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AAL USA, Inc. v. Black Hall, LLC

United States District Court, N.D. Alabama, Southern Division

May 30, 2017

AAL USA, INC., Plaintiff,
v.
BLACK HALL, LLC, et al., Defendants.

          MEMORANDUM OPINION

          KARON OWEN BOWDRE CHIEF UNITED STATES DISTRICT JUDGE.

         Federal courts are courts of limited jurisdiction but have a nearly unassailable obligation to exercise jurisdiction when they have it. Only exceptional circumstances justify a federal court's refusal to adjudicate a case properly before it. The Defendants claim this case is such an exceptional one, and have filed a motion for the court to abstain under the Colorado River doctrine, or in the alternative, to stay the case based on the court's inherent authority, or, if the court declines to do that, dismiss five counts of the complaint for failing to state a claim. For the reasons discussed below, the court will grant in part and deny in part the Defendants' motions.

         I. RELEVANT BACKGROUND

         AAL USA is an aviation services company incorporated in Delaware and with its principal place of business in Alabama. AAL USA filed this case in Jefferson County Circuit Court alleging that two of its officers, Paul Daigle and Keith Woolford, had engaged in tortious conduct against, and breached contracts with, the company. The Defendants removed this action.

         Already pending in Madison County Circuit Court was a lawsuit against AAL USA by Black Hall Aerospace involving the same factual universe as AAL USA's suit here. Because the two cases involve the same factual nexus, the court will lay out the events precipitating the litigation of these two cases before describing the claims and procedural posture of each of the actions.

         This narrative has three key characters: Oleg Sirbu, Paul Daigle, and Keith Woolford. Oleg Sirbu is the owner, president, and CEO of AAL USA. Paul Daigle is the former CEO of AAL USA, who was hired by AAL in 2011 and elevated to CEO in 2013. Keith Woolford is the former CFO of AAL USA, originally hired to be its finance manager before later promoting him. Mr. Daigle and Mr. Woolford are also owners of Black Hall Aerospace, which they formed to obtain and hold a Federal Aviation Agency “Part 145” license on behalf of AAL USA.

         AAL USA works as a subcontractor on contracts with the United States Military. Leidos is the prime contractor on the project. On September 23, 2016, AAL USA received a letter from Leidos informing it that Army Contracting Command had denied AAL access to United States Military bases outside the continental United States. The parties dispute many of the concerning the cause and effect of this letter. But Mr. Sirbu came to believe, based on representations made by the Defendants, that AAL USA was at risk of losing its government contracts. The parties dispute whether these representations were in fact misrepresentations.

         To prevent AAL USA from losing its contracts, Mr. Daigle suggested a plan where AAL USA would sell its assets and assign its contract to Black Hall Aerospace. Black Hall, it was believed, would be permitted to carry out the subcontract work and complete the contract with Leidos. In less than a week, AAL USA and Black Hall had drafted and signed an Asset Purchase Agreement (APA) by which AAL USA would sell its assets to Black Hall for $501, 660.46. The sale price reflects a five-year “earnings before interest, tax, depreciation and amortization” figure. The parties dispute whether this number was calculated by an independent accounting firm.

         Before the APA closed, Mr. Sirbu backed out of the agreement, believing the document to be a fraudulent instrument. AAL USA alleges that Mr. Daigle and Mr. Woolford wrote checks from AAL USA to Black Hall Aerospace for $3.2 million, despite the fact that the transaction never closed.

         AAL USA also alleges Mr. Daigle and Mr. Woolford used the company's credit and checking accounts for personal expenses, awarded themselves unauthorized bonuses, and used AAL USA money to buy personal residences and fund their personal business ventures before and after the events surrounding the APA. Further, AAL USA claims Mr. Daigle and Mr. Woolford used company money to buy a jet, and then assigned the ownership of the plane to a company they owned, all while charging AAL USA for use of the jet.

         A. The Madison County Action

         The APA contained a forum selection clause requiring any litigation related to the agreement to occur in Madison County Circuit Court. On October 29, 2016, Black Hall Aerospace filed suit against AAL USA in Madison County Circuit Court. The case is CV-2016-901750, pending before the Honorable Dennis O'Dell.

         The amended complaint against AAL USA contained eight counts: declaratory judgment that Black Hall is not in default under the Asset Purchase Agreement, breach of the Asset Purchase Agreement contract, interpleader of a payment under the APA AAL USA refused to accept, intentional interference with contractual relationships, intentional interference with business relationships, defamation, breach of fiduciary duty, and civil conspiracy.

         On November 30, 2016, AAL USA filed a counterclaim containing seventeen counts against Black Hall Aerospace. AAL USA alleged that Black Hall Aerospace was liable for fraud and fraudulent misrepresentation, fraudulent suppression, conversion, misappropriation and civil theft, breach of contract, fraudulent inducement, tortious interference, conspiracy, unjust enrichment, statutory and common law trademark infringement, cybersquatting, violation of the Computer Fraud and Abuse Act, and violation of the federal and Alabama trade secretes acts. AAL USA also claimed it was entitled to specific performance of a contract transferring ownership shares of Black Hall Aerospace to AAL USA, a constructive trust over Black Hall Aerospace's assets, and an accounting.

         The state court has partially stayed discovery. At the time this motion was briefed, no depositions had occurred, and while AAL USA had served discovery requests, no responses had been produced on federal question jurisdiction and supplemental jurisdiction over the state law claims.

         B. The Jefferson County Action

         On November 16, 2016, AAL USA filed suit in the Birmingham division of Jefferson County Circuit Court against Black Hall Aerospace, Black Hall, LLC, Corvis Arrow, LLC, Cold Harbor Certifications, Inc., Hindsight Coffee, LLC, Paul Daigle, Keith Woolford, Iberia Bank Corp, IberiaBank, and a set of fictitious defendants. The complaint contained fifteen counts: fraud and fraudulent concealment, fraudulent suppression, conversion, misappropriation, and civil theft, breach of contracts between AAL USA and Mr. Daigle and Mr. Woolford, violation of Alabama's trade secret statute, specific performance of contract to transfer Black Hall Aerospace's shares to AAL USA, breach of fiduciary duty, fraudulent inducement, tortious interference, conspiracy, unjust enrichment, faithless servant doctrine, declaratory judgment that AAL owns Black Hall, and injunctive relief.

         On December 2, 2016 AAL USA voluntarily dismissed Black Hall Aerospace from the Jefferson County Action. The remaining defendants removed the case to federal court on December 30, 2016.

         Discovery is in its infancy in this case. However, substantial motion practice has already occurred. The parties have filed a motion to abstain, a motion to stay, two motions to strike, a motion for summary judgment, a motion to dismiss, an emergency motion for order to show cause, a motion for relief from injunctive order, fourteen motions to quash, and a motion to compel.

         II. LEGAL STANDARDS

         The Defendants have moved for a stay of proceeding, or in the alternative to dismiss to dismiss five counts of the complaint for failure to state a claim. ...


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