Cherry Creek Aviation, Inc. v. City of Steamboat Springs

Decision Date16 April 1998
Docket NumberNo. 96CA1669,96CA1669
Citation958 P.2d 515
PartiesCHERRY CREEK AVIATION, INC., a Colorado corporation, d/b/a Mountain Air Express, Plaintiff-Appellant, v. CITY OF STEAMBOAT SPRINGS, Steamboat Springs Airport Authority, Anthony Lettunich, Kevin Bennett, Mary T. Brown, Paula Cooper Black, William B. Martin, Carol Booth Fox, John O. Ross, and Richard Tremaine, Counterclaimants and Defendants-Appellees. . II
CourtColorado Court of Appeals

Linda M. Cote, Denver, for Plaintiff-Appellant.

Hall & Evans, L.L.C., David R. Brougham, Denver; Lettunich & Vanderbloemen, L.L.C., Anthony B. Lettunich, Steamboat Springs, for Counterclaimants and Defendants-Appellees.

Opinion by Judge TAUBMAN.

Plaintiff, Cherry Creek Aviation, Inc., d/b/a/ Mountain Air Express (Cherry Creek), appeals the summary judgment entered in favor of defendants, City of Steamboat Springs (the City), Steamboat Springs Airport Authority, Anthony Lettunich, Kevin Bennett, Mary T. Brown, Paula Cooper Black, William B. Martain, Carol Booth Fox, John O. Ross, and Richard Tremaine, dismissing its claims for breach of contract and equitable relief and its constitutional claims under 42 U.S.C. § 1983 (1994). We affirm.

Cherry Creek responded to a request for proposal issued by the City for a fixed base operator for the Steamboat Springs Airport, a public airport authority. A fixed base operation is one that requires the operator to provide specific facilities, services, equipment, and personnel to meet the requirements of operation for the airport.

Negotiations ensued between the city attorney, the city manager, the chair of the airport authority, and Cherry Creek. In 1993, the City and Cherry Creek entered into an agreement entitled "Use and Lease Agreement," drafted by the City, in which the City was to lease real property to Cherry Creek and Cherry Creek would provide fixed base operations for the airport. More specifically, the agreement required Cherry Creek to provide, among other things, aircraft tie-down services, fuel and oil, aircraft airframe and engine repair, facilities for flight planning, and aircraft storage and hangar facilities. The term of the agreement was three years, beginning December 1, 1993, and terminating on November 30, 1996. The agreement granted Cherry Creek an option to extend for thirty years.

The City is a home rule municipality. Steamboat Springs City Charter § 13.6 provides in pertinent part:

The Council, by ordinance, may lease for such a term as the Council shall determine, any real property to any person, firm or corporation, public or private. The effective date of any sale or lease must be at least thirty (30) days after passage by Council, and Council shall not sign any such contractual document prior to the thirty (30) day period.

Despite this provision, the City Council did not adopt the lease by ordinance; however, during a city council meeting on November 16, 1993, there was "consensus" to approve all items relating to various airport contracts, including the one at issue.

In 1994, a new city attorney determined that there were few performance standards to which Cherry Creek could be held in its fixed base operation and that the lease was unfavorable to the City. At that time the City discovered that the agreement had not been approved by ordinance. Thereafter, the City Council, after a public meeting on December 13, 1994, determined that it would not ask the city attorney to prepare an ordinance ratifying and affirming the lease, but rather, instructed the city attorney to declare the lease invalid.

Cherry Creek subsequently instituted this action and the City responded with a counterclaim requesting that the trial court declare the lease invalid. In the interim, Cherry Creek remained on the premises and continued operations.

The trial court concluded that the failure to comply with the charter provision requiring the City Council to adopt by ordinance the lease with Cherry Creek rendered the entire agreement invalid, and precluded all of Cherry Creek's claims, legal and equitable, against the City.

In a separate action for Forcible Entry and Detainer (FED), initiated after the summary judgment ruling and later consolidated therewith, the City sought to evict Cherry Creek from the premises. After Cherry Creek voluntarily vacated the premises pursuant to stipulation, the trial court dismissed the FED action with prejudice. No appeal was taken.

Cherry Creek appeals here the trial court's dismissal on summary judgment of its claims for affirmative relief regarding the Use and Lease Agreement.

Summary judgment is a drastic remedy and should be granted only upon a clear showing that there are no genuine issues of material fact and that the moving party is entitled to judgment as a matter of law. Churchey v. Adolph Coors Co., 759 P.2d 1336 (Colo.1988).

When reviewing a motion for summary judgment, we must give the nonmoving party the benefit of all favorable inferences that may be drawn from the facts. Holland v. Board of County Commissioners, 883 P.2d 500 (Colo.App.1994). Also, review of a judgment granting a motion for summary judgment is de novo. Aspen Wilderness Workshop, Inc. v. Colorado Water Conservation Board, 901 P.2d 1251 (Colo.1995).

I. Breach of Contract

Cherry Creek first contends that the trial court erred as a matter of law in concluding that the contract was not a valid and enforceable agreement between the parties. More specifically, Cherry Creek argues that the Airport Authority had authority to enter into the Use and Lease Agreement pursuant to Steamboat Springs Municipal Ordinance 1065, § 4(d), thereby creating an enforceable contract even though the City Council did not adopt it by ordinance. The City contends that because the lease was not adopted by ordinance in the manner prescribed by the City Charter, the lease agreement is null and void. We agree with the City.

Contracts executed by municipal corporations are void when there is a failure to comply with the mandatory provisions of the applicable statutes or charters. See Swedlund v. Denver Joint Stock Land Bank, 108 Colo. 400, 118 P.2d 460 (1941). See also 10 E. McQuillin, Municipal Corporations § 29.02 (3d ed.1990).

Steamboat Springs Municipal Ordinance No. 1065, formally codified as Steamboat Springs Revised Municipal Code § 2-275, creating the Steamboat Springs Airport Authority, provides in pertinent part:

The Authority ... is hereby declared to be a political subdivision of the City, exercising essential governmental powers for a public purpose and is hereby authorized:

....

(d) to enter into contracts and agreements affecting the affairs of the Authority;

(e) to purchase, trade, exchange, acquire, buy, sell, and otherwise dispose of personal property and any interest therein, to lease to or for the benefit of the Authority real or personal property, to purchase, acquire or buy real property and any interest therein and to recommend to the City Council the trade, exchange, sale or other disposition of real property and any interest therein .... (emphasis added)

Rules of statutory construction apply to municipal charters and ordinances as well as to statutes. Courts should interpret municipal enactments in accordance with their plain and ordinary meaning. Additionally, city charters and ordinances pertaining to the same subject matter must be construed as a whole to ascertain legislative intent and to avoid inconsistencies and absurdities. Smith v. City & County of Denver, 789 P.2d 442 (Colo.App.1989).

It is the duty of the trial court to adopt, when possible, a construction that does not invalidate an ordinance. Hiatt v. City of Manitou Springs, 154 Colo. 525, 392 P.2d 282 (1964).

Further, § 2-4-205, C.R.S.1997, provides:

If a general provision conflicts with a special or local provision, it shall be construed, if possible, so that effect is given to both. If the conflict between the provisions is irreconcilable, the special or local provision prevails as an exception to the general provision, unless the general provision is the later adoption and the manifest intent is that the general provision prevail.

Here, as noted, Steamboat Springs City Charter § 13.6 requires that the City Council adopt by ordinance any lease of city property. Additionally, Steamboat Springs Municipal Ordinance 1065, 4(e), pertains to the power of the Authority regarding the disposition of real and personal property. Because the two enactments pertain to the same matter, the disposition of real property, they must be construed together to avoid any inconsistencies.

Further, Municipal Ordinance 1065, § 4(d), which gives the Airport Authority the general power to contract regarding affairs of the Authority, is followed by § 4(e), the more specific provision regarding the Authority's power to contract regarding real and personal property. Thus, to give effect to both provisions, § 4(e) must be construed so as to allow the Airport Authority only to recommend to the City Council a proposed disposition of real property owned by the City.

Significantly, § 4(e) expressly authorizes the Authority to act without recommendation to the City Council only when: (1) disposing of personal property; (2) entering into a lease "to or for the benefit of" the Authority, i.e., where the Authority is engaged in a transaction as a lessee; or (3) acquiring real property. Cherry Creek does not contend otherwise.

This interpretation of § 4(e) is both consistent with the requirements of the City Charter and gives effect to both § 4(d) and 4(e) of the ordinance. Thus, we conclude that, when read as a whole, the City Charter and Municipal Ordinance 1065 require that any lease of city property by the Authority must be adopted by the City Council pursuant to city ordinance.

It is undisputed that the City Council did not pass an ordinance adopting the lease agreement with Cherry Creek. Accordingly, that lease is void. Therefore, ...

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