Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Magic Carpet Ride LLC v. Rugger Investment Group, L.L.C.

California Court of Appeals, Fourth District, Third Division

October 25, 2019

MAGIC CARPET RIDE LLC et al., Plaintiffs and Respondents,
v.
RUGGER INVESTMENT GROUP, L.L.C., Defendant and Appellant.

          Appeal from a judgment of the Superior Court of Orange County, Linda S, Marks, Judge Super. Ct. No. 30-2016-00877830 Reversed and remanded.

          Van Riper Law and David A. Van Riper for Defendant and Appellant.

          Scott Sayre for Plaintiffs and Respondents.

          OPINION

          FYBEL, J.

         INTRODUCTION

         Defendant and Appellant Rugger Investment Group LLC (Rugger) entered into a contract to sell an airplane to Plaintiffs and Respondents Magic Carpet Ride, LLC (MCR) and Kevin T. Jennings. Rugger deposited a lien release into escrow eight days after the expiration of a 90 day period in which it was required to do so. The trial court found Rugger could not claim substantial performance because it had violated the plain language of the contract. For that reason, the court granted the motion of MCR and Jennings for summary adjudication of their breach of contract cause of action and for summary adjudication of Rugger's rescission and breach of contract causes of action. Voluntary dismissal of other causes of action produced an appealable final judgment.

         We reverse and remand. Whether Rugger substantially performed its contract obligations is a triable issue of material fact that defeats summary adjudication. We hold that a provision in the parties' contract making time of the essence does not automatically make Rugger's untimely performance a breach of contract because there are triable issues regarding the scope of that provision and whether its enforcement would result in a forfeiture to Rugger and a windfall to MCR.

         FACTS

         In September 2015, Jennings and Rugger entered into a purchase and sale agreement (the Agreement) by which Jennings agreed to purchase from Rugger an aircraft, identified as a pre owned 2000 JetProp DLX Conversion of 1989 Malibu JetProp (the Aircraft). The purchase price was $610, 000. Jennings made a $50, 000 down payment. Jetstream Escrow & Title Service, Inc. was the escrow agent for the transaction. Paragraph 6.14 of the Agreement states: “Unless specifically stated to the contrary herein, time shall be of the essence for all events contemplated hereunder.”

         Paragraph 2.6 of the Agreement required Rugger to transfer the Aircraft on the closing date free and clear of all liens and encumbrances. Rugger was not able to comply with this requirement due to a mechanic's or materialman's lien filed against the Aircraft by Cutter Aviation Phoenix, Inc. (Cutter).

         As a consequence, MCR and Rugger entered into an amendment to the agreement (the Amendment). The Amendment identified MCR as the buyer instead of Jennings. The Amendment gave Rugger 90 days from the date of closing in which to provide one of three means of releasing the Cutter lien, including, “Lien Release fully executed by Cutter... in original form delivered to Escrow Agent, recognized and accepted by the FAA [Federal Aviation Administration ].” Rugger agreed to hold back $90, 000 with escrow for a period of 90 days.

         Paragraph 3a. of the Amendment states that if Rugger can obtain a lien release by any one of the three ways identified in paragraph 2 within the 90 day term, then the entire amount of the holdback would be released to Rugger on the 90th day. Paragraph 3b. of the Amendment states that if Rugger cannot obtain a lien release by any one of the three ways identified in paragraph 2 within the 90 day term, then Rugger “agrees to release entire amount of holdback to Buyer at the expiration of the 90 day term.”

         Jennings, on behalf of MCR, and Rugger agreed the closing date would be February 23, 2016. An aircraft bill of sale dated February 23, 2016 passed title to the Aircraft from Rugger to MCR, and Jennings accepted the Aircraft on that date.

         Rugger did not obtain a lien release within 90 days of February 23, 2016. Rugger obtained a lien release from Cutter on May 31, 2016, eight days after the expiration of the 90 day period, and delivered the lien release to escrow. The lien release was on an FAA form entitled “Notice of Recordation-Aircraft Security Conveyance.” The lien release was not filed with the FAA. Rugger asked that $38, 000 be released to it from escrow to cover the amount that Jeffrey Brannon (Rugger's managing member, not a party to this appeal) had paid to Cutter to get the lien released. Jennings did not agree to that request.

         PROCEDURAL HISTORY

         Jennings filed a complaint against Rugger for breach of contract and breach of the implied covenant of good faith and fair dealing. An amended complaint added MCR as a plaintiff. The amended complaint alleged Rugger breached the Amendment by failing to obtain a release of the Cutter lien within the requisite 90 day time period and by refusing to release the $90, 000 holdback.

         An amended cross complaint brought by Rugger and Brannon asserted causes of action against Jennings for breach of contract, breach of implied contract, and rescission of the Amendment. The amended cross complaint alleged Jennings breached the Amendment by refusing to allow the escrow to release the $90, 000 holdback to Rugger. The trial court sustained without leave to amend Jennings's demurrer to the breach of implied contract cause of ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.