Chester County Aviation Holdings, Inc. v. Chester County Aviation Authority

967 F. Supp. 2d 1098, 2013 WL 4516371, 2013 U.S. Dist. LEXIS 120689
CourtDistrict Court, E.D. Pennsylvania
DecidedAugust 26, 2013
DocketCivil Action No. 12-3656
StatusPublished
Cited by4 cases

This text of 967 F. Supp. 2d 1098 (Chester County Aviation Holdings, Inc. v. Chester County Aviation Authority) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Chester County Aviation Holdings, Inc. v. Chester County Aviation Authority, 967 F. Supp. 2d 1098, 2013 WL 4516371, 2013 U.S. Dist. LEXIS 120689 (E.D. Pa. 2013).

Opinion

OPINION

RESTREPO, District Judge.

I. INTRODUCTION

This action arises out of a contract between Chester County Aviation Holdings [1101]*1101(“CCAH”), a fixed-base operator (“FBO”)1 , and Chester County Aviation Authority (the “Aviation Authority” or “Authority”), a municipal agency under Chester County, Pennsylvania. The contract permitted CCAH to provide various services in connection with the day-to-day operations of G.O. Carlson Airport (the “Airport”), an airport owned by Chester County and located in Coatesville. In exchange for retaining the revenue brought in by the Airport, CCAH was to make regular rent payments to the Aviation Authority and provide maintenance to the Airport. See Compl. (Doc. 1) ¶¶ 9,14, 24.

The relationship between CCAH and the Authority recently soured, and on June 28, 2012, CCAH commenced this action against the Authority and its Chairman, Albert Koenig. By way of 42 U.S.C. § 1983, Plaintiff alleges that the Authority violated its substantive and procedural due process rights under the Fourteenth Amendment to the U.S. Constitution (Counts I and II). Id. at ¶¶ 75-87. Plaintiff also alleges breach of contract by the Authority (Count III) and tortious interference with contract by Chairman Koenig (Count IV) as pendent state law claims. Id. at ¶¶ 88-99.

Presently before the Court is Defendants’ Motion to Dismiss the Complaint. For the reasons set forth below, Defendants’ motion will be GRANTED.

II. FACTUAL BACKGROUND

On November 23, 2005, Plaintiff CCAH and its affiliate, JetDireet Aviation, LLC, entered into a Fixed Base Operation Lease and Operating Agreement (the “Lease”) with Defendant Aviation Authority for a term of twenty-five years. Id. at ¶¶ 21-23. Pursuant to the terms of the Lease, Plaintiff was permitted to provide “fuel sales, fuel delivery, aircraft sales, aircraft storage and tie downs, line service and pilot/passenger services and facilities, aircraft rental and aircraft charter service” at the Airport and retain the revenue from these services; in exchange, Plaintiff agreed to make fixed rent payments to the Authority and pay an additional rent of three (3) percent of the gross revenue brought in at the Airport. Id. at ¶.¶ 24, 26.

According to Plaintiff, the economic downturn detrimentally affected its business at the Airport due, at least in part, to a drop in fuel sales. By 2010, Plaintiff was unable to make its rent payments and meet its maintenance obligations under the Lease. See Doc. No. 15 at 6. In an effort to accommodate Plaintiffs financial difficulties, the Authority agreed to amend the Lease (hereinafter “First Amendment to the Lease”) to memorialize a $13,760 loan from Defendant to Plaintiff, adjust Plaintiffs rent payments between August 2010 and January 2011, and postpone some of Plaintiffs maintenance obligations. Compl. ¶ 32.

However, the Amendment did not alleviate Plaintiffs economic difficulties, and Plaintiff now alleges that the Aviation Authority played a role in its continued loss of profitability. Specifically, Plaintiff claims that the Authority violated a non-compete covenant in the Lease by allowing Global Air, a fuel supplier to various aviation operations and therefore a direct competitor to Plaintiff, to provide fuel at the Airport. Compl. ¶¶ 27, 35, 38; Lease (Doc. No. 13) § 4.2. Importantly, while Global Mr had been supplying fuel at the Airport since 1999 — more than five years [1102]*1102prior to execution of the Lease at issue in this matter — Plaintiff only complained to the Aviation Authority for the first time in April 2011. Compl. ¶ 38. Plaintiff alleges that the Aviation Authority agreed to investigate its claim of unfair competition but ultimately never responded to its concerns, although Plaintiff suggests that the Authority may have discussed the issue in a closed executive session during its May 2011 monthly meeting. Id. at ¶¶ 41-42. According to the Complaint, the Aviation Authority continues to allow Global Air to provide fuel at the Airport to date. Id.

Plaintiff next alleges that the Aviation Authority refused to cooperate with Plaintiffs efforts to improve its business performance at the Airport. In May or June 2011, Plaintiff retained FBO Solutions Group (“FSG”) to develop a marketing campaign to attract new tenants to the Airport and increase fuel sales. Id. at ¶ 43. FSG proposed a joint marketing campaign involving Plaintiff, the Aviation Authority, and other stakeholders. Id. While the Authority considered the matter at its June and August 2011 monthly meetings, it ultimately decided to not participate in the marketing scheme. Id. at ¶¶ 44-46. Plaintiff contends that this was a purposeful attempt by the Aviation Authority to “hamper Plaintiffs business.” Id. at ¶ 78.

When it later became clear that business at the Airport was not improving, Plaintiff attempted to sell its business and assign its rights under the Lease to a third party. The Lease requires Plaintiff to obtain the Authority’s written consent prior to assigning its leasehold interests; in turn, the Authority cannot unreasonably withhold consent to a proposed assignment. Id. at ¶ 28; Lease at § 14.1 (“Neither the whole nor any part of this Agreement nor the leased premises may be assigned, transferred, or sublet by Operator, either by process or operation of law, or in any other manner whatsoever without the prior written consent of Authority. Said consent shall not be unreasonably withheld.”). The crux of Plaintiffs Complaint involves two occasions where it alleges that the Authority unreasonably prevented assignments proposed by Plaintiff.

The first instance involved Galaxy FBO (“Galaxy”), an FBO who allegedly approached Plaintiff in August 2011 about the possibility of purchasing the assignment for approximately $5.6 million. Compl. ¶ 48. Galaxy, on its own volition, decided to withdraw its offer sometime after meeting with Aviation Authority representatives, allegedly due to concerns that the Authority was disregarding its obligations under the Lease with Plaintiff and “intentionally hampering [Plaintiffs] ability to effectively run an FBO operation.” Id. at ¶ 51. Here, again, Plaintiff alleges that any discussion by the Authority of Galaxy’s proposal was conducted in closed execution sessions rather than in those portions of Aviation Authority’s meeting open to the public. Id. at ¶ 52.

The second instance allegedly occurred a few months later, when Plaintiff was approached by another FBO, Airport Property Partners LLC (“APP”), about the possibility of purchasing its business at the Airport. Id. at ¶ 53. Without first obtaining the Authority’s written consent to the assignment, Plaintiff entered into an agreement with APP’s local operating entity, Chester County FBO LLC, for the sale of Plaintiffs business and assignment of its interest under the Lease for a purchase price of roughly $5.3 million. Id. at ¶ 54. Only after the execution of this agreement did APP approach the Authority to obtain its consent to the assignment. Id. at ¶ 55. At that time, the Authority advised that it would not approve the assignment unless APP agreed to certain material changes in [1103]*1103the Lease. Id.

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Bluebook (online)
967 F. Supp. 2d 1098, 2013 WL 4516371, 2013 U.S. Dist. LEXIS 120689, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chester-county-aviation-holdings-inc-v-chester-county-aviation-authority-paed-2013.