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DaVinci Aircraft, Inc. v. United States

United States District Court, C.D. California

April 26, 2017

DAVINCI AIRCRAFT, INC.
v.
UNITED STATES OF AMERICA ET AL.

          Present: The Honorable CHRISTINA A. SNYDER Judge.

          CIVIL MINUTES - GENERAL

         Proceedings:(IN CHAMBERS) - UNITED STATES'S MOTION TO DISMISS (Filed March 20, 2017, Dkt. 26)

         I. INTRODUCTION

         On August 5. 2016. DaVinci Aircraft, Inc. ("DaVinci") filed a complaint against the United States of America, as well as Michael Christmas and Rodnev Lewis, two members of the United States Air Force. Dkt. 1 ("Compl."). The Complaint alleges five claims against all of the defendants, namely, (1) fraud. (2) negligent misrepresentation. (3) conspiracy, (4) implied contract, and (5) conversion. Id. The gravamen of DaVinci's complaint is that agents of the United States Air Force allegedly conspired to fraudulently compel DaVinci to surrender ten "JASSM antennas."[1]

         On November 28, 2016, the United States filed a motion to dismiss DaVinci's complaint pursuant to Federal Rules of Procedure 12(b)(1) and 12(b)(6). Dkt. 12. On January 30, 2017, the Court granted the United States's motion and granted DaVinci 21 days in which to file an amended complaint. Dkt. 18.

         On February 21, 2017, DaVinci filed a First Amended Complaint ("FAC"). Dkt. 19. The FAC adds a party, defendant Joel Russell, and alleges Bivens claims against "All Defendants." Unlike the Complaint, the FAC does not allege breach of an implied contract.

         On March 20, 3017, the United States filed a motion to dismiss the FAC. Dkt. 26 (the "Motion" or "Mot."). On March 31, 2017, Da Vinci filed an opposition. Dkt. 31. ("Opp'n"). On April 3, 2017, the United States filed a reply, in which the United States also requested that DaVinci's untimely opposition be stricken. Dkt. 32 ("Reply"). On April 4, 2017, DaVinci filed an opposition to the United States's request to strike DaVinci's opposition to the motion to dismiss. Dkt. 33 ("Opp'n to Striking").

         On April 17, 2017, the Court held oral argument on the instant motion, after which the Court took the matter under submission. Dkt. 37. Having carefully considered the parties' arguments, the Court rules as follows.

         II. BACKGROUND

         The FAC alleges the following facts.

         On or about March 2013, DaVinci avers that ten JASSM antennas were originally manufactured by Ball Aerospace and subsequently offered for sale to the public by Lockheed Martin. FAC ¶ 15. The antennas were allegedly purchased by Avatar Unlimited "as part of a bulk sale of surplus parts, " Id. at 2:14, and subsequently sold again to BPB Surplus, Id. at 2:13. DaVinci alleges that, on July 31. 2013. it purchased the ten antennas from BPB Surplus for $3, 000. Id. ¶ 24.

         Thereafter, DaVinci offered the ten JASSM antennas for sale for an asking price of $125, 000 each. Id.¶ 29. On September 17. 2013. Laura Voyatzis, a special agent with the U.S. Air Force Office of Special Investigations, accompanied by three other agents. Lenora Madison. John Drapalik. and David Givemero, visited DaVinci's office. Id. ¶ 26. Voyatzis allegedly stated that the agents were there to inspect and discuss the JASSM antennas. Id. After inspecting the antennas, Voyatzis allegedly demanded that DaVinci surrender the ten JASSM antennas. Id. ¶ 27. DaVinci refused to surrender the antennas and the agents asked for the price at which DaVinci would sell the equipment. Id. ¶ 29. After learning that the asking price was $125, 000 per antenna, the agents left. Id.

         On April 21. 2014 - in response to a price request from Rodney Lewis, a contracting officer on Eglin Air Force Base - DaVinci offered to sell the antennas for $75, 000 each. Id. ¶ 30. Lewis allegedly made a counteroffer to pay $7, 359 for all ten antennas, based upon the price that DaVinci originally paid. Id. ¶ 32. DaVinci rejected the offer and insisted upon payment of $750, 000. Id. ¶33. Lewis allegedly replied. "I encourage you to propose a more reasonable price so we both can benefit." Id.

         On June 11, 2014. DaVinci allegedly offered to sell the antennas to Eglin Air Force Base for a total of $600, 000. Id. ¶36. DaVinci received no response. Id. ¶ 37.

         On September 30, 2014, Joel Russell, a special agent with the Air Force Office of Special Investigations, arrived at Da Vinci's office with two other Air Force Officers. Id. ¶ 39. The agents insisted that DaVinci surrender the JASSM antennas. Russell stated that the Air Force was authorized and intended to take possession of the antennas. Id. Russell presented DaVinci with a letter, signed by Michael Christmas, Special Agent in Charge at the Office of Special Investigations, "purportedly authorizing the Air Force to take possession of the JASSM" antennas. Id. The letter stated:

The undersigned, being fully authorized to take possession of the following items being claimed as constituting or consisting of "information relating to the national defense" acknowledges received often (10) JASSM antennae -from Leonardo Parra and DaVinci Aircraft. The undersigned further acknowledges that the delivery of the said items by Leonardo Parra and DaVinci Aircraft is made under compulsion of law pursuant to 18 USC 793 (d) and is made without prejudice to any claims by Leonardo Parra andor DaVinci Aircraft for their fair market value.

Id. ¶ 39; Ex. F ("Christmas Letter"). DaVinci alleges that it surrendered the antennas "pursuant to the demands and threats made by Special Agent Russell to provide the JASSM Antennae under compulsion of law . . . including the threat of criminal prosecution for any failure to comply." Id. ¶ 40.

         DaVinci avers that the Air Force lacked authority to take possession of the JASSM antennas and fraudulently represented its authority to induce surrender of the antennas. Id. ¶ 78. DaVinci asserts that defendants knowingly and intentionally made false and fraudulent statements to DaVinci regarding its authority and the risk of criminal prosecution in order to defraud DaVinci. Id. ¶ 73. According to DaVinci. defendants knowingly conspired to make the foregoing misrepresentations to induce surrender of property without due process of law. Id. ¶ 78.

         On March 12. 2015. Da Vinci's counsel allegedly sent a letter to the Office of Special Investigations at Eglin Air Force Base, requesting that an attached "Form 95. Administrative Claim for Damages" be filed regarding plaintiffs intended tort claims. Id. ¶ 42. "Ms. Sipp, " a litigator in the Claims Division of the Office of the Staff Judge Advocate for the Department of the Army, requested that Da Vinci file its request, including the original signed documents, with the Claims Division of the Office of the Staff Judge Advocate "to process the claim." Id. ¶ 43. On August 18, 2015, DaVinci sent the requested documents to the Claims Division as well as the Office of Special Investigations at Eglin Air Force Base. Id. ¶ 44. On August 20, 2015, the Office of the Staff Judge Advocate acknowledged receipt of DaVinci's claim against the United States Government. Id. ¶45.

         The Government has offered evidence that at least part of the JASSM antennas are classified at the "SECRET and SECRET SPECIAL ACCESS REQUIRED level" pursuant to a Special Access Program called "SENIOR RODEO." Hemmingsen Decl. Ex. A. The principal change made by plaintiff to the pleadings as they relate to the United States is in relation to the classification of the JASSM Antennas. Plaintiff alleges that the JASSM Antennas were manufactured as "UNCLASSIFIED hardware and not subject to the security requirement which would have applied to the manufacture of classified hardware . . . [including] Special Access Program SENIOR RODEO." FAC ¶ 17. Plaintiff further alleges that ...


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