https://www.leagle.com/decision/infdco20190528728
這邊揭露了一些事實
針對事實發現部分我直接貼上 其餘自行點選觀看
I. FINDINGS OF FACT
A. The Parties
1. Plaintiff and Counter-Defendant Air Lease Corporation is a Delaware
corporation with its principal place of business in California. Plaintiffs
and Counter-Defendants ALC B378 41345, LLC and ALC B378 37772, LLC are
Delaware limited liability corporations that have their principal places of
business in Delaware. Air Lease Corporation is the sole member, servicer, and
manager of ALC B378 41345, LLC and ALC B378 37772, LLC. ALC leases and sells
commercial aircraft to air carriers around the world.
2. Defendant and Counter-Claimant Far Eastern Air Transport Corporation is a
Taiwanese commercial air carrier with its principal place of business in
Taiwan.
B. Far Eastern's Bankruptcy and Subsequent Development Plan
3. Far Eastern received court approval for bankruptcy protection in the
Republic of China (Taiwan) in May 2008. During the restructuring period, Far
Eastern's MD-80 aircraft were in storage and Far Eastern did not operate
commercial flights.
4. The Hua-Fu Group became the majority shareholder of Far Eastern in 2008.
5. Far Eastern resumed operations in April 2011 and Far Eastern's existing
fleet was returned to service.
6. The Taipei District Court approved Far Eastern's completion of its
bankruptcy reorganization in October 2015.
7. In 2014, Far Eastern prepared a Five Year Fleet Development Plan for
submission to the Taiwanese Civil Aviation Authority ("CAA").
8. Far Eastern was interested in renewing its fleet to fly to farther
destinations, as the MD-80 aircrafts in their fleet could not fly long
distances.
9. Far Eastern considered the purchase or lease of Boeing, Airbus,
Bombardier, and Embraer aircraft before focusing on the purchase or lease of
B738s. In the case of Boeing, Far Eastern considered the potential purchase
or lease of B738s and 737-900 aircraft.
10. Far Eastern contacted potential lessors in 2014. As of March 2015, Far
Eastern received proposals from several lessors for the lease of B738
aircraft. In February 2015, Far Eastern sought and received permission from
the CAA to lease two B738 aircraft.
C. The MSN 41345 Lease
11. In February 2015, Far Eastern contacted ALC to inquire about the
availability of B738 aircraft for delivery in 2016.
12. In April 2015, Far Eastern also pursued six other B738 aircraft from
UTAir that it knew were stored. (See Ex. 1207).
13. Szu Hsuan Lin testified that in considering whether a particular airplane
manufacturer or leasing company has suitable aircraft for operation by Far
Eastern, Far Eastern considers, among other factors, the aircraft's age, the
leasing period, and the rent.
14. On June 1, 2015, ALC provided Far Eastern with a term sheet for one new
B738 aircraft, Manufacturer Serial Number 41345 ("MSN 41345"), which was
executed on June 3, 2015.
15. After ALC sent a draft of the lease agreement for MSN 41345 on June 12,
2015, Far Eastern's legal team reviewed the draft clause-by-clause, and the
parties exchanged comments and drafts.
16. ALC and Far Eastern held lease negotiation meetings in Taipei regarding
MSN 41345 on July 6, 2015. The lease agreement for MSN 41345 (the "MSN 41345
Lease") was executed on July 13, 2015. (See Ex. 78).
17. On June 12, 2015, Far Eastern applied to the CAA for permission to
operate two B738 aircraft, which the CAA granted on July 13, 2015.
D. Lease Negotiations Regarding MSN 37772
18. On June 7, 2015, Far Eastern notified ALC that it was interested in
leasing a second B738. On June 11, 2015, ALC offered Far Eastern a second
B738 aircraft for delivery in 2016, but the offer expired before meaningful
discussions took place.
19. Far Eastern expressed interest in delivery in the May to June 2016
timeframe so that Far Eastern could utilize the aircraft for the summer peak
season.
20. In August 2015, ALC offered Far Eastern a young 737-800 aircraft,
Manufacturer Serial Number 37772 ("MSN 37772"). ALC informed Far Eastern that
MSN 37772 was on lease to Air Berlin with Air Berlin's lease return set for
November 2020, but that Air Berlin was interested in terminating the lease
early to switch to Airbus aircraft.
21. On August 27, 2015, ALC sent a proposed letter of intent ("LOI") for MSN
37772. (See Ex. 216). A revised LOI was sent on September 16, 2015. (See Ex.
1217). The revised LOI specified a lease execution date of October 15, 2015.
(See Joint Stipulation of Facts (Docket No. 257-2)). The LOI contained the
majority of the commercial terms, such as the lease rate, reserves, and
deposits, as well as information regarding the technical conditions of the
aircraft. The LOI also specified the delivery condition of MSN 37772 was "AS
IS WHERE IS." Far Eastern sought clarification regarding the "AS IS WHERE IS"
clause. ALC responded, and also explained that prior to delivery, MSN 37772
would undergo a C-Check. A C-Check is a "heavy check" during which an
aircraft is stripped down and systems and structures are examined and
inspected to, among other things, ensure the airworthiness of the aircraft.
22. Jie Chen, the ALC marketing executive directly responsible for the
marketing and negotiation of the Far Eastern leases, testified that, during
negotiations of the LOI, Far Eastern may have asked whether the airplane was
flying, to which Mr. Chen responded in the affirmative.
23. Far Eastern signed the revised LOI on September 19, 2015.
24. Alex Wang, deputy manager for the maintenance department at Far Eastern,
testified that during his August and September 2015 meetings with Mr. Chen
and Pierce Chang of ALC, he did not ask about the operational status of MSN
37772 specifically, but that he did ask Mr. Chang whether Air Berlin was
using MSN 37772, and that based on Mr. Chang's response, he concluded that
the aircraft was in operation.
25. After the LOI was executed, Mr. Chen gave the LOI to Toby MacCary so that
he could prepare a draft lease agreement based on the terms and conditions
outlined in the LOI. On September 29, 2015, ALC sent a draft lease for MSN
37772 to Far Eastern. During negotiations of the lease agreement, Amanda Lin
from Far Eastern prepared an "open issues list," which was a complete chart
representing all of the issues raised by either side during the negotiation
of the lease agreement. On October 9, 2015, Far Eastern provided its comments
to the MSN 37772 lease. During this time, Far Eastern never asked whether MSN
37772 was flying, or how Air Berlin was operating the Aircraft.
26. The parties did not execute the lease by October 15, as contemplated by
the LOI.
27. On November 7, 2015, Air Berlin put MSN 37772 into storage. Air Berlin
did not notify ALC that MSN 37772 was inducted into storage. The lease
agreement for MSN 37772 did not require Air Berlin to notify ALC that the
aircraft was being placed in storage.
28. Mr. Hazy, ALC's CEO, testified that ALC mandates in its lease agreements
that the airline is responsible for maintenance and upkeep of the aircraft in
compliance with the regulations of the country in which the airline operates.
29. The fact that MSN 37772 was being stored by Air Berlin was publicly
available on aviation websites. However, at no point before the parties
signed the MSN 37772 lease agreement did ALC tell Far Eastern that the
aircraft was in storage.
30. On November 19, 2015, ALC sent Far Eastern a revised version of the MSN
37772 lease and a side letter, including a "redline" comparing the updated
iteration of the MSN 37772 lease to the prior version. (See Joint Stipulation
of Facts).
31. On November 20, 2015, Far Eastern paid the first security deposit in the
amount of $317,000 pursuant to the MSN 37772 LOI.
32. On December 3, 2015, Air Berlin sent ALC a utilization report for MSN
37772, which indicated that the aircraft flew 34 hours in November, down from
226 hours in October. (See Ex. 119). A utilization report is a document
submitted by ALC's air carrier lessees that reports the usage of the
aircraft, including flight hours and the number of cycles flown, for a
particular period of time, typically one calendar month. These reports are
sent to ALC's utilization report email address on a monthly basis, which
includes various departments of ALC.
33. Mr. Chen travelled to Taipei in early December 2015 to assist in
finalizing the lease agreement for MSN 37772. During these negotiations, the
parties never discussed the flying status of the aircraft. Mr. Chen testified
that, over the span of his nearly 30-year career negotiating hundreds of
lease agreements, no airline has ever raised the issue of aircraft storage.
34. The meeting did not result in final execution of the lease agreement
since there were a few outstanding issues that needed to be further
negotiated. After returning to Los Angeles, Mr. Chen emailed CC Tseng, Far
Eastern's COO, and urged him to execute the lease agreement so that ALC could
begin modification of MSN 37772 as soon as possible to suit Far Eastern's
specifications — such as creating a first-class cabin — so that delivery
could be made by June 2016. The lease agreement for MSN 37772 was executed on
December 11, 2015 (the "MSN 37772 Lease"). (See Ex. 9).
35. During the lease negotiations for MSN 37772, the operational status of
the aircraft was never mentioned by either party.
36. On January 7, 2016, Far Eastern submitted a lease and purchase plan for
its use of MSNs 37772 and 41345 to the CAA.
37. In the first quarter of 2016, in preparation for the introduction of two
new aircraft to its fleet, Far Eastern hired 20 new pilots and 34 engineers
and sent them to Seattle, Washington for training.
E. Early Termination of Air Berlin's Lease Agreement
38. During the negotiations for Air Berlin's early termination of the lease
agreement for MSN 37772, ALC and Air Berlin did not discuss whether the
aircraft was being stored or would be stored.
39. The lease termination agreement was signed on December 22, 2015. (See Ex.
3). The effective date of the lease termination was anticipated to be July 1,
2016.
40. Mr. Khatibi testified that it was his understanding that MSN 37772 was
operational when the lease termination agreement was signed. Mr. Khatibi
testified that he did not know that MSN 37772 was in storage until Mr. Chen
asked him in May 2016 for confirmation from Air Berlin that MSN 37772 was
indeed parked.
41. Mr. Khatibi testified that he has negotiated hundreds of leases in his
career, and that storage has never been raised in these negotiations.
42. Mr. Khatibi also testified that leasing companies do not keep track of
the day-to-day operations and treatment of the assets they lease, so there
would be no reason to check storage specifically.
43. Pursuant to the lease termination agreement between ALC and Air Berlin,
Air Berlin paid a $1 million fee for early termination. Mr. Khatibi testified
that this termination fee acts primarily as a penalty for lost business but
is also designed to pick up some of the cost to transfer the aircraft to the
new lessee. A number of different variables affect the total of a given early
termination fee, including the relationship with the terminating lessee, the
prospect of continued business with the terminating lessee, and how many
other aircraft may be involved in the termination process.
F. MSN 37772 Lease Agreement
44. The lease agreement between ALC and Far Eastern had a provision that
required Far Eastern to notify ALC if it put the aircraft in storage. Section
15.3 of the lease agreement states in full: "If the Aircraft, any Engine or
any Part is out of revenue service (except for the performance of
maintenance, repair or Overhaul procedures), Lessee shall promptly notify
Lessor thereof and the Aircraft, such Engine or such Part shall be properly
and safely stored, maintained, and insured in accordance with accepted
industry and manufacturer specifications and procedures."
45. ALC began using a new form lease agreement in June 2015. The lease
agreement between ALC and Air Berlin for MSN 37772, which was executed in
August 2011, did not include a storage provision similar to Section 15.3 of
the lease agreement for MSN 37772 between ALC and Far Eastern. (See Ex. 325).
G. Communications Regarding Status of MSN 37772
46. The MSN 37772 Lease required Far Eastern to develop a maintenance program
for the aircraft, and to obtain approval from the CAA. In order to develop a
bridging maintenance plan for MSN 37772, Far Eastern required various
documents, including the Boeing Maintenance Planning Document ("MPD") and
other documents reflecting Air Berlin's maintenance programs and inspections.
47. To that end, Far Eastern requested various documents from ALC. In
response, in October 2015, Frank Burrati, the ALC executive responsible for
arranging the delivery of MSN 37772 to Far Eastern, sent Far Eastern a
variety of MSN 37772's maintenance documents, including the Task Card Last
Compliance Print ("TCLCP" or "Last Done Next Due" or "LDND"), which is a
record of all the maintenance tasks performed on an aircraft and a statement
of when the maintenance task is next scheduled to be performed. (See Ex. 4).
However, despite Far Eastern's requesting it, ALC did not send a copy of Air
Berlin's maintenance program, explaining that it was proprietary and Far
Eastern would instead have a chance to review it on-site during a
pre-delivery records inspection.
48. Pursuant to Far Eastern's request, on January 22, 2016, Mr. Buratti sent
an updated LDND to Mr. Wang. (See Ex. 5). In order to get the latest LDND,
Mr. Buratti had to ask Air Berlin for a copy. Mr. Buratti did not review the
document before he sent it to Mr. Wang.
49. The first line of the first page of the updated LDND stated "STORAGE FOR
MORE THAN 7 DAYS (B737NG)." The second line stated, "STORAGE FOR MORE THAN 30
DAYS (B737NG)." Both lines indicated that storage of the aircraft began on
November 7, 2015. The updated LDND was circulated to at least 29 employees at
Far Eastern, many of whom were in the Maintenance and Engineering Division.
None of the people in the email chain raised a concern about the length of
storage of MSN 37772 despite the first four entries on the LDND being related
to storage tasks.
50. On May 16, 2016, Mr. Wang requested an updated LDND for MSN 37772. (See
Ex. 12). In response to Mr. Wang's request, on the following day, Mr. Buratti
mistakenly sent Mr. Wang the LDND he had previously sent in January 2016. To
make sure there was not a more recent LDND available, Mr. Burrati checked the
aircraft's utilization report for January 2016 and noticed that the aircraft
reported no flight hours that month. Mr. Burrati then checked the aircraft's
utilization reports for February through May 2016 and observed that these
reports also indicated zero utilization. Mr. Burrati noted that because MSN
37772 had not flown since the last updated LDND, nothing on the LDND had
changed.
51. On May 17, 2016, Mr. Buratti received an email from Mr. Wang asking
whether MSN 37772 was parked in a hangar or outside, if there were any issues
with the paint, and for the storage task records. (See Ex. 262). Mr. Buratti
also received an email from Glen Lee at Far Eastern on May 18, 2016, telling
him that Far Eastern "will work with [ALC] for aircraft delivery issue."
52. Mr. Buratti testified that his practice when receiving utilization
reports from airlines every month is to save them to a folder on his
computer, but he does not open the reports unless he needs to obtain specific
information from them.
53. Low utilization of an aircraft is common and may stem from a number of
reasons, including scheduled maintenance, seasonal demand, and bad weather.
H. Rescission of MSN 37772 Lease
54. On May 23 and May 24, 2016, Far Eastern sent letters to ALC indicating
that it first learned of the storage of MSN 37772 in May 2016, and on that
basis, it was rescinding the lease agreement. At that point, Far Eastern had
never inspected MSN 37772 or its storage records, or asked if the storage
would impact the agreed-upon delivery date. Far Eastern never paid the second
and third deposits for MSN 37772. Far Eastern had not yet signed an
Acceptance Certificate for MSN 37772.
55. On May 27, 2016, ALC sent Far Eastern a letter stating that under the MSN
37772 Lease, Far Eastern had no right to rescind. ALC also sent Far Eastern a
"Parking Notification Statement" from Air Berlin, which stated that MSN 37772
had been parked since November 7, 2015; Air Berlin had no obligation to
notify ALC of the storage and had not notified Air Berlin of the storage; and
that during the storage, MSN 37772 had been maintained in accordance with
applicable regulations. Air Berlin had provided this statement to ALC at
ALC's request, so that ALC could provide it to Far Eastern. (See Exs. 38-39).
56. After Far Eastern rescinded the MSN 37772 Lease, Mr. Chen and Mr. Burrati
flew out to Taipei to meet with Mr. Tseng in person to discuss the issues.
The meeting occurred on May 27, 2016. The transcript of this meeting,
surreptitiously recorded by Mr. Chen with Mr. Burrati's knowledge, is Exhibit
1073.
57. On June 9, 2016, Mr. Hazy emailed Mr. Tseng with the following offer: (1)
ALC would agree to postpone delivery of MSN 41345 to June 23, 2016; (2) the
parties would mutually terminate the MSN 37772 Lease and ALC would apply Far
Eastern's $317,000 security deposit from the MSN 37772 Lease to the security
deposit Far Eastern owed on the MSN 41345 Lease, and (3) the parties would
release each other from any claims or liability in connection with the MSN
37772 Lease.
58. On June 13 and June 15, 2016, Mr. Hazy wrote to Far Eastern, following up
on the offer set forth above. He indicated that Far Eastern had no legal
right to rescind or terminate the MSN 37772 Lease, but that due to the
parties' relationship, ALC would "respect" Far Eastern's decision not to take
MSN 37772. Mr. Hazy also indicated that ALC could enforce the agreement in
court, but that was not how he conducted business with "good airlines" and
that instead he would "take the high road" to allow Far Eastern to take only
the MSN 41345 Lease, if Far Eastern complied with the lease agreement in all
respects.
I. Attempted Delivery of MSN 41345
59. As required by the MSN 41345 Lease, ALC customized MSN 41345 to Far
Eastern's specifications. Far Eastern executed the Acceptance Certificate,
pursuant to Section 2.6 of the lease agreement.
60. ALC's expectation was that Far Eastern would execute the lease
termination agreement for the MSN 37772 Lease, and so, on June 14, 2016, ALC
sent Far Eastern an invoice that applied the $317,000 from the MSN 37772
security deposit to the outstanding amount due on the security deposit for
MSN 41345. With the application of the $317,000 from the MSN 37772 security
deposit, the amount due on the security deposit for the MSN 41345 was
$83,000. ALC paid the $83,000 due under the invoice dated June 14, 2016.
61. On June 21, 2016, ALC's General Counsel reiterated to Far Eastern that in
order to complete the leasing of MSN 41345, ALC needed full payment of the
outstanding $317,000 balance of the security deposit for MSN 41345, and that
the $317,000 security deposit made for MSN 37772 would be credited to MSN
41345 once Far Eastern signed a lease termination for the MSN 37772 Lease.
62. Representatives for ALC and Far Eastern met at Boeing's delivery center
in Seattle, Washington, on June 23, 2016, for delivery of MSN 41345. The
night before, ALC had sent Far Eastern a lease termination agreement for the
MSN 37772 Lease. The lease termination agreement included the mutual release
that ALC offered to Far Eastern regarding the MSN 37772 Lease. Again, on June
26, 2016, Mr. Hazy explained to Far Eastern that because, in his view, there
was a valid lease agreement for MSN 37772, it could only be terminated by
signing a lease termination, and only then could the $317,000 deposit made on
the MSN 37772 be applied to the balance owed on the MSN 41345 Lease. ALC
reiterated the importance of the lease termination agreement in several other
communications.
63. However, Far Eastern did not sign the lease termination agreement for the
MSN 37772 Lease. Far Eastern explained that it would proceed with delivery of
MSN 41345, but it would not sign a release as to MSN 37772, because Far
Eastern had suffered millions of dollars' worth of damages related to the
collapse of that lease agreement.
64. On June 27, 2016, after several days of attempting to finalize delivery
of MSN 41345, Far Eastern told ALC that if delivery was not completed that
day, Far Eastern would fly back to Taiwan. That day, ALC agreed to tender
delivery of MSN 41345 to Far Eastern by hand-delivering to Far Eastern
representatives at Boeing's delivery center a tender of delivery letter. The
letter noted that delivery was "under the assumption and good faith that our
two companies will resolve by July 1, 2016, the outstanding issues related to
the termination of the lease agreement for MSN 37772, and the transfer of the
security deposit of $317,000 under the MSN 37772 lease to the MSN 41345 lease
once that lease is terminated." Far Eastern refused delivery of MSN 41345,
and instead flew back to Taiwan.
65. ALC's General Counsel testified in deposition that ALC had decided to
apply the $317,000 to the amount due on the MSN 41345 security deposit so
that Far Eastern could take the aircraft, and that she understood that the
issues involving the MSN 37772 agreement would be resolved at a later date.
J. Significance of Storage
66. Carol Giles testified that air carriers often store aircraft in the
course of their regular operations, commonly in response to decreased demand.
In its maintenance program, Boeing outlines the procedure for how to properly
store an aircraft. Ms. Giles testified that proper storage does not affect
airworthiness or maintenance condition of the aircraft, and that in her
experience she has not observed any lingering issues with maintenance after
an aircraft was placed in a proper storage program.
67. Ms. Giles testified that, in order to determine whether the storage of
MSN 37772 affected the aircraft's airworthiness, she looked at its storage
records, at the storage program from the aircraft maintenance manual from
Boeing, at the aircraft's C-Check records, and for anomalies or other issues.
Ms. Giles testified that her review of these records did not reveal any
issues arising from the storage of MSN 37772.
68. Ms. Giles testified that even though Air Berlin performed two work orders
late and that the records for MSN 37772 were missing an additional two work
orders, the aircraft was still airworthy.
69. Of the late orders, one was a work order for a seven-day and 14-day
interval check. Ms. Giles testified that "it's not a good thing" to perform
an inspection late, but that "[y]ou can actually do the 14-day check and take
credit for everything else below that 14-day check." Regarding the second
late inspection, Ms. Giles testified that the fact that the check was five
days late is "not something you want to see." However, Ms. Giles testified
that these two late checks would not be a reason "to take away the MRO's
certificate because they missed — they didn't do two checks on time."
70. Ms. Giles further testified that, with respect to the missing work
orders, she could nevertheless discern that the work orders were in fact
completed when she reviewed a work order summary that reflects all the work
for a period of time that was completed on that aircraft. Ms. Giles testified
that, in her experience, regulators can look to other records to recreate the
maintenance history of the aircraft if there are missing work orders.
71. MSN 37772 underwent a pre-delivery C-Check on May 27, 2016, which was
completed on June 9, 2016.
72. Stuart Rubin testified that, based on his experience, proper aircraft
storage does not adversely impact aircraft value. Mr. Rubin testified that
the ISTAT handbook and industry bluebooks do not mention the effect of
storage on value.
73. Mr. Rubin further testified that, while there may be additional costs of
returning an aircraft to operational status after a period of storage, these
additional costs do not impact the value of the aircraft.
74. Mr. Rubin testified that his practice as an appraiser is to include
information in his appraisal regarding an aircraft's storage if he receives
that information from the lessee, but that if he does not receive that
information he does not actively seek it out.
75. MSN 37772 had a valid certificate of airworthiness during the entire
period of storage.
76. After the C-Check for MSN 37772, the German aviation authority issued an
export certificate of airworthiness to India. (See Ex. 328). MSN 37772 also
received a certificate of airworthiness when delivered to SpiceJet, the
subsequent lessee of MSNs 37772 and 41345, by the Indian aviation authority.
(See Ex. 329).
77. Quentin Brasie testified that long-term storage of aircraft has a
material impact on the aircraft's maintenance, airworthiness, safety, and
adversely affects the time to return the aircraft to service. Mr. Brasie
testified that, even though these risks may be mitigated by a C-Check, latent
maintenance risks may develop after a period of storage.
78. Mr. Brasie also testified that the value of a stored aircraft is less
than the value of an operational aircraft because of uncertainty regarding
the costs or time required to return the aircraft to service.
79. Mr. Brasie testified that, even though storage decreases the value of an
aircraft, storage is not factored in industry blue books because those guides
are geared towards giving a value based upon the half-time hypothetical
aircraft for the year of manufacture.
80. Mr. Brasie also testified that storage is ordinarily verbally discussed
at the onset of any negotiation for the sale or lease of an aircraft, but
that these discussions do not typically appear in lease agreements.
81. Mr. Braise also testified that Air Berlin missed four storage checks and
was late on six other storage checks. Mr. Brasie testified that any break
with the maintenance program is material, and therefore Air Berlin's improper
storage of MSN 37772 rendered the aircraft unairworthy. Mr. Brasie also
testified that even though MSN 37772 had an airworthiness certificate from
the German aviation authorities, the airworthiness certificate does not mean
that the aircraft is airworthy, but rather that the aircraft meets its type
design.
K. Departmental Interaction at ALC
82. In order to effectuate the negotiation and finalization of a lease
agreement, various departments of ALC, including marketing, technical, and
finance, must interface and share information.
83. In order to facilitate the negotiation of maintenance reserves, the
marketing department must coordinate with the finance department regarding
the rates for the reserves. Maintenance reserves are intended to ensure that
a lessee pays an amount needed for future maintenance based on its use of the
aircraft.
84. After a lease is executed, the accounting department of ALC uses
utilization reports to calculate the total amount in maintenance reserves due
for a particular airline for a given time period. To facilitate the issuance
of maintenance reserve invoices, at the beginning of the lease term, the
accounting department sets up a general calculation sheet for that particular
aircraft based on the terms stated in the lease agreement. The calculation
sheet allows the accounting department to input utilization numbers each
month as reported in the utilization reports to produce maintenance reserve
invoices. Specifically, to calculate the maintenance reserve fees owed to
ALC, the accounting department multiplies the number of flight hours reported
in a utilization report by the maintenance reserve rate as set out in the
lease agreement.
85. Ms. Kuo testified that she knew that MSN 37772 flew only 34 hours in
November 2015 and flew no hours in December 2016, as Ms. Kuo needed that
information to produce the maintenance reserve invoices to Air Berlin. Ms.
Kuo also testified that flight hours on utilization reports normally vary for
aircraft from month to month.
L. Post-Incident Conduct
86. After the dissolution of the MSN 37772 and MSN 41345 Leases, Far Eastern
contacted several other aircraft lessors or sellers about acquiring other
B738 aircraft.
87. On May 24, 2016, the same day that Far Eastern rescinded the lease
agreement for MSN 37772, ALC began re-marketing the aircraft. Mr. Hazy
directed his marketing team to begin reaching out to other airlines that
operate Boeing 737-800s to remarket the aircraft. His marketing team
approached between 12 to 15 airlines in both the northern and southern
hemispheres. Kishore Korde at ALC was aware that SpiceJet, an Indian air
carrier, was looking for two 737-800s, so he contacted SpiceJet to explore
the opportunity of a leasing agreement. Mr. Korde did not try to remarket the
aircraft to other airlines. Mr. Korde testified that he negotiated the terms
and conditions of MSN 41345 with SpiceJet between June 28 and June 30, 2016.
88. Within two months, ALC re-leased MSN 37772 and MSN 41345, and delivered
both aircraft to SpiceJet for lower rent rates and shorter lease terms. On
June 30, 2016, ALC entered into a 76-month lease agreement with SpiceJet for
MSN 37772, with a base monthly rent of $290,000. (See Ex. 10). The lease
agreement with Far Eastern for MSN 37772 contemplated a 96-month lease with a
base monthly rent of $317,000. On July 14, 2016, ALC entered into a 96-month
lease agreement with SpiceJet for MSN 41345, with a base monthly rent of
$317,500. (See Ex. 79). The lease agreement with Far Eastern for MSN 41345
contemplated a 144-month lease with a base monthly rent of $378,000.
89. SpiceJet was able to secure a lower lease rate for MSN 41345 in part
because MSN 41345 was already customized to Far Eastern's specifications and
SpiceJet was acquiring the aircraft towards the end of the peak summer season
in India.
90. Mr. Korde testified that there was a sense of urgency to get both
aircraft placed with SpiceJet as soon as possible because the summer season
for SpiceJet was closing.
91. During negotiations, ALC disclosed to SpiceJet that MSN 37772 was in
storage. Mr. Korde testified that he does not recall SpiceJet raising the
issue of the storage of MSN 37772 during the lease negotiation.
92. Mr. Hazy testified that it was easier to lease the two aircraft as a
package to SpiceJet, but that if there would have been a better deal to split
up the aircraft and lease them separately to two different airlines, ALC
would have explored that option. But ultimately, SpiceJet was willing to take
both aircraft and to do so expeditiously.
93. Mr. Hazy testified that meeting the 10-Q reporting deadline, in which ALC
would have to report any unleased aircraft, did not impact the lease rate to
SpiceJet. Mr. Hazy testified that ALC's goal was to place both aircraft as
quickly as possible to generate revenue before the end of the peak summer
season. Mr. Korde also testified that he does not recall having any
discussions with Mr. Hazy regarding closing the deal with SpiceJet before the
financial quarter closed.
94. Section 15.3 of the lease agreement between ALC and SpiceJet for MSN
37772 provides in full: "If the Aircraft, any Engine or any Part is out of
revenue service (except for the performance of maintenance, repair or
Overhaul procedures), Lessee shall promptly notify Lessor thereof and the
Aircraft, such Engine or such Part shall be properly and safely stored,
maintained, and insured in accordance with accepted industry and manufacturer
specifications and procedures."
95. SpiceJet has been continuously flying both aircraft since acquiring them
without incident.
96. Under California law, the Court concludes as set forth below that its
rulings on materiality in regard to the MSN 37772 Lease are findings of fact.
Indeed, that was the basis for the denial of summary judgment. Nonetheless,
the Court's specific findings on materiality and reasons therefor are set
forth in the Conclusions of Law so that they flow from the discussion of the
elements.
97. Likewise, the Court's determinations as to damages are findings of fact.
The damages are based on the evidence. For example, while both experts were
qualified and well-prepared, the Court views the testimony of Samuel Engel as
more persuasively explaining the appropriate damages, based both on the
evidence and California law. The Court's specific findings on damages are set
forth in the Conclusions of Law so that they flow from the discussion of
California law and lead into the verdict.
98. I will drop the third person for a moment and mention a "non-finding" of
fact. That is the meeting between Messrs. Chen and Buratti with
representatives of Far Eastern, including Mr. Tseng, that is referenced above
in paragraph 56. Despite the attention the meeting and the recording received
at trial, I don't think that evidence helps or hurts either side. Mr. Chen's
decision to record the meeting does not tell me anything about ALC's business
culture. Perhaps Mr. Chen hoped to salvage the relationship; perhaps he hoped
to use the recording to justify himself somehow to Mr. Hazy. It doesn't
really matter. I think Mr. Tseng's outrage over the storage was genuine, but
neither the storage nor the outrage justified either breach of contract. The
outrage was probably rooted in a personal sense of betrayal. It doesn't
really matter.
針對37772之前是租給柏林航空 但柏林航空決定提前終止租約要換空巴
在正式簽約時遠東都沒問飛機是封存還是正在適航狀態常態飛行
41345交機前ALC發了37772的租約終止協議
結果遠東不願意簽並說因為這件事情遭受數百萬美元的損失