District Judge J. Paul Oetken


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Brazil’s Oceanair Linhas Aereas S.A. sought to lease a jetliner from Cayman Islands’ Avolon Aerospace AOE 90 Ltd. Oceanair designated Bank of Utah (BOU) as owner trustee. Avalon created a trust designating Wells Fargo Bank Northwest N.A. as trustee and transferring title to the jet to Wells Fargo, which leased the jet to BOU. Synergy Aerospace Corp. and Oceanair guaranteed payment by BOU. BOU fell behind on payments. As of Oct. 11, 2016, Synergy and Oceanair allegedly owed Wells Fargo $4,936,000, plus interest. The court denied dismissal of Wells Fargo’s diversity contract breach suit against Synergy and Oceanair. It rejected their claim that it was Avolon’s Cayman Islands citizenship that determined plaintiff’s citizenship, and destroyed diversity jurisdiction. Avolon’s June 2014 trust agreement conveyed title to the jet to Wells Fargo and divested Avolon of any legal title to the jet. The lease to Bank of Utah granted Wells Fargo the right to receive payment, and at its option, to pursue remedies in case of default. Wells Fargo was the real party to the breach of guaranty controversy, and the only potential plaintiff. Courts in the district have held that an aircraft’s trustee owner is a real and substantial party to the controversy.