Combined Aircraft Ownership, LLC v. Learjet, Inc.

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NORTH DAKOTA
EASTERN DIVISION
Combined Aircraft Ownership, LLC,
Plaintiff,
vs.
Learjet, Inc.,
d/b/a Bombardier Aircraft Services,
Defendant.
ORDER GRANTING
MOTION TO DISMISS
Case No. 3:22-cv-202
Defendant Learjet, Inc., d/b/a Bombardier Aircraft Services’ (“BAS”) moves to dismiss for
failure to state a claim upon which relief may be granted pursuant to Federal Rule of Civil
Procedure 12(b)(6). Doc. No. 11. Plaintiff Combined Aircraft Ownership, LLC (“CAO”) opposes
the motion. Doc. No. 21. For the reasons set forth below, the motion is granted.
I. BACKGROUND
The factual background, accepted as true for the purposes of this motion, is taken from the
complaint. See Doc. No. 1. This case involves a dispute over an airplane, its maintenance, parts
availability, and service, and the commercial disagreements between CAO and BAS as to
providing parts and services. CAO is a North Dakota limited liability company with its principal
place of business in Fargo, North Dakota. Id. at 3. It owns a Global Express fixed-wing multiengine
aircraft (the “airplane”) that was manufactured by BAS. Id. BAS is a Kansas corporation
authorized to do business in North Dakota. Id. BAS maintains aircraft maintenance and service
operations at the Fargo Jet Center in Fargo, North Dakota. Id.
The parties have a history of litigation surrounding the airplane at issue. In 2020, after
purchasing the airplane, CAO and BAS executed several proposals and contracted for BAS to
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provide maintenance and refurbishment services in exchange for payment from CAO. Id. at 4-5.
Following BAS’s completion of the work, a dispute arose over payment. Id. Because of the
payment issues, BAS refused to return the airplane to CAO, and litigation began in the United
States District Court for the District of Arizona. Id.; see also Combined Aircraft Ownership, LLC,
v. Learjet Inc. d/b/a/ Bombardier Aircraft Services, No. 4:20-cv-00330 (the “Arizona Action”).
Eventually, the Arizona Action settled, and the airplane was returned to CAO. Doc. No. 1 at 5.
According to CAO, after resolution of the Arizona Action, the airplane needed additional
service and certain parts needed to be replaced to maintain the airplane’s certification with the
Federal Aviation Administration (“FAA”). As alleged, because BAS was the original manufacturer
of the airplane, it effectively holds a monopoly on the parts as well, as even third-party suppliers
typically go back to the manufacturer for those parts. Id. at 6-11. So, according to CAO, when it
began its attempts to perform the latest maintenance and service on the airplane to update and
replace certain parts through third-party suppliers, BAS flatly refused to sell any parts to any
company that does business with CAO. Id. at 12. In turn, CAO filed this action.
CAO originally pleaded five claims against BAS: (1) breach of contract; (2) breach of
warranty; (3) promissory/equitable estoppel; (4) consumer fraud; and (5) tortious interference with
business relationships. Doc. No. 1. After BAS filed its motion to dismiss, CAO noted in its
response that it would not pursue the breach of contract and breach of warranty claims. Doc.
No. 21 at 2. So, the remaining claims against BAS are promissory/equitable estoppel, consumer
fraud, and tortious inference with business relationships.
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II. LAW AND ANALYSIS
BAS moves to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6),
asserting that the complaint fails to state a claim upon which relief may be granted.1 CAO argues
it has alleged plausible claims for relief against BAS.
A. Federal Rule of Civil Procedure 12(b)(6)
Federal Rule of Civil Procedure 8(a) requires a pleading only to contain “a short and plain
statement of the claim showing that the pleader is entitled to relief.” But a complaint may be
dismissed for “failure to state a claim upon which relief can be granted,” and a party may raise that
defense by motion. Fed. R. Civ. P. 12(b)(6). In reviewing a motion to dismiss for failure to state a
claim under Rule 12(b)(6), the court accepts as true the factual allegations in the complaint and
draw all reasonable inferences in the plaintiff’s favor. Gorog v. Best Buy Co., 760 F.3d 787, 792
(8th Cir. 2014) (citation omitted). Although the factual allegations need not be detailed, they must
be sufficient to “raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly,
550 U.S. 544, 555 (2007) (citation omitted). The complaint must “state a claim to relief that is
plausible on its face.” Id. at 570.
B. Promissory/Equitable Estoppel
With the breach of contract and breach of warranty claims dismissed, the first claim against
BAS is promissory/equitable estoppel. BAS argues CAO has not pleaded its claim for
promissory/equitable estoppel with the required particularity and that the allegations contained in
the complaint do not satisfy the necessary elements. CAO asserts that it has.
1 BAS also suggests venue is improper. While Doc. No.13-6 indicates that disputes related to the
settlement agreement may only be brought in Arizona, the current dispute (at least as alleged in
the complaint) appears to post-date the settlement agreement. There does not appear to be a
substantive argument that venue is inappropriate under 28 U.S.C. § 1391.
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Promissory estoppel requires a plaintiff to show: “1) a promise which the promisor should
reasonably expect will cause the promisee to change his position; 2) a substantial change of the
promisee’s position through action, or forbearance; 3) justifiable reliance on the promise; and 4)
injustice which can only be avoided by enforcing the promise.” Thimjon Farms P’ship v. First Int’l
Bank & Tr., 2013 ND 160, ¶ 17 (N.D. 2013). Here, it is entirely unclear how CAO changed its
position through action or forbearance based on the alleged promise of BAS. The complaint also
fails to allege how CAO justifiably relied on the promise of BAS. CAO is required to plead
sufficient factual allegations to plausibly allege its promissory estoppel claim. It has not done so
here, and the claim must be dismissed.
Beyond that, the estoppel claim, as alleged, appears to sound in fraud. On this claim, CAO
alleges:
56. Based upon its prior course of conduct, BAS intentionally and deliberately
led CAO to believe that BAS would at all times furnish CAO with the essential
replacement parts and services necessary for the repair and maintenance of the
Aircraft to ensure that it at all times remains airworthy.
57. Through its conduct and statements, BAS falsely represented that it would
at all times furnish CAO with the essential replacement parts and services necessary
for the repair and maintenance of the Aircraft.
Doc. No. 1 at 9. These are allegations of false or misleading statements, or conduct, and sound in
fraud under North Dakota law.2
Because this claim sounds in fraud, the heightened pleading standard of Federal Rule of
Civil Procedure 9(b) applies. See Olin, 910 F.3d 1072, 1076 (8th Cir. 2018). Rule 9(b) requires a
plaintiff to plead “such matters as the time, place and contents of false representations, as well as
2 Given the allegations in the complaint, this appears to be a claim of promissory estoppel,
however, even if viewed through the lens of equitable estoppel (as encouraged by CAO in response
to this motion), some form of affirmative deception is required, which triggers Rule 9(b). See
Dalan v. Paracelsus Healthcare Corp. of N. Dakota, 2002 ND 46, ¶ 19, 640 N.W.2d 726, 732.
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the identity of the person making the misrepresentation and what was obtained or given up
thereby.” H & Q Props., Inc. v. Doll, 793 F.3d 852, 856 (8th Cir. 2015) (citation omitted). To do
so, a plaintiff must identify the “who, what, where, when, and how” of the alleged fraudulent or
deceptive conduct. Freitas v. Wells Fargo Home Mortg., Inc., 703 F.3d 436, 439 (8th Cir. 2013).
But CAO’s complaint is silent as to the who made the purported promises, what was said, as well
as when and where the communication(s) occurred. As a result, the allegations in the complaint
do not satisfy Rule 9(b). CAO has not plausibly alleged its promissory/equitable estoppel claim,
and the claim is dismissed.
C. Consumer Fraud
CAO’s next claim against BAS is for consumer fraud in violation of North Dakota Century
Code section 51-15-02. BAS argues this fraud claim was not alleged with the required
particularity.
By statute, a North Dakota consumer fraud claim is:
The act, use, or employment by any person of any deceptive act or practice, fraud,
false pretense, false promise, or misrepresentation, with the intent that others rely
thereon in connection with the sale or advertisement of any merchandise, whether
or not any person has in fact been misled, deceived, or damaged thereby, is declared
to be an unlawful practice[.]
N.D. Cent. Code § 51-15-02. Here, CAO alleges, “BAS knowingly falsely promised CAO that
BAS would at all times furnish CAO with the essential replacement parts and services necessary
for the repair and maintenance of the Aircraft to ensure that it at all times remains airworthy, and
it intended that CAO rely upon its promises.” Doc. No. 1 at 11. While this accusation does include
a statement attributed to BAS, the claim again fails for lack of particularity under Federal Rule of
Civil Procedure 9(b). Again, the complaint is silent as to who made the statement, as well as when,
and where this alleged statement occurred, and as a result, the claim fails to satisfy Rule 9(b).
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Without the required facts supporting Rule 9(b)’s particularity requirement, the consumer fraud
claim must be dismissed.
D. Tortious Interference with Business Relationships
CAO’s final claim against BAS is for tortious interference with business relationships.
BAS asserts CAO has not pleaded the necessary elements to establish a claim for tortious
interference with business relationships under North Dakota law. CAO argues it has.
To state a claim for tortious interference with business relationships under North Dakota
law, a plaintiff must allege: (1) the existence of a valid business relationship or expectancy; (2)
knowledge by the interferer of the relationship or expectancy; (3) an independently tortious or
otherwise unlawful act of interference by the interferer; (4) proof that the interference caused the
harm sustained; and (5) actual damages to the party whose relationship or expectancy was
disrupted. Mr. G’s Turtle Mountain Lodge, Inc. v. Roland Twp., 2002 ND 140, ¶ 24, 651 N.W.2d
625, 632.
Importantly, the third element requires CAO to allege “an independently tortious or
otherwise unlawful act of interference by the interferer.” N. Bottling Co. v. Henry’s Foods, Inc.,
474 F. Supp. 3d 1016, 1020 (D.N.D. 2020) (cleaned up). The complaint alleges, “BAS has
deliberately interfered with the business relationships between CAO and the third-party suppliers
by refusing to sell essential replacement parts to any company doing business with CAO.”
Doc. No. 1 at 12. But the complaint does not contain any factual allegations that BAS’s actions
are independently tortious or unlawful (beyond saying so in conclusory fashion). Because CAO
has not alleged any unlawful or independently tortious act by BAS, it has not alleged an essential
element of its claim. Accordingly, BAS has failed to state a claim for tortious interference with
business relationships, and the claim must be dismissed.
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E. Dismissal Standard
The parties dispute whether the dismissal should be with or without prejudice. A district
court, in its discretion, may dismiss a pleading for failure to state a claim with or without prejudice.
See Orr v. Clements, 688 F.3d 463, 465 (8th Cir. 2012). BAS makes several non-frivolous
arguments that the complaint should be dismissed with prejudice. And the Court shares many of
these concerns. That said, because the deficiencies could be cured with sufficient factual
allegations, dismissal without prejudice is more appropriate here.
III. CONCLUSION
For the reasons set forth above, BAS’s motion to dismiss (Doc. No. 11) is GRANTED
without prejudice. Considering the comprehensive briefing on the motions, the motion for hearing
(Doc. No. 10) is DENIED.
IT IS SO ORDERED.
Dated this 21st day of June, 2023.
/s/ Peter D. Welte
Peter D. Welte, Chief Judge
United States District Court
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