Summary
granting CFS and GEC's motions to dismiss
Summary of this case from Corporate Aviation Concepts v. Multi-Service Aviation Corp.Opinion
Civil Action No. 03-3020.
August 24, 2004
Memorandum and Order
This case was originally a declaratory judgment action filed by plaintiffs Corporate Aviation Concepts, Inc. ("CAC") and CFS Air, LLC ("CFS") against Multi-Service Aviation Corporation ("MSC"), seeking a judicial determination that liens, placed by MSC upon three aircraft owned and operated by plaintiffs, were invalid. MSC then filed counterclaims and a third-party complaint. Currently pending before this court are the motions to dismiss the counterclaims by CFS and the third-party complaint by General Electric Capital Corporation ("GEC"). For the reasons stated below, these motions will be granted. Background
Plaintiff CAC has not moved to dismiss the counterclaims asserted against it, which are identical to those asserted against CFS. As a matter of judicial efficiency, however — because these counterclaims involve the same factual allegations, the same parties, and the same legal theories as those challenged by CFS; and because MSC has had an opportunity to address these issues — to the extent that MSC has failed to state legally sufficient claims against CAC, I will dismiss those counterclaims against CAC as well. See Roman v. Jeffes, 904 F.2d 192, 196 (3d Cir. 1990) ("there are times when a court may sua sponte raise the issue of the deficiency of a pleading under Rule 12(b)(6) provided that the litigant has had the opportunity to address the issue either orally or in writing") (citing Bryson v. Brand Insulations, Inc., 621 F.2d 556, 559 (3d Cir. 1980) and Dougherty v. Harper's Magazine Co., 537 F.2d 758, 761 (3d Cir. 1976)).
The facts giving rise to MSC's attempted placement of liens upon plaintiff's aircraft are not esential to the disposition of this motion. For this reason, the ensuing factual account will be limited to the factual allegations underlying MSC's claims for fraud and other business torts. A complete discussion of the extension of credit — by MSC — to various aircraft now operated by plaintiffs, the resulting debt incurred by the owners and guarantor of those aircraft, and MSC's placement of liens upon those aircraft, can be found in this court's opinion denying MSC's motion to dismiss or transfer. See Corporate Aviation Concepts, Inc. v. MultiService Corp., 2003 WL 22794693 (E.D. Pa. Nov. 13, 2003).
MSC's claims for creditor fraud and conspiracy depend upon the precise nature of the business and ownership relationships between and among CAC, an aviation services corporation based in Washington state; CFS, an aircraft leasing company operating out of Connecticut; GEC, the manager and 100% owner of CFS; and Northwestern Aircraft Capital Corp. (NWACC"), an aircraft dealer and distributor based in Washington state. Accordingly, I will go into some detail as to the structure of these businesses and their relationships with one another. For the purposes of this motion to dismiss only, the facts as related below presume MSC's allegations to be true.
MSC is a credit card processing company which issues corporate aviation cards to qualified businesses in the aviation industry. See defendant's official website, at https://aviation.multiservice.com/mscavi_index.shtml. Each credit card is attached to a specific aircraft, and with the card the operator of an aircraft can purchase fuel and services from approved MSC operators.
Sometime in the mid-1990s, MSC issued lines of credit to three aviation service providers — NW Executive, NW Leasing, and JS Aviation — all of which are owned by parent corporation NWACC. See Def.'s Am. Countercl. (Doc. # 22) at 7, ¶ 10, 13. As the parent corporation, NWACC issued Corporate Guarantees to MSC pursuant to which it ensured prompt payment of all debt incurred by these three companies through use of the Multi-Service credit card. Id. ¶¶ 6, 8-9.
NW Executive, NW Leasing, and JS Aviation used their Multi-Service cards to purchase aviation fuel and products and are currently in default under the terms of Multi-Service's Cardholder Agreement. Id. ¶¶ 18-20. As a result of unpaid credit card bills, NW Executive owes $19,464.20 to MSC, NW Leasing owes $147,004.45, and JS Aviation owes $183,486.60. Id. Despite its Corporate Guarantees, NWACC has failed to satisfy these debts or otherwise make payment to MSC. Id. ¶ 21. As a result, MSC filed multiple claims of lien with the Federal Aviation Administration ("FAA") and the State of Kansas which attach to three specific aircraft. Id. ¶ 22.
The three aircraft at issue are a Gates Learjet 55, Registration No. N29NW ("Gates 55"); a Gulf Stream American G-1159A, Registration No. N312NW ("Gulf Stream American"); and a Gates Learjet 35A, Registration No. N325NW ("Gates 35A").
At approximately the same time these liens were filed, the aircraft in question — which were under the control of NWACC or its subsidiaries — were sold, assigned, and ultimately came to be owned by CFS, which then leased them to CAC. According to defendant, GEC and CFS financed and created CAC for the specific and fraudulent purpose of continuing the operation of these three aircraft, and the leasing of the three aircraft to CAC was designed to defraud MSC from recovering on its liens. This set of transactions forms the basis of defendant's counterclaims and third-party complaint, and merits somewhat detailed discussion.
To reiterate, GEC, the third-party defendant in this case, is the manager and 100% owner of CFS. Def.'s Am. Countercl. ¶ 24.
With respect to the first aircraft, the Gulf Stream American, MSC alleges that it was originally owned by NWACC and was sold to GEC for "$1.00 and OVC" on April 4, 2003. Id. ¶ 26. As of April 1, 2003, however, CAC had entered into an agreement to lease the Gulf Stream American from GEC. Id. ¶ 27. Cory Coyle, an NWACC officer, signed both the lease for the Gulf Stream American, on behalf of CAC, and its bill of sale, on behalf of NWACC. Id. ¶ 28. According to MSC, Coyle's dual role as an officer for both NWACC and CAC raises suspicion as to the legitimacy of the CAC business entity. On May 19, 2003, GEC sold its ownership interest in the Gulf Stream American to CFS and assigned to CFS its lessor's interest in the aircraft as well. Id. ¶¶ 31-32. With respect to the Gulf Stream American, then, MSC's allegations appear to establish that this aircraft — originally owned and operated by NWACC and its subsidiaries — is currently being leased by CAC from CFS, its owner.
The second aircraft in question, the Gates 55, is alleged to have been leased to NWACC by GEC sometime prior to November 7, 2002. Id. ¶ 34. GEC then assigned its lessor's interest in the Gates 55 to CFS, sometime after this date. Id. ¶ 35. The Gates 55 is currently operated by CAC pursuant to a lease with CFS. The third aircraft, however — the Gates 35A — receives much less specific treatment by defendant in its factual allegations and is alleged only to be currently owned by CFS and to have been — at one time — owned or leased by NWACC. Id. ¶ 36.
In connection with the multiple transfers of these three aircraft, MSC has asserted six counterclaims against CAC, five against CFS, and brought a six-count third-party complaint against GEC. The essence of its complaint is that CFS and GEC conspired to create CAC, transfer ownership of the aircraft, and keep the aircraft in operation as a means of defrauding MSC and obstructing its efforts to enforce its liens. According to MSC, the formation of CAC enabled CFS and/or GEC to avoid taking "immediate write-downs of at least $8,500,000." Id. ¶ 39. MSC further alleges that CFS and/or GEC, in order to form CAC, purchased equipment, furnishings, trade names, and customer lists from NWACC and its subsidiaries. Id. ¶ 40.
In MSC's first count, it brings a claim for creditor fraud and deepening insolvency. MSC's second count alleges civil conspiracy, and its third claim is for aiding and abetting fraud. In counts four and five, MSC advances theories of joint venture and instrumentality liability. Finally, counts six and seven bring causes of action which sound in unjust enrichment. MSC asserts each of its claims against CAC, CFS, and GEC, except for count five, in which it relies upon the instrumentality theory to bring causes of action against only CAC and GEC. I will discuss each claim in turn.
The specific nature of MSC's six claims against CFS and GEC is altogether unclear from the complaint itself. The six counts are untitled and make no reference to the legal theories upon which they are based. In its opposition to the parties' motions to dismiss, however, MSC made clear — for the first time — the theories underlying its six claims. I will therefore evaluate the legal sufficiency of MSC's claims according to its after-the-fact titling thereof. Although movants were originally handicapped by MSC's imprecise pleading, their reply memorandum makes clear that they are now aware of the nature of the claims brought against them and have had sufficient opportunity to respond.
Legal Standard
In ruling on a motion to dismiss for failure to state a claim upon which relief may be granted, the court must accept as true all well-pleaded allegations of fact in the complaint and any reasonable inferences that may be drawn therefrom, in order to determine whether "under any reasonable reading of the pleadings, the [complainant] may be entitled to relief." Nami v. Fauver, 82 F.3d 63, 65 (3d Cir. 1996) (citations omitted); Colburn v. Upper Darby Township, 838 F.2d 663, 665-66 (3d Cir. 1988), cert. denied, 489 U.S. 1065 (1989) (citations omitted). Although the court must construe the complaint in the light most favorable to the complainant, it need not accept as true legal conclusions or unwarranted factual inferences. See Conley v. Gibson, 355 U.S. 41, 45-46 (1957). Courts will grant a 12(b)(6) motion to dismiss "only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Hishon v. King Spalding, 467 U.S. 69, 73, 104 S. Ct. 2229 (1984).
Movants also cite Rule 9(b) in their motions to dismiss, alleging that MSC's claims, which involve fraud, have not been pleaded with sufficient specificity. Because I hold that each of MSC's counterclaims and third-party claims is legally insufficient, I need not assess the degree of particularity with which they have been pleaded.
Discussion
1. Count I: Deepening Insolvency and Creditor Fraud
In count one MSC asserts claims against CAC, CFS, and GEC for deepening insolvency and creditor fraud. MSC alleges that GEC and CFS created a new corporate entity — CAC — in an attempt to allow its predecessor, NWACC, to avoid its debts while continuing the same operations under a new name. According to MSC, its first claim is supported by several allegations: GEC and CFS were involved in the funding of CAC; CAC is a successor to NWACC; NWACC owed approximately $247,000.00 to MSC; GEC and CFS entered into new leases with CAC for aircraft formerly in the possession of NWACC; GEC benefitted financially from the creation of CAC because it was able to avoid taking an immediate write-down of $8,500,000.00; and the creation of CAC prohibited MSC from enforcing its liens against NWACC.
The tort of "deepening insolvency" has never been discussed by Pennsylvania courts. The Third Circuit, however, has had occasion to evaluate the theory of "deepening insolvency" under Pennsylvania law and concluded, after lengthy analysis, that "if faced with the issue, the Pennsylvania Supreme Court would determine that `deepening insolvency' may give rise to a cognizable injury." Official Comm. of Unsecured Creditors v. R.F. Lafferty Co., Inc., 267 F.3d 340, 349 (3d Cir. 2001). Expanding upon the nature of this tort, the Third Circuit held that deepening insolvency occurs where corporate property is injured through the fraudulent or concealed expansion of corporate debt and prolongation of corporate life. Id. at 347. This tort rests upon the theory that a corporation, even when insolvent, can have valuable corporate property; the fraudulent incurrence of additional debt, however, can damage that value by hastening bankruptcy, undermining business relationships, and dissipating corporate assets. Id. at 349-50.
The R.F. Lafferty Court stressed the significance of the injury to the debtor corporation, however, and cited numerous cases in which debtors or committees suing on behalf of debtors were the injured parties. Id. at 347-50. Indeed, the Third Circuit clearly imagined the "injury" in a deepening insolvency case to be suffered by the debtor corporation itself, and specifically found that the plaintiff in R.F. Lafferty was asserting claims on behalf of the bankrupt corporations. Id. at 348-49. Only after holding that "the claims here belong to the Debtors, rather than to the creditors," did the Third Circuit undertake its deepening insolvency analysis. Id. at 349. Its acceptance of deepening insolvency as a cognizable cause of action under Pennsylvania law, therefore, does not appear to have contemplated the type of claim asserted by MSC; that is, a claim for deepening insolvency brought against companies allegedly related to the insolvent corporation, by an unsecured creditor of the insolvent corporation. MSC does not allege that it is bringing its claim on behalf of NWACC or its subsidiaries, nor does it allege that NWACC was injured by the prolonging of its corporate life or incurrence of fraudulent debt.
Because MSC has failed to allege the elements of deepening insolvency, however, I need not determine whether an unsecured creditor has standing to bring deepening insolvency claims against a bankrupt corporations successors. As articulated by the Third Circuit, deepening insolvency involves "prolonging an insolvent corporation's life through bad debt." Id. at 350. More specifically, the tort requires a showing of "fraudulent expansion of corporate debt and prolongation of corporate life." Id. at 347. MSC has not alleged that CAC, CFS, or GEC expanded NWACC's debt in any way. The unpaid credit card bills of NW Executive, NW Leasing, and JS Aviation existed prior to the creation of CAC and MSC has not alleged that CFS or GEC caused this debt to be increased. Furthermore, MSC has alleged no facts suggesting that the accumulation of debt was fraudulent; the only "debt" at issue in this case is the unpaid credit card bills, a debt which was incurred through purchase of aviation fuel on legitimately extended credit.
While certain aircraft formerly operated by NWACC may be under new leases, this fact alone does not constitute a fraudulent prolonging of corporate life through the incurrence of bad debt. MSC has failed to allege any facts which would support a claim for deepening insolvency and these claims will therefore be dismissed with prejudice.
MSC's first count also mentions "creditor fraud" as a theory of recovery. Pennsylvania courts have never recognized creditor fraud as a cause of action under Pennsylvania law. Assuming without deciding, however, that the Pennsylvania Supreme Court would — if faced with the issue — recognize this tort, MSC has nonetheless failed to state a legally sufficient claim for creditor fraud.
In Morganroth Morganroth v. Norris, McLaughlin Marcus, P.C., the Third Circuit — predicting New Jersey law — held that a plaintiff states a claim for creditor fraud under New Jersey law by alleging "that an attorney has knowingly and intentionally participated in a client's unlawful conduct to hinder, delay, and/or fraudulently obstruct the enforcement of a judgment of a court." 331 F.3d 406, 414 (3d Cir. 2003) (emphasis added). Relying upon this articulation of the elements of creditor fraud, as urged to do by MSC, it is clear that MSC has not stated a claim for creditor fraud. While MSC alleges an outstanding debt owed it by the NWACC subsidiaries, this debt is in the form of an unpaid credit card bill. MSC does not assert that it has obtained a "judgment" for this amount, nor that CAC, CFS, or GEC have obstructed the enforcement of any such judgment. Furthermore, while MSC alleges that the transfer of aircraft ownership and leasing rights interfered with its attempts to enforce its liens, it has failed to assert any facts supporting a finding of unlawful conduct or intentional obstruction. Accordingly, MSC's claim and counterclaims for creditor fraud cannot stand and will be dismissed with prejudice.
2. Count II: Civil Conspiracy
In count two MSC asserts claims against each party for civil conspiracy. In order to overcome a motion to dismiss a civil conspiracy claim, MSC must allege "(1) a combination of two or more persons acting with a common purpose to do an unlawful act or to do a lawful act by unlawful means or for an unlawful purpose; (2) an overt act done in pursuance of the common purpose; and (3) actual legal damage." Strickland v. Univ. of Scranton, 700 A.2d 979, 987-88 (Pa.Super. 1997) (citing Smith v. Wagner, 588 A.2d 1308, 1311-12 (Pa.Super. 1991)). "Proof of malice, i.e., an intent to injure, is essential in proof of a conspiracy." Skipworth v. Lead Indus. Assoc., Inc., 547 Pa. 224, 235 (1997) (citation omitted).
MSC has not alleged that any party acted with malice. Furthermore, MSC asserts that CAC, CFS, and GEC funded and created CAC; while MSC suggests that the motivation in creating this business was to ensure the continued operation of certain aircraft, MSC makes no allegation that the actual formation of CAC involved unlawful purposes. Because MSC has failed to allege any particular unlawful purpose or unlawful means, and because it has not alleged malice, it has failed to set forth a cause of action for civil conspiracy. MSC's second claim and counterclaims, therefore, will be dismissed, but without prejudice since it may be that with the benefit of discovery MSC may be able to rectify these deficiencies.
3. Count III: Aiding and Abetting Fraud
MSC's third count asserts a claim for aiding and abetting fraud. There can be no aiding and abetting of fraud unless there is fraud in the first place, and MSC has failed to assert any instance of fraud on the part of defendants. To plead fraud under Pennsylvania law, MSC must allege "(1) a misrepresentation (2) made by a person (3) with the intent to induce the recipient to act on it (4) which the recipient justifiably relies on and (5) which proximately damages the recipient." Knop v. McMahan, 872 F.2d 1132, 1140 (3d Cir. 1989) (citing Delahanty v. First Pa. Bank, N.A., 464 A.2d 1243, 1252 (Pa.Super. 1983)).
MSC's aiding and abetting claim evidently rests upon CFS and GEC's "scheme to defraud a lien creditor." Opp'n at 8. MSC, however, has pointed to no misrepresentation, no reliance, and no damage as a result of this reliance. Indeed, in its account of the allegedly fraudulent creation of CAC, MSC fails to so much as suggest that CFS and GEC made misrepresentations upon which MSC relied.
Setting aside MSC's clear failure to plead "all averments of fraud . . . with particularity," as required by Fed.R.Civ.P. 9(b), MSC has also failed to allege the basic requirements of fraud under Pennsylvania law. MSC's claims for aiding and abetting fraud, therefore, will be dismissed without prejudice pursuant to Rule 12(b)(6). MSC may replead this claim, if it can do so without violating Rule 11.
4. Counts IV and V: Joint Venture and Instrumentality Theories
MSC's fourth count alleges that CFS, GEC, and CAC formed an agreement to keep certain aircraft in operation and that this agreement amounted to a joint venture. Accordingly, MSC asserts a theory of joint venture liability.
Under Pennsylvania law, a joint venture is an "association of persons or corporations who by contract, express, or implied, agree to engage in a common enterprise for their mutual profit." Duquesne Light Co. v. Woodland Hills Sch. Dist., 700 A.2d 1038, 1055 (Pa.Cmwlth. 1997) (citing Richardson v. Walsh Constr. Co., 334 F.2d 334, 336 (3d Cir. 1964)). The "rights, duties, and obligations of joint venturers, as between themselves, depend primarily upon the terms of the contract by which they assume that relationship." Snellbaker v. Herrmann, 462 A.2d 713, 717 (Pa.Super. 1983). Certain factors are essential to a joint venture: "(1) each party to the venture must make a contribution, not necessarily of capital, but by way of services, skill, knowledge, materials or money; (2) profits must be shared among the parties; (3) there must be a `joint proprietary interest and right of mutual control over the subject matter' of the enterprise; (4) usually, there is a single business transaction rather than a general and continuous transaction." Id. at 716 (quoting McRoberts v. Phelps, 391 Pa. 591, 599 (1958)). Absent a limitation in the contract, "a joint venturer will be held responsible with his or her associates" for losses. Id. at 717.
In order to proceed under a theory of joint venture liability, therefore, MSC must first allege the existence of a joint venture. In its fourth count, MSC alleges that there existed an agreement among CAC, CFS, and GEC which included "a contribution by each party, . . . a joint proprietary interest, the right to share in profits and losses, and the right of joint control." Am. Countercl. ¶ 58. If true, these elements would support the finding of a joint venture. MSC, however, has alleged no facts in support of the legal conclusions stated in paragraph 58. While this court is required to accept all well-pleaded allegations of fact as true, it need not accept unsupported or conclusory statements, unwarranted inferences, or sweeping legal conclusions. MSC's assertion that CFS, CAC, and GEC formed a joint venture is wholly unsupported by MSC's factual allegations, as MSC has alleged nothing with respect to the existence or terms of an agreement to form a joint venture. Furthermore, in order to be liable as a joint venture there must be an underlying tort by the participants in the joint venture, which MSC has failed to allege. Accordingly, count IV will be dismissed without prejudice for failure to state a claim upon which relief can be granted. MSC may again replead if it can do so consistent with Rule 11.
In count five, MSC alleges that CAC was formed as a continuation or successor to NWACC and that CAC, under an instrumentality theory, is therefore liable to MSC for the debts of NWACC and its subsidiaries.
Under Pennsylvania's instrumentality doctrine, a corporation "may be held liable for the debts of another corporation where it misuses that corporation as a mere business conduit for its own purposes." Combustion Sys. Servs., Inc. v. Schuylkill Energy Res., Inc., 1993 WL 514496, *4 (E.D. Pa. Dec. 1, 1993). To recover under this theory, the following three elements are required:
(1) That one corporation controlled another corporation to such a degree that the controlled corporation is a mere instrumentality;
(2) That the controlling corporation is perpetrating a fraud or wrong through the controlled corporation (e.g., torts, violation of a statute, or stripping a subsidiary of its assets); and
(3) An unjust loss or injury to the claimant, such as insolvency of a controlled corporation.May v. Club Med Sales, Inc., 832 F. Supp. 937, 938-39 (E.D. Pa. 1993) (citing Stinson v. GAF Corp., 757 F. Supp. 644, 645 (W.D. Pa. 1990)). A finding that one corporation is a mere instrumentality of another requires that "the controlling corporation wholly ignored the separate status of the controlled corporation and so dominated the affairs of the controlled corporation that its separate existence was a mere sham. Id. (citing Culbreth v. Amosa, Ltd., 898 F.2d 13, 14 (3d Cir. 1990)). Put differently, assertion of an instrumentality or alter-ego theory requires "a threshold showing that the controlled corporation acted robot-or puppet-like in mechanical response to the controller's tugs on its strings or pressure on its buttons." Culbreth, 898 F.2d at 15.
In count five, MSC identifies six individuals who served as officers, directors, employees, shareholders, and/or members ofboth NWACC or its subsidiaries and CAC. See Am. Countercl. ¶¶ 61-62. It also alleges that CAC currently maintains offices in Bellevue, Washington and Allentown, Pennsylvania, and that NWACC and its subsidiaries formerly maintained offices in these same two cities. Id. ¶¶ 63-64. Furthermore, MSC alleges that CAC now operates aircraft formerly operated by NWACC, NW Executive, NW Leasing, and JS Aviation. Id. ¶¶ 65-66. And finally, MSC contends that CAC is a consolidation or continuation of the NWACC entities, that CAC was formed in order to enable NWACC to escape its debts, that CAC purchased NWACC assets for inadequate consideration, and that CAC — as a continuation of NWACC — therefore assumed its legal and financial obligations. Id. ¶ 67.
Because MSC has identified debt owed it by NWACC and has set forth facts that, if true, could support its theory that CAC is the mere instrumentality of NWACC, NW Executive, NW Leasing, or JS Aviation, it has stated a claim against CAC on these grounds.
MSC also brings this claim against GEC, alleging that GEC has "actual and total control over CFS," that CFS is being misused by GEC, and that GEC and is therefore also liable on an instrumentality theory. Third Party Compl. ¶¶ 25-27. Despite MSC's contention that "[f]raud or injustice has or will proximately result from the misuse of CFS by [GEC], including damages to Multi Service," MSC has failed to allege any way in which CFS is liable to it in the first place. Even if CFS is a mere instrumentality of GEC, GEC cannot be held liable on an instrumentality theory absent something to be held liable for. Because MSC has made out no claim against CFS, it cannot rely upon a theory of instrumentality liability to recover damages it has not alleged for a tort it has not identified. MSC's fifth claim will therefore be dismissed, again without prejudice, as to GEC.
5. Counts VI and VII: Unjust Enrichment
In its sixth counterclaim, MSC argues that CAC has been unjustly enriched by its retention of the benefits conferred upon it by MSC, in the form of credit extended to NWACC through the Multi-Service credit card. Its seventh counterclaim asserts the same cause of action against CFS. In the sixth count of its third party complaint MSC makes similar allegations relating to GEC, claiming that GEC has been unjustly enriched by its use of the claimed onceindebted aircraft.
Under Pennsylvania law, a claim for unjust enrichment requires three elements: "benefits conferred on one party by another, appreciation of such benefits by the recipient, and acceptance and retention of these benefits under such circumstances that it would be inequitable [or unjust] for the recipient to retain the benefits without payment of value." Allegheny Gen. Hosp. v. Philip Morris, Inc., 228 F.3d 429, 427 (3d Cir. 2000) (citing 16 Summary of Pa. Jur. 2d Commercial Law § 2.2); see also Temple Univ. Hosp. Inc. v. Healthcare Mgmt. Alternatives, Inc., 832 A.2d 501, 507 (Pa.Super. 2003) (same).
MSC has alleged that it extended credit to NW Executive, NW Leasing, and JS Aviation — and that NWACC issued a guaranty to MSC on behalf of those companies. These companies, now insolvent, have not paid more that $247,000.00 of past due credit card debt. MSC has not alleged that this line of credit was extended to CAC, CFS, or GEC, however, and therefore has not demonstrated that this "benefit" was conferred upon these parties by MSC. Moreover, MSC has failed to allege that anyone other than NWACC "accepted" these benefits.
It appears that the credit card debt was accumulated mainly through the purchase of airplane fuel. Fuel burned by aircraft under the ownership or control of NWACC, however, cannot possibly be held to have enriched CAC, CFS, or GEC, which had no interest in the aircraft at the time the fuel was purchased with the Multi Service Card. Fuel consumed by another business's aircraft cannot be considered a "benefit" to the companies now in control of those same aircraft.
While MSC may be able to recover this debt through bankruptcy proceedings or other debt collection measures — or by establishing that CAC is liable under an instrumentality theory — it cannot recover against other parties based on an unjust enrichment theory for a benefit clearly conferred upon NW Executive, NW Leasing, and JS Aviation. MSC's sixth and seventh counterclaims will be dismissed with prejudice, as will the sixth claim in its third party complaint.
Conclusion
For the foregoing reasons, MSC has failed to state a claim against either CFS or GEC upon which relief can be granted. With the exception of its claim under an instrumentality theory, MSC has also failed to state a legally sufficient claim against CAC. An appropriate order follows.
ORDER
And now, this __th day of August, 2004, upon consideration of third-party defendant General Electric Capital Corp.'s motion to dismiss and defendant Multi-Service Aviation Corp.'s opposition thereto, and upon consideration of plaintiff CFS Air's motion to dismiss and Multi-Service's opposition thereto, it is hereby ORDERED that:1.) General Electric Capital Corp.'s motion to dismiss (Doc. #27) is GRANTED and all claims against GEC are DISMISSED;
a.) Counts I and VI of Multi-Service's Third-Party Complaint (Doc. #22) are DISMISSED with prejudice;
b.) Counts II, III, IV, and V of Multi-Service's Third-Party Complaint are DISMISSED without prejudice to the right of Multi-Service to file an amended Third-Party Complaint within twenty days of the date of this order;
2.) Plaintiff CFS Air's motion to dismiss (Doc. #28) is GRANTED and all counterclaims against CFS Air are DISMISSED;
a.) Counts I and VII of Multi-Service's counterclaim complaint (Doc. #22) are DISMISSED, as to plaintiff CFS Air, with prejudice;
b.) Counts II, III, and IV of Multi-Service's counterclaim complaint are DISMISSED without prejudice to the right of Multi-Service to file an amended Third-Party Complaint within twenty days of the date of this order.
3.) Multi-Service's counterclaims 1, 2, 3, 4, and 6 against plaintiff Corporate Aviation Concepts, Inc. are DISMISSED;
a.) Counts I and VI of Multi-Services's counterclaim complaint are DISMISSED, as to plaintiff CAC, with prejudice.
b.) Counts II, III, and IV of Multi-Service's counterclaim complaint are DISMISSED, as to plaintiff CAC, without prejudice to the right of Multi-Service to file an amended Third-Party Complaint within twenty days of the date of this order;
4.) A status conference will be held on September 16, 2004, at 4:00 p.m. in chambers.