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Aircraft Service International Inc. v. TBI Overseas Holdings, Inc.

Superior Court of Delaware, New Castle

August 5, 2014

AIRCRAFT SERVICE INTERNATIONAL, INC., a Delaware corporation Plaintiff,
v.
TBI OVERSEAS HOLDINGS, INC., a Delaware corporation, Defendant.

Submitted: April 7, 2014

On Defendant's Motion to Dismiss – DENIED

Christopher Viceconte, Esquire, Gibbons, P.C., Louis E. Dolan, Jr., Esquire, Nixon Peabody LLP, Attorneys for Plaintiff.

Joel Friedlander, Esquire, Friedlander & Gorris, P.A., Andrew L. Morrison, Esquire and Jeffrey J. Davidson, Esquire, Manatt, Phelps & Phillips, LLP, Attorneys for Defendant.

MEMORANDUM OPINION

WILLIAM C. CARPENTER, JR. JUDGE

Before this Court is TBI Overseas Holdings, Inc.'s ("Defendant") Motion to Dismiss pursuant to the statute of limitations. The Court finds that the applicable statute of limitations for Aircraft Service International, Inc.'s ("Plaintiff") claims is two years from the date of closing. However, because the Court finds that Plaintiff provided notice of a potentially-indemnifiable claim, the statute was tolled and the claim survived until Plaintiff resolved the matter. When the claim was resolved is unclear to the Court and therefore it will deny the Motion and allow additional discovery on this issue. Accordingly, at this juncture, Defendant's Motion to Dismiss is DENIED.

1. FACTUAL BACKGROUND

On October 27, 2004, Plaintiff and Defendant entered into a Purchase and Sale Agreement through which Defendant sold Plaintiff all of its membership interests in its subsidiary AGI Holdings and AGI Holdings' subsidiary AGI, LLC, for $27 million (the "Agreement"). The sold entities were engaged "in the business of providing airport services, including ground handing, fuel farm management and into-plane refueling, at certain airports in the United States and its territories."[1] One of the airports served was the "Burbank Airport" at Glendale/Burbank, California, North Hollywood Operable Unit of the San Fernando Valley Superfund Site (the "NHOU Site"). Due to the nature of the sold entities' business, the Agreement contained certain representations and warranties regarding litigation and environmental matters at the various airports and the parties conducted due diligence, which uncovered a number of pending or threatened litigation matters. The Agreement provided that the sole remedy for the breach of such representations and warranties was indemnification.

On March 21, 2006, Plaintiff received a statutory General Notice letter and information request from the Environmental Protection Agency ("EPA"), dated March 13, 2006, regarding potential liability at the NHOU Site. Plaintiff sent the letter to Defendant on April 12, 2006, stating that the potential liability "may constitute a loss or litigation expense for which [Plaintiff] is entitled to indemnification."[2] Defendant responded on June 16, 2006, declining to assume Plaintiff's defense in the matter. Plaintiff received a second letter from the EPA on July 1, 2010, again providing notice of potential liability and requesting that Plaintiff participate in negotiations to resolve the environmental issues at the NHOU site. Thereafter, it appears that Plaintiff began making payments to the EPA to resolve the matter.

Plaintiff brought suit against Defendant on June 26, 2013 for (i) Breach of Contract; (ii) Declaratory Judgment; (iii) Mandatory Injunction; and (iv) Fraud and Fraudulent Inducement. Defendant moved to dismiss the original complaint for lack of subject matter jurisdiction due to the equitable relief sought in the Complaint. After considering the motion, the Court provided Plaintiff an opportunity to decide whether they wanted equitable relief from the Court of Chancery or law relief from the Superior Court. Thereafter, Plaintiff filed the First Amended Complaint (the "Complaint"), dropping the mandatory injunction and fraud claims and instead asserts: (i) Breach of Contract; (ii) Indemnity; and (iii) Declaratory Judgment. All of Plaintiff's claims arise out of Defendant's alleged breach of the Agreement by failing to indemnify Plaintiff for losses Plaintiff incurred, allegedly due to Defendant's breaches of the representations and warranties relating to the NHOU Site's environmental liability. Defendant now moves to dismiss arguing that Plaintiff's claims are barred by the statute of limitations.

2. STANDARD OF REVIEW

Under Delaware Superior Court Civil Rule 12(b)(6), the Court may dismiss a plaintiff's claim for "failure to state a claim upon which relief can be granted."[3] When analyzing a motion to dismiss under Rule 12(b)(6), the Court must proceed without the benefit of a factual record and assume as true the well-pleaded allegations in the complaint.[4] A complaint is "well-plead" if it puts the opposing party on notice of the claim being brought against it.[5] Therefore, the Court may dismiss a complaint under Rule 12(b)(6) only where the Court determines with "reasonable certainty" that no set of facts can be inferred from the pleadings upon which the plaintiff could prevail.[6] Additionally, although the Court need not blindly accept as true all allegations nor draw all inferences in the plaintiff's favor, "it is appropriate . . . to give the pleader the benefit of all reasonable inferences that can be drawn from its pleading."[7] Further:

A claim may be dismissed for failure to comply with the statute of limitations if the facts pled in the complaint, and the documents incorporated within the complaint, demonstrate that the claims are untimely. The plaintiff bears the burden to plead facts that demonstrate the applicability of an exception to the statute of limitations. Otherwise, when that burden is not ...

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