Mansfield Heliflight, Inc. v. Freestream Aircraft USA, Ltd. et al

Filing 172

ENTRY OF FINAL JUDGMENT AND AWARD OF COSTS: granting 161 MOTION for Entry of Final Judgment as to Freestream Aircraft USA, Ltd. and granting in part, denying in part 161 MOTION for Award of Prejudgment Interest and Costs. Judgment ente red in favor of Plaintiff Mansfield Heliflight, Inc., against Defendant Freestream Aircraft USA, Ltd. in the amount of $3,240,000 and costs of $11,249.87; plaintiff's request for equitable relief is denied. Signed by Judge Christina Reiss on 10/10/2019. (law)

UNITED STATES DISTRICT COURT
FOR THE
DISTRICT OF VERMONT
MANSFIELD HELIFLIGHT, INC.,
Plaintiff,
V.

FREESTREAM AIRCRAFT USA, LTD.,
Defendant.

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Case No. 2:16-cv-28

ENTRY OF FINAL JUDGMENT AND A WARD OF COSTS
Plaintiff Mansfield Heliflight, Inc. brought this action against Defendant
Freestream Aircraft USA, Ltd. alleging the following state-law claims arising out of the
purchase and sale of a Gulfstream IV jet (the "Aircraft"): fraudulent inducement, tortious
interference with a contract, tortious interference with a prospective business relationship,
civil conspiracy, and unjust enrichment.
Following a five-day trial held from July 12 through July 16, 2019, the jury found
in favor of Plaintiff on its claims of fraudulent inducement, tortious interference with a
contract, tortious interference with a prospective business relationship, and unjust
enrichment, and in Defendant's favor on Plaintiffs civil conspiracy claim. The jury
awarded Plaintiff $420,000 in restitution damages for the unjust enrichment claim,
$800,000 in compensatory damages, and $2,440,000 in punitive damages, for a total
award of $3,660,000.
On July 22, 2019, the court issued an Entry Order requesting supplemental
briefing from the parties regarding whether the jury's verdict on Plaintiffs unjust
enrichment claim should be vacated because there exists an adequate remedy at law. On
August 5, 2019, Plaintiff and Defendant each filed supplemental briefing addressing this
issue.

Pending before the court is Plaintiffs August 5, 2019 motion for entry of final
judgment and award of prejudgment interest and costs. (Doc. 161.) Plaintiff requests
that the court enter an order "reflecting the jury's award ($3,660,000) plus prejudgment
interest at the rate of twelve percent per annum from October 28, 2015 up to the date of
entry of judgment, plus costs in the amount of $11,249.87." (Doc. 161 at 5.)
Plaintiff is represented by Jennifer E. McDonald, Esq., and Walter E. Judge, Jr.,
Esq. Defendant is represented by Courtney R. Rockett, Esq., Jack G. Stem, Esq.,
Jonathan R. Voegele, Esq., Patrick J. Rohan, Esq., and Richard B. Drubel, Esq.

I.

Whether to Award Plaintiff Damages for Unjust Enrichment.
Defendant requests that the court vacate Plaintiffs $420,000 award for unjust

enrichment because Plaintiff has an adequate remedy at law and cannot be allowed to
recover twice for the same harm. Alternatively, Defendant requests that the court reduce
the amount of the unjust enrichment verdict to $85,000, which it asserts is the net profit
that Defendant received from the sale of the Aircraft. 1 Plaintiff asks the court to enter
judgment for the full amount awarded by the jury and argues that equitable damages are
permissible because compensatory damages did not afford a complete remedy and
because the remedy at law and the equitable relief reflect two different types of harm.
Unjust enrichment requires a party seeking equitable relief to prove: "'(l) a benefit
was conferred on defendant; (2) defendant accepted the benefit; and (3) defendant
retained the benefit under such circumstances that it would be inequitable for defendant
not to compensate plaintiff for its value."' Kellogg v. Shushereba, 2013 VT 76,

~

31, 194

Vt. 446,463, 82 A.3d 1121, 1133 (quoting Center v. Mad River Corp., 561 A.2d 90, 93
(Vt. 1989)); JW, LLC v. Ayer, 2014 VT 71, ~ 22, 197 Vt. 118, 129, 101 A.3d 906, 914
(observing that unjust enrichment may be awarded in equity where "'[t]he law implies a
promise to pay [because] a party receives a benefit and the retention of the benefit would
be inequitable."') (alterations in original) (quoting Cedric Elec., Inc. v. Shea, 472 A.2d

1

Defendant's President and Owner, Rebecca Posoli-Cilli, testified that "after expenses and
commission payouts," the amount Freestrearn "ke[pt]" was approximately "[$]85 to [$]90,000."
(Doc. 158 at 160.)
2

be inequitable."') (alterations in original) (quoting Cedric Elec., Inc. v. Shea, 472 A.2d
757, 757 (Vt. 1984) (per curiam)). "In determining whether a quasi-contract should be
implied under an equitable theory of unjust enrichment, the inquiry is whether, in light of
the totality of the circumstances, equity and good conscience demand that the defendant
return that which the plaintiff seeks to recover." Brookside Mem 'ls, Inc. v. Barre City,
702 A.2d 47, 50 (Vt. 1997).
"[W]here a case involves both legal and equitable claims, the jury verdict must
come first, after which the court may issue findings on the equitable claims that must be
consistent with the jury verdict." LeBlanc v. Snelgrove, 2015 VT 112, ,i 39, 200 Vt. 570,
588, 133 A.3d 361,373. "In an action not triable of right by a jury, the court, on motion
or on its own[,] ... may try any issue with an advisory jury[.]" Fed. R. Civ. P. 39(c); see
also Sturgis Motorcycle Rally, Inc. v. Rushmore Photo & Gifts, Inc., 908 F .3d 313, 343
(8th Cir. 2018) ("To bind the district court's equitable powers, a jury's findings must be
on an issue 'common' to the action's legal and equitable claims; otherwise, the court is
free to treat the jury's findings as 'merely advisory' under Federal Rule of Civil
Procedure 3 9( c). ").
"Equitable remedies are available when there is not an adequate remedy at law on
the very subject in question." Wynkoop v. Stratthaus, 2016 VT 5, ,i 50,201 Vt. 158, 18384, 136 A.3d 1180, 1196. "To be adequate the legal remedy must be able to provide
complete relief for the case before the court and must be equally convenient, beneficial,
and effective." Id. at ,i 18; see also Moreau v. Sylvester, 2014 VT 31, ,i 20, 196 Vt. 183,
193, 95 A.3d 416, 423 ("Equity will not afford relief where there is a plain, adequate, and
complete remedy at law.") (citation omitted).
[B]efore a court's equitable jurisdiction is foreclosed because of the
availability of a legal remedy, the legal remedy must be competent to afford
relief on the very subject matter in question, and be equally convenient,
beneficial and effective as the equitable remedy which would otherwise be
available. In other words, to be adequate the remedy at law must be
practical and as efficient to the ends of justice and its prompt administration
as the remedy in equity.

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court recognized that "[i]n the event Plaintiffs adequate recovery at law is established,
Plaintiffs equitable claims will be dismissed." Mansfield Heliflight, Inc. v. Freestream

Aircraft USA, Ltd., 2016 WL 7176586, at *17 (D. Vt. Dec. 7, 2016). This result is
mandated because if a plaintiff has an adequate remedy at law "and the main cause of
action is of a legal nature, equity has no jurisdiction." Gerety v. Poitras, 224 A.2d 919,
921 (Vt. 1966).
An unjust enrichment claim does not require proof of a monetary loss suffered by
Plaintiff. See Restatement (Third) of Restitution and Unjust Enrichment§ 1 (2011)
(noting that unjust enrichment claims do not necessarily require proof that "the claimant
has suffered a loss"); see also Birchwood Land Co. v. Krizan, 2015 VT 37, ,r 9, 198 Vt.
420,425, 115 A.3d 1009, 1012 ("We frequently have adopted provisions of [the
Restatement (Third) of Restitution and Unjust Enrichment] where our law is
undeveloped."). Instead, unjust enrichment addresses the harm of benefiting from
tortious behavior. See Weed v. Weed, 2008 VT 121, ,r 17, 185 Vt. 83, 90, 968 A.2d 310,
315 ("[T]he equitable doctrine of unjust enrichment rests upon the principle that a man
shall not be allowed to enrich himself unjustly at the expense of another.") (citation
omitted). It is not available, however, "where it simply duplicates, or replaces, a
conventional contract or tort claim[.]" Corsello v. Verizon New York, Inc., 967 N.E.2d
1177, 1185 (2012). Because "a plaintiff is generally not permitted to recover twice for
the same injury," Will v. Mill Condo. Owners' Ass 'n, 2006 VT 36, ,r 7, 179 Vt. 500, 503,
898 A.2d 1264, 1267, Plaintiff generally cannot recover both compensatory and
restitution damages for the same harm. 2
2

The cases that Plaintiff cites are inapposite. In Gladstone v. Amidon, 2012 WL 2880367, at* 1
(Vt. July 11, 2012), the plaintiffs did not challenge the validity of the jury's unjust enrichment
damages award and the Vermont Supreme Court did not address it. In Beaudoin on Behalf of
New England Expedition Ltd. P'shipllv. Feldman, 2018 VT 83, ,I 14, 196 A.3d 768, 774,
although the plaintiff brought claims for conversion, breach of fiduciary duty, and unjust
enrichment, he sought only compensatory and punitive damages. The Vermont Supreme Court
held that the evidence was insufficient to support the punitive damages award but was not asked
to consider whether the compensatory damages award was duplicative or otherwise invalid. In
Porter v. Hu, 169 P.3d 994, 1008 (Haw. Ct. App. 2007), the trial court allowed the plaintiffs to
elect to receive an unjust enrichment award for restitution damages instead of the compensatory
4

At trial, the jury received instructions regarding Plaintiffs legal claims as well as
its equitable claim for unjust enrichment. In the event the jury found in favor of Plaintiff
on the unjust enrichment claim, the jury was instructed to consider whether Plaintiff was
entitled to restitution damages, which were described as follows: "Unjust enrichment
requires that the party who has been unjustly enriched surrender the benefit it received at
the expense of the other party. With regard to this equitable claim, you must determine
as a fact what you believe that benefit is." (Doc. 148 at 20.) The jury was not instructed
to determine whether Plaintiff had an adequate remedy at law, nor would it be
permissible to ask it to make that determination. See Loose-Wiles Biscuit Co. v. Deering
Vil/. Corp., 48 A.2d 715, 717 (Me. 1946) ("Whether a litigant seeking equitable relief has

an adequate remedy at law is a question oflaw.").
Plaintiff introduced into evidence a "Settlement Statement" prepared for
Defendant which showed that upon closing the sale of the Aircraft to Blackjet, LLC on
October 28, 2015, Defendant received $210,000, Rudolph Melk received $210,000, and
Galaxy Aviation Ltd. received $180,000. (Plaintiffs Ex. 99.) Rebecca Posoli-Cilli,
Defendant's President and Owner, testified that Defendant earned "[$]210,000 before
expenses and commission payouts" on the sale of the Aircraft, but that after paying
expenses and commissions, Defendant kept approximately $85,000 to $90,000. (Doc.
158 at 160.) In closing argument, Plaintiff stated that Defendant's "unjust enrichment for
the benefit that Freestream got from buying the jet that it would not have gotten if
Mansfield's deal had gone through is $600,000." (Doc. 160 at 69.) Defendant countered
that if the jury were to find it liable for unjust enrichment, the jury should award $85,000,
the "net profit" that it received upon sale of the Aircraft. Id. at 80. The jury found that
Defendant was unjustly enriched and that the restitution damages owed for unjust
enrichment amounted to $420,000. Because these findings pertained only to Plaintiffs
damages awarded under theories of breach of contract and tortious interference. Although the
Intermediate Court of Appeals of Hawaii endorsed this approach, Plaintiff does not identify
authority for its application in Vermont. In any event, Plaintiff would not benefit from being
allowed to elect the restitution damages award instead of the compensatory damages award
because the latter award is greater.
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equitable claim for unjust enrichment, they are merely advisory. See Fed. R. Civ. P.
39( C).
With regard to compensatory damages for Plaintiffs legal claims, the jury was
instructed:

If you decide in favor of Mansfield on all or some of its claims, then you
must determine the amount of money that reasonably, fairly, and
adequately compensates Mansfield for the harm that it suffered. Your aim
in calculating compensatory damages is to put Mansfield as nearly as
possible in the same position that it would have occupied but for
Freestream's unlawful actions.
The burden is on Mansfield to prove by a preponderance of the evidence
the amount of damages which it has suffered, except for with regard to its
fraudulent inducement claim where the burden is clear and convincing
evidence. Where the amount of damages are capable of being calculated in
dollars and cents, Mansfield must demonstrate the amount of its loss in
dollars and cents. Under no circumstances may you award damages that
are speculative or conjectural.
Lost profits may not be recovered as an element of damages unless they are
proved with reasonable certainty. If lost profits are proved with sufficient
certainty, the amount that may be recovered is the net loss only. The net
loss in this case can be calculated by deducting amounts that Mansfield
would be obligated to pay other parties.
(Doc. 148 at 20.)
At trial, Plaintiff introduced evidence that it had signed a contract to purchase the
Aircraft from Punj Lloyd Limited ("PLL") for $2,100,000. Eric Chase, the owner of
Mansfield, testified that if he had not terminated the contract to purchase the Aircraft
from PLL, he would have resold the Aircraft for $3,100,000 to Gulfstream Aviation
Services, Inc. Mr. Chase also testified that he would likely have paid $100,000 to his
broker, Koshy Varghese, if the deal had been carried out smoothly, and that the costs for
ferrying and inspection of the Aircraft would likely have amounted to $100,000. The
jury found that Plaintiff was entitled to $800,000 in compensatory damages. These
compensatory damages reflect the consummation of Plaintiffs purchase and resale of the
Aircraft. They thus fully compensate Plaintiff for losing its deal on the Aircraft to
Defendant.
6

Were Plaintiff to recover for damages and restitution, it would receive the benefits
of both parties' bargains, a clear windfall that would be inequitable on the facts before the
court. Those facts include evidence that Plaintiff willingly entered into agreements with
Rudolph Melk after Plaintiff believed Mr. Melk had filed a fraudulent FAA lien on the
Aircraft. They also include evidence that Plaintiff paid an "inside man" who worked for
the Aircraft's owner to provide information regarding negotiations for its sale. Against
this factual backdrop, the court would be reluctant to award equitable relief even if it
were available.
Plaintiff argues that it should be permitted to recover compensatory and restitution
damages because these two monetary awards addressed "two distinct harms[.]" (Doc.
162 at 5.) However, this case is distinguishable from cases in which a plaintiff is
permitted to recover two types of damages for two distinct injuries. 3 The facts that
formed the basis for Plaintiffs unjust enrichment claim were the same facts underlying
its tort claims. The only additional evidence introduced to support the unjust enrichment
claim were the Settlement Statement indicating that Defendant was paid $210,000 upon
the sale of the Aircraft to Blackjet, LLC and Ms. Posoli-Cilli's testimony that
Defendant's profit on that sale was approximately $85,000 to $90,000. To the extent
Plaintiff argues that Defendant must be deprived of any benefit derived from its
wrongdoing, the jury's sizable punitive damages award achieves that result.
The jury's remedy at law is adequate because it placed Plaintiff in the same
position it would have occupied but for Defendant's unlawful actions. Because the jury's
compensatory damage award affords "complete relief for the case before the court" and
provides an equally, if not more, "convenient, beneficial, and effective" remedy, Plaintiff

3

See, e.g., Will v. Mill Condo. Owners' Ass 'n, 2006 VT 36, 17, 179 Vt. 500, 503, 898 A.2d
1264, 1267 (finding that plaintiff could simultaneously pursue claims for rescission and money
damages because plaintiff sought to recover for the "distinct harms" of loss of ownership of a
condominium and loss of her use of the condominium for an extended period of time); Gokey v.
Bessette, 580 A.2d 488,492 (Vt. 1990) (affirming two separate damages awards because "[t]he
events giving rise to the emotional damage were not contemporaneous with, nor did they
concern, the same occurrence [as the retaliatory eviction]").
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may not recover equitable damages under a theory of unjust enrichment. Wynkoop, 2016
VT 5 at ,r 18,201 Vt. at 170, 136 A.3d at 1187.

II.

Whether to Award Plaintiff Prejudgment Interest.
Plaintiff argues that because the jury's compensatory damages and unjust

enrichment damages were reasonably ascertainable, an award of prejudgment interest is
mandatory. Plaintiff asserts that the $800,000 compensatory award "reflects the $1
million profit Mansfield would have realized through its sale of the G4 Aircraft to
Gulfstream Aviation Services, Inc., less the costs Mansfield would have incurred to
transport the aircraft and to pay its broker" and that the $420,000 unjust enrichment
award "precisely matches the commission Freestream received from the sale of the G4
Aircraft to Blackjet." (Doc. 161 at 4.) Alternatively, Plaintiff requests that prejudgment
interest be awarded as a matter of the court's discretion.
Defendant responds that Plaintiff is not entitled to prejudgment interest because
Defendant could not have ascertained Plaintiffs expected profits on the sale of the
Aircraft prior to trial. In addition, Defendant asserts that the true value of Plaintiffs
damages remains subject to dispute based on the sufficiency of the evidence and the
propriety of the jury award. Defendant also maintains that the court should not award
prejudgment interest in its discretion because there is no "reasonable and established
method to calculate" such interest and because Plaintiff has presented no evidence of
harm caused by delayed payment. (Doc. 167 at 4.)
"Vermont law governs the award of prejudgment interest in [a] diversity case."
JA. McDonald, Inc. v. Waste Sys. Int'! Moretown Landfill, Inc., 247 F. Supp. 2d 542,547

n.6 (D. Vt. 2002) (citing Campbellv. Metro. Prop. & Cas. Ins. Co., 239 F.3d 179,186
(2d Cir. 2001)). "In an action where monetary relief is awarded, the amount of the
judgment shall include the principal amount found to be due, all interest accrued on that
amount up to and including the date of entry of judgment, and all costs allowed to the
prevailing party." Vt. R. Civ. P. 54(a); see also Smedberg v. Detlef's Custodial Serv.,
Inc., 2007 VT 99, ,r 36, 182 Vt. 349,365,940 A.2d 674,685 (mandating "the award of

prejudgment interest in cases where damages are liquidated or readily ascertainable at the
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time of the tort") (internal quotation marks omitted). '"The principal rationale for an
award of prejudgment interest as of right is that, where damages are liquidated or
determinable by a reasonably certain standard of measurement, the defendant can avoid
the accrual of interest by simply tendering to the plaintiff a sum equal to the amount of
damages."' B & F Land Dev., LLC v. Steinfeld, 2008 VT 109, il 17, 184 Vt. 624, 628,
966 A.2d 127, 132 (quoting Agency ofNat. Res. v. Glens Falls Ins. Co., 736 A.2d 768,
774 (Vt. 1999)). 4
"Even when the amount of damages is uncertain, a court may award prejudgment
interest in its discretion." Birchwood Land Co. v. Ormond Bushey & Sons, Inc., 2013 VT
60, ,i 23, 194 Vt. 478,490, 82 A.3d 539, 548. The court may exercise its discretion "only
where a reasonable and established method can be used to calculate the prejudgment
interest." JA. McDonald, Inc., 247 F. Supp. 2d at 548. Courts generally exercise this
discretion "when the plaintiff was harmed by the delay in reimbursement." Wells Fargo
Bank NA. v. Sinnott, 2010 WL 297830, at *11 (D. Vt. Jan. 19, 2010). Where damages
are not "readily ascertainable" and where "the parties dispute how the jury could arrive at
the damages it awarded[,]" prejudgment interest may properly be denied. Winey v.
William E. Dailey, Inc., 636 A.2d 744, 752 (Vt. 1993).
The mere fact that plaintiff and defendant presented conflicting theories of
damages does not, as defendant argues, automatically lead to the conclusion
that the damages were not reasonably ascertainable. Plaintiffs and
defendants in a tort action will always have an incentive to characterize the
correct measure of damages in a way that is advantageous to them. Despite
this fact, where the court has the option to rely on an established method of
calculation, the damages may be said to be reasonably ascertainable.
4

Defendant urges the court to exercise its discretion to apply a federal statutory interest rate
calculated under 28 U.S.C. § 1961 based on Chandler v. Bombardier Capital, Inc., 44 F.3d 80,
84 (2d Cir. 1994). In that case, the Second Circuit disagreed with the District Court's method of
calculating prejudgment interest, but affirmed the District Court's ultimate award on the basis
that it "achieved a fair figure," not specifically because it applied the federal statutory interest
rate. Id. Under Vermont law, the amount of prejudgment "interest is calculated at the statutory
legal rate in effect at the time of calculation (currently 12% simple annual interest under 9
V.S.A. § 41a(a))." Vt. R. Civ. P. 54, Reporter's Notes--1981 Amendment; see also Concord
Gen. Mut. Ins. Co. v. Gritman, 2016 VT 45, ,r 35,202 Vt. 155, 170, 146 A.3d 882, 892
(affirming trial court's award of prejudgment interest at rate of twelve percent).
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Estate of Fleming v. Nicholson, 724 A.2d 1026, 1031 n.3 (Vt. 1998).
In this case, the measure of compensatory damages was by no means readily
ascertainable. Whether Plaintiff had a contract with a resale buyer; the terms of that
contract; the costs Plaintiff would have incurred in transporting, inspecting, and
maintaining the Aircraft; and Plaintiffs loan arrangement with its investor were all hotly
contested and impacted any compensatory damages computation. Plaintiffs reliance on
comparisons to lost wages or medical expenses is unavailing as those are concrete and
static measures of damages. In addition, Plaintiff has not established any prejudice from
the delay in payment. Defendant did not assume the risk of prejudgment interest by
failing to "simply tender[] the amount due." Birchwood Land Co., 2013 VT 60 at, 24,
194 Vt. at 491, 82 A.3d at 548. Plaintiffs motion for an award of prejudgment interest is
therefore DENIED.

III.

Whether to Award Allowable Costs.
Plaintiff asserts that its allowable costs in this action amount to $11,249.87. These

include fees of the clerk, fees for service of process, as well as court reporters'
appearances and transcription fees for depositions in the case. Defendant argues that the
court should decline to award costs until the parties' claims and Defendant's post-trial
motions are resolved.
"Unless a federal statute, these rules, or a court order provides otherwise, costsother than attorney's fees-should be allowed to the prevailing party." Fed. R. Civ. P.
54(d)(l). Plaintiffs motion for costs in the amount of $11,249.87 is therefore
GRANTED.

CONCLUSION
Plaintiffs motion for prejudgment interest is DENIED and Plaintiffs motion for
costs is GRANTED. (Doc. 161.)
The court ORDERS entry of final judgment as follows: Plaintiff is awarded
$800,000 in compensatory damages and $2,440,000 in punitive damages and
JUDGMENT IS HEREBY entered in the amount of $3,240,000 for Plaintiff Mansfield

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Heliflight, Inc. against Defendant Freestream Aircraft USA, Ltd. Costs are awarded in
the amount of $11,249.87. Plaintiffs request for equitable relief is DENIED.
SO ORDERED.

. t-,-t

Dated at Burlington, in the District of Vermont, this£ day of October, 2019.

Christina Reiss, District Judge
United States District Court

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