Sky Harbor Air Service, Inc. v. Reams

491 F. App'x 875
CourtCourt of Appeals for the Tenth Circuit
DecidedJuly 20, 2012
Docket11-8004, 11-8025, 11-8062
StatusUnpublished
Cited by19 cases

This text of 491 F. App'x 875 (Sky Harbor Air Service, Inc. v. Reams) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit 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. v. Reams, 491 F. App'x 875 (10th Cir. 2012).

Opinion

ORDER AND JUDGMENT *

SCOTT M. MATHESON, JR., Circuit Judge.

In 2008, Sky Harbor Air Service, Inc., (“Sky Harbor”) and its owner, H. Paul Martin, asserted more than a dozen claims against various defendants in the U.S. District Court for the District of Wyoming. On summary judgment, the district court dismissed all of their claims. Sky Harbor and Mr. Martin also were held liable on a breach-of-eontract counterclaim and ordered to pay attorney fees.

In the three appeals consolidated before us, Sky Harbor challenges rulings in favor of defendants Shelly Reams, the Cheyenne Regional Airport Board, and Great Lakes Aviation (collectively the “Defendants”). Exercising jurisdiction pursuant to 28 U.S.C. § 1291, we affirm the district court’s grant of summary judgment to the Defendants but remand for a recalculation of the attorney fees awarded to Ms. Reams.

I. BACKGROUND

A. Factual History

Sky Harbor and Mr. Martin (collectively “Sky Harbor”) accuse the Defendants of forcing them into financial ruin. Sky Harbor’s allegations are rooted primarily in two events: (1) the State of Wyoming’s decision to stop using Sky Harbor’s services at the Cheyenne Regional Airport, and (2) Sky Harbor’s lease negotiations with the Cheyenne Regional Airport Board (the “Board”).

1. Sky Harbor’s Services for the State

Sky Harbor was a fixed-base operator (“FBO”) at the Cheyenne Regional Airport. As an FBO, Sky Harbor provided ground support services, including fueling, tie-down services, and aircraft maintenance for general aviation customers. Between 1988 and 2005, Sky Harbor had an annual lease arrangement with the State of Wyoming Aeronautics Division (“Aeronau *878 tics”) to house the State’s aircraft and to provide other services at the airport.

In March 2005, a Sky Harbor employee damaged an elevator on a state jet. Sky Harbor’s chief mechanic determined that the damage was within limits for safe flight and that it did not require immediate repair or entry in the aircraft’s logbook. He confirmed his assessment with the aircraft’s manufacturer.

The next day, Mr. Martin reported the incident to Sky Harbor’s insurance provider, and Sky Harbor’s chief mechanic reported the incident to the Federal Aviation Administration (“FAA”). The mechanic also applied a sealant or adhesive to temporarily fix the elevator damage.

Shelly Reams, the head of Aeronautics, did not learn of the aircraft damage until weeks later — on April 21, 2005 — after state pilots noticed the damage. On May IS, 2005, Ms. Reams contacted an FAA official, who agreed to investigate the incident.

On May 19, 2005, the Wyoming Department of Transportation (“WyDOT”) Commission met in an executive, closed-door session. According to minutes from the meeting, Ms. Reams informed the Commission that Sky Harbor had damaged the elevator on a state aircraft, that Sky Harbor did not report the damage to Aeronautics, and that a cover-up of the incident was suspected. The WyDOT director stated he would request a criminal investigation.

The WyDOT Commission then voted to end Aeronautics’ lease with Sky Harbor. On May 24, 2005, Ms. Reams delivered a letter to Mr. Martin informing him that Aeronautics would not renew its annual lease with Sky Harbor to house state aircraft and to provide other services.

During the transition away from Sky Harbor’s services, Ms. Reams sought assistance from Great Lakes Aviation (“GLA”) to temporarily provide emergency fuel and minor maintenance for state aircraft. Ms. Reams also recommended to the WyDOT Commission that the State build its own hangar facility, and the State eventually contracted with the Board to do so.

On June 2, 2005, an FAA official told Ms. Reams that recordkeeping of aircraft repairs had not been Sky Harbor’s responsibility, but rather the responsibility of the State’s pilots and mechanics. The FAA official nevertheless agreed to open an investigation into the damage to the state aircraft. However, Ms. Reams left the issue to law enforcement and did not provide the FAA with any documentation on the incident.

At some point, the Federal Bureau of Investigation and the Department of Homeland Security began an investigation of the aircraft damage. 1 The FBI questioned Ms. Reams about the damage to the jet, the sequence of events surrounding the incident, and the quality of Sky Harbor’s services.

Media then began reporting about an investigation into Sky Harbor’s role in damaging the state aircraft. Five articles quoted Ms. Reams as saying, in regard to Sky Harbor: “There are possible serious problems that are under investigation. But it would be inappropriate to comment at this time.” Aple. Appx. (11-8004), Vol. IV, at 704.

2. Sky Harbor’s Leases with the Board

In 2004 — before the aircraft damage— Sky Harbor negotiated with the Board to *879 take over the lease of a hangar at the airport. This hangar, known as the “Paint Shop,” had been operated as a facility for painting aircraft. Sky Harbor requested to use the Paint Shop for purposes other than painting, including general aircraft maintenance. The Board refused Sky Harbor’s proposed change in use.

Sky Harbor nonetheless assumed the Paint Shop lease — in addition to its lease with the Board to provide FBO services at the airport — in December 2004. Sky Harbor’s rent was $9,500 per month.

Sky Harbor eventually became significantly delinquent in its payments to the Board on the Paint Shop and FBO leases. To allow Sky Harbor to continue its airport services, Sky Harbor and the Board engaged in lease amendment negotiations and reached an agreement on October 23, 2006. Under this agreement, Sky Harbor’s satisfaction of $114,000 in unpaid Paint Shop rent would culminate with a payment of $104,000 on April 30, 2007.

Sky Harbor did not fulfill its obligation to pay the Paint Shop’s past-due rent, and the Board terminated the Paint Shop lease in December 2007. As a result, in March 2008, Sky Harbor and the Board submitted a stipulated motion in Laramie County Circuit Court agreeing that Sky Harbor would vacate the Paint Shop. The court entered an order approving the parties’ stipulated motion.

After Sky Harbor left the Paint Shop, the Board sought a new lessee. GLA submitted a lease proposal that would have required the Board to change the use of the building from aircraft painting to general aviation maintenance. 2 GLA was not awarded the Paint Shop lease and has never occupied the building. 3

B. Procedural History

1. Preliminary Injunction

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491 F. App'x 875, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sky-harbor-air-service-inc-v-reams-ca10-2012.