Sununu v. PHILIPPINE AIRLINES, INC.
2011 U.S. Dist. LEXIS 64641
| D.D.C. | 2011Background
- PAL and World Airways entered ASA for four aircraft with termination date November 15, 1997 and rates set, with the ASA deemed the entire contract between PAL and WA.
- PAL amended the ASA to add two more aircraft, but the termination date dispute remained, with WA asserting a staggered approach and PAL insisting on November 15, 1997.
- PAL hired Sununu and Frank in 1997 to facilitate renegotiation, agreeing to a $50,000 retainer and a 4% 'success fee' if they secured a settlement favorable to PAL by July 11, 1997.
- Sununu and Frank signed a written contract knowing of the dispute, and pursued meetings with WA while PAL maintained its November 15 date position.
- Amendment negotiations culminated in a July 11, 1997 amendment to the ASA that did not meet the contract contingencies for the success fee, and WA later amended the ASA with different terms.
- Sununu invoiced PAL for $570,000 (including $50,000 retainer); PAL paid $50,000 but disputed the $520,000, leading to the current summary judgment motion on unjust enrichment and fraud.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether PAL’s alleged misrepresentation of termination date supports fraud | Sununu-Frank claim PAL knew the date was false. | PAL genuinely believed the November 15 date; no knowledge of falsity. | No genuine issue; PAL believed its position; fraud not proven. |
| Whether PAL’s nondisclosure of WA dispute constitutes fraud | PAL had a duty to disclose the WA dispute; nondisclosure fraud. | No fiduciary duty; information was discoverable; no duty to disclose. | Duty to disclose not shown; nondisclosure not fraud. |
| Whether Sununu-Frank affirmed the contract, baring fraud rescission claims | Affirmation did not preclude rescission and fraud claims. | Sununu-Frank affirmed by pursuing performance and collecting; bars fraud. | Affirmation bars fraud and rescission claims; cannot claim voidable contract. |
| Whether the unjust enrichment claim survives where an express contract governs | Contract invalid; unjust enrichment should apply. | Express contract governs; unjust enrichment barred absent invalid contract. | Express contract governs; unjust enrichment Precluded; summary judgment for PAL. |
Key Cases Cited
- Sununu v. Philippine Airlines, Inc., 638 F. Supp. 2d 35 (D.D.C. 2009) (fraud standard and substantial performance discussed)
- Schmidt v. Shah, 696 F. Supp. 2d 44 (D.D.C. 2010) (affirmative defense of contract; effect on voidability)
- Harbor Ins. Co. v. Stokes, 45 F.3d 499 (D.C. Cir. 1995) (risk of mistake and unilateral mistake doctrine guidance)
- Grumman Allied Indus., Inc. v. Rohr Indus., Inc., 748 F.2d 729 (2d Cir. 1984) (duty of sophisticated business buyers to perform due diligence)