United States District Court, D. Vermont
OPINION AND ORDER GRANTING IN PART AND DENYING IN
PART COUNTER-DEFENDANT MANSFIELD HELIFLIGHT, INC.'S AND
THIRD-PARTY DEFENDANT ERIC D. CHASE'S MOTION TO DISMISS
CHIRISTINA REISS, CHIEF JUDGE.
Heliflight, Inc. ("Mansfield") initially brought
this action against Freestream Aircraft USA, Ltd.
("Freestream") and Rudolph Melk, Jr. ("Mr.
Melk") alleging six state-law causes of action arising
out of the disputed purchase and sale of a Gulfstream IV jet
("the Aircraft"). On December 7, 2016, the court
denied Freestream's motion to dismiss. See Mansfield
Heliflight, Inc. v. Freestream Aircraft USA, Ltd., 2016
WL 7176586 (D. Vt. Dec. 7, 2016) ("Mansfield
Heliflight F). Freestream thereafter served an Answer,
Counterclaims, Crossclaim, and Third-Party Complaint in
Response to the Complaint ("Counterclaims") (Doc.
35) against Mansfield and Eric D. Chase (collectively, the
"Mansfield Defendants"). The Counterclaims allege
the following causes of action: tortious interference with
contract, tortious interference with a prospective business
relationship, promissory estoppel, and defamation. Freestream
also seeks common law indemnification from Mr. Melk.
before the court is the Mansfield Defendants' March 6,
2017 motion to dismiss for failure to state a claim. (Doc.
41.) Freestream opposes the motion and requests leave to
amend in the event the court grants any part of the motion.
Following oral argument on June 30, 2017, the court took the
pending motion under advisement.
Mansfield Defendants are represented by Benjamin H. Klein,
Esq. Freestream is represented by Patrick J. Rohan, Esq.,
Jonathan R. Voegele, Esq., Richard B. Drubel, Esq., and
Courtney R. Rockett, Esq.
Factual Background and Procedural History.
following facts are derived from the allegations in
Freestream's Counterclaims. Freestream is a New Jersey
corporation with its principal place of business in
Teterboro, New Jersey. Mansfield is a Vermont corporation
with its principal place of business in Milton, Vermont. Mr.
Chase is Mansfield's President and resides in Burlington,
about July 21, 2015, an entity allegedly affiliated with Mr.
Melk known as Lima Mike Bravo, LLC ("LMB") agreed
to purchase the Aircraft from Punj Lloyd Limited
("PLL"), an India-based aircraft seller (the
"LMB Purchase Agreement"). A second contract
provided for the Aircraft's resale (the "Resale
Agreement") by LMB to an unnamed buyer represented by
Freestream (the "resale buyer"). A third contract
provided that the resale buyer would pay Freestream a
commission in exchange for securing its right to purchase the
Aircraft (the "Commission Agreement"). At the time,
the Mansfield Defendants had knowledge of all three
agreements because an Indian broker in New Delhi had kept
them apprised of the status of any deal involving the
Aircraft. Thereafter, the Mansfield Defendants allegedly
"concocted various schemes with [Mr.] Melk" to
purchase the Aircraft and resell it to a buyer other than
Freestream's resale buyer. (Doc. 35 at 31, ¶ 249.)
about August 2, 2015, Mansfield entered into an agreement to
purchase the Aircraft from PLL (the "Mansfield Purchase
Agreement")- Two days later, Mr. Melk filed a Federal
Aviation Administration ("FAA") lien against the
Aircraft for over $400, 000 related to repairs, expenses, and
inspections he purportedly performed. Freestream was
allegedly unaware of Mr. Melk's intention to file the FAA
lien and took no part in the decision to file it.
in early August 2015, Freestream's Executive Vice
President, Connie Marrero, was informed by the escrow agent
holding the resale buyer's non-refundable deposit on the
Aircraft that there was an open file on the Aircraft by Leda
Francis, an escrow agent with Jetstream Escrow & Title
Service, Inc. ("Jetstream"). On or about August 14,
2015, Ms. Marrero contacted Ms. Francis, who stated that
Jetstream held a refundable deposit for the purchase of the
Aircraft. Ms. Francis did not disclose the identity of the
parties to the deal. Ms. Marrero told Ms. Francis that if Ms.
Francis's buyer wanted to contact her to discuss the
matter, the buyer could do so.
August 19, 2015, Mansfield's Chief Financial Officer and
Director of Sales, Tina Lindberg, contacted Ms. Marrero and
was "dismayed to learn" that Freestream and the
resale buyer had entered into a "pre-buy" deal,
that the resale buyer's deposit was non-refundable, and
that the deal was nearer to closing than Mansfield's
deal. Id. at 33, ¶ 261. Ms. Lindberg stated to
Ms. Marrero that the deposit in Mansfield's deal was
refundable, and confirmed that "the deal was not even
close to closing." Id. Ms. Lindberg then
attempted to persuade Ms. Marrero to pay Mansfield to
"walk away" from its planned purchase of the
Aircraft. Id. at 33, ¶ 262. Ms. Marrero refused
and referred Ms. Lindberg to Mr. Melk because Freestream was
merely representing the resale buyer. Ms. Lindberg then
informed Ms. Marrero that Mansfield would terminate its deal
if Mr. Melk agreed to pay Mansfield. On or about the
following day, after negotiating with Mr. Melk, the Mansfield
Defendants promised to terminate the Mansfield Purchase
Agreement. However, they did not fulfill that promise.
about August 25, 2015, the Mansfield Defendants "falsely
stated that Freestream had filed a fraudulent lien with the
FAA on the [Aircraft]." Id. at 34, ¶ 264.
These false statements took the form of written and spoken
communications to PLL, to Mansfield's escrow agent, and,
upon information and belief, to a prospective resale buyer
the Mansfield Defendants had identified. Freestream
characterizes these alleged statements as a "false,
unsubstantiated, and defamatory allegation of an unlawful act
perpetrated on a federal agency" which "surpasses
the norms of even the most rough-and-tumble of
industries." Id. Freestream alleges that the
business jet market consists of "an especially
tight-knit community of buyers, sellers, and interconnected
service providers" and that a market participant's
reputation is critical to its success. Id. at 34,
¶ 265. Freestream further asserts that while it had a
longstanding good reputation in the business jet market, the
Mansfield Defendants' communications to other market
participants that Freestream filed a fraudulent FAA lien
harmed its reputation. At some point during this time period,
the LMB Purchase Agreement failed to close. The resale buyer
represented by Freestream was left with "hundreds of
thousands of dollars in losses" as a result.
Id. at 34, ¶ 266.
about September 25, 2015, the Mansfield Defendants and Mr.
Melk allegedly met in Vermont and "agreed to leave
Freestream and its buyer in the cold so they could resell the
aircraft to some other buyer." Id. at 35,
¶ 267. However, PLL did not close a deal with the
Mansfield Defendants and Mr. Melk. As a result, PLL
"soured on their antics and refused to deal with either
of them." Id. at 35, ¶ 269.
about early October of 2015, PLL sold the Aircraft to
Freestream which, in turn, resold the Aircraft to Blackjet
LLC ("Blackjet") on or about October 28, 2015.
Blackjet was not affiliated with any prior deal involving Mr.
Melk or the Mansfield Defendants. Freestream earned a
commission as a result of this sale. Mr. Melk "was paid
some amount" for mechanical services and out-of-pocket
expenses incurred in connection with rendering the Aircraft
flightworthy and ferrying it to the United States.
Id. at 10, ¶ 79.
Conclusions of Law and Analysis.
Standard of Review.
to Fed.R.Civ.P. 12(b)(6), the Mansfield Defendants move to
dismiss Freestream's Counterclaims for failure to state a
plausible claim for which relief can be granted. Ms. Lindberg
filed a declaration in support of the motion (the
"Lindberg Declaration") wherein she avers that on
August 17, 2015 she was copied as a recipient of an email
sent by PLL's President of Projects Monitoring which
attached "a fully executed copy of the Aircraft Purchase
and Sale Agreement between Punj Lloyd Limited and Lima Mike
Bravo, LLC." (Doc. 41-1 at 1.) The Mansfield Defendants
argue that § 1.3.1 of that document reveals that the LMB
Purchase Agreement, by its terms, had not closed by the time
the Mansfield Purchase Agreement was executed. They contend
the court may consider the Lindberg Declaration and the
document attached thereto because Freestream "refers
directly to the agreement between PLL and the Melk-affiliated
entity in its complaint[.]" (Doc. 41 at 14 n.4.)
considering a motion under Fed.R.Civ.P. 12(b)(6) to dismiss a
complaint for failure to state a claim on which relief can be
granted, the district court is normally required to look only
to the allegations on the face of the complaint."
Roth v. Jennings, 489 F.3d 499, 509 (2d Cir. 2007).
While "[d]ocuments that are attached to the complaint or
incorporated in it by reference are deemed part of the
pleading and may be considered[, ]" id.,
"[consideration of extraneous material in judging the
sufficiency of a complaint is at odds with the liberal
pleading standard of Fed. R Civ. P. 8(a)(2)[.]"
Chambers v. Time Warner, Inc., 282 F.3d 147, 154 (2d
Cir. 2002). For this reason, before a court may consider a
document that is purportedly "integral" to, but not
attached to or incorporated by reference in, the complaint,
"it must be clear on the record that no dispute exists
regarding the authenticity of the document." DiFolco
v. MSNBC Cable L.L.C, 622 F.3d 104, 111 (2d Cir. 2010)
(quoting Faulkner v. Beer, 463, F.3d 130, 134 (2d
Cir. 2006)) (internal quotation marks omitted); see
also 35B C.J.S. Federal Civil Procedure § 856
(commenting that "[i]n considering motions to dismiss a
claim, primarily, the court will, for the purpose of the
motion, consider the allegations in the complaint. .. and
documents whose contents are alleged in the complaint and
whose authenticity no party questions but which are not
physically attached to the pleading").
standard for consideration of matters outside the
Counterclaims is not satisfied in this case. Freestream does
not concede the authenticity of the document attached to the
Lindberg Declaration, and maintains that discovery is
required to establish the precise terms of the LMB Purchase
Agreement. When presented with such extraneous material,
"Rule 12(b) afford[s] two options" to the court:
"exclude the extrinsic document" or
"convert the motion to one for summary judgment and give
the parties an opportunity to conduct appropriate discovery
and submit the additional supporting material contemplated by
Rule 56." Chambers, 282 F.3d at 154. As this
case is in a nascent phase, the court declines to convert the
pending motion into a motion for summary judgment. The
document attached to the Lindberg Declaration (Doc. 41-2)
will therefore not be considered in determining whether
dismissal is appropriate.
adjudicating a motion pursuant to Fed. R Civ. P. 12(b)(6),
the court is "guided by '[t]wo working
principles[.]'" Harris v. Mills, 572 F.3d
66, 72 (2d Cir. 2009) (quoting Ashcroft v. Iqbal,556 U.S. 662, 678 (2009)) (alteration in original). First,
"a court must accept as true all of the [factual]
allegations contained in a complaint[, ]" a
"tenet" that is, however, "inapplicable to
legal conclusions." Iqbal, 556 U.S. at 678.
Second, "only a complaint that states a plausible claim
for relief survives a motion to dismiss" and a claim
"has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged." Id. at ...