United States District Court, D. New Jersey
MCNULTY, UNITED STATES DISTRICT JUDGE
Falcon Jet Corporation ("Dassault Jet") engaged
China Falcon Flying Limited ("China Falcon"), owned
and led by its principal Cheung "Michelle" Wang, to
promote specific models of its Falcon series of aircraft in
the Chinese business jet market. In return, China Falcon
would receive a commission or finder's fee of about
2%-2.5% for each sale made in that market. The parties
dispute the commissions on four sales of Falcon aircraft in
China. Dassault Jet now moves for summary judgment in its
favor. For the foregoing reasons, I will grant Dassault
Jet's motion for summary judgment as to the claims of
breach of contract for the sales of s/n 721, s/n
212, and s/n 244, but deny the motion as to the breach of
contract claim for s/n 141. I will also deny Dassault
Jet's motion for summary judgment as to the claims for
breach of the implied covenant of good faith and fair
dealing, but grant its motion for summary judgment as to the
claims of unjust enrichment and quantum meruit.
Summary of Facts
September 1, 2009, China Falcon and Dassault Jet entered into
a Finder's Fee Agreement ("FFA"), which would
expire on December 31, 2009. (Def. St. ¶ 1; Pl. Resp.
¶ 1.) Under this agreement, China Falcon would earn a
2.5% commission on the sale of certain Falcon aircraft to
two companies, Minsheng Bank and Deer Jet. (Def. St. ¶
2; Pl Resp. ¶ 2.) The agreement contained language
stating that this commission percentage could "be
reduced proportionally, if the sale occurred] at a price less
than [Dassault Jet]'s current list price." (Def. St.
¶ 3; Pl Resp. ¶ 3.) The agreement also conditioned
the eligibility of China Falcon to receive a commission on
(a) the buyer had to "enter into and sign a binding and
enforceable contract of sale with [Dassault Jet] for the
purchase of one or more new Falcon aircraft on or before
December 31, 2009"; and
(b) "the buyer who enters into the contract of sale must
 complete the acquisition,  fully pay for and  take
title to the aircraft in accordance with the terms of the
contract." (Def. St. ¶ 4; Pl. Resp. ¶ 4
([bracketed] numbers added.)
Falcon disputes, however, that the parties actually acted in
accordance with these provisions. It claims that through a
course of dealing it was understood that China Falcon became
eligible to receive its commission upon the completion of
condition (a), supra, only (i.e., the signing of the
purchase agreement) only. (Pl. Resp. ¶¶ 3-4.) The
parties also dispute China Falcon's exact role in the
execution of purchase agreements and the events after the
signing those agreements. (Pl. St. ¶¶ 13-14; Def.
Resp. ¶¶ 13-14.)
was first amended in January 2010. That amendment extended
the duration of the FFA to December 31, 2011, if either
Minsheng Bank or Deer Jet purchased five Falcon aircraft
before June 30, 2010. (Def. St. ¶¶ 5, 7; Pl. Resp.
¶¶ 5, 7.) If not, the FFA would expire on December
31, 2010. (Def. St. ¶ 7; Pl. Resp. ¶ 7.) China
Falcon claims it was not aware of the condition governing
termination at the time of the amendment's signing. (PI,
St. ¶ 1.)
parties amended the FFA a second time on January 26, 2011.
(Def. St. ¶ 9; Pl. Resp. ¶ 9.) This Second
Amendment to the FFA dropped Deer Jet as one of the two
specified purchasers, leaving only Minsheng Bank. (Def. St.
¶ 10; Pl. Resp. ¶ 10.) Dassault Jet points to the
language of the Second Amendment, which replaced the 2.5%
commission with a flat fee of $732, 500 for the sale of
101 and a 2.5% commission on the sale of s/n 133. (Def. St.
¶ 11; see also Tor. Decl., Ex. 5, § II.)
As to aircraft other than s/n 101 and s/n 133, the Second
Amendment left the prior terms and conditions unchanged, and
specifically provided that the agreement would stay in force
until December 31, 2011 (as agreed in the First Amendment).
(Tor. Decl, Ex. 5, § III.)
Cheung claims that she did not read this Second Amendment but
admits she "voluntarily" signed it after Dassault
had signed it. (Def. St. ¶ 13; Pl. Resp. ¶ 13.) Ms.
Cheung also asserts that she was not able to read English at
the time and that the Second Amendment as orally described to
her was different from the agreement as written. (Pl. Resp.
¶ 13.) "It's only a standard agreement, "
she testified, "and it's such a big company. I have
a trust in the company." (Id.) China Falcon
alleges that "at all relevant times" and
"(according to the parties' course of dealing"
China Falcon would continue to earn a 2.5% commission for all
sales to Minsheng and "each of its 'special purpose
venture' subsidiaries." (Pl. Resp. ¶ 11;
see also Pl St. ¶ 2.)
on September 2, 2009, China Falcon and Dassault Jet entered
into a Sales Representation Agreement ("SRA"), with
an expiration date of December 31, 2010. Under the SRA, China
Falcon would earn a 2% commission upon the sale of any
aircraft model from a specified list of models to private
companies in the People's Republic of China (other than
Minsheng Bank or Deer Jet, which were covered by the FFA).
(Def. St. ¶¶ 18-20; Pl Resp. ¶¶ 18-20.)
To qualify for this commission, the sale had to result
"predominantly and primarily" from China
Falcon's services. (Def. St. ¶ 21; Pl Resp. ¶
21.) The parties subsequently amended the SRA four separate
times, with the fourth amendment extending the SRA until
December 31, 2013. (Def. St. ¶ 23; Pl Resp. ¶ 23.)
issues in this lawsuit involve the commissions for the sale
of four aircraft. Those aircraft are designated s/n 721; s/n
212; s/n 244; and s/n 141. China Falcon claims that,
regardless of the "technical" language of the
agreements, the parties conducted themselves at all relevant
times with the understanding that China Falcon would earn a
2.5% commission on sales to Minsheng and Deerjet, while
earning a 2% commission on all other sales. (Pl St. ¶
8.) China Falcon claims moreover that this
"understanding" between the parties survived the
expiration of the relevant written agreements and is
documented by email communications between them. (See Pl St.
review the facts as to each of the four aircraft sales at
26, 2013, De Hong Capital Co. Ltd. signed a contract with
Dassault Jet to purchase s/n 721 for $27 million. (Def. St.
¶ 24; Pl Resp. ¶ 24.) S/n 721 is a model 7200s
airplane manufactured by Dassault Jet. (Def. St. ¶ 25;
Pl Resp. ¶ 25.) This model was not listed in the SRA.
(See Tor. Decl, ex. 2 at 2 ("[Dassault Jet] is engaged
in marketing and selling new Falcon 7X, Falcon 900 LX/DX, and
Falcon 2000DX/LX.").) Dassault Jet contends that this
sale does not fall within the SRA, and that China Falcon, by
signing a separate agreement specific to die sale of s/n 721,
agreed to a flat $200, 000 commission for this sale. (Def.
St. ¶ 26; Tor. Decl, Ex. 9, at 3.) China Falcon instead
claims that the parties contemplated that this sale would
fall within the SRA, entitling it to a larger, 2% commission.
(Pl Resp. ¶ 26.) China Falcon calculates that 2%
commission to be at least a $540, 260. (AC ¶ 35.)
time, the parties apparently disputed China Falcon's
entitlement to a finder's fee. China Falcon claims that
it pursued "this customer" for three years in an
attempt to close the sale and invested more than $200, 000 in
its efforts to do so, (Pl St. ¶ 35.) Dassault Jet
counters that the transaction-specific contract governing s/n
721 settled any dispute and that they paid China Falcon $200,
000 according to that agreement. (Def. Br. at 2.)
September 13, 2011, Minsheng Guilong (Tianjin) Aviation
Leasing ["Minsheng Tianjin"], a subsidiary of
Minsheng, signed a purchase agreement for s/n 163. (Def. St.
¶ 35; Pl Resp. ¶ 35; Pl St. ¶ 48; Def. Resp.
¶ 48.) However, Minsheng Tianjin failed to take delivery
of s/n 163. (Def. St. ¶ 36; Pl Resp. ¶ 36.)
September 3, 2013, Minsheng Jiayi Leasing (Fenglong)
["Minsheng Jiayi"], another Minsheng subsidiary,
signed an agreement with Dassault Jet to purchase a second
aircraft, s/n 212, for $49.65 million. (Def. St. ¶ 38;
Pl. Resp. ¶ 38; Pl. St. ¶ 50; Def. Resp. ¶
50.) China Falcon and Dassault Jet entered into an agreement
[the "s/n 212 Agreement"] on April 24, 2014, which
specified that China Falcon would receive a $150, 000 fee for
this sale of s/n 212. (Def. St. ¶ 40; Pl. Resp. ¶
40; Tor. Decl., ex. 12, § III.) At the time of the
signing of the s/n 212 Agreement, Ms. Cheung believed the fee
offered by Dassault Jet was unfair. (Def. St. ¶ 44; Pl.
Resp. ¶ 44.) She claims that she signed the agreement to
receive $150, 000 only because she believed that China Falcon
would otherwise get nothing at all. (Pl. St. ¶ 93.)
Falcon contends that, for this s/n 212 sale, it was entitled
to a 2.5% commission under the FFA. (Pl. Resp. ¶ 40.)
The sale price, it says, was approximately $49.5 million, and
its 2.5% commission should have amounted to approximately $1,
203, 650. (AC ¶ 45.) China Falcon's reasoning is
somewhat complex. It characterizes the sale of s/n 212 as not
a simple sale, but a "swap" (i.e., a substitute
purchase of some kind) involving s/n 163, s/n210, and then
212 sale, says China Falcon, should receive the benefit of
the terms that would have governed the s/n 163 sale if it had
closed. The original (abortive) purchase of s/n 163, says
China Falcon, fell within the window of the Second Amendment
to the FFA, because the purchase agreement for s/n 163 was
executed on September 13, 2011, before the expiration of the
Second Amendment on December 31, 2011. (Pl. St. ¶¶
49, 53; Klein Decl., ex. 32, at 9; see also Pl. St.
¶ 55 (claiming that Dassault Jet admitted to the
transaction being a "swap").) Dassault Jet points
to evidence that the terms for the sale of s/n 163 were
materially different than those for s/n 212, so that the two
cannot be regarded as part of a single, continuous
"swap" transaction. (Def. Resp. ¶ 49.)
China Falcon claims that the parties' agreement or course
of dealing, "as borne out by contemporaneous
communications, " was that the 2.5% rate would apply to
all planes sold to Minsheng, during and even after the
expiration of the Second Amendment. (Pl. St. ¶ 54.)
China Falcon characterizes this "swap" as part of a
bad faith strategy to prevent it from receiving a commission
on the sale of s/n 163. (Pl. St. ¶ 69.) Here, China
Falcon points to an agreement between Minsheng and Dassault
Falcon, entitled the "Business Assistance
Agreements" ("BAAs"). It claims that, under
the BAAs, funds that should have been disbursed to China
Falcon as commissions were instead given to Minsheng to
promote, distribute, and market Falcon aircraft in China.
(Pl. Resp. ¶ 96.) That arrangement allegedly gave
Minsheng an incentive to terminate its purchase agreement,
with the knowledge that it could receive "a bigger back
end" if it did not take delivery of the aircraft. (Pl.
St. ¶ 77.) Dassault Jet admits only that it had
"business assistance agreements" with Minsheng for
the promotion of its aircraft. Dassault Jet claims that it
handed copies of these agreements to China Falcon during the
negotiations, which Ms. Cheung denies. (Def. St. ¶¶
96-98; Pl. Resp. ¶¶ 96-98.)
the sale of s/n 721, Dassault Jet argues that, though the
parties initially disputed the finder's fee owed on the
aircraft, they nevertheless executed a transaction-specific
contract governing China Falcon's finder's fee for
s/n 212 and that they paid China Falcon according to that
agreement. (Def. Br. at 2.)
September 15, 2011, Minsheng Bolong (Tianjin) Aviation
Leasing Co. Ltd. ["Minsheng Bolong"] signed a
purchase agreement to purchase s/n 157 for $52.1 million.
(Def. St. ¶ 47; Pl. Resp. ¶ 47.) Though the
purchase agreement contemplated an April 30, 2012 delivery
date for the aircraft (Def. St. ¶ 48; Pl. Resp. ¶
48), Minsheng Bolong refused to take delivery of die aircraft
on that day, saying that it had been unable to arrange a
resale or lease of the aircraft. (Def. St. ¶ 49; Pl.
Resp. ¶ 49.) In response, Dassault Jet adjusted its
production schedule to give Minsheng greater flexibility to
market the aircraft to its prospective client base. (Def. St.
¶ 50; Pl. Resp. ¶ 50.) As of October 13, 2013,
Minsheng Bolong was still refusing to accept delivery. (Def.
St. ¶ 51; Pl Resp. ¶ 51.) These delays caused
Dassault Jet to incur expenses for maintenance, storage, and
labor. (Def. St. ¶ 52; Pl. Resp. ¶ 52.) Dassault
Jet finally sold s/n 157 to another buyer. (Def. St. ¶
53; Pl. Resp. ¶ 53.)
December 24, 2013, another Minsheng entity, Minsheng Fenglong
Aviation Leasing Co. Ltd. ["Minsheng Fenglong"],
which had been assigned die purchase rights previously held
by Minsheng Bolong, entered into a purchase agreement with
Dassault Jet to purchase not s/n 157 but another jet, s/n
244. (Def. St. ¶¶ 54-55; Pl. Resp. ¶¶
54-55.) That purchase agreement specified a price of $47.95
million for the aircraft. (Def. St. ¶ 58; Pl Resp.
¶ 58.) However, Minsheng Fenglong refused to accept
delivery. (Def. St. ¶ 59; Pl Resp. ¶ 59.) Dassault
Jet, wary of repeating the situation with s/n 157, offered
Minsheng Fenglong financing on the sale and a discount of
$500, 000 if delivery occurred within 45 days. Minsheng
Fenglong accepted that offer. (Def. St. ¶ 60; Pl Resp.
¶ 60.) On November 26, 2014, Dassault Jet and Minsheng
Fenglong entered into an agreement including 0.75% per annum
financing, a delivery date of December 14, 2015, and an
additional purchase "incentive" (i.e., discount) of
$500, 000 for prompt delivery. (Def. St. ¶ 62-64; Pl
Resp. ¶ 62-64.) The price of the aircraft was $47.95
million without the $500, 000 purchase incentive. (Def. St.
¶ 65; Pl Resp. ¶ 65.) Dassault Jet states that
China Falcon had "no personal knowledge" of die
events and negotiations between Dassault Jet and Minsheng
Fenglong that resulted in this sale. (Def. St. ¶ 66)
China Falcon states that Ms. Cheung was involved in
"many meetings" regarding both sales (s/n 157 and
s/n 244). (Pl Resp. ¶ 66.)
Falcon believes it was entitled to a 2.5% commission,
amounting to at least a $1, 186, 250, for the sale of s/n
244. (AC ¶ 54; Pl St. ¶ 112.) It characterizes the
sale of s/n 157 to a different buyer and the sale of s/n 244
to Minsheng Fenglong as a swap" and claims that Ms.
Cheung was involved in many meetings regarding die sale of
both aircraft. (Pl St. ¶¶ 100, 107, 113.)
Jet counters that this was no continuous "swap."
After years of negotiation and a failed delivery, it simply
sold s/n 157 to another, separate entity and, in a separate
transaction, sold s/n 244 to a different Minsheng subsidiary.
(Def. Resp. ¶ 107.) It states that at the time of the
sale of s/n 244 there existed no contract under which China
Falcon could earn a finder's fee.
October 2012, Ms. Cheung informed Dassault Jet that she had
identified a potential purchaser of s/n 141, Mr. Li Guangyu,
who offered a "very low" price of $46 million.
(Def. St. ¶¶ 69-70; Pl. Resp. ¶¶ 69-70.)
She communicated to Mr. Li Dassault Jet's counteroffer of
$52 million, with an eight-week delivery schedule and $1
million commission to China Falcon. (Def. St. ¶ 71-72;
Pl. Resp. ¶ 71-72.) Dassault Jet warned Ms. Cheung,
though, that "if further negotiations are needed, it
will be deducted from your success fees." (Def. St.
¶ 73; Pl. Resp. ¶ 73.) Mr. Li rejected the
counteroffer. (Def. St. ¶ 74; Pl Resp. ¶ 74.) On
December 18, 2012, Dassault Jet revised its offer to $49.5
million with a $1 million credit toward the Falcon Care
aircraft maintenance program, but with no commission to China
Falcon. (Def. St. ¶¶ 75-76; Pl Resp. ¶¶
75-76.) Upon reviewing this offer, Ms. Cheung requested that
China Falcon receive a $500, 000 commission in the event of a
sale, a proposal which Dassault Jet rejected. (Def. St.
¶¶ 77-78; Pl Resp. ¶¶ 77-78.) In an
email, Ms. Cheung noted that in the past she had
"compromise[d]" her commission in order to close a
sale, and she informed Dassault Jet that "[i]f we can
fulfill die price the customer wants of 47 million, then I
don't need commission." "If we do so, "
she wrote, "at least the customer will be very happy,
and he will introduce other customers to me." (Def. St.
¶¶ 79-80; Pl Resp. ¶¶ 79-80.) The sale,
however, did not go through on those terms.
December 20, 2012, Dassault Jet offered Mr. Li not s/n 141
for $47 million, but a different model jet for $48.2 million,
with a commission to China Falcon of $200, 000. (Def. St.
¶¶ 81-82; Def. Resp. ¶¶ 81-82.) Dassault
Jet states that Ms. Cheung informed them that this commission
was acceptable to her (Def. St. ¶ 83), at least if the
plane sold for that specific price. (Def. St. ¶ 84; Pl
Resp. ¶ 84.) However, Mr. Li rejected this offer because
the delivery date was unacceptable. (Def. St. ¶ 85; Pl
Resp. ¶ 85.)
December 31, 2012, the negotiations returned to the subject
of s/n 141. Mr. Li offered a price of $48 million for s/n
141. (Def. St. ¶ 89; Pl. Resp. ¶ 89.) Dassault Jet
informed Ms. Cheung of the offer and told her that she would
not receive a commission if the sale occurred at that price.
(Def. St. ¶ 90; Pl. Resp. ¶ 90.) The sale for s/n
141 eventually went through with a purchase price of $49.5
million which included $1 million worth of Falcon Care
maintenance. (Def. St. ¶¶ 92-93; Pl. Resp.
¶¶ 92-93.) Mr. Li's company paid for the
aircraft and accepted delivery on May 16, 2013. (Def. St.
¶ 94; Pl. Resp. ¶ 94.)
April 11, 2013, Dassault Jet responded to an email that Ms.
Cheung had sent during negotiations for the purchase of s/n
141 by Mr. Li. A Dassault Jet representative wrote that
"I confirm that [Dassault Jet] will stay in phase with
your agreement of not receiving any finder['s] fee"
and that "[China Falcon] agreed [to the sale of s/n 141]
at a very low price and accepted not [to] take any finder[s]
fee." (PI St. ¶ 35; Def. Resp. ¶ 35.) China
Falcon says that it never agreed to forgo a commission on a
sale at a price of $49 million. (PI St. ¶ 36.) It also
claims that Dassault Jet repeatedly tried to cut it out of
the negotiation process to force it into a reduced commission
or no commission at all. (Pl. St. ¶ 41.)
parties agree that the then-operative Fourth Amendment to the
SRA, executed on January 24, 2013, shortly before the
execution of the purchase agreement for s/n 141, did not
contain a specific reference to the commission for s/n 141.
(Pl. St. ¶¶ 44-45; Def. Resp. ¶¶ 44-45.)
China Falcon claims that it was practice between the parties
not to identify not to identify each and every plane, but
only those that deviated from the "standard"
commission rate that would govern that sale. (Pl. St. ¶
46.) In support it cites the Third Amendment to the SRA which
made such a provision for a particular plane. (Id.)
Falcon states that, under the Fourth Amendment of the SRA, it
was entitled to a 2% commission on the $49 million sale price
of s/n 141, amounting to at least $1, 393, 910. (AC ¶
60; Pl. St. ¶ 17; Pl St. ¶ 47)
English Capability of Ms. Cheung
is also a dispute in the record as to Ms. Cheung's
ability to speak, read, and write the English language.
Dassault Jet claims that Ms. Cheung "understood"
English during the negotiations, though she used a number of
assistants, including her then-boyfriend, to help communicate
with Dassault Jet and to translate documents. (Def. St.
¶ 95.) Ms. Cheung, however, denies that she understood