Save-A-Connie, INC., d/b/a Airline History Museum v. Executive Beechcraft, INC. and the City of Kansas City, Missouri

Missouri Court of Appeals·Decided May 23, 2023·No. WD85355·Published

Opinion

In the

Missouri Court of Appeals Western District

SAVE-A-CONNIE, INC., ) D/B/A AIRLINE HISTORY MUSEUM, )

)

Appellant, )

) WD85355

v. )

) OPINION FILED:

EXECUTIVE BEECHCRAFT, INC. ) AND THE CITY OF KANSAS CITY, ) MAY 23, 2023 MISSOURI, )

)

Respondents. )

Appeal from the Circuit Court of Clay County, Missouri The Honorable K. Elizabeth Davis, Judge

Before Division Two: Alok Ahuja, Presiding Judge, Anthony Rex Gabbert, Judge, Thomas N. Chapman, Judge

Save a Connie, Inc., d/b/a Airline History Museum (“Museum”), appeals the circuit court’s Judgment dated March 21, 2022, which found in favor of Executive Beechcraft, Inc. (“Executive”) on Museum’s First Amended Petition for Declaratory Judgment and Damages, and in favor of Executive on Executive’s counterclaim. Museum argues that the circuit court erred in concluding that the Sublease Agreement between Museum and Executive survived termination of the 1973 Master Lease. Museum additionally appeals the circuit court’s July 31, 2020 Order of Dismissal which dismissed Museum’s First Amended Petition as to the City of Kansas City, Missouri (the “City”) for lack of standing. Museum argues that the circuit court erred in finding that

Museum was not a third-party vested donee beneficiary and lacked standing to sue. We affirm.

Factual and Procedural Background The relevant facts are not in dispute. The City is a municipal corporation of the State of Missouri which operates and maintains an airport known as Charles B. Wheeler Downtown Airport located in Clay County, Missouri (the “Airport”). Since the early 1970s, Executive or its predecessors have leased certain ground and improvements at the Airport from the City pursuant to a Fixed Based Operations and Lease Agreement.

Executive subleased certain land on the west side of the Airport (the “Premises”)

to Museum through a Sublease Agreement dated June 5, 2000. (the “Sublease”). Museum operates an airline museum at the Airport on that land. The initial term of the Sublease was five years or until 2005, with three additional five-year options. For the first five years of the Sublease, Museum was to pay $14,000 per month in rent.

The initial lease between the City and Executive was created in 1973 and amended thereafter. In 2005, the City and Executive created a new lease. (the “Master Lease of 2005”). The Master Lease of 2005 provides that all prior leases, including the Master Lease of 1973, are cancelled, and the terms of the Master Lease of 2005 began January 1, 2006, for a term of thirty years, ending on December 31, 2035.

The Master Lease of 2005 between the City and Executive also provides, in part:

Sec. 2.5. Airline Museum. As identified at Parcel D and set forth in Exhibit “B”, the Hanger leased to the Airline Museum shall be leased to Lessee at the reduced ground (improved and unimproved) and building

rental rates set forth in Exhibit “B” for as long as it remains a non-profit airline museum. The Rent for the Airline Museum shall be adjusted annually as set forth in Sec. 2.2 Adjustments to Rent Above.

In an undated letter to Executive, Museum gave written notification that it wished to “exercise the option at this time to renew the subject sublease for the first of the three additional five-year terms provided for in the sublease agreement.” By letter dated January 12, 2006, Executive acknowledged Museum’s exercise of the first of its three five-year extensions under the Sublease.

In 2009, Executive and Museum executed a “Second Amendment to Sublease Agreement,” replacing Section Five “Rent” of the Sublease and establishing a “Rental Discount Period.” The “Rental Discount Period” required Executive to charge $0.00 per month for rent for certain portions of the Premises. The 2009 amendment to the Sublease provided that either party could terminate the Rental Discount Period without cause upon thirty days written notice. It also provided that, “In no event shall any Rental Discount Period exceed the existing term or any renewal term of the Sublease.”

Only the 2009 amendment to the Master Lease of 2005 discusses the zero-rent rate. Other rates were in effect prior to that time. Effective January 1, 2006, Executive was charged $1,344.37 monthly rent by the City for the Premises subleased by Museum; effective January 1, 2007, Executive was charged $1,365.88 monthly rent by the City for the Premises subleased by Museum; effective January 1, 2008, Executive was charged $1,406.85 monthly rent by the City for the Premises subleased by Museum; effective June 1, 2009, Executive was charged $0.00 monthly rent by the City for the Premises

subleased by Museum, with the “Building and Ground rents for the Airline History Museum [] abated so long as it is a non-profit aviation-history facility.” This provision in the Master Lease of 2005, as amended, further provides that, in the event the Building and Ground for Parcel D-2 are no longer used as a non-profit aviation-history facility, the building rates would adjust to fair market rental value and ground rates would comport with rates for other facilities under the Lease.

By memo dated December 11, 2009, Museum issued its “Notice of Intent to Renew” to Executive whereby it stated that “it intends to renew its Sublease of the premises … and extend the Rental Discount Period as described in the Second Amendment to the Sublease Agreement.” The notice further stated that, “All other terms and conditions of the Sublease and the First Amendment to the Sublease shall remain in full force and effect.”

By letter dated July 8, 2010, Museum notified Executive that “Pursuant to the Sublease Agreement … and amendments thereto” it was exercising the second of its three five-year renewals under the Sublease, extending the Sublease from January 1, 2011 to December 31, 2015. Further, that “All other terms and conditions of the Sublease and all Amendments to the Sublease shall remain in full force and effect.”

On July 30, 2010, the City and Executive executed a Second Amendment to the Master Lease which amended Exhibit B to the Master Lease “to reflect $0.00 annual Building and Ground Rent so long as Parcel D-2 is a non-profit Airline History Museum as authorized by the Federal Registry.” The Second Amendment was effective retroactive

to June 1, 2009, which aligned the Master Lease rent owed by Executive to the City with the terms of the 2009 amendment to the Sublease as to rent owed by Museum to Executive.

By letter dated April 2, 2014, Museum notified Executive that it was exercising the “3rd and final” 5-year renewal period, and “All other terms and conditions of the Sublease dated, June 5, 2000, [and amendments thereafter] shall remain in full force and effect.” Museum further stated in the letter:

There is no clear designation as to a renewal date identified in the Sublease.

Given the date of June 5, 2005 in the original sublease and the renewal intervals established in the First Amendment, we hereby give notice that the lease renewal shall extend the sublease of Save A Connie, Inc. to December 31, 2020.

On June 19, 2019, Museum filed a Petition for Declaratory Judgment and Damages against Executive alleging that, as a third-party donee vested beneficiary, Executive and the City were bound to the Master Lease of 2005 between the City and requested a declaration that Museum’s lease expiration be based on the Master Lease of 2005’s expiration of December 31, 2035.

On September 9, 2019, the Sixth Amendment to the Master Lease deleted “Sec.

2.5 Airline Museum” in its entirety, effective December 1, 2019. By letter dated September 27, 2019, Executive notified Museum that it was terminating the Rental Discount Period effective October 31, 2019, and starting on or about December 1, 2019, Executive would pass along to Museum the rent the City charged Executive. Beginning

in December 2019, Executive sent monthly invoices in the amount of $3,256.02 to Museum for rent owed by Museum. Museum did not pay any of the invoices.

Free access — add to your briefcase to read the full text and ask questions with AI

Save-A-Connie, INC., d/b/a Airline History Museum v. Executive Beechcraft, INC. and the City of Kansas City, Missouri, (Mo. Ct. App. 2023).

Save-A-Connie, INC., d/b/a Airline History Museum v. Executive Beechcraft, INC. and the City of Kansas City, Missouri (Save-A-Connie, INC., d/b/a Airline History Museum v. Executive Beechcraft, INC. and the City of Kansas City, Missouri) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

ITT Commercial Finance Corp. v. Mid-America Marine Supply Corp.
854 S.W.2d 371 (Supreme Court of Missouri, 1993)
Barekman v. City of Republic
232 S.W.3d 675 (Missouri Court of Appeals, 2007)
Kansas City Hispanic Ass'n Contractors Enterprise v. City of Kansas City
279 S.W.3d 551 (Missouri Court of Appeals, 2009)
Siragusa v. Chang Su Park
913 S.W.2d 915 (Missouri Court of Appeals, 1996)
Corozzo v. Wal-Mart Stores, Inc.
531 S.W.3d 566 (Missouri Court of Appeals, 2017)