Jobe v. ATR Marketing, Inc ( 1999 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
____________________
No. 98-31366
Summary Calendar
____________________
TONY B JOBE, Individually and as Assignee of
Air New Orleans, Inc,
Plaintiff-Appellant,
v.
ATR MARKETING, INC; AEROSPATIALE, S.N.I.; FINMECCANICA
S.P.A.; AVIONS DE TRANSPORT REGIONALE (GIE); AEROSPATIALE
INC,
Defendants-Appellees.
_________________________________________________________________
Appeal from the United States District Court
for the Eastern District of Louisiana
(96-CV-3396-C)
_________________________________________________________________
June 23, 1999
Before KING, Chief Judge, POLITZ and BARKSDALE, Circuit Judges.
PER CURIAM:*
Plaintiff-appellant Tony B. Jobe, suing individually and as
the assignee of Air New Orleans, Inc., brought a detrimental
reliance claim against defendants-appellees ATR Marketing, Inc.,
Aerospatiale, S.N.I., Finmeccanica S.p.A., Avions de Transport
Regionale (G.I.E.), and Aerospatiale, Inc. The district court
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
granted summary judgment in favor of the defendants-appellees.
After careful consideration of the pleadings, summary judgment
evidence, briefs, and relevant case law, we affirm.
I. FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff-appellant Tony B. Jobe is the former president and
chief executive officer of Air New Orleans, Inc. (“Air New
Orleans” or “ANO”), a bankrupt Louisiana airline.1 Avions de
Transport Regionale (G.I.E.) (“ATR”) is a French business
association similar to a joint venture. The joint venturers are
Aerospatiale, S.N.I., a government-owned French aerospace
corporation, and Finmeccanica, S.p.A., a somewhat analogous
entity operated by the Italian government. ATR Marketing, Inc.
(“ATR Marketing”) is an ATR sales subsidiary headquartered in
Virginia.
Air New Orleans began operating as a regional airline in
1981. In 1986, Air New Orleans became a Continental Airlines
(“Continental”) code-sharing partner, meaning that passengers
could book Air New Orleans flights through Continental’s computer
reservations system, and a carrier for Continental Express,
providing commuter service to cities in Louisiana, Mississippi,
Alabama, and Florida. In August of that year, Hugh Schmittle, a
sales representative for ATR Marketing, contacted Air New Orleans
to propose a meeting at which he could make a marketing
1
Air New Orleans’s trustee in bankruptcy assigned the
estate’s claims to Jobe.
2
presentation for ATR-42 aircraft.2 Schmittle made such a
presentation several weeks later to Jobe and Gordon Long, Air New
Orleans’s vice-president of operations.
The result of Schmittle’s efforts was a protracted series of
negotiations for the purchase of ATR-42 aircraft by Air New
Orleans. In September 1986, Jobe and Long attended the
Farnsborough Air Show in England and toured ATR’s plant in
Toulouse, France with Schmittle and Sheldon Best, ATR Marketing’s
chief operating officer. Soon afterward, according to Air New
Orleans, ATR made a “written commitment” to provide two aircraft
at $7.6 million each, and Air New Orleans agreed to all but the
“details” of the “commitment.” Later that month, Long met with
Schmittle in Dayton, Ohio to discuss “what the terms of the
agreement might be.” Long also traveled to ATR Marketing’s
Virginia headquarters, where he met with Schmittle and other ATR
Marketing representatives to discuss the “fine points” of the Air
New Orleans-ATR transaction. In October 1986, Jobe and Long met
again with Schmittle and other ATR Marketing representatives in
Las Vegas, Nevada, and on the following November 6, Long met with
Schmittle and ATR Marketing’s president, Joel LeBreton, in
Virginia. Schmittle’s report of the October meeting and Long’s
notes of the November meeting both indicate that Air New Orleans
contemplated that an ATR-Air New Orleans deal would involve
Continental’s participation.
2
The ATR-42 aircraft is a 42- to 50-seat turboprop
commuter plane in wide use throughout the United States.
3
Finally, on December 2, 1986, Jobe wrote to LeBreton to
advise him that Air New Orleans was preparing a proposal for
Continental to expand its service at the New Orleans airport and
to be the “hub feeder” for Continental at Houston
Intercontinental Airport. Jobe informed LeBreton that it was
“absolutely necessary that we have the proposal outlined by
yourself at our meeting in Las Vegas in writing, so that we can
demonstrate Aerospatiale’s intentions in this matter as they
currently stand.” At an Air New Orleans shareholders meeting
four days later, Jobe informed those present that the company
“[r]equire[d] ATR-42s or British Aerospace Jetstreams” and that
it was “[g]etting [a] written proposal from Aerospatiale to
provide [a] loan with aircraft; British Aerospace [is] trying to
make [the] same type of proposal.”
Soon after the shareholders’ meeting, Air New Orleans
received an ATR proposal for the supply of four ATR-42's. The
proposal set forth, among other things, payment and financing
conditions of the offer and noted that Air New Orleans had
acknowledged that it was “not . . . in a position to make the
down and progress payments usually required by [ATR] and would
have to obtain financing covering 100% of the price of the
aircraft.” Because Air New Orleans’s “current creditworthiness”
was “not sufficient” to permit such an arrangement, ATR required
that Texas Air Corporation, Continental’s parent company, provide
certain financial guarantees. The proposal stated that ATR’s
“present offer is valid until January 15, 1987" and that if Air
4
New Orleans accepted it, the parties would enter into a written
agreement. Air New Orleans did not accede to ATR’s proposal by
January 15, 1987. Jobe testified in his deposition that his
company was “attempting to get some of these minor points that to
us, being a small carrier, were fairly major[,] refined.”
Negotiations for the sale of the ATR-42's continued after
January 15, 1987. In March 1987, Best attended an Air New
Orleans board meeting to address the points remaining to be
resolved with reference to a sale of ATR-42's to Air New Orleans,
and Long enjoyed a weekend of skiing with ATR executives, after
which he wrote Schmittle, “Hopefully our relationship will
someday result in the acquisition of ATR-42's for Air New
Orleans.” In June 1987, Jobe traveled to the Paris Air Show,
where he met with Best, Schmittle, and Neal Meehan, the president
of Continental’s commuter division, to discuss the guarantees
that ATR’s December 1986 proposal required. Jobe testified at
his deposition that his meeting with Meehan left him somewhat
“pessimistic” because Meehan had not given him “a more firm
agreement” enabling Air New Orleans to “go ahead and get the ATR
aircraft.” In July 1987, following the Paris negotiations, Jobe
notified Air New Orleans employees that he had begun negotiating
with Beech for the lease of more C-99 aircraft and with Fairchild
for the acquisition of several larger aircraft. No mention was
made of ATR-42's. Later that same month, Jobe submitted a second
proposal to Continental stating that Air New Orleans planned to
operate an expanded commuter service “with Beech C-99 and
5
Fairchild Metro III aircraft, and is currently negotiating the
terms and conditions of acquisition with Fairchild.” Once again,
he did not mention ATR or its planes.
On July 31, 1987, ATR and Texas Air Corporation entered into
an agreement for the sale of sixteen ATR-42's, with an option to
purchase an additional thirty-four aircraft. Jobe continued
discussions with Best regarding a potential acquisition of ATR
aircraft through August or September 1987, but, in January 1988,
Air New Orleans declared bankruptcy without ever having acquired
a single ATR-42.
In October 1996, Jobe filed a diversity suit against the
defendants in the United States District Court for the Eastern
District of Louisiana. He brought six claims: breach of
contract, detrimental reliance, breach of a nondisclosure
agreement, breach of fiduciary duty, solidary liability, and
unjust enrichment. After both sides had taken extensive
discovery, the defendants moved for summary judgment on all
claims, which the district court granted. Jobe appeals only the
district court’s grant of summary judgment on his detrimental
reliance claim.
II. STANDARD OF REVIEW
We review a district court’s grant of summary judgment de
novo, applying the same standards as the district court. See
United States v. Johnson, 160 F.3d 1061, 1063 (5th Cir. 1998).
After consulting applicable law in order to ascertain the
material factual issues, we consider the evidence bearing on
6
those issues, viewing the facts and the inferences to be drawn
therefrom in the light most favorable to the non-movant. See Doe
v. Dallas Indep. Sch. Dist, 153 F.3d 211, 214-15 (5th Cir. 1998).
Summary judgment is properly granted if “the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party
is entitled to a judgment as a matter of law.” FED. R. CIV. P.
56(c).
The moving party may demonstrate the absence of a genuine
issue of material fact by pointing out the lack of evidence to
support the non-moving party’s case. See Duffy v. Leading Edge
Prods., Inc., 44 F.3d 308, 312 (5th Cir. 1995). Once this
showing is made, the burden shifts to the non-movant to identify
specific evidence in the record showing that there is a material
fact issue for trial and to state the “precise manner” in which
the record supports his claims. See ContiCommodity Servs., Inc.
v. Ragan, 63 F.3d 438, 441 (5th Cir. 1995). A summary judgment
motion will not be defeated by the “existence of some alleged
factual dispute.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
247-48 (1986). The non-movant must “do more than simply show
there is some metaphysical doubt as to the material facts,”
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,
587 (1986), and a mere scintilla of evidence does not suffice to
prevent summary judgment, see Davis v. Chevron U.S.A., Inc., 14
F.3d 1082, 1086 (5th Cir. 1994).
7
III. DISCUSSION
Louisiana law provides:
A party may be obligated by a promise when he knew or should
have known that the promise would induce the other party to
rely on it to his detriment and the other party was
reasonable in so relying. Recovery may be limited to the
expenses incurred or the damages suffered as a result of the
promisee’s reliance on the promise. Reliance on a
gratuitous promise made without required formalities is not
reasonable.
LA. CIV. CODE ANN. art. 1967. The essential elements of a
detrimental reliance theory of recovery in Louisiana are: (1) a
representation by conduct or word; (2) justifiable reliance
thereon; and (3) a change of position to one’s detriment because
of the reliance. See Breaux v. Schlumberger Offshore Servs., 817
F.2d 1226, 1230 (5th Cir. 1987) (citing John Bailey Contractor,
Inc. v. State, 425 So. 2d 326, 328 (La. Ct. App. 1982), aff’d,
439 So. 2d 1055 (La. 1983)). Jobe need not prove the existence
of a contract to establish his detrimental reliance claim, even
in a context where a contract would normally govern. See Newport
Ltd. v. Sears, Roebuck & Co., 6 F.3d 1058, 1069 (5th Cir. 1993)
(citing Morris v. People’s Bank & Trust Co., 580 So. 2d 1029,
1036 (La. Ct. App.), writ denied, 588 So. 2d 101, 102 (La. 1991);
Morris v. People’s Bank & Trust Co., 580 So. 2d 1037, 1043 (La.
Ct. App. 1991)).
We must first identify the representations on which Jobe
allegedly relied to his detriment. The district court indicated
“some confusion as to the specific promise or representation
allegedly made by the defendants” but read Jobe’s pleadings as
alleging that the defendants had represented (1) that “a sale had
8
been confected or a preliminary agreement reached,” and (2) that
the December 5, 1986 proposal’s expiration date was “of no
moment.” Our review of Jobe’s pleadings in the district court
and his briefs on appeal reveals that his detrimental reliance
claim is indeed based on defendants’ alleged representations that
ATR and Air New Orleans entered into an agreement for the sale of
ATR-42 aircraft and that the expiration date for the December 5
proposal was not a firm deadline. In addition, Jobe suggested
below, and argues vehemently on appeal, that he is entitled to
relief because the defendants represented that they were
bargaining in good faith when, in fact, they had no intention of
selling ATR-42's to Air New Orleans. We address each of these
alleged representations in turn.
The record does not support Jobe’s claim that the
defendants-appellees represented that ATR and Air New Orleans
reached a preliminary agreement on the sale of ATR-42's to Air
New Orleans. Air New Orleans’s interrogatory answers state that
“[a]t the conclusion of [the first Virginia] meeting, ANO
believed that it had entered into a binding contract with ATR
Marketing and the other Defendants for the delivery of six (6)
ATR-42 aircraft.” But the summary judgment evidence does not
show that the defendants represented that a contract existed at
any point prior to or during this meeting. Although Jobe alleges
that ATR Marketing made a “written commitment” in September 1986,
no such writing appears in the record. Furthermore, the
testimony of Air New Orleans’s own witness, Long, indicates that
9
no firm contract existed in the fall of 1986. Long stated that
during the trip to the Farnsborough Air Show, he participated in
“discussions” with Schmittle and Best, the “substance” of which
was that Air New Orleans was “very interested in receiving the,
acquiring the ATR 42, along with the financing package that
included an over financing to allow cash fusion to Air New
Orleans, and that ATR was quite interested in placing the
airplanes with Air New Orleans.” At his first meeting at ATR
Marketing’s Virginia headquarters, Long testified, Schmittle told
him that “the acquisition of the airplanes was going forward,”
and while Long was “not sure that we finalized the fine points”
of the deal, “we probably moved along in establishing the fine
points.” This testimony in no way demonstrates that the
defendants represented that Air New Orleans had a binding
contract for the purchase of ATR-42 aircraft.
Jobe also contends that, after the first Virginia meeting,
the defendants represented that Air New Orleans had a contract to
buy ATR-42's. In his deposition, for example, he testified that
the December 5, 1986 proposal was, in fact, a written contract.
That document does not represent that ATR and Air New Orleans had
a binding contract, however; on the contrary, it states on its
face that it is a “proposal” and an “offer” that was valid only
until January 15, 1987, does not reflect any final agreement on
the price of the aircraft or financing conditions, and concludes
by expressing a hope that “the above proposal will be of
interest” to Air New Orleans. Although Schmittle testified that
10
the December 5 proposal could have been accepted at any time, it
is undisputed that Air New Orleans never did so, and our review
of the record reveals no other evidence that the defendants-
appellees represented that Air New Orleans had a binding contract
to purchase ATR-42's.
Even assuming that the defendants did, in fact, make such a
representation, the record demonstrates that Air New Orleans did
not rely on it. Jobe’s actions in December 1986 indicate that he
did not believe that Air New Orleans had a firm contract. His
December 2 letter requested a “proposal” from ATR, not a copy of
the contract, so that Air New Orleans could demonstrate ATR’s
intentions “as they currently stand.” At the Air New Orleans
shareholders meeting, Jobe told attendees that the company was
attempting to acquire “ATR-42s or British Aerospace Jetstreams”
(emphasis added) and, as late as July 1987, Jobe informed Air New
Orleans employees and Continental executives that Air New Orleans
was considering purchasing Beech or Fairchild planes, omitting
any mention of ATR-42's. Such conduct is inconsistent with
Jobe’s allegation that he relied on a representation that Air New
Orleans had a firm contract to buy ATR-42's.
Moreover, under the circumstances, any reliance on a
representation that Air New Orleans had a binding contract would
have been unjustified. Although Jobe could not recall any other
instance in which Air New Orleans purchased or leased aircraft
without a written contract, he never signed a written purchase or
lease agreement with the defendants. Furthermore, at no point
11
did the parties agree on certain major contract terms, including
the exact price of each aircraft and the amount of the cash
infusion to accompany each plane. Nor did Air New Orleans ever
obtain the support from Continental that ATR and ATR Marketing
had demanded since October 1986. Thus, the situation in this
case is markedly different from that in Breaux, in which we held
that the plaintiff reasonably relied on the defendant’s written
promise to rent a building because “[t]he terms of the lease, the
price, the duration, and the square footage had been agreed to by
the parties” and the plaintiff knew that the defendant had
negotiated with signmakers, interior decorators, and architects
to prepare the rented office space for its occupancy. 817 F.2d
at 1231.
We next consider defendants’ alleged representation that the
December 1986 proposal’s January 15, 1987 expiration date was “of
no moment.” Although there is ample evidence that the defendants
did make such a promise, Jobe does not explain how any reliance
it placed on defendants’ representation was detrimental, as Air
New Orleans never attempted to accept the December 1986 offer.
We therefore agree with the district court that “even if [the
expiration dates’s] extension was undisputed, that fact remains
immaterial. Again, Jobe has not indicated how or when any offer
was accepted, or how or when any ‘preliminary agreement’ was
reached.” Nor does a promise that an expiration date will be
extended constitute a representation that the parties had an
agreement for the purchase or lease of aircraft; indeed, such a
12
statement suggests that no agreement existed. The defendants’
alleged representation that the putative deadline for acceptance
of the December 1986 proposal was “of no moment” cannot be the
basis for a detrimental reliance claim.
Finally, we turn to Jobe’s assertion that defendants
represented that they were negotiating in good faith when, in
fact, they had no intention of selling ATR-42's to Air New
Orleans. This argument states a claim for fraud, not detrimental
reliance. See Automatic Coin Enters., Inc. v. Vend-Tronics,
Inc., 433 So. 2d 766, 768 (La. Ct. App.) (holding that a promise
made with the present intent not to perform constitutes fraud),
writ denied, 440 So. 2d 756 (La. 1983).3
Jobe fails to show that there is a genuine issue of material
fact with respect to his detrimental reliance claim. The
defendants are therefore entitled to judgment as a matter of law,
3
Jobe also contends that the district court erred in
failing to draw an adverse inference from the defendants’ failure
to produce certain reports of visits made by ATR Marketing
representatives to Air New Orleans. A district court’s refusal
to draw an adverse inference is reviewed for abuse of discretion.
See In re Evangeline Ref. Co., 890 F.2d 1312, 1321 (5th Cir.
1989). The party requesting an adverse inference must first show
that the documents in question exist or existed and were within
the control of the opposing party. See Brewer v. Quaker State
Oil Ref. Corp., 72 F.3d 326, 334 (3d Cir. 1995). Although Jobe
claims that “[t]here is no question that the reports had been in
Defendants’ possession,” he points to no evidence in the record
supporting this assertion. Moreover, a party seeking to obtain
an adverse inference based on non-production or destruction of
documents must show bad faith. See Vick v. Texas Employment
Comm’n, 514 F.2d 734, 737 (5th Cir. 1975). Jobe does not
identify, nor have we been able to find, any record evidence
showing bad faith on the part of the defendants. We therefore
conclude that the district court did not abuse its discretion in
declining to draw an adverse inference from the non-production of
the trip reports.
13
and the district court properly granted it.
IV. CONCLUSION
For the foregoing reasons, we AFFIRM the judgment of the
district court.
14