Mente Group LLC v. Arnell Enterprises, Inc

Background

Mente Group LLC and Arnell Enterprises, Inc. entered into a written “New Aircraft Acquisition and Completion Management Agreement” concerning Arnell’s purchase of an Embraer Phenom 300E aircraft. The agreement appointed Mente as Arnell’s sole and exclusive agent for the aircraft transaction and required Mente to advise and negotiate on the transaction.

The agreement required Arnell to pay Mente $15,000 plus 27.5% of the savings between the aircraft’s final purchase price and the “current proposal” Arnell had received from Embraer for a $9.45 million base aircraft with $1.02 million in options, subject to finalizing the options at list price. The agreement also required reimbursement of certain out-of-pocket expenses.

Mente negotiated with Embraer, and Arnell eventually purchased the aircraft for $9.45 million. Mente calculated its transaction-services fee as $312,620 and its expenses as $1,527.96, for a total invoice of $314,147.96. Arnell paid $150,000 but did not pay the remaining $164,147.96.

Mente sued Arnell for breach of contract. Arnell asserted counterclaims for breach of contract, slander of title, declaratory relief, and quiet title concerning the aircraft, along with twelve affirmative defenses. Mente moved for partial summary judgment on its contract claim, Arnell’s contract and slander-of-title counterclaims, and nine affirmative defenses.

Contract interpretation and breach

The parties agreed that Texas law governed Mente’s contract claim. The court explained that summary judgment is proper when the evidence shows no genuine dispute about a material fact and the moving party is entitled to judgment as a matter of law.

The court held that the fee provision was not ambiguous. It concluded that the reference to the “current proposal” Arnell “has received from Embraer” referred to a proposal already received before or when the parties signed the agreement, not one Arnell would obtain later. The court also concluded that the agreement did not require that proposal to be a formal quotation or to contain a discount from list price.

The court found no genuine factual dispute that the August 3, 2018 email from Embraer was the current proposal referenced in the agreement. The email contained the same base-aircraft and options pricing described in the agreement. Because Mente negotiated a final purchase price of $9.45 million, the court concluded that Mente obtained the savings used to calculate its fee. Arnell did not dispute Mente’s calculation of the unpaid fee and expenses. The court therefore granted summary judgment in favor of Mente on Mente’s breach-of-contract claim and determined that Arnell owed Mente $164,147.96 under the agreement.

The court also rejected Arnell’s reliance on alleged prior oral understandings about obtaining proposals in parallel or limiting Mente’s fee. It held that such evidence could not vary or contradict the parties’ fully integrated written agreement.

Arnell’s counterclaims

The court granted summary judgment in favor of Mente on Arnell’s breach-of-contract counterclaim. Arnell alleged that Mente breached the agreement by seeking more money than it was entitled to receive, preventing Arnell from independently obtaining an Embraer proposal, and filing a mechanic’s lien. Arnell did not respond on the merits to Mente’s motion on this counterclaim, and the court found no supporting evidence or argument.

The court also granted summary judgment in favor of Mente on Arnell’s slander-of-title counterclaim. At the hearing, Arnell conceded that Texas law requires proof of the loss of a specific sale or sales to recover on that claim.

Affirmative defenses

The court granted summary judgment in favor of Mente on Arnell’s affirmative defenses of failure to mitigate damages, assumption of risk, estoppel, the applicable statute of limitations, setoff, laches, waiver, unclean hands, and lack of notice. Arnell identified no specific supporting evidence and conceded at the hearing that it had not made a sufficient showing to defeat summary judgment on these defenses.

Disposition and remaining proceedings

The court granted Mente’s motion for partial summary judgment in each of the areas described above. The opinion states that a bench trial had been scheduled, but the court said it was unclear whether any claims or defenses remained to be tried after the order. The court directed the parties to confer and jointly report whether a trial was necessary and, if so, which claims or defenses remained.