PCS Aerospace and Marketing LLC v. Select Aviation Services, Inc.
Filing
83
OPINION Nunc Pro Tunc. Signed by Judge Dana L. Christensen on 7/1/2014. (APP, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
lVIISSOULA DIVISION
CV 14-26-M-DLC
PCS AEROSPACE AND
MARKETING, L.L.C., a Florida
Limited Liability Company,
OPINION
NUNC PRO TUNC
Plaintiff,
vs.
SELECT AVIATION SERVICES,
INC., a Montana Corporation,
FILED
Defendant,
jUlO \
201~
CIeIk. u.s. District court
and
DistriCt Of Montana
Missoula
MATN,
Intervenor-Defendant.
On May 27, 1 Select filed notice that it was appealing what it characterized
as the Court's "order granting preliminary injunction entered in open court in this
action on May 23." (Doc. 60.) Select then moved the Court to stay its order that
MATN is entitled to immediate possession of the seven Bell 212 helicopters that
All dates contained in this opinion refer to the year 2014.
This opinion is entered nunc pro tunc, and replaces the Court's opinion filed
on June 27,2014 (Doc. 81). This opinion does not differ in any substantive way from the
Court's original opinion, but merely amends misidentified parties in the first and second
paragraphs of the original opinion (Doc. 81 at 2).
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are the subject of this case. (Doc. 62.) MATN and PCS filed their briefs in
opposition to the motion on June 11, and on June 13, Counsel for Select notified
the Court that MATN intends to take possession of the helicopters on June 16, and
requested an immediate ruling on the motion for stay pending appeal. The Court
accommodated Select's request on the same day it was received, issuing an order
denying the motion. (Doc. 79.) In the interest of providing Select a prompt ruling
the Court did not include the reasoning behind its decision, which it now
addresses in this opinion.
Select has mischaracterized several aspects of the May 23 hearing, but this
opinion need only address its erroneous statement that the Court issued a
preliminary injunction. As described herein, the Court did no such thing. The
Court has reviewed the docket in this case, including the transcript of the hearing,
and will now outline the status of the case at the time of the hearing and clarify its
findings and orders.
PCS filed its Complaint in Montana's Twenty-First Judicial District Court
alleging breach of contract, and Select removed the case to this Court on January
27. While the underlying dispute is based on breach of contract, it is the subject of
that contract - seven Bell 212 helicopters and associated materials - that has been
the focus of this case to date. At the time of removal PCS and Select were both in
2
possession of some of the helicopter components and materials. On February 20,
PCS filed its Renewed Amended Motion for Possession of the helicopters
("Motion for Possession"). (Doc. 20). On March 6, Select filed a Motion to
Restore Property Subject to Lien for Services ("Motion to Restore Property"),
requesting that the Court restore to Select the helicopter materials in PCS' s
possession, claiming that they were subject to Select's lien for services under
Montana law. (Doc. 23.) Upon review of the briefs and other materials filed in
support of both motions, the Court noted several key issues that must be
considered prior to determining the helicopters' fate, but that had not been
addressed by the parties. Of foremost concern was the absence ofMATN, the
company that owned the helicopters and contracted with PCS to refurbish them, as
a party to this case. Based on the information available at the time the Court
believed that MATN owned the helicopters, and was troubled by the parties'
failure to discuss the impact of any potential ruling on MATN and whether MATN
is a necessary party pursuant to Rule 19 of the Federal Rules of Civil Procedure.
The parties also failed to address the relationship between the breach of contract
claim and the lien/possession claims, and why the arbitration clause contained in
the contract between PCS and Select did not govern this dispute. On April 30, the
Court ordered additional briefing on these subjects and set a hearing for June 25.
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(Doc. 33.)
On May 8, MATN filed an Unopposed Motion to Intervene and Request for
Expedited Ruling (Doc. 34), which the Court granted on May 12. (Doc. 37.) The
following day MA TN filed a Motion for Immediate Possession of Property and
Declaratory Relief ("Motion for Immediate Possession"). (Doc. 41.) MATN
moved for immediate possession of the helicopters and associated materials
pursuant to Federal Rule 64(b) and Montana Code Annotated § 27-1-432, and for
declaratory judgment pursuant to 28 U.S.C. § 2201 and Federal Rule 57 that any
purported liens placed on MA TN's property by Select are invalid. On the same
day, May 14, MATN filed another motion titled Motion for Temporary
Restraining Order, for Order to Show Cause Why Preliminary Injunction Should
Not Issue and for Order Requiring Inventory of the Helicopters ("Motion for
Temporary Restraining Order"). (Doc. 43.) In that motion MATN requested the
Court issue a temporary restraining order ("TRO") preventing PCS and Select
from moving or altering the helicopters and associated materials pursuant to
Federal Rule 65, and requiring PCS and Select to show cause why a preliminary
injunction should not issue upon expiration of the TRO in order to protect
MATN's property interests and to prevent irreparable harm until the Court rules
on its Motion for Immediate Possession. MA TN further requested an order
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requiring PCS and Select to compile an inventory of all helicopter materials in
their possession.
Thus, as of May 14 the Court had before it four motions through which all
three parties claimed the right to possess the helicopters, albeit based on different
arguments and legal theories.
On May 15, the Court issued an order establishing a roadmap to facilitate
the resolution of the competing claims relating to ownership and right of
possession, and granting MATN's Motion for Temporary Restraining Order. (Doc.
45.) The Court first conducted the appropriate analysis pursuant to Winter v.
Natural Resources Defense Council, Inc., 555 U.S. 7 (2008), concluding that a
TRO was appropriate. The Court issued a TRO effective for 14 days - the
maximum term permitted under Federal Rule 65(b)(2). Next, the Court recognized
that even if it eventually granted the 14 day extension provided for in Rule
65(b )(2), the TRO would lapse prior to the June 25 hearing. In order to avoid such
a lapse and due to its confidence that the parties were prepared to address these
issues, the Court reset the hearing for May 23 and ordered that the parties be
prepared to address: (1) MATN's Motion for Immediate Possession (Doc. 41); (2)
the conversion of the TRO into a preliminary injunction pursuant to Rule 65(a),
should the Court decline to rule on MATN's Motion for Immediate Possession;
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and (3) the merits ofPCS's Motion for Possession (Doc. 20) and Select's Motion
for Return of Property (Doc. 23). Finally, the Court ordered PCS and Select to
conduct an inventory of the helicopter materials currently in their possession. The
Court closed its order by stating that it was "committed to reaching an expeditious
and final disposition of the possession issue, which will benefit all parties, and
will permit the parties to move forward with the underlying breach of contract
claim." (Doc. 45 at 9 (emphasis added).)
On May 16, PCS filed a brief stating that MATN was in fact the exclusive
owner of the helicopters and as such, was entitled to possession (Doc. 46). On
May 19, PCS filed an unopposed motion to be relieved from appearing at the May
23 hearing, stating that it does not oppose MATN's motions and would not offer
any testimony or argument in opposition to those motions. (Doc. 49.) While it
appeared that PCS was "essentially withdrawing its claim for possession on favor
of MATN's claim," out of an abundance of caution, the Court ordered PCS to file
notice "regarding its claim to possession, and either withdrawing its motion for
possession (Doc. 20), or informing the Court of the reasons why it declines to
withdraw." (Doc. 50 at 3.) PCS filed notice expressing its support for MATN's
request for sole possession and withdrawing its Motion for Possession in support
ofMATN's Motion for Immediate Possession. (Doc. 51) The Court excused PCS
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from attending the hearing and denied its withdrawn Motion for Possession as
moot. (Doc. 52.)
Thus, on the morning of the hearing the Court had before it two competing
motions: Select's Motion to Restore Property (Doc. 23), and MATN's Motion for
Immediate Possession (Doc. 41). In the days leading up to the hearing, the Court
received and reviewed various briefs and supporting materials submitted by Select
and MATN. Counsel for both parties appeared on May 23 and advanced several
arguments - most of which had been addressed in their various briefs - and
responded to the Court's questions. Based on the parties' briefing, the testimony
and evidence offered in support thereof, the statements made by Counsel at the
hearing, and applicable law, the Court made several findings on the record and
issued several orders.
First, the Court found as a matter of law that MATN is the exclusive owner
of the seven helicopters at issue, as well as their log books and all associated
equipment and materials. (Doc. 71 at 53.) Next, the Court found as a matter oflaw
that Select failed to provide a proper affidavit as required by the applicable state
lien statute, Montana Code Annotated § 71-3-1203. (Doc. 71 at 54.) Third, the
Court found that Select's valid cancellation of the contract underlying this case did
not affect its waiver of sale, which is the only remedy permitted under the lien
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statute. (Id.) Finally, based on these findings, the Court concluded as a matter of
law that Select does not have a valid lien on any of the materials at issue. (Doc. 71
at 55.)
Based on its findings the Court granted MATN's Motion for Immediate
Possession and denied Select's Motion for Return of Property. In so doing, the
Court acted under Federal Rule 64 and granted MATN immediate possession of
the helicopters pursuant to Montana Code Annotated § 27-1-432. The Court also
acted under the authority of Federal Rule 57 and granted declaratory judgment that
Select does not hold a valid lien on the helicopters. Based on its definitive rulings
on these underlying legal issues, the Court ordered that Select permit MATN to
recover its property. It did not issue an injunction - preliminary, mandatory, or
otherwise. 2 The only injunctive relief granted in this matter was the TRO, which
was vitiated by the Courts findings and orders of May 23.
Federal Rule of Civil Procedure 62(c) states: "While an appeal is pending
2
Select's characterization of the Court's actions as a form of injunctive relief
simply stretches the concept of such relief too far. Black's Law Dictionary defines "injunction"
as a "court order commanding or preventing an action." "In a general sense, every order of a
court which commands or forbids is an injunction; but in its accepted legal sense, an injunction is
a judicial process or mandate operating in personam by which, upon certain established
principles of equity, a party is required to do or refrain from doing a particular thing." I Howard
C. Joyce, A Treatise on the Law Relating to Injunctions § 1, at 2-3 (1909). The Court ordered
PCS and Select to make arrangements to permit MATN to obtain the helicopters based on its
rulings on the underlying legal issues, not as a form of injunctive relief.
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from an interlocutory order or final judgment that grants, dissolves, or denies an
injunction, the court may suspend, modify, restore, or grant an injunction on terms
of bond or other terms that secure the opposing party's rights." Because the order
that is currently pending appeal does not grant an injunction, this Court does not
have the authority to grant a stay pursuant to Rule 62( c). 3 The parties do not cite
and the Court is not aware of any other authority under which it may properly
issue a stay in this situation. For all intents and purposes, Select's motion amounts
to a request that the Court reconsider its rulings that MATN is entitled to
immediate possession of the helicopters and that Select's purported lien is invalid.
The Court issued its findings and orders following a hearing and after thorough
3
Even if the Court had the authority to stay its order pending appeal pursuant to
Rule 62(a), Select has failed to demonstrate the critical element of irreparable harm. See Nken v.
Holder, 556 U.S. 418,433-434 (2009) (stating that issuance of a stay is guided by consideration
of four factors, including "whether the applicant will be irreparably injured absent a stay," and
rejecting an approach whereby a stay can issue by "simply showing some possibility of
irreparable injury"); Leiva-Perez v. Holder, 640 F.3d 962, 965-968 (9th Cir. 2011) ("stays must
be denied to all petitioners who [do] not meet the applicable irreparable harm threshold" by
showing that "irreparable harm is probable if the stay is not granted"). Select argues that if it
prevails on the breach of contract claim and is awarded a monetary judgment, the helicopters will
be the only means by which it may recover, claiming that neither MATN nor PCS will be able to
satisfy the potential judgment. This argument is simply predicated on too many "ifs" and
unresolved issues still pending in this case. Select's showing on irreparable harm is entirely
speculative and does not present a likelihood or probability of any harm absent a stay. Finally, the
Court rejects Select's argument predicated on the Court's previous determination that the
helicopters are unique and irreplaceable. The Court clarifies that the helicopters are unique in
relation to MATN because they are a component of a larger project MATN is completing for the
Congolese government, and due to the State Department's approval of the sale of these specific
helicopters. (Doc. 45 at 4-5.) Because neither of these considerations applies to Select, they are
not unique and irreplaceable relative to that party.
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review of the parties' briefing and applicable law. Select has not raised any new
arguments in the instant motion, and the Court will not revisit the issues it
resolved at the May 23 hearing.4
As a final matter, although determination of the issue of appealability lies
with the Ninth Circuit, it is the Court's opinion that Select's appeal is defective.
Select is appealing an interlocutory order. See Black's Law Dictionary 1207 (9th
ed. 2009) (defining "interlocutory order" as "[a]n order that relates to some
intermediate matter in the case; any order other than a final order"). United States
courts of appeals have jurisdiction over appeals from "Interlocutory orders of the
district courts of the United States ... granting, continuing, modifying, refusing or
dissolving injunctions, or refusing to dissolve or modify injunctions." 28 U.S.C.
§ 1292(a). Because the interlocutory order is not in any way related to an
injunction, Select was required to petition the Ninth Circuit for permission to
appeal the order, which it failed to do. s Fed. R. App. P. 5.
4
As stated during the hearing, Select has presented several valid arguments related
to the breach of contract claim that forms the basis of this action. Select may advance these
arguments as this case progresses, but they have no bearing on the issue of possession and
validity of the lien.
S
Even if a Rule 62(a) analysis was proper in this case, since the appeal is defective
Select is highly unlikely to succeed on the merits. See Nken, 556 U.S. at 433-434 (the issuance
of a stay is guided by four factors, including "whether the stay applicant has made a strong
showing that he is likely to succeed on the merits," which is one of the most critical factors,
along with a showing of irreparable harm).
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This opinion hereby constitutes the Court's analysis supporting its June 13
order denying Select's Motion for Stay Pending Appeal (Doc. 79).
st day of July, 2014.
Dated this 1
Dana L. Christensen, Chief Judge
United States District Court
showing that he is likely to succeed on the merits," which is one of the most critical factors,
along with a showing of irreparable harm).
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