Thursday, December 26, 2013

Brown v. AVEMCO Investment Corp. case brief

Brown v. AVEMCO Investment Corp. case brief summary
603 F.2d 1367 (1979)

Plaintiff airplane owners challenged the judgment of the United States District Court for the District of Montana, which found in favor of defendant lender in plaintiffs' action for conversion of their airplane. Plaintiffs argued that the district court erred when it failed to give plaintiffs' proposed instruction on acceleration to the jury.

An airplane purchase was financed with a note payable to defendant lender. The note contained an acceleration clause if the airplane was leased. Plaintiff airplane owners leased the airplane, and defendant had notice of the lease. Two years later, plaintiffs offered to pay off the loan. Defendant refused the payment and accelerated the loan. Defendant then repossessed and re-sold the airplane. Plaintiffs brought an action for conversion, and defendant brought a counterclaim for interference with contractual rights. Plaintiffs requested a jury instruction on bad faith acceleration, which the district court denied. The district court rendered judgment for defendant. Plaintiffs brought a motion for new trial, which was denied.


  • On appeal, the court held that by submitting the proposed instruction and getting the district court's ruling on their submission, plaintiffs had preserved error on the denial of the instruction. 
  • The court held that plaintiffs were entitled to an instruction regarding bad faith in the acceleration of the note and that the failure to give such an instruction prejudiced plaintiffs.
The court reversed the judgment and remanded the case for a new trial.

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