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Ga Telesis, LLC, A Delaware Limited Liability Company v. Gkn Aerospace

November 2, 2012

GA TELESIS, LLC, A DELAWARE LIMITED LIABILITY COMPANY, PLAINTIFF,
v.
GKN AEROSPACE, CHEM-TRONICS, INC., A CALIFORNIA CORPORATION;
POWERTURBINE, INC., DEFENDANTS.
GKN AEROSPACE, CHEM-TRONICS, INC., A CALIFORNIA CORPORATION, THIRD-PARTY PLAINTIFF,
v.
POWERTURBINE, INC. THIRD-PARTY DEFENDANT.



The opinion of the court was delivered by: Irma E. Gonzalez United States District Judge

ORDER DENYING THIRD- PARTY DEFENDANT'S MOTION TO DISMISS THIRD-PARTY PLAINTIFF'S THIRD CAUSE OF ACTION FOR CONCEALMENT [Doc. No. 14]

Presently before the Court is a motion by Third-Party Defendant, Powerturbine, Inc. ("Third-Party Defendant") to dismiss Third-Party Plaintiff GKN Aerospace, Chem-Tronics, Inc. ("Third-Party Plaintiff")'s third cause of action for concealment pursuant to Fed. R. Civ. P. 12(b)(6). [Doc. No. 14.] For the reasons stated below, the Court DENIES Third-Party Defendant's motion to dismiss.

BACKGROUND

This case involves the purchase and sale of 63 airplane engine fan blades ("Fan Blades"). [Doc. No. 1, Compl. ¶ 5.] Plaintiff GA Telesis, LLC ("Plaintiff" or "Plaintiff GA Telesis") purchases and sells commercial aircraft, commercial aircraft engines, and engine parts. [Id. ¶ 5.] Third-Party Plaintiff alleges in its Third-Party complaint that it overhauls, repairs, and sells commercial aircraft engine parts. [Doc. No. 4, Third-Party Compl. ¶ 6.] Third-Party Plaintiff further alleges that Third-Party Defendant obtains and re-sells aircraft engine parts. [Id. ¶ 7.]

Third-Party Defendant alleges in its motion to dismiss that Third-Party Plaintiff's allegations regarding its business model are too broad, and that Third-Party Defendant is in reality a "broker" on behalf of airlines that sends engine parts rejected by one repair station to a second repair station for potential repairs before attempting to resell them. Third-Party Defendant further states in its motion to dismiss that it assumes no responsibility for the quality of the engine parts. [Doc. No. 14-1, Third Party Def.'s Mem. of P. & A. in Supp. of Mot. to Dismiss ("Third-Party Def.'s P. & A.") at 2.] Third-Party Plaintiff alleges in its Third-Party complaint that it did not know that Third-Party Defendant's business model was to seek certification of parts which another repair shop had previously inspected and rejected. [Doc. No. 4, Third-Party Compl. ¶ 15.]

Third-Party Plaintiff alleges in its opposition to the motion to dismiss that Third-Party Defendant had previously purchased the 63 Fan Blades from Saudi Arabian Airlines ("SAA") [Doc. No. 20, Third-Party Pl.'s Opp'n to Mot. to Dismiss ("Third-Party Pl.'s Opp'n") at 4.]; and that prior to the sale, SAA had sent the Fan Blades to a repair station, MTU Maintenance ("MTU"), for inspection and repair. [Id. at 4]. It alleges in its Third-Party complaint that MTU determined that the Fan Blades' wall thickness failed to meet the manufacturer's specifications. [Doc. No. 4, Third-Party Compl. ¶¶ 12-13.] Third-Party Plaintiff alleges that Third-Party Defendant, despite knowing about MTU's determination, purchased the Fan Blades. [Id. ¶¶ 13-15.] Third-Party Plaintiff alleges that MTU would likely have attached to the Fan Blades documentation to indicate defects ("reject tags"). Third-Party Plaintiff believes that after Third-Party Defendant purchased the Fan Blades, it removed the reject tags. [Id. ¶¶ 13-14.]

On June 14, 2010, Third-Party Defendant sent the Fan Blades to Third-Party Plaintiff for an "overhaul repair" to get them certified before reselling. [Doc. No. 4, Third-Party Compl. ¶¶ 9, 13.] At the time, Third-Party Defendant did not notify Third-Party Plaintiff about the insufficient wall thickness. [Id. ¶¶ 11, 13-15.] After adhering to the governing Federal Aviation Administration ("FAA") regulations regarding overhaul, Third-Party Plaintiff subsequently rejected 6, overhauled 57, and purchased 30 of the Fan Blades for $690,000 from Third-Party Defendant. [Id. ¶¶ 10, 11.]

On August 4, 2010, Third-Party Plaintiff sold 22 of the overhauled Fan Blades to Plaintiff GA Telesis and 8 to a different party. [Id. ¶ 11; Doc. No. 1, Compl. ¶¶ 6-7.] On August 10, 2010, Third-Party Plaintiff issued an invoice to Plaintiff in the amount of $745,690.00, certifying that all 22 of the Fan Blades were in "overhauled condition" and were "serviceable." [Id. ¶ 7.] Plaintiff subsequently sold these Fan Blades to Delta Airlines, Inc. ("Delta"). [Doc. No. 4, Third-Party Compl. ¶ 11.] Third-Party Plaintiff alleges that Delta sent the Fan Blades to MTU, which informed Delta that some of the Fan Blades had previously been rejected by MTU for insufficient wall thickness, as a result of which they could not be used as intended. [Id. ¶ 12.]

In May 2012 [Doc. No. 20, Third-Party Pl.'s Opp'n at 10.], Plaintiff demanded a full refund in the amount of $745,690 from Third-Party Plaintiff. [Doc. No. 4, Third-Party Compl. ¶ 18] On June 4, 2012, Plaintiff filed a complaint against Third-Party Plaintiff and Third-Party Defendant alleging breach of contract and asserting money damages. [Doc. No. 1, Compl.] On June 5, 2012, Third-Party Plaintiff filed a third-party complaint*fn1 against Third-Party Defendant alleging the following causes of action: (1) indemnity; (2) breach of implied warranty of merchantability; (3) concealment; and (4) declaratory relief. [Doc. No. 4, Third-Party Compl.] On July 24, 2012, Third-Party Defendant filed the present motion to dismiss Third-Party Plaintiff's third cause of action for concealment. [Doc. No. 14-1, Third-Party Def.'s P. & A.]*fn2

DISCUSSION

Presently before the Court is Third-Party Defendant's motion to dismiss Third-Party Plaintiff's third cause of action for concealment.

I. Motion to dismiss

A court should grant a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) if the plaintiff fails to proffer "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 547 (2007). Allegations of material fact must be taken as true and construed in the light most favorable to the nonmoving party. Cahill v. Liberty Mutual Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). However, it is improper for a court to assume "the [plaintiff] can prove facts which [he or she] has not alleged." Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983). A court need not accept as true allegations that are conclusory, legal conclusions, unwarranted deductions of fact, or unreasonable inferences. Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). As a general rule, a court may not consider any material beyond the pleadings in ...


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