Asheville Jet, Inc. v. City of Asheville

• Decision Date: 19 January 2010
• Docket Number: No. COA08-1549.,COA08-1549.
• Citation: 689 S.E.2d 162
• Parties: ASHEVILLE JET, INC., d/b/a Million Air Asheville, Plaintiff-Appellee, v. The CITY OF ASHEVILLE, North Carolina Municipal Corporation; Asheville Regional Airport Authority; and The County of Buncombe, Defendants-Appellants.
• Court: North Carolina Court of Appeals

689 S.E.2d 162

ASHEVILLE JET, INC., d/b/a Million Air Asheville, Plaintiff-Appellee, v. The CITY OF ASHEVILLE, North Carolina Municipal Corporation; Asheville Regional Airport Authority; and The County of Buncombe, Defendants-Appellants.

No. COA08-1549.

Court of Appeals of North Carolina.

January 19, 2010.

Appeal by Defendants from order entered 15 September 2008 by Judge J. Marlene Hyatt in Superior Court, Buncombe County. Heard in the Court of Appeals 19 August 2009.

Roberts & Stevens, P.A., by Sarah Patterson Brison and Jacqueline D. Grant, Asheville, for Plaintiff-Appellee.

Asheville City Attorney's Office, by City Attorney Robert W. Oast, Jr. and Associate City Attorney Kelly L. Whitlock, for Defendant-Appellant City of Asheville.

Womble Carlyle Sandridge & Rice, P.L.L.C, by James R. Morgan, Jr. and Robert T. Numbers, II, Winston-Salem, for Defendant-Appellant Asheville Regional Airport Authority.

McGEE, Judge.

Plaintiff entered into a lease with Asheville Regional Airport Authority (the Authority) to act as a Fixed Based Operator (FBO) at the Asheville Regional Airport (the Airport) on 1 January 1993, to provide general aviation services such as fueling, maintenance and ground services for private aircraft at the Airport. Pursuant to the lease agreement between Plaintiff and the Authority, Plaintiff was to pay the Authority a monthly rent amounting to five percent of Plaintiff's gross receipts.

The Authority receives federal money pursuant to 49 U.S.C. §§ 47101 et seq., the Airport and Airway Improvement Act of 1982 (AAIA). By accepting these federal grants, the Authority agrees to abide by certain policies, rules, standards, and regulations set out in the AAIA. Approval for these grant applications is conditioned on the Authority's agreement to abide by the policies, rules, standards, and regulations concerning airport operations (grant assurances) established by the Federal Aviation Administration (FAA), a division of the Department of Transportation (DOT). Pursuant to 14 C.F.R. § 16.23, any "person directly and substantially affected by any alleged noncompliance" with the AAIA, including grant assurances, "may file a complaint with the [FAA] Administrator. A person doing business with an airport and paying fees or rentals to the airport shall be considered directly and substantially affected by alleged revenue diversion as defined in 49 U.S.C. 47107(b)." 14 C.F.R. § 16.23 (2008). This type of action is commonly known as a "Part 16 proceeding."

Encore FBO Acquisitions, LLC (Encore) entered into an FBO lease agreement with the Authority on 9 November 2007. Plaintiff initiated a Part 16 proceeding with the FAA pursuant to 14 C.F.R. § 16.23 on 25 January 2008, alleging that the Authority was in violation of multiple grant assurances. Specifically, Plaintiff alleged that the lease agreement between Encore and the Authority granted Encore substantially more favorable terms than those granted Plaintiff in its lease agreement with the Authority, including the rent charged to Encore. Plaintiff alleged that the lease agreement between Encore and the Authority violated certain sections of 49 U.S.C. § 47107(a) and 40103(e), implementing regulations, policy, and grant assurances.

Plaintiff also filed a complaint against Defendants in Buncombe County Superior Court on 6 February 2008, in which it alleged that the more favorable terms granted to Encore constituted a breach of Plaintiff's lease agreement with the Authority, because Plaintiff's lease agreement included a provision guaranteeing that more favorable terms would not be granted to any competitor. Plaintiff's complaint included claims for breach of contract, constitutional violations, statutory violations, procedural violations, unfair and deceptive trade practices, and tortious interference with contract and business relations. Plaintiff asked for monetary and declaratory relief. The FAA is not a party to Plaintiff's state court action.

The Authority moved to dismiss Plaintiff's complaint on 28 July 2008, pursuant to Rules 12(b)(1) and 12(b)(6) of the North Carolina Rules of Civil Procedure, arguing that: (1) Plaintiff's claims were preempted by federal law, (2) Plaintiff had failed to exhaust its administrative remedies, (3) Plaintiff's claims were subject to the primary jurisdiction of the FAA, and (4) Plaintiff failed to state a claim upon which relief could be granted. The City of Asheville filed a motion to dismiss on the same grounds as the Authority on 7 August 2008. By order entered 15 September 2008, the trial court denied Defendants' motions to dismiss. Defendants appeal. Additional facts will be addressed in the body of this opinion.

I.

Defendants argue a single assignment of error on appeal: "The trial court erred in denying Defendants' Motions to Dismiss because [Plaintiff's] claims for relief are preempted by federal law."

The dispositive question is whether this interlocutory appeal from the order of the trial court is properly before our Court. Defendants argue that their appeal from the 15 September 2008 order is properly before us because the 15 September 2008 order affects substantial rights that will be lost absent immediate appeal. We disagree.

N.C. Gen.Stat. § 1-277(a) (2007) states: "An appeal may be taken from every judicial order or determination of a judge of a superior or district court, upon or involving a matter of law or legal inference, whether made in or out of session, which affects a substantial right claimed in any action or proceeding[.]" See also N.C. Gen.Stat. § 7A-27(d)(1) (2007); Jeffreys v. Raleigh Oaks Joint Venture, 115 N.C.App. 377, 379, 444 S.E.2d 252, 253 (1994). "A right is substantial when it will clearly be lost or irremediably and adversely affected if the order is not reviewed before final judgment." RPR & Assocs. v. University of N.C.-Chapel Hill, 153 N.C.App. 342, 347, 570 S.E.2d 510, 514 (2002) (citation omitted). "`The "substantial right" test for appealability is more easily stated than applied.' `It is usually necessary to resolve the question in each case by considering the particular facts of that case and the procedural context in which the order from which appeal is sought was entered.'" Bernick v. Jurden, 306 N.C. 435, 439, 293 S.E.2d 405, 408 (1982) (citations omitted). "[I]t is the appellant's burden to present appropriate grounds for this Court's acceptance of an interlocutory appeal and our Court's responsibility to review those grounds." Jeffreys, 115 N.C.App. at 379, 444 S.E.2d at 253.

Defendants argue that, because the trial court denied their motions to dismiss, Defendants will "now be required to litigate the same issues in two different proceedings." Defendants contend that "the trial court's order affects [their] substantial right to avoid the possibility of inconsistent verdicts in separate trials. Our Supreme Court has held that the right to avoid the possibility of two trials on the same issues is a substantial right that may support immediate appeal." Alexander Hamilton Life Ins. Co. of Am. v. J & H Marsh & McClennan, Inc., 142 N.C.App. 699, 701, 543 S.E.2d 898, 900 (2001) (citations omitted) (emphasis added).

One writer, in seeking to formulate a rule based on our decisions in these cases, has concluded: "The right to avoid one trial on the disputed issues is not normally a substantial right that would allow an interlocutory appeal, while the right to avoid the possibility of two trials on the same issues can be such a substantial right." We adhere to our earlier statement that "[i]t is usually necessary to resolve the question in each case by considering the particular facts of that case and the procedural context in which the order from which appeal was sought is entered." However, we are of the opinion that the above statement constitutes, as the author suggests, only "a general proposition that in many circumstances should be helpful in analyzing the substantial right issue."

Green v. Duke Power Co., 305 N.C. 603, 606, 290 S.E.2d 593, 595 (1982) (internal citations omitted). Therefore, the possibility that Defendants may be required to defend two "trials" on the same issues does not create a per se right to immediate appeal of this interlocutory order. "Ordinarily the possibility of undergoing a second trial affects a substantial right only when the same issues are present in both trials, creating the possibility that a party will be prejudiced by different juries in separate trials rendering inconsistent verdicts on the same factual issue." Green, 305 N.C. at 608, 290 S.E.2d at 596.

II.

In order to determine whether Defendants are facing the possibility of prejudice resulting from separate "trials" involving the same issues reaching different verdicts in this case, we must examine the relevant facts in the context of the procedures and purposes of the two proceedings at issue. Id. at 606, 290 S.E.2d at 595.

Plaintiff initiated a Part 16 proceeding against the Authority on 25 January 2008, alleging that the Authority had violated multiple federal statutes involving "regulations, policy and relevant grant assurances" by: (1) improperly leasing to Encore a federally funded apron that was previously open for general aviation use; (2) permitting Encore to operate without complying with minimum standards; and (3) providing substantially favorable lease terms to Encore." Plaintiff requested the FAA administrator to:

(1) withhold any and all federal funds promised but [that] have not yet been paid to the Airport Sponsors; (2) refuse to accept future grant applications from the Airport Sponsors until the Airport is in compliance with applicable federal statutes, regulations, FAA policy and the grant assurances provided by the Airport Sponsors; and (3) seek repayment from each of the Airport Sponsors for the previously paid airport grant funds based on violations of applicable statutes, regulations, and grant assurances.

Plaintiff's 6 February 2008 complaint...