Company Reposesses Zero G Aircraft Engines, Sues for Costs and Damages

Swimsuit 2014: Zero Gravity
Kate Upton
Cape Canaveral, Florida, USA
Credit: James Macari

By Douglas Messier
Managing Editor

The air cargo company that operated Zero Gravity Corporation’s G-FORCE ONE aircraft ended its management services agreement (MSA) with the parabolic flight provider on  May 4, and subsequently repossessed the three jet engines it owns from Zero G’s Boeing 727, according to court records.

Amerijet also has sued Zero G for alleged breaches of the management services and engine lease contracts, seeing to recover unpaid fees, expenses and damages. Amerijet alleged that it is owed more than $127,000 in a July 10 court filing, which Zero G has disputed.

Zero G provides parabolic flight services to NASA under an exclusive contract and to private individuals and companies on a commercial basis. Individual tickets cost $4,950 plus a 5 percent tax.

The dispute has left the company’s grounded for a period of time, with the current status of G-FORCE ONE uncertain.  A look at Zero G’s website has a notice that reads, “2015 Schedule Coming Soon!” The company’s most recent press release was issued on Feb. 18.

“Zero Gravity Corporation is currently in the process of restructuring flight operations management. Details of our 2015 ZERO-G Experience schedule will be posted to our web site in the coming months,” company spokeswoman Michelle Peters said in an email.

Zero G his disputed Amerijet’s claims. It has told the court that the $127,435.66 the company is seeking is offset by losses suffered by Zero G as a result of the legal action.

“Zero Gravity informed the Texas Court that it believed the disputed payments were offset by the expenses that Zero Gravity incurred as a part of the dispute under the MSA and also informed the Texas Court that Zero Gravity had a claim for ‘lost revenues associated with Amerijet’s delays in providing required maintenance records . . . [and] costs resulting from Amerijet’s past breaches of the [MSA],'” according to a Zero G court filing.

The dispute began in April when Amerijet gave a 30-day notice that it was terminating its agreements with Zero G. According to the company’s lawsuit, Amerijet sought

either a signed extension of the expired Engine Lease Agreement, with certain amendments which Amerijet deemed necessary to protect Amerijet from contingencies that might arise during the final 30 days of the business relationship between Amerijet and Zero G, or failing Zero G’s execution of that amendment and extension of the Engine Lease Agreement, the immediate return of the engines to Amerijet.

In response, Zero G’s General Counsel notified Amerijet that Zero G would not sign the amendment and extension of the Engine Lease Agreement, and further stated that Amerijet had no right to the immediate possession of its engines that were on the Zero G aircraft.

Amerijet then filed a lawsuit on April 14 in state court in Harris County, Texas, where the Zero G plane was then located. The company obtained a temporary restraining order preventing Zero G from moving the aircraft until the matter was resolved.

Amerijet says Zero G subsequently provided “Amerijet with an executed extension of the Engine Lease Agreement, extending the Engine Lease Agreement without amendment through the remainder of the term of the Management Services Agreement.”

Zero G succeeded in moving the case from state court to United States District Court for the Southern District of Texas. Zero G says the case was dismissed due to the out-of-court settlement, but with the Texas court retaining jurisdiction.

Zero G says it filed a motion with the Texas court to enforce the settlement after “Amerijet failed to comply with the parties’ agreement,” including delays in the transfer of aircraft maintenance records. The court has held a series of hearings over the last few months on the case.

On July 28, Amerijet filed a separate lawsuit in the United States District Court for the Southern District of Florida seeking unpaid fees, expenses and damages from Zero G. One of the claims is for the cost of removing the engines from G-FORCE ONE.

Amerijet incurred costs and expenses in obtaining the return of the engines to Amerijet, relating to the removal of the engines from the Zero G aircraft and the delivery of the engines to Amerijet’s place of business in Miami from the location in Georgia where Zero G elected to park the Zero G aircraft.

Amerijet has demanded payment of these costs and expenses from Zero G but which Zero G has refused to pay. Therefore Amerijet seeks to recover those payments in this action in accordance with the provisions of the Engine Lease Agreement.

Following the termination of the Engine Lease Agreement, Amerijet continued to be deprived of the use or possession of the engines until such time as Amerijet was able to obtain the return of those engines. Amerijet seeks payment for the period that its engines remained in the possession of Zero G according to quantum meruit.

Amerijet says it filed the lawsuit in Florida because this is where the engine lease agreement specifies that any disputes be settled. The company also claims that the cases in Florida and Texas are substantially different.

Amerijet brought the Texas action to clarify its rights and to settle an apparent controversy as to Amerijet’s ability to repossess its aircraft engines before taking any action to repossess those engines.

In this [Florida] action Amerijet asserts entirely different claims, for breach of contract or quantum meruit, under contracts which formed no basis at all for Amerijet’s conversion and declaratory judgment claims in the Texas action.

However, Zero G claims the two cases are overlapping and accuses Amerijet of “forum shopping.” Zero G has filed a motion to have the Florida case dismissed or transferred to Texas.

In its motion to stay the Texas Court’s order enjoining Amerijet from pursuing its claims in this Court (filed in the Fifth Circuit), Amerijet admitted that it only filed the Florida Action because it was dissatisfied with the Texas Court’s rulings: “When it became clear to Amerijet that its disputes with Zero Gravity informally raised in the closed District Court action would not
be resolved to Amerijet’s satisfaction in that court, Amerijet brought suit in the U.S. District Court for the Southern District of Florida .…” Amerijet’s Motion to Stay at 4.14 This blatant forum shopping and gamesmanship has no place in federal practice. Therefore, Zero Gravity respectfully requests that this Court dismiss Amerijet’s claims or transfer them to the Texas Court.

Amerijet filed a motion opposing dismissal or transfer of the case to Texas on Tuesday.