APA sues Calif. corporation for non-delivery of cargo loaders

Asia Pacific Airlines has filed a lawsuit in federal court against a corporation based in Sta. Fe Springs, California, for allegedly failing to deliver two cargo loaders and refusing to return the $144,000 that was paid as a security deposit.

Aero Micronesia Inc., which does business as Asia Pacific Airlines, is suing Mercury GSE Inc. for breach of contract, restitution-unjust enrichment, and conversion.

Asia Pacific Airlines, through counsel Steven P. Pixley, asked the U.S. District Court for the NMI to issue a judgment against Mercury GSE in the amount of $144,000 representing the security deposit. Asia Pacific is also demanding punitive damages and pre- and post-judgment interests.

Asia Pacific Airlines, a corporation in Guam, with bases in Guam and Honolulu, Hawaii, is a cargo carrier and is engaged in cargo air transportation services throughout the Pacific. It also operates in the CNMI. APA is owned by THC Communications Corp., which is organized under CNMI laws.

The company it is suing, Mercury GSE Inc., is located in Sta. Fe Springs, California, and is primarily engaged in the repair, rental, and sale of aviation ground-handling equipment.

According to Pixley in the complaint filed Friday, APA had ordered two cargo loaders from Mercury GSE and wired it $158,028 on July 27, 2018, and that Mercury GSE received the funds on Aug. 3, 2018. Pixley said $144,000 of this wire transfer was designated as a deposit relating to the purchase of the two 2000 FMC Commander 15 cargo loaders. These equipment are used in the aviation industry to pack, load and unload aircraft and transfer freight and baggage between airport buildings and aircraft.

Pixley said the cargo loaders were never delivered to Asia Pacific Airlines, yet Mercury GSE Inc. has retained the deposit.

Asia Pacific Airlines had intended to use the two cargo loaders for loading aircraft engaged in business activities in the CNMI as well as other locations in the Western Pacific region.

The whole transaction began on June 25, 2018, Pixley said, when Adam Ferguson, president of Asia Pacific Airlines, met with James Spiegel, a sales representative employed by Mercury GSE Inc. and Bob Travis, chief operating officer of Mercury GSE in Torrance, California to discuss the purchase and repair of two 2000 FMC Commander 15 cargo loaders. They also discussed the repair of a used Lantis Loader Kl-206 and shipment of this cargo loader from the Seattle airport to Mercury GSE Inc.’s Santa Fe Springs facility.

On July 24, 2018, Spiegel reportedly emailed Ferguson to sell the two “fully services, repaired and painted” cargo loaders for $165,000 each. Two days later, Spiegel allegedly sent another email to Ferguson lowering the price of each equipment to $160,000.

Pixley said Spiegel further represented that “this work will start after the beginning of September once we have completed the move. We estimate the lead time of 8-10 weeks for the completion of both units. We are requiring a 45% deposit to start work on all orders placed…” This email, Pixley said, also discussed the costs of rebuilding the Lantis Loader KL-206.

Relying on this, Asia Pacific Airlines wired $158,028 from its Bank of Guam account to Mercury GSE’s account in Hawthorne, California, on July 27, 2018. Pixley said that $144,000 of this wire transfer was identified as a security deposit for the two cargo loaders. The remaining $14,028 was payment for shipping costs for the Lantis Loader KL-206 from Seattle airport to Mercury GSE Inc. Pixley said the funds were received by Mercury GSE on Aug. 3, 2018.

Pixley said that, on Oct. 22, 2018, Mercury GSE’s CEO Bob Travis sent an email to Ferguson stating that they were “experiencing delays in getting our shop operating at full capacity due to our move.”

Pixley said Travis further stated that he did “not anticipate Mercury GSE Inc. being able to start work on the Commanders or your Lantis before Q1 of 2019.”

On May 20, 2019, Ferguson allegedly spoke with Travis regarding the status of the two 2000 FMC Commander 15 cargo loaders. Following this telephone conversation, Pixley said, Ferguson sent an email to Travis stating that no work had been done on the two cargo loaders.

Pixley said upon information and belief the two cargo loaders had been sold to a third party.

On May 22, 2019, Ferguson sent an email demanding the return of Asia Pacific Airlines’ $144,000 deposit.

Since May 22, 2019, Pixley said, the parties have attempted to resolve this matter but Mercury GSE has failed to return the deposit, insisting that no enforceable contract existed between the parties.

As a result of Mercury GSE’s breach of its contract with Asia Pacific Airlines, Mercury GSE is liable to Asia Pacific Airlines for all damages resulting from its breach of contract in an amount to be proven at trial plus pre-judgment and post-judgment interest, Pixley said, adding that Mercury GSE has been unjustly enriched through the retention of the $144,000 security deposit at the expense of Asia Pacific Airlines.

APA, like Saipan Tribune, is an affiliate company of TanHoldings.