AAL USA, Inc. v. Black Hall Aerospace, Inc.

          MEMORANDUM OPINION

          KARON OWEN BOWDRE, CHIEF UNITED STATES DISTRICT JUDGE

         This matter is before the court on Defendants' joint motion to dismiss the complaint in AAL Group Ltd. v. Black Hall Aerospace Inc., 2:17-cv-00399-KOB, which is one of two consolidated cases. (Doc. 6). The consolidated cases arise primarily from an Asset Purchase Agreement that AAL USA entered into with one of the Defendants in this case, Black Hall Aerospace.

         Each of the consolidated cases takes a slightly different tack regarding the legal import of the Asset Purchase Agreement. In this case, AAL Group-a separate entity from AAL USA- asserts that, if the Asset Purchase Agreement were valid, then (1) Black Hall Aerospace is liable for breach of contract, and (2) Black Hall and two of its executives are liable for unjust enrichment.^[1] In the other case, AAL USA contends that the Asset Purchase Agreement is invalid and was part of a conspiracy among some of its top executives to have Black Hall Aerospace take over AAL USA.

         In this case, AAL Group alleges that it entered five contracts with AAL USA. After AAL Group performed its obligations under the five contracts, AAL USA and Black Hall Aerospace entered into the Asset Purchase Agreement in which AAL USA transferred to Black Hall Aerospace all of its assets and some of its liabilities. AAL Group contends that under the Asset Purchase Agreement, Black Hall Aerospace assumed the liabilities under the five contracts but has not satisfied them. AAL Group, therefore, raises a breach of contract claim against Black Hall Aerospace.

         AAL Group also brings an unjust enrichment claim against Black Hall Aerospace and two of its officers, Paul Daigle and Keith Woolford. Mr. Daigle used to be the Chief Executive Officer of AAL USA, and is now the CEO of Black Hall Aerospace; Mr. Woolford used to be the Chief Financial Officer of AAL USA, and is now the CFO of Black Hall Aerospace.^[2]According to AAL Group, while Mr. Daigle and Mr. Woolford were officers of AAL USA, they diverted money that AAL USA owed to AAL Group and spent it on Black Hall Aerospace and themselves.

         The court WILL GRANT IN PART AND DENY IN PART the motion to dismiss. First, the court declines to dismiss the complaint based on hypothetical pleading because Federal Rule of Civil Procedure 8(d) permits hypothetical pleading. Second, the court declines to dismiss the complaint based on judicial estoppel because, at this stage in the proceedings, the court cannot conclude that AAL Group and AAL USA are in fact one party taking inconsistent positions in different cases.

         Assuming the Asset Purchase Agreement is valid, it expressly provides that Black Hall Aerospace is not liable for any of AAL USA's obligations that arose before the execution of the Agreement. AAL USA's obligations under one of the contracts at issue arose before the execution of the Agreement, so the court WILL DISMISS WITH PREJUDICE the claim that Black Hall Aerospace breached that contract. The complaint does not state when AAL USA's obligations under two of the other contracts arose, so the court WILL DISMISS WITHOUT PREJUDICE the claim that Black Hall Aerospace breached those contracts.

         The court WILL DENY Defendants' motion to dismiss the unjust enrichment claim against Black Hall Aerospace because Alabama law does not bar AAL Group from pleading unjust enrichment as an alternative to a breach of contract claim. The court WILL GRANT Defendants' motion to dismiss the unjust enrichment claim against Mr. Daigle and Mr. Woolford because AAL Group failed to plead the facts underlying the claim with the particularity required by Federal Rule of Civil Procedure 9(b). The court WILL DISMISS WITHOUT PREJUDICE the unjust enrichment claim against Mr. Daigle and Mr. Woolford.

         I. BACKGROUND

         At this stage, the court must accept as true the allegations in the complaint and construe them in the light most favorable to the plaintiff. Butler v. Sheriff of Palm Beach Cty., 685 F.3d 1261, 1265 (11th Cir. 2012). “A court's review on a motion to dismiss is limited to the four corners of the complaint. A court may consider only the complaint itself and any documents referred to in the complaint which are central to the claims.” Wilchombe v. TeeVee Toons, Inc., 555 F.3d 949, 959 (11th Cir. 2009) (citation and quotation marks omitted).

         AAL Group is a contractor that provides aviation services to governments and prime contractors. (Doc. 1 at 3). In 2011 it created a subsidiary, the similarly-named AAL USA, to support some of its contracts. (Id.). In early 2014, AAL Group and AAL USA became independent companies, but they continued to work together on various contracts. (Id.). For some unspecified period of time, Mr. Daigle was the CEO of AAL USA and Mr. Woolford was its CFO. (Id. at 4).

         1. The Contracts

         Relevant to this case are five contracts that AAL Group entered into with AAL USA between 2011 and 2016. Those contracts are: (1) the KN53 Aviation Equipment contract; (2) the Northrop Grumman contract; (3) the Airbus Iraqi MILDS® contract; (4) the F2AAST Certified Logistics Support contract; and (5) the MAG DS Helicopter contract. (Doc. 1 at 6-12).

         a. The KN53 Aviation Equipment Contract

         In October 2011, AAL Group contracted with AAL USA to supply and deliver certain aviation equipment. (Id. at 11). At some point-the complaint does not give a specific date- AAL Group made an advance payment of $77, 012.50, but AAL USA never delivered the equipment. (Id.).

         b. The Northrop Grumman Contract

         Between April 2014 and February 2015, AAL USA entered into several purchase orders to provide technical maintenance of helicopters for Northrop Grumman. (Id. at 6). AAL USA subcontracted work under three of those purchase orders to AAL Group. (Id. at 6-7). AAL Group performed its obligations under two of the purchase orders in January 2015, so AAL USA owed AAL Group $2, 834, 706.07. (Doc. 1 at 6-7; Doc. 1-10; Doc. 1-11). AAL Group completed work under another purchase order in February 2015, so AAL USA owed AAL Group $745, 551.13 for that work. (Doc. 1 at 7). In total, by February 2015, AAL USA owed AAL Group $3, 580, 257.20 for AAL Group's work on the two purchase orders. (Id. at 6-7).

         AAL USA, instead of collecting the money Northrop Grumman owed it, “factored” its accounts receivable. (Id. at 8). In other words, AAL USA sold its accounts receivable to another company at a discount in exchange for a lump sum payment. (Id. at 8 n.3). It factored at least $2, 922, 490.56 of Northrop Grumman receivables. (Id. at 8). The date on which AAL USA sold its receivables is not clear, but in March 2015, AAL USA's CFO, Mr. Woolford, sent Northrop Grumman a letter informing it that AAL USA and the factoring company had entered into a factoring agreement and instructing Northrop Grumman to pay all invoices directly to the factoring company. (Doc. 1-12).

         AAL USA never paid AAL Group for the work that AAL Group did under the three purchase orders. (Doc. 1 at 8). AAL USA's CEO, Mr. Daigle, misrepresented to AAL Group that Northrop Grumman had not paid for the work performed. (Id.). Instead, Mr. Daigle and Mr. Woolford “spent the money in some other way, leaving AAL Group without proper compensation under the Northrop contract.” (Id.). AAL Group alleges that Mr. Daigle and Mr. Woolford “kept the money for their personal benefit and use as well as for the use of [Black Hall Aerospace].” (Id.).

         c. The Airbus Iraqi Contract

          In June 2015, AAL USA entered another contract with AAL Group, under which AAL USA was to supply and deliver aviation equipment to AAL Group. (Doc. 1 at 9). AAL Group made an advance payment of $362, 316.03, but it has not received any of the equipment. (Id.).

         d. The F2AAST Certified Logistics Support Contract

          In September 2015 and September 2016, AAL Group entered into two purchase orders with AAL USA to provide labor and travel services. (Doc. 1 at 9-10). At some point, AAL Group performed its obligations under the purchase orders, so AAL USA owes it $418, 884.65. (Id. at 10). But AAL USA has not paid the money it owes. (Id.). e. The MAG DS Helicopter Contract In January 2016, AAL USA contracted with AAL Group to lease to AAL USA a helicopter and to provide training, certification support, licenses, safety inspections, and maintenance services. (Doc. 1 at 10). By October 2016, AAL USA owed AAL Group $223, 000 under that contract, but AAL USA never paid that money. (Id. at 11).

         2. The Asset Purchase Agreement

         In June 2015, Black Hall Aerospace was incorporated. (Doc. 1 at 3). AAL USA's CEO, Mr. Daigle, and CFO, Mr. Woolford, own shares of Black Hall Aerospace. (Id.). Mr. Daigle is Black Hall Aerospace's CEO and, apparently, its President. (Doc. 1 at 4; Doc. 1-2 at 9). Mr. Woolford is Black Hall Aerospace's CFO. (Doc. 1 at 4-5).

         On September 29, 2016, AAL USA and Black Hall Aerospace entered into the Asset Purchase Agreement, which AAL Group attached to its complaint. (Id. at 4; Doc. 1-2). AAL Group states that, according to AAL USA, Mr. Daigle and Mr. Woolford fraudulently induced AAL USA into entering the Asset Purchase Agreement and selling its assets for a fraction of the company's worth. (Doc. 1 at 4-5).

         Because the Asset Purchase Agreement is attached to the complaint, the court can consider it at the motion to dismiss stage. Hoefling v. City of Miami, 811 F.3d 1271, 1277 ...