Sky Harbor Air Service, Inc., a Wyoming Corporation, and H. Paul Martin v. Cheyenne Regional Airport Board, a Wyoming Corporation

2016 WY 17, 368 P.3d 264, 2016 Wyo. LEXIS 17
CourtWyoming Supreme Court
DecidedFebruary 9, 2016
DocketS-15-0143, S-15-0144, S-15-0145
StatusPublished
Cited by15 cases

This text of 2016 WY 17 (Sky Harbor Air Service, Inc., a Wyoming Corporation, and H. Paul Martin v. Cheyenne Regional Airport Board, a Wyoming Corporation) is published on Counsel Stack Legal Research, covering Wyoming Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sky Harbor Air Service, Inc., a Wyoming Corporation, and H. Paul Martin v. Cheyenne Regional Airport Board, a Wyoming Corporation, 2016 WY 17, 368 P.3d 264, 2016 Wyo. LEXIS 17 (Wyo. 2016).

Opinion

BROOKS District Judge

[M1] These three eonsohdated appeals are the culmination of years of litigation between the parties. They involve a tangled web of claims and allegations between the Appellant ("Sky Harbor") and the Appellee (Cheyenne Regional Airport or "Airport"). At the heart of the controversy is Sky Harbor's alleged failure to pay rent to the Airport, The focus of Sky Harbor's defense is that the District Court lacked subject matter jurisdiction to decide any of the cases now on appeal. The District Court disagreed and generally found in favor of the Airport in all three cases. We affirm

ISSUES

[12] The parties raised numerous issues on appeal. The Court finds the follovvmg issues to be dispositive:

1. Did the District and Circuit Courts lack subject matter jurisdiction in the three combined appeals?
If the lower Courts had subject matter jurisdiction, were judgments entered . in accordance with the law?

FACTS

[138] Sky Harbor ran a Fixed Based Operator ("FBO") business at the Airport for many years., An FBO provides mooring, hangar space, fuel, maintenance, and other services for general aviation users of the Airport. Sky Harbor entered into an FBO lease with the Airport in September of 1996. The lease contained a termination date of December 81, 2011. >

*267 [¶ 4] In addition, the Airport decided to renovate a hangar and convert it into an aircraft paint shop. The Airport received partial funding for the renovation from the U.S. Department of Commerce Economic Development Administration (“EDA”). The Paint Shop became operational in 1997. It was operated by several entities, but was never successful. The Paint Shop lease was taken over by Sky Harbor in 2004.

[¶ 5] Thereafter, Sky Harbor had difficulty staying current with rent payments on both the FBO and Paint Shop. leases. In 2006, Sky Harbor sought and obtained additional funding through a Small, Business Administration (“SBA”) grant which was ultimately administered by United Western Bank (“Bank”) 1 of Denver, Colorado.

[¶ 6] In 2006, there was.an amendment to the FBO lease which allowed Sky Harbor to extend the lease to December 31, 2018, if certain conditions were met. In 2006, there was also an agreement between Sky Harbor and the Airport which allowed Sky Harbor to assign its interest in the FBO lease to the Bank as collateral for the SBA loan. The Assignment of Sky Harbor’s interest- to the Bank included the following:

1. If Sky Harbor defaulted under the lease, the Bank could reassign the lease tó a new FBO operator who would assume all of Sky Harbor’s responsibilities;
2. That the Bank would have no liability under thp, lease unless the Bank itself took over the lease;
3. That Sky Harbor would remain fully liable for all obligations under the lease;
4. If the Bank took possession of the lease it would pay any unpaid rent;
5. If the Bank took possession • of the lease it would make payments due under the lease, but if the Bank-abandoned the lease or reassigned the lease, the Bank would have no further obligations to the Airport;
6.The Airport would not terminate the ' lease without giving the Bank notice of Sky Harbor’s default and the opportunity to cure the default within 60 days from receipt of the notice.

[¶ 7] On October 6, 2010, the Airport gave the Bank notice of Sky Harbor’s default under thé FBO lease. The Airport alleged that Sky Harbor had failed to pay rent due, failed to pay required insurance premiums, and had failed to meet minimum performance standards.' There was no attempt to cure the default by the Bank or Sky Harbor. On December -23, 2010, the Airport terminated the FBO lease with Sky Harbor. On January 21, 2011, the Bank failed and went into Federal Deposit Insurance Corporation (“FDIC”) receivership.

PROCEDURAL BACKGROUND

Federal Court Litigation

[¶ 8] In 2008, Sky Harbor initiated litigation against the Airport in the United States District Court for Wyoming, based on the Paint Shop lease. Sky Harbor Air Serv., Inc. v. Reams, 491 Fed.Appx. 875, 879 (10th Cir.2012). Sky Harbor asserted claims for extortion, fraud, conspiracy, defamation, violation of Constitutional rights, breach of contract, and multiple other causes of action. Id. at 880. The Airport counterclaimed for breach of contract. Id. Ultimately, the U.S. District Court granted summary judgment in favor, of the Airport and awarded the Arport $429,809.20 in damages, attorney fees, and costs. Id.

[¶ 9] That Judgment was appealed by Sky Harbor to the United States Court of Appeals for the Tenth Circuit. The Tenth Circuit generally affirmed the District Court. Sky Harbor did not appeal to the United States Supreme Court.

Ejectment Action (S-15-0143)

[¶ 10] After the Airport terminated the FBO lease in December of-2010, the Airport filed a petition for ejectment and recovery of *268 real property in February 2011. Suit was brought in Wyoming State District Court, seeking possession of the FBO buildings and removal of Sky Harbor from the premises. Sky Harbor filed multiple counterclaims. The Airport then filed a motion for summary judgment asking the District Court to address only the FBO lease termination date. In 2012, the District Court, in a comprehensive opinion, concluded the FBO lease expired by its own terms on December 81, 2011, and was never extended. The claim for ejectment was therefore granted.

[T11] The Airport then filed another motion for summary judgment in the same case, to determine whether Sky Harbor was in breach of the FBO lease, and whether the Airport was due any damages. After some procedural starts and stops, the District Court concluded that Sky Harbor breached multiple amendments to the FBO lease. A judgment was entered in the efectment action, awarding the Airport $13,735.89 in uncontested damages for fallure to pay insurance premiums regarding the FBO lease.

Forcible Entry and Detainer Action (S15 0144)

[112] On July 5, 2011, the Airport filed a complaint for forcible entry and detainer ("FED") in Cireuit Court. At that time, the ejectment action was pending in District Court. The Cireuit Court held a hearing and heard testimony from witnesses for both the Airport and Sky Harbor. The Court found in favor of the Airport and awarded a judgment of $50,550 for rent due on the FBO lease.

Garnishment Action (S~15-0145)

[T18] The Airport filed a garnishment action in the District Court in an attempt to collect the $429,809.20 judgment entered by the Federal Court. By this time, the FED action had resulted in a judgment against Sky Harbor. Sky Harbor posted a bond, and the FED judgment was stayed pending Sky Harbor's appeal to the District Court, which then affirmed the Cireuit Court, The District Court issued two writs of garnishment for funds held by the District and Cireuit Courts in the FED action.

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Cite This Page — Counsel Stack

Bluebook (online)
2016 WY 17, 368 P.3d 264, 2016 Wyo. LEXIS 17, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sky-harbor-air-service-inc-a-wyoming-corporation-and-h-paul-martin-v-wyo-2016.