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Fabas Consulting Int'l, Inc. v. Jet Midwest, Inc.

United States District Court, W.D. Missouri, Western Division

February 10, 2015

Fabas Consulting Int'l, Inc., Plaintiff,
v.
Jet Midwest, Inc., Defendants

Page 1027

For Fabas Consulting International, Inc., Plaintiff: Carl H. Hoffman, Jr., LEAD ATTORNEY, Hoffman & Hertzig, PA, Coral Gables, FL; Arthur K. Shaffer, Intellectual Property Center, LLC, Overland Park, KS.

For Jet Midwest, Inc., Defendant: Amber F. Steinbeck, LEAD ATTORNEY, Husch Blackwell LLP - KCMO, Kansas City, MO; R Pete Smith, LEAD ATTORNEY, McDowell Rice Smith & Buchanan, Kansas City, MO.

Page 1028

ORDER

John T. Maughmer, United States Magistrate Judge.

On October 17, 2014, plaintiff Fabas Consulting International, Inc. (" Fabas" ) instituted the present federal litigation against defendant Jet Midwest, Inc. (" Jet" ). According to the Complaint, Fabas, a Florida corporation, is in the business of dealing in new and used commercial aircraft parts for resale and lease to scheduled and regional commercial airlines in Latin America. Conversely, Jet is a supplier of used commercial aircraft parts and components, including aircraft engines, landing gear, wheels, brakes, auxiliary power units, windshields and thrust reversers. In May of 2014, Fabas paid $150,000 for an auxiliary power unit[1] for one of its customers in Mexico. The COMPLAINT alleges that the auxiliary power unit delivered to Mexico " was unserviceable and otherwise defective due to extensive contamination with sulfation, oxide, fungus and corrosion, and that the [auxiliary power unit] otherwise failed to meet the requirements of [Aviation Suppliers Association Quality System Standard] ASA100 and [Federal Aviation Administration Advisory Circular] FAA AC005." Consequently, Fabas brought this suit against Jet alleging:

(a) fraudulent misrepresentation,
(b) negligent misrepresentation,
(c) breach of contract, and
(d) breach of the Florida Deceptive and Unfair Trade Practices Act [Fla. Stat. § § 501.201, et seq.].

Presently pending before the Court is Jet's Motion To Dismiss [Doc. 10], wherein Jet seeks dismissal under Fed.R.Civ.P. 12(b)(6) of Fabas' two misrepresentation claims as well as the claim for a violation of the Florida Deceptive and Unfair Trade Practices Act (" FDUTPA" ). For the reasons set out herein, the motion is granted.

With regard to some misrepresentation claims, Missouri[2] law provides that the " economic loss doctrine" prohibits a plaintiff from seeking to recover in tort for economic losses that are contractual in nature. Captiva Lake Investments, LLC v. Ameristructure, Inc., 436 S.W.3d 619, 628 (Mo. App. [E.D.] 2014). Accordingly, in most contract cases:

Recovery in tort for pure economic damages [is] limited to cases where there is personal injury, damage to property other than that sold, or destruction of the property sold due to some violent occurrence.

Page 1029

Id. Jet argues that this Missouri economic loss doctrine bars Fabas' misrepresentation claims -- whether based on negligence or based on fraud. The Court agrees.

Even a cursory reading of the Complaint discloses that Fabas is seeking to recover in tort for economic losses that are contractual in nature. The fact that Fabas also alleges fraud does not change this conclusion. As explained by one Missouri court:

Two critical factors in examining whether a fraud claim is independent of a contract claim under the economic loss doctrine are (1) whether the subject matter of the alleged misrepresentations was incorporated into the parties' contract, and (2) whether the plaintiff suffered additional damages outside the contract as a result of the alleged fraud.

Compass Bank v. Eager Road Associates, LLC, 922 F.Supp.2d 818, 827 (E.D. Mo. 2013). In this case, in its ...


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