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Central Wyoming Neurosurgery, LLC v. Barta-Iso Aviation

United States District Court, D. Wyoming

November 17, 2014

CENTRAL WYOMING NEUROSURGERY, LLC, Plaintiff,
v.
BARTA-ISO AVIATION, EAGLE CREEK AVIATION SERVICES, and JETSTREAM ESCROW & TITLE SERVICE, INC., Defendants.

OPINION AND ORDER GRANTING EAGLE CREEK AVIATION SERVICES' MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND TRANSFERRING CASE TO INDIANA IN LIEU OF DISMISSAL

ALAN B. JOHNSON, District Judge.

Eagle Creek's Motion to Dismiss (Doc. No. 50), CWN's opposition (Doc. No. 58) and Barta-Iso's opposition thereto (Doc. No. 61) and Eagle Creek's further reply (Doc, No. 63) have come before the Court for consideration. Having considered the pleadings, the applicable law, the parties' written submissions and materials offered in support of their respective positions, the Court FINDS and ORDERS as follows:

BACKGROUND

Central Wyoming Neurosurgery (CWN) contracted with Barta-Iso Aviation (Barta-Iso), a New York company, to buy a plane. The next day, Barta-Iso contracted with Eagle Creek Aviation Services (Eagle Creek) to purchase a plane to satisfy CWN's order. In an addendum to the Barta-Iso/CWN Purchase Agreement, Barta-Iso and CWN agreed that Eagle Creek (an Indiana company) would repair the plane. Later Eagle Creek communicated with CWN about repairs that exceeded the amount of repair costs contemplated in CWN and Barta-Iso's agreement. CWN and Eagle Creek agreed on the additional work that Eagle Creek would perform, and CWN paid Eagle Creek a deposit. Eagle Creek allegedly failed to perform the repairs to the plane and Barta-Iso allegedly failed to deliver the plane to CWN. CWN sued Eagle Creek and Barta-Iso for breach of contract, civil conspiracy, promissory estoppel, and fraud. Eagle Creek moved to dismiss for lack of personal jurisdiction.

Because Eagle Creek lacks minimum contacts with Wyoming, the Court agrees that it lacks personal jurisdiction over Eagle Creek and therefore GRANTS Eagle Creek's motion. In lieu of dismissal, the Court GRANTS Barta-Iso's request to transfer the case to a court with jurisdiction over the parties.

FACTS

Drawing all reasonable inferences in favor of Plaintiff CWN, the following facts are from the Complaint and attached exhibits, and the affidavits and exhibits attached to the parties' briefs. This case arises out of an allegedly failed transaction between CWN, the buyer of a plane, Barta-Iso, the seller of the plane, and Eagle Creek Aviation Services, the possessor and repairer of the plane.

CWN is a Wyoming limited liability company with its principal place of business in Wyoming. (Compl. ¶ 1). It is a medical practice comprised of doctors who frequently travel to treat a variety of brain, spinal cord, spinal column, peripheral nerve, and carotid artery abnormalities. (Compl. ¶ 7). CWN wanted to buy a plane to accommodate its doctors' frequent travel. (Compl. ¶ 9). To that end, CWN entered into negotiations with Barta-Iso to purchase a plane. (Compl. ¶ 13). The negotiations were successful, and on October 16, 2012, CWN contracted with and agreed to pay Barta-Iso $750, 000 for a 1980 King Air 200 and $345, 000 for repairs to plane (CWN/Barta-Iso Purchase Agreement). (Compl. ¶ 15). At the time CWN entered into the CWN/Barta-Iso Purchase Agreement, CWN did not know that the day before Barta-Iso had contracted to purchase the King Air from Eagle Creek and that Eagle Creek, not Barta-Iso, possessed the King Air. (Compl. ¶ 14).

An addendum to the CWN/Barta-Iso Purchase Agreement outlined the condition in which Barta-Iso would deliver the King Air to CWN and listed the necessary plane repairs and modifications for which Barta-Iso agreed to pay. (Compl. ¶ 22). More importantly, CWN and Barta-Iso agreed in the addendum that Eagle Creek would perform all King Air repairs as outlined in the CWN/Barta-Iso Purchase Agreement, except painting the King Air. (Compl. ¶ 23). At all times relevant to this case, Eagle Creek retained possession of the King Air in Indiana. (see generally Compl.).

The other salient terms of the CWN/Barta-Iso Purchase Agreement contract are these. After signing the contract, CWN agreed to wire $125, 000 to the agreed upon escrow agent. (Compl. ¶ 20). CWN would then conduct a logbook review of the plane and, if satisfied, would notify Barta-Iso that it accepted the plane. Id. At that point, Barta-Iso would have ninety days to complete the repairs called for under the contract. (Compl. ¶ 21). Once those repairs were finished, CWN and Barta-Iso agreed that within five days, CWN would make full payment, including release of the funds from escrow, and Barta-Iso would deliver the plane. (Compl. ¶ 21).

In October 2012, CWN sent its employees, Jeff Holmes[1] and Richard W. Carney, to Eagle Creek in Indiana review the King Air logbooks. (Compl. ¶ 24). In November 2012, CWN sent Carney to review the King Air logbooks again. (Compl. ¶ 25). On November 13, 2012, satisfied the logbooks were compliant with FAA requirements, CWN notified Barta-Iso of its acceptance of the King Air. (Compl. ¶ 27). In accordance with CWN/Barta-Iso Purchase Agreement, CWN wired $125, 000 to the escrow agent as instructed. (Compl. ¶ 20).

In mid-January 2013, Eagle Creek notified CWN directly that the King Air needed additional repairs in furtherance of CWN's agreement with Barta-Iso. (Compl. ¶ 32). Eagle Creek sent CWN a quote for $73, 834 for the additional work. (Compl. ¶ 33). CWN advised Eagle Creek that it did not approve of all the work described in the quote. As such, Eagle Creek adjusted the amount of work, reduced the quote to $68, 806, and resent it to CWN.[2] (Compl. ¶ 34, Exs. H and I). CWN accepted this quote and sent an initialed copy back to Eagle Creek. (Compl. Ex. I). The parties termed the revised and accepted quote the "additional work agreement." On February 1, 2013, CWN wired $34, 903, a 50% deposit for the additional work, to Eagle Creek. (Compl. ¶ 35).

Then things went haywire. Eagle Creek allegedly failed to make the repairs within the ninety-day deadline established by the CWN/Barta-Iso Purchase Agreement and allegedly kept the additional work deposit. Further, the escrow agent allegedly released the $125, 000 to Barta-Iso even though, according to CWN, the conditions precedent to that release were not satisfied. Further, Barta-Iso allegedly failed to deliver the King Air to CWN and allegedly failed to return CWN's $125, 000 purchase deposit. (Compl. ¶¶ 40-42). On that score, CWN sued Eagle Creek and Barta-Iso for breach of contract, fraud, promissory estoppel, and civil conspiracy. CWN also sued Jet Stream, but the Court dismissed Jet Stream for lack of personal jurisdiction. (Doc. No. 35).

Eagle Creek filed a motion to dismiss for lack of personal jurisdiction, arguing that this Court cannot exercise personal jurisdiction over it because it lacks minimum contacts with Wyoming. Additionally, Eagle Creek argues that venue is improper based on the CWN/Barta-Iso Purchase Agreement and the Barta-Iso/Eagle Creek Purchase Agreement. CWN argues that Wyoming has jurisdiction over Eagle Creek because: (1) Eagle Creek solicited CWN, a Wyoming company, and entered into a contract with CWN for additional work to the King Air; (2) CWN sent and Eagle Creek received a $34, 903 wired deposit from Wyoming; (3) Eagle Creek and CWN engaged in repeated correspondence and monetary transactions; and (4) CWN suffered injuries as a result of Eagle Creek's breach of contract.

Barta-Iso essentially adopts CWN's argument for personal jurisdiction. Barta-Iso further argues that the Court has ancillary jurisdiction over its cross-claims because CWN's communications and agreement with Eagle Creek for additional work are sufficient to establish minimum contacts and its cross-claims are related. Additionally, Barta-Iso requests that if this Court does not have personal jurisdiction, it transfer the case to an appropriate jurisdiction in lieu of dismissal.

The Court will discuss the rules governing personal jurisdiction before turning to their application in this case. Next, the Court will discuss Eagle Creek's venue argument. Finally, the Court will discuss Barta-Iso's request for ...


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