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MN Airlines, LLC v. Global Aviation Services USA, Inc.

United States District Court, D. Minnesota

October 17, 2019

MN Airlines, LLC, d/b/a Sun Country Airlines, Plaintiff,
v.
Global Aviation Services USA, Inc., and Carmel Borg, Defendants.

          MEMORANDUM AND ORDER

          PAUL A. MAGNUSON UNITED STATES DISTRICT COURT JUDGE

         This matter is before the Court on Plaintiff's Motion to Dismiss Amended Counterclaims and Defendants' Motion to Amend. For the following reasons, the Motion to Dismiss is granted and the Motion to Amend is denied.

         BACKGROUND

         The full factual background is set forth in an earlier Order and will not be repeated here. (Order (Docket No. 25)). In early 2018, Plaintiff MN Airlines, LLC d/b/a Sun Country Airlines (“Sun Country”) entered into a contract for ground-handling services at MSP airport with Defendant Global Aviation Services USA, Inc (“Global”). (Compl. (Docket No. 1-1) ¶ 3.) Ground-handling services include baggage handling, customer check-in, aircraft servicing, ground staff, and loading and unloading cargo. (Id. ¶ 2.) Sun Country alleges that Global failed to perform, and that failure resulted in flight delays, lost baggage, and customer complaints. (Id. ¶ 4.) Sun Country claims breach of contract against Global, and fraud against Global and its CEO, Defendant Carmel Borg.

         Defendants filed three counterclaims, alleging breach of contract and defamation. (Docket No. 27.) Sun Country filed a Motion to Dismiss the counterclaims, but rather than opposing that Motion, Defendants instead filed an Amended Answer and Counterclaims, alleging breach of contract and defamation. (Am. Answer (Docket No. 33.) Sun Country subsequently filed the instant Motion to Dismiss. (Docket No. 36.) Along with a Memorandum in Opposition, Defendants filed a Motion to Amend Counterclaims, should the Motion to Dismiss be granted. (Docket No. 41.)

         DISCUSSION

         A. Motion to Dismiss

         To survive a motion to dismiss under Rule 12(b)(6), a complaint need only “contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)); see also Fed.R.Civ.P. 12(b)(6). A claim bears facial plausibility when it allows the Court “to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. When evaluating a motion to dismiss under Rule 12(b)(6), the Court must accept plausible factual allegations as true. Gomez v. Wells Fargo Bank, N.A., 676 F.3d 655, 660 (8th Cir. 2012). But “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, ” are insufficient to support a claim. Iqbal, 556 U.S. at 678.

         At this stage, the Court assumes the allegations in the Amended Counterclaims are true and views them in the light most favorable to Global and Borg. See Miller v. Redwood Toxicology Lab., Inc., 688 F.3d 928, 933 n.4 (8th Cir. 2012). Sun Country asks the Court to dismiss both of Defendants' amended counterclaims for breach of contract and defamation.

         1. Breach of Contract

         Global alleges that Sun Country “set up [Global] to fail at the outset of the contractual relationship.” (Am. Answer ¶ 122.) Sun Country contends Global has failed to plead with the requisite specificity to survive a 12(b)(6) motion. To state a breach of contract claim, Global must show that: (1) a contract was formed; (2) Global performed any conditions precedent; (3) Sun Country materially breached the contract, and (4) Global suffered damages. Parkhill v. Minn. Mut. Life Ins. Co., 174 F.Supp.2d 951, 956 (D. Minn. 2000) (Doty, J.).

         Global references an “understanding that Sun Country would pay” for a staffing company because Sun Country directed Global to hire the company. (Id. ¶ 130-31.) But an understanding is not a contract. Global does not plead the elements of a contract claim and omits any contractual language beyond referencing “section 3.1 of the agreement and its representation” that Sun Country would pay for the staffing company. (Id. ¶ 131.) Global's Opposition Memorandum adds that Sun Country breached the implied covenant of good faith and fair dealing by “unjustifiably hindering Global's performance from the outset.” (Defs. Opp'n Mem. at 4.) A breach of the implied covenant of good faith and fair dealing, though, is not a breach of contract. Furthermore, Sun Country's claim lacks plausibility because had Sun Country set up Global to fail, Sun Country would have faced the backlash of customers upset with the airline. Sun Country's Motion is granted as to Counterclaim I.

         2. Defamation

         Both Defendants bring this counterclaim, alleging that Sun Country defamed Borg and Global “to the media, to relevant individuals within the airline industry, ” and even in this lawsuit regarding Global's “work at the MSP airport.” (Am. Answer ¶ 139.) But, Global and Borg claim that they are “not yet aware of what specific individuals made each of the false statements, though ...


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