Fifth District Rules on Appeals Arising from Breach of Contract Action

Posted on: August 21, 2013

Bombardier v. Signature, 5D12-2401, 5D12-2403 (Fla. 5th DCA 2013):

This consolidated appeal and cross-appeal arose from a breach of contract dispute. Bombardier manages an aircraft fleet for use by its clients across the United States. Signature is a Fixed Base Operator (“FBO”), providing ground services to aircraft owners/operators at airports nationwide. Bombardier and Signature entered into an agreement for Signature to perform FBO services on Bombardier’s aircraft fleet at numerous airports. At issue in the agreement was Signature’s responsibility for damage to Bombardier aircraft.

Between 2004 and 2006, Signature damaged six aircraft in Bombardier’s fleet. Bombardier repaired the aircrafts, presented damage claims to Signature, and demanded payment for damages. In April 2009, Bombardier submitted a final demand to Signature for $1,267,782.78. Signature refused to pay.

On August 17, 2009, Bombardier sued Signature. Signature argued that the statute of limitations precluded some of Bombardier’s claims. The trial court allowed Bombardier to go forward on all six breach of contract counts. The jury found Signature’s employees damaged all six aircraft, but Bombardier was not entitled to recover any damages because it made an unreasonable pre-suit demand.

The Fifth District agreed with Signature’s appeal that the statute of limitations barred three of the counts. The agreement between the parties specified the application of Texas law. In Texas, a party asserting a breach of contract claim must sue within four years after the claim accrues. Further, a cause of action accrues and the statute of limitations begins to run when facts come into existence that authorize a party to seek a judicial remedy. Consequently, any claim accruing more than four years prior to August 17, 2009 would be time-barred.

With regard to the other three timely filed counts, the Fifth District reversed the final judgment. The jury should not have been asked to resolve whether Bombardier had made a reasonable pre-trial demand. The trial court’s ruling led to a punitive forfeiture of Bombardier’s right to damages to three of its aircraft, a result not permitted under Texas law. A new trial on damages regarding the three timely filed counts is necessary.