Case 1:11-cv-22861-KMM Document 1

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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA MIAMI DIVISION CASE NO.: ____________________________ IOTC AIR, LLC, a Florida limited liability company, Plaintiff, v. BOMBARDIER INC., an alien corporation; and BOMBARDIER AEROSPACE CORPORATION, a foreign corporation, Defendants. _____________________________________/ COMPLAINT Plaintiff, IOTC AIR, LLC (IOTC Air or Plaintiff), by and through undersigned counsel, hereby sues BOMBARDIER INC. (Bombardier) and BOMBARDIER AEROSPACE CORPORATION (BAC) and alleges: PARTIES, JURISDICTION AND VENUE 1. and costs. 2. Plaintiff IOTC Air is a Florida limited liability company organized under the laws This is an action for damages in excess of US$75,000.00, exclusive of interests JURY TRIAL REQUESTED

of the State of Florida, active and current at all times material hereto, and otherwise sui juris. 3. On information and belief, Defendant Bombardier, an alien corporation, is based

in Montral, Qubec, Canada, and doing business throughout the United States, including in this district, at all times material hereto.

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4.

On information and belief, Defendant BAC is Texas corporation organized under

the laws of the State of Texas, and doing business throughout the United States, including in this district, at all times material hereto. 5. control. 6. This Court has subject matter jurisdiction pursuant to 28 U.S.C. 1332 as the On information and belief, BAC and Bombardier have common ownership and/or

parties domiciles are fully diverse and the amount in controversy exceeds $75,000. 7. Venue in this district is proper pursuant to 28 U.S.C. 1391 because a substantial

part of the events upon which the claims rest occurred in this district. GENERAL ALLEGATIONS 8. In or about September 2007, IOTC Air entered into a written agreement with

Bombardier for the purchase of a Bombardier Challenger CL-600-2B16 variant 605 aircraft (CL605 aircraft). A true and correct copy of said agreement is attached hereto and

incorporated herein as Exhibit 1. 9. 10. 11. July 9, 2007. 12. 2009. 13. The third payment of $20,250,000 for the CL605 aircraft was due September The second payment of $1,000,000 for the CL605 aircraft was due on March 15, The total purchase price of the CL605 aircraft was $26,347,000. Payment for the CL605 aircraft was to be made in four installments. The first payment of $3,000,000 for the CL605 aircraft was made by Plaintiff on

2009, upon issuance of the Green Certificate of Airworthiness.

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14.

The balance of the purchase price for the CL605 aircraft, $2,097,000, was due

upon delivery of the CL605 aircraft to IOTC Air. 15. Delivery of the CL605 aircraft was scheduled no later than within 30 days of

April 30, 2010 at Bombardiers facility in Montral, Qubec, Canada. 16. In or about June 2008, IOTC Air entered into a written agreement with BAC for

the purchase of a Bombardier Global Express XRS Green aircraft (XRS aircraft). A true and correct copy of said agreement is attached hereto and incorporated herein as Exhibit 2. 17. 18. 19. The total purchase price for the XRS aircraft was $49,557,000. Payment for the XRS aircraft was to be made in five installments. Plaintiff made the first payment for the XRS aircraft of $2,500,000 upon

execution of the agreement. 20. 2009. 21. 22. The third payment of $1,500,000 for the XRS aircraft was due on June 15, 2009. The fourth installment of $42,500,000 for the XRS aircraft was due upon issuance The second payment of $2,000,000 for the XRS aircraft was due on December 15,

of the Green Certificate of Airworthiness. 23. The balance of the purchase price for the XRS aircraft, $1,057,000, was due upon

delivery of the XRS aircraft to IOTC Air. 24. Delivery of the XRS aircraft was scheduled no later than within 30 days of

February 29, 2012 at BACs facilities in Savannah, Georgia. 25. Beginning February 2009 and continuing until December 2009, all parties

engaged in numerous oral and written discussions negotiating a global adjustment to the aircraft slots that IOTC Air was to purchase from Bombardier and BAC.

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26.

In or about March 2009, IOTC Air and BAC entered into a subsequent agreement

for the purchase of a new Learjet 85 aircraft (Lear 85). 27. Via e-mail on March 25, 2009, BACs Sales Director, Andr Nills, offered the

following terms for the Lear 85: The contract for the CL605 would terminate and the parties would sign an agreement for a new Lear 85; The fixed price for the Lear 85 would be $19,350,00 with no escalation; An additional credit memo of $350,000 for goods/services/options, etc.; Delivery of the Lear 85 in late 2013/early 2014; and Using the $3,000,000 already paid toward the CL605 aircraft toward the Lear 85 aircraft instead, with the balance due upon delivery of the Lear 85.

A true and correct copy of the referenced March 25, 2009 email is attached hereto and incorporated herein as Exhibit 3. 28. Harry Sargeant, III (Sargeant), in his capacity as President of IOTC Air,

accepted the terms of the contract offered by BAC as memorialized in Exhibit 3. 29. The terms of the new agreement for the Learjet 85 extinguished any prior

payment obligations on the CL605. 30. On or about October 28, 2009, Bombardiers Contracts Administrator, Brian

Sherman, Sr., sent a written demand notice to IOTC Air for payment of $1,000,000 under the previously terminated CL605 contract. A true and correct copy of said notice is attached hereto and incorporated herein as Exhibit 4. 31. In response to that demand, by letter dated December 3, 2009, Sargeant, for IOTC

Air, denied that there was any payment due and owing, in light of prior and ongoing contractual renegotiations between the parties and an upcoming meeting between IOTC Air, Bombardier and

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BAC. A true and correct copy of the referenced December 3, 2009 email is attached hereto and incorporated herein as Exhibit 5. 32. On or about December 7, 2009, Sargeant was to have a face-to-face meeting with

Bombardiers senior management in Montral to discuss a global adjustment to the aircraft slots that IOTC Air was purchasing from Bombardier and BAC. That meeting was subsequently canceled and held instead in January 2010. 33. The purpose of that meeting was to discuss the fact that the CL605 aircraft had

been offered for delivery before the XRS aircraft, a critical timeline for IOTC Air that was not achievable by BAC. 34. At the January 2010 meeting, BAC compensated for its inability to perform by

demonstrating a willingness to renegotiate both aircraft contracts with a new market offer for IOTC Air. 35. After months of negotiating, BAC offered new proposals for the purchase of an

XRS and a CL605. 36. By letter dated March 31, 2010, BAC, through its Director of Contract

Management, Barry Winfield, proposed a $3,707,000 price reduction for the XRS aircraft with a new delivery date of not later than within 30 days of August 31, 2011. A true and correct copy of the March 31, 2010 letter is attached hereto and incorporated herein as Exhibit 6. 37. BAC also proposed a $2,647,000 price reduction for a CL605, with a delivery

date of late August/early September 2011. 38. Based upon IOTC Airs prior course of dealings with Bombardier and BAC, it

was IOTC Airs expectation that the $5,500,000 previously paid toward the original aircraft (i.e.,

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$3 million toward the original CL605 slot and $2.5 million toward the original XRS slot) would be applied to the renegotiated contracts. 39. However, on April 21, 2010, just three weeks after submitting its last proposal

and after months of renegotiating, BAC sent IOTC Air a written notice of default under the original CL605 contract, executed in September 2007. A true and correct copy of the April 21, 2010 default notice is attached hereto and incorporated herein as Exhibit 7. 40. Defendant BAC announced to IOTC Air that the initial $5,500,000 in down

payments under the original, superseded aircraft contracts for a CL605 and an XRS were being retained as liquidated damages. 41. As a direct result of Defendants wrongful acts or omissions, Plaintiff IOTC Air

has had to retain the services of the undersigned attorneys to pursue its legal remedies, including in this action, and Plaintiff has agreed to compensate said attorneys for their expenses outlaid and services performed, at reasonable and customary rates. COUNT I: Breach of Contract 42. Plaintiff hereby incorporates by reference paragraphs 1 through 41 above as

though fully set forth herein. 43. Defendant Bombardier is a party to the original written agreement executed in or

about September 2007 for the purchase of a CL605 aircraft. 44. Defendant BAC is a party to the original written agreement executed in or about

June 2008 for the purchase of an XRS aircraft. 45. Plaintiff IOTC Air has performed each and every term and condition of the

original aircraft agreements that was not waived or excused.

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46.

Through the parties course of dealings and the renegotiation of the original

contracts, IOTC Air was no longer required to make further payments under the original CL605 aircraft contract. 47. Defendants breached the original aircraft contracts by failing to apply the

$5,500,000 under the initial CL605 contract to the renegotiated contracts. 48. Defendants further breached the original contracts by applying the initial

$2,500,000 payment made under the separate and distinct XRS aircraft contract to satisfy the purported but non-existent default under the original CL605 aircraft contract. 49. As the result of Defendants breach, Plaintiff has been damaged in the sum of not

less than $5,500,000. WHEREFORE, Plaintiff IOTC AIR LLC demands judgment against Defendants BOMBARDIER INC. and BOMBARDIER AEROSPACE CORPORATION, jointly and severally, in an amount not less than $5,500,000, plus interest, costs of suit and reasonable attorneys fees; plus all such other and further relief as the interests of justice may require or permit. COUNT II: Breach of the Covenant of Good Faith and Fair Dealing 50. Plaintiff hereby incorporates by reference paragraphs 1 through 41 above as

though fully set forth herein. 51. The aircraft agreements imposed upon Defendants a duty of good faith and fair

dealing. That covenant imposes upon each contracting party the duty not to do anything which prevents the realization of the benefits of the contract, and the duty to do everything the contract presupposes each party will do to accomplish its purpose.

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52.

The parties intended and mutually understood that the initial payments totaling

$5,500,000 would be applied to the renegotiated aircraft contracts. 53. Defendants application of those $5,500,000 as liquidated damages under

superseded aircraft contracts breached Defendants duty of good faith and fair dealing. 54. Defendants breached their implied covenant of good faith and fair dealing by

depriving IOTC Air of the benefits to which it is legally entitled. 55. Defendants breach has damaged Plaintiff in the sum of $5,500,000.

WHEREFORE, Plaintiff IOTC AIR LLC demands judgment against Defendants BOMBARDIER INC. and BOMBARDIER AEROSPACE CORPORATION, jointly and severally, in an amount not less than $5,500,000, plus interest, costs of suit and reasonable attorneys fees; plus all such other and further relief as the interests of justice may require or permit. COUNT III: Breach of Fiduciary Duty 56. Plaintiff hereby incorporates by reference paragraphs 1 through 41 above as

though fully set forth herein. 57. Defendants owed Plaintiff a fiduciary duty to properly account for and manage all

funds paid over by Plaintiff for its account with Defendants. 58. Specifically, Defendants were required to ensure that all monies delivered to

Defendants by Plaintiff were correctly and exclusively applied to the original contracts, later renegotiated, and not for any other use or purpose. 59. However, Defendants instead wrongfully applied and retained those monies as

liquidated damages against the renegotiated and superseded CL605 contract. 60. Defendants thus breached their fiduciary duty, damaging Plaintiff.

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WHEREFORE, Plaintiff IOTC AIR LLC demands judgment against Defendants BOMBARDIER INC. and BOMBARDIER AEROSPACE CORPORATION, jointly and severally, for damages, plus interest, costs of suit and reasonable attorneys fees; plus all such other and further relief as the interests of justice may require or permit. COUNT IV: Fraudulent Misrepresentation 61. Plaintiff hereby incorporates by reference paragraphs 1 through 41 above as

though fully set forth herein. 62. During the several months of renegotiations of the aircraft contracts, Defendants

made material misrepresentations of fact regarding the application of Plaintiffs initial deliveries of funds totaling $5,500,000. 63. Prior to declaring defaults, Defendants represented to Plaintiff that the CL605

aircraft contract and the XRS aircraft contract were terminated. 64. Defendants also represented to Plaintiff that all funds previously delivered on the

original CL605 and XRS contracts would be applied to the renegotiated contracts. 65. IOTC Air justifiably relied on these representations. Had the Defendants revealed

the truth to it, IOTC Air would not have, in good faith, entered into subsequent aircraft agreements with Defendants. 66. Defendants fraudulently induced IOTC Air to enter into subsequent aircraft

agreements by misrepresenting Defendants intentions and by failing to disclose its desire to continue to operate under the terminated aircraft contracts. 67. Defendants are not entitled to exercise dominion over or retain possession of the

$5,500,000 of Plaintiffs funds that Defendants thus fraudulently procured.

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68.

As a direct and proximate result of Defendants fraudulent misrepresentations,

Plaintiff has been damaged in the sum of not less than $5,500,000. WHEREFORE, Plaintiff IOTC AIR LLC demands judgment against Defendants BOMBARDIER INC. and BOMBARDIER AEROSPACE CORPORATION, jointly and severally, for damages, plus interest, costs of suit and reasonable attorneys fees; plus all such other and further relief as the interests of justice may require or permit. COUNT V: Negligent Misrepresentation 69. Plaintiff hereby incorporates by reference paragraphs 1 through 41 above as

though fully set forth herein. 70. In the course of their business relationship, Defendants supplied Plaintiff with

materially false information, including (a) that the CL605 aircraft contract and the XRS aircraft contract had been terminated, and (b) that the $5,500,000 initial payments for the terminated, original CL605 and XRS contracts would be applied to the renegotiated contracts. 71. 72. Defendants knew or should have known that these statements were untrue. IOTC Air reasonably relied to its detriment on Defendants materially false

statements, entering into subsequent aircraft contracts with Defendants. 73. As a direct and proximate result of Defendants negligent misrepresentations,

Plaintiff has been damaged in the sum of not less than $5,500,000. WHEREFORE, Plaintiff IOTC AIR LLC demands judgment against Defendants BOMBARDIER INC. and BOMBARDIER AEROSPACE CORPORATION, jointly and severally, for damages, plus interest, costs of suit and reasonable attorneys fees; plus all such other and further relief as the interests of justice may require or permit.

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DEMAND FOR JURY TRIAL Plaintiff IOTC Air demands trial by jury as to all matters triable as of right. Dated August 8, 2011. By: /s Roger S. Kobert Roger S. Kobert (FBN: 765295) rkobert@raffertylawyers.com Marc C. Pugliese (FBN 86169) mpugliese@raffertylawyers.com RAFFERTY, KOBERT, TENENHOLTZ, BOUNDS & HESS, P.A. 1401 Brickell Avenue, Suite 825 Miami, Florida 33131-3502 (305) 373-0330 Telephone (305) 373-2735 Facsimile Counsel for Plaintiff
.

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