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Peregrine Falcon LLC v. Piaggio America, Inc.

United States District Court, D. Idaho

August 24, 2016

PEREGRINE FALCON LLC, Trustee of the Peregrine Falcon Leasing Trust, and FAST ENTERPRISES, LLC, a New York limited liability company, Plaintiffs,
PIAGGIO AMERICA, INC, a Delaware corporation, and CHARLIE BRAVO AVIATION, LLC, a Texas limited liability company, Defendants.


          B. Lynn Winmill Chief Judge


         The Court has before it a Motion to Dismiss (Dkt. 7) from defendant Piaggio America, Inc., as well as a Motion to Dismiss (Dkt. 18) filed by defendant Charlie Bravo Aviation, LLC (“CBA”), both asserting a lack of personal jurisdiction in the District of Idaho. Alternatively, both Piaggio and CBA seek to compel arbitration of the dispute. CBA further seeks a change of venue.


         This case arises from the sale of a personal aircraft, and the plane's subsequent crash in Springfield, Illinois. Plaintiffs Peregrine and Fast Enterprises bring contract and tort claims against defendants Piaggio and CBA for the manufacture and sale of the allegedly defective aircraft. Litigation was initially filed in the Fourth Judicial District of the State of Idaho, for the County of Ada, but was removed to this Court under diversity jurisdiction, as provided in 28 U.S.C. § 1332. See generally Notice of Removal at 4, Dkt. 1.

         At the heart of this claim is a somewhat complex network of business entities. Piaggio is a Delaware corporation with its principal place of business in West Palm Beach, Florida. Piaggio Def's Br. at 3, Dkt. 7. CBA is a Texas limited liability company with its principal operations in Georgetown, Texas. CBA Def's Br. at ¶ 14, Dkt. 18-1. Fast Enterprises is a New York limited liability company whose principal office is in Greenwood Village, Colorado, but has operations and agents in Boise, Idaho. Am. Compl. at ¶ 2, Dkt. 1-3. Peregrine is an Idaho trust established and existing under the laws of the State of Idaho, which is principally located in Boise, Idaho. See Am. Compl. at ¶ 1, Dkt. 1-3.

         On December 21, 2012, CBA entered into a sales agreement (Agreement No. 1) to purchase a custom-built P. 180 Avanti II aircraft manufactured by Piaggio. See Piaggio/CBA Agreement, Dkt. 7-1. Agreement No. 1 was signed for Piaggio by John M. Bingham, who was identified in the agreement as “President & CEO.” Id. René Banglesdorf signed for CBA and was identified as a “Managing Member.” Id. Section 7, paragraph D of the agreement stated that “any controversy or claim between the parties arising out of or relating to this Agreement, or the breach thereof, shall be governed by Florida law and settled by arbitration in Miami, FL. . . .” Id.

         Also on December 21, 2012, CBA contracted to sell the Plane to Fast Enterprises (“Agreement No. 2). See generally Decl. James Harrison, Exhibit 1-CBA/Fast Agreement, Dkt. 32-1. Once again, Banglesdorf signed for CBA under her title of “Managing Member, ” whereas James Harrison Dated: behalf of Fast Enterprises under the designation of “Point of Contact.” Id. Notably, Harrison hand-wrote his address as located in Boise, Idaho. Id. Like Agreement No. 1 above, Agreement No. 2 included an identical choice of law and arbitration clause that required the application of Florida law and mandated arbitration in Miami, Florida. Id.

         Manufacturing delays on the part of Piaggio pushed back the date of delivery. See First Amendment Sales Agreement, Dkt. 7-2. On September 23, 2013, Piaggio, CBA, and Fast Enterprises all signed a First Amendment Sales Agreement (“First Amendment”), which acknowledged the existence of both Agreement No. 1 and Agreement No. 2, and expressly stated that all three parties were involved in a “back to back transaction.” Id. The First Amendment set forth that the manufacturing delays “directly impact FAST ENTERPRISES, making FAST ENTERPRISES a third party beneficiary of Agreement No. 1.” Id. In essence, the First Amendment reduced the price equally for CBA and Fast Enterprises to compensate for the delays in manufacturing by Piaggio. Id. The First Amendment did not identify a choice of law provision, include a forum selection clause, or mandate arbitration. However, it did confirm that Agreement No. 1 and 2 would, except as explicitly provided in the First Amendment, “remain in full force and effect and unamended by this Amendment.” Id.

         On December 18, 2013, Piaggio, CBA and Fast Enterprises entered into a Second Amendment to the Sales Agreement (“Second Amendment”). See Second Amendment to Piaggio P.180 Avanti II Aircraft Sales Agreements, Dkt. 7-3. Much like the First Amendment, the Second Amendment was initiated due to further delays in the manufacturing process and provided additional discounts to both CBA and Fast Enterprises, paid at the expense of Piaggio. See id.

         In order to compensate for the delays, Piaggio and CBA also coordinated flight coverage for Harrison and other Boise-based Fast employees into and out of Idaho. See, e.g., Harrison Decl., Dkt. 32; Declaration of Sarah Holman de Leon, Dkt. 30-2; Hissam Depo. at 78:23-79:2, 94:6-16, 102:15-103:1, Dkt. 31-2; Banglesdorf Depo. at 68:12-19, 73:8-22, Dkt. 31-3. These trips spanned approximately nine months. Hissam Depo. at 102:15-103:1, Dkt. 31-2. The flights were scheduled through Western Aircraft or Mountain Aviation in Idaho. Id. at 91:13-93:20. Both CBA and Piaggio emailed Harrison directly in Idaho about the trips, and coordinated with other Boise-based Fast employees by email. See Declaration of Megan Mooney, Dkt. 30-9. Additionally, CBA began helping Fast Enterprises screen potential pilots to be based in Boise. See Harrison Decl., Dkt. 32-6-8. In March 2013, Banglesdorf agreed to travel to Boise, Idaho to make travel arrangements, and also agreed to look at hangar space and interview at least two pilots upon Fast's request and at its expense. Banglesdorf Depo. at 23:23-24, Dkt. 31-3. However, CBA did not complete these services. Id. at 23:1-15; see also Def's Reply Br. at 4, ¶ 7, Dkt. 35.

         Prior to accepting possession of the Plane, Fast Enterprises entered into an Assignment of Aircraft Sales Agreement with Peregrine on December 19, 2013. Assignment of Aircraft Sales Agreement, Dkt. 31-1. The Assignment Agreement recognized the transaction was to “ensure the eligibility of the Aircraft for United States registration with the Federal Aviation Administration. . . ” and served as a “modification” of the December 21, 2012 Sales Agreement between CBA and Fast Enterprises. Id. Signatories included Martin Rankin, a “Managing Member” of Fast Enterprises and Dan DeKeyrel, a “Manager” of Peregrine; it was “Approved by” CBA and signed by Banglesdorf. Id. This agreement assigned all ownership rights of the Plane to Peregrine, and was to be “construed in accordance with the laws of the State of Idaho. Id. at ¶ 2.

         The record is somewhat unclear how the sale was ultimately consummated. Allegedly, Piaggio delivered the Plane to CBA in Wichita, Kansas (for alleged “accounting reasons”) on December 20, 2013. Banglesdorf Decl. at 3, ¶ 5, Dkt. 18-2. CBA then transported the plane to Texas. Id. Fast Enterprises took possession of the plane in Texas around that time. Id. Peregrine then took possession of the Plane in January 2014. Harrison Decl., at 3, ¶ 11, Dkt. 32. However, the FAA “Aircraft Bill of Sale” states that the plane was sold directly from CBA to Peregrine, listing its Boise office and address on December 20, 2013. Aircraft Bill of Sale, Dkt. 32-10. Both Peregrine and Piaggio signed a “memo of final delivery and receipt of wire” that listed each company's representatives and the location of delivery as “Denton, Texas.” See Decl. James Harrison, Exhibit 15, Dkt. 32-15.

         On January 31, 2014, the Plane was being operated by Peregrine on a round-trip flight from Boise, Idaho to the “east coast.” Harrison Decl. at 4, ¶ 21, Dkt. 32. On a stopover flight from Madison, Wisconsin to Springfield, Illinois, an alleged malfunction with the Plane's landing gear caused the aircraft to make an emergency landing. Am. Compl. at 3, ¶ 14-16, Dkt. 1-3. Plaintiffs filed the present claims seeking to hold Defendants liable for the damages resulting from the plane crash.


         1. Motions to Dismiss

         Both Piaggio and CBA ask the Court to dismiss the claims against them for lack of personal jurisdiction in Idaho. To establish this Court has personal jurisdiction over a defendant, a plaintiff must establish that the assertion of jurisdiction is consistent with Idaho's long-arm statute (I.C. §5-514(a)) and does not offend due process. See Lake v. Lake, 817 F.2d 1416, 1420 (9th Cir. 1987) (interpreting the Idaho long-arm statute). However, the Idaho legislature, in adopting the state's long-arm statute, intended the Idaho courts to exercise jurisdiction to the fullest extent possible under the due process clause of the United States Constitution. Id. Thus, the state statutory and federal constitutional limits are "coextensive, " and the Court need only determine whether this Court's exercise of personal jurisdiction is consistent with due process. Id. A court's assertion of personal jurisdiction comports with due process where the defendant has “certain minimum contacts with [the state] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.'” Int'l Shoe Co. v. Wash., 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S.457, 463 (1940)).

         In applying International Shoe, the Supreme Court recognizes two categories of personal jurisdiction - general and specific. Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011). A defendant is subject to general personal jurisdiction “when their affiliations with the State are so ‘continuous and systematic' as to render them essentially at home in the forum state.” See Id. (citing International Shoe Co. v. Washington, 326 U.S. 310, 317 (1945)). That is clearly not the case here, and Plaintiffs appear to acknowledge that. But Plaintiffs do contend that the defendants are subject to the specific personal jurisdiction of the Idaho courts.

         A court may assert specific jurisdiction over an out-of-state defendant "when the suit 'aris[es] out of or relate[s] to the defendant's contacts with the forum."' Id. (quoting Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n.8 (1984)). Plaintiffs may establish a prima facie case for specific jurisdiction by demonstrating (1) that defendants have purposefully directed its activities at Idaho, and (2) that their claims against defendants grow out of defendants' forum-related activities. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477 (1985). If both elements apply, the burden then shifts to the defendants to make a “compelling case” that the exercise of jurisdiction would be “unfair or unreasonable.” Id.

         Plaintiffs bear the burden of proving that the Court has personal jurisdiction over the defendants. Rano v. Sipa Press, Inc., 987 F.2d 580 (9th Cir. 1995). Because the Court is deciding this matter on the record, without holding an evidentiary hearing, the plaintiffs need only establish a prima facie showing of jurisdictional facts to withstand a motion to dismiss. See Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir. 1990). In determining whether plaintiffs have made a prima facie case, “conflicts between the facts contained in the parties' affidavits must be resolved in plaintiffs' favor.” AT&T Company v. Compagnie Bruxelles Lambert, 94 F.2d 586, 591 (9th Cir. 1996), as amended, 95 F.3d 1156 (9th Cir. 1996).

         A. Piaggios's Purposeful Availment.

         Plaintiffs argue that Piaggio has “purposefully availed itself” of Idaho's jurisdiction by,

[E]ntering a contract for the sale of an airplane to be based in Idaho, emailing Idaho residents regarding the Plane, negotiating agreement terms with Idaho residents, coordinating flights for Idaho residents to and from Idaho in order to keep the agreement alive, and delivering the Plane to an Idaho entity.

Pls' Resp. Br. at 11, Dkt. 30. Although Piaggio does not dispute the alleged conduct, it maintains that such conduct is insufficient for this Court to maintain ...

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