Coastal Aviation, Inc. v. Commander Aircraft Co.

937 F. Supp. 1051 (1996)

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Coastal Aviation, Inc. v. Commander Aircraft Co.

United States District Court for the District for the Southern District of New York
937 F. Supp. 1051 (1996)

  • Written by Mike Begovic, JD

Facts

Coastal Aviation, Inc. (Coastal) (plaintiff), a company selling aircraft through a network of dealerships, entered into negotiations with Commander Aircraft Co. (Commander) (defendant), a manufacturer of aircraft, to obtain exclusive rights to sell Commander’s airplanes in certain markets. Coastal expressed strong interest in reserving certain markets, and it promised Commander strong sales numbers through its dealership model. Coastal and Commander engaged in a prolonged series of discussions and meetings that focused on discounts, profit margins, and marketing. Coastal executives met with Commander’s president, William Boettger, and its vice president, Matt Goodman, during a showcase of Commander’s new aircraft. After this meeting, William Morton, Coastal’s vice president, engaged in written correspondence with Boettger. During this correspondence, Boettger wrote a letter to Morton, which stated, in part: “I have requested Goodman to reserve New York and New Jersey for Coastal until we finish our discussions.” Ultimately, Commander awarded many of the territories Coastal sought to a competitor. Coastal continued to pursue other territories and, after a long series of negotiations, was informed that all remaining territories were reserved to other entities. Coastal filed a suit alleging breach of an option contract for the territories relating to Boettger’s letter and seeking damages for lost profits. Coastal based its claim on New York Uniform Commercial Code (NYUCC) § 2-205, which permitted the formation of option contracts without consideration. A two-day bench trial was held, at which Coastal presented as evidence all written correspondence and testimony of the oral correspondence.

Rule of Law

Issue

Holding and Reasoning (Conner, J.)

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