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Peregrine Falcon LLC v. Piaggio America, Inc.

United States District Court, D. Idaho

April 30, 2019

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, Defendant.


          B. Lynn Winmill, U.S. District Court Judge.


         Pending before the Court is Defendants' Motion to Dismiss (Dkt. 80). For the following reasons, the Court DENIES the motion.


         The Court has extensively detailed the background facts of this litigation in its prior Memorandum Decision and Order. Dkt. 80. The Court will assume the reader's familiarity with its prior decision.


         Federal Rule of Civil Procedure 8(a)(2) requires only “a short and plain statement of the claim showing that the pleader is entitled to relief, ” in order to “give the defendant fair notice of what the ... claim is and the grounds upon which it rests.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). While a complaint attacked by a Rule 12(b)(6) motion to dismiss “does not need detailed factual allegations, ” it must set forth “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id.

         The Supreme Court identified two “working principles” that underlie Twombly in Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). First, the court need not accept legal conclusions that are couched as factual allegations as true; the trial court “can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth.” Id. Rule 8 does not “unlock the doors of discovery for a plaintiff armed with nothing more than conclusions.” Id. at 678-79. Second, to survive a motion to dismiss, a complaint must state a plausible claim for relief. Id. at 679. “Determining whether a complaint states a plausible claim for relief will ... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id.


         1. Idaho Contract Law Provides the Rule of Decision for Fast's Contract-Based Claims

         First the Court address which law governs Fast's contract-based claims. Fast and Peregrine (collectively, “Fast”) argue that Idaho law governs. Dkt. 84 at 10-12. Conversely, Piaggio argues that Florida law governs. Dkt. 80 at 8-9. The Parties seemingly agree that a substantive conflict between Florida and Idaho contract law exists. Applying the proper choice of law analysis, the Court concludes that Idaho law provides the rule of decision for Fast's contract-based claims.

         Before turning to that analysis however, the Court notes that previously it held that Fast not bound by the arbitration provision in Agreement No. 1. Dkt. 36 at 19. That same provision also contains the following language: “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.” Dkt. 7-1 at 4. In its reasoning regarding the applicability of the arbitration provision to Fast, the Court included the following analysis in a footnote: “the Court will rely on Idaho law and ignore the choice of law provisions in Agreement No. 1 because neither Fast nor Peregrine were signatories to that agreement.” Dkt. 36 at 19 n.1. Thus, the Court has already suggested an outcome regarding this dispute.

         A full analysis applying Idaho's choice-of-law case law confirms the Court's conclusion. Idaho law requires the Court, when determining which state has the “most significant relationship to the transaction and the parties” to consider five factors in determining what law to apply: (1) the place of contracting, (2) the place of negotiation of the contract, (3) the place of performance, (4) the location of the subject matter of the contract, and (5) the domicile, residence, nationality, place of incorporation and place of business of the parties. Wayne Enters., LLC v. McGhee, No. 1:15-cv-EJL-CWD, 2017 WL 1960662 (D. Idaho May 10, 2017), citing Rest. Second Conflict of Laws § 188.

         Piaggio's analysis focuses solely on Agreement 1, which it argues was negotiated, drafted, executed, and largely performed in Florida. Because Piaggio improperly confines its analysis to Agreement 1 and not the combined contents of Agreement 1, Agreement 2, Amendment 1 and Amendment 2, its argument misses the mark. Piaggio and Fast do not detail exactly where the negotiation and execution of Amendment 1 and Amendment 2 took place, but based on the incorporation of countersigning language the Court infers, as it must at this stage, that the negotiation and execution by Piaggio's and Fast's representatives took place from their offices in Florida and Idaho respectively. Dkt. 7-2; Dkt. 7-3. Thus, the first, second, and fifth factors are neutral.

         The Court agrees with Fast that the third and fourth factors are dispositive in favor of applying Idaho law. The plane at issue in this case was delivered to Fast in Idaho. Furthermore, Amendment 1 and Amendment 2 contemplate the provision of charter services for Fast in Idaho during the period that the plane was not available due to production delays. Dkt. 7-2; Dkt. 7-3. Finally, the plane was intended to be based out of Idaho and serviced by Fast's employees in Idaho. Accordingly, Idaho has the most significant relationship to the transaction, and its law must therefore govern the Court's decision.

         2. Fast Has Plausibly Alleged It Is in Privity of Contract with Piaggio Regarding Delivery of an Airplane Free from Defects

         Fundamentally, the Parties disagree over just what agreement, if any, existed between Fast and Piaggio. According to Piaggio, Fast's claim of privity rests solely upon Agreement 1 - the contract signed solely by Piaggio and CBA. Dkt. 80 at 11-12. On the other hand, Fast argues that Amendment 1 and Amendment 2 create a contractual relationship between Fast and Piaggio. Dkt. 84 at 9-10, 12. The Court finds at this stage that Fast has adequately alleged that contractual privity exists between Fast and Piaggio.

         A. ...

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