February 8, 2022

"Bare Evidentiary Cupboard" Does Not Support Claims for Interference with Aircraft Transaction

Holland & Knight Aviation Law Blog
Marc L. Antonecchia
Aviation Law Blog

A comprehensive decision by an Illinois federal court instructs that claims for tortious interference arising from a failed aircraft transaction requires actual evidence of wrongdoing. In dismissing all claims and granting summary judgment to defendants, the court determined that an aircraft broker had not interfered with an aircraft transaction because the plaintiffs failed to proffer any evidence of the broker's knowledge of an actual contract. Among the takeaways are that lawsuits are not a proper mechanism to stifle competition, and that evidence – not "speculation, conjecture, or unsupported theories" – is necessary to sustain a claim.

At the outset, the court acknowledges that the record is complicated by numerous names and dates. But in sum, two aircraft brokers each wanted to buy and sell – i.e., flip – the same aircraft from the aircraft's owner (seller) to an end purchaser (buyer). When Broker 1 learned that Broker 2 was attempting to make a deal with the seller and buyer, Broker 1 sent a cease-and-desist letter asserting "exclusive" rights to the aircraft. A short time later, Broker 2 ended its efforts to purchase the aircraft, while Broker 1 continued forward. After Broker 1's deal did not close, Broker 1 blamed Broker 2 and filed a multicount complaint, including allegations of tortious interference with the contract. On Broker 2's motion for summary judgment to dismiss, the court framed the question at hand as why Broker 1's deal fell through, and whether a jury could find Broker 2 responsible based on the actual evidence in the record.

The record before the court was that there had been negotiations involving Broker 1 and the seller and buyer between May and July 2018. In late June 2018, Broker 2 contacted the seller after hearing that the deal with Broker 1 was "cratering" and having spotted an advertisement for the aircraft labeled as "non-exclusive." The seller advised Broker 2 that it continued to be in negotiations with another buyer, invited Broker 2 to make an offer and that it would advise Broker 2 if the aircraft was released for sale.

In the court's view, there was no evidence to support a claim for Broker 2's tortious interference with a contract between Broker 1 and the seller, which first required Broker 2's knowledge of an actual contract: "There is evidence that [Broker 2] knew about a potential deal (between [Seller] and someone else), but there is no evidence that they knew about an actual deal. Without knowledge of a contract, there is a no claim." So too, the court found an absence of evidence of the requisite inducement because Broker 2 never encouraged the seller to cut off negotiations with Broker 1: "[Broker 2] never encouraged [Seller] to give the other potential buyer the shaft." The court was especially bemused by the fact that Broker 2's communications with the seller pre-dated the formation of the contract between Broker 1 and the seller: "And [Seller] couldn't have breached the Sale and Purchase Agreement in June, because the contract did not exist until July. Communications in June can't breach an agreement in July."

Likewise, there was no evidence to support a claim for Broker 2's tortious interference with a contract between Broker 1 and the buyer, who had signed a non-binding offer letter in May 2018. The offer letter was expressly subject to the entering of a definitive sale and purchase agreement, and, in the court's view "did not bind [Buyer] to buy anything." The court disregarded Broker 1's suggestion that a redline version of a sale and purchase agreement labeled "draft" and with blank signature lines was evidence of an actual contract between Broker 1 and the buyer: "A draft agreement isn't a contract. It's just a piece of paper."

The court was unimpressed with Broker 1's efforts to shift the blame to Broker 2 by asserting that Broker 2's actions in proposing a lower price caused the buyer to reject the aircraft. The court cited the offer letter between Broker 1 and the buyer, which expressly gave the buyer the right to walk away "for any reason whatsoever," and determined there was no bad faith by the buyer in seeking a price reduction for an aircraft with "technical problems." Blaming Broker 2's lower offer for the buyer's decision to seek a price reduction after a failed inspection was a nonstarter: "That's just a theory, with no citation to the record. There is no supporting evidence. It is backed by nothing, so it counts for nothing."

The decision, Brinley Holdings Inc. v. RSH Aviation, Inc., 2022 WL 180571 (N.D. Ill., Jan. 20, 2022), is a useful reminder that "inflammatory rhetoric" is no substitute for actual evidence in disputes arising out of factually intensive aircraft transactions involving multiple parties with competing interests. Quite simply, the evidence demonstrated that the buyer "just didn't like the price for the plane, so he walked away." The court signals that ignoring the terms of an express agreement and, even more fundamentally, whether an agreement exists, should not be a winning litigation strategy: "[I]n the end, [Broker 1] came to the courthouse empty handed. Its evidentiary cupboard was bare."

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