Lockard Aircraft Sales Co., Inc. v. Dumont Aircraft Sales, LLC et al
Filing
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OPINION AND ORDER by Chief Judge John E Dowdell ; denying 81 Motion for Partial Summary Judgment (JED1, Chambers)
UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF OKLAHOMA
LOCKARD AIRCRAFT SALES CO.,
INC.,
Plaintiff,
v.
DUMONT AIRCRAFT SALES, LLC;
DAN PIRAINO; KEVIN WARGO;
Defendants.
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Case No. 16-CV-469-JED-FHM
OPINION AND ORDER
Before the Court is the defendants’ Motion for Partial Summary Judgment (Doc.
81).
The defendants seek partial summary judgment on several issues.
First, the
defendants argue that the plaintiff has acknowledged that his claim is a simple breach of
contract claim and there is no evidence of fraud, such that the plaintiff’s fraud claim and
request for punitive damages should be dismissed. Second, the individual defendants
maintain that the plaintiff cannot maintain claims against them as a matter of law. Third,
the defendants contend that plaintiff may not maintain any breach of contract claim for
commissions on “parts planes,” because the parties’ agreement does not expressly include
“parts planes.” The plaintiff filed a response (Doc. 84), and the defendants filed a reply
brief (Doc. 87).
I.
Background
The following facts are undisputed, except where otherwise noted. Defendant
Dumont Aircraft Sales, LLC (DAS) purchases and sells pre-owned aircraft. Defendant
Kevin Wargo is the manager and a principal of DAS, and defendant Daniel Piraino is also
a principal. The plaintiff, Lockard Aircraft Sales, Inc. (Lockard) is owned and operated by
Dennis and Tammie Lockard. Lockard’s business includes buying, selling, and brokering
aircraft.
By email, Lockard and DAS entered into an agreement in December 2014. Pursuant
to the agreement, Lockard would serve as an independent contractor for DAS and would
be responsible for sourcing aircraft deals for DAS, in exchange for compensation,
including commissions. Lockard was to receive an annual base compensation of $120,000,
paid $10,000 monthly. Once $360,000 in profit was generated from Lockard’s annual
aircraft sales, Lockard was to receive one-third (33 1/3%) of DAS’s net profits of those
sales that were above $360,000. (Doc. 81-5).
DAS paid Lockard the annual base compensation of $120,000. DAS also paid
commissions totaling $79,659.00 through January 12, 2016. Lockard challenged the
amount of commissions paid and subsequently terminated the agreement. Lockard brought
suit against DAS for breach of contract and against all defendants for fraud. The defendants
removed the action, based upon diversity jurisdiction.
II.
Summary Judgment Standards
Summary judgment is appropriate “if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). “[S]ummary judgment will not lie if the
dispute about a material fact is ‘genuine,’ that is, if the evidence is such that a reasonable
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jury could return a verdict for the nonmoving party.” Anderson, 477 U.S. at 248. The
courts thus must determine “whether the evidence presents a sufficient disagreement to
require submission to a jury or whether it is so one-sided that one party must prevail as a
matter of law.” Id. at 251-52. The non-movant’s evidence is taken as true, and all
justifiable and reasonable inferences are to be drawn in the non-movant’s favor. Id. at 255.
The court may not weigh the evidence and may not credit the evidence of the party seeking
summary judgment and ignore evidence offered by the non-movant. Tolan v. Cotton, 572
U.S. 650, 657-59 (2014) (per curiam).
III.
Discussion
A.
Fraud Claim
The defendants argue that the plaintiff has acknowledged his claim is a simple
breach of contract claim. They also contend that the plaintiff has no evidence of fraud. In
support of their arguments, the defendants cite portions of Mr. Lockard’s deposition in
which he noted numerous bookkeeping “mistakes” and stated that his dispute was based
upon DAS’s failure to pay Lockard in accordance with the agreement. (See Doc. 81 at 1920 of 31 [citing deposition testimony]). However, the testimony cited by the defendants
does not exclude the possibility of fraud. (See id.).
Moreover, reading Mr. Lockard’s testimony in context, it is clear that he is asserting
that the defendants intentionally and fraudulently presented false information to Lockard
in calculations that related to Lockard’s commissions. Mr. Lockard not only testified as to
specific examples of what he believed to be intentionally misleading calculations and
misrepresentations by the defendants, but Lockard also expressly alleged that such
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representations were, in his view, “fraudulent.” (See, e.g., Doc. 84-3 at 61-67 of 77). For
example, Lockard testified that the defendants represented that they were not subtracting
Lockard’s base pay from commissions, but they were subtracting the base. (Id. at 61). He
also testified that the defendants’ calculations did not truthfully list the amounts at which
aircraft were sold. (Id. at 62-63). He further identified several other facts that support his
fraud claim. (See id. at 64-67).
The Court has reviewed all of the record evidence submitted with the parties’
briefing, which reveals that there are genuine disputes of material fact regarding Lockard’s
fraud claim. Taking the plaintiff’s evidence as true, as is required at the summary judgment
stage, a reasonable jury could find that the defendants knowingly or recklessly made
material misrepresentations with the intent that the plaintiff rely upon the false information
to accept a lower commission. As a result, the defendants’ motion for partial summary
judgment as to plaintiff’s fraud claim and request for punitive damages will be denied.
B.
Claims Against the Individual Defendants
The defendants argue that Lockard cannot maintain claims against them as a matter
of law. The defendants argue that the plaintiff’s contract was with DAS and not the
individual defendants, such that the individual defendants may not be liable on the contract.
(See Doc. 81 at 24 of 30). Lockard’s breach of contract claim is against DAS, not the
individual defendants. (Doc. 2-1 at 9 [First Cause of Action]). The individual defendants
are the subject of plaintiff’s Second Cause of Action, which alleges fraud. (See id. at 9-10
[Second Cause of Action]). It is well-settled that a corporate entity’s officers and agents
may be liable for their own tortious conduct. See Okla. Federated Gold & Numismatics,
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Inc. v. Blodgett, 24 F.3d 136, 141 (10th Cir. 1994); Smoot v. B & J Restoration Servs., Inc.,
279 P.3d 805, 814 (Okla. Civ. App. 2012); Prairie Capital III, L.P. v. Double E Holding
Corp., 132 A.3d 35, 60 (Del. Ch. 2015) (“As the human through which the corporate
principal acts, ‘[a] corporate officer can be held personally liable for the torts he commits
and cannot shield himself behind a corporation when he is a participant.’ . . . ‘This includes
situations where a corporate agent participates in corporate fraud.’ ‘It is immaterial that the
corporation may also be liable.’”) (citations omitted).1
Lockard has presented evidence to support its claim that the defendants presented
Lockard with spreadsheets that intentionally misrepresented pricing, costs, and sales in an
effort to reduce the amount of commissions owed to plaintiff and that the individual
defendants made oral misstatements to the plaintiff. (See Doc. 84-3 at 61-69). Lockard
also alleges that the individual defendants engaged in fraudulent conduct in relation to
presenting inaccurate information in relation to a sale of an aircraft to another entity in
which the individuals were also principals. Participation by the individual defendants in
such alleged tortious conduct subjects them to liability for their own tortious conduct, as
noted above. As a result, the motion as to that issue will be denied.
The defendants assert that Delaware law should apply because that is where the
agreement was performed, while the plaintiff argues that the contract was made by an offer
extended to plaintiff in Oklahoma, was accepted in Oklahoma, and was performed by
plaintiff in Oklahoma, requiring commissions to be paid to plaintiff in Oklahoma. The
parties’ email agreement does not indicate any agreement on choice of law. The parties
have not identified a material distinction or conflict between Oklahoma and Delaware law
on the issues presented in the motion for summary judgment. (See, e.g., Doc. 81 at 19 of
30, fn.1, 2, 3, 4, 5, 7, 8, 9 [noting Oklahoma and Delaware law do not differ]). As no
“conflict” has been presented, the Court declines at this time to determine a hypothetical
conflicts issue.
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C.
“Parts Planes”
The defendants argue that the plaintiff’s contract claim as to parts planes must fail
because the agreement did not expressly mention “parts planes.” On the other hand, the
plaintiff points out that, consistent with the parties’ prior dealings, the agreement included
all sales of aircraft, because it did not carve out an exception for parts planes. The
agreement, the terms of which were derived through a back and forth email exchange, does
not mention “parts planes.” (See Doc. 81-5). However, the agreement refers to profits
calculated “per plane” and a commission of 33.3% on Lockard’s “aircraft sales,” without
excluding profits from parts planes. (See id.).
While DAS contends that the agreement unambiguously excludes parts planes
because it does not specifically mention them as a separate type of plane or aircraft, the
agreement does not exclude them, but instead refers to “aircraft sales” and “planes.” In
addition, the agreement indicates it applies to selling out of DAS’s inventory and “any new
deals we find together.” (See id.). Lockard has also presented evidence of the parties’
history of dealings, which included parts planes, and Mr. Lockard’s understanding that his
commission above $360,000 in profits would be calculated as to all planes, including parts
planes. (See Doc. 84-3 at 12-16 of 77). DAS ultimately paid Lockard only 33.3% of a flat
fee of $5,000 or $10,000 on parts planes, which was not consistent with the formula for
commissions in the agreement. DAS contends that the different formula was discussed at
some point after the agreement was reached, but Lockard denies that any conversation or
separate agreement was reached. The evidence as to this issue presents a genuine dispute
of material fact for a jury.
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IV.
Conclusion
For the foregoing reasons, the defendants’ Motion for Partial Summary Judgment
(Doc. 81) is denied.
SO ORDERED this 3rd day of September, 2019.
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