Free Complaint - District Court of Delaware - Delaware

Case 1:08-cv-00533-SLR

Document 1

Filed 08/22/2008

Page 1 of 10

IN THE UNITED STATES DISTRICT COURT IN AND FOR THE DISTRICT OF DELAWARE

AVIATION EXCHANGE CORPORATION, INC., a Delaware Corporation, Plaintiff,
VS.

C.A. No. JURY TRIAL DEMANDED

NIGHTCLUB MANAGEMENT AND DEVELOPMENT, LLC; MOUNTAIN AIR PARTNERS, LLC; BIKERS DREAM INTERNATIONAL, LLC; REALTY DEVELOPMENT SERVICES MANAGEMENT, LLC; BROWN CJ2, LLC; SAM GUADAGNOLI; KYLE J. GEDITZ; GREGORY D. TIMM; RAYMOND F. O'SULLIVAN; AND ALLEN BROWN Defendants.

COMPLAINT Plaintiff, AVIATION EXCHANGE CORPORATION, INC., a Delaware corporation (hereinafter "Plaintiff") by and through its attorneys of record at Marshall, Dennehey, Warner, Coleman & Goggin, hereby brings forth its complaint against Defendants NIGHTCLUB MANAGEMENT AND DEVELOPMENT, LLC,

MOUNTAIN AIR PARTNERS, LLC, BIKERS DREAM INTERNATIONAL, LLC, REALTY DEVELOPMENT SERVICES MANAGEMENT, LLC, BROWN CJ2, LLC all of which are Colorado limited liability companies and SAM GUADAGNOLI, KYLE J. GEDITZ, GREGORY D. TIMM, RAYMOND F. O'SULLIVAN and ALLEN BROWN, all individuals, (hereinafter collectively referred to as "Defendants"), alleging as follows:

Case 1:08-cv-00533-SLR

Document 1

Filed 08/22/2008

Page 2 of 10

JURISDICTION AND VENUE 1. Plaintiff is and was at all times relevant a Delaware corporation with its

principal place of business in Dover, Delaware. 2. Defendant, Nightclub Management and Development, LLC, is a

Colorado limited liability company, which may be served at Brown CJ2, LLC, 18401 East U.S. Highway 24, Woodland Park, CO 80863 pursuant to an Aircraft Purchase Agreement (hereinafter the "Agreement") entered into on or about June 21, 2007 between Plaintiff and Defendants. 3. Defendant, Mountain Air Partners, LLC, is a Colorado limited liability

company, which may be served at Brown CJ2, LLC, 18401 East U.S. Highway 24, Woodland Park, CO 80863 pursuant to the Agreement entered into on or about June 21, 2007 between Plaintiff and Defendants. 4. Defendant, Bikers Dream International, LLC, is a Colorado limited

liability company, which may be served at Brown CJ2, LLC, 18401 East U.S. Highway 24, Woodland Park, CO 80863 pursuant to the Agreement entered into on or about June 21, 2007 between Plaintiff and Defendants. 5. Defendant, Realty Development Services Management, LLC, is a

Colorado limited liability company, which may be served at Brown CJ2, LLC, 18401 East U.S. Highway 24, Woodland Park, CO 80863 pursuant to the Agreement entered into on or about June 21, 2007 between Plaintiff and Defendants. 6. Defendant, Brown CJ2, LLC, is a Colorado limited liability company,

which may be served at Brown CJ2, LLC, 18401 East U.S. Highway 24, Woodland Park, CO 80863 pursuant to the Agreement entered into on or about June 21, 2007 between Plaintiff and Defendants. 7. Defendant, Sam Guadagnoli, is and was at all material times, Manager

2

Case 1:08-cv-00533-SLR

Document 1

Filed 08/22/2008

Page 3 of 10

of Defendant, Nightclub Management and Development, LLC, and is a citizen and resident of the State of Colorado with an address for service of process at 20 North Tejon Street, Colorado Springs, CO 80903. 8. Defendant, Kyle J. Geditz, is and was at all material times, Manager of

Defendant, Mountain Air Partners, LLC, and is a citizen and resident of the State of Colorado with an address for service of process at 3935 Hill Circle, Colorado Springs, CO 80904. 9. Defendant, Gregory D. Timm, is and was at all material times, Manager

of Defendant, Bikers Dream International, LLC, and is a citizen and resident of the State of Colorado with an address for service of process at 3740 Camel Rock Vw, Colorado Springs, CO 80904. 10. Defendant, Raymond F. O'Sullivan, is and was at all material times,

Manager of Defendant, Realty Development Services, LLC, and is a citizen and resident of the State of Colorado with an address for service of process at 25 North Tejon Street, Colorado Springs, CO 80903. 11. Defendant, Allen Brown, is and was at all material times, Manager of

Defendant, Brown CJ2, LLC, and is a citizen and resident of the State of Colorado with an address for service of process at 725 Sun Valley Drive, Woodland Park, CO 80863. 12. On or about June 21, 2007, Plaintiff, as Purchaser, and Defendants, as A true, accurate, and correct copy of the

Sellers, entered into the Agreement.

Agreement is attached hereto as Exhibit 1. Section 9.20 of the Agreement contains the following jurisdiction clause: 9.20. Governing Law. This Agreement shall in all respects be governed by, and construed in accordance with, the laws of the State of Delaware, USA including all matters of construction, validity and performance, without giving effect to its conflict of laws provisions. Each of the parties irrevocably and unconditionally: a) agrees that any suit, action or legal proceeding

3

Case 1:08-cv-00533-SLR

Document 1

Filed 08/22/2008

Page 4 of 10

arising out of or relating to this Agreement shall be brought in the courts of the State of Delaware in the District Court of the United States having jurisdiction in Delaware; b) waives any objection which it may have to the laying of venue of any such suit, action or proceeding in any of such courts; and, c) agrees that service of any court paper may be effected on such party by mail, or in such other manner as may be provided under applicable laws or court rules in Delaware. 13. The jurisdiction of this Court is invoked and is proper pursuant to 28

U.S.C. §§1331 and 1332 and 28 U.S.C. §§ 2201 and 2202 and Section 9.20 of the Agreement. This Court has jurisdiction over state law based claims pursuant to 28 U.S.C. §1367 and Section 9.20 of the Agreement. Venue is proper pursuant to 28 U.S.C. §1391 and Section 9.20 of the Agreement. THE CONTRACT 14. On or about June 21, 2007, Plaintiff and Defendants entered into the

Aircraft Purchase Agreement attached hereto as Exhibit 1, whereby Plaintiff agreed to purchase from Defendants one (1) Cessna Citation CJ2 Aircraft for the sum of Five Million Two Hundred Fifty Thousand United States Dollars ($5,250,000.00). 15. Under the terms of said Agreement, the Defendants state that both

engines of the aircraft are on an "Engines 100% Paid on Williams TAP Elite" engine program (See Sections 3.1, 4.1.2, 5.3.8 and Aircraft Specifications of Exhibit 1). 16. Contrary to the terms of the Agreement, the Defendants did not have the

aircraft engines on a fully paid TAP Elite engine program. 17. To place the aircraft engines on a 100% paid Williams Tap Elite engine

program current to the time of the closing on the aircraft purchase by Plaintiff will cost the sum of One Hundred One Thousand One Hundred Twenty Five Dollars and Sixty Two Cents ($101,125.62) which sum the Plaintiff contends is the obligation of Defendants to pay in accordance with the terms of the Agreement. 4

Case 1:08-cv-00533-SLR

Document 1

Filed 08/22/2008

Page 5 of 10

18.

Plaintiff has made demand upon Defendants to make payment of the

$101,125.62 to bring the Williams TAP Elite program current as provided in the Agreement, but Defendants have wholly refused and failed to pay such sum despite demands of Plaintiff. 19. Section 9.13 of the Agreement provides that "In the event it becomes

necessary to enforce the terms of this Agreement by litigation or otherwise, the prevailing party shall be entitled to recover its reasonable attorney fees and court costs..." 20. in this cause. FIRST CLAIM FOR RELIEF Breach of Contract Against Defendants 21. Plaintiff repeats and realleges each and every allegation contained above Plaintiff seeks to recover its attorney fees and costs should they prevail

and incorporates the same here by reference. 22. 23. 24. Plaintiff and Defendants entered into a valid Agreement. Plaintiff satisfied all conditions precedent to the Agreement. Defendants have materially breached the Agreement by greatly

diminishing the value of the aircraft by not having it on a fully paid engine program. 25. As a direct and proximate cause of the Defendants' breach, Plaintiff has

been damaged in an amount in excess of $100,000.00, in an amount to be determined at trial. 26. Plaintiff has been forced to retain the services of an attorney to prosecute

this matter, including this specific claim, and is entitled to receive reasonable costs and attorneys fees incurred herein as special damages.

5

Case 1:08-cv-00533-SLR

Document 1

Filed 08/22/2008

Page 6 of 10

SECOND CLAIM FOR RELIEF Breach of the Covenant of Good Faith and Fair Dealing Against Defendants 27. Plaintiff repeats and realleges each and every allegation contained above

and incorporates the same here by reference. 28. dealing. 29. Given that every contract contains an implied covenant of good faith and Every contract contains an implied covenant of good faith and fair

fair dealing, the Defendants had an obligation to deal with Plaintiff in good faith in connection with the Agreement. 30. The Defendants have failed and refused, and continue to fail and refuse,

to deal in good faith with Plaintiff by misrepresenting the aircraft and by failing to pay Plaintiff the funds necessary to place the Aircraft engines on the 100% paid Williams TAP Elite engine program. 31. As a result of this conduct and their fraudulent misrepresentation of the

aircraft engine program, the Defendants have breached the covenant of good faith and fair dealing. 32. As a direct and proximate cause of the Defendants' breach, Plaintiff has

been damaged in an amount in excess of $100,000.00, in an amount to be determined at trial. 33. Plaintiff has been forced to retain the services of an attorney to prosecute

this matter, including this specific claim, and is entitled to receive reasonable costs and attorneys fees incurred herein as special damages. THIRD CLAIM FOR RELIEF Conversion Against Defendants 34. Plaintiff repeats and realleges each and every allegation contained above

and incorporates the same here by reference.

6

Case 1:08-cv-00533-SLR

Document 1

Filed 08/22/2008

Page 7 of 10

35.

By failing to act pursuant to the terms of the Agreement, Defendants

have substantially interfered with and deprived Plaintiff of its use or enjoyment of property and accordingly have not returned any of the said property to Plaintiff in which Plaintiff had a property interest. 36. By retaining said property, the Defendants have wrongfully and willfully

disposed of and/or possessed and used Plaintiff's property in a manner inconsistent with Plaintiff's rights to possess, use and enjoy said property, which conduct constitutes a conversion. 37. Defendants have completely and permanently deprived Plaintiff of the

use and possession of the property justifying payment of the full value to Plaintiff. 38. Plaintiff has never consented to the Defendants' possession, disposition

or use of the Plaintiff's monies that are currently due and owing to Plaintiff. 39. As a direct result of the Defendants' conversion, the Plaintiff has lost the

benefit and use of its property to the extent that the Plaintiff is justified in seeking payment for the full value of the property of which it has been deprived. 40. As a direct and proximate cause of the Defendants' conversion, Plaintiff

has been damaged in an amount in excess of $100,000.00, in an amount to be determined at trial. 41. Plaintiff has been forced to retain the services of an attorney to prosecute

this matter, including this specific claim, and is entitled to receive reasonable costs and attorneys fees incurred herein as special damages. FOURTH CLAIM FOR RELIEF Fraudulent Concealment Against Defendants 42. Plaintiff repeats and realleges each and every allegation contained above

and incorporates the same here by reference. 43. Upon information and belief, Defendants' actions in entering into the

7

Case 1:08-cv-00533-SLR

Document 1

Filed 08/22/2008

Page 8 of 10

Aircraft Purchase Agreement were undertaken, at least in part, with fraudulent intent and for purposes of denying the Plaintiff the value of an aircraft on a fully paid engine program. Defendants' fraudulent intent is further evidenced by their failure and refusal to repay Plaintiff the sums necessary to place the Aircraft engines on a 100% paid Williams TAP Elite engine program. 44. On or about April 26, 2005, the Defendants, their agents or assigns or "Amendment to Total Assurance "Elite" Program"

designees entered into an

(hereinafter the "Amendment") with Williams-Rolls that required in part that Defendants would only pay a portion of the engine program fee and further that Defendants "... must disclose the details of this contract to the new prospective owner before actual sale of aircraft" which Defendants did not disclose to Plaintiff evidencing their fraudulent intent to conceal the type engine program the aircraft was truly on. A true, accurate and correct copy of the Amendment is attached hereto as Exhibit 2. Defendants deliberately concealed and failed to disclose details of the

contract, as required, with the intent to induce Plaintiff's reliance upon this concealment. 45. As a direct and proximate cause of the Defendants' fraudulent

concealment, Plaintiff has been damaged in an amount in excess of $100,000.00, in an amount to be determined at trial. 46. Plaintiff has been forced to retain the services of an attorney to prosecute

this matter, including this specific claim, and is entitled to receive reasonable costs and attorneys fees incurred herein as special damages. FIFTH CLAIM FOR RELIEF Alter Ego Against Defendants 47. Plaintiff repeats and realleges each and every allegation contained above

and incorporates the same here by reference.

8

Case 1:08-cv-00533-SLR

Document 1

Filed 08/22/2008

Page 9 of 10

48.

At all times relevant hereto, there has been such a unity of ownership

between each of the Defendants that one and the other are essentially the same. 49. Specifically, Defendants actions were taken under corporate action or

veil when, in fact, they were one in the same. 50. To recognize and perpetuate a legal distinction between the Defendants

and not pierce the corporate veil would permit them to perpetrate fraud and contravene in the foregoing Agreement and Amendment and applicable common law principles in an unjust manner. 51. Plaintiff is entitled to an order and/or declaration that each of the

Defendants is the alter ego of each other and that all are responsible for the acts complained of herein. 52. Plaintiff has been forced to retain the services of an attorney to prosecute

this matter, including this specific claim, and is entitled to receive reasonable costs and attorneys fees incurred herein as special damages. SIXTH CLAIM FOR RELIEF (IN THE ALTERNATIVE) Unjust Enrichment Against Defendants 53. Plaintiff repeats and realleges each and every allegation contained above

and incorporates the same here by reference. 54. Plaintiff provided money and services to the Defendants for an aircraft

that was falsely represented by Defendants as being on a fully paid engine program which program would greatly enhance the value of the aircraft. 55. The Defendants have enjoyed the benefit of Plaintiff's money and

services, in circumstances where it is inequitable for them to retain the benefit without payment for the value thereof to Plaintiff. 56. As a direct and proximate cause of the Defendants' actions, Plaintiff has

9

Case 1:08-cv-00533-SLR

Document 1

Filed 08/22/2008

Page 10 of 10

been damaged in an amount in excess of $100,000.00, in an amount to be determined at trial. 57. Plaintiff has been forced to retain the services of an attorney to prosecute

this matter, including this specific claim, and is entitled to receive reasonable costs and attorneys fees incurred herein as special damages. WHEREFORE, Plaintiff prays for judgment against Defendants as follows: 1. For general damages in excess of $100,000.00 against Defendants, in an

exact amount to be determined at trial; 2. 3. For cost and attorneys' fees incurred herein; For injunctive relief and a declaration that Defendants' acts are in violation

of the Agreement and Amendment at issue and Plaintiff's contractual and common law rights; 4. 5. necessary. For interest; and For such other and further relief as this Court may deem just and

BY: __/s/ Kevin J. Connors KEVIN J. CONNORS, ESQ. (I.D. #2135) MARSHALL, DENNEHEY, WARNER, COLEMAN & GOGGIN 1220 N. Market Street, 5th Floor P.O. Box 8888 Wilmington, DE 19899-8888 Attorney for Plaintiff, Aviation Exchange Corporation, Inc. Dated: August 21, 2008
15/659030.v1

10

Case 1:08-cv-00533-SLR

Document 1-2

Filed 08/22/2008

Page 1 of 30

Case 1:08-cv-00533-SLR

Document 1-2

Filed 08/22/2008

Page 2 of 30

Case 1:08-cv-00533-SLR

Document 1-2

Filed 08/22/2008

Page 3 of 30

Case 1:08-cv-00533-SLR

Document 1-2

Filed 08/22/2008

Page 4 of 30

Case 1:08-cv-00533-SLR

Document 1-2

Filed 08/22/2008

Page 5 of 30

Case 1:08-cv-00533-SLR

Document 1-2

Filed 08/22/2008

Page 6 of 30

Case 1:08-cv-00533-SLR

Document 1-2

Filed 08/22/2008

Page 7 of 30

Case 1:08-cv-00533-SLR

Document 1-2

Filed 08/22/2008

Page 8 of 30

Case 1:08-cv-00533-SLR

Document 1-2

Filed 08/22/2008

Page 9 of 30

Case 1:08-cv-00533-SLR

Document 1-2

Filed 08/22/2008

Page 10 of 30

Case 1:08-cv-00533-SLR

Document 1-2

Filed 08/22/2008

Page 11 of 30

Case 1:08-cv-00533-SLR

Document 1-2

Filed 08/22/2008

Page 12 of 30

Case 1:08-cv-00533-SLR

Document 1-2

Filed 08/22/2008

Page 13 of 30

Case 1:08-cv-00533-SLR

Document 1-2

Filed 08/22/2008

Page 14 of 30

Case 1:08-cv-00533-SLR

Document 1-2

Filed 08/22/2008

Page 15 of 30

Case 1:08-cv-00533-SLR

Document 1-2

Filed 08/22/2008

Page 16 of 30

Case 1:08-cv-00533-SLR

Document 1-2

Filed 08/22/2008

Page 17 of 30

Case 1:08-cv-00533-SLR

Document 1-2

Filed 08/22/2008

Page 18 of 30

Case 1:08-cv-00533-SLR

Document 1-2

Filed 08/22/2008

Page 19 of 30

Case 1:08-cv-00533-SLR

Document 1-2

Filed 08/22/2008

Page 20 of 30

Case 1:08-cv-00533-SLR

Document 1-2

Filed 08/22/2008

Page 21 of 30

Case 1:08-cv-00533-SLR

Document 1-2

Filed 08/22/2008

Page 22 of 30

Case 1:08-cv-00533-SLR

Document 1-2

Filed 08/22/2008

Page 23 of 30

Case 1:08-cv-00533-SLR

Document 1-2

Filed 08/22/2008

Page 24 of 30

Case 1:08-cv-00533-SLR

Document 1-2

Filed 08/22/2008

Page 25 of 30

Case 1:08-cv-00533-SLR

Document 1-2

Filed 08/22/2008

Page 26 of 30

Case 1:08-cv-00533-SLR

Document 1-2

Filed 08/22/2008

Page 27 of 30

Case 1:08-cv-00533-SLR

Document 1-2

Filed 08/22/2008

Page 28 of 30

Case 1:08-cv-00533-SLR

Document 1-2

Filed 08/22/2008

Page 29 of 30

Case 1:08-cv-00533-SLR

Document 1-2

Filed 08/22/2008

Page 30 of 30

Case 1:08-cv-00533-SLR

Document 1-3

Filed 08/22/2008

Page 1 of 1