Case 5:07-cv F Document 60 Filed 06/12/2007 Page 1 of 7 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA
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1 Case 5:07-cv F Document 60 Filed 06/12/2007 Page 1 of 7 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA DIXIE AIRE TITLE SERVICES, INC., an Oklahoma corporation, Plaintiff, v. Case No. 5:07-CV-141 SPW, L.L.C., et al., Defendants. ORIGINAL CROSS-CLAIM OF DEFENDANT MELVYN I. WEISS Defendant Melvyn I. Weiss ( Weiss, for his Original Cross-Claim against Jet Network, LLC ( Jet Network and Stuart L. Cauff ( Cauff, alleges and states as follows: Background Facts 1. During the early months of 2005, defendant Jet Network, LLC ( Jet Network, by and through its owner Stuart Cauff ( Cauff, approached Weiss, a partner of defendant Milberg Weiss & Bershad, LLP ( Milberg Weiss to discuss with him the possibility of entering into a aircraft services agreement with Jet Network that would entail Weiss leasing an airplane to Jet Network for Jet Network to manage, maintain and use in its aircraft charter business. 2. Weiss did not own an airplane to place under Jet Network s management. However, Jet Network, by and through Cauff, told Weiss that Jet Network was negotiating the purchase of a Gulfstream American G-1159A aircraft, registration number N9KL (the Aircraft with defendant SPW, LLC ( SPW and Jet Network would be willing to re-sell Weiss that Aircraft for the same great price it had negotiated with Jet Network. This offer was intriguing to Weiss given that Jet Network, by and through Cauff, represented that the buy-sell agreement it negotiated for the Aircraft was the best one available in the entire industry at this time.
2 Case 5:07-cv F Document 60 Filed 06/12/2007 Page 2 of 7 3. Thereafter, Jet Network, by and through Cauff, provided Weiss with a proposed letter of intent dated June 1, 2005, that purported to memorialize the terms of a purchase agreement between Jet Network and SPW for the Aircraft. Unbeknownst to Weiss, this letter of intent did not represent a bona fide agreement. Instead, it was a fabrication by Jet Network, by and through Cauff, who knowingly misrepresented that Jet Network was purchasing the Aircraft for $6,950, Jet Network, by and through Cauff, offered to re-sell the Aircraft to Weiss for the same great price of $6,950, provided that Weiss place the Aircraft under Jet Network s management and pay an escrow deposit of $250, into the trust account maintained by plaintiff, Dixie Aire, pending Jet Network s consummation of the purchase contract with SPW. Weiss never assented to purchase the Aircraft from Jet Network or place it under Jet Network s management. However, based upon the aforementioned false representations of Jet Network and/or Cauff, Weiss used his own money to pay for an Aircraft inspection and fund the escrow deposit. However, given that Weiss had not assented to purchase the Aircraft from Jet Network this escrow deposit was expressly conditioned upon the following unambiguous terms: Notwithstanding anything in this Agreement to the contrary, Milberg Weiss should have the right to demand, and the parties hereto shall cause, Escrow Agent to refund the Deposit to Milberg Weiss, less applicable Escrow fees, for any reason whatsoever.... (emphasis added. SPW was not a party to Weiss written escrow agreement with Dixie Aire. 5. On June 24, 2005, pursuant to the aforementioned escrow agreement, Weiss transferred Two Hundred Fifty Thousand Dollars ($250, of his personal funds to Dixie Aire. Soon thereafter, Weiss learned for the first time, that Jet Network and Cauff had falsely represented the terms of its buy-sell agreement with SPW. Rather, than purchasing the Aircraft for $6,950, as they represented, Jet Network was really only paying $5,950,00.00 for the plane. 2
3 Case 5:07-cv F Document 60 Filed 06/12/2007 Page 3 of 7 Accordingly, Jet Network stood to make an immediate profit of One Million Dollars by flipping the Aircraft to Weiss. 6. When Weiss learned of the deception of Jet Network and/or Cauff, he immediately terminated all negotiations concerning the repurchase and management of the Aircraft and demanded an immediate refund of the $250, he had deposited with Dixie Aire. But even though Dixie Aire was required to refund Weiss his escrow deposit for any reason whatsoever and even though, Dixie Aire did not owe any legal duty to SPW to retain the escrow deposit for its potential benefit, Dixie Aire failed and refused to refund Weiss his money. Instead, on December 2005, Dixie Aire commenced this interpleader action. First Claim for Relief (Indemnity For his first claim for relief, Weiss incorporates paragraphs 1-6 as set forth above in his Original Cross-Claim. 7. In the event that Weiss is found legally liable to SPW for damages as a result of the allegations and claims for relief asserted by in SPW s Amended Cross-Claim, said responsibility was caused by the acts and omissions of Jet Network and/or Cauff and therefore Weiss is entitled to full indemnity from Jet Network and Cauff. WHEREFORE, premises considered Defendant Weiss seeks judgment against Jet Network and Cauff for any amount it is found owing to SPW due to the fact that it was the acts, omissions and conduct of Jet Network and Cauff that caused SPW s damages, if any. Second Claim for Relief (Contribution For its second claim for relief, Weiss adopts and incorporates paragraphs 1-7 as set forth above in his Original Cross-Claim. 3
4 Case 5:07-cv F Document 60 Filed 06/12/2007 Page 4 of 7 8. Weiss denies any and all liability to Jet Network. 9. In the alternative, Weiss asserts that if SPW is awarded judgment against Weiss, to the extent there is joint and several liability established, then Weiss is entitled to contribution against Jet Network and Cauff to the extent he pays or becomes obligated to pay more than his pro rata share of any common liability. WHEREFORE, premises considered Defendant Weiss seeks a judgment against Jet Network and Cauff in contribution for any amount it pays or becomes obligated to pay more than its pro rata share of any common liability. Third Claim for Relief (Breach of Escrow Agreement For his third claim for relief, Weiss adopts and incorporates paragraphs 1-9 as set forth above in his Original Cross-Claim. 10. Weiss and Dixie Aire entered into a written escrow agreement whereby Weiss agreed to deposit $250, of his own funds into Dixie Aire s escrow account to be held in trust by Dixie Aire who in turn promised Weiss that upon Weiss demand it would immediately refund the entire escrow deposit to him for any reason whatsoever. 11. SPW was not a party to the escrow agreement between Weiss and Dixie Aire. 12. Weiss reposed trust and confidence with Dixie Aire to keep and protect his escrow deposit pursuant to the terms of the escrow agreement. 13. When Weiss realized that Jet Network misrepresented the terms and conditions of its alleged buy-sell agreement with SPW and the transaction was a sham to flip an aircraft to Weiss for an exorbitant profit, Weiss demanded Dixie Aire refund the escrow deposit according to the terms and conditions of the escrow agreement. 4
5 Case 5:07-cv F Document 60 Filed 06/12/2007 Page 5 of Although all conditions precedent to Weiss right to demand and receive a refund of his escrow deposit had been performed or had otherwise occurred, Dixie Aire has refused to honor its contractual obligation and refund the same to Weiss. 15. Instead, Dixie Aire has breached its contractual and fiduciary duties to Weiss by unlawfully retaining his escrow funds for the benefit of SPW, a stranger to the escrow agreement, who has no cognizable claim thereto. 16. Dixie Aire should in good conscience and equity return the escrow funds to Weiss. 17. Dixie Aire s conduct is in reckless disregard for the rights of others entitling Weiss to an award of punitive damages. 18. As a direct and proximate result of Dixie Aire s unlawful conduct, Weiss has suffered and continues to suffer damages and other loss in excess of $75, WHEREFORE, premises considered Defendant Weiss prays for judgment against Dixie Aire for actual and exemplary damages, costs of suit and attorneys fees and such other and further relief that this Court deems proper. Fourth Claim for Relief (Fraud by Jet Network and/or Cauff For its fourth claim for relief, Weiss adopts and incorporates paragraphs 1-18 as set forth above in his Original Cross Claim. 19. Jet Network made knowingly false representations to Weiss for the purposes of inducing his assent to repurchase the Aircraft for an inflated purchase price. 20. Weiss reasonably relied upon the false representations of Jet Network and Cauff to pay hundreds of thousands of his own dollars to have the Aircraft inspected and fund the escrow deposit in trust with Dixie Aire. 5
6 Case 5:07-cv F Document 60 Filed 06/12/2007 Page 6 of Jet Network and Cauff have acted in reckless disregard for the rights of others entitling Weiss to an award of punitive damages. 22. As a direct and proximate result of Dixie Aire s unlawful conduct, Weiss has suffered and continues to suffer damages and other loss in excess of $75, WHEREFORE, premises considered Defendant Weiss prays for judgment against Dixie Aire for actual and exemplary damages, costs of suit and attorneys fees and such other and further relief that this Court deems proper. Respectfully submitted, s/tony Gould Tony Gould, OBA #18564 Leonard, Gould & Brown, PLLC 116 E. Sheridan, Suite 270 Oklahoma City, OK ( Facsimile: ( tgould@lgblawfirm.com Attorney for Defendant Melvyn I. Weiss 6
7 Case 5:07-cv F Document 60 Filed 06/12/2007 Page 7 of 7 CERTIFICATE OF SERVICE I hereby certify that on the 12 th day of June, 2007, I electronically transmitted the attached document to the Clerk of Court using the ECF System for filing and transmittal of a Notice of Electronic Filing to the following ECF registrant: Mark D. Mitchell Mitchell, Davis, Klein & Pickens 101 Park Avenue, Suite 250 Oklahoma City, OK mdmoklaw@cs.com Attorneys for Plaintiff Brian L. Peterson, P.C. 101 Park Avenue, Suite 275 Oklahoma City, OK bpeterson@blppc.com Henry A. Meyer, III Abowitz, Timberlake & Dahnke, P.C. P.O. Box 1937 Oklahoma City, OK mainmail@abowitzlaw.com Attorneys for Defendant SPW, LLC and mailed to: Jet Network, LLC c/o Seth Coblentz 420 Lincoln Road, Suite 365 Miami Beach, FL s/tony Gould Tony Gould 7
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