Center Capital Corp. v. PRA Aviation, LLC

In 2007 PRA Aviation (PRA) (defendant) financed the purchase of a 1987 Learjet 55B with $3 million from Center Capital Corp. (plaintiff). When PRA defaulted on its obligation in 2009, Center Capital repossessed the aircraft. Center Capital planned to sell the Learjet 55B, and it hired a professional broker, J. Phillip Jordan, who had sold 10 to 15 aircraft per year. In preparing a value estimate for the aging Learjet 55B, Jordan used market data from the Learjet 60, the condition of the Learjet 55B, and the increase in value from moving the lavatory from the front to the back of the plane to arrive at a value of $1.45 million. Jordan’s company then marketed the jet with a sale price of $1.595 million. Jordan received offers of $1 million, $1.2 million dollars, and $1.35 million dollars. The highest bidder was offered a discount of $50,000 if the bidder would take the plane as is without conducting an inspection. The bidder accepted. The Learjet 55B was sold for $1.3 million. Center Capital received $1.189 million from the sale. However, this amount was far short of the $3 million PRA owed, so Center Capital sued PRA for the deficiency. PRA did not dispute its breach of the contract or its liability to Center Capital. However, at trial, PRA argued that Center Capital did not conduct the sale of the Learjet 55B in a commercially reasonable manner. PRA hired its own expert, Samuel Tabaei, who testified that he believed the Learjet 55B could be worth $2.4 million to $2.9 million. Tabaei grounded his opinion on his own experience with the Learjet 55B as a pilot and mechanic, formerly in PRA’s employ. Tabaei did not assess market data or the prices that planes actually sold for in the prior year. Tabaei was not a broker and had not sold airplanes in a professional capacity. Tabaei did testify that avoiding the inspection was a smart move that likely increased the sales price by as much as $150,000.