The Huntington National Bank v. Bristow U.S. LLC et al

Filing 64

OPINION & ORDER re: 28 MOTION for Summary Judgment . filed by The Huntington National Bank. For the reasons explained above, HNB's motion for summary judgment is GRANTED in part and DENIED in part. Specifically, HNB's motio n is GRANTED insofar as it seeks dismissal of Defendants' counterclaim for unjust enrichment, and it is DENIED otherwise. The parties are directed to appear for a status conference on Friday, March 15, 2019, at 10:00 A.M., and to file a joint pr etrial statement in accordance with section 3.A of the Court's Individual Practices. The Clerk of Court is respectfully directed to terminate the motion, Doc. 28. SO ORDERED. (Status Conference set for 3/15/2019 at 10:00 AM before Judge Edgardo Ramos.) (Signed by Judge Edgardo Ramos on 3/1/2019) (kv)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
THE HUNTINGTON NATIONAL BANK,
Plaintiff,
- against -

OPINION AND ORDER

BRISTOW U.S. LLC, a Louisiana Limited Liability
Company, and BRISTOW GROUP INC., a Delaware
Corporation,

17 Civ. 8595 (ER)

Defendants.

Ramos, D.J.:
On November 6, 2017, The Huntington National Bank (“HNB” or “Plaintiff”) filed the
instant action against Bristow U.S. LLC (“Bristow”) and Bristow Group Inc. (collectively,
“Defendants”). The parties’ dispute arises out of Defendants’ alleged failure to return a leased
helicopter to HNB with its engines enrolled in a certain engine maintenance program. Doc. 1.
As damages, HNB seeks holdover rent, the estimated cost of the engines’ enrollment in an
acceptable engine maintenance program, and attorneys’ fees.
Before the Court is HNB’s motion for summary judgment on its claims against
Defendants and on Defendants’ counterclaims. Doc. 28. Resolution of the motion turns on the
answer to the following question: Were Defendants obligated to enroll the helicopter’s engines
in an engine maintenance program (or to pay the estimated costs for such enrollment) before
Defendants received from HNB a time and location to return the helicopter? For the reasons
explained below, the Court finds that the Lease’s provisions are reasonably susceptible to
different interpretations that result in different conclusions, rendering the Lease ambiguous.
Accordingly, HNB’s motion is GRANTED in part and DENIED in part.

I. BACKGROUND
1. Factual Background1
Bristow is a Louisiana limited liability company that provides industrial aviation services
worldwide. The sole member of Bristow is Bristow Group, a Delaware corporation with its
principal place of business in Texas.
On December 29, 2011, Bristow, as Lessee, and Wilmington Trust Company, as Lessor,
executed an agreement (the “Lease”) whereby Wilmington Trust, in its capacity as “owner
trustee,” leased to Bristow a Sikorsky S-92 helicopter (the “Aircraft”). Doc. 1-1. Bristow
negotiated the Lease’s terms and conditions with Banc of America Leasing & Capital, LLC,
which was the beneficial interest holder of the Aircraft. Doc 41 ¶ 47. Bristow Group guaranteed
Bristow’s obligations under the Lease. Doc. 34 ¶ 8. Following the Lease’s execution, Banc of
America assigned to HNB—an Ohio-based bank—all its rights and interest in the Lease and
Aircraft. Id. ¶¶ 8–9.
Pursuant to the Lease, the Rent Commencement Date was January 5, 2012, and the
Expiration Date was January 5, 2017. Doc. 41 ¶ 50. The Lease incorporates several
supplements, exhibits, riders, and addenda attached thereto. Id. ¶ 51. This includes the Return
Addendum, which sets forth the parties’ obligations with respect to the Aircraft’s return upon
expiration, cancellation, or other termination of the Lease. Id. Three paragraphs in the Return
Addendum are of particular relevance to this motion:

1

The following facts are recounted in the light most favorable to Defendants, the nonmovants. See Edelhertz v. City
of Middletown, 943 F. Supp. 2d 388, 393 (S.D.N.Y. 2012), aff’d, 714 F.3d 749 (2d Cir. 2013) (per curiam). The
facts are drawn from Defendants’ Response and Counter-Statement to Plaintiff’s Local Civil Rule 56.1 Statement of
Facts, see Doc. 34; Plaintiff’s Response to Defendants’ Counter-Statement of Material Facts, see Doc. 41; and the
parties’ supporting declarations and exhibits. References to the parties’ Rule 56.1 Statements incorporate the
evidentiary citations therein, and, in describing the Lease’s provisions, all capitalized terms not expressly defined in
this Opinion shall have the meaning ascribed to them in the Lease. Where the meaning of a capitalized word or
phrase is not obvious or departs from its commonly understood meaning, the Court will recite its specific meaning
under the Lease.

2

First, under paragraph (a), Bristow agreed to return the Aircraft “at a location specified
by [HNB] within the continental U.S.” and in accordance with all other requirements in the
subsequent paragraphs:
(a) Condition Upon Return. Unless purchased by Lessee, upon the expiration,
cancellation, or other termination of the Lease, Lessee will return the Aircraft
(together with all Records) to Lessor at a location specified by Lessor within the
continental U.S. . . . The Aircraft, at Lessee’s expense, upon redelivery pursuant
hereto . . . (vi) shall . . . be in compliance with all other Applicable Law and
Maintenance Requirements; and (vii) shall be otherwise in the condition and
repair required under the Lease.
Doc. 1-1–1-2, Return Addendum ¶ (a) (emphases added).
Second, paragraph (f), titled “Maintenance Contracts,” contains two subparts. Subpart (i)
simply provides that the requirements set forth in paragraphs (c)–(e) are inapplicable if, “at the
time of the return of the Aircraft to Lessor,” certain maintenance requirements concerning the
Aircraft’s Rotor Blade, Rotor Component, APU (auxiliary power unit), and Airframe are met.
Subpart (ii)—the specific provision at issue here—concerns the maintenance
requirements for the Aircraft’s Engines. In short, subpart (ii) provides that Bristow must do one
of three things to comply with the Return Addendum. It must either: (1) assign its rights under
its current “Engine Maintenance Program” 2 with General Electric Company (“GE”) to HNB; (2)
“arrange,” at no cost to HNB, for the Engine’s “eligibility” in a comparable Engine Maintenance
Program between HNB and GE; or (3) pay HNB an amount equal to the current estimated cost of
causing the Engines’ full enrollment in an Engine Management Program. In full, subpart (ii)
provides:

“Engine Maintenance Program shall mean that certain Maintenance Cost Per Hour (“MCPH”) Engine Services
Agreement dated as of October 25, 2007 between General Electric Company (“GE”) and [Bristow Group] . . . or
such other similar engine maintenance program from GE or another similar program provider (which such other
program shall not be on a pro rata basis, and such other program and the provider thereof must be acceptable to
Lessor in its reasonable discretion); and upon return, consistent with the requirements of paragraph (f)(ii) of the
Return Addendum.” Doc. 1-1 at 27 (emphasis added).
2

3

(ii) Engines. The Engines shall then be enrolled in the Engine Management
Program; and with respect to both Engines, Lessee shall either (A) assign all of its
rights and interests under the Engine Management Program, without cost or other
condition to such assignment (as acknowledged in writing by an authorized
representative of the maintenance provider and any other party to the agreements
relating to such program), (B) at no cost or expense to Lessor, arrange to have the
Engines eligible with no initial “buy-in” or “start-up” costs to Lessor to be
completely covered (and not on a pro rata basis) under a service and maintenance
contract between Lessor (or its designee) and the manufacturer (or other entity
acceptable to Lessor in its sole discretion), which such service and maintenance
contract provides for the complete maintenance and overhaul of the Engines for a
fixed hourly rate (which such rate shall be at the then fair market rate for similar
engines) and shall otherwise be in form and substance acceptable lo Lessor, or (C)
pay to Lessor an amount equal to the current estimated cost of causing the
Engines to be fully enrolled in an Engine Management Program. The payment
required by sub-clause (C) shall be made by Lessee to Lessor in good funds on
the Required Return Date, as liquidated damages, and not as a penalty, for
Lessee’s failure to comply with sub-clauses (A) and (B).
Id. ¶ (f)(ii) (emphases added). Notably, aside from the phrase “shall then,” and unlike subpart
(i), subpart (ii) does not contain a fixed time for Bristow’s performance with respect to its option
either to assign its rights in its Engine Maintenance Program with GE or to arrange for the
Engines’ eligibility in a comparable one acceptable to HNB. Subpart (ii) does, however, provide
that if Bristow elected instead to pay the estimated cost of causing the Engines’ full enrollment in
an Engine Maintenance Program—in lieu of an assignment or arrangement—such payment
would be due at the Aircraft’s “Required Return Date.” Doc. 41 ¶ 59.
Third, and finally, paragraph (m) of the Return Addendum provides that HNB is entitled
to holdover rent in the event Bristow failed to return the Aircraft “at the time, place and in the
condition specified” in the Return Addendum:
(m) Holdover Rent. If Lessee fails to return the Aircraft (including the Records)
at the time, place and in the condition specified in this Return Addendum, (A) all
of Lessee’s obligations under the Lease shall continue until it is so returned
. . . and . . . Lessee shall pay to Lessor an amount equal to the greater of the fair
market rent value . . . or the Daily Rent for each day after the end of the Term to,
but excluding the day the Aircraft is actually returned in accordance with this
Return Addendum. . . .

4

As early as June 2016, approximately seven months prior to the Lease’s Expiration Date,
Bristow and HNB engaged in discussions concerning whether Bristow would re-lease or
purchase the Aircraft from HNB. Doc. 41 ¶ 67. In August 2016, Bristow determined that it
would not re-lease or purchase the Aircraft and subsequently notified HNB that it planned to
return the Aircraft upon the Lease’s expiration. Id. ¶ 68. Thus, on August 28, 2016, Bristow
provided HNB with contact information for its personnel who would coordinate the return of the
Aircraft to HNB, id. ¶ 69, and it continued to follow up with HNB regarding the Aircraft’s return
for several weeks thereafter, id. ¶ 73.
On October 23, 2016, approximately two months prior to the Lease’s Expiration Date,
Bristow—concerned that HNB was not taking steps to allow for the Aircraft’s return by the
Expiration Date—emailed HNB to schedule a return inspection of the Aircraft. Id. ¶ 74. Despite
Bristow’s inquires, HNB did not participate in discussions with Bristow concerning the
Aircraft’s return until November 2016. Id. ¶ 75. At that time, HNB informed Bristow that it
intended to open an account with GE to facilitate transfer of the Aircraft’s Engines from
Bristow’s Engine Maintenance Program to HNB. Id. ¶ 78.
On December 20, 2016, approximately two weeks before the Lease’s Expiration Date,
Defendants emailed HNB requesting an update as to whether agreements had been reached with
Sikorsky (the Aircraft’s manufacturer) and GE concerning enrollment of the Aircraft’s Engines
into an Engine Maintenance Program. Id. ¶ 80. Defendants wrote that “[i]t is very important
that these agreements are put in place among [HNB] and the . . . providers so that the benefits
can be transferred to the bank at lease expiration.” Id. In that same email, Defendants also asked
HNB to tell them “with whom and at what location [the Aircraft] is going to be stored after lease
expiration.” Doc. 33-1 Ex. D.

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The next day, HNB advised Defendants that it had called GE to discuss transferring the
Engines from Defendants’ Engine Maintenance Program. Doc. 41 ¶ 81.
The Lease expired on January 5, 2017. At no time prior to the Expiration Date did HNB
specify a date and location for the Aircraft’s return notwithstanding that Bristow was ready,
willing, and able to return the Aircraft to HNB on the Expiration Date. Id. ¶¶ 86–87.
On several occasions following the Expiration Date, Defendants continued to request
return instructions or, alternatively, confirmation that HNB wanted them to store the Aircraft for
thirty days in accordance with paragraph (j) of the Return Addendum.3 Id. ¶¶ 94–98. HNB
failed to respond until January 26, 2017. That day, HNB emailed Defendants stating that there
were “a number of issues that needed to be addressed” prior to the formal termination of the
Lease. Doc. 33-1 Ex. I; see also Doc. 41 ¶ 99. According to HNB, one issue concerned
“[d]elivery of the [Aircraft] . . . to [HNB]’s chosen point of return in accordance with the Return
Addendum to the Lease.” Doc. 41 ¶ 99. HNB informed Defendants that it was “finalizing plans
to have the [A]ircraft stored at RSG [Aviation, Inc.] at Meacham International Airport in Fort
Worth, Texas.” Id.
On February 3, 2017, HNB emailed Defendants and wrote that it “want[ed] to complete
the delivery of [the Aircraft] to RSG at Meacham International Airport in Fort Worth, Texas[,] as
soon as possible.” Doc. 33-1 Ex. K; Doc. 41 ¶ 101. However, HNB did not provide delivery
instructions. Doc. 41 ¶ 101.

3

Paragraph (j) of the Return Addendum reads, in part, as follows:
(j) Storage. Upon the expiration . . . of the Lease, Lessee will, if requested by Lessor, permit
Lessor to store the Aircraft at the Primary Hangar Location for up to thirty (30) days. During such
storage period Lessee will, at its own expense, keep the Aircraft properly hangered and will permit
Lessor or any Person designated by Lessor, including the authorized representatives of any
prospective purchaser, lessee or user of the Aircraft to inspect the same.

6

One month following the Lease’s Expiration Date, on February 16, 2017, HNB emailed
Defendants to inform them that it had contacted GE to discuss the Engines’ enrollment in a new
GE maintenance and service contract. Id. ¶ 103. HNB explained that it had engaged in several
phone conversations with GE, and HNB attached to its email a draft letter agreement from GE
that “outline[d] what [GE w]as willing to offer to HNB on a going forward basis.” Doc. 33 Ex.
M. At this time, HNB also noted that it believed the draft agreement was “not responsive to the
requirements of HNB or the return conditions of the Lease”—specifically, paragraph (f)(ii) of the
Return Addendum. Id.
On March 9, 2017, more than two months following the Lease’s Expiration Date, HNB
advised Defendants that it was designating the RSG facility at Meacham International Airport in
Fort Worth, Texas, as the location for redelivery of the Aircraft. Doc. 41 ¶ 105. HNB
represented that it was prepared to send a pilot to Bristow’s facility in Angleton, Texas, on
March 13, 2017, to conduct an end-of-lease evaluation flight, where, at the end of the evaluation,
the helicopter would be flown to Forth Worth. Id. In connection with the contemplated return of
the Aircraft to HNB, Defendants forwarded to HNB, among other documents, a letter agreement
that would extend coverage for the Aircraft under Defendants’ Engine Maintenance Program
with GE for an additional 60 days—time Defendants believed was enough to allow HNB to
complete its own program arrangements with GE. Id. ¶ 106.
On March 13, 2017, Bristow had pilots available in Angleton to conduct the test flight;
however, HNB did not send a pilot to Angleton. Id. ¶¶ 107–109. Following this date, HNB
neither specified another date and location for the Aircraft’s return nor specified a “Required
Return Date” pursuant to paragraph (f)(ii) of the Return Addendum. Id. ¶ 110. Instead, HNB
proposed a new potential arrangement whereby Bristow would continue to maintain the Aircraft

7

pursuant to Bristow’s Engine Maintenance Program with GE, at Bristow’s cost, while HNB
attempted to remarket the Aircraft. Id. ¶ 111. Defendants told HNB that this arrangement was
unacceptable. Id. ¶ 112.
On June 13, 2017, five months following the Lease’s Expiration Date, HNB again
informed Bristow that it believed the Aircraft did not comply with paragraph (f)(ii) of the Return
Addendum. See Doc. 41 ¶ 121; see also Doc. 33-2 Ex. W. Specifically, HNB claimed
Defendants had failed their obligation to assign their rights in, to arrange for the Engines to be
eligible in, or to pay the estimated costs for enrollment in an Engine Maintenance Program.
Defendants disagreed at that time and continue to do so now. Instead, Defendants believe
that HNB’s continuous refusal to provide a time and place for the Aircraft’s return was made in
bad faith. SeeDoc. 35 at 2 (“To avoid incurring the costs associated with owning an Aircraft
without an operating lease, HNB sat on its hands as long as possible and let Bristow store,
maintain, and insure the Aircraft for HNB’s benefit.”). In support of their hypothesis,
Defendants point out that there was an oversupply of Sikorsky S-92 helicopters—the Aircraft’s
make and model—and an oversupply of other heavy passenger transportation helicopters in the
market prior to the Lease’s Expiration Date, see Doc. 41 ¶ 90, and note that HNB has yet to find
another operator to lease or sell the Aircraft to. Id. ¶¶ 91, 130.
After several letters back and forth among the parties, see id. ¶¶ 122–24, on July 29,
2017, Defendants notified HNB that it intended to “leave the Aircraft at the Fort Worth
Meacham International Airport, the only return location ever identified by HNB . . . on Friday,
August 4, 2017,” id. ¶ 124.

8

On August 4, 2017, Defendants delivered the Aircraft for storage at RSG Aviation Inc.,
in Fort Worth, Texas. Doc. 34 ¶ 29. HNB has had possession of the Aircraft since August 2017.
Doc. 41 ¶ 127.
2. Procedural Background
HNB filed the instant action on November 6, 2017. Doc. 1. In its Complaint, HNB
asserts a claim for breach of contract against Defendants for their alleged refusal to return the
Aircraft to HNB in accordance with paragraph (f)(ii) of the Return Addendum. In addition to
monetary damages, HNB seeks a declaration that Defendants remain liable to it for (1) holdover
rent pursuant to paragraph (m) of the Return Addendum, and for (2) the estimated cost of the
Engines’ full enrollment in a new Engine Maintenance Program pursuant to paragraph (f)(ii)(C).
Defendants answered HNB’s Complaint on December 29, 2017. In addition to denying
liability, Defendants assert counterclaims against HNB for (1) breach of contract, (2) breach of
the implied covenant of good faith and fair dealing, (3) unjust enrichment, and (4) declaratory
judgment. Doc. 16. Defendants maintain that they’ve complied with the Return Addendum and
that they were always ready, willing, and able to redeliver the Aircraft to HNB upon the Lease’s
expiration. According to Defendants, HNB’s refusal to receive the Aircraft back caused them to
incur substantial damages in the form of storage, maintenance, and insurance costs.
Following a pre-motion conference with the Court, HNB moved for summary judgment
on all its claims and all Defendants’ counterclaims. Docs. 28–31. This Court has jurisdiction
over this action, as the parties are completely diverse and the amount in controversy exceeds
$75,000, exclusive costs and interest. Doc. 41 ¶¶ 1–4; see also 28 U.S.C. 1332(a). Moreover,
pursuant to the Lease and accompanying Guaranty, the parties have consented to personal
jurisdiction and venue in this District. Doc. 41 ¶¶ 5–6.

9

II. STANDARD OF REVIEW
Summary judgment is appropriate when “the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to summary judgment as a matter of
law.” Fed. R. Civ. P. 56(a). “An issue of fact is ‘genuine’ if the evidence is such that a
reasonable jury could return a verdict for the non-moving party.” Senno v. Elmsford Union Free
Sch. Dist., 812 F. Supp. 2d 454, 467 (S.D.N.Y. 2011) (quoting SCR Joint Venture L.P. v.
Warshawsky, 559 F.3d 133, 137 (2d Cir. 2009)). A fact is “material” if it might affect the
outcome of the litigation under the governing law. Id. “When the burden of proof at trial would
fall on the nonmoving party, it ordinarily is sufficient for the movant to point to a lack of
evidence to go to the trier of fact on an essential element of the nonmovant’s claim. In that
event, the nonmoving party must come forward with admissible evidence sufficient to raise a
genuine issue of fact for trial in order to avoid summary judgment.” Jaramillo v. Weyerhaeuser
Co., 536 F.3d 140, 145 (2d Cir. 2008) (citing, e.g., Celotex Corp. v. Catrett, 477 U.S. 317, 322–
23 (1986)).
In deciding a motion for summary judgment, the Court construes the facts in the light
most favorable to the nonmovant and resolves all ambiguities and draws all reasonable
inferences against the movant. Brod v. Omya, Inc., 653 F.3d 156, 164 (2d Cir. 2011). The
nonmovant, however, may not rely on unsupported assertions or conjecture in opposing
summary judgment. Goenaga v. March of Dimes Birth Defects Found., 51 F.3d 14, 18 (2d Cir.
1995). Rather, the nonmovant “must set forth significant, probative evidence on which a
reasonable fact-finder could decide in its favor.” Senno, 812 F. Supp. 2d at 467–68 (citing
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256–57 (1986)).

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III. DISCUSSION
1. Whether HNB is Entitled to Summary Judgment for Breach of Contract
The Court first turns to HNB’s claim for breach of contract. To succeed on such a claim
under New York law, a plaintiff must establish (1) the existence of a valid contract among the
parties, (2) performance by the plaintiff, (3) non-performance by the defendants, and (4)
damages. Nick’s Garage, Inc. v. Progressive Cas. Ins. Co., 875 F.3d 107, 114 (2d Cir. 2017)
(citation omitted); see also Flomenbaum v. N.Y. Univ., 890 N.Y.S.2d 493, 502 (App. Div. 1st
Dep’t 2009) (explaining same), aff’d, 929 N.E.2d 403 (N.Y. 2010). “Summary judgment is only
proper in contract disputes if the language of the contract is wholly unambiguous.” Mellon
Bank, N.A. v. United Bank Corp. of N.Y., 31 F.3d 113, 115 (2d Cir. 1994) (internal quotation
marks omitted). “Whether a contractual term is ambiguous must be determined by the court as a
matter of law, looking solely to the plain language used by the parties within the four corners of
the contract to discern its meaning and not to extrinsic sources.” Ashwood Capital, Inc. v. OTG
Mgmt., Inc., 948 N.Y.S.2d 292, 297 (App. Div. 1st Dep’t 2012).
In interpreting a contract’s terms, “[t]he entire contract must be reviewed and [p]articular
words should be considered, not as if isolated from the context, but in the light of the obligation
as a whole and the intention of the parties as manifested thereby.” Riverside S. Planning Corp.
v. CRP/Extell Riverside, L.P., 920 N.E.2d 359, 363 (N.Y. 2009) (internal quotation marks
omitted); accord In re Estate of Stravinsky, 770 N.Y.S.2d 40, 45 (App. Div. 1st Dep’t 2003)
(“Contracts are not to be interpreted by giving a strict and rigid meaning to general words or
expressions without regard to the surrounding circumstances or the apparent purpose which the
parties sought to accomplish.” (emphasis and internal quotation marks omitted)).

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“A contract is ambiguous if the provisions in controversy are reasonably or fairly
susceptible of different interpretations.” Almah LLC v. AIG Emp. Servs., Inc., 68 N.Y.S.3d 429,
430 (App. Div. 1st Dep’t 2018) (citation omitted). Contrariwise, a contract is unambiguous if
the provision in controversy has “a definite and precise meaning, unattended by danger of
misconception in the purport of the [contract] itself, and concerning which there is no reasonable
basis for a difference of opinion.” Greenfield v. Philles Records, Inc., 780 N.E.2d 166, 170–71
(N.Y. 2002). Moreover, where a contract is clear and unambiguous on its face, discovery
regarding the parties’ intent is rendered unnecessary, as any parol evidence would be
inadmissible. Ashwood Capital, 948 N.Y.S.2d at 299; accord RM Realty Holdings Corp. v.
Moore, 884 N.Y.S.2d 344, 347 (App. Div. 1st Dep’t 2009) (“Any such discovery would simply
be an opportunity for [a party] to uncover parol evidence to attempt to create an ambiguity in an
otherwise clear and unambiguous agreement.”).
Here, the parties agree that the Lease is a legally enforceable contract that binds them.
See Doc. 29 at 4; Doc. 35 at 7. Thus, the first element of HNB’s claim for breach of contract is
satisfied. The Court next considers whether HNB fully performed under the Lease.

A.

There are Questions of Material Fact Concerning HNB’s Performance

HNB argues that it has fully performed all its obligations under the Lease, satisfying the
second element for breach of contract. Doc. 29 at 5–7. Defendants disagree. In their view,
HNB failed to satisfy its obligation under the Lease to provide Defendants with a time and
location for the Aircraft’s return following the Lease’s Expiration Date. Doc. 35 at 1–2. In
rejoinder, HNB argues that it wasn’t required to provide Defendants with a date and location for
the Aircraft’s redelivery—or to accept delivery at all, for that matter—prior to Defendants’
compliance with paragraph (f)(ii) of the Lease’s Return Addendum. Doc 40 at 1–2.

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The parties’ disagreement over HNB’s performance arises from three paragraphs
contained in the Lease’s Return Addendum: paragraphs (a), (f), and (m). As noted above,
paragraph (a), titled “Condition Upon Return,” provides that Bristow, “upon the expiration,
cancellation, or other termination of the Lease,” must “return the Aircraft (together with all
Records) to [HNB] at a location specified by [HNB] within the continental U.S.” Paragraph (f),
titled “Maintenance Contracts,” provides that Bristow either must (A) assign to HNB its rights
and interest in the Engine Maintenance Program in which the Engines were currently enrolled;
(B) “arrange” to have the Engines “eligible” to be enrolled under a service and maintenance
contract between HNB and the Engine’s manufacturer, at no cost or expense to HNB and with no
initial “buy-in” or “start-up costs,” along with some other conditions; or (C) pay to HNB an
amount equal to the current estimated cost of causing the Engines to be fully enrolled in an
Engine Management Program. And paragraph (m), titled “Holdover Lease” provides that if
[Bristow] fails to return the Aircraft (including the Records) at the time, place and in the
condition specified in this Return Addendum, . . . all of [Bristow]’s obligations under the Lease
shall continue until it is so returned.”
HNB argues that those paragraphs, read in tandem, establish that it wasn’t obligated to
accept redelivery of the Aircraft because paragraph (m) provides that Bristow’s obligations under
the Lease—including its obligation to possess the Aircraft—continue to run until Bristow
complied with its engine maintenance obligations under paragraph (f). Given Bristow’s failure
to assign, enroll, or pay, HNB contends that Defendants’ obligations under the Lease remain.4

4

To be clear, HNB acknowledges that paragraph (a) of the Return Addendum obligated it to specify a location
within the continental U.S. for return of the Aircraft, but it objects to any interpretation of the Lease that “implies
that HNB had any obligation to specify a location for return of the Aircraft prior to Bristow [U.S.] complying with
the return conditions in the Return Addendum.” Doc. 41 ¶ 60.

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Not so, say Defendants. Rather, Defendants point to language in paragraphs (a) and (m)
as creating an affirmative obligation (i.e., an express or implied condition precedent) for HNB to
designate a time and place for the Aircraft’s return before Defendants’ obligation to comply with
paragraph (f) arises. At minimum, Defendants continue, there is a genuine dispute of material
fact concerning whether HNB had such an obligation.
The Court concludes that the Lease is “reasonably or fairly susceptible” to Defendants’
interpretation. The Court reaches this conclusion for several reasons. First, the principal
purpose of the Lease’s Return Addendum clearly is to detail obligations concerning the
Aircraft’s required condition upon its return, rather than to detail the Aircraft’s required
condition upon the Lease’s expiration. Indeed, obligations arising “upon return,” “at the time of
return,” or “upon redelivery” or “after the return” of the Aircraft appear in almost every
paragraph contained in the Addendum. See, e.g., Doc. 1-1, Return Addendum ¶¶ (a) (providing
that “[t]he Aircraft, at Lessee’s expense, upon redelivery . . . shall be in compliance with
all . . . Maintenance Requirements”), (b) (providing that the parties would agree to engage a
helicopter appraiser “within ten (10) days after the return of the Aircraft to Lessor” and that,
“upon return of the Aircraft,” the parties shall consult for the purpose of determining the “Excess
Use Amount,” if any), (c) (providing that “[u]pon return . . . (iii) all life limited parts and
components shall have remaining not less than fifty percent (50%) of the available hours, cycles
and/or months, as the case may be, until the next scheduled replacement, other than any such life
limited parts and component covered by . . . an Engine Management Program complying with
the requirements of paragraph (f)(ii)”), (d)–(e) (setting forth obligations in the event of noncompliance with paragraph (c), which in turns set forth performance obligations due upon the
Aircraft’s return), (f)(i) (providing that the provisions of paragraphs (c)–(e) will not apply if, “at

14

the time of return” certain conditions are met), (g) (setting forth obligations in the event of noncompliance with paragraph (c), which in turns set forth performance obligations due upon the
Aircraft’s return), (f)(ii) (providing that any required payment under this paragraph shall be made
on the “Required Return Date”) (i) (providing for how much fuel shall be in the tank of the
Aircraft “upon return”), (k) (setting forth obligations for performance “concurrently with
delivery”). This observation alone militates in favor of Defendants’ argument that any
obligations they had under paragraph (f)(ii) would be ripen only upon the return of the Aircraft,
which in turn naturally requires a designated place and time for the Aircraft’s return.
Second, paragraph (f)—the very provision HNB relies upon—is ambiguous as to when
Bristow’s duties to assign or to arrange arise. As noted above, paragraph (f), titled “Maintenance
Contracts,” contains two subparts. Subpart (f)(i), like most other provisions in the Return
Addendum, explicitly provides that the maintenance obligations for several of the Aircraft’s
components are inapplicable “if at the of the return of the Aircraft to the Lessor,” certain
conditions are met. (Emphasis added). Immediately following is subpart (f)(ii), which concerns
the Aircraft’s Engines. The subpart first provides that “[t]he Engines shall then be enrolled in
the Engine Maintenance Program,” and proceeds to provide Bristow, as Lessee, three options to
satisfy its obligation for engine maintenance. Notably absent in that provision, however, is what
the word “then” refers to.
Traditionally, the word “then” means refers to something “at that time,” “soon after that,”
or “next in order of time.” Then, Merriam-Webster, https://www.merriamwebster.com/dictionary/then (last visited Feb. 25, 2019). But subpart(f)(ii) provides no clarity as
to what event or condition coincides with (or precedes) the obligation to enroll the Engines in a
maintenance program. Of course, the word “then” may refer to the proceeding subpart, (f)(i),

15

which prescribes maintenance obligations for other parts of the Aircraft that arise at the time of
the Aircraft’s return to HNB. This reading would arguably be the most natural. HNB’s
argument to the contrary rests on the assumption that Bristow’s obligation arose at or before the
Lease’s expiration, rather than at or after the Aircraft’s return. But neither the language of
subpart (f)(ii) nor its surrounding provisions, all concerning obligations upon return, support
such a reading.
Third, and relatedly, in the few instances in the Return Addendum where the parties have
agreed to obligations that precede the physical return of the Aircraft, they expressly state as
much. For example, paragraph (j) provides HNB with the option to instruct Bristow to store the
Aircraft for up to thirty days “upon the expiration, cancellation or other termination of the
Lease.” Similarly, in paragraph (l), Bristow agreed to certify that the Aircraft was in the
condition required by the Return Addendum or indicate what maintenance or repair was needed
to bring the Aircraft to the specified condition “[n]ot more than forty-five (45) days prior to the
expiration of the Lease, upon the written request of [HNB].”5 However, such language stands in
stark contrast to that found in paragraph (f), which contains phrases such as “at the time of the
return,” see Docs. 1-1–1-2, ¶ (f)(i), and “shall then,” id. ¶ (f)(ii).
Fourth, the paragraphs giving rise to Bristow’s obligation to return the Aircraft appear to
expressly contemplate that HNB would provide a time and date of return. See Doc. 1-1 ¶¶ (a)
(obligating Bristow to return the Aircraft upon the expiration of the contract “at a location
specified by Lessor within the continental U.S.” (emphasis added)), (m) (prescribing holdover
rent “[i]f Lessee fails to return the Aircraft (including the Records) at the time, place and in the
condition specified in this Return Addendum” (emphasis added)).

5

Notably, HNB made no such written request here. Doc. 41 ¶ 94.

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What’s more, as Defendants point out, to satisfy paragraph (f)(ii), Defendants retained
the option to pay the estimated cost of “causing” the Engines’ full enrollment in an Engine
Maintenance Program by the “Required Return Date.” Notably, while that term is capitalized, it
is left undefined. However, given that the Return Addendum repeatedly distinguishes between
performance obligations due upon the Lease’s expiration versus those due upon the Aircraft’s
physical return, the Court will not assume that the Required Return Date is synonymous with the
Lease’s Expiration Date of January 5, 2017. Accord Platek v. Town of Hamburg, 26 N.E.3d
1167, 1173 (N.Y. 2015) (“The use of different terms in the same agreement . . . implies that they
are to be afforded different meanings.”); cf. State St. Bank & Tr. Co. v. Salovaara, 326 F.3d 130,
139 (2d Cir. 2003) (“It is well-settled that courts should avoid statutory interpretations that
render provisions superfluous: It is our duty to give effect, if possible, to every clause and word
of a statute.” (internal quotation marks omitted)). If the Required Return Date is a date distinct
from the Lease’s Expiration Date, then there is a material question of fact concerning when, if
ever, the Required Return Date passed.
Fifth, and finally, the definition of the maintenance program in which the Engines were to
be enrolled seems to contemplate that Defendants’ performance obligation arose upon return of
the Aircraft. Specifically, the definition of “Engine Management Program” references paragraph
(f)(ii) of the Return Addendum, contains near-identical language to that in paragraph (f)(ii), and
suggests that the obligations thereunder is due upon the Aircraft’s return:
Engine Management Program shall mean that certain Maintenance Cost Per Hour
(“MCPH”) Engine Services Agreement dated as of October 25, 2007
between . . . GE . . . and Parent . . . or such other similar engine maintenance
program from GE or another similar program provider (which such other program
shall not be on a pro rate basis, and such other program and the provider thereof
must be acceptable to Lessor in its reasonable discretion); and upon return,
consistent with the requirements of paragraph (f)(ii) of the Return Addendum.

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At bottom, while HNB argues that Defendants failed to return the Aircraft in accordance with
paragraph (f)(ii) of the Return Addendum, nowhere in its motion papers does it explain when
Defendants’ obligation under that paragraph arose. Nor is it clear from the Return Addendum
that Defendants were required to perform prior to redelivery, especially given that they could
have satisfied paragraph (f)(ii) by virtue of a payment made at the Aircraft’s “Required Return
Date.” Nor is it clear that HNB fully performed its obligation under the Lease to designate a
time and place for return. Consequently, at this time the Court cannot conclude as a matter of
law that Defendants breached their obligation under the Lease. Summary judgment in HNB’s
favor is thus denied.

B.

There are Questions of Material Fact Concerning Defendants’ Performance

Assuming arguendo that HNB fully performed its obligations under the Lease,
Defendants argue that there remains a genuine issue of material fact concerning whether they
satisfied their obligations under the Lease by complying with Return Addendum paragraph
(f)(ii)(B) (i.e., whether they “arrange[d] to have the Engines eligible with no initial ‘buy-in’ or
‘start-up’ costs to [HNB] to be completely covered . . . under a service and maintenance contract
between [HNB] and [GE]” at no cost to HNB). The Court agrees.
HNB argues that Defendants failed to “make an arrangement for the Engines to be
eligible for enrollment in an engine maintenance program at no cost to HNB and subject to
additional specific conditions,” in accordance with paragraph (f)(ii)(B).6 Doc. 29 at 6.
Specifically, HNB contends that the draft engine maintenance and service agreement it received
from GE falls woefully short of the requirements outlined in paragraph (f)(ii)(B) and thus is not

6

The Court, in the previous section, held that there is a genuine dispute of material fact concerning whether and, if
so, when the time to pay under paragraph (f)(ii)(C) of the Return Addendum expired. The Court notes that
paragraph (f)(ii)(A) is not at issue here, as Defendants claim they were unable to assign their Engine Maintenance
Program benefits to HNB under their contract with GE. See Doc. 23 at 12–13; Doc. 41 ¶ 78.

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“in form and substance acceptable to” HNB, as mandated by Return Addendum paragraph
(f)(ii)(B). See Doc. 29 at 6–7; Doc. 40 at 2–4.
However, as Defendants correctly note, there is a quintessential issue of material fact as
to what the term “arrange to the have the Engines eligible” means. For one thing, Defendants
argue that a later maintenance and service agreement entered into between HNB and GE in
February 2018, six months after Defendants delivered the Aircraft, is substantially similar to that
offered to HNB in February 2017 and evidences that the Engines were eligible to be covered
under a compliant maintenance contract upon the Lease’s expiration (assuming the Lease’s
Expiration Date is the proper reference point). Doc. 35 at 13–14. And while HNB argues that
both agreements “clearly” do not satisfy paragraph (f)(ii)(B) (and that it entered the 2018
agreement for mitigation purposes only), see Doc. 40 at 3, the Court does not find such
conclusion “clear.” Thus, denial of summary judgment is proper.
2. Declaratory Relief, Attorneys’ Fees, and Defendants’ Counterclaims
Given the Court’s denial of summary judgment as to HNB’s claim for breach of contract,
the Court also denies summary judgment to HNB with respect to its claims for declaratory relief
and attorneys’ fees and with respect to Defendants’ counterclaims for breach of contract and
breach of the implied covenant of good faith and fair dealing. As mentioned above, there are
myriad questions of fact concerning (1) whether HNB was required to designate a location and
time for Bristow to return the Aircraft prior to Bristow’s obligations under paragraph (f) and (2)
whether Bristow did, in fact, arrange to have the Engines eligible.7 Summary judgment in favor
of HNB as to Defendants’ counterclaim for unjust enrichment is appropriate, however.

7

Defendants also ask this Court to hold as a matter of law that HNB is not entitled to holdover rent in the event
Defendants are found liable for breach of contract. However, given the denial of summary judgment to HNB, the
Court concludes that the question of HNB’s entitlement to holdover rent is premature.

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“Where the parties executed a valid and enforceable written contract governing a
particular subject matter, recovery on a theory of unjust enrichment for events arising out of that
subject matter is ordinarily precluded. Only where the contract does not cover the dispute in
issue may a plaintiff proceed upon a quasi-contract theory of unjust enrichment.” Ashwood
Capital, 948 N.Y.S.2d at 299 (citations and internal quotation marks omitted).
Here, the Lease clearly covers the dispute at issue. If Defendants were obligated to
satisfy the conditions in paragraph (f)(ii) of the Return Addendum prior to HNB’s duty to
specify a date and location for the Aircraft’s return, then Defendants’ alleged failure to satisfy
those conditions created a continuing obligation for them to possess, store, insure, and otherwise
maintain the Aircraft—in addition to continuing rental obligations—and thus Defendants will be
unable to recover for costs incurred in fulfilling those obligations. Alternatively, if HNB had a
preceding obligation to assign a date and location for the Aircraft’s return, yet refused to do so,
Defendants likely would be entitled to recover damages under their counterclaims for breach of
contract or breach of the implied covenant of good faith. In any event, final interpretation of the
Lease would define entirely the parties’ obligations vis-à-vis each other. Thus, summary
judgment in favor of HNB on Defendants’ counterclaim for unjust enrichment is warranted.

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IV. CONCLUSION

For the reasons explained above, HNB's motion for summary judgment is GRANTED in
part and DENIED in part. Specifically, HNB's motion is GRANTED insofar as it seeks
dismissal of Defendants' counterclaim for unjust enrichment, and it is DENIED otherwise. The
parties are directed to appear for a status conference on Friday, March 15, 2019, at 10:00 A.M.,
and to file a joint pretrial statement in accordance with section 3.A of the Court's Individual
Practices. The Clerk of Court is respectfully directed to terminate the motion, Doc. 28.
It is SO ORDERED.
Dated:

March 1, 2019
New York, New York

~J2-

Edgardo Ramds, U.S.D.J.

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