Flyboy Aviation Props., LLC v. Franck (In re Flyboy Aviation Props., LLC), Bankruptcy No. 13–55775–BEM.

• Decision Date: 11 October 2013
• Docket Number: Bankruptcy No. 13–55775–BEM.,Adversary No. 13–05111–BEM.
• Citation: 501 B.R. 808
• Parties: In re FLYBOY AVIATION PROPERTIES, LLC, Debtor. Flyboy Aviation Properties, LLC, Movant, v. Richard Franck, Respondent.
• Court: U.S. Bankruptcy Court — Northern District of Georgia

501 B.R. 808

In re FLYBOY AVIATION PROPERTIES, LLC, Debtor.
Flyboy Aviation Properties, LLC, Movant,
v.
Richard Franck, Respondent.

Bankruptcy No. 13–55775–BEM.
Adversary No. 13–05111–BEM.

United States Bankruptcy Court,
N.D. Georgia,
Atlanta Division.

Oct. 11, 2013.

[501 B.R. 813]

Leon S. Jones, Leslie M. Pineyro, Jones and Walden, LLC, Edward W. McCrimmon, McCrimmon & McCrimmon Doraville, GA, for Debtor.

William F. Mitchell, Atlanta, GA, for Movant.

ORDER
BARBARA ELLIS–MONRO, Bankruptcy Judge.

A trial was held in this adversary proceeding on September 23, 2013 (the “Trial”). Present at trial were Plaintiff's managing member, Joe Voyles, and Lisa McCrimmon, Ed McCrimmon, and Leon Jones, as Plaintiff's counsel. Also present were Defendant, Richard Franck, and his counsel, William Mitchell. Plaintiff Flyboy Aviation Properties, LLC (“Flyboy” or “Debtor”) alleges in its Complaint that Defendant, Richard Franck (“Franck”), trespassed on Debtor's property, causing interference with business operations and lost revenue. Franck responded and counterclaimed, arguing that he has an easement to use the airport, and seeking such a declaration from the Court.

In an order entered September 10, 2013, the Court bifurcated the issues raised in the complaint, such that the only matter heard at Trial is “what interest, if any, Defendant has in Debtor's property, and the nature of that interest. The issues of trespass, damages, and fees will be tried at a later date.” [Doc. No. 35].

After carefully considering the pleadings, the evidence presented and the applicable

[501 B.R. 814]

authorities, the Court enters the following findings of fact and conclusions of law in accordance with Fed. R. Bankr.P. 7052.

I. JURISDICTION

Bankruptcy courts are courts of limited jurisdiction whose jurisdiction is “derivative of and dependent upon” the three categories of proceedings set forth in 28 U.S.C. § 1334. See In re Toledo, 170 F.3d 1340, 1344 (11th Cir.1999). The matter presently before the Court concerns the Debtor's largest, and possibly only asset, an interest asserted against that property as well as damage claims. The property at issue herein is property of the Debtor's bankruptcy estate and subject to the Court's exclusive jurisdiction under 28 U.S.C. § 1334(e). See In re Finney, 2008 WL 7874260 at *4–5, 2008 Bankr.LEXIS 3767 at *13 (Bankr.N.D.Ga.2008). Debtor states in its “Response to Defendant's Motion to Remand” [Doc. No. 13] that the claims in this proceeding constitute core matters pursuant to 28 U.S.C. § 157(b)(2)(A), (B), (K), and (O), and expressly consents to entry of a final order by this Court. In his “Brief in Support of Defendant's Motion to Remand Case to Superior Court of Forsyth County” [Doc. No. 9], Defendant agrees that this proceeding is a core matter. Thus, the Court will enter a final order in this proceeding. To the extent the matters herein are non-core, given the agreement of the parties, the Court will enter a final order in this proceeding. See Seascape at Wrightsville Beach, LLC v. Mercer's Enters., Inc. (In re Mercer's Enters., Inc.), 387 B.R. 681, 685–686 (Bankr.E.D.N.C.2008).

II. FINDINGS OF FACTA. Procedural Posture

This case was commenced in the Superior Court of Forsyth County as Flyboy v. Franck, No. 08–CV–0509, on March 5, 2008 (the “State Court Action”). [Doc. No. 1, Ex. 1]. Debtor is the owner of certain real property at 3747 Mathis Airport Drive, Suwanee, Georgia, out of which the Debtor runs a small private airport (the “Airport”). [Doc. No. 1, Ex. 2]. Defendant Franck owns property in the neighborhood adjacent to the Airport, known as Mathis Airpark Subdivision (the “Subdivision”). The State Court Action arises out of Franck's alleged trespass on Airport property, for which Flyboy sought an injunction. Franck counterclaimed, asserting an easement for use of the Airport property, seeking damages for restricting his use of the Airport, and recording a notice of lis pendens against the Airport. [Doc. No. 1, Ex. 6]. Flyboy filed its Chapter 11 bankruptcy petition on March 15, 2013 and removed the State Court Action to this Court as an Adversary Proceeding on March 20, 2013, pursuant to 28 U.S.C. § 1452(a).

Defendant's “Motion to Remand” [Doc. No. 8] the Complaint back to the Superior Court of Forsyth County was denied [Doc. No. 18], and a hearing was held in the main case on Debtor's Motion For Authorization To Sell Real Properties Free And Clear Of Liens, Claims, Encumbrances, and Interests (the “§ 363 Hearing” and the “Sale Motion,” respectively). [Main Case Doc. No. 46, 47]. By the Sale Motion, Debtor seeks to sell approximately sixteen acres of land comprised of the fourteen acre Airport and two acres of adjacent property located in the Subdivision (collectively, the “Airport Property”). After the conclusion of the presentation of evidence, the Court announced it would not rule on the Sale Motion without first determining what rights, if any, Franck has to use the Airport and/or the Airport Property. The evidence presented at the

[501 B.R. 815]

§ 363 Hearing was included, with consent of the parties, in the record on the Trial.

B. Facts

In the early 1980's L.G. Mathis and Patrick McLaughlin began selling off lots in the Subdivision. [Franck Exhibits 10–14, Franck Exhibits are hereinafter referred to as “Ex. F ––––”]. A plat for the Subdivision was created in 1983 but was not recorded until 1995 or 1996. [Flyboy Exhibit 5, Flyboy Exhibits are hereinafter referred to as “Ex. FB ––––”]. Louis A. Musgrove, Jr. (“Musgrove”), was the predecessor in interest to Defendant, having purchased approximately 4.1 acres of land in the Subdivision in 1984 from L.G. Mathis and Patrick McLaughlin. [Ex. F 15; Ex. FB 1]. Musgrove testified that before he purchased his property, he saw a plat map of the Subdivision which included the Airport. Musgrove testified that this plat was part of his incentive for purchasing property in the Subdivision. However, no plat was referred to in Musgrove's deed and none was recorded at the time Musgrove purchased his property.

In or around February, 1990, Musgrove completed construction of a hangar home, a building comprised of a top floor apartment and a hangar below. Musgrove accessed the Airport using Mathis Airpark Road, the road in front of his property, and the taxiway between the road and the Airport from at least 1989 through and including 2002 when he moved from the Subdivision. Musgrove used the taxiways, airport taxiways and runway on a regular basis during the time he owned property in the Subdivision without asking permission from the owner, C.J. Mathis. He also accessed the office at the Airport regularly to pay for gasoline purchases and for “hanging out for hangar flying” with other aviators. Musgrove had spent time at the office for these purposes since 1978. In addition, Musgrove jogged and walked on the Airport property while he lived in the Subdivision without seeking permission from C.J. Mathis. The Airport was a public Airport from the early 1960's until 2001 when C.J. Mathis filed an application to convert the airport to a private airport. Musgrove testified that as a public airport, “pretty much anyone who wanted could come and go” from the Airport. In 2002, Musgrove rented the hangar home to Mr. Berndsen (“Berndsen”), who used the hangar to store an airplane and a disassembled project plane. Musgrove testified that he believed Berndsen used Mathis Airport Road and the taxiway between the road and the Airport from 2002 until Musgrove sold his property to Defendant in March, 2004.

When Musgrove purchased his property in 1984, he received a document at closing titled “Addendum To Settlement Statement” (the “Addendum”), which states:

As part of the consideration of this purchase and sale, Sellers agree that Purchasers shall be allowed to join taxiways to airport taxiways of Mathis Airport and to have use of landing strip as long as Mathis Airport shall continue as an airport; however this shall not restrict Sellers' right to sell said airport property as an airport or for other uses.

Purchasers agree that they will not operate an aircraft repair service on the subject property so long as an aircraft repair service is maintained at Mathis Airport.

This agreement shall survive the closing of this transaction.

Ex. FB 2; Ex. F 17]. Musgrove believes he had an easement to use the taxiways (the private subdivision roads) and the Airport taxiways and runways based upon the easement granted in the Addendum, but did not consider his activities at the Airport office or walking/jogging on Airport

[501 B.R. 816

property to be part of his easement. Musgrove stated that he was exercising his rights in accordance with the Addendum when he taxied, landed and took off from the Airport.

Mr. and Mrs. McCrimmon moved into the Subdivision in 1992. The McCrimmons purchased their property from a Mr. McGrath who had purchased property in the Subdivision in or about 1980. Mrs. McCrimmon testified that in 1992 there were planes using Mathis Airpark Road to taxi to the Airport. The McCrimmons received an easement from C.J. Mathis in 1992 when they purchased their property in the Subdivision. They subsequently received an easement from Debtor as well, and both easements were recorded. [Ex. F 5]. Walter and Alice Propheter, residents of the Subdivision since 1983, testified that residents, including Musgrove and Franck, regularly taxied on Mathis Air Park Road and onto the taxiways and runway at the Airport and that Mrs. Propheter regularly walked on the taxiways.

In 1997, certain homeowners, including Musgrove, performed maintenance on Mathis Airpark Road by having a portion of the road/taxiway paved. The residents also cleared brush adjacent to the taxiway. Mr. Propheter and Mr. McCrimmon testified that the residents paid for paving work to be done in 1997 and Mr. McCrimmon stated that all but two residents contributed funds for the road paving project. Mrs. Propheter testified that she...