Asia Pacific Airlines under Aero Micronesia is suing a California-based ground handling company for breach of contract after its allegedly failed to deliver two cargo loaders that the airline had ordered.
Steven Pixley, who represents Asia Pacific, is suing Mercury GSE for breach of contract, restitution, and conversion. Asia Pacific is demanding a jury trial and is seeking damages and the return of $144,000 that the company claims they paid as a security deposit. The complaint also asks the court to award Asia Pacific pre-judgment and post-judgment interest, costs and other awards, plus other relief the court deems just.
Mercury GSE has asked the U.S. District Court for the NMI to dismiss the lawsuit due to lack of personal jurisdiction and improper venue. Sean Frink, who represents Mercury, explained that jurisdiction over a defendant is determined by looking at the defendant’s contacts with the jurisdiction, not the plaintiff’s. Frink argues that Mercury simply has had no contact with the CNMI.
Frink said Asia Pacific essentially admitted to it by making no real allegations of Mercury’s contact with the CNMI in its complaint. Instead, Asia Pacific Airlines rested its jurisdiction and venue argument wholly on the facts that the airline, a Guam corporation, regularly does business in the CNMI and is owned by a CNMI corporation and that the airline claims that it intended to use the equipment it was to purchase from Mercury in the CNMI.
According to the lawsuit, on or about June 25, 2018, APA president Adam Ferguson met with James Spiegel, a sales representative for Mercury GSE, and Bob Travis, its chief operating officer in Torrance, California, to talk about buying two 2000 FMC Commander 15 cargo loaders. They also discussed the repair of a used Lantis Loader KL-206 and the shipment of this cargo loader from the Seattle airport to Mercury GSE’s Santa Fe Springs facility.
On July 24, 2018, Spiegel emailed Ferguson and offered to sell two cargo loaders that they claimed were fully serviced, repaired and painted for $165,000 each. Two days later, Spiegel told Ferguson that Mercury GSE would sell them the two cargo loaders refurbished and painted for $160,000 each. Spiegel added the repair work would start after the beginning of September once they had completed the move. The estimate completion time for both units was about 8-10 weeks but Mercury required a 45% deposit to start work on all orders. On July 27, 2018, Asia Pacific wired $158,028 from its Bank of Guam account to Mercury GSE’s account in Hawthorne, California.
APA said the $144,000 from the wire transfer was the security deposit for the two cargo loaders and the remaining $14,028 was payment for shipping costs for the Lantis Loader KL-206.
On May 20, 2019, Ferguson spoke with Mercury’s CEO regarding the status of the two cargo loaders and learned that no work had been done on the two equipment and they had been, in fact, sold to a third party.
APA claims Mercury has failed to return the deposit to date, maintaining that no contract existed between the two parties.