In a riveting legal battle concerning a high-stakes aircraft transaction, the Tenth Circuit delivered a decisive blow affirming that an aircraft seller is not obligated to pay a purchaser $500,000 in insurance proceeds. The proceeds were intended to cover repairs to the aircraft’s permanent engines and the installation of temporary engines. The ruling, resonating with intricacies and dramatic turns, shed light on a contentious agreement marred by a mutual mistake of fact.
Invalid Agreement Sparks Legal Showdown
The heart of the matter lies in a purchase and sale agreement inked in October 2021. LMI II LLC, the seller, and Accelerated LLC, the buyer, entered into a pact for the sale of a Bombardier Global Express aircraft. However, complications ensued when an aircraft maintenance company hired by Accelerated unearthed damage to the jet, prompting a renegotiation that saw LMI agreeing to a price reduction in exchange for Accelerated accepting the aircraft’s condition sans a complete prepurchase inspection.
A Game of Insurance and Intrigue Unfolds
With the deal struck, LMI, armed with an insurance policy through AIG Aerospace Insurance Services Inc., initiated a claim for engine damage. AIG, in a twist of fate, confirmed coverage under the policy and proposed a settlement under Coverage R, providing up to $500,000 for temporary replacement parts rental expense. Accelerated and LMI, eager to resolve the matter, executed an insurance payout agreement.
