748 F.3d 829
8th Cir.2014Background
- BLB Aviation (owner of two aircraft, N400GK and N789DJ) entered a dry lease agreement (DLA) with Jet Linx for N400GK and a management services agreement (MSA) for N789DJ; Jet Linx was responsible for maintenance and recordkeeping, BLB paid maintenance costs.
- BLB purchased N400GK in August 2007; Jet Linx guaranteed $47,100 monthly under the DLA but paid only partial amounts in some months; parties disputed whether reduced payments were agreed.
- In February 2008 N789DJ experienced an oil-loss event; teardown and repair costs totaled $158,014.98; Jet Linx invoiced BLB, who refused to pay.
- In August 2008 Jet Linx sent a closing letter with a check reflecting asserted adjustments; BLB deposited the check but protested and said it had not settled.
- District court after bench trial: found no accord-and-satisfaction; awarded BLB $163,953.17 (including unpaid DLA lease payments and overcharges for maintenance) and Jet Linx $158,014.98 (for oil-loss repairs); BLB’s claim for damages from missing maintenance records/part tags was denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether August 2008 check/letter created an accord and satisfaction | BLB accepted check and letter, so dispute settled | Jet Linx: tender + deposit manifested accord and satisfaction | No accord and satisfaction; letter/check lacked a condition that the payment be "in full" and BLB disavowed settlement |
| Whether Jet Linx breached DLA by failing to pay full lease amounts | BLB: Jet Linx owed full contract payments for specific months | Jet Linx: parties orally modified DLA to allow reduced payments | Breach by Jet Linx; district court’s factual credibility findings upholding unpaid lease award affirmed |
| Whether Jet Linx breached MSA by marking up maintenance costs | BLB: Jet Linx charged above actual costs in violation of MSA | Jet Linx: parties agreed to permit markups (oral modification) | Parol evidence barred alleged modification; Jet Linx liable for marked-up amounts; judgment for BLB affirmed |
| Proper measure of damages for missing maintenance records/part tags | BLB: cost to repair/recertify ($171,363.37) is proper measure | Jet Linx: diminution in value is proper; BLB failed to prove diminution | Reversed and remanded: district court erred by applying diminution without first finding cost-of-repair unreasonable; remand to determine appropriate measure |
| Whether BLB must reimburse Jet Linx for oil-loss repairs (proximate causation) | BLB: pilots’ failure to preflight/secure oil cap and delay in shutdown proximately caused damage | Jet Linx: causation not established; alternate cause (cracked oil cap) and insufficient proof | Judgment for Jet Linx affirmed: BLB failed to prove proximate causation by a preponderance; Jet Linx entitled to $158,014.98 |
Key Cases Cited
- Peterson v. Kellner, 513 N.W.2d 517 (Neb. 1994) (elements of accord and satisfaction)
- Rees v. Huffman, 384 N.W.2d 631 (Neb. 1986) (check deposit does not create accord and satisfaction absent conditional language)
- Langness v. "O" St. Carpet Shop, Inc., 353 N.W.2d 709 (Neb. 1984) (condition that payment be accepted as full must be declared)
- R & B Farms, Inc. v. Cedar Valley Acres, Inc., 798 N.W.2d 121 (Neb. 2011) (parol evidence rule and integrated agreements)
- Sack Bros. v. Tri-Valley Coop., Inc., 616 N.W.2d 786 (Neb. 2000) (parol evidence prohibits proof that contradicts written contract)
- Fink v. Denbeck, 293 N.W.2d 398 (Neb. 1980) (cost-of-repair vs. diminution-in-value framework)
- Moss v. Speck, 306 N.W.2d 156 (Neb. 1981) (defendant must prove cost-of-repair is unreasonable to displace repair measure)