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The Lima Delta Co. v. Global Aerospace, Inc.

Superior Court of Delaware

October 5, 2017


          Submitted: June 22, 2017

          William R. Firth, III, Esquire, Martin Law Firm, LLC, 1521 Concord Pike, Suite 301, Wilmington, DE 19803. Joseph A. Martin, Esquire, Martin Law Firm, LLC, 6000 Sagemore Drive, Suite 6202, Marlton, N.J. 08053. Attorneys for Plaintiffs,

          Neal J. Levitsky, Esquire, Seth A. Niederman, Esquire, Fox Rothschild LLP, 919 North Market Street, Suite 300, Wilmington, DE 19899. Jeffrey W. Moryan, Esquire, Connell Foley LLP, 85 Livingston Avenue, Roseland, N.J. 07068. Attorneys for Defendant


          Judge William C. Carpenter, Jr

         Before the Court is Global Aerospace, Inc.'s ("Defendant" or "Global") Motion to Dismiss the Complaint for Conversion, Trespass to Chattels, Negligence, Bad Faith and Other Relief ("Complaint") filed on behalf of The Lima Delta Company ("Lima Delta"), Trident Aviation Services, LLC ("Trident"), and Societe Commerciale et Industrielle Katangaise ("Socikat") (collectively, "Plaintiffs"). As set forth in this opinion, Defendant's Motion to Dismiss will be GRANTED.

         I. BACKGROUND

         This action for compensatory and punitive damages arises out of an aerospace insurance provider's allegedly wrongful seizure, control, and storage of the salvageable and valuable wreckage of an insured aircraft following a fatal accident in the Democratic Republic of Congo ("DRC"). Plaintiffs' Gulfstream G-IV aircraft (the "Aircraft"), a large-cabin intercontinental business jet, crashed on February 12, 2012.[1] At the time of the accident, the Aircraft was insured under a "Broad Horizon Aviation Insurance Policy" ("Policy") issued by Defendant.[2]

         A. The Parties

         The Aircraft was purchased by Lima Delta on May 4, 20 ll.[3] While Lima Delta is the registered owner of the Aircraft, the plane was operated pursuant to a trust agreement whereby Lima Delta, as "owner trustee, " leased the Aircraft to Socikat, as trust beneficiary and "equitable owner, " for use in the course of Socikat's business.[4] Socikat, an entity based and domiciled in the DRC, supplies support equipment to the mining industry in the DRC.[5]

         Trident is the company that managed the Aircraft for Socikat. Trident arranged and provided contract flight crews, maintenance work, and flight support, among other aviation services.[6] Trident worked with Wells Fargo Insurance Services USA, Inc. ("Wells Fargo") in order to arrange insurance for the Aircraft.[7]

         Plaintiffs ultimately purchased coverage from Global, a self-proclaimed "leading provider of aerospace insurance."[8]

B. The Accident

         On February 12, 2012, the Aircraft departed Goma, DRC for the Bukavu Kavumu Airport carrying nine passengers in addition to two captains. Having been cleared to land, the Aircraft touched down in Bukavu without issue. However, the brakes malfunctioned and the crew was unable to decrease the Aircraft's forward velocity. As a result, the Aircraft proceeded off the far end of the runway and continued through an unpaved overrun area before ultimately plummeting off a cliff and crashing at the bottom of a ravine.[9] The crew members and one passenger were killed in the accident.[10]

         The allegations as to the events following the crash are somewhat unclear. Four days after the accident, Global retained Airclaims, Ltd. ("Airclaims"), an aviation claims surveyor, to investigate the crash site.[11] Global instructed Airclaims that all reports and correspondence relating to the investigation be forwarded to Global. Plaintiffs were assured that Global's investigation of the accident was proceeding normally and would be concluded in short order.

         As directed, Airclaims reported its findings to Global on March 19, 2012 ("Airclaims Report"). Airclaims found that the February 12, 2012 accident constituted a "Total Loss, " but two Rolls-Royce Tay engines and an auxiliary power unit ("APU") suffered minimal damage and still retained value.[12] According to the Complaint, this information was not shared with Plaintiffs.

         In April 2012, Global sought and secured a price quote for shipping the salvageable wreckage from the DRC to the United States. Global did not relay the quoted price to Plaintiffs. Instead, Global elected to store the wreckage in "non-climate-controlled shipping containers in the DRC."[13]

         As of May 2012, Global had neither acknowledged nor disclaimed coverage for the accident under the Policy. Like much of the Complaint, the allegations as to Plaintiffs' ability to recover the Aircraft's wreckage are imprecise. According to Plaintiffs:

Had Global accepted coverage and paid its insureds for the hull loss of the Aircraft, the wreckage would have become Global's property and Global would have had every right to abandon, waste and destroy the wreckage as it saw fit. However, unless and until Global agreed to pay the hull claim, the wreckage remained the plaintiffs' property, which Global knew had substantial value. And by the time Global took possession of the wreckage, Global was already actively taking steps to dispute coverage.[14]

         The Aircraft's "otherwise valuable, salvageable wreckage" was thus apparently "left to deteriorate in the DRC's profoundly inhospitable climactic conditions, " without regard to either "manufacturers' published standards" or "commonly accepted industry standards for the removal, preservation and storage of such components."[15] Plaintiffs characterize all of Global's conduct as part of a scheme to avoid coverage.[16]

         C. The Georgia Action

         On May 7, 2012, Global filed an action against Plaintiffs in the Superior Court of Georgia (the "Georgia Action") seeking rescission of the Policy or alternatively, that no coverage existed for the accident. "After years of vigorous litigation, Global secured.. .a judgment to the effect that it could rescind the policy, and that there was no coverage for the Plaintiffs' hull claim" in July 2016.[17]

         According to Plaintiffs, "as Global's senior leadership admitted in the Georgia coverage litigation, in the absence of coverage, the wreckage has always been and remains Plaintiffs' property, wasting away in Global's possession in the DRC."[18] Had the engines and APU been removed, preserved, and stored properly, the two engines would presently be valued at $ 1.4 million each and the APU would be worth $125, 000. Instead, the engines' current value is $200, 000 each and the APU is worth approximately $20, 000.[19]

         As a result of the alleged diminution in value of the Aircraft's wreckage, Plaintiffs commenced the instant litigation in this Court on November 28, 2016. Defendant moves to dismiss the Complaint, contending the claims are barred by the applicable statute of limitations and res judicata. This is the Court's decision on that Motion.


         Under Delaware Superior Court Civil Rule 12(b)(6), the Court may dismiss a complaint for "failure to state a claim upon which relief can be granted."[20] On a motion to dismiss, the Court accepts as true the well-pleaded allegations of the complaint and gives the plaintiff "the benefit of every reasonable inference to be drawn from those allegations."[21] A complaint is "well-plead" if it puts the opposing party on notice of the claim being brought against it. "Allegations that are merely conclusory and lacking factual basis, however, will not survive a motion to dismiss."[22] Additionally, where certain documents are "integral to a plaintiffs claims, [they] may be incorporated by reference without converting the motion to a summary judgment."[23]


         A. Documents Relied Upon in Motion to Dismiss

         Plaintiffs, while expressly referencing (and, at times, quoting from) the Policy, the Georgia Action, and the Airclaim's Report, have not filed any supporting documentation as exhibits to their pleading. In its Motion to Dismiss, Defendant cites to and submits a number of materials purportedly demonstrating that Plaintiffs' claims are untimely and foreclosed by res judicata. Specifically, Defendant supports its Motion with documents from the record in the Georgia Action and from litigation Plaintiffs filed against Global in this Court in 2014 ("First Delaware Action"). The Court's ability to consider these matters in resolving the Motion must thus be addressed preliminarily.

         Generally, when determining whether the presentation of matters outside of the pleadings will convert a motion to dismiss to a motion for summary judgment, the critical questions for the Court are "whether the extraneous matters are integral to and have been incorporated within the complaint and whether they have been offered.. .to establish the truth of their contents."[24] "Matters attached to a complaint, and incorporated by reference, are not 'extraneous' for purposes of Rule 12."[25] Similarly, when "a plaintiff chooses not to attach a document.. .to a complaint that raises claims based on the document.. .a defendant may properly attach a copy of the document to a motion to dismiss.... "[26] Further, when documents accompanying a defendant's motion were clearly "consulted, relied ...

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