BP Group, Inc. v. Kloeber
United States Court of Appeals for the Eighth Circuit
664 F.3d 1235 (2012)
Florida corporation BP Group, Inc. (plaintiff) subleased a jet aircraft to Capital Wings Airlines, Inc. (CWA) (codefendant) under a nonexclusive agreement, meaning BP could also use the jet. CWA’s owners, David Kloeber, Jr. and Gerald Trooien (codefendants) personally guaranteed CWA’s obligations. The agreement required CWA to pay BP based on the numbers of hours flown each month, with a monthly minimum of $80,000, minus BP’s hours of use. It also allowed CWA to paint and refurbish the jet at CWA’s expense. BP flew the jet to Colorado, where it was refurbished and painted to look exactly like planes owned by CWA’s affiliate. But the parties disputed who was supposed to pay the nearly $650,000 bill, and the refurbisher held the jet. After six months, BP paid the bill and retrieved the jet. A month later, BP found another airline to sublease the jet for less money and no monthly minimums. BP sued to recover what CWA was supposed to pay and what BP paid to paint, refurbish, and retrieve the jet, minus what BP earned from CWA’s replacement. The court applied a Florida damages statute allowing a lessor to recover revenue lost from a breached lease if the lessor finds a replacement under a substantially similar lease, reasoning that Kloeber did not rebut BP’s argument that no replacement would pay $80,000 monthly minimums during an economic downturn. The court calculated damages starting with lost revenue of $80,000 monthly and entered summary judgment awarding over $1.5 million. Kloeber appealed on multiple grounds, including the court’s calculation of damages, arguing that BP did not adequately mitigate its damages and could have found a replacement sublessee willing to pay similar amounts. BP countered that the leases were more similar than different despite the lack of monthly minimums, and that other contractual provisions made up for the difference.
Rule of Law
Holding and Reasoning (Riley, J.)
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