facts. Tamburo v. Dworkin, 601 F.3d 693, 700 (7th Cir. 2010). At this stage, all well-pleaded facts alleged in the complaint are taken as true and any factual disputes are resolved in plaintiffs' favor. Id. Where no federal statute authorizes nationwide service of process, personal jurisdiction is governed by the law of the forum state. Fed.R.Civ.P. 4(k)(1)(A); Tamburo, 601 F.3d at 700. Because the Illinois long-arm statute permits the exercise of jurisdiction to the full extent permitted by federal due process, here the state statutory and federal constitutional inquiries merge, Tamburo, 601 F.3d at 700, and a court may exclusively analyze federal due process limitations on personal jurisdiction. Kipp v. Ski Enter. Corp. of Wis., Inc., 783 F.3d 695, 697 (7th Cir. 2015).

         B. Analysis

         The plaintiffs assert that both general and specific jurisdiction exists over the Cessna defendants (Cessna Aircraft, Textron Aviation, and Mesa). General jurisdiction exists only when the defendant's affiliations with the forum state “are so constant and pervasive ‘as to render [it] essentially at home in the forum State.'” Daimler AG v. Bauman, 134 S.Ct. 746, 751 (2014) (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)). For an individual, the “paradigm forum” for general jurisdiction is the individual's domicile; for a corporation, it is the place of incorporation and principal place of business. Id. at 760 (citing Goodyear, 564 U.S. at 924). Specific jurisdiction exists when “the defendant's suit-related conduct creates a substantial connection with the forum State.” Walden v. Fiore, 134 S.Ct. 1115, 1121 (2014). Personal jurisdiction is a claim-specific inquiry, and a plaintiff bringing multiple claims must establish specific jurisdiction for each claim. Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 275 (5th Cir. 2006) (citing 5B Wright & Miller Fed. Prac. & Proc. Civil § 1351 n.30 (3d ed. 2004)).

         a. ...


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