AAL USA Inc v. Black Hall Aerospace Inc et al

Filing 88

MEMORANDUM OPINION Signed by Chief Judge Karon O Bowdre on 5/30/17. (SAC )

FILED
2017 May-30 PM 01:38
U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
AAL USA, INC.,

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Plaintiff,
v.
BLACK HALL, LLC, et al.,

Defendants.

CASE NO. 2:16-cv-02090-KOB

MEMORANDUM OPINION
Federal courts are courts of limited jurisdiction but have a nearly unassailable obligation
to exercise jurisdiction when they have it. Only exceptional circumstances justify a federal
court’s refusal to adjudicate a case properly before it. The Defendants claim this case is such an
exceptional one, and have filed a motion for the court to abstain under the Colorado River
doctrine, or in the alternative, to stay the case based on the court’s inherent authority, or, if the
court declines to do that, dismiss five counts of the complaint for failing to state a claim. For the
reasons discussed below, the court will grant in part and deny in part the Defendants’ motions.
I.

RELEVANT BACKGROUND
AAL USA is an aviation services company incorporated in Delaware and with its

principal place of business in Alabama. AAL USA filed this case in Jefferson County Circuit
Court alleging that two of its officers, Paul Daigle and Keith Woolford, had engaged in tortious
conduct against, and breached contracts with, the company. The Defendants removed this action.
Already pending in Madison County Circuit Court was a lawsuit against AAL USA by
Black Hall Aerospace involving the same factual universe as AAL USA’s suit here. Because the
two cases involve the same factual nexus, the court will lay out the events precipitating the
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litigation of these two cases before describing the claims and procedural posture of each of the
actions.
This narrative has three key characters: Oleg Sirbu, Paul Daigle, and Keith Woolford.
Oleg Sirbu is the owner, president, and CEO of AAL USA. Paul Daigle is the former CEO of
AAL USA, who was hired by AAL in 2011 and elevated to CEO in 2013. Keith Woolford is the
former CFO of AAL USA, originally hired to be its finance manager before later promoting him.
Mr. Daigle and Mr. Woolford are also owners of Black Hall Aerospace, which they formed to
obtain and hold a Federal Aviation Agency “Part 145” license on behalf of AAL USA.
AAL USA works as a subcontractor on contracts with the United States Military. Leidos
is the prime contractor on the project. On September 23, 2016, AAL USA received a letter from
Leidos informing it that Army Contracting Command had denied AAL access to United States
Military bases outside the continental United States. The parties dispute many of the concerning
the cause and effect of this letter. But Mr. Sirbu came to believe, based on representations made
by the Defendants, that AAL USA was at risk of losing its government contracts. The parties
dispute whether these representations were in fact misrepresentations.
To prevent AAL USA from losing its contracts, Mr. Daigle suggested a plan where AAL
USA would sell its assets and assign its contract to Black Hall Aerospace. Black Hall, it was
believed, would be permitted to carry out the subcontract work and complete the contract with
Leidos. In less than a week, AAL USA and Black Hall had drafted and signed an Asset Purchase
Agreement (APA) by which AAL USA would sell its assets to Black Hall for $501,660.46. The
sale price reflects a five-year “earnings before interest, tax, depreciation and amortization”
figure. The parties dispute whether this number was calculated by an independent accounting
firm.

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Before the APA closed, Mr. Sirbu backed out of the agreement, believing the document
to be a fraudulent instrument. AAL USA alleges that Mr. Daigle and Mr. Woolford wrote checks
from AAL USA to Black Hall Aerospace for $3.2 million, despite the fact that the transaction
never closed.
AAL USA also alleges Mr. Daigle and Mr. Woolford used the company’s credit and
checking accounts for personal expenses, awarded themselves unauthorized bonuses, and used
AAL USA money to buy personal residences and fund their personal business ventures before
and after the events surrounding the APA. Further, AAL USA claims Mr. Daigle and Mr.
Woolford used company money to buy a jet, and then assigned the ownership of the plane to a
company they owned, all while charging AAL USA for use of the jet.
A.

The Madison County Action

The APA contained a forum selection clause requiring any litigation related to the
agreement to occur in Madison County Circuit Court. On October 29, 2016, Black Hall
Aerospace filed suit against AAL USA in Madison County Circuit Court. The case is CV-2016901750, pending before the Honorable Dennis O’Dell.
The amended complaint against AAL USA contained eight counts: declaratory judgment
that Black Hall is not in default under the Asset Purchase Agreement, breach of the Asset
Purchase Agreement contract, interpleader of a payment under the APA AAL USA refused to
accept, intentional interference with contractual relationships, intentional interference with
business relationships, defamation, breach of fiduciary duty, and civil conspiracy.
On November 30, 2016, AAL USA filed a counterclaim containing seventeen counts
against Black Hall Aerospace. AAL USA alleged that Black Hall Aerospace was liable for fraud
and fraudulent misrepresentation, fraudulent suppression, conversion, misappropriation and civil

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theft, breach of contract, fraudulent inducement, tortious interference, conspiracy, unjust
enrichment, statutory and common law trademark infringement, cybersquatting, violation of the
Computer Fraud and Abuse Act, and violation of the federal and Alabama trade secretes acts.
AAL USA also claimed it was entitled to specific performance of a contract transferring
ownership shares of Black Hall Aerospace to AAL USA, a constructive trust over Black Hall
Aerospace’s assets, and an accounting.
The state court has partially stayed discovery. At the time this motion was briefed, no
depositions had occurred, and while AAL USA had served discovery requests, no responses had
been produced on federal question jurisdiction and supplemental jurisdiction over the state law
claims.
B.

The Jefferson County Action

On November 16, 2016, AAL USA filed suit in the Birmingham division of Jefferson
County Circuit Court against Black Hall Aerospace, Black Hall, LLC, Corvis Arrow, LLC, Cold
Harbor Certifications, Inc., Hindsight Coffee, LLC, Paul Daigle, Keith Woolford, Iberia Bank
Corp, IberiaBank, and a set of fictitious defendants. The complaint contained fifteen counts:
fraud and fraudulent concealment, fraudulent suppression, conversion, misappropriation, and
civil theft, breach of contracts between AAL USA and Mr. Daigle and Mr. Woolford, violation
of Alabama’s trade secret statute, specific performance of contract to transfer Black Hall
Aerospace’s shares to AAL USA, breach of fiduciary duty, fraudulent inducement, tortious
interference, conspiracy, unjust enrichment, faithless servant doctrine, declaratory judgment that
AAL owns Black Hall, and injunctive relief.

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On December 2, 2016 AAL USA voluntarily dismissed Black Hall Aerospace from the
Jefferson County Action. The remaining defendants removed the case to federal court on
December 30, 2016.
Discovery is in its infancy in this case. However, substantial motion practice has already
occurred. The parties have filed a motion to abstain, a motion to stay, two motions to strike, a
motion for summary judgment, a motion to dismiss, an emergency motion for order to show
cause, a motion for relief from injunctive order, fourteen motions to quash, and a motion to
compel.
II.

LEGAL STANDARDS
The Defendants have moved for a stay of proceeding, or in the alternative to dismiss to

dismiss five counts of the complaint for failure to state a claim. Accordingly, two legal standards
are applicable.
A.

Colorado River Abstention

When a federal court possess subject matter jurisdiction over a case before it, it generally
has an “unflagging obligation” to exercise its power to adjudicate the controversy. Colo. River
Water Conservation Dist., 424 U.S. 800, 817 (1976)). Exceptions to this rule arise when exercise
of federal jurisdiction would threaten the balance of federal and state power enshrined in our
constitutional system. See id., 424 U.S. at 813–17 (describing the federalism rationales
underlying the Pullman, Thibodaux, and Younger abstention doctrines).
A federal court may abstain in some circumstances where federalism’s concern for
“proper constitutional adjudication and regard for federal-state relations” are not relevant
considerations. Colo. River, 424 U.S. at 817. Instead, a federal court may ground its decision to
abstain on the principle of “(w)ise judicial administration, giving regard to conservation of
judicial resources and comprehensive disposition of litigation.” Id. (quoting Kerotest Mfg. Co. v.
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C-O-Two Fire Equipment Co., 342 U.S. 180, 183 (1952)). Because this form of abstention does
not invoke the “weightier” structural constitutional justification of other abstention doctrines,
Colorado River abstention “is permissible in fewer circumstances than are the other abstention
doctrines, which themselves carve out only slender exceptions to the robust duty to exercise
jurisdiction.” Ambrosia Coal & Const. Co. v. Pages Morales, 368 F.3d 1320, 1331 (11th Cir.
2004). Accordingly, Colorado River abstention is an “extraordinary and narrow” doctrine. Colo.
River, 424 U.S. at 813.
To abstain under Colorado River, a district court must make two findings: (1) a parallel
proceeding is occurring in state court, and (2) exceptional circumstances are present. See
Ambrosia Coal, 368 F.3d at 1328. The doctrine requires exceptional circumstances because
permitting federal courts to abstain in the midst of any parallel state proceeding would “betray” a
federal court’s obligation to exercising jurisdiction conferred on it. Id.
The Eleventh Circuit has set out six factors to guide a district’s court’s discretion in
determining whether a case has the exceptional circumstances required for Colorado River
abstention:
(1) whether one of the courts has assumed jurisdiction over
property, (2) the inconvenience of the federal forum, (3) the
potential for piecemeal litigation, (4) the order in which the fora
obtained jurisdiction, (5) whether state or federal law will be
applied, and (6) the adequacy of the state court to protect the
parties’ rights.
Ambrosia Coal, 368 F.3d at 1331. When a court weighs these factors, “[n]o one factor is
necessarily determinative,” Colo. River, 424 U.S. at 818, and “[t]he weight to be given to any
one factor may vary greatly from case to case.” Moses H. Cone Mem'l Hosp. v. Mercury Constr.
Corp., 460 U.S. 1, 16 (1983).
B.

Motion to Dismiss for Failure to State a Claim
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A Rule 12(b)(6) motion to dismiss attacks the legal sufficiency of the complaint. The
Federal Rules of Civil Procedure require the complaint to provide a short and plain statement of
the claim” demonstrating that the plaintiff is entitled to relief. Fed. R. Civ. P. 8(a)(1). A plaintiff
must provide the grounds of his entitlement, but Rule 8 rarely requires detailed factual
allegations. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson,
355 U.S. 41, 47 (1957)). Rule 8 does, however, demand more than an unadorned, the-defendantunlawfully-harmed-me accusation. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Pleadings that
contain nothing more than a formulaic recitation of the elements of a cause of action do not meet
Rule 8 standards nor do pleadings suffice that are based merely upon labels or conclusions or
naked assertions without supporting factual allegations. Twombly, 550 U.S. at 555, 557.
III.

DISCUSSION
A.

Colorado River Abstention

Defendants argue that this court should abstain from hearing this case on the basis of
Colorado River and defer to existing litigation in state court. Although the court agrees the
Madison County action is a parallel proceeding, it will not abstain because this case lacks the
extraordinary circumstances required by Colorado River.
1.

Parallel Proceeding

Colorado River abstention only applies when a parallel proceeding exists in state court.
To determine whether a state and federal action are parallel, a court looks to see whether the
“proceedings involve substantially the same parties and substantially the same issues.” Ambrosia
Coal, 368 F.3d at 1330. This analysis is “flexible” and “pragmatic”; a court is not bound by the
formalistic framing of the issues and parties in the pleadings. Id. at 1229–30. Otherwise, “only
litigants bereft of imagination would ever face the possibility of an unwanted abstention order, as
virtually all cases could be framed to include additional issues or parties.” Id. at 1330.
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The Madison County Case and this action are parallel. True, AAL USA is the only entity
who is a party to both actions. But that fact is a slanted truth. As AAL USA acknowledges, Mr.
Daigle and Mr. Woolford are in control of Black Hall Aerospace. (Doc. 44 at 34). Although a
corporation does have a separate legal personhood from the individuals who form it, it would be
overly formalistic—and not in keeping with the flexible and pragmatic character of Colorado
River analysis—for the court to simply ignore that the Defendants in this action are principals of
the plaintiff corporation in the Madison County action. Similarly, the additional defendants in
this action are either companies owned by Mr. Daigle and Mr. Woolford or AAL USA’s bank.
Given that reality, the court concludes that the Madison County case and this case are composed
of substantially the same parties.
The two cases are also considering substantially the same issues. Both sides haves
oversimplified the two actions. AAL USA contends the Madison County action is about the APA
while this action is about Mr. Daigle and Mr. Woolford’s acts. But the Madison County case is
litigating the same allegedly fraudulent conduct—misrepresentations surrounding the APA. AAL
USA may be seeking different damages (from Black Hall Aerospace versus Mr. Daigle and Mr.
Woolford individually) in the two actions, but the same fundamental conduct is at issue. For the
same reasons substantial—and not identical—identity of parties and issues is required for a
proceeding to be parallel, failure to seek identical damages does not make two cases divergent.
AAL USA seeks relief in this action it does not appear to seek in the Madison County
case. For instance, AAL USA claims Mr. Woolford and Mr. Daigle should repay compensation
they accepted to AAL USA under the faithless servant doctrine and has made claims against
ServisFirst, its bank. But these claims do not alter the fact that the issues in the two actions are
substantially similar.

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Neither, as the Defendants suggest, is the validity of the APA dispositive of all of the
issues in this case. AAL USA’s claims against Mr. Daigle and Mr. Woolford are based on
wrongful conduct separate and apart from conduct surrounding the APA. While the
enforceability of the agreement might be a key question in both cases, from what the court can
discern, the answer to that question will not resolve whether Mr. Daigle or Mr. Woolford
converted AAL USA property prior to drafting the APA, for instance. The Madison County
action and this case are neither wholly distinct nor entirely identical. Because of the significant
overlap, the court finds that the two cases involve substantially the same issues and parties, and,
therefore, that the Madison County action is a parallel proceeding to this case.
2.

Colorado River Factors

Because the court has found that a parallel proceeding to this action exists, it must
consider the Colorado River factors to decide whether to abstain.
First, the court considers whether the court in either case has acquired in rem jurisdiction.
Ambrosia Coal, 368 F.3d at 1331. Neither of the two cases is in rem, so the first factor is neutral.
Second, the court considers the relative inconvenience of the fora, and focuses
“primarily on the physical proximity of the federal forum to the evidence and witnesses.”
Ambrosia Coal, 368 F.3d at 1331–32. The Madison County case is pending in Huntsville,
Alabama, approximately ninety miles north of where this court sits, and the majority of the
evidence and witnesses appear to be Huntsville. But when “the federal forum and the state
forum are in close geographic proximity, the fora are equally convenient and the factor cuts
against abstention.” Reiseck v. Universal Commc'ns of Miami, Inc., 141 F. Supp. 3d 1295, 1305
(S.D. Fla. 2015) (citations omitted) (citing Jackson-Platts, 727 F.3d at 1141.
The Defendants acknowledge the precedents finding federal and state forums in this same
general area to be equally convenient, but attempts to distinguish them by noting those cases
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involved a distance of 50 or so miles between forums while this case is close to 100 miles. These
additional 50 miles—43 minutes of drive time, assuming one is traveling the speed limit on the
interstate—constitutes a “substantial prejudice,” in the Defendants’ mind. (Doc. 8 at 25). The
Defendants do not support this conclusory diagnosis with any evidence and reasoning, and the
court cannot marshal any to buttress the Defendants’ conclusion. Ninety miles is close enough;
alternatively the court can transfer the case to the Northeastern Division. Given the proximity of
the state and federal forum (the state forum is within the Northern District of Alabama, after all),
the court finds the state and federal fora to be equally convenient, and, therefore, that this factor
weighs against abstention.
The third factor—the potential for piecemeal litigation—is the most hotly contested.
Inefficient litigation is a risk whenever parallel proceedings exist; abstention is only warranted if
that risk is “abnormally excessive or deleterious.” Ambrosia Coal, 368 F.3d at 1333. The
Defendants argue that the substantial overlap between the two cases coupled with the fact that
AAL USA has issued identical discovery requests in both cases elevates this situation into the
exceptional category. (Doc. 8 at 21–23).
The court disagrees. In Colorado River, the United States brought suit against
approximately 1,000 water users in federal court. A suit addressing the same water rights was
already pending in state court. The most important factor in the Supreme Court’s reasoning in
finding abstention warranted was the McCarran Amendment, “a clear federal policy” favoring
“avoidance of piecemeal adjudication of water rights in a river system.” Colo. River, 424 U.S. at
819. The Court analogized this federal policy to a form of in rem jurisdiction for water rights. Id.
Colorado River evidences exceptional circumstances. Piecemeal adjudication of water
rights is “abnormally excessive or deleterious.” Ambrosia Coal, 368 F.3d at 1333. But piecemeal

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adjudication of contractual rights is not. See id. (district court erred in abstaining based on fear of
“inconsistent results or piecemeal litigation would likely result simply because both cases deal
with the validity of the Agreement”) (emphasis added). Considering the same issues of
contractual interpretation or application in two separate actions—without more—is insufficient
to justify abstention.
Even if the court abstained, the possibility of piecemeal litigation would not necessarily
be avoided. AAL USA’s counterclaim against Black Hall in the Madison County action appears
to be a mandatory counterclaim. From what the court can tell, AAL USA could have likely
properly joined their claims in this action with the counterclaim in Madison County as a cross
claim because a right to relief against the Defendants in both actions arises out of the same
transaction and occurrence, and at least one common issue of law or fact will arise.
Although AAL USA could possibly bring the claims together in a single action, the court
will not be able to force AAL USA to do so. A cross claim is permissive—it may, but not must,
be brought. Where a parallel proceeding contains a claim that could be permissively joined to the
other action, abstention does not further the goal of avoiding piecemeal litigation. See Am. Mfrs.
Mut. Ins. Co. v. Edward D. Stone, Jr. & Assoc., 743 F.2d 1519, 1525 (11th Cir. 1984) (“Because
the district court cannot force AMMIC to assert its claims as permissive cross claims in the state
proceeding, the stay order has not avoided, but has merely delayed, piecemeal consideration of
the claims.”). The Defendants have not shown that an abnormal risk of piecemeal litigation is
present in this case, or that abstention, if granted, would avoid that risk. For those two reasons,
the third factor weighs against abstention.
The fourth factor is the order jurisdiction was obtained and the relative progress of each
of the cases. Ambrosia Coal, 368 F.3d at 1331. The Supreme Court has clarified that the key

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consideration is how far the parallel action has progressed. See Moses H. Cone, 460 U.S. at 21,
103 (explaining the factor “should not be measured exclusively by which complaint was filed
first, but rather in terms of how much progress has been made in the two actions.”) (emphasis
added). In the court’s estimation, the Madison County case and this action are at nearly the same
stage of the litigation process. Discovery is in its infancy in both cases. Further, the Madison
County court has stayed components of discovery that would appear critical to resolving this
case. Accordingly, this factor does not support abstention. 1
Fifth, the court considers whether federal law provides the rule of decision. AAL’s brings
claims under both federal and state law. The presence of state law questions favor abstention
only when the issue is “particularly complex or best left for state courts to resolve.” JacksonPlatts, 727 F.3d at 1143. Further, the presence of a federal cause of action cautions against
abstention. Moses H. Cone, 460 U.S. at 26 (“Although in some rare circumstances the presence
of state-law issues may weigh in favor of [abstention] . . . the presence of federal-law issues must
always be a major consideration weighing against surrender.”). The state law claims in this case
are not complex. Conversion, breach of contract, tortious interference, and the like, are topics a
first-year law student would be expected to have mastered come exam time. In so stating, the
court does not ignore the complexity of the facts in this case; but the factor focuses not on factual
complexity but the complexity of the state law. Given the lack of complex state law claims and
the presence of claims arising under federal law, the fifth factor weighs against abstention.

1 The Defendants also argue that a forum selection clause contained in the APA designating Huntsville,
Alabama as the location for litigation related to the agreement to occur weighs in favor of abstention. But AAL USA
and Black Hall Aerospace executed the APA, and so the forum selection clause could only govern disputes between
those parties. Because Black Hall Aerospace is no longer a party to this action, the forum selection clause is
irrelevant.

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Finally, the court weighs the sixth factor—the ability of the fora to protect the parties’
rights. If both fora protect the parties’ rights, the factor is neutral. Ambrosia Coal, 368 F.3d 1320,
1334 (11th Cir. 2004) (“This factor will only weigh in favor or against abstention when one of
the fora is inadequate to protect a party's rights.”). This court and the state court are equally
capable of adjudicating this dispute while protecting the parties’ rights. The claims and defenses
raised in each action could be properly presented in the other. Therefore, the final factor is
neutral.
Unsurprisingly, the parties have traded accusations of forum shopping and jurisdictional
gamesmanship. The court is not persuaded by either side’s charges and does not find them to
weigh for or against abstention. The Defendants claim the “only reason” AAL USA filed this
action was “to further [a] campaign to destroy Black Hall and its officers.” (Doc. 8 at 23). AAL
USA asserts that the Defendants removed this case and filed a motion to abstain as an end
around the state court’s order denying the Defendants’ motion to dismiss, consolidate, or
transfer. Rather than attempting to divine the motives behind a party’s strategic choices in
litigation, the court will restrict its analysis to whether a motion is procedurally proper and
meritorious. By doing so, parties with impure motives will be found out by the substance of their
arguments.
Taken together, the factors do not overcome the “heavy burden” of showing that a federal
court that possess jurisdiction should decline to exercise it. Although no single factor is
dispositive, the court believes it to be unlikely that a situation where no single factor weighs in
favor of abstention—and some weigh against—could constitute the exceptional circumstances
contemplated by Colorado River. This case does not have the “exceptional circumstances” and

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“the clearest of justifications” that warrant abstention. Moses H. Cone, 460 U.S. at 25 (internal
quotations omitted). For that reason, the court will deny the motion to abstain.
B.

Stay of Case Pending Resolution of Madison County Action

The Defendants also ask this court to use its inherent power to control its docket to stay
this case pending resolution of the civil action in state court in Madison County. For the same
reasons abstention is not appropriate, a stay likewise is not warranted. If a stay were granted on
these grounds, the court would be effectively surrendering its obligation to exercise jurisdiction.
Therefore, the court will deny the Defendants’ motion to stay. 2
C.

Motion to Dismiss

The Defendants last argument is that AAL USA’s claims for breach of contract, specific
performance, accounting, constructive trust, and unjust enrichment should be dismissed under
Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon which this court can grant relief. The
court will grant in part and deny in part the Defendants’ motion.
1.

Breach of Contract and Specific Performance

The Defendants argue AAL USA’s counts for Breach of Contract (Count Four) and
Specific Performance (Count Nine) should be dismissed for failure to state a claim because AAL
USA has not alleged the existence of a contract between AAL USA and the Defendants requiring
transfer of Black Hall Aerospace’s ownership shares to AAL USA. In both Counts Four and
Nine, AAL alleges that Mr. Daigle and Mr. Woolford had an express contract for the transfer of
Black Hall Aerospace shares to AAL USA. However, this legal conclusion is not supported by
the facts pled. The complaint does not plead facts that, if proven, would the existence of a
contract. The complaint does state Mr. Daigle made a “promise” to transfer Black Hall

2 The court will consider the grounds raised in the Defendants’ other motion to stay (doc. 79) in a separate opinion.

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Aerospace shares to AAL USA. (Doc. 1-7 at 98). But AAL USA has not plead facts showing that
it extracted consideration from Mr. Daigle in exchange for that promise. Therefore, AAL USA
has not stated a claim for breach of contract, and the court will grant the motion to dismiss Count
Four and Count Nine of the complaint.
2.

Accounting and Constructive Trust

The Defendants argue AAL’s counts for Accounting (Count Eight) and a Constructive
Trust (Count Ten) should be dismissed because they seek relief against Black Hall Aerospace,
which is no longer a party. However, at this stage of the litigation, who possesses (or has
liquidated) assets rightfully belonging to AAL USA is unclear.
The Defendants accuse AAL USA of trying to have it both ways: distinguishing Black
Hall Aerospace from Mr. Daigle and Mr. Woolford for abstention purposes but conflating them
for these two counts. However, on the face of this complaint, AAL USA has stated a claim for
both causes of action by tying these counts directly to the conduct of Mr. Daigle and Mr.
Woolford. See (Doc. 1-7 at 115) (“Daigle [and] Woolford . . . are in possession of [AAL USA]
assets”); (Doc. 1-7 at 116–17). Therefore, the court will deny the motion to dismiss Counts Eight
and Ten of the complaint.
3.

Unjust Enrichment

Finally, the Defendants seek dismissal of AAL USA’s count for Unjust Enrichment
(Count Fourteen) because it does not allege that AAL USA had a “reasonable expectation of
compensation” in exchange for paying Mr. Daigle and Mr. Woolford. The Defendants’ argue
AAL does not “allege that Daigle and Woolford’s actions failed to compensate AAL for their
employment or that they were derelict in their duties as employees.” (Doc. 65 at 17).
AAL USA may not have used those magic words, but pleading is not spellcraft. The
Federal Rules of Civil Procedure require “a short and plain statement of the claim showing that
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the pleader is entitled to relief,” not recitation of an incantation. Fed. R. Civ. P. 8(a)(2). Contrary
to the Defendants’ assertions, the complaint is riddled with facts that, if proven, would
demonstrate that AAL USA had not received compensation in the form of valuable work from
Mr. Daigle and Mr. Woolford’s employment or that the two employees were derelict in their
duties by, among other conduct, their misappropriation of company assets. Therefore, the court
will deny the motion to dismiss count fourteen of the complaint.
IV.

CONCLUSION
The court will grant in part and deny in part the Defendants’ motion. The court will deny

the motion as to its request to abstain or stay proceedings, as well as its request to dismiss Counts
Eight (Accounting), Ten (Constructive Trust), and Fourteen (Unjust Enrichment) of the
complaint. The court will grant the motion as to their request to dismiss Count Four (Breach of
Contract) and Count Nine (Specific Performance). AAL USA will have 14 days to file an
amended complaint as to those two counts. The court will enter a separate order consistent with
this opinion.
DONE this 30th day of May, 2017.

___________________________________
KARON OWEN BOWDRE
CHIEF UNITED STATES DISTRICT JUDGE

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